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17 June 2021
Jefferson County Engineer Sentenced for $13 Million COVID-Relief FraudRead the Press Release
BEAUMONT, Texas – A Beaumont engineer has been sentenced for his participation in a scheme to file two fraudulent loan applications seeking more than $13 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, announced Eastern District of Texas Acting U.S. Attorney Nicholas J. Ganjei today
Shashank Rai, 31, pleaded guilty on Feb. 9, 2021, to making false statements to a bank and was sentenced to 24 months in federal prison today by U.S. District Judge Marcia A. Crone. Rai admitted that he sought millions of dollars in forgivable loans guaranteed by the SBA by claiming to have 250 employees earning wages when, in fact, no employees worked for his purported business. In the application submitted to the first lender, Rai sought $10 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of $4 million. In the second application, Rai sought approximately $3 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of approximately $1.2 million.
“The Payroll Protection Program was designed to provide financial support during the COVID-19 pandemic to real American businesses with real employees,” said Acting U.S. Attorney Nicholas J. Ganjei. “It was not designed to provide loans to individuals for personal investment purposes. Today’s sentence demonstrates our shared commitment to protecting this important, taxpayer-funded program.”
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
This case was investigated by the FHFA-OIG, FDIC-OIG, SBA-OIG, and USPIS. Assistant Chief L. Rush Atkinson and Trial Attorney Lou Manzo of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys Nathaniel Kummerfeld and Frank Coan prosecuted the case.
The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Jackson Man Sentenced to 15 Years in Prison for Possession of a Firearm by a Convicted FelonRead the Press Release
Jackson, Miss. - A Jackson man was sentenced today to 15 years in prison for possessing a firearm after having been previously convicted of multiple felony offenses, announced Acting U.S. Attorney Darren J. LaMarca and Michelle Sutphin, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi.
According to court documents, on January 21, 2019, Jackson Police officers responded to a call concerning a suspected house burglary in the city of Jackson. When officers arrived, Albert Thompson, 24, of Jackson, was found at the scene along with two other individuals. All three individuals ran from the officers. Thompson was taken into custody and had a 9mm pistol in his hand. The arresting officer reported that Thompson raised the pistol toward her.
Thompson had four prior felony convictions for burglary of a dwelling in Rankin and Madison counties, and a felony conviction for motor vehicle theft in Rankin County. As a convicted felon, it is contrary to federal law for Thompson to possess any firearm.
Thompson was indicted and pled guilty to possessing a firearm as a convicted felon. Due to the number and nature of Thompson’s prior felony convictions, he faced an enhanced penalty at sentencing.
The Federal Bureau of Investigation and the Jackson Police Department investigated the case.
Assistant U.S. Attorney Bert Carraway prosecuted the case.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Inland Empire Attorney Faces Federal Charge of Producing Child Pornography for Enticing Minor to Send Sexually Explicit ImagesRead the Press Release
RIVERSIDE, California – An attorney with a law practice in Ontario was taken into federal custody today on a charge of producing child pornography that alleges he paid a teenaged girl to send him sexually explicit images.
Sagi Schwartzberg, 38, of Fontana, was taken into custody by special agents with the FBI after the San Bernardino County District Attorney on Wednesday dismissed its child exploitation charges against him. Schwartzberg – who used the aliases “Jason D,” “drunkesq_o64” and “xocdrunkx” on social media platforms – is expected to be arraigned on the federal charge this afternoon in United States District Court in Riverside.
Schwartzberg is named in a federal criminal complaint, filed on April 27 and unsealed today, that charges him with production of child pornography, an offense that carries a mandatory minimum sentence of 15 years in federal prison.
Schwartzberg was arrested February 17 in the state case, approximately three months after the National Center for Missing and Exploited Children forwarded a tip from Kik, a mobile messaging application, to the Fontana Police Department. The tip indicated that a person later identified as Schwartzberg had uploaded suspected child pornography to Kik from two locations – later determined to be his residence and his law office – in October and November. The FBI later reviewed the videos, one of which depicts a girl who appears to be under the age of 10 being sexually assaulted, according to the affidavit in support of the complaint.
During a search on February 17, Fontana Police officers seized Schwartzberg’s mobile phone, which had a hidden vault containing file folders, labeled with girls’ names, one of which contained sexually explicit images and videos of a girl who is now 15 years old, the affidavit alleges.
During a subsequent interview with police officers outlined in the affidavit, the girl said she had been solicited by Schwartzberg to send sexually explicit images via SnapChat starting 2019 and that she had received electronic gift cards in exchange. The victim “reported that ‘Jason’ asked her to meet up with him for sex but she never agreed to it,” the affidavit states. “‘Jason’ also asked her to introduce him to her other friends but [the victim] claimed that she did not introduce him to any of her friends.”
