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5 November 2021
Shelby County man sentenced to 27 years in prison for sending money to Filipino mothers in exchange for child pornographyRead the Press Release
DAYTON, Ohio – A Sidney, Ohio, man was sentenced in U.S. District Court to 27 years in prison for attempting to produce child pornography and for violating his supervised release while registered as a sex offender from a previous conviction.
Charles Lee Frazier, 42, admitted during his guilty plea in March 2021 that he solicited child pornography from impoverished mothers in the Philippines.
According to court documents, Frazier used Filipino dating sites to connect with women in poverty. In subsequent Skype chats with the women, he obtained sexually explicit pictures of their children in exchange for money. Specifically, Frazier’s conversations included requests for pornography of naked minor children engaging in sexual conduct with other children or with their mothers. Frazier distributed child pornography to several women, as examples of what images he wanted them to create with their children, or with instructions to show the images to their children to convince them to engage in that behavior. The defendant also had discussions about committing violent acts against children. For example, he discussed killing infants during sexual assaults.
From April through July 2019, Frazier sent money via MoneyGram from a Sidney, Ohio, store to women in the Philippines in exchange for child pornography. Frazier sent approximately $800 to one individual in exchange for nude images of a seven-year-old girl. One of the women in the online chats stated she needed the money from Frazier for food.
Frazier was a registered sex offender at the time of the offense. He was convicted in a 2011 federal case for receiving child pornography. He was sentenced to 84 months in prison for that conviction.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; and Sidney Police Chief William Balling announced the judgment entry filed Nov. 4. Frazier was sentenced by Senior U.S. District Judge Walter H. Rice. The FBI’s Child Exploitation and Human Trafficking Task Force investigated this case and Assistant United States Attorney Christina E. Mahy represented the United States.
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Seattle man sentenced to 8 years in prison for child sex abuse crimesRead the Press Release
Seattle – A 33-year-old Seattle man was sentenced today in U.S. District Court in Seattle to 8 years in prison and 15 years of supervised release for three federal felonies involving sexual exploitation of children. Gary Stensland was arrested August 5, 2020, and on February 18, 2021, pleaded guilty to interstate travel with intent to engage in illicit sexual conduct, distribution of child pornography, and possession of child pornography. At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez said, “This is a disturbing and troubling case, and a very sad case…. One of the evils of the internet is how it has substantially increased the exploitation of children all around the world.”
According to records filed in the case, in September 2018, Stensland traveled to Portland to meet a 13-year-old whom he had contacted via an internet app. Stensland returned to Seattle with the minor and paid the minor for sex. Stensland then drove the youth back to Portland. The youth disclosed the abuse in summer 2020.
On August 5, 2020, the FBI, as part of the Seattle Internet Crimes Against Children (ICAC) Task Force, executed a search warrant at Stensland’s residence and seized his electronic devices. The investigation revealed Stensland sexually assaulted other minors as well as trafficked in images and videos of child sexual abuse.
Chief Judge Martinez agreed to recommend a federal prison in Texas which has a highly regarded program for treating sex offenders. “I think he is serious about wanting to make changes,” Chief Judge Martinez said. Addressing Stensland the Chief Judge said, “I hope you utilize the time (in prison) to work on these issues.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case is being investigated by the FBI in conjunction with the Internet Crimes against Children Task Force. The case was prosecuted by Assistant United States Attorney Matthew Hampton.
Rensselaer County Man Charged with Receipt and Possession of Child PornographyRead the Press Release
ALBANY, NEW YORK – Derek Luch, age 49, of Troy, New York, appeared in federal court today on charges that he received and possessed child pornography.
The announcement was made by United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
A criminal complaint alleges that on or about November 4, 2021, Luch possessed more than 100 images of child pornography, including images of pre-pubescent minors from the ages of 8 to 12 years old. Luch is also charged with using an internet-based peer-to-peer network to download and receive child pornography. The charges in the complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.
Luch initially appeared today before United States Magistrate Judge Daniel J. Stewart. He waived his right to a detention hearing, and will remain detained pending trial.
If convicted, Luch faces at least 5 years and up to 20 years in prison, a term of post-release supervision of at least 5 years and up to life, and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. Luch would also be required to register as a sex offender.
This case was investigated by the FBI and its Child Exploitation Task Force. The Child Exploitation Task Force is comprised of FBI Special Agents, and state and local police investigators. The case is being prosecuted by Assistant U.S. Attorney Alexander P. Wentworth-Ping as part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc
Readout of Justice Department Leadership Meeting on Human Smuggling and Trafficking NetworksRead the Press Release
On Nov 3, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division convened a meeting on efforts to combat human smuggling and trafficking networks as part of the department’s work on Joint Task Force Alpha (JTF Alpha). Participants included Attorney General Merrick B. Garland, Deputy Attorney General Lisa O. Monaco, the U.S. Attorneys in districts along the southern border of the United States, Acting Deputy Director Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement (ICE), Acting Commissioner Troy A. Miller of U.S. Customs and Border Protection (CBP), and additional members of JTF Alpha.
