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11 April 2022
United States Reaches Agreement with CVS Pharmacy, Inc., to Ensure Online Access to COVID-19 Vaccine Registration for People with DisabilitiesRead the Press Release
PROVIDENCE, R.I. – The United States Attorney’s Office for the District of Rhode Island and the Justice Department announced today that they have reached a settlement agreement with CVS Pharmacy, Inc., (CVS) to ensure that people with disabilities can get information about COVID-19 vaccinations and book vaccination appointments online. CVS, headquartered in Woonsocket, Rhode Island, is the country’s largest retail pharmacy, with nearly 10,000 locations nationwide.
Following investigation, the United States determined that CVS’s COVID-19 vaccine registration portal, currently located at https://www.cvs.com/immunizations/covid-19-vaccine, was not accessible to people with certain disabilities, including those who use screen reader software or have a hard time using a mouse. For instance, at the outset of the scheduling process, the types of vaccine appointments offered (which included influenza, pneumonia, and others in addition to the COVID-19 option) were not read to screen reader users. Further, on the page where a user picks a time for their appointment, screen reader users were told that all available times were “checked,” even though the user had not made any selection. Additionally, people who use the “Tab” key instead of a mouse to navigate websites were not able to navigate past a request for insurance information.
Title III of the Americans with Disabilities Act (ADA) requires public accommodations like drugstores and grocery stores to provide individuals with disabilities with full and equal enjoyment of goods and services. The ADA also requires public accommodations to provide effective communication with people with disabilities, including through the use of auxiliary aids and services like accessible technology.
Under the terms of the agreement, CVS will facilitate accessibility by conforming its web content about the COVID-19 vaccine, including the forms for scheduling an appointment to get the vaccine, to the Web Content Accessibility Guidelines (WCAG), Version 2.1, Level AA. WCAG is a set of voluntary industry guidelines for making information on a website accessible to users with disabilities. The agreement also requires CVS to regularly test the pages of its website that include vaccine scheduling and information about the COVID-19 vaccine, and quickly fix any problems that keep people with disabilities from being able to use these pages.
“While web accessibility is always important, when it comes to critical health services like COVID-19 vaccination, making sure that everyone—regardless of disability—can access information and care is essential,” said U.S. Attorney Zachary A. Cunha of the District of Rhode Island. “This Office is committed to vigorously enforcing the ADA to eliminate unnecessary barriers that stand in the way of lifesaving care.”
“Now more than ever, we must ensure web accessibility for people with disabilities seeking access to critical needs and services,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We are working aggressively to identify and remove barriers that prevent people with disabilities from privately and independently securing potentially life-saving COVID-19 vaccines. We will continue to work towards the ADA’s promise of equal access during the ongoing global pandemic.”
This matter was handled jointly by Assistant United States Attorney Amy R. Romero of the District of Rhode Island and Anne Langford and Joy Welan, attorneys for the Disability Rights Section of the Department’s Civil Rights Division.
The U.S. Attorney’s Office for the District of Rhode Island is committed to investigating alleged violations of the Americans with Disabilities Act. The Department of Justice has a number of publications available to assist entities in complying with the ADA. For more information on the ADA and to access these publications, visit www.ada.gov or call the Justice Department’s toll-free ADA information Line at 800-514-0301 or 800-514-0383 (TTY). Any member of the public who wishes to file a complaint alleging a public entity or public accommodation in Rhode Island is not accessible to persons with disabilities may contact the U.S. Attorney’s Office at https://www.justice.gov/usao-ri/civil-rights-enforcement or 401-709-5000.
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United States Files Suit Against Methodist Le Bonheur Healthcare and Methodist Healthcare-Memphis HospitalsRead the Press Release
NASHVILLE – The United States today filed a complaint in intervention alleging violations of the False Claims Act (FCA) and the Anti-Kickback Statute (AKS) by Methodist Le Bonheur Healthcare (MLH) and Methodist Healthcare Memphis Hospitals (collectively, Methodist), for paying unlawful kickbacks to West Clinic, P.C. (West) in exchange for West’s patient referrals, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
The government began investigating the wrongdoing alleged in today’s complaint in response to a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The qui tam action was initially filed on May 30, 2017, by Jeffrey H. Liebman, the former President of Methodist University Hospital. In December 2019, David M. Stern, M.D., the former Executive Dean and Vice Chancellor at the University of Tennessee Health Sciences Center, who served on the Board of Directors of MLH from 2011 to 2017, joined the lawsuit. Stern was also a member of the Executive Cancer Council and the Steering Committee for the West Cancer Center.
The complaint sets forth in detail the unlawful kickbacks, disguised through a sophisticated business integration wherein Methodist purchased substantially all of the outpatient locations of the largest oncology practice in the Memphis area, owned by West. At the time of the arrangement, Methodist lacked a comprehensive cancer treatment center.
The multi-agreement transaction purported to be a lawful way to allow West’s patients to be treated at Methodist locations by West-employed physicians for outpatient and inpatient services, with West providing management services to Methodist’s adult oncology service line. As a result of the deal, Methodist would receive increased Medicare reimbursements relating to the cancer care. The parties described it as a “partnership” to achieve a cancer “center without walls,” where patients would go to Methodist-owned facilities for all their cancer-related care in what was called the West Cancer Center. However, there was never any formal partnership created, as to do so likely would have violated regulatory requirements.
As part of Methodist’s business combination with West, Methodist made a separate for-profit $7 million investment in ACORN Research, LLC (ACORN), an entity in which West and its Medical Director and shareholder, Dr. Lee Schwartzberg, had a personal financial interest. Through the deal, Methodist provided an immediate influx of millions of dollars in cash to West through its purchase of certain assets, as well as the ACORN investment, which resulted in a repayment of $3.5 million in debt owed to West and its shareholder, Dr. Schwartzberg. Kickbacks for the revenues Methodist generated from the West referrals, however, were disguised as payments Methodist made to West during the seven years of the deal, and expressly for certain services that were supposed to be – but were not – provided under the management services agreement.
As a result of the transaction, Methodist, which prior to the deal had no outpatient cancer treatment, was able to establish a new stream of income in the reimbursements for outpatient treatment that previously went to West. Methodist also realized a huge increase in referrals for inpatient services from West, which previously referred the bulk of its patients to Methodist’s competitors, including Baptist Memorial Hospital.
By purchasing West’s outpatient locations, Methodist was able to bill Medicare not only for the facility and professional components of outpatient treatment but also for the chemotherapy and other drugs provided, for which Methodist could recoup a staggering discount in costs through the 340B Discount Drug Program, resulting in $50 million in profits to Methodist in one year alone.
Methodist knew that it would be a violation of the AKS to compensate West in exchange for the volume or value of referrals to Methodist, yet, as the referrals to Methodist increased over the seven years of the deal, so did Methodist’s payments to West under the management agreement.
Methodist also knew that West had not been providing all the management services at all the locations required by the MSA. For the management services West was performing, Methodist often was double-paying West, as it was paying West separately for these services pursuant to other agreements.
In sum, Methodist knowingly agreed to pay West millions of dollars in kickbacks for the revenues Methodist expected to, and ultimately did, realize from West’s referrals. The arrangement lasted from January 1, 2012, through December 31, 2018, and continued even after Methodist knew that the United States was investigating these allegations following the filing of the whistleblowers’ lawsuit.
The matter is being investigated by the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Kara F. Sweet represents the United States.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability. The lawsuit is captioned United States of America ex rel. Jeffrey H. Liebman and David M. Stern, M.D. v. Methodist Le Bonheur Healthcare, et al., Case No. 3:17-cv-00902 (M.D. Tenn.).
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United States Attorney’s Office and Washington State Office of Attorney General to Announce Largest Ever Health Care Fraud Settlement in Eastern WashingtonRead the Press Release
Spokane, WA: At 10 a.m. on Tuesday, April 12, the United States Attorney for the Eastern District of Washington, Vanessa R. Waldref, and the Washington State Attorney General, Bob Ferguson, will hold a joint press conference to announce the resolution of a major case involving health care fraud, elder abuse, and patient harm, which will be the largest-ever health care fraud settlement in Eastern Washington.
U.S. Attorney Waldref will also address the U.S. Attorney’s Office’s ongoing efforts to work with state and federal law enforcement partners to combat elder abuse, health care fraud, and patient endangerment in Eastern Washington.
The press conference will take place in front of the Thomas Foley Federal Courthouse Building at 920 W. Riverside Avenue, Spokane, Washington, 99201 or, in the event of inclement weather, in the Building in Conference Room 116. U.S. Attorney’s Office anticipates being able to release additional information regarding the resolution prior to the press conference.
United States Attorney Vanessa R. Waldref Highlights Fentanyl Prosecutions Relating to Operation Engage SpokaneRead the Press Release
Spokane, WA – The Drug Enforcement Administration (D.E.A.), in partnership with the U.S. Attorney’s Office for the Eastern District of Washington, recently launched Operation Engage Spokane, which is a comprehensive community-level approach for addressing the drug epidemic – focusing on fentanyl distribution – through prevention strategies, facilitating conversations, and collaboration with local partners.
“The fentanyl crisis is the new face of the opioid epidemic. By working together with our law enforcement partners, local governments, and community outreach organizations, such as the Spokane Alliance for Fentanyl Education and the Rayce Rudeen Foundation,” U.S. Attorney Waldref stated, “we have a unique opportunity to proactively work to avoid the tragedy that fentanyl causes on a daily basis.”
“These dangerous counterfeit pills are impacting people of all ages.” U.S. Attorney Waldref emphasized. “Drug traffickers are adapting to social change, using Snapchat, Instagram, YouTube and other mainstream social media to infiltrate this poison into communities like ours. As a mother who is navigating social media and screen time for my kids – like so many parents – it is frightening to know that fentanyl can be hidden in plain sight and accessible through any smartphone.”
When Operation Engage Spokane was launched, DEA Special Agent in Charge Frank Tarantino III expressed the need for the entire community to work together to target fentanyl: “The impact and overall effectiveness of this initiative is directly dependent on the community, law enforcement, health care, prevention and social service professionals working together to mitigate the fentanyl drug threat.” U.S. Attorney Waldref agreed that our communities must unite to address the opioid crisis, emphasizing that her office will continue to do its part to curb the illegal distribution of fentanyl. “As the chief law enforcement officer in Eastern Washington, I am committed to prosecuting the criminal drug cartels who put our communities and our youth at risk. Our office has been prosecuting fentanyl cases since 2016, and we will continue vigorously prosecuting these cases as part of our ongoing efforts to build safer and stronger communities in the Eastern District of Washington.”
For its part, the United States Attorney’s Office currently is prosecuting numerous cases involving fentanyl distribution in Eastern Washington. The following are recent examples of fentanyl cases, some of which are pending in federal court in Spokane, Richland, and Yakima. For those matters that are currently pending, an indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
• United States v. Dustin Allen and Kolin Mazur: Indicted on January 4, 2022 for distribution of fentanyl. Mazur originally was charged in Idaho state court, and the matter was referred to the U.S. Attorney’s Office for the Eastern District of Washington. According to state court documents, Allen and Mazur’s distribution resulted in at least one overdose death.
• United States v. Francisco Erasmo Angulo-Rivera: Indicted on April 5, 2022, for distributing fentanyl on various occasions in 2021 and 2022.
• United States v. Yancarlos Arredondo-Mendoza: Indicted on February 1, 2022, for possession with intent to distribute 400 grams or more of fentanyl. According to charging documents, Arredondo-Mendoza was in possession of approximately 20,000 suspected fentanyl-laced pills, suspected heroin, and a loaded Glock 9mm pistol in early January 2022.
• United States v. Raymond Keith Hewlett: Indicated on April 5, 2022, for distributing fentanyl and methamphetamine in Spokane, Washington.
• United States v. Antoinne Holmes and Reigan Allen: Indicted on July 20, 2021 for conspiracy to distribute fentanyl and, specific to Holmes, two counts of possession with intent to distribute fentanyl and two counts of felon in possession of a firearm. Holmes had previously been indicted in the District of Idaho on April 14, 2021 for distribution of fentanyl resulting in the death of a sixteen-year-old. Allen’s then-five month old infant also overdosed on fentanyl during the conspiracy, but survived.
• United States v. Jeremiah James LaFave: Indicted on March 1, 2022, for possession with intent to distribute fentanyl, felon in possession of a firearm, and assault on law enforcement with a deadly weapon.
• United States v. Hunter Bow O’Mealy, Caleb Ryan Carr, Jaime Lynn Bellovich, Matthew Gudino-Pena: Indicted on November 2, 2021 on conspiracy charges stemming from distribution of fentanyl in Spokane, Washington. Charging documents allege the defendants’ conspiracy resulted in at least one violent shooting, at least one overdose death, and the seizure of more than 50,000 fentanyl pills as well as numerous firearms.
• United States v. Josue Medina-Perez and Francisco Delgado: In March 2021, Medina-Perez was sentenced to a 96-month term of imprisonment and Delgado was sentenced to 10 years of incarceration. According to charging documents, Medina-Perez and Delgado were identified as one of the first major sources of Fentanyl-laced pills in Eastern
Washington and were responsible for transporting and distributing more than 5,000 to 10,000 pills per week beginning in 2017.
• United States v. Lewis Mesa: Indicted on April 5, 2022, for possession with intent to distribute 400 grams or more of fentanyl and for possessing a firearm in furtherance of a drug-trafficking crime.
• United States v. Dwight Norwood Jr.: Indicted on March 1, 2022, for possession with intent to distribute fentanyl and felon in possession of a firearm.
• United States v. Carlos Reyes-Santana, Eduardo Reyes-Santana, Rosa Martinez-Rodriguez, Molly Margret Brown, and Alfonso Avila Olivera: Superseding indictment filed on February 15, 2022, alleging various drug-trafficking offenses, including conspiracy to distribute 500 grams or more of methamphetamine, 1 kilogram or more of heroin, 5 kilograms or more of cocaine, and 400 grams or more of fentanyl. According to charging documents, law enforcement recovered approximately 52 pounds of methamphetamine, 1 pound of cocaine, about 50,000 fentanyl-laced pills, $500,000 in U.S. currency, and multiple firearms during the execution of a number of search warrants in March 2021.