Fontana Police also identified another victim, currently 17 years old, who had sent images to Schwartzberg via SnapChat when she was 16, sometimes in response to specific instructions, according to the affidavit, which notes authorities have identified at least two other minor victims who also sent images to Schwartzberg.
The FBI continues to work to identify other victims in this case. Anyone who may have information in this matter is encouraged to contact the FBI’s Los Angeles Field Office at 310-477-6565.
This matter is being investigating by the FBI in conjunction with Fontana Police Department, as part of Inland Regional Child Exploitation and Human Trafficking Task Force. The Task Force also includes the Upland Police Department, the Rialto Police Department, the San Bernardino County Sheriff's Department, the Riverside County District Attorney’s Office, the Riverside County Sheriff’s Department and the Riverside Police Department.
Assistant United States Attorney Sonah Lee of the Riverside Branch Office is prosecuting this case.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on June 15 was:
Jesse Jon Strack, 40, of Billings, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Strack faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Strack was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-29.
Douglas Lynn Vanderslice, 35, of Butte, on charges of unlawful drug user in possession of a firearm. If convicted of the most serious crime, Vanderslice faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Vanderslice was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-36.
Donald Ray Gardner, 58, of Lodge Grass, on charges of aggravated sexual abuse of a child and abusive sexual contact. If convicted of the most serious crime, Gardner faces a maximum of life in prison, a $250,000 fine and five years of supervised release. Gardner was released pending further proceedings. The FBI investigated the case. PACER case reference. 20-70.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Individual Charged with Kidnapping Woman from Laboratorio Clínico Millennium in HumacaoRead the Press Release
SAN JUAN, Puerto Rico – On June 16, 2021, a federal grand jury returned a three-count indictment charging José Reyes-Serrano with kidnapping, carjacking, and robbery, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
As stated in the Affidavit submitted in support of the Complaint, On June 9, 2021, after 7:00 a.m., Reyes-Serrano entered the Laboratorio Clínico Millennium in Humacao and demanded money from the staff while indicating that he had a weapon. After he was given approximately $80, Reyes-Serrano asked who owned the Honda Passport parked outside. When no one responded, he threatened to kill people in the laboratory if the owner did not give him the key. The owner came forward. Reyes-Serrano told her to accompany him to the vehicle and ordered her to sit in the front passenger seat. Reyes-Serrano then took the woman to San Juan. She was later found unharmed near Residencial Luis Llorens Torres.
Using tracking technology, the Federal Bureau of Investigation was able to locate the carjacked vehicle. Agents from the Puerto Rico Police Bureau then intercepted the car, which Reyes-Serrano crashed. He was arrested nearby.
“Tracking technology on vehicles has the potential to make carjacking cases easier to solve and much less profitable for criminals,” said U. S. Attorney Muldrow. “Thanks to the Puerto Rico Police Bureau and the FBI who worked as one team to solve this case immediately.”
Assistant U.S. Attorney Jeanette Collazo of the Violent Crimes and National Security Section is in charge of the prosecution of the case. The Federal Bureau of Investigation is in charge of the investigation. If convicted, the defendant faces up to life in prison.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Henderson County Man Sentenced to 10 Years in Federal Prison for Trafficking MethamphetamineRead the Press Release
TYLER, Texas – An Athens, Texas man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Matthew Don Herrington, 49, pleaded guilty on Dec. 12, 2020, to possession with intent to distribute methamphetamine and was sentenced to 120 months in federal prison on June 16, 2021, by U.S. District Judge Jeremy D. Kernodle.
“Drug dealers who pump poison into our communities will face certain and severe consequences,” said Acting U.S. Attorney Nicholas J. Ganjei. “Our office will continue to partner with federal, state, and local agencies to ensure our communities are safe and to bring to justice those who spread the misery of methamphetamine.”
According to documents and information presented in court, Herrington was arrested on Oct. 22, 2019 by Rusk County Sheriff’s Deputies with a quantity of methamphetamine that he intended to distribute to others, along with a firearm. In March 2020, Rusk County Deputies learned that Herrington was still engaged in methamphetamine trafficking. On March 25, 2020, Deputies executed a search warrant of Herrington’s home and recovered a distributable quantity of methamphetamine and another firearm. Herrington is prohibited from possessing firearms because of multiple prior felony convictions, including a 2009 federal conviction for distribution of methamphetamine, for which he received 70 months in federal prison.
This case was investigated by the U.S. Drug Enforcement Administration and the Rusk County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Ryan Locker.
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Great Falls man sentenced to prison for illegal firearm possessionRead the Press Release
GREAT FALLS – A Great Falls man was sentenced today to one year and one day in prison followed by three years of supervised release on a firearms conviction after law enforcement officers found him slumped over in a running vehicle, under the influence of drugs and with a firearm, Acting U.S. Attorney Leif M. Johnson said.
