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6 July 2021
Owner of Spring Hill-Based Crestar Labs, LLC Charged in Massive Medicare Fraud SchemeRead the Press Release
NASHVILLE – The owner and Chief Executive Officer of Spring Hill, Tennessee-based Crestar Labs, LLC, (Crestar) was charged Friday with aiding and abetting and violation of the anti-kickback statute for his role in orchestrating a fraudulent Medicare billing scheme relating to genetic testing in cancer patients, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee.
The criminal complaint was unsealed yesterday and outlined the charges against Fadel Alshalabi, 53, of Waxhaw, North Carolina. Alshalabi was arrested by federal agents Sunday evening in Chicago and will return to the Middle District of Tennessee to face the charges.
The complaint alleges that beginning as early as 2016, Alshalabi, as the owner of Crestar, engaged in a scheme to pay illegal health care kickbacks in exchange for the solicitation of genetic tests from Medicare beneficiaries. In addition to the laboratory in Spring Hill, Alshalabi owned associated labs in other locations, including Karemore Labs in Baltimore, Maryland, and Martis Labs and CrestarDX in Dallas, Texas.
Alshalabi, as the owner and Chief Executive Officer, contracted with marketing companies to target and recruit elderly patients who were federal health care program beneficiaries in order to obtain their genetic material for conducting genetic tests. Marketers, who were not health care professionals, obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Often, the patients or their treating physicians never received the results of the tests. Alshalabi paid illegal kickbacks and bribes in exchange for the doctor’s orders and tests, without regard to any medical necessity. During the period of late 2017 to present, Crestar billed Medicare approximately $86 million for genetic testing and was paid almost $14 million for those claims.
If convicted, Alshlabi faces up to 10 years in prison.
This case is being investigated by the U.S. Department of Health & Human Services- Office of Inspector General and the FBI. Assistant U.S. Attorney Sarah K. Bogni is prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Ohio Man Pleads Guilty to Federal Drug CrimeRead the Press Release
HUNTINGTON, W.Va. – A Ohio man pleaded guilty today to a federal drug crime.
On February 25, 2019, Maurice Lavelle Miller, Jr., 31, sold approximately one gram of heroin to a confidential informant at a residence on Davis Street in Huntington.
Miller pleaded guilty to distribution of heroin and faces a up to 20 years in prison when sentenced on October 12, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative efforts of the Cabell County Sheriff’s Department and the FBI’s Southern West Virginia Transnational Organized Crime (TOC) West Task Force.
United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Ryan A. Keefe is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:19-cr-00155.
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Newport, N.C. Man Is Sentenced to 10 Years for Online Enticement of A MinorRead the Press Release
CHARLOTTE, N.C. – James Wesley Safrit, 33, of Newport, N.C. was sentenced today by U.S. District Judge Frank D. Whitney to 120 months in prison for the online enticement of a minor, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. Judge Whitney also ordered Safrit to register as a sex offender and to serve 25 years under court supervision after he is released from prison.
Acting U.S. Attorney Stetzer is joined in making today’s announcement by Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to court documents and today’s court proceedings, between January 9 and January 21, 2020, Safrit used MeetMe, a social networking application, to engage in multiple communications with an FBI undercover employee posing as a minor. Court records show that, during these communications, Safrit discussed his interest in engaging in sexual contact with the minor and made arrangements to meet the minor. Law enforcement arrested Safrit in Matthews, N.C., when he arrived at the agreed-upon location to meet with the person Safrit thought was a 14-year-old boy, for the purpose of engaging in sexual activities. Safrit pleaded guilty on June 19, 2020, to enticement of a minor using a means and facility of interstate commerce.
In imposing today’s sentence, Judge Whitney noted that “this type of criminal conduct is unacceptable and will be punished severely.”
Safit is currently in federal custody and he will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility.
The investigation was led by the FBI. Assistant U.S. Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Newark Woman Charged with Wire Fraud, SBA Fraud, and Money LaunderingRead the Press Release
WILMINGTON, Del. – U.S. Attorney David C. Weiss announced today that a federal grand jury returned an indictment today charging a Newark woman with wire fraud, loan fraud, and money laundering in connection with seventeen fraudulent loan applications under programs authorized by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).
According to the indictment, Ana Soto, 40, fraudulently applied for loans designed to support small businesses during the COVID-19 pandemic. Between March 2020 and January 2021, using the names of five separate companies, Soto submitted applications to the U.S. Small Business Administration (“SBA”) and its authorized lenders, inflating, among other metrics, the revenues and number of employees of the companies in attempt to obtain greater payments under either the Paycheck Protection Program (“PPP”) or Economic Injury Disaster Loans (“EIDL”). In some instances, Soto falsely claimed businesses that had either already closed or not yet open at the onset of the pandemic were entitled to funds. While many of these applications were denied, as a result of her illegal conduct, Soto obtained approximately $246,000. Soto then used the money for personal expenses, not authorized by the PPP or EIDL program, including the purchase of a personal use vehicle.
U.S. Attorney Weiss commented on the charges, “In the midst of a global crisis, this defendant took advantage of government programs designed to support small businesses and the employees of those businesses. The defendant’s opportunism, at the expense of the U.S. government and its citizens, deserves sanction and today’s indictment represents the first step in seeking to hold her accountable for her actions.”
Soto is charged with wire fraud, SBA fraud, and money laundering. If convicted, she faces up to 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties.
IRS Criminal Investigation and the FBI Baltimore Division’s Wilmington Resident Agency conducted the investigation in this matter. Assistant U.S. Attorney Lesley F. Wolf is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
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Mississippi Teen Pleads Guilty to ArsonRead the Press Release
Baltimore, Maryland – Cornelius Hendrix, age 19, of Starkville, Mississippi, pleaded guilty today to arson within special maritime and territorial jurisdiction.
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; Acting Special Agent in Charge Rachel Byrd of the Federal Bureau of Investigation (FBI), Baltimore Field Office; and Fire Chief Trisha L. Wolford of the Anne Arundel County Fire Department.
According to his guilty plea, on August 21, 2020 Hendrix poured lighter fluid in areas of his father’s and stepmother’s Fort Meade military home, including outside his parents’ bedroom door, and the front door welcome mat. The presence of an ignitable liquid was also detected at the top of the stairs near his father’s and stepmother’s bedroom.
Hendrix then ignited a fire within the home before jumping off the rear porch and injuring his leg.
As stated in his plea agreement, the fire was extinguished with minimal property damage and no physical injuries. However, Hendrix’s father and stepmother’s lives were placed in jeopardy as a result of Hendrix’s conduct.
After being medically evaluated and cleared, Hendrix was taken to Fort Meade Military Police Department for an interview. Hendrix knowingly and voluntarily acknowledged spreading the lighter fluid and lighting the fire.
Hendrix faces a maximum sentence of life in prison for arson. U.S. District Judge Catherine C. Blake will schedule a sentencing hearing at a later date.
Acting United States Attorney Jonathan F. Lenzner commended the ATF, FBI, the Anne Arundel County Fire Department, the Howard County State Fire Marshal’s Office, the Fort Meade Fire Department and the Fort Meade Military Police for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Judson T. Mihok who is prosecuting the case.
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Methamphetamine Possession with Intent to Distribute Nets 10-Year Prison SentenceRead the Press Release
COEUR D'ALENE – Denvil Alan Baldwin, 46, of, Spokane Valley, Washington, was sentenced to ten years in federal prison based upon his March 2021 guilty plea to possession of methamphetamine with intent to distribute, Acting U.S. Attorney Rafael M. Gonzalez, Jr. announced today. Baldwin was indicted on the charge by a grand jury on January 30, 2020.
Court records reflect that on January 8, 2020, Baldwin was found with 70 grams of methamphetamine in his car. A search warrant was issued for a trailer he was living in on the Coeur d’Alene Indian reservation. Another 740 grams of methamphetamine was found in the trailer. In pleading guilty, Baldwin admitted he possessed the methamphetamine with the intent to distribute it to others.
After serving his prison sentence, Baldwin will be on supervised release with the United States Probation Office for five years.
Acting U.S. Attorney Gonzalez commented that “drug traffickers operating on a reservation will be prosecuted to the fullest extent of the law.” He went on to credit the cooperative efforts of the Benewah County Sheriff’s Office, the Narcotics Division of the Bureau of Indian Affairs, and the Coeur d'Alene Tribal Police Department, which led to charges.
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Melrose Man Pleads Guilty to Unemployment Insurance ScamRead the Press Release
BOSTON – A Melrose man pleaded guilty on Thursday, July 1, 2021 in connection with his role in an unemployment insurance fraud scheme.
Alan Neal Scott, 68, pleaded guilty to four counts of mail fraud, one count of wire fraud and five counts of aggravated identity theft. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 12, 2021. Scott was indicted in August 2020.
Over the course of six years, Scott submitted numerous fraudulent unemployment insurance claims with the Massachusetts Department of Unemployment Assistance (DUA). Scott submitted these claims using his own identity as well as the identities of various individuals, including some who were not eligible for unemployment benefits as they were incarcerated at the time and could not have been employed as reported. Moreover, the fraudulent claims all reported prior employment at a non-operational Massachusetts-based business also associated with Scott. As a result of these fraudulent claims, the DUA sent unemployment benefits funds to several addresses connected to Scott and deposited funds into accounts he controlled. Scott also submitted fraudulent pandemic unemployment insurance claims in the names of others.
The charges of mail and wire fraud provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The aggravated identity theft charges provide for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year 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; Nikitas Splagounias, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigation; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Joshua McCallister, Acting Inspector in Charge of the U.S. Postal Inspection Service; and Tonya Perkins, Acting Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division made the announcement. The Commonwealth of Massachusetts, Department of Unemployment Assistance, Program Integrity Unit also provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Mendell’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
Massachusetts Men Sentenced for Home Invasion Robbery and Discharging Firearms During RobberyRead the Press Release
PORTLAND, Maine: Two Massachusetts men were sentenced today in U.S. District Court in Portland for interfering with commerce through acts of violence, conspiring to do so, and discharging a firearm during the acts of violence, Acting U.S. Attorney Donald E. Clark announced.
Chief U.S. District Judge Jon D. Levy sentenced Eric Mercado, 33, of Lowell, Massachusetts, to 16 years in prison and four years of supervised release. Judge Levy sentenced Steven Hardy, 33, of Maynard, Massachusetts, to 15 ½ years in prison and four years of supervised release. Both men were also ordered to pay $3,740 in restitution to the victim.
According to court records, on May 11, 2019, Mercado, Hardy and other persons travelled from Lowell, Massachusetts to the York, Maine residence of a medical marijuana caregiver with a plan to rob the caregiver of money and marijuana. Some of the members of the conspiracy posed as friends of the caregiver to gain entry into the house and socialized with the caregiver. While the caregiver and these persons were socializing, Mercado and Hardy entered the house through a door that had been unlocked by a member of the conspiracy. They were wearing masks, Mercado was armed with a 12-gauge shotgun and Hardy was armed with a 9 mm pistol. Mercado and Hardy ordered the victim onto the ground and demanded money and marijuana, but the victim refused. The victim fled to another part of the house pursued by Mercado and Hardy. Both Mercado and Hardy fired their guns but missed the victim. The victim eventually escaped the house while being chased by Mercado and Hardy. While running down the driveway, Hardy shot at the victim but missed. Mercado and Hardy then returned to the house, stole the victim’s truck and fled the scene. They crashed the vehicle a short time later and fled on foot into the nearby woods. They were later picked up by the driver who had driven them to the house before the robbery.
