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Friday 5 November 2021
Leader of Drug Trafficking Organization Sentenced to 20 Years in Federal Prison for Supplying Heroin to Open-Air Market on Chicago’s West SideRead the Press Release
CHICAGO — The leader of a drug trafficking organization has been sentenced to 20 years in federal prison for supplying heroin to an illegal open-air market on the West Side of Chicago.
LEVAUGHN COLLINS obtained bulk quantities of heroin and provided it to numerous associates, who, at Collins’s direction, processed and packaged the drugs for street-level sales. Many of the sales occurred at an illegal open-air market in the 3700 block of West Grenshaw Street in Chicago’s North Lawndale neighborhood.
Collins obtained significant profits from the sale of multiple kilograms of heroin. During the investigation, law enforcement conducted a court-authorized search of his residence and discovered a Maserati automobile, $50,000 in cash, and more than $400,000 worth of jewelry. A search of another location which Collins utilized to stash the heroin revealed ten firearms, many of which were loaded and equipped with extended magazines.
Collins, 41, of Chicago, pleaded guilty in 2019 to federal drug and firearm charges. U.S. District Judge Gary Feinerman imposed the prison sentence Tuesday after a hearing in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Robert J. Bell, Special Agent-in-Charge of the Chicago Division of the U.S. Drug Enforcement Administration; and David Brown, Superintendent of the Chicago Police Department. The multi-agency investigation was supported by the High Intensity Drug Trafficking Area Task Force (HIDTA) Initiative. Substantial assistance was provided by the Cook County State’s Attorney’s Office and IRS Criminal Investigation Division in Chicago.
“The defendant financed his lifestyle by taking advantage of those addicted to heroin,” Assistant U.S. Attorneys Scott M. Edenfield and Jared C. Jodrey argued in the government’s sentencing memorandum. “Drug trafficking, at any level, is a serious offense that has well-documented deleterious effects not only on traffickers and users, but on the community at large.”
Kentucky Man Sentenced in Methamphetamine Distribution CaseRead the Press Release
ABINGDON, Va. – A Jenkins, Kentucky man was sentenced yesterday to 147 months in prison for trafficking methamphetamine from Kentucky into Wise County, Virginia.
From February to April 2021, James Orlin Little, 54, sold large quantities of methamphetamine to three confidential informants working for the Southwest Virginia Drug Task Force. On April 21, 2021, authorities conducted a traffic stop on Little’s vehicle and found approximately 40 grams of methamphetamine, digital scales, spoons with narcotics residue, plastic baggies, and a loaded 9mm rifle.
Little pleaded guilty in July 2021 to distributing more than five grams of “ice” methamphetamine, possessing with the intent to distribute more than five grams of “ice” methamphetamine, and possessing a firearm in furtherance of a drug trafficking crime.
United States Attorney Christopher R. Kavanaugh of the Western District of Virginia and Charlie J. Patterson, Special Agent in Charge of ATF’s Washington Field Division made the announcement.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Southwest Virginia Drug Task Force, the Wise County Sheriff’s Office, and the Virginia State Police investigated the case.
Assistant U.S. Attorney Lena L. Busscher prosecuted the case.
Justice Department Secures Surrender of over 500 Dogs from Iowa Dog Breeder and a Permanent Prohibition on Dealing in AnimalsRead the Press Release
In a consent decree entered on Nov. 2 by the U.S. District Court for the Southern District of Iowa, Daniel Gingerich, an Iowa dog breeder, has agreed to revocation of his Animal Welfare Act (AWA) dealer license, a permanent prohibition on engaging in any activity that requires an AWA license, and the surrender of more than 500 dogs and puppies to the Animal Rescue League of Iowa.
In September, the United States filed suit against Gingerich, alleging that he was placing the health of his dogs in serious danger in violation of the AWA. Gingerich had amassed over 100 citations by U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) inspectors in only six months for violations of the AWA, including for the failure to provide an emaciated golden retriever veterinary care, failure to provide potable water and feeding dogs moldy food and food contaminated with wood chips. Gingerich was also cited for failing to follow an appropriate vaccine regime, which resulted in outbreaks of Parvovirus and distemper, both highly contagious but easily preventable diseases.
Under the consent decree, Gingerich was required to identify and surrender all of his dogs at his USDA-licensed and unlicensed facilities. Those dogs have now been transferred to the Animal Rescue League of Iowa, which is partnering with Wayside Waifs, Wisconsin Humane Society, the American Society for the Prevention of Cruelty to Animals and other organizations to provide the dogs the care they need. Gingerich also agreed to permanently refrain from any activity requiring an AWA license. USDA simultaneously negotiated the permanent revocation of Gingerich’s AWA license.
“This case demonstrates the department’s commitment to ensuring that those placing the health of their animals in serious danger are swiftly held accountable, and that these animals receive the humane care they are legally owed,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “We will continue to partner with USDA to vigorously enforce these animal welfare laws in the future.”
“The resolution of this case highlights the important partnership between county, state and federal governments in animal welfare cases,” said Deputy Administrator Dr. Betty Goldentyer, of USDA APHIS’ Animal Care Program. “We are grateful to everyone who assisted us in providing for the welfare of the dogs at this facility, and we will continue to work diligently to ensure the welfare of animals under the Animal Welfare Act.”
This settlement is the result of inspection and investigation by USDA and prosecution by Senior Trial Attorney Mary Hollingsworth and Trial Attorney Shampa Panda of ENRD’s Wildlife and Marine Resources Section, with the assistance of the U.S. Attorney’s Office for the Southern District of Iowa.
Jury convicts Chinese official of espionage crimes, attempting to steal trade secrets from Cincinnati companyRead the Press Release
CINCINNATI – The first Chinese intelligence agent ever to be extradited to the United States to stand trial was convicted today by a federal jury in Cincinnati.
Yanjun Xu was found guilty on all counts, including conspiring to and attempting to commit economic espionage and stealing trade secrets.
The verdict was announced today following a trial that began on Oct. 19 before U.S. District Judge Timothy S. Black. Closing arguments concluded Wednesday.
“The jury, by its guilty verdict here today, held Xu accountable for his classic spy techniques,” said Acting U.S. Attorney Vipal J. Patel. “Xu conspired to commit economic espionage on behalf of the Chinese government, and he tried to steal the valuable innovation and trade secrets of industry-leading American aviation technology companies. This Office will continue to seek to protect American innovation and hold accountable those who attempt to steal our nation’s science and technology, regardless of status or affiliation, whether civilian, military, or spy.”
“Investigating, arresting, and successfully prosecuting an intelligence officer from the Chinese Ministry of State Security is a victory for the American people and the U.S. intelligence community,” stated FBI Cincinnati Special Agent in Charge J. William Rivers. “The Chinese Communist government, which tasked Xu, is continuing to operate other spies, hackers, and intelligence officers who are intent on stealing advanced technologies and exploiting U.S. businesses innovations. Government and private industry must strengthen our partnerships to protect our advancements and our national security.”
Xu is a deputy division director at the Chinese Ministry of State Security (MSS), which is the intelligence and security agency for China.
According to court documents and trial testimony, beginning in at least December 2013, Xu targeted specific companies in the United States and abroad that are recognized as leaders in the field of aviation. He identified individuals who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the individuals stipends on top of covering travel costs.
According to today’s conviction, Xu attempted to steal technology related to GE Aviation’s exclusive composite aircraft engine fan – which no other company in the world has been able to duplicate – to benefit the Chinese state.
In March 2017, a GE Aviation employee in Cincinnati was solicited to give a report at a university in China. The employee traveled to China two months later to present at the university and was introduced to Xu. Xu and others paid the employee’s travel expenses and a stipend.
In January 2018, Xu requested “system specification, design process” information from the employee and – with the cooperation of the company, who was working with the FBI – the employee emailed a two-page document from the company that included a label that warned about the disclosure of proprietary information.
In February 2018, Xu began discussing with the employee the possibility of meeting in Europe during one of the employee’s business trips and asked the employee to send a copy of the file directory for his company-issued computer.
Xu traveled to Belgium on April 1, 2018 to meet with the employee and was arrested at that time.
The Department of Justice Criminal Division’s Office of International Affairs secured Xu’s extradition to the United States, with valuable assistance provided by the government of Belgium, as well as the Belgian Federal Police.
Economic espionage is punishable by up to 15 years in prison and a fine of up to $5 million. Theft of trade secrets carries a potential maximum sentence of 10 years in prison.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; Matthew G. Olsen, Assistant Attorney General of the Department of Justice’s National Security Division; and J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; announced today’s guilty verdict. Assistant Deputy Criminal Chief Timothy S. Mangan, Deputy Criminal Chief Emily N. Glatfelter, and Trial Attorney Matthew J. McKenzie from the Department of Justice’s Counterintelligence and Export Control Section represented the United States in this case. Acting U.S. Attorney Patel commended the integral cooperation of GE Aviation throughout the investigation and subsequent prosecution.
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Jury Convicts Felon of Sex Trafficking, Drug, and Firearm ChargesRead the Press Release
A federal jury convicted a Norfolk man yesterday on charges of sex trafficking, fraud, conspiracy to distribute methamphetamine and other drugs, and being a felon in possession of a firearm.
According to court records and evidence presented at trial, LeAnthony Winston, 34, is a six-time convicted felon. Shortly after he was released from state prison in December 2019 for firearm and drug convictions, Winston obtained another firearm and began to traffic methamphetamine, marijuana, cocaine, and cocaine base.
From March through May 2020, Winston trafficked two women in Norfolk and coerced them into engaging in commercial sex. He used a combination of false promises of love and protection, threats, and violence, including beatings and pointing a firearm at the women to gain compliance. Winston’s co-conspirator, Tonya Hardesty, 37, of Norfolk, trained the women, created advertisements, and set up commercial sex “dates” with clients, while Winston set the prices and kept all of the proceeds from commercial sex. He also distributed drugs to the women, including methamphetamine and crack, to keep them awake so that they could have as many “dates” as possible and so that they would be indebted to him for the cost of the drugs.
On April 15, 2020, Norfolk Police Department patrol officers responded to the Ocean View Inn Motel in Norfolk after Winston beat, choked, and threatened to kill one of the women in a dispute about money. The female victim stated that she was assaulted by her “pimp,” so the patrol officers referred the case to Norfolk vice and narcotics detectives for further investigation.
At the time of his arrest, Winston had approximately 16.8 grams of crack cocaine on his person. Within the hotel room, law enforcement found the second female victim and Winston’s loaded firearm. After Winston was taken into custody, he continued to coerce the second female to engage in commercial sex, claiming that he would be out on a bond soon. He also threatened her over a jail call.
Winston faces a mandatory minimum of 20 years in prison and a maximum penalty of life in prison when sentenced on March 7, 2022. Hardesty pleaded guilty on May 3 to promotion of prostitution and is scheduled for sentencing on December 9. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Raymond Villanueva, Special Agent in Charge of U.S. Homeland Security Investigations (HSI) Washington, D.C. Field Office; and Larry D. Boone, Chief of Norfolk Police, made the announcement after Senior U.S. District Judge Robert G. Doumar accepted the verdict.
Assistant U.S. Attorneys Amanda Turner and Megan Montoya are prosecuting the case.
This investigation was conducted by the Hampton Roads Human Trafficking Task Force, a collaboration between federal, state, and local law enforcement and prosecutors, as well as non-governmental organizations, working together to combat human trafficking in the Hampton Roads Region. The Virginia Army National Guard Counterdrug Task Force provided significant assistance in this investigation.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-108.
Jury Convicts Chinese Intelligence Officer of Espionage Crimes, Attempting to Steal Trade SecretsRead the Press Release
A federal jury today convicted Yanjun Xu, a Chinese national and Deputy Division Director of the Sixth Bureau of the Jiangsu Province Ministry of State Security, of conspiring to and attempting to commit economic espionage and theft of trade secrets. The defendant is the first Chinese intelligence officer to be extradited to the United States to stand trial.
“This conviction of a card-carrying intelligence officer for economic espionage underscores that trade secret theft is integral to the PRC government’s plans to modernize its industries,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “But this conviction also serves notice that the United States will not sit by as China, or any other nation-state, attempts to steal instead of researching and developing key technology. Instead, and with the support of our allies, we will continue to investigate, prosecute, and hold accountable those who try to take the fruits of American ingenuity illegally.”
“The jury, by its guilty verdict here today, held Xu accountable for his classic spy techniques,” said Acting U.S. Attorney Vipal J. Patel for the Southern District of Ohio. “Xu conspired to commit economic espionage on behalf of the Chinese government, and he tried to steal the valuable innovation and trade secrets of industry-leading American aviation technology companies. This office will continue to seek to protect American innovation and hold accountable those who attempt to steal our nation’s science and technology, regardless of status or affiliation, whether civilian, military or spy.”
“This was state-sponsored economic espionage by the PRC designed to steal American technology and put Americans out of work,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “For those who doubt the real goals of the PRC, this should be a wakeup call; they are stealing American technology to benefit their economy and military. The FBI is partnering with over 50 U.S. Government agencies to share information and investigative resources to stop the PRC’s illegal activities.”
According to court documents and evidence presented at trial, beginning in at least December 2013, Xu used multiple aliases to target specific companies in the United States and abroad that are recognized as leaders in the field of aviation. He identified experts who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the experts stipends on top of covering travel costs. According to today’s conviction, Xu attempted to steal technology related to GE Aviation’s exclusive composite aircraft engine fan – which no other company in the world has been able to duplicate – to benefit the Chinese state.
In March 2017, a GE Aviation employee in Cincinnati, Ohio, was solicited to give a report at a university in China. The employee traveled to China two months later to present at the university and was introduced to Xu. Xu and others paid the employee’s travel expenses and a stipend.
In January 2018, Xu requested “system specification, design process” information from the employee and – with the cooperation of the company, who was working with the FBI – the employee emailed a two-page document from the company that included a label that warned about the disclosure of proprietary information.
In February 2018, Xu began discussing with the employee the possibility of meeting in Europe during one of the employee’s business trips and asked the employee to send a copy of the file directory for his company-issued computer.
Xu traveled to Belgium on April 1, 2018, to meet with the employee and was arrested at that time.
Xu was convicted of two counts of conspiring and attempting to commit economic espionage, which carries a maximum statutory penalty of 15 years in prison for each count and a fine of up to $5 million. Xu was also convicted of conspiracy to commit trade secret theft and two counts of attempted theft of trade secrets, which carries a maximum statutory sentence of 10 years in prison for each count and a $250,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI investigated the case.
Assistant Deputy Criminal Chief Timothy S. Mangan and Deputy Criminal Chief Emily Glatfelter for the Southern District of Ohio and Trial Attorney Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
The Criminal Division’s Office of International Affairs secured Xu’s extradition to the United States, with valuable assistance provided by the government of Belgium and the Belgian Federal Police.
