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27 September 2021
Baltimore Businessman Charles Nabit Sentenced to 18 Months in Federal Prison for Transportation of Women to Engage in ProstitutionRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Charles “Chuck” Nabit, age 66, of Baltimore, Maryland, today to 18 months in federal prison, followed by three years of supervised release, for transportation of an individual to engage in prostitution. Judge Russell also ordered Nabit to pay a fine of $55,000 and a special assessment of $5,100. Nabit, who owns residences and resides in Bethany Beach, Delaware and Deerfield Beach, Florida, is the owner of Westport Group, LLC. and previously owned Mountain Manor Treatment Center, a comprehensive drug treatment center. As agreed to in the plea agreement, Nabit regularly paid money for commercial sex with women that he knew regularly used narcotics or were severely addicted to narcotics, including one victim who died from a drug overdose, and another victim that Nabit supplied with cocaine.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; and Chief Lisa Myers of the Howard County Police Department.
“Charles Nabit paid thousands of dollars for commercial sex with victims that he knew were addicted to narcotics, including one woman that he personally supplied with cocaine and another who died from an overdose. Rather than use his abundant resources to help these victims, Nabit perpetuated their victimization for his own gratification,” said Acting U.S. Attorney Jonathan Lenzner. “One would hope that a businessman with means who previously owned a drug treatment center would help these victims rather than further their drug addiction and reliance on commercial sex. Charles Nabit not only violated federal law, he also used his wealth and stature to gratify himself while perpetuating the victimization of these women.”
“The sentencing today serves as a bittersweet moment for the victims of Charles Nabit’s reprehensible actions,” said HSI Special Agent in Charge James R. Mancuso. “HSI is proud to have partnered with the Howard County Police Department and the U.S. Attorney’s office to hold Mr. Nabit accountable for his crimes.”
According to his guilty plea, beginning in 2017 until his arrest on June 10, 2020, Nabit regularly paid for commercial sex, including in at least 52 payments via Cash App to an adult man who has been charged with sex trafficking. The seven women whom Nabit admitted he paid for commercial sex (Victims 1 through 7) either regularly used narcotics or suffered from serious substance abuse disorders during the time periods in which Nabit engaged in commercial sex with them.
Nabit admitted that from August 2018 to May 2020, he paid at least $90,000, as well as an additional unknown amount of cash, to women with whom he had commercial sex. This includes 52 Cash App transactions to an individual who he knew to be someone other than the victim he was seeing for commercial sex. For example, on April 11, 2019, Nabit received a message from the Cash App account registered to De’Angelo Johnson requesting $140 for “coming thru on a good girl and a hot girl.” The victim, Victim 1, had requested that Nabit pay her directly, sending a message to Nabit’s CashApp account, but Nabit refused to pay her and sent $145 payment to the Cash App account registered to Johnson with a message indicating the payment was “for (the first name of Victim 1).” De’Angelo Johnson has been charged in federal court with sex trafficking in a separate indictment and is scheduled for trial beginning in March 2022.
As detailed in his plea agreement, Nabit regularly transported victims to and from his Baltimore office for commercial sex, either in his vehicle or by using a rideshare car service. In separate encounters with Victim 1, Victim 3, and Victim 5, Nabit also recorded their sex acts with a Go Pro camera despite their objections to being filmed. Nabit was aware of Victim 5’s substance abuse as she discussed her struggles with addiction and depression. Nabit knew that, more than likely, some of the money provided to Victim 5 was being used to fund her drug use.
According to the plea agreement, beginning no later than February 2019, Nabit began seeing Victim 6 for commercial sex and travel dates. She discussed her addiction struggles with Nabit on several occasions. During their sexual encounters, Nabit provided Victim 6 with monetary payment and cocaine. For example, Nabit paid $5,000 to Victim 6 for her to accompany him to Fort Lauderdale, Florida and engage in commercial sex. During that trip, Nabit also provided Victim 6 with cocaine. Nabit also traveled with Victim 6 to a hotel in Richmond, Virginia on at least three separate occasions to engage in commercial sex. Victim 6 was paid at least $1,000 in cash for one of these trips. Hotel records revealed multiple overnight stays by Nabit between August 2019 and March 2020.
Until her death in May 2019, Nabit admitted that he also regularly engaged in commercial sex with Victim 7. Victim 7 repeatedly discussed her drug addiction in text messages with Nabit and expressed to Nabit her desire to obtain treatment for her substance abuse. Specifically, on August 13, 2018, Victim 7 told Nabit she completed an application for Mountain Manor Treatment Center and Nabit replied, “As you recall, I used to own MM and my ex-partner still does.” Nabit and Victim 7’s mother spoke on several occasions about Victim 7’s drug use. For example, on August 18, 2018, Nabit texted Victim 7’s mother about Victim 7 going to drug rehabilitation. Nabit stated that Victim 7 began using opiates again but that “she seemed to handle crack ok for weeks.” On May 23, 2019, Victim 7’s mother informed Nabit that Victim 7 had overdosed on drugs and died.
On December 9, 2019, Nabit and his attorney met with investigators for an interview in relation to a sex trafficking investigation involving alleged sex trafficker De’Angelo Johnson and Victims, 1, 2, 3, and 4. During this interview Nabit was asked whether he was aware that the sex trafficking victims were drug users. He was shown pictures of four victims and claimed to have only been aware of one victim’s drug use. He also claimed he had never seen signs of drug use in the remaining victims, as he had owned a drug treatment facility for 10 years and he would have recognized signs of drug use.
Nabit was arrested on June 10, 2020, and law enforcement executed federal search warrants for his person, his electronics, his Baltimore office, and his vehicle. Law enforcement recovered numerous sex toys and filming equipment, including five Go Pro cameras, from Nabit’s office. Nabit’s office also had a large sectional sofa that converted to a bed which had a sheet on it. A forensic analysis of Nabit’s cell phone and Go Pro cameras recovered numerous messages related to commercial sex as well as images and videos of victims engaging in commercial sex with Nabit.
Acting United States Attorney Jonathan F. Lenzner commended HSI and the Howard County Police Department for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Mary W. Setzer and P. Michael Cunningham, who prosecuted the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Allegheny County Man Sentenced for Conspiring to Distribute Synthetic CannabinoidsRead the Press Release
PITTSBURGH, PA – Diassandai Serrano was sentenced to 35 months in prison for conspiring to distribute Schedule I synthetic cannabinoid controlled substances while on federal supervised release, Acting United States Attorney Stephen R. Kaufman announced today.
Serrano, age 26, formerly of North Versailles, Pennsylvania. was sentenced by United States District Judge J. Nicholas Ranjan. Judge Ranjan sentenced Serrano to 27 months in prison for the drug trafficking conspiracy conviction and to 8 months in prison for the supervised release violation. Judge Ranjan ordered that the prison sentences be served consecutively to each other. Judge Ranjan also ordered Serrano to pay a $500 fine and to serve three years of supervised release following his prison sentence.
Serrano was previously convicted in 2015 and sentenced to serve 60 months in federal prison for possession of a firearm in furtherance of a drug trafficking crime. He was released to supervised release following the prior prison sentence. He then conspired to distribute the Schedule I synthetic cannabinoid controlled substances while on supervised release for the prior conviction. As part of the conspiracy, he supplied the controlled substances to other dealers, including to a co-defendant who was incarcerated at FCI-Hazelton at the time.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Prisons, and the Pennsylvania Office of Attorney General led the multi-agency investigation that also included the United States Postal Inspection Service, the Beaver County District Attorney’s Office, the Department of Homeland Security/Homeland Security Investigations, the Pittsburgh Police Department, the United States Marshals Service, the Pennsylvania State Police, the Munhall Police Department, the Robinson Township Police Department, the McKees Rocks Police Department, the Stowe Township Police Department, the Etna Police Department, and the Erie County District Attorney’s Office.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Akron Man Sentenced to 10 Years in Federal Prison for Role in Methamphetamine ConspiracyRead the Press Release
HUNTINGTON, W.Va. – An Akron man was sentenced to 10 years in federal prison today for his role in a methamphetamine conspiracy.
According to court documents, Tionte Lavon Blanchard, 25, previously pleaded guilty to conspiracy to distribute 500 grams or more of methamphetamine and admitted that he and others participated in a conspiracy from the fall of 2018 to June 2019 to distribute methamphetamine that was frequently shipped from Akron, Ohio to various locations in West Virginia. Blanchard utilized a residence on 25th Street in Huntington to store methamphetamine after it arrived from Akron. On June 6, 2019, investigators executed a search warrant at the residence and seized over 1.7 kilograms of 100% pure methamphetamine. Blanchard admitted that he possessed the methamphetamine and intended to distribute it in the Huntington area.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Violent Crime and Drug Task Force West, the Metropolitan Drug Enforcement Network Team (MDENT), the West Virginia State Police, the Drug Enforcement Administration (DEA) Task Force, the Beckley/Raleigh County Drug and Violent Crime Unit, the United States Marshals Service, the Cabell County Sheriff’s Department, the Charleston Police Department, the Putnam County Sheriff’s Department, the Ohio State Highway Patrol, the Akron, Ohio Police Department, and the Brecksville, Ohio Police Department.
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams 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. 3:19-cr-000245.
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Akron Career Criminal Sentenced to 15 Years After Convictions of Felon in Possession of Firearm and Possession of an Unregistered ShotgunRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced that Jackie Mitchell Jr., 29, of Akron, was sentenced on September 22, 2021, by Judge Benita Y. Pearson to a term of 15 years imprisonment after Mitchell pleaded guilty in June of 2021 to felon in possession of firearm and possession of an unregistered short-barrel shotgun.
According to court records, on October 21, 2020, Akron Police responded to a call for a domestic violence incident involving shots fired at a residence. Upon arrival, police determined that Mitchell had fired multiple shots from a firearm during the incident. Mitchell fought with the responding police officers at the scene and was subsequently arrested. Police then recovered several firearms from the residence that belonged to Mitchell, including an unregistered short-barrel shotgun, two pistols, two rifles and miscellaneous ammunition.
Mitchell is prohibited from possessing a firearm due to prior convictions of domestic violence, assault and drug trafficking. Mitchell has four prior domestic violence convictions in the Summit County Common Pleas Court. These previous convictions qualified Mitchell to be sentenced as an Armed Career Criminal.
This investigation was conducted by the ATF and the Akron Police Department. This case was prosecuted by Assistant U.S. Attorney Aaron P. Howell.
20-Year-Old Sentenced to Federal Prison for Armed Carjacking CrimeRead the Press Release
Memphis, TN – Carlos Jones, 20, has been sentenced to 90 months in federal prison for his role in a carjacking, committing the carjacking and brandishing a firearm during a crime of violence. Acting U.S. Attorney Joseph C. Murphy Jr., announced the sentenced today.
According to information presented in court, on July 13, 2018, at approximately 9 p.m., the victim J.M. was washing his 2013 Volkswagen Passat at a local carwash on Holmes Road when approached by two suspects, both of whom pointed firearms and demanded his vehicle. The victim said one of the suspects pointed a gun at him from behind and said, "Get the hell away from the car and go."
Surveillance video showed the suspects entered the carwash in a white vehicle, exited the vehicle and approached the victim. Footage captured the victim's vehicle leaving the carwash, followed by the suspect's vehicle. The victim's vehicle was tracked by GPS and later recovered from an apartment complex in Southaven, Mississippi.
Fingerprints belonging to co-defendant Angelo Bunting, 22, were recovered from the interior of the vehicle. The victim positively identified both co-defendants as the suspects responsible for the carjacking. Bunting was previously sentenced to 20 years for this carjacking, as well as others.
On September 23, 2020, Jones entered a guilty plea to the charges of carjacking and brandishing a firearm during a crime of violence.
On September 23, 2021, U.S. District Court Judge Mark Norris sentenced Jones to 90 months in federal prison to be followed by five years’ supervised release. There is no parole in the federal system.
The Memphis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated this case.
Special Assistant U.S. Attorney Samuel D. Winnig and Assistant U.S. Attorney Elizabeth Rogers prosecuted this case on behalf of the government. SAUSA Winnig is currently assigned from the Shelby County District Attorney General’s Office for prosecuting violent crimes and firearms offenses in federal court.
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24 September 2021
Willamette Valley Grass Seed Company Pleads Guilty in Federal CourtRead the Press Release
PORTLAND, Ore.—A Willamette Valley wholesale grass seed distributor pleaded guilty today in federal court for knowingly concealing a scheme to defraud the Jacklin Seed Company, then a subsidiary of the J.R. Simplot Company.
ProSeeds Marketing, Inc., a company based in Jefferson, Oregon, pleaded guilty to one count of misprision of felony.
According to court documents, ProSeeds had a longstanding commercial relationship with the Jacklin Seed Company and routinely contracted with Jacklin for the purchase and sale of grass seed. These contracts were typically negotiated with a Jacklin employee acting under the supervision of Christopher Claypool, Jacklin’s general manager. In March 2021, Claypool, 53, of Spokane, Washington, was convicted of wire fraud and money laundering for perpetrating multiple schemes to defraud Jacklin. Claypool was later sentenced to three years in federal prison.
Beginning in December 2018, Claypool and the Jacklin employee conspired to divert a portion of the overseas sales Claypool negotiated on behalf of Jacklin so that Claypool and the employee could collect commissions on those sales. As part of this scheme, Claypool incorporated Green Pyramid, LLC to pose as an independent grass seed broker and accept payment of the fraudulent commissions.
In furtherance of the scheme, the Jacklin employee whom Claypool supervised arranged for ProSeeds to book sales diverted from Jacklin with mark-ups dictated by Claypool. The bulk of these mark-ups were then kicked back to Claypool. ProSeeds participated in the scheme with the aim of creating an overseas customer base. Nevertheless, the company intended to and did conceal Claypool’s scheme.
From December 2018 to August 2019, ProSeeds booked twelve diverted and bogus sales, generating more than $474,000 in mark-ups on Jacklin seed. Although the bulk of the mark-ups went to Claypool and his subordinate, ProSeeds retained more than $78,000 in revenue from the transactions.
