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Newest first across public DOJ and U.S. Attorney press releases.
5 April 2022
Senior Executive of Oil-Services Company Sentenced to Three Years for $886 Million Securities Fraud SchemeRead the Press Release
A North Dakota man, formerly the executive vice president of U.S. operations at a publicly traded Canadian oil-services company, was sentenced yesterday to three years in prison for perpetrating a scheme to fraudulently inflate the company’s reported revenue that resulted in shareholder losses in excess of $886 million.
According to court documents, Joseph A. Kostelecky, 61, of Dickinson, engaged in a scheme to defraud while serving as the highest-ranking U.S. executive of Poseidon Concepts Corporation (Poseidon) from approximately November 2011 to December 2012. Kostelecky previously pleaded guilty on Oct. 13, 2021, admitting that, in his role, he caused Poseidon to falsely report approximately $100 million in revenue from purported long-term contracts with oil and natural gas companies that were Poseidon’s customers.
Kostelecky’s misconduct included fraudulently directing Poseidon’s accounting staff at the U.S. corporate headquarters in Denver, Colorado, as well as its field office in Dickinson, to record revenue from such contracts and then assuring management that the associated revenue was collectable, when he knew that the contracts either did not exist or that the associated revenue was not collectable. After Poseidon reported a partial write-down of uncollectable accounts in its financial statements, resulting in a drop in the company’s stock price, Kostelecky fraudulently caused the issuance of a public filing falsely reporting that he had purchased a substantial number of shares of the company when, in fact, he had made no such purchase. Kostelecky admitted that when the inflated revenue came to light at the end of 2012, Poseidon’s stock price plunged and the company was forced into bankruptcy, causing over $886 million in shareholder losses. Kostelecky further admitted that he perpetrated the scheme to inflate the value of the company’s stock price in order to enrich himself through the continued receipt of compensation and appreciation of his own stock and stock options.
In addition to the prison sentence, Kostelecky was ordered to pay approximately $406.2 million in restitution.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
The U.S. Postal Inspection Service Criminal Investigation Group’s DOJ Mail Fraud Team investigated the case.
Assistant Deputy Chief Anna G. Kaminska and Trial Attorney Jason M. Covert of the Criminal Division’s Fraud Section prosecuted the case. The Securities and Exchange Commission and the U.S. Attorney’s Office for the District of North Dakota provided valuable assistance.
Self-Described Member of “Boogaloo Bois” Sentenced to Prison for Riot ConvictionRead the Press Release
MINNEAPOLIS – A Texas man was sentenced today to 52 months in prison followed by three years of supervised release for rioting during the 2020 civil unrest, announced U.S. Attorney Andrew M. Luger.
According to court documents, Ivan Hunter, 24, admitted to traveling from San Antonio, Texas, to Minneapolis with the intent to participate in a riot. Hunter is a self-described member of the Boogaloo Bois, a loosely connected group of individuals who espouse violent anti-government sentiments. The term “Boogaloo” itself references the group’s belief in an impending second civil war in the United States that includes a violent uprising against the government.
On the night of May 28, 2020, within hours of arriving in Minneapolis, Hunter met up with other Boogaloo Bois members, obtained an AK-47 assault rifle, and blindly fired 13 rounds into the entryway of the Minneapolis Police Department’s Third Precinct building. At the time of the shooting there were other individuals, believed to be looters, still inside the building. Hunter’s actions were captured on surveillance video and law enforcement recovered from the scene discharged rifle casings consistent with an AK-47 style firearm. Hunter’s gunfire caused approximately $85,000 in damage to the building.
According to court documents, upon returning to Texas, Hunter made various statements on social media describing the violence in which he engaged in Minneapolis. On June 3, 2020, officers with the Austin Police Department conducted a traffic stop on a pick-up truck for numerous traffic violations. Hunter was one of three occupants in the vehicle. Hunter, the front seat passenger, had six loaded magazines for an AK-47 style assault rifle affixed to a tactical vest he was wearing. Officers found three semi-automatic rifles on the rear seat of the vehicle, one loaded pistol in plain view next to the driver’s seat, and another loaded pistol in the center console. Several days after the traffic stop, federal agents became aware of Hunter’s online affiliation with Boogaloo Bois member Steven Carrillo, who recently pleaded guilty in the Northern District of California to the murder of a Federal Protective Service Officer he committed May 29, 2020.
This case was the result of an investigation conducted by the FBI’s Joint Terrorism Task Force, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
This case was prosecuted by Assistant U.S. Attorney Andrew R. Winter, and Trial Attorney Daniel Gardner of the National Security Division's Counterterrorism Section.
Scranton Man Sentenced to 42 Months’ Imprisonment for Committing Aggravated Identity Theft While Serving A Term of Federal Supervised ReleaseRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Robert Cagle, age 57, of Scranton, Pennsylvania, was sentenced on April 4, 2022, to 24 months’ imprisonment to be followed by a 1-year term of supervised release, by United States District Court Judge Robert D. Mariani, for Aggravated Identity Theft. Because Cagle engaged in this new criminal conduct while serving a prior term of federal supervised release, Judge Mariani also sentenced Cagle to a consecutive 18 months’ imprisonment for the supervised release violation, resulting in a total, aggregate sentence of 42 months’ imprisonment.
According to United States Attorney John C. Gurganus, on December 4, 2019, Cagle used the personal identification information of a Florida man to open a line of credit in the victim’s name in an attempt to purchase a cellular phone plan. Cagle engaged in this conduct while he was serving a term of federal supervised release that had been imposed in connection with similar identity theft and fraud offenses committed by Cagle in 2014.
This case was investigated by the Federal Bureau of Investigation (FBI) – Philadelphia Division and the Wilkes-Barre Township Police Department. Assistant United States Attorney Jeffery St. John prosecuted the case.
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Roswell escrow manager arraigned on charges of wire fraud and illegal transactionsRead the Press Release
ALBUQUERQUE, N.M. – Christopher Adam Jensen-Tanner, 43, of Roswell, New Mexico, was arraigned in federal court today on a 38-count indictment charging him with 34 counts of wire fraud and four counts of engaging in monetary transactions in property derived from specified unlawful activity. Jensen-Tanner is subject to conditions of release pending trial, which has not been scheduled.
A federal grand jury indicted Jensen-Tanner on March 8. According to the indictment and other court records, Jensen-Tanner allegedly used his position and access as owner and president of Roswell Escrow Services, Inc. (RES) to fraudulently redirect customer funds for his personal benefit.
RES served both as a qualified intermediary and as a servicer for real estate contracts. As a qualified intermediary, RES held proceeds from property sales in trust for clients for a period of up to 180 days, during which time the clients could use the funds to purchase a like-in-kind property and not incur capital gains. As a real estate contract servicer, RES received monthly payments from property buyers, taking a portion of the payment to cover insurance, property taxes, and fees. Ordinarily, such funds would be segregated through numerous bank accounts based on the nature and purpose of the funds, and occasionally further delineated by individual clients.
On or before Jan. 11, 2017, Jensen-Tanner allegedly began commingling funds within the RES corporate accounts by moving funds held in trust to operating accounts and vice-versa, contrary to established best practices of the industry. From around Jan. 11, 2017, to Oct. 23, 2019, Jensen-Tanner allegedly made several personal purchases for himself directly from RES corporate accounts. During that same period, Jensen-Tanner allegedly transferred funds from RES corporate accounts at Wells Fargo bank to a holding account for Wells Fargo certified funds tied to Wells Fargo cashier's checks. Jensen-Tanner then allegedly transferred those certified funds to pay for personal expenses, either directly or via his personal checking account.
The extent of the fraud was in excess of $2 million.
An indictment is only an allegation. A defendant is considered innocent unless and until proven guilty. If convicted, Jensen-Tanner faces up to 20 years in prison for each count of wire fraud and up to 10 years in prison for each count of engaging in monetary transactions in property derived from specified unlawful activity.
The FBI and IRS Criminal Investigation are investigating this case with assistance from the Securities and Financial Institutions Divisions of the New Mexico Regulation and Licensing Department. Assistant United States Attorneys Ry Ellison and Richard Williams are prosecuting the case.
The FBI is seeking other potential fraud victims in this case. Anyone who was a customer of RES and believes they were the victim of fraud is asked to contact the FBI at 1-800-CALL-FBI or go online to tips.fbi.gov.
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Restraining Order Entered Against Florida Operators of Technical-Support Fraud Scheme Targeting SeniorsRead the Press Release
The U.S. District Court for the Southern District of Florida has ordered Florida company, Windows Service Center LLC, and its owner and operator, Erica Herson, 41, of Miami, to stop operating a technical-support fraud scheme that is alleged to have defrauded elderly and vulnerable U.S. victims out of over $1 million.
In a complaint filed on March 30, the United States alleges that Herson operated a scheme through Windows Service Center, as well as through her prior company USEL Support LLC, in which she contacted individuals over the phone and convinced them to purchase overpriced and unnecessary technical support services and anti-virus software by falsely claiming that their computers were infected with viruses or malware or were accessed by hackers. The complaint alleges that, in reality, Herson had no specific knowledge of the security of the victims’ computers prior to making the calls.
The complaint also alleges that Herson charged victims thousands of dollars for the installation of software that is available online for free or for a low cost. In addition, the complaint alleges that once a victim had made a purchase from USEL Support, Herson and USEL Support contacted that same victim repeatedly to try to obtain further payments by falsely claiming that the victim’s computer had additional security problems. The complaint alleges that Herson is continuing the same technical support fraud scheme through her new company, Windows Service Center.
“Technical support fraud schemes often prey on America’s seniors, exploiting their fear of online threats to steal their hard-earned savings,” said Principal Deputy Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to using all tools available to protect seniors from telemarketing fraud, whether those fraudulent phone calls are coming from call centers abroad, or from right here in the United States.”
“The U.S. Attorney’s Office and our law enforcement partners will hold accountable anyone engaging in schemes to defraud our seniors,” said U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “We urge the public to avoid giving computer access to unsolicited callers claiming a computer needs repair, to use caution before clicking on links in emails or on social media and to report suspected fraud to the appropriate authorities.”
“Schemes of this nature target our elderly citizens under the guise of helping them,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigation Division. “The FBI works hand-in-hand with our law enforcement partners to dismantle crimes and scams like these, and we will bring to justice those fraudsters who commit them. Protecting our nation’s senior and vulnerable citizens is of the utmost importance to the FBI.”
The temporary restraining order entered March 31 prohibits Herson and Windows Service Center from engaging in telemarketing activity related to computer or software technical support and from accepting consumer payments related to any computer or software technical support service.
This case is being handled by Trial Attorneys Amy Kaplan and Ann Entwistle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney James A. Weinkle for the U.S. Attorney’s Office in the Southern District of Florida.
The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors and other seniors who can use that information to protect themselves.
The public can report suspected fraud to law enforcement and file a complaint at https://reportfraud.ftc.gov/#/ and/or www.ic3.gov/Home/FileComplaint.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish and other languages are available.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
Repeat Offenders Sentenced to Prison for Distributing MethRead the Press Release
MACON, Ga. – Two co-defendants with criminal histories who attempted to out-run deputies during an evening high-speed motorcycle chase with nearly three kilograms of methamphetamine in their possession—resulting in injuries to three law enforcement officers—have been sentenced to federal prison for distribution.
John Terrell Johnson, 34, of Jackson, Georgia, was sentenced to serve 276 months in prison to be followed by four years of supervised release after he previously pleaded guilty to possession with intent to distribute more than five grams of methamphetamine and Tosha Danielle Kidd, 31, of Conyers, Georgia, was sentenced to serve 222 months in prison to be followed by three years of supervised release after she previously pleaded guilty to possession with intent to distribute methamphetamine. U.S. District Judge Tilman “Tripp” Self presided over the sentencing hearings today. There is no parole in the federal system.
“The actions of both defendants in this case recklessly endangered the public and could have cost lives, including their own,” said U.S. Attorney Peter D. Leary. “Repeat offenders who distribute large quantities of methamphetamine in our communities face the possibility of federal prosecution for their continued criminal activities.”
“We appreciate the strong relationship we have with the U.S. Attorney’s Office as we work together to make our community safer,” said Monroe County Sheriff Brad Freeman.
According to court documents, on Dec. 12, 2020, at nearly 9:00 p.m., Monroe County Sheriff’s Office deputies noticed a motorcycle speeding southbound on I-75 near Forsyth. The motorcycle was driven by Johnson, with Kidd riding as the passenger and carrying a camouflage backpack. The pair fled when officers attempted to pull them over, reaching speeds of up to 150 mph while weaving through traffic and using the emergency shoulder to pass other motorists. Eventually, with the help of a civilian motorist, law enforcement blocked Johnson’s motorcycle and brought it to a halt on the side of I-75.
Several law enforcement officers from Monroe County Sheriff’s Office and the Georgia State Patrol, focused on subduing Johnson and Kidd, were injured when a roadside collision occurred. At least two patrol cars were totaled. Kidd seized the opportunity for escape and fled on foot. As she ran, she dumped the camouflage backpack. She was eventually taken into custody near the site where Johnson’s motorcycle had been stopped, and the backpack was recovered. The backpack contained nearly three kilograms of 99% pure methamphetamine. Johnson, a convicted felon, was illegally carrying a stolen handgun in his pocket and $1,075 in cash. Two deputies struck by a car in the line of duty sustained physical injuries requiring treatment at the hospital. One trooper also sustained physical injuries and was transported and treated at the hospital.
A few months prior to this incident, Johnson was arrested under similar circumstances. On Sept. 29, 2020, Monroe County Sheriff’s deputies spotted Johnson speeding on a motorcycle and attempted to conduct a traffic stop; Johnson fled from officers. Deputies were able to bring Johnson to a stop and found a 9mm semi-automatic pistol secured to his shoulder holster plus 11.944 grams of methamphetamine, a digital scale and two smoking devices in a bag clipped to the motorcycle’s handlebars. Johnson told officers he was a convicted felon who had been selling drugs for a long period of time and had bought numerous guns during that time. Johnson also admitted that fleeing from pursuing officers is “just what you do” when possessing drugs. Johnson has two prior felony convictions in Newton County and Butts County, Georgia. Kidd was on probation for a state offense when she was taken into custody in this case.
The case was investigated by DEA with the assistance of the Monroe County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Assistant U.S. Attorney Joy Odom prosecuted the case for the Government.
