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18 January 2022
Justice Department and Federal Trade Commission Seek to Strengthen Enforcement Against Illegal MergersRead the Press Release
Today, the Justice Department’s Antitrust Division and Federal Trade Commission (FTC) launched a joint public inquiry aimed at strengthening enforcement against illegal mergers. Recent evidence indicates that many industries across the economy are becoming more concentrated and less competitive – imperiling choice and economic gains for consumers, workers, entrepreneurs and small businesses. These problems are likely to persist or worsen due to an ongoing merger surge that has more than doubled merger filings from 2020 to 2021. To address mounting concerns, the agencies are soliciting public input on ways to modernize federal merger guidelines to better detect and prevent illegal, anticompetitive deals in today’s modern markets.
“Our country depends on competition to drive progress, innovation and prosperity,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We need to understand why so many industries have too few competitors, and to think carefully about how to ensure our merger enforcement tools are fit for purpose in the modern economy.”
“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation and less resiliency,” said FTC Chair Lina M. Khan. “This inquiry launched by the FTC and DOJ is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals. Hearing from a broad set of market participants, especially those who have experienced first-hand the effects of mergers and acquisitions, will be critical to our efforts.”
Competition is critical to the success of the economy. It ensures that Americans have the freedom to choose among different suppliers and different employers. When businesses face competition, it spurs them to improve their products, develop new ones and lower prices. Mergers can reduce choices for consumers, workers and other businesses, leaving them increasingly dependent on larger and more powerful firms that have purchased greater power to dictate the terms of their deals. To protect competition and prevent increased consolidation, Congress passed a series of antitrust laws and authorized the Justice Department and FTC to enforce them.
The antitrust laws charge the Justice Department and the FTC with preventing mergers that may substantially lessen competition or tend to create a monopoly. Merger guidelines are frameworks for the analysis of mergers under the antitrust laws. The Justice Department first published merger guidelines in 1968, with the goal of providing transparency into the standards it applied in reviewing mergers. Since then, the agencies have published a number of updates, generally specified by whether the transaction is considered horizontal (within the same market) or vertical (within the same supply chain). Although the guidelines identify some of the competitive harms mergers present, markets may fall outside the frameworks under the current approach.
The public inquiry launched today seeks comments on developments in the modern economy and new evidence of mergers’ effects on competition to inform potential revisions to the guidelines. The agencies encourage the public, including market participants, government entities, economists, attorneys, academics, unions, employees, farmers, workers, businesses, franchisees and consumers, to share feedback, evidence and ideas that may inform revisions to the guidelines. Some of the specific areas of inquiry on which the agencies are seeking public input and information include:
- Purpose and scope of merger review: The agencies seek information on whether the guidelines explain and implement the statutory ban on transactions that “may” substantially lessen competition or tend to create a monopoly, and what harms are contemplated by those standards. The agencies further seek input on whether distinctions between horizontal and vertical transactions reflected in the guidelines should be revisited in light of trends in the modern economy.
- Presumptions that certain transactions are anticompetitive: The guidelines identify certain market circumstances that justify a presumption of competitive harm based on market concentration. The agencies seek information on whether concentration thresholds should be adjusted to improve the efficiency and effectiveness of enforcement, whether alternative metrics or qualitative factors should also trigger presumptions of competitive harm, and evidence regarding the accuracy of such presumptions.
- Use of market definition in analyzing competitive effects: The agencies seek input on potential updates to the guidelines’ market definition analysis to better account for non-price competition. They also seek to input on when direct evidence of a transaction’s likely competitive effects, such as evidence of head-to-head competition, may eliminate the need for a separate market definition exercise.
- Threats to potential and nascent competition: The agencies seek input on potential updates to the guidelines’ discussion of potential and nascent competitors, which may be key sources of innovation and competition.
- Impact of monopsony power, including in labor markets: The agencies seek input on how to address the issue of buyer power in more detail in the guidelines. Labor markets are a key example of buyer power, and the agencies seek information regarding how the guidelines should analyze labor market effects of mergers.
- Unique characteristics of digital markets: The agencies seek information on how to account for key areas of the modern economy like digital markets in the guidelines, which often have characteristics like zero-price products, multi-sided markets and data aggregation that the current guidelines do not address in detail.
The Request for Information is available at https://www.regulations.gov/docket/FTC-2022-0003/document.
The comment period is open for 60 days. Comments can be submitted to regulations.gov and must be received no later than Monday, March 21, 2022. The information will be used by the agencies to consider updates and revisions to the guidelines. If such revisions are contemplated in light of the evidence received and the agencies’ independent research, the agencies will publish proposed guidelines for public comment.
Click to view AAG Kanter's remarks.
Click to view Chair Khan's remarks.
Judge sentences Doniphan man to 148 months in federal prison for attempting to meet juvenile for sexRead the Press Release
CAPE GIRARDEAU-The United States Attorney's Office announced that JOSHUA J. DAMON, age 35, was sentenced today to serve 148 months in federal prison following his guilty plea to attempted enticement of a minor. The sentence was imposed by United States District Judge Stephen R. Clark at the federal courthouse in Cape Girardeau, Missouri.
According to court documents, the charges stemmed from an investigation in which a law enforcement officer, posing in an undercover capacity as a 14-year-old boy, began communicating with Damon on a social media platform. During the communications, Damon made repeated requests to meet the minor in person for the purpose of engaging in sexual activity. Arrangements were made to meet at a particular location in Doniphan, Missouri on the evening of February 25, 2021. Law enforcement officials established surveillance and Damon arrived at the agreed upon time with a condom and a jar of lubricant. At his guilty plea hearing last year, Damon admitted that he arrived at the location with the expectation of engaging in sexual activity with a 14-year-old boy.
After serving the 148-month sentence, Damon was ordered to be placed on a lifetime term of supervised release. Damon will also be required to register as a sex offender for life.
This case was investigated by the Missouri State Highway Patrol and the Federal Bureau of Investigation. Assistant United States Attorney Jack Koester handled the prosecution for the government.
Jake’s Fireworks Owner Guilty of Federal Drug Trafficking ViolationsRead the Press Release
BEAUMONT, Texas – Two Jake’s Fireworks defendants, including the owner of the Nederland business, have pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.
Jake Ellis Daughtry, 35, of Nederland, pleaded guilty to conspiracy to possess with intent to distribute a date rape drug over the internet to an unauthorized purchaser. Kip William Daughtry, 48, of Vidor, pleaded guilty to possession with intent to distribute a controlled substance analogue.
According to information presented in court, Jake Daughtry and Kip Daughtry are the leaders of a Chemical Trafficking Organization (“CTO”) cell operating on a national scale. Investigation of the organization began in 2018 when DEA West Palm Beach, Florida intercepted mail parcels of a chemical identified as 1,4 butanediol, commonly referred to as “BDO.” BDO is a chemical manufactured only for industrial or laboratory use as a floor stripper or vehicle wheel cleaner and is not intended for human consumption. Investigators determined that when BDO is ingested, it immediately metabolizes into GHB (a known date-rape drug) with the same effects, causing potential overdoses, addiction, and death.
DEA traced the seized parcels to their origination point, Right Price Chemicals, a business located on Twin City Highway in Nederland, Texas, and owned by Jake Daughtry. A seasonal fireworks business called “Jake’s Fireworks” is also operated at that location. Customers from all over the United States were able to order quantities of BDO from the Right Price Chemicals website in small amounts to use for personal consumption. The Daughtry’s continued to sell BDO even after becoming aware that some customers were ingesting the substance for its’ narcotic effect, rather than using it for its intended commercial purpose. Agents determined that since 2016, Right Price Chemicals has distributed approximately 7,000 gallons of BDO over thousands of orders, and that those sales generated $4.5 million.
The defendants were indicted by a federal grand jury on June 3, 2020 and face up to 20 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
In addition, Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry agreed to the entry of a permanent injunction that prohibits them, or Right Price Chemicals, to ever sell or distribute BDO to anyone, anywhere, at any point in the future.
“After being notified by Florida law enforcement that this dangerous and lethal chemical was being sold to users for a nefarious purpose, East Texas law enforcement agencies took action to protect the public and prevent others from falling prey to the sale and use of this dangerous substance,” said U.S. Attorney Brit Featherston. “This was a complicated investigation involving numerous investigative agencies and both the criminal and civil divisions of the U.S. Attorney’s Office. Their collaborative efforts have made our community and country a safer place to live.”
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being investigated by the Drug Enforcement Administration West Palm Beach, Florida, and Beaumont; U.S. Postal Service; Internal Revenue Service-Criminal Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Jefferson County Sheriff's Office. Essential support and coordination was provided by numerous components of DEA headquarters and the Department of Justice’s multi-agency Special Operations Division (SOD). This case is being prosecuted by Assistant U.S. Attorneys Christopher Rapp, Donald Carter and Robert Wells.
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Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared recently before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Jan. 10 was:
Eric Charles Swan, 43, of Billings, and Elizabeth Ardelle Grace Ronshaugen, 29, of Billings, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Swan and Ronshaugen face a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Swan and Ronshaugen were detained pending further proceedings. The Eastern Montana High Intensity Drug Trafficking Area Task Force investigated the case. PACER case reference. 21-117.
Appearing on Jan. 11 was:
Lindsay Marie Blunt, 30, of Billings, on charges of possession with intent to distribute cocaine. If convicted of the most serious crime, Blunt faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release. Blunt was released pending further proceedings. The FBI investigated the case. PACER case reference. 21-84.
Miles Edward Bessman, 49, of Billings, on charges of possession of child pornography. If convicted of the most serious crime, Bessman faces a maximum of 20 years in prison, a $250,000 fine and five years to life of supervised release. Bessman was released pending further proceedings. The Montana Division of Criminal Investigation investigated the case. PACER case reference. 21-83.
Bobby Joe Garcia, 27, a transient, on charges of counterfeit, uttering or passing counterfeit currency. If convicted of the most serious crime, Garcia faces a maximum of 20 years in prison, a $250,000 fine and three years of supervised release. Garcia was detained pending further proceedings. The U.S. Secret Service investigated the case. PACER case reference. 21-101.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Jan. 12 was:
Jeramiah Kayson Gohde, 24, of Belgrade, on charges of prohibited person in possession of a firearm, possession of unregistered firearm, and possession of firearm with obliterated serial number. If convicted of the most serious crime, Gohde faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. Gohde was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives, Bozeman Police Department and Montana Probation and Parole investigated the case. PACER case reference. 22-01.
Appearing on Jan. 13 was:
Larry Craig Layne, 58, formerly of Bozeman, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Layne faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Layne was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and Bozeman Police Department investigated the case. PACER case reference. 21-09.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Jan. 11 was:
Monte Clyde Fox, 69, of Kevin, on charges of felon in possession of a firearm and unlawful drug user in possession of a firearm. If convicted of the most serious crime, Fox faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. Fox was released pending further proceedings. The FBI investigated the case. PACER case reference. 22-03.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Idaho Falls Man Sentenced to over 5 Years in Federal Prison for Trafficking MethamphetamineRead the Press Release
POCATELLO – An Idaho Falls man was sentenced to 68 months in federal prison for possession with intent to distribute methamphetamine.
According to court records, on June 19, 2019, Idaho State Police officers initiated a traffic stop on a van driven by Matthew Gary Leander, III, 39, of Idaho Falls. Law enforcement suspected Leander and his passenger, Kevin Ralph Nixon, 55, also of Idaho Falls, were recently involved in the sale of methamphetamine.
After a short pursuit, law enforcement forcefully stopped the van. Leander then fled on foot and was later apprehend. A search of Nixon’s person yielded a bag that contained methamphetamine and drug paraphernalia. In the vehicle, law enforcement also found 99.54 grams of methamphetamine. Leander admitted at the time of his guilty plea that he possessed the methamphetamine to distribute it to others.
Chief U.S. District Judge David C. Nye also ordered Leander to serve four years of supervised release following his prison sentence. Leander pleaded guilty to the charges on August 18, 2021. On December 6, 2021, Judge Nye sentenced Nixon to three years of probation.
U.S. Attorney Rafael M. Gonzalez, Jr., of the District of Idaho made the announcement and commended the cooperative efforts of the Drug Enforcement Administration, Idaho State Police-District 6, and the Idaho Falls Police Department, which led to charges.
This case was handled by the U.S. Attorney Office’s specially deputized Special Assistant U.S. Attorney (SAUSA), funded by the Eastern Idaho Partnership (EIP) and the State of Idaho. The EIP is a coalition of local city and county officials in eastern Idaho as well as the Idaho Department of Correction.
The EIP SAUSA program allows law enforcement to utilize the federal criminal justice system – through the EIP SAUSA – to prosecute, convict, and sentence violent, armed criminals and drug traffickers. These criminals often receive stiffer penalties than they might in state courts.
This program was created in January 2016. Since that time, approximately 188 defendants have been indicted by the EIP SAUSA. Of these defendants, 127 have been indicted on drug trafficking charges. The defendants indicted under the program have been sentenced to 7,857 months (approximately 655 years) in federal prison, representing an average prison sentence of 53.09 months (4.42 years). Defendants indicted for drug trafficking offenses serve, on average, approximately 42.13 months (3.5 years) in federal prison.
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Honduran National Indicted for Illegal Re-EntryRead the Press Release
NEW ORLEANS – U.S. Attorney Duane Evans announced today that OLGA MARINA ESTRADA-BARAHONA, age 44, was charged on January 14, 2022 in a one-count indictment for illegal reentry of a removed alien in violation of Title 8, United States Code, Section 1326(a).