The York Police Department received an emergency E-911 call. A York officer observed a vehicle in the vicinity of the robbery and recorded that vehicle’s license plate number. Further investigation of the vehicle revealed that it had been rented by the person whom Mercado had recruited to drive him and Hardy to the victim’s house.
FBI was called to assist in the investigation. In September 2019, acting on information that Mercado had thrown the shotgun away while running through the woods, FBI investigators conducted an evidence recovery search of the area and recovered the shotgun submerged in mud.
The FBI, the York Police Department and the York County Sheriff’s Office investigated the case.
Leader of “Mike’s Candyshop” Drug Delivery Service Pleads Guilty to Narcotics Distribution That Resulted in the 2018 Death of Colin KrollRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that ARIEL TAVAREZ, a/k/a “A,” a/k/a “Mike,” pled guilty today in Manhattan federal court to conspiring to distribute heroin, cocaine, fentanyl, and a fentanyl analogue, and to distributing narcotics that caused the 2018 death of Colin Kroll, the co-founder of the video hosting service Vine and the trivia game application HQ Trivia. TAVAREZ pled guilty before United States District Judge Katherine Polk Failla.
U.S. Attorney Audrey Strauss said: “For years, Ariel Tavarez operated a covert on-demand delivery service for the distribution of highly addictive and dangerous drugs. Tavarez and his underlings peddled their poison, which Tavarez sometimes secretly laced with deadly synthetic opioids, throughout New York City. Thanks to the tireless efforts of law enforcement, Mike’s Candyshop is permanently closed.”
According to the allegations in the Indictment, and statements made in Court:
TAVAREZ was the leader of a drug trafficking organization (the “DTO”) that engaged in a drug delivery service, which identified itself as “Mike’s Candyshop.” The DTO delivered heroin and cocaine (sometimes laced with fentanyl and a fentanyl analogue) on demand to customers in New York City, and distributed numerous kilograms of heroin and cocaine throughout the course of the conspiracy. Mike’s Candyshop generally operated seven days per week, from approximately 6:00 p.m. to 12:00 a.m., with the exception of major holidays such as Thanksgiving, New Year’s Eve, and Labor Day.
Customers of the DTO placed delivery orders via text message to a centralized phone number (the “Candyshop Number”). The operator of the Candyshop Number was usually TAVAREZ. Using the Candyshop Number, TAVAREZ accepted customer orders and subsequently arranged for a courier working for the DTO to deliver the narcotics to the customer, usually within hours of the customer texting his or her order to the Candyshop Number. Certain of the DTO members, including Christian Baez, Luis Meson, a/k/a “Sito,” Gregoris Martinez, a/k/a “Greg,” Kevin Grullon, a/k/a “Kev,” a/k/a “JB,” and Jeffrey Urena, a/k/a “Jeff,” a/k/a “Jay,” served as couriers for the DTO, and regularly delivered and sold narcotics to the DTO’s customers in hand-to-hand drug transactions coordinated through the Candyshop Number.
The DTO stored heroin, cocaine, a fentanyl analogue, and cash from drug sales in various stash locations maintained by the DTO, including in Brooklyn, New York. In an effort to avoid law enforcement detection, the DTO sold only to customers who had been referred by existing customers, periodically changed the Candyshop Number, used coded language to discuss narcotics, and delivered narcotics directly to customers at locations specified by the customer. As a means of marketing its cocaine, and to ensure that the DTO’s customers knew the cocaine provided by the couriers belonged to the DTO, the DTO sold its cocaine in vials sealed with different colored tops.
On or about December 16, 2018, Colin Kroll, a customer of the DTO, died of a drug overdose in New York, New York. The narcotics that caused Kroll’s death – cocaine, heroin, fentanyl, and a fentanyl analogue – were purchased from Mike’s Candyshop on the evening of December 14, 2018.
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TAVAREZ pled guilty to one count of conspiring to distribute heroin, cocaine, fentanyl, and a fentanyl analogue, the use of which resulted in the death of Colin Kroll on or about December 16, 2018. This count carries a statutory mandatory minimum term of 20 years in prison and maximum penalty of life in prison. The maximum and mandatory minimum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
TAVAREZ is scheduled to be sentenced by Judge Failla on November 23, 2021.
Baez, Meson, Martinez, Grullon, and Urena each previously entered a plea of guilty to participating in the Mike’s Candyshop narcotics trafficking conspiracy. Martinez was sentenced on June 29, 2021, to 72 months in prison by Judge Failla. Baez, Meson, Grullon, and Urena will be sentenced later this year by Judge Failla.
Ms. Strauss praised the outstanding investigative work of Homeland Security Investigations, the Drug Enforcement Administration, the New York City Police Department, and the Organized Crime Drug Enforcement Task Force. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Mollie Bracewell, Nicholas W. Chiuchiolo, and Aline R. Flodr are in charge of the prosecution.
Las Vegas Man Pleads Guilty to Filing Fraudulent Claims for over $250,000 in Unemployment Insurance Benefits Through Mail Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A Las Vegas man pleaded guilty today to filing two dozen fraudulent unemployment insurance claims, which were approved for more than $250,000 in unemployment benefits from the Nevada Department of Employment, Training, and Rehabilitation (DETR) and California Employment Development Department (EDD).
According to court documents and admissions made in court, from June 1, 2020 to September 28, 2020, Antwine Demon Hunter, 24, and co-conspirators used personally identifiable information belonging to victims to submit 24 false unemployment claims to DETR and EDD. As part of the scheme, Hunter had DETR and EDD mail debit cards containing unemployment benefits to addresses he had access to. In total, more than $250,000 in unemployment benefits were approved, and at least $189,118 were withdrawn by Hunter.
Hunter pleaded guilty to one count of mail fraud. U.S. District Judge Andrew P. Gordon scheduled sentencing for October 27, 2021. Hunter faces a statutory maximum penalty of 20 years in prison and a $250,000 fine.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Quentin Heiden of the U.S. Department of Labor Office of Inspector General (DOL-OIG), Los Angeles Region made the announcement.
This case was investigated by the DOL-OIG. Assistant U.S. Attorney Jim Fang is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Kingston Man Charged with Felon in Possession of FirearmRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Ahmyr Younger, age 19, of Kingston, Pennsylvania, was charged by criminal complaint June 30, 2021, with illegal possession of a firearm.
According to Acting United States Attorney Bruce D. Brandler, the complaint alleges that on June 30, 2021 in Luzerne County, Younger illegally possessed a 9mm handgun after having been previously convicted of a felony.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Sean Camoni is prosecuting the case.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Indictments and Criminal Informations and Complaints are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Kendallville Man Sentenced to over 17 Years in PrisonRead the Press Release
FORT WAYNE-Jason Wallen, 41, of Kendallville, Indiana, was sentenced before United States District Court Judge Holly A. Brady following his plea of guilty to possessing with intent to distribute 50 grams or more of methamphetamine, announced Acting United States Attorney Tina L. Nommay.
Wallen was sentenced to 210 months in prison followed by 5 years of supervised release.
According to documents filed in the case, on or about May 23, 2019, Wallen possessed with intent to distribute 50 grams or more of methamphetamine. Because he had been convicted of several prior drug trafficking felonies, Wallen qualified as a career offender pursuant to the United States Sentencing Guidelines.
This case was investigated by the Drug Enforcement Administration, with the assistance of the Garrett Police Department, the Indiana State Police, the DeKalb County Sheriff’s Department, and the Allen County Sheriff’s Department. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
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Kansas Man Sentenced to 21 Years on Federal Drug ChargesRead the Press Release
East St. Louis, Ill. – Lloyd Parker, 32, of Hutchinson, Kansas, was sentenced last week to 262 months in federal prison for conspiring to distribute methamphetamine and cocaine. Parker pled guilty to the charged conspiracies, as well as distribution and possession of methamphetamine, on March 9, 2021.
The crimes took place between 2014 and 2018 and involved the distribution of drugs in East St.
Louis, Illinois; Los Angeles, California; Ontario, California; Houston, Texas; Memphis, Tennessee; Jackson, Mississippi; and other locations. Overall, the organization was responsible for the distribution of approximately 240 pounds of methamphetamine and 48 kilograms of cocaine in the Southern District of Illinois and elsewhere. Parker personally distributed or assisted in the acquisition of over 60 pounds of methamphetamine and over 5 kilograms of cocaine.As part of his sentence, Parker was ordered to serve a five-year term of supervised release and pay a $700 fine. Some of Parker’s alleged co-conspirators were charged in the same case, and several are still awaiting trial.
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 investigated by the DEA, the IRS, the United States Postal Inspection Service, the
Illinois State Police, and other law enforcement agencies.
Jefferson Parish Man Indicted for Making Threatening Phone CallsRead the Press Release
NEW ORLEANS – United States Attorney Duane A. Evans today announced RUSSELL VENNELL, age 59, of Jefferson Parish, Louisiana, was charged on July 1, 2021 in a one-count indictment by a federal Grand Jury with making threatening phone calls in violation of Title 18, United States Code, Section 875(c).
According to previously filed court documents, on June 13, 2021, at approximately 2:08 a.m., a person called the Brookings Institution in Washington, DC 20036, from a telephone number found to be subscribed to VENNELL. The caller stated that he was going to kill S.H., a person employed by the Brooking Institution at the time of the call. The subject later left a voicemail, at the Brookings Institution, reiterating the previous threat he made to kill S.H. VENNELL was arrested on June 18, 2021 by agents of the Federal Bureau of Investigation.
U.S. Attorney Evans reiterated that an indictment is merely a charge and that the guilt of a defendant must be proven beyond a reasonable doubt.
If convicted, VENNELL faces a maximum penalty of five (5) years imprisonment, followed by up to three (3) years of supervised release, up to a $250,000.00 fine, and a mandatory $100 special assessment fee based on the charge outlined in the indictment.
This case is being investigated by special agents of the Federal Bureau of Investigations and the prosecution is being handled by Assistant U.S. Attorney Gregory M. Kennedy.
Fort Bragg Soldier Convicted of Theft of Government Property, Tampering with a Witness, Conspiracy to Commit Marriage Fraud and Naturalization FraudRead the Press Release
NEW BERN, N.C. – A federal jury convicted a Fort Bragg soldier assigned to 2nd SFAB (Security Force Assistance Brigade) Friday on charges of conspiracy to commit marriage fraud, aid and abet naturalization fraud, harboring an alien, visa fraud, theft of government property, along with trying to obstruct the testimony of a witness in an official proceeding.
According to court records and evidence presented at trial, Samuel Manu Agyapong, 34, a naturalized U.S. citizen from Ghana, was indicted on June 3, 2021 in a third superseding indictment. Evidence presented at trial revealed that in February of 2019, a tipster alerted Fort Bragg U.S. Army CID (Criminal Investigation Division) that Agyapong, a U.S. citizen and soldier, was engaged in a sham marriage with Barbara Oppong, a citizen of Ghana who was unlawfully present in the U.S. Agyapong agreed to engage in the sham marriage in exchange for Basic Allowance for Housing (BAH) for him and a lawful permanent resident card, commonly known as a green card, for Oppong. Agyapong and Oppong were married in New York in January 2015.