The meeting focused on: discussing JTF Alpha’s investigations and prosecutions, and the challenges thereto; supporting JTF Alpha’s efforts to enhance U.S. enforcement efforts against the most prolific human smuggling and trafficking networks operating in Mexico, Guatemala, El Salvador and Honduras; and identifying ways to strengthen efforts to disrupt and dismantle human smuggling and trafficking networks, including those that abuse or exploit those being smuggled, pose national security risks, or have links to transnational organized crime. The meeting discussed multiple examples of migrants being killed, sexually assaulted, kidnapped and abused by the smuggling and trafficking networks, as well as exploring those networks’ links with cartels, gangs and weapons smuggling.
Assistant Attorney General Polite highlighted how this joint law enforcement effort has already resulted in a number of successful prosecutions, new indictments, increased forfeitures and stronger international partnerships. He praised the partnership among ICE, CBP and other participating federal law enforcement agencies including FBI and DEA, in concert with JTF Alpha prosecutors and attorneys, to coordinate investigative resources and focus on the most prolific human smuggling and trafficking networks. The meeting also recognized the key role played by our law enforcement partners in Mexico, El Salvador, Guatemala and Honduras.
Attorney General Garland and Deputy Attorney General Monaco both reaffirmed the Justice Department’s commitment to combat human smuggling and trafficking networks and noted the serious risk of violence, injury and even death that too often results from exploitation of migrants by transnational criminal organizations.
U.S. Attorney Ashley C. Hoff for the Western District of Texas, Acting U.S. Attorney Randy S. Grossman for the Southern District of California, Acting U.S. Attorney Jennifer Lowery for the Southern District of Texas and Acting U.S. Attorney Glenn McCormick for the District of Arizona spoke about smuggling trends in their respective districts and the ways in which JTF Alpha resources and enhanced law enforcement efforts have been and could be used against the most prolific and dangerous smuggling organizations. ICE Acting Deputy Director Lechleitner and CBP Acting Commissioner Miller spoke about the need to continue coordinating law enforcement strategy and prioritizing resources and efforts in support of JTF Alpha. The Office of Prosecutorial Development, Assistance, and Training (OPDAT) spoke about the important collaborative work being done with our partners in El Salvador, Guatemala, Honduras and Mexico. Numerous components of the Criminal Division that are part of JTF Alpha – including the Human Rights and Special Prosecutions Section, the Narcotic and Dangerous Drug Section, the Money Laundering and Asset Recovery Section, the Office of Enforcement Operations and the Office of International Affairs – also participated in the meeting, along with representatives from the Civil Rights Division and the Executive Office for U.S. Attorneys.
The meeting ended with the participants confirming their steadfast support and prioritization of JTF Alpha and focus on its continued success.
Purported Surgeon Indicted in Connection with Romance Scam involving Online Dating WebsitesRead the Press Release
TALLAHASSEE, FLORIDA – Brian Brainard Wedgeworth (a/k/a “Dr. Brian Anderson,” a/k/a “Dr. Anthony Watkins,” a/k/a “Dr. Brian Adams,” a/k/a “Dr. Edward Chen,” a/k/a “Dr. Brian Chris,” a/k/a “Dr. Chris Williamson,” a/k/a “Dr. Brian Christopher Williamson,” a/k/a “Dr. Brian Edmonds,” a/k/a “Dr. Brian Ammerson,” a/k/a “Dr. Brian Lamar Wilson,” a/k/a “Dr. Brian Wilson,” a/k/a “Dr. Brian Mims,” a/k/a “Dr. Brian Lamar Sims”), 46, formerly of Tallahassee, Florida, and Center Point, Alabama, was arrested in Tennessee on charges of wire fraud, mail fraud, aggravated identity theft, and money laundering. Jason R. Coody, Acting United States Attorney for the Northern District of Florida, announced the indictment after Wedgeworth made his initial appearance in federal court in Nashville, Tennessee.
The indictment alleges that, between October 2016, and March 2021, Wedgeworth devised a scheme to defraud money and property by means of material false and fraudulent pretenses, representations, and promises, and for the purpose of executing such scheme falsely represented that he was physician in online dating forums to meet women for the purpose of defrauding them. The indictment further alleges that Wedgeworth made promises to the women in order to induce them to send him money and buy him jewelry and watches. Wedgeworth is alleged to have fraudulently obtained more than $750,000 in funds and property as a result of his scheme.