Repeat Offender Pleads Guilty to Knowingly Possessing Visual Depictions of Children Engaging in Sexually Explicit ConductRead the Press Release
SACRAMENTO, Calif. — William Richter, 38, of Shasta County, pleaded guilty today to knowing possession of visual depictions of the sexual exploitation of minors, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Richter had been convicted of the same offense and was on federal supervised release when he committed this new crime on July 23, 2020. On June 6, 2013, Richter was sentenced to 51 months in prison in his prior case. In July of 2020, Richter was on supervised release when a law enforcement officer pulled over Richter for a traffic violation. A smart phone was discovered hidden in Richter’s driver’s seat cover. According to the terms of his supervised release, Richter was not allowed to use the internet or to possess a smart phone. Forensic analysis revealed that Richter possessed at least 51 explicit photographs of pre-pubescents on his phone, one of which depicted sexual abuse of an infant. The victims in the images came from locations outside of California, such as the Philippines, Germany, Russia, Ukraine, Ecuador, Slovenia, Sweden, Pennsylvania, Alabama, Virginia, Florida, Tennessee, Utah, and Delaware. Richter had installed programs such as Kik messenger, VLC medial player, the TOR browser, Yo Live, Telegram and Mega on his unauthorized phone, and accessed websites which likely hosted sexually explicit conduct.
This case is the product of an investigation by Homeland Security Investigations and the Shasta County Sheriff’s Office. Assistant U.S. Attorney Christina McCall is prosecuting the case.
Richter is scheduled to be sentenced by U.S. District Judge John A. Mendez on July 12, 2022. He faces a maximum statutory penalty of 20 years in prison, and a mandatory minimum sentence of 10 years, due to his prior conviction for this same offense. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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.
Quincy Man Arrested for Child PornographyRead the Press Release
BOSTON – A Quincy man was arrested this morning and charged with receiving child pornography.
Matthew Ormon, 50, was charged with one count of receipt of child pornography. Following an initial appearance today before U.S. District Court Magistrate Judge Marianne B. Bowler, Orman was detained pending a detention hearing scheduled for April 7, 2022.
According to the charging document, a search of Ormon’s residence resulted in the recovery of multiple electronic devices, including two custom built computers and a network drive. An on-site forensic exam allegedly revealed numerous videos depicting child pornography on at least one device. Forensic review of the devices remains ongoing.
The charge of receipt of child pornography provides for a sentence of at least five years and up to 20 years in prison, at least five years and up to a lifetime of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Members of the public who have questions, concerns, or information regarding this case should call 617-748-3274.
United States Attorney Rachael S. Rollins and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. Special assistance was provided by the Quincy Police Department. Assistant U.S. Attorney Charles Dell’Anno of Rollins’ Major Crimes Unit is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Prisma Health Midlands to Pay $1 Million to Resolve Alleged Controlled Substance Act ViolationsRead the Press Release
COLUMBIA, SOUTH CAROLINA — Prisma Health Midlands (“Prisma”) has agreed to pay a record $1 million to resolve allegations that it committed recordkeeping and dispensing violations of the Controlled Substances Act (CSA). These requirements are designed to prevent the diversion of controlled substances.
This civil settlement includes a memorandum of agreement and is the culmination of a joint Drug Enforcement Administration (DEA) and U.S. Attorney’s Office investigation that began in November of 2018 when two Prisma patients were arrested for distributing drugs, some of which, the United States alleges, they were able to receive through Prisma’s pharmacy. This marks the largest settlement involving allegations of CSA violations in the state of South Carolina.
“Pharmacists must comply with their responsibilities to issue controlled substances only for legitimate medical purposes and in the usual course of their professional practice,” said U.S. Attorney Corey F. Ellis. “When pharmacists ignore or disregard red flags, their actions allow controlled substance prescriptions to be diverted for illegitimate and dangerous purposes.”
“The mission of DEA’s Division of Diversion Control is to prevent, detect and investigate the diversion of controlled pharmaceuticals,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “In this case, DEA Diversion Investigators did an outstanding job of uncovering recordkeeping discrepancies for the controlled substances Prisma purchased, maintained and dispensed. The DEA and the U.S. Attorney’s Office are committed to making sure healthcare providers are abiding by these important mandates.”
The United States alleges that Prisma failed to notify the DEA within one business day regarding thefts or significant losses of controlled substances over a three-year time period. As a DEA registrant, Prisma has certain recordkeeping and reporting obligations and one of these is to promptly notify the DEA whenever a theft or significant loss occurs.
The United States further alleges that Prisma violated the CSA by filling prescriptions that were not issued for a legitimate medical purpose for two patients who have now pleaded guilty to federal drug distribution charges.
The conduct outlined in the settlement agreement is merely alleged; the agreement does not constitute an admission of liability by Prisma.
A main objective of the CSA is controlling illegitimate traffic of controlled substances. To prevent the diversion of controlled substances, the CSA regulates persons, companies and other entities that manufacture, distribute, and dispense controlled substances. With more than 100,000 Americans dying last year from drug overdose, the Justice Department and the DEA are committed to using every resource available to prevent overdose deaths and hold accountable those responsible for the opioid crisis. The government’s rigorous investigation and resolution of this matter illustrates the government’s ongoing dedication to stem the prescription opioid crisis by ensuring that opioids are not diverted and abused.
This matter was investigated by the DEA Group Supervisor Adam Roberson, DEA Investigator Kelli Capehart, and DEA Investigator Sai Rivera along with Civil Division Chief James Leventis and Assistant U.S. Attorney Johanna Valenzuela of the U.S. Attorney’s Office for the District of South Carolina.
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Previously Deported Guatemalan Man Sentenced to 28 Days’ Imprisonment for Illegal Re-EntryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on April 5, 2022, Baudilio Jimenez-Canan, age 30, was sentenced to time served of 28 days of imprisonment and 1 year of supervised release, by United States District Court Judge Christopher C. Conner for illegal re-entry of a previously deported alien.
According to United States Attorney John C. Gurganus, Jimenez-Canan pleaded guilty to having illegally reentered the United States sometime after his last removal in October 2019. He was encountered in the United States on March 4, 2022, in York County, Pennsylvania, pursuant to a York County Sheriff’s arrest on an outstanding Delaware County, PA, DUI warrant. It is expected he will be removed to Guatemala upon completion of his sentence and the resolution of unrelated criminal charges.
This matter was investigated by U.S. Immigration and Customs Enforcement and Removal Operations (ERO) and was prosecuted by Assistant United States Attorney Joanne M. Sanderson.
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Porcupine Man Sentenced to Ten Years in Federal PrisonRead the Press Release
United States Attorney Dennis R. Holmes announced that a Porcupine, South Dakota, man convicted of Abusive Sexual Contact was sentenced on April 1, 2022, by Judge Jeffrey L. Viken, U.S. District Court.
Duane Cross, age 52, was sentenced to 10 years in federal prison, followed by five years of supervised release, and ordered to pay $100 special assessment to the Federal Crime Victims Fund.
Cross was indicted by a federal grand jury in October 2020. He pleaded guilty on November 5, 2021.
The conviction stems from Cross using force to engage in sexual contact with a juvenile female between 2015 and 2016 at Porcupine.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Cross was immediately turned over to the custody of the U.S. Marshals Service.
Pine Ridge Woman Pleads Not Guilty to Embezzlement and Theft from Indian Tribal OrganizationRead the Press Release
United States Attorney Dennis R. Holmes announced that a Pine Ridge, South Dakota, woman has been indicted by a federal grand jury for Theft of Money from Federal Program and Embezzlement and Theft from Indian Tribal Organization.
Darcel Pourier, age 37, was indicted on March 17, 2022. She appeared before U.S. Magistrate Judge Daneta Wollmann on March 18, 2022, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction 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 Pourier, an agent of the Oglala Sioux Tribe, embezzling at least $5,000 in 2021 from the OST Health Administration Department.
The investigation is being conducted by the Department of Health and Human Services – Office of the Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Pourier was released from custody pending trial. A trial date has been set for May 24, 2022.
Peoria Man Pleads Guilty to Distributing Child PornographyRead the Press Release
PEORIA, Ill. – A Peoria, Illinois man, Kiantre Dykeman, 24, of the 5100 block of N. Karen Court, pleaded guilty on April 4, 2022, to distribution of child pornography. Sentencing for Dykeman has been scheduled for August 4, 2022, at the federal courthouse in Peoria, Illinois.
In court before U.S. District Judge James Shadid, Dykeman admitted to advertising and selling images of child pornography on an internet-based application. During the hearing, the government stated that in November 2020, Dykeman advertised online that he had over 1,000 pictures of child pornography for sale, providing various prices for differing levels of access to the images. The investigation revealed that Dykeman in fact received payment via a mobile application money transfer service and, in turn, provided child pornography to a purchaser by sending images over a text messaging platform. Dykeman admitted to law enforcement that he sold the child pornography because he needed the money, indicating that he profited approximately $60 from the sales.
Dykeman was on bond in the custody of a third-party custodian and was remanded to the custody of the United States Marshals Service pending sentencing.
Dykeman faces a statutory penalty of five to 20 years in prison for the offense of distribution of child pornography. The offense also carries up to a $250,000 fine, a $5,000 Justice for Victims of Trafficking Act (JVTA) assessment if he is determined not to be indigent, and up to a $35,000 special assessment for child pornography cases under 18 U.S.C. § 2259A. He also faces a minimum of five years and up to a life term of supervised release.
The investigation was conducted by the United States Secret Service, the Peoria Police Department, the Peoria County Sheriff’s Department, and the Bloomington Police Department. Assistant U.S. Attorney Ronald L. Hanna is representing the government in the prosecution.
The case against Dykeman 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.
Penn Hills Man Admits Robbing a Tire Store and a Convenience MarketRead the Press Release
PITTSBURGH, Pa - A resident of Penn Hills, Pennsylvania, pleaded guilty in federal court to charges of robbery, conspiracy to commit robbery, and brandishing a firearm during a crime of violence, United States Attorney Cindy K. Chung announced today.
Rudolph McBride 24, pleaded guilty to four counts before United States District Judge William S. Stickman IV.
In connection with the guilty plea, the court was advised that on November 24, 2018, McBride and others robbed employees of the Swifty Tires store, located on Frankstown Road in Penn Hills, at gunpoint. On January 30, 2019, McBride and his coconspirators also robbed what used to be the CoGo’s convenience store located at 2800 Brownsville Road in Pittsburgh.
Judge Stickman scheduled sentencing for August 11, 2022, at 1:30 PM The law provides for a total sentence of up to life in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that McBride remain detained.
Assistant United States Attorney Douglas C. Maloney is prosecuting this case on behalf of the government.
The successful prosecution of McBride is the result of a collaborative effort between the Federal Bureau of Investigation, the Pittsburgh Bureau of Police, the Monroeville Police Department, and the Penn Hills Police Department.
Ohio woman sentenced for embezzling from Wetzel County businessRead the Press Release
WHEELING, WEST VIRGINIA – Cheryl M. Zambori, of St. Clairsville, Ohio, was sentenced today to 27 months of incarceration for an embezzlement charge, United States Attorney William Ihlenfeld announced.
Zambori, 50, pleaded guilty in September 2021 to one count of “Wire Fraud.” Zambori was employed as a Finance Manager at Litman Excavating, Inc. in New Martinsville, West Virginia. Beginning in July 2016, Zambori began a scheme to take $317,290.53 from the Litman business account held at a bank in Wheeling, West Virginia, and transfer funds to her personal accounts held out of state.
Zambori was ordered to pay restitution to Litman Excavating, Inc. in the amount of $317,290.53.
Assistant U.S. Attorney Danae DeMasi-Lemon prosecuted the case on behalf of the government. The U.S. Postal Service Inspection Service investigated.
U.S. District Judge John Preston Bailey presided.
Ohio man sentenced for drug chargesRead the Press Release
WHEELING, WEST VIRGINIA – Michael Edward Lamp, II, of East Liverpool, Ohio, was sentenced today to 135 months of incarceration for drug charges, United States Attorney William Ihlenfeld announced.
Lamp, also known as “Chubs,” 43, pleaded guilty in December 2021 to one count of “Conspiracy to Distribute and Possess with the Intent to Distribute 50 Grams or More of Methamphetamine” and one count of “Distribution of 5 Grams or More of Methamphetamine.” Lamp admitted to working with others to distribute more than 50 grams of methamphetamine from September 2020to February 2021 in Hancock County and elsewhere, including the Northern District of Ohio.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Hancock-Brooke-Weirton Drug Task Force, a HIDTA-funded initiative; the Drug Enforcement Administration in Youngtown, Ohio; the Liverpool Township Police Department-Ohio; and the East Liverpool Police Department -Ohio investigated. The U.S. Attorney’s Office in the Northern District of Ohio assisted.
U.S. District Judge John Preston Bailey presided.
Ohio man indicted on drug chargesRead the Press Release
WHEELING, WEST VIRGINIA – Dallas Michael Acoff, of Euclid, Ohio, was indicted today on drug charges, United States Attorney William Ihlenfeld announced.
Acoff, also known as “Dal,” 33, was indicted today on one count of “Distribution of Cocaine Base within 1000 Feet of a Protected Location,” one count of “Possession with Intent to Distribute Cocaine Base,” one count of “Possession with Intent to Distribute Cocaine,” one count of “Possession with Intent to Distribute Methamphetamine,” and one count of “Possession with Intent to Distribute Fentanyl.” Acoff is accused of selling cocaine, also known as “coke,” cocaine base, also known as “crack,” methamphetamine, and fentanyl in February 2022 in Ohio County.
Acoff faces at least one year and up to 40 years of incarceration and a fine of up to $2,000,000 for the distribution near a protected location charge and faces up to 20 years of incarceration and a fine of up to $1,000,000 each of the remaining charges. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Ohio Valley Drug Task Force, a HIDTA-funded initiative, and the Wheeling Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Ohio Man Sentenced to 130 Months for Methamphetamine TraffickingRead the Press Release
COVINGTON, Ky. — A Cincinnati man, Fred Carroll Randolph, 47, was sentenced to 130 months in federal prison on Tuesday, by U.S. District Judge David Bunning, after pleading guilty to possession with intent to distribute 50 grams or more of methamphetamine.
According to Randolph’s plea agreement, Randolph was stopped during a traffic stop where law enforcement recovered multiple bags of methamphetamine. The bags contained 81.2 grams of very pure, crystal methamphetamine. Randolph admitted that he had recently picked up three ounces of methamphetamine from a source of supply in Cincinnati, that he had distributed methamphetamine for a couple of months, and that he had distributed more than 500 grams of the drugs.
Randolph pleaded guilty to the charges in the indictment in December 2021.
Under federal law, Randolph 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 three years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky, and Kent Kleinschmidt, Special Agent in Charge, DEA, Detroit Field Office, jointly announced the sentence.
The investigation was conducted by the DEA. The United States was represented by Assistant U.S. Attorneys Tony Bracke and Andrew Spievack.
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Norfolk Man Sentenced to Prison for Fentanyl Distribution Resulting in Death of Chesapeake WomanRead the Press Release
NORFOLK, Va. – A federal judge yesterday sentenced a Norfolk man to 45 years in prison for his role in a conspiracy to manufacture and distribute fentanyl, acetyl-fentanyl, and heroin in the Hampton Roads region. He was convicted by a jury in May 2021 of all five counts related to the drug conspiracy, including distribution of fentanyl resulting in a young woman’s death.