On September 14, 2021, ProSeeds was charged by criminal information with misprision of felony. The company faces a maximum sentence of five years’ probation and a $500,000 fine. ProSeeds will be sentenced on November 29, 2021, before U.S. District Court Judge Karin J. Immergut.
As part of the plea agreement, ProSeeds has agreed to pay $78,775 in restitution to Simplot.
Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by IRS-Criminal Investigation and the U.S. Department of Agriculture Office of Inspector General. It is being prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.
Whitley County Man Pleads Guilty to KidnappingRead the Press Release
LONDON, Ky. — A Corbin, Kentucky, man, Douglas M. Edmonson, 38, pleaded guilty on Thursday, before U.S. District Judge Robert E. Wier, to kidnapping.
According to the investigation and his guilty plea, Edmonson and his three co-defendants lured a victim to a location in Tennessee, using an unrelated party’s Facebook account. Edmonson and his co-defendants then forced the victim into a vehicle and transported her to Corbin. The victim was bound, blindfolded, and repeatedly assaulted during the 2-day kidnapping. The investigation revealed that Edmonson and his co-defendants employed firearms, as well as explosive devices during the kidnapping. On August 11, 2018, ATF agents were called to the kidnapping scene in Corbin, and assisted in locating and detonating several homemade pipe bombs.
Edmonson was indicted in September 2019. Edmonson’s co-defendants, Dallas Chain Perkins, Bryanna Soper , and Erik Peace, previously entered guilty pleas to kidnapping and are also awaiting sentencing.
“After being lured, restrained, and held for drugs or ransom, the victim in this case was threatened with firearms and homemade explosives, then brutally beaten, burned, and repeatedly assaulted,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “While nothing can make up for the unspeakable suffering the victim endured here, she knows that those who did this to her will now face the consequences of their appalling conduct. I want to commend the work of our law enforcements partners. Without their efforts, this result would not have been possible.”
“This defendant was an armed drug trafficker and part of a group that reigned terror and committed heinous acts of violence in our rural communities,” said ATF Special Agent In Charge R. Shawn Morrow of the Louisville Field Division. “I commend the efforts of the ATF agents and our Kentucky State Police partners who worked diligently on this year-long investigation to help bring a sense of justice to the victim. I hope this case sends the message that ATF and our law enforcement partners will not standby and allow these acts of violence.”
The investigation was conducted by the ATF and KSP, with assistance provided by the Williamsburg Police Department. The United States was represented by Assistant U.S. Attorney Jenna E. Reed.
Edmonson is scheduled to be sentenced on January 17, 2022. All 4 defendants face a maximum of Life in prison and a $250,000 fine. However, any sentence will be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
This case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. The PSN program involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, Acting U.S. Attorney Shier coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
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West Virginia Man Convicted After Two Day Jury TrialRead the Press Release
FORT WAYNE- Kevin Hartleroad, 64, of Parkersburg, West Virginia, was convicted on the sole count of an Indictment charging him with attempted production of child pornography following a two day jury trial announced Acting United States Attorney Tina L. Nommay.
According to documents in this case, in February 2020, Hartleroad attempted to coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
Sentencing is scheduled for January 5, 2022.
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
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West Branch Resident Sentenced to 30 Months in Federal Prison on Tax ChargesRead the Press Release
BAY CITY – A West Branch resident was sentenced yesterday to 30 months in federal prison on charges of filing false tax returns and aiding and abetting the filing of false tax returns and ordered to pay $844,945 in restitution to the IRS, announced Acting United States Attorney Saima Mohsin.
Mohsin was joined in the announcement by Acting Special Agent in Charge Brian Thomas, Internal Revenue Service, Criminal Investigation, Detroit Field Office.
Sentenced was Christopher Fratine, 53. Fratine pleaded guilty in July 2019 to five counts of making a false tax return and four counts of aiding and abetting the filing of false tax returns before United States District Judge Thomas Ludington. Sentencing was delayed due to the COVID-19 pandemic.
According to court documents, Fratine owned and operated a home health care business named Unity Home Care Services (UHCS). He also operated a separate home health care business named Unity Home Health Care (UHHC), which was owned by his wife. UHCS and UHHC provided in-home skilled nursing care, physical therapy, speech therapy and occupational therapy services in the general vicinities of Houghton Lake, Traverse City and Bay City, Michigan. From 2013 until 2016, Fratine willfully made and subscribed false and fraudulent Individual Income Tax Returns, for calendar years 2012 through 2015, and Form 1120, U.S. Corporation Income Tax Return for UHCS, for calendar year 2013. Fratine also reviewed the tax returns prepared by the CPA based on the information he provided to her and willfully aided and assisted in, procured, counseled and advised the preparation and presentation to the IRS of false and fraudulent tax Forms 1120, U.S. Corporation Income Tax Returns for UHHC, for calendar years 2012 through 2015. IRS records showed that between 2012 and 2015, UHCS earned approximately $3 million in gross receipts, all of which came from Medicare, and UHHC earned approximately $6.4 million in gross receipts, of which approximately $5 million came from Medicare and the rest from private insurers. Fratine deposited all of the revenue from private insurers and a portion of the Medicare revenue into business bank accounts. He provided bank statements from these bank accounts to a CPA, who prepared the Forms 1120 for UHCS and UHHC and individual income tax returns for the Fratine based on this information. Fratine deposited the rest of the Medicare revenue in accounts with other financial institutions, but failed to disclose this and failed to provide statements to his CPA, concealing the existence of this income and of these accounts from the CPA. Between 2012 and 2015, FRATINE diverted over $2,147,537 of business gross receipts into bank accounts hidden from his CPA. In addition, Fratine wrote several business checks in 2012 through 2015, with a total of approximately $114,000, payable to Medicare and Humana, from the business bank accounts known to the CPA, claiming they were overpayments by the insurance companies, and, as such, deductible from gross receipts as returns and allowances; he then deposited those checks into the concealed business accounts. The CPA received carbon copies of all of these business checks causing her to incorrectly report the checks payable to Medicare and Humana as returns’ and deduct the checks from the businesses’ gross receipts on the Forms 1120. Fratine transferred the funds from these undisclosed bank accounts into his personal bank accounts and used the funds for gambling and other personal purposes.
“Individuals like Mr. Fratine, who created elaborate schemes to purposefully mislead others and defraud the IRS should expect to be prosecuted,” said IRS – Criminal Investigation, Detroit Field Office, Acting Special Agent in Charge Brian Thomas. “The sentencing of Mr. Fratine demonstrates he intentionally falsified tax returns to hide millions of dollars of taxable income from the IRS. These types of crimes will always be investigated and prosecuted to the full extent of the law.”
This case was investigated by agents of the Internal Revenue Service, Criminal Investigation and was prosecuted by Assistant United States Attorney Anca Pop.
Virginia Doctor Pleads Guilty to $1.8 Million Health Care Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – A Virginia doctor pleaded guilty today to his role in a $1.8 million health care fraud scheme to prescribe medically unnecessary compounded pain and scar creams and other expensive medications.
“Through his deceit and greed, Rosen exploited the trust placed in him as a medical professional to engage in an extensive scheme that defrauded health insurance programs out of $1.8 million,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Instead of prescribing medications in an honest and lawful manner to help those in need, the defendant sold out his medical license and training, and will now become a convicted felon.”
According to court documents, Leonard Rosen, 72, of Fairfax Station, was an obstetrician-gynecologist (OB-GYN) who practiced in Northern Virginia since 1980. Rosen was also the owner of an OB-GYN medical practice. In 2014, Rosen met Mohamed Abdalla, 48, of Allendale, New Jersey, who was a licensed pharmacist and owned and operated several pharmacies. Shortly thereafter, Rosen entered into an agreement with Abdalla to prescribe expensive compounded pain and scar creams, which Rosen then ensured were sent to Abdalla’s pharmacies. In return, Abdalla agreed to pay Rosen a percentage of the profits. Prior to this scheme, Rosen had not prescribed expensive compounded medications. However, during the scheme, Rosen prescribed countless medically unnecessary compounded medications. In total, Rosen’s illegal actions resulted in $1,880,575.70 in losses to private health care benefit programs.
“Leonard Rosen exploited health care programs and his patients for personal gain by participating in a scheme to prescribe medically unnecessary prescriptions in return for money, and those criminal actions have consequences,” said Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division. “Today’s plea is an example of the dedicated work of the FBI and our partners to root out fraud, ensure the safety of our communities, and hold criminals accountable for their actions.”
For his role in this and other schemes, Abdalla was sentenced on March 19 to four years in prison. Rosen is scheduled to be sentenced on December 10. He faces a maximum penalty of 10 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division; Chris Dillard, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; and Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services (HHS), made the announcement after Senior U.S. District Judge Claude M. Hilton accepted the plea.
Assistant U.S. Attorneys Monika Moore and Carina A. Cuellar are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:21-cr-205.
Vicksburg Man Sentenced to Four Years in Prison for Bank RobberyRead the Press Release
Jackson, Miss – A Vicksburg man was sentenced to 48 months in federal prison for bank robbery, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi.
According to court records, on August 1, 2018, David Michael Gammill, 45, of Vicksburg, entered Trustmark National Bank located on North Frontage Road in Vicksburg, approached a teller, and said the bank was being robbed. Gammill passed a plastic bag to the teller and demanded money. Gammill told the teller that he possessed a firearm in his coat pocket and, according to bank employees, it appeared as if he did. Gammill’s intimidating behavior caused the teller to hand over money out of fear of bodily injury. Gammill then fled the bank.
Gammill was captured later that day by the Vicksburg Police Department and the Federal Bureau of Investigation. Gammill was charged with bank robbery and pled guilty on February 24, 2020.
The case was investigated by the Vicksburg Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant United States Attorney Bert Carraway.
United States Files Suit Against Tampa Doctor for Allegedly Taking Kickback Payments in Return for Fraudulent Fentanyl Spray PrescriptionsRead the Press Release
Tampa, Florida – The United States has filed a civil lawsuit against Dr. Edward Lubin, a pain management doctor practicing in Tampa, alleging that he issued patients medically unnecessary prescriptions for Subsys, a fentanyl-based spray manufactured by Insys Therapeutics, Inc., and used to treat breakthrough cancer pain. Dr. Lubin allegedly participated in Insys’ sham speaker program, through which it paid doctors in exchange for them writing such unnecessary prescriptions for Subsys.
In its complaint, the government alleges Dr. Lubin violated the federal Anti-Kickback Statute and the False Claims Act by repeatedly accepting payments of up to $3,700 from Insys for attending sham speaking events and, in exchange for these payments, prescribed Subsys to patients for whom the drug was either not medically necessary or otherwise inappropriate. These prescriptions were submitted to and paid through the Medicare and TRICARE federal healthcare programs. As further alleged in the complaint, between 2014 and 2016, Dr. Lubin prescribed Subsys to 61 patients, only nine of whom actually had cancer. In total, the United States alleges Dr. Lubin received more than $159,000 in payments from Insys and, in return, wrote Subsys prescriptions for which Medicare paid more than $2.8 million in claims.
The United States previously prosecuted Insys under a criminal information filed in the District of Massachusetts, and Insys agreed to a global resolution of the government’s separate civil and criminal investigations. As part of the civil resolution, Insys agreed to pay $195 million to settle allegations it violated the False Claims Act and, as part of the criminal resolution, it entered into a deferred prosecution agreement with the government, its operating subsidiary pleaded guilty to five counts of mail fraud, and the company was subject to a $2 million fine and $28 million in forfeiture.
Additionally, the United States criminally prosecuted the founder and four former executives of Insys. A federal jury in Boston previously found those defendants guilty of, among other things, using Insys’ speaker program to bribe medical practitioners to prescribe Subsys.
The claims asserted against Dr. Lubin are allegations only, and there has been no determination of liability.
This case was investigated by the Department of Justice, the U.S. Department of Health and Human Services – Office of Inspector General, and Department of Defense Office of Inspector General – Defense Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Jeremy Bloor.
Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477) and the Department of Defense Office of Inspector General at 1-800-424-9098.
Two Officers Indicted on Charges in Death of 20-Year-Old Karon Hylton-BrownRead the Press Release
WASHINGTON – An indictment was unsealed today charging two members of the Metropolitan Police Department (MPD) with offenses stemming from the Oct. 23, 2020, police vehicular pursuit in Northwest Washington that caused the death of Karon Hylton-Brown.
Terence Sutton, 37, an officer, was indicted on a District of Columbia charge of second-degree murder and federal charges of conspiracy and obstruction of justice. Andrew Zabavsky, 53, a lieutenant, was indicted on federal charges of conspiracy and obstruction of justice.
“Police officers are sworn to uphold the law and ensure the safety of the community. The vast majority of officers execute their duties in an exemplary manner, and we are grateful for their dedicated service,” said Acting U.S. Attorney Channing D. Phillips. “But when a select few violate their oath by engaging in criminal conduct, they cannot do so with impunity and must be held accountable. This indictment seeks to do just that.”
“As alleged in the indictment, these sworn law enforcement officers showed a careless disregard for Mr. Hylton-Brown’s life and then conspired to obstruct the investigation of their actions,” said Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division. “The FBI has an obligation to ensure that law enforcement officers do not abuse their positions of trust and authority to the detriment of the communities they serve.”
The indictment was returned by a grand jury yesterday and unsealed today. Sutton and Zabavsky made their first appearances this afternoon before the Honorable Magistrate Judge Zia M. Faruqui in the U.S. District Court for the District of Columbia. They were released under certain conditions set by the Court, with the next hearing set for Oct. 4, 2021.
According to the indictment, at the time of the police pursuit, Sutton was assigned to the Crime Suppression Team in MPD’s Fourth Police District. Zabavsky supervised the Fourth Police District’s Crime Suppression Team officers, including Sutton. The pursuit began at approximately 10 p.m. on Friday, Oct. 23, 2020, after officers observed Mr. Hylton-Brown, 20, driving a moped on a sidewalk in the Brightwood Park area of Northwest Washington. The pursuit continued on neighborhood streets for more than 10 blocks and into an alley off the 700 block of Kennedy Street NW. Immediately upon exiting the alley and entering Kennedy Street, Mr. Hylton-Brown was struck by an oncoming civilian vehicle. He suffered severe head trauma and died on Oct. 25, 2020.