According to the indictment, OLGA MARINA ESTRADA-BARAHONA (“ESTRADA”), reentered the United States after she was previously deported on January 25, 2006. If convicted, ESTRADA faces up to a maximum term of imprisonment of up two years, a fine of up to $250,000, up to a one-year term of supervised release, and a mandatory $100 special assessment fee.
U. S. Attorney Duane Evans reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Evans praised the work of the United States Immigration and Customs Enforcement Department in investigating this matter. Assistant U. S. Attorney Carter K. D. Guice, Jr. is in charge of the prosecution.
Hammond Resident Pleads Guilty to Possessing with Intent to Distribute More Than One Kilogram of HeroinRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced that JIMMELLE PINES, age 41, a resident of Hammond, Louisiana, pled guilty on January 13, 2022 to Count 1 of the Indictment, charging him with possessing with intent to distribute one (1) kilogram or more of a mixture or substance containing heroin, pursuant to Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A). The defendant faces a minimum sentence of ten (10) years in prison up to a maximum sentence of up to life imprisonment, up to a $10,000,000.00 fine, a period of supervised release of no less than five (5) years, and a $100 mandatory special assessment fee.
According to court records, PINES, when arrested on November 5, 2020 at his grandmother’s property in Ponchatoula, Louisiana, possessed approximately 1.575 kilograms of heroin that he intended to sell. In October 2020, officers working with the Ponchatoula Police Department (“PPD”) and federal agents from Homeland Security Investigations (“HSI”), the investigative branch of the United States Department of Homeland Security, received credible information that PINES stored large quantities of heroin in immobile cars parked on his grandmother’s property in Ponchatoula.
U.S. District Judge Mary Ann Vial Lemmon will sentence PINES on March 24, 2022.
U.S. Attorney Evans praised the work of the Homeland Security Investigations, Hammond Police Department, Ponchatoula Police Department, and Tangipahoa Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney David Howard Sinkman is in charge of the prosecution.
Grand Rapids Man Guilty of Fatal Distribution of Heroin and Fentanyl Causing Two DeathsRead the Press Release
KALAMAZOO, MICHIGAN – On January 13, 2022, a jury found Mustafa Deville Reynolds, 23, of Grand Rapids, guilty of distributing heroin and fentanyl that caused the deaths of two men in Grand Rapids, announced U.S. Attorney Andrew Birge. The two victims were 25 and 27 years old at the time of their deaths.
The evidence at trial showed that the victims were found by their roommates, unresponsive, in the early morning hours of August 21, 2019 – just hours apart from one another. After being transported to the hospital, both men subsequently died from fentanyl and heroin toxicity. Detectives with the Grand Rapids Police Department (GRPD) found cell phone evidence that showed in the evening of August 20, 2019, Reynolds sold the fatal drugs directly to one of the victims, and that Reynolds sold the fatal drugs through a middleman to the other victim. One week later, on August 27, 2019, Reynolds sold a mixture of heroin and fentanyl to an undercover GRPD detective. During the sale, Reynolds pointed to the drugs and told the detective, “Be careful with that one. Don’t do too much.” The jury also convicted Reynolds for the sale to the undercover detective. A forensic chemist with the Michigan State Police testified at trial that one of the baggies of “heroin” that Reynolds sold to the undercover officer was mostly fentanyl, which is a synthetic opioid 100 times more potent than morphine.
“Fentanyl is extremely potent and the deadliest of drugs found on the street. Individuals who order heroin are increasingly receiving fentanyl, a synthetic opioid that is cheaper and easier to produce. Unfortunately, users who ingest fentanyl often do so with deadly consequences,” said U.S. Attorney Birge. “Drug dealers in West Michigan are on notice: if you sell heroin and fentanyl, your product not only causes misery, it causes death. Law enforcement is committed to investigating and prosecuting these cases to ensure that dealers who sell drugs resulting in death are brought to justice,” added U.S. Attorney Birge.
“This case tragically shows the dangers of fentanyl in communities throughout Michigan,” said Kent R. Kleinschmidt, Acting Special Agent in Charge of the U.S. Drug Enforcement Administration’s Detroit Field Division. “While we mourn the lives of those lost, the U.S. Drug Enforcement Administration and our law enforcement partners will work tirelessly to protect our communities from the dangers of illicit drug trafficking and bring justice to those who seek to profit at the expense of human life.”
“The opioid epidemic in Michigan has claimed far too many lives. The Grand Rapids Police Department is committed to seeking out those who sell heroin and fentanyl in the West Michigan area. We are thankful for the partnership of the Drug Enforcement Administration and the United States Attorney’s Office in helping make Grand Rapids a safer community,” said Grand Rapids Police Department Lieutenant Jonathan Wu.
Reynolds will be sentenced by U.S. District Judge Paul L. Maloney this spring. He faces a statutory mandatory minimum sentence of 20 years in prison and up to life in prison for each distribution of heroin and fentanyl that resulted in death, and up to 20 years in prison for selling heroin and fentanyl to the undercover detective. The Grand Rapids Police Department Vice Unit and the Drug Enforcement Administration investigated this case. The case is being prosecuted by Assistant United States Attorneys Dan McGraw and Alexis Sanford.
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Frankfort Man Sentenced to 42 years for MurderRead the Press Release
LONDON, Ky. - A Frankfort, Kentucky man, Patrick Baker, 43, was sentenced to 42 years in prison, with credit for the 30 months he served in state prison, on Tuesday, by U.S. District Judge Claria Horn Boom, after previously being convicted by a federal jury of murder committed during a drug trafficking crime.
According to testimony at trial, Baker fatally shot Donald L. Mills, Jr., 29, during an armed home invasion, on May 9, 2014, in the Stinking Creek community. Mr. Mills’ pregnant wife and other children were held at gunpoint, while Baker ransacked the victims’ home for oxycodone pills. Baker entered the Mills’ home posing as a United States Marshal.
According to the evidence at trial, the KSP firearm forensics laboratory tied shell casings recovered from the victim’s master bedroom to Baker’s Kel Tec PF9. This gun was later recovered from a mud pit in Bell County. A surveillance video from the London Dollar General also showed Baker purchasing plastic handcuffs, approximately seven hours before the murder. The same handcuffs were later recovered just feet from where the victim was fatally shot. Further, cell tower data was used to trace Baker’s movements, throughout May 8 and 9, from London, to Stinking Creek, to Bell County.
Baker was convicted at trial in August 2021.
“The simple truth of this case is that Patrick Baker was found guilty of planning and committing an armed home invasion, to acquire drugs, where he shot and killed Donald Mills,” said Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky. “Baker was convicted of a brazen act of violence – one that resulted in a murder, committed while the victim’s family was nearby. I want to commend the dedicated work of all our law enforcement partners and our trial team. Their faithful efforts were critical to the verdict, conviction, and sentence.”
“This was a violent crime that took a victim’s life and devastated a family,” said ATF Special Agent in Charge R. Shawn Morrow of the Louisville Field Division. “ATF is proud to have worked with the Kentucky State Police and the United States Attorney’s Office in bringing justice to this family.”
United States Attorney Shier; Special Agent in Charge Morrow; and Colonel Phillip Burnett, Jr., Commissioner, Kentucky State Police, jointly announced the sentencing.
Under federal law, Baker 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. Baker was also ordered to pay $7,500 for funeral expenses of the victim.
The investigation was conducted by Bureau of Alcohol, Tobacco, Firearm and Explosives and the Kentucky State Police. The United States was represented in the case by Assistant U.S. Attorney Jenna E. Reed.
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Four Sentenced for Bribery and Scheme to Defraud VA and SBARead the Press Release
ANCHORAGE – Four Anchorage individuals involved in a bribery and fraud scheme to obtain Service-Disabled Veteran-Owned Small Business (SDVOSB) government contracts with the U.S. Department of Veterans Affairs (VA) have been sentenced in federal court.
Donald Garner, 50, owner of Veteran Ability, was a government contractor who provided various services to the U.S. government, including the VA in Anchorage. Richard Vaughan, 74, worked at the Anchorage VA as a contract officer representative responsible for awarding and managing numerous contracts for the VA, including a $700,000 SDVOSB contract to perform snow removal services at the Anchorage VA.
Between 2015 and 2017, Garner directed his bookkeeper Yalonda Moore, 52, to deliver more than $29,000 in bribe payments to Vaughan. In exchange, Vaughan gave preferential treatment to Garner by selecting Veteran Ability to complete dozens of “purchase card” jobs at the Anchorage VA, totaling more than $100,000. Vaughan also approved numerous invoices submitted by Garner related to the snow removal contract for work that was either unnecessary or never actually performed, causing the government an estimated $347,000 in losses.
Garner and Vaughan each pleaded guilty to one count of bribery involving a public official and were sentenced to one year and one day in federal prison, followed by three years of supervised release. They must also pay $347,000 in restitution to the VA.
Additionally, between 2014 and 2016, Dale Johnson, 50, owner of ADALECO General LLC, conspired with Garner to perpetrate a “pass-through” scheme in which Johnson allowed Garner to use ADALECO’s name to bid on and obtain SDVOSB set-aside contracts for which Garner’s company was not eligible, including the VA snow removal contract. Although ADALECO was expected to perform the work, Garner’s company illegally assumed control of the contract and received the majority of the profits. In return, Garner paid Johnson a percentage of the contract as a kickback, totaling $54,302.
Johnson pleaded guilty to one count of conspiracy to defraud the United States and was sentenced to five years’ probation and ordered to pay $54,302 in restitution.
The FBI and the VA Office of the Inspector General began investigating Garner, Vaughan, and Johnson in 2016. During that investigation, Moore, who worked as a bookkeeper for both Veteran Ability and ADALECO, intentionally obstructed the government’s investigation by tipping off Garner about the FBI’s investigation plans. Prior to that Moore had been purporting to cooperate with the government’s investigation. Moore recently pleaded guilty to one count of obstruction of justice and was sentenced to three years’ probation.
“The bribery and fraud scheme by these defendants not only cheated the government, but simultaneously diverted work from eligible, law-abiding service-disabled veterans,” said John E. Kuhn, Jr. U.S. Attorney for the District of Alaska. “The U.S. Attorney’s Office will prosecute every unlawful attempt to corrupt the government contracting process and will work to ensure that no one profits from such efforts.”
“At the expense of U.S. taxpayers, these individuals traded their integrity for greed, and undermined the VA’s efforts to lawfully contract with service-disabled veteran-owned businesses in Alaska,” said Assistant Special Agent in Charge Shawn Peters of the FBI Anchorage Field Office. “Dismantling criminal enterprises involving bribery and corruption will always be a priority for the FBI, and together with our law enforcement partners, we will hold those accountable who take part in such schemes.”
The Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of the Inspector General, the Small Business Administration Office of the Inspector General, and the General Services Administration Office of the Inspector General investigated the case.
Assistant U.S. Attorney Ryan Tansey prosecuted the case.
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Note to Editors:
- Garner case: 3:19-cr-00120-SLG-DMS
- Vaughan case: 3:19-cr-00120-SLG-DMS
- Johnson case: 4:19-cr-00018-RRB-SAO
- Moore case: 3:21-cr-00084-JMK-MMS
The United States Small Business Administration (SBA) is an independent agency of the federal government responsible for aiding, counseling, assisting and protecting the interests of small business concerns. The SBA and VA administer a program to award SDVOSB contracts which can only be awarded to small businesses owned and controlled by qualified Service-Disabled Veterans (SDVs)
Service-Disabled Veteran-Owned Small Business (SDVOSB) is a small business that is 51% unconditionally owned and controlled by a service-disabled veteran. Through the SDVOSB, the federal government aims to award at least three percent of all federal contracting dollars to SDVOSBs each year. Competition is limited for certain federal contract opportunities to businesses that participate in the SDVOSB program.
More information about veteran assistance programs can be found here: https://www.sba.gov/federal-contracting/contracting-assistance-programs/veteran-assistance-programs#section-header-11
Former U.S. Postal Employee Sentenced for Stealing from Greeting CardsRead the Press Release
Benton, Ill. – Casey L. Neal, 31, of Belle Rive, Illinois (Jefferson County), was sentenced this afternoon to 2 years’ probation and was ordered to pay restitution to her victims.
Neal pled guilty in October 2021, to theft of mail by a postal service employee.
In January and February 2021, while working as a substitute sales and distribution clerk at the
Belle Rive, Dahlgren, and Macedonia post offices, Neal stole over $300 worth of cash and gift cards from greeting cards that were sent through those post offices. Neal used some of the gift cards to purchase money orders used to pay her personal creditors. After being alerted to the thefts, investigators located other gift cards from retailers and restaurants, including Dick’s Sporting
Goods, Chik-fil-A, and Dairy Queen, which Neal had stolen from the mail.The case was investigated by the United States Postal Service, Office of the Inspector General.
The case was prosecuted by Assistant United States Attorney Zoe J. Gross.Former Executive Vice President of T.J. Martell Foundation Charged with Embezzling over $3.7 MillionRead the Press Release
NASHVILLE – A criminal Information filed today charges Melissa Goodwin, 55, of Nashville, Tennessee, with wire fraud in relation to a fraudulent scheme in which she embezzled over $3.7 million from the T.J. Martell Foundation for Cancer Research, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
The T.J. Martell Foundation is the music industry’s leading foundation that funds innovative medical research focused on finding treatments and cures for cancer. The Foundation raises money for cancer research by soliciting in-kind donations from celebrities and then auctioning off those donations for a profit. Goodwin had been employed at the Foundation since 2005 and was the Executive Vice President and General Manager of the Foundation from 2018 until July 2020.
