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19 October 2021
Milton Woman Sentenced for Role in Multimillion-Dollar Marijuana EnterpriseRead the Press Release
BOSTON – A Milton woman was sentenced today in federal court in Worcester for her role in a multimillion-dollar marijuana delivery service.
Deana Martin, 53, was sentenced by U.S. District Judge Timothy S. Hillman to four years in prison and three years of supervised release. Martin was also ordered to pay restitution of $528,146. On May 4, 2021, Martin pleaded guilty to one count of tax evasion, one count of conspiracy to distribute marijuana, one count of possession with intent to distribute marijuana and three counts of money laundering.
Martin and co-defendant Tatiana Fridkes were indicted in May 2019 in connection with their management of Northern Herb, a marijuana delivery service that operated in Massachusetts from 2015 to 2018. On Sept. 10, 2021, Fridkes was sentenced by Judge Hillman to time served and two years of supervised release after previously pleading guilty to conspiracy to distribute marijuana. Fridkes was also ordered to pay restitution of $82,000.
Martin owned and managed Northern Herb, which operated a website offering marijuana products for sale including raw marijuana, pre-rolled marijuana cigarettes and marijuana edibles. While Northern Herb purported to provide medical marijuana, it did not require a customer to provide proof of a medical marijuana card. Furthermore, Northern Herb delivered marijuana to unattended locations (such as a front door or hallway) where unknown third parties could have accessed it. Northern Herb used locations in Canton, Milton, Foxborough and Hyde Park to store and distribute marijuana, and employed at least 25 workers.
From May 2016 through July 2018, Northern Herb’s revenue exceeded $14 million. Northern Herb did not withhold or pay taxes on its millions of dollars in marijuana sales and did not pay taxes on its profits. Much of the cash collected by Northern Herb from customers was used to pay its suppliers and its workers. In paying cash wages, Northern Herb did not withhold, remit, or pay any payroll or income taxes. Northern Herb did not report worker wages to the IRS via Form 941, nor did it issue W-2s or 1099s to its workers.
Acting United States Attorney Nathaniel R. Mendell; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The United States Postal Inspection Service also provided valuable assistance with this investigation. Assistant U.S. Attorneys William Abely, Chief of Mendell’s Criminal Division, John Mulcahy of Mendell’s Narcotics & Money Laundering Unit and Assistant Chief Kathleen Barry of the Justice Department’s Tax Division prosecuted the case.
Military Supplier to Pay $850,000 to Settle Breach of Contract and False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – A supplier of vehicle parts to the military has agreed to pay $850,000 to resolve allegations that it breached contracts with the United States and violated the False Claims Act by selling items that were manufactured in prohibited countries, Acting U.S. Attorney Rachael A. Honig announced today.
The settlement resolves allegations that from 2012 to 2019 Brighton Cromwell LLC knowingly sold items to the Department of Defense’s Defense Logistics Agency that it failed to ascertain and verify were manufactured by or for its suppliers in non-compliant countries under either the Buy American Act or the Trade Agreements Act, in violation of the Defense Federal Acquisition Regulation Supplement. The United States also alleged that Brighton Cromwell was unjustly enriched and breached its contracts with the United States because it sold items to the Defense Logistics Agency that were manufactured or assembled in prohibited countries.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty; and special agents of the Naval Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Michael T. Wiest, with the investigation leading to the agreement.
The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark, along with Senior Trial Counsel Art Coulter and Trial Attorney Eric Schmelzer of the Civil Frauds Section of the Civil Division in Washington, D.C.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Massachusetts Woman Sentenced to Prison on Tax and Drug Charges Arising from Multimillion-Dollar Black Market Marijuana EnterpriseRead the Press Release
A Massachusetts woman was sentenced today to four years in prison for tax evasion, conspiracy to distribute and to possess with intent to distribute 50 kilograms or more of marijuana, possession with intent to distribute marijuana, and money laundering.
According to court documents, Deana Martin, of Milton, controlled Northern Herb, a black-market marijuana delivery service that operated in Massachusetts from 2015 to 2018. While Northern Herb purported to sell medical marijuana, it did not require a customer to provide proof of a medical marijuana card. Furthermore, Northern Herb would deliver marijuana to unattended locations, such as a front door or car, where unknown third parties might have access to the package. Northern Herb used locations in Canton, Milton, Foxborough, and Hyde Park to store and distribute marijuana, and employed at least 25 workers.
From May 2016 through July 2018, Northern Herb had total revenue exceeding $14 million. Northern Herb did not withhold or pay employment taxes. Martin evaded employment taxes that Northern Herb owed by operating in cash and using nominee entities to manage Northern Herb’s finances. Further, Northern Herb did not file with the IRS required reports documenting the payments made to Northern Herb’s employees and independent contractors. Martin caused a tax loss of more than $500,000.
In addition to the term of imprisonment, U.S. District Judge Timothy S. Hillman ordered Martin to serve three years of supervised release and to pay approximately $528,146.66 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Nathaniel R. Mendell for the District of Massachusetts made the announcement.
The Drug Enforcement Administration and IRS Criminal Investigation investigated the case.
Assistant Chief Kathleen M. Barry of the Justice Department’s Tax Division and Assistant U.S. Attorneys William Abely and John Mulcahy of the USAO prosecuted the case.
Maryland Nuclear Engineer and his wife indicted on national security chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA - Jonathan and Diana Toebbe, both of Annapolis, Maryland, were indicted today by a Grand Jury in Elkins, West Virginia, on national security charges, United States Attorney William J. Ihlenfeld, II announced.
Jonathan, 42, and Diana 45, are each charged with one count of “Conspiracy to Communicate Restricted Data” and two counts of “Communication of Restricted Data.” The charges come after a complaint was filed and the Toebbes were arrested on October 9, 2021.
For almost a year, Jonathan Toebbe, aided by his wife, Diana, sold information known as Restricted Data concerning the design of nuclear-powered warships to a person they believed was a representative of a foreign power. In actuality, that person was an undercover FBI agent. The Toebbes had previously been charged in a criminal complaint alleging violations of the Atomic Energy Act.
Jonathan Toebbe is an employee of the Department of the Navy who served as a nuclear engineer and was assigned to the Naval Nuclear Propulsion Program, also known as Naval Reactors. He held an active national security clearance through the U.S. Department of Defense, giving him access to Restricted Data.
Toebbe worked with and had access to information concerning naval nuclear propulsion including information related to military sensitive design elements, operating parameters, and performance characteristics of the reactors for nuclear powered warships.
The indictment alleges that on April 1, 2020, Jonathan Toebbe sent a package to a foreign government, listing a return address in Pittsburgh, Pennsylvania, containing a sample of Restricted Data and instructions for establishing a covert relationship to purchase additional Restricted Data. The indictment also alleges that, thereafter, Toebbe began corresponding via encrypted email with an individual whom he believed to be a representative of the foreign government. The individual was really an undercover FBI agent. Jonathan Toebbe continued this correspondence for several months, which led to an agreement to sell Restricted Data in exchange for thousands of dollars in cryptocurrency.
On June 8, 2021, the undercover agent sent $10,000 in cryptocurrency to Jonathan Toebbe as “good faith” payment. Shortly afterwards, on June 26, 2021, Jonathan and Diana Toebbe traveled to a location in West Virginia. There, with Diana Toebbe acting as a lookout, Jonathan Toebbe placed an SD card concealed within half a peanut butter sandwich at a pre-arranged “dead drop” location. After retrieving the SD card, the undercover agent sent Jonathan Toebbe a $20,000 cryptocurrency payment. In return, Jonathan Toebbe emailed the undercover agent a decryption key for the SD Card. A review of the SD card revealed that it contained Restricted Data related to submarine nuclear reactors. On August 28, 2021, Jonathan Toebbe made another “dead drop” of an SD card in eastern Virginia, this time concealing the card in a chewing gum package. After making a payment to Toebbe of $70,000 in cryptocurrency, the FBI received a decryption key for the card. It, too, contained Restricted Data related to submarine nuclear reactors. The FBI and the Naval Criminal Investigative Service (NCIS) arrested Jonathan and Diana Toebbe on October 9, after he placed yet another SD card at a pre-arranged “dead drop” at a second location in West Virginia.
Trial Attorneys Matthew J. McKenzie and S. Derek Shugert, Counterintelligence and Export Control Section, U.S. Department of Justice, National Security Division, Assistant U.S. Attorneys Jarod J. Douglas and Lara Omps-Botteicher, Northern District of West Virginia, and Special Assistant U.S. Attorney Jessica Lieber Smolar, Western District of Pennsylvania, are prosecuting the case on behalf of the government. The FBI and the NCIS investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Marshall County man admits to fraud chargeRead the Press Release
WHEELING, WEST VIRGINIA – Francis Tucker, of Moundsville, West Virginia, has admitted to a fraud charge, United States Attorney William J. Ihlenfeld, II announced.
Tucker, 67, pleaded guilty today to one count of “Structuring Financial Transactions to Evade Reporting Requirements.” Tucker admitted to conducting withdrawals of proceeds from the sale of a property in Florida in a manner and, with the intent to avoid bank reporting requirements regarding certain cash transactions. This crime occurred in 2016.
Tucker faces up five years of incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Danae DeMasi-Lemon and Jarod J. Douglas are prosecuting the case on behalf of the government. The FBI investigated.
U.S. Magistrate Judge James P. Mazzone presided.
Liberian National Pleads Guilty to $23 Million COVID-19 Relief FraudRead the Press Release
A Liberian national who orchestrated a fraudulent scheme to secure more than $23 million in forgivable Paycheck Protection Program (PPP) loans pleaded guilty today to a federal financial crime, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Steven Jalloul, a 43-year-old tax consultant from the Dallas area, was first charged via criminal complaint in September 2020 and indicted later that month. He pleaded guilty on Tuesday to a superseding information charging him with one count of engaging in monetary transactions using property derived from unlawful activity.
“The Paycheck Protection Program was designed to help hardworking businesspeople keep their companies afloat during the pandemic – not to line the pockets of unscrupulous accountants,” said Acting U.S. Attorney Chad Meacham. “The Justice Department will prosecute anyone who attempts to exploit pandemic-era financial programs. There are countless businesses ravaged by COVID-19 that deserved this money; Mr. Jalloul did not.”
According to plea papers, Mr. Jalloul admitted he defrauded lenders participating in the Paycheck Protection Program — a measure authorized by Congress in the early days of the pandemic to award forgivable loans to small business impacted by COVID-19 — while awaiting sentencing in a separate tax fraud case.
In court documents, he admitted that he submitted roughly 170 falsified PPP loan applications to lenders (including through a fintech company) seeking more than $23 million on behalf of over 160 clients of his tax preparation business, Royalty Tax & Financial Services LLC.
Mr. Jalloul admitted he inflated clients’ employee rosters and monthly payroll expenses in order to increase the amount of PPP funds for which their businesses would be eligible. He generally charged clients a 2 to 20 percent commission on the PPP loans they received and even listed his ex-wife as Royalty Tax’s authorized representative, without her consent, when seeking an inflated PPP loan for his own business.
In total, 97 false PPP loan applications were ultimately approved, and Mr. Jalloul’s clients were awarded more than $12 million in PPP money. Those clients paid him at least $972,114 in fees.
Mr. Jalloul now faces up to 10 years in federal prison for the PPP fraud. His sentencing date has not yet been set.
He is already behind bars at FCI-Seagoville, having pleaded guilty to tax fraud in the separate case in January 2020; in that case, he was sentenced to six years in federal prison.
The Dallas Field Offices of the Federal Deposit Insurance Corporation, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Fabio Leonardi and Marty Basu are prosecuting the case. Assistant U.S. Attorney Dimitri Rocha is handling the asset-forfeiture component of the case.
The Paycheck Protection Program was authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted on March 29, 2020, to provide emergency financial assistance to Americans suffering economic hardship due to the COVID-19 pandemic. The PPP initially provided for up to $349 billion in forgivable loans to small businesses for payroll costs and certain other expenses, including rent; in April 2020, Congress authorized more than $300 billion in additional PPP funding. The PPP allows qualifying small businesses to receive loans with a maturity of two years and an interest rate of 1 percent. In addition, the PPP allows both the interest and principal on the loans to be forgiven if the business spends the money on qualifying expenses within a designated period of time.
Justice, Labor Departments Reach Settlements with Facebook Resolving Claims of Discrimination Against U.S. Workers and Potential Regulatory Recruitment ViolationsRead the Press Release
The U.S. Department of Justice and the U.S. Department of Labor today announced separate settlement agreements with Facebook regarding its use of the permanent labor certification program (PERM). The Justice Department’s settlement resolves its claims that Facebook routinely refused to recruit, consider or hire U.S. workers, a group that includes U.S. citizens, U.S. nationals, asylees, refugees and lawful permanent residents, for positions it had reserved for temporary visa holders in connection with the PERM process. Additionally, the Labor Department’s settlement resolves issues it separately identified through audit examinations of Facebook’s recruitment activities related to its PERM applications filed with the Employment and Training Administration’s Office of Foreign Labor Certification (OFLC).
In December 2020, the Justice Department filed a lawsuit against Facebook, alleging that from at least Jan. 1, 2018, until at least Sept. 18, 2019, Facebook routinely reserved jobs for temporary visa holders through the PERM process. Specifically, the lawsuit alleged that, in contrast to its standard recruitment practices, Facebook used recruiting methods designed to deter U.S. workers from applying to certain positions, such as requiring applications to be submitted by mail only; refused to consider U.S. workers who applied to the positions; and hired only temporary visa holders. According to the lawsuit, Facebook’s hiring process for these positions intentionally discriminated against U.S. workers because of their citizenship or immigration status, in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA). The INA generally prohibits employers from discriminating against workers because of their citizenship or immigration status.
In early 2021, the Labor Department initiated audit examinations of Facebook’s pending PERM applications to determine compliance with regulatory requirements. As a result of these audits, OFLC identified potential regulatory recruitment violations and sought additional information from Facebook in an effort to confirm that Facebook followed all applicable regulatory requirements regarding the posting and advertisement requirements for these positions.
Under the DOJ settlement, Facebook will pay a civil penalty of $4.75 million to the United States, pay up to $9.5 million to eligible victims of Facebook’s alleged discrimination, and train its employees on the anti-discrimination requirements of the INA. In addition, Facebook will be required to conduct more expansive advertising and recruitment for its job opportunities for all PERM positions, accept electronic resumes or applications from all U.S. workers who apply, and take other steps to ensure that its recruitment for PERM positions closely matches its standard recruitment practices. Today’s civil penalty and backpay fund represent the largest fine and monetary award that the Division ever has recovered in the 35-year history of the INA’s anti-discrimination provision.