The indictment alleges that Sutton caused Mr. Hylton-Brown’s death by driving a police vehicle in conscious disregard for an extreme risk of death or serious bodily injury to Mr. Hylton-Brown. It also alleges that Sutton and Zabavsky conspired and combined to hide from MPD officials the circumstances of the traffic crash leading to Mr. Hylton-Brown’s death.
The charge of second-degree murder carries a statutory maximum of 40 years in prison. The conspiracy charge carries a statutory maximum of five years and the obstruction of justice charge carries a maximum of 20 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Criminal Investigation and Intelligence Unit of the U.S. Attorney’s Office for the District of Columbia and the FBI’s Washington Field Office. The case is being prosecuted by the Public Corruption and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia.
Two Former Employees at New York Branch of Major Bank and an Accountant Charged with Cares Act Loan FraudRead the Press Release
Earlier today, in federal court in Brooklyn, a criminal complaint was unsealed and two criminal informations were filed yesterday charging Anuli Okeke, Charlene Wint and Hashim Campbell, respectively, for their participation in a conspiracy to commit bank and wire fraud in connection with a scheme to fraudulently obtain more than $3 million from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, both of which were created by Congress as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Wint and Campbell pleaded guilty on Thursday to conspiracy to commit bank and wire fraud before United States Magistrate Judge Roanne L. Mann. Okeke was arrested this morning and made her initial appearance this afternoon before United States Magistrate Judge Robert M. Levy who released the defendant on a $100,000 bond.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); John Grasso, Special Agent-in-Charge, Social Security Administration, Office of the Inspector General (SSA-OIG); Jay N. Lerner, Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); Stephen Donnelly, Acting Special Agent-in-Charge, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Eastern Region (FRS-OIG); and Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG) announced the charges.
“As alleged, the defendants plotted to steal millions in funds that were specifically earmarked by Congress to provide emergency assistance to small businesses and vulnerable workers during a global pandemic and time of great economic hardship,” stated Acting U.S. Attorney Kasulis. “Together with our law enforcement partners, this Office will vigorously prosecute defendants who shamelessly seek to enrich themselves by taking advantage of government programs that are designed to help those in need during the COVID crisis.”
“Fraudulent schemes exploiting the Paycheck Protection Program are unfortunately all too commonplace. Okeke, Wint, and Campbell, as charged today, join the ranks of others before them who took it upon themselves to personally and illegally benefit from the protections offered to small businesses during a global pandemic. They are likely not the last, however, and the FBI and our partners will continue to uncover more schemes of this nature and being their perpetrators to justice,” stated FBI Assistant Director-in-Charge Driscoll.
“Our office will relentlessly investigate fraud schemes and pull them out by the roots,” stated SBA-OIG Special Agent-in-Charge McCall-Brathwaite. “SBA’s PPP and EIDL programs are intended to provide assistance to the nation’s small businesses struggling with the pandemic challenges. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“The defendants in this case – two bank officials at a major financial institution and an accountant – are charged with misusing the bank’s operations for their personal benefit, in order to fraudulently obtain Government-guaranteed loans [which were intended to help small businesses during the current pandemic]. We remain committed to working with our law enforcement partners in investigating such cases where individuals seek to exploit Federal relief programs and threaten to undermine the integrity of our nation's banks,” stated FDIC Inspector General Lerner.
“We are fully committed to holding accountable any wrongdoers whose fraudulent actions impact the Federal Reserve Board’s ability to assist small businesses under the Paycheck Protection Program Liquidity Facility,” stated FRS-OIG Special Agent-in-Charge Donnelly.
The CARES Act is a federal law enacted on March 29, 2020 to provide emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. The PPP provided for forgiveness of the loan if recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.
Another source of relief provided by the CARES Act was the EIDL program, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. Under the program, EIDL recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance). The amount of an EIDL Advance was determined based on the number of employees working for the applicant. The EIDL Advance did not have to be repaid.
As alleged in the charging documents, Okeke, a branch manager at a large financial institution, Wint, a supervisor at the same branch, and Campbell, a tax preparer, along with their co-conspirators, provided false tax documents and helped borrowers to complete and submit PPP applications that contained fraudulent information. Despite knowing that the PPP applications contained false statements, Okeke signed each PPP loan application on behalf of the bank and submitted them for approval. Once the loan proceeds were disbursed to the borrowers, Okeke, Wint, Campbell and their co-conspirators received kickbacks from the loan proceeds. Moreover, Okeke, Wint, Campbell and their co-conspirators were involved in preparing fraudulent EIDL applications that fabricated borrower’s financials, and at times sought loans for individuals who were not legitimate business owners.
The charges in the complaint are allegations, and Okeke is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section. Assistant United States Attorneys Julia Nestor, Chand Edwards-Balfour, and Lindsay Gerdes of the Eastern District of New York, and Trial Attorney Michael McCarthy of the Fraud Section are in charge of the prosecution, with assistance from Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Section.
The Defendants:
ANULI OKEKE
Age: 49
Bronx, New YorkCHARLENE WINT
Age: 54
Bronx, New YorkHASHIM CAMPBELL
Age: 41
New York, New YorkE.D.N.Y. Docket Nos. 21-CR-477 (FB), 21-CR-478 (FB), and 21-CR-477 (FB)
Two Charged in Airline Baggage Scam Involving over $550,000 in False ClaimsRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today that on September 23, 2021, two Bills of Information charging PERNELL ANTHONY JONES, JR., age 31, of Kenner, Louisiana, and DONMONICK MARTIN, age 29, of Chalmette, Louisiana, for their roles in a conspiracy to defraud airlines through false claims for lost baggage.
JONES was charged in a two-count Bill of Information with Conspiracy to Commit Mail Fraud, in violation of Title 18, United States Code, Section 1349 and Mail Fraud, in violation of Title 18, United States Code, Section 1341. If convicted, JONES faces a maximum term of twenty (20) years imprisonment as to each count and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss caused by the offense. In addition, JONES faces a term of supervised release of up to three (3) years as to each count and a $200 mandatory special assessment fee. MARTIN was charged with one count of Conspiracy to Commit Mail Fraud, in violation of Title 18, United States Code, Section 371. If convicted, MARTIN faces a maximum term of five years of imprisonment and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss caused by the offense. MARTIN also faces up to three years of supervised release and a $100 mandatory special assessment fee.
According to court documents, beginning in or around 2015, JONES and his co-conspirators submitted over 180 claims to commercial airlines, including American, Alaska, Southwest, United, and JetBlue, requesting over $550,000 in reimbursement for luggage that JONES falsely alleged had been lost. In total, the airlines paid over $300,000 in fraudulent claims. The Bill of Information alleges that JONES would take flights with commercial airlines under false or fictitious identities using fraudulent identification cards. When he arrived at the destination airport, JONES would falsely claim that his baggage had been lost and would request reimbursement to compensate him for his lost luggage. Through this scheme, JONES and others caused airlines to mail reimbursement checks through the United States Postal Service.
MARTIN was charged for his role in this scam, which included going into Louis Armstrong International Airport in January 2020 under a fictitious identity and falsely telling American Airlines that his bag had been lost on a flight. MARTIN’s Bill of Information also alleges that, on four occasions, MARTIN agreed to accept reimbursement funds from airlines for false claims for lost baggage.
U.S. Attorney Evans reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Evans would like to acknowledge the investigation by the Federal Bureau of Investigation, the U.S. Department of Homeland Security, Jefferson Parish Sheriff’s Office, and the City of Dallas Police Department. The prosecution of this case is being handled by Assistant U.S. Attorney Maria Carboni.
Three Pike County Men Charged with Sexual Exploitation of a ChildRead the Press Release
SPRINGFIELD, Ill. – A federal grand jury indicted three men – Anthony M. Westemeyer, Bobby J. Warner, and Michael Wallace – all of Nebo, Illinois – on September 9, 2021 for sexual exploitation of a child. The indictment was unsealed today when the last of the three men, Westemeyer, was arraigned in federal court.
The indictment alleges that in May 2021 the three men caused a minor victim to engage in sexually explicit conduct, which was recorded and stored on a computer.
If convicted, the men face a maximum statutory penalty of 30 years’ imprisonment, followed by a life term of supervised release. Each charge also carries a mandatory minimum sentence of 15 years’ imprisonment.
Wallace was arrested in Nebo on September 10, 2021. Warner was arrested in Pittsfield, Illinois, on September 13, 2021. United States Magistrate Judge Tom Schanzle-Haskins ordered that both men be detained pending trial at a related hearing on September 16, 2021. The U.S. Marshals Service lodged a detainer for Westemeyer, who is presently in the custody of the Pike County, Illinois, Sheriff. Judge Schanzle-Haskins also ordered that Westermeyer be detained pending trial at today’s hearing.
Agencies participating in the investigation include U.S. Immigration and Customs Enforcement, Homeland Security Investigations; the Illinois Attorney General’s Office; the Pike County Sheriff’s Office; and the Pike County State’s Attorney’s Office. Assistant U.S. Attorneys Sarah E. Seberger and Tanner K. Jacobs are representing the government in the prosecution.
Anyone with information connected with this investigation is urged to call the Department of Homeland Security Investigations at (217) 547-2100.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
This case is being prosecuted as part of Project Safe Childhood, a nationwide Department of Justice initiative to combat child sexual exploitation and abuse. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Three Individuals Sentenced in Southeast Idaho Methamphetamine Distribution CaseRead the Press Release
POCATELLO – Jesse Kirby, 45, Trevor Van Horn, 31, and Debra Trujillo, 63, all of Idaho Falls, were sentenced to federal prison for possession with the intent to distribute methamphetamine, Acting U.S. Attorney Rafael M. Gonzalez, Jr. announced today. Senior U.S. District Judge B. Lynn Winmill sentenced Kirby to 110 months imprisonment, Van Horn to 100 months imprisonment, and Trujillo to 96 months imprisonment. Kirby, Van Horn, and Trujillo were ordered to serve an additional five years of supervised release upon completion of their sentences.
According to court records, from October 2019 through January 2020, law enforcement investigated multiple individuals for distributing methamphetamine in southeast Idaho. Through the use of surveillance, undercover officers, controlled purchases, and search warrants, law enforcement found evidence that Robert Winterholler, 36, Trujillo, Van Horn, and Kirby were actively engaged in the distribution of methamphetamine in southeast Idaho, and each was in possession of large quantities of methamphetamine. During the investigation, law enforcement recovered more than seven pounds of methamphetamine. In addition, law enforcement recovered drug ledgers, heroin, fentanyl, marijuana, and multiple firearms.
Winterholler, the remaining defendant, pleaded guilty on May 12, 2021, and is currently scheduled to be sentenced on October 20, 2021 before Judge Winmill at the federal courthouse in Pocatello.
Acting U.S. Attorney Gonzalez praised the collective work of the Drug Enforcement Administration, Idaho State Police, Bonneville County Sheriff’s Office, Idaho Falls Police Department, Pocatello Police Department, Bannock County Sheriff’s Office, and Fremont County Sheriff’s Office, which led to charges. Mr. Gonzalez added, “these talented investigators working under the Organized Crime Drug Enforcement Task Forces (OCDETF) banner made this case possible and our streets safer. OCDETF is an independent component of the U.S. Department of Justice. Established in 1982, OCDETF is the centerpiece of Attorney General Merrick Garland’s strategy to combat transnational organized crime and to reduce the availability of illicit narcotics in the nation by using a prosecutor-led, multi-agency approach to enforcement. OCDETF leverages the resources and expertise of its partners in concentrated, coordinated, long-term enterprise investigations of transnational organized crime, money laundering, and major drug trafficking networks. This case proves that multi-jurisdictional, cooperative law enforcement works, and works well in Idaho.”
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Taunton Man Indicted for Child Pornography OffenseRead the Press Release
BOSTON – A Taunton man was indicted yesterday by a federal grand jury in Boston for allegedly possessing hundreds of images depicting child pornography.
Rudy Frabizio, 59, was indicted on one count of possession of child pornography. An arraignment date has not yet been scheduled by the court. Frabizio was arrested and charged by criminal complaint in May 2021 and has been in custody since.
According to the charging documents, during a search of Frabizio’s residence on May 19, 2021, agents found at least 465 images and videos depicting child pornography. It is also alleged that Frabizio uploaded images depicting child pornography via his Google account. Frabizio is a registered Level 2 sex offender due to an April 2009 conviction for possession of child pornography.
The charge of possession of child pornography provides for a sentence of up to 20 years in prison, five years and up to a lifetime of supervised release and a fine of $250,000. Due to his prior conviction, Frabizio faces a minimum mandatory sentence of 10 years in prison. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. The Taunton Police Department provided valuable assistance with the investigation. Assistant U.S. Attorney Adam Deitch of Mendell’s Major Crimes Unit is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Tampa Accountant Charged with Murder-For-HireRead the Press Release
Tampa, Florida– DeAnna Marie Stinson (50, Tampa) has been arrested and charged by federal criminal complaint with soliciting a crime of violence and murder-for-hire. If convicted on all counts, Stinson faces a maximum penalty of 10 years in federal prison.
According to the criminal complaint, on June 24, 2021, Stinson created an account on a dark web website (“The Website”) that purported to provide murder-for-hire services to its customers. On June 25, 2021, Stinson submitted an “order” requesting that a hitman be assigned to complete a “quick hit in southern Florida” to kill the spouse of Stinson’s former significant other. In the order, Stinson provided the Victim’s name, address, and a photograph of the Victim. Between June and July 2021, Stinson sent four additional orders and over $12,000 in Bitcoin to effect the hit. During this time, Stinson repeatedly messaged administrators of The Website and purported hitmen, requesting that the “job” be completed as soon as possible, and even offered a “bonus” if the hit was completed by a specific date. When Stinson had not received a status update from administrators of The Website, on July 31, 2021, Stinson requested that the administrators “reassign the job to someone who has a history of getting jobs done” because she “need[ed] th[e] job done ASAP.”
