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Wednesday 11 August 2021
U.S. Attorney's Office Files Sexual Harassment Lawsuit Against Owner of Massachusetts Sober HomesRead the Press Release
BOSTON – The U.S. Attorney’s Office for the District of Massachusetts and the U.S. Department of Justice’s Civil Rights Division filed a lawsuit today alleging that Peter McCarthy, who operates residential sober homes through his company, Steps to Solutions, Inc., subjected female tenants to sexual harassment and retaliation in violation of the Fair Housing Act.
The lawsuit alleges that since at least 2012 through at least 2019, Peter McCarthy, 49, of Lynn — the registered agent and sole officer of Steps to Solutions, Inc. — sexually harassed female residents of his sober homes by offering to reduce or forgive rent, granting extra house privileges, or waiving security deposits in exchange for engaging in sexual acts; requesting sexually explicit photographs and indicating that he would reduce or waive rent in exchange for the images; making unwanted sexual comments; and retaliating and taking adverse housing actions against residents who reported his conduct. The lawsuit seeks a court order to prevent future discriminatory conduct, monetary damages to compensate victims of McCarthy’s conduct and civil penalties.
“It is disappointing that a landlord who is supposed to be helping vulnerable women beat drug addiction was allegedly sexually harassing them and offering to reduce their rent in exchange for sex,” said Acting United States Attorney Nathaniel R. Mendell. “Thankfully, the Fair Housing Act gives us effective tools to stop such despicable conduct and protect those who are being preyed upon. People who have experienced this kind of sexual harassment might be reluctant to report it, but we need to hear from them. Reporting sexual harassment is essential to stop and prevent sexual harassment.”
“The Fair Housing Act’s promise of non-discrimination applies to everyone,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “At a time when our country is experiencing record numbers of deaths related to drug overdoses, it is particularly disturbing to see sexually harassing conduct targeted at individuals who are in recovery. The Department of Justice will not tolerate landlords who abuse their power and will continue to vigorously pursue allegations of sexual harassment.”
The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing. Since launching the Initiative in October 2017, the Justice Department has filed 22 lawsuits alleging sexual harassment in housing.
Individuals who have information about this case can contact the U.S. Attorney’s Office by calling 617-748-3274, by e-mailing [email protected] or by visiting the case webpage.
Acting U.S. Attorney Mendell and AAG Clarke made the announcement today. Assistant U.S. Attorneys Gregory Dorchak and Michelle Leung of Mendell’s Civil Rights Unit, Assistant U.S. Attorney Eve Piemonte of Mendell’s Civil Division, and Deputy Chief R. Tamar Hagler of the Housing Section of the Department of Justice’s Civil Rights Division are handling the matter.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2016 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
U.s. Attorney’s Office Reminds Communities That the Americans with Disabilities Act Applies to Outdoor Dining AreasRead the Press Release
DETROIT, MI.— As part of a COVID-19 pandemic mitigation strategy, many cities and other local municipalities have allowed restaurants to create or expand outdoor dining spaces onto streets, sidewalks, and parking lots. To ensure that such new dining spaces are accessible and do not impair the ability of pedestrians who use wheelchairs to travel around the area, the U.S. Attorney’s Office for the Eastern District of Michigan announced today that it will be providing the attached Dear Colleague Letter to remind communities and restaurants of their obligations under the Americans with Disabilities Act (“ADA”), 42 U.S.C. §§12101 et seq.
The Dear Colleague Letter explains that under the ADA, restaurants must ensure that all dining areas (both indoor and outdoor) are accessible. It is also a reminder to municipalities, who often must approve the use or expansion of outdoor dining, that these areas must not obstruct the accessible path of travel on sidewalks. Additionally, outdoor dining spaces should not reduce the availability of accessible parking spaces in streets and parking lots.
“We know that due to the COVID-19 pandemic, the restaurant industry was hit extremely hard and we are glad that cities and townships across Michigan have supported their restaurants by allowing them to creatively utilize and expand their outdoor spaces,” said Saima S. Mohsin, Acting U.S. Attorney for the Eastern District of Michigan. “However, it is important for municipalities and restaurants to comply with the ADA and ensure any outdoor dining spaces are accessible to people with disabilities, and do not diminish the accessibility of surrounding areas, including sidewalks and availability of accessible parking spaces.”
The Dear Colleague Letter also includes a link to the Department of Justice’s website, ADA.gov, which provides information and technical assistance on the ADA’s requirements for public accommodations, such as restaurants, as well as state and local governments.
The Civil Rights Unit at the U.S. Attorney’s Office for the Eastern District of Michigan was established in 2010 and vigorously enforces a variety of federal statutes that prohibit discrimination, including the ADA. Members of the public with a complaint relating to ADA compliance may submit a complaint by email to [email protected], or by calling (313) 226-9151.Two Huntsville Men Sentenced on Drug and Gun ChargesRead the Press Release
BIRMINGHAM, Ala. – A federal judge today sentenced two Huntsville men on drug and gun charges, announced U.S. Attorney Prim F. Escalona and Drug Enforcement Administration Special Agent in Charge Brad L. Byerley.
U.S. District Judge Karon O. Bowdre sentenced Antonio Lavar Burton, a/k/a Fat Tony, 37, and Quincy Cortez McClendon, 37. Burton was sentenced to 156 months in prison for distributing heroin. He pleaded guilty to the charge in October 2020. McClendon was sentenced to 144 months in prison for distributing heroin, possession with the intent to distribute heroin, and possession of a firearm in furtherance of a drug trafficking crime. McClendon pleaded guilty to the charges in March.
“Alabama’s opioid crisis is eroding the quality of life for many of our residents. Misuse of prescription opioid pain medicine puts people at risk of turning to heroin and eventual overdose.” U.S. Attorney Escalona said. “These defendants profited from the misery of addiction and will now spend many years in prison. We are grateful to the Huntsville Police Department, DEA, and the U.S. Marshals for their work to combat violent crime and heroin trafficking in Northern Alabama.”
“The successful prosecution of Burton and McClendon should put others who engage in this type of activity on notice: if you sell drugs you will face federal charges and a lengthy prison sentence,” SAC Byerley.
DEA investigated the case, along with the Huntsville Police Department, and the United States Marshals Service. Assistant U.S. Attorney Robert J. Becher Sr. prosecuted the case.
Two Fairbanks Drug Dealers Sentenced to Federal PrisonRead the Press Release
FAIRBANKS – A Fairbanks man was sentenced by Senior U.S. District Judge Ralph R. Beistline to more than eight years (97 months) in federal prison followed by four years of supervised release for the possession of heroin and fentanyl with the intent distribute those drugs.
According to court documents, Michael Miller, 35, aka “Smiles,” and his co-defendant Araka Taylor, 37, were indicted in October 2020 on multiple drug charges. In March 2021, Miller and Taylor pleaded guilty to trafficking heroin and fentanyl in the Fairbanks area. In a separate hearing, Taylor was sentenced to more than five years (65 months) in federal prison followed by four years of supervised release.
In May 2020 the U.S. Drug Enforcement Administration (DEA) and the Alaska State Troopers (AST) began an investigation into the illegal distribution of narcotics in the Fairbanks area by an individual named “Smiles” who reportedly sold heroin that had caused multiple accidental overdoses. As part of the investigation, law enforcement purchased heroin from Miller through a confidential source on three separate occasions between May 27 and June 5, 2020. Laboratory analysis confirmed the presence of fentanyl in all of the heroin the defendant sold to the confidential source. The buyer requested only heroin from Miller – at no time did the buyer request fentanyl nor did Miller tell the buyer that the heroin contained fentanyl.
Miller was arrested on July 9, 2020 at his Fairbanks residence. Taylor fled back to her home state of Florida where she was later arrested by federal law enforcement. While executing the search warrant at the Fairbanks residence, law enforcement found more than $32,000 cash, 315.8 grams of heroin containing fentanyl, 100.5 grams of heroin, 4.1 grams of fentanyl transdermal patches, as well as drug ledgers, scales and other drug dealing paraphernalia.
After AST arrested Miller on July 9, 2020, reports of heroin overdoses declined substantially in the Fairbanks area. Specifically, in the three months prior to Miller and Taylor’s arrest (April 10, 2020 – July 10, 2020), the DEA Fairbanks Post received seven reports of drug overdoses – a dramatic increase for Fairbanks. By contrast in the nearly three months after Miller’s arrest and Taylor’s departure from Alaska, DEA Fairbanks received only one overdose report. Data recently released by the CDC reveals that over 92,000 people died last year as a result of drug overdoses in the United States which is a nearly 30 percent increase – the largest drug related deaths ever recorded in a 12-month period. Sixty-one percent of the overdose deaths nationwide involved synthetic opioids such as fentanyl. Fentanyl is approved by the FDA for treating pain, typically in advanced cancer patients, that is 50 to 100 times more potent than morphine.
“Offenses involving fentanyl have increased at an alarming rate in recent years across the U.S. and in Alaska,” said Acting U.S. Attorney Bryan Wilson, District of Alaska. “This case demonstrates the serious threat people face with fentanyl now being commonly hidden in a variety of illicit narcotics. Drug traffickers are on notice – we are committed to going after individuals who push fentanyl laced narcotics within our communities. We are determined to reduce the number of opioid overdoses in Alaska.”
“Saving lives and keeping our communities safe are top priorities of the Drug Enforcement Administration,” said DEA Special Agent in Charge Frank Tarentino. “This undercover investigation revealed these defendants were responsible for the distribution of heroin tainted with potentially deadly fentanyl. Investigations like this one illustrates the commitment and sense of urgency the men and women of DEA routinely demonstrate as they carry out their mission of enforcing the federal narcotic laws of the United States. We must continue to focus our valuable resources and leverage our much needed and well established partnerships with the United States Attorney’s Office and local, state, county and federal law enforcement agencies to stem the tide of the systemic and widespread abuse of opioids in our communities.”
“This sentencing exemplifies the commitment of Alaska’s law enforcement to getting illegal drugs off our streets and holding accountable those that are responsible,” said Lieutenant Michael Roberts, Deputy Commander of D Detachment, Alaska State Troopers. “These two were preying on our community and profiting off the sale of fentanyl laced heroin that was directly linked to multiple overdoses. Alaska State Troopers along with our local, state and federal partners will continue to work diligently to dismantle illegal drug operations in the interior and throughout the state.”
The U.S. Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), Alaska State Troopers, Fairbanks Police Department and the North Pole Police Department investigated this case.
Assistant U.S. Attorney Ryan Tansey prosecuted the case.
This case is part of Alaska’s High Intensity Drug Trafficking Area (HIDTA). HIDTA was established in 2018 to enhance and coordinate efforts among local state and federal law enforcement agencies, providing equipment, technology and additional resources to combat drug trafficking and its harmful consequences in critical regions of Alaska.
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Two Charlotte Men Are Sentenced to Prison for the Attempted Armed Robbery of A Local RestaurantRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad Jr. sentenced to prison today Deonte Marques Curry, 27, and Trevon Gregory Ricks, 26, both of Charlotte, for the attempted armed robbery of Mr. C’s Original Soul Food restaurant, during which a victim sustained multiple gunshot injuries, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. Judge Conrad ordered Curry to serve 10 years in prison and three years of supervised release. Ricks was sentenced to five years in prison, followed by two years of supervised release.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD), join Acting U.S. Attorney Stetzer in making today’s announcement.
According to filed court documents and today’s sentencing hearing, on March 5, 2020, at approximately 12:00 p.m., Curry and Ricks attempted to rob Mr. C’s Original Soul Food restaurant, located at 3726 North Tryon Street, in Charlotte. Court records show that Ricks and Curry entered the restaurant through a rear access door, and ordered an employee working in the kitchen area to get on the ground. The employee complied and the two robbers headed toward the front of the restaurant. Upon entering the front area, Curry pointed a loaded 9mm pistol equipped with an extended magazine at the restaurant owner and demanded his wallet. While the owner put his hands up, another individual, identified in court documents as M.C., tackled Curry in an attempt to disrupt the robbery. A struggle ensued and Curry fired his pistol several times, striking M.C. in the chest, stomach, left arm and right hand. Ricks fled the scene, while the restaurant owner continued to struggle with Curry, until CMPD police officers arrived and arrested Curry at the scene. Ricks was apprehended nearby shortly thereafter.
In September 2020, both Curry and Ricks pleaded guilty to conspiracy to commit Hobbs Act Robbery and attempted Hobbs Act Robbery and aiding and abetting. They are currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked the FBI and CMPD for their investigation of the case.
Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Two Charged with Participating in Fraudulent Schemes Related to the Covid-19 PandemicRead the Press Release
CONCORD – Michael Rosa, 61, of Salem, and George Adyns, 50, of Sandown, have been charged with participating in pandemic-related wire fraud schemes, Acting United States Attorney John J. Farley announced today.
According to an indictment issued by a federal grand jury, the defendants allegedly executed two schemes to defraud government programs that were intended to provide economic assistance related to the COVID-19 pandemic.
The indictment alleges that Rosa and Adyns laid off employees from Enviromart and KSC Industrial, two companies they controlled. However, the indictment alleges that the defendants directed the employees to continue working for the companies while collecting Unemployment Insurance payments from New Hampshire Employment Security. These payments included the additional $600 emergency weekly benefits provided for by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The indictment also alleges that Adyns applied for an Economic Injury Disaster Loan (EIDL) funded through the U.S. Small Business Administration, and a Paycheck Protection Program (PPP) loan. The indictment alleges that Adyns made multiple false representations on the loan applications and improperly used the personal identifying information of one the company’s employees to obtain the funds. In addition to the wire fraud charges, Adyns also is charged with aggravated identity theft.
Both men were arrested this morning. They have been released pending their trial, which is currently scheduled for October 5, 2021.
The case was investigated by the U.S. Defense Criminal Investigative Service, the U.S. Labor Department’s Office of the Inspector General, and the U.S. Naval Criminal Investigative Service, with assistance from New Hampshire Employment Security and the New Hampshire Attorney General’s Office. The case is being prosecuted by Assistant United States Attorney Matthew T. Hunter and Special Assistant United States Attorney Alexander S. Chen.
The charges in the indictment are only allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Thoroughbred Trainer Jorge Navarro and Head of New York Veterinary Clinic Plead Guilty in Federal Doping CaseRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that defendants JORGE NAVARRO and KRISTIAN RHEIN have pled guilty to their respective roles in the distribution of adulterated and misbranded drugs with the intent to defraud and mislead, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV). NAVARRO pled guilty today and RHEIN pled guilty on August 3, 2021, both before U.S. District Judge Mary Kay Vyskocil. RHEIN will be sentenced by Judge Vyskocil on December 2, 2021, and NAVARRO will be sentenced by Judge Vyskocil on December 17, 2021.
Manhattan U.S. Attorney Audrey Strauss said: “Kristian Rhein and Jorge Navarro represent the supply side and the customer side of the market in performance enhancing substances that have corrupted much of the horse racing industry. As he admitted today, Navarro, a licensed trainer and the purported ‘winner’ of major races across the world, was in fact a reckless fraudster whose veneer of success relied on the systematic abuse of the animals under his control. Rhein previously admitted that he flouted his oath as a veterinarian to protect the animals under his care, choosing instead to pursue money through the sale and administration of unregulated substances used by trainers engaged in fraud and animal abuse. These latest convictions demonstrate the continued commitment of this Office and our partners at the FBI to the investigation and prosecution of corruption, fraud, and endangerment at every level of the horse racing industry.”
According to the allegations contained in the Superseding Indictment, the Superseding Information charging RHEIN, prior charging instruments, and other filings in this case[1], and statements during court proceedings:
The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses. Trainers, like NAVARRO, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings, and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Veterinarians, including RHEIN, who was the head veterinarian and owner of Empire Veterinary Group, profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances.
NAVARRO operated his doping scheme covertly, importing misbranded “clenbuterol” that he both used and distributed to others, avoiding explicit discussion of PEDs during telephone calls, and working with others to coordinate the administration of PEDs at times that racing officials would not detect such cheating. Among the horses that NAVARRO trained and doped was XY Jet, a thoroughbred horse that won the 2019 Golden Shaheen race in Dubai. Among NAVARRO’s preferred PEDs were various “blood building” drugs, which, when administered before intense physical exertion, can lead to cardiac issues or death.
Among the misbranded and adulterated PEDs promoted, sold, and administered by RHEIN were an illegally distributed prescription drug, Clenbuterol, used as a bronchodilator and the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities and contained growth factors that the defendants knew to be undetectable through regular drug screens. SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors” supposedly derived from sheep placenta.
The horse “Maximum Security,” briefly considered the winner of the 2019 Kentucky Derby (though later disqualified), was among the horses that RHEIN assisted in doping. On June 5, 2019, New Jersey racing regulators tested Maximum Security for performance enhancing drugs a short time after Maximum Security had received a shot of SGF-1000. The testing occurred in advance of a race scheduled for June 16, 2019, in which Maximum Security competed and placed second. On an intercepted call following that test, RHEIN asserted that Maximum Security would not test positive for the presence of the drug: “[t]hey don’t even have a test for it [SGF-1000] . . . There’s no test for it in America.”
Through their pleas, NAVARRO has agreed to the payment of restitution in the amount of $25,860,514, reflecting winnings obtained through his fraudulent doping scheme, and RHEIN has agreed to pay restitution in the amount of $729,716 in connection with fraud committed through a false billing practice related to RHEIN’s drug misbranding scheme. RHEIN, and others working under RHEIN’s direction, created false billing records to be provided to horse owners that did not reflect the drugs that RHEIN and others had actually injected into racehorses under their “care.” Through this false billing scheme, RHEIN attempted to conceal from potential investigators and horse owners the true nature and means of administration of the PEDs that he and others provided and administered.
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Ms. Strauss praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Sarah Mortazavi, Andrew C. Adams, Benet Kearney, and Anden Chow are in charge of the prosecution.
[1] As to Navarro and Rhein’s codefendants, the entirety of the texts of the Indictments and the descriptions of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Third Defendant Sentenced for Fraud Against Fort Wayne CompanyRead the Press Release
SOUTH BEND – Angela Jasinski, 31, of Granger, Indiana, was sentenced by United States District Court Judge Damon R. Leichty upon her plea of guilty to wire fraud, announced Acting U.S. Attorney Tina L. Nommay.
Ms. Jansinski was sentenced to 18 months on Probation with the first 8 months to be served on home detention and 80 hours of community service and ordered to pay $68,930 in restitution.
According to documents in this case, Jasinski worked as a receptionist and administrative assistant at a Fort Wayne dental practice from September 2010 until March 2016. Her brother, Brian Nordan, one of the co-defendants in this case, was the chief marketing officer and general manager of the dental practice. During Jasinski’s period of employment at the dental practice, she earned an hourly wage. In March 2016, she left her job and moved to Granger, Indiana. As she no longer worked at the dental practice, she was not entitled to any further wages or employee benefits from the practice. Due to her brother’s intervention, Jasinski was left on the payroll and continued to receive wages and benefits from March 2016 through September 2017 in a “ghost employment” scheme.
Last month Jasinski’s co-defendants, Brian Nordan and Dustin Coleman, were sentenced for their roles in this fraud scheme. Between the three defendants in this case, the owner dentist was defrauded of over 3 million dollars.
Brian Nordan was sentenced to 42 months in prison, 2 years of supervised release and ordered to pay $2,981,357.05 in restitution. Dustin Coleman was sentenced to 6 months in prison, 12 months of supervised release and ordered to pay $149,756.00 in restitution.
This case was investigated by the FBI’s Indiana Financial Crimes Task Force with the assistance of the Organized Crime and Corruption Unit of the Indiana State Police. This case was prosecuted by Acting United States Attorney Tina L. Nommay and Assistant United States Attorneys Sarah E. Nokes and Luke N. Reilander.
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Teen Guilty of Shooting Port Arthur Man During CarjackingRead the Press Release
BEAUMONT, Texas – A Port Arthur man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Charles Robert Knatt, 19, pleaded guilty to carjacking and use of a firearm during a crime of violence today before U.S. District Judge Marcia A. Crone.
“Today’s guilty plea represents another step forward in getting justice for the victim of this senseless and violent crime,” said Acting U.S. Attorney Nicholas J. Ganjei. “I am thankful for the hard work of the Port Arthur Police Department and the ATF in helping bring this case to a successful conclusion.”
According to court documents, on March 15, 2021, law enforcement officers responded to a carjacking and shooting in Port Arthur and found a man shot in the arm at his residence. The victim told officers he remote-started his truck from his home before leaving for work at 4:30 a.m. As he left his residence, he was approached by Knatt, who was armed with a gun. Knatt demanded money from the victim and the keys to his truck. Knatt gave the keys to an accomplice, who entered the driver’s seat, while Knatt entered the passenger side of the truck. The victim ran back to his house and began to ring his doorbell, at which point Knatt exited the truck and shot him. Security cameras at the victim’s home captured the carjacking and shooting on video. Three days later, Knatt turned himself in to police after seeing news reports about the carjacking and shooting. Knatt admitted to law enforcement that he stole the victim’s keys and shot him.
Knatt was indicted by a federal grand jury on May 6, 2021. He faces up to life in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
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.
This case is being investigated by the Port Arthur Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Matthew Quinn.
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Special assistant prosecutor sworn in to continue gun crime initiativeRead the Press Release
CINCINNATI – Acting United States Attorney Vipal J. Patel and Cincinnati Mayor John Cranley announced today the designation of a special prosecutor to assist with federal gun cases.
Meagan W. Myers with the City of Cincinnati Law Department has been designated as a Special Assistant United States Attorney (SAUSA) and will continue an anti-violence initiative between the local and federal prosecutor’s offices.
“Meagan is an accomplished and respected prosecutor for the City of Cincinnati, and we look forward to continued success in her new role at the Department of Justice,” said Deputy City Solicitor Emily Smart Woerner.
The initiative includes a committed focus from federal, state and local law enforcement agencies to work collaboratively to identify those individuals who consistently use firearms to commit crimes, who habitually possess illegal firearms, and who present a clear threat to the safety of the community.
Federally, possession of a firearm by a convicted felon can result in a prison sentence of up to 10 years in prison. Defendants convicted of possessing a firearm in furtherance of a drug trafficking offense face a mandatory minimum of five years and up to life in prison. Offenders who possess a firearm after having been convicted of three violent felonies face between 15 years and life in prison.
The SAUSA position is dedicated as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Southwest Virginia Man Sentenced in $499,000 Unemployment Fraud SchemeRead the Press Release
ABINGDON, Va. – A Southwest Virginia man was sentenced yesterday to 30 months in prison for conspiring with others to defraud the government of more than $499,000 and to commit mail fraud.
According to court documents, Eric Mullins, 29, waived his right to be indicted and pleaded guilty in April 2021 to one count of conspiring to defraud the United States and one count of conspiracy to commit mail fraud with respect to benefits authorized and paid in connection with a presidentially declared major disaster or emergency.
Mullins participated in a conspiracy to commit fraud against the United States in connection with a scheme involving the filing of fraudulent claims for pandemic unemployment benefits.
According to court documents, Mullins, and others, conspired to collect personal identification information of more than 35 co-conspirators, including 15 inmates in the custody of the Virginia Department of Corrections, and to file fraudulent claims of pandemic-related unemployment benefits.
Over the course of nine months, the conspiracy filed fraudulent claims for at least 37 individuals, with a total actual loss to the United States of at least $499,000.
Acting United States Attorney Daniel P. Bubar of the Western District of Virginia, Darrell J. Waldon, IRS-CI Acting Special Agent in Charge of the Washington DC Field Office, and Syreeta Scott, Acting Special Agent-in-Charge, Philadelphia Region, U. S. Department of Labor Office of Inspector General announced the sentence today.
The Department of Labor Office of the Inspector General, the Internal Revenue Service – Criminal Investigation, the Norton Police Department, and the Russell County Sheriff’s Office investigated the case.
Assistant United States Attorney Daniel J. Murphy prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Shreveport Man Sentenced for Trafficking MethamphetamineRead the Press Release
SHREVEPORT, La. - Acting United States Attorney Alexander C. Van Hook announced that Kyion J. Washington, 37, of Shreveport, was sentenced by United States District Judge Elizabeth E. Foote to 46 months in prison, followed by 3 years of supervised release, for possession of methamphetamine with intent to distribute.
According to information presented to the court, Washington was involved with other co-conspirators in trafficking methamphetamine between Waskom, Texas and the Shreveport/Bossier City, Louisiana areas. Law enforcement agents with the U.S. Drug Enforcement Administration (DEA) were able to intercept phone conversations between Washington’s co-conspirators in which they arranged methamphetamine transactions.