Jamaican National Pleads Guilty to Conspiracy to Commit Mail and Wire FraudRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that ACDANE CAMPBELL, age 25, a resident of Jamaica, pleaded guilty today to a one-count Indictment for Conspiracy to Commit Mail and Wire Fraud before U.S. District Court Judge Susie Morgan.
According to the Indictment, from in or around August 2016, CAMPBELL and others conspired to operate a scheme to obtain money unlawfully by falsely informing elderly victims that they had won a lottery, sweepstakes, or car. The unidentified co-conspirators called the victims and promised that the victims would receive their winnings if they first paid taxes and fees.
After being instructed by the unidentified co-conspirators that they needed to send payments to CAMPBELL, the victims would send their payments electronically through a money services business or in the mail via FedEx or the United States Postal Service. Working as what is known as a “money mule,” CAMPBELL either kept the money that he received from the victims or sent it to unknown persons in Jamaica.
Sentencing is set for February 10 , 2022, before Judge Morgan. CAMPBELL faces up to a maximum of 5 years imprisonment, a fine of not more than $250,000 or twice the gross gain or twice to gross loss to any victim, up to a maximum of 3 years of supervised release, and a mandatory special assessment fee of $100.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
The case was investigated by the United States Postal Inspection Service and Homeland Security Investigations. The case is being prosecuted by Assistant U. S. Attorney Edward J. Rivera.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week 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 Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Nov. 1 was:
Casey Mills Howard, 20, of Rexford, on charges of transportation of child pornography, distribution of child pornography and receipt of child pornography. If convicted of the most serious crime, Howard faces a mandatory minimum five years to 20 years in prison, a $250,000 fine and five years to life of supervised release. Howard was released pending further proceedings. The Internet Crimes Against Children Task Force, Homeland Security Investigations and Flathead County Sheriff’s Office investigated the case. PACER case reference. 21-48.
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Nov. 4 was:
Daniel James Garza, 31, a transient, on charges of bank fraud and aggravated identity theft. If convicted of the most serious crime, Garza faces a maximum 30 years in prison, a $250,000 fine and five years of supervised release on the bank fraud count and a mandatory minimum two years in prison consecutive to any other sentence, a $250,000 fine and one year of supervised release on the aggravated identity theft count. Garza was detained pending further proceedings. The Billing Police Department and Homeland Security Investigations investigated the case. PACER case reference. 21-88.
Appearing in Great Falls before Chief U.S. District Judge Brian M. Morris and pleading not guilty on Nov. 3 was:
Scotty Ray Steen, 50, of Great Falls, on charges of possession with intent to distribute methamphetamine, possession of a firearm in furtherance of a drug trafficking crime and felon in possession of a firearm. If convicted of the most serious crime, Steen faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release on the drug crime and a mandatory consecutive five years in prison, a $250,000 fine and five years of supervised release on the firearm in relation to drug trafficking crime. Steen was detained pending further proceedings. The Russell Country Drug Task Force and Homeland Security Investigations investigated the case. PACER case reference. 21-88.
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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Humboldt Iowa Man Sentenced to Federal Prison for being a Felon in Possession of a Stolen Firearm and AmmunitionRead the Press Release
A Humboldt, Iowa man who possessed a gun and ammunition as a felon was sentenced November 4, 2021 to more than 2 years in federal prison.
DJ McMillan, age 31, from Humboldt, Iowa, received the prison term after a June 9, 2021, guilty plea to possession of a stolen firearm and ammunition by a felon. In a plea agreement, McMillan admitted he was convicted of burglary 3rd in 2014, and knew he was prohibited from possessing guns and ammunition. McMillan possessed a stolen gun while shoplifting from Target on November 25, 2020. McMillan also possessed ammunition when he shoplifted from Menard’s earlier that same day.
McMillan was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. McMillan was sentenced to 30 months’ imprisonment. He must also serve a 2-year term of supervised release after the prison term. There is no parole in the federal system. McMillan is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorneys Ron Timmons and Mikala Purdy-Steenholdt, and investigated by the Webster County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-3004.
Follow us on Twitter @USAO_NDIA.
High-Ranking Members of the Sinaloa Cartel Charged with International Drug TraffickingRead the Press Release
TUCSON, Ariz. – Today, the United States Attorney’s Office, District of Arizona, announced the unsealing of two indictments charging high-ranking members of the Sinaloa Cartel with international drug trafficking. On November 13, 2019 and February 19, 2020, a federal grand jury in Tucson returned superseding indictments against cartel members Aureliano Guzman-Loera of Sinaloa, Mexico, and brothers Ruperto, Jose, and Heriberto Salgueiro-Nevarez of Guadalupe Y Calvo, Mexico.
The indictments allege various violations of United States law related to the international distribution of controlled substances, including fentanyl, heroin, cocaine, methamphetamine, and marijuana, occurring over several years.
The Salgueiro-Nevarez brothers allegedly operate a faction of the Sinaloa Cartel known as the SNO, which stands for the Salgueiro-Nevarez Organization. Aureliano Guzman-Loera is the brother of former Sinaloa Cartel leader, Joaquin Guzman-Loera.
An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
Homeland Security Investigations is conducting the investigation in this case. The United States Attorney’s Office, District of Arizona, Tucson, is handling the prosecution.
CASE NUMBERS: 18-CR-1840-TUC-RCC(JR); 18-CR-00597-TUC-RCC(BGM)
RELEASE NUMBER: 2021-079_Guzman-Loera# # #
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.Hawaii Man Indicted for Violating the Atomic Energy Act, Obstruction of Agency Proceedings, Making False Statements and Bank FraudRead the Press Release
A federal grand jury returned an indictment yesterday charging a Hawaii man with violating the Atomic Energy Act (AEA), making false statements to the Nuclear Regulatory Commission (NRC), obstruction of NRC proceedings and bank fraud.
According to court documents, Mark Kazee, 57, of Hawaii, worked in the materials and equipment testing industry for over 30 years, serving both as an inspector and as a supervisor of inspectors who used industrial radiography. Industrial radiography is the process of using a radiation source and a specialized camera to examine materials below the surface to check for flaws. On or about December 2016, Defendant Kazee was hired by a testing company to be its Regional Manager in Hawaii. Later, Kazee made a surreptitious plan to take over his employer’s business, by, among other things, misappropriating his employer’s equipment and personnel. As alleged in the indictment, he set up two other companies, APINDE and Hawaii Testing & Technology (HTT), as part of the takeover attempt. In doing so, he violated the AEA, submitted false statements to the NRC and fraudulently obtained a significant line of credit from a Hawaii bank.
In the fall of 2018, Kazee, working through others, set up two new businesses (APINDE and HTT) to do non-destructive testing in West Virginia and other states where the NRC maintains jurisdiction, including Hawaii. To do the work, Kazee needed a new radiographic camera, which involved obtaining a “materials” license for APINDE from the NRC. He did not have a trained Radiation Safety Officer (RSO), which all materials licensees are required to have. Nevertheless, he prepared an application that falsely claimed he had a qualified RSO, among other things. In response to NRC questions about the application, he submitted more false information about training and qualifications. The NRC issued the license, based on the false representations. After receiving the license, Kazee ordered and signed for a camera containing radioactive material. The NRC opened an investigation after concerns were raised to the agency about the information contained in the license application.
In January 2019, while still in the employ of his original company, Kazee misappropriated one of its radiographic cameras, which contained iridium-192 and depleted uranium radioactive source material. He had HTT employees use the camera for industrial radiography, without recording the transfer of the radioactive sources, as required by law. Around the same time, Kazee applied to the Bank of Hawaii on behalf of HTT for a revolving line of credit and provided bank loan officers false information including about HTT assets.
“Radiography is a marvelous technology, and when it is used with proper safeguards, it increases safety and improves lives,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The Justice Department will vigorously prosecute those like Kazee who would circumvent those safeguards and treat worker safety as an afterthought as part of a criminal scheme.”
“No one should disregard our laws designed to protect people from dangerous radiation, and certainly not for the purpose of advancing fraudulent business enterprises,” said Acting U.S. Attorney Judith A. Philips for the District of Hawaii. “We will continue our vigilance in enforcing radiation safety laws.”
“Individuals who use radioactive material for commercial purposes must have the appropriate credentials and training to protect the user and the public,” said Administrator David C. Lew of NRC Region I. “The NRC does not tolerate willful violations of its safety requirements and demands that licensees and their employees act with integrity and communicate with candor.”
Kazee is charged with making false statements to the NRC, obstruction of the NRC’s proceedings, violating the Atomic Energy Act, and bank fraud. The defendant will be scheduled for his initial court appearance before a U.S. Magistrate Judge of the U.S. District Court for the District of Hawaii. If convicted, he faces up to 42 years in prison. The federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the NRC’s Office of Investigations. Senior Trial Attorney Kris Dighe of the Justice Department’s Environmental Crimes Section is prosecuting the case jointly with Assistant U.S. Attorney Gregg Paris Yates of the District of Hawaii.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Harrison County men sentenced for roles in bank robberyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Two Harrison County men were sentenced today for their roles in the robbery of Summit Community Bank in November 2020, United States Attorney William J. Ihlenfeld, II announced.
Clint Monroe Utter, of West Milford, West Virginia, was sentenced to 188 months of incarceration. Utter, 43, pleaded guilty in June 2021 to one count of “Bank Robbery” and one count of “Conspiracy to Commit Money Laundering.” Utter admitted to robbing the Summit Community Bank in Salem, West Virginia, of $69,100 on November 17, 2020 and then attempting to conceal the proceeds from the bank robbery by directing the purchase of prepaid cards.
David Alan Gill, of Salem, West Virginia, was sentenced today to 48 months of incarceration. Gill, 61, pleaded guilty today to one count of “Accessory After the Fact – Bank Robbery.” Gill admitted to helping Clint Monroe Utter evade authorities.
Utter and Gill were also ordered to pay $69,100 jointly in restitution to the bank.
Assistant U.S. Attorney Sarah E. Wagner prosecuted the cases on behalf of the government. The FBI and the Harrison County Sheriff’s Office investigated.
U.S. District Judge Thomas S. Kleeh presided.
Harford County Narcotics Dealer Sentenced to Nine Years in Federal Prison for Participating in a Conspiracy to Sell Crack CocaineRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Reginald Leon Bolden, age 37, of Harford County, Maryland yesterday to nine years in federal prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute crack cocaine. As part of his plea agreement, Bolden must also forfeit a Chevrolet Camaro and more than $3,000.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Harford County State’s Attorney Albert J. Peisinger, Jr.; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Chief Melissa R. Hyatt of the Baltimore County Police Department; Sheriff Jeff Gahler of the Harford County Sheriff’s Office; and the Harford County Narcotics Task Force comprised of members of the Harford County Sheriff's Office, Aberdeen Police Department, Bel Air Police Department, and Havre de Grace Police Department.
According to his guilty plea, as a result of the Harford County Narcotics Task Force investigation Bolden, Tremayne Gerrad Murphy, and Joel William Hammond were identified as members of a drug trafficking organization (DTO) that was distributing powder and crack cocaine.
Law enforcement observed Bolden and his co-conspirators engaged in drug-related activities, including on February 24, 2020, when investigators surveilled Bolden and Murphy as they traveled to Wilmington, Delaware to meet with a cocaine supplier. After purchasing nine ounces of cocaine from the supplier, Bolden and Murphy returned to Harford County to distribute the cocaine.
Two days later, Murphy was observed traveling to a Wilmington, Delaware casino to return the cocaine to the cocaine source after customers complained about the quality of the cocaine. After meeting with the source, detectives followed Murphy back to Harford County where they saw Murphy conduct a hand-to-hand drug transaction.
As stated in his agreement, on March 15, 2020, Bolden was heard discussing the purchase of three ounces of crack cocaine from co-defendant Hammond. Bolden arranged the transaction through an intermediary, who gave money to Hammond in exchange for a small backpack, which investigators believed contained the cocaine.
Once the intermediary notified Bolden that he was home, Bolden arranged for Murphy to pick up the crack cocaine, then texted the intermediary. Investigators subsequently saw the intermediary leave his residence with the small backpack of suspected cocaine and get into a vehicle operated by Murphy. The intermediary quickly exited Murphy’s vehicle without the backpack and Murphy then traveled to Bolden’s residence.
Later, Bolden was seen leaving Hammond’s residence and driving back to Harford County. As Bolden returned to Harford County, members of the Harford County Narcotics Task Force executed a search warrant on his vehicle and seized 16 grams of powder cocaine, 41 grams of crack cocaine, and $660 in cash. That same day, a search warrant was executed at Bolden’s residence and law enforcement recovered 12 grams of crack cocaine, $2,785 in cash, numerous items of packaging material, and a digital scale containing cocaine residue.
As a member of the DTO, Bolden agrees that it is reasonably foreseeable that the amount of crack cocaine sold was at least 280 grams but less than 840 grams.
On September 1, 2021, co-defendant Tremayne Murphy, age 40, of Harford County, Maryland, pled guilty to conspiracy to distribute crack cocaine. Murphy and the government have agreed that, if the Court accepts the plea agreement, he will be sentenced to between 60 months and 92 months in federal prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for December 17, 2021 at 11 a.m.
On October 28. 2021, Judge Bennett sentenced co-defendant Joel Hammond, age 35, of Essex, Maryland, to six years in federal prison for his role in the drug distribution conspiracy.
United States Attorney Erek L. Barron commended the DEA, the Harford County State’s Attorney’s Office, the Harford County Narcotics Task Force, and the Baltimore County Police Department for their work in the investigation. Mr. Barron thanked Special Assistant U.S. Attorney Christopher J. Romano, who is prosecuting the case.
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Gang Member Sentenced to 4 Years in Federal Prison for Distributing FentanylRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that LUIS COLON, also known as “Shoes” and “Zapato,” 50, was sentenced today by U.S. District Judge Michael P. Shea to 48 months of imprisonment, followed by five years of supervised release, for distributing fentanyl.
According to court documents and statements made in court, in 2018, the FBI’s Northern Connecticut Gang Task Force began investigating Ricardo Reyes, also known as “Rick the Ruler,” a member of the Los Solidos street gang who was distributing fentanyl, heroin, cocaine and crack in the area of Park Street and Hungerford Street in Hartford. During the investigation, law enforcement conducted multiple controlled purchases of narcotics from Reyes. Court-authorized wiretaps confirmed that Reyes was distributing narcotics to numerous customers, and identified individuals who supplied drugs to Reyes and associates, including Colon, who sold drugs on his behalf. Intercepted communications also revealed Reyes was acquiring and trafficking firearms.
Colon, a member of Los Solidos, has a lengthy criminal history that includes convictions for firearm, robbery, narcotics and other offenses. He was on probation for the robbery offense when he was distributing fentanyl.