According to the charging document, between July 2018 and June 2020, Goodwin devised a scheme to defraud the T.J. Martell Foundation by purchasing approximately $3.96 million in tickets from online ticket vendors Ticketmaster, Stubhub, Primesport, and On-Location, using a Foundation credit card she had obtained in her own name. These tickets were not for a legitimate Foundation purpose and included tickets to musical concerts such as Lady Gaga and Celine Dion, and some were to sporting events, such as Super Bowl LIV, which was scheduled to take place in Miami, Florida, on February 2, 2020.
Goodwin provided these tickets to an individual in New York City who owned and operated a charity auction business. This business conducted auctions for clients, offering consignment items such as event tickets and sports memorabilia to the clients for use in their auctions. As part of the scheme, Goodwin led this individual to believe that she had acquired the tickets at no cost or at a discounted rate. Goodwin also used the Foundation’s credit card to purchase other items that were not for legitimate Foundation purposes, such as expensive and rare alcohols, plane tickets, and hotel stays. She then used the Foundation’s bank accounts to pay the credit card charges.
In order to conceal the ticket purchases, Goodwin provided falsified credit card statements and false expense reports to the Foundation’s accounting firm. Goodwin falsified the credit card statements by altering them to conceal the ticket purchases, as well as other expenses. She often replaced the name of the actual vendor with the name of a different vendor so that the charges appeared to be legitimate Foundation expenses. In total, Goodwin concealed over $3 million in fraudulent credit card expenses.
The Foundation’s accounting firm prepared the Foundation’s periodic financial statements based on these falsified credit card statements and expense reports. The accounting firm then emailed those statements to Goodwin, whose job it was to provide them to the Foundation’s CEO.
However, before providing them to the CEO, Goodwin falsified those financial statements by inflating the Foundation’s assets and lowering its liabilities to make the Foundation appear to be more liquid than it was at the time. These falsifications prevented the Foundation from detecting Goodwin’s fraudulent transactions.
In addition to falsifying the credit card statements and financial statements, Goodwin forged the signature of the Foundation’s CEO on six checks totaling $966,275.78 that were not approved by the Foundation.
If convicted, Goodwin faces up to 20 years in prison and a fine of up to $250,000.
The government also seeks the forfeiture of at least $3,765,606.77, which represents the proceeds of the alleged crime.
This case was investigated by the FBI. Assistant U.S. Attorney Kathryn W. Booth is prosecuting the case.
The charges contained in the Information are merely accusations. The defendant is presumed innocent until proven guilty in a court of law.
# # # # #
Former City of New Orleans Building Inspector SentencedRead the Press Release
NEW ORLEANS, LA – The U.S. Attorney’s Office announced today that KEVIN RICHARDSON, 59, of New Orleans, was sentenced on January 13, 2022 by United States District Judge Susie Morgan to thirty (30) months in the Bureau of Prisons for violating Title 18, United States Code, Sections 1952(a)(3) and 2, use of an interstate facility with intent to carry on unlawful activity.
According to the court documents, RICHARDSON was employed as a building inspector for the City of New Orleans and utilized the internet-based City of New Orleans’ LAMA system to alter and/or delete city documents and submit material information. He solicited and accepted approximately $65,000 in bribe payments from individuals seeking favorable inspection reports and certificates of completion for properties that did not comply with the city and state building codes and for properties that had not been inspected. He also paid bribe money to a City of New Orleans permit analyst for the issuance of permits without proper documentation and plan review.
RICHARDSON’s sentence will be followed by one (1) year of supervised release. He was also ordered to pay a mandatory $100 special assessment fee.
This matter was investigated by the City of New Orleans Office of Inspector General, Housing and Urban Development, Office of Inspector General, and the Department of Homeland Security, Office of Inspector General. Assistant United States Attorney Tracey N. Knight is prosecuting the matter.
Former CEO of recycling firm sentenced to second prison term for tax fraudRead the Press Release
Seattle – The former owner and co-CEO of an electronics recycling firm was sentenced today in U.S. District Court in Seattle to 6 months in prison for tax fraud, announced U.S. Attorney Nick Brown. Jeffrey Zirkle, 58, of Gig Harbor, Washington, was the owner and co-CEO of Total Reclaim, the Northwest’s largest recycler of electronic waste. In 2019, Zirkle was sentenced to 28 months in prison for defrauding clients by secretly exporting electronic waste to Hong Kong, despite presenting his business as an environmentally-friendly recycling service. Today’s second criminal case stems from Zirkle using company funds to pay for his personal expenses and failing to report the transactions on his income tax returns.
At today’s sentencing hearing U.S. District Judge James L. Robart said, “He’s been defrauding the company and defrauding the government for years…. He has no respect for the law whatsoever.” Judge Robart ordered Zirkle to pay $125,549 in restitution to the government.
“Those who fail to pay their taxes are not just cheating the government, they are also stealing from taxpayers who are following the rules. But despite earning nearly $1 million a year in salary, Mr. Zirkle refused to pay his fair share,” said U.S. Attorney Nick Brown. “At the same time that he was misleading customers about his company’s business practices, he was also lying to the IRS by mischaracterizing his personal expenses as business expenses. No one is above the law.”
According to records filed in the case, following the prosecution of Zirkle and his partner for fraud, a new CEO took over Total Reclaim. That executive discovered Zirkle had embezzled from the company by charging hundreds of thousands of dollars in personal expenses on company credit cards. An investigation by the FBI and IRS:CI determined that as much as $480,000 were for personal items and that Zirkle never reported those benefits on his income tax returns. Many of the charges involved the purchase of luxury goods: more than $4,000 at Louie Vuitton Las Vegas, $4,000 as a down payment on a motocross bike, and over $15,000 for the partial payment of a vintage 1966 Chevrolet Chevelle. Zirkle also spent over $17,000 in corporate funds on a single day to purchase home appliances, and over $15,000 on a home irrigation system. Even after his sentencing on the fraud charges in April 2019, Zirkle continued to use the corporate credit card for his own expenses charging over $5,000 for septic work on his home.
In October 2021, Zirkle pleaded guilty to filing false tax returns from 2008 to 2017. Zirkle negotiated a settlement with Total Reclaim regarding the expenses. Zirkle was ordered to pay $125,549 in restitution for the tax loss.
“Mr. Zirkle not only defrauded the Government and endangered the environment, Mr. Zirkle also had the audacity to further line his pockets by stealing from his own company,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “IRS:CI is committed to investigating financial and tax crimes, and we will not let these crimes go unnoticed. Today’s sentence is proof of this commitment, and the sentence represents further justice for Mr. Zirkle’s schemes.”
In the earlier criminal case, an EPA investigation concluded that Total Reclaim had secretly exported over eight million pounds of monitors containing toxic materials such as mercury. The investigation revealed that Zirkle and his co-defendant had concealed this practice by submitting fraudulent documents to auditors and customers, and had falsified more documents when the practice was discovered.
Due to concern about the pandemic, Judge Robart ordered Zirkle to begin serving his sentence in early August. Over the objections of the prosecutor, Zirkle asked for the delay in serving his time, so he could attend two family weddings. Zirkle will be on 18 months of supervised release for the tax crimes following his prison term.
The tax case was investigated by the FBI and Internal Revenue Service Criminal Investigation (IRS:CI).
The case was prosecuted by Assistant United States Attorney Seth Wilkinson.
Father and Son Plead Guilty to Charge of Conspiracy to Defraud Their Former EmployerRead the Press Release
OAKLAND – Anthony Giovanni Montanelli and his father, Steven John Montanelli each pleaded guilty today to one count of conspiracy to commit mail fraud in connection with a scheme to divert medical equipment owned by Kaiser Foundation Hospitals and Health Plan, Inc. (Kaiser) for use in their own San Jose-based company, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig Fair. The guilty pleas were accepted by the Hon. Jon S. Tigar, U.S. District Judge.
Anthony Montanelli, 34, and his father Steven Montanelli, 63, both of San Ramon, pleaded guilty to the charges pursuant to separate plea agreements entered by the court. According to the plea agreements, the defendants worked as biomedical engineers at Kaiser, responsible for repairing and servicing Kaiser ultrasound systems used at its medical facilities located throughout the Bay Area. The defendants used their positions at Kaiser to order new ultrasound parts that were supposed to be used to repair, replace, and/or maintain Kaiser’s medical equipment, but instead were diverted to their own business, Pacific Coast Imaging (PCI). They then sold the diverted equipment through PCI for their own profit. The father and son also admitted operating their scheme and business, which they did not disclose to Kaiser, while being paid by Kaiser to service Kaiser-owned equipment.
The defendants admitted that, beginning February 2010 and continuing through about April 2018, they worked together to defraud Kaiser. Specifically, the defendants rented storage units in which they stockpiled new, used, and decommissioned Kaiser-owned ultrasound systems and parts. Some of the Kaiser inventory they ordered through Kaiser became PCI inventory, which they sold and leased to PCI customers. The defendants acknowledged that for years they caused Kaiser’s procurement specialists to process, order, and have mailed to them an unknown number of ultrasound parts which they diverted to PCI. Further, the defendants admitted that they recorded parts and systems as decommissioned when, in fact, the equipment was diverted to PCI. In sum, the defendants both admitted they diverted Kaiser-owned equipment to PCI, operated PCI while employed by Kaiser, and used work hours paid for by Kaiser to operate PCI. The defendants admitted that the loss to Kaiser resulting from the conspiracy exceeded $1,500,000.
A federal grand jury issued a superseding indictment on June 10, 2021, charging each defendant with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349. Both defendants pleaded guilty to the count. The conspiracy charge carries a maximum statutory penalty of 20 years in prison and a fine of up to $250,000. The court also may order additional terms of supervised release, fines, forfeitures, and restitution; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Thomas Green and Garth Hire are prosecuting the case, with the assistance of Kay Konopaske and Noble Hughes. The prosecution was the result of an investigation by the Federal Bureau of Investigation.
Contractor Sentenced for Attempting to Evade Paying Taxes on Nearly Two Million Dollars of Unreported IncomeRead the Press Release
PROVIDENCE, R.I. – A Boston-area contractor who frequently traveled to Rhode Island to cash business checks at a check-cashing business as part of a scheme to not report or pay taxes on nearly $2 million in income was sentenced today in U.S. District Court in Providence, announced United States Attorney Zachary A. Cunha.
Richard Karski, 60, owner and operator of K.C.O. Builders, pleaded guilty on October 7, 2021, to attempt to evade or defeat tax.
In pleading guilty, Karski admitted that for tax years 2015 through 2018, he failed to declare any income or pay any taxes on approximately $1,917,658 in business and personal income.
Karski admitted that as part of his scheme, he frequented a Pawtucket, RI, check-cashing business where he cashed checks he received from clients. The income was never reported to the Internal Revenue Service. In total, Karski failed to pay $179,182 in taxes.
At sentencing, U.S. District Court Judge Mary S. McElroy sentenced Karski to two years federal probation and ordered him to pay $179,182 in restitution to the Internal Revenue Service.
The case was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The matter was investigated by Internal Revenue Service Criminal Investigation.
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Coastal NC Drug Trafficker Sentenced to 12 YearsRead the Press Release
RALEIGH, N.C. – An Elizabeth City man was sentenced Friday to 144 months in prison for distributing cocaine, cocaine base (crack), and fentanyl. On June 23, 2021, Maurice Dwight Toxey pled guilty to the charges.
According to court documents and other information presented in court, Toxey, 37, was involved in the distribution of narcotics including cocaine, crack, methamphetamine, heroin, and fentanyl in the communities surrounding Elizabeth City and the Outer Banks. Law enforcement was able to conduct controlled purchases of drugs from Toxey, including some deals while Toxey was on state probation. Toxey has previously been convicted of crimes involving the distribution or possession with the intent to sell or deliver controlled substances.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Federal Bureau of Investigation, United States Marshals Service, Currituck County Sheriff’s Office, Pasquotank County Sheriff’s Office, Dare County Narcotics Task Force, Elizabeth City Police Department, and Kitty Hawk Police Department investigated the case and Assistant U.S. Attorney Nick J. Miller prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 2:21-CR-10-D.
Chicago Heights Woman Sentenced to 37 Months of ImprisonmentRead the Press Release
HAMMOND-Tanisha Bledsoe,48, of Chicago Heights, Illinois, was sentenced by United States District Court Chief Judge Jon E. DeGuilio following her guilty plea to wire fraud, announced United States Attorney Clifford D. Johnson.
Bledsoe was sentenced to 37 months in prison followed by 1 year of supervised release. Bledsoe was ordered to pay $2,167,710 in restitution to the Internal Revenue Service.
According to documents filed in the case, on or about January 21, 2016, Bledsoe assisted in the preparation and filing of a false 2015 tax return for a client. Bledsoe used the internet and an online company to create and file a fabricated W-2 form for the purpose of supporting the false wage income on the client’s tax return. Bledsoe then filed the tax return knowing that it was false. In total, Bledsoe admitted that she assisted in the preparation of 540 false tax returns as part of this scheme.
