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Monday 2 August 2021
Felon Pleads Guilty to Illegal Possession of a Firearm with an Obliterated Serial Number and AmmunitionRead the Press Release
Baltimore, Maryland – Damian Covington, age 24, of Baltimore, Maryland, pleaded guilty today to being a felon in possession of a firearm and ammunition.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department (BPD).
According to his guilty plea, on September 24, 2020 BPD officers observed a black vehicle bearing a Virginia license plate driving at a high rate of speed and committing several traffic violations, including changing lanes without a signal. Two BPD officers notified other officers of the traffic violations. Soon after, several BPD officers stopped the vehicle on Reisterstown Road in Baltimore, Maryland.
One of the BPD detectives informed the driver that he was being pulled over for an unsafe lane change and requested vehicle registration. Covington was seated in the passenger seat. As the driver reached for the registration, one of the BPD officers observed a clear tube containing suspected marijuana. The driver acknowledged the presence of marijuana in the tube and held it up for the officers to view. BPD officers then conducted a search of the vehicle.
During the search, a BPD detective discovered the driver’s 9mm firearm with 12 rounds of ammunition located in the locked glove compartment. Officers also recovered a semi-automatic pistol with an obliterated serial number, six bullets, and two rounds of ammunition in a backpack behind the Covington’s seat. The bag also contained Covington’s identification card, three debit cards, and suspected marijuana.
BPD read Miranda rights to Covington who then admitted that he possessed the firearm inside of the backpack.
Prior to possessing the firearm and ammunition on September 24, 2020, Covington had been convicted of a crime punishable by imprisonment for a term exceeding one year and his civil rights had not been restored.
Covington and the government have agreed that, if the Court accepts the plea agreement, Covington will be sentenced to 30 months in federal prison. U.S. District Judge George L. Russell III has scheduled sentencing for October 21, 2021 at 10 a.m.
Acting United States Attorney Jonathan F. Lenzner commended the ATF and BPD for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Lindsey McCulley and Zachary B. Stendig, who are prosecuting the case.
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Federal-State Settlement Resolves Environmental Violations at Hussey Copper Smelting Facility in Leetsdale, PennsylvaniaRead the Press Release
Hussey Copper has agreed to perform a comprehensive environmental audit, implement an updated environmental management system, and pay an $861,500 penalty to resolve alleged violations of the federal Clean Water Act (CWA) and Pennsylvania’s Clean Streams Law (PCSL) at its smelting facility in Leetsdale, Allegheny County, Pennsylvania.
The civil complaint, brought by the U.S. Department of Justice on behalf of the U.S. Environmental Protection Agency (EPA) and the Pennsylvania Department of Environmental Protection (PADEP) and filed simultaneously with the settlement, alleges violations of the CWA and PCSL that threaten to degrade receiving streams and impact public health and harm aquatic life. These include chronic exceedances of effluent limits in the facility’s PADEP-issued CWA permit -- limiting oil sheens and discharges of copper, chromium, nickel, oil and grease, lead, pH, total suspended solids and zinc.
“This settlement reaffirms that industrial polluters must do the necessary work to ensure that their operations are not causing harm to our nation’s waterways,” said Deputy Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division. “We are happy to have partnered with the Commonwealth of Pennsylvania to ensure the continued protection of the Ohio River.”
“This agreement holds Hussey Copper accountable for the impact their actions have had on the health of the Ohio River,” said Acting U.S. Attorney Stephen R. Kaufman for the United States Attorney’s Office for the Western District of Pennsylvania. “We will continue to work with our partners to enforce the laws enacted to protect our region’s abundant natural resources.
“Today’s settlement improves water quality for the citizens of Leetsdale and surrounding communities,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “This agreement requires Hussey to address their existing environmental violations, as well as implement plans to address any future noncompliance.”
Under the settlement, along with payment of the penalty, Hussey Copper will:
- Conduct a comprehensive review of its wastewater treatment system.
- Hire third-party consultants to conduct a compliance audit and implement corrective measures.
- Hire third-party consultants to review, update, and audit compliance with the facility’s environmental management system.
- Implement a process to prevent and correct violations of permit effluent limits.
- Conduct annual compliance training of employees and contractors.
Pay agreed-upon penalties on demand for future violations.
PADEP has assisted EPA in the investigation and litigation of this case and is a co-plaintiff and signatory to the proposed consent decree. Under the settlement, penalty funds will be distributed evenly between the United States and PADEP.Previous to this settlement, Hussey Copper was ordered to pay a criminal fine of $550,000 and to serve three years’ probation after pleading guilty to three felony CWA charges in December 2020 for offenses involving a multi-year pattern of submitting false discharge monitoring reports to conceal 140 National Pollutant Discharge Elimination System (NPDES) permit violations, discharges of oil into the Ohio River, and the failure to report those oil discharges to the federal government.
The settlement is with Libertas Copper LLC, which does business as Hussey Copper.
This settlement furthers EPA’s national compliance initiative to reduce significant noncompliance and improve surface water quality by assuring dischargers comply with NPDES permit requirements. For more information on this initiative, visit: https://www.epa.gov/enforcement/national-compliance-initiative-reducing-significant-non-compliance-national-pollutant
More information on the Clean Water Act is available at: https://www.epa.gov/laws-regulations/summary-clean-water-act
More information on Pennsylvania’s Clean Streams Law is available at: https://www.dep.pa.gov/Citizens/My-Water/Pages/default.aspx
The proposed consent decree, filed in the federal district court in Pittsburgh, is subject to a 30-day public comment period and approval by the court.
Federal Jury Convicts Massachusetts Man on Five Counts of Child Exploitation Related OffensesRead the Press Release
GREENEVILLE, Tenn. - Following a four-day trial in United States District Court at Greeneville, a jury convicted Nicholas Nassif Hayek, 22, of Leominster, Massachusetts, of knowingly or attempting to knowingly entice a minor to engage in sexual activity, knowingly or attempting to knowingly persuade a minor to engage in sexually explicit conduct for the purpose of producing any visual depiction of such conduct, knowingly transferring obscene matter to another individual who had not attained the age of 16 years, knowingly receiving child pornography and knowingly possessing child pornography involving a child less than 12 years of age.
Sentencing is set for November 29, 2021, at 1:30 p.m., before the Honorable J. Ronnie Greer, in United States District Court for the Eastern District of Tennessee at Greeneville. Hayek faces a maximum life sentence in prison and a 10-year minimum mandatory and a 15-year minimum mandatory for count one and two, respectively, for enticing a minor.
The evidence presented at trial demonstrated that Hayek found a 10-year-old child via social media. Hayek befriended the child and at trial the jury saw numerous chat messages exchanged between the two. The messages also detailed the countless requests from Hayek asking the child to send him nude photos. Law enforcement also obtained 22 pictures and one video of Hayek exposing himself to the child.
Acting U.S. Attorney Francis M. Hamilton, III of the Eastern District of Tennessee, made the announcement.
The Federal Bureau of Investigations led the investigation that resulted in the indictment and subsequent conviction of Hayek.
Assistant U.S. Attorneys Meghan L. Gomez and J. Gregory Bowman represented the United States at trial.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit www.justice.gov/psc. For more information about internet safety education click on the link for “Publications & Resources.”
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Federal Judge Convicts Northeast Harbor Man of Failing to Register as a Sex OffenderRead the Press Release
BANGOR, Maine: A federal district court judge convicted a Northeast Harbor man today of failing to register as a sex offender following a half-day bench trial, Acting U.S. Attorney Donald E. Clark announced.
The evidence at trial revealed that in 2016, Jack Palmer, 70, was convicted in federal court in Bangor of possessing child pornography. As a result of that conviction, Palmer was required to register as a sex offender in Maine and to update that registration within three days if he changed residences. In November 2020, he moved from Portland to Northeast Harbor and failed to notify the Maine Sex Offender Registry. He lived at this residence until his arrest in April 2021.
Palmer faces up to 10 years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The United States Marshals Service and the Bar Harbor/Mount Desert Police Department investigated the case.
Cutt Master Barber School Settles Allegations of False Claims Act ViolationsRead the Press Release
EL PASO –Victor Phillips, owner of Cutt Master Barber School, LLC (Cutt Master), has agreed to pay $900,000 to settle allegations that he violated the False Claims Act by falsely submitting claims to the Veteran’s Administration (VA).
Cutt Master is a hair salon and barber shop school doing business in El Paso. In 2011 the Texas Veterans Commission approved Cutt Master offering veterans and active-duty military members educational courses for reimbursement under the GI Bill. The VA paid Cutt Master tuition and fees for covered courses.
The government alleged that Cutt Master received payments for claims that did not comply with VA requirements and submitted claims for courses not properly accredited. The government also alleged that Phillips falsely certified that he and Cutt Master complied with VA requirements regarding the appropriate ratio of VA students enrolled in their programs. Phillips and the government have agreed to resolve the dispute with Phillips paying $900,000.00 to the United States.
U.S. Attorney Ashley C. Hoff of the Western District of Texas and Department of Veterans Affairs OIG Special Agent in Charge Jeffrey Breen of the South Central Field Office made the announcement.
The matter was investigated by the Office of Inspector General for the Department of Veterans Affairs.
The claims asserted against the defendants are allegations only; there has been no determination of liability.
Assistant U.S. Attorney Eduardo R. Castillo handled this matter.
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Cresco Man Will Spend a Decade in Federal Prison for “Tormenting” Minnesota Woman for Two YearsRead the Press Release
A Cresco man who cyberstalked a Minnesota woman for nearly two years was sentenced on July 30, 2021, to ten years in federal prison.
Michael Shawn McGuire, age 58, from Cresco, Iowa, received the prison sentence after a December 8, 2020 guilty plea to four counts of cyberstalking.
Information disclosed at the sentencing and plea hearings showed that in the fall of 2017, the victim, who was living in Minnesota, met McGuire on an online dating website. The two dated for approximately seven months before the victim broke up with McGuire. At that point, McGuire began texting and emailing the victim consistently, sending her harassing messages. In the summer of 2018, the victim obtained a no-contact order prohibiting McGuire from contacting her or anyone in her family. McGuire went on to harass and torment the victim over the course of the next approximately two years.
During that time, McGuire created five fake Facebook profiles. The profiles contained the victim’s name or photo and contained sexually explicit messages about the victim. The fake profiles sent over 80 friend requests to the victim’s friends and family. McGuire also made dozens of flyers and yard signs, which contained sexually explicit messages, photographs of the victim, and sexually explicit photographs of women appearing to be the victim. The flyers and yard signs contained the victim’s name, phone number, and address. The flyers were delivered to dozens of people, including the victim’s children, extended family members, neighbors, friends, her employer, a priest, and businesses she associated with. The yard signs were left in multiple places in the town the victim lived in, including her employer’s parking lot, her church lawn, and a popular local restaurant. On one occasion, McGuire spray painted a sexually explicit message including the victim’s name on a business front in the victim’s hometown. On another occasion, McGuire texted the victim that she should call the police because he was violating his restraining order, then proceeded to follow the victim around town in his car. McGuire was arrested for that incident and spent a few days in a county jail.
At the sentencing hearing, the judge pointed out that McGuire was undeterred by his arrest and continued to stalk and harass the victim for several months after his arrest. In the fall of 2019, investigators searched McGuire’s place of business in Cresco. There, they located and seized multiple items, including photos of the victim and her family and friends, her Facebook friends list, supplies used to make the flyers and yard signs, rubber gloves, and rope.
McGuire was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Judge Williams described McGuire’s conduct toward the victim and her friends and family as “a form of mental torture” and “form of public terrorism in a way.” McGuire was sentenced to 120 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. McGuire must pay $400 to the special assessment fund, a $15,000 fine, and $17,500 in restitution to the victim.
“Michael McGuire tormented the victim for over two years,” said Acting United States Attorney Sean R. Berry following the sentence. “He will spend the next decade in federal prison, protecting both his victim and the public from his malicious behavior. This sentence sends a strong message to all that this kind of behavior will not be tolerated.”
The case was prosecuted by Assistant United States Attorneys Ashley Corkery, Kyndra Lundquist, and Lisa Williams and was investigated by the Kandiyohi County (Minnesota) Sheriff’s Office, Willmar (Minnesota) Police Department, Litchfield (Minnesota) Police Department, Renville (Minnesota) Police Department, Pipestone County (Minnesota) Sheriff’s Office, Kandiyohi County (Minnesota) Community Corrections, Minnesota Bureau of Criminal Apprehension, Cresco (Iowa) Police Department, Iowa Division of Criminal Investigation, and the Federal Bureau of Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-2075.
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Cheektowaga Man Arrested on Charges of Production and Possession 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 Kenneth Ritchie, 30, of Cheektowaga, NY, was charged by criminal complaint with production and possession of child pornography. The charges carry a mandatory minimum penalty of 15 years in prison, a maximum of 50 years, and a $250,000 fine.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, on July 16, 2021, an individual contacted the Cheektowaga Police Department and reported observing child pornography on a cell phone belonging to the defendant. The individual stated that he met Ritchie on the Grinder chat application and then met him in person at the defendant’s residence in Cheektowaga. While at the residence, the individual stated that Ritchie showed him images and videos containing what he believed to be child pornography. The individual told the defendant that he was disgusted by what he observed and told him he was reporting him to the police.