Leonard James Hilton, 35, pleaded guilty on March 16 to possession of a firearm by an unlawful user of a controlled substance.
Chief U.S. District Judge Brian M. Morris presided. Hilton was detained.
In court documents filed in the case, the government alleged that through out 2019 and 2020, Hilton had numerous interactions with Great Falls law enforcement and had repeatedly acknowledged to police that he was addicted to methamphetamine and heroin. The government further alleged that on April 9, 2020, police responded to a call and found Hilton slumped over the steering wheel of a running car in a motel parking lot. Officers knocked on the window. Hilton was sluggish to respond, but then reached toward the center console where officers saw a pistol in plain view. Officers ordered Hilton out of the vehicle, and as he exited, numerous hypodermic needles fell out of his coat pocket. Hilton told officers he had received the pistol from a friend.
Assistant U.S. Attorney Jessica A. Betley prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Great Falls Police Department and the Cascade County Sheriff’s Office.
This case is part of Project Guardian, a Department of Justice initiative launched in the fall of 2019 to reduce gun violence and enforce federal firearms laws. Through Project Guardian, the U.S. Attorney’s Office in the District of Montana is working to enhance coordination of its federal, state, tribal and local law enforcement partners in investigating and prosecuting gun crimes. In addition, Project Guardian supports information sharing and taking action when individuals are denied a firearm purchase by the National Instant Criminal Background Check System for mental health reasons or because they are a prohibited person.
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Fort Pierre Woman Indicted on Methamphetamine ChargesRead the Press Release
Acting United States Attorney Dennis Holmes announced that a Fort Pierre, South Dakota, woman has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance.
Lisa Herren, a/k/a Lisa Miller, age 42, was indicted on June 8, 2021. She appeared before U.S. Magistrate Judge Mark A. Moreno on June 11, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 40 years in prison, including a mandatory minimum of five years in prison, a $5,000,000 fine, and at least four years, up to life of supervised release, and $100 to the Federal Crime Victims Fund for each Count. Restitution may also be ordered.
The Indictment alleges that between September 2018 and June 2021, Herren was involved in a conspiracy with several others to distribute over 50 grams of methamphetamine in and around the Pierre and Fort Pierre, South Dakota, area.
The charge is merely an accusation and Herren is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force, Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, and the South Dakota Highway Patrol. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Herren was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former Western New Yorker Pleads Guilty to Bank Fraud and Tax EvasionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ronald Rechan, 58, of Douglasville GA, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to making a false statement on a bank loan application and to tax evasion. The charges carry a maximum penalty of 30 years in prison and a fine of $1,000,000.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that in November 2017, the defendant submitted a $150,000 home loan application to First National Bank of America. In order to influence the bank into issuing the loan, Rechan fraudulently overstated his income. In addition to providing false information to the bank, between April 2013 and January 2018, the defendant committed tax evasion. During that period, while serving as a chief financial officer, the defendant paid himself $1,962,167.21 which constituted income for federal tax purposes. In order to avoid paying tax on this income, Rechan paid personal expenses directly from a company account and deposited $332,746.19 into a nominee bank account. His actions resulted in a tax loss to the IRS of $628,144.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge, New York Field Office.
Sentencing is scheduled for October 12, 2021, before Judge Sinatra.
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Former Florence County Sheriff’s Lieutenant Sentenced to Just over a Year in Federal Prison after Joint Investigation into Public Corruption and Illegal GamblingRead the Press Release
FLORENCE, SC --- Acting U.S. Attorney M. Rhett DeHart announced today that former Florence County Sheriff’s Lieutenant Mark Edward Fuleihan, 49, of Florence, was sentenced to just over a year in federal prison as the result of an extensive joint federal and state investigation into public corruption and illegal gambling operations in the Pee Dee region. Fuleihan, who previously pleaded guilty for operating an illegal gambling business, is one of nine defendants to be charged in the case and is among eight defendants who have pleaded guilty for their role in the illegal operation.
Homeland Security Investigations (HSI) and the South Carolina Law Enforcement Division (SLED) began the operation years ago after a request from the Florence County Sheriff’s Office. The investigation specifically focused on allegations that a senior law enforcement official was obstructing the ability of SLED and others to monitor illegal gambling operations by, among other things, informing those gambling operators about planned law enforcement activity. The case led to SLED’s arrest of Fuleihan on April 2, 2020, on a South Carolina State Grand Jury arrest warrant for a state Ethics Act bribery charge, followed by South Carolina State Grand Jury indictments for misconduct in office and Ethics Act bribery charges on May 14, 2020. Federal charges for obstruction of justice were filed on June 30, 2020, and a federal grand jury indicted Fuleihan on October 20, 2020, for operating an illegal gambling business, conspiracy to obstruct enforcement of state criminal law, and obstruction of an official proceeding. Then-Florence County Interim Sheriff William Barnes dismissed Fuleihan, who had served as a Florence County Sheriff’s Deputy since 1995, from his position just before his arrest by SLED.