Thereafter, Agyapong and Oppong submitted fraudulent applications to United States Citizenship and Immigration Services (USCIS) requesting Oppong’s adjustment of status as a lawful permanent resident in the United States, which she received. Based on the marriage to Agyapong, Oppong then filed an application for U.S. citizenship.
Additional evidence presented at the trial showed that Oppong resided in New York, and Agyapong purchased a residence in Fayetteville, and they seldom, if ever, travelled to see each other nor had they engaged in an actual marital union. Further, evidence revealed that around the time Oppong and Agyapong were married and filed the applications, they omitted the fact that Oppong had two children with another individual.
The jury found Agyapong guilty on nine out of eleven counts including conspiracy to commit marriage fraud, aiding and abetting naturalization fraud, visa fraud, harboring certain aliens, false statements in immigration proceedings, theft of government property and tampering with a witness.
At sentencing, scheduled for the term of court commencing on October 5, 2021, Agyapong faces maximum penalties of twenty-five years imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
“U.S. Soldiers who continue to engage in marriages to foreign nationals in order to reside off base, obtain BAH, and allow the alien access to military bases and military and immigration benefits jeopardize and erode the critical infrastructure of Government installations, and our national security” said G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina.
Mr. Acker made the announcement after U.S. District Judge Louise W. Flanagan accepted the verdict. The Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina led by Homeland Security Investigations and assisted by US Army CID investigated the case and Assistant U.S. Attorney Gabriel J. Diaz is prosecuting the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No.5:19-CR-00423-FL.
Former juvenile facility guard pleads guilty in scheme to smuggle contraband into residence for young offendersRead the Press Release
Tacoma - A former guard at the Green Hill School, a juvenile rehabilitation facility in Chehalis, Washington, pleaded guilty today in U.S. District Court in Tacoma to extortion under the color of official right, for taking bribes in exchange for delivering contraband, including illegal drugs, into the secure facility. Julio W. Hayes, 40, was terminated as a staffer in February 2020 following an FBI operation that uncovered HAYES was accepting bribes and smuggling drugs and other contraband. Hayes will be sentenced by U.S. District Judge Robert J. Bryan on October 1, 2021.
According to records filed in the case, Hayes began working as a guard at Green Hill School in November 2018. Despite the fact that Hayes had significant training regarding his ethical obligations as an employee of the Department of Children, Youth and Families (which operates Green Hill School), Hayes began accepting bribes from offenders or their family and friends in May 2019 for smuggling marijuana, iPhones, vape pens, and chewing tobacco into the facility. Hayes was paid in cash and via electronic payments such as Cash App and accepted more than $11,000 before his employment was terminated in February 2020.
Court documents describe various text messages and electronic payments where Hayes essentially took orders from offenders as to the types of contraband they wanted him to bring to the facility. Hayes and the offenders would set the pricing and payment amounts for his services. On February 25, 2020, law enforcement conducted a traffic stop on Hayes on his way to work. In his possession, Hayes had marijuana packaged for smuggling into the facility, as well as three vape cartridges containing liquid marijuana.
Extortion Under Color of Official Right, is punishable by up to 20 years in prison. Judge Bryan will determine the appropriate sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the FBI with assistance from the Chehalis Police Department and the Joint Narcotics Enforcement Team (JNET) in Lewis County.
The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Michael Dion.
Former UAW Regional Director and Board Member Sentenced to Prison for Racketeering and Embezzlement ConspiracyRead the Press Release
Vance Pearson, the former Director of the United Auto Worker’s Region 5 and a former member of the UAW’s International Executive Board, was sentenced to 12 months in prison today for conspiring with other UAW officials to embezzle hundreds of thousands of dollars of UAW dues money and to further racketeering activity announced Acting U.S. Attorney Saima S. Mohsin.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Timothy Waters, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Brian Thomas, Acting Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Vance Pearson, 58, of St. Charles, Missouri, was sentenced to 12 months in prison, $250,000 in restitution to the UAW, forfeiture of $122,258.26 and three years of supervised release by United States District Judge Paul Borman based on his conviction for conspiring with former UAW President Gary Jones and other senior UAW officials to embezzle UAW dues money and to further racketeering crimes between 2010 and September 2019.
Between June 2018 and September 2019, Pearson served as the Director of Region 5 of the International Union, United Automobile, Aerospace, and Agricultural Workers of America (“UAW”). The UAW represents over 400,000 active members and over 580,000 retired members in more than 600 local unions across the United States. The UAW’s Region 5 was headquartered in Hazelwood, Missouri, and covered the tens of thousands of UAW members in Missouri and the sixteen states to the southwest, including California and Texas.
Pearson stands convicted of conspiring with at least six other high-level UAW officials in a multi-year conspiracy to embezzle money from the UAW for the personal benefit of senior UAW officials. Pearson and other UAW officials concealed personal expenditures in the cost of UAW Region 5 conferences held in Palm Springs, California, Coronado, California, and Lake of the Ozarks, Missouri. Between 2010 and 2018, Pearson and other UAW officials submitted fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters for expenditures supposedly incurred in connection with Region 5 leadership and training conferences. In truth, however, Pearson and his co-conspirators used the conferences to conceal the hundreds of thousands of dollars in UAW funds spent on lavish entertainment and personal spending for the conspirators.
Pearson admitted that he and other senior UAW officials used the UAW money to pay for personal expenses, including golf clubs, private villas, cigars, golfing apparel, green fees at golf courses, and high-end liquor and meals costing over $750,000 in UAW funds. For example, during the course of the conspiracy, Pearson and the other co-conspirators used UAW money to purchase over $60,000 in cigars and four sets of custom-made golf clubs for the use of high-level UAW officials.
As part of the court’s sentence, Pearson was ordered to forfeit a custom-made set of Titleist golf clubs, $81,000 held in his “Flower Fund” account and $38,000 from his Members in Solidarity account. In addition, Pearson has been ordered to pay $250,000 in restitution to the UAW. Co-defendant Edward Robinson was ordered to pay restitution of $300,000 to the UAW, co-defendant Dennis Williams paid $132,000 in restitution to the UAW, and co-defendant Gary Jones was ordered to pay $550,000 in restitution to the UAW.
Because Pearson provided substantial assistance in the investigation of other individuals and entities, the United States sought a lower prison sentence for him.
Pearson is the seventeenth defendant convicted in connection with the ongoing criminal investigation into corruption within the UAW or relating to illegal payoffs to UAW officials by FCA executives. The following other individuals have already pleaded guilty to their participation in the scheme and have been sentenced: former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), former senior UAW official Michael Grimes (28 moths), former UAW Midwest CAP President Edward “Nick” Robinson (12 months in prison), former UAW Vice President Joseph Ashton (30 months), former UAW President Dennis Williams (21 months), and former UAW President Gary Jones (28 months). The company, FCA US LLC, now known as Stellantis, pleaded guilty in January 2021 to conspiring to violate the Taft-Hartley Act, and the company will be sentenced on June 21, 2021. Former senior UAW official Jeffrey “Paycheck” Pietrzyk passed away before being sentenced.
In December 2020, the United States filed a civil lawsuit against the UAW under the Anti-Fraud Injunction Act based on the criminal investigation of the UAW, FCA US LLC, and FCA’s executives. Subsequently, the United States and the UAW entered into a Consent Decree to settle the lawsuit that was approved by the U.S. District Court. The Court has appointed attorney Neil Barofsky to serve as the Independent Monitor of the UAW for the next six years. The Monitor is tasked with providing federal oversight of the UAW concerning fraud, corruption, and misconduct within the UAW. In addition, the Monitor will conduct and oversee a referendum of all UAW members to determine if the membership wants to adopt a direct election, also known as “one member, one vote,” method of electing the members of the UAW’s International Executive Board.
Acting U.S. Attorney Mohsin commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
“Today’s conviction shows our office’s commitment to holding accountable the high level officials of the UAW who embezzled hundreds of thousands of dollars on the backs of working men and women of their union,” said Acting United States Attorney Saima S. Mohsin.
“Today’s sentence holds Vance Pearson accountable for his actions to personally enrich himself at the expense of dues-paying UAW members. Pearson conspired with senior UAW officials to embezzle hundreds of thousands of dollars of union dues money to further their racketeering activity. We will continue to work with our law enforcement partners to protect the financial integrity of labor organizations,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
“Today’s sentencing continues to show that IRS Criminal Investigation is working vigorously to protect the UAW’s membership from corrupt leadership and the integrity of the American tax system." said IRS-CI Acting Special Agent in Charge, Brian Thomas, of the Detroit Field Office.”
“Safeguarding financial integrity in labor unions and combating financial malfeasance is a very high priority for the U.S. Department of Labor. While the vast majority of union officials do their work diligently and without incident, Vance Pearson betrayed the trust the UAW membership placed in him by participating in a complex embezzlement scheme to steal over a million dollars from the UAW, so he and other high-ranking UAW officers could live a lavish lifestyle at the expense of the UAW and its members,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “OLMS will continue to work with its law enforcement partners to hold accountable anyone that unlawfully exploits their union position to enrich themselves without regard to the best interests of union members.”
The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, Steven Cares, and Adriana Dydell.
Former Employee of Veterans Affairs Medical Center Indicted for Stealing More Than $10 Million Worth of HIV MedicationRead the Press Release
NEWARK, N.J. – A former pharmacy procurement technician was indicted today for stealing prescription HIV medications from the pharmacy of the Veterans Affairs Medical Center (VAMC) in East Orange, New Jersey, Acting U.S. Attorney Rachael A. Honig announced.
Lisa M. Hoffman, 48, of Orange, New Jersey, is charged by indictment with one count each of conspiracy, theft of government property, and theft of medical products.
According to documents filed in this case and statements made in court:
From October 2015 through November 2019, Hoffman was a procurement officer at the VAMC, who used her authority to order large quantities of HIV prescription medications so that she could steal the excess. After the medications arrived, Hoffman waited until co-workers were out of sight and then removed them from the VAMC.
Once Hoffman stole the medications, she met her associate, Wagner Checonolasco, aka “Wanny,” generally at Hoffman’s residence, so that Hoffman could provide the stolen HIV medications to Checonolasco in exchange for cash. Hoffman and Checonolasco used an encrypted messaging application to plan and execute their thefts and sales of the stolen HIV medications, including arranging for the medications-for-cash exchanges. After obtaining the stolen HIV medications from Hoffman, Checonolasco sold them. Hoffman and Checonolasco stole approximately $10 million worth of HIV medications belonging to the VAMC during the conspiracy.
Checonolasco, 33, of Lyndhurst, New Jersey, was previously charged with conspiracy to steal government property, and those charges remain pending.
The conspiracy charge is punishable by a maximum penalty of five years in prison. The theft of government property charge is punishable by a maximum penalty of 10 years in prison. The charge of theft of medical products is punishable by a maximum penalty of 20 years in prison. Each charge also is punishable by a maximum fine of $250,000, or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss sustained by any victims of the offense, whichever is greatest. The theft of medical products charge also carries a civil penalty of $1 million, or three times the economic loss attributable to the offense.