• United States v. Jonathan Rivera-Venegas: Indicted on April 5, 2022 on charges of conspiracy and distribution of fentanyl in Ellensburg, Washington. While Rivera-Venegas initially was charged in Washington state court, the case was adopted by the U.S. Attorney’s Office for federal prosecution. According to state charging documents, Rivera-Venegas’s distribution of fentanyl has been linked with at least two overdose deaths.
• United States v. Keauve D. Ruff: Pled guilty to conspiracy to distribute fentanyl and cocaine in September 2021. As part of his guilty plea, Ruff admitted to distributing fentanyl, which resulted in an overdose death in Airway Heights, Washington in May 2020. Ruff’s sentencing currently is set for July 15, 2022 in Spokane, Washington.
• United States v. Michael Lee Vantiger: Indicted on February 19, 2020 for possession with intent to distribute 400 grams or more of fentanyl. According to charging documents, Vantiger was found in possession of approximately 53,000 fentanyl-laced pills inside a rental car.
• United States v. Christopher West and Ron Montgomery: Indicted on January 7, 2020 on charges stemming from a conspiracy to distribute fentanyl in the Tri-cities area. According to court documents, West and Montgomery’s distribution resulted in at least one overdose death.
For more information and local resources, visit Spokane.dea.gov as well as the national page: www.OperationEngage.com.
U.S. Attorney’s Office for District of Idaho Commemorates Sexual Assault Awareness MonthRead the Press Release
BOISE – Every April, the Department of Justice and the U.S. Attorney’s Office for the District of Idaho join survivors, advocates, and communities nationwide in observing Sexual Assault Awareness and Prevention Month. Sexual violence is far too prevalent, and it is important to not only raise awareness of the myriad forms of sexual violence, but to engage in meaningful prevention efforts, take action to hold offenders accountable, and care for survivors in a trauma-informed manner. U.S. Attorney Rafael M. Gonzalez, Jr. joins the Department of Justice and the Office on Violence Against Women (OVW) in applauding the recent passage of the Violence Against Women Reauthorization Act of 2022 (VAWA 2022), which treats sexual assault as the serious violation it is and creates new programs and initiatives that provide survivors of sexual violence with increased access to services and justice. One such program is the Violence Against Women Tribal Special Assistant U.S. Attorney (SAUSA) program, which cross-designates tribal prosecutors as SAUSAs to support tribes and U.S. Attorneys’ Offices in investigating and prosecuting cases involving sexual assault, domestic and dating violence, stalking, and certain sex trafficking offenses. VAWA 2022 also expands outreach to survivors in underserved communities by improving access to sexual assault medical forensic examinations for survivors in rural areas, providing community-specific services for LGBT survivors, and restoring tribes’ jurisdiction to prosecute non-Indian perpetrators of sexual violence and sex trafficking, among certain other offenses committed on tribal lands.
“This year, as we in Idaho recognize Sexual Assault Awareness and Prevention Month, we again commit to the victims of sexual assault that we will do everything in our power to support and deliver justice to them,” said U.S. Attorney Gonzalez. “Sexual assault victims are not alone, we in the law enforcement community stand shoulder to shoulder with them. Absolutely no one should live in fear of being sexually assaulted or of being retaliated against for reporting a sexual assault,” he concluded.
“During Sexual Assault Awareness and Prevention Month, and every month, OVW-funded programs across the nation provide essential services to survivors of sexual assault, responding to their needs, helping them heal, and supporting them as they pursue the justice they seek,” said OVW Principal Deputy Director Allison Randall. “The impact of sexual violence is felt by the entire community and can devastate survivors’ lives, which is why it is critical that VAWA 2022 strengthens not just services and justice interventions but also prevention.”
OVW funds resources in every jurisdiction, please see this website which lists OVW FY21 awards by state.
OVW provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.
If you or someone you know is experiencing or has experienced sexual violence, you are not alone and there are many services available to help, including the Sexual Assault Hotline, 1-800-656-HOPE (4673), and the StrongHearts Native Helpline, 1-844-7NATIVE (762-8483). In addition, you can find a local resources page on OVW’s website, which lists state sexual assault coalitions that can direct you to local resources and services, as well as opportunities to get involved.
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U.s. Attorney’s Office for the District of Montana Commemorates Sexual Assault Awareness MonthRead the Press Release
BILLINGS – The Department of Justice and U.S. Attorney’s Office for the District of Montana join survivors, advocates, and communities nationwide in April to observe Sexual Assault Awareness and Prevention Month. Sexual violence is far too prevalent, and it is important to not only to raise awareness of the myriad forms of sexual violence, but to engage in meaningful prevention efforts, take action to hold offenders accountable, and care for survivors in a trauma-informed manner.
U.S. Attorney Leif M. Johnson joins the Department of Justice and the Office on Violence Against Women (OVW) in applauding the recent passage of the Violence Against Women Reauthorization Act of 2022 (VAWA 2022), which treats sexual assault as the serious violation it is and creates new programs and initiatives that provide survivors of sexual violence with increased access to services and justice.
One such program is the Violence Against Women Tribal Special Assistant U.S. Attorney (SAUSA) program, which cross-designates tribal prosecutors as SAUSAs to support tribes and U.S. Attorneys’ Offices in investigating and prosecuting cases involving sexual assault, domestic and dating violence, stalking, and certain sex trafficking offenses. VAWA 2022 also expands outreach to survivors in underserved communities, including by improving access to sexual assault medical forensic examinations for survivors in rural areas, providing community-specific services for LGBT survivors, and restoring tribes’ jurisdiction to prosecute non-Indian perpetrators of sexual violence and sex trafficking, among certain other offenses committed on tribal lands.
“Sexual violence has no place in society, yet it is a real, horrible and under-reported crime, especially in our tribal communities. All individuals, women, men and children, deserve to be safe from violence, including sexual violence. This office will continue to seek justice for victims by prosecuting and holding offenders accountable and supports healing and recovery for survivors while strengthening prevention and education efforts,” U.S. Attorney Johnson said.
“During Sexual Assault Awareness and Prevention Month, and every month, OVW-funded programs across the nation provide essential services to survivors of sexual assault, responding to their needs, helping them heal, and supporting them as they pursue the justice they seek,” said OVW Principal Deputy Director Allison Randall. “The impact of sexual violence is felt by the entire community and can devastate survivors’ lives, which is why it is critical that VAWA 2022 strengthens not just services and justice interventions but also prevention.”
According to the CDC and Prevention 2015 National Intimate Partner and Sexual Violence Survey:
- 43.6% of women and 24.8% of men have experienced contact sexual violence,
- 21.3% of women and 2.6% of men reported being raped or subject to attempted rape in their lifetime,
- 37% of women and 17.9% of men have experienced unwanted sexual contact.
And according to the National Institute of Justice (NIJ) study on Violence Against American Indian and Alaska Native Women and Men, American Indian and Alaska Native (AI/AN) people face disproportionate levels of violence, including sexual assault. Approximately 56.1% of AI/AN women and 27.5% of AI/AN men report experiencing sexual violence in their lifetime, with many of these assaults at the hands of non-Indian perpetrators.
OVW funds resources in every jurisdiction, please see this website which lists OVW FY21 awards by state. In 2021, OVW awarded $7.1 million in grants to 11 organizations/resources in Montana for survivors of sexual assault.
OVW provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges.
If you or someone you know is experiencing or has experienced sexual violence, you are not alone and there are many services available to help, including the Sexual Assault Hotline, 1-800-656-HOPE (4673), and the StrongHearts Native Helpline, 1-844-7NATIVE (762-8483).
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Three California Women Indicted for Conspiracy to Commit Wire Fraud and Related OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on March 23, 2022, Davida Algie Fortenberry, Laje Elise Ford, and Chartanae Ajanee Lovely, all from Oakland, California, were indicted by a federal grand jury on wire fraud and conspiracy to commit wire fraud charges.
According to United States Attorney John C. Gurganus, the indictment alleges that between May 2020 and June 2021, Fortenberry, Ford and Lovely, working with other unnamed co-conspirators, defrauded numerous victims using fraudulently obtained bank account information from US banks and foreign banks. The victims included Giant Food Stores in the Middle District of Pennsylvania. The indictment also alleges that the women possessed more than 15 fraudulently obtained financial access devices. The indicted conspiracy took place in 13 states and Washington DC, and it resulted in losses exceeding $400,000.
The case was investigated by the United States Secret Service, Harrisburg Office. Assistant U.S. Attorney Paul J. Miovas, Jr. is prosecuting the case.
The maximum penalty under federal law for wire fraud and conspiracy to commit wire fraud is 20 years’ imprisonment. These charges may also carry a fine and a term of supervised release following imprisonment. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Tax fraud sends another to prisonRead the Press Release
LAREDO – As the filing deadline for tax season 2021 approaches, a woman has been ordered to federal prison following her conviction of preparing and filing false income tax returns, announced U.S. Attorney Jennifer B. Lowery.
Lisa Gonzalez pleaded guilty Sept. 9, 2021.
Today, U.S. District Judge Diana Saldana sentenced Gonzalez to 12 months and a day in federal prison. Judge Saldana further ordered Gonzalez to pay $301,908 in restitution to the IRS.
At the hearing, the court heard additional evidence detailing that from 2012 to 2015, Gonzalez learned how to conduct her own scheme while working for another tax preparer. That individual was also convicted of the same crime. .
At the time of her plea, Gonzalez admitted she prepared fraudulent tax returns for clients under a business known as BG Tax Service. The false income tax returns resulted in a total loss of $301,908 in tax revenue for the IRS.
In the fraudulent tax returns, Gonzalez made false claims for earned income tax credit, business income losses, child tax credits, farm income, itemized deductions, residential energy credits, general business credits and American Opportunity credits.
Gonzalez was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-Criminal Information conducted the investigation. Assistant U.S. Attorney Adam L. Goldman prosecuted the case.
Statement of United States Attorney Breon Peace on the Verdict in United States v. EscobarRead the Press Release
“I am Breon Peace, the United States Attorney for the Eastern District of New York.
Five years ago today, on April 11, 2017, the defendant Leniz Escobar lured five young men to a park not far from the federal courthouse in Central Islip, Long Island. Those five young men, in the prime of their lives, had no idea that Escobar was leading them to their death—into a killing field where MS-13 gang members lay in wait, armed with machetes, an axe, knives, tree limbs, and a chisel. One of the young men managed to escape and lived to tell his story to a federal jury. His four friends were not so fortunate. Escobar’s cohorts hacked and beat them to death. One of the murder victims was so disfigured he was only identifiable by dental records.
Today, on the five-year anniversary of this tragic mass murder, a federal jury delivered justice to Escobar. Our hearts go out to the families of the victims. We know that the verdict does not erase the pain you wake up with every day and will always carry with you. But, we hope that this day brings some measure of consolation.
My Office, and all our law enforcement partners on the FBI’s Long Island gang task force will not rest until every single MS-13 gang member and associate responsible for this horrendous crime is held accountable. I am so grateful for my amazing team – prosecutors Paul Scotti, Justina Geraci, and Megan Farrell, paralegal Shernita Moore-Glasgow, along with the FBI special agents and the Suffolk County detectives who did such great work on this important case.
Finally, I want to thank the jury. They came from all over our District to the courthouse for three weeks during a pandemic. They were committed to serve, to do justice and that is exactly what they did.”
Click here for a video of the statement.
Six men indicted for illegal firearms possession, drugsRead the Press Release
SAVANNAH, GA: Six defendants are among those facing federal charges including drug trafficking and illegal possession of firearms after separate indictments by a grand jury in the Southern District of Georgia, while recent actions in U.S. District Court include guilty pleas and criminal sentences related to illegal gun possession.
The indicted cases are being investigated part of Project Safe Neighborhoods in collaboration with federal, state and local law enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the FBI and the U.S. Drug Enforcement Administration, to reduce violent crime with measures that include targeting convicted felons who illegally carry guns.
“It is a priority of our office to collaborate with our law enforcement partners to target those whose illegal possession of firearms threatens the safety of our communities,” said David H. Estes, U.S. Attorney for the Southern District of Georgia. “We won’t tolerate violent criminal activity in the Southern District.”
In the past four years, more than 750 defendants have been federally charged in the Southern District of Georgia for illegal firearms offenses – most often for possessing a firearm after conviction for a previous felony.
Defendants named in federal indictments from the April 2022 term of the U.S. District Court grand jury include:
- Juan Eloy Quintanilla, 29, of Willacoochee, Ga., charged with Distribution of Hydrocodone and Methamphetamine; Possession with Intent to Distribute Five or More Grams of Methamphetamine; Possession of a Firearm in Furtherance of a Drug Trafficking Crime; and Possession of a Firearm by a Convicted Felon;
- Rashejon B. Curry, 28, of Savannah, charged with Possession of a Firearm by a Convicted Felon; Possession with Intent to Distribute Cocaine and Marijuana; and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
- Nequan O’Neal Roberson, 22, of Augusta, charged with Possession of a Firearm by a Convicted Felon;
- Charles Barnes, 50, of Savannah, charged with Possession of a Firearm by a Convicted Felon;
- Kareem M. Harris, 38, of Savannah, charged with Possession of a Firearm by a Convicted Felon; and,
- James Hoffman, 37, of Savannah, charged with Possession of a Firearm by a Convicted Felon.
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
Additional defendants recently have been adjudicated on federal charges that include illegal firearms possession:
- Charles Aimee Fields Jr., a/k/a “Slim,” 33, of Savannah, was sentenced to 72 months in prison followed by three years of supervised release after pleading guilty to Distribution of Crack Cocaine, and Possession of a Firearm by a Convicted Felon. Fields is among 14 defendants indicted in September 2021 for their roles in operating an open-air drug market in an area of Savannah called “The Dips.”