The individual took Ritchie’s cell phone, went to Cheektowaga Police Headquarters, and showed investigators two of the photos that the defendant had shown him. One of the photos was a sexually explicit photo of a boy under five years old (Victim). The second photo was a sexually explicit photo of Ritchie holding the same little boy. During the execution of a search warrant on the defendant’s cell phone, investigators recovered additional sexually explicit images of the Victim. The search also recovered additional videos and images containing child pornography on the cell phone, several of which appeared to be obtained through the Telegram application.
The defendant appeared before U.S. Magistrate Judge Jeremiah J. McCarthy for a detention hearing today and was ordered held.
The complaint is the result of an investigation by the Cheektowaga Police Department, under the direction of Assistant Chief Brian Gould, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Canadian Citizen Convicted for Pump-and-Dump Securities Fraud SchemeRead the Press Release
SAN DIEGO – A federal jury today convicted Andrew Hackett, a Canadian citizen who previously resided in Toronto, Canada, of participating in a securities fraud pump-and-dump scheme surrounding the publicly-traded stock of a small company.
The jury found that Hackett committed securities fraud, and conspired to commit securities fraud, by engaging in a scheme to manipulate the market for Arias Intel Corp stock. According to the evidence presented at trial, Hackett’s scheme included efforts to artificially inflate the price of Arias Intel’s stock by controlling the majority of the company’s free-trading shares through concealed offshore and other nominee accounts, coordinating the company’s press releases with the issuance of penny stock newsletters, and using high-pressure call rooms targeting innocent investors. Hackett and his co-conspirators also engaged in manipulative trading to create the appearance that Arias Intel stock traded at higher prices and with greater volume than was actually the case.
The FBI investigated this case through a combination of forensic analysis and sophisticated covert techniques, including the use of an undercover agent and an informant, both of whom gathered evidence through recorded phone conversations and captured email and text messages.
Hackett was one of several defendants charged here. His co-conspirators, Kuldeep Sidhu of Vancouver, British Columbia, Annetta Budhu of New York, New York, and Kevin Gillespie of Tampa, Florida all pleaded guilty in connection with the scheme.
“In addition to victimizing innocent investors, pump and dump schemes weaken the integrity of securities markets and alter the level playing field consumers expect when making investment decisions,” said Acting U.S. Attorney Randy S. Grossman. “As this verdict demonstrates, those who engage in pump-and-dump and similar market manipulation schemes will face serious consequences.” Grossman commended the work of Assistant U.S. Attorneys Aaron P. Arnzen and Andrew J. Galvin and the FBI agents who diligently pursued this matter.
“Securities fraud is a serious crime which impacts our citizens and our financial markets. The FBI is committed to aggressively investigating these complex crimes with considerable resources and sophisticated techniques,” stated FBI San Diego Special Agent in Charge Suzanne Turner. “The criminal enterprise behind this scam attempted to commit wholesale fraud using boiler rooms to victimize ‘mom and pop’ investors, including some of our elderly citizens. The hard work of our agents certainly limited the number of victims and losses in this case.”
Hackett will be sentenced for his crimes on October 25, 2021.
DEFENDANT Case Number 18cr3072-TWR
Andrew Hackett Age: 32 Toronto, CanadaSUMMARY OF CHARGES
Securities Fraud – Title 15, U.S.C., Section 78(j)
Conspiracy to Commit Securities Fraud – Title 18., U.S.C., Section 371
Maximum Penalty: 20 yearsAGENCY
Federal Bureau of Investigation
Brazilian National Arrested on Child Pornography ChargesRead the Press Release
BOSTON – A Brazilian national residing in Whitman was arrested on Friday, July 30, 2021, on charges of possession and distribution of child pornography.
Walace Lima, 40, was indicted on one count of possession of child pornography and one count of distribution of child pornography. Following an initial appearance before U.S. District Court Magistrate Judge Donald L. Cabell, Lima was detained pending a detention hearing scheduled for this afternoon.
According to the charging document, Lima possessed child pornography on or about Dec. 16, 2020, and distributed child pornography on various dates between Oct. 5 and Nov. 24, 2020.
The charge of possession of child pornography provides for a sentence of up to 20 years in prison, up to a lifetime of supervised release and a fine of $250,000. The charge of distribution of child pornography provides for a sentence of at least five years and up to 20 years in prison, up to a lifetime of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. 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 criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Baton Rouge Man Sentenced to 78 Months in Federal Prison for Multiple Firearm ViolationsRead the Press Release
Acting United States Attorney Ellison C. Travis announced that U.S. District Judge John W. deGravelles sentenced Edward Thompson, age 35, of Baton Rouge, Louisiana, to 78 months in federal prison following his conviction for possession of a firearm by a felon. The Court further sentenced Thompson three years of supervised release following his term of imprisonment and ordered that the firearm involved be forfeited.
According to admissions made as part of his guilty plea, on January 4, 2020, the Baton Rouge Police Department was dispatched to the 3200 block of Fairfields Avenue in Baton Rouge, in response to an accident involving one vehicle that had run off the road and sideswiped a utility pole before coming to a stop. Upon arrival, officers found the driver, later determined to be Thompson, asleep at the wheel. The vehicle was still in contact with the utility pole and Thompson was the driver and sole occupant of the vehicle.
Officers approached the vehicle and detected the smell of marijuana. While questioning Thompson, officers observed a gun in between the driver’s seat and driver’s side door, as well as a clear baggie with a green leafy substance in the handle compartment of the driver’s side door. Officers retrieved the firearm, which was identified as a Smith & Wesson, model SD40, .40 caliber semi-automatic pistol.
Thompson was identified as a convicted felon. He admitted to possessing the firearm and said he needed it because of where he lives. After being taken into custody, officers located a clear baggie containing a white crystal, powdery substance in the pocket of Thompson’s pants, which Thompson stated was crystal methamphetamine. Officers also retrieved a clear baggie containing a white powdery substance and another with a rock like substance. Thompson told officers the baggies contained crack cocaine.
Prior to possessing the firearm, Thompson had four prior felony convictions, all in East Baton Rouge Parish: in November 2004, for possession of cocaine; in August 2005, for simple robbery and illegal use of a weapon; in February 2016, for aggravated flight from an officer and possession of Schedule II methamphetamine; and in March 2017, for possession of cocaine.
Acting U.S. Attorney Travis stated, “Keeping guns out of the hands of prohibited persons is one of my office’s top priorities. I commend our dedicated law enforcement personnel from BRPD and ATF and our prosecution team for their outstanding efforts to take a dangerous repeat offender off the streets of Baton Rouge.”
“The sentence imposed today sends a message to repeat offenders who illegally possess firearms that they will be held accountable for their crimes,” said ATF New Orleans Field Division Special Agent in Charge Kurt Thielhorn. “The collaborative effort of federal and local law enforcement of keeping our neighborhoods and communities safe is a top priority for ATF.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with critical assistance from the Baton Rouge Police Department. The case was prosecuted by Assistant United States Attorney Kristen L. Craig.
Acting U.S. Attorney Farley Encourages Participation in National Night Out EventRead the Press Release
CONCORD – Assistant U.S. Attorneys will join law enforcement, community leaders and residents on Tuesday, August 3rd at Rollins Park, Concord from 5:00 pm to 8:00 pm and at Arms Park in Manchester from 5:00 pm to 8:00 pm to celebrate the 37th annual National Night Out crime and drug prevention event, announced Acting U.S. Attorney John J. Farley.
National Night Out is a community-building and crime prevention campaign that promotes collaborative law enforcement-community partnerships and neighborhood camaraderie. Thousands of communities nationwide will participate in neighborhood block parties, festivals, cookouts, safety demonstrations, seminars, and activities that heighten crime and drug prevention awareness and generate support for and participation in local anticrime efforts. Events such as these help to strengthen neighborhood spirit, police-community partnerships, and demonstrate a shared commitment for strong and safe communities.
“Strong community partnerships are an important way to prevent violent crime,” said Acting U.S. Attorney Farley. “I encourage everyone to participate in National Night Out and to become involved in their communities. By working together, we can help to keep our cities and towns safe from crime.”
This year, National Night Out events will be held in several communities throughout New Hampshire. Registered events will take place in Bedford, Belmont, Brentwood, Center Tuftonboro, Claremont, Dover, Exeter, Farmington, Gilford, Goffstown, Greenland, Hollis, Hooksett, Hudson, Lebanon, Lincoln, Manchester, Merrimack, Milford, Nashua, Newport, Portsmouth, Raymond, Rochester, Salem, Seabrook, Somersworth, Stratham, Thornton, Waterville Valley and Woodstock. For more information about National Night Out, visit their website www.natw.org.
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76-month federal prison sentence for Arizona man who participated in South Florida prescription medication diversion schemeRead the Press Release
Miami, Florida – On Friday, a Miami federal judge sentenced a 38-year-old Arizona resident to 76 months in federal prison for his role in a sophisticated fraud scheme involving millions of dollars in diverted pharmaceutical drugs.
Joshua Ryan Joles managed one of the wholesale companies involved in the scheme. Rather than pay full price to drug manufacturers for HIV, cancer, and other expensive medications, Joles bought his wholesale supply at a discount from co-conspirators who obtained the drugs on the streets, from black market sellers. While the drugs were branded medications, produced by the original pharmaceutical developers, they had been diverted from legitimate, secure supply chains to the black market through health care fraud and other illegal means. Once purchased from the black-market sellers, the co-conspirators re-packaged the drugs and sold them to Joles, complete with fabricated documentation to disguise the drugs’ origins. Joles knew he was buying illegally diverted drugs that were not from legitimate suppliers. Nevertheless, he sold the diverted drugs to unwitting retail pharmacies and consumers at big mark-ups. During the conspiracy, which lasted from 2014 to 2019, $78 million in illegal proceeds was laundered through shell company bank account operated by Joles’ co-conspirators.
On May 27, Joles pled guilty to one count of conspiring to traffic in medical products with false documentation and one count of conspiring to launder money.
Joles is one of nine defendants originally charged in case no. 19-cr-20674, seven of whom have pled guilty and been sentenced. There are five more defendants facing charges in a second superseding indictment, and one fugitive. The charges against these five defendants are mere allegations. They are innocent until proven guilty in a court of law.
Juan Antonio Gonzalez, Acting U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Justin Fielder, Special Agent in Charge, U.S. Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), announced the sentence.
FBI Miami and FDA-OCI Miami Field Office investigated this case, with assistance from the U.S. Attorney’s Offices for the Northern District of California, the District of Arizona, and the Western District of Washington, and FBI’s Los Angeles, Phoenix and Seattle Field Offices.
Assistant U.S. Attorneys Frank Tamen and Walter Norkin are prosecuting the case.
Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.
The prosecution was part of Operation Southern Hospitality, which is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 19-cr-20674.
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20 arrested for conspiracy to distribute thousands of pounds of marijuanaRead the Press Release
LAREDO, Texas – A total of 16 Laredoans are now in custody following the return of two separate, but related indictments related to the distribution of large quantities of marijuana, announced Acting U.S. Attorney Jennifer B. Lowery.
Most are expected to make their initial appearances before U.S. Magistrate Judge Diana Song Quiroga in Laredo as early as 1:30 p.m. today.
Among those taken into custody were Jose Guadalupe Alaniz and Fernando Garcia, both 39; 21-year-olds Eduardo Javier Vazquez, Carlos Alejo Soliz and Carlos Erik Lopez; Arturo Villarreal and Francisco Arturo Neri, both 22; Edgar Alejandro Mashuca and Gustavo Alberto Duenes-Perez, both 34; Gavino Cadena, 33, Eduardo Gutierrez, 27, Jose Gerardo Gutierrez-Gonzalez, 23, Jesus Hernandez, 20, Jesus Rodriguez, 37, Leonardo Garza, 40, and Juan Lopez, 30. Also arrested were Alberto Castro, 40, Austin, and Mexican nationals Sergio Rodriguez and Jose Hernandez-Vazquez, both 37; and Jonathan Guadalupe Rodriguez-Rivera, 29.
A federal grand jury returned a three-count indictment under seal June 29 charging Cadena, Sergio Rodriguez, Gutierrez, Villarreal and Mashuca. It alleges they conspired to possess with intent to distribute 1,000 kilograms or more of marijuana Feb. 5-21, 2019.
A separate, but related six-count sealed indictment was also returned June 29. It alleges Gutierrez-Gonzalez, Duenes-Perez, Hernandez, Castro, Garza, Juan Lopez, Hernandez-Vazquez, Jesus Rodriguez, Neri, Vazquez, Soliz, Carlos Lopez and Rodriguez-Rivera conspired to possess with intent to distribute 1,000 kilograms or more of marijuana between March 28, 2019 and April 23, 2020. Some are also charged with substantive counts of possession with intent to distribute marijuana on varying dates during that time.
Alaniz and Garcia were charged via a related criminal complaint, alleging they conspired to possess with intent to distribute 1,000 kilograms or more of marijuana March 28-May 15, 2019.
All men face a minimum of 10 years and up to life in federal prison as well as a possible $10 million maximum fine, upon conviction. Those charged in the substantive possession counts could also face additional maximum terms ranging from 40 years to life.
The investigation was part of the Blue Indigo Task Force and brought as part of the Organized Crime Drug Enforcement Task Force (OCDETF) investigation dubbed Operation Noreste. OCDETF is the largest anti-crime task force in the country. Its mission is to disrupt and dismantle the most significant drug trafficking and transnational criminal organizations that threaten the United States through prosecutor-led, intelligence-driven, multi-agency task forces that leverage the authorities and expertise of federal, state, and local law enforcement.