Wedgeworth was ordered temporarily detained until a detention hearing and arraignment are held at the United States Courthouse in Tallahassee. If convicted, he faces up to 20 years in prison for wire fraud and mail fraud counts, up to 10 years in prison for the money laundering counts, and a minimum mandatory sentence of 2 years in prison, consecutive to any other imprisonment that might be imposed, for the aggravated identity theft count.
This case resulted from a joint investigation by the United State Postal Inspection Service (USPIS) and the Internal Revenue Service – Criminal Investigations (IRS-CI), and work is ongoing to ensure that all potential victims are identified. If you believe that you were in contact with Brian Brainard Wedgeworth, or through one of his aliases, and would like to speak with an investigator, please contact the USPIS by email at [email protected]. Assistant United States Attorney Justin M. Keen is prosecuting the case.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
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 for the Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Previously Convicted Felon Indicted for Illegally Transporting and Storing Hazardous Waste, Falsifying a Hazardous Waste Manifest and Obstructing an Agency ProceedingRead the Press Release
A federal grand jury in Hawaii returned an indictment against Anthony Shane Gilstrap, 54, for violating the Resource Conservation and Recovery Act (RCRA) by transporting hazardous waste without a required manifest, falsifying a hazardous waste manifest, and storing hazardous waste without a permit. He is also charged with obstructing an agency proceeding.
In January 2017, Gilstrap, who has lived in Hawaii, Georgia and Kansas, agreed to remove drums of the RCRA-listed hazardous waste perchloroethylene (perc) from Young Laundry & Dry Cleaning (YLD), owned by U.S. Dry Cleaning Corp. (USDC). YLD’s Regional Manager hired Gilstrap to remove the drums for $15,000, which was less than half the price that legitimate hazardous waste disposal companies had quoted to YLD. Gilstrap removed the drums to his warehouse, which was not a permitted storage or treatment site, without required RCRA manifests. Furthermore, both Gilstrap and USDC produced false manifests to put the Hawaii Department of Health (HDOH) off the trail. When an HDOH inspector later tried to locate the missing drums, Gilstrap lied about their whereabouts.
The YLD Regional Manager who hired Gilstrap has pleaded guilty before the U.S. District Court of the District of Hawaii to causing the transportation of hazardous waste without a manifest and received a sentence of probation.
On Oct. 5, Gilstrap was indicted in the District of Kansas for possession of a firearm by a previously convicted felon.
“Perc is a dangerous toxic substance, and stashing drums of it at a cut rate price with no plan for proper final disposal, is a gross dereliction of care and violates the law,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “With hazardous waste, the department will aggressively prosecute a knowing failure to do what is right.”
“Hazardous waste manifests are the receipts that track how dangerous wastes are handled,” said the Acting U.S. Attorney Judith A. Philips for the District of Hawaii. “Here, their absence, and the efforts of HDOH and EPA to close the loop, led to the accountability we see today. We will follow through and hold the defendant to account for his illegal transportation and storage as well as his attempts to cover that up.”
“The hazardous waste involved in this case posed serious public health and environmental dangers,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “EPA and our law enforcement partners are committed to holding responsible parties accountable for actions that put communities at risk.”
Gilstrap will be scheduled for his initial court appearance before a U.S. Magistrate Judge in the U.S. District Court for the District of Hawaii. If convicted, he faces a penalty of up to 13 years in prison. A 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 EPA’s Criminal Investigation Division. Environmental Crimes Section Senior Trial Attorney Kris Dighe is prosecuting the case jointly with Assistant U.S. Attorney Gregg Paris Yates for 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.
Pair Plead Guilty to Distributing Eutylone in WinchesterRead the Press Release
HARRISONBURG, Va. – A pair of Winchester, Virginia men, pleaded guilty this week to possessing and distributing Eutylone, a Schedule I controlled substance primarily used for its psychoactive, stimulant effects.
Eutylone emerged on the United States’ illicit drug market in 2014, reports of its abuse have sharply increased since 2018. The Drug Enforcement Administration reports that Eutylone is being falsely marketed by drug dealers as MDMA (“Ecstasy” or “Molly”) and has been distributed under the street names of “Red Bull” and “Blue Playboy,” among others.
Beginning in January 2020, the Northwest Virginia Regional Drug and Gang Task Force conducted multiple controlled drug buys from Gregory McKinley Frye, 54, and his nephew, Lamont Antoine Parson, 39. On February 6, 2020, law enforcement obtained and executed a search warrant at the Winchester, Virginia apartment occupied by Frye and Parson and recovered over three kilograms of Eutylone, a 9mm pistol, and a digital scale.