According to court records and evidence presented at trial, between early 2017 and May 2020, Daniel Carrington, a.k.a. “Eastside,” a.k.a. “E,” 28, traveled to Baltimore, Maryland, and purchased heroin, fentanyl, and acetyl-fentanyl to resell in Chesapeake and throughout the Hampton Roads region. The drugs distributed by Carrington resulted in the overdose death of a Chesapeake woman, identified in Court documents as D.J., on December 27, 2019. Although Carrington was aware D.J.’s death, he continued to sell fentanyl until his arrest in May 2020.
Evidence presented at trial included a video of the defendant laughing at his “tester” while he was falling out of consciousness and proudly declaring how strong his fentanyl was. Other videos introduced to the jury included large quantities of cash, a firearm, and illegal narcotics. Text messages introduced at trial showed the defendant’s knowledge that he was distributing pure fentanyl and that he knew of its lethal effects. A medical examiner testified that the levels of fentanyl in the victim’s body were five times the minimum level considered to be lethal by forensic pathologists.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office, and Kelvin L. Wright, Chief of the Chesapeake Police Department made the announcement after sentencing by U.S. District Judge John A. Gibney.
Assistant U.S. Attorneys John F. Butler and Joseph E. DePadilla are prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), which 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.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-106.
Nicholas County Man Sentenced for Federal Gun OffenseRead the Press Release
CHARLESTON, W.Va. – A Nicholas County man was sentenced today to one year and one month in prison, to be followed by three years of supervised release, for being a felon in possession of a firearm.
According to court documents and statements made in court, a deputy with the Nicholas County Sheriff’s Department arrived at the Mount Lookout residence of Brian Jacob Taylor, 35, in February 2021 to serve Taylor with a warrant for his arrest concerning an unrelated charge. Taylor asked the deputy if he could put a shirt on and secure his dog before being transported to the police station. While inside Taylor’s residence, the deputy observed a loaded shotgun and marijuana in plain view. Later that same day, the Nicholas County Sheriff’s Department obtained and executed a search warrant for Taylor’s residence and located two loaded firearms as well as several controlled substances, including methamphetamine, a heroin-fentanyl mixture and marijuana. Taylor was prohibited from possessing firearms by virtue of two prior felony convictions in Nicholas County Circuit Court for the delivery of a controlled substance.
U.S. Attorney Will Thompson made the announcement. The Nicholas County Sheriff’s Department conducted the investigation with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Senior United States District Judge David A. Faber presided over the sentencing. Assistant United States Attorney Andrew J. Tessman is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00019.
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New York Man Pleads Guilty to Federal Fraud ChargesRead the Press Release
CHARLESTON, W.Va. – A New York man pleaded guilty today to his role in a wire fraud scheme that involved the use of stolen identities to purchase two new trucks together worth more $100,000 from a pair of Charleston dealerships.
According to statements made in court, Julio Hisael Almonte, 31, of the Bronx, traveled to West Virginia in June 2018 and worked with a co-conspirator to fraudulently purchase the Ford F-150 Raptor and Toyota Tacoma using fraudulent identification cards and the stolen identities of other people. Almonte was arrested by the West Virginia State Police on June 30, 2018, in Braxton County, as he attempted to drive the Ford F-150 back to the New York area.
Almonte pleaded guilty to two counts of wire fraud and one count of conspiracy to commit wire fraud. He is scheduled to be sentenced on July 20, 2022, and faces a maximum penalty of 60 years in prison.
U.S. Attorney Will Thompson made the announcement. The Federal Bureau of Investigation (FBI) and West Virginia State Police conducted the investigation. The U.S. Postal Inspection Service also provided assistance with the investigation.
Senior United States District Judge David A. Faber presided over the hearing. Assistant United States Attorney Nowles Heinrich is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00160.
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New York Man Pleads Guilty to Charges Related to Robbery and Murder of Stamford JewelerRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, announced that ROBERT RALLO, 58, of New York, pleaded guilty today before U.S. District Judge Kari A. Dooley in Bridgeport to federal offenses in connection with the robbery of Marco Jewelers in Stamford in March 2020. During the robbery, the owner of Marco Jewelers was shot and killed.
According to court documents and statements made in court, on March 28, 2020, at approximately 2:48 p.m., Stamford Police Officers responded to Marco Jewelers, located at 16 Sixth Street in Stamford. When officers arrived, they found evidence of a robbery and encountered the storeowner, Mark Vuono, lying on the ground in front of an open safe. Emergency medical personnel arrived and pronounced Vuono deceased.
Investigators collected and analyzed surveillance video from Marco Jewelers, surrounding businesses and Stamford city cameras. Video obtained from Marco Jewelers revealed that, on March 28, Rallo and an associate were driven in a black Jaguar to Marco Jewelers. Rallo and his associate then entered the store. Rallo, armed with a handgun, engaged in a physical altercation with Vuono, while Rallo’s associate stole items from the display cases. Vuono, who also possessed a firearm, and Rallo struggled next to a large open safe. During the more than three-minute struggle, Rallo reached into the safe and pulled out a third firearm, a .357 Magnum revolver. Rallo subsequently shot and killed Vuono with the .357 revolver.
Following the robbery, law enforcement located the black Jaguar in Staten Island and maintained surveillance on the vehicle. On March 30, at approximately 5:30 p.m., a black BMW X3 pulled up beside the black Jaguar. Rallo exited the rear door of the BMW and entered the driver’s door of a black Jaguar. The two vehicles then left the area and rapidly accelerated. The Jaguar crashed on Tompkins Street. Rallo attempted to flee on foot, but was quickly apprehended. The BMW crashed into a tree and parked car at the intersection of Daniel Low Terrace and Corson Avenue. The operator of the BMW also attempted to flee and was apprehended.
A search of the BMW revealed 63 rings, eight bracelets, two tie pins, an earring and a cufflink, and a search of the BMW operator’s residence revealed 23 pairs of earrings and three rings. These items were stolen from Marco Jewelers on March 28.
Rallo pleaded guilty to one count of interference with commerce by robbery (Hobbs Act robbery), an offense that carries a maximum term imprisonment of 20 years; interstate transportation of stolen property, an offense that carries a maximum term of imprisonment of 10 years, and using a firearm to cause a death during a robbery, which carries a maximum term of imprisonment of life
Judge Dooley scheduled sentencing for June 28. Under the terms of a binding plea agreement, if accepted by the court, the parties have agreed that a sentence of between 25 years and life in prison is an appropriate sentence in this case.
Rallo has been detained since his arrest.
Rallo’s two associates have been charged with related offenses and are detained while awaiting trial. U.S. Attorney Boyle stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation has been conducted by the Federal Bureau of Investigation, Stamford Police Department and Greenwich Police Department, with the assistance of the New York Police Department, Yonkers (N.Y.) Police Department and New Rochelle (N.Y.) Police Department. The case is being prosecuted by Assistant U.S. Attorneys Jocelyn Courtney Kaoutzanis and Rahul Kale.
New Jersey Heroin/Fentanyl Supplier Sentenced to 12 Years in PrisonRead the Press Release
PITTSBURGH, PA - A former New Jersey resident has been sentenced in federal court to 12 years of imprisonment followed by eight years of supervised release on his conviction for violating the federal narcotics laws, United States Attorney Cindy K. Chung announced today.
Senior United States District Judge Joy Flowers Conti imposed the sentence on Herbert Felder, 53, formerly of East Orange, New Jersey. In December 2019, Felder pled guilty to the one-count Indictment charging him with conspiracy to possess with intent to distribute 400 grams or more of fentanyl and 100 grams or more of heroin from in and around December 2018 and continuing to May 1, 2019, in the Western District of Pennsylvania and elsewhere.
According to information presented to the Court, Felder was identified as source of supply of over 600 “bricks” – more than 31,000 individual dosage units – of heroin/fentanyl mixtures, which he provided to co-conspirators for redistribution in the Western District of Pennsylvania. Agents with the Pennsylvania State Police and the Federal Bureau of Investigation surveilled Felder and his co-conspirators in May 2019 at a hotel in Hershey, Pennsylvania. In connection with his guilty plea, Felder admitted to distributing the “bricks” of heroin and fentanyl to co-conspirators while in Hershey, Pennsylvania, at that time. The Court was advised that law enforcement later seized the bricks of heroin/fentanyl pursuant to search warrants, thereby preventing the distribution of this large quantity of narcotics in the Western District of Pennsylvania. In connection with his plea, Felder admitted to knowing that those substances were being trafficked to the Western District of Pennsylvania for further distribution.
Felder has been in the custody of the United States Marshals since his arrest in this matter in August 2019.
Assistant United States Attorney Jerome A. Moschetta prosecuted this case on behalf of the government.
United States Attorney Chung commended the Federal Bureau of Investigation and the Pennsylvania State Police Drug Law Enforcement Division for the investigation leading to the successful prosecution of Felder.
Navajo man arraigned for child sexual abuse in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Leonard Yazzie, 39, of Pine Hill, New Mexico, and an enrolled member of the Navajo Nation, was arraigned in federal court today on a charge of aggravated sexual abuse of a child in Indian Country. Yazzie will remain in custody pending a detention hearing scheduled for April 7.
A federal grand jury indicted Yazzie on March 23. According to the indictment, on March 28, 2016, and March 27, 2017, Yazzie allegedly engaged in a sexual act with a victim, identified as Jane Doe. At the time, Jane Doe was under 12 years old. The abuse is alleged to have occurred on the Ramah Navajo Reservation.
An indictment is only an allegation. A defendant is considered innocent unless and until proven guilty. If convicted, Yazzie faces a minimum of 30 years and up to life in prison.
The Gallup Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from the Ramah Navajo Police Department. Special Assistant United States Attorney Chelsea N. Van Deventer is prosecuting the case.
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Morganton, N.C. Man Is Sentenced to 13+ Years for Transportation of Child PornographyRead the Press Release
CHARLOTTE, N.C. – Martin Lee McGee, 32, of Morganton, N.C., was sentenced to 160 months in federal prison today for transporting child pornography, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, McGee was ordered to serve a lifetime of supervised release, to register as a sex offender, and to pay a $100 special assessment, a $5,000 Justice for Victims of Trafficking Act (JTVA) assessment, and a $35,000 Amy, Vicky, and Andy Child Pornography Victim Assistance Act (AVAA) assessment.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Vidal Sipe of the Newton Police Department join U.S. Attorney King in making today’s announcement.
According to court records and today’s sentencing hearing, in April 2020, law enforcement were alerted to an individual, later identified as McGee, using Snapchat to upload child pornography. Law enforcement executed search warrants at McGee’s residence and Snapchat account. A forensic analysis of the seized devices and information revealed that McGee possessed more than 13,500 images and videos depicting the sexual abuse of children. Some of the child pornography in McGee’s extensive collection depicted minors as young as toddlers engaging in sadistic and masochistic conduct.
On October 6, 2021, McGee pleaded guilty to transportation of child pornography. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons Upon designation of a federal facility.
In making today’s announcement U.S. Attorney King commended the FBI and the Newton Police Department for their investigation of the case, and thanked the Catawba County Sheriff’s Office for their assistance.
Assistant United States Attorneys Cortney Randall and Nick J. Miller 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 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.
Mississippi Doctor Convicted of Hospice FraudRead the Press Release
Greenville, MS – A federal jury convicted a Cleveland, Mississippi doctor on Monday of Conspiracy to Commit Healthcare Fraud following a two week trial for his role in referring and certifying patients to hospice who were not terminally ill and should not have been placed on hospice care.
According to court documents and evidence presented at trial, Dr. Scott Nelson, of Cleveland was a medical director for numerous hospice organizations in the Mississippi Delta. At least four of the hospice owners associated with Dr. Nelson had been convicted of healthcare fraud prior to Dr. Nelson’s trial. Hospice employees routinely transported prospective patients to Dr. Nelson’s office in Cleveland, sometimes transporting three or four patients at a time. Dr. Nelson saw the patients in his office and then referred them for hospice, claiming to be their primary care physician, or attending physician. In almost all cases, the patients had no idea they were being placed on hospice and multiple patients testified at trial that Dr. Nelson did not explain hospice to them and did not tell them he was referring them to hospice care. Dr. Nelson also certified patients as terminally ill who were not actually terminally ill and he “robosigned” numerous medical records, allowing hospice owners to bill Medicare and Medicaid for hospice services that were not medically necessary. From 2009 through 2014, Dr. Nelson served as medical director for as many as 14 hospice providers and received approximately $442,000 in medical director fees from those hospices.
During the course of the conspiracy charged in the indictment, hospice owners received over $15 Million in Medicare funds based on Dr. Nelson’s patient referrals and certifications.
Prior to the trial, co-defendants Charline Brandon, Wendell Brandon, and Annette Lofton all pled guilty to the conspiracy to commit healthcare fraud.
“This type of fraud drives up medical costs for those who truly need care and jeopardizes our entire healthcare system.” said U.S. Attorney Clay Joyner. “The U.S. Attorney’s Office will continue to work with all federal, state and local partners to do everything in our power to eradicate it.”
"Just to enrich himself, Dr. Nelson fraudulently prescribed hospice care for a steady stream of Medicare and Medicaid beneficiaries who he knew were not dying, ignoring the fact that under this end-of-life status they would not be eligible for curative services,” said Special Agent in Charge Tamala E. Miles of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). “The guilty verdict in this case shows that our investigators and our law enforcement partners will aggressively pursue irresponsible practitioners who put their greed for profits above the well-being of their patients.”
“Healthcare fraud is not just about the dollars these medical professionals have taken, but also the trust they have violated,” said Mississippi Attorney General Lynn Fitch. “Patients put their faith in their doctors. They should not have to worry about being pawns in a get-rich-quick scheme. My Office is pleased to work with our partners at the U.S. Attorney’s Office to protect patients and defend the sacred trust so essential to our healthcare system.”
The HHS-OIG and the Mississippi Attorney General’s Medicaid Fraud Control Unit are investigating the case. The case is being prosecuted by Assistant U.S. Attorneys Clay Dabbs and Kim Hampton.
Mexican Citizen Sentenced to 42 Months for Possessing Methamphetamine for DistributionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Gregorio Arreola Mendoza, 34, a citizen of Mexico found in Eau Claire County, Wisconsin, was sentenced today by U.S. District Judge William M. Conley to 42 months in prison for possession of methamphetamine with intent to distribute. Arreola Mendoza pleaded guilty to this charge on November 2, 2021.
On February 24, 2021, a trooper with the Wisconsin State Patrol stopped a vehicle on Interstate 94 in Eau Claire County, Wisconsin. While talking to the driver, later identified as Arreola Mendoza, the trooper smelled the odor of marijuana and alcohol coming from the car. He also saw an open bottle of beer on the floor between the passenger’s legs. During an interview, the passenger, identified as Jose A. Mendoza-Cortez, admitted to having marijuana in the center console. The trooper searched the car and saw marijuana debris on the floor and a marijuana blunt in the center cup holder. As the officer continued his search, he found 20 plastic bags in the trunk, each containing a crystalline substance. The total amount of the substance from the 20 bags weighed approximately 20 pounds and tested positive for methamphetamine.