Colon has been detained since his arrest on June 19, 2019. On June 27, 2019, a grand jury Hartford returned a 32-count indictment charging Reyes, Colon and 13 associates with various narcotics trafficking and firearm possession offenses. On April 6, 2021, Colon pleaded guilty to one count of conspiracy to possess with intent to distribute fentanyl.
Reyes pleaded guilty and, on February 11, 2021, was sentenced to 18 years of imprisonment.
The FBI’s Northern Connecticut Gang Task Force includes members of the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Former employee admits embezzling more than $650,000 from Trout Creek companyRead the Press Release
MISSOULA – A Trout Creek woman accused of embezzling more than $650,000 while working for a Trout Creek company admitted fraud charges today, Acting U.S. Attorney Leif M. Johnson said.
Tina Rae Wood, 49, pleaded guilty to wire fraud. Wood faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release.
A plea agreement reached in the case calls for 22 other counts in an indictment to be dismissed at sentencing if the court accepts the agreement. In addition, restitution is mandatory, and Wood agrees to be responsible for complete restitution. The government may pursue restitution of approximately $783,393, but the final amount will be determined by the court.
U.S. District Judge Donald W. Molloy presided. Judge Molloy set sentencing for Feb. 25, 2022. Wood was released pending further proceedings.
The government alleged in court documents that Wood was hired in 2013 by a supply company in Trout Creek as an office administrator and secretary. Wood eventually was placed in charge of depositing payments from customers and given access to the company’s accounting system. Wood used the accounting software to embezzle checks from one of the company’s biggest customers and deposited most of the embezzled money into a personal bank account she opened in a bank in Idaho. In February 2019, when the company’s owner realized something was amiss, he contacted Wood. Wood refused to talk to the owner and cleaned out her desk the next weekend. An investigation found 109 customer checks, totaling about $650,843, that Wood had deposited into her own account.
Assistant U.S. Attorney Timothy J. Racicot is prosecuting the case, which was investigated by the FBI.
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Former University Athletic Official Pleads Guilty in College Admissions CaseRead the Press Release
BOSTON – The former senior women’s administrator at the University of Southern California (USC) pleaded guilty today in connection with a scheme to admit students as purported athletic recruits in exchange for money.
Donna Heinel, 60, of Long Beach, Calif., pleaded guilty to honest services wire fraud. U.S. District Court Judge Indira Talwani scheduled sentencing for March 11, 2022.
According to the terms of the plea agreement, the government will recommend a prison sentence within the sentencing guideline range, a fine within the sentencing guidelines range, two years of supervised release and forfeiture.
As set forth in the charging document, Heinel solicited and received bribe payments from William “Rick” Singer and his clients to facilitate their children’s admission to USC as athletic recruits. Specifically, Heinel presented athletic profiles to the USC subcommittee for athletic admissions, presenting the students as legitimate recruits to USC’s athletic teams when in fact they were not. Heinel did so in exchange for payments, including to university athletic accounts she designated, without disclosing that fact to the USC subcommittee for athletic admissions.
The charge of honest services wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, forfeiture, and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Mark Deckett, Resident Agent in Charge of the Department of Education, Office of Inspector General made the announcement today. Assistant U.S. Attorneys Leslie A. Wright, Kristen A. Kearney and Kriss Basil of Mendell’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former TVA Senior Project Manager Pleads Guilty to Falsifying Financial Information as Part of A Fraudulent SchemeRead the Press Release
CHATTANOOGA, Tenn. – On November 5, 2021, James Christopher Jenkins, aka Chris Jenkins, 60, of Chattanooga entered a guilty plea to one count of making a false official statement, in violation of 18 U.S.C. § 1001 in the Eastern District of Tennessee at Chattanooga.
Sentencing has been set for March 11, 2022 at 9:00 a.m., before the Honorable Travis R. McDonough, U.S. District Judge, in the United States District Court at Chattanooga. Jenkins faces a maximum sentence of 5 years in prison and 3 years of supervised release, and $250,000 in fines.
According to court documents, Jenkins was employed from May 2011 to February 2017 as a Senior Project Manager in the Nuclear Power Group and the Major Projects Group at Tennessee Valley Authority (TVA) with fiduciary and management responsibilities which required him to file annual reports disclosing any outside positions, employment, and income. These disclosures are made through an Office of Government Ethics (OGE) Form 450. Government officials review these forms to identify conflicts of interests that may exist between TVA employees and private entities doing business with the TVA or seeking business with the TVA. For instance, a conflict of interest could, among other things, provide a TVA contractor an economic advantage over others and defeat the government’s attempt to secure a competitive contract.
TVA employees who are in a position to negotiate with vendors and contractors on behalf of TVA are required to file an annual Confidential Financial Disclosure Report which requires those employees to report certain personal assets, sources of income, and debts, and to report their other outside financial positions, agreements or arrangements. Between 2012 and 2016, Jenkins failed to annually disclose certain debts and income on the Report and sought to profit outside the scope of his employment at TVA. This failure to report led to an actual conflict of interest from which Jenkins personally benefited.
"The integrity of government employees -- especially those in supervisory or senior positions -- is paramount to maintaining the public’s trust in the officials who serve the nation. Protecting the federal procurement process from false statements is central to the mission of the Department of Justice. The defendant betrayed the public’s trust by failing to disclose these debts and other financial activities. Our office is committed to safeguarding that trust through the vigorous enforcement of federal laws," said Acting United States Attorney Francis M. Hamilton III.
"The vast majority of TVA employees serve the people of the valley by generating power, protecting our natural resources, and encouraging job growth through economic development, while also avoiding personal and financial conflicts that would undermine the public trust in TVA. Regrettably, in this instance, Mr. Jenkins failed to live up to that standard. He held a senior role at TVA with authority to negotiate with vendors and award contracts. He failed to disclose numerous conflicts with companies in which he had an ownership interest or owed substantial sums of money. The Tennessee Valley Authority - Office of Inspector General (TVA-OIG) plays an aggressive role in identifying and addressing this type of abuse, and, due to the collaborative efforts of TVA and our law enforcement partners, Mr. Jenkins has now pled guilty to falsifying an ethics disclosure that impacted financial decisions made by TVA. The TVA-OIG would like to thank the United States Attorney’s Office, specifically Assistant U.S. Attorney Steve Neff, and the Federal Bureau of Investigation for working hand in hand with our office to investigate this fraudulent activity," said Jill Matthews, TVA Acting Inspector General.
"Today’s guilty plea represents the FBI’s commitment to investigate these cases. There is zero tolerance for those who exploit their official position for personal gain. It erodes public confidence and undermines the Rule of Law. We want the people we serve to know the FBI along with our law enforcement partners will hold those accountable who betray the public's trust," said FBI Special Agent in Charge Joe Carrico.
The investigation was conducted by agents of TVA-OIG and the FBI.
Assistant U.S. Attorney Steven Neff represented the United States.
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Former New Orleans Postal Employee Sentenced to Probation and Community Service for Stealing Cash from a Birthday Card He was Entrusted to DeliverRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today that RONNIE BARTHOLOMEW, age 64 and a resident of New Orleans, was sentenced to probation, 50 hours of community service and payment of a $10 mandatory special assessment fee by United States District Court Judge Eldon E. Fallon for obstruction of mail, in violation of 18 U.S.C. § 1701.
According to court documents, BARTHOLOMEW, while employed by the United States Postal Service as a letter carrier at the Central Carrier Station in New Orleans, opened a birthday card he was carrying and removed five marked twenty-dollar bills. BARTHOLOMEW had pled guilty on June 10, 2021, to a one-count bill of information.
U.S. Attorney Evans praised the work of the United States Postal Inspection Service. Assistant United States Attorney David Howard Sinkman is in charge of the prosecution.
Former Beckley Resident Sentenced to Four Years in Prison for Federal Drug CrimeRead the Press Release
BECKLEY, W.Va. – Zachary Mitchem, 36, formerly of Beckley, was sentenced to four years in federal prison for possession with the intent to distribute methamphetamine and heroin.
According to court documents, Mitchem was found passed out in a car parked in front of a local business near Beckley on July 5, 2019. When a law enforcement officer came to check on Mitchem, she observed suspected controlled substances in Mitchem’s car. The officer then conducted a search of the car and found approximately 21 grams of methamphetamine, approximately 14 grams of heroin and a firearm. Mitchem was prohibited from possessing a firearm due to previous felony convictions. After his arrest, Mitchem admitted that he intended to distribute the drugs in and around Raleigh County.
United States Attorney William S. Thompson made the announcement and commended the investigative work of the Beckley Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
United States District Judge Frank W. Volk imposed the sentence. Assistant United States Attorney Timothy D. Boggess handled the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:20-cr-00032.
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Former Ambulance Service Owner Charged with Tax FraudRead the Press Release
A Virginia man was arraigned today on an indictment charging tax fraud that was returned by a federal grand jury in Roanoke, Virginia, on Aug. 20, 2020. He was arrested upon entry into the United States after residing overseas for more than a year.
According to the indictment, from approximately 1987 through at least 2010 James C. Jones Jr., of Christiansburg, owned Lifeline Ambulance Service Inc. (Lifeline). From approximately January 2008 through December 2009, Jones allegedly withheld payroll taxes from Lifeline’s employees’ paychecks but willfully failed to pay over these taxes to the IRS. He also allegedly obstructed the IRS’s ability to collect these delinquent payroll taxes by making false statements on IRS forms, selling real estate he owned and transferring assets under his control in the United States to foreign and domestic nominee entities. Jones supported these foreign asset transfers by allegedly providing false documents to the IRS and causing his then-attorney to make false statements in response to a grand jury subpoena.
The indictment also charges that Jones submitted false individual tax returns each year from 2013 to 2018. In addition to tax fraud, the indictment further alleges that Jones submitted false applications to the Social Security Administration that omitted his domestic and foreign rental income.
Jones is charged with tax evasion, filing false individual tax returns, corruptly endeavoring to obstruct the IRS, obstruction of justice and making a false statement regarding Social Security benefits. Jones was arraigned today before U.S. Magistrate Judge Joel C. Hoppe for the Western District of Virginia. If convicted, Jones faces a maximum penalty of five years in prison on the tax evasion charge, 10 years on the obstruction of justice charge, three years on the tax obstruction charge and each count of filing a false tax return and five years on the Social Security fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS - Criminal Investigation is investigating the case.
Trial Attorneys Parker Tobin and Todd Ellinwood of the Justice Department’s Tax Division are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Florida Attorney Pleads Guilty to Securities Fraud in Connection with Fraudulent Opinion Letter SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that THOMAS CRAFT, a licensed attorney, pled guilty in Manhattan federal court to securities fraud. CRAFT’s guilty plea results from his involvement in a fraudulent scheme in which he falsely represented that he had undertaken certain legal work in connection with attorney opinion letters, when in truth and in fact, he merely rubber-stamped the opinion letters that had been prepared by his co-defendant, Richard Rubin, who was a disbarred attorney.
CRAFT was arrested on December 2, 2020, and pled guilty today before U.S. District Judge Paul A. Engelmayer. As part of his plea agreement, CRAFT agreed to relinquish his law license in Florida.
U.S. Attorney Damian Williams said: “As an attorney, Craft was supposed to act as a gatekeeper against fraud in the securities markets. Instead, as he admitted today, Craft falsely represented that he had carried out certain work in attorney opinion letters, giving false comfort to the investing public that the relevant securities rules had been satisfied. Now he stands guilty of securities fraud and awaits sentencing for his crime.”
As alleged in the Indictment filed against CRAFT, as well as his co-conspirator Rubin, and other statements made in open court:
Securities Registration Requirements and SEC Rule 144
Under the Securities Act of 1933 (the “Securities Act”), anyone seeking to sell a security must first register that security unless an exemption applies. This registration requirement protects investors by promoting disclosure of information pertinent to informed investment decisions.
A company registering new securities must complete a registration statement known as U.S. Securities and Exchange Commission (“SEC”) Form S-1 before the securities can be listed on a national exchange and publicly traded. SEC Form S-1 contains information pertinent to informed investment decisions, including, among other things, information on the company’s business operations, the company’s financial condition, and a description of the company’s management. In connection with SEC Form S-1, the company is required to file an opinion letter (the “Form S-1 Opinion Letter”) from a licensed attorney attesting that the statements in the SEC Form S-1 are true and correct. A company’s SEC Form S-1 and the Form S-1 Opinion Letter are available to the public on the SEC’s Electronic Data Gathering, Analysis, and Retrieval System (“EDGAR”).
“Restricted securities” refers to securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer, with “affiliate” meaning a person who directly or indirectly controls, or is controlled by, or is under common control with, an issuer. Affiliates can also include an executive officer or a director or large shareholder who is in a relationship of control with respect to the issuing company. Restricted securities bear a legend indicating that the securities may not be resold in the marketplace unless they are registered with the SEC or are exempt from such registration requirements.
Securities Act Rule 144 (“Rule 144”), codified at 17 C.F.R. § 230.144, provides a registration exemption for restricted securities. Specifically, it permits the public resale of restricted securities if a number of conditions are met, including conditions relating to how long the securities are held, the way in which they are sold, the public information available to investors about the securities, and the amount that can be sold at any one time. Pursuant to Rule 144, however, even if these conditions are met, the sale of restricted securities to the public is still not permitted until a transfer agent removes the “restricted” legend from the security.
The term “transfer agent” refers to a company that keeps track of individuals and entities that own the stocks and bonds of a given company that has publicly traded securities. Among other things, transfer agents issue and cancel certificates to reflect changes in ownership, serve as the company’s intermediary for payouts, exchanges, or mailings, and handle lost, destroyed or stolen certificates. Transfer agents also, when appropriate, remove the “restricted” legend from securities.
A Rule 144 Seller’s Representation Letter, or “Seller’s Representation Letter,” is a letter from an affiliate seller (that is, a seller in a relationship of control with the issuer, such as an executive officer, a director, or a large shareholder) of restricted securities to a transfer agent to establish certain facts underlying a legal opinion that the securities at issue can be sold publicly pursuant to Rule 144. The issuer’s consent to the removal of a legend typically comes in the form of an opinion letter from the issuing company’s attorney, the Seller’s Representation Letter, indicating that the securities at issue satisfy the conditions of Rule 144. Seller’s Representation Letters contain multiple attestations that are required by law prior to the restricted legend being removed. The transfer agent relies on the Seller’s Representation Letter in determining whether to remove the restricted legend from a security.
Over-the-Counter Securities and OTC Markets Group
Over-the-counter (“OTC”) securities are securities that are traded between two counterparties outside of a formal securities exchange. OTC Markets Group (“OTC Markets”) is a securities market headquartered in New York, New York, that provides price and liquidity information for OTC securities.
OTC Markets requires issuers seeking to be listed on OTC Markets to hire a licensed attorney to review company records and submit a letter to OTC Markets (an “OTC Markets Attorney Letter”) regarding whether information publicly disclosed by the issuer is in compliance with the condition in SEC Rule 144 governing the public information available to investors about the issuer. OTC Markets relies on the OTC Markets Attorney Letter to determine whether an issuer’s security may be listed on OTC Markets. OTC Markets Attorney Letters are available to the public on the OTC Markets website.