This case was investigated by the Internal Revenue Service, Criminal Investigative Division. This case was prosecuted by Assistant U.S. Attorney Jennifer Chang.
Butler City Woman Sentenced for Conspiring to Distribute FentanylRead the Press Release
PITTSBURGH – A resident of Butler City, Pennsylvania, has been sentenced in federal court on charges of conspiracy to possess with intent to distribute and distribute fentanyl and possession with intent to distribute fentanyl, United States Attorney Cindy K. Chung announced today.
Kristin Tate, 39, currently housed in the Butler County Prison, was sentenced by Judge Christy Criswell Wiegand to time served (17 months’ incarceration) at each count, with a supervised release imposed for a term of 36 months at each count.
Assistant United States Attorney Benjamin J. Risacher is prosecuting this case on behalf of the government.
The Butler County District Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the prosecution of Tate.
Administrative Assistant at Suburban Chicago Medical Practice Sentenced to a Year in Federal Prison for Fraudulently Writing Opioid PrescriptionsRead the Press Release
CHICAGO — An administrative assistant at a suburban Chicago medical practice has been sentenced to a year in federal prison for fraudulently writing opioid prescriptions to an acquaintance.
AMANDA BIESIADA worked as an administrative assistant at Hinsdale Orthopaedics, a medical practice in Westmont, Ill. Biesiada was not a licensed physician and could not lawfully prescribe medications without the direction and approval of licensed doctors.
From 2017 to 2019, Biesiada fraudulently wrote 85 prescriptions to the acquaintance for hydrocodone, oxycodone, and other controlled substances. Biesiada purported to write the prescriptions on behalf of six Hinsdale Orthopaedics health care providers. In reality, the providers did not direct or approve the prescriptions. Biesiada attempted to conceal the fraudulent prescriptions by marking them as having been “filed in error” in the Hinsdale Orthopaedics prescription system.
Biesiada, 39, of Alsip, Ill., pleaded guilty last year to one count of knowingly and intentionally dispensing controlled substances outside the usual course of professional practice and without a legitimate medical purpose. U.S. District Judge John J. Tharp, Jr., on Thursday sentenced Biesiada to a year and a day in federal prison.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Robert J. Bell, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.
“The opioid epidemic has devastated the lives of countless individuals through addiction and overdose,” Assistant U.S. Attorney G. David Rojas argued in the government’s sentencing memorandum. “Defendant contributed to this national crisis by helping make opiates available to an individual who otherwise would not and should not have had access to them.”
17 January 2022
Wallace Man Sentenced to 30 Years for Producing Child PornographyRead the Press Release
United States Attorney Jan Sharp announced that Richard L. Moore, 67, formerly of Wallace, Nebraska, was sentenced on January 13, 2022 in Lincoln, Nebraska, by United States District Judge John M. Gerrard for production of child pornography. Moore was sentenced to 360 months in prison and will also spend the remainder of his life on supervised release after that period of incarceration. There is no parole in the federal system. After serving his prison sentence, Moore will also be required to register as a sex offender. Additionally, Moore was ordered to pay restitution of more than $100,000. The federal sentence was ordered to run concurrent with the 25- to 35-year sentence previously imposed by the Lincoln County District Court for his state conviction.
In October, 2019, a report was received by the Lincoln County Sheriff’s Office that Moore had engaged in and produced images of sexually explicit conduct involving two minor children. The children had reported the abuse to their parents. Subsequent interviews with the minor children confirmed the sexual conduct had occurred and Moore was identified as the perpetrator.
On October 18, 2019, the Perkins County Sheriff and members of the Lincoln County Sheriff's Office served a search warrant at Moore’s residence. During the search warrant, law enforcement found multiple devices used to reproduce both video and digital images; 5 monitors connected to a single system; at least 5 external hard drives with a total capacity of 36 terabytes; and a substantial collection of VHS and digitally stored pornography. Forensic examination determined a minimum of 48,000 images and 84 videos of child pornography found on the computers and storage media located at the defendant’s residence. The sheer volume of the data located at Moore’s residence renders a more accurate count virtually impossible.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by the Lincoln County Sheriff’s Office, Perkins County Sheriff’s Office and the Federal Bureau of Investigation.
U.S. Attorney Chung Statement on Martin Luther King, Jr. DayRead the Press Release
PITTSBURGH – United States Attorney Cindy Chung released the following statement today for Martin Luther King. Jr. Day.
“Each year, America honors the life and vision of a great American: the Reverend Martin Luther King, Jr. Dr. King’s lifelong dedication to justice, equality, and service for the greater good inspires us today and every day.
“The examples set by Dr. King and other civil rights leaders instilled in me a desire to serve the community and do my part to protect the civil rights of all citizens. This led me to work as an official corruption prosecutor in New York City, then as an attorney prosecuting criminal violations of civil rights at the Department of Justice in Washington, D.C., and then doing the same work here in Pittsburgh as an Assistant United States Attorney.
“It is now my great privilege to lead the U.S. Attorney’s Office for the Western District of Pennsylvania. This office is committed to the vigorous, fair, and impartial enforcement of the civil rights of all persons, particularly the most vulnerable members of our society.
“Civil Rights Crimes: We are enhancing collaboration with our local and state law enforcement partners, and with our community groups who work and see victims on a daily basis -- victims who are often hesitant or fearful to report these crimes. Prosecuting these civil rights cases -- hate crimes, criminal excessive force and other official misconduct, and human trafficking -- are among our highest priorities.
“Non-Criminal Measures: Criminal laws are just one tool -- we cannot solely rely on prosecutions to achieve these goals. Thus, we are also increasing our use of non-criminal measures, like training and legal action, to fight unfair treatment, discrimination, and sexual harassment in the areas of employment, housing, education, public accommodation, and in ensuring that every eligible voter can cast a vote. If you are interested in hosting a civil rights training, please contact our office.
“Finally, our office is also prioritizing reentry, turning our attention to the success of people returning to our neighborhoods after confinement. Our re-entrants face many barriers and we are committed to supporting them through efforts such as our specialized re-entry court and Veterans Court.
“Today, we honor Dr. King’s legacy and those who continue to do Dr. King’s work to guarantee equal rights and freedom for all.”
15 January 2022
Saugerties Man Sentenced in Ulster County Cocaine and Marijuana Trafficking ConspiracyRead the Press Release
ALBANY, NEW YORK – Russell J. Neglia, age 26, was sentenced today to 21 months in prison for his involvement in a drug trafficking organization in Ulster County that was dismantled in March 2020.
The announcement was made by United States Attorney Carla B. Freedman; Ricky J. Patel, Special Agent in Charge of Homeland Security Investigations (HSI), New York; Ulster County Sheriff Juan Figueroa, whose office leads the Ulster Regional Gang Enforcement Narcotics Team (URGENT); and Ulster County District Attorney David Clegg.
In March 2020, HSI and URGENT investigators acted on evidence they had collected, executing three search warrants on residences in Saugerties and southern Greene County related to a cocaine and marijuana trafficking organization. In the course of the takedown, three members of the organization – Neglia, Roger W. Hummer II and Michael A. Manor – were arrested on federal drug trafficking charges. Investigators seized over two kilograms of cocaine, 125 pounds of marijuana, $68,000 in drug proceeds, three vehicles used to traffic drugs, and one firearm.
Following up on the evidence uncovered by those searches and arrests, four additional individuals affiliated with the drug trafficking organization were arrested and charged by the Ulster County District Attorney.
As part of his plea, Neglia admitted that between January 2019 and March 2020, he sold at least 1.8 kilograms of cocaine on behalf of the organization.
As part of his sentence, U.S. District Judge Mae A. D’Agostino also ordered Neglia to serve a 3-year term of supervised release upon his release from prison, pay a $15,000 fine and forfeit approximately $19,000 in drug proceeds and two vehicles used in furtherance of his cocaine trafficking.
The following defendant pled guilty in connection with the conspiracy, and was sentenced as follows:
Name
Age
Prison Term
Supervised Release Term
Michael A. Manor
40
60 months
4 years
The following defendant has also pled guilty in connection with the conspiracy, and faces the following penalties:
Name
Age
Minimum
Maximum
Roger W. Hummer, II
39
10 years
Life
This case was investigated by HSI, the Ulster County Sheriff’s Office in conjunction with URGENT, an inter-agency taskforce targeting drug dealers and gang members in Ulster County, and the Ulster County District Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorneys Emmet O’Hanlon and Ashlyn Miranda.
14 January 2022
Wiretap Leads to Vinton Man’s Guilty Plea to Conspiring to Distribute HeroinRead the Press Release
A man who conspired to distribute heroin, fentanyl, and other synthetic opioids pled guilty today in federal court in Cedar Rapids.
Ryan Rick Schlitter, age 39, from Vinton, Iowa, was convicted of one count of conspiracy to distribute heroin.
In a plea agreement, Schlitter admitted that he obtained distribution quantities of heroin through a group of heroin dealers based out of Cedar Rapids. During a federal wiretap investigation in 2021, investigators intercepted calls between one of the dealers and an associate of Schlitter’s. After the intercepted calls, Schlitter and his associate drove to meet with the dealer. The associate purchased over seven grams of a substance containing heroin, fentanyl, and the synthetic opioids acetyl fentanyl, para‑fluorofentanyl, and metonitazene. Officers stopped the vehicle and seized the drugs, which Schlitter admitted that he possessed and intended to distribute to others. Schlitter also admitted that, in June 2021, he sold $200 worth of a substance containing heroin, acetyl fentanyl, and fentanyl during an undercover operation in Cedar Rapids.
Sentencing before United States District Court Judge C.J. Williams will be set after a presentence report is prepared. Schlitter remains in custody of the United States Marshal pending sentencing. Schlitter faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, and a lifetime of supervised release following any imprisonment.
The case was investigated by the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; and the Iowa Division of Narcotics Enforcement and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21‑CR‑00032‑10‑CJW‑MAR.
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Virginia Beach Man Sentenced for Life Insurance Fraud SchemeRead the Press Release
NORFOLK, Va. – A Virginia Beach man was sentenced today to 27 months in prison for defrauding life insurance companies.
According to court documents, in 2018, Michael Leonard Morgan-Towe, 37, and Antionette D. Pringle, 33, also of Virginia Beach, obtained approximately $150,000 in fraudulent advance commissions from life insurance companies. Morgan-Towe recruited indigent individuals, falsely promising them months of “free” life insurance if they would provide their personal identifying information. Then, Pringle, a licensed insurance agent in Virginia, used this information to submit applications for life insurance, falsifying their income to make it appear as if they could pay the monthly premiums, when she knew they could not. In some instances, she misstated their health conditions as to ensure their application would be approved.
The life insurance companies sent Pringle thousands of dollars in advance commissions as soon as the applications were approved, which she shared with Morgan-Towe. However, almost all of the policies lapsed immediately because no premiums were paid, as the individual beneficiaries thought they were obtaining free life insurance.
In December 2020, Pringle was sentenced to 4 years in prison for her role in the scheme.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen.
The Virginia State Corporation Commission provided significant assistance with this investigation.
Assistant U.S. Attorney Rebecca Gantt prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:21-cr-22.
Universal Aryan Brotherhood Member Who Killed a Man in 2017 Pleads Guilty to Participating in a Racketeering ConspiracyRead the Press Release
Universal Aryan Brotherhood member Dillon Rose, 30, pleaded guilty this week to conspiracy to participate in a racketeering enterprise, announced U.S. Attorney Clint Johnson.
As part of the conspiracy, he admitted to murdering victim Jason Harris in 2017.
The plea agreement calls for Rose to serve 22 years in prison to run concurrent with the state of Oklahoma sentence he is presently serving. U.S. District Judge Claire V. Eagan will determine Rose’s sentence on May 3, 2022.
“Dillon Rose took an active role in the Universal Aryan Brotherhood. As part of his nefarious crimes, he kidnapped and murdered a man,” said U.S. Attorney Clint Johnson. “I want to thank Assistant U.S. Attorney Dennis Fries and special agents with Homeland Security Investigations and IRS-Criminal Investigation who have sought justice for Oklahomans victimized by this deadly criminal organization.”Rose, in his plea agreement, stated that he was a member of the Universal Aryan Brotherhood from 2016 to the present. Rose knew that at least two other UAB members would commit racketeering crimes. He understood the objectives of the racketeering conspiracy and took part in it. Rose admitted to being involved directly, or as a coconspirator, in two or more racketeering crimes to include murder, kidnapping, and more. Specifically on Oct. 4, 2017, Rose along with Dustin Baker kidnapped, robbed and killed Jason Harris. The 38-year-old victim was later discovered in an SUV on the shoulder of Highway 169.
Rose was indicted on Dec. 7, 2018, with 17 other UAB members and associates. The indictment was unsealed Feb. 20, 2019, and alleged the gang to be a racketeering enterprise that committed acts of murder, kidnapping, the trafficking of methamphetamine and firearms, money laundering, assault, and robbery throughout the State of Oklahoma. The indictment alleged that nine individuals were murdered as part of the UAB’s racketeering operations, often upon the orders of the Main Council, the highest governing body of the UAB.
The UAB is a “whites only” prison-based gang with members operating inside and outside of state prisons throughout Oklahoma. It was established in 1993 within the Oklahoma Department of Corrections and modeled itself after the principles and ideology of the Aryan Brotherhood, a California-based prison gang that formed in the 1960s.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS-Criminal Investigation led the investigation with assistance from the Tulsa County Sheriff’s Office, the Oklahoma Department of Corrections, the Tulsa and Enid Police Departments, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the U.S. Marshals Service, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Dennis A. Fries is prosecuting this case.