“We trust our law enforcement officers to protect society and stand against wrongdoing,” said Acting U.S. Attorney DeHart. “When an officer violates that trust, it is imperative that we hold them accountable. I commend our state and federal partners for doing just that in this case. This team was able to dismantle a criminal organization that was bolstered by a crooked cop and to send that officer to prison.”
“We greatly appreciate the work of our federal, state, and local partners in this joint investigation, which involved the US Attorney’s Office, HSI, SLED, the Florence County Sheriff’s Office, and the Attorney General’s State Grand Jury Division,” South Carolina Attorney General Alan Wilson said. “It is our goal to successfully synch and pool the resources of all the various jurisdictions to best achieve justice for South Carolinians,” he added.
“A law enforcement officer’s badge and gun are not only symbols of trust and professionalism, but they are also tools that should be used for protecting the public, not enabling criminal activity,” said Special Agent in Charge Ronnie Martinez, who oversees HSI operations in North and South Carolina. “Corruption in law enforcement undermines the public’s trust and makes all of our jobs harder.”
“When a law enforcement officer breaks the law, it tarnishes the entire profession, and we lose the respect of the communities we serve” said SLED Chief Mark Keel. “SLED is committed to continuing our work with our federal, state, and local partners to ensure that we have professional accountable law enforcement in South Carolina.”
Evidence presented to the court showed that since at least July 2014, the defendants operated illegal gambling houses throughout Florence and Williamsburg. The gambling organization allowed individuals to play illegal gambling machines, collected monies from those individuals playing, and payed out winnings to those individuals. Approximately $1,000,000 in cash was deposited into the accounts of at least two members of the gambling organization.
The evidence showed that Fuleihan was essential to the ability of the gambling operation to operate. Fuleihan used his former position as a senior officer with the Florence County Sheriff’s Office to uncover details about the joint federal and state investigation into the illegal gambling operation, which included calling SLED officials and requesting to be informed about any upcoming operations related to gambling enforcement. Fuleihan would share this information with members of the illegal gambling operation, and the members would use it to evade law enforcement operations and to destroy potentially relevant evidence. Fuleihan was recorded on several calls with at least one member of the gambling operation discussing pending federal search warrants, potential wiretaps, and law enforcement raids. At least one member of the illegal gambling operation explained how Fuleihan would sell previously seized gambling machines back to members of the illegal gambling operation.
Chief U.S. District Judge R. Bryan Harwell sentenced Fuleihan to twelve months and one day in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system. The South Carolina State Grand Jury charges remain pending at this time.
The following co-defendants in the case have pled guilty and been sentenced to terms of probation or house arrest: Timothy Dane Keefe, 39, of Lake City; Thyrone Eaddy, 54, of Lake City; Cliff Cantey, 62, of Lake City; Kenneth Moore, 64, of Salters; George Dollard, 70, of Lake City; and Leroy Barbour 51, of Florence. Co-defendant Sheryl Kirby, 52, of Lake City, has pleaded guilty and is awaiting sentencing. Co-defendant Dale Smith, 64, of Lake City, has been charged but has not entered a plea in the case or otherwise been convicted.
The case was investigated by HSI, SLED, the Florence County Sheriff’s Office, and the South Carolina State Grand Jury. Assistant United States Attorney Derek A. Shoemake prosecuted the federal case. State Grand Jury Division Chief Attorney S. Creighton Waters and Assistant Attorney General Johnny Ellis James, Jr. are prosecuting the case for the South Carolina State Grand Jury.
Former Enforcer of New Bedford Latin Kings Chapter Sentenced for Drug Trafficking and ManufacturingRead the Press Release
BOSTON – A former Enforcer for the New Bedford Chapter of the Massachusetts Almighty Latin King and Queen Nation (Latin Kings) was sentenced today on drug charges.
Jeremia Medina, a/k/a “King Sweepy,” 33, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to eight years in prison and three years of supervised release. On March 10, 2021, Medina pleaded guilty to conspiracy to distribute, manufacture and possess with intent to distribute cocaine base.
Medina was a former Enforcer of the New Bedford Chapter of the Latin Kings and conspired with other gang members to distribute, manufacture and possess with intent to distribute cocaine and cocaine base. As Enforcer, Medina was a leader of the New Bedford Chapter charged with organizing violent acts by the gang and administering violations and other violence. Medina also conspired with other Latin Kings members and leaders to operate a vast drug trafficking network throughout New Bedford, using a number of multi-unit apartment buildings controlled by the Latin Kings, known as trap houses. Medina was also recorded on video participating in multiple beatings of individuals targeted by the gang.
The Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Medina is the 32nd defendant to be sentenced in the case.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Joseph C. Cordeiro made the announcement. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorneys Philip A. Mallard and Lauren Graber of Mendell’s Criminal Division prosecuted the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Boston Police Sergeant Pleads Guilty to Overtime FraudRead the Press Release
BOSTON – A former Boston Police Sergeant pleaded guilty today in connection with committing over $25,000 in overtime fraud while assigned to the Boston Police Department’s (BPD) evidence warehouse.
Gerard O’Brien, 62, of Braintree, pleaded guilty to one count of conspiracy to commit theft concerning programs receiving federal funds and one count of embezzlement from an agency receiving federal funds. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Oct. 28, 2021.
In September 2020, O’Brien and eight other Boston Police officers were arrested and charged for their roles in an overtime fraud scheme that is alleged to have collectively embezzled over $250,000 between May 2016 and February 2019. As part of the ongoing investigation, four additional officers have been charged: former officer Joseph Nee, former Captain Richard Evans and former Sergeants George Finch and William Baxter. Finch pleaded guilty on June 1, 2021. Nee and Baxter are each scheduled to plead guilty on June 22, 2021 and June 25, 2021, respectively. On April 8, 2021, Evans pleaded not guilty.
From December 2016 through February 2019, O’Brien submitted false and fraudulent overtime slips for overtime hours that he did not work for two overtime shifts at the evidence warehouse. The first, called “purge” overtime, was a 4 – 8 p.m. weekday shift intended to dispose of old, unneeded evidence. The second shift, called “kiosk” overtime, involved driving to each police district in Boston one Saturday a month to collect old prescription drugs to be burned.
For the “purge” shift, O’Brien claimed to have worked from 4 – 8 p.m., but he routinely left at 6 p.m., and sometimes earlier. Additionally, O’Brien knowingly endorsed the fraudulent overtime slips of his subordinates who, allegedly, also left early from this shift. For the “kiosk” shift, O’Brien and, allegedly, others submitted overtime slips claiming to have worked eight-and-one-half hours, when in fact he and, allegedly, other members of the unit, only worked three-to-four hours of those shifts.
From December 2016 to February 2019, O’Brien personally collected approximately $25,930 for overtime hours he did not work.
From 2015 through 2019, BPD received annual benefits from the U.S. Department of Transportation and U.S. Department of Justice in excess of $10,000, which were funded pursuant to numerous federal grants.
The charge of embezzlement from an agency receiving federal funds provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. The charge of conspiracy provides for a sentence of up to five years in prison, three years 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; Russell W. Cunningham, Special Agent in Charge of the Department of Justice Office of the Inspector General, Washington Field Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistance was provided by the Boston Police Department. Assistant U.S. Attorney Mark Grady of Mendell’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Boston Police Officer Charged in Overtime Fraud SchemeRead the Press Release
BOSTON – A former Boston Police officer has been charged and has agreed to plead guilty in connection with an ongoing investigation of overtime fraud at the Boston Police Department’s (BPD) evidence warehouse.
Craig Smalls, 55, of Roxbury, agreed to plead guilty to one count of conspiracy to commit theft concerning programs receiving federal funds and one count of embezzlement from an agency receiving federal funds. A plea hearing has not yet been scheduled.
Smalls admitted that from at least March 2015 through September 2016, he submitted false and fraudulent overtime slips for overtime hours that he did not work for two overtime shifts at the evidence warehouse. The first, called “purge” overtime, was a 4 – 8 p.m. weekday shift intended to dispose of old, unneeded evidence. The second shift, called “kiosk” overtime, involved driving to each police district in Boston one Saturday a month to collect old prescription drugs to be burned.
For the “purge” shift, Smalls claimed to have worked from 4 – 8 p.m., but he routinely left at 6 p.m., or earlier. For the “kiosk” shift, Smalls submitted overtime slips claiming to have worked eight-and-one-half hours, when in fact he and, allegedly, other members of the unit only worked three-to-four hours of those shifts. As a result, between March 2015 and September 2016, Smalls personally collected approximately $16,252 for overtime hours he did not work.
In September 2020, nine Boston Police officers were arrested and charged for their roles in an overtime fraud scheme that is alleged to have collectively embezzled over $250,000 between May 2016 and February 2019. As part of the ongoing investigation, four additional officers have been charged: former officer Joseph Nee, former Captain Richard Evans and former Sergeants George Finch and William Baxter. Finch pleaded guilty on June 1, 2021. Nee and Baxter are each scheduled to plead guilty on June 22, 2021 and June 25, 2021, respectively.