Law enforcement agents received information regarding Stinson’s criminal activity and obtained records from her virtual currency exchange account. The records showed that Stinson had paid Bitcoin to The Website. An agent contacted Stinson while acting in an undercover capacity as a hitman for The Website. In a recorded phone call, Stinson confirmed that she wanted the Victim killed and agreed to send additional money to the undercover agent via Bitcoin so that the transaction could not be traced. On September 13, 2021, Stinson sent $350 in Bitcoin to the undercover agent so that the agent could purchase a revolver to commit the murder.
A criminal complaint is only an allegation and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Lisa M. Thelwell.
Tallahassee Man Sentenced to Twenty Years on Charges of Production and Distribution of Child PornographyRead the Press Release
TALLAHASSEE, FLORIDA – Gregory Carroll Johnson, 40, of Tallahassee, Florida, was sentenced to twenty years in federal prison on charges of conspiracy to produce, distribute, possess, and receive child pornography. The sentence, which followed his guilty plea earlier this year, was announced by Jason R. Coody, Acting United States Attorney for the Northern District of Florida.
Court documents reflect, in July 2019, representatives of local, state, and federal law enforcement executed a search warrant at Johnson’s residence in Tallahassee. The evidence showed that Johnson had been receiving child pornography from an individual in Atlanta. While conducting the search, however, authorities found messages on Johnson’s phone that demonstrated Johnson and co-defendant Madison King had also conspired to produce child pornography. The recovered evidence included short video clips and pictures that King had taken and transmitted to Johnson depicting the sexual abuse of a toddler. Florida investigators quickly obtained emergency legal process to locate King and contacted their Georgia counterparts. That same day, agents with Homeland Security Investigations, in concert with the Berrien County (Georgia) Sheriff’s Office, executed a search of King’s Nashville, Georgia residence, whereupon the child was rescued.
“There is no greater charge than the protection of our children,” stated Acting U.S. Attorney Coody. “This sentence is yet another example of the unwavering commitment to the protection of our most vulnerable and should serve as a significant deterrent to those who would attempt to harm them. Our law enforcement partners are to be commended for the swift, multi-state investigation, which resulted in the immediate rescue of this child, preventing further abuse.”
“During the course of this investigation, a child was saved from this predator thanks to HSI partnerships in our offices in Philadelphia, Atlanta, and here in Tallahassee,” said HSI Tampa Assistant Special Agent in Charge Micah McCombs.
“There is no crime worse than the crimes against our children,” said Berrien County Sheriff Ray Paulk. “I would like to thank our investigators and our District Attorney’s Office for acting swiftly and efficiently in this case to ensure the safety of this child. I also want to thank all of the local, state, and federal law enforcement that worked together in making a case like this priority.” “We couldn’t be more thankful for Acting U.S. Attorney Jason Coody and his staff for securing another conviction in this case, making the world a safer place for our children to live.”
Johnson's prison sentence will be followed by ten years of supervised release. He will also be required to register as a sex offender and will be subject to all sex offender conditions.
This conviction was the result of an investigation conducted by Homeland Security Investigations, the Leon County Sheriff’s Office, the Berrien County Sheriff’s Office, and the Florida Department of Law Enforcement. Assistant United States Attorneys Meredith L. Steer and Michelle Spaven prosecuted the case.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Sunland Man Sentenced to Nearly 3½ Years in Federal Prison for Scheming to Fraudulently Obtain $650,600 COVID-Relief LoanRead the Press Release
LOS ANGELES – A Sunland resident has been sentenced to 41 months in federal prison for fraudulently obtaining a $650,600 Paycheck Protection Program loan under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Department of Justice announced today.
Andranik Amiryan, 42, was sentenced late Thursday afternoon by United States District Judge Dolly M. Gee, who also ordered him to pay $650,600 in restitution. Amiryan pleaded guilty on April 28 to one count of conspiracy to commit bank fraud.
Amiryan opened a bank account by using a stolen identity, then, posing as the identity theft victim, he falsely told the bank that he was the CEO of ACBA Technologies Inc., a Northridge-based software company. In fact, ACBA existed only as a corporate shell. Amiryan’s co-conspirators arranged to wire into that account $650,600 of CARES Act relief funds by falsely claiming that ACBA Technologies had a monthly payroll of more than $500,000 and attaching forged tax forms as support. Once the money was in his account, Amiryan wrote checks to his co-conspirators and to other shell companies he controlled, effectively withdrawing approximately $452,287 of the funds before the bank froze the account.
Amiryan has been in federal custody since his arrest in this case in September 2020. At the time of his arrest, authorities seized $11,800 in cash found in his jacket, and soon afterward seized more than $262,000 from bank accounts he controlled. As part of his guilty plea, Amiryan agreed to forfeit those assets, which are worth nearly $275,000.
Judge Gee described as “despicable” Amiryan’s theft of public funds that were intended by Congress to help small businesses survive the COVID-19 pandemic.
The case is the result of an investigation by Homeland Security Investigations Los Angeles’ El Camino Real Financial Crimes Task Force and the Small Business Administration Office of Inspector General.
Assistant United States Attorneys Andrew Brown of the Major Frauds Section and Victor Rodgers of the Asset Forfeiture Section prosecuted this case.
In May, 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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Sioux City Man Sentenced to Federal Prison for Conspiracy to Distribute MethamphetamineRead the Press Release
A Sioux City man who conspired to distribute methamphetamine around the tri-state area was sentenced September 22, 2021 to 10 years in federal prison.
Leroy Eric McCoy, age 39, from Sioux City, Iowa, received the prison term after an April 15, 2021 guilty plea to conspiracy to distribute methamphetamine.
In a plea agreement, McCoy admitted to conspiring to distribute large quantities of methamphetamine around the tri-state area. McCoy was previously convicted in 2005 of conspiracy to distribute methamphetamine near a private location and possession with intent to distribute methamphetamine.
McCoy was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. McCoy was sentenced to 120 months’ imprisonment. He must also serve a 6-year term of supervised release after the prison term. There is no parole in the federal system.
McCoy is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Ron Timmons and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4039.
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Rocky Mount Blood Gang Member Sentenced to 14 Years for Armed RobberyRead the Press Release
WILMINGTON, N.C. – A Rocky Mount man was sentenced yesterday to 168 months in prison for armed robbery and brandishing a firearm in connection to a crime of violence. On June 16, 2021, Dexter Jamal Williams pled guilty to the charges.
According to court documents and other information presented in court, Williams, 23, and his co-defendants, Arafat Alzer and Bashar Hroub, committed an armed robbery at the Royal Eco Marketing Company in Raleigh, North Carolina, on December 4, 2019. During the robbery, the defendants duct-taped the store manager to a chair, and repeatedly pistol-whipped and assaulted him before stealing over $20,000 worth of merchandise from the business. Video surveillance from the parking lot of the business shows Williams and Alzer leaving the scene in Alzer’s Toyota Camry, and Hroub leaving in his Chevrolet Silverado pickup truck. As the defendants were leaving the scene, an employee of the business is observed firing multiple rounds from a gun at the two vehicles, striking both the Camry and the Silverado. Following the robbery, Alzer and Williams discarded Alzer’s vehicle in a parking lot in Raleigh and returned to Rocky Mount. When Raleigh Police responded to the vehicle, they recovered Alzer’s identification card and vehicle registration. Later that day, Williams checked into Nash General Hospital to receive treatment for his gunshot wound, and Alzer and Hroub traveled back to Raleigh to hide Williams’ firearm at Hroub’s girlfriend’s residence. On December 11, 2019, the Wake County Sheriff’s Office executed a search warrant at this residence and recovered the firearm.
Arafat Alzer pled guilty to Interference With Commerce by Robbery and Brandishing a Firearm During and in Relation to a Drug Trafficking Crime or a Crime of Violence; and Aiding and Abetting on July 28, 2020 and was sentenced to 70 months imprisonment on September 3, 2021. Bashar Hroub pled guilty to Interference With Commerce by Robbery and Possession of a Firearm by a Convicted Felon on July 23, 2021 and is awaiting sentencing.
On February 11, 2020, officers with the Rocky Mount Police Department executed a search warrant at Williams’ residence, and recovered 688 grams of marijuana and a .40 caliber handgun. On May 12, 2020, Rocky Mount Police responded to a shooting at a residential location. There, they encountered Williams, who was in possession of a stolen .9mm handgun.
Acting U.S. Attorney Acker commented: “The United States Justice Department and the United States Attorney’s Office are aggressively pursuing violent offenders and gang members. This sentence is part of our efforts to “Take Back North Carolina” from those who wish to bring harm to the citizens of the Eastern District of North Carolina.”
“ATF remains committed to protecting lives and property against violent gun crime,” said ATF Special Agent in Charge Vince Pallozzi. “Our federal and local law enforcement agencies put together a very comprehensive investigation and stopped a serious threat to our communities. This arrest and conviction absolutely makes our community safer.”
“Our mission here at the Rocky Mount Police Department is to improve the quality of life in the city of Rocky Mount by building partnerships to reduce crime,” commented Rocky Mount Police Chief Robert Hassell. “We value our partnership with our Federal Law Enforcement agencies, who assist us in creating a safe environment for all citizens who reside and visit Rocky Mount, NC. The Rocky Mount Police Department will continue to work with Federal, State, and Local law enforcement agencies while providing the highest level of police services.”
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by Chief U.S. District Judge Richard E. Myers II. The Raleigh Police Department, the Rocky Mount Police Department, and the Wake County Sheriff’s Office 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-00250-M.
Presque Isle Man Sentenced for Conspiring to Distribute MethamphetamineRead the Press Release
BANGOR, Maine: A Presque Isle man was sentenced today in federal court for conspiring to distribute and possess with intent to distribute methamphetamine, Acting U.S. Attorney Donald E. Clark announced.
U.S. District Judge Lance E. Walker sentenced Reece Humphrey, 28, to 10 years in prison and three years of supervised release. Humphrey pleaded guilty in April 2021.
According to court records, between approximately July 2018 and May 2019, members of the conspiracy obtained methamphetamine in western and southern states from sources in Mexico. Humphrey and his co-conspirators distributed the drugs in Aroostook County and other parts of central and northern Maine. Humphrey traveled with co-conspirators on at least one trip to Mexico and Arizona to obtain methamphetamine and transport it back to Maine.
The U.S. Drug Enforcement Administration, Homeland Security Investigations and the Maine Drug Enforcement Agency investigated this case with the assistance of multiple state and local law enforcement agencies.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Ohio man admits to drug chargesRead the Press Release
WHEELING, WEST VIRGINIA – Rashaad Shadee Washington, of Pleasant City, Ohio, has admitted to drug charges, Acting United States Attorney Randolph J. Bernard announced.
Washington, 37, pleaded guilty today to one count of “Distribution of Methamphetamine within 1000 Feet of a Protected Location” and two counts of “Distribution of Methamphetamine.” Washington admitted to selling methamphetamine, sometimes near McNinch Primary School, in Marshall County and Ohio County in February and March 2021.
Washington is facing at least one and up to 40 years of incarceration and a fine of up to $2,000,000 for the protected location charge, and up to 20 years of incarceration and a fine of up to $1,000,000 for each of the distribution charges. 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 Shawn M. Adkins is prosecuting the case on behalf of the government. The Ohio Valley Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge James P. Mazzone presided.
New Jersey Man Extradited to United States to Face Charges for Wire Fraud and International Money LaunderingRead the Press Release
TRENTON, N.J. – A New Jersey man has been arrested for charging unauthorized credit card transactions for music lessons that were not provided to students, and laundering these funds outside of the United States, Acting U.S. Attorney Rachael A. Honig announced.
Michael Lawson, 49, was indicted in 2013 on six counts of wire fraud and six counts of international money laundering. Lawson was extradited from the Czech Republic, made his initial appearance today before U.S. Magistrate Judge Bongiovanni in Trenton federal court, and was released.
According to documents filed in this case and statements made in court:
Lawson was the owner of several internet-based companies that matched art and music teachers with students in need of lessons throughout the United States. The students entered into contracts with Lawson’s companies and agreed to pay for lessons via online credit card transactions. Beginning in November 2008, Lawson started renewing students’ contracts for music lessons without the students’ knowledge and consent, and started charging the students’ credit cards for the lessons that they had not requested. Lawson then directed the funds to be transferred internationally to accounts that he controlled abroad.
The counts of wire fraud are punishable by a maximum of 20 years in prison and a maximum fine $250,000, or twice the gross gain or loss from the offense, whichever is greatest. The counts of money laundering are punishable by a maximum penalty of 20 years in prison and a maximum fine of $500,000, or twice the amount involved in the offense, whichever is greater.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the charges. She also thanked the U.S. Marshals Service; the Ministry of Justice of the Czech Republic; the Czech Police Presidium; INTERPOL; the office of FBI Legat Prague; the office of FBI Legat "The Hague;" and FBI-New York JFK Airport Resident Agency, for their assistance. The Justice Department’s Office of International Affairs provided substantial assistance in securing Lawson’s arrest and extradition from the Czech Republic.
The government is represented by Assistant U.S. Attorney Eric Suggs in Trenton.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mt. Carmel Doctor Pleads Guilty to Operating A Massive “Pill Mill”Read the Press Release
WILLIAMSPORT –The United States Attorney’s Office for the Middle District of Pennsylvania announced that Dr. Raymond Kraynak, age 64, of Mt. Carmel, Pennsylvania, pled guilty on September 23, 2021, before Chief United States District Court Judge Matthew W. Brann to 12 counts of unlawful distribution of a controlled substance. The guilty plea occurred after 13 days of trial testimony in the Williamsport federal courthouse and after the government rested its case-in-chief.