“Facebook is not above the law, and must comply with our nation’s federal civil rights laws, which prohibit discriminatory recruitment and hiring practices,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Companies cannot set aside certain positions for temporary visa holders because of their citizenship or immigration status. This settlement reflects the Civil Rights Division’s commitment to holding employers accountable and eradicating discriminatory employment practices.”
Under the DOL OFLC settlement, Facebook will conduct additional notice and recruitment for U.S. workers and will be subject to ongoing audits to ensure its compliance with applicable regulations.
“This settlement is an important step forward and means that U.S. workers will have a fair chance to learn about and apply for Facebook’s job opportunities,” said Seema Nanda, Solicitor at the Department of Labor. “No matter an employer’s size or reach, the Department of Labor is committed to vigorously enforcing the law.”
The Department of Justice, Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship or immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
Applicants or employees who believe they were discriminated against based on their citizenship, immigration status or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, can file a charge. The public also can contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites.
The Department of Labor, Employment and Training Administration’s Office of Foreign Labor Certification (OFLC) provides national leadership and policy guidance to carry out the responsibilities of the Secretary of Labor under the INA, as amended, concerning the admission of foreign workers to the United States for employment.
A permanent labor certification allows an employer to hire a foreign worker to work permanently in the United States. In most instances, before the U.S. employer can submit an immigration petition to the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS), the employer must obtain a certified labor certification application from OFLC. The Secretary of Labor must certify to the USCIS that there are not sufficient U.S. workers able, willing, qualified and available to accept the job opportunity in the area of intended employment and that employment of the foreign worker will not adversely affect the wages and working conditions of similarly employed U.S. workers.
Suspected violations relating to the PERM labor certification process can be promptly referred to OFLC at [email protected].
Jury convicts Lodge Grass man of sexually abusing children on Northern Cheyenne, Crow Indian reservationsRead the Press Release
BILLINGS — A jury today convicted a Lodge Grass man of sexually abusing two children in the 1990s on the Northern Cheyenne and the Crow Indian reservations, Acting U.S. Attorney Leif M. Johnson said.
A jury found Donald Ray Gardner, 58, guilty on two counts of aggravated sexual abuse of a child and two counts of abusive sexual contact. The two-day trial began on Monday, Oct. 18.
Gardner faces a maximum of life in prison, a $250,000 fine and five years of supervised release on each count.
U.S. District Judge Susan P. Watters presided. Judge Watters set sentencing for March 2, 2022 and ordered Gardner detained pending further proceedings.
“A jury held Gardner accountable for sexually abusing children over a period of years. Children must be protected from sexual predators, and we will prosecute offenders to the full extent of the law. I want to thank Assistant U.S. Attorney Lori Harper Suek and the FBI for investigating and prosecuting the case,” Acting U.S. Attorney Johnson said.
In court documents and in evidence presented at trial, the government alleged that Gardner engaged in a sexual act and in sexual contact with a victim, identified as Jane Doe 1, in 1994 in Lame Deer, on the Northern Cheyenne Reservation. The government further alleged Gardner engaged in a sexual act and in sexual contact with another victim, identified as Jane Doe 2, in the Crow Agency area on the Crow Reservation in 1996 and in 1998. Both victims were under the age of 12 at the time.
Assistant U.S. Attorney Lori Harper Suek is prosecuting the case, which was investigated by the FBI.
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Jury Convicts Tulsa Man for the Assault and Attempted Kidnapping of an Intimate PartnerRead the Press Release
A federal jury today convicted a Tulsa man who assaulted and attempted to kidnap his wife then called her from jail trying to convince her to lie to authorities about the incident, announced Acting U.S. Attorney Clint Johnson.
Derek Lee Lovell, 37, was found guilty of attempted kidnapping in Indian Country; assault with intent to commit a felony; and attempting to influence, delay, and prevent testimony through corrupt persuasion.
“There is no excuse for domestic violence, and this office will hold perpetrators accountable for their abuse. Mr. Lovell is no exception,” said Acting U.S. Attorney Clint Johnson. “Three witnesses observed Lovell assault his spouse and took action. They are to be commended for intervening and preventing a kidnapping.”
On Jan. 28, 2021, the Tulsa Police Department responded to a Burger King near 1100 S. Harvard Ave. and 3242 E. 11th Street. Callers provided information that a man was assaulting a woman near the establishment. Callers further reported the man had a knife and fled in a silver Chrysler sedan.
Responding officers made contact with the female victim who stated that she had fled from her spouse as he chased her down the sidewalk. He eventually pinned her against a nearby concrete wall then attempted to drag her back to a vehicle. Officers observed the victim was visibly shaken. She was also concerned about cooperating with officers due to fear of reprisal.
During the assault, a driver pulled over and attempted to help the victim. Lovell then pulled out a pocketknife, approached the vehicle, stabbed the front right tire and shouted an expletive. Two other witnesses, along with camera footage, corroborated the driver’s statement to officers. The witnesses were also able to describe Lovell’s vehicle and license plate.
On Jan. 29, 2021, Tulsa Police officers executed a traffic stop on Lovell’s vehicle while on South Lewis Avenue and took the defendant into custody.
Lovell is a citizen of the Choctaw Nation, and the crime was committed within the Muscogee Nation reservation.
Following closing statements, the jury deliberated four hours then returned guilty verdicts on all counts. Lovell’s trial lasted two days.
The FBI and Tulsa Police Department are the investigative agencies. Assistant U.S. Attorneys Julie A. Childress and Edward Snow are prosecuting the case.
Jury Convicts Missouri Man for using Online Dating App to Lure a Teen Girl to have Sex and Produce Child PornographyRead the Press Release
BENTON, Ill. – A Jefferson County, Missouri, man is facing at least 15 years in prison after a federal jury found him guilty Monday of arranging to have sexual activity with a minor, traveling to pick her up in Belleville, Illinois, and producing sexually explicit images of her.
According to court documents and evidence presented at trial, Earl G. Rice, Jr., 63, chatted online via a dating application with a teenage girl. Rice quickly indicated his interest in traveling to Belleville, Illinois, from Dittmer, Missouri, to meet the victim and engage in sexual acts with her. On Valentine’s Day of 2018, Rice arrived with alcohol, condoms, and a candle to take the victim to a nearby motel. Rice engaged in sexual acts with the victim and produced sexually explicit images of the teen girl on his cell phone. Belleville Police Department apprehended Rice at the scene of the crime on February 15, 2018, after he was described driving a “red hooptie”.
Graphic images taken by Rice of the minor victim were shown to the jury during the five-day trial held at the federal courthouse in Benton, Illinois. Jurors also saw surveillance footage from the motel and heard testimony about DNA evidence connecting Rice to the crimes.
Sentencing has been scheduled for January 27, 2022, in front of United States District Judge Staci
M. Yandle. Enticement of a Minor is punishable by at least 10 years in prison and up to life; Travel with Intent to Engage in Illicit Sexual Conduct is punishable up to 30 years in prison; and
Sexual Exploitation of a Minor (Production of Child Pornography) is punishable by at least 15 years in prison and up to 30 years.Belleville Police Department conducted the investigation, along with support from the
Illinois State Police, and FBI-Springfield and Saint Louis Divisions.The case was prosecuted by Assistant U.S. Attorneys Ali Burns and Karelia Rajagopal.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation
and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Judge sentences leader of St. Louis County drug trafficking organizationRead the Press Release
ST. LOUIS – Ronald Gales, 54, of St. Louis, Missouri, appeared before United States District Court Judge John A. Ross and was sentenced to 12 years in federal prison today. Gales previously pleaded guilty to conspiracy to distribute cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, and being a felon in possession of a firearm.
Pursuant to the plea agreement, beginning in 2018, investigators with the Federal Bureau of Investigation and St. Louis County Police Department began an investigation into Gales, who was the principal supplier of a drug trafficking organization supplying cocaine to other distributors operating in the St. Louis area.
During the investigation, law enforcement officers executed search warrants at various residences of individuals supplied by Gales, where they recovered distributable amounts of cocaine and crack cocaine. Investigators also conducted controlled purchases of cocaine from Gales and conducted surveillance of Gales’ operations before ultimately executing a federal search warrant at Gales’ residence in October 2019. Investigators found two .40 caliber handguns, $46,000 in cash, and drug trafficking paraphernalia, as well as distribution quantities of cocaine and crack cocaine.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The Federal Bureau of Investigation and St. Louis County Police Department investigated the case.
Jefferson County Man Sentenced to Nearly Two Decades in Federal Prison for Methamphetamine TraffickingRead the Press Release
BEAUMONT, Texas - A Port Arthur man has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Michael James Shaw, 40, pleaded guilty on June 30, 2021 to possession with intent to distribute methamphetamine and was sentenced to 235 months in federal prison today by U.S. District Judge Marcia Crone.
“Methamphetamine remains one of the greatest threats to the health and safety of East Texans,” said Acting U.S. Attorney Nicholas J. Ganjei. “The sentence in this case is directly proportional to the amount of methamphetamine Mr. Shaw intended to traffic, and thus proportional to the harm he was willing to inflict upon the Jefferson County community.”
According to information presented in court, Shaw was arrested on Oct. 6, 2020 after Jefferson County Narcotics Task Force officers executed a search warrant at Shaw’s residence and found 454 grams of pure methamphetamine. The drugs were hidden inside an upholstered chair in Shaw’s living room. The officers also found four firearms locked in a safe inside the master bedroom.
Shaw was indicted by a federal grand jury on April 7, 2021 and charged with the drug trafficking violations.
This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney John B. Ross.
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Jackson Man Sentenced to 3 1/2 Years in Prison for Drug TraffickingRead the Press Release
Jackson, Miss. – A Jackson man was sentenced to 42 months in federal prison for possession with intent to distribute cocaine, announced Acting U.S. Attorney Darren LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi.
According to court records, in December 2019, Johnathan Ledbetter, 34, and a co-defendant, negotiated multiple sales of cocaine in Jackson. The case is the result of an extensive investigation, dubbed “Hailstorm”, targeting illegal drug trafficking in the Jackson area.
This Operation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The Federal Bureau of Investigation, the Mississippi Bureau of Narcotics and the Jackson Police Department investigated the case.
The case was prosecuted by Assistant United States Attorney Keesha Middleton.
Jackson Man Sentenced to 17 Years in Federal Prison for Possessing a Firearm as an Armed Career CriminalRead the Press Release
Jackson, Miss – A Jackson man was sentenced today to serve 17 years in federal prison for possessing a firearm as an armed career criminal, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi.
According to court documents, on September 3, 2017, Darius D. Wright, 28, was found by a Jackson police officer sitting in a car behind a Dollar General with a ski mask, ammunition, a bandana, and a shotgun. Wright has two previous felony convictions for house burglary in Hinds County Circuit Court, and one felony conviction for armed robbery in Marion County Circuit Court.
Wright pled guilty on October 21, 2019, to possessing a firearm as a convicted felon.
This case was investigated by the Federal Bureau of Investigation and the Jackson Police Department.
Assistant U.S. Attorney Bert Carraway prosecuted the case.
This case was 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.
Indianapolis Man Sentenced for Role in Jennings County Robbery and MurderRead the Press Release
NEW ALBANY – An Indianapolis man was sentenced to 30 years in prison for his role in the murder and robbery of Scott D. Maxie, a gun store owner near North Vernon, Indiana.
In September 2014, DeJuan Andre Worthen, 30, along with Darryl Worthen and Darion Harris traveled from Indianapolis to North Vernon to see what inventory was inside the Muscatatuck Outdoors Gun Shop. They drove back to Indianapolis and made plans to rob the owner, Scott Maxie, the following day.
The next day the group returned to the gun store. Once inside, one of the defendants disconnected the security camera and confronted Mr. Maxie. During the robbery, Darryl Worthen shot and killed Maxie with a semiautomatic handgun. While Maxie lay dying, the defendants stole 45 firearms from the gun shop and returned to Indianapolis. Once home with the guns, the defendants sold and distributed many of the firearms and kept several for themselves.
“This type of senseless violence is something no family or community should have to face,” said Acting U.S. Attorney John E. Childress. “This sentence should send a loud and clear message that gun violence cannot and will not be tolerated in the Southern District of Indiana. Those committing such violent acts will be held accountable for their actions.”
“Violent crime will not be tolerated in this community,” said Jennings County Prosecuting Attorney Brian Belding. “The individuals responsible should be punished to the fullest extent of the law. The decision to have these individuals charged federally was made after thoughtful consultation with the family members. My goal was that the individuals responsible for this heinous act serve the maximum sentence under the law. This was accomplished under the federal sentencing guidelines. Hopefully, now that all the defendants involved have been sentenced for their role in Mr. Maxie’s murder, the family can have some closure. All law enforcement agencies involved did an excellent job coordinating the investigation to bring those responsible to justice. My heart goes out to Mr. Maxie’s family, friends, and loved ones.”
DeJuan Worthen’s co-defendants, Darryl Worthen, 32, Indianapolis, was sentenced by U. S. District Judge Sarah Evans Barker to 60 years imprisonment in November of 2015, while Darion Harris, 28, Indianapolis, was sentenced to 30 years imprisonment on July 23, 2019.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Indiana State Police, the Indianapolis Metropolitan Police Department, the Jennings County Sheriff’s Office, and the Jennings County Prosecutors Office.
Assistant U.S. Attorneys Barry D. Glickman and William L. McCoskey prosecuted the case and said that Worthen must also serve three years of supervised release after his sentence.
Helena woman admits trafficking methamphetamine from Las Vegas into MontanaRead the Press Release
GREAT FALLS – A Helena woman accused of helping to bring pounds of methamphetamine from Las Vegas, Nevada, into Montana admitted to a drug trafficking crime today, Acting U.S. Attorney Leif M. Johnson said.
Rhonda Jeanette Lapier, also known as Rhonda Trench, 49, pleaded guilty to possession with intent to distribute meth. Lapier faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris set sentencing for Feb. 16, 2022. Lapier was detained pending further proceedings.
In court documents filed in the case, the government alleged that in May, Russell Country Drug Task Force officers executed a search warrant on a Great Falls residence, recovered meth and learned that the source of supply was traveling to Great Falls with meth. The investigation led to Lapier’s residence, where she and the source of supply were suspected of trafficking meth together. Officers ultimately stopped a vehicle being driven by the source of supply and found about 3.6 pounds of meth in the trunk. Officers also obtained a warrant to search Lapier’s residence. When told that officers were looking for illegal contraband in the residence, Lapier volunteered, “We’ll just make this easy, there is something in that house. But it belongs to me and I’ll show you where it’s at.” Officers located three, one-pound bags of meth and $6,132 in a bedroom where Lapier had been staying with another person. Individuals told law enforcement that several people, including Lapier, had gone to Las Vegas to pick up meth, had returned with six pounds and had dropped some of it off at Lapier’s residence. Six pounds of meth is the equivalent of 21,744 doses.