“Eutylone is especially risky to users because it looks nearly identical to other drugs like Ecstasy or Molly but produces a weaker effect, tempting people to take more, and leading to severe adverse effects such as tremors, seizures, or even death,” United States Attorney Christopher R. Kavanaugh said today. “The prosecution of these defendants serves to make Winchester a safer community by educating its citizens of the presence of this dangerous drug in their town.”
Frye pleaded guilty to one count of possessing with the intent to distribute Eutylone and two counts of distribution of Eutylone. He is scheduled to be sentenced on March 31, 2022 and faces up to 20 years in prison. Parson pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute Eutylone and one count of possessing with the intent to distribute Eutylone. He is scheduled to be sentenced on April 5, 2022 and faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Northwest Virginia Regional Drug and Gang Task Force (comprised of the Clarke County Sheriff’s Office, the Frederick County Sheriff’s Office, the Page County Sheriff’s Office, the Shenandoah County Sheriff’s Office, the Luray Police Department, the Front Royal Police Department, the Strasburg Police Department, the Winchester Police Department, and the Virginia State Police) investigated the case.
Assistant U.S. Attorney Ronald M. Huber is prosecuting the case.
Owner of Louisiana Construction and Building Inspection Businesses and His Two Siblings Plead Guilty to Tax FraudRead the Press Release
A Louisiana man who owns construction and building inspection businesses, along with his brother and sister who were employed by the construction businesses, pleaded guilty today to conspiracy to defraud the IRS.
According to court documents, from 2011 through at least June 2019, Randy A. Farrell Sr., of Jefferson Parish, along with his brother, David Farrell, also of Jefferson Parish, and sister, Dawn Farrell Ruiz, of St. Tammany Parish, conspired to conceal income from the IRS and prevent employment taxes from being deducted from their own and others’ wages. Randy Farrell also conspired with Matthew Reck, who pleaded guilty to conspiring to defraud the IRS on July 7.
According to court documents, Randy Farrell and Reck co-owned and operated two commercial construction companies, SES Construction Consulting Group (SES) and Global Technical Solutions (GTS) through 2015, when Reck sold his interest in the companies to Randy Farrell. Court documents show that Randy Farrell and Reck took funds from SES and GTS without reporting the profits on their tax returns, and they worked with an accountant to conceal these efforts on the companies’ internal books and records. Randy Farrell and Reck also ensured certain SES and GTS employees, including David Farrell and Dawn Farrell Ruiz, were paid outside of the normal payroll process so employment taxes would not be withheld from their paychecks.
Since 2007, Randy Farrell has also co-owned a building inspection business, IECI & Associates LLC (IECI). To help conceal the income he received from IECI, Randy Farrell directed IECI to issue checks payable to nominees in amounts under $10,000 and then cashed the checks, keeping the funds for himself. Randy Farrell also used IECI corporate funds for gambling, and then he concealed his actions by directing these expenditures to be falsely entered into IECI’s corporate records as “materials” expenses or “contract labor” payments. After the IRS executed a search warrant at his business offices and home in September 2017, Randy Farrell filed tax returns that falsely underreported the taxable income he earned from his businesses.
Randy Farrell, David Farrell and Ruiz are scheduled to be sentenced at a later date. Each faces a maximum penalty of five years in prison. Reck is scheduled to be sentenced on Jan. 12, 2022, and also faces a maximum of five years in prison. All defendants face a period of supervised release, restitution and monetary penalties. 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 and the U.S. Attorney's Office for the Eastern District of Louisiana made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorneys William Montague and Parker Tobin of the Tax Division and Assistant U.S. Attorney Nicholas Moses of the Eastern District of Louisiana are prosecuting the case.
Omaha Woman Sentenced to 34 Months for Conspiracy to Commit RobberyRead the Press Release
Acting United States Attorney Jan W. Sharp announced that Tyanna D. Laushman, age 24, of Omaha, Nebraska, was sentenced today in federal court in Omaha for conspiracy to commit robbery. Chief United States District Court Judge Robert F. Rossiter, Jr. sentenced Laushman to 34 months’ imprisonment. There is no parole in the federal system. After completing her term of imprisonment, Laushman will begin a 3-year term of supervised release. Chief Judge Rossiter ordered Lausham to pay $270 in restitution.
On February 23, 2020, Laushman and her co-defendant, Germon Partee, conspired to rob a Bucky’s gas station in Omaha. Partee threatened the cashier, claimed to have a gun, and obtained between $90 and $120. Laushman served as the look-out during the robbery. Later that day, Laushman and Partee conspired to rob another Bucky’s gas station in Omaha. This time they obtained $150 after Partee threatened the cashier. Laushman has a prior conviction for burglary, shoplifting, criminal impersonation, and multiple theft convictions.