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 the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri, with the ongoing investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the Health Care Fraud Unit.
The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Former CFO Pleads Guilty to Embezzling over $1.6 MillionRead the Press Release
SACRAMENTO, Calif. — Christopher Firle, 51, of Fairfield, pleaded guilty today to one count of wire fraud, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, Firle was the Chief Financial Officer of a holding company that managed several vehicle dealerships. From January 2016 through September 2019, Firle misappropriated over $1.6 million from the company. He carried out his embezzlement scheme in multiple ways, including by using company credit cards to pay for over $750,000 in personal expenses. The unauthorized charges included tickets to sporting events and purchases at several retail stores, including Bergdorf Goodman, Chanel, Hermès, Nordstrom, and Tiffany & Co. Firle also initiated over 30 unauthorized wire transfers from the company to a family member. Those transfers totaled over $500,000. Additionally, Firle issued over 30 unauthorized company checks to himself that totaled over $165,000, and he withdrew over $50,000 from a company account without authorization. Finally, Firle issued himself excess bonus payments totaling almost $160,000.
This case is a product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Matthew Thuesen is prosecuting the case.
As part of his guilty plea, Firle agreed to pay restitution of $1,937,706 to his former employer. He also agreed to forfeit $1,652,269.44 to the United States.
U.S. District Judge John A. Mendez is scheduled to sentence Firle on October 19, 2021. Firle faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the court’s discretion after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Federal Grand Jury Indicts Man for Gun and Drug OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – On July 1, 2021, a federal grand jury returned a three-count indictment charging a New Orleans man for violations of the Federal Gun Control and Federal Controlled Substances Acts, announced U.S. Attorney Duane A. Evans.
According to court documents, CHARLES ROY, age 32, is charged in Count 1 with possession with intent to distribute a quantity of a mixture of fentanyl and heroin, in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(B), and (b)(1)(C). In Count 2, ROY is charged with possession of a firearm by a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1). In Count 3, ROY is charged with possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18 United States Code, Section 924(c)(1)(A).
If convicted of Count 1, ROY faces a maximum sentence of 40 years imprisonment, up to a $5,000,000 fine, at least 4 years of supervised release, and a mandatory special assessment of $100. If convicted of Count 2, ROY faces a maximum sentence of 10 years imprisonment, up to a $250,000 fine, up to 3 years of supervised release, and a mandatory special assessment of $100. If convicted of Count 3, ROY faces a mandatory consecutive 5 years imprisonment, up to life imprisonment, a $250,000 fine, up to 5 years of supervised release, and a mandatory special assessment of $100.
U.S. Attorney Evans stated that an indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Louisiana State Police and the Office of Homeland Security Investigations. The prosecution of this case is being handled by Assistant United States Attorney Christopher Usher.
Eastern District of Texas Delivers Another Blow Against White Supremacist Prison GangRead the Press Release
BEAUMONT, Texas – Three individuals connected to the Aryan Circle (AC) prison gang have pleaded guilty to federal violations, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Anthony Levi Cochran, 39, of Bullard, Texas pleaded guilty today to charges related to an October 2016 violent assault in the Eastern District of Texas. Specifically, he admitted to assault resulting in serious bodily injury in aid of racketeering, as well as conspiracy to sell firearms to a convicted felon. Cochran committed the assault as part of his membership in the AC.
Additionally, Breanna Beckley, 40, of Moberly, Missouri, pleaded guilty on June 29, 2021, to conspiracy to possess with intent to distribute a controlled substance, namely 500 grams or more of a mixture or substance containing methamphetamine. Shane Louque, 46, of Gonzales, Louisiana, pleaded guilty to the same charges today.
“In the battle against organized, multistate criminal organizations, agency cooperation is essential,” said Acting U.S. Attorney Nicholas J. Ganjei. “Criminals carry on their illegal and violent conduct in whatever jurisdiction benefits them the most, so we need to bring the fight to them, wherever they might be.”
The AC is a violent, white supremacist organization that originated in the Texas Department of Corrections and operates in federal prisons across the country, as well as outside prisons in states including Texas, Arkansas, Louisiana, and Missouri. The AC enforces its rules and promotes discipline among its members, prospects, and associates through murder, attempted murder, assault, and threats. Members, and oftentimes associates, are required to follow the orders of higher-ranking members without question.
Cochran’s offense conduct included planning and participating in the events surrounding a violent beating of another AC member who wanted to switch his gang affiliation, or “patch over,” from the AC to a different gang. Cochran and other AC members carried out the attack in order to “X,” or remove, the AC member from the gang, because it violated the AC’s rules to join another organization. According to court documents, Beckley transported between 1.5 and 5 kilograms of methamphetamine in 2016, from Houston, Texas, to buyers in Louisiana, such as Louque and other AC members. The drug conspiracy that Beckley and Louque pleaded to was uncovered as part of Operation Noble Virtue, an investigation into the AC that has targeted AC leadership.
Cochran was indicted by a federal grand jury on Oct. 7, 2020. He faces up to 20 years in federal prison. Beckley and Louque were also indicted on Oct. 7, 2020, and each face up to life in federal prison. The maximum statutory sentences prescribed by Congress are provided here for information purposes, as the sentencings will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the U.S. Probation Office.
This case is being investigated by an Organized Crime Drug Enforcement Task Force (OCDETF) consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) Prosecutor’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office.
Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas is prosecuting these cases along with trial attorneys from the Organized Crime and Gang Section of the Department of Justice.
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East Hartford Man Pleads Guilty to Trafficking Fentanyl AnalogueRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that WILLIAM VALERIO-PALERMO, also known as “Willy,” 35, of East Hartford, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to possession with intent to distribute 100 grams or more of acetylfentanyl, a fentanyl analogue.
According to court documents and statements made in court, in 2018, law enforcement received information that Valerio was trafficking kilogram-quantities of fentanyl and was using his Hartford auto-repair business to launder drug proceeds. On July 12, 2018, a court-authorized search of a West Hartford apartment that Valerio rented revealed approximately six kilograms of acetylfentanyl, items used to process and package narcotics, and approximately $49,000 in cash.
Judge Thompson scheduled sentencing for September 28, 2021.
Valerio has been detained since his arrest on July 12, 2018.
This investigation has been conducted by the DEA’s Hartford Task Force and the FBI’s Northern Connecticut Gang Task Force. The Drug Enforcement Administration’s Hartford Task Force includes personnel from the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments. The FBI’s Northern Connecticut Gang Task Force includes the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Duquesne, PA Felon Indicted on Drug and Gun ChargesRead the Press Release
PITTSBURGH, PA - A resident of Duquesne, Pennsylvania has been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotic and firearm laws, Acting United States Attorney Stephen R. Kaufman announced today.
The three-count Indictment, returned on May 5 and unsealed today, named Brandon McCaskill, age 35, as the sole defendant.
According to the Indictment, on or about August 17, 2020, McCaskill possessed with the intent to distribute mixtures of controlled substances containing fentanyl, heroin, tramadol, and cocaine. The Indictment also alleges that McCaskill was in possession of a firearm in furtherance of a drug trafficking crime. The Indictment further alleged that McCaskill, a convicted felon, possessed both a firearm and ammunition. Federal law prohibits an individual who has been convicted of a felony from possessing a firearm or ammunition.
The law provides for a term of imprisonment of life and/or a fine of up to $2,000,0000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan J. McKenna is prosecuting this case on behalf of the government.
The Duquesne Police Department, The Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Drug Enforcement Administration conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Dubuque Man Sentenced to Twelve Years in Prison for Attempting to Tamper with WitnessesRead the Press Release
A man who attempted to tamper with witnesses after he was facing charges related to an incident with a firearm was sentenced on July 2, 2021, to twelve years in federal prison.
Stephan Wayne Toliver, age 35, from Davenport, Iowa, received the prison term after a January 13, 2021 guilty plea to attempted witness tampering.
In a plea agreement, Toliver admitted that he struck a woman with a gun, knocking her unconscious. Toliver also admitted to making false accusations against family members of the victim resulting in an investigation by DHS and the Dubuque Police Department that ultimately showed no wrongdoing by them. Toliver also admitted that he sent a letter to the victim falsely telling her that if she or her family testified against him, DHS would use that information against her family.
Toliver was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Toliver was sentenced to 144 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Toliver is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Dubuque Police Department and the Bureau of Alcohol, Tobacco, and Firearms.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-1033.
Follow us on Twitter @USAO_NDIA.
Documented Macon Gang Member Pleads Guilty to Federal Gun ChargeRead the Press Release
MACON, Ga. – A documented gang member with a violent criminal history pleaded guilty to illegally possessing a firearm after law enforcement arrested him with a loaded semi-automatic pistol.
Derrick Murphy, 28, of Macon, pleaded guilty to one count of possession of a firearm by a convicted felon before U.S. District Judge Marc Treadwell today and remains in custody. Murphy faces a maximum sentence of ten years in prison and a $250,000 fine. Sentencing is currently scheduled for September 8, 2021. There is no parole in the federal system.
According to court documents, Murphy was taken into custody on March 5, 2020, following a traffic stop by a Georgia State Patrol (GSP) trooper on Pio Nono Avenue in Macon. The trooper on patrol observed the vehicle Murphy was driving make multiple traffic violations and then turn into a fast-food restaurant’s drive-thru. Murphy was in the drive-thru line when the trooper pulled into the parking lot. Murphy then drove away without picking up any items in the drive-thru window and backed his car into some bushes. Someone got out of the right rear passenger door and ran. Murphy drove towards the trooper’s vehicle and the trooper turned on his take down lights in order to initiate a traffic stop.
The trooper approached the vehicle and could smell marijuana coming from the vehicle. Murphy, who was in the driver’s seat, claimed that he did not know who ran from the vehicle, and he and the passenger did not have identification. Murphy gave a false name and date of birth. An infant was in the back seat of the vehicle and the trooper noticed that the child was not properly restrained in the child safety seat. In the vehicle, the trooper located several sandwich bags which contained methamphetamine along with a digital scale. A firearm was also visible. The firearm was a 9-millimeter caliber semi-automatic pistol loaded with four rounds in the magazine and one round in the chamber. Murphy, who was driving with a suspended license for DUI drugs and was wanted on a parole violation warrant, was taken into custody and admitted that he had been incarcerated for five years for criminal street gang activity and that he had purchased the firearm for $150 approximately two weeks prior to his arrest. Murphy has prior convictions in the Superior Court of Bibb County, Georgia, for violation of the street gang terrorism and prevention act, obstruction of an officer and aggravated assault.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case was investigated by the Georgia State Patrol (GSP), Bibb County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Assistant U.S. Attorney William Keyes is prosecuting the case.
Dickinson County Man Pleads Guilty to Meth ConspiracyRead the Press Release
A Dickinson County man who conspired to distribute meth pled guilty July 7, 2021, in federal court in Sioux City.
Jared Wolthuis, 32, from Milford, Iowa, was convicted of conspiring to distribute methamphetamine.