On May 10, 2018, Washington traveled with another co-conspirator from Shreveport to Waskom to purchase methamphetamine and the men were later stopped by law enforcement agents for a traffic violation. During the traffic stop, agents located and seized methamphetamine from Washington. The suspected methamphetamine was sent to the North Louisiana Criminalistics Laboratory and the substance was confirmed to be methamphetamine and weighed approximately 40.95 grams.
The DEA and Caddo Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Brandon B. Brown prosecuted the case.
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San Fernando Valley Man Found Guilty in Terror Plot to Bomb a Rally in Long BeachRead the Press Release
LOS ANGELES – A federal jury this afternoon convicted a San Fernando Valley man for attempting to bomb a rally in Long Beach for the purpose of causing mass casualties.
Mark Steven Domingo, 28, of Reseda, was found guilty of providing material support to terrorism and attempting to use of a weapon of mass destruction.
As a result of today’s guilty verdicts, Domingo faces a statutory maximum sentence of life in federal prison. Domingo, who has been in federal custody since his arrest in April 2019, is scheduled to be sentenced by United States District Judge Stephen V. Wilson on November 1.
The investigation into Domingo was prompted by his online posts and conversations in an online forum in which he expressed support for violent jihad, a desire to seek retribution for attacks against Muslims, and a willingness to become a martyr. After considering various attacks – including targeting Jewish people, churches, and police officers – Domingo decided to bomb a rally scheduled to take place in Long Beach in April 2019.
As part of the plot, Domingo asked a confederate – who actually was working with the FBI as part of the investigation – to invite a bomb-maker into the scheme. Domingo then purchased and provided to the confederate and the bomb-maker – who in fact was an undercover law enforcement officer – several hundred 3½-inch nails to be used as shrapnel for the bombs. Domingo specifically chose those nails because they were long enough to penetrate organs in the human body.
Leading up to the attack, Domingo called for another event similar to the October 2017 mass shooting in Las Vegas. Following an attack on Muslims in New Zealand in March 2019, Domingo called for retribution in an online post.
Domingo selected the Long Beach rally as his target and, in April 2019, drove his confederate and the undercover officer to Long Beach to scout the location he planned to attack. While there, Domingo discussed finding the most crowded areas so he could kill the most people. On April 26, 2019, Domingo received what he thought were two live bombs, but were actually inert explosive devices delivered by an undercover law enforcement officer. He was arrested that same day with one of the bombs in his hands.
This matter is the product of an investigation by the FBI’s Joint Terrorism Task Force. JTTF members who participated in the investigation include the FBI, the Los Angeles Police Department, the Naval Criminal Investigative Service, the Los Angeles County Sheriff's Department, and the Long Beach Police Department.
This case is being prosecuted by Assistant United States Attorneys Reema M. El-Amamy and David T. Ryan of the Terrorism and Export Crimes Section, and Trial Attorneys Lauren Goddard and Joshua Champagne of the Department of Justice’s Counterterrorism Section.
Readout of Attorney General Merrick B. Garland and Associate Attorney General Vanita Gupta's Meeting with State Chief JusticesRead the Press Release
Today, Attorney General Merrick B. Garland and Associate Attorney General Vanita Gupta met with over 35 Chief Justices of state supreme courts to discuss the housing and eviction crisis confronting the country. The Attorney General thanked the Chief Justices for their work on the issue and highlighted the Associate Attorney General’s recent letter outlining steps that state courts could take to raise awareness of emergency rental assistance and to implement eviction diversion strategies in their jurisdictions. The Attorney General applauded the work in states like Michigan, where the State Supreme Court has issued an order requiring courts to stay eviction proceedings for up to 45 days to allow a tenant to apply for rental assistance. In Texas, the Supreme Court modified the notices that are sent to tenants who are sued for eviction to make sure they are aware of the benefits available to them. Simple steps like these can increase the chance that tenants can stay in their homes and help courts that are being deluged with eviction filings.
The Attorney General also heard from the Chief Justices about the obstacles their courts face in combating the crisis and committed the Department of Justice to doing everything it can to support their efforts. He emphasized that the federal government has made funds available to state courts that are seeking to implement eviction diversion programs, including the $350 billion that the American Rescue Plan allocated to state and local governments and the $46.5 billion Emergency Rental Assistance Program. The President of the National Center for State Courts spoke to the Attorney General about the work the Center has done to support eviction diversion efforts, including creating a diagnostic tool that helps courts fashion diversion programs that best suit their jurisdiction.
The Attorney General asked the Associate Attorney General and Chief Justices to continue working together on this critical issue and to identify obstacles that the federal government can help address.
Pikeville Man Sentenced to over 12 Years for Two Armed RobberiesRead the Press Release
RALEIGH, N.C. – A Pikeville man was sentenced to 147 months in prison for committing armed robberies in Kenly and Selma, North Carolina. Richard Lavar Carter entered his guilty plea on April 13, 2021.
According to court documents and other information presented in court, Carter and another unidentified subject committed two armed robberies in Johnston County in the early morning hours of October 15, 2019. Around 3:00am, video surveillance footage from a Waffle House in Kenly, North Carolina, showed Carter brandishing a handgun at employees before fleeing the store with money from the register. Just an hour later, video surveillance footage from the New Dixie Mart in Selma, North Carolina, showed Carter and another unidentified male subject brandishing a handgun and an AK-style rifle and robbing the store. During this robbery, Carter assaulted one of the store clerks with his handgun. Investigators were able to identify Carter’s face from the store video. Carter was arrested on state charges on October 18, 2019. Carter was charged federally in April of 2020 and transferred to federal custody in May of 2020.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by Senior U.S. District Judge W. Earl Britt. The Kenly Police Department, the Selma Police Department, the Johnston County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case and Assistant U.S. Attorney Aakash Singh prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-CR-178-BR.
Phenix City Man Sentenced for Distributing Child PornographyRead the Press Release
Montgomery, Ala. – Today, Acting United States Attorney Sandra J. Stewart announced that a Phenix City, Alabama man has been sentenced for distribution of child pornography. On August 10, 2021, 37-year-old Richard Ryan Jazek was sentenced to 151 months in prison, to be followed by five years of supervised release. There is no parole in the federal system.
According to court records, in the Fall of 2020, the FBI received information about a Kik messenger app user who was sharing images and videos of suspected child pornography. Law enforcement discovered that the suspected Kik account and username was linked to Jazek, along with the IP address. Further investigation revealed that Jazek’s Kik account had in fact uploaded multiple images and videos containing child pornography. In his plea agreement, Jazek admitted specifically sharing a video on September 22, 2020, and then sharing an image on October 4, 2020. After both of these Kik postings, Jazek responded to other users viewing the video and image in the chat section and made disturbing comments. In addition to his prison sentence, Jazek was ordered to pay $27,000.00 in restitution, or $3000.00 each to nine victims identified in the videos and images he was sharing.
The Federal Bureau of Investigation (FBI) investigated this case. Assistant United States Attorneys James P. Lamb and MaryLou E. Bowdre prosecuted the case.
Pensacola Man Sentenced in Federal Court on Drug ChargesRead the Press Release
MOBILE, AL – A Pensacola, Florida, man was sentenced on August 10, 2021, to 10 years in prison for his participation in a conspiracy to possess with intent to distribute methamphetamine ice.
According to court documents, Cameron Alexander Michanowicz, 42, distributed large amounts of methamphetamine ice from his residence and his business in the Pensacola, Florida, area. Many people from Baldwin County, Alabama, traveled to Pensacola to deal with Michanowicz and brought the drugs to Alabama for distribution here. When federal agents obtained a search warrant for Michanowicz’s residence and business, firearms, drugs, several cell phones, computers, and cash were seized. Michanowicz provided a statement to the agents after being advised of his Miranda rights in which he admitted his participation in the illegal distribution of drugs. Michanowicz was held accountable for the distribution of 10.4 kilograms of methamphetamine ice and one pound of heroin.Chief United States District Court Judge Kristi K. Dubose imposed the 10-year sentence and ordered that Michanowicz would also serve five years on supervised release following his imprisonment. Michanowicz will also undergo testing and treatment for drug abuse, and he will be subject to a search of his person and premises upon reasonable suspicion during that time. No fine was imposed but Chief Judge Dubose ordered that Michanowicz pay $100 in special assessments.
The case was investigated by the Baldwin County Sheriff’s Office, the Baldwin County Drug Task Force, and the FBI’s Safe Streets Task Force. Assistant U.S. Attorney Gloria Bedwell prosecuted the case on behalf of the United States.
Parkersburg Man Pleads Guilty to Federal Methamphetamine ChargeRead the Press Release
CHARLESTON, W.Va. – A Parkersburg man pleaded guilty today to a federal methamphetamine charge.
According to court documents, the Parkersburg Police Department stopped Justin Andrew Beardsley, 33, on Lynne Street in Parkersburg for a traffic violation on June 1, 2019. After a drug dog alerted on the vehicle, officers searched and found methamphetamine, packaging materials, scales, three loaded firearms, body armor, a hand grenade and miscellaneous ammunition. At his plea hearing, Beardsley admitted his intent to sell the methamphetamine and acknowledged that he had sold between 200 and 350 grams of methamphetamine in the year leading up to the traffic stop and arrest.
Beardsley pleaded guilty to possession with intent to distribute methamphetamine and faces up to 20 years in prison when he is sentenced on November 8, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Parkersburg Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
United States District Judge Joseph R. Goodwin presided over the hearing. Assistant United States Attorney Joshua C. Hanks is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-0060.
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Parker, Washington Man Pleads Guilty to Three Counts of Second-Degree MurderRead the Press Release
Spokane – Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Clifton Frank Peter, age 37, of Parker, Washington, and an enrolled member of the Yakama Nation, pled guilty to three counts of Second Degree Murder. A sentencing hearing has been set before Chief United States District Judge Stanley Bastian to take place on December 1, 2021.
According to information disclosed during court proceedings, on June 1, 2020, Peter became enraged while playing a video game, subsequently attacked his mother and departed from her residence in a vehicle. As Peter was backing out of the driveway, his vehicle struck victim J.G.’s vehicle as it passed by. Shortly after J.G.’s vehicle stopped, Peter exited his vehicle and shot J.G. with a shotgun. J.G. died at the scene.
Peter then drove away from the scene and headed northbound on Yakima Street. At the same time, victims I.G. and O.V. were in a vehicle driving northbound on Yakima Street. Peter observed they were moving slowly and he intentionally rear-ended their vehicle, causing an accident. Peter then exited his vehicle and shot I.G. and O.V. with a shotgun. Both victims died at the scene. Peter was quickly apprehended by law enforcement. All three homicides occurred within the external boundaries of the Yakama Nation.
This case was investigated by the Yakima Resident Office of the Federal Bureau of Investigation. This case was prosecuted by Rick Burson and Tom Hanlon, Assistant United States Attorneys for the Eastern District of Washington.
Nine SEPTA Maintenance Managers and Vendors Charged with Bribery and Fraud in Connection with Multiple Procurement Fraud SchemesRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Mark Irvello, 56, of Broomall, PA; Stanley Woloff, 58, of Philadelphia, PA; David Abell, 72, of Chincoteague Island, VA; Stephen Kish, 65, of Philadelphia, PA; Rodney Martinez, 50, of Blackwood, NJ; Jesse Fleck, 43, of Philadelphia, PA; Peter Brauner, 58, of Kintersville, PA; James Turner, 59, of Horsham, PA; and John Brady, 60, of Blue Bell, PA; were charged in separate Criminal Informations with bribery and fraud offenses.
The Informations allege that at various times from 2013 through 2019, management-level employees working in SEPTA’s Bridges and Buildings Department (“BBD”) engaged in bribery and theft schemes with two SEPTA vendors, defendants Mark Irvello of MSI Tool Repair and Supply (“MSI”), located in Upper Darby, PA; and Stanley Woloff of Advantage Industrial Supply (“AIS”), located in Philadelphia, PA. The SEPTA managers alleged to have engaged in the scheme are David Abell, Stephen Kish, Rodney Martinez, Jesse Fleck, Peter Brauner, James Turner, and John Brady.
According to the Informations, the BBD is responsible for maintaining, repairing, and renovating SEPTA facilities throughout the southeastern Pennsylvania region. To facilitate this work, SEPTA issues “procurement cards” (also known as P-Cards) to management-level employees working in the BBD. The P-Cards, which operate as SEPTA credit cards, are to be used for purchasing items needed for the legitimate work of the BBD.