According to Acting United States Attorney Bruce D. Brandler, Kraynak pled guilty to 12 counts of unlawful distribution and dispensing of a controlled substance outside the usual course of professional practice and not for legitimate medical purpose. Kraynak also admitted that the Schedule II narcotic opioid drugs that he prescribed resulted in the deaths of five of his patients. Under the terms of his plea agreement, and if accepted by the Court, Kraynak will be sentenced to a 15 year term of imprisonment on each of the twelve counts he pleaded guilty to and the sentences will run concurrently. Kraynak also faces a fine of $1 million, and a maximum term of supervised release for up to life.
Kraynak was indicted by a federal grand jury on December 20, 2017, in a 19-count indictment charging unlawful distribution and dispensing of controlled substances, causing the death of five patients by the unlawful distribution and dispensing of controlled substances, and maintaining two drug-involved premises, one in Mt. Carmel and the other Shamokin, Pennsylvania. Kraynak stopped seeing patients and surrendered his license in December 2017 when he was arraigned in federal court on the indictment.
Kraynak operated two offices, one in Mt. Carmel and the other in Shamokin, Pennsylvania, both known as Keystone Family Medicine Associates, and prescribed approximately 9.5 million units of oxycodone, hydrocodone, oxycontin and fentanyl to patients between January 2014 and July 31, 2017. The prosecution evidence included testimony from DEA analysts that Kraynak was the top prescriber of opioids in Pennsylvania in 2014, 2015, and 2016 and during those years prescribed more opioids than both the Veterans Medical Center in Pittsburgh and the Veterans Hospital in Philadelphia.
The prosecution’s evidence at trial also included testimony by a medical expert that Kraynak continued to prescribe high doses of opioids despite knowing that patients had previously been treated for drug overdoses, respiratory problems and other medical conditions increasing the risks of overdose and death.
The prosecution’s evidence also established that Kraynak, in prescribing these opioids to multiple patients outside of the usual course of professional practice and without a legitimate medical purpose, and did so without conducting a proper medical examination, inadequately verifying the patient’s medical complaint, and failing to assess the risk of abuse by individual patients.
“When this case was indicted in 2017 former Attorney General Jeff Sessions described Kraynack’s behavior as ‘unconscionable’,” stated Acting United States Attorney Bruce D. Brandler. Former AG Sessions further stated that “we will take this fight to street dealers, corrupt doctors, and the companies that helped fuel this devastating crisis.” The Department of Justice continues this fight under the leadership of Attorney General Merrick Garland and the Middle District of Pennsylvania is proud to be a part of it.”
“Dr. Kraynak’s criminal acts are especially reprehensible as his unlawful distribution of powerful painkillers resulted in the death of five people,” said Thomas Hodnett, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “His total and utter disregard of his professional and ethical obligations as a doctor and care of his patients was sickening.”
"Dr. Kraynak recklessly funneled millions of units of opioids into Shamokin neighborhoods, continuing to fuel an epidemic that takes the lives of 14 Pennsylvanians every day," said Attorney General Shapiro. "We're working closely with our federal partners to combat this crisis that continues to destroy Pennsylvania families and communities."
This case was investigated by the Drug Enforcement Administration Diversion Control Division, with assistance from the Pennsylvania State Police, the Pennsylvania Office of Attorney General, the Mt. Carmel Borough Police Department, Shamokin Police Department, the Schuylkill County Drug Task Force, the Commonwealth of Pennsylvania Bureau of Professional and Occupational Affairs, the Commonwealth of Pennsylvania Department of Health, Office of Drug Surveillance and Misuse Prevention, the Northumberland County Coroner’s Office, the Schuylkill County Coroner’s Office, and Lehigh County Coroner’s Office. Assistant United States Attorneys William Behe and George Rocktashel prosecuted the case.
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Michigan Man Pleads Guilty to Threatening GHUHS StudentsRead the Press Release
The Office of the United States Attorney for the District of Vermont stated Jason Graham, 24, of Holland, Michigan, pled guilty today to making a 2019 threat over Facebook to “shoot up” Green Mountain Union High School located in Chester, Vermont.
According to court documents, in February 2019, Jason Graham became engaged in an on-line dispute on Facebook with a group of Vermont high school students. During the course of the dispute, on February 4, 2019, Graham made threats via Facebook to “shoot up” the students’ school. On February 7, 2019, as the on-line dispute continued, Graham arranged for an associate to call the Vermont students’ high school and state that he had placed a bomb inside the school and had sharpshooters outside the building.
At the plea hearing, the government noted that more than half the GMUHS student body skipped school in response to Graham’s February 4, 2019 Facebook threat, and that the subsequent bomb threat to GMUHS drew a massive law enforcement response.
According to court documents, at the time Graham orchestrated the threats, Graham was under the supervision of Michigan authorities for prior felony convictions. Shortly after the threats were tracked to Graham, authorities in Michigan confronted Graham at his residence and found him unlawfully possessing a firearm. Graham was then arrested and convicted of a Michigan firearm violation, and recently completed his minimum state term of incarceration for that conviction.
According to the terms of the federal plea agreement, in exchange for admitting to a violation of 18 U.S.C. § 875(c), which prohibits the making of threats in interstate commerce, Graham will receive a sentence of no more than one year and one day. Graham will remain detained pending sentencing.
Acting U.S. Attorney Jonathan A. Ophardt thanked Chester Police Department, the Vermont State Police, the Vermont Intelligence Center, and the Federal Bureau of Investigation’s Joint Terrorism Task Force for their investigation of the case. Assistant U.S. Attorneys Eugenia A. P. Cowles and Michael P. Drescher are prosecuting the case. Assistant Federal Public Defender David McColgin represents Graham.
Mexican National Pleads Guilty to Drug Trafficking Following Two-Kilogram Cocaine DealRead the Press Release
BOSTON – A Mexican national pleaded guilty yesterday in federal court in Boston in connection with selling two kilograms of cocaine.
Ana Guadalupe Acosta Grajeda, 58, pleaded guilty to one count of possession with intent to distribute 500 grams or more of cocaine. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Jan. 14, 2022. Grajeda and her son, Carlos Acosta Estrella were indicted in October 2019.
According to court documents, Grajeda and Estrella were arrested after they were videotaped selling two kilograms of cocaine to a cooperating witness in East Boston. A search of Estrella and Grajeda’s apartment allegedly resulted in the seizure of one kilogram of heroin, numerous cellphones, a high-powered tactical shotgun with a laser sight and a box of ammunition for the shotgun.
The charge of possession with intent to distribute 500 grams or more of cocaine provides for a mandatory minimum sentence of five years and up to 40 years in prison, at least four years of supervised release and a fine of $5 million. 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; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Boston Police Acting Commissioner Gregory Long made the announcement. Assistant U.S. Attorney Christopher Pohl of Mendell’s Narcotics and Money Laundering Unit is prosecuting the case.
The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Meriden Man Sentenced to More Than 6 Years in Prison for Trafficking Heroin from Bridgeport MarketsRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that EDDY ANTONIO TORRES MOREL, 51, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 78 months of imprisonment followed by three years of supervised release for trafficking heroin. Judge Shea also ordered Torres to pay a $50,000 fine.
According to court documents and statements made in court, an investigation revealed that Torres was trafficking narcotics from Big Daddy’s Deli and Jamal’s Market, two stores he operated on East Main Street in Bridgeport. During the investigation, law enforcement made two controlled purchases of a half-kilogram of heroin from Torres, first at Jamal’s Market on October 29, 2019, and then at Big Daddy’s Deli on January 24, 2020.
Torres was arrested on February 5, 2020. On that date, investigators searched his residence and stores and seized two firearms, assorted firearm parts, ammunition, and approximately $22,000 in cash.
On June 28, 2021, Torres pleaded guilty to one count of conspiracy to possess with intent to distribute one kilogram or more of heroin.
Torres, who is released on a $300,000 bond, is required to report to prison on February 10, 2022.
This matter was investigated by the FBI’s Bridgeport Safe Streets Task Force, the Drug Enforcement Administration, the Bridgeport Police Department and the Stamford Police Department. The case was prosecuted by Assistant U.S. Attorney Joseph Vizcarrondo.
Maryland Man Sentenced for Credit Card Fraud OffensesRead the Press Release
PORTLAND, Maine: A Maryland man was sentenced today in federal court for using counterfeit credit cards, Acting U.S. Attorney Donald E. Clark announced.
U.S. District Judge John A. Woodcock, Jr., sentenced Charles Harris, 38, to eight months in prison and three years of supervised release. He was also ordered to pay $1,008.15 in restitution. He pleaded guilty in December 2020.
According to court records, in December 2018, Harris and his co-defendant, Bryan Boley, used counterfeit credit cards at Maine retail outlets. The credit card numbers were bought online.
Harris’s co-defendant Boley was sentenced to 22 months in prison and three years of supervised release on November 15, 2019.
The U.S. Secret Service; the Maine State Police; and the Auburn, Brunswick, Cape Elizabeth and Yarmouth police departments investigated the case.
Maryland Man Facing Federal Indictment for Fraudulently Obtaining $3.5 Millions in COVID Relief FundsRead the Press Release
Greenbelt, Maryland – A federal grand jury has returned an indictment charging Rudolph Elwood Brooks, Jr., age 45, of Bowie, Maryland, with federal wire fraud and money laundering charges.
The indictment was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Shimon R. Richmond of the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC OIG); Acting Special Agent in Charge Darrell Waldon of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington, D.C. Field Office; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Inspector General Hannibal “Mike” Ware of the U.S. Small Business Administration Office of Inspector General (SBA OIG).
The nine-count indictment charges Brooks with three counts of wire fraud relating to Brooks’ transmission of loan applications submitted through the Paycheck Protection Program (“PPP”) in the names of three entities controlled by Brooks: Cars Direct by Gavawn HWD Bob’s Motors (“Cars Direct”), Madaro, LLC (“Madaro”), and Kingdom Tabernacle of Restoration of Ministries (“Kingdom Tabernacle”). As alleged in the indictment, Brooks electronically submitted PPP loan applications in the name of Cars Direct, Madaro and Kingdom Tabernacle containing false statements regarding the number of employees and payroll expenses of the entities. In support of the PPP loan applications, Brooks also submitted false tax forms not on file with the Internal Revenue Service.
On May 9, 2020, the Cars Direct PPP loan was approved and on May 12, 2020 $1,556,589 in loan proceeds were deposited into an account controlled by Brooks. On May 11, 2020, the Madaro PPP loan was approved and on May 13, 2020 $204,266 in loan proceeds were deposited into an account controlled by Brooks. On May 14, 2020, the Kingdom Tabernacle PPP loan was approved and on May 15, 2020 $1.8 million in loan proceeds were deposited into an account controlled by Brooks.
In total, on the basis of the false and fraudulent PPP loan applications, Brooks obtained at least $3,560,855 in PPP loan proceeds. Brooks used the PPP loan proceeds for his personal benefit and on payments and purchases not permissible under the Paycheck Protection Program, including payments for a residence, the purchase of a luxury vehicle, purchases at restaurants, retail stores, grocery stores, cash withdrawals and transfer to other bank accounts controlled by Brooks.
The indictment also charges Brooks with three counts of money laundering for wire transfers derived from the criminal proceeds of the PPP loans that were used for the purchase of a 2018 Tesla Model 3, a real property in Baltimore, Maryland, and a real property in Upper Marlboro, Maryland. The indictment also charges Brooks with three counts of money laundering for the April 5, 2021 purchase of three $100,000 cashier’s check payable to “Rudolph Brooks” from the proceeds of the fraudulent PPP loans.
To date, the United States has recovered more than $1.6 million in proceeds of the fraudulent PPP loans as well as a 2018 Tesla Model 3 purchased with proceeds of the Cars Direct PPP loan. As alleged in the indictment, if convicted, the United States will seek forfeiture of the seized property as well as the Upper Marlboro, Maryland property purchased with fraud proceeds. The United States also filed a parallel civil forfeiture complaint against the Upper Marlboro, Maryland property on August 12, 2021 alleging that the property was purchased with more than $500,000 in proceeds traceable to the Kingdom Tabernacle and Cars Direct PPP loans.
As detailed in the indictment, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted in March 2020 to provide emergency financial assistance to the millions of Americans suffering from the economic consequences of COVID-19. The CARES Act authorized up to $659 billion in forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (“PPP”). The business must use PPP loan proceeds on payroll costs, mortgage interest, rent, and utilities. Initially, the program allowed the principal to be forgiven if the business spent the loan proceeds on qualifying expenses within eight weeks of loan issuance and used at least 75 percent of the loan for payroll. On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 went into effect. This law extended the period from eight weeks to 24 weeks that the loan proceeds had to be spent and reduced the requirement that the loan proceeds be spent on payroll from 75 percent to 60 percent.
If convicted, Brooks faces a maximum sentence of 20 years in federal prison for wire fraud and money laundering followed by three years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Jonathan F. Lenzner commended the FDIC OIG, the IRS-CI, the FBI, and the SBA OIG for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Sean R. Delaney, Jessica C. Collins, and Jennifer L. Wine, who are prosecuting 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.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/community-outreach.
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Manhattan U.S. Attorney Announces Criminal and Civil Charges Against CEO of Apparel Company for Engaging in Customs FraudRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent in Charge of the New York Office of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), and Marty Raybon, Acting Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), announced the filing of criminal and civil charges against GEORGE ILOULIAN, a/k/a “George Illulian,” the CEO of an apparel company located in New York, New York. ILOULIAN was charged, in an indictment unsealed yesterday, with participating in a years-long scheme to defraud CBP by submitting invoices to CBP that falsely understated the true value of the goods his company imported into the United States, thereby evading the obligation to pay hundreds of thousands of dollars in customs duties.