- Demont Latrell Gresham, 33, of Washington, Ga., was sentenced 34 months in prison followed by three years of supervised release after pleading guilty to Possession of a Firearm by a Convicted Felon. Gresham ran from Wilkes County Sheriff’s Deputies and Georgia State Patrol troopers in July 2020 when they attempted to arrest him on an outstanding warrant, and officers found a rifle in his vehicle. He was arrested in August 2020 when located by Wilkes County deputies.
- Ashley Lanier Powell, 39, of Pulaski, Ga., was sentenced to 18 months in prison followed by three years of supervised release and fined $1,500 after being found guilty at trial Nov. 8, 2021, for Possession of a Firearm by a User of Illegal Drugs, and Possession of a Firearm by a Prohibited Person. Powell, who was on probation for a conviction of domestic violence, was arrested in May 2019 in Twin City, Ga., after a police officer saw two firearms in Powell’s vehicle.
- Charles Kevin Matthews, 50, of Carlton, Ga., was sentenced to 30 months in prison followed by three years of supervised release and fined $1,500 after pleading guilty to Possession of a Firearm by a Convicted Felon. Matthews was on parole for a prior state conviction when investigators found a pistol in his possession during a search of his girlfriend’s residence.
- James Ricardo Harris, 29, of Augusta, was sentenced to 26 months in prison followed by three years of supervised release and fined $1,500 after pleading guilty to Possession of a Firearm by a Convicted Felon. Harris was arrested in May 2019 when Columbia County Sheriff’s deputies found him in possession of a pistol during a traffic stop.
- Keyon Quinton Adams, 28, of Augusta, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. U.S. Marshals serving warrants for Adams’ arrest on Florida charges found him in possession of a pistol when they took him into custody in October 2021 in Martinez.
- Phillip Allen Loughry, 41, of Baxley, Ga., awaits sentencing after pleading guilty to Possession of a Stolen Firearm. Appling County Sheriff’s deputies charged Loughry after he ran from a December 2020 traffic stop and dropped a pistol as deputies pursued and captured him.
- Ricardo DeAngelo Norman, 33, of Augusta, awaits sentencing after pleading guilty to Possession of a Firearm by an Unlawful Drug User. Norman was charged in the October 2021 indictment in Operation Washout, an investigation into a cocaine-trafficking ring in the greater Burke County area.
- Fredrick Connell Blount, 38, of Augusta, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Blount was arrested after a traffic stop in August 2020 when Richmond County Sheriff’s deputies found a pistol in the vehicle Blount was driving.
- De’Montre Murray, 22, of Columbia, S.C., awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. A four-time convicted felon, Murray was charged after a June 21 chase by Glynn County Sheriff’s deputies and the Georgia State Patrol on Interstate 95 for 57 miles at speeds up to 100 mph. A pistol was discovered in the stolen vehicle Murray was driving.
- Jamie Lee Cogan, 37, of Thomson, Ga., awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Columbia County Sheriff’s deputies arrested Cogan in April 2021 after finding him in possession of a pistol. Cogan was being sought at the time by Pickens County, Ga., authorities on a warrant for violating probation.
- Antoine Ladson, 33, of Brunswick, awaits sentencing after pleading guilty to Possession with Intent to Distribute Fentanyl and Possession of a Firearm by a Convicted Felon. Brunswick Police officers arrested Ladson in January 2021 after finding him in possession of large amounts of drugs, cash and a pistol while loitering near a liquor store.
- Treyon Antonio Williams, 30, of Savannah, awaits sentencing after pleading guilty to Possession of a Stolen Firearm. Savannah Police officers investigating reports of gunshots in February 2021 arrested Williams on an outstanding felony warrant after finding a pistol in his pocket.
Agencies investigating these cases include the ATF, the FBI, the DEA, the Savannah Police Department, the Richmond County Sheriff’s Office, the Columbia County Sheriff’s Office, and the McDuffie County Sheriff’s Office.
The cases are being prosecuted for the United States by Southern District U.S. Attorney’s Office Assistant U.S. Attorneys, including Jeremiah L. Johnson, Steven H. Lee, Marcela C. Mateo, Patricia G. Rhodes, and Henry W. Syms Jr., with firearms forfeitures coordinated through the Southern District of Georgia U.S. Attorney’s Office Asset Recovery Unit.
Under federal law, it is illegal for an individual to possess a firearm if he or she falls into one of nine prohibited categories including being a felon; illegal alien; or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime. It is also illegal to purchase – or even to attempt to purchase – firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, also is a federal offense.
For more information on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atf-form-4473.
Six Southern California Companies Ordered to Pay $1.83 Billion in Restitution for Scheming to Avoid Payment of Aluminum DutiesRead the Press Release
LOS ANGELES – Six Southern California companies today were ordered to pay $1.83 billion in restitution for participating in a conspiracy to defraud the United States through a scheme in which huge amounts of aluminum – disguised as “pallets” to avoid $1.8 billion in customs duties – were exported to the United States and were “sold” to fraudulently inflate a China-based company’s revenues and deceive investors worldwide.
United States District Judge R. Gary Klausner sentenced two aluminum businesses and four warehousing companies – all of which were related to one another – to five years of probation, which is the maximum penalty permitted by law, and ordered them to pay $1.83 billion in restitution. The defendants are:
- Perfectus Aluminium Inc., an Ontario-based business;
- Perfectus Aluminium Acquisitions LLC, a subsidiary of Perfectus Aluminium formed in 2014 to oversee several companies that received aluminum pallets shipped to the United States after duties were imposed on Chinese aluminum in 2011;
- Scuderia Development LLC, which owns a warehouse in Riverside;
- 1001 Doubleday LLC, which owns a warehouse in Ontario;
- Von Karman – Main Street LLC, which owns a warehouse in Irvine; and
- 10681 Production Avenue LLC, which owns a warehouse in Fontana.
At the conclusion of a nine-day trial in August 2021, a federal jury found all six corporate entities guilty of one count of conspiracy, nine counts of wire fraud and seven counts of passing false and fraudulent papers through a customhouse. The Perfectus Aluminium defendants also were found guilty of seven counts of international promotional money laundering.
“The Perfectus and Warehouse defendants were integral participants in this conspiracy,” prosecutors wrote in a sentencing memorandum. “Indeed, they existed only to perpetrate it.”
The corporate defendants sentenced today – along with indicted defendants China Zhongwang Holdings Ltd., Asia’s largest manufacturer of aluminum extrusions; Zhongtian Liu, the company’s former president and chairman; and several other individuals – lied to U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping and countervailing duties (AD/CVD) that were imposed in 2011 on certain types of extruded aluminum imported into the United States from China.
The aluminum sold to United States-based companies controlled by Liu was simply aluminum extrusions that were spot-welded together to make them appear to be functional pallets. In fact, there were no customers for the 2.2 million pallets imported by the Liu-controlled companies between 2011 and 2014, and no pallets were ever sold.
The vast majority of the pallets were imported through the ports of Los Angeles and Long Beach and then stockpiled at four large warehouses in Southern California, all of which were purchased at Liu’s direction.
Liu and his co-defendants orchestrated the bogus sales of aluminum to Liu-controlled companies in Southern California to falsely inflate China Zhongwang’s value. Liu was the majority owner of China Zhongwang, which has been listed on the Stock Exchange of Hong Kong since a 2009 initial public offering that raised $1.26 billion.
After the AD/CVD duties were put in place in 2011, China Zhongwang’s annual reports falsely claimed that there was a robust demand for the aluminum pallets in the United States. Although the annual reports asserted that the aluminum pallets were being sold to independent third parties – and the defendants used these reported “sales” to inflate China Zhongwang’s reported sales volume and purported volume of exports to the United States – in fact the aluminum was being stockpiled by Liu-controlled entities in more than 2 million square feet of warehouse space owned by the warehouse defendants in Southern California, as well as at Liu’s New Jersey facility.
Since there was no actual demand for the pallets, Liu and China Zhongwang arranged for aluminum melting facilities to be built and acquired, which were to be used to reconfigure the aluminum imported as pallets into a form with commercial value.
The defendants facilitated their schemes by laundering hundreds of millions of dollars through shell companies to the U.S.-based aluminum companies controlled by Liu. The funds were then transferred to China Zhongwang and the other shell companies as payments for the aluminum.
On March 24, Judge Klausner ordered the forfeiture to the United States the seized aluminum, currently estimated to be worth approximately $70 million.
The remaining four defendants charged in a 2019 federal grand jury indictment in this case have yet to appear in court in the United States to face the criminal charges in this matter:
- Zhongtian Liu, 58, a billionaire Chinese citizen who is a former Tustin resident, and who is the former president and former chairman of the board of China Zhongwang Holdings Ltd.;
- China Zhongwang Holdings Ltd., a publicly traded aluminum company based in Liaoyang City that at the time of the indictment was the largest aluminum extrusion manufacturer in Asia and the second largest in the world, and which has accrued approximately $3.6 million in contempt sanctions for its failure to appear in this case;
- Zhaohua Chen, 62, a Chinese national who allegedly was a close friend of Liu and a key player in the scheme; and
- Xiang Chun Shao, a.k.a. “Johnson Shao,”60, most recently of Irvine, who allegedly managed a collection of Southern California businesses that pretended to be independent third parties importing the Chinese aluminum, including the Perfectus defendants.
In 2017, the United States Attorney’s Office filed civil forfeiture actions against the four Southern California warehouses used by Perfectus to store the pallets. In 2018, the government filed a fifth civil forfeiture complaint against “approximately 279,808 Aluminum Structures in the Shape of Pallets,” about half of which were seized in early 2017 at the Ports of Los Angeles and Long Beach, and the other half were seized from three other warehouses Perfectus was using to store the pallets.
Those civil asset forfeiture cases have been stayed pending the completion of the criminal prosecution.
Homeland Security Investigations and IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Roger A. Hsieh and Gregory D. Bernstein of the Major Frauds Section prosecuted this case. Assistant United States Attorney Jonathan S. Galatzan, Chief of the Asset Forfeiture Section, is handling the asset forfeiture-related portion of this case.
San Antonio Man Convicted of Firearm ViolationsRead the Press Release
SAN ANTONIO – Today U.S. District Court Judge Fred Biery found Chance Anthony Uptmore, 25, of San Antonio, guilty of one count of being an unlawful user of a controlled substance in possession of a firearm in violation of Title 18, United States Code, Section 922(g)(3).
According to court documents and evidence presented at trial, on January 18, 2021, law enforcement officers executed a search warrant at Uptmore’s residence for his involvement in the January 6th Capitol Riots in Washington D.C. During a search of the Defendant’s residence, he was found to be in possession of a loaded Taurus .38 Special Revolver along with more than 13 pounds in gross weight of marijuana; approximately 1.8 pounds in gross weight of Tetrahydrocannabinol (THC) edible products; approximately 1.2 pounds in gross weight of THC waxes, dabs and oils; and approximately one-third of a pound in gross weight of Psilocin mushrooms.
According to testimony from law enforcement officers at trial along with Uptmore’s own video recorded statements, Uptmore described himself as a “weedaholic” who smoked marijuana, by his own estimation, multiple times per day. Uptmore admitted to officers that at the time of his arrest in January 2021, there had not “been a day where [Uptmore] had not gotten high all day in at least six months, maybe even a year.” At the conclusion of trial, the Court concluded that Uptmore was both an unlawful user of and addicted to controlled substances at the time he possessed the loaded revolver.
Uptmore is scheduled for sentencing on July 26, 2022 and faces up to 10 years in prison.
U.S. Attorney Ashley C. Hoff of the Western District of Texas and FBI Acting Special Agent in Charge Jason Hudson made the announcement.
The FBI’s San Antonio Joint Terrorist Task Force (JTTF) is investigating the case, with the assistance of U.S. Immigration and Customs Enforcement – Enforcement and Removal Operations (ICE-ERO) and San Antonio Police Department.
Assistant U.S. Attorneys Matthew W. Kinskey and Mark T. Roomberg are prosecuting the case.
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Pennsylvania Man Sentenced to 32 Years for Kidnapping and Sexual AssaultRead the Press Release
ASHLAND, Ky. — A Parkersburg, Penn., man, Nathan Thomas Welch, 53, was sentenced on Monday, to 384 months in federal prison, by U.S. District Judge David Bunning, after previously being convicted of kidnapping and sexual assault.
According to testimony at his trial, on July 10, 2020 (and the early hours of July 11, 2020), Welch and Charles Glorioso, 53, of Portsmouth, Ohio, kidnapped a woman at knifepoint. The victim was driving the two men, in her vehicle, from Portsmouth, into Greenup County, Kentucky. There, the victim testified, both men physically and sexually assaulted her, until she was allowed to leave, when she traveled back across the river on foot. The incident was reported to police and she was transported to the hospital, for treatment of multiple injuries sustained during the assault. Later, where the assault took place in Greenup County, officers located the victim’s abandoned vehicle, her belt, shoe, and sandal, as well as the knife used during the kidnapping, all in or near the vehicle.
Welch was convicted by a federal jury in December 2021. Glorioso was convicted by a federal jury, in March 2022, and is scheduled to be sentenced in June 2022.
Under federal law, Welch must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for five years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Jodi Cohen, Special Agent in Charge, Federal Bureau of Investigation (FBI), Louisville Field Office; Col. Phillip Burnett, Jr., Commissioner of the Kentucky State Police; and Chief Debby Brewer, Portsmouth Police Department, jointly announced the sentence.
The investigation was conducted by FBI, KSP, the Portsmouth Police Department, and the Ohio Bureau of Investigation. The United States was represented in the case by Assistant U.S. Attorney Francisco Villalobos.
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Pennsylvania Man Sentenced to 10 Years in Federal Prison for Attempted Enticement of a MinorRead the Press Release
United States Attorney Dennis R. Holmes announced that a Claysville, Pennsylvania, man convicted of Attempted Enticement of a Minor Using the Internet was sentenced on April 1, 2022, by U.S. District Judge Jeffrey L. Viken.