At the plea hearing, Wolthuis admitted his involvement in a conspiracy that distributed more than three pounds of pure methamphetamine from July, 2018, through approximately March of 2020 in the Dickinson County, Iowa area. On March 17, 2020, law enforcement executed a search warrant at a co-conspirators residence and seized 20 pounds of methamphetamine from the residence. During the course of the execution of the search warrant, law enforcement stopped Wolthuis leaving the residence in a vehicle. Upon a search of the vehicle, law enforcement seized 3 pounds of pure meth that Wolthuis admitted he planned to distribute to other persons.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Wolthuis remains free on bond previously set. Wolthuis faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, and 5 years up to life of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4050. Follow us on Twitter @USAO_NDIA.
Detroit Man Pleads Guilty to Federal Drug CrimeRead the Press Release
HUNTINGTON, W.Va. – A Detroit man pleaded guilty today to a federal drug crime. Jaishawn Harris, 19, pleaded guilty to possession with intent to distribute fentanyl.
According to court documents, on March 11, 2021, law enforcement officers were conducting criminal interdiction and surveillance at a motel on Route 60 for possible drug activity. The officers observed numerous individuals associated with at least two different rooms interacting with each other. During the surveillance, officers observed a gold Honda pull up to the hotel room. An unknown black male, later identified as Harris, exited a room with a female and placed a bag in the trunk. Officers following the vehicle attempted a traffic stop, however, the Honda failed to stop. Eventually, Harris fled from the Honda on foot and was apprehended shortly thereafter. Law enforcement officers searched the Honda and found approximately nine grams of fentanyl in the bag that Harris had placed in the trunk.
Harris faces up to 20 years imprisonment when sentenced on October 12, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative efforts of the Huntington Violent Crime Drug Task Force, the Huntington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Greg McVey is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:21-cr-00059.
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Detroit Man Pleads Guilty in Unemployment Fraud SchemeRead the Press Release
DETROIT - A Detroit man pleaded guilty today for his role in a scheme aimed at defrauding the State of Michigan, other states, and the U.S. Government of funds earmarked for unemployment assistance during the COVID19 pandemic, announced Acting United States Attorney Saima Mohsin.
Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, Special Agent in Charge Douglas J. Zloto, US Secret Service, Acting Special Agent in Charge Juan Vargas, US Postal Inspection Service, Special Agent in Charge Timothy Waters, Federal Bureau of Investigation, Acting Special Agent in Charge Brian Thomas, Internal Revenue Service-Criminal Investigation and Liza Estlund Olson, acting director of the Unemployment Insurance Agency.
Pleading guilty was Johnny Richardson, 26.
According to court records, Richardson conspired with others including Brandi Hawkins—a former contract employee for the State of Michigan Unemployment Insurance Agency who pleaded guilty last month—to fraudulently obtain hundreds of thousands of government money that was intended to support individuals who lost their jobs during the COVID-19 pandemic.
According to the plea agreement, Richardson, either himself or through others, filed fraudulent unemployment claims over the Internet in at least five states resulting in the fraudulent disbursement of at least $683,555 of funds intended for unemployment assistance during the pandemic. Richardson provided Hawkins information on Michigan claims, and Hawkins subsequently used her insider access to fraudulently release payments on these claims.
Richardson is scheduled to be sentenced on November 9, 2021 at 11 am before United States District Judge Bernard A. Friedman. Co-defendant Micahia Taylor is scheduled for a plea hearing on August 10, 2021 at 11:30am.
The case is being prosecuted by Assistant United States Attorney Timothy Wyse. The investigation is being conducted jointly by the Department of Labor, Office of Inspector General, United States Secret Service, Internal Revenue Service - Criminal Investigation, Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Unemployment Insurance Agency, Michigan Department of Labor and Economic Opportunity
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
Des Moines Man Sentenced for Defrauding WIC and SNAP ProgramsRead the Press Release
Des Moines, Iowa – A Des Moines man was sentenced on Friday, July 2, 2021, to 15 months in prison for conspiracy to commit wire fraud.
According to court documents, Osman Rashid Jama, age 39, defrauded the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the Supplemental Nutrition Assistance Program (SNAP) from at least January 2017 through April 2019. Jama owned and operated the MidCity Halal Food Market Inc., d/b/a International Food Market (International), in Des Moines. Jama, and others at his direction, scanned SNAP and WIC recipients’ EBT cards at his store. Instead of giving the recipient the WIC and/or SNAP approved items, Jama and others gave recipients non-approved items, store credit, and cash. Jama also used SNAP recipients’ EBT cards to purchase items to stock his store. Jama was found to have defrauded the programs a total of $1,445,460.47 and was ordered to pay restitution to the agencies that administer the programs.
Acting United States Attorney Richard D. Westphal made the announcement. The Federal Bureau of Investigation and United States Department of Agriculture – Office of Inspector General investigated the case.
Cleveland man admits to role in drug trafficking operationRead the Press Release
WHEELING, WEST VIRGINIA – Eiandreus Kirkland Rebraun Pique, of Cleveland, Ohio, has admitted to his role in a drug trafficking conspiracy, Acting United States Attorney Randolph J. Bernard announced.
Pique, also known as “Duke,” age 25, pleaded guilty to one count of “Aiding and Abetting the Distribution of Cocaine Base within 1000 feet of a Protected Location.” Pique admitted to working with someone to distribute cocaine base, also known as “crack,” near Wheeling University in February 2020.
Pique faces at least one and up to 40 years of incarceration and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Shawn M. Adkins and Clayton J. Reid are prosecuting the case on behalf of the government. The Ohio Valley Drug and Violent Crimes Task Force, a HIDTA-funded initiative, which includes the Drug Enforcement Administration, West Virginia State Police, Ohio County Sheriff’s Office, and the Wheeling Police Department, investigated. The U.S. Marshal Service, Columbus Police Department Gang Crimes Unit, the Martins Ferry Police Department, and the Bellaire Police Department also assisted.
U.S. Magistrate Judge James P. Mazzone presided.
Original case indictment here: https://www.justice.gov/usao-ndwv/pr/26-charged-drug-conspiracy-involving-heroin-fentanyl-crack-cocaine-and-meth-wheeling
Charleston Woman Sentenced to Federal Prison for Role in Multi-State Methamphetamine ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Charleston woman who conspired with multiple individuals to distribute methamphetamine in 2018 and 2019 was sentenced today to 12 months and one day in federal prison.
According to court documents, between the fall of 2018 and September 2019, Melanie Lynne Curnutte, 58, conspired with multiple individuals to distribute methamphetamine in the Huntington and Charleston areas. During the conspiracy, Curnutte repeatedly obtained quantities of methamphetamine which were transported from Akron to Huntington. Curnutte relied on multiple individuals from Akron to deliver the methamphetamine to her and Curnutte would in turn distribute the methamphetamine to various customers. Curnutte admitted that she was aware that some of her customers intended to distribute the methamphetamine she provided to them.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Violent Crime and Drug Task Force West, the Metropolitan Drug Enforcement Network Team (MDENT), the West Virginia State Police, the Drug Enforcement Administration (DEA) Task Force, the Beckley/Raleigh County Drug and Violent Crime Unit, the United States Marshals Service, the Cabell County Sheriff’s Department, the Charleston Police Department, the Putnam County Sheriff’s Department, the Ohio State Highway Patrol, the Akron, Ohio Police Department and the Brecksville, Ohio Police Department.
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams handled the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:19-cr-00245.
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Bridgeport Gang Member Pleads Guilty to Federal Racketeering Charge Stemming from 2018 MurderRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that TA’RON PHARR, also known as “250,” 21, of Bridgeport, pleaded guilty today before U.S. District Judge Kari A. Dooley in Bridgeport to a racketeering charge stemming from a gang-related murder in Bridgeport’s East End in August 2018.
According to court documents and statements made in court, the FBI, ATF, DEA, U.S. Marshals Service and Bridgeport Police have been investigating multiple Bridgeport-based gangs whose members are involved in narcotics trafficking, murder and other acts of violence. Pharr was a member of the Original North End (“O.N.E.”), a gang based in the Trumbull Gardens area of Bridgeport that committed acts of violence against rival gang, including the East End gang, the East Side gang, and the PT Barnum gang. O.N.E. members also robbed drug dealers, sold narcotics, laundered narcotics proceeds, and stole cars from inside and outside Connecticut and used the cars to commit crimes.
On August 8, 2018, Pharr and other O.N.E. members stole a white Jeep Grand Cherokee in Newburgh, New York, and drove it back to Bridgeport. In the early morning hours of August 13, 2018, O.N.E. members drove the stolen Jeep to Union Avenue in Bridgeport where they shot and killed Len Smith, 25, who they mistook for a rival East End group member, and shot and seriously wounded Smith’s female companion, both of whom were seated in a parked car. After the shooting, Pharr and others transported the Jeep to Indian Wells State Park in Shelton where they burned the vehicle in an effort to destroy evidence of the murder.
Pharr pleaded guilty to one count of engaging in a pattern of racketeering activity, which carries a maximum term of imprisonment of 20 years. He has been detained since July 7, 2020.
This ongoing investigation is being conducted by the FBI’s Safe Streets and Violent Crimes Task Forces, ATF, DEA, U.S. Marshals Service, Bridgeport Police Department, Connecticut State Police and the Bridgeport State’s Attorney’s Office, with the assistance of the U.S. Postal Inspection Service, Connecticut Forensic Science Laboratory and the Waterbury Police Department. The case is being prosecuted by Assistant U.S. Attorneys Rahul Kale, Jocelyn C. Kaoutzanis, Peter D. Markle and Karen L. Peck.
This prosecution is a part of the Justice’s Department’s Project Safe Neighborhoods (PSN), Project Longevity and Organized Crime Drug Enforcement Task Forces (OCDETF) programs. PSN is a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone. Project Longevity is a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
AAR Corp. Agrees to Pay $11 Million to Settle False Claims Act Allegations on Aircraft Maintenance Contract and to Pay Penalties Assessed by the FAARead the Press Release
AAR Corp., located in Wood Dale, Illinois, and its subsidiary, AAR Airlift Group Inc. (Airlift), located in Melbourne, Florida, have agreed to pay the United States $11,088,000 to resolve False Claims Act allegations in connection with aircraft maintenance services performed by Airlift on two U.S. Transportation Command (TRANSCOM) contracts.
The allegations involve helicopters that Airlift owned and maintained for use in transporting Department of Defense (DoD) cargo and personnel in support of DoD missions in Afghanistan and Africa. The settlement resolves allegations that Airlift knowingly failed to maintain nine aircrafts in accordance with contract requirements, and that because of this failure, the helicopters were not airworthy and should not have been certified by Airlift as “fully mission capable.”
AAR and Airlift have also agreed to pay $429,273.69 to resolve a separate Federal Aviation Administration (FAA) matter citing deficiencies in Airlift’s helicopter maintenance.
“The knowing failure to comply with contractual obligations is unacceptable, particularly when such violations raise safety concerns,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “Today’s settlement reaffirms that the government will hold contractors to the quality and safety standards in their contracts that are intended to protect our men and women in uniform.”