During a post-arrest interview, Arreola Mendoza admitted that someone paid him and Mendoza-Cortez to transport the drugs from Minnesota to Ohio.
At sentencing, Judge Conley noted that Arreola Mendoza and Mendoza-Cortez were entrusted with a significant amount of methamphetamine. Judge Conley also stressed that such a large amount of drugs would have caused a staggering amount of damage to the community.
Judge Conley sentenced Mendoza-Cortez to 48 months in prison on March 24, 2022.
The charges against Arreola Mendoza and Mendoza-Cortez were the result of an investigation conducted by the Wisconsin State Patrol, West Central Drug Task Force, Eau Claire County District Attorney’s Office, and Drug Enforcement Administration. Assistant U.S. Attorney Chadwick M. Elgersma prosecuted this case.
Marshall County man sentenced for drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Dalton Kade Riggs, of Cameron, West Virginia, was sentenced today to 57 months of incarceration for a drug charge, United States Attorney William Ihlenfeld announced.
Riggs, 34, pleaded guilty in September 2021 to one count of “Distribution of Methamphetamine.” Riggs admitted to distributing methamphetamine in March 2021 in Marshall County.
Assistant U.S. Attorney Clayton J. Reid prosecuted the case on behalf of the government. The Marshall County Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.
Man from Albuquerque sentenced to seven years in federal prison for attempted carjacking and illegal possession of a firearm and ammunitionRead the Press Release
ALBUQERQUE, N.M. – James Hawley, 36, of Albuquerque, was sentenced in federal court today to seven years in prison for attempted carjacking and being a felon in possession of a firearm and ammunition.
Hawley pleaded guilty on Aug. 9, 2021. According to the plea agreement, on July 27, 2019, Hawley attempted to carjack a victim who was stopped at an intersection in Albuquerque. Hawley approached the vehicle and pointed a firearm at the victim in an attempt to gain access. The victim was able to escape by speeding through the intersection. Hawley was later found unconscious and was disarmed by paramedics while they attempted to render aid.
At the time of the offenses, Hawley previously had been convicted of aggravated battery with a deadly weapon and aggravated battery on a household member with great bodily harm. As a convicted felon, Hawley could not legally possess a firearm or ammunition.
Upon his release from prison, Hawley will be subject to three years of supervised release.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department investigated this case. Assistant U.S. Attorney Timothy D. Trembley is prosecuting the case.
Man Sentenced for 2015 Rape Near OSU-Tulsa CampusRead the Press Release
A Tulsa man was sentenced in federal court Tuesday for a rape he committed near the OSU-Tulsa campus in 2015.
“Eugene Nunley will spend 14 years in prison for the physical and emotional harm he has caused this victim,” said U.S. Attorney Clint Johnson. “My team of federal prosecutors and victim specialists will continue to support survivors of sexual assault and fight for justice on their behalf.”
U.S. District Judge Claire V. Eagan sentenced Eugene Todd Nunley, 48, to 14 years in federal prison followed by a lifetime of supervised release.
On Aug. 26, 2021, Nunley pleaded guilty to aggravated sexual abuse by force and threat in Indian Country.
The defendant admitted that he forced the female victim into a wooded area and raped her on Aug. 13, 2015. The victim was walking on the Osage Prairie Trail near 900 North Greenwood Avenue when Nunley attacked her from behind. Following the rape, the defendant told the victim she was “lucky” then ran away.
The victim reported the crime and told officers she did not know her attacker. In early September 2015, DNA testing revealed Nunley was the perpetrator. Officers located the defendant in the Creek County jail, where he was being held on unrelated charges.
Nunley, a Muscogee Nation citizen, was previously convicted of the 2015 rape in Tulsa County District Court. His conviction was overturned after the Cherokee Nation reservation was recognized as having never been disestablished by Congress. He was indicted in federal court in June 2021.
The FBI and Tulsa Police Department conducted the investigation. Assistant U.S. Attorney Chantelle D. Dial prosecuted the case.
April is Sexual Assault Awareness Month. According to the Centers for Disease Control and Prevention (CDC) 2015 National Intimate Partner and Sexual Violence Survey, 21.3% of women and 2.6% of men living in the United States reported being raped or subject to attempted rape during their lifetime.
If you or someone you know is experiencing or has experienced sexual violence, you are not alone and there are 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 resources page on the Office on Violence Against Women’s website. The page includes contact information for state sexual assault coalitions that can direct you to local resources and services, as well as opportunities to get involved.
MBTA Resolves Allegations of ADA ViolationsRead the Press Release
BOSTON – The Massachusetts Bay Transportation Authority (MBTA) has resolved allegations that it violated the Americans with Disabilities Act (ADA) by providing a subsidy for users of The Ride paratransit service to supplement their paratransit rides with ride sharing companies like Uber and Lyft, even though these companies did not have the capacity to provide service to passengers who used wheelchairs.
During its investigation, the U.S. Attorney’s Office found that because wheelchair accessible vehicles were either unavailable or the wait times were excessive, wheelchair users could not benefit from the MBTA program in the same way as other users of The Ride.
In resolving the investigation, the MBTA has implemented a policy that incentivizes ride sharing companies to increase the number of wheelchair-accessible vehicles available for hire, which has resulted in more wheelchair-accessible vehicles in service and available for both The Ride program and the public at large. The MBTA has also agreed to monitor wait times for riders needing wheelchair-accessible vehicles and to report that data to the U.S. Attorney’s Office for a period of 18 months. They must also notify the U.S. Attorney’s Office of any material changes to its policy.
“Innovation is not an excuse for avoiding accessibility. Rather, it is an opportunity to enhance accessibility. That is what the MBTA has now done here. The first iteration of the MBTA’s program left out rights for those who use wheelchairs. We commend the MBTA on its efforts to rectify this problem and its success in implementing a program that has resulted in more wheelchair accessible vehicles on the road. This solution helps and includes everyone – not only users of The Ride,” said United States Attorney Rachael S. Rollins.
The matter was handled by Assistant U.S. Attorney Gregory Dorchak of Rollins’ Civil Rights Unit.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
Lancaster County Woman Charged with Theft of Government FundsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sally Schrom, age 66, of Mountville, Pennsylvania, was charged in a criminal information with theft of government funds.
According to United States Attorney John C. Gurganus, the information alleges that between April 2017 and November 2019, Schrom unlawfully received federal military retirement benefits and federal civilian retirement benefits that were meant for another individual. The benefits totaled over $73,000.
“Every dollar stolen from the U.S Government's retirement coffers is one less dollar available for legitimate beneficiaries," stated Patrick J. Hegarty, Special Agent-in-Charge of the Defense Criminal Investigative Service's (DCIS) Northeast Field Office. “DCIS commends the efforts of our partners at the U.S. Attorney’s Office for the Middle District of Pennsylvania, the Naval Criminal Investigative Service, and the Defense Finance and Accounting Service, for protecting the interests of those who served our country."
“Ms. Schrom’s criminal actions to receive military retirement benefits and federal civilian retirement benefits intended for a family member who passed away wasted valuable taxpayer money that should have been used to support the many military and federal civilian retirees who dedicated their lives to public service,” said NCIS Special Agent in Charge Michael T. Wiest of the NCIS Northeast Field Office. “NCIS and our law enforcement partners remain committed to rooting out theft and corruption that threatens the wellbeing of our Department of the Navy family.”
The case was investigated by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Defense Finance Accounting Service, and the Manheim Township Police Department. Assistant U.S. Attorney Carlo D. Marchioli is prosecuting the case.
The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. 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.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Kennett Square Man Pleads Guilty to Federal Tax ChargeRead the Press Release
WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware, announced that a Kennett Square, Pennsylvania man pleaded guilty today to federal tax evasion. U.S. District Court Judge Maryellen Noreika accepted the plea.
According to court documents, Joseph Timlin, 63, formerly of Claymont, Delaware, pled guilty to evading his federal tax obligations by failing to file a 2016 income tax return and by directing his compensation be paid to a bank account held in the name of a corporate entity he created and controlled. Pursuant to his plea agreement, Timlin further admitted to evading these same obligations for 2014, 2015, 2017, and 2018. In total, Adams agreed to make restitution to the Internal Revenue Service totaling $246,629.00.
Timlin faces a maximum penalty of 5 years in prison when sentenced on August 4, 2022. Judge Noreika will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Weiss commented on the plea, “The requirement to file and pay income taxes is not optional, and it is a burden shared by the people living and working in this country. When sophisticated actors like this defendant evade that requirement, it undermines confidence in the fairness of the system. My office will continue to prosecute those who choose to obscure their income and evade taxes.”
"As someone who prepared tax returns for a living, Mr. Timlin knew that the actions he took were illegal and fraudulent," said Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation. "The Special Agents of IRS-CI will continue to investigate and prosecute individuals like this who intentionally violate the tax laws so that honest taxpayers know that everyone is being held accountable to pay their fair share."
IRS-Criminal Investigation investigated the case. Assistant U.S. Attorney Lesley F. Wolf is prosecuting the case.
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. 21-cr-48.
Kamiah Man Sentenced to More Than 19 Years in Federal Prison for Second Degree MurderRead the Press Release
COEUR D'ALENE – A Kamiah man was sentenced to 235 months in federal prison for second degree murder.
According to court records, Travis Dewayne Ellenwood, 44, beat and strangled his girlfriend, Bessie Blackeagle, killing her on October 31, 2020. Ellenwood maintains he was too intoxicated to remember what happened. Ellenwood is a member of the Nez Perce Tribe, as was Ms. Blackeagle. Ms. Blackeagle was 28 at the time of her murder. She was a Nez Perce language speaker and well versed in Nez Perce traditions and customs. Her death has affected many in the tribal community.
Senior U.S. Ninth Circuit Judge Richard C. Tallman also sentenced Ellenwood to serve five years of supervised release upon completion of his prison sentence and to pay a $2,500 fine. Ellenwood pleaded guilty to the charge on October 4, 2021.
U.S. Attorney Rafael M. Gonzalez, Jr., of the District of Idaho made the announcement and credited the cooperative efforts of the Federal Bureau of Investigation, Nez Perce Tribal Police, and the Idaho County Sheriff's Office, which led to charges.
“Ms. Blackeagle’s murder is a tragic reminder of the danger Native American women face in the community,” said U.S. Attorney Gonzalez. “Generations of Native Americans have experienced violence or mourned a missing or murdered family member or loved one, and the lasting impacts of such tragedies are felt throughout the country. Native Americans face unacceptably high levels of violence, and are victims of violent crime at a rate much higher than the national average. Native American women, in particular, are disproportionately the victims of sexual and gender-based violence, including intimate partner homicide. Our focus remains centered on refining coordination between our office and our tribal partners so that no family must endure this kind of heartbreak in the future,” Mr. Gonzalez concluded.
"The FBI extends its deepest condolences to the family and friends of Bessie Blackeagle. The pain and sorrow of a life taken in an act of egregious violence is a weight Bessie's loved ones will carry indefinitely," said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. "Though nothing can bring Bessie back, the FBI remains dedicated to working with our tribal partners to investigate the most serious crimes affecting our tribal communities."
Mr. Gonzalez also encourages those experiencing domestic violence or those who know of someone in need of help to reach out, “everyone deserves a relationship free from domestic violence,” he added. If you or a loved one need assistance, please reach out to the free and confidential National Domestic Violence Hotline by calling 1-800-799-SAFE, texting “START” to 88788, or visiting their website at www.thehotline.org.
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Justice Department Issues Guidance on Protections for People with Opioid Use Disorder under the Americans with Disabilities ActRead the Press Release
The Department of Justice announced today that it has published guidance on how the Americans with Disabilities Act (ADA) protects people with opioid use disorder (OUD) who are in treatment or recovery, including those who take medication to treat their OUD. The publication, “The Americans with Disabilities Act and the Opioid Crisis: Combating Discrimination Against People in Treatment or Recovery,” is intended to help people with OUD who are in treatment or recovery understand their rights under federal law and to provide guidance to entities covered by the ADA about how to comply with the law.
“The opioid epidemic continues to pose an extraordinary challenge to communities across our country, and the COVID-19 pandemic has exacerbated this crisis,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “People who have stopped illegally using drugs should not face discrimination when accessing evidence-based treatment or continuing on their path of recovery. The Justice Department is committed to using federal civil rights laws such as the ADA to safeguard people with opioid use disorder from facing discriminatory barriers as they move forward with their lives.”
The guidance document explains how the ADA protects people with OUD who are in treatment or recovery from discrimination in a number of settings, including employment, healthcare and participation in state or local government services and programs. The publication is part of the department’s comprehensive response to the opioid crisis, which promotes prevention, enforcement and treatment.
The Civil Rights Division, together with U.S. Attorneys’ offices, has been working to remove discriminatory barriers to recovery for individuals who have completed, or are participating in, treatment for OUD. Through outreach, technical assistance and enforcement under the ADA, the Civil Rights Division seeks to ensure that those in treatment and recovery can successfully participate in their communities and the workforce. For example:
- On March 25, the department issued a letter finding that the Indiana State Board of Nursing violated the ADA by denying a nurse the opportunity to participate in a substance use disorder rehabilitation program because she takes medication for OUD. The program is required for the individual to reinstate her nursing license.
- On March 24, the department into a Settlement Agreement with the Massachusetts Trial Court to resolve allegations that its drug court violated the ADA by discriminating against individuals with OUD.
- On March 17, the department entered into a Settlement Agreement with Ready to Work, a Colorado-based employment, residential and social services program for individuals experiencing homelessness, resolving allegations that the program denied admission to an individual because she takes medication for OUD.
- On Feb. 24, the department filed a lawsuit against the Unified Judicial System of Pennsylvania, alleging that it prohibits or otherwise limits participants in its court supervision programs from using medication to treat OUD.
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. Individuals who believe that they may have been victims of disability discrimination may file a complaint at www.ada.gov/complaint.
Justice Department Investigation Leads to Shutdown of Largest Online Darknet MarketplaceRead the Press Release
The Justice Department announced today the seizure of Hydra Market (Hydra), the world’s largest and longest-running darknet market. In 2021, Hydra accounted for an estimated 80% of all darknet market-related cryptocurrency transactions, and since 2015, the marketplace has received approximately $5.2 billion in cryptocurrency.
The seizure of the Hydra servers and cryptocurrency wallets containing $25 million worth of bitcoin was made this morning in Germany by the German Federal Criminal Police (the Bundeskriminalamt), in coordination with U.S. law enforcement.
“The Justice Department will be relentless in our efforts to hold accountable those who violate our laws – no matter where they are located or how they try to hide their crimes,” said Attorney General Merrick B. Garland. “Together with our German law enforcement partners, we have seized the infrastructure of the world’s largest darknet market, but our work is far from over. We will continue to work alongside our international and interagency partners to disrupt and dismantle darknet markets, and to hold those who commit their crimes on the dark web accountable for their acts.”