Kevin William Clements, age 24, was sentenced to 10 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Clements will also be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Clements was arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2020 Sturgis Motorcycle Rally, targeting internet predators. Clements initiated sexual chats with what he believed to be a 13-year-old prostitute, but who was in fact an undercover agent. Clements then negotiated a time and place he would meet the minor to engage in unlawful sex acts. When Clements went to the pre-determined location to meet the minor’s pimp, he was met by law enforcement. Clements attempted to flee by driving his motorcycle away and fought with agents until he was tased and placed under arrest.
This case was investigated by Homeland Security Investigations, South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Clements was immediately turned over to the custody of the U.S. Marshals Service.
Parma Heights Man Convicted of Distributing Fentanyl that Led to Fatal OverdoseRead the Press Release
Acting U.S. Attorney Michelle M. Baeppler announced that a federal jury returned guilty verdicts on Thursday, April 7, 2022, against Defendant Marcus L. Sanders, 24, of Parma Heights, Ohio, following a four-day trial before Judge Benita Y. Pearson in Youngstown. Sanders was found guilty of distributing fentanyl that led to the death of an individual and possession with intent to distribute fentanyl, heroin, N-Butyl Pentylone, cocaine and marijuana.
According to court documents and evidence presented at trial, on May 3, 2020, Middleburg Heights Police responded to a call for a suspected overdose at a residence. First responders arrived and transported the individual to a hospital, where they were later pronounced deceased. The Cuyahoga County Medical Examiner’s Office conducted an autopsy and determined the victim’s cause of death to be acute intoxication by fentanyl and diphenhydramine.
Law enforcement officials began an investigation into the overdose incident and identified Sanders as the person who had distributed the fentanyl that led to the fatal overdose. Sanders was later arrested, and his residence and vehicle were searched. During the search, officials obtained quantities of fentanyl, N-Butyl Pentylone, heroin, cocaine and marijuana.
Sanders is scheduled to be sentenced on August 4, 2022, and faces a maximum possible sentence of life in prison.
This case was investigated by the Middleburgh Heights Police Department and the DEA, with assistance from the Cuyahoga County Medical Examiner’s Office, the Cuyahoga County Regional Forensic Science Laboratory, and the FBI Cellular Analysis Survey Team. This case was prosecuted by Assistant U.S. Attorneys James P. Lewis and Patrick P. Burke.
Orleans Parish Man Pleads Guilty to Violating the Federal Controlled Substances and Gun Control ActsRead the Press Release
NEW ORLEANS, LOUISIANA – KENDALL GILMER, JR., age 41, a resident of New Orleans, Louisiana, pled guilty on April 6, 2022, before U.S. District Judge Lance M. Africk to possession with intent to distribute fifty grams or more of methamphetamine in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), and being a felon in possession of firearms in violation of Title 18, United States Code, Section 922(g)(1), announced U.S. Attorney Duane A. Evans.
According to court documents, on October 18, 2021, after conducting surveillance on GILMER, Drug Enforcement Administration agents and New Orleans Police Department officers conducted a traffic stop on GILMER, who was driving on North Claiborne Avenue in New Orleans. A search of GILMER’s vehicle revealed 80.3 grams of methamphetamine, 10.69 grams of a mixture and substance containing heroin and fentanyl, and two semi-automatic handguns.
For possession with intent to distribute methamphetamine, GILMER faces a statutory mandatory minimum sentence of five years, up to forty years imprisonment, a fine of up to $5,000,000, and at least four years of supervised release following any term of imprisonment. For being a felon in possession of firearms, GILMER faces up to ten years imprisonment, a fine of up to $250,000, and up to three years supervised release. For both counts, GILMER faces payment of a $100 mandatory special assessment fee.
This case was investigated by the Drug Enforcement Administration and New Orleans Police Department. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers.
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Oklahoma City Man Pays Nearly $123,000 to Settle Claims That He Wrongfully Obtained Social Security Benefits to Which He Was Not EntitledRead the Press Release
OKLAHOMA CITY – David Lehman ("Lehman"), paid $122,949 to settle civil False Claims Act allegations that he obtained and used Social Security benefits to which he was not entitled, announced United States Attorney Robert J. Troester.
The United States alleges that from April 2013, through March 2019, Social Security benefits were deposited into the bank account of a deceased Social Security beneficiary. The Social Security benefits would not have been paid had the United States been notified of the beneficiary’s death. Lehman had access to the beneficiary’s bank account and withdrew the Social Security benefits for his own use. To resolve these allegations, Lehman agreed to pay $122,949 to the United States.
In reaching this settlement, Lehman did not admit liability, and the government did not make any concessions about the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Social Security Administration, Office of Inspector General-Office of Investigations. Assistant U.S. Attorney Ronald R. Gallegos prosecuted the case.
Ocala Man Who Threatened Sheriff Sentenced to PrisonRead the Press Release
Ocala, Florida – Senior U.S. District Judge John Antoon II has sentenced Lonnie Lorenzo Hollingsworth, Jr. (37, Ocala) to three years in federal prison for possessing ammunition as a convicted felon. Hollingsworth had been found guilty following a bench trial on October 15, 2021.
According to court documents, Hollingsworth had previously threatened the Marion County Sheriff, and his deputies, in connection with an event on March 10, 2013, wherein Hollingsworth was shot by an individual Hollingsworth was attempting to rob. The incident resulted in Hollingsworth being arrested and convicted for attempted strong arm robbery. Despite his guilty plea in that case, Hollingsworth blamed the Sheriff’s Office for his prosecution, claiming that he was a victim.
On December 18, 2020, Hollingsworth walked into the Marion County Jail visitation center and handed over a package containing a “manifesto” detailing his desire to retaliate against the Sheriff. Four days later, he taped an identical copy of the manifesto to the doors of the Marion County Courthouse.
Three months later, on April 5, 2021, Hollingsworth called 911 from an Ocala gas station and threatened the Sheriff with violence. Ocala Police officers responded to the scene and were successful in deescalating the situation with Hollingsworth. A round of ammunition was found in Hollingsworth’s possession, which he is prohibited from possessing under federal law due to his five prior felony convictions.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Ocala Police Department. It was prosecuted by Assistant United States Attorney Michael P. Felicetta.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Nigerian Man Extradited to the United States from the United Kingdom to Face Multiple Fraud and Money Laundering Charges in Bismarck, NDRead the Press Release
BISMARCK: Interim United States Attorney Nicholas W. Chase announced, that on April 11, 2022, Kolawole Bamidele Akande, a/k/a Patric Elis Ferguson, a/k/a David Louis Wallace, a/ka/ Ramos Joseph Hogan made an initial appearance in the United States District Court for the District of North Dakota on charges of 1) Conspiracy to Commit Bank Fraud; 2) Conspiracy to Commit Wire Fraud; 3) Conspiracy to Commit Mail Fraud; 4) Conspiracy to Commit Money Laundering; 5) Mail Fraud; and 6) Money Laundering.
Akande appeared at this hearing in Bismarck, ND, after being extradited from the United Kingdom. The court ordered Akande be detained pending trial.
As alleged in the Indictment, the defendant participated in a complicated computer intrusion scheme targeting a Dickinson, ND company which was allegedly defrauded out of approximately $348,000.00. The defendant, and other codefendants, fraudulently obtained checks from the Dickinson company through the mail and deposited these checks in fraudulently obtained accounts in financial institutions located within the State of Texas. Once the funds from these checks were available for withdrawal and transfer, the defendant, and other codefendants, withdrew and transferred the funds to conceal and disguise their nature, location, source, and ownership.
The United States District Court for the District of North Dakota previously sentenced:
• Co-Defendant Olawale Sule a/k/a Brand King Mohammed, a/k/a John Thomas, on February 17, 2021, to serve two years’ imprisonment and payment of restitution on a charge of Conspiracy to Commit Bank Fraud.
• Co-Defendant Oluwafemi Elijah Olasode, on September 7, 2021, to time served imprisonment and payment of restitution on a charge of Misprision of Felony.
An Indictment is an accusation and notice of charges. The defendant is presumed innocent under the law.
Link for Prior Press Release Unsealing Indictment is located below:
https://www.justice.gov/usao-nd/pr/federal-grand-jury-indicts-nigerian-nationals-multiple-fraud-schemes-against-dickinson-nd
This case is being investigated by the Federal Bureau of Investigation; United States Postal Inspection Service; Homeland Security Investigations, and the United States Attorney’s Office in the Northern District and Eastern District of Texas, and is being prosecuted by Assistant United States Attorney Jonathan J. O’Konek
The Justice Department’s Office of International Affairs provided valuable assistance in securing Kolawole Bamidele Akande’s arrest and extradition.
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New Jersey man sentenced for role in drug trafficking ringRead the Press Release
MARTINSBURG, WEST VIRGINIA – Braheem Sallie, of Camden, New Jersey, was sentenced today to 60 months of incarceration for his role in a drug conspiracy that spanned several states, United States Attorney William Ihlenfeld announced.
After a three-day trial in October 2021, Sallie was found guilty of one count of “Conspiracy to Possess with Intent to Distribute and to Distribute 100 Grams or More of Heroin and 40 Grams or More of Fentanyl,” one count of “Unlawful Use of Communication Facility,” and one count of “Aiding and Abetting Travel Act – Distribution of Proceeds.” Sallie worked with others to distribute 100 grams or more of heroin and 40 grams or more of fentanyl from June 2019 to November 2019 in Berkeley and Jefferson Counties and elsewhere.
Co-conspirators in West Virginia would wire money for drug payments to Sallie and another in Camden, New Jersey. This trafficking ring involved multiple trips by West Virginia co-conspirators to Camden, New Jersey to obtain large amounts of heroin and fentanyl that were distributed and intended to be redistributed in West Virginia. This case involved nearly 100 grams of fentanyl and more than 137 grams of heroin.
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.
Assistant U.S. Attorney Lara Omps-Botteicher and Special Assistant U.S. Attorney C. Lydia Lehman, also with the Berkeley County Prosecuting Attorney’s Office, prosecuted the cases on behalf of the government. The FBI; Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms & Explosives; and the Eastern Panhandle Drug Task Force, a HIDTA-funded initiative, investigated. The Berkeley County Prosecuting Attorney’s Office assisted.
U.S. District Judge Gina M. Groh presided.
Find the related press release here: https://www.justice.gov/usao-ndwv/pr/25-charged-six-state-drug-conspiracy-involving-heroin-fentanyl-cocaine
New Haven Man Sentenced to Federal Prison for Narcotics Distribution OffenseRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, announced that DARRYL RUSSELL, 33, of New Haven, was sentenced today by U.S. District Judge Kari A. Dooley in Bridgeport to 27 months of imprisonment, followed by three years of supervised release, for distributing heroin, cocaine and crack.
According to court documents and statements made in court, on March 13, 2021, New Haven Police encountered James Lee as he was sitting in a car at a gas station. The car had fled from police on March 8. A search of Lee’s person revealed $3,815 and a search of the car revealed $3,443. Officers then found a hidden compartment in the vehicle’s center counsel that contained heroin, crack and cocaine packaged for distribution, and a loaded 9mm handgun.
On the morning of April 5, 2021, a New Haven Police detective traveling in an unmarked police cruiser in the area of Orange Street and Wall Street identified another car that had fled from West Haven Police during an attempted traffic stop on April 1. The detective followed the car to a location of Brown Street, where he observed occupants of the vehicle engage in what appeared to be street-level drug transactions, and then to a location on Elm Street. On Elm Street, Lee, who had been released on bond, and Russell exited the car and entered a building. Lee was arrested after he exited the building. Russell ignored commands not to leave the scene but was apprehended a short distance away after he was found hiding in a trash can. A search of their car revealed heroin, crack and cocaine packaged for distribution, and more than $2,000 in cash.
Russell has been detained since May 21, 2021. On that date, he possessed additional narcotics packaged for distribution and more than $1,000 in cash. On September 14, 2021, he pleaded guilty to possession with intent to distribute, heroin, cocaine and cocaine base (“crack”).
Lee pleaded guilty to the same charge and, on February 14, 2022, he was sentenced to 46 months of imprisonment.
This matter was investigated by the New Haven Police Department and the Federal Bureau of Investigation. The was prosecuted by Assistant U.S. Attorney Nathaniel J. Gentile.
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.
Morgantown woman sentenced for tax fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Diann Carol Clark, of Morgantown, West Virginia, was sentenced today to five years of probation, with the first six months on home confinement, for a payroll tax fraud charge, United States Attorney William Ihlenfeld announced.
Clark, 59, pleaded guilty in November 2021 to one count of “Willful Failure to Collect or Pay Over Employment Tax.” Clark was employed by Alpha Associates, Inc. in Morgantown. Clark was an office manager and bookkeeper at Alpha Associates, where she managed payroll between 2014 and 2018. Clark was responsible for collecting and paying over to the IRS Social Security, Medicare, and income taxes withheld from the wages of Alpha Associates employees. Despite knowing the firm withheld these payroll taxes from its employees’ paychecks, Clark did not pay over approximately $1,900,000, in such taxes to the IRS.
Assistant U.S. Attorney Danae DeMasi-Lemon and Trial Attorney Kevin Schneider of the Justice Department’s Tax Division prosecuted the case on behalf of the government. The IRS investigated.
Chief U.S. District Judge Thomas S. Kleeh presided.
Middletown Man Sentenced to over 8 Years of Federal Prison for Selling Methamphetamine and Fentanyl and Illegally Possessing AmmunitionRead the Press Release
WILMINGTON, Del. – A Middletown man was sentenced on April 6, 2022 to 97 months in prison for possessing methamphetamine and fentanyl with intent to distribute, as well as possession of ammunition by a person prohibited.
Leon Ransom, 31, was arrested by the Drug Enforcement Administration (“DEA”) after multiple sales of methamphetamine and a separate sale of fentanyl to a DEA confidential source. Following a search of the home in which Ransom was living, the DEA found almost four additional ounces of crystal methamphetamine, over two ounces of fentanyl, three ounces of cocaine, two scales, cutting agents, and a box of ammunition. The methamphetamine sold and possessed by Ransom was chemically tested by the DEA and found to be 100% pure.