The Drug Enforcement Administration and Laredo Police Department conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Marshals Service; Border Patrol; Customs and Border Protection; FBI; Homeland Security Investigations; U.S. National Guard; Webb County District Attorney’s Office, Sheriff’s Office and Constable's Office, Precincts 1 and 4; and Texas Department of Public Safety.
Assistant U.S. Attorney Jennifer Day is prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Friday 30 July 2021
Wilkes-Barre Man Sentenced to 180 Months’ Imprisonment for Running Methamphetamine LaboratoryRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Michael Laury, age 42, of Wilkes-Barre, Pennsylvania, was sentenced to 180 months’ imprisonment by United States District Court Judge Malachy E. Mannion, for methamphetamine and false statement offenses.
According to Acting United States Attorney Bruce D. Brandler, Laury was convicted at trial of one count of managing a drug premises, one count of conspiring to manufacture and distribute methamphetamine, and one count of making a false statement to the FBI. The evidence presented at trial showed that in May and June 2017, Laury assisted two drug dealers in running a methamphetamine laboratory in the basement of Laury’s Wilkes-Barre residence. The FBI and Pennsylvania State Police shuttered the laboratory in June 2017, when executing a search warrant. Following the search, Laury made false statements to the FBI about his knowledge of and involvement with the laboratory.
At sentencing, Laury was held accountable for between 50 grams and 200 grams of methamphetamine. In pronouncing sentence, Judge Mannion highlighted Laury’s extensive criminal history, and his efforts to bribe two witnesses into giving false testimony at trial, and to threaten a third witness against testifying. Laury also was held accountable for creating a substantial risk of harm to children that lived in the same residence as the methamphetamine laboratory.
Laury has remained in custody since his October 2017 arrest. He was charged with three coconspirators, all of whom pleaded guilty and have been sentenced:
- Mark Heath, of Wilkes-Barre, Pennsylvania, pleaded guilty to a methamphetamine conspiracy and was sentenced to 84 months’ imprisonment;
- Shawn Melleski, of Wilkes-Barre, Pennsylvania, pleaded guilty to a methamphetamine conspiracy and was sentenced to 46 months’ imprisonment; and
- Amy Casey, of Wilkes-Barre, Pennsylvania, pleaded guilty to maintaining a drug premises and received a time served sentence of approximately 9 months.
The matter was investigated by the FBI, the Pennsylvania State Police, and the Wilkes-Barre Police Department. Assistant United States Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
This case was being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.”
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Westfield Man Sentenced for Wire Fraud and Money LaunderingRead the Press Release
INDIANAPOLIS – A Westfield man was sentenced to 5 years in prison for wire fraud and money laundering. He will also serve 3 years of supervised release and was ordered to pay over $1,500,000 in restitution.
According to court documents, George S. Blankenbaker Jr., 56, was charged April 1, 2021 with wire fraud and money laundering after an investigation by the Internal Revenue Service Criminal Investigation. Between May 2008 and August 2016, Blankenbaker created three business entities, Stargrower Commercial Bridge Loan Fund 1 LLC, Stargrower Asset Management LLC and EDU Holding Trust. He later used these entities, which he owned and managed, in the execution of a Ponzi and money laundering scheme.
Blankenbaker persuaded more than 100 individuals to invest more than ten million dollars in the Stargrower Entities. He represented to investors that the funds they invested would be used to finance the use of shipping containers of food. Contrary to Blankenbaker promises to investors, he did not invest their money as he had described. Blankenbaker diverted the investment money he received to primarily make interest payments and return of principal payments to other Stargrower Entities investors, and to fund personal expenses and unrelated business ventures of his. Thirty-four investors lost over $1,400,000 in this scheme.
Blankenbaker other business, EDU Holding Trust, was designed to utilize investor funds to purchase life insurance policies on the secondary market at a price less than the face maturity amount of the policies. Investors believed they were beneficiaries and that they would receive compensation from the profits generated when the life insurance policy matured, that is, when the insured died. In August 2016, one of the policies purchased matured, and a proceeds check in excess of 2.5 million dollars was issued by the life insurance company. The check was not deposited into an escrow account, but was rather deposited into an account Blankenbaker opened at PNC Bank in the name of EDU Holding Esc Acct. Although some of the funds were appropriately transferred to investors, others were transferred to another account he controlled at PNC Bank in the name of one of the Stargrower Entities. These funds were used, in part, for business and personal expenses of Blankenbaker. This scheme resulted in a loss of $110,200 to an investor.
This case was investigated by IRS Criminal Investigation, the United States Postal Inspection Service, and the Securities and Exchange Commission.
Assistant U.S. Attorney James M. Warden prosecuted the case.
Link to original release: https://www.justice.gov/usao-sdin/pr/central-indiana-man-faces-federal-fraud-charges
Valparaiso Man Sentenced to 151 Months of ImprisonmentRead the Press Release
HAMMOND-Christopher F. Zinanni, 34, of Valparaiso was sentenced by U.S. District Court Judge Phillip Simon upon his plea of guilty to one count of distribution of child pornography, announced Acting United States Attorney Tina L. Nommay.
Zinanni was sentenced to 151 months in prison followed by 15 years of supervised release.
According to documents in this case, Zinanni drew the attention of law enforcement personnel when he distributed child pornography to an undercover agent on the Whisper social media platform. An investigation revealed Zinnani distributed disturbing images of child pornography, including a graphic image of prepubescent females, to other individuals over the internet in an effort to trade them for additional images of child pornography.
This case was the result of Investigation by Department of Homeland Security Investigations with the assistance of the Hammond Police Department. This case was prosecuted by Assistant United States Attorneys Jill Koster and Molly Kelley
United States Seizes Oil Tanker Used to Violate Sanctions Against North KoreaRead the Press Release
A New York federal court today entered a judgment of forfeiture regarding the M/T Courageous, a 2,734-ton oil-products tanker used to make illicit deliveries of petroleum products through ship-to-ship transfers with vessels flagged in the Democratic People’s Republic of Korea (DPRK or North Korea) and direct shipments to the North Korean port of Nampo.
According to court documents, payments to purchase the Courageous, to obtain oil for supplying to North Korea using the Courageous, and to procure necessary services for the Courageous were made using U.S. dollars through unwitting U.S. banks, in violation of U.S. law and United Nations Security Council resolutions. On April 23, 2021, a civil forfeiture action was filed against M/T Courageous. Criminal charges of conspiracy to evade economic sanctions on the DPRK and money laundering conspiracy are pending against the alleged owner and operator of the Courageous, Kwek Kee Seng, a Singaporean national who remains at large.
Pursuant to the International Emergency Economic Powers Act (IEEPA) and the North Korea Sanctions and Policy Enhancement Act of 2016 (NKSPEA), the DPRK and individuals or entities that the Department of the Treasury, Office of Foreign Assets Control (OFAC), has determined are involved in the facilitation of proliferation of weapons of mass destruction are prohibited from engaging in transactions with U.S. persons or using the U.S. financial system. The United Nations Security Council has similarly imposed economic sanctions on North Korea, prohibiting among other things the conduct of ship-to-ship transfers with DPRK-flagged vessels and the provision of petroleum products to the DPRK.
According to documents filed in the civil forfeiture action and allegations contained in the criminal complaint, Kwek and his co-conspirators engaged in an extensive scheme to evade these U.S. and U.N. sanctions by using vessels under their control to covertly transport fuel to North Korea, thereby providing a critical resource for the North Korean government and for DPRK-based companies. One of those vessels was M/T Courageous — formerly known as the Sea Prima — which was purchased by Kwek through front companies to further the scheme to evade sanctions and launder money. Among other things, for a four-month period between August and December 2019, M/T Courageous illicitly stopped transmitting information regarding its location, during which time satellite imagery shows that M/T Courageous both engaged in a ship-to-ship transfer of more than $1.5 million worth of oil to a North Korean ship, the Saebyol, which had been designated by OFAC, and traveled to the North Korean port of Nampo. Kwek and his co-conspirators allegedly took additional steps to hide the scheme by (1) operating a series of shell companies, (2) lying to international shipping authorities about M/T Courageous’s dealings with North Korea, and (3) falsely identifying M/T Courageous as another ship in order to evade detection.
In furtherance of the scheme, Kwek and his co-conspirators arranged for a variety of payments denominated in U.S. dollars that were processed through U.S.-based correspondent accounts to purchase oil – including more than $1.5 million to purchase the oil that was transferred to the Saebyol, over $500,000 to buy M/T Courageous, and thousands more dollars to procure necessary services for M/T Courageous and another vessel, including registration fees, ship materials, and salary payments for crewmembers. Kwek and his co-conspirators overseas sought to conceal these sanctions-evading transactions by, among other things, using front companies to disguise the nature of the transactions; disguising location information for vessels carrying illicit shipments; and conducting ship-to-ship fuel transfers on the open sea in an attempt to hide their counterparties, such as the Saebyol.
Cambodian authorities seized M/T Courageous in March 2020 and held the vessel pursuant to a U.S. seizure warrant, which was issued under seal on April 2, 2020. On April 23, 2021, the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture complaint against M/T Courageous and the case was subsequently assigned to District Judge Hon. Valerie Caproni, who issued today’s judgment of forfeiture.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division, U.S. Attorney Audrey Strauss for the Southern District of New York and Assistant Director-in-Charge Michael J. Driscoll for the FBI’s New York Field Office made the announcement.
The FBI’s New York Field Office, Counterintelligence Division, is investigating the case, with valuable assistance provided by the FBI Legal Attaché Office in Phnom Penh, Cambodia; the Justice Department’s National Security Division, Counterintelligence and Export Control Section, Money Laundering and Asset Recovery Section’s Program Operations Unit, and Office of International Affairs; the U.S. Coast Guard; the Cambodian Ministry of Justice; and the Cambodian National Police.
Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener for the Southern District of New York and Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Promoter of Foreign Cryptocurrency Companies Pleads Guilty for Role in Multimillion-Dollar Securities Fraud SchemeRead the Press Release
A California man pleaded guilty today in the Eastern District of New York for his participation in a coordinated cryptocurrency and securities fraud scheme through purported digital currency platforms and foreign-based financial accounts.
As part of his guilty plea, John DeMarr, 55, of Santa Ana, admitted that he conspired with others to defraud investor victims by inducing them to invest in their companies, “Start Options” and “B2G,” based on materially false and misleading representations. Start Options purported to be an online investment platform that provided cryptocurrency mining, trading and digital asset trading services. B2G was purportedly an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking and trade digital and fiat currencies “on a secure, comprehensive platform.” Both Start Options and B2G, however, were fraudulent.
As part of the conspiracy, in approximately December 2017, DeMarr and others began offering securities in the form of investment contracts to U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars or Euros. To participate, investors had to deposit their funds for a specified contract period, after which they were told that they could withdraw their money at a significant profit.
According to court documents, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and to remodel DeMarr’s home in California.
Similarly, Start Options also claimed to feature celebrity endorsements to promote its securities offerings. For example, Start Options falsely represented that a professional athlete had endorsed Start Options when, in fact, the athlete was not involved with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars’ worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad.
In late January 2018, rather than permitting Start Options investors to withdraw money from their accounts after the requisite time period, DeMarr and others required investors to roll over their accounts into an unregistered “initial coin offering,” or ICO, of B2G, the second of the two fraudulent companies in which DeMarr was involved. Among other fraudulent misrepresentations, DeMarr and others falsely told investors that the ICO would raise capital for the company to build an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trading. In truth, investors never actually received any digital tokens, and funds from the offering were not used to develop the B2G platform.
As part of the conspiracy, DeMarr and others also paid various promoters, including an actor famous for martial arts films made in the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate an “8000%” return for investors within one year, and that he was a participant in the ICO. DeMarr and others also created false press releases and whitepapers about B2G, fabricated B2G account statements and refused to allow investors to withdraw their money.
DeMarr pleaded guilty to one count of conspiracy to commit securities fraud and is scheduled to be sentenced on Jan. 4, 2022. DeMarr faces a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Acting U.S. Attorney Jacquelyn M. Kasulis of the Eastern District of New York, Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office, and Special Agent in Charge Ryan L. Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
The FBI and IRS-CI are investigating the case.
Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell.
The Criminal Division’s Fraud Section plays a pivotal role in the Justice Department's fight against white collar crime around the country.
Two Shreveport Men Sentenced in Federal Court on Firearms ChargesRead the Press Release
SHREVEPORT, La. - Acting United States Attorney Alexander C. Van Hook announced that two defendants from Shreveport have been sentenced in the Western District of Louisiana.
Carnell L. Briggs, a/k/a “Bankroll” and “Bug,” 23, of Shreveport, was sentenced by United States District Judge Elizabeth E. Foote, to spend 49 months in prison, followed by 3 years of supervised release on firearms charges. Briggs, a local rapper, was arrested on September 15, 2020, only months after serving a federal sentence for possession of a stolen firearm in the Western District of Louisiana. Agents of the U.S. Marshal Service Task Force executed an outstanding arrest warrant for illegal use of a weapon on Briggs at his girlfriend’s apartment. The warrant had been issued as a result of Briggs being implicated in a recent shooting in Shreveport. Agents knocked on the door and Briggs answered, holding a 9mm pistol. He was immediately taken into custody. Briggs admitted to agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) that he purchased the firearm soon after being released from federal prison and knew he was prohibited from having a firearm in his possession.