Assistant U.S. Attorney Ethan R. Plaut is prosecuting the case, which was investigated by the Russell Country Drug Task Force, the Missouri River Drug Task Force, FBI, Great Falls Police Department, Cascade County Sheriff’s Office and Lewis & Clark County Sheriff’s Office.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Hardy and Grant County residents indicted on drug chargesRead the Press Release
ELKINS, WEST VIRGINIA – Scott Allen Greenwalt, of Moorefield, West Virginia, and Tonda Marie Hixenbaugh, of Petersburg, West Virginia, were indicted today on drug charges, United States Attorney William J. Ihlenfeld, II announced.
Greenwalt, 48, and Hixenbaugh, 30, were each indicted on one count of “Conspiracy to Distribute Methamphetamine” and one count of “Possession with Intent to Distribute Methamphetamine.” Greenwalt was also indicted on three counts of “Distribution of Methamphetamine” and one count of “Unlawful Possession of a Firearm.” Greenwalt and Hixenbaugh are accused of working together to distribute more than five grams of methamphetamine, also known as “crystal meth” and “ice,” in the spring of 2021 in Hardy County and elsewhere. Greenwalt, a person prohibited from having a firearm because of prior felony convictions, is accused of having a 9mm pistol in April 2021 in Hardy County.
Greenwalt and Hixenbaugh each face at least five years and up to 40 years of incarceration and a fine of up to $5,000,000 for each of the conspiracy and possession with intent charges. Greenwalt also is facing up to 20 years of incarceration and a fine of up to $1,000,000 for each of the distribution charges and faces up to 10 years of incarceration and a fine of up to $250,000 for the firearms charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Potomac Highlands Drug Task Force, a HIDTA-funded initiative, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Fresno Woman Indicted for Bank Fraud and Identity Theft in Year-Long SchemeRead the Press Release
FRESNO, Calif. — An indictment was unsealed today following the arrest of Bobbi Jo Heiss, 34, of Fresno, charging her with bank fraud and aggravated identity theft, Acting U.S. Attorney Phillip A. Talbert announced.
A federal grand jury returned a 10-count indictment on October 14.
According to court documents, between August 2020 and September 2021, Heiss engaged in a scheme to steal debit cards, checks, identity documents, and banking information in order to make fraudulent purchases, cash checks, and open unauthorized lines of credit. It is alleged that caused at least $250,000 in actual and attempted loss during that year-long period.
This case is the product of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Fresno County Sheriff’s Office - Elder Abuse Unit. Assistant U.S. Attorney Laura D. Withers is prosecuting the case.
If convicted of bank fraud, Heiss faces a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted of the aggravated identity theft, Heiss faces a mandatory, consecutive sentence of two years in prison and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Mexican Federal Police Commander Pleads Guilty to Drug-Trafficking ConspiracyRead the Press Release
Earlier today in federal court in Brooklyn, Ivan Reyes Arzate, a former Mexican Federal Police Officer and Commander of the Mexican Federal Police’s Sensitive Investigative Unit (“SIU”), pleaded guilty to cocaine trafficking conspiracy. Reyes Arzate received a bribe in exchange for agreeing to assist the El Seguimiento 39 drug cartel ship cocaine from Mexico to the United States. The El Seguimiento 39 cartel is associated with the Sinaloa Cartel, the Beltran Leyva Organization and other Mexico-based cartels. Today’s proceeding was held before U.S. District Judge Brian M. Cogan.
Breon Peace, United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Ricky J. Patel, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Kevin P. Bruen, Superintendent, New York State Police (NYSP), announced the guilty plea.
“By accepting thousands of dollars in bribes in exchange for information about law enforcement’s investigation into the El Seguimiento 39 cartel, Arzate forged a deplorable alliance with drug traffickers, and betrayed not only the people of Mexico he was sworn to protect, but also his law enforcement partners who put themselves at risk to disrupt the cartel,” stated United States Attorney Peace. “This Office and its law enforcement partners remain committed to rooting out corruption and preventing drug cartels from sending massive quantities of illegal drugs into the United States.” Mr. Peace expressed his appreciation to the United States Attorney’s Offices for the Southern District of California and the Northern District of Illinois for their assistance on the case.
“Reyes-Arzate turned a blind eye toward drug traffickers, enabling criminal enterprises to operate with impunity, while serving as a Commander in the Mexican Federal Police. DEA and our law enforcement partners worked tirelessly to isolate and identify this bad seed and bring him to justice,” stated DEA Special Agent-in-Charge Donovan.
“Arzate turned his back on the people of Mexico who he was sworn to protect, on the oath that he took to uphold law and order, and on his fellow law enforcement brothers and sisters around the globe, who put their trust in each other to combat the scourge of narcotics trafficking carried out by vicious drug cartels,” stated HSI Acting Special Agent-in-Charge Patel. “At the time when Arzate commanded a special unit of the Mexican Federal Police and worked closely with law enforcement officials from the U.S., he was also meeting with the leadership of several Mexico-based cartels. He chose to selfishly serve his own interest by taking hundreds of thousands of dollars in bribes from the cartels in exchange for sensitive information about U.S. investigations. This case was carried out in coordination with the full force of U.S. law enforcement and Arzate will now have to answer for his crimes when he learns his sentence.”
“This guilty plea should demonstrate that who choose abuse their position of trust and put others in danger for financial gain, will be brought to justice. This former police officer and commander not only betrayed those he swore to protect, but also his fellow law enforcement working to dismantle a dangerous drug cartel. The State Police will continue to work with our law enforcement partners to prevent cartels from shipping deadly narcotics to the United States, but also to hold accountable those who mistakenly think they can get away with and benefit from these types of crimes,” stated NYSP Superintendent Bruen.
SIU officers in Mexico routinely work with U.S. law enforcement to combat narcotics trafficking, money laundering and other criminal activities. From 2003 to 2016, Reyes Arzate was a Mexican Federal Police Officer assigned to SIU. In 2008, he was appointed SIU Commander, making him its highest-ranking officer and principal point of contact for information sharing between U.S. and Mexican law enforcement personnel assigned to the SIU.
In approximately November 2016, while participating in a joint investigation of El Seguimiento 39 with U.S. law enforcement authorities, Reyes Arzate met with the leadership of El Seguimiento 39, shared with them information about the U.S. law enforcement investigation, and accepted a $290,000 bribe in exchange for his agreement to assist the cartel.
When sentenced, Reyes Arzate faces a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.
This investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime DEA Task Force and the New York/New Jersey High Intensity Drug Trafficking Area. The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, NYPD, NYSP, HSI, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, United States Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering and Public Integrity Sections. Assistant United States Attorneys Ryan Harris and Philip Pilmar are in charge of the prosecution.
The Defendant:
IVAN REYES ARZATE
Age: 49
Mexico City, MexicoE.D.N.Y. Docket No. 20-CR-30 (BMC)
Former Bank Employee Pleads Guilty to Conspiracy to Commit Bank FraudRead the Press Release
WASHINGTON – Danielle Bartley, 26, a former Capital One Bank employee from Silver Spring, Md., pleaded guilty today to taking part in a conspiracy that compromised the account information of at least nine bank account holders and sought at least $253,000 in fraudulent withdrawals and transfers.
The announcement was made by Channing D. Phillips, Acting U.S. Attorney for the District of Columbia, Matthew R. Stohler, Special Agent in Charge, Washington Field Office, U.S. Secret Service, and Daniel A. Adame, U.S Postal Inspector in Charge for the Washington Division.
Bartley pleaded guilty in the U.S. District Court for the District of Columbia to conspiracy to commit bank fraud. The charge carries a statutory maximum of 20 years in prison and financial penalties. Under federal sentencing guidelines, she faces a likely range of between 27 and 33 months in prison and a fine of up to $100,000. The plea agreement requires her to pay $50,000 in restitution to Capital One and a forfeiture money judgment of the $3,750 she individually received. The Honorable Thomas F. Hogan scheduled sentencing for Jan. 20, 2022.
As Bartley admitted in entering her guilty plea, at the time of the conspiracy in 2017, she was a branch associate in Washington, D.C. Between June and August 2017, Bartley and her co-conspirators, including Krishna Jannor-John Marsh, posed as nine different actual bank account holders and sought at least $253,000 in fraudulent withdrawals and transfers. They succeeded in obtaining one $50,000 wire transfer using personal identifiers of an account holder that Marsh purchased on the dark web. Other attempts were stopped, including one by an alert teller.
In September 2018, as part of his broader conspiracy, Marsh, 25, of New York, N.Y., was sentenced to 46 months in prison, ordered to pay $338,100 in restitution, and had a forfeiture money judgment of $50,000 entered against him. Despite agreeing to plead guilty in 2018, Bartley fled to Jamaica and was extradited back to the United States earlier this year.
In announcing the plea, Acting U.S. Attorney Phillips, Special Agent in Charge Stohler, and Inspector in Charge Adame commended the work of those who investigated the case from the U.S. Secret Service and U.S. Postal Inspection Service. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office. including former Paralegal Specialists Joshua Fein and Kristy Penny. Finally, they commended the work of Assistant U.S. Attorney Arvind Lal and former Assistant U.S. Attorney Anthony Saler, who investigated and prosecuted the case.
Fentanyl Trafficker Convicted at TrialRead the Press Release
Tampa, Florida – A federal jury has found Clifford Edward Albritton, III (44, Lakeland) guilty of conspiracy to possess 400 grams or more of fentanyl with the intent to distribute it and possession of 40 grams or more of fentanyl with the intent to distribute it. Albritton faces a minimum mandatory sentence of 10 years, and up to life, in federal prison. His sentencing hearing is scheduled for January 14, 2022.
Albritton had been indicted on August 4, 2020.
According to testimony and evidence presented at trial, in July 2020, Albritton arrived at a purported deal with his supplier, Donovan Holmes. Albritton had more than 300 grams of fentanyl and a scale hidden in his pants. Both men were subsequently arrested. Holmes, who testified at trial after previously pleading guilty, described how Albritton was a part of a larger fentanyl conspiracy encompassing multiple dealers. The sentencing hearing for Holmes is scheduled for October 28, 2021.
This case was investigated by the Drug Enforcement Administration, the Tampa Police Department, and the Florida Highway Patrol. It is being prosecuted by Assistant United States Attorney Callan Albritton (no relation).
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Federal Charges Against Former San Francisco PUC General Manager Expanded to Include Bank Fraud ConspiracyRead the Press Release
SAN FRANCISCO – A federal indictment filed today charges Harlan Kelly, the former General Manager of the San Francisco Public Utilities Commission (PUC), and Victor Makras, a locally prominent San Francisco real estate investor, with bank fraud and conspiracy to commit bank fraud, announced Acting United States Attorney Stephanie M. Hinds, Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, and Internal Revenue Service-Criminal Investigation Special Agent in Charge Mark H. Pearson. The indictment also charges honest services wire fraud and conspiracy to commit honest services wire fraud in connection to a bribery scheme that was first leveled against Kelly in a November 2020 federal complaint. That complaint is superseded by today’s federal indictment.
Today’s indictment alleges, as did the November 2020 complaint, that Kelly, 59, engaged in a long-running bribery scheme and corrupt partnership with an individual identified in the indictment as “Contractor #1.” Kelly was appointed General Manager of the San Francisco PUC in 2012 and held that position until November 30, 2020, when he resigned upon the filing of criminal charges in the federal complaint. Contractor #1 is a San Francisco construction company executive and permit expediting consultant who ran or controlled multiple entities doing business with the City of San Francisco. Today’s indictment alleges that Kelly provided confidential internal PUC documents and information to Contractor #1 to give Contractor #1 competitive advantages during public contract bidding competitions. In exchange, Contractor #1 lavished Kelly with personal financial benefits, including discounted construction work on Kelly’s residence and an international vacation for Kelly and his family that included Contractor #1 paying for hotel charges, hundreds of dollars for meals, and jewelry.
The indictment’s further allegations, made public for the first time today, describe the conduct leading to the indictment’s bank fraud and bank fraud conspiracy charges against Kelly and Victor Makras. Makras, 63, who resides in San Francisco, is a San Francisco real estate broker and the principal of Makras Real Estate. He also brokered a consortium of individual real estate investors (here referred to as Makras Investors) that collectively made residential real estate loans secured by San Francisco Bay Area real property and real property elsewhere. Makras sat on a number of San Francisco public agency commissions and boards, including the San Francisco PUC, the San Francisco Port Commission, and the San Francisco Employees Retirement System Board.
According to the indictment’s allegations, Kelly and Makras conspired to defraud Quicken Loans, the financial lending institution, in a $1.3 million dollar real estate loan to Kelly. The indictment describes that in applying for the $1.3 million loan, Kelly and Makras represented to Quicken Loans a falsely inflated debt amount that Kelly owed on his existing real estate loan to Makras Investors. That falsely inflated amount allowed Kelly to obtain an increased amount of loan funds from Quicken Loans and at a lower loan rate. The alleged conspiracy also involved concealing from Quicken Loans the other outstanding debts of Kelly, including thousands of dollars owed to Contractor #1 for extensive remodel work on Kelly’s residence and a $70,000 personal loan made earlier by Makras to Kelly. The scheme further included repaying Kelly’s undisclosed debts using the loan proceeds from Quicken Loans. The undisclosed debts are alleged to have been paid, with the assistance of Makras, in a method designed to conceal that Quicken Loans’ loan proceeds were used to repay these other debts.
Kelly will make his initial appearance on the indictment tomorrow, October 20, in San Francisco federal court at 10:30 a.m. before United States Magistrate Judge Thomas S. Hixson.
The court date for the initial appearance of Makras on today’s indictment has not yet been set.
Kelly is charged with one count of honest services wire fraud and one count of conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 1349. If convicted, each count carries a maximum statutory penalty of 20 years in prison and a fine of $250,000, or the greater of twice the gross gain or gross loss. Kelly and Makras are both charged in one count of bank fraud and one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. §§ 1344(1),(2) and 1349. If convicted, each count carries a maximum statutory penalty of 30 years imprisonment and a fine of $1,000,000, or not more than the greater of twice the gross gain or gross loss. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal indictment are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco. To date, twelve individuals have been charged, including two high-ranking San Francisco public officials, Mohammed Nuru and Harlan Kelly. Multiple city contractors and facilitators have been charged. According to the charges earlier filed against Mohammed Nuru and others, Nuru allegedly took hundreds of thousands of dollars in bribes in cash, meals, and work on his vacation home from contractors who obtained San Francisco public contracts.
The case is being prosecuted by the Corporate And Securities Fraud Team of the U.S. Attorney’s Office. The case is being investigated by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI).