You can find the press release announcing charges in February 2019 here.
U.S. Citizen Charged with Conspiring to Provide Electronic Equipment and Technology to the Government of IranRead the Press Release
A criminal complaint has been unsealed in federal court in Brooklyn charging Kambiz Attar Kashani, a dual citizen of the United States and Iran, with conspiring to illegally export U.S. goods, technology, and services to end users in Iran, including the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA). Kashani was arrested yesterday in Chicago, Illinois, and had an initial appearance today before United States Magistrate Judge Sheila M. Finnegan at the federal courthouse in Chicago. The defendant was remanded pending a detention hearing.
Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, and Joseph R. Bonavolanta, Special Agent-in-Charge, Federal Bureau of Investigation, Boston Field Office (FBI), announced the arrest.
“As alleged, Kashani orchestrated an elaborate scheme to evade U.S. export laws and use the U.S. financial system in procuring U.S. electronic equipment and technology for the Central Bank of Iran, which has been designated by the United States government as acting for or on behalf of terrorist organizations. The defendant allegedly used two United Arab Emirates companies as fronts to procure items from multiple U.S. technology companies, including a company in Brooklyn,” stated United States Attorney Peace. “Kashani’s arrest underscores the unrelenting resolve of this Office and the Department of Justice to prosecute those who seek to profit by compromising our national security.”
“We arrested Kambiz Attar Kashani for conspiring to deceive U.S. companies, including one headquartered in Massachusetts, by illegally exporting their highly sophisticated electronic equipment and technology to the Government of Iran. We believe Mr. Kashani profited financially by strengthening the economy of one of the world’s most infamous state sponsors of terrorism, while circumventing critical U.S. laws designed to protect our national security interests,” stated FBI Special Agent-in-Charge Bonavolonta. “This case is another example of the FBI’s commitment to work with our law enforcement partners to protect American businesses and stop the illegal export of sensitive information and technology to nations that are hostile to the United States.”
As set forth in the complaint, Kashani conspired to illegally export goods and technology to the Central Bank of Iran (CBI), which the United States government recognizes is an agency of the Government of Iran. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has classified CBI as a Specially Designated National (SDN) signifying that CBI is acting for or on behalf of a terrorist organization. According to the U.S. government, CBI has materially assisted, sponsored and provided financial, material or technological support, goods or services to Lebanese Hizballah, a terrorist organization, and to the Qods Force of Iran’s Islamic Revolutionary Guards Corps (IRGC). The IRGC is a branch of the Iranian armed forces and represents the primary means of the Government of Iran to direct and implement its global terrorism campaign.
Kashani allegedly perpetrated the illegal transshipping scheme through two separate United Arab Emirates (UAE) front companies for which he acts as principal. From around February 2019 through June 2021, Kashani and his co-conspirators used the two UAE companies to procure electronic goods and technology from multiple U.S. technology companies, including a company located in Brooklyn, New York, for end users in Iran, including CBI, without obtaining required OFAC export licenses. Kashani and his co-conspirators intentionally concealed from the U.S. companies that they intended to send the items to Iran, falsely claiming that the UAE front companies would be the ultimate end users.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon and Meredith A. Arfa are in charge of the prosecution, with assistance provided by Trial Attorney S. Derek Shugert of the Justice Department’s Counterintelligence and Export Control Section and Assistant United States Attorney Shawn McCarthy of the Northern District of Illinois.
Defendant:
KAMBIZ ATTAR KASHANI
Age: 44
United Arab EmiratesE.D.N.Y. Docket No.: 21-MJ-31
U.S. Attorney's Office Collects $4,281,327.54 in Civil and Criminal Actions in Fiscal Year 2021Read the Press Release
KNOXVILLE, Tenn. – United States Attorney Francis M. Hamilton III announced today that the Eastern District of Tennessee collected $4,281,327.54 in criminal and civil actions in Fiscal Year 2021. Of this amount, $3,668,516.41 was collected in criminal actions and $612,811.13 was collected in civil actions.
Separately, in fiscal year 2021, the District of Eastern District of Tennessee also recovered $555,110.14 as the result of filling an execution in an ongoing criminal matter.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s office in Eastern District of Tennessee, working with partner agencies and divisions, collected $2,663,255 in asset forfeiture actions in FY 2021. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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Two Kyle Men Charged in 2016 Murder on the Pine Ridge ReservationRead the Press Release
United States Attorney Dennis R. Holmes announced that two Kyle, South Dakota, men have been charged in federal court with First Degree Murder.
Stetson Eagle Elk, age 28, was charged on January 12, 2022, and Gary Little Bull, Jr., age 29, was charged on January 13, 2022. They appeared before U.S. Magistrate Judge Daneta Wollmann on January 14, 2022, and pled not guilty to the charges.
The maximum penalty upon conviction is mandatory life in federal prison and/or a $250,000 fine, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges stem from Eagle Elk and Little Bull shooting and killing Todd Little Bull in August 2016 in Kyle. The charges are merely an accusation and Eagle Elk and Little Bull are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Eagle Elk and Little Bull were detained pending a preliminary hearing on the charges.
Ten Charged with Offenses Related to Multi-Year Cocaine ConspiracyRead the Press Release
MADISON, WIS. – Three indictments have been unsealed charging a total of 10 people with participating in a cocaine conspiracy, announced Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin. The indictments were returned by a federal grand jury sitting in Madison, Wisconsin, on January 5, 2022.
The first indictment charges:
1. Winfield Agee, 35, Chicago, Illinois;
2. Darryl McDonald, 38, Chicago;
3. Jason Hall, 36, Sun Prairie, Wisconsin;
4. Nikia Cannon, 46, Chicago;
5. Kiayla Alston, 28, Madison;
6. Daniel Barlow, 34, Madison;
7. Daren Jones, 27, Madison; and
8. Larry Dotson, 40, Madison.
This indictment charges that from December 2014 to November 2020, Winfield Agee and Darryl McDonald conspired to distribute and possess with intent to distribute 5 kilograms or more of cocaine. The indictment also charges that from November 2010 to July 2020, Agee conspired to distribute and possess with intent to distribute marijuana. If convicted, Agee and McDonald face a mandatory minimum penalty of 10 years and a maximum of life on the cocaine conspiracy charge, and Agee faces a maximum penalty of 5 years in federal prison on the marijuana conspiracy. Agee was arrested in Chicago on January 12, 2022 and his initial appearance in U.S. District Court in Madison occurred on the same day. McDonald was arrested in Indiana on January 12, 2022. His initial appearance in U.S. District Court in Fort Wayne, Indiana occurred on January 13, 2022.
The indictment also charges that from December 2018 to May 2020, Jason Hall conspired to distribute and possess with intent to distribute cocaine. The indictment alleges that the amount of cocaine attributable to Hall was 500 grams or more. In addition, the indictment charges Hall with 5 counts of distributing cocaine in April and May 2020, and with possessing cocaine with intent to distribute on February 24, 2021. If convicted, Hall faces a mandatory minimum penalty of 10 years and a maximum of life on the cocaine conspiracy charge, and a maximum of 20 years on the other 6 charges. Hall was arrested in Madison on January 13 and his initial appearance in U.S. District Court in Madison occurred on the same day.
The indictment charges that from December 2018 to May 2020, Nikia Cannon and Kiayla Alston conspired to distribute and possess with intent to distribute cocaine. If convicted, they face a maximum penalty of 20 years in federal prison. Cannon was arrested in Chicago, Illinois on January 13, 2022 and her initial appearance in U.S. District Court in Chicago occurred on the same day. Alston was arrested in Madison on January 13, 2022 and her initial appearance in U.S. District Court in Madison occurred on the same day.
The indictment charges Daren Jones with 3 counts of possessing cocaine with intent to distribute. The indictment alleges that he possessed cocaine for distribution on April 26, April 30, and May 6, 2020. If convicted, he faces a maximum penalty of 20 years in federal prison on each count. Jones was arrested in Madison on January 13, 2022. His initial appearance in U.S. District Court in Madison is scheduled for today.
The indictment charges Daniel Barlow with 2 counts of possessing cocaine with intent to distribute. The indictment alleges that he possessed cocaine for distribution on April 24 and May 5, 2020. If convicted, he faces a maximum penalty of 20 years in federal prison on each count. Barlow was already in custody on an unrelated matter. His initial appearance in U.S. District Court in Madison has not been scheduled.
Finally, the indictment charges Larry Dotson with attempting to possess 500 grams or more of cocaine with intent to distribute on November 25, 2020. If convicted, he faces a mandatory minimum penalty of 10 years and a maximum of life in federal prison. Dotson was arrested in Madison on January 12, 2022. His initial appearance in U.S. District Court in Madison has not been scheduled.
The second indictment charges Shaneeque Parker, 27, Madison, Wisconsin, with possessing cocaine with intent to distribute on November 25, 2020. If convicted, Parker faces a maximum penalty of 20 years in federal prison. Her initial appearance in U.S. District Court in Madison has not been scheduled.
The third indictment charges Brian Battle, 44, Jefferson, Wisconsin, with possessing cocaine with intent to distribute and with being a felon in possession of a firearm. The indictment alleges that on April 25, 2021, he possessed cocaine for distribution and a firearm. If convicted, Battle faces a maximum penalty of 20 years in federal prison on the cocaine charge and a maximum of 10 years on the gun charge. His initial appearance in U.S. District Court in Madison has not been scheduled.
The charges against these individuals are the result of an investigation by the Drug Enforcement Administration; Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Wisconsin Department of Justice Division of Criminal Investigation; Dane County Narcotics Task Force; Jefferson County Narcotics Task Force; Madison Police Department; and Chicago Police Department. Assistant U.S. Attorney Diane Schlipper is handling the prosecution.
You are advised that a charge is merely an accusation and that the defendants are presumed innocent until and unless proven guilty.
St. Francis Man Indicted for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Dennis R. Holmes announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Tanner Kills Enemy, age 23, was indicted on January 11, 2022. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 13, 2022, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, five years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that Kills Enemy, a person required to register as a sex offender, knowingly failed to register and update his registration between November 12, 2021, and December 16, 2021, while living in St. Francis on the Rosebud Sioux Indian Reservation.
The charge is merely an accusation and Kills Enemy is presumed innocent until and less proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Cameron J. Cook is prosecuting the case.
Kills Enemy was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Sioux Falls Men Charged with Possession of a Stolen Firearm and Drug User in Possession of a FirearmRead the Press Release
United States Attorney Dennis R. Holmes announced that two Sioux Falls, South Dakota, men have been indicted by a federal grand jury for Possession of a Stolen Firearm and Drug User in Possession of a Firearm.
Harry Nyemah, age 18, and Ebenezer Jatenaw, age 18, were indicted on January 4, 2022. They both appeared before U.S. Magistrate Judge Veronica L. Duffy on January 12, 2022, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and up to $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about December 14, 2021, Nyemah and Jatenaw were found in possession of a stolen firearm, a Rock River Arms LAR 15, 5.56x45mm NATO Caliber, semi-automatic pistol, which had been previously shipped and transported in interstate and foreign commerce. Nyemah is also alleged to be an unlawful user of a controlled substance in possession of a firearm.
The charges are merely accusations and Nyemah and Jatenaw are presumed innocent until and unless proven guilty.
The investigation is being conducted by Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Nyemah and Jatenaw were released on bond pending trial which has been set for March 22, 2022.
Selma Man with Prior Assault Conviction Sentenced in Firearms CaseRead the Press Release
MOBILE, AL – A Selma man was sentenced today to one year and one day in prison for being a felon in possession of a firearm.
According to court documents, Roderick James McGuire, 41, was arrested during a traffic stop by Dallas County sheriff’s deputies in January 2019 in possession of a loaded Hi-Point 9mm pistol and marijuana. McGuire admitted to deputies that he had a gun and marijuana in the car he was driving. At the time of his arrest, McGuire knew that he had previously been convicted in 2013 for first degree assault after he shot a victim in the arm. McGuire was on state probation for that offense at the time he possessed the gun and marijuana in this case. Under federal law, McGuire is prohibited from possessing firearms or ammunition as a result of his felony conviction.
United States District Judge Kristi K. DuBose ordered McGuire to serve a three-year term of supervised release upon his release from prison, during which time he will undergo drug testing and treatment. The court did not impose a fine, but Judge DuBose ordered McGuire to pay $100 in special assessments.
U.S. Attorney Sean P. Costello of the Southern District of Alabama made the announcement.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas County Sheriff’s Office investigated the case.
Assistant U.S. Attorney Justin Roller prosecuted the case on behalf of the United States.
Rochester Man Who Bilked at Least 1000 Victims Out of More Than 100-Million in A Nationwide Multi-Million Dollar Ponzi Scheme Going to PrisonRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Perry Santillo, 41, of Rochester, NY, who was convicted of conspiracy to commit mail fraud, mail fraud, and conspiracy to launder money, was sentenced to serve 210 months in prison by U.S. District Judge Frank P. Geraci, Jr. Santillo was also ordered to pay restitution totaling $102,952,582.77.
Assistant U.S. Attorney John J. Field, who handled the case, stated that between January 2008 and June 2018, Perry Santillo conspired with Christopher Parris and others, to obtain money through an investment fraud commonly known as a Ponzi scheme. In 2007, Santillo and Parris, as equal partners, formed a business known as Lucian Development in Rochester, which raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Santillo and C.P. were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Santillo and Parris agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.