Dschwadraa D. Wesley, 26, of Shreveport, Louisiana, was sentenced by Chief United States District Judge S. Maurice Hicks, Jr. to spend 120 months in prison, followed by 3 years of supervised release. Wesley was charged in a federal indictment with being a convicted felon in possession of a firearm and pleaded guilty to the charge on January 5, 2021. The charge stems from an incident which occurred on February 3, 2020, when Shreveport Police Department officers responded to a domestic call at a residence. Law enforcement officers began to search for and located a vehicle in which Wesley was a passenger. Officers attempted to stop the vehicle, but the driver refused to stop and a chase ensued. During the lengthy pursuit, officers observed Wesley throw something out of the window into a ditch. Other officers stopped and searched the ditch and recovered a 9mm pistol which had been reported stolen in November 2019. When the vehicle finally came to a stop, Wesley was arrested and taken into custody. He admitted to possessing the firearm and knew that it was illegal for him to do so as a person convicted of a felony offense. Wesley’s prior convictions are for possession with intent to distribute narcotics (2013) and attempted possession of a firearm by a convicted felon (2015).
The ATF, U.S. Marshal Service Task Force, and Shreveport Police Department conducted these investigations. Assistant U.S. Attorneys Brandon B. Brown and Tennille Gilreath prosecuted the cases.
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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Two Ramsey County Men Sentenced to Prison for Twin Cities Postal Crime SpreeRead the Press Release
ST. PAUL, Minn. – Two St. Paul area men involved in a Twin Cities-based mail theft scheme have been sentenced to prison for their roles in the conspiracy.
Sonny Vang Xiong, 32, of Maplewood, and Davis Her, 36, of St. Paul, each pleaded guilty to one count of conspiracy to commit theft of mail. Her also pleaded guilty to one count of felon in possession of a firearm. The defendants were sentenced to 36 and 78 months in prison, respectively.
According to court documents, from at least August 2020 through November 2020, Xiong and Her conspired with others to steal mail and packages from post offices, apartment complexes, and mailboxes. The defendants broke into apartment buildings and other locations where many mailboxes could be accessed at once to steal personal mail, business mail, packages, and other items. The defendants used stolen postal keys, pry bars, and other burglary tools to steal the mail. The defendants would look for checks, money orders, identification documents, credit and debit cards, and other items of value. Xiong and Her used the stolen checks and money orders to create fraudulent checks and falsified money orders that they gave to others to cash. Xiong and Her also used stolen account numbers, IDs, and personal identifying information to create fake checks and fake identification documents.
Acting U.S. Attorney W. Anders Folk for the District of Minnesota made the announcement after U.S. District Judge Eric C. Tostrud sentenced the defendants.
This case was the result of an investigation conducted by the United States Postal Inspection Service, with assistance from the St. Paul Police Department, the Roseville Police Department, the Coon Rapids Police Department, the Ramsey County Sheriff’s Office, and the St. Croix County (Wisconsin) Sheriff’s Office. United States Secret Service, and the United States Department of State, Diplomatic Security Service.
Assistant U.S. Attorney Sarah E. Hudleston prosecuted the case.
Two Kansas Companies Sentenced for Using Illegal SoftwareRead the Press Release
WICHITA, KAN. – In separate court cases, two Kansas-based companies have been sentenced for operating with pirated computer software. Lightning Aerospace, LLC, and Fly Manufacturing, LLC, had previously pleaded guilty to one count of Circumvention of Protected Copyrighted Work.
Dassault Systèmes owns the copyright to a software called Computer Aided Three-dimensional Interactive Application or CATIA. According to court documents, Lightning Aerospace and Fly Manufacturing admitted to intentionally acquiring unlicensed versions of CATIA and using the illegal software for years. During that time Lightning Aerospace and Fly Manufacturing didn’t purchase software from Dassault Systèmes or pay for licensing.
“Defendants involved in these types of crimes like to claim them as victimless,” said Katherine Greer, special agent in charge of Homeland Security Investigations (HSI) in the Kansas City area of operations.“The offenses in this case are aggravated by the fact that the accused used unlicensed software to design and test parts for aircraft-actions that could have grave consequences to consumers,” said Greer. “Not to mention the billions of dollars legitimate companies are losing each year to cybercriminals engaged in digital thefts, costs likely being passed along to customers.”
During sentencing, the court ordered Lightning Aerospace to pay $46,002 in restitution to Dassault Systèmes and pay approximately $28,000 in court fines. Fly Manufacturing was ordered to pay $67,272 in restitution and approximately $8,000 in fines.
“Not only did these two businesses defraud a software company, they also gave themselves an unfair financial advantage over competitors who obeyed the law by paying for software and licensing fees,” said Acting U.S. Attorney Duston Slinkard. “Hopefully these convictions will deter other companies from engaging in intellectual property theft.”
This case was investigated by Homeland Security Investigations (HSI), Kansas City.
Assistant U.S. Attorney Alan Metzger prosecuted the case.
###Three Plead Guilty to their Roles in Drug Trafficking ConspiracyRead the Press Release
Jackson, Miss. – Two Mississippi men and a Louisiana man pled guilty today to their roles in a drug trafficking conspiracy, announced Acting U.S. Attorney Darren J. LaMarca and Brad Byerley, Special Agent in Charge of the Drug Enforcement Administration (DEA).
Chey Johnson, 48, of Terry, pled guilty to conspiracy to possess with intent to distribute 5 kilograms or more of cocaine; Alton Monroe, 43, of Jackson, pled guilty to possession with intent to distribute 500 grams or more of cocaine; and Dwight Powell, 53, of New Orleans, pled guilty to use of a communication facility to facilitate a controlled substance offense.
According to court documents, from January 2017 to December 2017, DEA agents carried out an extensive investigation into drug traffickers in central Mississippi. The investigation resulted in the indictment of multiple defendants and the seizure of approximately $585,000 in U.S. currency and 12 kilograms of cocaine.
This Operation, dubbed “Deadly Dose” 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.
All three defendants will be sentenced on November 9, 2021 in Jackson. Johnson faces a maximum penalty of life in prison and a $10,000,000 fine; Monroe faces a maximum penalty of 40 years in prison and a $5,000,000 fine; and Powell faces a maximum penalty of 48 months in prison and a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Drug Enforcement Administration, the Bureau of Alcohol Tobacco Firearms and Explosives, the U.S. Marshals Service, the Hinds County Sheriff’s Office, the Jackson Police Department, the Mississippi Bureau of Narcotics, and the Internal Revenue Service.
The case is being prosecuted by Assistant United States Attorneys Chris Wansley and Keesha Middleton.
Suspect in Amarillo Explosion Charged with Possession of Destructive DeviceRead the Press Release
The man suspected of causing an explosion at his residence in Amarillo, Texas on Monday has been federally charged, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Erfan Salmanzadeh, a 32-year-old naturalized citizen of the U.S. born in Iran, was charged via criminal complaint on Friday with one count of possession of a destructive device. (He has also been charged by the state with possession of components of explosives.)
“Mr. Salmanzadeh had absolutely no business handling unregistered destructive devices. We believe this defendant is a danger to the community and must be kept behind bars,” said Acting U.S. Attorney Prerak Shah.
“The FBI is committed to protecting our communities from harm and working with our law enforcement partners to disrupt violent activity. This defendant allegedly possessed a device with the potential to cause significant damage or injury to innocent people,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We want to thank the Amarillo Police Department, Texas Department of Public Safety, and Homeland Security Investigations for their tireless assistance in this investigation.”
Following the explosion Monday afternoon, officers discovered explosive components in Mr. Salmanzadeh’s residence, his backyard, and the alleyway behind his home, law enforcement has confirmed. The incident prompted the immediate evacuation of the area; neighbors were allowed to return to their homes on Wednesday.
Though the arrest warrant against Mr. Salmanzadeh was unsealed this afternoon, the criminal complaint and affidavit remain sealed, per judicial order.
A criminal complaint is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Salmanzadeh is presumed innocent until proven guilty in a court of law.
If convicted of the federal offense, he faces up to 10 years in prison.
The Federal Bureau of Investigation’s Dallas Field Office and the Amarillo Police Department’s Bomb Squad conducted the investigation with the assistance of the North Texas Joint Terrorism Taskforce, Homeland Security Investigations, the Texas Department of Public Safety, and the Amarillo Fire Department. Assistant U.S. Attorneys Jeffrey Haag and Josh Frausto are prosecuting the case.
UPDATE: On May 26, a federal grand jury returned a superseding indictment charging Mr. Salmanzadeh with attempted use of a weapon of mass destruction, a violation of 18 U.S.C. § 2332a(a)(2). The charge carries a potential sentence of up to life in federal prison. Mr. Salmanzadeh’s trial has been continued to Tuesday, August 9.
St. Louis County woman pleads guilty to straw purchasing a firearm linked to a homicideRead the Press Release
ST. LOUIS – Laquesha Hardimon, 29, of Dellwood, Missouri, appeared before United States District Court Judge Sarah E. Pitlyk on today’s date and pleaded guilty to providing false information to a federally licensed firearms dealer (Kevin’s Guns).
On October 2, 2020, Hardimon bought a firearm from Kevin’s Guns under false pretenses. Hardimon falsely indicated on paperwork, required to be completed prior to the purchase of the firearm, that she was buying the firearm for herself, when, in fact, she was purchasing the firearm for her brother. Hardimon believed her brother was prohibited from purchasing the firearm for himself under federal law.
After purchasing the firearm, Hardimon gave the firearm to her brother. Less than a week later, Hardimon’s brother gave the firearm to another individual. On October 17, 2020, the firearm was used in a homicide in Wisconsin. The individual to whom Hardimon’s brother gave the firearm is facing charges for that homicide.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant United States Attorney Jennifer Szczucinski is handling the matter.
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Six Southwest Missouri Residents Indicted for Kidnapping, MurderRead the Press Release
SPRINGFIELD, Mo. – Six southwest Missouri residents have been indicted by a federal grand jury for their roles in a kidnapping conspiracy that resulted in the death of the victim.
Freddie Lewis Tilton, also known as “Ol’ Boy,” 48, and Carla Jo Ward, 47, both of Joplin, Mo.; Amy Kay Thomas, 38, of Webb City, Mo.; James B. Gibson, 39, of Neosho, Mo.; Lawrence William Vaughan, also known as “Scary Larry,” 49, of Newton County, Mo.; and Russell Eugene Hurtt, also known as “Uncle,” 49, of Greenwood, Mo.; were charged in a five-count indictment returned by a federal grand jury on Thursday, July 29.
The federal indictment alleges that each of the six defendants participated in a conspiracy to kidnap the victim, identified as “M.H.,” in July 2020. According to the indictment, Ward picked up M.H. and took him to Vaughan’s residence. Tilton, Thomas, and Gibson arrived at Vaughan’s residence in the early morning hours of July 15, 2020. They bound M.H.’s hands with handcuffs, and duct tape was placed around his mouth and other parts of his body. In Vaughan and Ward’s presence, the indictment says, Thomas cut M.H. repeatedly with a knife and Gibson beat M.H. with a club. Tilton fatally shot M.H. in the head. They wrapped M.H.’s body in plastic wrap and transported it to Hurtt’s property.
Law enforcement officers executed a search warrant at Hurtt’s property on July 28, 2020, based on information that a deceased body was located on the acreage. When officers attempted to contact the occupants of the residence, the indictment says, Tilton fired multiple shots from inside the residence at the officers. Tilton was apprehended. Officers found M.H.’s body on the property.
In addition to the conspiracy, the indictment charges each of the six defendants in one count of kidnapping resulting in death and in one count of using a firearm in furtherance of a crime of violence, resulting in murder.
Tilton, Thomas, Gibson, and Ward are also charged together in one count of being felons in possession of a firearm on July 14, 2020.
Tilton is also charged with one count of being a felon in possession of firearms on July 28, 2020. Tilton allegedly was in possession of a Rigarmi .25-caliber pistol, an Ithaca .22-caliber rifle, a Remington .22-caliber rifle, a Harrington and Richardson 12-gauge shotgun, a Ruger 9mm handgun, and a Taurus 9mm handgun at the time of his arrest.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Newton County, Mo., Sheriff’s Department, the Neosho, Mo., Police Department, the Joplin, Mo., Police Department, and the Cherokee County, Kan., Sheriff’s Department.
Organized Crime Drug Enforcement Task Forces (OCDETF)
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Sioux Falls Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Sioux Falls, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on July 28, 2021, by U.S. District Judge Lawrence L. Piersol.
Steven Roubideaux, age 51, was sentenced to 20 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Roubideaux was indicted by a federal grand jury on March 2, 2021. He pled guilty on May 3, 2021.
The conviction stems from Roubideaux failing to register as a sex offender as required by federal law between May 17, 2020, and May 28, 2020. Roubideaux had previously been convicted of a sex offense in state court, which requires him to register for the rest of his life.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Roubideaux was immediately turned over to the custody of the U.S. Marshals Service.
Savannah tire store owner convicted of selling methamphetamineRead the Press Release
SAVANNAH, GA: A Savannah tire store owner faces decades in federal prison after a U.S. District Court jury found him guilty of distributing methamphetamine.
Reginald Anderson, a/k/a “Red,” 49, of Savannah, awaits sentencing after being found guilty on three counts of Distribution of Methamphetamine, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. Anderson faces a possible statutory sentence of up to thirty years in prison, along with substantial financial penalties and a period of supervised release upon completion of any prison sentence.
There is no parole in the federal system.
“Meth is deadly and highly addictive, and its corrosive effects are devastating to our communities,” said Acting U.S. Attorney Estes. “’Red’ Anderson sold tires out of the front of his store and drugs from the back. That doesn’t make him a legitimate businessman; that makes him a drug dealer.”