“The Department of Justice will not allow darknet markets and cryptocurrency to be a safe haven for money laundering and the sale of hacking tools and services,” said Deputy Attorney General Lisa O. Monaco. “Our message should be clear: we will continue to go after darknet markets and those who exploit them. Together with our partners in Germany and around the world, we will continue our work to disrupt the ecosystem that allows these criminal actors to operate.”
Hydra was an online criminal marketplace that enabled users in mainly Russian-speaking countries to buy and sell illicit goods and services, including illegal drugs, stolen financial information, fraudulent identification documents, and money laundering and mixing services, anonymously and outside the reach of law enforcement. Transactions on Hydra were conducted in cryptocurrency and Hydra’s operators charged a commission for every transaction conducted on Hydra.
In conjunction with the shutdown of Hydra, the department also announced criminal charges against Dmitry Olegovich Pavlov, 30, a resident of Russia, for conspiracy to distribute narcotics and conspiracy to commit money laundering, in connection with his operation and administration of the servers used to run Hydra.
“This coordinated action sends a clear message to anyone attempting to operate or support an online criminal enterprise under the cover of the dark web,” said U.S. Attorney Stephanie M. Hinds for the Northern District of California. “The dark web is not a place criminals can operate with impunity or hide from U.S. law enforcement, and we will continue to use our sophisticated tools and expertise to dismantle and disable darknet markets. This action also underscores the importance of international law enforcement collaboration. We thank German authorities and the Bundeskriminalamt, the German Federal Criminal Police Office, for its valued assistance in this case.”
“The darknet has been a key online marketplace for the sale of deadly drugs worldwide,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “The availability of illicit substances and money laundering services offered by Hydra threaten the safety and health of communities far and wide. Criminals on the darknet hide behind the illusion of anonymity, but DEA and our partners across the globe are watching. We will continue to investigate, expose, and take action against criminal networks no matter where they operate. I commend the extraordinary investigative efforts of DEA’s Miami Counternarcotic Cyber Investigations Task Force, Cyber Support Section, and Special Operations Division, and the teamwork from federal and international law enforcement partners that led to this action.”
“The Hydra darknet site provided a platform for criminals who thought they were beyond the reaches of law enforcement to buy and sell illegal drugs and services,” said Chief Jim Lee of IRS-Criminal Investigation. “Our Cyber Crimes Unit once again used their cryptocurrency tracking expertise to help take down this site and identify the criminal behind it. Denying criminals a space to operate freely to conduct their nefarious activities is the first step in stopping this activity from happening altogether.”
“The successful seizure of Hydra, the world's largest darknet marketplace, dismantled digital infrastructures which had enabled a wide range of criminals – including Russian cyber criminals, the cryptocurrency tumblers and money launderers that support them and others, and drug traffickers,” said FBI Director Christopher Wray. “Today’s announcement is a testament to the strength and potency of our law enforcement partnerships here and around the world – and another example of our strategy to broadly target the entire illicit ecosystem that drives and enables crime.”
“The U.S. Postal Inspection Service is dedicated to protecting the United States mail from being used to transport illegal drugs and illicit goods available on the darknet,” said Chief Postal Inspector Gary R. Barksdale of the U.S. Postal Inspection Service National Headquarters. “The seizure of the criminal marketplace, Hydra Market, reflects the effective collaboration of law enforcement to stop criminal enterprises from their illicit activity. The Postal Inspection Service will continue to work with our federal partners to end these criminal organizations regardless of where they are.”
“The dismantling of the Hydra Market, the dark web’s largest supplier of illicit goods and services, sends a message to these electronic criminal kingpins that think they can operate with impunity,” said Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami. “HSI will continue to work with our U.S. and international law enforcement partners to target these transnational criminal organizations who attempt to manipulate the anonymity of the dark web to push their poison all over the world.”
According to the indictment, vendors on Hydra could create accounts on the site to advertise their illegal products, and buyers could create accounts to view and purchase the vendors’ products. Hydra vendors offered a variety of illicit drugs for sale, including cocaine, methamphetamine, LSD, heroin and other opioids. The vendors openly advertised their drugs on Hydra, typically including photographs and a description of the controlled substance. Buyers rated the sellers and their products on a five-star rating system, and the vendors’ ratings and reviews were prominently displayed on the Hydra site.
Hydra also featured numerous vendors selling false identification documents. Users could search for vendors selling their desired type of identification document – for example, U.S. passports or drivers’ licenses – and filter or sort by the item’s price. Many vendors of false identification documents offered to customize the documents based on photographs or other information provided by the buyers.
Numerous vendors also sold hacking tools and hacking services through Hydra. Hacking vendors commonly offered to illegally access online accounts of the buyer’s choosing. In this way, buyers could select their victims and hire professional hackers to gain access to the victims’ communications and take over the victims’ accounts.
Hydra vendors also offered a robust array of money laundering and so-called “cash-out” services, which allowed Hydra users to convert their bitcoin (BTC) into a variety of forms of currency supported by Hydra’s wide array of vendors. In addition, Hydra offered an in-house mixing service to launder and then process vendors’ withdrawals. Mixing services allowed customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Hydra’s money laundering features were so in-demand that some users would set up shell vendor accounts for the express purpose of running money through Hydra’s bitcoin wallets as a laundering technique.
Starting in or about November 2015, Pavlov is alleged to have operated a company, Promservice Ltd., also known as Hosting Company Full Drive, All Wheel Drive and 4x4host.ru, that administered Hydra’s servers (Promservice). During that time, Pavlov, through his company Promservice, administered Hydra’s servers, which allowed the market to operate as a platform used by thousands of drug dealers and other unlawful vendors to distribute large quantities of illegal drugs and other illicit goods and services to thousands of buyers, and to launder billions of dollars derived from these unlawful transactions.
As an active administrator in hosting Hydra’s servers, Pavlov allegedly conspired with the other operators of Hydra to further the site’s success by providing the critical infrastructure that allowed Hydra to operate and thrive in a competitive darknet market environment. In doing so, Pavlov is alleged to have facilitated Hydra’s activities and allowed Hydra to reap commissions worth millions of dollars generated from the illicit sales conducted through the site.
The DEA’s Miami Field Division, FBI, IRS-CI, U.S. Postal Inspection Service, and HSI investigated the case.
The U.S. investigation was conducted with support and coordination provided by the Department of Justice’s multi-agency Special Operations Division and the Joint Criminal Opioid and Darknet Enforcement (JCODE) Team.
Trial Attorneys C. Alden Pelker and Christen M. Gallagher of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Claudia A. Quiroz and Robert S. Leach for the Northern District of California are prosecuting the case.
In addition to the critically important efforts of the German Federal Criminal Police, significant assistance was provided by the Justice Department’s Office of International Affairs and the U.S. Attorney’s Office for the District of Columbia. Assistance was also provided by the Justice Department’s National Cryptocurrency Enforcement Team.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Investigation Leads to Shutdown of Largest Online Darknet MarketplaceRead the Press Release
SAN FRANCISCO – The Justice Department announced today the seizure of Hydra Market (Hydra), the world’s largest and longest-running darknet market. In 2021, Hydra accounted for an estimated 80% of all darknet market-related cryptocurrency transactions, and since 2015, the marketplace has received approximately $5.2 billion in cryptocurrency.
The seizure of the Hydra servers and cryptocurrency wallets was made this morning in Germany by the German Federal Criminal Police (the Bundeskriminalamt), in coordination with U.S. law enforcement.
“The Justice Department will be relentless in our efforts to hold accountable those who violate our laws – no matter where they are located or how they try to hide their crimes,” said Attorney General Merrick B. Garland. “Together with our German law enforcement partners, we have seized the infrastructure of the world’s largest darknet market, but our work is far from over. We will continue to work alongside our international and interagency partners to disrupt and dismantle darknet markets, and to hold those who commit their crimes on the dark web accountable for their acts.”
“The Department of Justice will not allow darknet markets and cryptocurrency to be a safe haven for money laundering and the sale of hacking tools and services,” said Deputy Attorney General Lisa O. Monaco. “Our message should be clear: we will continue to go after darknet markets and those who exploit them. Together with our partners in Germany and around the world, we will continue our work to disrupt the ecosystem that allows these criminal actors to operate.”
“This coordinated action sends a clear message to anyone attempting to operate or support an online criminal enterprise under the cover of the dark web. The dark web is not a place criminals can operate with impunity or hide from U.S. law enforcement, and we will continue to use our sophisticated tools and expertise to dismantle and disable darknet markets,” said Stephanie M. Hinds, U.S. Attorney for the Northern District of California. “This action also underscores the importance of international law enforcement collaboration. We thank German authorities and the Bundeskriminalamt, the German Federal Criminal Police Office, for its valued assistance in this case.”
Hydra was an online criminal marketplace that enabled users in mainly Russian-speaking countries to buy and sell illicit goods and services, including illegal drugs, stolen financial information, fraudulent identification documents, and money laundering and mixing services, anonymously and outside the reach of law enforcement. Transactions on Hydra were conducted in cryptocurrency and Hydra’s operators charged a commission for every transaction conducted on Hydra.
In conjunction with the shutdown of Hydra, the department also announced criminal charges against Dmitry Olegovich Pavlov, 30, a resident of Russia, for conspiracy to distribute narcotics and conspiracy to commit money laundering in connection with his operation and administration of the servers used to run Hydra.
“The darknet has been a key online marketplace for the sale of deadly drugs worldwide,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “The availability of illicit substances and money laundering services offered by Hydra threaten the safety and health of communities far and wide. Criminals on the darknet hide behind the illusion of anonymity, but DEA and our partners across the globe are watching. We will continue to investigate, expose, and take action against criminal networks no matter where they operate. I commend the extraordinary investigative efforts of DEA’s Miami Counternarcotic Cyber Investigations Task Force, Cyber Support Section, and Special Operations Division, and the teamwork from federal and international law enforcement partners that led to this action.”
“The Hydra darknet site provided a platform for criminals who thought they were beyond the reaches of law enforcement to buy and sell illegal drugs and services,” said Chief Jim Lee of IRS-Criminal Investigation. “Our Cyber Crimes Unit once again used their cryptocurrency tracking expertise to help take down this site and identify the criminal behind it. Denying criminals a space to operate freely to conduct their nefarious activities is the first step in stopping this activity from happening altogether.”
“The successful seizure of Hydra, the world's largest darknet marketplace, dismantled digital infrastructures enabling a wide range of criminals – including Russian cyber criminals, the cryptocurrency tumblers and money launderers that support them and others, and drug traffickers” said FBI Director Christopher Wray. “Today’s announcement is a testament to the strength and potency of our law enforcement partnerships here and around the world – and another example of our strategy to broadly target the entire illicit ecosystem that drives and enables crime.”
“The U.S. Postal Inspection Service is dedicated to protecting the United States mail from being used to transport illegal drugs and illicit goods available on the darknet,” said Chief Postal Inspector Gary R. Barksdale of the U.S. Postal Inspection Service National Headquarters. “The seizure of the criminal marketplace, Hydra Market, reflects the effective collaboration of law enforcement to stop criminal enterprises from their illicit activity. The Postal Inspection Service will continue to work with our federal partners to end these criminal organizations regardless of where they are.”
“The dismantling of the Hydra Market, the dark web’s largest supplier of illicit goods and services, sends a message to these electronic criminal kingpins that think they can operate with impunity,” said Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami. “HSI will continue to work with our U.S. and international law enforcement partners to target these transnational criminal organizations who attempt to manipulate the anonymity of the dark web to push their poison all-over the world.”
According to the indictment, vendors on Hydra could create accounts on the site to advertise their illegal products, and buyers could create accounts to view and purchase the vendors’ products. Hydra vendors offered a variety of illicit drugs for sale, including cocaine, heroin, methamphetamine, LSD, and other opioids. The vendors openly advertised their drugs on Hydra, typically including photographs and a description of the controlled substance. Buyers rated the sellers and their products on a five-star rating system, and the vendors’ ratings and reviews were prominently displayed on the Hydra site.
Hydra also featured numerous vendors selling false identification documents. Users could search for vendors selling their desired type of identification document – for example, U.S. passports or drivers’ licenses – and filter or sort by the item’s price. Many vendors of false identification documents offered to customize the documents based on photographs or other information provided by the buyers.
Numerous vendors also sold hacking tools and hacking services through Hydra. Hacking vendors commonly offered to illegally access online accounts of the buyer’s choosing. In this way, buyers could select their victims and hire professional hackers to gain access to the victims’ communications and take over the victims’ accounts.
Hydra vendors also offered a robust array of money laundering and so-called “cash-out” services, which allowed Hydra users to convert their bitcoin (BTC) into a variety of forms of currency supported by Hydra’s wide array of vendors. In addition, Hydra offered an in-house mixing service to launder and then process vendors’ withdrawals. Mixing services allowed customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Hydra’s money laundering features were so in-demand that some users would set up shell vendor accounts for the express purpose of running money through Hydra’s bitcoin wallets as a laundering technique.
Starting in or about November 2015, Pavlov is alleged to have operated a company, Promservice Ltd., also known as All Wheel Drive and 4x4host.ru, that administered Hydra’s servers (Promservice). During that time, Pavlov, through his company Promservice, administered Hydra’s servers, which allowed the market to operate as a platform used by thousands of drug dealers and other unlawful vendors to distribute large quantities of illegal drugs and other illicit goods and services to thousands of buyers, and to launder billions of dollars derived from these unlawful transactions.
As an active administrator in hosting Hydra’s servers, Pavlov allegedly conspired with the other operators of Hydra to further the site’s success by providing the critical infrastructure that allowed Hydra to operate and thrive in a competitive darknet market environment. In doing so, Pavlov is alleged to have facilitated Hydra’s activities and allowed Hydra to reap commissions worth millions of dollars generated from the illicit sales conducted through the site.
The DEA’s Miami Field Division, FBI, IRS-CI, U.S. Postal Inspection Service, and HSI investigated the case.
The U.S. investigation was conducted with support and coordination provided by the Department of Justice’s multi-agency Special Operations Division and the Joint Criminal Opioid and Darknet Enforcement (JCODE) Team.
Assistant U.S. Attorneys Claudia A. Quiroz and Robert S. Leach of the U.S. Attorney’s Office for the Northern District of California and Trial Attorneys C. Alden Pelker and Christen M. Gallagher of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.
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.
In addition to the critically important efforts of the German Federal Criminal Police, significant assistance was provided by the Justice Department’s Office of International Affairs and the U.S. Attorney’s Office for the District of Columbia. Assistance was also provided by the Justice Department’s National Cryptocurrency Enforcement Team.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Inland Empire Man Agrees to Plead Guilty in Bid-Rigging Scheme to Obtain Contracts to Provide Food to Federal Prison FacilitiesRead the Press Release
LOS ANGELES – A former contractor at a food supply company has agreed to plead guilty to a felony bid-rigging charge, admitting that he conspired with a person at another food company to determine which supplier would obtain low-bid contracts from the United States Bureau of Prisons (BOP), the Justice Department announced today.