Federal and Local Law Enforcement Agencies Announce Operation Scarecrow- HarrisburgRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Harrisburg Police Bureau announced a joint initiative (Operation Scarecrow - Harrisburg) that targets individuals who illegally purchase and possess firearms in Harrisburg and surrounding areas. Operation Scarecrow focuses on individuals who are prohibited from possessing firearms due to a prior felony conviction who use third parties (“straw parties”) to purchase firearms on their behalf. Under federal and state law, such transactions are illegal and both the prohibited person and the straw party are subject to criminal prosecution for engaging in this type of behavior.
Operation Scarecrow - Harrisburg began in April 2021 and has thus far resulted in ten individuals being charged in federal court regarding 139 straw purchases of firearms, and 26 firearms being recovered.
U.S. v. Holton, et. al.
- Jamia Philecia Holton, age 22, Harrisburg, PA, charged with conspiracy to make false statements during the purchase of a firearm;
- Shadaya Nakeyma Jackson, age 30, York, PA, charged with conspiracy to make false statements during the purchase of a firearms;
- Tykeam Markel Jackson, age 26, York, PA and Boston, MA, charged with conspiracy to make false statements during the purchase of firearms, unlawful possession of firearm by prohibited person, and two counts of false statement during the purchase of a firearm;
- 53 guns straw purchased;
- 10 additional attempted straw purchases
- 5 recovered.
U.S. v. Tasker, et. al.
- Dontrece Tasker, age 22, Harrisburg, PA, charged with conspiracy to deal in firearms without a license and false statement during purchase of a firearm;
- Yahmir Miller-Holmes, age 22, Harrisburg, PA, charged with conspiracy to deal in firearms without a license;
- Khyree Randolph, age 20, Harrisburg, PA, charged with conspiracy to deal in firearms without a license;
- Anthony Braxton, age 22, Harrisburg, PA, charged with conspiracy to deal in firearms without a license;
- 33 guns straw purchased;
- 10 recovered.
U.S. v. Lugo-Brooks
- Destynee Lugo-Brooks, age 23, Harrisburg, PA, charged with three counts of false statement during purchase of a firearm;
- 6 guns straw purchased;
- 5 recovered.
U.S. v. Bailey
- Darar Bailey, age 25, Newark, NJ, charged with six counts of false statement during purchase of a firearm;
- 22 guns straw purchased;
- 0 recovered.
U.S. v. Adorno
- Jose Ramon Adorno, Jr., age 25, Harrisburg, PA, charged with engaging in the unlawful business of dealing in firearms;
- 25 guns straw purchased;
- 6 recovered.
The investigations are continuing, and numerous other individuals are expected to be charged in the near future.
“Taking illegal guns off the streets is a high priority of the Department of Justice,” stated Acting United States Attorney Bruce D. Brandler. “Illegal guns fuel the epidemic of violence we see too often in Harrisburg, and around the nation. We will work with all our state and local partners to reduce gun violence and investigate any and all suspicious straw party transactions that result in felons or other prohibited persons illegally possessing firearms.”
“ATF has a zero-tolerance policy for straw purchasers who acquire firearms from a federal firearms licensee for someone who is either ineligible to purchase a firearm or wishes to conceal his/her identity,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division. “ATF remains committed to removing those offenders who put these guns in the hands of criminals. We will continue to work with our partners at all levels to make our communities safer.”
“The City of Harrisburg is working diligently to ensure that the safety of its residents is a priority,” said Mayor Papenfuse. “The Police Bureau’s collaboration with ATF on Operation Scarecrow is an important step in making the City streets safer.”
The indictments are the result of an investigation by ATF, and the Harrisburg Bureau of Police.
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Indictments 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.
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Fayette County Man Charged with Drug TraffickingRead the Press Release
PITTSBURGH, PA – A Fayette County man has been indicted by a federal grand jury in Pittsburgh on a charge of violating federal narcotics laws, Acting United States Attorney Stephen R. Kaufman announced today.
The one-count Superseding Indictment named Kwame Eddings, 41, formerly Republic, PA 15475, as the sole defendant.
According to the Superseding Indictment, on or about March 17, 2021, Kwame Eddings possessed with the intent to distribute quantities of cocaine base, cocaine, and a mixture containing heroin and fentanyl.
At each count, the law provides for a maximum total sentence of not more than 30 years in prison, a fine of not more than $2,000,000.00 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Barbara K. Doolittle is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the Pennsylvania State Police conducted the investigation leading to the Superseding Indictment in this case.
A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Eight Defendants Charged in Tenderloin-Based Drug Trafficking ConspiracyRead the Press Release
SAN FRANCISCO – The U.S. Attorney’s Office has charged eight defendants with conspiracy, each in connection with the activities of one of two drug trafficking organizations that are alleged to have supplied the Tenderloin district of San Francisco with copious amounts of narcotics, including several varieties of fentanyl, announced Acting United States Attorney Stephanie M. Hinds, Drug Enforcement Administration (DEA) Special Agent in Charge Wade D. Shannon, and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge, San Francisco Field Division, Patrick Gorman. The charges were made in two complaints, both filed October 14, 2021, and unsealed hours ago, that provide details of the large-scale drug distribution conspiracies.
The complaints signal the continued commitment of the Office of the United States Attorney to coordinate efforts of federal and local law enforcement to deal with the endemic drug dealing in the Tenderloin District.
“The disturbing upward trend of organized fentanyl sales in our cities is a triple threat: fentanyl is deadly, its organized trade attracts violent offenders, and its sales and use devastates neighborhoods,” said Acting U.S. Attorney Hinds. Our prosecutions target those who seek to turn our city streets into open fentanyl marketplaces.”
“Fentanyl, regardless of color, can be lethal in the smallest amounts. Whether it is pink, blue, green, purple, red, or silver, it all can be fatal. Marketing gimmicks, such as changing the color, are not uncommon, but nevertheless can be dangerous,” said DEA Special Agent in Charge Shannon. “As overdoses continue to plague the Tenderloin, so will our efforts to investigate those who supply the region with deadly drugs.”
“Through the collaboration of local, state, and federal agencies, law enforcement works diligently to remove key distributors of narcotics from our communities,” said ATF Special Agent in Charge Gorman. “Throughout this case, ATF has worked side by side with our partners at DEA & the San Francisco Police Department to fulfill one of our core duties to the public. That duty being to ensure the safety of the public. ATF will continue to work hard every day alongside our partners to honor our pledge to this city.”
“The staggering loss of life we’ve seen due to drug overdoses is a public health calamity San Franciscans haven’t witnessed since the height of the AIDS crisis,” said Chief of Police Bill Scott. “Our street drug trade has been nearly twice as deadly as COVID-19 in San Francisco. While the primary chemical culprit is fentanyl, drug-related gun violence is beginning to take an increasingly troubling toll. We are incredibly thankful to Acting U.S. Attorney Stephanie M. Hinds; DEA Special Agent in Charge Wade D. Shannon; ATF Special Agent in Charge Patrick Gorman and their enormously dedicated investigators and prosecutors who’ve been our full partners in this operation.”
The first complaint describes a conspiracy allegedly headed by Luis Ochoa, 24, of Alameda, and his brother Roger Arteaga, 28, of Berkeley. The complaint alleges that since at least May of 2021, Ochoa, Arteaga , and three co-conspirators participated in a drug trafficking organization whose members distribute primarily fentanyl. The name of one of the co-conspirators has been redacted from court papers.
According to the complaint, the defendants supplied narcotics for resale to multiple local narcotics re-distributors. Some of the co-conspirators also allegedly engaged in street-level drug sales. The complaint describes several cell phone conversations intercepted by wiretaps in which Ochoa allegedly is heard receiving orders for drugs and arranging to have the drugs delivered to customers.
The complaint also describes a branding scheme by which the organization sought to sell fentanyl to customers by colors, each color reflecting a type of fentanyl that either burns a particular color or has been dyed a particular color. Intercepted communications described in the complaint reveal the large array of colors or types of fentanyl that the organization allegedly sold, including fentanyl that burns or has been colored blue, yellow, pink, green, purple, red, and silver. The complaint describes how members of the organization colored some of the fentanyl themselves using different dyes.
The complaint also describes the large quantities of fentanyl sold by the organization. A single seizure by law enforcement resulted in the recovery of approximately one kilogram of fentanyl, a quantity with the potential to create 500,000 lethal doses of the drug. Among the items seized at the time of Ochoa’s arrest was four pounds (about 1.8 kilograms) of fentanyl.
The second complaint describes a separate drug-distribution organization led by Fernando Viera, 27, of Oakland. According to the complaint, Viera is a mid-level drug trafficker in the Bay Area who allegedly supplied drugs to multiple resellers and street-level dealers. The street-level dealers, in turn, sold the drugs in the Tenderloin. The complaint describes several transactions indicating that in addition to fentanyl, numerous other drugs continue to be sold in the Tenderloin. For example, a recent seizure by law enforcement from one co-conspirator recovered more than 250 grams of fentanyl, as well as ounce quantities of methamphetamine, heroin, cocaine, and cocaine base.
According to both complaints, the investigation of these drug distribution organizations took over a year and involved law enforcement resources of the DEA, the ATF, and the San Francisco Police Department.
In sum, the defendants in the two cases include the following:
OCHOA COMPLAINT
Defendant
Aliases
Age
Luis Ochoa
Luis Valle
Luis Castro-Valle
Panda
24
Roger Arteaga
Jorge Miguel Casco-Raudales
Alfredo Zuniga
Rorro
28
Rosales Avila
Jamileth Avila
29
Jose Aguilar
Joe Aguilar Estrada
Danny
22
VIERA COMPLAINT
Defendant
Aliases
Age
Fernando Viera
Oscar F Viera
Oscar Fernando Viera Rodriguez
Tata
27
Edgardo Aguilar-Cruz
Jose
22
Nelson Casteneda
42
Nolan Ramos
Nelson Ramos
26
The complaint contains allegations only and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
All defendants are charged with engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 841(a)(1)(C) and 846. If convicted, each defendant faces a statutory maximum of 20 years in prison, a maximum fine of $1,000,000, and between 3 years and a lifetime term of supervised release. Further, additional fines, forfeitures, and restitution may be ordered; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The defendants made the following appearances and are next scheduled to appear as follows:
OCHOA COMPLAINT
Defendant
Initial Appearance
Next Appearance
Luis Ochoa
October 15, 2021
October 20, 2021, at 10:30 a.m. for detention hearing
Roger Arteaga
October 15, 2021
October 20, 2021, at 10:30 a.m. for detention hearing
Rosales Avila
Pending Arrest
--
Jose Aguilar
Pending Arrest
--
VIERA COMPLAINT
Defendant
Initial Appearance
Next Appearance
Fernando Viera
October 15, 2021
October 25, 2021, at 10:30 a.m. for detention hearing
Edgardo Aguilar-Cruz
October 15, 2021
October 22, 2021, at 10:30 a.m. for detention hearing
Nelson Casteneda
Pending Transfer to Federal Custody
--
Nolan Ramos
--
October 19, 2021 at 10:30 a.m. for initial appearance and arraignment
Assistant U.S. Attorneys Sailaja Paidipaty, Kristina Green, Sloan Heffron, and Kenneth Chambers are prosecuting the case. The prosecution is the result of an investigation by the DEA, ATF, and San Francisco Police Department.
This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Eagle Grove Man Pleads Guilty to Meth ChargesRead the Press Release
A man who possessed with intent to distribute methamphetamine pled guilty October 12, 2021, in federal court in Sioux City.
Celestin Loux, 64, from Eagle Grove, Iowa, was convicted of possessing with intent to distribute methamphetamine.
At the plea hearing, Loux admitted that on November 10, 2020, law enforcement conducted a traffic stop of Loux after receiving a report of a vehicle theft. Law enforcement seized seven bags from Loux’s person totaling 14.39 grams of methamphetamine. Evidence further showed that from December 2019 through February 2020, during three controlled drug-buy operations with law enforcement, Loux sold a total of 51.54 grams of methamphetamine.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Loux remains in custody of the United States Marshal pending sentencing. Loux faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, and at least four years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Patrick T. Greenwood and was investigated by the Iowa Department of Narcotics Enforcement, Wright County Sheriff’s Office, and Iowa DCI Laboratory.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-3024. Follow us on Twitter @USAO_NDIA.
District Man Pleads Guilty to Murder in Road Rage Incident Inside Third Street TunnelRead the Press Release
WASHINGTON – Daquon Brooks, 24, of Washington, D.C., has pleaded guilty to fatally shooting a man in the Third Street Tunnel in July 2019, as well as shooting another person in a separate domestic violence incident the same month, announced Acting U.S. Attorney Channing D. Phillips and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Brooks pleaded guilty on Oct. 18, 2021, in the Superior Court of the District of Columbia, to second-degree murder while armed in the killing of Leon Williams. He also pleaded guilty to charges of assault with a dangerous weapon and stalking, stemming from a domestic violence incident. His guilty plea, which is contingent upon the Court’s approval, calls for an agreed-upon sentence of 13 to 17 years in prison, to be followed by up to five years of supervised release. The Honorable Juliet J. McKenna scheduled sentencing for Jan. 25, 2022.
According to a proffer of facts submitted at the plea hearing, on July 30, 2019 at 2:50 p.m., Brooks was riding in the passenger seat of his girlfriend’s car; she was driving the car and her minor child sat in the backseat. As the vehicle entered the Third Street Tunnel, Mr. Williams 52, rear-ended her car. Both cars stopped and Brooks’ girlfriend got out of her car, walked over to the driver’s side door of Mr. Williams’ vehicle, and confronted him for rear-ending her.
A short time later, Brooks got out of the car, walked over to Mr. Williams’ driver’s side door, and pointed a loaded gun at his head. Brooks fired one shot into Mr. Williams’ neck. Both Brooks and his girlfriend ran back to the girlfriend’s car and fled the scene. Mr. Williams was paralyzed and never recovered from his injuries. He died of his injuries on Oct. 18, 2020.
The other shooting incident occurred on July 15, 2019, roughly two weeks before the tunnel gunfire. According to the proffer of facts, Brooks sent numerous messages via Instagram and text between July 9, 2019 and July 15, 2019 threatening to kill his former girlfriend after she began a relationship with another man. On July 15, 2019, at approximately 6:10 p.m., Brooks approached his ex-girlfriend’s new boyfriend in the 4800 block of Benning Road SE and fired multiple bullets with a pistol at the new boyfriend, striking him in the leg and foot.
Brooks has been in custody since his arrest on Aug. 5, 2019.
In announcing the plea, Acting U.S. Attorney Phillips and Chief Contee commended the work of the officers, detectives and other personnel who investigated the case from the Metropolitan Police Department. They acknowledged the efforts of those who handled the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Colleen Kukowski, Kenya Wells, Jason Feldman, and Dana Joseph; Paralegal Specialists Tasha Harris, Michelle Wicker, and Cynthia Muhammad; Special Agent Mark Crawford, of the Criminal Investigation and Intelligence Unit; Victim/Witness Security Specialist Ashli Tolbert, Victim/Witness Advocate Marcia Rinker, and Victim/Witness Program Specialist Lan Lu.