As described in court documents and testimony, Anderson was the owner of Anderson’s Tire Shop, and was indicted in November 2019 after he sold methamphetamine on multiple occasions to informants for the U.S. Drug Enforcement Administration in June 2018. Testimony was delivered in which Anderson had propositioned at least one person for sexual favors in exchange for narcotics, and that the methamphetamine that he was selling at the time was nearly 100 percent pure. A jury convicted him on all counts after a two-day trial in federal court.
“The success of this investigation was possible because of unified law enforcement cooperation,” said the Special Agent in Charge of the DEA Atlanta Field Division Robert J. Murphy. “As a result of a trial verdict, this methamphetamine trafficker was found guilty on all counts and will now spend well-deserved time in prison.”
“The Postal Inspection Service, along with our local, state, and federal partners, will continue to pursue individuals that abuse the Postal Service for their illegal drug enterprise and this verdict is a testament of the diligent investigative work performed by Postal Inspectors,” said Joseph W. Cronin, Inspector in Charge of the Miami Division for the U.S. Postal Inspection Service.
The case was investigated by the U.S. Drug Enforcement Administration and the U.S. Postal Inspection Service, and prosecuted for the United States by Assistant U.S. Attorney Joshua S. Bearden and Special Assistant U.S. Attorney Darron J. Hubbard.
Retired School Teacher Arrested and Charged with Enticement of A Minor and Possession 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 Richard W. Scherer, 70, of Depew, NY, was arrested and charged by complaint with enticement of a minor and possession of child pornography. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that according to the criminal complaint, on June 28, 2021, the FBI received information regarding the defendant from a citizens group known as Predator Poacher, which maintains a website and YouTube channel. The group maintains several online accounts that purport to be minors of various ages, using the accounts to chat with adults who later meet for sexual contact. These contacts are recorded, the individuals interviewed, and the videos then posted to the group’s platforms. A member of the group made contact with Scherer on the Instagram account richard_scherer. The defendant believed the member was a 13-year-old girl. The communications between the two were sexual in nature and culminated with a planned meeting at a retail store on Amherst Street in Buffalo. When Scherer arrived, the group confronted him outside the store and interviewed him for about 58 minutes, during which he allegedly admitted that he is a pedophile. The Buffalo Police were called following the interview.
Subsequently, investigators accessed Scherer’s communications with the purported 13-year-old girl, which occurred between April and June 2021. During those communications, which became graphic and sexual in nature, the defendant mentioned he was a teacher, who taught sexual education in the past. On June 27, 2021, Scherer arranged to meet the purported 13-year-old girl the following day, and when he showed up for that meeting, the defendant was confronted by members of Predator Poacher. The final text from Scherer was “I’m here.” According to the complaint, the defendant also communicated with a purported eight-year-old girl through Predator Poacher, during which the communications also became graphic and sexual in nature.
Scherer was a teacher for approximately 25 years in the Montgomery County (Maryland) Public Schools. A report obtained from the school system during the investigation stated, “On June 13, 2011, the parent of a 4th grade student, [redacted by MCPS], came to the school and made a report to an assistant principal about some concerns she had regarding possible inappropriate behavior by Mr. Scherer while interacting with students.” The report stated that the student related that when the defendant has lunch with a particular student, “he pulls her to him and hugs her, that he has patted her rear end and hips, and that he pressures her to each lunch with him.” The parent advised that her daughter and the daughter’s friend are often pressured to each lunch with Scherer. In September 2011, the Superintendent of Montgomery County Public Schools sent a letter to the State of Maryland Superintendent of Schools. The letter stated, “this is to notify you that Mr. Richard W. Scherer, an English for Speakers of Other Languages (ESOL) teacher for Montgomery County Public Schools, resigned after notice of allegations of misconduct involving a student. I recommend that Mr. Scherer’s certificate be revoked.” The defendant’s teaching certificate was subsequently revoked.
A search of the defendant’s cell phone recovered two images of child pornography.
Members of the public who have information related to this case are asked to call the Federal Bureau of Investigation at 716-843-1680.
The criminal complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Stephen Belongia, Special Agent-in-Charge.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Repeat Offender Sentenced for Committing Two Armed Bank Robberies in April 2018Read the Press Release
LAS VEGAS, Nev. – A Las Vegas felon was sentenced Thursday to 10 years and one month in prison for robbing two banks at gunpoint on the same day in April 2018, stealing approximately $22,000.
According to court documents, on April 17, 2018, Robert Carl Litheredge, 61, entered a bank in Henderson wearing a ski mask and carrying a semi-automatic handgun. Litheredge commanded the bank customers and employees to get down on the floor as he waved the handgun in the air. He pointed the handgun at a bank employee and demanded money. Litheredge left the bank with the stolen money.
Several hours later, Litheredge — again wearing a ski mask and carrying a semi-automatic handgun — entered a different bank in Las Vegas and demanded money. He fired one round from his handgun into the ceiling. Before fleeing the bank with the stolen money, Litheredge also fired another round into the ceiling.
Litheredge was arrested the following day in a local casino, in possession of a semi-automatic handgun and cash. During a post-arrest interview with detectives from the Henderson Police Department and the Las Vegas Metropolitan Police Department, Litheredge admitted to robbing both banks.
Litheredge pleaded guilty to two counts of bank robbery and one count of use and discharge of a firearm during and in relation to a crime of violence. He has eight prior felony convictions, including two bank robbery convictions from 2001 and 2007. In addition to the prison term, U.S. District Judge Richard F. Boulware II sentenced Litheredge to five years of supervised release.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Aaron C. Rouse for the FBI made the announcement.
This case was investigated by the FBI, Henderson Police Department, and Las Vegas Metropolitan Police Department. Assistant U.S. Attorney Steven Myhre prosecuted the case.
The case was brought as part of Project Safe Neighborhoods (PSN), a nationwide program by the Department of Justice that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, the Department announced the reinvigoration of PSN. For more information about PSN, visit www.justice.gov/usao-nv.
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Registered Sex Offender Arrested and Charged with 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 Juan Quinones-Rivera, 39, was arrested and charged by criminal complaint with production of child pornography. The charge carries a mandatory minimum penalty of 15 years in prison, a maximum of 30 years and a $250,000 fine.
Assistant U.S. Attorney Caitlin M. Higgins, who is handling the case, stated that on April 21, 2021, New York State Parole contacted the FBI after a parole officer, while conducting a search of defendant’s room, discovered that he had a cell phone, which was a violation of his parole. During a cursory search of the device, the parole officer located Snapchat chats and text messages between Quinones-Rivera and a female (Victim). A subsequent search of the phone recovered numerous images and videos of suspected child pornography. In addition, investigators recovered sexually explicit text conversations between the defendant and Victim, during which Quinones-Rivera requested and received approximately 50 videos and photos from the Victim. In May 2021, the FBI contacted the Greene County, Virginia Sheriff's Office for assistance in identifying the Victim. After doing so, investigators searched the Victim’s cell phone and located an image that was also found on the defendant’s phone.
The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci; the Town of Tonawanda Police Department, under the direction of Chief James Stauffiger; and the Greene County, Virginia Sheriff’s Office, under the direction of Sheriff Steven Smith.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Pennsylvania Man Pleads Guilty to Selling Methamphetamine in Cecil County, MarylandRead the Press Release
Baltimore, Maryland – Nakir Ali Kiett, age 25, of Philadelphia, Pennsylvania, pleaded guilty today to possession with intent to distribute approximately 211 grams of methamphetamine in Cecil County, Maryland.
The guilty plea 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 the members of Cecil County Drug Task Force, including Chief Carolyn Rogers of the Elkton Police Department, Cecil County Sheriff Scott Adams, Colonel Woodrow W. Jones III, Superintendent of the Maryland State Police, and Cecil County State’s Attorney James Dellmyer.
According to his guilty plea, in the fall of 2019, Cecil County Drug Task Force officers received information that an individual known as “Omar” was selling methamphetamine in Cecil County, Maryland. “Omar” was later identified as Kiett.
In August 2019, a confidential informant introduced an undercover officer to Kiett. Between August 28 and September 30, 2019, the undercover officer then arranged and conducted five separate controlled purchases of methamphetamine from Kiett, totaling approximately 150 grams of methamphetamine.
As stated in the plea agreement, on October 9, 2019, investigators obtained a search warrant for Kiett’s vehicle. On October 10, 2019 investigators arranged for a controlled purchase of methamphetamine from Kiett. When Kiett arrived at the agreed-upon meeting location, investigators detained him and searched Kiett and his vehicle pursuant to the search warrant. During the search of the vehicle, investigators recovered approximately 61 grams of methamphetamine located in a space behind the vehicle’s radio.
In total, investigators purchased or seized approximately 211 grams of methamphetamine from Kiett between August 2019 and October 2019. Kiett agrees and admits that he knowingly and intentionally possessed the above-referenced methamphetamine with the intent to distribute it.
Kiett and the government have agreed that, if the Court accepts the plea agreement, Kiett will be sentenced to six years in federal prison. U.S. District Judge George L. Russell III has scheduled sentencing for September 21, 2021 at 9:30 a.m.
Acting United States Attorney Jonathan F. Lenzner commended the Department of Homeland Security and the Cecil County Drug Task Force (CCDTF) comprised of the Elkton Police Department, the Cecil County Sheriff's Office, the Maryland State Police, the Cecil County State's Attorney's Office for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Anatoly Smolkin who is prosecuting the case.
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Owner of local marketing business pleads guilty to COVID relief fraudRead the Press Release
COLUMBUS, Ohio – A Columbus woman pleaded guilty in federal court here today to crimes related to COVID relief fraud.
Janet Jenison, 38, pleaded guilty to three counts of wire fraud and one count of making a false statement on a Paycheck Protection Program loan application. Jenison was charged by bill of information on May 20, 2021.
According to court documents, Jenison submitted three fraudulent applications to obtain Paycheck Protection Program (PPP) loans, created by the CARES Act, for Janet Minton Marketing, LLC, a business registered in her maiden name. The applications collectively sought $298,719.67 in fraudulent loans.
Two of the applications were approved and a financial institution disbursed $160,247. Jenison first received $98,120 in June 2020. She filed the second successful application on Feb. 18, 2021, and received $62,127.
To date, the United States has seized and recovered $58,276.56 of the fraudulent proceeds.
In support of the three applications, Jenison created false Fifth Third Bank account statements for her business for the period Feb. 8, 2020 to March 6, 2020. The bank statements showed debits for payroll, tax withholding and business expenses. The business account at Fifth Third Bank was not opened until April 27, 2020.
Jenison also submitted false tax documents. One document claimed she elected for her marketing business to be classified as a corporation and was dated Jan. 24, 2020, but the employer identification number on the form was not created until four months later. In support of her loan applications, the defendant also submitted fabricated tax documents claiming that she had made federal employment tax deposits on behalf of employees of her business, when in fact she had not done so.
Jenison was interviewed by law enforcement in March 2021 and admitted to creating the false documents submitted in support of the applications.
Wire fraud carries a maximum penalty of 20 years in prison. Making a false statement is punishable by up to five years in prison. Each crime carries a potential fine not to exceed $250,000. Congress sets the maximum statutory sentence. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; officials with the U.S. Treasury Inspector General for Tax Administration; and Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced the plea entered today before Chief U.S. District Judge Algenon L. Marbley. Assistant United States Attorney Peter K. Glenn-Applegate is representing the United States in this case.
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Oswego County Woman Pleads Guilty to Possession with Intent to Distribute a Controlled SubstanceRead the Press Release
SYRACUSE, NEW YORK – Alisha Obey, age 35, of Fulton, New York, pled guilty yesterday to unlawfully possessing with the intent to distribute eutylone, a Schedule I controlled substance.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
As part of her guilty plea, Obey admitted that on July 14, 2019, November 8, 2019, and December 3, 2019, she possessed eutylone, which she intended to distribute to customers throughout Oswego County. Eutylone is a synthetic cathinone and has pharmacological effects on the central nervous system similar to other schedule I or II substances such as cocaine, methamphetamine, and MDMA.
Obey faces up to 20 years in prison, a fine of up to $1 million, and a term of post-release supervision of at least 3 years and up to life when she is sentenced by Senior United States District Judge Frederick J. Scullin, Jr. on December 1, 2021. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The case was investigated by Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation (IRS-CI), and the Oswego County Drug Task Force, comprised of Special Agents of HSI, members of the City of Oswego Police Department, the Oswego County Sheriff’s Office, investigators from the Oswego County District Attorney’s Office, the SUNY Oswego Police Department and agents of the U.S. Border Patrol. The case is being prosecuted by Special Assistant United States Attorney Adrian LaRochelle.
Organizer of fraud and identity theft schemes pleads guilty to 10 federal countsRead the Press Release
COLUMBUS, Ohio – A Columbus man pleaded guilty in federal court today to a range of federal crimes, including fraud conspiracy, aggravated identity theft, money laundering, false claims to United States citizenship and firearms violations.
Nana Yaw Addo, 56, a citizen of Ghana, admitted his guilt to 10 separate counts today. He admitted to stealing an individual’s identity in order to create a fraudulent business and accompanying bank account, laundering the proceeds of “man in the middle” email scams, organizing the theft of lines of credit at furniture stores, printing and encoding fake credit cards, and illegally purchasing and possessing a firearm.
In total, the intended loss from Addo’s fraud was between half a million and $1.5 million.
According to Addo’s plea agreement, in 2018, he stole an individual’s identity and used the stolen identity to create a business called Focal Point Wireless. Addo fraudulently registered the company with an address on Cleveland Avenue in Columbus. The address matched that of Addo’s actual company, Beeps Computer Clinic.