“Defense contracting is a special trust because it supports the servicemembers who protect our nation’s interests around the world,” said U.S. Attorney Steven D. Weinhoeft for the Southern District of Illinois. “Whenever a military contractor cuts corners, it presents not only a possible fraud against taxpayers but also a potential safety hazard to our soldiers. The settlement announced today addresses both of those concerns. I am especially grateful to my staff, the many dedicated agents who worked on this matter and the witnesses who came forward.”
“Our military is entitled to rely on high level contractor performance when it procures essential services like those at issue here,” said Acting U.S. Attorney Karin Hoppmann for the Middle District of Florida. “We are grateful for the diligent and collaborative work put into this investigation by the Southern District of Illinois, the Department of Justice Civil Frauds Section and all of the investigative agencies who supported these cases.”
“Failure to properly maintain aircraft is unacceptable under any circumstances, but it’s especially egregious in a war zone, where the lives of America’s warfighters are on the line,” said John F. Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR). “I’m proud of the work of SIGAR’s special agents – in Afghanistan and the United States – whose collaboration brought this case to a successful conclusion.”
“The Department of the Air Force Office of Special Investigations (OSI) commends the complainant for coming forward, which allowed us and our joint investigative partners to vigorously protect the DoD’s procurement process, preserve the military’s ability to carry out its warfighting mission and ensure the wrongdoers were held accountable,” said Special Agent in Charge Nicholas J. Groesbeck of the OSI Procurement Fraud Detachment 4, Wright-Patterson AFB, OH.
“This case demonstrates the commitment of the Defense Criminal Investigative Service (DCIS), along with our partner agencies, to aggressively go after those who disregard and ignore critical safety and contractual specifications on Department of Defense contracts,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “Today’s resolution highlights the culmination of investigative efforts to hold those who supply the Department of Defense accountable for their product and actions.”
“It is unacceptable that anyone would bypass contractual agreements and most importantly safety guidelines meant to ensure the wellbeing of our American service men and women,” said Christopher Grey, spokesperson for the U.S. Army Criminal Investigation Command (CID). “We will continue to aggressively investigate allegations such as this and work closely with our law enforcement partners to bring a successful resolution.”
“The failure to perform critical maintenance to Department of Defense aircraft poses a grave and unnecessary threat to our nation’s military readiness,” said Special Agent in Charge Michael DeFamio of the Naval Criminal Investigative Service (NCIS) Central Field Office. “NCIS and our federal law enforcement partners remain committed to fully investigating any and all allegations of contract fraud that compromise the safety of our service members and waste American taxpayer money.”
“Those certified to perform critical safety aircraft inspections and maintenance work are expected to adhere to aviation regulations in order to ensure that safety is not compromised,” said Special Agent in Charge Todd Damiani of the U.S. Department of Transportation Office of Inspector General, Southern Region. “The settlement reached today clearly demonstrates that we will vigorously pursue those who choose profits over the quality and integrity of the work they are contracted to perform.”
“Improperly maintaining aircraft creates a safety risk that we absolutely will not tolerate,” said FAA Administrator Steve Dickson. “Today’s agreement makes clear that disregard for maintenance requirements is unacceptable.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Christopher Harvey, a former Airlift employee. The act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. The qui tam case is captioned U.S. ex rel. Harvey v. AAR Corp., et al., No. 3:15-cv-00390 (S.D. Ill.). Mr. Harvey will receive $2,162,160 of the False Claims Act settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Southern District of Illinois; and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the U.S. Transportation Command, the FAA, Air Force OSI, DCIS, NCIS, Army CID, Department of Transportation Office of the Inspector General, the Defense Contract Audit Agency (DCAA) and SIGAR.
The case was investigated by Trial Attorney Elspeth A. England of the Civil Division and Assistant U.S. Attorneys Nathan D. Stump and Laura J. Barke of the Southern District of Illinois and Randy Harwell of the Middle District of Florida.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
5 July 2021
Texas Man Sentenced in Federal Court for Failure to Register as a Sex OffenderRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Texas man convicted of failure to register as a sex offender was sentenced on June 28, 2021, by U.S. District Judge Charles B. Kornmann.
Rene Alvarez DeLeon, Jr., age 45, was sentenced to 30 months in federal prison, followed by five years of supervised release. He was also ordered to pay $100 to the Federal Crime Victims Fund.
DeLeon was indicted for failure to register as a sex offender by a federal grand jury on March 2, 2021. He pled guilty to on May 11, 2021.
According to court documents, in April 2020, DeLeon, a person required to register under the Sex Offender Registration and Notification Act, knowingly failed to register and update his registration. He is a sex offender by reason of a conviction for sexual assault of a child under the laws of the State of Texas, and he traveled in interstate commerce, and having entered, left, and resided in Indian country, while failing to register or update his registration.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Jeremy Jehangiri prosecuted the case.
DeLeon was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced to Federal Prison for Firearm and Drug ChargesRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Rapid City man convicted of Possession of a Firearm by a Prohibited Person, Possession with Intent to Distribute a Controlled Substance, and Possession of a Firearm in Furtherance of Drug Trafficking Crime was sentenced on June 24, 2021, by Judge Jeffrey L. Viken, U.S. District Court.
Jonathan Blacksmith, age 45, was convicted by a jury of all five charges and was sentenced to a total of 16 years and three months in federal prison. Blacksmith was also sentenced to four years of supervised released and was ordered to pay a total of $500 in special assessments to the Federal Crime Victims Fund.
Evidence at trial established Blacksmith, knowing he was a convicted felon, possessed a Glock 9mm pistol in Kyle on February 17, 2017, and a .40 caliber pistol in Rapid City in January 2017. Blacksmith distributed 50 grams or more of methamphetamine in Kyle in February 2017. In January 2017, Blacksmith distributed methamphetamine in Rapid City while in possession of the .40 caliber pistol.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice's signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department's past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/opa/pr/attorney-general-william-p-barr-announces-launch-project-guardian-nationwide-strategic-plan.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bureau of Indian Affairs Division of Drug Enforcement, the Oglala Sioux Tribe Department of Public Safety, the Pennington County Sheriff’s Office, the Rapid City Police Department, and the Unified Narcotics Enforcement Team (“UNET”), which is a local drug task force comprised of various agencies. Assistant U.S. Attorney Eric Kelderman prosecuted and tried the case.
Blacksmith was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Charged with Unlawful Possession of Unregistered FirearmRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Rapid City, South Dakota, man was charged in federal district court with Possession of a Firearm by a Prohibited Person and Possession of an Unregistered Firearm.
Cory Marshall, age 42, was charged on June 17, 2021. Marshall appeared before U.S. Magistrate Judge Daneta Wollmann on June 23, 2021, and pleaded not guilty to the charges. The maximum penalty upon conviction is 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Marshall, previously convicted of a felony and prohibited from possessing firearms, possessing an unregistered, illegally shortened Remington Arms, 12-gauge, pump-action shotgun, which was found after Marshall came into contact with Pennington County Sheriff’s deputies in April 2021. The charges are merely an accusation and Marshall is presumed innocent until and unless proven guilty.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Marshall was detained pending trial. A trial date has not been set.
Rapid City Man Charged with Unlawful Possession of Unregistered FirearmRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Rapid City, South Dakota, man was charged in federal district court with Possession of a Firearm by a Prohibited Person and Possession of an Unregistered Firearm.
Toby Acevedo, age 50, was charged on March 18, 2021. Acevedo appeared before U.S. Magistrate Judge Daneta Wollmann on June 23, 2021, and pleaded not guilty to the charges. The maximum penalty upon conviction is 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Acevedo, previously convicted of a felony and prohibited from possessing firearms, possessing an unregistered, illegally shortened Mossberg International semi-automatic rifle, which was found after Acevedo came into contact with Rapid City Police officers in July 2020. The charges are merely an accusation and Acevedo is presumed innocent until and unless proven guilty.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Acevedo was detained pending trial. A trial date has not been set.
Rapid City Man Charged with Unlawful Possession of FirearmRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Rapid City, South Dakota, man was charged in federal district court with Possession of a Firearm by a Prohibited Person.
Waylon Loefer, age 42, was charged on June 17, 2021. Loefer appeared before U.S. Magistrate Judge Daneta Wollmann on June 23, 2021, and pleaded not guilty to the charge. The maximum penalty upon conviction is 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Loefer, previously convicted of a felony and prohibited from possessing firearms, possessing a Taurus, .40 Smith & Wesson caliber, semi-automatic pistol, which was found after Loefer came into contact with Rapid City Police officers in February 2021. The charge is merely an accusation and Acevedo is presumed innocent until and unless proven guilty.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Loefer was detained pending trial. A trial date has not been set.
Box Elder Man Pleads Not Guilty to Aggravated Sexual AbuseRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Box Elder, South Dakota, man has been indicted by a federal grand jury for three counts of Aggravated Sexual Abuse and one count of Abusive Sexual Contact.
Ricardo Edward Franc Olandez, age 34, was indicted on June 17, 2021. He appeared before U.S. Magistrate Judge Daneta Wollmann on June 28, 2021, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is lifetime imprisonment and/or a $250,000 fine, up to life of supervised release, and a $400 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Olandez forcing a juvenile female to engage in sexual acts with him between April 1, 2021, and May 14, 2021, on the Ellsworth Air Force Base.
The charges are merely accusations and Olandez is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Department of the U.S. Air Force Office of Special Investigations. Assistant U.S. Attorney Heather Sazama is prosecuting the case.
Olandez was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for September 7, 2021.
3 July 2021
Man Arrested on Charge of Illegally Transporting Fireworks, Including Homemade Devices that Caused Huge Explosion in South L.A.Read the Press Release
LOS ANGELES – A South Los Angeles man was arrested this afternoon on federal charges of illegally transporting tons of explosives he purchased in Nevada – including dangerous homemade devices that were detonated by police, leading to a massive explosion that destroyed a specially designed containment vehicle and injured 17 people.
Arturo Ceja III, was arrested by ATF special agents pursuant to a criminal complaint filed late Friday that charges him with transporting explosives without a license. Ceja will remain in custody until an initial appearance expected on July 6 in United States District Court in Los Angeles.
The complaint alleges that Ceja made several trips to Nevada in late June to purchase various types of explosives – including aerial displays and large homemade fireworks containing explosive materials – that he transported to his residence in rental vans. Most of the explosives were purchased at Area 51, a fireworks dealer in Pahrump, Nevada. The complaint notes that fireworks in California can be sold for as much as four times what purchasers pay for the fireworks in Nevada.
Ceja told investigators that he purchased the homemade explosives – constructed of cardboard paper, hobby fuse and packed with explosive flash powder – from an individual selling the devices out of the trunk of a Honda in the Area 51 parking lot, according to the complaint.
“Ceja did not possess an ATF explosives license or permit of any kind that would authorize him to transport either aerial display fireworks or homemade fireworks made with explosive materials, including but not limited to flash powder,” according to the complaint affidavit written by a special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On Wednesday, after receiving a tip that fireworks were being stored in Ceja’s backyard, Los Angeles Police officers responded to his residence on East 27th Street. At the house, officers found over 500 boxes of commercial grade fireworks in large cardboard boxes. The initial investigation by local authorities estimated that approximately 5,000 pounds of fireworks were found; however, today the ATF determined that Ceja was storing approximately 32,000 pounds of fireworks in his backyard.