Edgar Porras, 49, of Moreno Valley, was charged in a criminal information filed today with one count of bid rigging. In a plea agreement also filed today, Porras agreed to plead guilty to the offense.
During the scheme that ran from 2013 through August 2018, Porras conspired “to suppress and restrain competition by rigging bids to obtain selected food contracts offered by the BOP,” according to court documents. To further the scheme, Porras, who was a contractor to a food company identified as “Company A,” agreed with co-conspirators not to compete to obtain the BOP contracts, and collectively they decided which conspirator would submit the lowest – and presumably winning – bid for a contract.
Porras admitted in his plea agreement that he rigged the bidding process for approximately 111 BOP food contracts cumulatively worth approximately $1.9 million.
Porras agreed to plead guilty to violating a provision of the Sherman Antitrust Act, which carries a statutory maximum penalty of 10 years in federal prison and a maximum fine of $1 million. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.
Porras will be directed to appear in United States District Court in Los Angeles at a later date.
The United States Department of Justice, Office of Inspector General conducted the investigation in this matter as part of the Procurement Collusion Strike Force (PCSF).
Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Jason Pang of International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case. The United States Attorney’s Office is a participating member of the PCSF.
In November 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at the federal, state and local levels.
In the fall of 2020, the Strike Force expanded its footprint with the launch of PCSF: Global, which is designed to deter, detect, investigate, and prosecute collusive schemes that target government spending outside of the United States.
To contact the PCSF, or to report information on market allocation, price fixing, bid rigging or other anticompetitive conduct, go to https://www.justice.gov/procurement-collusion-strike-force.
Hickory Drug Trafficker Is Sentenced to Five Years for Firearms OffenseRead the Press Release
CHARLOTTE, N.C. – Carlos Car’tre Ikard, 26, of Hickory, N.C., was sentenced to 60 months in prison and three years of supervised release for possession of a firearm in furtherance of a drug trafficking crime, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Kenneth D. Bell presided over today’s sentencing.
U.S. Attorney King is joined in making today’s announcement by Brian Mein, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Thurman Whisnant of the Hickory Police Department.
According to filed documents and court proceedings, on July 13, 2020, while Ikard was on post-release supervision with the State of North Carolina, he began posting images on his Snapchat account in which he was possessing multiple firearms. The next day, law enforcement located Ikard in a vehicle parked at his residence in Hickory. Law enforcement seized from the vehicle three firearms, one of which was stolen, Oxycodone pills, and marijuana. Law enforcement also executed search warrants for Ikard’s Snapchat account and cell phone, which contained images of Ikard with the seized firearms and messages in which Ikard arranged drug sales.
Ikard is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
The investigation was led by the ATF and the Hickory Police Department, with the assistance of the North Carolina Department of Public Services, Division of Community Corrections.
Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Group Home Owners Convicted in $1 Million Medicare Fraud SchemeRead the Press Release
A federal jury convicted a Texas husband and wife yesterday for a $1 million Medicare fraud scheme, including violations of the federal Anti-Kickback Statute.
According to court documents and evidence presented at trial, Lindell King, 52, and Ynedra Diggs, 44, both of Missouri City, were patient recruiters who owned and operated group homes in which Medicare beneficiaries lived. In exchange for sending their group home residents to Behavioral Medicine of Houston (BMH), a community mental health center that purported to provide partial hospitalization services, BMH paid Diggs, King, and other patient recruiters kickbacks in cash and by check, often concealed as payment for “transportation” or other sham services. Over the course of the conspiracy, BMH billed approximately $1 million to Medicare based on kickbacks paid to Diggs and King.
Both Diggs and King were convicted of a conspiracy to defraud the United States and to pay and receive health care kickbacks, and several substantive violations of the Anti-Kickback Statute. Diggs and King are both scheduled to be sentenced on Aug. 4. King faces up to 20 years in prison on all charges and Diggs faces up to 15 years in prison on all charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer B. Lowery of the Southern District of Texas; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge James H. Smith III of the FBI’s Houston Field Office; and Major William Marlowe of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
The HHS-OIG, FBI, and MFCU investigated the case.
Trial Attorneys Monica Cooper and Brynn Schiess of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.
Former Correctional Officer Sentenced for Smuggling Cellphones into Dauphin County PrisonRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Kyle Bower, age 32, of Harrisburg, Pennsylvania, was sentenced on April 4, 2022, to 2 months’ imprisonment to be followed by 2 months of home detention by United States District Court Judge Christopher C. Conner for smuggling cellular telephones into Dauphin County Prison.
According to United States Attorney John C. Gurganus, Bower was a correctional officer at Dauphin County Prison when he agreed to smuggle cellphones into the prison for money on behalf of inmates. Between October 2015 and January 2016, he smuggled phones into the prison for inmates and was paid hundreds of dollars for each phone.
This case was investigated by the Federal Bureau of Investigation (FBI) and the Dauphin County Criminal Investigation Division. Assistant U.S. Attorney Michael Consiglio prosecuted the case.
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Former CEO of Shreveport Federal Credit Union Sentenced on Federal ChargesRead the Press Release
SHREVEPORT, La. - United States Attorney Brandon B. Brown announced that Helen Godfrey-Smith, 72, of Shreveport, Louisiana, has been sentenced by United States District Judge Elizabeth E. Foote for making and using a false document. Judge Foote sentenced Godfrey-Smith to one year of probation and she was ordered to pay a fine in the amount of $5,000.
According to information presented at Godfrey-Smith’s guilty plea hearing, she was employed by the Shreveport Federal Credit Union (SFCU) from 1983 to 2017 and during much of that time was employed as the Chief Executive Officer (CEO) of the SFCU. The SFCU was a Shreveport, Louisiana based financial institution under the regulation of the National Credit Union Administration (NCUA).
In October 2016, the SFCU, through Godfrey-Smith, entered into an agreement with the United States Department of the Treasury to buy back certain securities that were part of the Department’s Troubled Asset Relief Program (TARP). As part of that process, on December 27, 2016, Godfrey-Smith signed and submitted to the United States Department of the Treasury an Officer’s Certificate which certified that all conditions precedent to the closing had been satisfied.
In reality, SFCU had not met all conditions precedent to closing and had suffered a material adverse effect. Unbeknownst to the United States Department of the Treasury and the NCUA, SFCU was in a financial crisis. From 2015 through 2017, another individual who was the Chief Financial Officer of SFCU (Individual 1), had been falsifying call reports to the NCUA which included millions of dollars in fictitious fee income. In addition, she was creating fictitious entries in the banks records to support the false call reports. This created the illusion that SFCU was profitable when, in fact, the bank was failing. In addition, Individual 1, embezzled approximately $1.5 million from the credit union.
By the time Godfrey-Smith signed the Officer's Statement, she had become aware of deficiencies at the credit union. Specifically, she had recently investigated and discovered that there were millions of dollars of fictitious entries on SFCU's general ledger, and the credit union's books were not balanced. However, she failed to disclose this information to the United States Department of the Treasury and signed the false Officer’s Statement.
In the Spring of 2017, the institution failed. It was taken over by regulators from the NCUA and placed into a conservatorship. An investigation by the NCUA revealed that SFCU had amassed in excess of $10 million in losses by December 2016.
This case was investigated by the FBI, IRS-Criminal Investigation, and U.S. Department of Treasury–Office of Special Inspector General for the Troubled Asset Relief Program. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
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Former Bookkeeper Sentenced to 36 Months in Prison for Decades-Long Theft from Charleston Real Estate CompanyRead the Press Release
Charleston, South Carolina --- Karen Rhett, 59, of Mt. Pleasant, was sentenced to 36 months in federal prison after pleading guilty to wire fraud and false statements on tax documents. Rhett formerly served as the bookkeeper for Simmons Realty Company (“SRC”) and related business entities.
Evidence presented to the Court showed that over two and a half decades, Rhett stole more than a million dollars from the Simmons’ business entities. As the bookkeeper, Rhett was in a position of trust to maintain accounting and business records. Rhett devised a complex scheme to defraud the businesses through various means, including by embezzling funds through unrecorded general ledger deposits that she would transfer to herself. As part of the scheme, Rhett often transferred funds between the related business entities before transferring the funds to herself. Rhett also created false business expenses through fabricated invoices then wrote checks to herself for the same amount, recording the payments as legitimate business expenses.
United States District Judge David C. Norton sentenced Rhett to 36 months in federal prison, to be followed by a three-year term of court-ordered supervision. This sentencing is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service. Assistant United States Attorney Emily Limehouse prosecuted the case.
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Florida Man Sentenced to Time-Served for Transferring Obscene Material to a MinorRead the Press Release
PITTSBURGH – A former resident of Tampa, Florida, has been sentenced in federal court to time-served and 3 years’ supervised release on his conviction of transferring obscene material to a minor, United States Attorney Cindy K. Chung announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Robert Fike, age 51, of Tampa, Florida.
According to information presented to the court, in January of 2019 and in February of 2019, Fike sent packages to a minor female residing in the Western District of Pennsylvania. The packages contained obscene material—socks or leggings with Fike’s semen, as confirmed by laboratory testing, and letters addressed to the minor female with graphic, sexually explicit content.
Fike has been in custody related to this case since December 2019 and has served nearly 28 months in prison.
Assistant United States Attorney Heidi M. Grogan prosecuted this case on behalf of the government.
United States Attorney Chung commended the United States Postal Inspection Service, the Pennsylvania Office of Attorney General, and the Penn Township Police Department for the investigation leading to the successful prosecution of Fike.
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 individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Fentanyl Dealer Sentenced to Eight Years in Overdose DeathRead the Press Release
SAN JOSE – Xavier Robledo was sentenced in federal court today to 96 months in prison for distributing fentanyl that caused overdoses in two people and killed one, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Special Agent in Charge Wade R. Shannon. The sentence was handed down by United States District Judge Beth L. Freeman.
“M30 pills sold on the street are often laced with fentanyl, a cheap and deadly substitute,” said U.S. Attorney Stephanie M. Hinds. “These counterfeit pills mimic Oxycodone, but they can be killers in disguise. The mismeasurement of even a microgram of fentanyl can have lethal consequences. We urge all to stay away from fentanyl sold on the street in any form it takes.”
“The death and destruction caused by fentanyl knows no boundaries. From coast to coast this poison is devasting families,” said DEA Special Agent in Charge Wade R. Shannon. “Holding accountable those, like Robledo, who ruin lives with their criminal actions is our priority.”
Robledo, 21, of Seaside in Monterey County, California, pleaded guilty on February 8, 2022, to two counts of distributing fentanyl. In his plea agreement, Robledo admitted that in mid- April 2020, Robledo sold counterfeit, fentanyl-laced pills known as “M30” pills. M30 pills are light blue and imprinted with an “M” on one side and “30” on the other. He arranged the sale of three fentanyl-laced M30 pills via cell phone messages to a customer to whom Robledo had previously sold M30s. This person is identified only as “Individual 1” in the plea agreement. Robledo admitted he personally delivered the M30 pills, which he knew contained fentanyl, to Individual 1 at his house. The M30 pills caused Individual 1 to suffer a fentanyl overdose, and law enforcement officers found Individual 1 in an unresponsive state. Individual 1 was later able to recover from his overdose.
Robledo further admitted in his plea agreement that in early May 2020, he again sold a counterfeit M30 that he knew contained fentanyl. He sold this M30 to a different individual identified in the plea agreement as “Individual 2.” Robledo knew Individual 2 because two weeks earlier Robledo sold and delivered drugs to Individual 2 at a drug rehabilitation facility where Robledo knew Individual 2 was undergoing treatment. In the early May sale, Robledo arranged the sale to Individual 2 using cell phone messages, and Robledo delivered the M30 to Individual 2 at his house. A few hours later Individual 2 ingested the M30 pill. It caused him to overdose on fentanyl. Law enforcement officers found Individual 2 in an unresponsive state and transported him to a hospital. Individual 2 continued to be unresponsive. On or about May 8, 2020, Individual 2 died. Robledo admitted in his plea agreement that Individual 2 died as a result of the fentanyl in the M30 that Robledo sold him.
In addition to the 96 month prison term, U.S. District Judge Beth L. Freeman ordered Robledo to pay restitution for, among other things, the funeral costs of Individual 2. In addition, Robledo was sentenced to serve three years of supervised release following release from federal prison.
Assistant U.S. Attorneys Christina Liu and Casey Boome prosecuted the case with the assistance of Linda Love and Mark DiCenzo. The prosecution is the result of an investigation by DEA and the Pacific Grove Police Department.
Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone and can typically be obtained at a lower cost than genuine Oxycodone. However, small variations in the amount or quality of fentanyl can have significant effects on the potency of the counterfeit pills, raising the danger of overdoses. Fentanyl has become the leading cause of drug overdose deaths in the United States. In this case, the counterfeit, fentanyl-laced pills that Robledo distributed were shaped and colored to resemble Oxycodone pills that are sold legitimately in the marketplace. As in this case, counterfeit pills known as M30s are round tablets that are sometimes light blue and with “M” and “30” imprinted on opposite sides of the pill.
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.
Federal Grand Jury Indicts Louisville Man for Possession of Handgun at Shawnee High SchoolRead the Press Release
LOUISVILLE, KENTUCKY – A federal grand jury in Louisville, Kentucky returned an indictment on March 16, 2022, charging a Louisville man with illegal possession of a firearm in a school zone.
According to court documents, Jaylin Ready 18, of Louisville was indicted for possessing a handgun at Shawnee High School on January 31, 2022.
The defendant made his initial appearance today before U.S. Magistrate Judge Colin H. Lindsay of the U.S. District Court for the Western District of Kentucky. If convicted, he will face a maximum penalty of 5 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky and Special Agent in Charge R. Shawn Morrow of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) made the announcement.
The ATF and the Louisville Metro Police Department are investigating the case.
Assistant U.S. Attorney Joshua Porter 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.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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East Brookfield Man Convicted of Illegally Operating a Helicopter, Making False Statements and Attempted Witness TamperingRead the Press Release
BOSTON – An East Brookfield man was convicted today by a federal jury in Worcester in connection with unlawfully operating a helicopter, making false statements to federal investigators and attempting to tamper with a witness.
Antonio Santonastaso, 62, was convicted following a three-day jury trial of one count of serving as an airman without an airman certificate, one count of making false statements to federal agents and one count of attempted witness tampering. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Oct. 5, 2022. Santonastaso was indicted in May 2019.
“Mr. Santonastaso demonstrated a blatant disregard for FAA rules and regulations by operating a helicopter out of his backyard without a license on numerous occasions. Every time he did so, he endangered himself, his community and the general public on the ground,” said United States Attorney Rachael S. Rollins. “My office will continue our work to detect and hold accountable individuals who violate federal laws and regulations, as well as those who make false statements to federal investigators and who attempt to tamper with witnesses. I commend the Northeast U.S. Department of Transportation, Office of Inspector General, for their diligence and efforts in handling this case.”