In about 2013, defendant Abell, who was a Senior Director of Maintenance at SEPTA, agreed with defendant Irvello of MSI, and separately, with defendant Woloff of AIS (collectively “the vendors”), to exploit the P-Card system for their mutual benefit. Abell solicited the vendors to provide him with regular cash payments of approximately $1,000 to $2,000 per month. In exchange for those payments, the vendors falsely billed SEPTA through the P-Card system for items that the vendor was not providing to SEPTA. The false charges to SEPTA covered the cash payments to Abell, plus a substantial additional amount to generate fraud proceeds for the vendor. As part of the corrupt deals with the vendors, Abell encouraged other BBD managers to use and continue to use MSI and AIS for SEPTA purchases, growing the vendors’ business with SEPTA. To conceal the scheme, Irvello and Woloff billed SEPTA for items that SEPTA might use, but in fact, did not need at that time, or billed SEPTA for substantially more of certain products than they were actually providing to the agency. The vendors thus combined legitimate with fraudulent billing, making the scheme difficult to detect.
At various times, beginning around 2014, several other SEPTA BBD managers began engaging in similar fraud activity with defendants Irvello and Woloff. Those managers included defendant Martinez, who in 2016 replaced Abell as Senior Director of Maintenance and took over Abell’s legitimate role in SEPTA’s BBD, as well as his role in the fraud and bribery scheme. Martinez regularly solicited cash payments from the vendors under the same arrangement that the vendors had with Abell. The cash payments to Martinez totaled over $144,000.
Other BBD managers, including defendants Kish, Fleck, Brauner, Turner, and Brady, individually solicited the vendors for cash and personal items. The vendors agreed to provide the cash and personal items to the managers, and then fraudulently billed SEPTA to cover the cost of those payments and products and to generate additional fraud proceeds for themselves.
The most prolific participant in this fraud scheme was defendant Kish. Kish had Irvello make over $225,000 in purchases to benefit Kish. In most of these cases, Kish directed Irvello to purchase specific precious metals, particularly gold coins, each worth thousands of dollars. The purchases included several American Gold Eagle Coins, Gold American Buffalo Coins, South African Gold Krugerrand Coins, Canadian Gold Maple Leaf Coins, Royal Canadian Mint Gold Bars, and PAMP Suisse Gold Bars. Defendant Kish is also alleged to have engaged in money laundering for using the proceeds of the scheme to purchase real estate. The other participants in the scheme also obtained numerous personal items, including a $5,000 backhoe attachment for defendant Brauner, ATV equipment for defendant Fleck, and numerous electronics, tools, articles of clothing, and automobile repairs for defendants Turner and Brady.
In connection with this scheme, the vendor companies owned by defendants Irvello and Woloff each became one of SEPTA’s largest billers through the P-Card system. In doing so, Irvello defrauded SEPTA of more than $540,000, and Woloff defrauded SEPTA of more than $330,000.
“Philadelphians deserve public employees who do their jobs honestly, without gaming the system to line their own pockets,” said Acting U.S. Attorney Williams. “At a time when SEPTA is facing significant challenges to continue faithfully serving its riders, many of whom have no other reliable, cost-effective transportation options, the defendants’ alleged actions perpetrating this fraud scheme are the definition of selfish greed.”
“The FBI is committed to tracking down public officials and servants who abuse their positions of trust for personal gain,” said Brian T. Herrick, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Public corruption erodes citizens' faith in their community servants, and it will continue to be the FBI’s top criminal investigative priority. Today’s indictment sends the message that the FBI will work tirelessly to protect government entities and services from fraud, waste and abuse.”
“SEPTA is a public trust. Employees who engage in fraud violate that trust and will face serious consequences,” said D. James Bannan, the Authority’s Inspector General. “The vast majority of SEPTA’s workforce are honest, hard-working individuals who are dedicated to providing critical public transportation service to our region. We will continue to do right by them, the taxpayers, and the riding public by holding those who engage in illegal activity accountable for their actions.”
If convicted, each defendant faces maximum sentences of at least 20 and as much as 40 years in prison.
The case was investigated by the Federal Bureau of Investigation with the assistance of SEPTA Office of Inspector General, and is being prosecuted by Deputy United States Attorney Louis D. Lappen. SEPTA’s Internal Audit Division launched an investigation after receiving tips from employees, and the Authority’s Inspector General shared the findings with the FBI.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Haven Men Charged with Trafficking CocaineRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and Joshua W. McCallister, Acting Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, today announced that JOSE L. GERENA, 31, and BRIAN I. CRUZ-RODRIGUEZ, 29, both of New Haven, were arrested yesterday and charged by federal criminal complaint with conspiracy to possess with intent to distribute cocaine.
As alleged in court documents, in November 2020, the U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force executed a federal search warrant on a suspicious package that had been sent through the U.S. Mail from New Haven to an address in Aguadilla, Puerto Rico. The package contained $102,450 in cash. The investigation revealed that Gerena, with the assistance of Cruz-Rodriguez and others, was supervising the receipt of numerous parcels containing kilogram quantities of cocaine that had been shipped from Puerto Rico, the resale of the cocaine to others, and the shipment of narcotics proceeds to individuals in Puerto Rico. During the investigation, the organization regularly received cocaine shipments at 365 Poplar Street, 206 Exchange Street and other addresses in New Haven.
Prior to yesterday’s arrests of Gerena and Cruz-Rodriguez, investigators intercepted two parcels each containing a kilogram of cocaine that had been sent through the U.S. Mail from Puerto Rico to 365 Poplar Street and 206 Exchange Street. Investigators then made a controlled delivery of a parcel containing a kilogram of cocaine to 365 Poplar Street before executing search warrants and making the arrests.
Conspiracy to possess with intent to distribute cocaine carries a maximum term of imprisonment of 20 years.
Gerena is currently detained and Cruz-Rodriguez is released on a $150,000 bond.
Acting U.S. Attorney Boyle stressed that a complaint is only a charge and 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 U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force and the Drug Enforcement Administration, with the assistance of the New Haven Police Department. The Task Force includes members from the U.S. Postal Inspection Service, the U.S. Postal Service – Office of the Inspector General, the Connecticut Army National Guard, and the Hartford, New Britain, Meriden and Town of Groton Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Konstantin Lantsman through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Mount Vernon Baseball Coach Charged with Coercion and Enticement of A MinorRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Jacqueline Maguire, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Miriam E. Rocah, Westchester County District Attorney, announced today the arrest of ROBERT POPE for persuading, inducing, enticing and coercing a 16-year-old minor to engage in sexual activity. POPE was arrested yesterday morning and presented before U.S. Magistrate Judge Paul E. Davison in White Plains federal court.
Manhattan U.S. Attorney Audrey Strauss said: “The alleged conduct in this case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them. We have zero tolerance for the exploitation of children and we will prosecute and punish those who engage in this conduct. Any individuals who may have relevant information concerning Robert Pope should please contact the FBI at 1-800-CALL-FBI.”
FBI Acting Assistant Director Jacqueline Maguire said: "Adults who are entrusted with educating and instructing children usually have the child's best interest at heart. As we allege, Mr. Pope instead chose to abuse his position of authority as a baseball coach to coerce and entice a child into having sex with him. We believe there may be other victims who haven't yet come forward, and we're asking any potential victims and their parents or guardians to contact us at 1-800-CALL-FBI or online at tips.fbi.gov. Your information could help our investigation, and help us hold Mr. Pope accountable."
Westchester County District Attorney Miriam E. Rocah said: "As alleged in this case, Robert Pope abused his position of trust to take advantage of the most vulnerable for his own sexual gratification. We are proud to work together with the Southern District of New York, the New York FBI and the Mount Vernon Police Department to aggressively prosecute sexual abuse of minors and will use all of our collective resources to ensure sexual predators are stopped and held accountable.”
According to the Complaint[1] filed on August 9, 2021 in White Plains federal court and unsealed yesterday:
Between at least on or about September 1, 2020, up to and including at least on or about April 11, 2021, POPE communicated with a 16-year-old minor (“Victim-1”) by cellphone and persuaded Victim-1 to meet POPE in person in Westchester County, New York on more than one occasion to engage in sexual activities with POPE.
On or about June 15, 2021, ROBERT POPE was charged in Westchester County, New York, with three counts of Criminal Sexual Act in violation of New York Penal Law 130.40(2).
Ms. Strauss stated that the investigation is ongoing. Ms. Strauss requests that any individuals who may have relevant information concerning ROBERT POPE contact the Federal Bureau of Investigation at 1-800-CALL-FBI (225-5324).
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POPE, 30, of Mount Vernon, New York, is charged with one count of coercion and enticement, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life imprisonment. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the efforts of the FBI, the Westchester County District Attorney’s Office, the Westchester County Safe Streets Task Force, and the Mount Vernon Police Department in connection with this investigation. She added that the investigation is ongoing.
This case began as an investigation in Westchester County District Attorney’s Office by Assistant District Attorneys Marissa Morra Wynn and Christine Hatfield. The prosecution is being handled by the Office’s White Plains Division. Assistant United States Attorney Marcia S. Cohen is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Missouri Man Indicted on Federal Hate Crime and Firearm ChargesRead the Press Release
A federal grand jury in Kansas City, Missouri, returned a two-count indictment charging a Missouri man with hate crime and firearm violations for shooting a teenager with the intent to kill because of the victim’s sexual orientation.
According to court documents, Malachi Robinson, 25, is charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and with using a firearm during and in relation to a crime of violence. Robinson allegedly shot the victim with a 9mm handgun because of his sexual orientation, causing significant non-fatal injuries.
If convicted, Robinson faces up to life in prison on the hate crime charge and a mandatory minimum 10 years in prison, consecutive to any other sentence, on the firearm charge. Robinson also faces a fine of up to $250,000 with respect to each charge.
The case is being investigated by the FBI’s Kansas City Field Office and the Kansas City Police Department. The case is being prosecuted by Assistant U.S. Attorney David Ketchmark of the Western District of Missouri and Trial Attorneys Shan Patel and Eric Peffley of the Justice Department’s Civil Rights Division.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, Acting U.S. Attorney Teresa A. Moore for the Western District of Missouri and Acting Special Agent in Charge Michael Hensle of the FBI’s Kansas City Field Office made the announcement.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes.
Menomonie Man Sentenced to 81 Months for Illegal Firearm & Heroin PossessionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that David Hartwig, 34, Menomonie, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 81 months in federal prison for possessing a firearm and ammunition as a felon and for possessing heroin with intent to distribute. This prison term will be followed by 3 years of supervised release.
On May 6, 2020, undercover officers approached Hartwig as part of a drug trafficking investigation. Upon seeing the officers, Hartwig ran, resulting in a short pursuit during which Hartwig displayed a 9mm pistol. After tackling Hartwig, officers recovered the gun along with a backpack Hartwig dropped. The backpack contained an additional magazine loaded with 9mm ammunition, heroin packaged for sale, Hartwig’s wallet, and a small amount of methamphetamine.
At the time of these offenses, Hartwig was on community supervision in connection with a 2011 Wisconsin conviction for delivery of heroin and a 2019 Wisconsin conviction for possession of methamphetamine. Under federal law, he has been prohibited from possessing any firearm or ammunition since 2007.
At sentencing Judge Peterson remarked that Hartwig’s persistent drug offenses, along with acts of violence in his criminal history, made him a danger to the community. Judge Peterson also noted that Hartwig’s illegal possession of the firearm demonstrated his disregard of the law, as did the fact he fled from officers.
The investigation in this case was conducted by the West Central Drug Task Force, Dunn County Sheriff’s Office, Menomonie Police Department, and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant United States Attorney Taylor L. Kraus.
Marrero Man Pleads Guilty to Conspiring to Stage Automobile Accidents in Order to Defraud Insurance and Trucking CompaniesRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Duane A. Evans announced today that DEWAYNE COLEMAN (“COLEMAN”), age 22, of Marrero, Louisiana, entered a plea of guilty today to Conspiracy to Commit Mail Fraud, in violation of Title 18, United States Code, Section 371, arising out of staged automobile accidents with tractor-trailers occurring in New Orleans.
According to today’s guilty plea, COLEMAN, along with his co-defendants, Erica Lee Thompson (“Erica Lee”), Donisha Lee, Donreion Lee, and Aisha Thompson, conspired to commit mail fraud in connection with a staged accident with Cornelius Garrison, occurring on September 6, 2017. Today’s guilty plea brings the total number of defendants convicted in “Operation Sideswipe” to twenty-seven (27).