“[T]he fireworks were stored outside and in an unsafe manner, namely under unsecured tents and next to cooking grills,” the complaint alleges. “None of the commercial fireworks or homemade fireworks, which contained explosive materials, were stored in an approved magazine.”
In addition to the commercial fireworks, the initial search of Ceja’s residence led to the discovery of over 140 other homemade fireworks (typically referred to M devices of varying sizes), as well as explosives-making components, including hobby fuse that matched the fuse on a homemade mortar shell wrapped in tin foil that was discovered inside the residence, according to the affidavit.
While the fireworks were being removed from Ceja’s residence, the LAPD Bomb Squad determined that some of the homemade fireworks containing explosive materials were not safe to transport due to risk of detonation in a densely populated area and therefore would be destroyed on scene using a total containment vessel (TCV), according to the affidavit. During the destruction of the devices, the entire TCV exploded, causing a massive blast radius, damaging homes in the neighborhood and injuring a total of 17 law enforcement personnel and civilians.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The charge of transporting explosives without a license carries a statutory maximum sentence of 10 years in federal prison.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Department of Transportation, Office of Inspector General; and the Los Angeles Police Department are investigating this matter.
Assistant United States Attorneys Amanda M. Bettinelli and Erik M. Silber of the Environmental and Community Safety Crimes Section are prosecuting this case.
2 July 2021
Woman Pleads Guilty to Violating Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced on Thursday July 1, 2021, that JILL MARTIN, age 39, a resident of New Orleans, pled guilty to participating in a conspiracy to distribute and to possess with intent to distribute 500 grams or more of a mixture or substance containing a detectible amount of methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A).
According to court documents, MARTIN supplied another New Orleans drug dealer with pounds of methamphetamine which she obtained from a drug dealer in Hammond, Louisiana.
United States District Court Judge Mary Ann Vial Lemmon will sentence MARTIN on October 21, 2021. For the drug trafficking violation, MARTIN faces a term of imprisonment of not less than 10 years and not more than life in prison, a fine of up to $10,000,000.00, a period of supervised release of at least 5 years, and a mandatory special assessment fee of $100.00.
The case was investigated by the Federal Bureau of Investigation and the New Orleans Police Department. This case is being prosecuted by United States Attorney Maurice Landrieu of the U.S. Attorney’s Office.
Two O.C. Men Agree to Plead Guilty to Securities Fraud Charge for Swindling Investors Through $1.8 Million Cryptocurrency OfferingRead the Press Release
LOS ANGELES – Two Orange County men were charged today with conning thousands of investors into purchasing a cryptocurrency that purportedly provided exclusive access to a trading program that they falsely claimed was profitable, and then using most of the $1.8 million raised to enrich themselves.
Jeremy David McAlpine, 25, of Fountain Valley, and Zachary Michael Matar, 28, of Huntington Beach, each were charged in a one-count information with securities fraud.
McAlpine and Matar have agreed to plead guilty to the charge, according to plea agreements that also were filed today. The defendants are expected to plead guilty in United States District Court in the coming weeks.
According to court documents, in 2017, McAlpine and Matar founded Dropil Inc., a Belize-based company operating out of Fountain Valley. Dropil provided and managed investments in digital assets such as cryptocurrency. The defendants primarily were responsible for the development of Dropil’s digital asset, called DROP tokens, as well as its digital asset trading program, an automated trading bot called “Dex.” Purchasers of DROPs had access to Dex, which could only be used with DROP tokens. Neither McAlpine, Matar nor Dropil was registered with the Securities and Exchange Commission (SEC) as a broker or dealer.
McAlpine and Matar induced investors to purchase DROPs by making false claims about the functionality and profitability of Dex, which was said to provide an “expertly managed portfolio balancing algorithm [that] manages risk,” according to information published on Dropil’s website. The DROP tokens were said to “ensure privacy while also offering added value and exclusivity.” Dropil further promised that Dex’s trading would generate profits that would be distributed as additional DROP tokens every 15 days.
Beginning in late 2017, McAlpine and Matar began an unregistered offer and sale of DROPS on Dropil’s website. In January 2018, the defendants launched an initial coin offering (ICO) for the sale of DROPs, again through Dropil’s website, which continued through March 2017. To induce investors to purchase DROPs, McAlpine and Matar made a series of false statements to investors in a “White Paper” published on Dropil’s website and on its Twitter account, promoting the cryptocurrency’s supposed success.
The defendants also manufactured fake Dex profitability reports and made payments in the form of DROPs to Dex users, giving the false appearance that Dex was operational and profitable. McAlpine and Matar also made false statements about the volume and dollar amount of DROPs sold both during and after the ICO, stating Dropil had successfully raised $54 million from 34,000 investors both foreign and domestic. In fact, the ICO raised less than $1.9 million from fewer than 2,500 investors.
In total, the defendants obtained approximately $1,896,657 from 2,472 investors through the sale of approximately 629 million DROPs. But McAlpine and Matar did not use at least $1.6 million of the invested money as promised, using it instead to fund disbursements to themselves and their associates.
In conjunction with today’s announcement of the defendants’ agreement to plead guilty to securities fraud charges, the SEC has also announced that, in connection with a complaint filed in April 2020, Dropil, McAlpine and Matar have agreed to permanent injunctions barring further fraudulent conduct and prohibiting them from directly or indirectly participating in the offer, purchase, or sale of digital securities, with disgorgement, prejudgment interest, and civil penalties to be determined by the court.
The FBI investigated this matter.
Assistant United States Attorney Ranee A. Katzenstein, Chief of the Major Frauds Section, is prosecuting this case.
Two Men from Hope, Idaho, Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
COEUR D’ALENE – Morgan Kenney, 35, and Zachary Craig Carlson, 30, of Hope, Idaho, were sentenced to federal prison for conspiracy to distribute methamphetamine, announced Acting U.S. Attorney Rafael M. Gonzalez, Jr., today. Senior United States Ninth Circuit Judge Richard C. Tallman sentenced Kenney to 52 months and Carlson to 37 months. Kenney and Carlson, upon completion of their time, were ordered to serve an additional three years of supervised release.
According to court records, in 2015 and 2016, Kenney and Carlson conspired with Larry Junior Hillbroom, 37, and Sean Robert Wathen, 49, to smuggle methamphetamine through international airports between North Idaho and the Pacific islands of Guam and Palau. Kenney and Carlson used several different methods to smuggle the drugs, including shampoo containers and carrying the substance on their person. Once in Guam or Palau, Kenney and Carlson would coordinate with locals to sell the methamphetamine. Law enforcement officers learned of the conspiracy and were able to investigate and ultimately arrest Kenney, Carlson, and their coconspirators.
The two remaining defendants, Hillbroom and Wathen, are currently scheduled for trial in November at the federal courthouse in Coeur d’Alene.
Acting U.S. Attorney Gonzalez credited the cooperative efforts of the Drug Enforcement Administration, Bonner County Sheriff's Office, Bureau of Indian Affairs, Coeur d'Alene Police Department, Idaho State Police, U.S. Border Patrol, and the U.S. Marshals Service, which led to charges.
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.
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Trader at Large Canadian Asset Management Firm Charged with Insider Trading for Engaging in Multimillion-Dollar Front Running SchemeRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, 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 that SEAN WYGOVSKY, a trader at a large Canadian asset management firm (the “Employer Firm”), was charged in a Complaint in Manhattan federal court with securities fraud and wire fraud in connection with his scheme to steal confidential information about the trade orders of the Employer Firm in order to conduct hundreds of timely, profitable personal securities trades in the same stocks as the Employer Firm. WYGOVSKY attempted to hide his conduct by trading or causing trading in brokerage accounts held in the names of his close relatives. WYGOVSKY was arrested this morning in Austin, Texas, and is expected to be presented in federal court this afternoon before a U.S. Magistrate Judge for the Western District of Texas.
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Sean Wygovsky illegally exploited his access to his employer firm’s yet-to-be-executed trade orders to make numerous trades in anticipation of the bump or dip the firm’s buying or selling would cause. To conceal the scheme, Wygovsky allegedly made his front running trades through brokerage accounts of certain of his relatives. As alleged, Wygovsky made or directed over 700 timely transactions that netted him more than $3.6 million in illegal profits. Now Sean Wygovsky is in custody and facing serious criminal charges.”
FBI Assistant Director William F. Sweeney Jr. said: “Over the course of several years, as alleged, Wygovsky made hundreds of short-term trades based on inside information that ultimately reaped more than $3 million in profits. Schemes like the one alleged here grossly affect the integrity of our financial markets and remain a top priority for our financial fraud investigative teams.”
As alleged in the Complaint unsealed today in Manhattan federal court:[1]
SEAN WYGOVSKY has been employed at the Employer Firm since approximately 2013. The Employer Firm is an asset management firm based in Toronto, Canada, with at least approximately $19 billion in assets under management. WYGOVSKY has a number of close relatives who live in the United States, including a relative in North Carolina (“Relative-1”) and two relatives in Virginia (“Relative-2” and Relative-3”) who are married to each other.
The Front Running Scheme
Based on his position as a trader at the Employer Firm, WYGOVSKY had access to the trade information and trade orders of the Employer Firm. Like most large asset managers, the Employer Firm had rules and regulations concerning employees’ personal trading, including requirements about the confidentiality of client information and prohibitions against insider trading and personal trading in the same securities as the Employer Firm. The size of the Employer Firm’s trade orders often caused slight, temporary movements in the price of the securities traded. For example, if the Employer Firm engaged in a large purchase of stock, the increased demand could cause a slight rise in the stock price, and if the Employer Firm engaged in a large sale of stock, the increased supply could cause a slight drop in the stock price. Because WYGOVSKY had access to the Employer Firm’s trade orders, he knew in advance when a particular stock price would move slightly up or down based on that trading.
WYGOVSKY’s relatives maintained brokerage accounts for the personal purchase and sale of securities. In particular, Relative-1 maintained at least one brokerage account and Relative-2 and Relative-3 maintained at least four brokerage accounts (the “Subject Accounts”). From at least 2015 through April 2021, after obtaining information about the Employer Firm’s upcoming trading activity but before those trades were executed, WYGOVSKY caused the Subject Accounts to buy or sell the same securities the Employer Firm would be buying or selling, in order to profit through the subsequent movement of the stock that would often result from the Employer Firm’s trading. WYGOVSKY would then cause the Subject Accounts to exit those positions once the Employer Firm’s trading was underway, often within hours of when the Subject Accounts had first entered the positions. For example, if WYGOVSKY knew that the Employer Firm would be buying a particular stock, WYGOVSKY would cause one or more of the Subject Accounts to purchase that stock beforehand in relatively small amounts. Then, as the Employer Firm made relatively large purchases, the stock price would increase and WYGOVSKY would cause the Subject Accounts to sell their holdings at a profit.
At times, WYGOVSKY personally conducted the trading on behalf of both the Employer Firm and the Subject Accounts. For example, on occasion, IP log-ins from the Subject Accounts show the Subject Accounts were being accessed from locations where WYGOVSKY was travelling. On other occasions, WYGOVSKY would cause others to execute the timely, profitable trading in the Subject Accounts. Over an approximately five-year period, WYGOVSKY caused the Subject Accounts to engage in more than 700 such short-term timely, profitable trades, resulting in at least over $3.6 million of profits in the Subject Accounts.