ILOULIAN was arrested yesterday and presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court. The criminal case has been assigned to U.S. District Judge Paul G. Gardephe. In addition, a civil fraud lawsuit against ILOULIAN and his company, DELTA UNIFORMS, INC. (“DELTA”), which is also assigned to Judge Gardephe, was unsealed in Manhattan federal court earlier today. The civil complaint asserts that ILOULIAN and DELTA violated the False Claims Act by misrepresenting the true value and nature of the goods they imported into the United States on entry documents submitted to CBP. The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, George Iloulian cheated the United States out of hundreds of thousands of dollars by causing false documents that misrepresented the value of imported goods to be submitted to CBP to avoid paying lawfully owed customs duties. Iloulian now faces criminal charges for his alleged fraud, and the government’s civil suit seeks treble damages and penalties against Iloulian and his company.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “Iloulian allegedly evaded the obligation to pay hundreds of thousands of dollars in customs duties using a double-invoicing scheme, essentially creating two invoices, one for payment and one for customs. HSI New York and U.S. Customs and Border Protection will continue to partner in protecting U.S. trade from perpetrators who intentionally defraud the U.S. government for a profit.”
CBP Acting Director of New York Field Operations Marty Raybon said: “U.S. Customs and Border Protection is proud to have played an important role to this ongoing investigation that resulted in the takedown of an elaborate conspiracy to defraud the United States of hundreds of thousands of dollars in revenue. This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle nefarious enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.”
According to the allegations in the Government’s indictment and civil complaint[1]:
From at least in or about 2010 through at least in or about 2020, ILOULIAN, and others known and unknown, including individuals associated with overseas manufacturers, conspired to submit fraudulent invoices to CBP that understated the value of apparel imported into the United States, thereby depriving the United States of hundreds of thousands of dollars in customs duty revenue. ILOULIAN and his co-conspirators achieved lower customs duties on imported goods in two ways: (i) a “double-invoicing scheme,” and (ii) a “fabric-type scheme.”
To effect the double-invoicing scheme, which was perpetrated by ILOULIAN and his co-conspirators from at least in or about 2010 through at least in or about 2020, ILOULIAN utilized two invoices: One invoice, at times referred to by ILOULIAN and his co-conspirators as the “Actual Invoice” or the “For Payment” invoice, contained higher prices and reflected what DELTA actually paid overseas manufacturers for apparel. The second invoice, which they at times referred to as the “Customs Invoice” or “For Customs Declaration” invoice, contained false lower prices. The information in the Customs Invoice was submitted by DELTA, through a customs broker (the “Customs Broker”), to CBP. CBP relied on the information from the Customs Invoice in assessing and collecting customs duties from DELTA. Accordingly, by presenting the false Customs Invoices to CBP, DELTA was able to pay fraudulently lower customs duties than DELTA actually owed. In one version of the double-invoicing scheme, DELTA directed an overseas manufacturer to send to DELTA two sets of invoices for the same shipment of merchandise, the Actual Invoice and the Customs Invoice. In a second version of the double-invoicing scheme, the overseas manufacturer provided DELTA with only the Actual Invoice; a Customs Invoice was created by other means and provided by DELTA to the Customs Broker.
From at least in or about 2011 through at least in or about 2016, ILOULIAN and his co-conspirators also engaged in a fabric-type scheme. To effect the fabric-type scheme, DELTA directed an overseas manufacturer to misstate the composition of the fabric in the apparel in order to obtain a lower duty rate. Specifically, the invoice would indicate that the imported goods were predominantly made of cotton rather than from man-made fibers, even though the reverse was true. The falsified invoices were then presented to CBP, which allowed DELTA to pay lower customs duties than DELTA actually owed, because materials containing more cotton than man-made materials are subject to lower duty rates.
These multi-year fraud schemes resulted in the loss of hundreds of thousands of dollars in duty revenue to the United States.
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ILOULIAN is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of falsely effecting the entry of goods into the United States, which carries a maximum sentence of two years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ILOULIAN and DELTA are also charged with civil claims under the False Claims Act, through which the Government may recover treble damages and civil penalties arising from his conduct.
Ms. Strauss thanked HSI, CBP, and the Special Agents of the United States Attorney’s Office for the Southern District of New York for their efforts and ongoing support and assistance with the case.
The criminal case is being handled by the Office’s General Crimes Unit, and Assistant U.S. Attorney Kaylan E. Lasky is in charge of the prosecution.
The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant U.S. Attorney Dominika Tarczynska is in charge of the matter.
The charges contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the texts of the indictment and the civil complaint, and the descriptions of the indictment and civil complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Mandeville Man Sentenced for Defrauding FEMA After a DisasterRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that BRUCE D. COX, age 62, of Mandeville, was sentenced on September 23, 2021 to one year of probation and over $35,000 in combined fine and restitution payments today for theft of government funds in connection with a false application for disaster assistance.
According to court documents, COX submitted a falsified application to the Federal Emergency Management Administration (“FEMA”) for disaster assistance. Following the August 2016 storms and flooding in Tangipahoa Parish, the application sought disaster assistance for a rental property in Robert, Louisiana that COX managed. In the application, COX falsely stated that the property in Robert was the owner’s primary residence, when in fact COX rented out the property to a tenant and knew that the property’s owner had never lived there. As a result of false statements in the application, FEMA paid disaster benefits to the property’s owner, despite the property owner not qualifying for those benefits.
United States Magistrate Judge Michael B. North sentenced COX to one year of probation, a fine of $4,000, restitution of $31,361.28 to FEMA, and a mandatory special assessment of $25.
U.S. Attorney Evans praised the work of the Department of Homeland Security’s Office of Inspector General. Assistant U.S. Attorney Nicholas D. Moses is in charge of the prosecution.
Lakewood Man Pleads Guilty to Wire FraudRead the Press Release
ROCKFORD — A Lakewood, Ill., man pleaded guilty Thursday to a federal criminal charge of wire fraud.
From approximately January 2007 through April 2015, VALENTINO VALERIU AGIGNOAE, 55, participated in a scheme to defraud and obtain money from the United States, specifically Social Security Administration disability insurance benefits. In total, Agignoae fraudulently obtained and caused the U.S. government to suffer losses of approximately $157,503.
Agignoae faces a maximum term of imprisonment of twenty years. As part of the guilty plea, Agignoae agreed to the entry of a personal money judgment in the amount of $157,303.
Sentencing is set for Jan. 13, 2022, at 1:30 p.m. before U.S. District Judge Joan Humphrey Lefkow.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Andrew Boockmeier, Special Agent-in-Charge of the Chicago Office of the Social Security Administration's Office of the Inspector General. The government is represented by Assistant U.S. Attorneys Michael C. Beckman, Robert S. Ladd, and Michael D. Love, and Special Assistant U.S. Attorney Niranjan Emani.
Agignoae began receiving SSA disability insurance benefits in 1996. In 2015, Agignoae’s benefits were terminated following a multi-year SSA-OIG investigation. The probe revealed that Agignoae failed to notify the SSA that he was able to work and was in fact working at a Chicago restaurant, which he also owned. He also made false statements and representations regarding prior work and employment.
Kensington Drug Boss Convicted at Trial for Supplying Crack and Heroin to Open-Air Drug MarketRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Ricardo Carrion, a.k.a. “PR,” age 41, of Philadelphia, PA, was convicted at trial of all counts with which he was charged, including conspiracy to distribute controlled substances and possession with intent to distribute crack and heroin, arising from his leadership role in supplying a drug trafficking organization operating on the 3100 block of Weymouth Street, steps from McPherson Square and just two blocks from the notorious intersection of Kensington & Allegheny Avenues in the Kensington section of Philadelphia.
This case originated from a joint investigation into the scourge of drug trafficking and overdoses in the Kensington area conducted by the U.S. Drug Enforcement Administration and the Philadelphia Police Department. During the investigation, the agencies utilized covert surveillance to observe thousands of drug customers purchasing narcotics on the 3100 block of Weymouth Street, in effect, an open-air drug market. Street dealers were observed utilizing stash houses on the block to store narcotics, including the target drug crew’s signature stamped heroin called “Funeral” so named to advertise its potency and lethalness to addicted consumers.
After a series of search warrants were executed in 2019, the DEA developed information that the defendant was the supplier of narcotics in this organization. Covert surveillance showed him repeatedly carrying large bags into stash houses. In June of that same year, the DEA and PPD initiated a traffic stop of a cab in which Carrion was the sole passenger. At his feet, law enforcement recovered a bag containing over 3,300 flip top containers of crack cocaine. Evidence presented at trial showed that Carrion used code words including “lenta,” which translates to “slow” in English, and “hard cola” to discuss the heroin he ordered for the street dealers. Prosecutors also presented evidence that the defendant supplied thousands and thousands of servings of heroin and crack cocaine to this city block from 2018 until the DEA and PPD dismantled his drug operation.
“This years-long drug trafficking enterprise impacted more than just this one block; it left a path of destruction across Kensington and throughout Philadelphia,” said Acting U.S. Attorney Williams. “This trial conviction is one more example of this Office’s dedicated effort to take down prolific drug dealers pedaling poison to those suffering from addiction, and we remain committed to cutting off the supply of deadly drugs into our communities.”
“No area in Pennsylvania has been more disproportionately affected by the ravages of the opioid epidemic than Kensington, particularly the area around McPherson Square where Carrion supplied and distributed heroin and crack cocaine,” said Thomas Hodnett, Acting Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Carrion’s criminal activities ruined the quality of life for the residents who live in Kensington and destroyed the lives of those struggling with substance use disorder. His federal drug conviction will ensure that he serves a lengthy prison sentence for his drug-trafficking activities.”
The case was investigated by Drug Enforcement Administration and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Jason D. Grenell and Derek E. Hines.
Kasilof Man Indicted for Making Interstate Death ThreatsRead the Press Release
ANCHORAGE – A federal grand jury in Alaska returned an indictment charging a Kasilof, Alaska, man with five counts of making interstate threats and one count of cyberstalking for making death threats from Alaska to individuals in other states.
According to court documents, Benjamin Tarbell, 34, began making death threats against individuals in Vermont and other states in August 2021. The threats, which continued to escalate through early September, were made via text messages, Instagram messages and telephone calls. Tarbell moved from Vermont to Alaska around April 2021.
Tarbell was arrested by the FBI on a federal complaint on September 10 at the Kenai Municipal Airport as he was checking in for his flight to Vermont with a rifle, two handguns, ammunition, two knives and a tactical vest.
The defendant made his initial court appearance on September 14 before U.S. Magistrate Judge Matthew M. Scoble of the U.S. District Court for the District of Alaska. Tarbell is in federal custody and will remain detained pending trial.
If convicted, he faces a maximum sentence of five years each for counts 1 through 5, and a maximum of ten years in prison for count 6. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Federal Bureau of Investigation is investigating the case with support from the Alaska State Troopers, Vermont State Police and the Massachusetts State Police.
Assistant U.S. Attorney Michael Heyman 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.
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Justice Department Awards Nearly $187 Million to Support Community SafetyRead the Press Release
The Department of Justice today announced that the Bureau of Justice Assistance (BJA), a component of the department’s Office of Justice Programs (OJP), has awarded almost $187 million to support state, local and tribal public safety and community justice activities. The awards, from the Edward Byrne Memorial Justice Assistance Grant (JAG) Program, are going to all 50 states, the District of Columbia and the territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.
“Our state, local and tribal law enforcement partners are at the forefront of public safety in their communities, and their effectiveness depends on a justice system that is fair, equitable and engages the communities they serve,” said Attorney General Merrick B. Garland. “These awards will help support traditional crime reduction and violence prevention efforts across the country, as well as innovative community violence intervention strategies that increase trust and make communities a full partner in protecting public health and safety.”
“The crime and justice problems facing America today are unique to each community, and so are many of the solutions,” said Associate Attorney General Vanita Gupta. “The awards we are announcing today, and many more to come, can be used by our state and local partners to support crime reduction efforts, diversion programs, reentry services and a wide range of public safety activities that are vital in their efforts to keep communities safe and uphold the promise of equal justice to all citizens.”
The JAG program is the leading source of federal justice funding to state and local jurisdictions. It provides states, tribes and local governments with critical funding to support law enforcement, prosecutors, public defenders, courts and corrections and community corrections agencies. JAG funding also supports crime prevention and education initiatives, drug treatment and enforcement activities, criminal justice planning and evaluation, technology improvements, crime victim and witness initiatives and mental health programs, including behavioral programs and crisis intervention teams.
“Public safety and equal justice are twin, and mutually reinforcing, goals that we have been fighting to achieve,” said Acting Assistant Attorney General Amy L. Solomon for the OJP. “The resources we are making available today reflect our unwavering commitment to protecting America’s communities while ensuring that our systems of justice operate fairly, effectively and in a manner that earns the trust of the people they serve.”
In addition to the state JAG awards announced today, BJA will make more than 900 awards, totaling almost $85 million, under its local JAG program in the coming weeks. The JAG program is a key part of the Community Violence Intervention strategy announced by President Biden in April.
To view the JAG allocation amounts, please visit https://bja.ojp.gov/program/jag/fy-2021-allocations.
The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.
Jury Finds Hartford Man Guilty of Illegal Gun PossessionRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, today announced that a federal jury in Hartford has found JOSE PEREZ, 40, of Hartford, guilty of possession of a firearm by a felon.
The trial before U.S. District Judge Vanessa L. Bryant began yesterday and the jury returned the verdict this afternoon.
According to the evidence and testimony at trial, on November 13, 2016, Hartford Police detectives responding to a ShotSpotter activation recovered a loaded revolver in a car last registered to Perez and containing documents addressed to Perez in the glove box. DNA analysis of the seized firearm indicated Perez had handled the firearm.
Prior to November 2016, Perez had sustained state felony convictions for narcotics and burglary offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Perez was apprehended on January 19, 2021.
At sentencing, which is not scheduled, Perez faces a maximum term of imprisonment of 10 years. Perez is released on a $30,000 bond pending sentencing.
This matter was investigated by the Hartford Police Department and the FBI’s Connecticut Violent Crime Task Force, with the assistance of the Connecticut Forensic Science Laboratory. This case is being prosecuted by Assistant U.S. Attorneys Tara E. Levens and Maria del Pilar Gonzalez.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Jury Convicts Hampton Roads Conspirators of Drug Trafficking and Money Laundering ChargesRead the Press Release
NEWPORT NEWS, Va. – On Wednesday, a federal jury convicted two individuals on charges relating to drug trafficking and money laundering.