COLEMAN admitted that on September 6, 2017, on the I-10 near the Almonaster exit, he was a passenger in co-defendant Erica Lee’s 2015 RAV4 being driven by their former co-defendant, when he intentionally crashed into a tractor-trailer owned by Averitt Express. After the staged accident, the driver exited the RAV4 and told Erica Lee to get behind the wheel of the RAV4 to make it appear that Erica Lee was driving the vehicle at the time of the staged accident. The defendants contacted the NOPD and falsely claimed that Erica Lee was the driver at the time of the collision. COLEMAN retained counsel and made a claim for damages. The total settlement for the Averitt accident was $30,000.
On March 26, 2019, COLEMAN, Donisha Lee, and Donreion Lee each provided false testimony in depositions taken in conjunction with the Thompson Lawsuit. On April 9, 2019, Aisha Thompson provided false testimony in a deposition taken in conjunction with the Thompson Lawsuit. In these depositions, COLEMAN, Donisha Lee, Donreion Lee, and Aisha Thompson lied about the September 6, 2017 accident including, but not limited to, who was driving the RAV4 and the extent of their injuries.
COLEMAN faces a maximum sentence of five (5) years of incarceration. Upon release from prison, COLEMAN also faces a term of supervised release up to (3) three years, and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to any person under Title 18, United States Code, Section 3571, and a mandatory $100 special assessment fee. Sentencing in this matter is scheduled for January 5, 2022, before United States District Judge Sarah S. Vance.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the Federal Bureau of Investigation, Louisiana State Police, and the Metropolitan Crime Commission with this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit; Assistant U.S. Attorney Edward J. Rivera; Assistant U.S. Attorney Shirin Hakimzadeh; Assistant U.S. Attorney Maria Carboni; and Assistant U.S. Attorney Brandon Long.
Manchester Man Sentenced to 30 Months for Distribution of FentanylRead the Press Release
CONCORD - Michael Messina, 34, of Manchester, was sentenced to 30 months in federal prison for distribution of fentanyl, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, on June 4, 2019, Manchester police detectives observed Messina engage in an apparent drug deal. Immediately after the exchange, the customer placed a small object down his pants. The two men then separated and walked in opposite directions. Suspecting another drug deal, detectives separately detained both Messina and the customer. After relinquishing a quantity fentanyl to detectives, the customer admitted purchasing fentanyl from Messina.
Messina was approached and dropped money and a cellophane wrapper containing powder that later tested positive for fentanyl. After waiving his rights, Messina admitted to selling drugs to the customer.
“Fentanyl traffickers endanger lives by selling an extremely deadly substance,” said Acting U.S. Attorney Farley. “To protect the public, we are working with the Manchester Police Department to identify and prosecute the traffickers who are distributing fentanyl and other dangerous opioids in Manchester.”
This matter was investigated by the Manchester Police Department. The case was prosecuted by Assistant U.S. Attorney Joachim H. Barth.
This case is part of Operation Synthetic Opioid Surge (S.O.S.). In July of 2018, Attorney General Jeff Sessions announced the creation of S.O.S., which is being implemented in the District of New Hampshire and nine other federal districts. The goal of S.O.S. is to combat the large number of overdoses and deaths associated with fentanyl and other synthetic opioids. In New Hampshire, the U.S. Attorney’s Office is focusing its efforts on prosecuting synthetic opioid trafficking cases arising in Hillsborough County, which includes Manchester and Nashua.
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Man from Mescalero charged with assault in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Romeo Martinez, 22, of Mescalero, New Mexico, appeared in federal court on Aug. 6 for a preliminary hearing where he was charged with assault resulting in serious bodily injury in Indian Country. Martinez will remain detained pending trial.
According to a criminal complaint, on June 9 Martinez allegedly showed up at his grandmother’s house on the Mescalero Apache Reservation. Martinez, who is not an enrolled member of the Mescalero Apache Tribe, had been banished from the reservation by the Tribal Council. Martinez allegedly started screaming at his grandmother and her sister, identified as MB, accusing them of involvement in having his vehicle towed. When MB pleaded that they had not been involved, Martinez allegedly hit MB over the head and repeatedly punched her in the face. He then allegedly shook his grandmother and pinned her against the couch.
MB and Martinez’s grandmother drove to the Bureau of Indian Affairs Police Station to report the alleged assault. MB was taken by ambulance to Lincoln County Medical Center where she received stitches to close a wound sustained in the assault. She will require surgery to repair a fractured nasal bone and septum. MB is an enrolled member of the Mescalero Apache Tribe.
A complaint is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Martinez faces up to 10 years in prison.
The Las Cruces Resident Agency of the FBI Albuquerque Field Office and the Bureau of Indian Affairs investigated this case. Assistant United States Attorney Matilda McCarthy Villalobos is prosecuting the case.
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Man Indicted for Distribution of Oxymorphone Causing DeathRead the Press Release
EL PASO – A federal grand jury in El Paso returned an indictment last week charging an El Paso man with distribution of a controlled substance causing death.
According to court documents, on or about March 11, 2019, Michael Martinez, 30, distributed oxymorphone, also known as numorphan, to another individual who died as a result.
Martinez is charged with one count of distributing oxymorphone causing death and one count of distributing oxymorphone. The defendant’s initial court appearance was held today before U.S. Magistrate Judge Robert Castaneda. If convicted, he faces a mandatory minimum of 20 years to life for distribution of oxymorphone causing death and up to 20 years in prison for distribution of oxymorphone. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ashley C. Hoff of the Western District of Texas and Special Agent in Charge Kyle Williamson of the Drug Enforcement Administration, El Paso Division made the announcement.
The Drug Enforcement Administration is investigating the case.
Assistant U.S. Attorney Phillip Countryman is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Malden Man Pleads Guilty to Cocaine and Firearms OffensesRead the Press Release
BOSTON – A Malden man pleaded guilty yesterday to operating a drug trafficking enterprise in which he sold fentanyl, cocaine and cocaine base to an undercover officer on multiple occasions.
Dhamari Jordan, a/k/a/ “DMO,” a/k/a “DMO Crashout,” 20, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime and one count of conspiracy to possess firearms in furtherance of a drug trafficking crime. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for Dec. 13, 2021. Jordan was arrested and charged on Feb. 25, 2021.
Jordan and other members of his conspiracy were captured on recording selling fentanyl, cocaine and cocaine base to an undercover officer on three occasions in January 2021. During these sales, Jordan was on pretrial release for a pending firearms case in Cambridge District Court from June 2019. A loaded 9mm firearm was recovered in Jordan’s residence at the time of his arrest. During today’s hearing, Jordan also admitted to his participation in a series of shootings targeting rival gang members in November 2019 in Somerville.
The charge of conspiracy to distribute and possess a controlled substance with intent to distribute provides for a sentence of up 40 years in prison, at least five years and up to a lifetime of supervised release and a fine of up to $5 million. Based upon the weight of suspected narcotics involved in the conspiracy, the statute provides for a mandatory minimum sentence of five years in prison. The charge of possessing a firearm in furtherance of a drug trafficking conspiracy provides for a sentence of at least five years and up to life in prison to be served consecutively to the sentence imposed for the drug trafficking crime, five years of supervised release and a fine of $250,000. The charge of conspiring to possess a firearm in furtherance of a drug trafficking conspiracy provides for a sentence of up to life in prison, five years of supervised release and a fine of $250,000. Sentences are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; James Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. Assistance was provided by the Middlesex District Attorney’s Office, Suffolk District Attorney’s Office, Boston Police Department and Malden Police Department. Assistant U.S. Attorneys Philip A. Mallard and Sarah Hoefle of Mendell’s Organized Crime and Gang Unit are prosecuting the case.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
Lumberton Man Convicted of Possessing a Firearm as a Convicted FelonRead the Press Release
RALEIGH, N.C. – A federal jury convicted a Lumberton man yesterday on a charge of Possession of a Firearm by a Convicted Felon.
According to court records and evidence presented at trial, Robeson County Sheriff’s Office responded to a shooting that occurred on December 25, 2019. At the residence, they found an individual suffering from multiple gunshot wounds. Through the course of the investigation, law enforcement developed Michael Lane Breeden, 51, as a suspect in the shooting.
Officers executed a search warrant at the residence of Michael Lane Breeden on January 7, 2020. During the execution of the search warrant, officers recovered a loaded shotgun in Breeden’s bathroom just a few feet from where officers detained him. Breeden had previously been convicted of robbery with a dangerous weapon and assault with a deadly weapon inflicting serious injury.
Breeden faces a maximum penalty of 120 months in prison when sentenced in November of 2021.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after Senior U.S. District Judge W. Earl Britt accepted the verdict. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, Robeson County Sheriff’s Office, and Cumberland County Sheriff’s Office are investigating the case and Assistant U.S. Attorneys Chad Rhoades and John Parris are prosecuting the case.
A copy of this press release is located on our website. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No.7:20-cr-00198-BR.
Lincoln County Man Pleads Guilty to Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – A Lincoln County man pleaded guilty today to a federal drug crime.
According to court documents, the South Charleston Police Department conducted a traffic stop on a vehicle in which Bert Tackett, 56, of Alkol, was a passenger on February 8, 2021. Tackett possessed approximately 117 grams of a mixture/substance containing fentanyl and 41.989 grams of methamphetamine and admitted that he intended to distribute the controlled substances. Law enforcement officers also recovered a Bersa Thunder 9mm handgun from inside the vehicle. When officers arrested Tackett at his Alkol residence on June 15, 2021, they found two bags of suspected fentanyl weighing approximately 31.123 grams and 1.244 grams, a bag of suspected methamphetamine weighing approximately 27.238 grams and two loaded firearms inside his residence.
Tackett pleaded guilty to a single-count indictment charging him with possession with intent to distribute 40 grams or more of fentanyl and five grams or more of methamphetamine. He faces a mandatory minimum of five years and up to 40 years in prison when sentenced on November 3, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the excellent investigative work of the South Charleston Police Department, the Metropolitan Drug Enforcement Network Team (MDENT), the Drug Enforcement Administration (DEA) and the U.S. Marshals Service.
United States District Judge Joseph R. Goodwin presided over the hearing. Assistant United States Attorney Nick Miller is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00097.
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Kings de Monte Gang Member Sentenced to 10 Years in Federal PrisonRead the Press Release
DENVER – Felipe Nevarez of Alamosa, Colorado, was sentenced yesterday to 10 years in federal prison, followed by 4 years of supervised release, for possession with the intent to distribute methamphetamine.
According to court documents and facts presented at trial and sentencing, Nevarez was a leader in the violent Kings de Monte Gang operating in the San Luis Valley. On April 3, 2019, deputies with the Alamosa County Sherriff’s Department encountered Nevarez driving a black BMW near Alamosa and Monte Vista. He evaded law enforcement, reversing the BMW at top speed down a rural driveway. Nevarez got out of the car and fled into an open field. After nearly forty-five minutes of searching, law enforcement found Nevarez hiding within arm’s reach of a large bag of methamphetamine and in possession of more than $16,000 in cash. At the time, Nevarez had several state warrants for his arrest. This federal conviction was Nevarez’s ninth adult felony, including three prior drug distribution convictions.
United States District Court Judge Robert Blackburn handed down the sentence on August 10, 2021, following Nevarez’s conviction at jury trial on April 15, 2021. Nevarez was also ordered to forfeit over $16,000 in narcotics sales proceeds.
“We will prosecute violent gangsters no matter where they operate in our state, said Acting U.S. Attorney Matt Kirsch. “Nevarez’s conviction and justly deserved sentence should serve as a warning to gangs in the San Luis Valley.”
“The distribution of meth in rural communities can have devasting affects that go beyond those associated with taking the drug,” said Eric Balliet, deputy special agent in charge, HSI Denver. “HSI and its law enforcement partners work tirelessly to identify, arrest, and prosecute those involved in producing and selling this poison to keep our communities safe.”
Homeland Security Investigations, the Alamosa County Sherriff’s Department, the Alamosa Police Department, and Immigrations Customs and Enforcement conducted the investigation. Assistant United States Attorney Jeffrey Graves handled the prosecution of the case.
CASE NUMBER: 19-cr-00271-REB-JMC.
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Justice Department Supports the Federal Reserve Board’s Proposed Rule on Debit Card Interchange Fees and Routing to Promote CompetitionRead the Press Release
Today, the Justice Department’s Antitrust Division filed a comment in support of the Federal Reserve Board of Governors’ (Board) notice of proposed rulemaking on Debit Card Interchange Fees and Routing. The Board’s proposed rule would require banks that issue debit cards (“issuers”) to give merchants a choice of debit networks for transactions made online and in circumstances where consumers pay without physically presenting their debit cards. By introducing choice, the proposed rule has the potential to reduce merchants’ transactional costs and ultimately save consumers money.