Financial Transfers Back to Wygovsky
During the course of the front running scheme, Relative-2 and Relative-3 caused at least approximately hundreds of thousands of dollars to be sent back to WYGOVSKY from the Subject Accounts. For example, between 2015 and 2020, Relative-2 and Relative-3 moved millions of dollars from the Subject Accounts to bank accounts that they controlled, and wrote checks to WYGOVSKY and his immediate family members for hundreds of thousands of dollars. Furthermore, in or about late 2017 and early 2018, Relative-2 and Relative-3 transferred hundreds of thousands of dollars to a Slovenian bank for the benefit of certain relatives of WYGOVSKY’s wife.
* * *
WYGOVSKY, 40, of Ontario, Canada, is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the work of the FBI. Ms. Strauss further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action, for their cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Daniel Tracer is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Three years after victim's overdose death, drug trafficker pleads guilty to distributing the heroin that killed herRead the Press Release
ROME, Ga. - Shane Terhune, who sold heroin to a young couple just hours before the woman’s July 2018 overdose death, pleaded guilty to a charge of distributing that heroin, and admitted to causing the victim’s death.
“Terhune’s act of trafficking narcotics tragically ended the life of a young woman,” said Acting U.S. Attorney Kurt R. Erskine. “Opioid overdoses will be investigated as a federal priority and those who sell this poison will be held accountable for the death and serious injury that it causes.”
“The life of a young lady abruptly ended when Shane Terhune provided her with a deadly dose of heroin. DEA and its law enforcement partners are committing to bringing to justice, defendants like Mr. Terhune who pollute our streets with dangerous and deadly substances which cause immeasurable damage to our communities,” said Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Field Division.
According to Acting U.S. Attorney Erskine, the charges and other information presented in court: On July 6, 2018, officers of the Floyd County Police Department responded to a 911 call seeking medical attention for 25-year-old G.L. She died of a heroin overdose that night. The investigation revealed that earlier that afternoon, Terhune met G.L. and her fiancé at a location in Rome, Georgia, and gave them a plastic bag containing heroin in exchange for cash. G.L. subsequently injected the heroin Terhune sold, causing her death.
With this guilty plea, Terhune, who has a history of drug trafficking offenses, admitted to trafficking in heroin and acknowledged that the heroin he sold caused the victim’s death.
Sentencing for Shane Terhune, 41, of Rome, Georgia, is scheduled for October 19, 2021, at 10:00 a.m., before U.S. District Court Judge Steve C. Jones.
This case is being investigated by the Drug Enforcement Administration.
Assistant U.S. Attorney Irina Dutcher is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Texas Man Pleads Guilty to a Violation of the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA –GUSTAVO BALDERAS, age 34, a resident of Texas, pled guilty on June 30, 2021 before United States District Court Judge Martin L. C. Feldman to a one-count superseding bill of information charging him with conspiracy to distribute and possess with intent to distribute five hundred grams or more of cocaine hydrochloride, announced U.S. Attorney Duane A. Evans.
On February 9, 2018, a Drug Enforcement Administration (DEA) Task Force learned that Rafael Molina, an upper lever narcotics trafficker, was in route to Thibodaux, Louisiana to deliver two kilograms of cocaine hydrochloride the following day. Task Force officers established surveillance in Thibodaux and observed Molina, riding in a white pickup truck, and BALDERAS and an individual identified as Michael Garza, riding in a black Chrysler 300, registered to Garza, at a motel in Thibodaux. BALDERAS and Garza entered the truck with Molina, and they drove from the motel. Officers conducted a traffic stop on the truck, searched both vehicles, and located an ice chest in the Chrysler 300. Inside the ice chest were two kilograms of cocaine hydrochloride.
BALDERAS faces a mandatory minimum term of imprisonment of five years and a maximum term of forty years, a fine of up to $5,000,000.00, at least four years of supervised release following any term of imprisonment and a $100 special assessment fee.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
This case was investigated by the Drug Enforcement Administration, Office of Homeland Security Investigations, Terrebonne Parish Sheriff’s Office, and the Lafourche Parish Sheriff’s Office. The prosecution is being handled by Assistant United States Attorney André Jones.
Tampa Woman Sentenced to Twenty Years for Distribution of Heroin and Fentanyl Resulting in DeathRead the Press Release
Tampa, Florida – U.S. District Judge Thomas P. Barber has sentenced Leslie Pagan (40, Tampa) to 20 years in federal prison for conspiracy to distribute heroin and fentanyl and distribution of heroin and fentanyl resulting in death. The court also ordered Pagan to forfeit $105,932, which are traceable to proceeds of the offense. A federal jury had found her guilty on March 24, 2021.
According to testimony presented at trial, Pagan supplied coconspirators with heroin and fentanyl that was distributed in Hillsborough County. On December 19, 2019, a Tampa woman obtained a substance containing fentanyl from one of Pagan’s distributors, Jackylin Bonifacio. The victim used the fentanyl and shortly thereafter she collapsed and died.
The Hillsborough County Sheriff’s Office investigated the overdose death and identified Bonifacio as the person who had distributed the fentanyl to the victim. On December 20, 2019, Bonifacio was arrested and had 25 baggies of fentanyl, packaged for distribution in her possession.
The Hillsborough County Medical Examiner’s Office conducted an autopsy and determined that the victim had died from ingestion of substances, including heroin and fentanyl. Baggies recovered from Bonifacio and residue from a syringe found near the victim at the time of the overdose were analyzed and identified to contain fentanyl. Lab analysis also determined that the fentanyl mixtures were all very similar and, based on the circumstances of the death and the toxicology from the autopsy, the victim’s use of the fentanyl caused the victim’s death.
A joint investigation led by the FBI identified Pagan as Bonifacio’s supplier. During a series of covert operations, Pagan distributed fentanyl and heroin to a confidential informant and received payments from that informant. Pagan was arrested on September 1, 2020, and investigators recovered 97 grams of fentanyl and more than $105,000 from her residence.
On February 12, 2021, Bonifacio pleaded guilty to distribution of heroin and fentanyl, resulting in death. Her sentencing hearing is scheduled for August 31, 2021.
This investigation is the result of a partnership between the United States Attorney’s Office, the Federal Bureau of Investigation, Homeland Security Investigations, the Drug Enforcement Administration, the Hillsborough County Sheriff’s Office, the Tampa Police Department, the Hillsborough County Medical Examiner’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Michael Sinacore.
This investigation is the result of the Organized Crime Drug Enforcement Task Forces (OCDETF) program. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Tampa Man Sentenced to Twenty Years in Prison for Drug TraffickingRead the Press Release
GAINESVILLE, FLORIDA – Willie Murphy, Jr., 39, of Tampa, Florida, has been sentenced to serve 20 years in federal prison for possession with intent to distribute 28 grams or more of cocaine base and a synthetic cathinone as a result of his previously entered guilty plea. The sentence was announced by Jason R. Coody, Acting United States Attorney for the Northern District of Florida.
On June 5, 2020, Florida Highway Patrol troopers conducted a traffic stop on Murphy’s vehicle as it travelled northbound on Interstate 75 through Alachua County. During a search of the vehicle, troopers located more than 55 grams of cocaine base (crack), and over 1,100 pills later determined to be Eutylone Hydrochloride (a synthetic cathinone), and a small amount of marijuana. During questioning, Murphy admitted that he had a couple ounces of crack and about 1000 “molly” pills in the vehicle, which he intended to sell.
Murphy’s prior criminal history includes more than 15 felony convictions, several which involve narcotics distribution and violence against law enforcement officers. As a result, he has been previously incarcerated in the Florida Department of Corrections on five separate occasions.
“Those who repeatedly commit serious crimes are deserving of significant prison sentences,” stated Acting U.S. Attorney Coody. “Thanks to the outstanding work of our law enforcement partners at the Florida Highway Patrol and the Drug Enforcement Administration, this recidivist drug trafficker has been called to account for his continued criminal conduct.”
“The robust partnerships established between our federal, state and local law enforcement agencies allow us to work together to prevent crime and stop drug trafficking,” said Lieutenant Colonel Troy Thompson, Deputy Director of the Florida Highway Patrol. “We are proud of our partnerships and the incredible efforts our Florida Highway Patrol troopers perform every day to build a stronger, safer Florida”.
“This conviction highlights the importance of the relationship between the federal and state law enforcement agencies,” said DEA Miami Field Division Acting Special Agent in Charge La Verne Hibbert. “As a result of the collaboration with our law enforcement partners, this repeat offender will now be behind bars, and rendering our community safer.”
This sentencing resulted from the collaborative efforts of the Drug Enforcement Administration and the Florida Highway Patrol. Assistant United States Attorney Christopher Elsey prosecuted the case.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Tahlequah Resident Found Guilty of Sexually Abusing Child Under 12 in Indian Country and Production of Child PornographyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that Michael David Jackson, age 39, of Tahlequah, Oklahoma was found guilty by a federal jury of two counts of Aggravated Sexual Abuse of a Minor Under 12, one count of Abusive Sexual Contact with a Child Under 12 Years, one count of Sexual Exploitation of a Child/Use of a Child to Produce a Visual Depiction, and two counts of Possession of Certain Material Involving the Sexual Exploitation of a Minor. The jury trial began with testimony on Monday, June 28, 2021 and concluded on Thursday, July 1, 2021 with the guilty verdicts. The punishment for Aggravated Sexual Abuse of a Minor Under 12 is a mandatory minimum of not less than 30 years imprisonment.
During the jury trial, the United States presented evidence that Jackson began sexually abusing the victim in the fall of 2019 and the abuse continued until late December 2019. The child’s parents testified they relied on Jackson to provide childcare for them while they worked because they thought they could trust Jackson. In his caretaking role, Jackson had continued access to the child, which included staying overnight. Jackson used this time with the victim to sexually abuse her. The trial evidence also proved Jackson used a cell phone camera to capture images of the abuse.
The United States Attorney’s Office for the Eastern District of Oklahoma prosecuted the case because the defendant is a member of a federally-recognized Indian tribe and the crime occurred in Cherokee County, within the boundaries of the Cherokee Nation, and within the Eastern District of Oklahoma.
The guilty verdicts were the result of an investigation by the Cherokee Nation Marshal Service and the Federal Bureau of Investigation.
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma in Muskogee, presided over the trial and ordered the completion of a presentence report. Sentencing will be scheduled following completion of the report. Jackson was remanded to the custody of the United States Marshal pending the imposition of sentencing.
Assistant United States Attorneys Courtney Jordan and Dean Burris represented the United States.
Springfield Man Sentenced to 30 Years for Producing Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Missouri, man was sentenced in federal court today for sexually exploiting a minor to produce child pornography.
Anthony Thompson, 40, was sentenced by U.S. District Judge Roseann Ketchmark to 30 years in federal prison without parole. The court also ordered Thompson to spend 10 years on supervised release following incarceration.
On Oct. 19, 2020, Thompson pleaded guilty to one count of the sexual exploitation of a minor. Thompson admitted that he victimized a minor in to produce child pornography on July 1, 2018.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Springfield, Mo., Police Department and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."