“As the evidence at trial showed, the defendants engaged in a conspiracy to launder the proceeds of their drug trafficking crimes on behalf of a network of conspirators that peddled illegal and potent substances from Puerto Rico into the Hampton Roads area,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Our Office is grateful to the trial team and our law enforcement partners for their thorough investigative efforts, which helped secure the guilty verdicts in this case.”
According to court records and evidence presented at trial, beginning in or about 2018 through in or about 2020, Jose Luis Cruz-Colon, 42, and Nastassja Lopez-Alvarado, 31, both originally from Puerto Rico but living in Suffolk, were responsible for importing kilogram quantities of cocaine into the Hampton Roads area for distribution and then sending the proceeds of those illegal sales back to Puerto Rico to further the drug trafficking conspiracy. Their participation in the conspiracy came to light as part of a larger investigation into the criminal activities of the Rivera Drug Trafficking Organization in the Hampton Roads area.
Through court-authorized wiretap interceptions, parcel interdictions, and other investigative work, agents were able to conduct controlled purchases of heroin and seize at least three kilograms of cocaine. Further, on December 12, 2020, Cruz-Colon and Lopez-Alvarado were stopped at the Richmond International Airport and were prevented from taking approximately $28,000 in U.S. currency in a vacuum-sealed bag from the Hampton Roads area to Puerto Rico.
Cruz-Colon was convicted of conspiracy to launder money and conspiracy to distribute and possess with intent to distribute at least five kilograms or more of cocaine and at least one kilogram or more of heroin. Lopez-Alvarado was convicted of conspiracy to launder money and conspiracy to distribute and possess with intent to distribute at least five kilograms or more of cocaine. Cruz-Colon and Lopez-Alvarado each face a mandatory minimum sentence of 10 years in prison with a maximum possible penalty of life in prison when sentenced on February 2, 2022. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division; Brian Dugan, Special Agent in Charge of the Federal Bureau of Investigation’s (FBI) Norfolk Field Office; Daniel A. Adame, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Kenneth Mark Talbot, Chief of Hampton Police; and Larry D. Boone, Chief of Norfolk Police, made the announcement after U.S. District Judge David J. Novak accepted the verdict.
The Richmond International Airport Police provided significant assistance in this investigation. This case was investigated by the DEA Norfolk Office in conjunction with the Norfolk Police Department.
Assistant U.S. Attorneys Eric Hurt and Julie Podlesni are prosecuting the case.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-69.
Jackson Man Sentenced to over 4 Years in Prison for Possessing a Firearm as a Convicted FelonRead the Press Release
Jackson, Miss – A Jackson man was sentenced to 50 months in prison for possessing a firearm as a convicted felon, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Kurt Thielhorn of the Bureau of Alcohol, Tobacco, Firearms, and Explosives in Mississippi.
According to court documents, on May 5, 2018, Braxton Dontrel Burns, 35, tossed a handgun from a vehicle he was driving when a Jackson Police officer initiated a traffic stop. Burns had a prior conviction for auto burglary in Madison County, Mississippi.
On February 20, 2019, Burns was charged with being a convicted felon in possession of a firearm. He pled guilty on September 13, 2019.
The Jackson Police Department and Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) investigated the case.
Assistant U.S. Attorney Bert Carraway prosecuted the case.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Sept. 23 was:
Joshua Robert Ludtke, 39, of Billings, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Ludtke faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Ludtke was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-73.
Terrence Michael Seadeer, 44, of Billings, on charges of prohibited person in possession of a firearm and ammunition. If convicted of the most serious crime, Seadeer faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Seadeer was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-65.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Sept. 21 was:
Taylor Wind Set, 65, of Ennis, on charges of prohibited person in possession of firearms. If convicted of the most serious crime, Wind Set faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Wind Set was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Forest Service investigated the case. PACER case reference. 21-28.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Sept. 20 was:
Joshua Julius Bartman, 40, of Great Falls, on charges of possession with intent to distribute methamphetamine and distribution of meth. If convicted of the most serious crime, Bartman faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release. Bartman was detained pending further proceedings. The Drug Enforcement Administration and Great Falls Police Department investigated the case. PACER case reference. 21-43.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Individual Charged with Conspiracy to Possess with Intent to Distribute Fentanyl, Heroin, and MarihuanaRead the Press Release
SAN JUAN, Puerto Rico – On September 22, 2021, a federal grand jury in the District of Puerto Rico returned a four-count indictment charging Israel Hernández with Conspiracy to Possess with Intent to Distribute Controlled Substances, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. The United States Postal Inspection Service was in charge of the investigation of the case.
According to the indictment, from on or about 2017 and continuing up to August 11, 2021, in Puerto Rico and California, the defendant conspired and agreed with others to knowingly and intentionally possess with intent to distribute and distribute fentanyl, heroin, and marihuana. Members of this conspiracy acquired kilograms of fentanyl, heroin, and marihuana in California and concealed them in U.S. Postal parcels. Then they deposited these parcels into the mail and sent them to Puerto Rico. Similarly, members of the conspiracy mailed bulk cash proceeds from Puerto Rico back to California.
“Fentanyl is turning up on our streets in increasing quantities. It is also mixed with other substances, oftentimes without the knowledge of the end users of the drugs and with fatal results,” said U.S. Attorney Muldrow. “Federal law provides for particularly severe consequences when illegal drug trafficking results in death and we will aggressively prosecute those who traffic in these deadly drugs.”
“The U.S. Postal Inspection Service is committed to identifying and removing dangerous substances from the mail stream to ensure the safety of our employees and the community,” said Inspector in Charge Carroll Harris of the Los Angeles Division. “This indictment demonstrates our commitment to disrupt these criminal organizations and deliver consequences for the devastation they cause across our nation.”
If convicted, Hernández faces up to life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Special Assistant U.S. Attorney R. Vance Eaton from the U.S Postal Inspection Service 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.
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Idaho Falls Man Sentenced for Drug TraffickingRead the Press Release
POCATELLO – Brian Rogers, 43, of Idaho Falls, was sentenced to 63 months in federal prison for possession with intent to distribute methamphetamine, Acting U.S. Attorney Rafael M. Gonzalez, Jr. announced today. Rogers was originally indicted by a federal grand jury on October 15, 2020 and pleaded guilty to the offense on June 30, 2021.
According to court records, on July 21, 2020, officers from Idaho Department of Correction Probation and Parole, with the assistance of the Idaho Falls Police Department, conducted a parole compliance search of Rogers’ Idaho Falls residence. During the search, officers located a quarter of a pound of methamphetamine along with evidence Rogers was selling methamphetamine. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated a firearm that was also located at the residence.
Senior U.S. District Judge B. Lynn Winmill also ordered Rogers to serve five years of supervised release following his prison sentence. Rogers must also serve a sentence in the State of Idaho based on a parole violation.
Acting U.S. Attorney Gonzalez recognized the cooperative efforts of the Idaho Department of Correction Probation and Parole, Idaho Falls Police Department, and ATF, which led to charges. Mr. Gonzalez added, “Idaho is best served when local, state, and federal law enforcement cooperatively work together. This prosecution task force model, strongly supported by eastern Idaho communities and leaders, reduces violent crime. That is the purpose of Idaho’s reinvigorated Project Safe Neighborhoods program and the Eastern Idaho Partnership Special Assistant U.S. Attorney program. My office is pleased to join the communities of southeast Idaho and the State of Idaho in this important endeavor.”
This case was handled by the U.S. Attorney Office’s specially deputized Special Assistant U.S. Attorney (SAUSA), funded by the Eastern Idaho Partnership (EIP) and the State of Idaho. The EIP is a coalition of local city and county officials in eastern Idaho as well as the Idaho Department of Correction.
The EIP SAUSA program allows law enforcement to utilize the federal criminal justice system – through the EIP SAUSA – to prosecute, convict, and sentence violent, armed criminals and drug traffickers. These criminals often receive stiffer penalties than they might in state courts.
This program was created in January 2016. Since that time, approximately 181 defendants have been indicted by the EIP SAUSA. Of these defendants, 133 have been indicted on drug trafficking charges. The defendants indicted under the program have been sentenced to 7,549 months (approximately 629 years) in federal prison, representing an average prison sentence of 53.53 months (4.46 years). Defendants indicted for drug trafficking offenses serve, on average, approximately 58.92 months (4.91 years) in federal prison.
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Huawei CFO Wanzhou Meng Admits to Misleading Global Financial InstitutionRead the Press Release
Earlier today, Wanzhou Meng, Chief Financial Officer of Huawei Technologies Co., Ltd. (Huawei), appeared before U.S. District Judge Ann M. Donnelly in federal district court in Brooklyn, New York, for an arraignment on charges of conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud, after she entered into a deferred prosecution agreement (DPA) with the United States Attorney’s Office for the Eastern District of New York, the Counterintelligence and Export Control Section of the Justice Department’s National Security Division (CES), and the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division (MLARS) to resolve those charges.
Nicole Boeckmann, Acting United States Attorney for the Eastern District of New York, Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, and Alan Kohler, Assistant Director, Federal Bureau of Investigation, Counterintelligence Division (FBI), announced the deferred prosecution agreement.
“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” stated Acting U.S. Attorney Boeckmann. “Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution. The truth about Huawei’s business in Iran, which Meng concealed, would have been important to the financial institution’s decision to continue its banking relationship with Huawei. Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud—that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government, and the public about Huawei’s activities in Iran.”
“This Deferred Prosecution Agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” stated Acting Assistant Attorney General Lesko for the Justice Department’s National Security Division. “We are enormously grateful to Canada’s Department of Justice for its dedicated work on this extradition and for its steadfast adherence to the rule of law.”
“Financial institutions are our first line of defense in maintaining the safety and security of the U.S. financial system,” said Assistant Attorney General Polite of the Justice Department’s Criminal Division. “That is why the law requires that companies who avail themselves of the U.S. financial system provide financial institutions with truthful information about their business operations. Meng Wanzhou, CFO of Huawei Technologies, admitted today that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of U.S. law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court.”
“Meng's admissions are evidence of a consistent pattern of deception to violate U.S. law. The FBI will continue to aggressively investigate companies doing business in the United States when there are signs they behave with contempt for our laws,” stated FBI Assistant Director Kohler.
The Scheme to Defraud Financial Institutions
According to court filings, and as agreed to by Meng in the DPA’s statement of facts, Skycom Tech. Co. Ltd. (“Skycom”) was a Hong Kong company that primarily operated in Iran. As of February 2007, Skycom was wholly owned by a subsidiary of Huawei Technologies Co., Ltd. (“Huawei”), Hua Ying Management (“Hua Ying”). In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings (“Canicula”). At the time Hua Ying transferred its Skycom shares to Canicula, Meng was the Secretary of Hua Ying.
In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Meng joined Skycom’s Board of Directors, which was comprised of Huawei employees. She served on the Board until April 2009. After Meng departed from Skycom’s Board, Skycom’s Board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei. As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.
Between 2010 and 2014, Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei. All significant Skycom business decisions were made by Huawei. Moreover, Skycom’s country manager—the head of the business—was a Huawei employee. Individuals employed by Skycom believed they worked for Huawei.
During the same time period, Huawei employees engaged with a U.K. staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers. Negotiations and contracting on behalf of Skycom were conducted by Huawei employees. To pay for these contractors, Huawei sent at least $7.5 million to the U.K. staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (“Financial Institution 1”), to the U.K. staffing company’s account in the United Kingdom. The transactions were denominated in U.S. dollars and cleared through the United States.
In December 2012 and January 2013, various news organizations, including Reuters, reported that Skycom offered to sell “embargoed” equipment from a U.S. computer equipment manufacturer in Iran in potential violation of U.S. export controls law, and that Huawei had close ties with Skycom. In a statement to Reuters published in a December 2012 article, Huawei claimed that Skycom was one of its “major local partners” in Iran. Reuters reported that Huawei had further stated that “Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U. This commitment has been carried out and followed strictly by our company. Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”
In January 2013, a subsequent Reuters article reported that Meng had served on the Board of Directors of Skycom between February 2008 and April 2009 and identified other connections between Skycom directors and Huawei. The article also quoted the following statement from Huawei: “The relationship between Huawei and Skycom is a normal business partnership. Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the UN. We also require our partners, such as Skycom, to make the same commitments.” This statement was incorrect, as Huawei operated and controlled Skycom; Skycom was therefore not Huawei’s business “partner.”
After these articles were published, Financial Institution 1 and other global financial institutions that provided international banking services to Huawei (collectively, the “Financial Institutions”), including U.S. dollar-clearing, made inquiries to Huawei in response to the above-described press reports. In early 2013, Huawei employees represented to the Financial Institutions that Skycom was just a local business partner of Huawei in Iran and that Skycom had not conducted Iran-related transactions using its accounts at the Financial Institutions.
To address the allegations in the news reports, Huawei requested an in-person meeting with a senior Financial Institution 1 employee. That meeting occurred on August 22, 2013 in Hong Kong, at which time Meng met with an executive of Financial Institution 1 responsible for operations in the Asia Pacific region. During the meeting, Meng delivered a PowerPoint presentation written in Chinese, which was translated by an interpreter into English. Meng stated that she was using an interpreter to be precise in her language.
In her presentation, Meng stated, among other things, that Huawei’s relationship with Skycom was “normal business cooperation” and “normal and controllable business cooperation,” and she described Skycom as a “partner,” a “business partner of Huawei,” and a “third party Huawei works with” in Iran. Those statements were untrue because, as Meng knew, Skycom was not a business partner of, or a third party working with, Huawei; instead, Huawei controlled Skycom, and Skycom employees were really Huawei employees. It would have been material to Financial Institution 1 to know that Huawei controlled Skycom.
In addition, Meng stated that Huawei “was once a shareholder of Skycom” but had “sold all its shares in Skycom.” Those statements were untrue, because, as Meng knew, Huawei had “sold” its shares to an entity that Huawei controlled. Specifically, Huawei transferred Skycom shares from a Huawei subsidiary (Hua Ying) to another entity that was controlled by Huawei (Canicula). It would have been material to Financial Institution 1 to know that Skycom was transferred from one Huawei-controlled entity to another.