From 2015 through 2019, BPD received annual benefits from the U.S. Department of Transportation and U.S. Department of Justice in excess of $10,000, which were funded pursuant to numerous federal grants.
The charge of embezzlement from an agency receiving federal funds provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. The charge of conspiracy provides for a sentence of up to five years in prison, three years 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; Russell W. Cunningham, Special Agent in Charge of the Department of Justice Office of the Inspector General, Washington Field Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistance was provided by the Boston Police Department. Assistant U.S. Attorney Mark Grady of Mendell’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five Employees of Utility Company Charged in Bribery and Kickback SchemeRead the Press Release
Defendant Complained to Contractor in Code That Bribe Payment was Insufficient: “Sandwich was Light on the Meat”
A criminal complaint was unsealed today in Brooklyn charging Devraj Balbir, Ricardo Garcia, Patrick McCrann, Jevan Seepaul and Richard Zavada, managers employed in the facilitiesdepartment of a New York utility company (the “Company”), with conspiring to violate the Travel Act by accepting hundreds of thousands of dollars in bribes and kickbacks in exchange for steering contracts to certain Long Island-based contractors with whom the Company did business. One contractor (the “Contractor”) secured more than $50 million in facility maintenance contracts from the Company during the time that the Contractor was paying bribes to the defendants. The defendants were arrested today and will make their initial appearances this afternoon before United States Magistrate Judge James R. Cho.
Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.
“As alleged, the defendants made corrupt demands for bribes and kickbacks to line their own pockets and upgrade their lifestyles, while putting the contractors at risk of losing business if they did not comply,” stated Acting U.S. Attorney Lesko. “This Office is committed to protecting the integrity of the bidding process and ensuring that businesses compete on a level, honest playing field.”
"Crimes of this nature weaken the integrity of the bidding process and deny consumers the benefit of free and open competition in the marketplace. The FBI will continue to work with the Antitrust Division to ensure fair bidding practices are employed across all sectors of our economy," stated FBI Assistant Director-in-Charge Sweeney.
As alleged in the complaint, between 2013 and 2020, the defendants solicited and accepted bribes and kickbacks from the owners of the Contractor and other contractors in connection with the awarding of maintenance work contracts for the Company. As managers in the facilities department of the Company, McCrann, Garcia (after May 1, 2019) and Balbir (after May 1, 2020) had the authority to approve “no-bid” contracts valued at less than $50,000. The Contractor understood that if it did not pay bribes, these defendants would award the Company’s work to the Contractor’s competitors. In exchange for the bribe payments, the defendants, including Seepaul and Zavada, also took various steps to assist the Contractor in obtaining contracts from the Company for which there was a bidding process, including providing it with non-public bidding information, circumventing the Company’s competitive bidding process and offering favorable reviews of the Contractor’s work. The Contractor paid bribes to ensure that the defendants did not slow or stop disbursement of project funds to the Contractor, provide negative performance reviews regarding the Contractor’s work, or otherwise claim that the Contractor’s work did not meet contractual specifications. The defendants communicated with the contractors about bribe payments by text messages, among other forms of communication. For example, on September 2, 2016, McCrann texted a contractor, “Sandwich was light on the meat” and that McCrann was “a little concerned,” indicating that a bribe payment had been insufficient. The contractor replied, “I’ll ask for a nice one next time,” indicating that the next bribe payment would be larger.
The illicit payments to the defendants took multiple forms, including cash, purchase of a recreational vehicle, home improvements, landscaping and an overseas vacation. For example, during 2017 and 2018, the Contractor paid tens of thousands of dollars in bribes to Balbir in the form of renovations performed at his residence. Between August 2015 and April 2019, the Contractor also made college tuition payments totaling more than $30,000 for a family member of Garcia. On February 25, 2018, Garcia sent a text message to a contractor containing images of airlines reservations for two individuals in April 2018 from Newark to Dubai and hotel reservation information for a 10-night hotel stay in Dubai for two individuals so that the contractor could pay for the expenses. Financial records obtained during the investigation also revealed that the Contractor paid approximately $100,000 for work performed at Seepaul’s home during 2017.
As part of the investigation, agents recovered approximately $300,000 in cash from a safe deposit box held by Zavada. On November 18, 2020, FBI special agents executed a search warrant at Zavada’s residence in Hicksville, New York, and seized electronic spreadsheets he maintained that contained dates, the amounts of bribe payments, and the names of various entities that provided facilities services to the Company.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Turner Buford, Artie McConnell and Nathan Reilly are in charge of the prosecution.