Subsequently, Santillo and Parris chose not to disclose the truth to investors that their money was gone. Instead, they continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Santillo and Parris purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (5 businesses), Florida, South Carolina (2 businesses), Texas, Pennsylvania, Maryland, and Indiana. Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Santillo and Parris to finance lavish lifestyles, expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors, and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans.
Between January 2012 and June 19, 2018, Santillo and Parris obtained at least $115.5 million from approximately 1000 investors. By the time the scheme collapsed in late-2017/early 2018, Santillo and Parris had returned approximately $44.8 million to investors as part of their scheme but continued to owe investors approximately $70.7 million.
“For years, Perry Santillo preyed on investors who placed their trust in him to properly invest their hard-earned money,” stated U.S. Attorney Ross. “However, Santillo abused the trust of those investors to finance his own self-interests. Because of the hard work of law enforcement to expose Santillo’s fraudulent scheme, he is facing the consequences of his actions, including going to prison.”
“IRS-CI agents are known for following the money trail, and in this case, it stretched nearly a decade long and involved more than 1,000 victims and $100 million,” said Thomas Fattorusso, Special Agent-in-Charge of the IRS-CI New York Field Office. “I am grateful to our agents and law enforcement partners who helped unravel this Ponzi scheme, and I hope the scheme’s victims have closure today knowing that justice was served.”
Christopher Parris was previously convicted and is awaiting sentencing.
The sentencing is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Ketty Larco-Ward, Boston Division; the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia; the Internal Revenue Service, Criminal Investigation Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Jonathan Mellone, Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; and the Securities and Exchange Commission.
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Rochester Man Sentenced to 10 Years in Prison for Arson of Minneapolis Pawn Shop that Resulted in the Death of a ManRead the Press Release
ST. PAUL, Minn. – A Rochester man was sentenced to 120 months in prison followed by three years of supervised release for the arson of a Minneapolis pawn shop that resulted in the death of a man. Acting U.S. Attorney Charles J. Kovats made the announcement after U.S. District Judge Wilhelmina M. Wright sentenced the defendant.
According to court documents, on May 28, 2020, Montez Terriel Lee, 26, along with others, broke into the Max It Pawn Shop on East Lake Street in Minneapolis. Surveillance video footage showed Lee pouring a fire accelerant around the pawn shop and lighting the accelerant on fire. The fire destroyed the building. A second video showed Lee standing in front of the burning pawn shop and Lee could be heard saying, “[expletive] this place. We’re gonna burn this [expletive] down.”
According to court documents, on July 20, 2020, authorities located the body of a 30 year old man, O.S., in the rubble of the burned Max It Pawn building. The Hennepin County Medical Examiner’s Office attributed O.S.’s death to “probable inhalation of products of combustion and thermal injury (building fire).”
This case was the result of an investigation conducted jointly by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the FBI, the Minneapolis Police Department, the Rochester Police Department, and the Minnesota State Fire Marshal Division.
This case was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.
Rochester Man Going to Prison for 15 Years for Fentanyl Trafficking and Causing Non-Fatal OverdoseRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Shermart D. Merriwether, 26, of Rochester, NY, who was convicted of distribution of fentanyl, was sentenced to serve 180 months in prison by Chief U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that Merriwether was part of a group of individuals who ran a drug house at 192 Weaver Street in the City of Rochester. Merriwether and others sold quantities of fentanyl from the house in 2018 and 2019. Merriwether admitted to selling a quantity of fentanyl to a 24-year-old female who suffered a non-fatal overdose at a gas station on East Ridge Road in Irondequoit, NY. The victim ingested the fentanyl and then lost consciousness while at a pump at the gas station. Irondequoit Ambulance personnel responded and gave the victim Narcan, after which she regained consciousness. Merriwether admitted that, if emergency personnel had not administered Narcan to the victim, there was a substantial risk that she would have died from fentanyl toxicity.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Acting Special Agent-in-Charge Keith Kruskall, New York Field Division; the Monroe County Sheriff’s Office, under the direction of Sheriff Todd Baxter; and the Rochester Police Department, under the direction of Interim Chief David Smith.
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Raleigh Eight Trey Crip Gangster Sentenced to 40 Years in Prison for VICAR and Methamphetamine Distribution ConvictionsRead the Press Release
RALEIGH, N.C. – A Raleigh man was sentenced today to 480 months in prison for conspiracy to distribute and possess with intent to distribute fifty grams or more of methamphetamine; possession with intent to distribute fifty grams or more of methamphetamine and violent crimes in aid of racketeering (VICAR) for conspiring to kill a rival Eight Trey Gangster Crip (ETGC). On May 5, 2021, Deandre Earp pled guilty to all charges.
According to court documents and other information presented in court, Earp, after being tased and assaulted by a rival gang member on Quarry Street in Raleigh in July 2019, attempted to retaliate by planning his murder with other ETGC associates. Earp and another co-defendant then got into a car and were driving to kill the rival gang member when the Raleigh Police Department initiated a traffic stop of a vehicle in which Earp was the passenger. Earp and his co-defendant both had loaded firearms with them in the car and were taken into custody, thereby preventing the potential murder of a rival Crip gang member. Earp’s arrest was based on electronic, physical, and documentary evidence. Earp was also responsible for conspiring to distribute more than 4.5 kilograms of methamphetamine into the Raleigh area.
For approximately two decades, ETGCs have operated in North Carolina, including in the North Carolina prison system. The ETGC, a wholly illegitimate criminal enterprise, has a reputation for a propensity for violence that includes several homicides, aggravated assaults and robberies. Members and associates of ETGC have been involved in numerous violent crimes that have resulted in the loss of life, decrease in quality of life, and damage to societal norms in and around the City of Raleigh. The ETGCs committed acts of violence to maintain membership and discipline, both within the gang and against non-gang members. The ETGCs are recognized as a national criminal street gang originating out of Los Angeles, California.
In his North Carolina leadership position, Earp was the second in command in the ETGC organization and directed members of his gang in selling methamphetamine in Raleigh. Earp was heavily involved in the day-to-day operations of the gang and discussed strategy, policy and decision-making with both the leader of North Carolina and ranking ETGC members in Los Angeles, California. Earp also trained less experienced ETGC members and associates on distribution of narcotics without being detected by law enforcement.
The prosecution of Earp was a part of an Organized Crime and Drug Enforcement Task Force Operation (OCDETF) targeting violent gang members and drug traffickers in Raleigh, North Carolina and Los Angeles, California. This investigation spanned into the Los Angeles, California area where kilogram quantities of illicit drugs were distributed into Raleigh, North Carolina utilizing a complex network of high-ranking ETGC’s from L.A. who have also been indicted in this case.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Raleigh Police Department led the investigation with assistance from the Federal Bureau of Investigation, Raleigh/Wake City-County Bureau of Identification and United States Marshals Service. Assistant U.S. Attorney Kelly L. Sandling prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-cr-00395-D-2.
Phoenix Man Sentenced to 25 Years for Armed Bank RobberyRead the Press Release
PHOENIX, Ariz. – Yesterday, Carlos Devon Lewis, 41, of Phoenix, Arizona, was sentenced by Senior U.S. District Judge David G. Campbell to 25 years in prison, followed by five years of supervised release. Lewis was convicted of three counts of Armed Bank Robbery.
In late 2019, Lewis and his co-conspirators robbed three area banks at gunpoint. In each robbery, Lewis, fully masked, jumped the bank teller counter, stole cash from teller drawers, and hopped back over the counter while his masked co-conspirator pointed a gun at bank employees and customers. Both then escaped in a getaway car. In total, Lewis and his co-conspirators stole more than $80,000.
The Federal Bureau of Investigation, Peoria Police Department, Surprise Police Department and the Phoenix Police Department conducted the investigation in the case. Assistant U.S. Attorneys Tracy Van Buskirk, Emma Mark, and Lindsay Short, District of Arizona, Phoenix, handled the prosecution.
CASE NUMBER: CR-20-00045-PHX-DGC
RELEASE NUMBER: 2022- 004_Lewis# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Philadelphia Woman Charged with Money Laundering and Stealing Federal Funds in Scheme Directed by Online-Dating ParamourRead the Press Release
PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that Myrna Ortiz, 43, of Philadelphia, PA, was charged in a 32-count Indictment in connection with a conspiracy to steal and conceal the origin of fraudulently obtained Social Security benefits and COVID-19 PUA unemployment benefits. The Indictment charges Ortiz with one count of conspiracy to commit money laundering and 31 counts of theft of government funds. She made her initial appearance in federal court on these charges earlier today.
According to the Indictment, Ortiz met an individual through the online dating website ‘Match.com,’ and began a relationship via digital messaging. She is charged with helping her online paramour execute a scheme in which fraudulent claims were filed for Social Security Administration (SSA) Retirement benefits, using the personal identifiable information of individuals age 62 or older, the age at which taxpayers become eligible to begin collecting those benefits. The indictment charges that Ortiz participated by laundering the stolen money. Specifically, she is charged with opening ten bank accounts at the direction of her co-conspirator in order to receive the fraudulently issued government funds, and then withdrawing the funds, purchasing gift cards with the cash, and laundering the funds back to her co-conspirator through the gift cards. The scheme targeted high wage earners who are over the age of 62 but have not yet filed for SSA Retirement benefits on their own, and it impacted at least twenty-three victims.
Further, the Indictment alleges that the defendant helped steal money from the government specifically related to COVID-19 emergency relief funds or Pandemic Unemployment Assistance (“PUA”) funds. Using the same bank accounts to which the fraudulently obtained SSA funds were directed, Ortiz is also charged with depositing fraudulently obtained PUA funds in the names of various victims and laundering these illegal proceeds back to the same co-conspirator. This scheme involved deceiving the state workforce agencies of Pennsylvania, Illinois, Indiana, West Virginia, Arizona, and Ohio.
Through these schemes, Ortiz is alleged to have been involved in a conspiracy to defraud the government, and to launder the stolen government funds in an amount of almost $600,000.
“Social Security retirement benefits and pandemic unemployment assistance funds are intended to help Americans who have worked hard and now need some extra help making ends meet, either because they are now enjoying their well-deserved retirement or because the COVID-19 pandemic has dramatically impacted their ability to work and earn a living,” said U.S. Attorney Williams. “Thieves who attempt to take these funds are taking advantage of honest workers – ripping them off while also ripping off all taxpayers who fund these programs. As alleged, Ortiz fraudulently obtained nearly $600,000 in government funds, all at the behest of an individual she met through an online dating website.”
“An important part of the mission of the Office of Inspector General is to investigate allegations of fraud related to unemployment insurance programs. We will continue to work with the Pennsylvania Department of Labor and Industry and our law enforcement partners to investigate these types of allegations,” stated Syreeta Scott, Special Agent-in-Charge of the Philadelphia Region, U.S. Department of Labor Office of Inspector General.
The case was investigated by the United States Department of Labor Office of Inspector General and the Social Security Administration Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Megan Curran.
Omaha Railcar Cleaning Company and its Owners Sentenced for Violating Environmental and Worker Safety Laws Resulting in Workers’ 2015 DeathsRead the Press Release
Steven Michael Braithwaite, Adam Thomas Braithwaite and their company Nebraska Railcar Cleaning Services LLC (NRCS) were sentenced today in Omaha, Nebraska, for willful violations of worker safety standards that resulted in two worker deaths, knowing violations of the Resource Conservation and Recovery Act (RCRA) involving hazardous waste and knowing endangerment to others, knowing submission of false documents to the Occupational Safety and Health Administration (OSHA) and perjury. Steven Braithwaite will serve 30 months in prison and pay $100,000 in restitution for his role in the offenses. Adam Braithwaite will serve one year and one day in prison and pay $100,000 in restitution. In addition, NRCS and the individual defendants must serve five years of probation and pay a $21,000 fine.
According to court documents, on April 14, 2015, NRCS workers were inside and on top of a rail tanker car, removing petroleum residue from inside the tank, when flammable gases in the tanker car ignited and exploded. Two workers died and another was injured in the blast. NRCS took the job after receiving an inquiry from one of its customers in January 2015. The inquiry included a Safety Data Sheet (SDS) for the product in the railcar, describing it as “natural gasoline” with a “severe” class four flammability rating (the highest rating). The SDS went on to indicate that the natural gasoline would ignite at zero degrees Fahrenheit and that it contained benzene, a “cancer hazard.”
Despite no test for benzene and an unacceptably high explosive gas level test at the beginning of the job, NRCS sent two of its employees into the tanker car. The employees began removing the toxic, ignitable residue, with a third employee helping from outside. The third employee pulled bucket loads of waste up through the top hatch and dumped them into a regular dumpster to be taken to a municipal landfill, even though the residue was hazardous waste. Approximately one hour after the cleaning began, a spark caused the deadly explosion.
Steven Braithwaite was the president and majority owner of NRCS and was responsible for all phases of the business, including both environmental and worker safety issues. Adam Braithwaite was the vice president and a minority owner of NRCS. He too handled both environmental and worker safety issues.