David C. Weiss, U.S. Attorney for the District of Delaware made the announcement after sentencing by U.S. District Judge Maryellen Noreika. U.S. Attorney Weiss commented, “Methamphetamine and fentanyl are two of the deadliest drugs plaguing our streets today. Peddling these poisons endangers the safety of our community. My office will continue to seek significant prison sentences for those who profit from illegal drug sales.”
“As U.S. Attorney Weiss said, illicit fentanyl and methamphetamine are two street drugs that have had a disproportionately destructive effect on our communities,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “That Ransom was selling distribution quantities of both and had gun ammunition shows how dangerous his criminal conduct was.”
Assistant U.S. Attorney Alexander Ibrahim prosecuted the case, which was investigated by the DEA.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 1:21-cr-69-MN.
Mattoon Sex Offender Sentenced to over 38 Years in Prison for Child Enticement and Sex Trafficking CrimesRead the Press Release
URBANA, Ill. – A Mattoon, Illinois, man, Christopher Ohm, 35, of the 2500 block of Moultrie Ave., was sentenced today to 458 months’ (38 years and two months) imprisonment for enticement of a minor, sex trafficking of a minor, and receipt and possession of child pornography.
According to court documents, law enforcement identified Ohm after he met with a 13-year-old minor through a popular dating application, Grindr. Ohm arranged to meet the minor for sexual activity at an abandoned railroad track in Janesville, Illinois, and offered the minor money if the minor agreed. The minor escaped from Ohm’s vehicle, and Ohm was arrested shortly afterwards when he tried to meet the minor again at a cemetery. When law enforcement reviewed the contents of Ohm’s phone, they learned that Ohm tried to meet another minor, a 15-year-old, in a park in Bloomington, Illinois, in July 2020, also using Grindr. In addition, law enforcement found a tablet that Ohm discarded at the cemetery where he was arrested that contained thousands of images and videos of child pornography.
Ohm was previously convicted of transportation of child pornography and in September 2012, was sentenced to serve almost 10 years in prison. Ohm was released from the Bureau of Prisons in September 2019, and was serving a term of supervised release when he was arrested by Cumberland County officials in September 2020 in relation to the instant offense.
A federal grand jury charged Ohm with one count of enticement of a minor, one count of sex trafficking of a minor, and one count of commission of a sex offense as a registered sex offender in November 2020, and Ohm was transferred to the custody of the U.S. Marshals service, where he has remained. In January 2021, the federal grand jury added counts involving the second minor and the child pornography materials located on Ohm’s tablet. The grand jury returned a superseding indictment charging Ohm with one count of enticement of a minor, one count of receipt of child pornography, and one count of possession of child pornography. Ohm pleaded guilty in October 2021 to the seven-count superseding indictment.
Senior U.S. District Judge Michael Mihm emphasized his concern that the public be protected from from Ohm, calling him “a dangerous person.” Judge Mihm sentenced Ohm to 36 years and eight months’ imprisonment, for the 2020 offenses, and a consecutive 18 months’ imprisonment for violating the terms of his supervised release. Following his release from the Bureau of Prisons, Ohm will serve the remainder of his natural life term on supervised release.
“HSI will continue to do everything it can to protect the most vulnerable members of our community,” said HSI Chicago Special Agent in Charge Angie Salazar. “Ohm’s reprehensible actions underscore the importance of talking with our children about the dangers they could encounter online.”
“Offenders who repeatedly victimize children have shown by their actions that are unwilling or unable to conform to the bounds of the law, and today’s sentence reflects the need to remove dangerous child sex offenders from the community,” said Assistant U.S. Attorney Elly M. Peirson. “We appreciate the swift attention that our law partners gave to the investigation of this recidivist offender.
U.S Immigration and Customs Enforcement Homeland Security Investigations and the Cumberland County Sherriff’s Office conducted the investigation. Assistant U.S. Attorney Elly Peirson represented the government in this prosecution.
The case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Manteno Man Sentenced to over Seven Years in Prison for Child Pornography CrimesRead the Press Release
URBANA, Ill. – A Manteno, Illinois, man, Mark C. Devries, 43, of the 200 block of Raven Dr., was sentenced today to 87 months’ (seven years, three months) imprisonment for distribution and possession of child pornography.
Devries was arrested in September 2021 after a federal grand jury returned an indictment charging him with child pornography crimes committed in May through August 2018. Devries has remained in the custody of the U.S. Marshals Service since his arrest.
Senior U.S. District Judge Michael Mihm sentenced Devries to the 87 months’ imprisonment and also imposed a 10-year term of supervised release of supervised release. Devries pleaded guilty in November 2021 to the three-count indictment.
This case was investigated by the Federal Bureau of Investigation’s Field Offices in Springfield, Illinois, and Salt Lake City, Utah. Assistant U.S. Attorney Elly Peirson represented the government in this prosecution.
The case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Man Pleads Not Guilty to Involuntary Manslaughter and AssaultRead the Press Release
United States Attorney Dennis R. Holmes announced that a South Dakota man has been indicted by a federal grand jury for two counts of Involuntary Manslaughter and one count of Assault Resulting in Serious Bodily Injury.
Moses Runs Against, age 38, was indicted on February 17, 2022. He appeared before U.S. Magistrate Judge Daneta Wollmann on April 8, 2022, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction for each Involuntary Manslaughter charge is eight years in federal prison and/or a $250,000 fine, three years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. As to the charge of Assault Resulting in Serious Bodily Injury, the maximum penalty is 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Runs Against killing two females by operating a motor vehicle while under the intoxicating influence of alcohol on January 22, 2022, near Manderson, South Dakota. Two other females were also seriously injured in the accident.
The charges are merely accusations and Runs Against is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Oglala Sioux Tribe Department of Public Safety and the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Runs Against was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for June 14, 2022.
Macon County Man Sentenced to over Eight Years in Prison for Child Pornography CrimesRead the Press Release
URBANA, Ill. – A Decatur, Illinois, man, Justin Rotramel, 38, of the 400 block of Timber Dr., was sentenced today to 102 months’ (eight years and six months) imprisonment for possession of child pornography.
Rotramel was arrested in November 2020 after a federal grand jury returned an indictment charging him with possession of child pornography in April 2020. Rotramel was initially remanded to the custody of U.S. Marshal’s Service, but upon reconsideration was released on bond in March 2021 in light of certain extenuating circumstances. Rotramel’s bond was revoked in June 2021, and he was again remanded to the custody of the U.S. Marshal’s Service, where he has remained.
Senior U.S. District Judge Michael Mihm sentenced Rotramel to the 102 months imprisonment, to be followed by 10 years of supervised release. In addition, Rotramel was ordered to pay $12,000 in restitution to a victim of the child pornography images he possessed. Rotramel pleaded guilty in November 2021 to the single-count indictment.
This case was investigated by the Macon County Sheriff’s Office, with the cooperation of the Macon County State’s Attorney. Assistant U.S. Attorney Elly Peirson represented the government in this prosecution.
The case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
MS-13 Gang Associate Convicted of Racketeering and the Murders of Four Young Men in a Central Islip Park in 2017Read the Press Release
A federal jury in Central Islip returned a guilty verdict today against Leniz Escobar, an associate of the Leeward Locos Salvatruchas (“Leeward”) and Brentwood Locos Salvatruchas (“Brentwood”) cliques of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization. Escobar was convicted of racketeering, including predicate acts of murder, conspiracy to murder rival gang members, and obstruction of justice; and murder in aid-of racketeering, in connection with her participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos. The verdict followed a four-week trial before United States Circuit Judge Joseph F. Bianco. When sentenced, Escobar faces up to life in prison.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Rodney K. Harrison, Commissioner, Suffolk County Police Department (SCPD), announced the verdict.
“With today’s verdict, Escobar has been held responsible for the crucial role that she willingly played in orchestrating one of the most vicious and senseless mass murders in the district in memory,” stated United States Attorney Peace. “The defendant showed utter disregard for human life by leading the victims into a killing field, to their slaughter, to enhance her stature with her fellow cold-blooded murderers within the MS-13 gang. It is my hope that Escobar’s conviction will bring some measure of closure to the relatives of the victims and serve as a warning to other gang members that this Office, together with our law enforcement partners, will not rest until everyone responsible for these murders is held accountable and the MS-13 no longer poses a danger to our district.”
Mr. Peace expressed his thanks to the members of the FBI’s Long Island Gang Task Force for their outstanding work on the case.
“As proven at trial, Ms. Escobar played a crucial role in a heinous and senseless crime, the 2017 slayings of four young men believed by MS-13 to be members of a rival gang. Subsequent to the murders she continued to demonstrate her callous disregard for human life when she boasted about her role in the killings to enhance her stature within the gang. While nothing can bring the victims back, it is our hope that today’s verdict can bring their families a measure of comfort, knowing justice has been served,” stated FBI Assistant Director-in-Charge Driscoll.
“Today’s verdict sends a clear message that those who associate with a gang will be held accountable for their involvement with gang activity,” stated SCPD Commissioner Harrison. “Escobar showed a complete disregard for human life and put her allegiance to the gang ahead of the rule of law. I applaud all those involved from the Suffolk County Police Department, the FBI and our partners in law enforcement for their hard work and dedication to justice.”
The evidence at trial proved that on the evening of April 11, 2017, Escobar, also known as “Diablita,” and a co-conspirator, Keyli Gomez, lured five young men, including the four murder victims, to a park in Central Islip where they were attacked by members of the MS-13. The MS-13 members believed the victims to be members of a rival gang, at least two of whom had disrespected the MS-13 by posting photos on social media in which they wore certain items and flashed hand signs that signified membership in the MS-13 gang. Escobar and Gomez showed the gang-related photos to members of the MS-13, who confirmed the young men did not belong to MS-13, and it was decided that the victims would be killed. Gomez testified at the trial that she and Escobar drove with the victims to the park, led them to a predetermined wooded area, and sent the MS-13 members text-messages notifying them of their arrival. The MS-13 members and associates proceeded to the designated location and encircled the victims under the cover of darkness. One of the intended victims immediately fled and was able to escape. Llivicura, Lopez, Tigre and Villalobos were surrounded by MS-13 members, who attacked them with machetes, knives, an axe, and wooden clubs. After the attack, the MS-13 members dragged the victims’ bodies to a more secluded spot in the woods, piled them up, and then fled. The victims’ bodies were discovered the following evening.
In the days following the murders, Escobar bragged to other MS-13 members about her role in the killings and, in recorded calls with her boyfriend, who was a high-ranking member of the Brentwood clique, discussed the attack in detail. Using barely coded language, and referring to the victims who were killed, she said, “four individuals took the train and who knows when they’ll be back, got me?” Escobar then shared how that plan went awry when one person escaped, adding “But one of them, one of them managed to still be here on the map” and “he knows stuff about me.” In a separate call, Escobar told her boyfriend that she was “happy for this to happen.” Of the four victims, she said they were “never coming back . . . somewhere else . . . seeing the light . . . no more . . . out of here . . . not on the map.”
Additionally, Escobar destroyed evidence of her involvement in the murders by disposing of a sweatshirt stained with the blood of a victim, tossing her cellular phone from a moving vehicle when she was being followed by the police, and falsely telling detectives that she and Gomez were victims of a random robbery in the park on the night of the murders. Gomez pleaded guilty to racketeering charges in connection with the murders and is awaiting sentencing.
More than a dozen MS-13 members and associates have been charged in connection with the April 11, 2017 murders.
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:
LENIZ ESCOBAR
Age: 22
Islip Terrace, New YorkE.D.N.Y. Docket No. 21-CR-101 (JFB)
Lowery appointed U.S. AttorneyRead the Press Release
HOUSTON – Jennifer B. Lowery has taken the oath of office to remain as chief federal law enforcement officer for the Southern District of Texas (SDTX).
“I am extremely grateful to the district judges for allowing me to continue to serve the SDTX and our community,” said Lowery. “It is an honor and a privilege to be the U.S. Attorney (USA). I take pride in our office and the work it does in support of our law enforcement partners, our mutual mission to protect our citizens and hold accountable those who commit federal crimes. Likewise, I am blessed to work alongside the dedicated employees in this district who are devoted to public service and to our office’s core values of professionalism, ethics and civility.”
Lowery was first appointed Acting USA Feb. 22, 2021, upon the resignation of former USA Ryan K. Patrick. Attorney General Merrick Garland then appointed Lowery to be the interim USA Dec. 26 and was to serve in that role for 120 days. The district judges in the U.S. District court for the SDTX then voted to appoint Lowery as U.S. Attorney until the appointment and qualification of a successor to the SDTX as provided by law.
Chief U.S. District Judge Lee H. Rosenthal administered the oath of office April 7.
Lowery joined the SDTX in 2008, but has been with the Department of Justice since 2000. She first served as a Special Assistant U.S. Attorney and then an Assistant U.S. Attorney (AUSA) in the Eastern District of Texas. During this time, she was detailed to Washington D.C. and New York, New York, as a hearing officer for the 9/11 Victims’ Compensation Fund. She later worked in Washington D.C. in the Office of the Deputy Attorney General and Executive Office for US Attorneys, in both their Counsel to Director’s Office and General Counsel’s Office.
While with the SDTX, Lowery has served as AUSA in the Major Offenders, Fraud and Organized Crime Drug Enforcement Task Force Sections. She has also held the titles of First Assistant USA, Executive AUSA, criminal chief, deputy criminal chief of the Program Fraud Section, acting deputy criminal chief of the Major Fraud Section, senior litigation counsel and ethics advisor.
Prior to her federal service, Lowery was an Assistant Criminal District Attorney in the Jefferson County District Attorney’s Office for eight years where she prosecuted hundreds of cases, including four capital murders. She served as a grand jury attorney, drug intake lawyer, drug diversion lawyer, misdemeanor chief and attorney and felony attorney.