The Scheme to Defraud
From at least in or about 2011 through at least in or about September 2018, CRAFT and Rubin participated in a fraudulent scheme in which CRAFT falsely represented that he had undertaken certain legal work in connection with Seller’s Representation Letters, OTC Markets Attorney Letters, and S-1 Opinion Letters, all of which enabled the relevant securities to be sold to the investing public. The false representations were in letters pertaining to over a dozen companies.
CRAFT, 56, of Tequesta, Florida, pled guilty to one count of securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R. § 240.10b-5, and 18 U.S.C. § 2, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
CRAFT will be sentenced on February 24, 2022, at 10:30 a.m. CRAFT’s co-defendant, Richard Rubin, was sentenced on November 2, 2021, to one year’s probation, 200 hours of community service, and a $1,000 fine. Rubin was also ordered to forfeit $117,068.15 in crime proceeds.
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Mr. Williams praised the investigative work of the Office of Inspector General of the SEC and also thanked the SEC Division of Enforcement for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Jordan Estes is in charge of the prosecution.
Federal Court Permanently Shuts Down Michigan Tax PreparerRead the Press Release
A federal court in the Eastern District of Michigan has permanently enjoined a Detroit-area tax return preparer from preparing federal income tax returns for others and from owning or operating any tax return business in the future.
According to the court’s order entered Nov. 5, Abdou Ndiaye and Ndiaye’s LLC, dba Pro Tax Services, consented to entry of the injunction, with permits the United States to conduct post-judgment discovery to monitor compliance. The order requires that Ndiaye and Pro Tax Services send notice of the injunction to their prior customers.
The civil complaint filed against Ndiaye and Pro Tax Services alleged that Ndiaye reported fabricated business losses or income on his customers’ returns, to either reduce a customer’s legitimate W-2 taxable income or illegitimately increase the customer’s earned income. These improper adjustments caused those individuals to claim earned income tax credits to which they were not entitled. The complaint also alleged that Ndiaye impermissibly lowered some of his customers’ tax liabilities by falsely claiming head of household filing status for individuals who were not entitled to claim it.
Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that a person or business may be violating an injunction, please contact the Tax Division with details.
Fairfield Man Sentenced to 14 Years in Prison for Attempted Online Coercion of a ChildRead the Press Release
SACRAMENTO, Calif. — Kevin Blaine Cline, 47, of Fairfield, was sentenced today to 14 years in prison to be followed by 10 years of supervised release for attempted online coercion of a child, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, on Nov. 1, 2019, an undercover agent observed Cline’s post on the social media platform Whisper that said he was “Looking for dad’s (sic) who love their daughters near me I … Have a question.” The notation at the bottom of Cline’s post said, “Freaky Sexual Desires.” The undercover agent, posing as a dad, engaged in a two-day conversation on Whisper with Cline, and Cline sent the agent two images of child pornography. Cline planned a meeting with the “dad” and “daughter” in order to sexually molest her. Cline then drove from Fairfield to Pleasant Hill to meet up with what he believed to be a seven‑year-old girl. When Cline arrived, however, he was placed under arrest.
The factual basis of the plea agreement contains a description of the sexual activity that Cline wanted to engage in with the seven-year-old girl, as well as sexual acts he planned to perform with a 10-year-old girl in Washington state. Cline brought a tube of lubricant and three wrapped condoms in his car when he arrived to meet with what he believed to be the father and his seven-year-old daughter. In the week before his arrest, Cline was distributing files containing visual depictions of children engaged in sexually explicit conduct with other people through Whisper messenger.
“Cline attempted to commit vile acts on children, and he may have continued undetected for years but for the painstaking work of the investigators who brought him to justice,” said Acting U.S. Attorney Talbert. “We are gratified by the sentence he received today which will help prevent him from harming other children.”
“This case is representative of the collaborative efforts among Homeland Security Investigations, the Contra Costa County District Attorney’s Office, the Silicon Valley Internet Crimes Against Children (ICAC) Task Force, and the U.S. Attorney’s Office, Eastern District of California, which led to this guilty plea and the ultimate rescue of a child in another region,” said Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. “Parents and caregivers are urged to engage with their children on the potential dangers of social media interaction and to alert law enforcement authorities if they have any concerns. Additional info is available at HSI iGuardians and NCMEC Netsmartz.”
This case was the product of an investigation by the Silicon Valley Internet Crimes Against Children Task Force (SVICAC) a federally and state-funded task force with agents from federal, state, and local agencies that investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. The Contra Costa District Attorney’s Office and Homeland Security Investigations conducted the investigation as part of the SVICAC. Assistant U.S. Attorney Christina McCall prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Estonian Man Sentenced to 10 Years in Prison for Conspiring to Import Fentanyl into the United StatesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that AMID MAGERRAMOV was sentenced to 10 years in prison for conspiring to import massive quantities of carfentanil and fentanyl into the United States. MAGERRAMOV pled guilty on May 4, 2021, before U.S. District Judge J. Paul Oetken, who imposed today’s sentence.
U.S. Attorney Damian Williams stated: “Amid Magerramov conspired to import into the U.S. large quantities of fentanyl and carfentanil – an opioid so potent that its legitimate use is as an elephant sedative. Appropriately, he has now been sentenced to prison for conspiring to add fuel to the fire that is the opioid crisis in this country.”
According to the Complaint, Indictment, and other filings in the case:
Between approximately October 2017 and August 2018, MAGERRAMOV conspired to import large quantities of carfentanil and fentanyl into the United States. Carfentanil is a fentanyl analogue approximately 1,000 times more potent than heroin, and is used commercially to sedate large animals such as elephants. During that period, MAGERRAMOV participated in a series of recorded meetings and telephone communications with an individual he understood to be affiliated with an international drug trafficking organization, for the purpose of arranging to import narcotics into the United States. That individual was, in fact, a confidential source (the “CS”) working with the U.S. Drug Enforcement Administration (“DEA”). MAGERRAMOV and his co-conspirators prepared and distributed a total of over five kilograms of substances containing carfentanil for importation into the United States.
In mid-October 2017, MAGERRAMOV met together with the CS in Estonia. During the meeting, the CS informed MAGERRAMOV that the CS was a member of a Colombian drug cartel that distributed narcotics in the United States and laundered the resulting proceeds.
Throughout late 2017 and early 2018, the CS also participated in a series of meetings with MAGERRAMOV and his co-conspirators to discuss narcotics transactions. During the meetings, MAGERRAMOV agreed to provide the CS with fentanyl in Denmark, with the understanding that the fentanyl would be transported to the United States, mixed with heroin and other controlled substances, and sold to the cartel’s customers in New York City, among other places.
In May 2018, MAGERRAMOV coordinated the delivery of samples of carfentanil to the CS in Denmark. On May 9, 2018, MAGERRAMOV and his co-conspirators delivered three samples of narcotics to an agreed-upon location in Denmark. The three samples were seized by law enforcement, tested in a laboratory, and found to contain approximately 550 grams of mixtures and substances containing carfentanil. The CS later informed MAGERRAMOV that the three samples had been transported to the United States, that the purported cartel was satisfied with the quality of the narcotics, and that the CS wanted to purchase additional carfentanil from MAGERRAMOV and his associates.
In late May 2018, MAGERRAMOV arranged to have additional carfentanil delivered to the CS for importation into the United States. On May 30, 2018, one of MAGERRAMOV’s co-conspirators delivered a package of narcotics to an agreed-upon location in Denmark. The package was seized by law enforcement, tested in a laboratory, and found to contain approximately 5.2 kilograms of mixtures and substances containing carfentanil. The CS subsequently reported to MAGERRAMOV that the carfentanil had been transported to the United States.
During June and July 2018, the CS continued to meet and communicate with MAGERRAMOV about arranging additional narcotics transactions in the future and payment for the carfentanil that had been delivered.
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MAGERRAMOV, 40, of Estonia, pled guilty to one count of conspiring to import fentanyl and carfentanil into the United States. In addition to the prison term, MAGERRAMOV was ordered to forfeit $38,500.
Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division, the DEA’s Country Office in Copenhagen, Denmark, the Estonia Central Criminal Police, the Estonia Office of the Prosecutor General, and the U.S. Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys George D. Turner and Kyle A. Wirshba are in charge of the prosecution.
Elizabethton Man Sentenced to 210 Months' Imprisonment for Distribution of Child PornographyRead the Press Release
GREENEVILLE, Tenn. – On November 4, 2021, James Ellison Catoe, 48, currently of Elizabethton, was sentenced by the Honorable Clifton L. Corker, in the United States District Court for the Eastern District of Tennessee at Greeneville to 210 months in prison, followed by lifetime supervised release. Catoe will be required to register with the state sex offender registry and comply with special sex offender conditions during his supervised release.
As part of the plea agreement, Catoe agreed to plead guilty to one count of an indictment charging him with distribution of child pornography in violation of 18 U.S.C. §§ 2252A (a)(2)(A) and (b)(1).
According to the filed plea agreement, in November 2019, a search warrant was executed at Catoe’s home after information was provided to the Carter County Sheriff’s Office and Homeland Security Investigations from the National Center for Missing and Exploited Children (NCMEC) about child pornography images and videos being downloaded at the residence. During the search, over 11,000 images of child pornography were found on Catoe’s computer and cellular phone. Some images depicted the sexual victimization of a toddler. During questioning, Catoe admitted to possessing child pornography and stated that he had been downloading and viewing child pornography for some time. Catoe also admitted to distributing and trading child pornography to hundreds of individuals over the course of a year. Catoe went on to tell law enforcement that he and a 14-year-old female had exchanged naked photos of themselves approximately 50 times.
The case was investigated by the Carter County Sheriff’s Office (“CCSO”) and Homeland Security Investigations (“HSI”) and was led by HSI Special Agent Travis Carrier and CCSO Captain Jeff Markland.
Assistant United States Attorney Andrew C. Parker represented the United States.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit www.justice.gov/psc.
For more information about internet safety education, please visit www.justice.gov/psc/resources.html and click on the tab "resources.”
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Eight Men from Michigan, Indiana, and Illinois Arrested on Federal Drug Trafficking ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Andrew Birge announced that law enforcement arrested eight individuals on a complaint alleging they are involved in a transnational and interstate cocaine ring. The investigation centered around Ivan Huerta Hernandez (32) whose alleged drug trafficking operations were based in New Buffalo, Michigan. Through conduits in Mexico, Hernandez was supplied by sources located in Chicago, Illinois and distributed cocaine to dealers in West Michigan and Northern Indiana.
On the morning of November 3, 2021, approximately 90 federal, state, and local law enforcement officers executed arrest warrants and six search warrants in four judicial districts: the Western District of Michigan, the Northern District of Indiana, the Northern District of Illinois, and the Central District of Illinois. Investigators seized approximately 2 kilograms of suspected cocaine. Investigators also seized approximately $99,900 in cash and two firearms.
The men arrested are listed below:
Name
Residence
Age
Ivan Huerta Hernandez
New Buffalo, Michigan
32
Adrian Romero Antunez
Chicago, Illinois
35
Henry Shavar Nichols
Greenville, South Carolina
41
Marcus Jemel Johnson
Benton Harbor, Michigan
42
Juan Martinez Camarillo
Michigan City, Indiana
36
Donald James Rogers
New Buffalo, Michigan
62
Manuel Eudave
La Porte, Indiana
54
Santiago Cardenas
Michigan City, Indiana
41
For more information, please see the continuation in support of the criminal complaint available on the public docket. United States v. Hernandez, et al., No. 21-MJ-551, ECF No. 1 (W.D. Mich.).
The arrests are part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation that began in 2020 and has been led by the Federal Bureau of Investigation (FBI),
Drug Enforcement Administration (DEA), United States Marshals Service (USMS), Immigration and Customs Enforcement (ICE), United States Postal Inspection Service (USPIS), Michigan State Police’s Southwest Enforcement Team (SWET), Berrien County Sheriff’s Department (BCSD), Pokagon Band Tribal Police, Michigan City Police Department, La Porte City Police Department, and the Cook County Sheriff Department.
OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using an intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Under the United States Constitution, the government must present felony cases to a grand jury and obtain indictments to proceed with prosecution. The charges in the complaints are merely accusations and are not evidence of guilt. The defendants are presumed innocent unless and until proven guilty in a court of law. The government has the burden of proving guilt beyond a reasonable doubt.
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Drug User Who Possessed Thirteen Firearms Sentenced to a Decade in Federal PrisonRead the Press Release
A drug user who unlawfully possessed multiple firearms was sentenced today to ten years in federal prison.
Chandrique Day, age 21, from Waterloo, Iowa, received the prison term after a May 14, 2021 guilty plea to possessing a firearm as a drug user.
Evidence at the sentencing hearing showed that Day possessed multiple handguns, some of which were equipped with an extended magazine. In addition, Day possessed an AR-15 rifle equipped with a high-capacity magazine.
Day was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Day was sentenced to 120 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Day is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by a Federal Task Force composed of the Waterloo Police Department, Federal Bureau of Investigation, and Bureau of Alcohol Tobacco and Firearms assisted by the Black Hawk County Sheriff’s Office and Cedar Falls Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-CR-2007.
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Dothan Man Sentenced to Nine Years in Federal Prison for Truck BombingRead the Press Release
Montgomery, Alabama – Today, Acting U.S. Attorney Sandra J. Stewart announced the sentencing of a Dothan man for detonating a truck bomb in an attempt to kill the driver. On November 4, 2021, Sylvio Joeseph King, 48, was sentenced to 108 months in prison, to be followed by 3 years of supervised release. There is no parole in the federal system. King previously pleaded guilty to conspiracy and the malicious use of an explosive device in October of 2020.
According to the factual basis contained in the plea agreement and court records from his co-defendant’s trial, King worked at Wiregrass Rehabilitation Center in Dothan with co-defendant Ashley Nicole Haydt, 36, from Taylor, Alabama. King developed a friendship with Haydt during their time working together and she told King of her relationship and custody issues with a former boyfriend. Haydt would frequently communicate to King her hatred of the ex-boyfriend and how the custody dispute was impacting her and her other children.
Evidence presented at Haydt’s trial showed that she provided King with her ex-boyfriend’s address and, in the early morning hours of October 23, 2017, King placed an explosive device in the ex’s work truck and detonated the bomb while the victim was driving to work. Thankfully, the victim survived. Haydt was convicted for her role in the conspiracy after a four-day trial in October 2021. Her sentencing hearing is scheduled for February 1, 2022.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Houston County Sheriff’s Office, the Dothan Police Department, and the Alabama Law Enforcement Agency (ALEA), with assistance from the Federal Bureau of Investigation (FBI) and the Alabama Fire Marshal’s Office. Assistant United States Attorneys Brandon Bates and Chelsea Phillips prosecuted the case.