Addo then laundered the proceeds of business email compromise scams through his American bank accounts.
For example, a co-conspirator compromised the email address of a supervisor at a separate victim company in order to initiate a wire transfer of more than $67,000 to an account Addo opened using the stolen identity.
An employee of the victim company received an email into his/her workplace email account purportedly from his/her supervisor telling the employee to initiate the wire transfer and that the supervisor would later provide an invoice. When the employee asked the supervisor about when to expect to receive the invoice, the victim company discovered the supervisor’s email had been compromised.
Bank records show Addo wired at least $20,000 of the victim company’s money into a Beeps Computer Clinic bank account and purchased $2,000 in money orders at Kroger.
Addo received and laundered the proceeds of a scam defrauding a second victim company of $80,499 in October 2018.
The next month, Addo laundered nearly $422,000 obtained by fraudsters through a “man in the middle” email scheme. In this type of scheme, the attacker impersonates a vendor or customer by mimicking email address domain names which appear to the same, but are, in reality, slightly different.
Addo admitted in his plea agreement that he served as a leader of credit card scams at furniture retailers. The defendant would send other people into retailers with victims’ stolen personal information in order to open lines of credit and order furniture. The furniture was then delivered to Addo’s business address on Cleveland Avenue. The stolen information was also used to print and encode fraudulent credit cards.
While searching his residence and business, law enforcement officials discovered more than 600 stolen credit card numbers.
Addo falsely claimed to be a United States citizen to get a driver’s license and lied on federal forms to purchase a firearm.
As part of his plea, Addo will pay nearly $214,000 in restitution.
Addo faces up to 20 years in prison for money laundering, up to 10 years in prison for each firearm crime, up to five years in prison for conspiring to commit wire fraud, up to three years in prison for falsely claiming to be a United States citizen and a mandatory term of two years in prison – to be served consecutively to any other imposed sentence – for aggravated identity theft.
Congress sets the minimum and maximum statutory sentences. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; Yvonne DiCristoforo, Special Agent in Charge, United States Secret Service; Bryant Jackson, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; and Vance Callender, Special Agent in Charge, Homeland Security Investigations (HSI), announced the plea entered into today before Chief U.S. District Judge Algenon L. Marbley. Assistant United States Attorneys Kelly A. Norris and Peter K. Glenn-Applegate are representing the United States in this case.
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Nurse Practitioners Sentenced to Prison for Health Care FraudRead the Press Release
GREAT FALLS – Two Montana nurse practitioners have been sentenced for conspiring to defraud Medicare of millions of dollars. Chief U.S. District Judge Brian Morris sentenced Janae Nichole Harper, 34, of Kalispell, to 12 months in prison and Mark Allen Hill, 54, of Edinburg, North Dakota to 9 months in prison. Both defendants will be placed on supervised release for 3 years after their release from prison. Additionally, Harper was ordered to pay $4,307,934.58 in restitution and Hill was ordered to pay $5,054,866 in restitution.
Harper was a licensed nurse practitioner in Montana, Missouri, Nevada, South Carolina and Wyoming and was enrolled as a medical provider with Medicare. Hill was a licensed nurse practitioner in Montana, Iowa, Maine, Minnesota, North Dakota, South Dakota and Washington.
In court documents filed in Harper’s case, the government alleged that from Nov. 18, 2017 through July 16, 2019, Harper worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign brace orders that were prepared by telemarketers who had no medical training or certification. Harper routinely signed these orders for Medicare beneficiaries regardless of medical necessity. Harper signed approximately 7,673 brace orders, which resulted in $8,259,849 billed to Medicare, of which Medicare paid approximately $4,307,934. Harper was paid at least $94,395 for the orders she signed.
In court documents filed in Hill’s case, the government alleged that from Oct. 15, 2017 to April 24, 2019, Hill worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign unnecessary brace orders for Medicare beneficiaries regardless of medical necessity, often without ever talking to the Medicare beneficiary to determine whether the braces were medically necessary. Hill signed approximately 7,097 brace orders, which resulted in $10,055,436 billed to Medicare, of which Medicare paid approximately $5,054,866. Hill was paid at least $124,900 for the orders he signed.
Both defendants previously pled guilty to conspiracy to commit health care fraud.
The cases were prosecuted by Assistant U.S. Attorney Michael A. Kakuk and Darren Halverson, Trial Attorney, and Robyn Pullio, former Trial Attorney, Fraud Section, Criminal Division of the Justice Department and investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.
Norwich Man Guilty of Distributing Fentanyl Analogues on Dark Web; Possessing Drugs, Firearm and AmmunitionRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, today announced that a federal jury in Bridgeport has found BARRY DUCLOS, 42, of Norwich guilty of fentanyl analogue trafficking, possession with intent to distribute fentanyl and carfentanil and firearm possession offenses.
The trial before U.S. District Judge Victor A. Bolden began on July 21 and the jury returned guilty verdicts this afternoon.
According to the evidence introduced during the trial, between approximately September 2017 and February 2018, Duclos operated a vendor page on the dark web “Dream Market.” Using the alias 1NOLEFB1, Duclos advertised the sale of fentanyl analogues on Dream Market. He then used the U.S. Mail to ship fentanyl analogues to customers who paid for the drugs using Bitcoin.
Duclos was arrested on a federal criminal complaint on February 12, 2018. A search of his residence at the time of his arrest revealed a YHM rifle with multiple magazines, two of which were extended magazines. The firearm was loaded with a round in the chamber. Investigators also located and fentanyl and carfentanil from the residence, along with a computer used by Duclos to access Dream Market.
Duclos was convicted in state court, in February 2001, of sale of narcotics and, in March 2017, of larceny in the third degree. 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.
The jury found Duclos guilty of seven counts of possession with intent to distribute and distribution of fentanyl analogues; one count of possession with intent to distribute fentanyl and carfentanil; one count of possession of ammunition by a convicted felon; and one count possession of a firearm in furtherance of a drug trafficking crime.
Duclos has been detained since his arrest. A sentencing date is not scheduled.
This matter was investigated by the U.S. Postal Inspection Service and the Drug Enforcement Administration, with the assistance of Homeland Security Investigations, U.S. Customs and Border Patrol, Connecticut State Police, Norwich Police Department, and Robertson County Tennessee Sherriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Lauren C. Clark and Patrick J. Doherty.
North Carolina Man Sentenced to 12 ½ Years for Meth Trafficking ConspiracyRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that an Archdale, North Carolina, man who pleaded guilty to Conspiracy to Distribute a Controlled Substance was sentenced on July 28, 2021, by U.S. District Court Judge Karen E. Schreier.
Erick Anaya, age 31, was sentenced to 12 1/2 years in federal prison, followed by five years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Erick Anaya was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on October 22, 2020. He pleaded guilty on April 28, 2021.
During his involvement in the conspiracy, the Defendant transported approximately 30 pounds of methamphetamine to South Dakota from California. The defendant then dispersed methamphetamine to others for further distribution. The Defendant also collected money from people in South Dakota and transported that money back to the suppliers.
This case was investigated by the Unified Narcotics Enforcement Team (UNET), Drug Enforcement Agency, the South Dakota Division of Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, the Rapid City Police Department, South Dakota Division of Criminal Investigation, the South Dakota National Guard, and the South Dakota Highway Patrol. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Anaya was immediately returned to the custody of the U.S. Marshals Service.
Nampa Man Sentenced to 5 Years in Federal Prison for Drug TraffickingRead the Press Release
BOISE – Steven L. Lantz, 43, of Nampa, was sentenced to 60 months in federal prison for distribution of methamphetamine, announced Acting U.S. Attorney Rafael M. Gonzalez, Jr. today. Chief U.S. District Judge David C. Nye also ordered Lantz to serve five years of supervised release following his prison sentence.
According to court records, on January 21, 2020, law enforcement used a confidential informant to arrange the purchase of approximately two ounces of methamphetamine from Lantz. Lantz met the informant in Meridian and entered the informant’s vehicle. Lantz and the informant then drove to Boise, where Lantz obtained methamphetamine and sold it to the informant. Lantz pleaded guilty to the charge on May 12, 2021.
Lantz has a lengthy criminal history that includes convictions for domestic violence and robbery. At the time of this offense, Lantz was out on parole for the robbery conviction. Lantz has also been documented as a member of the Aryan Knights prison gang.
Acting U.S. Attorney Gonzalez applauded the efforts of the Treasure Valley Metro Violent Crimes Task Force, which led to charges. The Task Force is comprised of federal, state, and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Ada County Sheriff’s Office; Boise Police Department; Caldwell Police Department; Canyon County Sheriff’s Office; Meridian Police Department; Nampa Police Department; and Idaho Department of Correction, Bureau of Probation and Parole.
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.
This case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit www.treasurevalleypartners.org.
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Multi-Kilogram Fentanyl Trafficker Convicted at TrialRead the Press Release
Tampa, Florida – A federal jury has found Wilis A. Santiago Rivera (60, St. Petersburg) guilty of conspiracy to possess with the intent to distribute 400 grams or more of fentanyl. Santiago faces a minimum mandatory penalty of 10 years, and up to life, in federal prison. A sentencing date has not yet been set.
Santiago had been indicted on September 12, 2019.
According to evidence presented at trial, Santiago Rivera was intercepted on a court-authorized wiretap coordinating payment for 2 kilograms of fentanyl that he had previously received on consignment. Other intercepted calls captured Santiago Rivera’s attempts to sell additional kilograms of fentanyl.
This case was investigated by the Drug Enforcement Administration, the U.S. Postal Inspection Service, and the Tampa Police Department. It is being prosecuted by Assistant United States Attorney Callan Albritton.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Morris County Pharmacy Employee Admits to Kickback and Bribery SchemeRead the Press Release
NEWARK, N.J. – A pharmacy employee today admitted to conspiring to offer and pay bribes and kickbacks in exchange for having prescriptions steered to the Morris County, New Jersey pharmacy where she worked, Acting U.S. Attorney Rachael A. Honig announced today.
Magdalena “Maggie” Jimenez, 56, of Newark, New Jersey pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging her with conspiring to violate the federal anti-kickback statute.
According to documents filed in this case and statements made in court:
Jimenez worked as a pharmacy technician and sales representative for a pharmacy located in Morris County, New Jersey. From at least August 2019 to February 2020, Jimenez worked with other pharmacy personnel to pay kickbacks and bribes to a doctor’s employee in exchange for receiving numerous prescriptions from that doctor’s Jersey City office. Jimenez paid up to $150 for each prescription steered to the pharmacy, which resulted in monthly kickback payments of up to $2,500 cash. When Jimenez discussed the kickbacks and bribes, she instructed others to communicate in coded language. As a result of the scheme, the pharmacy received reimbursement payments from Medicare of approximately $539,000.
The conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for Dec. 7, 2021.
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, and special agents with the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas J. Mahoney.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit.
Defense counsel: Peter Guadagnino, Esq., New York, NY
Mexican National and Repeat Felon Sentenced for Multiple Immigration CrimesRead the Press Release
TYLER, Texas – A Mexican national residing in Tyler has been sentenced to federal prison for violations related to unlawfully reentering the United States after having been deported to Mexico three times and being found unlawfully present in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Jose Daniel Sanchez-Escobar, also known as Jose Sanchez-Esquivel, 38, pleaded guilty on April 13, 2021 to being found unlawfully present in the United States after having been removed to Mexico and then reentering the U.S. without the permission of the Secretary for the Department of Homeland Security. Sanchez was sentenced to 41 months in federal prison on July 29, 2021 by U.S. District Judge Jeremy D. Kernodle. After this sentence was imposed, Judge Kernodle accepted Sanchez’s plea to violating the conditions of his supervised release in a previous conviction in 2017 for unlawful reentry after removal in the Eastern District of Texas and sentenced Sanchez to an additional 12 months in federal prison.
According to information presented in court, on April 22, 2013, Sanchez was convicted of fraud use or possession of identification in Smith County and sentenced to nine months in federal prison. On Oct. 22, 2013, Sanchez was ordered removed from the United States to Mexico by an immigration judge in Houston after a state felony conviction for fraud use or possession of identification information. Pursuant to this order, Sanchez was removed from the United States to Mexico on Oct. 23, 2013. After this removal, Sanchez reentered the United States.
On Sep. 28, 2017, Sanchez was convicted in the Eastern District of Texas of unlawful reentry after removal and sentenced to ten months and three year term of supervised release. On Dec. 6, 2017, Sanchez was removed to Mexico. After this removal, Sanchez reentered the United States and was arrested for unlawfully reentering the United States. On April 26, 2018, Sanchez was removed from the United States to Mexico a third time. After each of these removals, Sanchez reentered the United States without receiving the consent of the Secretary of the Department of Homeland Security to apply for readmission to the United States.
On April 12, 2020, Sanchez was found by Immigration and Customs Enforcement (ICE) officers at the Smith County Jail. He was in state custody after being arrested for driving while intoxicated. On Sep. 17, 2020, the federal grand jury returned a one count indictment charging Sanchez with unlawful reentry after removal.
This case was investigated by the Department of Homeland Security-Immigration Customs and Enforcement-Enforcement and Removal Operations (DHS/ICE/ERO) Dallas Field Office, the Smith County Sheriff’s Office, and the Tyler Police Department. This case was prosecuted by Assistant U.S. Attorney Allen Hurst.