Lowery holds a B.A. from Texas State University (formerly Southwest Texas State University) and a J.D. from South Texas College of Law in Houston.
Lowery was honored to have her mother, niece, mentor, members of the judiciary and bar and various employees of the SDTX in attendance as she took the oath of office.
Pursuant to Vacancy Reform Act, the second in the chain of command, generally the First USA, automatically begins serving as Acting USA upon exit of a presidentially-appointed USA and serves for up to 300 days. If a new USA is not in place by that time, the Attorney General has the authority to name an interim USA to serve for up to 120 days. At that time, if no one has been presidentially-appointed to that position, the district judges vote to name someone as USA until the appointment and qualification of a successor as provided by law.
The SDTX is among the busiest in the nation. With more than 200 attorneys, the office serves more than nine million people in 43 counties from Houston to the Mexican border and prosecutes more federal criminal cases than most other districts. The SDTX currently comprises seven divisions with federal district courts in Houston, Galveston, Victoria, Corpus Christi, Brownsville, McAllen and Laredo.
Long Haul Truck Driver Sentenced for Transporting Children to Engage in Sexual ActivityRead the Press Release
EL PASO – Today an El Paso man was sentenced to life in prison for sexual exploitation of a minor.
According to court documents, Travis Wayne Vavra, 60, was a long-haul truck driver who advertised free amusement park passes and cross-country trips for boys to explore the United States. As a result of the advertisement, Vavra transported a minor in his tractor trailer from the El Paso, Texas area to different states, including New Mexico, Missouri, Arizona, California, Wisconsin, Illinois, Nebraska, Maryland, Oklahoma, and Louisiana from May 2015 to June 2019. Vavra sexually assaulted the minor during these cross-country trips that began when the victim was nine years old. Vavra had also previously molested two other victims. On the date of his arrest, Vavra posted another flyer for parents and boys advertising these free cross-country trips. Vavra was found to be in possession of child sexual abuse material on his phone at the time of his arrest.
On June 29, 2021, a federal jury found Vavra guilty of one count of transportation of minors with intent to engage in criminal sexual activity and one count of possession of a visual depiction involving the sexual exploitation of a minor. Vavra has remained in federal custody since his arrest on December 6, 2019.
“Our office is committed to vigorously prosecuting cases against individuals who prey upon the most vulnerable among us – children,” said U.S. Attorney Ashley C. Hoff. “We, along with our law enforcement partners, strive to protect our communities from these sexual predators and bring justice to victims of these heinous crimes so that they can begin the healing process.”
“From suspicious flyers posted in store windows to reports of sexual abuse, the investigation involving Vavra showed how concerned citizens came together to stop a predator from destroying the innocence of additional young boys and assist in providing closure to the victims of his previous sexual assaults,” said Jeffrey R. Downey, FBI El Paso Special Agent in Charge. “We cannot protect our community alone. The FBI is thankful to those citizens who came forward to voice their suspicions. The FBI along with our partners assigned to the El Paso Crimes Against Children and Human Trafficking task force remain committed to the most vulnerable members of El Paso, the children.”
The FBI investigated the case.
Assistant U.S. Attorneys Sarah Valenzuela and Richard Watts prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and 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.justice.gov/psc.
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Lawton Man Sentenced to 120 Months in Federal Prison for a Lawton Bank Robbery Involving a Fake BombRead the Press Release
OKLAHOMA CITY – Last Friday, a federal judge sentenced JOHN SCOTT BROOKS, 39, of Lawton, to serve 120 months in federal prison for a Lawton bank robbery involving a fake bomb, announced United States Attorney Robert J. Troester.
On June 3, 2020, a federal grand jury returned a two count Indictment against Brooks. Count 1 charged Brooks with bank robbery and Count 2 charged him with making a bomb threat. According to evidence presented at trial in April 2021, Brooks pulled up to the drive-through teller lane at the Southwest Oklahoma Federal Credit Union, located at 6714 West Gore Boulevard, Lawton, Oklahoma, on March 23, 2020, and he placed a fake bomb and demand note in the teller drawer. He immediately held up a device displaying timer, which was counting down. After the teller provided Brooks with bank proceeds, he took the fake bomb and drove away.
Evidence at trial further showed that Brooks attempted to get away with the robbery by creating a cover story, which included altering the appearance of his vehicle, erasing electronic information from his cell phone, and driving to another bank and then to Wichita Falls, Texas, so he could tell law enforcement he was somewhere else at the time of the robbery. Evidence at trial included testimony from the bank teller, bank surveillance footage of the robbery, a bank robbery list found at Brooks’ residence, and a vehicle image comparison analysis performed by an FBI forensic examiner, which showed Brooks changed the appearance of his vehicle immediately after the robbery. Additionally, multiple witnesses testified that they recognized Brooks in the still photo of the surveillance footage taken from the robbery.
The trial lasted two days, and the jury deliberated approximately two hours before finding Brooks guilty of one count of bank robbery.
At the sentencing, U.S. District Court Judge Scott Palk sentenced Brooks to serve 120 months in federal prison. In support of his sentence, Judge Palk cited, among other things, the serious nature of the offense, Brooks’ criminal history, and the impact the robbery had on the teller. Judge Palk also ordered Brooks to serve five years of supervised release when released from federal prison. Brooks has been detained in federal custody since April 3, 2020.
This case was the result of an investigation by the Federal Bureau Investigation’s Oklahoma City Field Office and the Lawton Police Department. Assistant U.S. Attorneys Wilson D. McGarry and Stan West prosecuted the case.
Reference is made to public filings for more information.
Laredo man sentenced for attempting to smuggle assault rifles into MexicoRead the Press Release
LAREDO, Texas – A 29-year-old local man has been sent to prison following his conviction of being a felon in possession of a firearm, announced U.S. Attorney Jennifer B. Lowery.
Manual Dominquez, Laredo, pleaded guilty Aug. 12, 2021.
Today, U.S. District Judge Diana Saldana ordered he serve 87 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the Judge noted Dominguez’s violent criminal history, the cache of weapons and ammunition in his home and the fact he was attempting to smuggle high-powered rifles into Mexico.
Dominquez was taken into custody following an undercover operation in May 2021. Someone in Mexico had sent him to pick up two Barrett .50 caliber rifles at a Home Depot parking lot. Upon arrival, Dominguez inspected the firearms and provided three stacks of $9,900, wrapped in rubber bands.
Dominguez loaded the first firearm into the back seat of his car, at which time he was taken into custody. Authorities conducted a search at his residence where they found more firearms and over 6,000 rounds of ammunition.
The rifles were intended to go to members of the Cartel De Norte, a violent drug cartel in Mexico.
Dominguez was previously convicted in Webb County of aggravated assault with a deadly weapon. As such, he is prohibited from possessing firearms or ammunition per federal law.
He was permitted to remain on bond and voluntarily report to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; Homeland Security Investigations and the Laredo Police Department conducted the investigation. Assistant U.S. Attorneys Anthony J. Evans and Brandon Bowling prosecuted the case.
Kennewick WA man Sentenced to over 11 Years in Federal PrisonRead the Press Release
Yakama, Washington – Chief U.S. District Judge Stanley Bastian has sentenced Jesus B. Zavala-Alvarez, 28, of Kennewick, Washington, to 135 months in federal prison for his role in guarding a stash house, where the Drug Enforcement Administration (D.E.A.) seized over 8 pounds of methamphetamine, 64 ounces of liquid methamphetamine and 19,000 deadly fentanyl-laced pills, along with a loaded firearm. Zavala-Alvarez was also sentenced to serve five years on federal supervision if he is allowed to remain in the United States. Zavala-Alvarez’s drug trafficking organization operated primarily out of the Tri-Cities area, which includes Kennewick, Pasco, and Richland, Washington.
According to information disclosed during court proceedings, DEA Tri-Cities and the Tri-City METRO Drug Task Force identified a transnational drug trafficking organization operating in and around the Tri-Cities. DEA agents identified Zavala-Alvarez during an investigation into two of his codefendants – Daniel Hernandez and Jessie Mendoza. During the investigation, Zavala-Alvarez delivered two pounds of methamphetamine as part of a controlled buy. This led agents to Zavala-Alvarez’s residence in Kennewick, Washington. Upon the execution of a federal search warrant at Zavala-Alvarez’s residence in April 2020, agents seized a large stash of narcotics, which included over 19,000 fentanyl-laced pills. Hernandez and Mendoza were later arrested and found to be in possession of more than 20,000 fentanyl-laced pills, approximately 5 pounds of methamphetamine, and several ounces of heroin. Hernandez and Mendoza were also in possession of multiple firearms.
At the sentencing proceedings in the case, Chief Judge Bastian noted Zavala-Alvarez’s substantial role in the organization, including that he was entrusted to safe keep a large cache of drugs, while armed with a loaded firearm. Chief Judge Bastian also acknowledged that this was Zavala-Alvarez’s first felony offense, but because of the seriousness of the case, imposed a sentence of 135 months in federal custody.
U.S. Attorney Vanessa R. Waldref commended the law enforcement team who investigated the case, leading to the prosecution of Zavala-Alvarez and his co-defendants. She stated, “Fentanyl is a poison being pumped into our communities at an unprecedented rate with devastating effects. Even trace amounts in a fentanyl-laced pill can kill a person. I am grateful to for the state, federal, and local law enforcement officers who work together on a daily basis to identify the large-scale suppliers of this dangerous drug. Through these joint efforts to curb the distribution of fentanyl, we are building safer and stronger communities in Eastern Washington.”
“The Zavala-Alvarez’s drug trafficking organization was flooding our city streets with their methamphetamine and poisonous fentanyl-laced counterfeit pills, marketed as legitimate prescription pills to unsuspecting victims of the Tri-Cities community,” said Frank A. Tarentino III, Special Agent-in-Charge DEA Seattle Field Division. “Our neighborhoods are under siege from the criminal drug networks who use guns and violence to push these fake pills to the most vulnerable people in our communities. The drug and gun evidence seized in this investigation are examples of the link between violence and drug trafficking, which is responsible for causing the most harm in the United States. With the assistance of our law enforcement partners and the community, we will continue to drive down the overdoses and violence that are negatively impacting the people of Tri-Cities and their quality of life.”
This case was prosecuted under the Organized Crime Drug Enforcement Task Force (OCDETF) program. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes.
This case was investigated by the DEA Tri-Cities Office, Border Patrol, the Tri-City METRO Drug Task Force, Kennewick Police Department, Richland Police Department, and Pasco Police Department. This case was prosecuted by Stephanie Van Marter, Assistant United States Attorney for the Eastern District of Washington.
Kennewick Drug Trafficker and Sureno Gang Member Sentenced to 10 Years in Federal PrisonRead the Press Release
Yakima, Washington – Chief U.S. District Judge Stanley Bastian has sentenced David Reyes, 30, of Kennewick, Washington, to 120 months in federal prison for possession with intent to distribute methamphetamine, fentanyl, and heroin. As part of the sentence, Chief Judge Bastian also imposed a period of five-years’ federal supervised release. Reyes’s drug trafficking activities occurred primarily in the Tri-Cities area (Kennewick, Pasco, and Richland, Washington).
According to information disclosed during court proceedings, Reyes was arrested on drug trafficking charges in March 2021. At that time, the Washington Department of Corrections (“DOC”) was supervising Reyes for multiple convictions in Washington state court. During a March 11, 2021 search of Reyes’s home, DOC officers seized approximately 350 grams of methamphetamine, a number of fentanyl-laced pills, and 280 grams of heroin inside a sweatshirt, which was in Reyes’s bedroom. DOC also recovered a digital scale and several thousands of dollars in U.S. Currency. Reyes is a known member of the Sureno Gang. He goes by the moniker, “Lil’ Monster.”
“The seamless partnership of the Federal Bureau of Investigation, the Pasco Police Department, and Washington Department of Corrections lead directly to the apprehension of this Sureno Gang Member, who was distributing deadly narcotics while on state supervision,” U.S. Attorney Waldref stated. “These types of federal, state, and local partnerships, coupled with community engagement, are necessary to rid our communities of this dangerous poison, thereby making our communities safer and stronger.” U.S. Attorney Waldref continued, “Today’s sentence will remove Mr. Reyes from our community for 10 years, sending a powerful signal that our office continues to vigorously prosecute those who distribute deadly narcotics in Eastern Washington.”
“The fact that Mr. Reyes previously served time in prison was no deterrent to reoffending.” said Special Agent in Charge Donald M. Voiret of the FBI’s Seattle Field Office. “This sentence will keep him from distributing drugs into our communities for the next decade. I want to thank our investigators and partners on the Southeast Washington Safe Streets Task Force for their work on this case.”
This case was prosecuted under the Organized Crime Drug Enforcement Task Force (OCDETF) program. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes. This OCDETF investigation is being conducted by the Federal Bureau of Investigation’s
Safe Streets Task Force in Tri-Cities Washington, Pasco Police Department, and Washington Department of Corrections.
This case was prosecuted by Caitlin A. Baunsgard, Assistant United States Attorney for the Eastern District of Washington.
Justice Department Secures Agreement with CVS Pharmacy Inc., to Make Online COVID-19 Vaccine Registration Accessible for People with DisabilitiesRead the Press Release
The Justice Department and the U.S. Attorney’s Office for the District of Rhode Island today announced a settlement agreement with CVS Pharmacy Inc., under the Americans with Disabilities Act (ADA) that will eliminate barriers preventing people with certain disabilities from getting information about COVID-19 vaccinations and booking vaccination appointments online. CVS is the country’s largest retail pharmacy, with nearly 10,000 locations. Today’s resolution is the department’s fifth agreement on the critical issue of COVID-19 vaccination website accessibility, following settlement announcements with Rite Aid Corporation, Hy-Vee Inc., The Kroger Co. and Meijer Inc.