Finally, they commended the work of Assistant U.S. Attorney Kristian L. Hinson, who investigated and prosecuted the homicide case, and Assistant U.S. Attorneys Joseph Drummey and Danielle White, who prosecuted the domestic shooting case.
Disbarred Columbus Lawyer Sentenced to Prison, Ordered to Pay $1.6 Million in Restitution in Fraud CaseRead the Press Release
COLUMBUS, Ga. – A former Columbus-based attorney was sentenced to federal prison and was ordered to pay $1.6 million in restitution for mail fraud after a U.S. Secret Service investigation revealed he had stolen a settlement fee from two clients in a personal injury case.
George W. Snipes, 68, of Columbus, was sentenced to serve 51 months in prison to be followed by three years of supervised release by U.S. District Clay Land after he previously pleaded guilty to mail fraud. In addition, Judge Land ordered Snipes to pay $1,638,000 in restitution to the victims. There is no parole in the federal system.
“George Snipes violated his sworn oath as a lawyer and committed a federal crime when he made the choice to divert money intended for his injured clients into his own pocket,” said Acting U.S. Attorney Peter D. Leary. “The U.S. Attorney’s Office, along with our law enforcement partners, will hold individuals who lie and defraud people accountable for their crimes.”
“The United States Secret Service along with its law enforcement partners remain committed to aggressively investigative those responsible for defrauding victims the way Snipes did. Not only did he violate the trust of his clients but the oath he swore to uphold as an attorney,” said Clint Bush, United States Secret Service, Resident Agent in Charge, Albany, Georgia, Resident Office.
According to court documents, Snipes was a licensed attorney in Georgia, representing clients in personal injury cases. Two clients, injured in an automobile accident in August 2017, retained Snipes to represent them on a contingency fee basis in connection with their injuries and wages lost as a result of the accident. In September 2017, without the clients’ authorization or knowledge, Snipes settled the case with an insurance company for $48,000, and the settlement checks were sent to Snipes per his request. Snipes used the money for his own personal benefit. Snipes now admits he willfully participated in a scheme to defraud and obtain money by materially false pretenses by placing in an authorized depository for mail a request for funds for the payment of the two clients’ medical expenses and lost wages, knowing that the expenses would not be paid to the intended recipients.
In addition, records obtained from Snipes’ Interest on Lawyers Trust Accounts (“IOLTA”) from the same general period show a pattern of illegal distributions to Snipes. Essentially, all attorneys are required to maintain IOLTA accounts that accumulate interest until such time as distributions are made to clients or otherwise authorized recipients. Attorneys are not permitted to withdraw funds from these accounts without consulting with and gaining permission from their clients. From at least January 2017 to January 2018, there were numerous unauthorized distributions from this IOLTA account, including personal distributions to Snipes, payments to a rental company he owned, distributions to Parent-Teacher Associations and storage facilities. During this same time period, withdrawals from the IOLTA account made to “cash” totaled $468,750. There were also numerous checks written to Snipes totaling $167,600.
This case was investigated by the U.S. Secret Service and the Columbus Police Department.
Assistant U.S. Attorney Melvin Hyde prosecuted the case.
Detroit Man Charged with Robbing Kay Jewelers in Washington, PA and Attempting to Rob Other Jewelry StoresRead the Press Release
PITTSBURGH, PA - A resident of Detroit, Michigan, has been indicted by a federal grand jury in Pittsburgh on charges of robbery and conspiracy to commit robbery, Acting United States Attorney Stephen R. Kaufman announced today.
The two-count Indictment named Willie James Harvey, age 37.
According to the Indictment, on November 13, 2019, Harvey robbed the Kay Jewelers store located at 2200 Tanger Boulevard in Washington, PA, and also conspired to rob jewelry stores in Mahoning County, Ohio and Washington County, Pennsylvania from November 12, 2019 through November 13, 2019.
The law provides for a maximum total sentence of 40 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Douglas C. Maloney is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, South Strabane Police Department, Boardman (Ohio) Police Department, and Hillsborough County (Florida) Sheriff’s Department conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Department of Justice Issues Annual Report to Congress on its Work to Combat Elder Fraud and AbuseRead the Press Release
The Department of Justice issued its Annual Report to Congress on its Activities to Combat Elder Fraud and Abuse. The report summarizes the department’s extensive elder justice efforts from July 1, 2020 through June 30, 2021.
As Attorney General Merrick B. Garland recognized, the COVID-19 pandemic exposed and exacerbated injustices faced by far too many of the most vulnerable among us, including older Americans. Even with the unprecedented challenges of the COVID-19 pandemic, the department achieved noteworthy success in combating elder abuse, neglect and financial exploitation and fraud as detailed in the report.
“While technology has brought the world together in many ways, it has also opened the door to a myriad of fraud schemes that prey upon older adults,” said Deputy Attorney General Lisa O. Monaco. “The department will not hesitate to use all the tools at its disposal to identify and disrupt such schemes, wherever they may originate or occur.”
“The COVID-19 pandemic has heightened the risk for abuse directed towards seniors who are socially isolated and vulnerable to exploitation,” said Associate Attorney General Vanita Gupta. “As this Annual Report demonstrates, the department has marshalled a wide array of tools – enforcement actions, research, public education and outreach, training and victim services – to combat elder abuse and to ensure that our seniors have the support and protections that they deserve.”
Collectively, the department brought over 220 criminal and civil enforcement actions covering nearly 20 different types of fraud that targeted or disproportionately affected older Americans. Fraud types included tech support scams, veteran scams and fraud perpetrated by guardians and powers of attorney which are particularly egregious as these individuals hold a special duty to care. For the first time, the department brought cases that disrupted conduct facilitating fraud by stopping overseas internet calling services that facilitate fraudulent robocalls, and bringing down data companies and list brokers than facilitate mass marketing fraud. Interrupting fraud schemes prior to reaching older adults is key in the fight against elder fraud.
Over the past year, the department invested heavily in training and tools to ensure federal, state and local elder justice professionals are equipped to hold offenders accountable while ensuring victims receive the services they need. For example, the department supported the development of online elder abuse training for law enforcement that, for the first time, enables law enforcement officers to receive Peace Officer Standards and Training credit in 36 states.
The report also highlighted the many ways the department provides victim support for older Americans. For example, the FBI’s Recovery Asset Team was able to work with financial institutions to freeze over $13.5 million (a 75% success rate) among older victims of fraud before those monies were wired and lost to the victims. Moreover, the department’s Office for Victims of Crime awarded Victims of Crime Act (VOCA) grants to states totaling more than $1.6 billion, with $86 million of that allocated for programs serving older crime victims.
Components throughout the department engaged in public outreach activities as part of the department’s effort to prevent elder abuse. For example, many U.S. Attorney’s Offices participated in local outreach events such as town halls and media events, both in conjunction with World Elder Abuse Awareness Day celebrations and otherwise. In 2021, the National Crime Victims’ Rights Week (NCVRW) Resource Guide featured elder fraud and the National Elder Fraud Hotline.
Finally, research and statistical components within the department play a critical role in funding or producing information thereby enhancing our understanding of elder abuse, and ultimately informing policy and practice. The FBI’s Internet Crime Complaint Center (IC3) released the first 2020 Elder Fraud Report providing information useful for targeting interventions. For example, the report found that over 100,000 persons over the age of 60 filed a complaint, with a resulting loss of nearly $1 billion, although the greatest financial losses were associated with confidence fraud/romance scams.
To report financial fraud, call the National Elder Fraud Hotline, 1-833-FRAUD-11 (1-833-372-8311). For more information on the department’s elder justice activities, visit https://www.justice.gov/elderjustice.
Delaware Facility Supervisor Sentenced to More Than Three Years in Federal Prison for Tax Evasion and Interstate Transportation of Stolen GoodsRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Joseph Kukta, age 45 of Laurel, Delaware, to 42 months in federal prison, followed by three years of supervised release, for interstate transportation of stolen goods and tax evasion, in connection with his theft and resale of merchandise being shipped through a commercial mail service. Judge Blake has also ordered Kukta to pay $1,101,743.91 in restitution and forfeiture of $1,880,000.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore.
According to his plea agreement, from 2007 through July 2019, Kukta worked as a Senior Manager at the FedEx facility located in Seaford, Delaware where he oversaw all operational aspects of the facility, supervised over 100 employees and contractors, and earned an annual salary of more than $92,000. The facility handled all the FedEx Ground and FedEx Home Delivery packages passing through the Delmarva Peninsula.
Kukta admitted that he stole packages shipped via FedEx and resold the items to co-defendant Saurabh Chawla, at approximately 50% of the item’s retail price from 2009 to June 2019. Kukta then transported the stolen items, using his vehicles and trailers, to a relative of Chawla who resided in Maryland. From about 2009 to 2019, Kukta received more than $1,880,000 in illegal proceeds for selling stolen goods that were worth at least $3,250,000.
As detailed in his plea agreement, Kukta stole packages that contained bulk retail goods and merchandise shipped by suppliers including Apple and other high-end manufactured products intended for delivery to a Walmart Distribution Center in Smyrna, Delaware. Beginning in 2012, Kukta’s theft of packages became frequent and consistent, occurring on a weekly basis in certain months. Kukta identified packages he would steal by accessing FedEx computer systems and reviewing packages that had been loaded onto a FedEx trailer awaiting delivery to the Walmart Distribution Center. Kukta selected specific packages which he believed, based on the shippers of the packages, contained high-end electronics or other merchandise of value that could be easily resold.
In 2018, Kukta began to also steal packages from FedEx trailers that were loaded for delivery to a retail Store in Rehoboth Beach, Delaware.
Kukta went to the FedEx facility on Sundays, holidays, or other times when employees were not at the facility, and removed the packages he previously identified from the FedEx trailers. Kukta attempted to avoid detection by turning off the lights at the facility and blocking certain surveillance cameras with cardboard boxes and other objects. Kukta loaded the stolen packages into his truck or into vehicles operated by FedEx contractors and parked at the facility, then drove the vehicles to his rented storage unit in Seaford, where he unloaded and stored the items.
As stated in his plea agreement, on June 5, 2019, Kukta learned that law enforcement had subpoenaed surveillance footage from the FedEx facility in Seaford. Approximately two weeks later, Kukta went to the storage unit and retrieved the remaining stolen items. Kukta sold that merchandise at an auction house in Lincoln, Delaware.
Kukta also admitted that he evaded paying income taxes on the proceeds of the scheme by failing to report that income on his annual joint federal income tax returns, causing a tax loss to the United States totaling $660,439. To conceal the income, Kukta provided false information to two banks when they questioned why he was receiving money from Company A (which was controlled by Chawla). As to each bank, Kukta falsely told bank representatives that he had been selling items from his father’s estate, which he knew was false. Kukta also provided false information to the IRS during a correspondence audit, claiming that the items he had sold on eBay during 2014 were from his father’s estate, not the sale of stolen goods.
Co-conspirator Saurabh Chawla, age 36, of Aurora, Colorado, was previously sentenced to 66 months in federal prison for federal charges of conspiracy, interstate transportation of stolen goods, and tax evasion. Chawla was also ordered to pay restitution to the Internal Revenue Service in the amount of $713,619, and ordered to forfeit a 2013 Tesla Model S and $2,308,062.61 from accounts held in his name and the sale of property in Aurora, Colorado.
United States Attorney Erek L. Barron praised the IRS-CI and HSI for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Harry M. Gruber and Paul A. Riley, who prosecuted the case.
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Defendant Who Stole More Than $16,000 in Cryptocurrency and Orchestrated a “Swat” Attack on His Accomplice Pleads Guilty to Aggravated Identity TheftRead the Press Release
Baltimore, Maryland – Kyell Bryan, age 20, of Kingston, Pennsylvania, pleaded guilty today to aggravated identity theft in connection with his involvement in a “SIM swap” and cryptocurrency theft scheme.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; and Chief Melissa R. Hyatt of the Baltimore County Police Department (BCPD).
According to his guilty plea, in June 2019, Bryan conspired with others, including co-defendant Jordan K. Milleson, to carry out a scheme to steal cryptocurrency from others. At the beginning of the conspiracy, Bryan knew Milleson only by an online alias and did not know Milleson’s real name.
The scheme to defraud was carried out by fraudulently obtaining the login credentials of wireless service provider or affiliate employees, using the stolen credentials of these employees to access the service providers’ computer networks. Upon accessing the computer networks of the wireless service providers, Bryan and his co-conspirators conducted unauthorized “SIM swaps.” “SIM swapping” refers to a method of unauthorized takeover of a person’s wireless account, effectively allowing malicious actors to divert phone and data traffic intended for one device, e.g., a cell phone, to another device controlled by the malicious actors. The conspirators then used their unauthorized access to victims’ cellular telephone accounts to illegally gain access to victims’ email and financial accounts, enabling them to transfer the victims’ cryptocurrency from the victims’ accounts.
Specifically, in June 2019, Milleson used several phishing websites he created to steal the login credentials of Victim 2, who worked for a specific wireless provider or its affiliate. On June 25, 2019, Bryan and Milleson used Victim 2’s credentials to gain unauthorized access to the wireless provider’s computer network and execute “SIM swaps”.
After gaining access to the wireless provider’s network, Milleson and Bryan intentionally used the stolen login credentials to redirect phone and text message traffic intended for a mobile device used by the owner of a digital currency investment company, Victim 3, to a device controlled by them.
After conducting a successful “SIM swap” of Victim 3’s phone account, Bryan and his co-conspirators unlawfully gained access to Victim 3’s online accounts, including their email account, and an account containing digital currency. Bryan then instructed and directed Milleson to transfer Victim 3’s cryptocurrency out of Victim 3’s account. At the time of the transfer, Victim 3’s cryptocurrency was valued at approximately $16,847.47.
Soon after the theft, Bryan and his co-conspirators began to suspect that Milleson cheated Bryan and the other accomplices out of their share of the stolen proceeds. Bryan and other accomplices then began to threaten Milleson; one accomplice stated that if Milleson did not share the proceeds, they would burn down Milleson’s house and ruin Milleson’s life.
Bryan and his co-conspirators then attempted to uncover Milleson’s true identity by messaging other individuals for Milleson’s real name, address, and contact information. During a conversation with a co-conspirator, Bryan learned that Milleson went by the alias of “Chikri”. Later on, Bryan stated that the conspiracy would find Milleson’s identifying information and “swat” him. “Swatting” refers to a criminal harassment tactic in which a person makes a false report to law enforcement such as a bomb threat, murder, or hostage situation in order to trigger police or SWAT response to a specific address and place the target in a real life-threatening situation.