“We commend the Board for its efforts to promote competition in this important part of the debit card industry by ensuring that smaller debit networks will have a greater ability to compete for merchants’ business,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “There is limited competition to process online and other card-not-present debit transactions — which in 2019 accounted for over $1 trillion in transaction value. Consistent with President Biden’s Executive Order on Promoting Competition in the American Economy, the department looks forward to working with the Board on this and other efforts to foster competition.”
Section 1075 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Durbin Amendment”) requires issuers to make available at least two independent debit networks on the cards they issue so that merchants have a choice of debit networks when processing debit transactions. But this requirement has not been effective for online and other card-not-present transactions because many large issuers have not implemented necessary technological changes to permit debit networks other than Visa and Mastercard to process transactions. The Board’s proposal would clarify that the Durbin Amendment’s two-debit-network requirement applies with equal force to such transactions.
The department supports the Board’s proposed rule because it has the potential to increase competition by lowering one of many barriers to entry and expansion that new or smaller competitors face in this important segment of the debit card industry. At the same time, the department encourages the Board to consider whether there may be ways to improve upon the proposal. Specifically, the Board should consider whether the proposal is drafted broadly enough to capture all card-not-present transactions. In addition, incumbent industry participants may attempt to circumvent the proposed rule. Accordingly, the department encourages the Board to actively assess additional ways the proposed rule may be enhanced to increase competition for debit payment processing.
The Board is responsible for prescribing regulations pursuant to the Durbin Amendment, a statute designed to promote competition in the debit card market.
Click here to view the comment on the proposed rule.
Justice Department Files Sexual Harassment Lawsuit Against Massachusetts Sober Home OperatorRead the Press Release
The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of Massachusetts filed a lawsuit today alleging that Peter McCarthy, who operates a group of residential sober homes through his company, Steps to Solutions Inc., subjected female residents to sexual harassment and retaliation in violation of the federal Fair Housing Act.
The lawsuit alleges that from at least 2012 through at least 2019, Peter McCarthy — the registered agent and sole officer of Steps to Solutions Inc. — sexually harassed female residents of his Steps to Solutions sober homes by offering to reduce or forgive rent, granting extra house privileges or waiving security deposits in exchange for engaging in sexual acts; requesting sexually explicit photographs and indicating that he would reduce or waive rent in exchange for the images; making unwanted sexual comments regarding female residents’ bodies; and retaliating and taking adverse housing actions against residents who reported his conduct. The lawsuit seeks a court order to prevent future discriminatory conduct, monetary damages to compensate victims of McCarthy’s conduct and civil penalties. The lawsuit alleges that Steps to Solutions Inc. is liable for McCarthy’s conduct.
“The Fair Housing Act’s promise of non-discrimination applies to everyone,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “At a time when our country is experiencing record numbers of deaths related to drug overdoses, it is particularly disturbing to see sexually harassing conduct targeted at individuals who are in recovery. The Department of Justice will not tolerate landlords who abuse their power and will continue to vigorously pursue allegations of sexual harassment.”
“It is disappointing that a landlord who is supposed to be helping vulnerable women beat drug addiction was allegedly sexually harassing them and offering to reduce their rent in exchange for sex,” said Acting U.S. Attorney Nathaniel R. Mendell for the District of Massachusetts. “Thankfully, the Fair Housing Act gives us effective tools to stop such despicable conduct and protect those who are being preyed upon. People who have experienced this kind of sexual harassment might be reluctant to report it, but we need to hear from them. Reporting sexual harassment is essential to stop and prevent sexual harassment.”
The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing. Since launching the initiative in October 2017, the Justice Department has filed 22 lawsuits alleging sexual harassment in housing.
Individuals who have information about this case can contact the U.S. Attorney’s Office by calling (888) 221-6023 or by emailing [email protected].
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals wishing to report discrimination in housing may call the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or submit a report online.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
Jury convicts man for smuggling 105 in trailerRead the Press Release
LAREDO, Texas – A Laredo federal jury has convicted a 32-year-old out-of-state man for conspiring to transport and transporting undocumented aliens within the United States, announced Acting U.S. Attorney Jennifer B. Lowery.
The jury deliberated for less than four hours before convicting Christopher Faust, Sacramento, California, following a two-day trial.
On May 5, law enforcement stopped Faust for a traffic violation, at which time he claimed to be transporting green bananas. However, authorities quickly noticed the temperature on the refrigerated trailer was too high for produce. A K-9 then alerted to an odor emanating from inside the vehicle. Authorities opened the trailer and found 105 undocumented aliens.
The jury heard from a representative of the storage facility who Faust claimed had given him the load. He told the jury they do not ship green bananas and that Faust never picked up a load of produce from their facility.
The defense attempted to convince the jury Faust did not know that the people, all 105 of them, were in his trailer. The jury did not believe those claims and found him guilty as charged.
U.S. District Judge Marina Garcia Marmolejo presided over trial and will set sentencing at a later date. At that time, Faust faces up to 10 years of imprisonment and a possible $250,000 maximum fine.
Faust was permitted to remain on bond pending his that hearing.
Homeland Security Investigations conducted the investigation with assistance from the Texas Department of Public Safety and Border Patrol. Assistant U.S. Attorneys David Fawcett and Aaron Petters are prosecuting the case.
Jury Convicts Hospers, Iowa Man of Meth and Gun ChargesRead the Press Release
A man who conspired to distribute methamphetamine and illegally possessed a firearm was convicted by a jury on August 6, 2021, after a 4-day trial in federal court in Sioux City.
Robert Nicholas Hansen, 42, from Hospers, Iowa, was convicted of one count of conspiracy to distribute methamphetamine; three counts of distribution of methamphetamine; and one count of being a prohibited person in possession of a firearm. The verdict was returned after four hours of jury deliberations.
The jury found that, from January 2017 through January 2021, Hansen was involved in a conspiracy to distribute more than 500 grams of mixed methamphetamine and more than 50 grams actual/pure methamphetamine. Evidence at trial showed that Hansen was involved with several other co-conspirators in the acquisition and distribution of more than 100 pounds of methamphetamine. Evidence further showed that, on three separate occasions, Hansen distributed one-half pound of methamphetamine to individuals cooperating with law enforcement and during one of the transactions was found to possess three separate bundles of cash, totaling $14,000. The jury verdict included findings that two of Hansen’s methamphetamine distributions occurred within 1000 feet of Hospers Elementary School and South Side Park in Hospers, Iowa. The jury also found that Hansen illegally possessed, due to having a prior felony conviction and also being an unlawful user of methamphetamine, a firearm, a .223 caliber AR-15 style rifle. Hansen was previously convicted of possession of methamphetamine with intent to deliver in 2003 in the Iowa District Court for Sioux County.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Hansen remains in custody of the United States Marshal pending sentencing. For all of his convictions, Hansen faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, up to a $10,000,000 fine, and at least five years of supervised release following any imprisonment. The firearm and drug offense convictions could be run consecutive or concurrently to each other, or concurrent in part and consecutive in part.
The case is being prosecuted by Assistant United States Attorneys Shawn Wehde and Patrick Greenwood and was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Sioux County Sheriff’s Office, the Orange City Police Department, the Plymouth County Sheriff’s Office, the Iowa Division of Narcotics Enforcement and 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 21-4014. Follow us on Twitter @USAO_NDIA.
Jefferson City Man Sentenced to 13 Years for Child PornographyRead the Press Release
JEFFERSON CITY, Mo. – A Jefferson City, Missouri, man was sentenced in federal court today for receiving child pornography over the internet.
Dana Paul Cline, 54, was sentenced by U.S. District Judge Roseann Ketchmark to 13 years in federal prison without parole. The court also ordered Cline to pay a total of $31,000 in restitution to several of his victims.
On July 7, 2020, Cline pleaded guilty to one count of receiving child pornography. Cline’s later motion to withdraw his guilty plea was denied by the court.
The investigation began on May 24, 2018, when a Missouri State Highway Patrol trooper downloaded child pornography from Cline’s computer during an investigation into a peer-to-peer file-sharing network. On June 27, 2018, law enforcement officers executed a search warrant at Cline’s residence. Officers examined Cline’s laptop and found videos and images of child pornography. According to court documents, Cline was seeking out child pornography of a very disturbing nature. The videos and images he distributed and received depicted extremely young children engaged in horrendous sexual acts with adults.
According to court documents, Cline has a history of domestic violence, substance abuse, and a previous investigation of possession of child pornography. In 2011, Cline’s former landlord reported he found two flash drives in Cline’s apartment that contained child pornography. A forensic examination of the flash drives revealed one contained two child pornography videos and the second contained 17 child pornography videos. The second flash drive also had multiple documents stored on it with Cline’s name and/or images linked to him.
This case was prosecuted by Assistant U.S. Attorney Ashley S. Turner. It was investigated by the Missouri State Highway Patrol and the Cole County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jamesville Man Sentenced to 15 Years in Federal Prison for Distribution, Transportation and Possession of Child PornographyRead the Press Release
SYRACUSE, NEW YORK – Roy Bovee, age 34, of Jamesville, New York, was sentenced today to serve 15 years in federal prison for distribution, transportation and possession of child pornography, announced Acting United States Attorney Antoinette T. Bacon, Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), and New York State Police Superintendent Kevin Bruen.
As part of his guilty plea, Bovee admitted that in July 2020 he used the Kik Messenger application on his cellular telephone to distribute child pornography to other other Kik users. A search of the defendant’s cellular telephone revealed that he possessed 152 images and 113 video files depicting minors engaged in sexually explicit conduct. The images and videos included depictions of the rape and sodomy of prepubescent children. In addition, Bovee admitted to uploading over 100 images and videos depicting minors engaged in sexually explicit conduct to his on-line cloud storage account.
Bovee is a registered sex offender who while in the military was convicted in 2010 of Distribution of Child Pornography, sentenced to 20 months imprisonment, and given a bad conduct discharge.
United States District Judge David N. Hurd also imposed a 20-year term of supervised release, which will start after Bovee is released from prison, and ordered him to pay a $300 special assessment and $9,000 in restitution to the victims of his crimes.
At the time of his offense Bovee was on federal supervised release for a 2014 conviction for failing to register as a sex offender, for which he served a 54-month sentence. Today he also received a concurrent term of 9 months imprisonment for violating the conditions of that release.
Bovee’s case was investigated by the FBI Syracuse Mid-State Child Exploitation Task Force, comprised of FBI Special Agents and Investigators of the New York State Police, Bureau of Criminal Investigation (BCI), and Computer Crimes Unit (CCU) with assistance from the United States Probation Office. The case was prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown as a part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Huntington Man Sentenced to Federal Prison for Methamphetamine OffenseRead the Press Release
CHARLESTON, W.Va. – A Huntington man was sentenced today to 46 months in prison for possession with intent to distribute methamphetamine. Deshawn Derese Nelson, 52, previously admitted that he intended to distribute approximately 18 grams of methamphetamine seized from him during an arrest in Parkersburg.
According to court documents, Nelson was arrested by the Parkersburg Police Department during a traffic stop on Lynne Street on December 26, 2018 for an outstanding capias from Cabell County. While processing him on the arrest, officers found methamphetamine hidden in Nelson’s pantleg. Nelson had previously been convicted of robbery, theft, carrying a deadly weapon and possession with intent to distribute crack cocaine, and was facing charges of first degree arson and possession with intent to deliver a controlled substance when he was arrested.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the excellent investigative work of the Parkersburg Police Department and the Parkersburg Narcotics Task Force.
Senior United States District Judge John. T. Copenhaver, Jr. imposed the sentence. Assistant United States Attorney Joshua C. Hanks handled the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00062.
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Health Center Pays $350K to Settle Improper Billing Allegations Related to Medicaid Dental ServicesRead the Press Release
Acting United States Attorney Leonard C Boyle and Connecticut Attorney General William Tong today announced that CORNELL SCOTT HILL HEALTH CORPORATION (“CSH”) has entered into a civil settlement agreement with the federal and state governments and has paid $350,000 to resolve allegations that CSH improperly billed the Connecticut Medicaid program for certain dental services.