The department found that CVS’s COVID-19 vaccine registration portal, currently located at https://www.cvs.com/immunizations/covid-19-vaccine, was not accessible to people with certain disabilities, including those who use screen reader software or have trouble using a mouse. For instance, the types of vaccine appointments offered (which included influenza, pneumonia, and others, in addition to the COVID-19 vaccine) were not read audibly to screen reader users at the beginning of the scheduling process. Further, on the page where users pick a time for their appointment, screen reader users were told that all available times were “checked,” even though the user had not made any selection. Additionally, people who use the “Tab” key instead of a mouse to navigate websites were not able to navigate past a request for insurance information in the registration process.
“Now more than ever, we must ensure web accessibility for people with disabilities seeking access to critical needs and services,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We are working aggressively to identify and remove barriers that prevent people with disabilities from privately and independently securing potentially life-saving COVID-19 vaccines. We will continue to work towards the ADA’s promise of equal access during the ongoing global pandemic.”
“While web accessibility is always important, when it comes to critical health services like COVID-19 vaccination, making sure that everyone — regardless of disability — can access information and care is essential,” said U.S. Attorney Zachary A. Cunha for the District of Rhode Island. “This office is committed to vigorously enforcing the ADA to eliminate unnecessary barriers that stand in the way of lifesaving care.”
Under today’s settlement, CVS will conform web content about the COVID-19 vaccine, including the forms for scheduling an appointment to get the vaccine, to the Web Content Accessibility Guidelines (WCAG), Version 2.1, Level AA. WCAG is a set of voluntary industry guidelines for making information on a website accessible to users with disabilities. CVS also must regularly test the pages of its website that include vaccine scheduling and information about the COVID-19 vaccine, and quickly fix any problems that keep people with disabilities from being able to use these pages.
This matter was handled jointly by the Disability Rights Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of Rhode Island. Title III of the ADA requires public accommodations like drugstores to provide individuals with disabilities with full and equal enjoyment of goods and services, such as vaccines. The ADA also requires public accommodations to ensure effective communication with people with disabilities, including by using auxiliary aids and services like accessible technology.
For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. ADA complaints may be filed online at www.ada.gov/complaint. Anyone in the District of Rhode Island may also report civil rights violations directly to the U.S. Attorney’s Office for the District of Rhode Island at https://www.justice.gov/usao-ri-civil-rights-enforcement or (401) 709-5000.
Justice Department Announces New Rule to Modernize Firearm DefinitionsRead the Press Release
Today, the Department of Justice announced that it has submitted to the Federal Register the “Frame or Receiver” Final Rule, which modernizes the definition of a firearm. Once implemented, this rule will clarify that parts kits that are readily convertible to firearms are subject to the same regulations as traditional firearms. These regulatory updates will help curb the proliferation of “ghost guns,” which are often assembled from kits, do not contain serial numbers, and are sold without background checks, making them difficult to trace and easy to acquire by criminals.
“One year ago, the Department committed to address the proliferation of ghost guns used in violent crimes,” said Attorney General Merrick B. Garland. “This rule will make it harder for criminals and other prohibited persons to obtain untraceable guns, will help ensure that law enforcement officers can retrieve the information they need to solve crimes, and will help reduce the number of untraceable firearms flooding our communities. I commend all our colleagues at the ATF who have worked tirelessly over the past 12 months to get this important rule finalized, and to do it in a way that respects the rights of law-abiding Americans.”
The rule goes into effect 120 days from the date of publication in the Federal Register, and once implemented, will address the proliferation of these un-serialized firearms in several ways. These include:
- To help keep guns from being sold to convicted felons and other prohibited purchasers, the rule makes clear that retailers must run background checks before selling kits that contain the parts necessary for someone to readily make a gun.
- To help law enforcement trace guns used in a crime, the rule modernizes the definition of frame or receiver, clarifying what must be marked with a serial number – including in easy-to-build firearm kits.
- To help reduce the number of unmarked and hard-to-trace “ghost guns,” the rule establishes requirements for federally licensed firearms dealers and gunsmiths to have a serial number added to 3D printed guns or other un-serialized firearms they take into inventory.
- To better support tracing efforts, the rule requires federal firearms licensees, including gun retailers, to retain records for the length of time they are licensed, thereby expanding records retention beyond the prior requirement of 20 years. Over the past decade, ATF has been unable to trace thousands of firearms – many reportedly used in homicides or other violent crimes – because the records had already been destroyed. These records will continue to belong to, and be maintained by, federal firearms licensees while they are in business.
As the final rule explains, from January 2016 to December 2021, ATF received approximately 45,240 reports of suspected privately made firearms recovered by law enforcement, including in 692 homicide or attempted homicide investigations. The chart below demonstrates the total annual numbers of suspected PMFs recovered by law enforcement over the past six years:
Today’s announcement marks one year since the Attorney General directed the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to issue a proposed rule within 30 days that would address the proliferation of unmarked firearms increasingly being used in crimes. On May 7, 2021, the Department of Justice issued a notice of proposed rulemaking, and during the 90-day open comment period, the ATF received more than 290,000 comments, the highest number of comments submitted to a proposed rule in ATF’s history. Today’s announcement is also the latest in a series of steps the department has taken to address violent crime and gun violence.
The final rule, as submitted to the Federal Register, can be viewed here: https://www.atf.gov/rules-and-regulations/definition-frame-or-receiver
To learn more about the rulemaking process, please see: https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf
For more information, see the attached fact sheet.
Justice Department Announces New Rule to Modernize Firearm DefinitionsRead the Press Release
WASHINGTON – Today, the Department of Justice announced that it has submitted to the Federal Register the “Frame or Receiver” Final Rule, which modernizes the definition of a firearm. Once implemented, this rule will clarify that parts kits that are readily convertible to firearms are subject to the same regulations as traditional firearms. These regulatory updates will help curb the proliferation of “ghost guns,” which are often assembled from kits, do not contain serial numbers, and are sold without background checks, making them difficult to trace and easy to acquire by criminals.
“One year ago, the Department committed to address the proliferation of ghost guns used in violent crimes,” said Attorney General Merrick B. Garland. “This rule will make it harder for criminals and other prohibited persons to obtain untraceable guns, will help ensure that law enforcement officers can retrieve the information they need to solve crimes, and will help reduce the number of untraceable firearms flooding our communities. I commend all our colleagues at the ATF who have worked tirelessly over the past 12 months to get this important rule finalized, and to do it in a way that respects the rights of law-abiding Americans.”
The rule goes into effect 120 days from the date of publication in the Federal Register, and once implemented, will address the proliferation of these un-serialized firearms in several ways. These include:
1. To help keep guns from being sold to convicted felons and other prohibited purchasers, the rule makes clear that retailers must run background checks before selling kits that contain the parts necessary for someone to readily make a gun.
2. To help law enforcement trace guns used in a crime, the rule modernizes the definition of frame or receiver, clarifying what must be marked with a serial number – including in easy-to-build firearm kits.
3. To help reduce the number of unmarked and hard-to-trace “ghost guns,” the rule establishes requirements for federally licensed firearms dealers and gunsmiths to have a serial number added to 3D printed guns or other un-serialized firearms they take into inventory.
4. To better support tracing efforts, the rule requires federal firearms licensees, including gun retailers, to retain records for the length of time they are licensed, thereby expanding records retention beyond the prior requirement of 20 years. Over the past decade, ATF has been unable to trace thousands of firearms – many reportedly used in homicides or other violent crimes – because the records had already been destroyed. These records will continue to belong to, and be maintained by, federal firearms licensees while they are in business.
As the final rule explains, from January 2016 to December 2021, ATF received approximately 45,240 reports of suspected privately made firearms recovered by law enforcement, including in 692 homicide or attempted homicide investigations. The chart below demonstrates the total annual numbers of suspected PMFs recovered by law enforcement over the past six years: Today’s announcement marks one year since the Attorney General directed the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to issue a proposed rule within 30 days that would address the proliferation of unmarked firearms increasingly being used in crimes. On May 7, 2021, the Department of Justice issued a notice of proposed rulemaking, and during the 90-day open comment period, the ATF received more than 290,000 comments, the highest number of comments submitted to a proposed rule in ATF’s history. Today’s announcement is also the latest in a series of steps the department has taken to address violent crime and gun violence.
The final rule, as submitted to the Federal Register, can be viewed here: https://www.atf.gov/rules-and-regulations/definition-frame-or-receiver
To learn more about the rulemaking process, please see: https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf -->Jefferson County woman sentenced for drug chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – Kia Johnson, of Ranson, West Virginia, was sentenced today to six months of incarceration for a drug charge, United States Attorney William Ihlenfeld announced.
Johnson, 25, pleaded guilty in October 2020 to one count of “Aiding and Abetting Unlawful Use of Communication Facility.” Johnson admitted to using a phone to help distribute Phencyclidine (PCP) in September 2019 in Berkeley and Jefferson Counties.
Assistant U.S. Attorney Lara Omps-Botteicher prosecuted the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Gina M. Groh presided.
Jamestown Woman Pleads Guilty to Drug ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that Antasia Babcock, 28, of Jamestown, NY, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of acetyl fentanyl; 50 grams or more of methamphetamine; 400 grams or more of fentanyl; and 500 grams or more of cocaine. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Assistant U.S. Attorneys Joshua A. Violanti and Misha Coulson, who are handling the case, stated that Babcock conspired with others, including co-defendant Jun Martinez, to sell cocaine, methamphetamine, and heroin in the Jamestown area. Martinez arranged to receive the narcotics via mail from a source out of state. In mid-September 2020, Martinez traveled out of state to acquire more narcotics in-person and was pulled over by an Illinois State Police Trooper. During a search of his vehicle, law enforcement officers recovered approximately 6,359 grams of methamphetamine, 3,157 grams of fentanyl, 2,241 grams of cocaine, and marijuana products. While Martinez was detained on Illinois state charges, Babcock continued the narcotics distribution in Jamestown. On October 16, 2020, investigators executed a search warrant the Wescott Street residence that Babcock shared with Martinez and recovered methamphetamine, drug paraphernalia, a plastic packaging sealer machine, a drug ledger, and approximately $62,255 in U.S. currency.
Jun Martinez was previously convicted and is awaiting sentencing.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The plea is the result of an investigation by the Jamestown Metro Drug Task Force, under the direction of Jamestown Police Chief Timothy Jackson, and the Drug Enforcement Administration, under the direction of Acting Special Agent-in-Charge Timothy Foley, New York Field Division.
Sentencing is scheduled for September 21, 2022, before Judge Sinatra.
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Illegal alien sentenced for drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Lucio Javier Escobedo Fernandez, a Mexican national, was sentenced today to 63 months of incarceration for a drug charge, United States Attorney William Ihlenfeld announced.
Fernandez, 28, pleaded guilty in November 2021 to one count of “Conspiracy to Distribute Methamphetamine.” Fernandez admitted to working with others to distribute methamphetamine from March 2018 to August 2020 in Monongalia County and elsewhere.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Mon Metro Drug Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Illegal Possession of Drugs Sends Two Men to Federal PrisonRead the Press Release
SHREVEPORT/LAFAYETTE, La. - United States Attorney Brandon B. Brown announced that two defendants have been sentenced on federal charges in the Western District of Louisiana.
Chief United States District Judge S. Maurice Hicks, Jr. sentenced David Williams, 51, of Shreveport, to 110 months (9 years, 2 months) in prison, followed by 5 years of supervised release, for conspiracy to distribute and possess with intent to distribute methamphetamine. Williams was charged with eight other defendants in a drug trafficking conspiracy. On September 19, 2019, law enforcement agents investigating the case were conducting a wiretap on the phone of one of Williams’ co-defendants. During the call, Williams agreed to meet the co-defendant at a gas station and park in the back. Agents observed Williams arrive and get into the co-defendant’s vehicle for a short time. A trooper with Louisiana State Police conducted a traffic stop of Williams’ vehicle. Inside the vehicle, agents located a hidden compartment under the center console and inside were two plastic baggies containing methamphetamine with a gross weight of 89.7 grams and a small bag of marijuana. Agents intercepted another call on September 24, 2019 wherein Williams informed his co-defendant that he had been caught with the narcotics. Williams pleaded guilty to the charge on March 30, 2021.
This case was investigated by the DEA, ATF, Shreveport Police Department, Caddo Parish Sheriff’s Office, Greenwood Police Department, and Louisiana State Police. The case was prosecuted by Assistant U.S. Attorneys Tennille Gilreath and Allison Duncan.
In Lafayette, Louisiana, United States District Judge David C. Joseph sentenced Keelan Elaire, 25, of Lafayette, to 75 months (6 years, 3 months) in prison, followed by 3 years of supervised release, for illegal possession of controlled substances. Agents with the U.S. Drug Enforcement Administration (DEA) and the Lafayette Narcotics Unit began an investigation into drug trafficking activities in Lafayette. On September 30, 2021, law enforcement officers executed a search warrant at Elaire’s residence and inside the residence found a 9mm pistol and ammunition. In addition, agents found approximately 30 grams of fentanyl packaged in small baggies in a manner consistent with street-level narcotics sales, and a large amount of cash inside vehicles belonging to Elaire and his girlfriend. A second search warrant was executed at another residence where Elaire lived and agents found approximately 650 grams of a mixture or substance containing fentanyl, three m-30 pills believed to contain fentanyl stamped into counterfeit pills, and a money counter. Elaire admitted to agents that the fentanyl and cash belonged to him.
The case was investigated by the DEA and Lafayette Police Department Narcotics Unit and prosecuted by Assistant U.S. Attorneys Robert C. Abendroth and John W. Nickel.
# # #Huntington Man Pleads Guilty to Federal Gun CrimeRead the Press Release
HUNTINGTON, W.Va. – A Huntington man pleaded guilty today to being a felon in possession of a firearm.
According to court documents and statements made in court, on December 30, 2021, officers with the Huntington Police Department observed a vehicle at the 3rd Avenue Speedway. The officers observed the driver and a passenger of the vehicle smoking marijuana.