“Anyone choosing to intentionally ignore Federal aviation regulations and requirements will be pursed to the fullest extent of the law,” said Joseph Harris, Special Agent-in-Charge, Department of Transportation Office of Inspector General, Northeastern Region. “As demonstrated by today’s conviction, we will continue working with our law enforcement and prosecutorial partners to support the safety and integrity of the Nation’s airspace.”
The Federal Aviation Administration (FAA) revoked Santonastaso’s license to pilot an aircraft in 2000, after he participated in the theft of a helicopter from Norwood Memorial Airport. Despite being aware of that revocation, Santonastaso operated a Robinson R-22 helicopter – taking off and landing from his backyard – more than 50 times between April 28, 2018, and Nov. 11, 2018.
When questioned by the FAA, Santonastaso made false statements regarding his eligibility to pilot the helicopter. Specifically, Santonastaso falsely claimed that the events that gave rise to the FAA’s revocation of his license were a fabrication. Evidence at trial also established that Santonastaso attempted to corruptly persuade an individual with the intent to hinder, delay and prevent that individual from reporting his illegal helicopter flights to law enforcement.
The charging statutes provide for a sentence of no greater than 20 years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
U.S. Attorney Rollins and DOT OIG SAC Harris made the announcement today. Assistant U.S. Attorneys Evan Panich of Rollins’ Affirmative Civil Enforcement unit, cross-designated to the Criminal Division, and Danial Bennett of Rollins’ Worcester Branch Office are prosecuting the case.
ESI Energy LLC, Wholly Owned Subsidiary of Nextera Energy Resources LLC, is Sentenced After Pleading Guilty to Killing and Wounding Eagles in Its Wind Energy Operations, in Violation of the Migratory Bird Treaty ActRead the Press Release
ESI Energy Inc. (ESI) was sentenced today in Cheyenne, Wyoming, for violations of the Migratory Bird Treaty Act (MBTA), announced Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney L. Robert Murray for the District of Wyoming.
ESI is a wholly owned subsidiary of NextEra Energy Resources LLC, which in turn is a wholly owned subsidiary of NextEra Energy Inc. ESI owns other companies, many of which operate wind energy generation facilities throughout the United States, including in Wyoming, New Mexico, Arizona, California, Colorado, Illinois, North Dakota and Michigan, as well as other states.
ESI pled guilty to three counts of violating the MBTA, each based on the documented deaths of golden eagles due to blunt force trauma from being struck by a wind turbine blade at a particular facility in Wyoming or New Mexico, where ESI had not applied for the necessary permits. ESI further acknowledged that at least 150 bald and golden eagles have died in total since 2012, across 50 of its 154 wind energy facilities. 136 of those deaths have been affirmatively determined to be attributable to the eagle being struck by a wind turbine blade.
The court sentenced ESI, pursuant to a plea agreement, to a fine of $1,861,600, restitution in the amount of $6,210,991, and a five-year period of probation during which it must follow an Eagle Management Plan (EMP). The EMP requires implementation of up to $27 million (during the period of probation; more thereafter if a written extension is signed) of measures intended to minimize additional eagle deaths and injuries, and payment of compensatory mitigation for future eagle deaths and injuries of $29,623 per bald or golden eagle. ESI also must over the next 36 months apply for permits for any unavoidable take of eagles at each of 50 of its facilities where take is documented or, in the case of four facilities not yet operational, predicted.
“The Justice Department will enforce the nation’s wildlife laws to promote Congress’s purposes, including ensuring sustainable populations of bald and golden eagles, and to promote fair competition for companies that comply,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “For more than a decade, ESI has violated those laws, taking eagles without obtaining or even seeking the necessary permit. We are pleased to see ESI now commit to seeking such permits and ultimately ceasing such violations.”
“Wyoming is graced with abundant natural resources – including both eagles and strong winds,” said U.S. Attorney L. Robert Murray for the District of Wyoming. “The sentencing today shows our commitment to both maintaining and making sustainable use of our resources. It also ensures a level playing field for business in Wyoming and ensures those receiving federal tax credits are complying with federal law.”
“The U.S. Fish and Wildlife Service (USFWS) has a long history of working closely with the wind power industry to identify best practices in avoiding and minimizing the impacts of land-based wind energy facilities on wildlife, including eagles,” said Edward Grace, Assistant Director of the USFWS’ Office of Law Enforcement. “This agreement holds ESI and its affiliates accountable for years of unwillingness to work cooperatively with the Service and their blatant disregard of wildlife laws, and finally marks a path forward for the benefit of eagles and other wildlife resources entrusted to the Service’s stewardship.”
“This prosecution and the restitution it secures will protect the ecologically vital and majestic natural resources of our bald eagle and golden eagle populations,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “California has been awarded more than $4.6 million in restitution under this plea agreement for the deaths of at least 92 eagles within the state caused by the defendant and affiliated companies.”
The MBTA prohibits the “taking” of migratory birds, including bald and golden eagles, without a permit from the U.S. Fish and Wildlife Service of the Department of the Interior. “Take” is defined by regulation to mean “to pursue, hunt, shoot, wound, kill, trap, capture or collect” or to attempt to do so.
Bald and golden eagles are also protected under the Bald and Golden Eagle Protection Act (the Eagle Act) which, like the MBTA, prohibits killing and wounding eagles without a permit from USFWS. USFWS is authorized to issue such eagle take permits (ETPs) only where: (1) the predicted take is compatible with the preservation of bald and golden eagles; (2) it is necessary to protect an interest in a particular locality; (3) the take is associated with, but not the purpose of, the activity; and (4) the take could not practicably be avoided. Permit applicants are required to avoid and minimize take to the maximum extent practicable, and to pay compensatory mitigation for unavoidable takes.
According to documents filed in court, it is the government’s position that ESI’s conduct violated both the Eagle Act and the MBTA, but the government accepted the company’s guilty plea to only MBTA counts due in large part to ESI’s agreement to apply for permits at 50 facilities and its prior efforts to minimize and mitigate for eagle fatalities.
ESI’s and its affiliated companies’ actions in Wyoming and New Mexico were taken under an admitted nationwide posture and alleged corporate policy of not applying for ETPs.
According to the information filed in this case:
- ESI and its affiliates deliberately elected not to apply for or obtain any ETP intended to ensure the preservation of bald and golden eagles, and instead chose to construct and operate facilities it knew would take eagles, and in fact took eagles, without any permits authorizing that take.
- Because ESI did not seek any ETPs, it avoided any immediate federal obligation to avoid and minimize eagle take to the maximum degree practicable and to pay for compensatory mitigation for the eagle deaths.
- Because some other wind energy companies (1) altered proposed operations as required to avoid and minimize take levels to the maximum degree practicable, (2) applied for ETPs, (3) obtained ETPs that in some cases were impacted by take levels caused by ESI’s unpermitted facilities, and/or (4) paid mitigation for eagle takings, ESI, by not doing these things, gained a competitive advantage relative to those wind energy companies.
- ESI and its affiliates began commercial operations at new facilities on a schedule intended to meet, among other things, power purchase agreement commitments and qualifying deadlines for particular tax credit rates for renewable energy, and with production amounts not impacted by avoidance and minimization measures that might have been required under an eagle take permit. ESI and its affiliates received hundreds of millions of dollars in federal tax credits for generating electricity from wind power at facilities that it operated, knowing that multiple eagles would be killed and wounded without legal authorization, and without, in most instances, paying restitution or compensatory mitigation.
According to documents filed in court, between 2018 and 2019, ESI authorized subsidiary Cedar Springs Transmission LLC (CST) to develop a multi-facility commercial wind power project in Converse County, Wyoming, consisting of the Cedar Springs I, II and III wind power facilities (collectively, the project).
On March 28, 2019, USFWS informed the defendant, through a letter to its agents, that Cedar Springs I and II, based on CST’s consultant’s calculations, could result in the collision mortality of 44 golden eagles and 23 bald eagles over the first five years of operations, and recommended that, because of the unusually high number of occupied golden eagle nests, the proposed wind facilities not be built. USFWS further stated that, if the facilities were built, the company should apply for an ETP under the Eagle Act as soon as possible. The defendant continued the development of the Cedar Springs facilities.
On July 17, 2019, representatives of CST met with USFWS representatives. During that meeting, USFWS recommended that, consistent with the recommendation made by USFWS in February, the wind project not be constructed due to the risk of avian fatalities. USFWS also recommended that, if the wind project was built, the project should implement seasonal curtailment during daylight hours. The defendant did not implement the recommended curtailment.
Between Sept. 10 and Sept. 23, 2019, USFWS sent additional letters to the defendant’s agents, each noting that the defendant’s parent company had documented that the project was anticipated to kill eagles and recommending that the facilities apply for an ETP. USFWS reiterated for the third time its recommendation that a wind project should not be constructed in the proposed area for the Cedar Springs project.
On or about Sept 28, 2020, the defendant’s affiliates began some turbine operations at Cedar Springs II. Between approximately Nov 29, 2020, and Dec 1, 2020, two golden eagle carcasses were found near wind turbines at Cedar Springs II (after which it was sold).
On or about Dec. 6, 2020, the defendant authorized the commercial operation of Cedar Springs I to commence. Between April 2021 and January 2022, seven golden eagle carcasses were found near wind turbines at Cedar Springs I.
On or about Dec. 15, 2020, the defendant authorized the commercial operation of Cedar Springs III to commence. On approximately Jan. 30, 2022, a golden eagle carcass was found near a wind turbine at Cedar Springs III.
Between 2018 and 2019, ESI authorized a subsidiary, Roundhouse Renewable Energy LLC (RRE), to develop a commercial wind power facility in Laramie County, Wyoming.
In a letter dated March 28, 2019, USFWS stated that, based on RRE’s consultant’s calculations, Roundhouse could result in the collision mortality of 19 golden eagles and 4 bald eagles over the first five years of operation, and recommended that RRE apply for an ETP under the Eagle Act. The defendant continued the development of Roundhouse.
In a letter dated Aug. 27, 2019, USFWS provided recommendations on opportunities to avoid and minimize impacts to eagles using the available data. USFWS again stated that the facility was predicted to take eagles even if all USFWS recommendations were implemented, however, and recommended that an ETP be sought.
On June 12, 2020, the defendant authorized the commercial operation of Roundhouse to commence. Between approximately Sept. 17, 2020, and April 17, 2021, four golden eagle carcasses were found near wind turbines at Roundhouse.
In 2003, ESI authorized a subsidiary, FPL Energy New Mexico Wind LLC (NMW), to begin operations at a commercial wind power facility in De Baca and Quay Counties, New Mexico. On or about Dec. 29, 2020, two golden eagle carcasses were found near a wind turbine at NMW.
No ETP was sought by or issued to ESI in connection with the operations or repowering of any of the above wind power facilities.
This case was investigated by the U.S. Fish and Wildlife Service Office of Law Enforcement. The prosecutions were handled by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division with assistance from the U.S. Attorneys’ Offices for the Eastern District of California, the District of Wyoming and the Northern District of California.
ESI Energy LLC, Wholly Owned Subsidiary of Nextera Energy Resources LLC, is Sentenced After Pleading Guilty to Killing and Wounding Eagles in Its Wind Energy Operations, in Violation of the Migratory Bird Treaty ActRead the Press Release
WASHINGTON – ESI Energy Inc. (ESI) was sentenced today in Cheyenne, Wyoming, for violations of the Migratory Bird Treaty Act (MBTA), announced Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney L. Robert Murray for the District of Wyoming.
ESI is a wholly owned subsidiary of NextEra Energy Resources LLC, which in turn is a wholly owned subsidiary of NextEra Energy Inc. ESI owns other companies, many of which operate wind energy generation facilities throughout the United States, including in Wyoming, New Mexico, Arizona, California, Colorado, Illinois, North Dakota and Michigan, as well as other states.
ESI pled guilty to three counts of violating the MBTA, each based on the documented deaths of golden eagles due to blunt force trauma from being struck by a wind turbine blade at a particular facility in Wyoming or New Mexico, where ESI had not applied for the necessary permits. ESI further acknowledged that at least 150 bald and golden eagles have died in total since 2012, across 50 of its 154 wind energy facilities. 136 of those deaths have been affirmatively determined to be attributable to the eagle being struck by a wind turbine blade.
The court sentenced ESI, pursuant to a plea agreement, to a fine of $1,861,600, restitution in the amount of $6,210,991, and a five-year period of probation during which it must follow an Eagle Management Plan (“EMP”). The EMP requires implementation of up to $27 million (during the period of probation; more thereafter if a written extension is signed) of measures intended to minimize additional eagle deaths and injuries, and payment of compensatory mitigation for future eagle deaths and injuries of $29,623 per bald or golden eagle. ESI also must over the next 36 months apply for permits for any unavoidable take of eagles at each of 50 of its facilities where take is documented or, in the case of four facilities not yet operational, predicted.
“The Justice Department will enforce the nation’s wildlife laws to promote Congress’s purposes, including ensuring sustainable populations of bald and golden eagles, and to promote fair competition for companies that comply,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “For more than a decade, ESI has violated those laws, taking eagles without obtaining or even seeking the necessary permit. We are pleased to see ESI now commit to seeking such permits and ultimately ceasing such violations.”
“Wyoming is graced with abundant natural resources – including both eagles and strong winds,” said U.S. Attorney L. Robert Murray for the District of Wyoming. “The sentencing today shows our commitment to both maintaining and making sustainable use of our resources. It also ensures a level playing field for business in Wyoming and ensures those receiving federal tax credits are complying with federal law.”
“The U.S. Fish and Wildlife Service (USFWS) has a long history of working closely with the wind power industry to identify best practices in avoiding and minimizing the impacts of land-based wind energy facilities on wildlife, including eagles,” said Edward Grace, Assistant Director of the USFWS’ Office of Law Enforcement. “This agreement holds ESI and its affiliates accountable for years of unwillingness to work cooperatively with the Service and their blatant disregard of wildlife laws, and finally marks a path forward for the benefit of eagles and other wildlife resources entrusted to the Service’s stewardship.”
“This prosecution and the restitution it secures will protect the ecologically vital and majestic natural resources of our bald eagle and golden eagle populations,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “California has been awarded more than $4.6 million in restitution under this plea agreement for the deaths of at least 92 eagles within the state caused by the defendant and affiliated companies.”
The MBTA prohibits the “taking” of migratory birds, including bald and golden eagles, without a permit from the U.S. Fish and Wildlife Service of the Department of the Interior. “Take” is defined by regulation to mean “to pursue, hunt, shoot, wound, kill, trap, capture or collect” or to attempt to do so.
Bald and golden eagles are also protected under the Bald and Golden Eagle Protection Act (the Eagle Act) which, like the MBTA, prohibits killing and wounding eagles without a permit from USFWS. USFWS is authorized to issue such eagle take permits (ETPs) only where: (1) the predicted take is compatible with the preservation of bald and golden eagles; (2) it is necessary to protect an interest in a particular locality; (3) the take is associated with, but not the purpose of, the activity; and (4) the take could not practicably be avoided. Permit applicants are required to avoid and minimize take to the maximum extent practicable, and to pay compensatory mitigation for unavoidable takes.