Shortly after Bryan asked other individuals for Milleson’s real information and learned that “Chikri” also identifies himself under the alias “Jordy”, the BCPD received a call from an unknown male claiming to have shot his father and was threatening to shoot himself. The male caller stated he was at Milleson’s home address and advised that he was armed with a handgun. During the call, the unknown male threatened to shoot if police confronted him.
The BCPD dispatched patrol officers and subsequently learned there was not a real emergency situation at the Milleson residence. However, a relative of Milleson informed authorities that an unknown person called the residence and said that Milleson had stolen $20,000.
Bryan agrees that he and his accomplices carried out the swatting attack to target Milleson because Milleson initially refused to share the proceeds stolen from Victim 3. Byran also agrees that he knowingly possessed and illegally used the identification of a real person during and in relation to wire fraud, unauthorized access of a protected computer in furtherance of fraud, and intentional damage of a protected computer.
Co-defendant Jordan Milleson was sentenced to two years in federal prison on May 5, 2021 by Chief U.S. District Judge James K. Bredar. Chief Judge Bredar also ordered Milleson to pay restitution of $34, 329.01.
Bryan faces a statutorily required sentence of two years in federal prison followed by one year of supervised release for aggravated identity theft. As part of his plea agreement, Bryan will be ordered to pay $16,847.47 in restitution. Chief U.S. District Judge James K. Bredar has scheduled sentencing for January 31, 2022 at 10 a.m.
This case was prosecuted utilizing resources from the Dark Market and Digital Currency Crimes (DMDCC) Task Force. The DMDCC Task Force is a joint effort between the U.S. Attorney’s Office, HSI – Baltimore, the U.S. Secret Service, the U.S. Postal Inspection Service; the Food and Drug Administration, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, the Defense Criminal Investigative Service, the Baltimore Police Department, and the Baltimore County Police Department, targeting the use of dark net marketplaces and digital currencies to facilitate criminal activities. The past several years have witnessed a significant increase in the use of the internet (both the clear net and dark net) and digital currencies to facilitate, for example, the illegal sale and distribution of narcotics and firearms, computer technologies (including hacking tools), and Personal Identifiable Information (PII). In response to this rising threat, the U.S. Attorney’s Office, HSI, and their partners formed the DMDCC Task Force to facilitate stronger collaboration among law enforcement partners combatting these crimes.
United States Attorney Erek L. Barron commended the HSI and BCPD for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Christopher M. Rigali, who is prosecuting the case.
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Danville Man Sentenced to 108 Months in Prison for Distributing MethamphetamineRead the Press Release
Urbana, Ill. – A Danville, Ill., man, Demaje Robinson-Potts, 23, has been sentenced to 108 months in prison for distributing crystal methamphetamine and fentanyl together with his brother and codefendant, D’Vaughnte Robinson, on September 16, 2020. Robinson was previously sentenced to the same prison term for his role in the brothers’ scheme.
At Robinson-Potts’s sentencing hearing, U.S. District Court Judge Michael Mihm emphasized the seriousness of Robinson-Potts’s crime, noting that fentanyl is a “curse” on the community and that methamphetamine poses significant danger to its users and the public. Judge Mihm also found Robinson-Potts responsible for a firearm that investigators located in the brothers’ shared residence during a search of the home on September 17, 2020.
Robinson-Potts was convicted of distributing methamphetamine following a guilty plea on January 15, 2021.
The Drug Enforcement Administration (Terre-Haute, IN) and the Federal Bureau of Investigation (Terre Haute, IN) investigated the case with assistance from the Vermilion Metropolitan Enforcement Group and the Vigo County Drug Task Force. Assistant United States Attorney Rachel Ritzer represented the government in the prosecution.
DOJ and Kaiser Foundation Health Plan of Washington settle claims it failed to provide interpreter service to patients who are deaf and deaf-blindRead the Press Release
Seattle – The U.S. Department of Justice and Kaiser Foundation Health Plan of Washington (KFHPW) today resolved allegations from several complainants that it repeatedly failed to provide interpreters to patients who are deaf or deaf-blind, in violation of the Americans with Disabilities Act (ADA), announced U.S. Attorney Nicholas W. Brown. The settlement establishes a $1 million fund to pay claims to those patients whose rights were violated. KFHPW also agrees to update and improve procedures for evaluating the need for interpreters, contracting with interpreters, and training staff surrounding those procedures.
“When health care facilities fail to provide interpreters to patients and their families, including those who are who are deaf or hard of hearing, it creates a major barrier to safe and appropriate medical care.” said U.S. Attorney Brown. “Our investigation uncovered evidence of systemic failures to provide interpreters when necessary, leading patients to delayed care and problems with communication. This settlement is a necessary step to ensuring that people receiving care through this system are able to communicate timely and effectively about their medical needs.”
An investigation by the U.S. Attorney’s Office revealed that in approximately 400 instances over a 4-year period, an interpreter was requested by KFPW staff, but none was provided, or other problems related to effective communication were raised by patients or their companions.
Under the terms of the settlement, KFHPW will establish a third-party claims administrator to allocate the settlement funds based on the harm suffered by each complainant. The administrator will work with KFHPW records to locate claimants. The U.S. Attorney’s Office will review the allocations after the claims have been submitted and reviewed.
For a two-year period, the U.S. Attorney’s Office will review new procedures and training of KFHPW staff to ensure patients who are deaf or deaf-blind receive appropriate interpreter services at the 41 medical facilities it operates in Northwest Washington, Central Washington, Eastern Washington, the Coastal and Olympic region, and Puget Sound.
Under the settlement some of the changes include: consistent screening of patients for the need of interpreter services; contracting with two interpreter services companies per facility to better provide services; contracting with video interpreter services for those occasions when in-person interpretation is not possible. The policies surrounding interpreter services will be posted on the KFHPW website as well as in KFHPW facilities. KFHPW will keep logs of interpreter requests and how they were fulfilled.
In addition to the $1 million fund for claimants, KFHPW will pay $85,000 to the United States to resolve the allegations.
The investigation in this case was conducted by Assistant United States Attorney Christina Fogg, the Civil Rights Program Coordinator for the U.S. Attorney’s Office for the Western District of Washington.
Credit Suisse Resolves Fraudulent Mozambique Loan Case in $547 Million Coordinated Global ResolutionRead the Press Release
Credit Suisse Group AG, a global financial institution headquartered in Switzerland, and Credit Suisse Securities (Europe) Limited (CSSEL), its subsidiary in the United Kingdom (together, Credit Suisse), have admitted to defrauding U.S. and international investors in the financing of an $850 million loan for a tuna fishing project in Mozambique, and have been assessed more than $547 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom. After taking account of crediting by the department of the other resolutions, Credit Suisse will pay approximately $475 million to authorities in the United States and the United Kingdom, as well as restitution to victims in an amount to be determined by the court.
“Credit Suisse Group AG, through its U.K. subsidiary CSSEL, defrauded U.S. and international investors in connection with a lending project in Mozambique,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Among other things, Credit Suisse Group AG, CSSEL, and their co-conspirators deceived investors by hiding information about the risk that loan proceeds were used for illegal purposes in connection with the restructuring of the loan. Today’s coordinated resolution with the U.S. Securities and Exchange Commission and the Financial Conduct Authority in the United Kingdom shows that the department will not tolerate fraud by international financial institutions and is committed to working in parallel to domestic and foreign authorities to use all tools at our disposal to hold corporate wrongdoers accountable.”
According to court documents filed today in the U.S. District Court for the Eastern District of New York and statements made during the proceeding, Credit Suisse Group AG entered into a three-year deferred prosecution agreement with the department in connection with a criminal information charging Credit Suisse Group AG with conspiracy to commit wire fraud, and CSSEL pleaded guilty to a one-count criminal information charging it with conspiracy to commit wire fraud.
This resolution follows the prior entry of guilty pleas by three CSSEL bankers. In July 2019, Andrew Pearse, a former managing director of CSSEL, pleaded guilty to conspiracy to commit wire fraud. In September 2019, Surjan Singh, a former managing director of CSSEL, pleaded guilty to conspiracy to commit money laundering, and in May 2019, Detelina Subeva, a former vice president of CSSEL, also pleaded guilty to conspiracy to commit money laundering.
“Over the course of several years, Credit Suisse, through its subsidiary in the United Kingdom, engaged in a global criminal conspiracy to defraud investors, including investors in the United States, by failing to disclose material information to investors, including millions of dollars in kickbacks to its bankers and a high risk of corruption, in connection with an $850 million fraudulent loan to a Mozambique state-owned entity,” said U.S. Attorney Breon Peace for the Eastern District of New York. “This coordinated global resolution demonstrates this Office’s commitment to working across borders with our global law enforcement partners to root out abuse and fraud by financial institutions in order to protect investors here in the United States.”
According to Credit Suisse’s admissions and court documents, between 2013 and March 2017, Credit Suisse, through CSSEL, and co-conspirators used U.S. wires and the U.S. financial system to defraud investors in securities related to a Mozambican state-owned entity, Empresa Moçambicana de Atum S.A. (EMATUM), which Mozambique created to develop a state-owned tuna fishing project. Credit Suisse, through its employees and agents, conspired to and did defraud investors and potential investors in EMATUM by making numerous material misrepresentations and omissions relating to, among other things, (1) the use of loan proceeds; (2) kickback payments to CSSEL bankers and the risk of bribes to Mozambican officials; and (3) the existence and maturity dates of debt owed by Mozambique, including another loan that Credit Suisse arranged to a Mozambique state-owned entity (ProIndicus) and a different loan another bank arranged with Credit Suisse’s knowledge. Credit Suisse represented to investors that the loan proceeds would only be used for the tuna fishing project. Instead, co-conspirators diverted loan proceeds obtained from investors. Specifically, a contractor that supplied boats and equipment for EMATUM and that received the loan proceeds from Credit Suisse paid kickbacks of approximately $50 million to CSSEL bankers and bribes totaling approximately $150 million to Mozambican government officials.
Credit Suisse also admitted that it identified significant red flags prior to and during the EMATUM financing. For example, Credit Suisse had learned of significant corruption and bribery concerns associated with the contractor. In addition, in or about 2015, Credit Suisse became aware that EMATUM had encountered problems servicing the loan, raising the risk of default. Credit Suisse agreed to arrange the restructuring and exchange of the original EMATUM security into a bond with a longer maturity date. During the restructuring, Credit Suisse employees raised concerns about corruption allegations made in the press and disparities in the use of loan proceeds. To address these concerns, Credit Suisse retained two independent industry experts to conduct a market valuation of the tuna fishing boats and other goods the contractor provided for the EMATUM project. Credit Suisse knew that the experts identified a shortfall of between $265 million and $394 million between the funds raised for the EMATUM loan and the fair market value of the boats and accompanying infrastructure and training the contractor sold to EMATUM. Credit Suisse did not disclose this material information to investors during the restructuring and the exchange. Aspects of Credit Suisse’s fraudulent conduct were revealed beginning in April 2016, causing the price of the EMATUM securities to drop and resulting in losses to investors.
Under the terms of its agreements, Credit Suisse’s penalty is approximately $247.5 million. After crediting by the department for payments to other authorities, Credit Suisse will pay approximately $175.5 million to the United States. Credit Suisse has also agreed to a methodology to calculate proximate fraud loss for victims of its criminal conduct; the amount of restitution payable to victims will be determined at a future proceeding. Credit Suisse also reached separate parallel resolutions with the U.S. Securities and Exchange Commission (SEC) and the United Kingdom’s Financial Conduct Authority (FCA). Switzerland’s Financial Market Supervisory Authority (FINMA) also engaged in an enforcement action, which includes the appointment of an independent third-party to review the implementation and effectiveness of compliance measures for business conducted in financially weak and high-risk countries, subject to FINMA’s administrative process.
The department reached this resolution with Credit Suisse based on several factors, including its failure to voluntarily disclose the conduct to the department and the nature and seriousness of the offense, which included the involvement of bankers within CSSEL. Credit Suisse received only partial credit for its cooperation with the department’s investigation because it significantly delayed producing relevant evidence. Accordingly, the total penalty reflects a 15% reduction off the bottom of the applicable U.S. Sentencing Guidelines range. Credit Suisse has also agreed to continue to cooperate with the department, to enhance its compliance program and internal controls, and to provide enhanced reporting to the department on the Credit Suisse’s remediation and compliance program. Among other things, the enhanced reporting provisions require Credit Suisse to meet with the department at least quarterly and to submit yearly reports regarding the status of its remediation efforts, the results of its testing of its compliance program, and its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced so that it is effective in deterring and detecting violations of fraud, money laundering, the Foreign Corrupt Practices Act, and other applicable anti-corruption laws.
The FBI is investigating the case.
Trial Attorneys Margaret A. Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), David M. Fuhr and Katherine Nielsen of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Hiral D. Mehta of the U.S. Attorney’s Office for the Eastern District of New York are prosecuting the case. The Criminal Division’s Office of International Affairs provided critical assistance in this case.
The department appreciates the significant assistance provided by the SEC and the FCA. The department also expresses its appreciation for the assistance provided by authorities in Switzerland and the United Kingdom in responding to Mutual Legal Assistance requests.
MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
Additional information about the Fraud Section’s role in the Criminal Division’s efforts to combat economic crime can be found at www.justice.gov/criminal-fraud.
Credit Suisse Resolves Fraudulent Mozambique Loan Case in $547 Million Coordinated Global ResolutionRead the Press Release
BROOKLYN, NY – Credit Suisse Group AG, a global financial institution headquartered in Switzerland, and Credit Suisse Securities (Europe) Limited (CSSEL), its subsidiary in the United Kingdom (collectively, Credit Suisse), each admitted to conspiring to commit wire fraud by defrauding U.S. and international investors in an $850 million loan to finance a tuna fishing project in Mozambique. Credit Suisse has been assessed with more than $547 million in penalties, fines and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom. After taking account of crediting by the department of the other resolutions, Credit Suisse will pay approximately $475 million, as well as restitution to victims in an amount to be determined by the Court. As part of these coordinated resolutions with the department, the U.S. Securities & Exchange Commission (SEC) and the U.K. Financial Conduct Authority (FCA), as well as an enforcement action by Switzerland’s Financial Market Supervisory Authority (FINMA), Credit Suisse will be subject to enhanced compliance and self-reporting, including that FINMA will impose an independent third party to monitor the bank’s transactions, risk management and internal control systems, as well as its existing credit transactions with financially weak and corruption-prone states and companies, to prevent and detect similar conduct in the future.
Credit Suisse entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the U.S. District Court for the Eastern District of New York charging the bank with conspiracy to commit wire fraud. CSSEL pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to commit wire fraud.
Previously, Andrew Pearse, a former managing director of CSSEL, pleaded guilty to conspiracy to commit wire fraud. Surjan Singh, a former managing director of CSSEL, and Detelina Subeva, a former vice president of CSSEL, pleaded guilty to conspiracy to commit money laundering. These cases are assigned to United States District Judge William F. Kuntz II of the Eastern District of New York.