As the defendants admitted in their plea agreements, prior to the explosion, OSHA officials conducted regulatory inspections of NRCS, and cited NRCS and its principals for violating OSHA safety regulations concerning confined space entries. Rail tanker cars are “confined spaces” under the Occupational Safety and Health Act. Confined spaces are dangerous because they may be filled with toxic, explosive, or unbreathable gases, among other reasons. After an inspection of NRCS, Steven Braithwaite entered into a Feb. 5, 2015, written agreement in which he represented that NRCS had been testing for benzene since July 2014. That was a lie. OSHA returned to NRCS in March 2015 to conduct a follow-up inspection, but Steven Braithwaite turned away the inspectors. Afterwards, Adam Braithwaite submitted falsified documents to OSHA purporting to show that NRCS had been purchasing equipment to test the contents of railcars for benzene and had taken other required safety precautions. NRCS had not been taking those steps. Adam Braithwaite also falsely testified under oath in an OSHA hearing that NRCS had been purchasing the benzene testing equipment.
Although they knew what was required, the defendants failed to implement worker safety standards, mishandled hazardous wastes violating the RCRA and knowingly submitted false documents to OSHA during inspections as a cover up. Their decisions led to the deaths of two of their workers. On July 12, Steven Braithwaite pleaded guilty to counts 2-4 of the indictment. Adam Braithwaite pleaded guilty to counts 2-3, 8-9 and 22. NRCS pleaded guilty to counts 1-21.
“Every worker, including every worker doing a dangerous job, has a right to a safe workplace,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Tragically, two workers suffered preventable deaths at Nebraska Railcar Cleaning Services because of the defendants’ failure to follow the law. Today’s sentences provide a measure of justice for them and their families.”
“Violations of worker safety and environmental standards are sometimes belittled as merely regulatory crimes, but this case demonstrates how much those regulations do matter,” said U.S. Attorney Jan W. Sharp of the District of Nebraska. “If the defendants had followed regulations they were well aware of, no one would have been inside a rail tanker with toxic gases at explosive concentrations. If they had followed regulations, buckets of hazardous waste would not have been dumped in regular dumpsters. If they had followed regulations, two men would have gone home at the end of their workdays.”
“The defendants’ decision to ignore environmental and worker safety regulations led to the tragic death of two workers,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance. “Today’s sentencings send a clear message that individuals who intentionally violate these laws will be held responsible for their crimes.”
“Steven and Adam Braithwaite disregarded OSHA regulations, ignored safety protocols, and provided false information to OSHA, which resulted in the tragic loss of two lives,” said Special Agent-in-Charge Steven Grell of the Department of Labor’s Office of Inspector General Dallas Region, which includes Nebraska. “We will continue to work with OSHA and our law enforcement partners to hold accountable those who obstruct Department of Labor agencies from fulfilling their missions.”
“Steven and Adam Braithwaite chose to protect themselves by providing false documentation to OSHA after the death of two employees, making it appear they had followed safety requirements, but in fact, willfully ignored warnings indicating a risk of explosion and sent these two men into a deadly situation,” said Regional Solicitor Christine Heri of the U.S. Department of Labor- Chicago. “The Department of Labor is committed to bring justice to the families of these workers and to hold employers responsible to their legal obligation to protect workers on the job.”
The case was investigated by the EPA’s Criminal Investigation Division and the Department of Labor’s Office of Inspector General. Senior Counsel Krishna S. Dighe of the Department of Justice, Environmental Crimes Section and Assistant U.S. Attorney Donald J. Kleine of the District of Nebraska are prosecuting the case.
Omaha Railcar Cleaning Company and its Owners Sentenced for Violating Environmental and Worker Safety Laws Resulting in Workers’ 2015 DeathsRead the Press Release
Steven Michael Braithwaite, Adam Thomas Braithwaite and their company Nebraska Railcar Cleaning Services LLC (NRCS) were sentenced today in Omaha, Nebraska, for willful violations of worker safety standards that resulted in two worker deaths, knowing violations of the Resource Conservation and Recovery Act (RCRA) involving hazardous waste and knowing endangerment to others, knowing submission of false documents to the Occupational Safety and Health Administration (OSHA) and perjury. Steven Braithwaite will serve 30 months in prison and pay $100,000 in restitution for his role in the offenses. Adam Braithwaite will serve one year and one day in prison and pay $100,000 in restitution. In addition, NRCS and the individual defendants must serve five years of probation and pay a $21,000 fine.
According to court documents, on April 14, 2015, NRCS workers were inside and on top of a rail tanker car, removing petroleum residue from inside the tank, when flammable gases in the tanker car ignited and exploded. Two workers died and another was injured in the blast. NRCS took the job after receiving an inquiry from one of its customers in January 2015. The inquiry included a Safety Data Sheet (SDS) for the product in the railcar, describing it as “natural gasoline” with a “severe” class four flammability rating (the highest rating). The SDS went on to indicate that the natural gasoline would ignite at zero degrees Fahrenheit and that it contained benzene, a “cancer hazard.”
Despite no test for benzene and an unacceptably high explosive gas level test at the beginning of the job, NRCS sent two of its employees into the tanker car. The employees began removing the toxic, ignitable residue, with a third employee helping from outside. The third employee pulled bucket loads of waste up through the top hatch and dumped them into a regular dumpster to be taken to a municipal landfill, even though the residue was hazardous waste. Approximately one hour after the cleaning began, a spark caused the deadly explosion.
Steven Braithwaite was the president and majority owner of NRCS and was responsible for all phases of the business, including both environmental and worker safety issues. Adam Braithwaite was the vice president and a minority owner of NRCS. He too handled both environmental and worker safety issues.
As the defendants admitted in their plea agreements, prior to the explosion, OSHA officials conducted regulatory inspections of NRCS, and cited NRCS and its principals for violating OSHA safety regulations concerning confined space entries. Rail tanker cars are “confined spaces” under the Occupational Safety and Health Act. Confined spaces are dangerous because they may be filled with toxic, explosive, or unbreathable gases, among other reasons. After an inspection of NRCS, Steven Braithwaite entered into a Feb. 5, 2015, written agreement in which he represented that NRCS had been testing for benzene since July 2014. That was a lie. OSHA returned to NRCS in March 2015 to conduct a follow-up inspection, but Steven Braithwaite turned away the inspectors. Afterwards, Adam Braithwaite submitted falsified documents to OSHA purporting to show that NRCS had been purchasing equipment to test the contents of railcars for benzene and had taken other required safety precautions. NRCS had not been taking those steps. Adam Braithwaite also falsely testified under oath in an OSHA hearing that NRCS had been purchasing the benzene testing equipment.
Although they knew what was required, the defendants failed to implement worker safety standards, mishandled hazardous wastes violating the RCRA, and knowingly submitted false documents to OSHA during inspections as a cover up. Their decisions led to the deaths of two of their workers. On July 12, Steven Braithwaite pleaded guilty to counts 2-4 of the indictment. Adam Braithwaite pleaded guilty to counts 2-3, 8-9, 22. NRCS pleaded guilty to counts 1-21.
“Every worker, including every worker doing a dangerous job, has a right to a safe workplace,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Tragically, two workers suffered preventable deaths at Nebraska Railcar Cleaning Services because of the defendants’ failure to follow the law. Today’s sentences provide a measure of justice for them and their families.”
“Violations of worker safety and environmental standards are sometimes belittled as merely regulatory crimes, but this case demonstrates how much those regulations do matter,” said U.S. Attorney Jan W. Sharp of the District of Nebraska. “If the defendants had followed regulations they were well aware of, no one would have been inside a rail tanker with toxic gases at explosive concentrations. If they had followed regulations, buckets of hazardous waste would not have been dumped in regular dumpsters. If they had followed regulations, two men would have gone home at the end of their workdays.”
“The defendants’ decision to ignore environmental and worker safety regulations led to the tragic death of two workers,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance. “Today’s sentencings send a clear message that individuals who intentionally violate these laws will be held responsible for their crimes.”
“Steven and Adam Braithwaite disregarded Occupational Safety and Health Administration (OSHA) regulations, ignored safety protocols, and provided false information to OSHA, which resulted in the tragic loss of two lives,” said Special Agent-in-Charge Steven Grell of the Department of Labor’s Office of Inspector General Dallas Region, which includes Nebraska. “We will continue to work with OSHA and our law enforcement partners to hold accountable those who obstruct Department of Labor agencies from fulfilling their missions.”
“Steven and Adam Braithwaite chose to protect themselves by providing false documentation to OSHA after the death of two employees, making it appear they had followed safety requirements, but in fact, willfully ignored warnings indicating a risk of explosion and sent these two men into a deadly situation,” said Regional Solicitor Christine Heri of the U.S. Department of Labor- Chicago. “The Department of Labor is committed to bring justice to the families of these workers and to hold employers responsible to their legal obligation to protect workers on the job.”
The case was investigated by the EPA’s Criminal Investigation Division and the Department of Labor’s Office of Inspector General. Senior Counsel Krishna S. Dighe of the Department of Justice, Environmental Crimes Section and Assistant U.S. Attorney Donald J. Kleine of the District of Nebraska are prosecuting the case.
Omaha Man Sentenced to 96 Months for Receipt of Child PornographyRead the Press Release
United States Attorney Jan Sharp announced that John Dethlefs, age 54, of Omaha, Nebraska, was sentenced today in federal court in Omaha for receipt of child pornography. United States District Judge Brian C. Buescher sentenced Dethlefs to 96 months of imprisonment. There is no parole in the federal system. After completing his term of imprisonment, Dethlefs will begin a 10-year term of supervised release. Dethlefs was also ordered to pay $12,000 in restitution and a $5,000 special assessment.
On February 24, 2019, Dethlefs uploaded an image of child pornography to Microsoft Bing’s search function. Dethlefs was trying to locate child pornography on the internet. On August 13, 2019, officers executed a search warrant at Dethlefs’s Omaha residence. Officers obtained Dethlefs’s computer which contained about 1,900 images of child pornography. The child pornography included children ages 2 to 16-years-old. Five of the images included bondage and one image included bestiality. Dethlefs admitted to possessing child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Omaha Police Department and the Federal Bureau of Investigation.
Nine Members of Newark Drug Trafficking Ring Charged in Superseding IndictmentRead the Press Release
NEWARK, N.J. – Nine members of a drug trafficking organization were charged today in a superseding indictment for their roles in a heroin, fentanyl, and crack cocaine distribution scheme that sold hundreds of thousands of dollars’ worth of illegal drugs out of a residential building on Fairmount Avenue in Newark, U.S. Attorney Philip R. Sellinger announced.
The 34-count superseding indictment charges all defendants with conspiracy to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and 280 grams or more of crack from July 2020 through June 2021. All defendants are charged with at least one count of distribution and possession with the intent to distribute controlled substances from purchases recorded by the FBI and from drug transactions observed by local law enforcement. The defendants were originally charged by complaint and arrested on June 29, 2021. Seven of the defendants have been detained since June. (See chart below)
Three of the defendants – Kasim Thurston, Jamar Hall, and Angel Kearney – are charged with firearms violations for possessing firearms and ammunition while having been previously convicted of a felony offense. Hall and Kearney were also charged with possessing a firearm in furtherance of a drug trafficking crime.
Three other members of the drug organization have previously entered guilty pleas. Elijah Shumate, 50, of Newark, pleaded guilty before U.S. District Judge Brian R. Martinotti on Jan. 13, 2022, to conspiracy to distribute 100 grams or more of heroin. Andre Fuller, 31, of Caldwell, New Jersey, pleaded guilty before Judge Martinotti on Jan. 10, 2022, to conspiracy to distribute 100 grams or more of heroin. Antwan Williams, 30, of Newark, pleaded guilty before Judge Martinotti on Dec. 9, 2021, to conspiracy to distribute one kilogram or more of heroin.
According to documents filed in this case and statements made in court:
The defendants allegedly took advantage of the residential building’s location to sell drugs from the porch area, which was guarded by a locked steel door and difficult for law enforcement to infiltrate despite a constant stream of buyers approaching the front porch area day and night. Defendants stored drugs and guns in apartments that they controlled.
The defendants worked in shifts from 6:00 a.m. until late in the evening. Buyers came on foot, in vehicles and on bicycles to purchase the illegal drugs. The heroin sold was of a high quality and was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin and fentanyl, allowing buyers to identify and purchase the brands that they preferred. FBI surveillance and local law enforcement witnessed hundreds of narcotics transactions from July 2020 through June 2021.
The count of conspiracy to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and 280 grams or more of crack cocaine carries a minimum sentence of 10 years in prison, a maximum of life in prison and a maximum fine of $10 million. The charges of distribution and possession with the intent to distribute heroin, fentanyl and crack cocaine carry a maximum sentence of 10 years in prison and a maximum fine of $1 million; the charge of possession of a firearm by a convicted felon carries a maximum penalty of 10 years in prison and a maximum fine of $250,000; and the charge of possession of a firearm in furtherance of a drug trafficking crime carries a minimum sentence of five years in prison, a maximum sentence of life in prison, and a maximum fine of $250,000.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the charges and guilty pleas. He also thanked police officers and detectives of the Newark Police Department, officers of the Essex County Sheriff’s Office, detectives of the Essex County Prosecutor’s Office, officers of the East Orange and Bloomfield police departments, and the Essex County Department of Corrections for their assistance with the investigation.
Three other organization members are charged by complaint and their cases are pending. The charges and allegations contained in the complaint and superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The government is represented by Senior Trial Counsel Robert Frazer of the Organized
Crime/Gangs Unit in the Criminal Division in Newark.