Partee was sentenced on October 12, 2021 to 28 months in prison for two counts of robbery to run concurrently.
The case was investigated by the Omaha Police Department and the Federal Bureau of Investigation.
Okmulgee County Resident Found Guilty of Firearm and Drug Charges in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that Dustin Kyle Marris, age 33, of Okemah, Oklahoma, was found guilty by a federal jury of Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country, in violation of Title 18, United States Code, Sections 113(a)(3), 1151, and 1153; Use, Carry, Brandish and Discharge of a Firearm During and in Relation to a Crime of Violence, in violation of Title 18, United States Code, Sections 924(c)(1)(A)(i), (ii), and (iii); Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); and Felon in Possession of a Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). The defendant was acquitted on one count of Assault with Intent to Kill in Indian Country.
The jury trial began with testimony on Tuesday, November 2, 2021, and concluded on Wednesday, November 3, 2021, with the guilty verdicts. Based on the jury’s verdicts, the defendant is facing over ten years of imprisonment.
The United States presented evidence that on or about November 9, 2020, the victim, a deputy with the Okmulgee County Sheriff’s Office, attempted to conduct a traffic stop on the defendant for speeding. The defendant failed to comply, fled from the victim, and reached speeds over 100 miles per hour. Shortly after the pursuit began, the defendant leaned out the driver’s side door, pointed a handgun at the victim, and fired 3-4 shots. The defendant, a convicted felon, was prohibited from possessing a firearm. Within a few minutes, the defendant crashed his car into a ditch and fled on foot. Law enforcement pursued the defendant but was unable to locate him. The following day, officers located and arrested the defendant. During a search of the defendant, officers found four baggies of methamphetamine weighing 49.38 grams.
The guilty verdicts resulted from an investigation by the Okmulgee County Sheriff’s Office and the Federal Bureau of Investigation.
The United States Attorney’s Office for the Eastern District of Oklahoma prosecuted the case because the defendant in this case is a member of a federally-recognized Indian tribe and the crimes occurred in Okmulgee County, within the boundaries of the Muscogee (Creek) Nation Reservation, and within the Eastern District of Oklahoma.
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma in Muskogee, presided over the trial and ordered the completion of a presentence report. Sentencing will be scheduled following completion of the report. Marris was remanded to the custody of the United States Marshal pending the imposition of sentencing.
Special Assistant United States Attorney Nathaniel Walters and Department of Justice Criminal Division Organized Crime and Gang Section Trial Attorney Brian Lynch represented the United States.
North Carolina Man Convicted of Multi-State Cocaine Distribution ConspiracyRead the Press Release
NEWPORT NEWS, Va. – A federal jury convicted an Edenton, North Carolina man yesterday on charges of conspiring with others to distribute more than five kilograms of cocaine, possessing cocaine with the intent to distribute it, and distributing cocaine.
According to court records and evidence presented at trial, Trezith Smart, 40, who maintained residences in Newport News and Edenton, would travel to Houston, Texas to obtain multi-kilogram quantities of cocaine and return to Newport News and Edenton, where the cocaine would be distributed. In 2017, Smart was stopped for speeding by the Louisiana State Police with five kilograms of cocaine. After posting bond, Smart returned to Newport News and continued his cocaine trafficking activities. In May 2018, Smart sold cocaine to a middleman, who then sold the drug to an undercover law enforcement cooperator. Then in August 2018, Smart was stopped and arrested by the Newport News Police Department with an ounce of cocaine and more than $15,000 in cash. When he was ultimately detained in November 2018, Smart confessed to distributing more than 500 kilograms of cocaine between 2015 and 2018.
Smart was convicted of conspiracy to distribute more than five kilograms of cocaine, possession with intent to distribute cocaine, and distribution of cocaine, and he faces a mandatory minimum sentence of 10 years and a maximum penalty of life imprisonment when sentenced on March 15, 2022. 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, and Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division, made the announcement after U.S. District Judge David J. Novak accepted the verdict.
This investigation was conducted by the DEA Hampton Post of Duty and significant assistance was provided by the Newport News Police Department.
Assistant U.S. Attorneys Eric M. Hurt and Devon Heath are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:18-cr-95.
Nightclub Magnate Convicted of Drug CrimesRead the Press Release
A DFW nightclub magnate and two of his managers have been convicted of operating an empire of clubs in which drugs were sold openly, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Following six weeks of trial and four days of deliberation, a federal jury on Friday found OK Corral/ Far West owner Alfredo Hinojosa, general manager Miguel Casas, and noted promoter Martin Salvador Rodriguez guilty of managing drug premises, conspiracy to manage drug premises, and conspiracy to possess with intent to distribute cocaine. The jury also convicted a lower-level bathroom dealer, Cesar Mendez, of possession with intent to distribute and conspiracy to possess with intent to distribute.