District Man Sentenced to Prison Term for Fatal Stabbing in Northwest WashingtonRead the Press Release
WASHINGTON – Aaron Jackson, 41, of Washington, D.C., was sentenced today to a prison term of 9 ½ years for fatally stabbing a man in Northwest Washington, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Jackson pleaded guilty in June 2021, in the Superior Court of the District of Columbia, to a charge of voluntary manslaughter. The plea, which was contingent upon the Court’s approval, called for a sentence of 9 ½ years of incarceration. The Honorable Milton C. Lee accepted the plea and sentenced Jackson accordingly. Following his prison term, Jackson will be placed on five years of supervised release.
According to the government’s evidence on Nov. 5, 2020, at about 2:30 a.m., Jackson and a group of acquaintances were hanging out on the sidewalk in the 600 block of Lamont Street NW. Jamaul Crockett joined the group in smoking K-2 (synthetic marijuana). According to the evidence, Mr. Crockett, 36, became belligerent and loud, and attempted to punch Jackson and missed. Mr. Crockett then pushed Jackson, causing Jackson to fall back and strike his head against a fence. Jackson took a knife that was in Jackson’s possession, and stabbed Mr. Crockett, inflicting the fatal wounds.
Jackson was arrested on Nov. 11, 2020 and has remained in custody since. He had admitted stabbing the victim when detectives canvassing the area approached him at his home and asked if he would agree to answer questions about the incident.
In announcing the sentence, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Criminal Investigations Division Homicide Branch of the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Lornce Applewhite; Victim/Witness Specialist Jennifer Clark, and Investigative Analyst Zachary McMenamin. Finally, they commended the work of Assistant U.S. Attorney John Interrante, who investigated and prosecuted the matter.
District Man Found Guilty by Jury of Fatally Stabbing Woman in Northeast WashingtonRead the Press Release
WASHINGTON –Robert Dean, 63, of Washington, D.C., has been found guilty by a jury of second-degree murder while armed in the fatal stabbing of a woman in Northeast Washington.
The verdict was returned yesterday in the Superior Court of the District of Columbia and announced this morning by Acting U.S. Attorney Channing D. Phillips and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD). The Honorable Marisa Demeo scheduled sentencing for Feb. 4, 2022.
According to the government’s evidence, on March 31, 2018, shortly before 5:04p.m., Dean stabbed his former girlfriend, Tamiya White, 38, at her parking lot in the 1000 block of Mount Oliver Road NE before she drove herself to the local McDonalds to seek help. Ms. White’s two children were in the apartment at the time.
Dean was arrested on April 5, 2018 and has been in custody ever since.
In announcing the verdict. Acting U.S. Attorney Phillips and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They also acknowledged the efforts of those who handled the case at the U.S. Attorney’s Office, including Assistant U.S. Attorneys Emma McArthur and Eric Hansford; Paralegal Specialists Grazy Rivera and Stephanie Siegerist; Investigative Analyst Zachary McMenamin; Victim/Witness Advocate Marcia Rinker; Litigation Technology Specialist Taylor Davis; Forensic Child Interviewers Tracy Owusu and Karen Giannakoulias, and teams from the Victim/Witness Assistance Unit and the Litigation Technology Unit.
Finally, they commended the work of Assistant U.S. Attorneys Monica Trigoso and George A. Pace, who investigated and prosecuted the case.
Crackdown on Illegal Firearms Possession and Trafficking Executed by Federal and State Law Enforcement in South Bay CitiesRead the Press Release
SAN JOSE – The Office of the United States Attorney has filed federal firearms charges against nine individuals in connection with a crackdown against illegal firearms trafficking and possession, announced Acting U.S. Attorney Stephanie M. Hinds; Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) San Francisco Field Division Special Agent in Charge Patrick T. Gorman; and U.S. Drug Enforcement Administration (DEA) Special Agent in Charge Wade R. Shannon.
The operation, spearheaded by the ATF, involved close coordination with the U.S. Drug Enforcement Administration (DEA), the California Highway Patrol, the Monterey County District Attorney’s Office, the Monterey County Sheriff’s Office, the Salinas Police Department, and the Watsonville Police Department. The operation reflects the continued efforts of federal and state law enforcement to work jointly to combat violent crime in South Bay counties by targeting the illegal sale of firearms and the illicit possession of firearms. In addition to federal charges levied against nine defendants, the Monterey County District Attorney’s Office has filed similar charges against a number of defendants that stem from same operation.
“This operation has removed over 80 firearms from the street, including privately made firearms also known as a “ghost guns” and conversion devices that enable firearms to function as fully automatic weapons,” said Acting U.S. Attorney Hinds. “Operations such as this one target the pipeline of firearms to the street. By reducing the availability of illegal firearms, we take an important step toward reducing violent crime.”
“Earlier this year, the Department of Justice announced the launch of Cross- Jurisdictional Firearms Trafficking Strike Forces,” said ATF Special Agent in Charge Gorman. “The Cross-Jurisdictional Firearms Trafficking Strike Forces were developed to help reduce gun violence by disrupting illegal firearms trafficking in key regions across the United States. The Bay Area was listed as one of those key regions. ATF works closely with our partners to track the illegal movement of firearms which creates an avenue for criminals and violent offenders to gain access to firearms. There were numerous firearms seized in this case that we allege were trafficked across state lines. We will continue to work diligently alongside our partners to honor our commitment to reducing violent gun crime in our communities.”
Criminal complaints were filed against the nine federal defendants on November 2, 2021; the complaints were unsealed earlier today. The complaints are supported by five separate affidavits that describe the alleged crimes, including the dates that the defendants unlawfully possessed and sold guns, as well as the types of guns that were sold. According to the affidavits, between February of 2020 and September of 2021, ATF, utilizing undercover methods, purchased from the nine federal defendants a total of at least 35 firearms (including machine guns), numerous rounds of ammunition, and quantities of methamphetamine. Additional firearms were seized from defendants who were charged in the Monterey County courts as part of the same operation. The sales occurred in various locations in Salinas and Watsonville, including the parking lots of local businesses and the defendants’ residences. In addition, at least 50 firearms were seized in connection with the arrests of the defendants on November 4.
The affidavits also describe the wide variety of firearms and ammunition that were purchased from the defendants during the operation. The weapons purchased were handguns, including handguns with high-capacity magazines; rifles, including a short-barreled rifle; shotguns, including a short-barreled shotgun; and machine guns. The complaints also allege that many of the defendants sold privately manufactured firearms, also known as “ghost guns.”
Further, as described in the affidavits, ATF purchased eight machine gun conversion devices – called “switches” or “sears” – from the federal defendants. According to the complaints, a switch is a machine gun conversion device that allows a semi-automatic firearm to function as a fully automatic weapon. The sear functions similarly. According to the complaints, the switches were used to convert semi-automatic pistol-type weapons to fire fully automatically and the sear was used to convert a semi-automatic AR-type rifle to fire fully automatically. The possession and/or transfer of these devices are illegal under federal law.
Six of the defendants are alleged to be convicted felons, and therefore, ineligible to possess firearms under federal law. In addition, each of the defendants facing gun charges is alleged to have either engaged in the business of dealing firearms without a license, or to have illegally possessed firearms, or illegally transferred firearms as follows:
Defendant
Charges
Maximum Statutory Penalties
Gregory Cabrera, 34, Salinas
18 U.S.C. § 922(g)(1) (felon in possession of a firearm and ammunition)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
18 U.S.C. § 922(a)(1)(A) (dealing firearms without a license)
5 years of imprisonment, $250,000 fine, 3 years of supervised release
Francisco Javier Jaramillo, a/k/a “Chito,” 27, Salinas
18 U.S.C. § 922(g)(1) (felon in possession of a firearm and ammunition)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
18 U.S.C. §922(a)(1)(A) (dealing firearms without a license)
5 years of imprisonment, $250,000 fine, 3 years of supervised release
Martin Campos, Jr., a/k/a “Silent,” 24, Springdale, Ariz.
18 U.S.C. § 922(g)(1) (felon in possession of a firearm and ammunition)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
Cody Lee Moreno, 23, Salinas
18 U.S.C. § 922(o) (illegal possession and transfer of a machinegun)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
Gabriel Penuelas-Garcia, 43, Aromas, Calif.
18 U.S.C. § 922(g)(1) (felon in possession of a firearm and ammunition)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
Ruben Adolfo Pimentel, 29, Salinas
18 U.S.C. § 922(g)(1) (felon in possession of a firearm and ammunition)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
21 U.S.C. § 841(a)(1) (distribution of methamphetamine)
20 years of imprisonment, $1,000,000 fine, not less than 3 years of supervised release to life
Gregory Smith, a/k/a “GNutty,” 50, Salinas
21 U.S.C. § 841(a)(1) (distribution of methamphetamine)
20 years of imprisonment, $1,000,000 fine, not less than 3 years of supervised release to life
Carlos Manuel Ruiz-Montanez, 20, Watsonville
18 U.S.C §§ 922(o) and 2 (aiding and abetting the illegal possession and transfer of machineguns)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
18 U.S.C. § 922(a)(1)(A) (dealing firearms without a license)
5 years of imprisonment, $250,000 fine, 3 years of supervised release
Ramon Castillo, 25, Watsonville
18 U.S.C. § 922(o) (illegal possession and transfer of machineguns)
10 years of imprisonment, $250,000 fine, 3 years of supervised release
In connection with the arrests of the defendants today, ATF seized approximately 50 firearms, including AR-type rifles, short-barrel rifles, shotguns, handguns, ghost guns, a machinegun, and over 5000 rounds of ammunition. Additionally, ATF made an arrest in Madera, California, that stemmed from this operation. The suspect was charged by the United States Attorney’s Office in the Eastern District of California by complaint alleging a violation of 18 U.S.C. § 922(o) (illegal possession and transfer of a machinegun) and 26 U.S.C. § 5861(d) (possession of an unregistered National Firearms Act weapon)
The some of the defendants are anticipated to make their initial federal court appearances on November 5, 2021. The criminal complaints merely allege that crimes have been committed, and each defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Assistant U.S. Attorney Neal C. Hong is prosecuting the case with the assistance of Elise Etter. These prosecutions are the result of investigations by the ATF in coordination with the DEA, California Highway Patrol, the Monterey County District Attorney’s Office, the Office of the Monterey County Sheriff, and the police departments of Salinas and Watsonville.
Corsica Man Sentenced for Wire Fraud and Money Laundering in a Multi-Million Dollar Cattle Ponzi SchemeRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Corsica, South Dakota, man convicted of Wire Fraud and Money Laundering was sentenced on November 4, 2021, by U.S. District Judge Karen E. Schreier.
Robert Blom, age 59, was sentenced to 91 months in federal prison, followed by three years of supervised release, $24,282,865.94 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $200.
Blom was indicted by a federal grand jury on March 3, 2020. He pled guilty on August 2, 2021.
The conviction stemmed from incidents beginning on or about January 2014 and continuing through February 2019, when Blom, with the intent to defraud, devised and intended to devise a scheme and artifice to defraud and to obtain money and property from others. Blom’s scheme and artifice to defraud was to unjustly enrich himself by obtaining funds fraudulently.
Blom operated a custom cattle-feeding business in the Corsica area. As a part of his business, Blom solicited investors for groups of cattle. He purchased groups of cattle from various livestock companies and those groups of cattle were raised on feedlots owned or used by Blom. He raised the groups of cattle to maturity, and then sold them to processing plants. After the groups of cattle were sold, Blom paid the profits to the investors in the groups.
However, Blom sold the same groups of cattle to multiple different investors. Blom sent identical cattle purchase invoices to multiple investor groups, when each invoice should have been used for just one group of investors. At the time, Blom knew that he did not have and could not purchase as many head of cattle as he represented to investors. Sometimes Blom altered the cattle purchase invoices in an effort to conceal that he sold the same group of cattle to multiple different investors. Because he sold the same groups of cattle to multiple different investor groups, the money generated from the sale of the cattle groups to a processing plant did not generate enough money to pay back all of the investors who invested in those cattle groups.
Blom falsely and fraudulently represented to investors that he would use their money to purchase groups of cattle and to care for those cattle. Instead, he routinely used money from new investors to pay back old investors, often by check.
On multiple occasions during the relevant time period, Blom mailed invoices and other investment-related documents to investors. Several investors mailed their investment checks to him.
As part of Blom’s scheme and artifice to defraud and to obtain money from others, Blom caused various wire communications to be sent. This includes an investment check for $256,996.72 made on or about December 17, 2018. This transaction involved an interstate wire transmission from Farmers State Bank in South Dakota, to First Dakota National Bank in South Dakota, through US Bank in Minnesota.
Blom also knowingly conducted multiple financial transactions that affected interstate commerce and that involved the proceeds of his fraud scheme, as described above. Blom made payments to investors knowing that the financial transactions were designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds of his fraud scheme. Blom knew that the money involved in these financial transactions represented the proceeds of his fraud scheme.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, and the U.S. Attorney’s Office. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Blom was immediately turned over to the custody of the U.S. Marshals Service.
Convicted Felon Sentenced for Unlawful Possession of Firearms, Including Stolen AR-15Read the Press Release
LAS VEGAS, Nev. – A Las Vegas man with multiple prior felony convictions was sentenced today to four years and seven months in prison for unlawful possession of firearms, including a stolen assault rifle.
According to court documents, on January 27, 2020, Matthew Robert Smith, 38, was arrested after law enforcement officers found an AR-15 rifle and a Glock 9mm pistol in his car. Both weapons previously had been stolen from parked vehicles. Smith is legally prohibited from possessing a firearm due to prior felony convictions in Nevada and California.
Smith pleaded guilty in November 2020 to one count of unlawful possession of a firearm. In addition to the prison term, U.S. District Judge James C. Mahan sentenced Smith to three years of supervised release.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Patrick Gorman for the Bureau of Alcohol, Tobacco, Explosives and Firearms (ATF) made the announcement.
This case was investigated by the ATF. Assistant U.S. Attorney Shaheen Torgoley prosecuted the case.
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Connecticut Man Sentenced for Stolen Firearms Offenses and Making False StatementsRead the Press Release
BOSTON – A Connecticut man was sentenced today in federal court in Springfield in connection with stealing 17 firearms from a West Springfield gun shop and making false statements to federal agents.
Fernando Rivera, 25, of New Britain, Conn., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 87 months in prison and three years of supervised release. On May 5, 2021, Rivera pleaded guilty to one count each of theft of a firearm from a Federal Firearms Licensee; being a felon in possession of a firearm; interstate transportation of a stolen firearm; receipt, possession, concealment, storage, barter, sale, or disposition of a stolen firearm in interstate commerce; and making false statements to a federal official.