*denotes free on bail
Defendant
Age
Residence
Charge
Counts
Angel Kearney, aka “Jim,” aka “Dred”
31
East Orange, New Jersey
Conspiracy to distribute heroin, fentanyl and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine; possession of a firearm by a convicted felon; possession of a firearm in furtherance of a drug trafficking crime
1, 21, 26, 27, 29, 30, 31 and 32
Thomas Gibson, aka “Tommy,”
44
Newark
Conspiracy to distribute heroin, fentanyl and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine;
1, 6, 13, 18, 19, 20 and 34
Jamar Hall, aka “Goo”
35
Hamilton, New Jersey
Conspiracy to distribute heroin, fentanyl and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine; possession of a firearm by a convicted felon; possession of a firearm in furtherance of a drug trafficking crime
1, 21, 22, 23,and 25
Kasim Thurston, aka “Kai,” aka “Kaz”
37
Newark
Conspiracy to distribute heroin, fentanyl and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine possession of a firearm by a convicted felon; possession of a firearm in furtherance of a drug trafficking crime
1, 12, 15, 17 and 33
Ibn Thurston, aka “Wheezy,” aka “Saheed”
33
Newark
Conspiracy to distribute heroin, fentanyl, and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine
1 and 7
*Kevin Hall
31
Newark
Conspiracy to distribute heroin, fentanyl, and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine
1, 3, 8, 24, and 28
Akim Gibson, aka “Ching”
24
Newark
Conspiracy to distribute heroin, fentanyl and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine
1, 11, 12, and 14
*Shalamar McCall, aka “Shaggy”
34
Newark
Conspiracy to distribute heroin, fentanyl, and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine
1, 9, and 10
Hakis Moses, aka “Hak”
43
Newark
Conspiracy to distribute heroin, fentanyl, and crack cocaine; distribution and possession with intent to distribute heroin, fentanyl and crack cocaine
1, 2, 4, and 5
New Haven Man Pleads Guilty to Federal Firearm Charge Related to Gun Trafficking SchemeRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, and James Ferguson, Special Agent in Charge, ATF Boston Field Division, today announced that QUINN MOORING, 40, of New Haven, pleaded guilty yesterday via videoconference before U.S. District Judge Stefan R. Underhill to unlawful possession of a firearm by a felon.
According to court documents and statements made in court, in March 2021, ATF Task Force officers learned that Mooring was receiving firearms from a source in South Carolina and selling them in Connecticut. On April 19, 2021, investigators made a controlled purchase of a 9mm Glock handgun and a drum magazine from Mooring and a co-conspirator in New Haven in exchange for $1,500. The firearm was one of five 9mm handguns that had been purchased by an individual at a pawn shop in Port Royal, South Carolina, in the month prior to the transaction in Connecticut.
On April 22, 2021, investigators made a controlled purchase of 9mm ammunition from Mooring in New Haven.
Mooring’s criminal history includes state convictions for felony robbery, unlawful restraint and failure to appear offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Mooring was arrested on a federal criminal complaint on June 14, 2021.
The offense carries a maximum term of imprisonment of 10 years. Mooring is released on a $50,000 bond pending sentencing, which is not scheduled.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), West Haven Police Department and New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Konstantin Lantsman.
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.
Multi-Count Federal Indictment Returned for Labor Trafficking ViolationsRead the Press Release
COLUMBIA, SOUTH CAROLINA — United States Attorney Corey F. Ellis announced today that a federal grand jury in Columbia returned a multi-count indictment in connection with trafficking in seasonal agricultural workers.
Elizabeth Balcazar, 19, Enrique Balcazar, 35 – both of Batesburg – and Balcazar Nature Harvesting, LLC have been charged with conspiracy to commit labor trafficking and fraud in foreign labor contracting. Elizabeth Balcazar and Enrique Balcazar have also been charged with the confiscation of passports and immigration documents in connection with labor trafficking. Enrique Balcazar has also been charged with two counts of labor trafficking.
“Our nation’s visa system is an asset that provides much-needed resources to our communities and valuable opportunities to those foreign workers seeking a new life here in the United States,” said U.S. Attorney Ellis. “Although the indictment speaks for itself, those who exploit the system and abuse these vulnerable workers will find no refuge here in South Carolina. Our office will utilize all available resources to bring such offenders to justice while rescuing and restoring victims in the process. Sadly, we know that many labor trafficking victims, both foreign and domestic, suffer here in the United States and that such violations frequently go undetected.”
“By targeting employers who exploit their workers, HSI is protecting the American labor market, the conditions of workplaces, and the dignity of the individual employees,” said Special Agent In Charge Ronnie Martinez, who oversees Homeland Security Investigations (HSI) operations in North Carolina and South Carolina. “We hope that cases like this will encourage other victims and witnesses to come forward to HSI to enable us to stop other employers from engaging in any similar conduct.”
“Labor trafficking and exploitation is real, and it is happening in South Carolina,” said South Carolina Law Enforcement Division (SLED) chief Mark Keel. “Agents have and will continue to work in collaboration with our local and federal partners to rescue those being victimized and bring justice to those who profit from the misery of others.”
The indictment alleges that Elizabeth Balcazar and Enrique Balcazar operated Balcazar Nature Harvesting, LLC, which provided seasonal harvesting labor to South Carolina area farms. The indictment further alleges that the defendants forced victims to work excessive hours, failed to pay the victims their due wages, and threatened deportation for those who did not work hard enough or produce enough. The indictment also alleges that the defendants attempted to restrain the victims by confiscating their passports and by carrying, brandishing, and discharging a firearm. The indictment also indicates there are multiple victims.
Elizabeth Balcazar and Enrique Balcazar face a maximum penalty of 20 years in prison, plus court ordered supervision to follow, and each of the defendants face a fine of up to $250,000. Elizabeth Balcazar and Enrique Balcazar are currently detained pending trial.
The case was investigated by U.S. Department of Homeland Security, HSI, SLED, and U.S. Department of Labor. Assistant U.S. Attorneys Elliott B. Daniels and Carrie Fisher Sherard are prosecuting the case.
All charges in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
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Matthew Morgan, Ruebin Beard Imprisoned for Bank LarcenyRead the Press Release
The United States Attorney for the District of Vermont announced that Matthew Morgan, 52, and Ruebin Beard, 52, both of Burlington, have been sentenced in United States District Court in Burlington following their guilty pleas to a charge of bank larceny. Today, U.S. District Judge Christina Reiss sentenced Beard to 14 months of imprisonment to be followed by three years of supervised release. This past November, Judge Reiss sentenced Morgan to 20 months of imprisonment, followed by three years of supervised release. The court ordered both defendants to pay restitution totaling $27,300 and that Morgan forfeit a Jeep vehicle. Both defendants are currently incarcerated.
In March 2021, a federal grand jury in Burlington returned a two-count superseding indictment charging Morgan and Beard with conspiracy and with stealing money and property worth more than $1000 from Citizens Bank, a federally-insured financial institution. The charges stem from the theft of an ATM machine from the UVM campus in September 2020. At the time of the theft, the ATM machine contained about $23,000 in cash. The indictment also sought to forfeit a 2011 Jeep Patriot automobile, which Morgan bought with proceeds of the ATM theft. Both defendants pleaded guilty to the bank larceny count.
This case was investigated by the University of Vermont Police Department and the Federal Bureau of Investigation.
Morgan is represented by Assistant Federal Defender Stephen Barth, and Beard by Lisa Shelkrot. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Massachusetts Man Sentenced for Unlawfully Possessing a FirearmRead the Press Release
BANGOR, Maine: A Massachusetts man was sentenced today in federal court for being a felon in possession of a firearm, U.S. Attorney Darcie N. McElwee announced.
U.S. District Judge John A. Woodcock, Jr., sentenced Terrence Ware, Jr., 28, of Springfield, Massachusetts, to a time served sentence of 15 months imprisonment to be followed by three years of supervised release. Ware pleaded guilty on May 19, 2021.
According to court records, Ware was convicted in 2019 of felony domestic violence offenses in Massachusetts. These convictions prohibited Ware from possessing firearms under federal law. On three separate occasions in June 2020, Ware possessed and shot firearms at gun range in Holden, Maine.
“The presence of a firearm in domestic violence situations significantly increases the risk of lethality,” said U.S. Attorney McElwee. “Prosecution of domestic abusers who illegally possess firearms is a priority of the U.S. Attorney’s Office and ATF in Maine.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The prosecution is part of the Department of Justice’s Project Safe Neighborhoods (PSN) initiative. PSN is a nationwide initiative that brings together federal, state, local and tribal law enforcement officials, prosecutors, community leaders and other stakeholders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them. PSN is coordinated by the U.S. Attorneys’ Offices in the 94 federal judicial districts throughout the 50 states and U.S. territories. PSN is customized to account for local violent crime problems and resources. Across all districts, PSN follows four key design elements of successful violent crime reduction initiatives: community engagement, prevention and intervention, focused and strategic enforcement, and accountability.
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Massachusetts Man Sentenced for Being a Felon in Possession of a FirearmRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that on January 11, 2022, Tahj McCormick, 25, of Springfield, Massachusetts, was sentenced in United States District Court in Burlington, Vermont, to serve 60 months in prison after his guilty plea to one count of being a previously convicted felon found in possession of a firearm. U.S. District Judge Christina Reiss also ordered McCormick to serve a three (3) year term of supervised release and to pay a $100 special assessment.
According to court records and proceedings, on February 19, 2021, McCormick met with an undercover special agent from the Bureau of Alcohol, Tobacco, Firearms & Explosives so McCormick could buy two guns from the undercover special agent. McCormick paid $700 for the two guns at the meeting, and was taken into custody when he took possession of them. When McCormick was searched incident to arrest, law enforcement discovered him to be in possession of another handgun. At the time of his arrest, McCormick had previously been convicted of a crime punishable by a term of imprisonment of greater than one year.
U.S. Attorney Nikolas P. Kerest commended the efforts of the Bureau of Alcohol, Tobacco, Firearms & Explosives in the investigation and prosecution of McCormick. U.S. Attorney Kerest also thanked the Vermont State Police, the Springfield, Massachusetts Police Department, the Holyoke, Massachusetts Police Department, and the Easthampton, Massachusetts Police Department, for their contributions to the investigation.
Assistant U.S. Attorney Barbara A. Masterson handled the prosecution of McCormick. Federal Public Defender Michael L. Desautels represented McCormick.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime. https://www.justice.gov/psn
Man Sentenced for Meth and Firearm PossessionRead the Press Release
United States Attorney Jan Sharp announced that Oscar Garfio-Zapien, 29, a citizen of Mexico, was sentenced today in Lincoln, Nebraska, by United States District Judge John M. Gerrard to more than 12 years in prison for possession of methamphetamine, with intent to distribute and another 5 years for possessing a firearm in furtherance of drug trafficking. Garfio-Zapien will be required to serve 5 years of supervision upon his release. There is no parole in the federal system.
On or about November 5, 2020, Garfio-Zapien was stopped in Hamilton County by a Nebraska State Patrolman for speeding along Interstate 80. Garfio-Zapien consented to a search of his rental vehicle. During the search, the trooper found a suitcase in the rear cargo area of the rental containing 13 packages of methamphetamine. In the center console, the trooper found a loaded Springfield XD 9 mm handgun. In a backpack located on the front passenger seat within reach of defendant, the trooper found eight packages of methamphetamine weighing approximately 1.5 pounds in total, a loaded Smith & Wesson .38 caliber revolver, and 33 rounds of .380 ammunition. The total weight of all the methamphetamine in the car was about 14.5 pounds.
This case was investigated by the Nebraska State Patrol and the Central Nebraska Drug and Safe Streets Task Force.
Loan Servicer Agrees to Pay Nearly $8 Million to Resolve Alleged False Claims in Connection with Federal Education LoansRead the Press Release
Conduent Education Services LLC, fka Xerox Education Services LLC, dba ACS Education Services LLC (CES), a contractor that serviced student loans for lenders under the Federal Family Education Loan Program (FFEL), has agreed to pay $7.9 million to resolve allegations that it violated the False Claims Act by submitting or causing the submission of false claims to the Department of Education. Prior to this settlement, CES paid $1.4 million to the Department of Education under a remediation plan to partially resolve the allegations and received a credit for that payment under the settlement agreement.
Loan servicers are required to accurately report the impact of monthly student loan repayments, principal capitalization and other changes to borrower accounts to the Department of Education. The settlement announced today resolves allegations that between 2006 and 2016, CES knowingly failed to make required financial adjustments to borrower accounts and improperly treated some borrowers as eligible for military deferments when they were not, resulting in incorrect reporting to the Department of Education and losses to the United States. CES stopped servicing commercially held federal student loans in September 2019.
“The United States expects servicers participating in federal loan programs to accurately report amounts owed to the Department of Education,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The resolution announced today reflects the department’s commitment to pursuing entities that fail to meet their obligations to the United States.”
“Holding loan servicers accountable is a top priority for the Biden-Harris Administration, so I am pleased that improper conduct at Conduent Education Services got the oversight and investigation it deserved,” said Under Secretary of Education James Kvaal. “We are grateful to the Department of Justice for working with the Education Department to ensure that CES is held accountable to borrowers and taxpayers.”
The resolution in this matter was the result of an investigation by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with the assistance of the Department of Education’s offices of Federal Student Aid and General Counsel.
The claims resolved by the settlement are allegations only and there has been no determination of liability.