The passenger, Jonathan Lee Sturkey, 37, was asked to step out of the vehicle. Sturkey admitted to the officers that he had a firearm. Officers retrieved a Smith & Wesson .38-caliber revolver from Sturkey’s left coat pocket. Sturkey was aware that he was prohibited from possessing a firearm because of his 2011 felony drug conviction in U.S. District Court for the Southern District of West Virginia.
Sturkey is scheduled to be sentenced on July 18, 2022, and faces up to 10 years in prison.
United States Attorney Will Thompson made the announcement and commended the Huntington Police Department for conducting the investigation.
United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Stephanie S. Taylor is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:22-cr-21.
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Hocking County couple charged federally with producing child pornographyRead the Press Release
COLUMBUS, Ohio – Two Logan, Ohio, individuals have been transferred to federal custody on charges alleging they created child pornography of at least three minor children, one as young as three-to-four years of age.
Robert Gemienhardt, 36, and Carrie Daniels, 41, each appeared in U.S. District Court on April 8.
According to court documents, the National Center for Missing and Exploited Children (NCMEC) received a tip from Kik messenger regarding Gemienhardt’s alleged online child exploitation activities. The Ohio Internet Crimes Against Children (ICAC) Task Force and the Hocking County Sheriff’s Office then began investigating the allegations.
Subsequent search warrants executed by the Hocking County Sherriff’s Office, in conjunction with the FBI, revealed that Gemienhardt and Daniels were acting together and allegedly produced child pornography through the grooming and sexual abuse of minor victims. It is alleged that Daniels also distributed images of the sexual abuse to Gemienhardt. In addition to the images Gemienhardt received from Daniels, Gemienhardt also possessed more than 1,100 images of child pornography.
Gemienhardt and Daniels were originally arrested on local charges in early March 2022.
Kenneth L. Parker, United States Attorney for the Southern District of Ohio; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; and Hocking County Sheriff Lanny E. North announced the charges. Assistant United States Attorney Emily Czerniejewski is representing the United States in this case.
Criminal complaints merely contain allegations, and defendants are presumed innocent unless proven guilty in a court of law.
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Henry County Woman Sentenced to 13 Years for Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – A Blairstown, Missouri, woman was sentenced in federal court today for her role in a conspiracy to distribute substantial quantities of methamphetamine in the Henry County, Mo., area.
Vita P. Hurt, 67, was sentenced by U.S. District Judge Greg Kays to 13 years and two months in federal prison without parole.
On Aug. 11, 2021, Hurt pleaded guilty to participating in a conspiracy to distribute more than five kilograms of methamphetamine from March 1, 2015, to June 11, 2019. Hurt admitted that she obtained methamphetamine from various sources and distributed it in the Blairstown area. She reported dealing in quantities of more than 500 grams of methamphetamine.
Law enforcement officers searched Hurt’s residence on June 11, 2019, and found two plastic bags that contained 4.77 grams of methamphetamine in her purse. Officers found a jar in Hurt’s bedroom that contained 175.31 grams of a liquid that contained methamphetamine; Hurt said the jar contained acetone that she used to clean methamphetamine.
This case was prosecuted by Assistant U.S. Attorney Byron H. Black. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Missouri State Highway Patrol.
Harrison County man sentenced to 14 years for child pornography chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Randy McKinley, of Bridgeport, West Virginia, was sentenced today to 168 months of incarceration for a child pornography charge, United States Attorney William Ihlenfeld announced.
McKinley, 58, pleaded guilty in November 2021 to one count of “Possession of Child Pornography.” McKinley admitted to having child pornography with children under the age of 12 in October 2020 in Harrison County.
McKinley was also ordered to pay $15,000 in restitution to the victims and victims assistance funds.
Assistant U.S. Attorney Danae DeMasi-Lemon prosecuted the case on behalf of the government. The Bridgeport Police Department, the West Virginia State Police, and the Harrison County Sheriff’s Office investigated
Chief U.S. District Judge Thomas S. Kleeh presided.
Great Falls meth trafficker sentenced to 54 months in prisonRead the Press Release
GREAT FALLS – A Great Falls woman who admitted to working with others to bring approximately seven pounds of methamphetamine from Las Vegas, Nevada, back to Montana for distribution was sentenced today to 54 months in prison, to be followed by four years of supervised release, said U.S. Attorney Leif M. Johnson said.
Ashley Nicole Rico, 34, pleaded guilty in October 2021 to conspiracy to distribute methamphetamine.
Chief U.S. District Judge Brian M. Morris presided.
The government alleged in court documents that Rico pooled money with co-defendants and traveled with them to Las Vegas, Nevada, to buy meth. Rico waited while co-defendants went to the source and purchased the meth and then traveled back to Montana with them. Law enforcement intervened before Rico received her portion of the meth. Law enforcement seized approximately seven pounds of meth. Officers ultimately stopped a vehicle being driven by co-defendant Lillian Lapier and found about 3.6 pounds of meth in the trunk. Law enforcement also executed a search warrant on the Helena residence of co-defendant, Rhonda Lapier, and located three, one-pound bags of meth and $6,132 in a bedroom. Officers stopped another suspect vehicle, driven by Rico, who was arrested on a state warrant. Rico admitted to distributing meth in Great Falls and that she and others had traveled to Las Vegas, picked up meth there and had contributed $1,000 to the deal. Seven pounds of meth is the equivalent of approximately 25,368 doses.
Assistant U.S. Attorney Ethan R. Plaut prosecuted the case, which was investigated by the Russell Country Drug Task Force, the Missouri River Drug Task Force, FBI, Great Falls Police Department, Cascade County Sheriff’s Office and Lewis & Clark County Sheriff’s Office.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Fresno Man Sentenced to over 11 Years in Prison for Receipt and Distribution of Child PornographyRead the Press Release
FRESNO, Calif. — Steven Dale Jones, 43, of Fresno, was sentenced today to 11 and a half years in prison by U.S. District Judge Dale A. Drozd for receipt and distribution of child pornography, U.S. Attorney Phillip A. Talbert announced.
The sentence imposed includes a term of supervised release of 20 years during which Jones’s access to minors, computers, and the internet will be restricted. He will also be required to register as a sex offender. The court has scheduled a hearing for June 27, 2022, to address restitution to victims.
According to court documents, Jones was detected by law enforcement investigators when he was sharing numerous child pornography files on a BitTorrent file-sharing network in December 2016. He admitted to investigating agents that he had used file-sharing programs for several years to obtain child pornography. He admitted in court, when pleading guilty, that between January 2012 and April 2017, he used a BitTorrent program and the TOR network to search for and download thousands of images of child pornography.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney David Gappa and Child Exploitation and Obscenity Section Trial Attorneys Alicia Bove and Nadia Prinz prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet-safety education.
Fourth Defendant Pleads Guilty in Scheme to Employ Homeless Individuals to Cash Bogus Business ChecksRead the Press Release
PROVIDENCE, R.I. – A fourth Georgia man charged in federal court in Rhode Island with participating in a long-running scheme to entice homeless and transient individuals in the Providence area to cash counterfeit business checks in return for cash payments pled guilty today to conspiracy to commit bank fraud, announced United States Attorney Zachary A. Cunha.
Cortavious Benford, 28, of Atlanta, GA, pled guilty today; Austin Weaver, 26, of Decatur, GA, pled guilty on April 6; Jalen Ronald Stanford, 28, of East Point, GA, pled guilty on March 10; and Michael Williams, 27, of East Point, GA, pled guilty on July 7, 2021.
Benford, Weaver, and Stanford are awaiting sentencing; Williams was sentenced by U.S. District Chief Judge John J. McConnell, Jr., on February 16, 2022, to 41 months in federal prison to be followed by 3 years of federal supervised release. A defendant’s sentence is determined by a federal district judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.
According to charging documents, homeless and other individuals enlisted by the four men were provided a bogus business check in their name and driven to financial institutions in Rhode Island, Massachusetts, Connecticut, Maine, and elsewhere. The bogus business checks had been created by members of the conspiracy using stolen banking information of actual businesses. The individuals recruited by the conspirators were instructed on how to enter the bank, cash the check using their own Rhode Island ID card or driver’s license for identification, and then return to the vehicle with the cash. Upon their return, a member of the conspiracy paid them between $100 and $200.
Two members of the conspiracy, Michael Williams and Cortavious Benford, were arrested on February 5, 2021, after they recruited and drove a homeless person to a Providence bank. They threatened to injure him if he failed to provide them with all of the check’s proceeds. Despite the threat, once inside the bank, the man pointed out the vehicle parked outside of the bank as containing individuals who provided him with a counterfeit check. Providence Police located the vehicle a short distance away and arrested Williams and Benford. They were in possession of $12,000 in cash.
A court-authorized search of a Providence residence by Providence Police and the United States Secret Service resulted in the seizure of a computer, which had a program used to design and print checks; a printer; blank check stock; and an envelope containing stolen checks and approximately $5,000 in cash. Several completed fraudulent checks were found on the computer.
Jalen Ronald Stanford was arrested on February 25, 2021; Austin Weaver was arrested on March 3, 2021.
The investigation determined that members of the conspiracy attempted to cash approximately $677,687 worth of counterfeit checks throughout the New England region, causing losses to financial institutions of approximately $480,000.
The cases are being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
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Former Portland Gang Member Sentenced to Federal Prison for Illegal Firearm PossessionRead the Press Release
PORTLAND, Ore.—A former member of Portland’s Hoover Criminal Gang was sentenced to federal prison today for illegally possessing a firearm as a convicted felon.
Javontae Nabien Gibson, 28, of Portland, was sentenced to 36 months in federal prison and three years’ supervised release.
According to court documents, as part of a federal racketeering investigation of the Hoover Criminal Gang, law enforcement obtained photos Gibson, a convicted felon, was posting online as advertisements for the sale of firearms and drugs. In August 2020, investigators executed a search warrant on Gibson’s northeast Portland apartment. They found and seized six handguns, two rifles, more than a dozen magazines, hundreds of rounds of ammunition, and approximately $5,000 in cash.
On August 19, 2020, a federal grand jury in Portland returned an indictment charging Gibson with illegally possessing a firearm as a convicted felon. On November 15, 2021, he pleaded guilty to the single charge.
U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by the Portland Police Bureau, Multnomah County Sheriff’s Office, Gresham Police Department, and FBI. It was prosecuted by the U.S. Attorney’s Office for the District of Oregon.
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.
Former Managing Partner of Manhattan Investment Advisory Firm Sentenced to 12 Years for Defrauding Investors in an over $120 Million Ponzi-Like SchemeRead the Press Release
Damian Williams, United States Attorney for the Southern District of New York, announced that DAVID HU, former managing partner and chief investment officer of the Manhattan-based investment advisory firm International Investment Group (“IIG”), was sentenced today to 12 years in prison for his role in an over $120 million scheme to defraud IIG’s clients and investors. HU pled guilty in January 2021 to investment adviser fraud, securities fraud, and wire fraud offenses. U.S. District Judge Alvin K. Hellerstein announced today’s sentence, which will be formally imposed following the conclusion of forfeiture and restitution proceedings in the case.
U.S. Attorney Damian Williams said: “David Hu shirked his fiduciary responsibilities and defrauded IIG funds and investors for more than a decade. Hu’s lies caused millions of dollars of losses. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans, used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny. Today’s sentence sends the message that brazen fraud does not pay and will be appropriately punished.”
According to the Information and based on statements made and documents filed in federal court in this case:
Background of IIG
HU and co-conspirator MARTIN SILVER founded IIG in 1994. HU was a managing partner and the chief investment officer of IIG. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (“TOF”); (2) the IIG Global Trade Finance Fund, Ltd. (“GTFF”); and (3) the IIG Structured Trade Finance Fund, Ltd. (“STFF”). IIG also advised the Venezuela Recovery Fund (“VRF”), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the “IIG Funds”). In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management.
IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses. IIG’s principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Trade finance loans are used by small and medium-sized companies, typically exporters and importers, to facilitate international trade. IIG’s purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on “soft commodities,” such as coffee, agriculture, fishing, and other food products. IIG’s trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.
Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry.
IIG purported to value the trade finance loans in the IIG Funds on a regular basis. IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds.
The Scheme
From approximately 2007 to 2019, HU conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner.
The scheme HU participated in involved, among other things:
- Mismarking the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”).
- Mismarking multiple loans that were distressed (the “Distressed Loans”). These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments.
- Creating fictitious loans in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOF’s financials, by removing the Defaulted Loans from the TOF portfolio and replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the “Fake Loans”).
- Using a collateralized loan obligation trust (the “CLO Trust”) to create liquidity through investments in fraudulent loans.
- Using the CLO Trust and Panamanian shell entities to cover up losses. Specifically, HU caused the creation of shell entities domiciled in Panama (“Panamanian Shell Entities”) that were controlled by an IIG nominee. Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities. Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU diverted to TOF in order to pay off TOF’s various debts and obligations.
- Generating liquidity by selling fraudulent loans to two new private IIG managed funds: GTFF and STFF. A foreign institutional investor provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF.
- Inducing a retail mutual fund to invest in a fictitious $6 million loan. Specifically, in or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the “Retail Fund”). As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG. In or about February 2017, a borrower (the “Argentine Borrower”) had failed to pay the principal on an approximately $6 million loan (“Loan-1”) in which the Retail Fund had invested and which was nearing its maturity date. In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (“Borrower-1”), and further directed the funds from Borrower-1’s account to pay off the debt owed by the Argentine Borrower to the Retail Fund. To replace the funds from Borrower-1’s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the “New Loan”). HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1’s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund. To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower.
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In addition to the prison sentence, HU, 64, of West Orange, New Jersey, was ordered to serve three years of supervised release. The Court also announced that it would impose restitution to victims and forfeiture of the proceeds of the offenses, with the amounts to be determined at a later date.
SILVER pled guilty to investment adviser fraud, securities fraud, and wire fraud offenses in April 2021 and his sentencing is pending.
Mr. Williams praised the investigative work of the FBI and also thanked the U.S. Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Drew Skinner, Negar Tekeei, and Alex Rossmiller are in charge of the prosecution.