CSH is a Federally Qualified Health Center (“FQHC”) that provides a variety of health care services, including dental services, to Connecticut Medicaid beneficiaries and other individuals. Pursuant to federal requirements, the State of Connecticut compensates FQHCs on an “encounter-based” reimbursement structure. For the provision of dental services, claims are limited to one all-inclusive encounter per day to include all dental services received by a patient on the same day.
The allegations against CSH arise out of improper billing for certain dental services, specifically prophylactic cleanings and dental exams. The government alleges that CSH implemented a policy that required Medicaid patients to receive prophylactic cleanings and dental exams on separate days, resulting in CSH getting paid two encounter rates instead of just one rate.
To resolve their liability, CSH paid $350,000 to the federal and state governments for conduct occurring between January 1, 2017 through December 31, 2019. In addition, CSH has agreed to change its policy and offer all Medicaid beneficiaries the option of scheduling a prophylactic cleaning and dental examination on the same day.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services. The case was prosecuted by Assistant U.S. Attorney Richard M. Molot and by Assistant Attorneys General Michael Cole and Joshua Jackson of the Connecticut Office of the Attorney General.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.
Harris County Man Sentenced for Laundering Drug Trafficking ProceedsRead the Press Release
BEAUMONT, Texas – A Houston man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Alexis Villatoro, 26, pleaded guilty on Jan. 12, 2021, to conspiracy to commit money laundering and was sentenced to 40 months in federal prison today by U.S. District Judge Thad Heartfield.
“Drugs and money laundering go hand-in-hand,” said Acting U.S. Attorney Nicholas J. Ganjei. “Seizing the proceeds of drug trafficking is an important part of our efforts to fight illegal drug activity and our district will continue to pursue these violators with every resource available.”
According to information presented in court, on Dec. 10, 2018, local law enforcement authorities conducted a traffic stop of Villatoro on Interstate-10 in Beaumont. During the traffic stop, a police canine positively alerted to the presence of contraband. A subsequent probable cause search was conducted on the vehicle, during which $12,360 in cash was located in the rear hatch area. Further investigation revealed the money was the proceeds of an illegal drug transaction. Villatoro was indicted by a federal grand jury on Oct. 7, 2020.
This effort is part of Operation Guitar Hero, an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by the U.S. Drug Enforcement Administration, the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Michael Anderson.
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Hancock County woman indicted on fraud chargesRead the Press Release
WHEELING, WEST VIRGINIA – Jacque Phillips, of Weirton, West Virginia, appeared in federal court this week after being indicted on wire fraud, theft, and money laundering charges, Acting United States Attorney Randolph J. Bernard announced.
Phillips, also known as “Jacque Phillips-Brown,” 32, was indicted on three counts of “Wire Fraud,” one count of “Theft from a Health Care Benefit Program,” and three counts of “Money Laundering.” Phillips was employed as a billing manager at a medical billing company in Steubenville, Ohio. According to the indictment, beginning in January 2018 through March 2019, Phillips defrauded her employer, her employer’s patients, and insurance companies out of more than $100,000. Phillips allegedly used the financial services company Square, Inc. by linking her personal bank accounts to the Square, Inc. accounts she registered in her employer’s name. It is alleged that Phillips then used those Square accounts to transfer funds paid to her employer, some from insurance and health care benefits programs, into her personal accounts.
Phillips faces up to 20 years of incarceration and a fine of up to $250,000 for each count of wire fraud, faces up to 10 years of incarceration and a fine of up to $250,0000 for the theft charge, and faces up to 20 years of incarceration and a fine of up to $500,000 for each count of money laundering. 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 Danae DeMasi-Lemon is prosecuting the case on behalf of the government. The FBI investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Magistrate Judge James P. Mazzone presided.
Grand Jury Returns IndictmentsRead the Press Release
MADISON, WIS. – A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
Two Rothschild Men Charged in Money Laundering Conspiracy
Mario Amezcua-Cardenas, 27, and Moises Amezcua-Cardenas, 20, both of Rothschild, Wisconsin, are charged with conspiring to commit money laundering involving the proceeds of a fraud scheme targeting businesses in Wisconsin and elsewhere. The two defendants are brothers.
The indictment alleges that from November to December 2020, the two defendants conspired to launder the proceeds of a scheme involving unknown perpetrators who operated from Mexico and convinced employees of businesses to collect and deliver the businesses’ cash-on-hand to the defendants by posing as company attorneys, store managers, or upper management from a corporate office.
As part of the conspiracy, the indictment alleges that the two defendants used financial transactions to transfer the fraud proceeds to others. The indictment alleges that in December 2020, the defendants collected $242,980 from a retail store located in the Western District of Wisconsin and transferred the funds to an individual in Milwaukee, Wisconsin.
If convicted, Mario Amezcua-Cardenas and Moises Amezcua-Cardenas face a maximum penalty of 20 years in federal prison. The charge against them is the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Federal Bureau of Investigation; Marathon and Portage County Sheriffs’ Offices; the Merrill, Everest Metropolitan, Stevens Point, Wausau, Rib Mountain, Plover, Rothschild, and West Allis Police Departments; with assistance by the Marathon County District Attorney’s Office. Assistant U.S. Attorney Meredith Duchemin is handling the prosecution.
Merrill Man Charged with Producing and Transporting Child Pornography
Jason D. Ridolfi, 40, Merrill, Wisconsin, is charged with two counts of using a minor to produce child pornography and one count of transporting child pornography. The indictment alleges that on August 30 and 31, 2017, Ridolfi used a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. The indictment further alleges that on October 20, 2020, Ridolfi transported a visual image of a minor engaged in sexually explicit conduct into a Google account.
If convicted, Ridolfi faces a mandatory minimum of 15 years and a maximum of 30 years in federal prison on each of the production charges, and a mandatory minimum of 5 years and a maximum of 20 years on the transportation charge. The charges against him are the result of an investigation by the Wisconsin Department of Justice Division of Criminal Investigation, Lincoln County Sheriff’s Office, and Kenosha Police Department. Assistant U.S. Attorney Elizabeth Altman is handling the prosecution.
Wisconsin Dells Man Charged with Drug & Gun Crimes
Levonte C. Scales, 29, Wisconsin Dells, Wisconsin, is charged with possessing 50 grams or more of methamphetamine with the intent to distribute, with possessing a firearm in furtherance of that drug trafficking crime, and with being a felon in possession of a firearm. The indictment alleges that he possessed the methamphetamine and a handgun on June 22, 2021.
If convicted, Scales faces a mandatory minimum penalty of 5 years and a maximum of 40 years on the methamphetamine charge, a mandatory minimum of 5 years and a maximum of life on the charge of possessing a firearm in furtherance of a drug trafficking crime, and a maximum of 10 years on the felon in possession of a firearm charge. Federal law requires that any sentence imposed on the charge of possessing a firearm in furtherance of a drug trafficking crime be served consecutive to any other sentence imposed.
The charges against Scales are the result of an investigation by the Lake Delton Police Department, Sauk County Sheriff’s Office, and Drug Enforcement Administration. Assistant U.S. Attorney Zachary Corey is handling the prosecution.
Baraboo Man Charged with Illegally Possessing Firearm
Anthony James Wilson, 28, Baraboo, Wisconsin, is charged with being a felon in possession of a firearm. The indictment alleges that Wilson possessed a loaded .357 caliber revolver on June 3, 2021.
If convicted, Wilson faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Sauk County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Corey Stephan is handling the prosecution.
The indictments charging Scales and Wilson have been brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders works 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.
Dunn County Man Charged with Distributing Methamphetamine
Richard Skramstad, 58, Knapp, Wisconsin, is charged with three counts of distributing methamphetamine. The indictment alleges that he distributed methamphetamine on April 12, April 13, and May 13, 2021.
If convicted, Skramstad faces a maximum penalty of 20 years in federal prison on each charge. The charges against him are the result of an investigation by the West Central Drug Task Force, Dunn County Sheriff’s Office, and Drug Enforcement Administration. Assistant U.S. Attorney Taylor Kraus is handling the prosecution.
Former Montgomery High School Assistant Principal Sentenced for Scamming School System Out of More Than $300,000.00Read the Press Release
Montgomery, Alabama – On Tuesday, August 10, 2021, Walter James, III, a 50-year-old from Montgomery, Alabama, and former Montgomery Public Schools (MPS) employee, was sentenced to 60 months in prison after pleading guilty to wire fraud, announced Acting United States Attorney Sandra J. Stewart, FBI Special Agent in Charge James Jewell, and Alabama Attorney General Steve Marshall. Following James’ prison sentence, he will serve three years of supervised release. There is no parole in the federal system. James was also ordered to pay restitution in the amount of $314,867.55 to MPS for the monetary losses his scheme cost their system.
According to court documents and testimony provided in open court, James held himself out to be the owner of a consulting company, "ED-ONE Professional Development Services,” while he was employed by the MPS system. He then worked in partnership with others at his high school and the MPS central office to submit fraudulent invoices for consulting or professional development services. The invoices that were submitted listed vague descriptions of the types of services that had been supposedly provided. For example, the invoices would include descriptions such as “books & materials,” “consulting,” or “three-day workshop.” In reality, James did not provide any professional development services or products of any kind to MPS, nor did any of the purported consulting companies on the corresponding invoices that James submitted for payment. During the sentencing hearing, the court determined that the scheme, which occurred from August 2016 to April 2019, created a loss of $314,867.55 to MPS. James was ordered to pay restitution in that amount to MPS.
“It is such an outrageous violation of the public trust when people responsible for the education of our children cheat taxpayers and line their own pockets instead of benefitting students who, in this great country, are entitled to a public education,” stated Acting U.S. Attorney Stewart. “Now, more than ever, it is critical that funds allocated to public schools make it to the classroom and are used to educate students. In this case, James ignored his responsibility to spend government funds on the children and he deprived both students and teachers of much needed resources. I hope this prosecution sends a strong message to all those educators who put themselves above the needs of our children and their teachers that they will be held accountable.”
“Employees of our nation’s educational system must hold themselves to a higher standard,” stated FBI Special Agent in Charge Jewell. “The strong partnerships we enjoy with our state and local partners ensure this type of criminal activity will be detected and dealt with accordingly.”
“Public employees are entrusted to be stewards of taxpayer funds,” said Attorney General Marshall. “When that trust is broken, not only are public resources diminished but the community’s faith in our government is undermined. Mr. James repeatedly stole considerable funds from the Montgomery Public School System and his acts have eroded citizens’ confidence in their local schools. His sentence should send an unmistakable message that those who violate the public trust will be held accountable.”
The Federal Bureau of Investigation (FBI), the Alabama Attorney General’s Office, the Alabama Ethics Commission, and the Alabama Department of Examiners of Public Accounts investigated this case. Special Assistant U.S. Attorney Thomas Govan and Assistant United States Attorney Jonathan Ross prosecuted the case.
Former Lunenburg Woman Sentenced for Stealing Social Security BenefitsRead the Press Release
BOSTON – A former Lunenburg woman was sentenced yesterday in federal court in Worcester to stealing Social Security benefits.
Sue E. Delaney, 68, was sentenced by U.S. District Court Judge Timothy S. Hillman to six months of home confinement and two years of probation. Delaney was also ordered to pay $221,656 in restitution to the Social Security Administration (SSA). On April 12, 2021, Delaney pleaded guilty to one count of conspiracy and one count of theft of public funds.
“Delaney purposefully failed to report the death of her own family member just to continue receiving and pocketing her dead relative’s Social Security benefits,” said Acting United States Attorney Nathaniel R. Mendell. “Her crime diverted benefits meant for people who are actually entitled to them. Our office will use federal charges where appropriate to punish this type of fraud and protect the integrity of the Social Security system.”
“Concealing death information from the Social Security Administration to steal benefits issued to the deceased is a Federal crime that we will continue to pursue,” said Gail S. Ennis, Inspector General for the Social Security Administration. “For over 16 years, this individual withheld essential information to maintain illegal access to more than $221,000. I thank the U.S. Attorney’s Office and Special Assistant U.S. Attorney Karen Burzycki for prosecuting this case.”
In 1999, Delaney’s mother-in-law, who was receiving monthly benefits from Social Security, passed away. Delaney failed to inform the Social Security Administration of the death, and SSA continued to deposit monthly benefits into a bank account held by Delaney’s mother-in-law. From November 1999 through March 2017, Delaney stole approximately $221,656 in Social Security benefits from her late mother-in-law’s account.
Acting U.S. Attorney Mendell and SSA IG Ennis made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Mendell’s Major Crimes Unit prosecuted the case.