Breon Peace, United States Attorney for the Eastern District of New York, Kenneth A. Polite Jr., Assistant Attorney General of the Justice Department’s Criminal Division, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), made the announcement.
“Over the course of several years, Credit Suisse, through its subsidiary in the United Kingdom, engaged in a global criminal conspiracy to defraud investors, including investors in the United States, by failing to disclose material information to investors, including millions of dollars in kickbacks to its bankers and a high risk of corruption, in connection with a $850 million fraudulent loan to a Mozambique state-owned entity,” stated U.S. Attorney Peace. “This coordinated global resolution demonstrates this Office’s commitment to working across borders with our global law enforcement partners to root out abuse and fraud by financial institutions in order to protect investors here in the United States.”
“Credit Suisse Group AG, through its U.K. subsidiary CSSEL, defrauded U.S. and international investors in connection with a lending project in Mozambique,” stated Assistant Attorney General Polite. “Among other things, Credit Suisse Group AG, CSSEL, and their co-conspirators deceived investors by hiding information about the risk that loan proceeds were used for illegal purposes in connection with the restructuring of the loan. Today’s coordinated resolution with the U.S. Securities and Exchange Commission and the Financial Conduct Authority in the United Kingdom shows that the department will not tolerate fraud by international financial institutions and is committed to working in parallel to domestic and foreign authorities to use all tools at our disposal to hold corporate wrongdoers accountable.”
According to Credit Suisse’s admissions and court documents, between 2013 and March 2017, Credit Suisse, through its subsidiary CSSEL, and its co-conspirators used U.S. wires and the U.S. financial system to defraud investors in securities related to a Mozambican state-owned entity, Empresa Moçambicana de Atum, S.A. (EMATUM), which Mozambique created to develop a state-owned tuna fishing project. Credit Suisse, through its employees and agents, conspired to defraud investors and potential investors in EMATUM by making numerous material misrepresentations and omissions relating to, among other things (i) the use of loan proceeds; (ii) kickback payments to CSSEL bankers and the risk of bribes to Mozambican officials; and (iii) the existence and maturity dates of debt owed by Mozambique, including another private loan that Credit Suisse arranged for a Mozambique state-owned entity (ProIndicus) and a different private loan another bank arranged with Credit Suisse’s knowledge. Credit Suisse represented to investors that the loan proceeds would only be used for the tuna fishing project. Instead, the co-conspirators used U.S. wires to divert loan proceeds obtained from investors; specifically, the contractor paid kickbacks of approximately $50 million to CSSEL bankers and bribes totaling approximately $150 million to senior Mozambican government officials.Credit Suisse also admitted that, prior to and during the EMATUM financing, it identified significant red flags concerning the transaction. For example, Credit Suisse identified significant corruption and bribery concerns associated with the contractor that supplied the boats and equipment for EMATUM and which received the loan proceeds directly from Credit Suisse. In addition, in or about 2015, Credit Suisse became aware that EMATUM had encountered problems servicing the loan, raising the risk of default. Credit Suisse agreed to arrange the restructuring and exchange of the original EMATUM security into a sovereign bond with a longer maturity date (the “EMATUM Exchange”). Credit Suisse did so, in part, to protect its reputation. During the EMATUM Exchange, Credit Suisse employees raised concerns about corruption allegations made in the press about the ProIndicus loan and disparities in the use of EMATUM loan proceeds. To address these concerns, Credit Suisse retained two independent industry experts to conduct a market valuation of the tuna fishing boats and other goods the contractor provided for the project. Credit Suisse knew that these experts identified a shortfall of between $265 million and $394 million between the funds raised for the EMATUM loan and the fair market value of the boats and accompanying infrastructure and training the contractor sold to EMATUM. Credit Suisse did not disclose this material information to investors during the EMATUM Exchange. Aspects of Credit Suisse’s fraudulent conduct were revealed beginning in April 2016, causing the price of the EMATUM Securities to drop and resulting in losses to investors.
Under the terms of the agreements, Credit Suisse will be assessed a criminal penalty of over $247 million, and after crediting by the department to the other resolutions, will pay approximately $175 million to the United States. Credit Suisse has also agreed to an event study methodology to calculate proximate fraud loss for victims of its criminal conduct, and the amount of restitution that Credit Suisse will pay to those victims will be determined at a future proceeding. Credit Suisse also reached separate parallel resolutions with the SEC and the FCA. In addition, as part of FINMA’s enforcement action, Credit Suisse will be subject to FINMA’s supervisory powers and enforcement tools, including an independent third-party monitor, to determine the effectiveness of the bank’s compliance measures for business conducted in financially weak and high-risk corruption countries.
The department reached this resolution with Credit Suisse based on several factors, including the nature and seriousness of the offense, which included the involvement of several bankers within CSSEL. Credit Suisse received credit for its cooperation with the department’s investigation because, among other things, it provided documents and information to the department and made several employees available as witnesses. Accordingly, the total criminal penalty reflects a 15 percent reduction off the bottom of the applicable United States Sentencing Guidelines range. Credit Suisse has also agreed to continue to cooperate with the department, to enhance its compliance program and internal controls, and provide enhanced reporting to the department on the bank’s remediation and compliance program. Among other things, the enhanced reporting provisions require Credit Suisse to meet with the department at least quarterly and to submit yearly reports regarding the status of its remediation efforts, the results of its testing of its compliance program, and its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced so that is effective in deterring and detecting violations of fraud, money laundering, the Foreign Corrupt Practices Act, and other applicable anti-corruption laws.
The investigation was conducted by the FBI’s New York Field Office. The prosecution is being handled by the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section. Assistant U.S. Attorney Hiral Mehta of the Eastern District of New York and Trial Attorneys Molly Moeser, David Fuhr and Katherine Nielsen of the Criminal Division are prosecuting the case. The Justice Department’s Office of International Affairs of the Criminal Division provided critical assistance in this case.
The department also appreciates the significant assistance provided by SEC and the FCA. The department also expresses its appreciation for the assistance provided by authorities in Switzerland and the United Kingdom in responding to Mutual Legal Assistance requests.
The Defendants:
CREDIT SUISSE GROUP AG
E.D.N.Y. Docket No. 21-CR-521
CREDIT Suisse Securities (Europe) limited
E.D.N.Y. Docket No. 21-CR-520
Columbus Man Sentenced to Statutory Maximum in Stolen Gun CaseRead the Press Release
COLUMBUS, Ga. – A Columbus resident who nearly ran over arresting police officers, leading them on a short chase before crashing his car into a tree, was sentenced to federal prison for possessing a stolen firearm.
Brian Doswell, 26, of Columbus, was sentenced to serve the statutory maximum of 120 months in prison to be followed by three years of supervised release by U.S. District Judge Clay Land after he pleaded guilty to possession of a stolen firearm. There is no parole in the federal system.
“The defendant put himself, police officers and bystanders in significant danger when he attempted to outrun law enforcement—notwithstanding the fact that he was a wanted person in possession of an illegal semi-automatic weapon,” said Acting U.S. Attorney Peter D. Leary. “Our office, working alongside our law enforcement partners, will continue to hold criminals accountable and do what we can to decrease instances of violent crime and havoc in Columbus.”
“Project Safe Neighborhoods continues to be a cornerstone of ATF’s strategy to fight violent crime,” said ATF Assistant Special Agent in Charge John Schmidt. “By partnering with local law enforcement, we can remove violent criminals who have no respect for the law and support the brave men and women of law enforcement who risk their lives daily to keep our community safe.”
“I am pleased with the successful prosecution of this case, and I really appreciate the dedicated work of our officers and the ATF. We will continue our partnership as we work to make Columbus a safe place,” said Chief Freddie Blackmon, Columbus Police Department.
According to court documents, Columbus Police Department (CPD) officers were patrolling the area of River Rd. and 50th St. in Columbus on Aug. 11, 2020, when they observed a vehicle driven by Doswell make an improper left turn. Officers were aware that Doswell had fled from police the day before and was involved in drug trafficking. Given the flight risk, an officer activated emergency lights and positioned his patrol car in front of the car driven by Doswell to prevent Doswell from fleeing. Additional CPD officers then approached the car. Doswell rolled up his window, drove his car forward almost striking the officers, then reversed his vehicle striking the car behind him. He then fled, and a car chase ensued. A short while later, Doswell lost control and crashed into a tree. Doswell was taken into custody. Officers spotted a 9mm pistol on the driver's side floorboard in plain view and a clear bag containing suspected drugs. A search of the vehicle uncovered a semi-automatic pistol in the arm rest and a semi-automatic rifle in the back seat. In addition, quantities of methamphetamine and other illegal drugs and drug paraphernalia including a digital scale and clear baggies were found. Doswell knew that the semi-automatic pistol in his possession was stolen.
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.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Columbus Police Department.
Assistant U.S. Attorney Christopher Williams prosecuted the case for the Government
Cherokee County Man Pleads Guilty to Illegal Possession of FirearmsRead the Press Release
A man who illegally possessed firearms pled guilty October 18, 2021, in federal court in Sioux City.
Reese Hageman, 36, from Marcus, Iowa, an unlawful user of methamphetamine, was convicted of possession of firearms by a prohibited person.
At the plea hearing, Hageman admitted that on April 18, 2019, law enforcement executed a search warrant at the farm residence of Hageman’s father and seized nearly two pounds of methamphetamine and several guns. During the search warrant execution, law enforcement seized four guns, including an AR-style rifle, a small quantity of methamphetamine and drug -user paraphernalia, all attributable to Reese Hageman. Reese Hageman further admitted that he was a regular methamphetamine user, and had been in possession over three rifles and a 410 shotgun. Federal law prohibits those using illegal drugs from possessing guns.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Hageman remains free on bond previously set. Hageman faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, and not more than three years of supervised release following any imprisonment.
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.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-4047. Follow us on Twitter @USAO_NDIA.
Buffalo Man Sentenced for Stealing Social Security Benefits for More Than 5 Years After His Father's DeathRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney Trini E. Ross announced today that Abdulkawi Al Shuaibi, 48, of Buffalo, N.Y., who was convicted of theft of government money, was sentenced to time-served, two years supervised release, and ordered to pay $76,393.50 in restitution by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Douglas A. C. Penrose, who handled the case, stated that the defendant’s father received retirement benefits under Title II of the Social Security Act. These benefits should have ceased when Al Shuaibi’s father died in August 2013. However, the Social Security Administration (SSA) continued to pay these benefits until February 2019. The defendant converted these benefits to his own use, knowing that he was not entitled them. The resulting loss to the SSA was approximately $76,393.50.
The sentencing is the result of an investigation by the Social Security Administration Office of Inspector General, under the direction of Special Agent-in-Charge John F. Grasso.
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Basketball Coach Charged with Federal Enticement of a Minor and Drug OffensesRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and David Sundberg, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Hartford Police Chief Jason Thody today announced that DANNY LAWHORN, 30, of Hartford, has been charged by federal criminal complaint with child enticement and narcotics distribution offenses.
Lawhorn appeared today via videoconference before U.S. Magistrate Judge Robert A. Richardson in Hartford and is detained pending a hearing that is scheduled for October 22 at 1:00 p.m. Lawhorn has been detained in state custody since October 5 when he was arrested on related state charges.
As alleged in the complaint, Lawhorn was the coach for a basketball program that had been registered with the Amateur Athletic Union (AAU) from 2018 to 2020. In the spring of 2021, the family of a minor female paid Lawhorn $700 and signed a contract for the minor to play in the program, which they believed to still be part of the AAU. Lawhorn and his girlfriend served as the minor’s host family and allowed her to reside with them at their home in Hartford. Other girls from the program also stayed at the house at times.
The complaint alleges that in the early morning hours of June 13, 2021, Lawhorn used his cellphone to text the minor a voice message asking her to give him a massage. When the minor went to Lawhorn’s bedroom, he directed her to massage his groin and inner thighs with her hands and, ultimately, sexually assaulted her. Lawhorn was arrested later that morning on related state charges for second degree sexual assault. Prior to his arrest, law enforcement found distribution quantities of crack cocaine in his pocket.
The complaint also alleges that two other girls reported that Lawhorn had repeatedly sexually assaulted them when they played on his AAU basketball team in 2017 and 2019, respectively. Both girls, who were under the age of 18 at the time they were sexually assaulted, reported that Lawhorn first asked for a massage before he sexually assaulting them.
It is further alleged that, on October 5, 2021, Hartford Police arrested Lawhorn on three counts of second-degree sexual assault charges for assaulting one of the girls. At the time of his arrest, Lawhorn possessed approximately 300 wax paper sleeves containing a white powder substance that tested positive for fentanyl.
The federal complaint charges Lawhorn with enticement and attempted enticement of a minor to engage in illegal sexual activity, which carries a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life, and possession with intent to distribute cocaine base (“crack”) and fentanyl, which carries a maximum term of imprisonment of 20 years.
Acting U.S. Attorney Boyle stressed that a criminal complaint is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorneys Nancy V. Gifford and Neeraj N. Patel.
Acting U.S. Attorney Boyle thanked the Hartford State’s Attorney’s Office for its cooperation in the investigation and prosecution of this case.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Individuals who believe they have been victimized by this defendant are encouraged to contact the FBI at 203-503-5593 or visit www.fbi.gov/DannyLawhorn.
Barbour County man indicted on drug chargesRead the Press Release
ELKINS, WEST VIRGINIA – Austin Jay Robinson, of Belington, West Virginia, was indicted today on drug charges, United States Attorney William J. Ihlenfeld, II announced.
Robinson, 22, was indicted on two counts of “Distribution of Methamphetamine.” Robinson is accused of selling methamphetamine in April 2021 in Barbour County.
Robinson faces up to 20 years of incarceration and a fine of up to $1,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Mountain Region Drug Task Force investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Arizona Man Sentenced to 10 Years in Prison for Role in Methamphetamine Distribution RingRead the Press Release
ST. PAUL, Minn. – An Arizona man was sentenced today to 120 months in prison followed by five years of supervised release for aiding and abetting possession with the intent to distribute methamphetamine.
According to court documents, in February of 2021, Randall Alex Ayon, 29, was one of three occupants staying at a hotel room in South St. Paul. While executing a search warrant for the room, law enforcement discovered two separate bags above the rented room’s bathroom ceiling tiles. Inside the two bags were several clear plastic baggies that contained approximately 14 pounds of methamphetamine. Law enforcement also seized a wire transfer receipt and seven cell phones from the hotel room. On June 24, 2021, Ayon pleaded guilty to one count of aiding and abetting possession with the intent to distribute methamphetamine.
Acting U.S. Attorney W. Anders Folk for the District of Minnesota made the announcement after U.S. District Judge Nancy E. Brasel sentenced the defendant. A sentencing date has not been set.