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Maryland Woman Pleads Guilty to Defrauding Medicaid Out of Hundreds of Thousands of DollarsRead the Press Release
WASHINGTON – Sikirat Adunni Brown, 59, of Upper Marlboro, Md., pleaded guilty today to defrauding the D.C. Medicaid program out of more than $340,000.
The announcement was made by Acting U.S. Attorney Channing D. Phillips; Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.
The Honorable Dabney L. Friedrich, who accepted Brown’s guilty plea, scheduled sentencing for Nov. 8, 2021. In addition to facing prison time, Brown faces financial penalties.
Brown admitted that, at various times between January 2014 and June 2020, she worked as a personal care aide for at least eight different home health agencies. The home health agencies employed her to assist D.C. Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating.
Brown was supposed to document the care that she provided to the Medicaid beneficiaries on timesheets and then submit the timesheets to the home health agencies, which would in turn bill Medicaid for the services that she rendered. In her guilty plea, Brown acknowledged that between 2014 and 2020, she caused the D.C. Medicaid Program to issue payments totaling $343,539 for services that she did not provide. As part of her scheme, she submitted false timesheets to different home health agencies claiming that she provided 20 hours or more of personal care aide services. She also claimed to provide services when she was traveling outside the D.C. metropolitan area. She paid kickbacks during the scheme to at least one beneficiary. She also acknowledged that she claimed to provide services to one beneficiary during the COVID-19 pandemic even though that beneficiary said she did not.
The FBI, the U.S. Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program.
Brown is the tenth former personal care aide in the last three years to plead guilty to defrauding Medicaid in the United States District Court for the District of Columbia. Five aides were sentenced to 13 months in prison; a sixth was sentenced to serve 15 months.
The government urges the public to provide tips and assistance to stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477] or the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].
This case was prosecuted by Assistant U.S. Attorney Kondi Kleinman of the Fraud Section, with assistance from Paralegal Specialist Mariela Andrade.
Maryland Man Pleads Guilty to Sexually Abusing and Blackmailing WomanRead the Press Release
WASHINGTON – A Maryland man pleaded guilty today to sexually abusing and blackmailing a woman he met in August 2019 through a dating website, announced Acting U.S. Attorney Channing D. Phillips.
Steven B. Fabrizio, 57, of Chevy Chase, Md., pled guilty to one count each of blackmail and third-degree sexual abuse. He faces a statutory maximum of five years in prison on the blackmail charge and up to 10 years on the sexual abuse charge. Additionally, he will be required to register as a sex offender for 10 years. He is to be sentenced on Oct. 29, 2021, by the Honorable Marisa Demeo in the Superior Court of the District of Columbia.
According to the government’s evidence, Fabrizio met the woman on Aug. 19, 2019, after corresponding via a dating website and text. They had consensual sex, and Fabrizio gave her $400 in cash, as agreed upon beforehand. The next day, Fabrizio sought to set up another meeting, and the woman declined. At that point, Fabrizio sent the first in a series of texts to her, warning that the woman’s employer, parents, and landlord would be told about their sex-for-cash arrangement unless it continued. Similar texts followed, and the woman agreed to see him. During that second encounter, on Aug. 20, 2019, Fabrizio sexually abused her. Fabrizio later persisted with the texts, and the woman contacted the Metropolitan Police Department. He was arrested on Aug. 21, 2019.
In announcing the plea, Acting U.S. Attorney Phillips commended those who investigated the case from MPD’s Sexual Assault Unit. He also expressed appreciation for the work of those who handled the case for the U.S. Attorney’s Office, including former Victim Witness Specialist Juanita Harris, and Assistant U.S. Attorney Peter V. Taylor, who is prosecuting the matter.
Manhattan U.S. Attorney Announces Forfeiture of Oil Tanker Used to Violate Sanctions Against North KoreaRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Mark J. Lesko, the Acting Assistant Attorney General for National Security, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the entry of a judgment of forfeiture regarding the M/T Courageous, a 2,734-ton oil products tanker used to make illicit deliveries of petroleum products through ship-to-ship transfers with vessels flagged in the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) and direct shipments to the North Korean port of Nampo. Payments to purchase the Courageous, to obtain oil for supplying to North Korea using the Courageous, and to procure necessary services for the Courageous were made using U.S. dollars through unwitting U.S. banks, in violation of U.S. law and United Nations Security Council resolutions. On April 23, 2021, a civil forfeiture action was filed against M/T Courageous. Criminal charges of conspiracy to evade economic sanctions on the DPRK and money laundering conspiracy are pending against the alleged owner and operator of the Courageous, KWEK KEE SENG, a Singaporean national who remains at large. U.S. District Judge Valerie E. Caproni issued today’s judgment of forfeiture.
The M/T Courageous
M/T CourageousManhattan U.S. Attorney Audrey Strauss said: “Today’s judgment reflects that the sanctions-evading ship, the Courageous, has been forfeited to the United States and will no longer be used to enable North Korea’s pattern of evading the global community’s prohibitions on support for that regime. Thanks to the extraordinary cooperation between U.S. and Cambodian law enforcement authorities, the Courageous is permanently out of service.”
According to documents filed in the civil forfeiture action and the allegations contained in the criminal complaint filed against KWEK KEE SENG in Manhattan federal court:[1]
Pursuant to the International Emergency Economic Powers Act (“IEEPA”) and the North Korea Sanctions and Policy Enhancement Act of 2016 (“NKSPEA”), the DPRK and individuals or entities that the Department of the Treasury, Office of Foreign Assets Control (“OFAC”) has determined are involved in the facilitation of proliferation of weapons of mass destruction are prohibited from engaging in transactions with U.S. persons or using the U.S. financial system. The United Nations Security Council has similarly imposed economic sanctions on North Korea, prohibiting among other things the conduct of ship-to-ship transfers with DPRK-flagged vessels and the provision of petroleum products to the DPRK.
KWEK and his co-conspirators engaged in an extensive scheme to evade these U.S. and U.N. sanctions by using vessels under their control to covertly transport fuel to North Korea, thereby providing a critical resource for the North Korean government and for DPRK-based companies. One of those vessels was M/T Courageous – formerly known as the Sea Prima – which was purchased by KWEK through front companies in order to further KWEK and his co-conspirators’ scheme to evade sanctions and launder money. Among other things, for a four-month period between August and December 2019, M/T Courageous illicitly stopped transmitting information regarding its location, during which time satellite imagery shows that M/T Courageous both engaged in a ship-to-ship transfer of more than $1.5 million worth of oil to a North Korean ship, the Saebyol, which had been designated by OFAC, and traveled to the North Korean port of Nampo. KWEK and his co-conspirators took additional steps to hide the scheme by (1) operating a series of shell companies, (2) lying to international shipping authorities about M/T Courageous’s dealings with North Korea, and (3) falsely identifying M/T Courageous as another ship in order to evade detection.
In furtherance of the scheme, KWEK and his co-conspirators arranged for a variety of payments denominated in U.S. dollars that were processed through U.S.-based correspondent accounts to purchase oil – including more than $1.5 million to purchase the oil that was transferred to the Saebyol, over $500,000 to buy M/T Courageous, and thousands more dollars to procure necessary services for M/T Courageous and another vessel, including registration fees, ship materials, and salary payments for crewmembers. KWEK and his co-conspirators overseas sought to conceal these sanctions-evading transactions by, among other things, using front companies to disguise the nature of the transactions; disguising location information for vessels carrying illicit shipments; and conducting ship-to-ship fuel transfers on the open sea in an attempt to hide their counterparties, such as the Saebyol.
Cambodian authorities seized M/T Courageous in March of 2020, and held the vessel pursuant to a U.S. seizure warrant, which was issued under seal on April 2, 2020. On April 23, 2021, the U.S. Attorney’s Office filed a civil forfeiture complaint against M/T Courageous and the case was subsequently assigned to Judge Caproni, who issued today’s judgment of forfeiture.
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Ms. Strauss praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division. Ms. Strauss also thanked the FBI Legal Attaché Office in Phnom Penh, Cambodia; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, Money Laundering and Asset Recovery Section’s Program Operations Unit, and Office of International Affairs; the United States Coast Guard; the Cambodian Ministry of Justice; and the Cambodian National Police, for their assistance.
The cases are being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are in charge of the cases, with assistance from Trial Attorney Matthew McKenzie of the Counterintelligence and Export Control Section.
The charges in the complaint against KWEK are merely accusations, and KWEK is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the criminal complaint filed against KWEK and the description of that complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation as against KWEK.
Manhattan U.S. Attorney Announces Extradition of Two Pakistani Nationals for Attempted Heroin ImportationRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and Anne Milgram, Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the extradition of Maulabaksh Gorgeech and Niamatullah Gorgeech for attempting to import heroin into the United States. The defendants, both citizens of Pakistan, were taken into custody by Thai authorities in Bangkok, Thailand, on April 11, 2021, and extradited to the United States today from Thailand. They will be presented before United States Magistrate Judge Sarah Netburn later today.
U.S. Attorney Audrey Strauss said: “As alleged, Maulabaksh Gorgeech and Niamatullah Gorgeech trafficked in wholesale importation of heroin to the United States. Thanks to the DEA’s global reach and the assistance of law enforcement authorities in Thailand, the defendants are in U.S. custody and facing serious federal charges.”
DEA Administrator Anne Milgram said: “At a time when the United States is facing an opioid overdose epidemic of unprecedented proportions, it is critical that DEA stop the flow of heroin into the country before it makes its way to our communities. Directly because of DEA’s efforts, Maulabaksh Gorgeech and Niamatullah Gorgeech are now on American soil, facing significant criminal charges for their alleged crimes.”
According to the allegations contained in the Complaints charging the defendants,[1] which were unsealed today in Manhattan federal court:
Beginning in late 2019, MAULABAKSH GORGEECH and NIAMATULLAH GORGEECH, Asia-based drug traffickers, began communicating and meeting with individuals whom they believed were heroin traffickers interested in purchasing multi-kilogram quantities of heroin for importation into the United States. Those individuals were, in fact, confidential sources working at the DEA’s direction, and an undercover DEA agent posing as a New York-based heroin distributor. In March 2019, NIAMATULLAH GORGEECH caused a sample of approximately seven kilograms of heroin to be delivered in Afghanistan, with the understanding that those drugs would be transported to and sold in the United States. In July 2019, MAULABAKSH GORGEECH offered to provide as many as 100 kilograms of heroin for importation to the United States. In September 2019, MAULABAKSH GORGEECH caused another sample of approximately seven kilograms of heroin to be delivered in Afghanistan, for importation and sale in the United States. Following these sample shipments, MAULABAKSH GORGEECH and NIAMATULLAH GORGEECH planned to supply larger quantities of heroin for importation to and distribution within the United States.
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MAULABAKSH GORGEECH, 43, and NIAMATULLAH GORGEECH, 37, each a citizen of Pakistan, are charged with one count of attempting to import heroin into the United States, and MAULABAKSH GORGEECH is also charged with a second count of conspiracy to import heroin into the United States. Each count carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison. The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the outstanding investigative efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, and the OCDETF New York Strike Force; the DEA’s Bangkok, Islamabad, Kabul, and Bucharest Country Offices, and Guam Resident Office; the United States Central Command; U.S. Embassy in Bangkok’s Consul General’s Office and Diplomatic Security Service; the Royal Thai Government’s Office of the Attorney General - International Affairs Department, Royal Thai Police Narcotics Suppression Bureau - Sensitive Investigative Unit, and Ministry of Foreign Affairs; and the Australian Criminal Intelligence Commission. Ms. Strauss also thanked the U.S. Department of Justice’s Office of International Affairs for its ongoing assistance.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF funds investigations that identify, disrupt, and dismantle the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being prosecuted by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Benjamin Woodside Schrier are in charge of the prosecution.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth below constitute only allegations and every fact described should be treated as an allegation.
Man Sentenced to a Year and a Half in Federal Prison for Illegally Possessing Loaded Gun During Looting in Downtown ChicagoRead the Press Release
CHICAGO — A man who illegally possessed a loaded handgun during widespread looting in downtown Chicago last summer was sentenced today to 18 months in federal prison.
Chicago Police officers attempted to detain JAVONTE T. WILLIAMS for suspected looting near North State Street and East Lake Street in downtown Chicago at 5:00 a.m. on Aug. 10, 2020. As officers pursued and arrested Williams, a semi-automatic handgun fell from his body to the ground. The gun was loaded with multiple rounds of ammunition in the magazine and one in the chamber.
During the investigation, law enforcement uncovered multiple social media postings by Williams in which he boasted about looting in Chicago in the summer of 2020.
Williams, 28, of Chicago, pleaded guilty earlier this year to illegal possession of a firearm by a convicted felon. He was prohibited from possessing a gun after previously being convicted of a felony firearm offense in the Circuit Court of Cook County, for which he was sentenced to probation.
U.S. District Judge Virginia M. Kendall imposed the 18-month federal sentence after a hearing in U.S. District Court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen de Tineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department. Valuable assistance was provided by the Cook County State’s Attorney’s Office in bringing the charge.
“During a night of complete lawlessness in the city of Chicago, the defendant put himself at ground zero and endangered the lives of law enforcement, the general public, and himself by carrying a loaded firearm in his waistband,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum. “The illegal possession of a firearm by a felon is always a dangerous and serious offense.”
Williams’s sentencing was the second sentencing this week in federal court for illegal firearm possession during looting incidents in downtown Chicago last summer. Judge Kendall on Tuesday sentenced BRANDON PEGUES, of Riverdale, to a year in federal prison for illegally possessing a semiautomatic handgun on the Near South Side on May 31, 2020.