Former Contractor Charged with Violating Federal Lead Paint LawsRead the Press Release
INDIANAPOLIS – A federal grand jury in Indianapolis returned an indictment yesterday charging a Richmond, Indiana man with violating the Toxic Substance Control Act, specifically the provisions of the Act concerning lead paint, and obstruction of justice.
According to court documents, Jeffrey Delucio, 52, of Richmond, was a co-operator of Aluminum Brothers Home Improvements LLC in Richmond. Delucio failed to follow lead-safe work practices while renovating residences in the Richmond area. As a result, lead-based paint chips were scattered throughout the properties and were not cleaned up timely or properly as work was being conducted. One of the residences was inhabited by a child with elevated blood lead levels, which had prompted the renovation work at that property to begin with.
The indictment also alleges that Delucio failed to train his workers on lead-safe work practices and then falsified documents to conceal his conduct. Delucio’s company received a federal grand jury subpoena for records, including records of employee training on lead-safe work practices. The indictment alleges that Delucio had not trained his employees but, in response to the subpoena, fabricated records purporting to state that he did.
“The health and safety of all Hoosiers is a responsibility that everyone plays a role in,” said Acting U.S. Attorney John Childress. “Mr. Delucio failed the community, his employees, and the environment. This is another example of bringing those who violate that responsibility to justice to help protect our citizens and preserve the environment for current and future generations.”
“The defendant created risks by not only failing to follow lead-safe work practices, but also falsely representing to the government that employees had received training,” said Special Agent in Charge Jennifer Lynn of EPA’s criminal investigation program. “Today’s indictment demonstrates that individuals that intentionally violate environmental laws will be held responsible for their crimes.”
“This indictment represents our continuing resolve to investigate instances of fraud, particularly when the programs involved protect children and families from lead and other hazardous materials,” said HUD OIG Special Agent in Charge Michael Powell. “It is our continuing core mission to work with our law enforcement partners and the United States Attorney’s Office to protect the integrity of our programs and to take strong action against those who seek to circumvent the laws meant to protect the most vulnerable in our communities.”
“I want to thank the U.S. EPA, HUD, and DOJ for their collaboration in protecting the health and well-being of Hoosiers,” said IDEM Commissioner Bruno Pigott. “Strong partnerships with our federal partners are vital to keeping our environment safe for children, vulnerable communities, and everyone throughout Indiana.”
Delucio has been charged with two counts of violating the Toxic Substances Control Act, as well as one count of falsifying documents during a federal investigation. If convicted, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was jointly investigated by the United States Environmental Protection Agency, the United States Department of Housing and Urban Development, and the Indiana Department of Environmental Management.
Assistant United States Attorney Kate Olivier is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Boston Police Auto Repair Technician Pleads Guilty to Wire Fraud ChargesRead the Press Release
BOSTON – A former auto repair technician with the Boston Police Department’s (BPD) Fleet Management Division pleaded guilty yesterday in connection with a scheme to embezzle hundreds of thousands of dollars from the BPD.
Bahram Gharony, 36, of Boston, pleaded guilty to two counts of wire fraud. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for Dec. 14, 2021. Gharony was charged on July 30, 2021.
“Mr. Gharony embezzled hundreds of thousands of dollars in auto parts and supplies from the Boston Police Department at the expense of the public’s trust in his honest and hardworking law enforcement colleagues,” said Acting United States Attorney Nathaniel R. Mendell. “Our office remains ready to prosecute people who abuse their positions and violate the public trust for personal gain.”
"While working for the Boston Police Department's fleet management division, Bahram Gharony has admitted he was also working for himself—orchestrating a fraudulent scheme that cost the city’s taxpayers more than a quarter of a million dollars. Mr. Gharony clearly knew what he was doing was wrong because of the steps he took to conceal his criminal conduct, but his divided loyalty got the best of him,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “We’d like to thank the Boston Police Department’s Anti-Corruption Unit for bringing this to our attention and putting a stop to this practice.”
Gharony engaged in a scheme that allegedly defrauded BPD’s Fleet Management Division of over $260,000 in automotive parts, tools and supplies between June 2017 and September 2020. Gharony used his position to order parts and supplies that he purported were for BPD, but were actually converted and sold to others by Gharony. In an effort to conceal the scheme, Gharony submitted fraudulent and altered invoices to BPD for the parts, tools and supplies he falsely claimed were ordered for the fleet. Additionally, Gharony purported that he had lawfully purchased the items through a discount available to BPD when selling the items to others.
The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and fine of $250,000, or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Boston Police Acting Commissioner Gregory Long made the announcement. Assistant U.S. Attorney Neil J. Gallagher Jr. of Mendell’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
Foley Man Sentenced in Federal Court on Methamphetamine and Firearm ChargesRead the Press Release
MOBILE, AL – A Foley, Alabama, man was sentenced on August 10, 2021, to 15 years in prison for his participation in a conspiracy to possess with intent to distribute methamphetamine ice and possession of a firearm in connection with a drug trafficking felony.
According to court documents, John Heath Carter, 38, distributed large amounts of methamphetamine ice he obtained from various suppliers in Baldwin County, Alabama. Carter was stopped by the Foley Police Department for a traffic violation and officers found methamphetamine ice, a .38 caliber pistol, and a CS grenade. The methamphetamine ice was packaged for distribution. Carter was advised of his Miranda rights and he admitted his participation in the scheme to possess with intent to distribute methamphetamine.Chief United States District Court Judge Kristi K. Dubose imposed the 15-year sentence, consisting of 10 years on the conspiracy charge and 5 years on the firearm charge. By operation of federal law, the sentence for the firearm charge must run consecutively to any other sentence of imprisonment. Chief Judge Dubose further ordered that Carter would also serve eight years on supervised release following his imprisonment. As conditions of his supervision, Carter will undergo testing and treatment for drug abuse, and he will be subject to a search of his person and premises upon reasonable suspicion. No fine was imposed but Chief Judge Dubose ordered that Carter pay $200 in special assessments.
The case was investigated by the Foley Police Department, the Baldwin County Sheriff’s Office, the Baldwin County Drug Task Force, and the FBI’s Safe Streets Task Force. Assistant U.S. Attorney Gloria Bedwell prosecuted the case on behalf of the United States.Florida Man Sentenced to 18 Months for Bank FraudRead the Press Release
CONCORD - Benjamin Stockwell, 31, formerly of Pittsfield, now residing in Florida, was sentenced to 18 months in federal prison for bank fraud on Tuesday, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, Stockwell stole checks from various mailboxes throughout New Hampshire, altered them, and cashed them at various banks in his own name.
Stockwell previously pleaded guilty on February 9, 2021.
“Fraud crimes can cause significant harm to victims,” said Acting U.S. Attorney Farley. “By stealing checks from the mail and defrauding banks with altered checks, this defendant committed a significant federal crime. We will continue to work closely with our law enforcement partners to identify and prosecute those who commit fraud crimes in the Granite State.”
“Forgery is a serious crime that affects the victim both financially and mentally. We are pleased that Mr. Stockwell is being held accountable for his crimes and we hope this sends a message to others that this behavior will not be tolerated,” Manchester Police Chief Allen Aldenberg.
This matter was investigated by the United States Postal Inspection Service, with assistance from the Manchester Police Department’s Fraud and Financial Crimes Unit and the Bow Police Department. The case was prosecuted by Assistant U.S. Attorneys Georgiana MacDonald and Matthew Hunter.
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Fintech CEO Sentenced to 6 Years in Prison for Multiple Fraud Schemes, Including $7 Million Covid-19 Pandemic Loan Fraud and Securities FraudRead the Press Release
Audrey Strauss, United States Attorney for the Southern District of New York, announced today that SHENG-WEN CHENG, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” was sentenced to 72 months in prison for multiple fraud schemes he perpetrated. In particular, CHENG engaged in a scheme to fraudulently obtain over $7 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic. CHENG also solicited and obtained investments in Alchemy Coin Technology Limited and related companies controlled by CHENG through materially false and misleading statements and omissions. Finally, CHENG fraudulently obtained due diligence fees from dozens of start-up companies as part of an advance fee scheme. CHENG was sentenced earlier today before U.S. District Judge Alison J. Nathan.
U.S. Attorney Audrey Strauss said: “Sheng-Wen Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for financially struggling small businesses hurt by the COVID pandemic. Further, Cheng committed securities fraud by lying to investors in his blockchain-based peer-to-peer lending platform, and wire fraud by engaging in an advance fee scheme. Now Cheng has been sentenced to prison for his multitude of crimes.”
According to the Complaint, Information, and other documents filed in Manhattan federal court:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s Paycheck Protection Program (“PPP”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. The CARES Act also expanded the separate Economic Injury Disaster Loan (“EIDL”) Program, which provided small businesses with low-interest loans that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19.
CHENG, a Taiwanese national who entered the United States on a student visa, was a self-proclaimed “serial entrepreneur” who attended Pennsylvania State University (“Penn State”). From at least in or about April 2020 through at least on or about August 13, 2020, CHENG used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, Wynston York LLC, and Neo Bellum Industries Inc. (collectively, the “Cheng Companies”). In connection with these loan applications, CHENG represented, among other things, that other individuals were the sole owners of the Cheng Companies and that the Cheng Companies together had over 200 employees and paid a total of approximately $1.5 million in wages to those employees on a monthly basis. In fact, however, the Cheng Companies appear to have had a total of no more than 14 employees.
In order to support the false representations in the loan applications about the number of employees at and the wages paid by the Cheng Companies, CHENG submitted fraudulent and doctored tax records that were never actually filed with the IRS and payroll records containing the forged electronic signature of a payroll company employee. CHENG also submitted a payroll summary for one of his companies that listed the names of more than 90 purported employees, several of which consisted of current and former athletes, artists, actors, and public figures. For example, the list of purported employee names included a co-anchor on Good Morning America, a former National Football League player, and a prominent former Penn State football coach who is now deceased.
Based on the fraudulent PPP loan applications submitted by CHENG, a total of more than $3.7 million in PPP loans were approved for the Cheng Companies and approximately $2.8 million in PPP loan proceeds were deposited into bank accounts solely controlled by CHENG. Instead of using the PPP loan proceeds for payroll costs, mortgage interest, rent, and/or utilities for the purported Cheng Companies as required by the PPP, CHENG transferred over $1 million abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent at least approximately $279,000 in PPP loan proceeds on personal expenses. These personal expenses included the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium used by CHENG, approximately $50,000 of furnishings for the condominium, a portion of the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.
In addition to the COVID-19 pandemic loan fraud described above, from at least in or about 2017 through at least in or about 2019, CHENG committed securities fraud by soliciting and obtaining approximately $400,000 in investments in Alchemy Coin Technology Limited and related companies (“Alchemy Coin”) controlled by CHENG. These investments were obtained through materially false and misleading statements and omissions regarding Alchemy Coin’s access to capital, use of investor proceeds, the product readiness of its purported blockchain-based peer-to-peer lending platform, and the registration of its tokens as part of an initial coin offering.
Finally, from at least in or about 2018 through at least in or about 2019, CHENG committed wire fraud by fraudulently obtaining a total of approximately $380,000 in so-called “due diligence fees” from dozens of start-up companies as part of an advance fee scheme. CHENG falsely told these companies seeking investors that, in exchange for a due diligence fee that was fully refundable, CHENG would perform due diligence on the companies and assess them for investments or otherwise assist them in securing funding. However, CHENG had no interest in or financial ability to invest in any of the victim companies, did not return the purportedly refundable fees despite repeated requests from victims, and used the fees for personal expenses as opposed to performing any due diligence. When CHENG was confronted by victims to return the fees after they realized that no investments were forthcoming, CHENG falsely told the victims that he did not have the fees and that a third-party due diligence company he had employed had stolen the fees.
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CHENG, 25 of New York, New York, pled guilty on April 20, 2021, to one count of major fraud against the United States, one count of bank fraud, one count of securities fraud, and one count of wire fraud.
In addition to the prison term, CHENG was sentenced to three years of supervised release and ordered to forfeit luxury items seized in connection with his arrest, including a Mercedes, a Rolex watch, and a diamond engagement ring. The amount of restitution to victims of the offense will be set at a later date. CHENG also consented to removal from the United States upon his release from prison.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Small Business Administration, and the Internal Revenue Service Criminal Investigation. Ms. Strauss also thanked the United States Securities and Exchange Commission, U.S. Customs and Border Protection, and the New York State Department of Labor for their assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.