The overall case included more than 30 defendants, all of whom have been convicted, including former Dallas Police Officers Eddie Villarreal and Craig Woods.
According to evidence presented at trial, Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez ran a conglomeration of businesses that brought in revenue of more than $107 million over a four-year period.
The defendants allowed cocaine to be sold in the bathrooms of their nightclubs on a daily basis, because such drug sales attracted customers and provided them with a competitive edge over rival clubs. These drugs sales increased revenue at the clubs between $9 million and $12 million.
“These defendants made millions by explicitly allowing cocaine trafficking in nightclubs across DFW. They assumed that permitting bathroom drug deals would be their ‘competitive edge.’ Instead, it was their downfall,” said Acting U.S. Attorney Chad Meacham. “The United States Attorney’s Office and the FBI will not permit nightclub owners – or anyone else – to willfully turn a blind eye to drug trafficking happening on their premises.”
“This conspiracy was designed to elevate the status of the defendants at a very high cost to our society,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Their extensive plans to conceal nightly high-volume drug sales included the recruitment of law enforcement officers as employees. We will continue to work with our local, state, and federal partners to protect the integrity of the profession, uphold the public’s trust, and prevent access to illicit drugs in our greater Dallas-Fort Worth communities.”
At trial, prosecutors presented evidence of 17 controlled drug buys that occurred at the OK Corral Dallas, OK Corral Fort Worth, and Far West nightclubs between 2013 and 2016. Half a dozen informants, all under the supervision of FBI agents, bought bag after bag of cocaine from traffickers operating out of club bathrooms.
Multiple security guards who worked inside the clubs testified at trial that Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez knew the drug trafficking was occurring and openly ordered security personnel to allow it. Drug traffickers, previously charged and convicted in the case, also testified that they were allowed to operate freely.
At trial, FBI agents explained that in 2015, they installed court-ordered microphones and a camera in Mr. Hinojosa’s office, unbeknownst to the defendants. Agent also sought and obtained more a dozen wiretaps in the case. During these recorded calls and intercepted communications, Mr. Hinojosa could be heard saying, “we can’t really clean it because then we lose business,” and “we need cocaine, man.”
Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez eventually confessed to knowing that the drug sales were ongoing and allowed. Prosecutors played Mr. Hinojosa’s 45-minute recorded interview for the jury. Other agents recounted statements made by Mr. Casas and Mr. Rodriguez.
According to one agent’s notes, Mr. Casas told a task force officer that when club management realized the business was “tanking,” they told bouncers to allow the drug sales to resume and leave drug dealers alone as long as they were “discreet.”
Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez now face a mandatory minimum sentence of 10 years and up to life in in federal prison. Mr. Mendez also faces 10 year mandatory minimum. Sentencing dates have not been set yet.
The Federal Bureau of Investigation’s Dallas Field Office and the Dallas Police Department conducted the investigation, which was dubbed “Operation Closing Time.” The Texas Alcoholic Beverage Commission's Enforcement Division provided valuable assistance. Assistant U.S. Attorneys P.J. Meitl, Nicole Dana, and Melanie Smith prosecuted the case. U.S. District Judge Sam A. Lindsay presided over trial.
New Orleans Man Sentenced on Weapons ChargesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that defendant DWIGHT ANDERSON, of New Orleans, Louisiana, was sentenced on November 4, 2021 by U.S. District Court Chief Judge Nannette Jolivette Brown to 90 months imprisonment, 3 years supervised release, and a $200 special assessment on Counts Two and Three of a three-count indictment.
Both Counts Two and Three of the indictment charged ANDERSON with being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1) and Title18, United States Code, Section 924(a)(2). As to Count Two, on June 2, 2020, investigators arrested ANDERSON and his co-defendant for being felons in possession of firearms. Law enforcement attempted to initiate a traffic stop on a vehicle being driven by ANDERSON’s co-defendant. ANDERSON was seated in the front passenger seat of the vehicle. The driver of the vehicle refused to stop and fled into the parking lot of a Home Depot located near the intersection of S. Claiborne Ave. and Earhart Blvd in New Orleans, LA. The vehicle proceeded into the gated parking lot, continuing to ignore the police vehicles, and attempted to evade law enforcement. The parking lot has a gate surrounding it and other access points were blocked at the time the vehicle was attempting to evade authorities. Following these discoveries, the occupants exited the vehicle and fled on foot. Two individuals, including ANDERSON, exited the passenger side of the vehicle, one from the front passenger side and one from the rear passenger side. Once the scene was secure, investigators observed several firearms within the immediate area of the vehicle. Investigators observed one rifle outside the driver side of the vehicle and two hands guns outside the passenger side of the vehicle. Additionally, investigators observed ski masks and a pair of gloves on the front passenger floorboard of the vehicle. ANDERSON was located by investigators hiding underneath a house in the 1300 block of Clara Street. He was in possession of a bag which contained another ski mask. As to Count Three, on June 12, 2020, ANDERSON was arrested pursuant to a federal arrest warrant. When investigators apprehended ANDERSON, they observed a firearm protruding from his back pants pocket.