According to documents filed in court, it is the government’s position that ESI’s conduct violated both the Eagle Act and the MBTA, but the government accepted the company’s guilty plea to only MBTA counts due in large part to ESI’s agreement to apply for permits at 50 facilities and its prior efforts to minimize and mitigate for eagle fatalities.
ESI’s and its affiliated companies’ actions in Wyoming and New Mexico were taken under an admitted nationwide posture and alleged corporate policy of not applying for ETPs.
According to the information filed in this case: • ESI and its affiliates deliberately elected not to apply for or obtain any ETP intended to ensure the preservation of bald and golden eagles, and instead chose to construct and operate facilities it knew would take eagles, and in fact took eagles, without any permits authorizing that take.
• Because ESI did not seek any ETPs, it avoided any immediate federal obligation to avoid and minimize eagle take to the maximum degree practicable and to pay for compensatory mitigation for the eagle deaths.
• Because some other wind energy companies (1) altered proposed operations as required to avoid and minimize take levels to the maximum degree practicable, (2) applied for ETPs, (3) obtained ETPs that in some cases were impacted by take levels caused by ESI’s unpermitted facilities, and/or (4) paid mitigation for eagle takings, ESI, by not doing these things, gained a competitive advantage relative to those wind energy companies.
• ESI and its affiliates began commercial operations at new facilities on a schedule intended to meet, among other things, power purchase agreement commitments and qualifying deadlines for particular tax credit rates for renewable energy, and with production amounts not impacted by avoidance and minimization measures that might have been required under an eagle take permit. ESI and its affiliates received hundreds of millions of dollars in federal tax credits for generating electricity from wind power at facilities that it operated, knowing that multiple eagles would be killed and wounded without legal authorization, and without, in most instances, paying restitution or compensatory mitigation.According to documents filed in court, between 2018 and 2019, ESI authorized subsidiary Cedar Springs Transmission LLC (CST) to develop a multi-facility commercial wind power project in Converse County, Wyoming, consisting of the Cedar Springs I, II and III wind power facilities (collectively, the project).
On March 28, 2019, USFWS informed the defendant, through a letter to its agents, that Cedar Springs I and II, based on CST’s consultant’s calculations, could result in the collision mortality of 44 golden eagles and 23 bald eagles over the first five years of operations, and recommended that, because of the unusually high number of occupied golden eagle nests, the proposed wind facilities not be built. USFWS further stated that, if the facilities were built, the company should apply for an ETP under the Eagle Act as soon as possible. The defendant continued the development of the Cedar Springs facilities.
On July 17, 2019, representatives of CST met with USFWS representatives. During that meeting, USFWS recommended that, consistent with the recommendation made by USFWS in February, the wind project not be constructed due to the risk of avian fatalities. USFWS also recommended that, if the wind project was built, the project should implement seasonal curtailment during daylight hours. The defendant did not implement the recommended curtailment.
Between Sept. 10 and Sept. 23, 2019, USFWS sent additional letters to the defendant’s agents, each noting that the defendant’s parent company had documented that the project was anticipated to kill eagles and recommending that the facilities apply for an ETP. USFWS reiterated for the third time its recommendation that a wind project should not be constructed in the proposed area for the Cedar Springs project.On or about Sept 28, 2020, the defendant’s affiliates began some turbine operations at Cedar Springs II. Between approximately Nov 29, 2020, and Dec 1, 2020, two golden eagle carcasses were found near wind turbines at Cedar Springs II (after which it was sold).
On or about Dec. 6, 2020, the defendant authorized the commercial operation of Cedar Springs I to commence. Between April 2021 and January 2022, seven golden eagle carcasses were found near wind turbines at Cedar Springs I.
On or about Dec. 15, 2020, the defendant authorized the commercial operation of Cedar Springs III to commence. On approximately Jan. 30, 2022, a golden eagle carcass was found near a wind turbine at Cedar Springs III.
Between 2018 and 2019, ESI authorized a subsidiary, Roundhouse Renewable Energy LLC (RRE), to develop a commercial wind power facility in Laramie County, Wyoming.
In a letter dated March 28, 2019, USFWS stated that, based on RRE’s consultant’s calculations, Roundhouse could result in the collision mortality of 19 golden eagles and 4 bald eagles over the first five years of operation, and recommended that RRE apply for an ETP under the Eagle Act. The defendant continued the development of Roundhouse.
In a letter dated Aug. 27, 2019, USFWS provided recommendations on opportunities to avoid and minimize impacts to eagles using the available data. USFWS again stated that the facility was predicted to take eagles even if all USFWS recommendations were implemented, however, and recommended that an ETP be sought.
On June 12, 2020, the defendant authorized the commercial operation of Roundhouse to commence. Between approximately Sept. 17, 2020, and April 17, 2021, four golden eagle carcasses were found near wind turbines at Roundhouse.
In 2003, ESI authorized a subsidiary, FPL Energy New Mexico Wind LLC (NMW), to begin operations at a commercial wind power facility in De Baca and Quay Counties, New Mexico. On or about Dec. 29, 2020, two golden eagle carcasses were found near a wind turbine at NMW.No ETP was sought by or issued to ESI in connection with the operations or repowering of any of the above wind power facilities.
This case was investigated by the U.S. Fish and Wildlife Service Office of Law Enforcement. The prosecutions were handled by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division with assistance from the U.S. Attorneys’ Offices for the Eastern District of California, the District of Wyoming and Northern District of California.
ESI Energy LLC, Wholly Owned Subsidiary of Nextera Energy Resources LLC, Is Sentenced After Pleading Guilty to Killing and Wounding Eagles in Its Wind Energy Operations, in Violation of the Migratory Bird Treaty ActRead the Press Release
SACRAMENTO, Calif. – ESI Energy Inc. (ESI) was sentenced today in Cheyenne, Wyoming, for violations of the Migratory Bird Treaty Act (MBTA), announced Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney L. Robert Murray for the District of Wyoming.
ESI is a wholly owned subsidiary of NextEra Energy Resources LLC, which in turn is a wholly owned subsidiary of NextEra Energy Inc. ESI owns other companies, many of which operate wind energy generation facilities throughout the United States, including in Wyoming, New Mexico, Arizona, California, Colorado, Illinois, North Dakota and Michigan, as well as other states.
ESI pleaded guilty to three counts of violating the Migratory Bird Treaty Act (MBTA), each based on the documented deaths of golden eagles due to blunt force trauma from being struck by a wind turbine blade at a particular facility in Wyoming or New Mexico, where ESI had not applied for the necessary permits. ESI further acknowledged that at least 150 bald and golden eagles have died in total since 2012, across 50 of its 154 wind energy facilities. 136 of those deaths have been affirmatively determined to be attributable to the eagle being struck by a wind turbine blade.
The court sentenced ESI, pursuant to a plea agreement, to a fine of $1,861,600, restitution in the amount of $6,210,991, and a five-year period of probation during which it must follow an Eagle Management Plan (EMP). The EMP requires implementation of up to $27 million (during the period of probation; more thereafter if a written extension is signed) of measures intended to minimize additional eagle deaths and injuries, and payment of compensatory mitigation for future eagle deaths and injuries of $29,623 per bald or golden eagle. ESI also must over the next 36 months apply for permits for any unavoidable take of eagles at each of 50 of its facilities where take is documented or, in the case of four facilities not yet operational, predicted.
“The Justice Department will enforce the nation’s wildlife laws to promote Congress’s purposes, including ensuring sustainable populations of bald and golden eagles, and to promote fair competition for companies that comply,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “For more than a decade, ESI has violated those laws, taking eagles without obtaining or even seeking the necessary permit. We are pleased to see ESI now commit to seeking such permits and ultimately ceasing such violations.”
“Wyoming is graced with abundant natural resources – including both eagles and strong winds,” said U.S. Attorney L. Robert Murray for the District of Wyoming. “The sentencing today shows our commitment to both maintaining and making sustainable use of our resources. It also ensures a level playing field for business in Wyoming and ensures those receiving federal tax credits are complying with federal law.”
“The U.S. Fish and Wildlife Service (USFWS) has a long history of working closely with the wind power industry to identify best practices in avoiding and minimizing the impacts of land-based wind energy facilities on wildlife, including eagles,” said Edward Grace, Assistant Director of the USFWS’ Office of Law Enforcement. “This agreement holds ESI and its affiliates accountable for years of unwillingness to work cooperatively with the Service and their blatant disregard of wildlife laws, and finally marks a path forward for the benefit of eagles and other wildlife resources entrusted to the Service’s stewardship.”
“This prosecution and the restitution it secures will protect the ecologically vital and majestic natural resources of our bald eagle and golden eagle populations,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “California has been awarded more than $4.6 million in restitution under this plea agreement for the deaths of at least 92 eagles within the state caused by the defendant and affiliated companies.”
The MBTA prohibits the “taking” of migratory birds, including bald and golden eagles, without a permit from the U.S. Fish and Wildlife Service of the Department of the Interior. “Take” is defined by regulation to mean “to pursue, hunt, shoot, wound, kill, trap, capture or collect” or to attempt to do so.
Bald and golden eagles are also protected under the Bald and Golden Eagle Protection Act (the Eagle Act) which, like the MBTA, prohibits killing and wounding eagles without a permit from USFWS. USFWS is authorized to issue such eagle take permits (ETPs) only where: (1) the predicted take is compatible with the preservation of bald and golden eagles; (2) it is necessary to protect an interest in a particular locality; (3) the take is associated with, but not the purpose of, the activity; and (4) the take could not practicably be avoided. Permit applicants are required to avoid and minimize take to the maximum extent practicable, and to pay compensatory mitigation for unavoidable takes.
According to documents filed in court, it is the government’s position that ESI’s conduct violated both the Eagle Act and the MBTA, but the government accepted the company’s guilty plea to only MBTA counts due in large part to ESI’s agreement to apply for permits at 50 facilities and its prior efforts to minimize and mitigate for eagle fatalities.
ESI’s and its affiliated companies’ actions in Wyoming and New Mexico were taken under an admitted nationwide posture and alleged corporate policy of not applying for ETPs.
According to the information filed in this case:
- ESI and its affiliates deliberately elected not to apply for or obtain any ETP intended to ensure the preservation of bald and golden eagles, and instead chose to construct and operate facilities it knew would take eagles, and in fact took eagles, without any permits authorizing that take.
- Because ESI did not seek any ETPs, it avoided any immediate federal obligation to avoid and minimize eagle take to the maximum degree practicable and to pay for compensatory mitigation for the eagle deaths.
- Because some other wind energy companies (1) altered proposed operations as required to avoid and minimize take levels to the maximum degree practicable, (2) applied for ETPs, (3) obtained ETPs that in some cases were impacted by take levels caused by ESI’s unpermitted facilities, and/or (4) paid mitigation for eagle takings, ESI, by not doing these things, gained a competitive advantage relative to those wind energy companies.
- ESI and its affiliates began commercial operations at new facilities on a schedule intended to meet, among other things, power purchase agreement commitments and qualifying deadlines for particular tax credit rates for renewable energy, and with production amounts not impacted by avoidance and minimization measures that might have been required under an eagle take permit. ESI and its affiliates received hundreds of millions of dollars in federal tax credits for generating electricity from wind power at facilities that it operated, knowing that multiple eagles would be killed and wounded without legal authorization, and without, in most instances, paying restitution or compensatory mitigation.
According to documents filed in court, between 2018 and 2019, ESI authorized subsidiary Cedar Springs Transmission LLC (CST) to develop a multi-facility commercial wind power project in Converse County, Wyoming, consisting of the Cedar Springs I, II and III wind power facilities (collectively, the project).
On March 28, 2019, USFWS informed the defendant, through a letter to its agents, that Cedar Springs I and II, based on CST’s consultant’s calculations, could result in the collision mortality of 44 golden eagles and 23 bald eagles over the first five years of operations, and recommended that, because of the unusually high number of occupied golden eagle nests, the proposed wind facilities not be built. USFWS further stated that, if the facilities were built, the company should apply for an ETP under the Eagle Act as soon as possible. The defendant continued the development of the Cedar Springs facilities.
On July 17, 2019, representatives of CST met with USFWS representatives. During that meeting, USFWS recommended that, consistent with the recommendation made by USFWS in February, the wind project not be constructed due to the risk of avian fatalities. USFWS also recommended that, if the wind project was built, the project should implement seasonal curtailment during daylight hours. The defendant did not implement the recommended curtailment.
Between Sept. 10 and Sept. 23, 2019, USFWS sent additional letters to the defendant’s agents, each noting that the defendant’s parent company had documented that the project was anticipated to kill eagles and recommending that the facilities apply for an ETP. USFWS reiterated for the third time its recommendation that a wind project should not be constructed in the proposed area for the Cedar Springs project.
On or about Sept 28, 2020, the defendant’s affiliates began some turbine operations at Cedar Springs II. Between approximately Nov. 29, 2020, and Dec. 1, 2020, two golden eagle carcasses were found near wind turbines at Cedar Springs II (after which it was sold).
On or about Dec. 6, 2020, the defendant authorized the commercial operation of Cedar Springs I to commence. Between April 2021 and January 2022, seven golden eagle carcasses were found near wind turbines at Cedar Springs I.
On or about Dec. 15, 2020, the defendant authorized the commercial operation of Cedar Springs III to commence. On approximately Jan. 30, 2022, a golden eagle carcass was found near a wind turbine at Cedar Springs III.
Between 2018 and 2019, ESI authorized a subsidiary, Roundhouse Renewable Energy LLC (RRE), to develop a commercial wind power facility in Laramie County, Wyoming.
In a letter dated March 28, 2019, USFWS stated that, based on RRE’s consultant’s calculations, Roundhouse could result in the collision mortality of 19 golden eagles and 4 bald eagles over the first five years of operation, and recommended that RRE apply for an ETP under the Eagle Act. The defendant continued the development of Roundhouse.
In a letter dated Aug. 27, 2019, USFWS provided recommendations on opportunities to avoid and minimize impacts to eagles using the available data. USFWS again stated that the facility was predicted to take eagles even if all USFWS recommendations were implemented, however, and recommended that an ETP be sought.
On June 12, 2020, the defendant authorized the commercial operation of Roundhouse to commence. Between approximately Sept. 17, 2020, and April 17, 2021, four golden eagle carcasses were found near wind turbines at Roundhouse.
In 2003, ESI authorized a subsidiary, FPL Energy New Mexico Wind LLC (NMW), to begin operations at a commercial wind power facility in De Baca and Quay Counties, New Mexico. On or about Dec. 29, 2020, two golden eagle carcasses were found near a wind turbine at NMW.
No ETP was sought by or issued to ESI in connection with the operations or repowering of any of the above wind power facilities.
This case was investigated by the U.S. Fish and Wildlife Service Office of Law Enforcement. The prosecutions were handled by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division with assistance from the U.S. Attorneys’ Offices for the Eastern District of California, the District of Wyoming and the Northern District of California.