Shortly after midnight on or about Aug. 29, 2020, Rivera and co-defendant Christian Castro engaged in a crime spree in Vermont, New Hampshire and Massachusetts that included seven ATM thefts or attempted thefts and culminated in the theft of 17 firearms from a federal firearms licensee in West Springfield. At the time of his offenses, Rivera was a felon on state probation for a prior narcotic charge in Connecticut.
On Sept. 18, 2020, federal agents arrested Rivera and Castro at their homes in Connecticut. During interviews with investigators, Castro admitted that he drove to and from several ATM robberies and the gun store robbery, but falsely stated he never received, kept or even touched any of the stolen guns.
During a search of Rivera’s phone, investigators identified several photographs and videos depicting Rivera (and Castro in one instance) with many of the stolen firearms. A forensic extraction of the defendants’ phones revealed communications indicating that on Sept. 4, 2020, Rivera discovered that he was a suspect in the thefts and then traveled with Castro to New York to sell at least three of the firearms.
On Oct. 29, 2021, Castro was sentenced by Judge Mastroianni to 87 months in prison and three years of supervised release.
Acting United States Attorney Nathaniel R. Mendell and James Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division made the announcement. Special assistance was provided by the Massachusetts State Police; Springfield, Hadley, West Springfield, New Britain (Conn.) and Middletown (Conn.) Police Departments; Connecticut State Police; Connecticut Department of Correction; and Connecticut Judicial Branch Adult Probation. Assistant U.S. Attorneys Steven H. Breslow and Julian Canzoneri of Mendell’s Springfield Branch Office prosecuted the case.
Company Agrees to Pay $175,000 in Civil Penalties to Resolve Alleged Violations of Controlled Substances ActRead the Press Release
OCEAN SPRINGS, Miss. – Acting United States Attorney Darren LaMarca announced today that Pharmaceutical Trade Services, Inc., which does business as Durbin USA, an importer, distributor, and exporter of pharmaceuticals in Ocean Springs, Mississippi, has agreed to pay the United States $175,000 to resolve allegations that it violated the Controlled Substances Act (CSA) by failing to maintain complete and accurate records of controlled substances, including thousands of doses of Schedule II-IV substances.
In addition to paying $175,000 to resolve the government’s allegations, Durbin USA has entered into a three-year Memorandum of Agreement (MOA) with the Drug Enforcement Administration (DEA), which includes additional responsibilities regarding the handling of controlled substances. The MOA imposes compliance obligations beyond those contained in the applicable laws and regulations.
Congress enacted the CSA to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications. To help achieve this aim, the CSA subjects all registered handlers of controlled substances to strict requirements regarding the inventory control and recordkeeping of controlled substances. These requirements ensure that DEA registrants account for controlled substances from the time that they are purchased until the time that they are delivered to other registrants, dispensed to patients, or discarded. The CSA’s recordkeeping requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances.
In response to the Department of Justice’s focus on combatting the opioid epidemic, the DEA has continued to conduct inspections and audits of DEA registrants, including pharmacies, narcotics treatment programs, medical providers, and distributors, throughout the Southern District of Mississippi. Based on results from multiple DEA audits of Durbin USA’s Ocean Springs facility, the United States alleges that Durbin USA violated the CSA by negligently failing to keep accurate records and inventories associated with Schedule II-IV narcotics that the company imported, distributed, and exported between 2013 and 2020.
“This settlement demonstrates our office’s continued commitment to combating the opioid epidemic on all fronts,” said Acting U.S. Attorney LaMarca. “Part of our strategy is making sure that registered opioid handlers keep accurate records of these highly addictive and potentially dangerous drugs. All individuals and facilities, large or small, licensed to handle controlled substances are responsible for maintaining accurate records, and all will be held accountable for any failures.”
“Prescription drug abuse has risen to epidemic proportions, with over 70,000 opioid related overdose deaths in 2020,” said DEA Special Agent in Charge Brad L. Byerley. "DEA Registrants, which include all importers, exporters and distributors, have an obligation to ensure that controlled prescription drugs are being distributed for legitimate use and not being diverted for abuse. Through enforcement and regulatory actions, education, and training, DEA is committed to keeping our communities safe from those who facilitate and enable the abuse of prescription drugs,” said Byerley.
Acting U.S. Attorney LaMarca commended the work of the U.S. Drug Enforcement Administration for its work on this case.
The claims resolved by this settlement are allegations only, and there has been no determination or admission of civil or criminal liability.
Colorado Man Sentenced to Federal Prison for Distributing Fentanyl Disguised as OxycodoneRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces Victor Manuel Ortega-Ochoa, age 47, was sentenced to 41 months in a federal prison followed by two years of supervised release for distribution and possession with intent to distribute fentanyl and possession of a firearm by a prohibited person.
According to the plea agreement, Ortega-Ochoa conspired with others to distribute thousands of pills having the appearance of Oxycodone tablets but that actually contained fentanyl. Ortega-Ochoa personally distributed approximately 3000 of these counterfeit pills during controlled purchases conducted by investigators. During these purchases, Ortega-Ochoa also quoted prices for, and agreed to distribute, multiple pounds of methamphetamine and a kilogram of cocaine. During a search of Ortega-Ochoa’s home, agents discovered two firearms and ammunition in the bedroom where Ortega-Ochoa was arrested. It was illegal for Ortega-Ochoa, who was present in the United States illegally, to be in possession of these firearms.
“The tens of thousands of counterfeit Oxycodone pills currently streaming into our state often contain fentanyl,” said Acting U.S. Attorney Matt Kirsch. “We will continue to aggressively prosecute people distributing these pills, which often cause fatal overdoses.”
“This investigation demonstrates DEA’s commitment to addressing the surge in overdose deaths across our country and more notably here in the State of Colorado. This is unfortunately another example of someone selling counterfeit fentanyl-laced pills disguised as a legitimate diverted medication in our community,” said Acting Special Agent in Charge David Olesky of the DEA Denver Field Division. “We applaud the work of our agents and our partners with IRS Criminal Investigation and the United States Attorney’s Office for their efforts and success in putting this case together.”
United States District Court Judge Christine M. Arguello sentenced Mr. Ortega-Ochoa on November 2, 2021.
The DEA and IRS Criminal Investigation conducted the investigation. Assistant United States Attorney Jeremy Chaffin handled the prosecution of the case.
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Camp Hill Attorney Found Guilty of Obstructing JusticeRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Charles W. Johnston, age 74, of Fairfax County, Virginia, was convicted on November 4, 2021, following a four-day bench trial before United States District Court Judge Jennifer P. Wilson for obstructing a United States Department of Labor (DOL) investigation to determine whether any person had violated federal laws and regulations governing the administration of a labor union pension plan.
According to Acting United States Attorney Bruce D. Brandler, Johnston previously maintained a law office in Camp Hill, Pennsylvania, and is now retired. Johnston began serving as legal counsel to the Plumbers and Pipefitters Local 520 Health and Welfare, Pension, and Annuity Plans in 1972. In 2014, DOL served a subpoena for records on the pension plan in connection with an investigation it was conducting into the pension plan’s financial activities. Johnston contacted the DOL investigator assigned to the investigation and informed him that as the attorney for the pension plan, he would be producing the records.
At trial, the Government proved that Johnston intentionally concealed and withheld from the Department of Labor emails and documents related to an internal audit of the union’s pension plan. The audit findings, which the Government established Johnston received, reported miscalculations of both pension and health and welfare benefits. When asked by DOL whether he had produced all the requested documents, Johnston lied and stated he had done so.
“Obstructing lawful government investigations into financial mismanagement by pension plans is serious criminal behavior and cannot be tolerated,” stated Acting United States Attorney Bruce D. Brandler. “When attorneys engage in this behavior it is particularly serious because attorneys hold a position of trust when representing clients and are expected to uphold the law, not violate it.”
“Charles W. Johnston Esq., attorney for the Plumbers and Pipefitters Local 520 Health and Welfare, Pension and Annuity Plans, illegally obstructed a U.S. Department of Labor, Employee Benefits Security Administration (EBSA) investigation by concealing subpoenaed documents,” said Syreeta Scott, Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General. “This guilty verdict is an affirmation of our commitment to continuing to work with EBSA and our law enforcement partners to investigate those individuals who attempt to derail DOL proceedings that protect the integrity of labor unions and their affiliated benefit plans.”
“The U.S. Department of Labor, Employee Benefits Security Administration, will pursue to the fullest extent of the law those who obstruct the investigative activities of the Agency,” said Michael Schloss, Regional Director of EBSA’s Philadelphia Regional Office.
“Anyone who obstructs a federal investigation is attempting to subvert the course of justice,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “When an attorney, an officer of the court, is doing so, that’s even more egregious. The FBI and our partner agencies will always seek to hold accountable those foolish enough to try to interfere with our cases.”
The case was investigated by the U.S Department of Labor Office of Inspector General, the Federal Bureau of Investigation, and the Employee Benefits Security Administration. Assistant U.S. Attorneys Joseph Terz and Samuel Dalke are prosecuting the case.
The maximum penalty under federal law for this offense is five years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances, and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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California Man Indicted for Firearms OffensesRead the Press Release
LAS VEGAS, Nev. – A California man made his initial court appearance today for allegedly making false statements in connection with the unlawful purchase of multiple firearms and selling the firearms without a license.
According to allegations contained in the indictment, from about May 13, 2020, to about August 17, 2021, Kenneth Earl Smith Jr. — 28, of Lancaster, California — engaged in dealing firearms without a firearms business license. During the purchase of 19 firearms at several Federal Firearms Licensees in Las Vegas, he made false statements on ATF Firearms Transactions Records (Form 4473). As alleged, Smith represented that he was the buyer of the firearms, when in fact he was acquiring the firearms on behalf of other persons. Smith likewise represented that he was a Nevada resident, when in fact he was a California resident.
Smith is charged with eight counts of illegal acquisition of a firearm and one count of engaging in the firearms business without a license. He was arraigned today before U.S. Magistrate Judge Daniel J. Albregts. A jury trial has been scheduled to begin on January 3, 2022 before U.S. District Judge Gloria M. Navarro. If convicted, Smith faces a statutory maximum penalty of 90 years in prison.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Patrick Gorman for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) made the announcement.
This case was investigated by ATF. Assistant U.S. Attorney Dan Cowhig is prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Anyone with information about the unlawful purchase of firearms can call ATF at 1-888-ATF-TIPS (1-888-283-8477), email [email protected], or submit information anonymously at www.reportit.com/.
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Caddo Parish Commissioner and Sister Plead Guilty to Federal Charges Just Days Before Trial Set to BeginRead the Press Release
SHREVEPORT, La. - Acting United States Attorney Alexander C. Van Hook announced that two defendants scheduled to begin trial Monday, November 8, 2021, each entered guilty pleas this evening before United States District Judge Elizabeth E. Foote.
Lynn D. Cawthorne, 54, a Caddo Parish Commissioner and resident of Shreveport, along with his sister, Belena C. Turner, 50, also of Shreveport, each appeared in United States District Court this evening and pleaded guilty to wire fraud in connection with their involvement in a scheme to defraud the Food and Nutrition Service, an agency of the United States Department of Agriculture (USDA) which administers the Child Nutrition Programs. Cawthorne also pleaded guilty to a charge of aiding and assisting in making and subscribing a false tax return in connection with a separate indictment that was returned by a federal grand jury against him in December 2019.
According to information introduced at the hearing, the Child Nutrition Programs administered by the USDA include the Summer Feeding Service Program (SFSP). The SFSP was established to ensure that children in low-income areas continue to receive nutritious meals when school is not in session during the summer. In Louisiana, the SFSP is administered by the Louisiana Department of Education’s (LDOE) Division of Nutrition Support. Meals are prepared and served by SFSP sponsors who are required to follow rules and regulations issued by the USDA and LDOE.
To participate in the SFSP, sponsors are required to submit a “sponsor application” that includes, among other things, a budget estimating revenues and expenses related to the feeding program. Sponsors are also required to submit a “site application” listing the physical address where meals will be served. In the application, sponsors agree to oversee the administration of SFSP at each approved site. Based on guidelines published by the USDA, LDOE regulations require sponsors to maintain certain records, including but not limited to, daily site records documenting the number of Eligible Meals served to Eligible Persons. Sponsors are reimbursed for expenses after electronically submitting claims to LDOE certifying that each claim is true and accurate. Sponsors can also receive an advance of funds to help pay approved expenses.
In 2013, Cawthorne was president of United Citizens and Neighborhoods, Inc. (UCAN) and Turner was the executive director. In 2013, Turner and Cawthorne caused UCAN to apply to the LDOE to participate in the SFSP at various feeding sites in the Western District of Louisiana. In late May 2013, Cawthorne created Harvest Catering, Inc. (Harvest Catering) in the name of an unindicted co-conspirator. However, Cawthorne maintained actual control and decision making over Harvest Catering’s financial activity. More specifically, Cawthorne drafted Harvest Catering checks and maintained a Harvest Catering debit card.
Turner and Cawthorne represented to the LDOE that Harvest Catering would be providing catering services to UCAN at its SFSP sites. In a claim for reimbursement, the defendants submitted a false claim which resulted in a wire being sent on May 20, 2013. On that same date, the LDOE electronically transferred $33,080.78 to UCAN’s bank account using a wire communication traveling in interstate commerce through the Western District of Louisiana. On May 24, 2013, Turner drafted and eventually negotiated a check made payable to a non-profit under her control called Dreamkeepers Academy. In addition, on May 30, 2013, Cawthorne drafted a UCAN check made payable to Harvest Catering in the amount of $8,000. Cawthorne and Turner either via cash withdrawal, check negotiation or debit card used a portion of these funds for personal use and not for the SFSP. The government and the defendants agreed that the loss amount caused by the fraud scheme would be determined at sentencing.
In connection with the tax fraud charge, Cawthorne admitted to hiring a tax return preparer to prepare his 2013 tax return and admitted that he assisted in the preparation of his tax return for the 2013 tax year. Cawthorne received income from Harvest Catering that he failed to report, and he fraudulently reported an adjusted gross income of $7,555 during the 2013 calendar year. Cawthorne knew the statement in his 2013 tax return was false and filed the 2013 tax return on or about April 15, 2014 knowing that it contained false information, in that the amount of his income was higher.
Cawthorne and Turner each face a sentence of up to 20 years in prison, 3 years of supervised release, and a fine of up to $250,000, on the wire fraud count. In addition, Cawthorne faces up to 3 years in prison, a $100,000 fine, or both, on the tax fraud count.
Sentencing for Cawthorne and Turner has been set for March 16, 2022 beginning at 9:30 a.m.
The Louisiana Office of the State Inspector General, FBI, IRS-Criminal Investigation, and USDA-OIG investigated the case. Assistant U.S. Attorneys Tennille M. Gilreath and Brandon B. Brown prosecuted the case.