Finally, Meng stated that Huawei “operates in Iran in strict compliance with applicable laws, regulations and sanctions” and that “there has been no violation of export control regulations” by “Huawei or any third party Huawei works with.” These statements were untrue because Huawei’s operation of Skycom, which caused the Financial Institutions to provide prohibited services, including banking services, for Huawei’s Iran-based business while Huawei concealed Skycom’s link to Huawei, was in violation of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560. Moreover, between 2010 and 2014, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran.
At no point during or after the meeting did Meng, who was aware of Huawei’s public statements about Skycom in Reuters, retract or amend any of those statements. Moreover, Huawei’s Treasurer, who also attended the August Meeting, did not correct or amend any of the statements made by Meng.
Shortly after the meeting between Meng and Financial Institution 1, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request. Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive she had met with in September 2013. The representations in the English version of the PowerPoint presentation closely tracked the ones Meng had made during the meeting.
After the meeting and subsequent to receipt of Meng’s PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei. The other Financial Institutions similarly continued their respective relationships with Huawei.
The DPA
Under the terms of the DPA, Meng has agreed to the accuracy of a four-page statement of facts that details the knowing false statements she made to Financial Institution 1. Meng also has agreed not to commit other federal, state, or local crimes. If Meng breaches the agreement, she will be subject to prosecution of all of the charges against her in the third superseding indictment filed in this case. The government also agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Sarah M. Evans, and Meredith A. Arfa, MLARS Trial Attorneys Laura Billings and Christian Nauvel, and CES Trial Attorneys Thea D. R. Kendler, David Lim and R. Elizabeth Abraham are in charge of the prosecution, with assistance provided by Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Trial Attorneys Andrew Finkelman, Margaret O’Malley, and John Reisenberg of DOJ’s Office of International Affairs.
The Defendant:
WANZHOU MENG
Age: 49
People’s Republic of ChinaE.D.N.Y. Docket No. 18-CR-457 (S-3) (AMD)
Huawei CFO Wanzhou Meng Admits to Misleading Global Financial InstitutionRead the Press Release
The Chief Financial Officer of Huawei Technologies Co. Ltd., Wanzhou Meng, 49, of the People’s Republic of China (PRC), appeared today in federal district court in Brooklyn, entered into a deferred prosecution agreement (DPA) and was arraigned on charges of conspiracy to commit bank fraud and conspiracy to commit wire fraud, bank fraud and wire fraud.
“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” said Acting U.S. Attorney Nicole Boeckmann for the Eastern District of New York. “Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution. The truth about Huawei’s business in Iran, which Meng concealed, would have been important to the financial institution’s decision to continue its banking relationship with Huawei. Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud — that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei’s activities in Iran.”
“This Deferred Prosecution Agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “We are enormously grateful to Canada’s Department of Justice for its dedicated work on this extradition and for its steadfast adherence to the rule of law.”
“Financial institutions are our first line of defense in maintaining the safety and security of the U.S. financial system,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “That is why the law requires that companies who avail themselves of the U.S. financial system provide financial institutions with truthful information about their business operations. Meng Wanzhou, CFO of Huawei Technologies, admitted today that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of U.S. law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court.”
“Meng's admissions are evidence of a consistent pattern of deception to violate U.S. law,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “The FBI will continue to aggressively investigate companies doing business in the United States when there are signs they behave with contempt for our laws.”
The Scheme to Defraud Financial Institutions
According to court documents, and as agreed to by Meng in the DPA’s statement of facts, Skycom Tech. Co. Ltd. (Skycom) was a Hong Kong company that primarily operated in Iran. As of February 2007, Skycom was wholly owned by a subsidiary of Huawei Technologies Co., Ltd. (Huawei), Hua Ying Management (Hua Ying). In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings (Canicula). At the time Hua Ying transferred its Skycom shares to Canicula, Meng was the Secretary of Hua Ying.
In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Meng joined Skycom’s Board of Directors, which was comprised of Huawei employees. She served on the Board until April 2009. After Meng departed from Skycom’s Board, Skycom’s Board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei. As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.
Between 2010 and 2014, Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei. All significant Skycom business decisions were made by Huawei. Moreover, Skycom’s countrymanager – the head of the business – was a Huawei employee. Individuals employed by Skycom believed they worked for Huawei.
During the same time period, Huawei employees engaged with a U.K. staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers. Negotiations and contracting on behalf of Skycom were conducted by Huawei employees. To pay for these contractors, Huawei sent at least $7.5 million to the U.K. staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (Financial Institution 1), to the U.K. staffing company’s account in the United Kingdom. The transactions were denominated in U.S. dollars and cleared through the United States.
In December 2012 and January 2013, various news organizations, including Reuters, reported that Skycom offered to sell “embargoed” equipment from a U.S. computer equipment manufacturer in Iran in potential violation of U.S. export controls law, and that Huawei had close ties with Skycom. In a statement to Reuters published in a December 2012 article, Huawei claimed that Skycom was one of its “major local partners” in Iran. Reuters reported that Huawei had further stated that “Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U. This commitment has been carried out and followed strictly by our company. Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”
In January 2013, a subsequent Reuters article reported that Meng served on the Board of Directors of Skycom between February 2008 and April 2009 and identified other connections between Skycom directors and Huawei. The article also quoted the following statement from Huawei: “The relationship between Huawei and Skycom is a normal business partnership. Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the UN. We also require our partners, such as Skycom, to make the same commitments.” This statement was incorrect, as Huawei operated and controlled Skycom; Skycom was therefore not Huawei’s business “partner.”
After these articles were published, Financial Institution 1 and other global financial institutions that provided international banking services to Huawei (collectively, the “Financial Institutions”), including U.S. dollar-clearing, made inquiries to Huawei in response to the above-described press reports. In early 2013, Huawei employees represented to the Financial Institutions that Skycom was just a local business partner of Huawei in Iran and that Skycom had not conducted Iran-related transactions using its accounts at the Financial Institutions.
To address the allegations in the news reports, Huawei requested an in-person meeting with a senior Financial Institution 1 employee. That meeting occurred on Aug. 22, 2013 in Hong Kong, at which time Meng met with an executive of Financial Institution 1 responsible for operations in the Asia Pacific region. During the meeting, Meng delivered a PowerPoint presentation written in Chinese, which was translated by an interpreter into English. Meng stated that she was using an interpreter to be precise in her language.
In her presentation, Meng stated, among other things, that Huawei’s relationship with Skycom was “normal business cooperation” and “normal and controllable business cooperation,” and she described Skycom as a “partner,” a “business partner of Huawei,” and a “third party Huawei works with” in Iran. Those statements were untrue because, as Meng knew, Skycom was not a business partner of, or a third party working with, Huawei; instead, Huawei controlled Skycom, and Skycom employees were really Huawei employees. It would have been material to Financial Institution 1 to know that Huawei controlled Skycom.
In addition, Meng stated that Huawei “was once a shareholder of Skycom” but had “sold all its shares in Skycom.” Those statements were untrue, because, as Meng knew, Huawei had “sold” its shares to an entity that Huawei controlled. Specifically, Huawei transferred Skycom shares from a Huawei subsidiary (Hua Ying) to another entity that was controlled by Huawei (Canicula). It would have been material to Financial Institution 1 to know that Skycom was transferred from one Huawei-controlled entity to another.
Finally, Meng stated that Huawei “operates in Iran in strict compliance with applicable laws, regulations and sanctions” and that “there has been no violation of export control regulations” by “Huawei or any third party Huawei works with.” These statements were untrue because Huawei’s operation of Skycom, which caused the Financial Institutions to provide prohibited services, including banking services, for Huawei’s Iran-based business while Huawei concealed Skycom’s link to Huawei, was in violation of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560. Moreover, between 2010 and 2014, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran.
At no point during or after the meeting did Meng, who was aware of Huawei’s public statements about Skycom in Reuters, retract or amend any of those statements. Moreover, Huawei’s Treasurer, who also attended the August meeting, did not correct or amend any of the statements made by Meng.
Shortly after the meeting between Meng and Financial Institution 1, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request. Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive she had met with in September 2013. The representations in the English version of the PowerPoint presentation closely tracked the ones Meng had made during the meeting.
After the meeting and subsequent to receipt of Meng’s PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei. The other Financial Institutions similarly continued their respective relationships with Huawei.
The DPA
Under the terms of the DPA, Meng has agreed to the accuracy of a four-page statement of facts that details the knowingly false statements she made to Financial Institution 1. Meng also has agreed not to commit other federal, state or local crimes. If Meng breaches the agreement, she will be subject to prosecution of all the charges against her in the third superseding indictment filed in this case. The government also agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Sarah M. Evans and Meredith A. Arfa for the Eastern District of New York; Trial Attorneys Laura Billings and Christian Nauvel for the Criminal Division’s Money Laundering and Asset Recovery Section; and Trial Attorneys Thea D. R. Kendler, David Lim and R. Elizabeth Abraham of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. Valuable assistance was provided by Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Associate Director John Riesenberg, Attaché Andrew Finkelman of U.S. Embassy Paris and former Trial Attorney Margaret O’Malley of the Justice Department’s Office of International Affairs.
Harrison County residents admit to drug chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – Two Shinnston, West Virginia, residents have admitted to methamphetamine charges, Acting United States Attorney Randolph J. Bernard announced.
Larry Thomas Gregory, II, 44, and Angela Chapman, 33, each pleaded guilty today to one count of “Possession with Intent to Distribute 50 grams or more of Methamphetamine.” Gregory and Chapman admitted to having more than 50 grams of methamphetamine in February 2020 in Harrison County.
Gregory and Chapman each face at least five and up to 40 years of incarceration and fine of up to $5,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Greater Harrison Drug Task Force, a HIDTA-funded initiative; the U.S. Postal Inspection Service; and the Shinnston Police Department investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Hamburg Man Going to Prison for 30 Years for Production of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney James P. Kennedy Jr. announced today that Robert Chapline, 61, of Hamburg, NY, who was convicted of production of child pornography, was sentenced to serve 30 years in prison by U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorneys Aaron J. Mango and Caitlin Higgins, who handled the case, stated that between February 13, 2016, and October 2, 2017, the defendant coerced a minor (Victim) to engage in sexually explicit conduct for the purpose of producing visual depictions. In February 2016, Chapline took photographs of the Victim getting out of a shower and then posing in a bedroom. The defendant engaged in sexual contact with the Victim on several occasions between 2012 and 2017.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the Hamburg Police Department, under the direction of Chief Kevin Trask; and the Regional Computer Forensics Laboratory.
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Hagerstown Man Facing Federal Charges for Allegedly Falsifying Documents in Order to Obtain COVID FundsRead the Press Release
Baltimore, Maryland – A federal criminal complaint has been filed charging Jeffrey Bearden, age 47, of Hagerstown, Maryland, with false statements and bank fraud. The criminal complaint alleges that in May 2020, Bearden applied for a loan through the Paycheck Protection Program (PPP). The complaint was signed on September 22, 2021 and unsealed upon Bearden’s arrest on September 23, 2020.
The federal charge was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; and Inspector General Hannibal “Mike” Ware of the U.S. Small Business Administration Office of Inspector General (SBA OIG).
According to the affidavit filed in support of the criminal complaint, on May 1, 2020 Bearden electronically signed falsified documents attesting to inaccurate statements in order for his company, B&D Consulting, to receive $734,609.00 through the PPP for use in paying business costs consisting primarily of employee salaries. At that time, the company had no employees, nor reported paying any earnings and wages for any employee to the Maryland Department of Labor and Licensing (DLLR) in 2020.
As detailed in the affidavit, on May 18, 2020, the funds were approved and deposited into Bearden’s bank account. That same day, the $734.609 was transferred to a different bank account. The next month, $600,000 was transferred to Bearden’s brokerage account that was used to purchase stocks in a variety of publicly-traded companies, including one that produced a vaccine for COVID-19. The purchase of stocks is not an approved use of PPP loan funds by the Small Business Administration.
In February 2021, Bearden applied for a second PPP loan of a similar amount, attaching a fraudulent bank statement for a B&D Consulting account for the month of March 2020 showing the company was paying salaries to at least 19 individuals. Records show that no deposits or withdraws had been made from that account in March 2020 and the account balance was in the negative.
If convicted, Bearden faces a maximum sentence of 30 years in federal prison for each of these charges. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. At today’s initial appearance in U.S. District Court in Baltimore, U.S. Magistrate Judge Beth P. Gesner ordered that Bearden be released pending his trial.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Jonathan F. Lenzner commended the HSI and SBA OIG for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Aaron S.J. Zelinsky, who is prosecuting the federal 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.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Foxborough Teacher Indicted on Child Exploitation ChargesRead the Press Release
BOSTON – A teacher at Foxborough High School was indicted by a federal grand jury yesterday in connection with possession of child pornography and receiving child pornography over the internet.
Thomas Davis, 41, of Mansfield, was indicted on one count of possession and receipt of child pornography. Davis was arrested and charged by criminal complaint on Aug. 26, 2021 and has remained in custody since that time.
According to the charging documents, on Aug. 26, 2021, law enforcement executed a search warrant at Davis’ residence and seized a laptop belonging to Davis. An on-site examination revealed approximately 40 images of child pornography on the laptop, including images involving prepubescent minors under the age of 12-years-old. A forensic analysis of Davis’ laptop revealed additional amounts of child pornography.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The charge of receipt of child pornography provides for a sentence of at least five years and up to 20 years in prison, at least five years and up to a lifetime of supervised release and a fine of up to $250,000. The charge of possession of child pornography provides for a sentence of up to 20 years in prison, at least five years and up to a lifetime of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. Valuable assistance was provided by the Mansfield Police Department. Assistant U.S. Attorney David G. Tobin of Mendell’s Major Crimes Unit is prosecuting the case
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.