This case is the result of an investigation conducted by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Dakota County Drug and Violent Crimes Task Force, and the Utah State Highway Patrol.
This case was prosecuted by Assistant U.S. Attorney Allen A. Slaughter, Jr.
Allentown Man Pleads Guilty to Importing Illegal Controlled Substances from China and Fraudulently Selling them as “Dietary Supplements”Read the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Leandro Rodriguez, 45, of Allentown, PA, entered a plea of guilty before United States District Court Judge Edward G. Smith to a charge of conspiracy in connection with a fraud scheme to smuggle mislabeled drugs and sell them as dietary supplements.
The June 2019 Indictment charged Rodriguez with a multi-object conspiracy: defrauding the United States by impeding and impairing the lawful functions of the Food and Drug Administration (FDA), and committing two offenses against the United States: smuggling, and receiving misbranded drugs and delivering those drugs in interstate commerce with intent to defraud. The charges arose from the defendant’s participation in a conspiracy from early 2011 until March 2017, to import from China and resell to consumers, substances falsely labelled as “all natural” dietary supplements, but which the defendant knew contained the undeclared ingredient Sibutramine, a dangerous controlled substance that could not legally be sold in the United States.
“The United States sets standards for controlled substances in order to keep American consumers and patients safe,” said Acting U.S. Attorney Williams. “The defendant knowingly skirted our country’s importation laws, and sold dangerous drugs under the guise of benign supplements. This scheme put many people’s health and safety at risk.”
The case was investigated by the Food and Drug Administration – Office of Criminal Investigations, the United States Postal Inspection Service, and Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Mary E. Crawley.
Albuquerque man sentenced to five years in prison for firing rifle from apartment windowRead the Press Release
ALBUQUERQUE, N.M. – Roy Thundercloud, 40, of Albuquerque, was sentenced in federal court today to five years and 10 months in prison. Thundercloud pleaded guilty on March 26 to being a felon in possession of a firearm and ammunition.
According to his plea agreement and other court records, on May 31, 2020, Thundercloud fired a rifle several times from a window of his apartment near Albuquerque High School. Thundercloud also tried to dispose of the spent rifle casings by throwing them in the apartment complex’s dumpster. Thundercloud eventually surrendered after police responded to the scene.
Thundercloud was previously convicted of possession with intent to distribute marijuana, burglary and aggravated driving while intoxicated. As a previously convicted felon, Thundercloud cannot legally possess a firearm or ammunition.
Upon his release from prison, Thundercloud will be subject to three years of supervised release.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department investigated this case with assistance from the Multi-Agency Task Force. The United States Attorney’s Office for the District of New Mexico prosecuted the case.
12th CBL/BFL Member Going to Prison for Racketeering Conspiracy and Selling FentanylRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that Shawn Woods, a/k/a Pif, 30, of Buffalo, NY, who was convicted of racketeering conspiracy and possession with intent to distribute of 400 grams or more of fentanyl, was sentenced to serve 144 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorneys Paul C. Parisi and Seth T. Molisani, and Christopher O. Taylor, of the Department of Justice Organized Crime and Gang Section, who handled the case, stated that the defendant was a member of the CBL/BFL Gang, which stands for, among other things, “Cash Been Long” and “Brothers for Life.” The gang, which was involved in the illegal possession and distribution of narcotics, was formed around 2009 and operates primarily in the City of Buffalo at the Towne Gardens Housing Complex. The gang used violence, including murder and attempted murder, threats, and intimidation to defend their territory against rivals and anyone deemed to be a threat to the gang.
Woods admitted that he possessed and sold controlled substances at various times and that on February 1, 2017, he and a co-defendant possessed, at 974 Jefferson Avenue in Buffalo, three firearms, ammunition, metal spoons, digital scales, grinders, kilogram presses, and quantities of heroin and various types of fentanyl.
Woods is the 12th defendant charged in this case to be sentenced.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the New York State Police, under the direction of Major James Hall; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; the Cheektowaga Police Department, under the direction of Chief Brian Gould; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent-in-Charge Matthew Scarpino; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Bureau of Alcohol Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. DeVito, New York Field Division; the Lackawanna Police Department, under the direction of Chief Mark Packard; and the Erie Crime Analysis Center. Additional assistance was provided by the Erie County District Attorney’s Office, under the direction of District Attorney John Flynn.
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18 October 2021
Wilmot Man Convicted of Unlawfully Possessing FirearmRead the Press Release
CONCORD, N.H. – Acting United States Attorney John J. Farley announced that a federal jury found Corey Donovan, 38, of Wilmot, guilty of unlawful possession of a firearm by a felon. The verdict was returned on Friday, October 15, 2021.
According to trial exhibits and witness testimony during the four-day jury trial, Donovan was prohibited from possessing firearms due to prior felony convictions. In March of 2021, law enforcement officers received a tip that Donovan possessed firearms. After investigating the matter, law enforcement officers obtained search warrants for Donovan’s property and vehicles associated with him. Located in Donovan’s Jeep, strapped to the roll bar, was a loaded 20-gauge shotgun. There were several rounds of ammunition on and in the weapon. Additional ammunition was in the Jeep’s center console. A companion 20-gauge shotgun barrel, several shotgun parts, multiple rounds of ammunition, and various gun accessories also were located on Donovan’s property.
Donovan, who is detained, faces up to 10 years in prison. He is scheduled to be sentenced on January 31, 2022.
“To protect our community from violent crime, it is essential to keep guns out of the hands of criminals,” said Acting U.S. Attorney Farley. “As this prosecution demonstrates, we will not hesitate to bring federal criminal charges against convicted felons who unlawfully possess firearms. By prosecuting dangerous criminals like Mr. Donovan, we are working to keep families and communities in the Granite State safe from violence.”
“ATF is committed to pursuing the illegal possession of firearms by prohibited persons. In this circumstance, Mr. Donovan had a previous violent felony conviction. These investigations are of high priority for the ATF because they directly impact public safety,” said Special Agent in Charge James Ferguson.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the United States Marshals Service, New Hampshire State Police, New Hampshire Information and Analysis Center, New Hampshire Fish and Game Department, Andover Police Department, and United States Probation and Pretrial Services. Special assistance was also provided by the Somersworth Police Department. The case was prosecuted by Assistant United States Attorneys Anna Krasinski and Charles Rombeau.
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Vermilion County Man Sentenced for Sexual Exploitation of a ChildRead the Press Release
URBANA, Ill. – A Hoopeston, Illinois, man, Dalton M.C. Burmeister, 27, was sentenced today to 30 years in federal prison, to be followed by 15 years of supervised release, for sexual exploitation of a child and trafficking in child pornography.
Burmeister was arrested on December 22, 2020, and charged by criminal complaint. According to the affidavit supporting the complaint, Burmeister exploited children under the age of six to engage in sexual activity and to create an image of that conduct. The affidavit further alleged that Burmeister trafficked images of child pornography with another unidentified individual.
During the sentencing hearing, Senior U.S. District Judge Michael M. Mihm commented on the egregiousness of Burmeister’s conduct, citing the explicit text messages he had sent regarding “vulnerable” and “trusting” children in his care. The judge said that the production of sexually explicit images of these young children was “bad enough” and stated that Burmeister had caused even more harm by sharing the images.
The indictment against Burmeister had charged him with four counts of sexual exploitation of a child, three counts of distribution of child pornography, and one count of receipt of child pornography, all in September 2020. Burmeister was also charged with possession of a cellular telephone containing child pornography in December 2020. He pleaded guilty to all counts in June 2021.
The aggregate 30-year sentence imposed by the judge consisted of concurrent sentences of thirty years’ imprisonment on each of the sexual exploitation counts, as well as concurrent sentences of 20 years’ imprisonment on each of the distribution, receipt, and possession counts; the judge also ordered that the 20-year sentences run concurrent to the 30-year sentences on the sexual exploitation counts.
The statutory penalty for each count of sexual exploitation of a child is 15 to 30 years in prison. For each count of distribution of child pornography and receipt of child pornography, the statutory penalty is five to 20 years in prison. For the possession of child pornography count, the statutory penalty is up to 20 years in prison. Each count carries a fine of up to $250,000.
Assistant U.S. Attorney Elly M. Peirson represents the government in the prosecution. The charges are the result of an investigation by the Illinois State Police and the Illinois Internet Crimes Against Children Task Force.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat child sexual exploitation and abuse launched in May 2006 by the Department of Justice. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
United States Settles with Private School to Resolve Allegations of Disability DiscriminationRead the Press Release
LEXINGTON, Ky. – The United States has reached a settlement with Sayre School (Sayre), a Lexington-based private school, resolving allegations of disability discrimination and taking steps to ensure that individuals with disabilities have equal access to the school’s facilities.
The settlement agreement resolves a compliance review, initiated in 2016 by the United States, under the Americans with Disabilities Act (ADA), after receiving a complaint about physical access barriers for individuals with mobility disabilities, at Sayre’s Lower School. Sayre is a private, nonsectarian school in Lexington that serves more than 600 students from pre-kindergarten through twelfth grade. As a private elementary and secondary school, Sayre is a “public accommodation” that is subject to the requirements of Title III of the ADA.
Following an on-site architectural assessment of Sayre’s campus, the United States concluded that numerous buildings on Sayre’s campus contained physical barriers to access in violation of the ADA. As part of the resolution between the parties, Sayre:
- Has taken broad remedial action to remove architectural barriers in school buildings across its campus, to ensure access for individuals with disabilities;
- Consulted with the United States during construction of its new Lower School to ensure the building was ADA-compliant; and
- Will renovate its playground facilities to ensure that they are readily accessible to, and usable by, children with disabilities.
“Under federal law, public accommodations like Sayre School have an obligation to provide facilities that do not discriminate against students with disabilities,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “Though this settlement, Sayre has agreed to address access barriers on its campus and safeguard ongoing compliance. The Department of Justice remains committed to doing its part to ensure that children with disabilities have equal access to their school facilities.”
“Sayre School appreciates the opportunity to work with the Department of Justice to ensure that our campus is inclusive and accessible to all students, faculty, and visitors,” said a statement released by Sayre. “By improving the accessibility of our campus, we have further enhanced our learning environment.”
This matter was handled by Assistant U.S. Attorneys Hydee Hawkins and Carrie Pond, in consultation with the Civil Rights Division’s Disability Rights Section.
For more information about the Civil Rights Division and the laws it enforces or to file an online complaint regarding a potential civil rights violation, please visit civilrights.justice.gov. Individuals seeking additional information about the ADA can call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
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USP Lee Inmate Sentenced for Illegal Possession of a Controlled Substance, Possession of Contraband in PrisonRead the Press Release
ABINGDON, Va. – A federal inmate at United States Penitentiary (USP) Lee in Jonesville, Virginia was sentenced last week to 84 additional months in prison for illegally possessing a controlled substance and for possessing contraband in prison.
According to court documents, Antoine Biggs, 37, pleaded guilty on July 14, 2021 to one count of possessing with the intent to distribute buprenorphine, a schedule III-controlled substance and one count of possessing contraband in prison.
In addition to his term of imprisonment, Biggs was sentenced to a 3-year term of supervised release and ordered to pay restitution to the Bureau of Prison in the amount of $31,471.
United States Attorney Christopher R. Kavanaugh announced the sentenced today.
The investigation of the case was conducted by the Federal Bureau of Prisons.
Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.
U.S. Attorney Announces Settlement of Civil Fraud Lawsuit Against Garment Manfacturer and Its Owner for Fraudulently Underreporting Value of Imported Goods to Evade Customs DutiesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Frank Russo, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), announced today that the United States settled a civil fraud lawsuit against QUEEN APPAREL NY, INC. (“QUEEN”), a defunct manufacturer and importer of apparel, and HANK HYUNHO CHOI (“CHOI”), the sole owner of QUEEN, for defrauding the United States by knowingly evading customs duties owed on imported goods. Specifically, the Government alleges that for years QUEEN, with CHOI’s knowledge, repeatedly falsified customs forms by undervaluing the garments it manufactured overseas and then imported into the United States. As part of the settlement, approved today in Manhattan federal court by U.S. District Judge George B. Daniels, QUEEN and CHOI made admissions regarding their conduct, agreed to pay $50,000 to the United States, and agreed, among other things, to refrain from acting as the importer of record for the purpose of entering merchandise into the United States.
U.S. Attorney Damian Williams said: “Queen and its owner engaged in a fraudulent scheme to cheat the Government of customs duties owed on imported garments. This Office remains committed to combatting customs fraud. Manufacturers, importers, and their owners will be held responsible when they evade customs duties by lying about the value of the goods they bring into the United States.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “Queen Apparel NY underreported the value of garments imported in the United States for the sole purpose of evading customs duties, resulting in a significant financial loss to the US government. Import fraud affects the integrity of our economy and trade, so HSI makes a priority to investigate any organization who chooses profits over honesty. Working closely with our partners at U.S. Customs and Border Protection, together we ensure anything that comes through our borders is in compliance with U.S. law.”
CBP Director of New York Field Operations Frank Russo said: “As global supply chains grow more complex, it is important for American businesses to know their suppliers and be confident of their integrity. The outcome of this case is a testament to the dedication of our partners in the United States Attorney’s Office, Homeland Security Investigations, and the men and women of CBP in enforcing our nation’s trade laws and holding accountable those perpetrating this type of fraud.”
QUEEN is a defunct New York-based manufacturer and importer of garments. While in business, QUEEN manufactured and imported garments for third parties who would then sell those garments through department stores and national retail chains in the United States. CHOI was the sole owner of QUEEN and was involved in the management and operations of the business.
The Complaint previously filed in Manhattan federal court alleges that from 2009 to 2013, QUEEN and CHOI manufactured garments overseas, imported those garments into the United States, and then repeatedly and falsely undervalued those garments on customs forms in order to evade the payment of lawful duties to the United States.
As part of the settlement, QUEEN and CHOI admit, acknowledge, and accept responsibility for the following conduct:
- QUEEN manufactured garments and imported them into the United States for various wholesalers. CHOI was the sole owner of QUEEN and was involved in the management and operations of QUEEN, including the importing of goods.
- QUEEN was responsible for paying any import duties owed to the United States for garments manufactured abroad and imported into the United States by QUEEN.
- During the relevant time period, and at CHOI’s direction, QUEEN repeatedly undervalued the garments it imported into the United States by making false statements in entry documents and commercial invoices that it presented to CBP. As a result of these false valuations, QUEEN underpaid customs duties that were due and owing to the United States.
On March 26, 2019, the United States settled a related civil fraud lawsuit against Byer California, Inc., a wholesaler that used QUEEN to manufacture and import garments from Vietnam. The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.
Mr. Williams praised the investigative work of HSI on this case. He also thanked CBP for its assistance.
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Jacob Bergman is in charge of the case.