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Brockton Woman Pleads Guilty to Stealing Veterans Affairs FundsRead the Press Release
BOSTON – A Brockton woman pleaded guilty today in federal court in Boston to stealing veteran affairs benefits.
Robin Calef, 63, pleaded guilty to one count of theft of public funds. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for March 1, 2022.
In December 2006, Calef’s sister, who was receiving monthly benefits from the Department of Veterans Affairs (VA), passed away. Calef failed to inform the VA of her sister’s death, and the VA continued to deposit monthly benefits into a bank account held by Calef and her sister. From Dec. 1, 2006 to Sept. 20, 2017, Calef stole approximately $102,289 in VA funds from that bank account.
The charge of theft of government funds provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Mendell’s Major Crimes Unit is prosecuting the case.
Bridgeport Gang Member Sentenced to 78 Months for Federal Gun Possession OffenseRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that CHAZ DEAR, also known as “Spazz,” 24, of Bridgeport, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 78 months of imprisonment, followed by three years of supervised release, for illegally possessing a loaded handgun.
According to court documents and statements made in court, in late 2019, law enforcement received information that Dear, who was on state parole, was selling marijuana. Investigators subsequently made a controlled purchase of marijuana from Dear. On January 30, 2020, Dear was arrested after a court-authorized search of his residence revealed a Glock 27, .40 caliber handgun with an extended magazine loaded with 23 rounds of ammunition, as well as small quantities of heroin and crack cocaine.
Dear has been a member of the “Greene Homes Boyz” (“GHB/Hotz”), a gang based in the Charles F. Greene Homes Housing Complex in Bridgeport’s North End, and his criminal history includes state felony convictions for narcotics, weapon and larceny offenses. In text messages in the weeks prior to his arrest in this case, Dear and other GHB/Hotz members discussed their prior and planned shootings of rival gang members. Judge Bryant found that, in the approximately six months Dear was on state parole prior to his arrest, he was dealing narcotics and firearms, and that the Glock 27 he possessed had the potential to aid those other felony offenses.
Dear has been detained since his arrest. On March 31, 2021, he pleaded guilty to possession of a firearm by a felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Connecticut State Police Statewide Narcotics Task Force and Bridgeport Police Department. The case was prosecuted by Assistant U.S. Attorney Rahul Kale.
This prosecution is a part of the Justice’s Department’s Project Safe Neighborhoods (PSN), Project Longevity and Organized Crime Drug Enforcement Task Forces (OCDETF) programs.
PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Project Longevity is a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. If a group member elects to engage in gun violence, the focused attention of federal, state and local law enforcement will be directed at that entire group.
OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Bonifay Doctor Pleads Guilty to Federal Income Tax CrimesRead the Press Release
PENSACOLA, FLORIDA – Ahmad T. Ismail, 70, of Bonifay, Florida, pled guilty on Wednesday to the subscription and transmission of multiple fraudulent federal income tax returns, announced Jason R. Coody, Acting United States Attorney for the Northern District of Florida.
“The United States relies on the payment of taxes to defend our country and maintain its operations,” stated Acting United States Attorney Coody. “We remain committed to the investigation and prosecution of those who falsely misrepresent their income – whether by traditional evasion or the filing of fraudulent tax income returns.”
At his guilty plea, Ismail admitted in federal court that he filed false federal income returns for the years 2017 and 2018. Ismail agreed that he knowingly understated his gross income by thousands of dollars per year by failing to report all the cash payments he received from patients at his medical practice over the course of the two years in question. During the execution of a federal search warrant on his residence in 2020, law enforcement located $39,000 in cash in Ismail’s residence along with hundreds of thousands of dollars in cash receipts from his practice. The Internal Revenue Service estimates the overall tax loss perpetrated by Ismail to be over $100,000.
“We owe it to every American taxpayer to use all lawful means to identify and prosecute those who evade their taxes,” said IRS Criminal Investigation Special Agent in Charge Brian Payne. “By his own admission, Ismail cheated the U.S. government out of tens of thousands of dollars, and there are consequences for individuals who intentionally conceal income and evade taxes which can include serving time in federal prison and paying back all of the taxes owed with costly penalties and interest.”
Ismail’s sentencing hearing is scheduled for January 20, 2022, at 9:00 am, at the United States Courthouse in Pensacola before the Honorable United States District Judge T.K. Wetherell. Ismail faces up to 6 years imprisonment for the tax crimes as well as the payment of restitution to the Internal Revenue Service.
“FDLE appreciates our federal criminal justice partnerships in keeping those in a position of trust accountable,” said Chris Williams, Florida Department of Law Enforcement Special Agent in Charge, Pensacola Region.
The case was investigated by the Internal Revenue Service – Criminal Investigation, the Florida Department of Law Enforcement, and the Medicaid Fraud Control Unit of the Office of the Attorney General for the State of Florida. The case is being prosecuted by Assistant United States
Attorneys David L. Goldberg and Kaitlin Weiss.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of
Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.Bogalusa Man Pleads Guilty to Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – CHRISTOPHER HARRIS, age 27, a resident of Bogalusa, Louisiana, pled guilty on November 4, 2021 before U.S. Chief District Judge Nannette Jolivette Brown to two counts of an indictment charging him with conspiracy to distribute and possess with intent to distribute fifty (50) grams or more of a mixture or substance containing a detectable amount of methamphetamine, and distribution of fifty (50) grams or more of a mixture or substance containing a detectable amount of methamphetamine; both in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), announced U.S. Attorney Duane A. Evans.
According to court documents, on July 26, 2019, Agents with the Bureau of Alcohol, Tobacco and Firearms used a confidential source to make a controlled purchase of methamphetamine from HARRIS. The confidential source, under the direction of agents, went to 1100 block of Columbia Street to meet HARRIS to purchase the drugs. The source was greeted at the door by Derrick Mark who made a telephone call to HARRIS to inform him that the source was at the residence to purchase the drugs from him. When HARRIS arrived at the residence, he entered the source’s vehicle and sold the source approximately one hundred six (106) grams of drugs that tested positive for methamphetamine.
HARRIS faces a mandatory minimum term of imprisonment of five (5) years up to a maximum term of imprisonment of forty (40) years, a fine of up to $5,000,000.00, at least four (4) years of supervised release following any term of imprisonment, and a mandatory $100.00 special assessment fee per count.
This prosecution was part of an extensive investigation by the Bureau of Alcohol, Tobacco, and Firearms and the Bogalusa Police Department of individuals suspected of trafficking large quantities of methamphetamine and/or firearms in the Bogalusa area. The prosecution is being handled by Assistant United States Attorney André Jones.
Bicycle Casino Agrees to Pay $500,000 Settlement and Submit to Increased Review of Anti-Money Laundering Compliance ProgramRead the Press Release
NON-PROSECUTION AGREEMENTLOS ANGELES – To resolve an investigation into alleged violations of the anti-money laundering provisions of the Bank Secrecy Act (BSA), the partnership that operates the Bicycle Hotel & Casino in Bell Gardens has agreed to pay $500,000 and undergo enhanced review and reporting requirements designed to prevent future violations of federal law.
According to a Non-Prosecution Agreement (NPA) with federal prosecutors, the Bicycle accepted responsibility for failing to properly file reports for a foreign national who conducted millions of dollars in cash transactions at the casino in 2016. The casino failed to file Currency Transaction Reports (CTRs) and Suspicious Activity Reports for Casinos (SARCS) that are required under the BSA, a law intended to thwart money laundering.
Federal prosecutors entered into the NPA in recognition of the Bicycle’s remedial efforts to strengthen its anti-money laundering program, as well as its acceptance of responsibility, cooperation with authorities during this investigation, and agreement to make a $500,000 payment.
Under the BSA, casinos like the Bicycle are required to implement and maintain programs designed to prevent criminals from using the casino to launder the large sums of cash that illegal activity can generate. For example, casinos must record and report to the government the details of transactions involving more than $10,000 in cash by any one gambler in a 24-hour period. The BSA also requires casinos to file reports documenting suspicious activity, such as efforts designed to avoid the filing of accurate currency transaction reports.
As part of the NPA, the Bicycle admitted that a “high roller” Chinese national gambled at the casino approximately 100 times over an eight-month period in 2016, playing high-limit baccarat in a VIP room with huge sums of cash that on some occasions he transported to and from the casino in duffle bags. A Statement of Facts in the NPA also chronicles some of the high roller’s marathon play sessions, such as one occasion where he withdrew $2 million from his player account at approximately 2:45 p.m. and played in a VIP room through 1:20 a.m. the following morning.
When conducting cash transactions, the high roller relied on an assistant to conduct over $100 million in cash-in or cash-out transactions on his behalf. The Bicycle admitted in the agreement that, from at least January 7, 2016, through July 27, 2016, it improperly filed currency transaction reports in the name of the assistant when it should have referenced the high roller in those reports. The casino also failed to file any SARCs during this period.
Bicycle staff informed senior management in July 2016 of the failure to file CTRs or SARCs in the high roller’s name, according to the Statement of Facts. The Bicycle then took various remedial actions, including amending the CTRs to indicate that the cash transactions were done on the high roller’s behalf, regularly filing SARCs for the high roller based on the suspicious nature of his source of funds, supplementing its compliance department with additional staff and resources, and creating an Anti-Money Laundering Committee comprising members of senior management to meet regularly to discuss BSA compliance issues.
Under the terms of the agreement, the Bicycle agreed to pay the United States $500,000, which represents the revenue the Bicycle made from the high roller. The Bicycle must also implement additional review and reporting requirements to assure BSA compliance, including an audit by a third party and regular reporting to the U.S. Attorney’s Office. The agreement also requires the Bicycle to cooperate with law enforcement in any additional investigations or proceedings arising from the conduct described in the agreement’s statement of facts.
Criminal investigators with the California Department of Justice’s Bureau of Gambling Control, IRS Criminal Investigation, and Homeland Security Investigations investigated this matter.
Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section negotiated the resolution of this investigation.
Atlanta restaurateur sentenced for willful failure to remit payroll taxesRead the Press Release
ATLANTA - Shanga A. Hankerson, the former owner of the Gladys Knight’s Chicken and Waffles restaurant in Atlanta, Georgia, has been sentenced for willful failure to remit payroll taxes.
“Hankerson willfully disregarded his tax obligations for many years,” said Acting U.S. Attorney Kurt R. Erskine. “Payroll taxes fund social insurance programs, including Social Security and Medicare, and are a large source of revenue for the federal government. Employers who fail to comply with their legal obligations will be held accountable.”
“While ownership of a well-known restaurant in our community has its perks, it also comes with great responsibility,” said IRS Criminal Investigation Special Agent in Charge James E. Dorsey. “Paying taxes is a way to give back to the community, but unfortunately Hankerson chose to use those funds for other means. This sentencing emphasizes that all employers, big and small, have equal responsibility to collect, report, and pay over their payroll taxes.”
According to Acting U.S. Attorney Erskine, the charges and other information presented in court: In 1997, Hankerson opened his first restaurant, Gladys Knight’s Chicken and Waffles, in Atlanta. Over the next several years, Hankerson expanded the concept to at least three other locations in northern Georgia and Washington, D.C. Hankerson was the sole owner of the businesses that operated the restaurants.
As an employer, Hankerson’s companies were required to withhold from employees’ gross pay Federal Insurance Contributions Act (“FICA”) taxes, which represent Social Security and Medicare taxes, and federal income taxes. Collectively, these withheld taxes are referred to as “payroll taxes.” Specifically, employers are required to file, one month after the conclusion of the calendar quarter, an Employer’s Quarterly Federal Tax Return, setting forth the amount of payroll taxes due.
An individual is responsible for collecting, accounting for, and paying over the payroll taxes if he or she has the authority required to exercise significant control over the employer’s financial affairs. As the sole owner, Hankerson was the responsible person, and he had the responsibility to collect, truthfully account for, and pay over payroll taxes due. From at least 2012 to 2016, Hankerson failed to fully remit over $1 million in payroll taxes due.
Shanga Hankerson, 45, of Atlanta, Georgia, was sentenced by U.S. District Judge Michael L. Brown to serve two years in prison, one year of supervised release, and ordered to pay restitution of $1,039,310.65. Hankerson was convicted on July 21, 2021, after he pleaded guilty.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Bernita B. Malloy prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
25 Individuals Charged in Rocky Mount Cigarette Smuggling and Money Laundering OperationRead the Press Release
RALEIGH – G. Norman Acker III, Acting United States Attorney for the Eastern District of North Carolina announced today that on October 20, 2021, a federal grand jury sitting in the Eastern District of North Carolina returned a sealed, twelve-count indictment charging 24 individuals with a scheme to defraud the federal government, the State of North Carolina, the State of New York, the State of New Jersey, and the Commonwealth of Virginia, of millions of dollars in tax revenues from the sale of cigarettes.
This investigation is an effort to end large scale tax fraud and to hold these defendants accountable for the millions in lost tax revenue as the result of their illegal scheme. The individuals charged are:
- Bahjet Shaher Ahmed Dari, 58
- Shaher Bahjat Dari, a/k/a “Boo”, 32
- Hashem Faraj Hatu, 30
- Tamara Delilah Richardson, 27
- Bismillah Barak, 38
- Khalid Naser Hizan, 23
- Jymonica Arnez Gorham, 29
- Adam Husam Salem, 21
- Husam Khaled Salem, 60
- Shelton Dewain Tenor, a/k/a “DC”, 50
- Sierra Nicole Strickland, 28
- Noe De Jesus Vega, 45
- Jermaine Tyrell Underhill, 28
- Sameer Mohammad Dari, 53
- Ali Osama Dari, 22
- Anastasia Chante Harrison, 29
- Leandro Alberto De Los Angeles-Perez, 43
- Amer Mohammed Zughbi, a/k/a “Amer Mohammad Zughbi”, 21
- Toribio Antonio Perez, 55
- Francisco Odalis Perez, 37
- Jason Peralta, 22
- Ahmad Awni Said Marzouq, 35
- Abdulla Mohamed Aezah, 30
- Alicia Walker, a/k/a “Alicia Mendez,” 44
The defendants were arrested yesterday and will be presented before U.S. Magistrate Judge Robert T. Numbers today. U.S. District Judge James C. Dever III presides over the case.
In Count One, the grand jury alleges that the 24 individuals listed in the indictment, had been engaged in a conspiracy, beginning in May of 2021 and continuing until at least the time the indictment was returned, to ship, transport, receive, possess, sell, distribute and purchase cigarettes, in quantities exceeding 10,000 cigarettes (as required by the relevant statute), which bore no evidence of the payment of applicable State or local cigarette taxes in the state and locality where they were found. The object of the conspiracy was to profit from the purchase of cigarettes with cash in North Carolina, drive those cigarettes to the northeast, and sell them without paying the applicable sales tax. This is all alleged to be in violation of Title 18, United States Code, Section 2342 (a) (which prohibits the trafficking in contraband cigarettes and smokeless tobacco) and Title 18, United States Code, Section 371, the general conspiracy statute.