This case was being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigations. The case was prosecuted by Assistant United States Attorney Inga Petrovich of the Violent Crime Unit of the U.S. Attorney’s Office.
New Orleans Man Sentenced on Weapons ChargesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that defendant DWIGHT ANDERSON, of New Orleans, Louisiana, was sentenced on November 4, 2021 by U.S. District Court Chief Judge Nannette Jolivette Brown to 90 months imprisonment, 3 years supervised release, and a $200 special assessment on Counts Two and Three of a three-count indictment.
Both Counts Two and Three of the indictment charged ANDERSON with being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1) and Title18, United States Code, Section 924(a)(2). As to Count Two, on June 2, 2020, investigators arrested ANDERSON and his co-defendant for being felons in possession of firearms. Law enforcement attempted to initiate a traffic stop on a vehicle being driven by ANDERSON’s co-defendant. ANDERSON was seated in the front passenger seat of the vehicle. The driver of the vehicle refused to stop and fled into the parking lot of a Home Depot located near the intersection of S. Claiborne Ave. and Earhart Blvd in New Orleans, LA. The vehicle proceeded into the gated parking lot, continuing to ignore the police vehicles, and attempted to evade law enforcement. The parking lot has a gate surrounding it and other access points were blocked at the time the vehicle was attempting to evade authorities. Following these discoveries, the occupants exited the vehicle and fled on foot. Two individuals, including ANDERSON, exited the passenger side of the vehicle, one from the front passenger side and one from the rear passenger side. Once the scene was secure, investigators observed several firearms within the immediate area of the vehicle. Investigators observed one rifle outside the driver side of the vehicle and two hands guns outside the passenger side of the vehicle. Additionally, investigators observed ski masks and a pair of gloves on the front passenger floorboard of the vehicle. ANDERSON was located by investigators hiding underneath a house in the 1300 block of Clara Street. He was in possession of a bag which contained another ski mask. As to Count Three, on June 12, 2020, ANDERSON was arrested pursuant to a federal arrest warrant. When investigators apprehended ANDERSON, they observed a firearm protruding from his back pants pocket.
This case was being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigations. The case was prosecuted by Assistant United States Attorney Inga Petrovich of the Violent Crime Unit of the U.S. Attorney’s Office.
New Orleans Man Pleads Guilty to Federal Firearms OffenseRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today that CURTIS EMILIEN, age 26, a resident of New Orleans, Louisiana, pleaded guilty on November 4, 2021 to possession of a firearm by a convicted felon in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). EMILIEN is facing up to ten years in prison, up to three years of supervised release, a maximum fine of $250,000, and a mandatory special assessment fee of $100.
According to court records, EMILIEN and another individual were in a conflict which escalated to the use of firearms. Officers responded to a report of gunshots on August 25, 2019 in the Lafitte Housing Development and found multiple spent shell casings. EMILIEN is prohibited from possessing firearms due to his criminal history.
The Honorable U.S. District Judge Susie Morgan will sentence EMILIEN for his current offense on Tuesday, February 8. 2022
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Evans praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and New Orleans Police Department in investigating this matter. Assistant United States Attorney Charles D. Strauss is in charge of the prosecution.
Matthew M. Graves Takes Office as United States AttorneyRead the Press Release
WASHINGTON – Matthew M. Graves took office today as United States Attorney for the District of Columbia. He succeeds Channing D. Phillips, who had been serving as Acting U.S. Attorney since March 3, 2021.
President Biden nominated Mr. Graves on July 26, 2021, to serve as U.S. Attorney, and the nomination was confirmed on Oct. 28, 2021, by the Senate. Mr. Graves was sworn into office by the Honorable Chief Judge Beryl A. Howell this afternoon in a ceremony at the U.S. District Court for the District of Columbia. Attorney General Merrick B. Garland made remarks at the ceremony, which was attended by numerous judges, and other dignitaries.
Mr. Graves, 45, is returning to the nation’s largest U.S. Attorney’s Office, where he worked for nearly a decade before going into private practice in 2016 as a litigation and compliance partner in DLA Piper’s Washington, D.C., office.