Man Sentenced for COVID-19 Relief FraudRead the Press Release
A Florida man was sentenced today to 33 months in prison for fraudulently seeking over $7,263,564 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Andre Clark, 48, of Miramar, pleaded guilty to one count of conspiracy to commit wire fraud on May 14, 2021. According to court documents, Clark admitted that he obtained a PPP loan of $488,565 on behalf of his company, Top Choice LLC, based on falsified information and documents that a co-conspirator, James Stote, submitted on his behalf. Clark also admitted to recruiting friends and associates whom he referred to Stote for the purpose of submitting additional fraudulent PPP loan applications, sometimes in exchange for kickbacks. Clark admitted to seeking $6,774,999 in fraudulent PPP loans through other conspirators that he referred to the scheme. In addition to the prison sentence, Clark was ordered to pay $2,975,086 in restitution.
Additionally, two other co-conspirators were recently sentenced for their role in the scheme. On July 29, 2021, Tonye Johnson, 29, of Philadelphia, Pennsylvania, was sentenced to 18 months in prison. According to court documents, Johnson admitted to obtaining a fraudulent PPP loan of $389,627 for his company, Synergy Towing & Transport LLC, based on falsified information and documents. And on July 13, 2021, Tiara Walker, 38, of Miami Gardens, Florida, was sentenced to 12 months and a day in prison. According to court documents, Walker admitted to obtaining a fraudulent PPP loan of $258,575 for her company, Utilization Review Pros LLC, based on falsified information and documents. Both Johnson and Walker falsely inflated the number of employees and monthly payroll for their companies, and they worked with Stote and other co-conspirators to obtain their fraudulent loans.
James Stote was charged by complaint on June 24, 2020, with wire fraud, bank fraud, and conspiracy to commit wire fraud, and his case remains pending. A complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Juan Antonio “Tony” Gonzalez of the Southern District of Florida; Special Agent in Charge Michael J. De Palma of the IRS Criminal Investigation (IRS-CI) Miami Field Office; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General (SBA-OIG) Eastern Region made the announcement.
The IRS-CI, FBI, and SBA-OIG investigated the cases.
Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Turken and David Snider of the U.S. Attorney’s Office for the Southern District of Florida prosecuted the cases.
The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
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
Louisiana Doctor Pleads Guilty to Workers’ Comp Fraud ConspiracyRead the Press Release
FAYETTEVILLE, Ark.—A Lake Charles, La., physician pleaded guilty today to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (taking kickbacks), in connection with a scheme to defraud the U.S. government and private insurance companies by over-billing for unnecessary medications provided to workers’ compensation patients.
U.S. District Judge Timothy L. Brooks presided over the plea hearing, in which Robert Dale Bernauer, Sr., 74, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to violate five different federal statutes. According to court documents, Bernauer, an orthopedic surgeon and clinician who practiced in Louisiana, made more than $1,000,000 off of the scheme, which ran from 2011 until 2017 and defrauded both federal and private workers’ compensation insurers.
Court documents allege that the basic premise of the scheme was that individuals associated with an Arkansas company recruited Bernauer to dispense pain creams and patches to his workers’ compensation patients by offering him a 50 percent split of the profits collected from successfully billing insurers. The company billed insurers at markups of anywhere from 1,500 to 2,000 percent—in other words, 15 to 20 times what the medications actually cost. The unnamed company acted as the billing agent for Bernauer, handling all of the paperwork and submitting the allegedly fraudulent claims to both the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers as well.
Bernauer admitted that both he and his co-conspirators knew he did not have a license to dispense medications from his clinic, which was required under Louisiana law, but proceeded anyway to sign two contracts under which he agreed to buy topical medications from the Arkansas company at set rates, and dispense them exclusively to his workers’ compensation patients. In turn, the contracts provided that Bernauer and the company would each get half of all amounts successfully collected from insurers.
Although such profit-splitting arrangements violated both federal and Louisiana laws, in pleading guilty Bernauer admitted he joined the scheme knowing it was, in his words, “too good to be true.” Bernauer further admitted he deliberately blinded himself to the illegality of the business arrangement, despite all the “red flags” he knew to be present. Bernauer’s plea agreement states that while not offering any excuses for his conduct, he joined in the conspiracy because he needed the money, and continued to participate due to expenses associated with his wife’s final illness.
Court documents indicate that Bernauer was not the only physician involved in this scheme, and the total financial harm to federal and private workers’ compensation insurers is not listed. However, Bernauer alone accounted for a loss of approximately $2,050,546, of which $664,176.50 was suffered by the federal agencies whose employees were Bernauer’s patients.
“The Department of Justice and this U.S. Attorney’s Office are committed to combatting health care fraud and holding accountable the perpetrators of schemes like the one alleged here,” said David Clay Fowlkes, Acting U.S. Attorney for the Western District of Arkansas.
“Today’s guilty plea highlights the commitment of the Department of Defense Inspector General, Defense Criminal Investigative Service, and our law enforcement partners to protect the integrity of the workers’ compensation program that serves our federal workforce,” said Special Agent in Charge Michael Mentavlos of the Defense Criminal Investigative Service Southwest Field Office. “Physicians, marketers and billing companies who attempt to take advantage of the program by paying and receiving kickbacks for prescribing unnecessary medications expose our workforce to potential physical harm and waste valuable taxpayer dollars.”
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the Department of Labor’s Office of Workers’ Compensation Programs. We will continue to work with our law enforcement partners and the Office of Workers’ Compensation Programs to protect the integrity of the department’s benefit programs and hold those who defraud them accountable as demonstrated in today’s guilty plea,” stated Steven Grell, Special Agent in Charge, Dallas Region, U.S. Department of Labor Office of Inspector General.
“Billing for unnecessary medications undermines the integrity of federal health care programs,” stated Jeffrey Breen, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General. “This guilty plea holds the defendant accountable for his criminal actions placing profits before his patients’ health. We thank our law enforcement partners for their collaboration in this important investigation.”
“Today’s guilty plea is a testament to the dedication and determination of the investigative and legal teams,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General, Southern Area Field Office. “The Postal Service spends hundreds of millions of dollars annually on health care related costs and these monies are critical to those who legitimately need medical services. As in this case, our criminal investigators will diligently pursue any individual or organization intent on defrauding the Postal Service with an eye on both federal prosecution and returning lost monies to the affected program.”
In his plea agreement, Bernauer promised to immediately start making amends, by within 30 days paying $664,176.30 directly to the Department of Labor, as restitution to the federal agencies that were primary targets of the fraudulent scheme, and a further $361,096.70 to the court clerk’s office, to be distributed to other insurers victimized by the conspiracy. Bernauer also acknowledged that he would be subject to an additional restitution order of approximately $1,025,273, as a shared obligation with any of his co-conspirators who are later convicted.
As a result of his guilty plea to the single conspiracy count, Bernauer may be sentenced to a maximum of five years in prison. The court will determine his sentence at a later date, after reviewing a pre-sentence investigation report prepared by the U.S. Probation Office, and considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Department of Defense, Defense Criminal Investigative Service, the Department of Labor Office of Inspector General, the Department of Veterans Affairs Office of Inspector General, the U.S. Postal Service Office of Inspector General, with the assistance of the Internal Revenue Service-Criminal Investigation, the Louisiana Department of Justice, the Louisiana State Board of Medical Examiners, and the Louisiana Board of Pharmacy.
Assistant U.S. Attorneys Steven Mohlhenrich and Hunter Bridges prosecuted the case for the United States.
Jury Convicts Registered Sex Offender of Attempted Enticement of a MinorRead the Press Release
PADUCAH, Ky. – A federal jury convicted a registered sex offender today of attempting to entice a minor to engage in sexual activity.
According to court documents and evidence presented at trial, Dustin R. Stone, age 29, of Greenville, Kentucky, was arrested on November 21, 2018, when he traveled to Paducah with the intent of having sex with a 13-year-old female he believed he was communicating with; in fact, Stone was communicating with undercover detectives with the Paducah Police Department. Stone sent sexually explicit text messages to the investigators and further solicited the encounter through a series of phone calls with an undercover female detective.
In 2014, Stone was previously convicted of Attempted Use of Electronic Means to Induce a Minor in a sex offense in Muhlenberg Circuit Court. He was ordered in that case to be placed on the sex offender registry for twenty years.
The jury found Stone guilty of Attempted Enticement and Commission of a Felony Involving a Minor by a Person Required to Register as a Sex Offender.
“Assistant U.S. Attorneys Leigh Ann Dycus and Raymond McGee did an outstanding job during the trial of this case,” stated Acting U.S. Attorney Michael A. Bennett. The investigation and prosecution of those who wish to sexually exploit and abuse our children is a high priority of this office. I commend the Paducah Police Department for their outstanding investigatory work which resulted in the successful prosecution of the Mr. Stone, a previously convicted sex offender.”
“I’m thankful for and appreciative of the hard work of the Paducah Police Department’s Criminal Investigations Unit for ensuring this predator is off the streets of Paducah and other communities,” said Paducah Police Chief Brian G. Laird. “Through our work and cooperation with the U.S. Attorney’s office, Stone was successfully prosecuted and convicted, and will not present a danger to our children for at least the next 20 years.”
Sentencing is scheduled for December 9, 2021. Under federal law, Stone is facing a mandatory sentence of not less than twenty years imprisonment. There is no parole in the federal system.
The General Investigations Unit of the Paducah Police Department is investigating the case.
This case is being prosecuted by Assistant United States Attorneys Leigh Ann Dycus and Raymond McGee.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Iranian National Charged with Illegally Exporting Laboratory Equipment to IranRead the Press Release
A federal grand jury in the District of Columbia returned an indictment today charging a Canadian national with the unlawful export of laboratory equipment from the United States to Iran, through Canada and the United Arab Emirates (UAE).
According to court documents, Reza Sarhangpour Kafrani, aka Reza Sarhang, 46, an Iranian national residing in Montreal, was indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, two counts of violations of the International Emergency Economic Powers Act (IEEPA), one count of causing a failure to submit export information and six counts of money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Kafrani will be arraigned on the charges on a date to be determined by the court.
According to the indictment, Kafrani and a co-conspirator co-owned Prolife Global, Ltd., which was based in Canada, but conducted business in the United States and elsewhere. In November 2015, Kafrani began negotiating with a U.S. company to purchase mass spectrometry equipment for import to Canada. During those negotiations, Kafrani initially inquired about costs to ship and install the equipment in Montreal, Canada. Later, however, Kafrani asked a representative of the company if the installation costs were the same for the Middle East, and the representative of the company emailed Kafrani, saying, “You know there are sanctions in place for Iran.” Kafrani was unable to purchase the equipment from this company.
As alleged in the indictment, he then began negotiations with a second U.S. company for the purchase of similar mass spectrometry equipment in March 2016. Ultimately, he and a co-conspirator were able to purchase three mass spectrometers and an autosampler, used to automatically load samples into the mass spectrometer, for a total of approximately $110,739.
Chromatography and spectrometry analytical instruments, such as some of the laboratory equipment purchased by Kafrani, are controlled for nuclear nonproliferation reasons and therefore require a license to be exported from the United States to either Iran or the UAE. Specifically, a license is required from the Department of Commerce’s Bureau of Industry and Security (BIS) to export such items to the UAE, while a license is required from the Department of the Treasury, Office of Foreign Assets Control (OFAC), to export to Iran. The remaining laboratory equipment purchased by Kafrani may not be exported to Iran without a license from OFAC. Kafrani and his co-conspirator applied for an export license from OFAC on Nov. 16, 2015, and again April 23, 2016, but OFAC declined to grant either application. Kafrani’s co-conspirator applied for a license from BIS on March 28, 2016, but that application was returned without action by BIS because OFAC is responsible for administering the U.S. sanctions against Iran.
On Aug. 24, 2016, Kafrani and his co-conspirator directed the second U.S. company to ship one mass spectrometer to Canada, and then coordinated with a Canadian shipping company to reexport it to the UAE on Sept. 7, 2016. From there, they arranged for a UAE-based shipping company to reexport the item to Iran on Sept. 25, 2016.
In September 2016, Kafrani and his co-conspirator arranged for a Canada-based shipping company to pick up two more mass spectrometers and an autosampler directly from the second U.S. company, transport the items to Canada and then reexport them to the UAE Kafrani then hired a UAE-based transport company to reexport the items to Iran on Oct. 11, 2016.
Kafrani never told the second U.S. company that the items were ultimately destined for Iran, causing the firm to fail to file the legally required electronic export information. Kafrani also made, or caused to be made, six separate money transfers from bank accounts in Canada and elsewhere to bank accounts in the United States with the intent to promote the unlawful exports to Iran described above. Charges of conspiracy and failing to submit export information carry a statutory maximum of five years in prison. Violations of the IEEPA and money laundering charges carry a statutory maximum of 20 years in prison. The charges also carry potential financial penalties. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division (NSD); Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge Kevin M. Kelly of the Homeland Security Investigations (HSI) Buffalo Field Office; Special Agent in Charge Jonathan Carson of the Department of Commerce’s New York Field Office, Office of Export Enforcement; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office and Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office made the announcement.
Homeland Security Investigations (HSI), the Department of Commerce’s Office of Export Enforcement. IRS-Criminal Investigations, and the FBI are investigating the case.
Assistant U.S. Attorney Christopher Tortorice for the U.S. Attorney’s Office in the District of Columbia and Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by former Assistant U.S. Attorney Jessica Brooks and former Trial Attorney Heather Alpino.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.