It is alleged in the indictment that members of the conspiracy would repeatedly purchase large quantities of cigarettes from wholesale cigarette outlets in Rocky Mount and Wilson, and then transport those quantities of cigarettes to storage locations for future shipment to Virginia, New Jersey, and New York. After purchasing the cigarettes from the wholesalers, members of the conspiracy would then prepare for transporting the cigarettes to the northeast by using large vehicles and cross into the Commonwealth of Virginia.
Counts Two through Eight allege seven specific instances where the individual(s) named in those counts (and who were part of the conspiracy charged in Count One) knowingly shipped, transported, received, possessed, or aided and abetted contraband cigarettes (in amounts greater than 10,000) which bore no evidence of the payment of applicable state cigarette taxes in the Commonwealth of Virginia. Each of these instances is alleged to be in violation of Title 18, United States Code, Section 2342(a), as well.
Count Nine alleges that all 24 defendants were engaged in a conspiracy to launder money in violation of Title 18, United States Code, Section 1956(h). In this count, the grand jury alleges that members of the conspiracy (a) conducted and attempted to conduct financial transaction affecting interstate commerce which involved the proceeds of specified unlawful activity, that is, cigarette trafficking, with the intent to further the goals of that crime, and that they knew that the property involved in the crime was in fact the proceeds of some form of unlawful activity; and (b) that while they conducted or attempted to conduct the specified unlawful activity – again, cigarette trafficking –the transactions were designed in whole or in part to conceal and disguise the nature, location, source, ownership and control of the proceeds of the unlawful activity. So, in sum, the money laundering conspiracy count alleges that the members of the conspiracy were trying to either further the goals of the crime or to conceal the crime by using the proceeds of the crime in some way or do both those things.
Count Ten alleges that Shaher Bahjat Dari, a/k/a “Boo Boo,” an alien illegally and unlawfully in the United States, possessed a firearm and ammunition.
Count Eleven alleges that Shaher Bahjat Dari, a/k/a “Boo Boo,” possessed with intent to distribute more than fifty (50) kilograms of marijuana.
Count Twelve alleges that Tamara Delilah Richardson possessed with intent to distribute a quantity of marijuana.
If convicted of Count One, the general conspiracy to traffic in contraband cigarettes, each defendant faces up to five years in federal prison and fines of up to $250,000 or both. If convicted of Counts Two through Eight, each defendant named therein faces up to five years in federal prison and fines of up to $250,000. If the defendants are convicted of money laundering as alleged in Count Nine, they each face up to 20 years imprisonment, a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater, or both. In Count Ten, the defendant faces up to 10 years imprisonment, a $250,000 fine or both. In Count Eleven, the defendant faces up to 20 years imprisonment, $250,000 fine or both. In Count Twelve, the defendant faces up to 5 years imprisonment, $250,000 fine or both.
In addition, the grand jury included a forfeiture notice in the indictment. That section of the indictment provides notice to each defendant that the items of property listed in that notice, and any other property which is the proceeds of or involved in the crime, is forfeitable to the United States. The forfeiture notice includes approximately 10,000 cartons of cigarettes, $440,000 in U.S. currency and vehicles that were seized during the investigation.
Further, on November 5, 2021, Wasim Bahgat Dari, 30, will be presented for an initial appearance based on a criminal complaint filed today charging him with trafficking in contraband cigarettes, conspiracy to traffic in contraband cigarettes and conspiracy to commit money laundering.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina said “North Carolina continues to be a target for cigarette trafficking organizations to take advantage of North Carolina as a source of supply of untaxed cigarettes. Any criminal activity that primarily conducts its illicit business with bulk cash, is susceptible to violent crimes occurring in those communities, can attract sophisticated and organized criminal groups, and could be a source of funding for terrorists. This office will continue to aggressively prosecute those organizations that are travelling to or are operating in the Eastern District.”
“Dari’s scheme to launder money and sell contraband cigarettes has gone up in smoke and he will have to answer for his crimes,” said Special Agent In Charge Ronnie Martinez, who oversees Homeland Security Investigations (HSI) operations in North Carolina and South Carolina. “Disrupting and dismantling criminal organizations is a priority for HSI and we will continue to find, arrest and prosecute these criminals.”
“Yesterday morning, Deputy United States Marshals from the Eastern District of North Carolina, and the Carolinas Regional Fugitive Task Force assisted Homeland Security Investigators, Nash County Sheriff’s Office Detectives and other state and local law enforcement officers in the simultaneous arrest of 22 individuals on federal charges. The coordinated arrests occurred in Nash County and surrounding areas, as well as in NY, FL & PA,” commented United States Marshal Michael East. “The arrests were the culmination of extensive investigative work by HSI, the Nash County Sheriff’s Office and the United States Attorney’s Office for the Eastern District of North Carolina. The United States Marshals Service is always willing to assist our federal, state and local partners in the apprehension of criminal suspects and fugitives.”
Nash County Sheriff Keith Stone stated, “This is a perfect example of well-trained law enforcement officers partnering with federal authorities for safer communities. With this case, it’s more than drug cigarette smuggling, it includes acts of violence. This is just another example of organized crime.”
"Edgecombe County Sheriff's Office prides itself on working with federal, state and, local partnerships to ensure our county and surrounding areas are safe and we will continue that relationship," commented Sheriff Clee Atkinson.
This case is being investigated by Homeland Security Investigations, Nash County Sheriff’s Office, Edgecombe County Sheriff’s Office, United States Marshals Service, and the Henrico County, Virginia Sheriff’s Office.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:21-CR-394.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty.
11 Central Ohio men convicted of conspiring to illegally smuggle hundreds of guns to Canada for profitRead the Press Release
COLUMBUS, Ohio – Eleven defendants have been convicted and sentenced in a conspiracy to smuggle at least 200 firearms from Ohio to Canada for tens of thousands of dollars.
Abdulwahab Sharif Mohamed Hassan, 30, of Columbus, Ohio, was sentenced in federal court today to 72 months in prison.
A federal grand jury charged the co-conspirators in indictments returned on Aug. 19, 2020, and Nov. 19, 2020. Defendants were sentenced to prison terms ranging from 12 months and 1 day to 72 months of imprisonment.
The defendants acquired firearms both legally and illegally, stockpiled the firearms, and smuggled them to Canada to re-sell them for a profit.
The group bought guns both through private sales and through straw purchases at gun shows.
For example, in April 2019, co-conspirators caused two individuals to conduct straw purchases of four firearms at the C&E Gun Show at the Ohio Expo Center in Columbus.
Defendants recruited female drivers to smuggle firearms across the border or to bring money back from Canada through promises of a free trip to Canada, payment, and access to drugs and alcohol.
In July 2018, more than $11,000 was seized by law enforcement from two of the defendants on one trip back to Ohio from Canada. Two months later, more than $25,000 in cash was seized from two other defendants at the John Glenn International Airport. For his part, Abdulwahab Hassan reported during the sentencing process that he had approximately $88,000 in cash on hand, despite not having a job during time periods relevant to the firearms-trafficking conspiracy.
On various occasions in 2019, individuals related to the conspiracy attempted to travel to Canada and were stopped by law enforcement. During each incident, multiple firearms were discovered in the vehicles.
In total, the defendants conspired to smuggle more than 200 guns from Ohio to Canada from approximately July of 2018 through about the middle of 2019. To date, at least 10 of those guns have been directly traced to crimes in Canada.
Those convicted in the conspiracy include:
Name
Also Known As
Age
City of Residence
Abdulwahab Sharif Mohamed Hassan
China
30
Columbus, Ohio
Omar Sharif Mohamed Hassan
O-Bandz
26
Columbus, Ohio
Jamil Jamal Abdalla
22
Columbus, Ohio
Mohamed Abdulkadir Mohamud
Bash
23
Columbus, Ohio
Mohamed Abdi Hirad
Mo Trippin’, Trippin’
21
Columbus, Ohio
Abdirahim Mahmoud Dualeh
A.D.
25
Columbus, Ohio
Shamarke Igal
Marke
25
Columbus, Ohio
Ahmed Ahmed
Seven
22
Columbus, Ohio
Abdiaziz Said Ahmed
Breezy
26
Columbus, Ohio
Ibrahim Ali
Ebey
25
Columbus, Ohio
Mohamed Sharif Ali Mohamed
MoMo
23
Columbus, Ohio
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; Roland Herndon, Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Columbus Police Chief Elaine Bryant; United States Marshal Pete Tobin; Ohio Highway Patrol Superintendent Lt. Col. Richard Fambro; and Franklin County Sheriff Dallas Baldwin announced the sentences imposed. Assistant United States Attorneys S. Courter Shimeall and Kelly A. Norris represented the United States in this case.
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Thursday 4 November 2021
Wolf Point man admits murder charge in shooting on Fort Peck Indian ReservationRead the Press Release
GREAT FALLS – A Wolf Point man admitted to a murder charge today in the November 2020 shooting of a man on the Fort Peck Indian Reservation, Acting U.S. Attorney Leif M. Johnson said.
Doratello “DJ” Juan Fischer, 36, pleaded guilty to second degree murder as charged in an information. Fischer faces a maximum of life in prison, a $250,000 fine and five years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris set sentencing for March 9, 2022. Fischer was detained pending further proceedings.
The government alleged in court documents that on Nov. 25, 2020, 911 received a call of a man, later identified as the victim, John Doe, outside of a bar in Wolf Point, on the Fort Peck Indian Reservation, waiving around a gun. Law enforcement determined that Doe shot one round into the ground and then pointed the gun at Fischer. No injuries were reported. On Nov. 27, 2020, a caller to 911 advised that shots had been fired in an area of 5th Avenue South and Helena Street in Wolf Point. A few minutes later, another call to 911 advised that Doe had been shot and was lying on the floor of a residence. Emergency responders and law enforcement transported Doe to a local hospital where he was pronounced dead. An autopsy determined the cause of death was a gunshot wound to the back of Doe.
The government further alleged that immediately before the Nov. 27, 2020 shooting, Doe was seen outside of a residence on 5th Avenue South by at least one of the residents. Law enforcement learned that an individual was driving Fischer around Wolf Point and stopped the car in an alley. Fischer exited the vehicle and shot Doe in the back as Doe was running away. At least one of the residents saw, at the time of the shooting, a man firing a rifle at Doe, who was running down 5th Avenue South. Fischer later told the driver he had killed Doe.
Assistant U.S. Attorneys Lori Harper Suek and Jared C. Cobell are prosecuting the case, which was investigated by the FBI, Fort Peck Tribes Criminal Investigation and Wolf Point Police Department.
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Windham Man Pleads Guilty to Failure to File a Foreign Bank Account ReportRead the Press Release
CONCORD - Georges Mazraani, 57, of Windham, pleaded guilty in federal court on Wednesday to willful failing to file a foreign bank account report, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, federal law requires that a U.S. person having a financial interest in, or signature or other authority over, a bank or other financial account in a foreign country, must file a Foreign Bank Account Report (“FBAR”) with the Treasury Department identifying each foreign account if the aggregate balance of all foreign accounts exceeds $10,000 at any point in the calendar year. FBAR information is used by the federal government in criminal, tax, or regulatory investigations or proceedings. A willful failure to file a required FBAR is a felony.
Defendant Mazraani owned and operated Dot Square, a New Hampshire corporation that exported computers and related goods primarily to Lebanon. He also had a financial interest in bank accounts held in Lebanon, from which he sometimes wired money to Dot Square’s bank account held in Salem, New Hampshire. For calendar year 2012, Mazraani filed an FBAR identifying three accounts in Lebanon. During the years 2013 through 2017, however, Mazraani did not file FBARs, even though he had an interest in at least one Lebanese bank account holding more than $10,000 during each of those years. For example, in calendar year 2017, $554,245 was wired, in 13 separate wire transmissions, from Mazraani’s account at a bank in Beirut to Dot Square’s business checking account in New Hampshire. Although Mazraani’s tax preparer advised the defendant’s bookkeeper about the FBAR filing requirement and Mazraani acknowledged on his 2016 and 2017 tax returns that he was required to file an FBAR, he nevertheless failed to file the report.
Mazraani is scheduled to be sentenced on February 14, 2022.
“Failing to file a Foreign Bank Account Report is a federal crime,” said Acting U.S. Attorney Farley. “By failing to file these reports from 2013 to 2017, the defendant concealed information about foreign bank accounts that he was required to disclose. We will continue to work with our law enforcement partners to identify and prosecute those who commit tax crimes and other financial offenses.”
“The law requires companies who use our country’s financial system to provide financial institutions with truthful information about their business operations, but Georges Mazraani admitted today that he knowingly and willfully failed to do that, over the course of five years. In fact, he went out of his way to conceal his bank accounts in Lebanon, despite a reminder from his bookkeeper,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI will not hesitate to aggressively investigate companies who are doing business in the United States but failing to adhere to our laws.”
“The accurate reporting of foreign bank accounts ensures fairness and integrity in the U.S. tax system. By his own admission today, Mr. Mazraani deliberately avoided his reporting requirements in an attempt to hide assets. As a result of his actions, he is now subject to a federal felony conviction,” said Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division, Boston Field Office.
This matter was investigated by the Internal Revenue Service, Criminal Investigation Division, the Department of Commerce, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney John S. Davis.
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Whiteville Man Sentenced to 17 Years in Drug and Gun CaseRead the Press Release
RALEIGH, N.C. – A Whiteville man was sentenced today by Judge James C. Dever to a total of 204 months for Possession of a Firearm by a Felon, Possession with Intent to Distribute a Quantity of Cocaine and Possessing a Firearm in Furtherance of a Drug Trafficking Crime. On June 24, 2021, Samuel Arnett Jr., 43, pled guilty to the charges.
According to court documents and other information presented in court, the Columbus County Sheriff’s Office engaged in a four-month long narcotics investigation into Arnett. During the summer of 2019, investigators purchased crack cocaine and firearms from Arnett utilizing a confidential source of information. On five separate occasions, Arnett sold quantities of crack cocaine. On two other occasions, Arnett sold firearms to the confidential source and on two additional occasions, Arnett sold both firearms and crack cocaine to the source of information. Based on that investigation, law enforcement executed a search warrant at Arnett’s house in Whiteville. Law enforcement found additional cocaine, drug paraphernalia indicative of the sale of narcotics, two other firearms, ammunition and United States currency.
Arnett was found to be a Career Offender, having two or more convictions for violent felonies. In 2003 Arnett was convicted of two separate Robbery with a Dangerous Weapon charges and in 2005 he was convicted again of Robbery with a Dangerous Weapon.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after the sentencing by U.S. District Judge James C. Dever III. The Bureau of Alcohol, Tobacco and Firearms, Columbus County Sheriff’s office investigated the case and Assistant U.S. Attorney Charity Wilson 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. 7:20-cr-00141-D-1.