“Having lived in the District of Columbia for nearly two decades, it is a distinct honor to return to the United States Attorney’s Office and to, once again, have the opportunity to serve my fellow community members and to work with this incredibly talented team of public servants,” said Mr. Graves.
In his previous time with the U.S. Attorney’s Office, Mr. Graves supervised and prosecuted a wide variety of cases as an Assistant U.S. Attorney, and later as Chief of the Fraud and Public Corruption Section. He handled numerous high-profile matters, including successful prosecutions of public officials, international business organizations, government contractors, and defendants engaged in Ponzi schemes and other large-scale fraud. Additionally, he prosecuted scores of cases involving shootings, robberies, kidnappings, and other violent crimes.
Mr. Graves graduated from Washington and Lee University and obtained his juris doctorate from Yale Law School in 2001. He clerked on the U.S. District Court for the District of Columbia for the Honorable Richard W. Roberts from 2001 to 2002 and was an associate at WilmerHale from 2002 to 2007, prior to joining the U.S. Attorney’s Office in 2007.
As he took on his new responsibilities today, U.S. Attorney Graves thanked Mr. Phillips for his decades of service with the U.S. Attorney’s Office and the Department of Justice, including commending him for his exceptional leadership over the past eight months.
Mableton pharmacist found guilty of illegally dispensing and distributing controlled substancesRead the Press Release
ATLANTA - Thomas Ukoshovbera A. Gbenedio has been convicted by a federal jury of illegally dispensing and distributing controlled substances from his pharmacy.
“As a pharmacist, Gbenedio was trusted to appropriately dispense controlled substances,” said Acting U.S. Attorney Kurt R. Erskine. “His behavior fed into the continuing problem of addiction to powerful prescription opioids, which, unfortunately, continues to take a daily toll on many members of our community.”
“Removing and ultimately eliminating healthcare providers who unlawfully dispense pharmaceutical products for non-medical reasons is an important part of DEA’s mission,” said Special Agent in Charge of the DEA Atlanta Field Division Robert J. Murphy. “This pharmacist not only distributed copious quantities of opiate-based pills to scores of drug-seeking patients but collected large sums of money from this illegal practice. Gbenedio will no longer be able to commit such unlawful acts due to the hard work and dedication put forth by our federal, state and local law enforcement counterparts who made this investigation a success.”According to Acting U.S. Attorney Erskine, the charges and other information presented in court: Gbenedio was a licensed pharmacist who owned Better Way Pharmacy in Mableton, Georgia. An investigation into Gbenedio began after Georgia Drug & Narcotics Agency (GDNA) agents conducted a routine inspection at Better Way and noticed that several of Gbenedio's customers were driving long distances - including from Kentucky and Alabama - to get prescriptions filled at Better Way. Several of the prescriptions were for large quantities of highly addictive opioids, like oxycodone, and many of the prescriptions were purportedly from the same physician.
The investigation later revealed that the prescriptions being filled by Gbenedio between 2014 and 2016 were not real prescriptions; they were fake, forged, fraudulent, or otherwise illegal. Gbenedio charged his customers up to $1,000 to fill the illegal prescriptions for controlled substances.
After a two-week jury trial, Gbenedio was convicted of 70 counts of illegally dispensing and distributing controlled substances and one count of refusing an administrative inspection warrant.
Once the jury announced its verdict, Gbenedio was ordered to report to Probation for location monitoring. Instead of reporting, Gbenedio attempted to flee. He was apprehended at the Dallas-Fort Worth airport with the assistance of U.S. Marshals.
Sentencing for Thomas Ukoshovbera A. Gbenedio, 71, of Mableton, Georgia, is scheduled for February 7, 2022, at 10:00 a.m. before U.S. District Judge Thomas W. Thrash.
This case is being investigated by the Drug Enforcement Administration.
Assistant U.S. Attorneys Angela Adams and Erin N. Spritzer are prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
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.
Luzerne County Man Charged with Straw Purchase of A FirearmRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on November 2, 2021, Dashea Simmons, age 25, of Pittston, Pennsylvania, was charged by a federal grand jury with making false statements in connection with the purchase of a firearm from a federally licensed firearms dealer.
According to Acting United States Attorney Bruce D. Brandler, the indictment charges Simmons with providing false information regarding the purchase of a firearm from Dunkelberger’s Sports Outfitter, in Stroudsburg, Monroe County, on June 24, 2020.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Newark, New Jersey, Police Department. Assistant U.S. Attorney Robert J. O’Hara is prosecuting the case.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.”
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under federal law, the maximum penalty is up to ten years in prison, a term of supervised release 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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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.