The Defendants:
DEVRAJ BALBIR
Age: 33
North Bellmore, New YorkRICARDO GARCIA
Age: 48
Stroudsburg, PennsylvaniaPATRICK MCCRANN
Age: 57
Selden, New YorkJEEVAN SEEPAUL
Age: 36
Rockville Centre, New YorkRICHARD ZAVADA
Age: 65
Hicksville, New YorkE.D.N.Y. Docket No. 21-MJ-696
Final Defendant Sentenced in Anderson County Drug Trafficking ConspiracyRead the Press Release
TYLER, Texas – The final defendant has been sentenced to federal prison in a drug trafficking conspiracy in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Amber Nicole Priehs, 30, pleaded guilty on Dec. 12, 2019, to conspiracy to distribute cocaine, methamphetamine, and heroin, and was sentenced to 80 months in federal prison today by U.S. District Judge Jeremy D. Kernodle. Priehs was the sixth and final Palestine, Texas resident to be sentenced in the drug trafficking conspiracy.
“The imprisonment of this drug trafficking organization is a significant victory for the citizens of Palestine and the rest of East Texas,” said Acting U.S. Attorney Nicholas J. Ganjei. “Our office will continue to pursue those who pump poison and misery into our communities. These defendants showed an utter lack of regard for their fellow citizens by lining their own pockets off of addiction and the decay of their own community.”
According to information presented in court, Byron Bernard Billups, Brandon Williams, and Priehs distributed large amounts of methamphetamine, cocaine, and heroin in Palestine and surrounding areas. Billups served as the leader and primary source of supply and worked with Priehs and others to acquire kilos of methamphetamine and other drugs from sources of supply across Texas and brought them back to East Texas for distribution. Brandon Williams distributed bulk methamphetamine, cocaine, and ecstasy to wholesale and retail customers from his home in Palestine, which he shared with his uncle, Larry Williams, who also assisted with handling customers in the drug deals. Priehs distributed bulk methamphetamine, cocaine, and heroin directly to customers and through Marcos Navarro, who reported to Priehs. Priehs also recruited Steve Foster to store bulk drugs at his house, which he also permitted Priehs to use to meet customers. A federal grand jury returned an indictment charging the defendants with federal drug trafficking violations on Feb. 20, 2019.
Brandon Kione Williams, 37, pleaded guilty on Sep. 21, 2020, to conspiracy to distribute drugs and was sentenced to 216 months in federal prison on March 25, 2021. Larry Joe Williams, 65, pleaded guilty on March 9, 2020, to misprision of a felony and was sentenced to 36 months in federal prison on Oct. 13, 2020. Byron Bernard Billups, 36, pleaded guilty on July 14, 2020, to conspiracy to distribute drugs and was sentenced to 120 months in federal prison on Dec. 17, 2020.
Marcos Antonio Navarro, 35, pleaded guilty on March 12, 2020, to conspiracy to distribute drugs and was sentenced to 60 months in federal prison on August 11, 2020. Steve Allen Foster, 33, pleaded guilty on March 16, 2020, to conspiracy to distribute drugs and was sentenced to 78 months in federal prison on Sep. 15, 2020.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by the U.S. Drug Enforcement Administration, Texas Department of Public Safety-CID, and the Palestine Police Department. These defendants were prosecuted by Assistant U.S. Attorneys Ryan Locker, Colleen Bloss, and Heather H. Rattan.
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El Departamento de Justicia llega a un acuerdo con un distrito escolar de Carolina del Norte para la provisión de la igualdad de oportunidades a estudiantes que están aprendiendo inglésRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo de conciliación con la Junta Educativa de Rowan-Salisbury, el cual resuelve la investigación del Departamento de los programas del sistema escolar de Rowan-Salisbury (el Distrito) para sus estudiantes que están aprendiendo inglés. La investigación del Departamento halló que incumplió, de manera generalizada, con su deber de proporcionar a estos estudiantes con la enseñanza y el apoyo que necesitan para aprender inglés y participar plenamente en la vida escolar. El Departamento llevó a cabo su investigación en virtud de la Ley de Igualdad de Oportunidades Educativas de 1974.
«Los estudiantes y padres que no dominan el inglés tienen el derecho a acceder a todos los programas y actividades educativas de su escuela, y ese acceso comienza con la comunicación significativa y la enseñanza apropiada por parte de los distritos escolares», declaró la Fiscal General Auxiliar Kristen Clarke de la División de Derechos Civiles. «El Departamento de Justicia reconoce que los estudiantes que están aprendiendo inglés hoy serán los graduados bilingües de mañana. Estos estudiantes aportan destrezas lingüísticas esenciales y diversas a nuestras comunidades y mano de obra. Nos anima ver cómo el sistema escolar de Rowan-Salisbury se ha comprometido con los objetivos de equidad y justicia que forman parte del corazón de este acuerdo y seguiremos luchando por asegurar que todos los estudiantes puedan disfrutar del acceso a las oportunidades educativas, independientemente de sus antecedentes.
Conforme al acuerdo de conciliación, el Distrito expandirá la enseñanza lingüística para estudiantes que están aprendiendo inglés, incluyendo aquellos que tienen discapacidades, para que puedan dominar el inglés. Asimismo, el Distrito capacitará a sus maestros y administradores en cuanto a la forma correcta de apoyar a estudiantes que están aprendiendo inglés en asignaturas académicas como matemáticas, ciencias o estudios sociales. El Distrito seguirá mejorando sus servicios de traducción e interpretación para padres cuyo dominio del inglés es limitado para que todos los padres puedan participar plenamente en la educación de sus hijos. Por otra parte, el Departamento de Justicia supervisará la implementación del acuerdo por parte del Distrito durante los próximos tres años escolares completos.
La ejecución de la ley de Igualdad de Oportunidades Educativas de 1974 es una de las prioridades principales de la División de Derechos Civiles del Departamento de Justicia. Para más información sobre la División de Derechos Civiles del Departamento de Justicia, puede visitar su sitio web en www.justice.gov/crt. Para más información sobre la labor de la Sección de Oportunidades Educativas, vaya a https://www.justice.gov/crt/educational-opportunities-section. Miembros del público también pueden informar de posibles vulneraciones de derechos civiles en https://civilrights.justice.gov/report/.
Durham Woman Pleads Guilty to Social Security FraudRead the Press Release
PORTLAND, Maine: A Durham woman pleaded guilty today in federal court to Social Security fraud, Acting U.S. Attorney Donald E. Clark announced.
According to court records, from about July 2009 through November 2018, Carol Bourgoin, 65, a recipient of Supplemental Security Income (“SSI”), concealed the presence of her husband in her household to maintain her eligibility to receive benefit payments. SSI benefits are paid to people with limited income who are blind, disabled or elderly. Bourgoin’s husband had sufficient income to render her ineligible for the benefits she received during that period. In multiple reviews of her eligibility for benefits, Bourgoin falsely represented to the Social Security Administration (“SSA”) that she was living alone and not receiving help or money from any other person during this time. At an interview with law enforcement agents, Bourgoin admitted to concealing her living situation from SSA because she knew it would make her ineligible to receive SSI.
Bourgoin faces up to five years in prison and a fine of up to $250,000, and up to three years of supervised release. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
SSA’s Office of the Inspector General investigated the case.
Denver Man Charged with COVID Relief Loan FraudRead the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado announced that Anthony Zaghab, 52, of Denver was arraigned today on charges relating to over $700,000 in fraudulently obtained COVID-relief loans and unemployment insurance. He has been charged with wire fraud.
According to the allegations contained in an Information filed in federal court, starting in April 2020, Zaghab submitted false and fraudulent Economic Injury Disaster Loan (“EIDL”) applications and Paycheck Protection Program (“PPP”) applications to the Small Business Administration and to an approved lender. By February 2021, he had submitted fraudulent applications that netted him $660,000 worth of payments. Zaghab also claimed and received over $40,000 in unemployment insurance benefits on behalf of ineligible family members without their knowledge or agreement.
Zaghab owned or controlled several corporate entities. He also claimed to own or control several more entities bearing his name and the names of family members. In loan applications for these entities, Zaghab falsely stated the number of employees, the purported gross revenues, and the purported cost of goods sold. Zaghab also applied for and obtained an EIDL for a fictitious business entity bearing the name of his deceased father. In addition, Zaghab applied for and attempted to obtain economic injury disaster loans on behalf of fictitious or purported business entities in the names of family members, without the knowledge or consent of those family members.
Zaghab submitted a PPP application in June 2020 for a business called “Anthony Zaghab.” He falsely represented the date the business was established and its monthly payroll. He received a PPP loan in the amount of $20,833. Zaghab applied for and received a second PPP loan of $20,832 for “Anthony Zaghab” in February 2021. He received two more PPP loans of over $20,830 each for a fictitious business in the name of a family member.
Zaghab also applied for and obtained approximately $41,500 in Colorado Pandemic Unemployment Assistance (“PUA”) for ineligible family members without their knowledge and consent. These family members included his mother and sister, both of whom resided outside of the United States, and his deceased father.
The charges in the Information are allegations. The Defendant is presumed innocent until proven guilty.
The United States Secret Service investigated this case. Assistant U.S. Attorneys Martha Paluch and Rebecca Weber are handling the prosecution.
Case Number: 21-cr-00188-RBJ
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Defendant with criminal convictions in Seattle and Kitsap County sentenced to 5 years in prison for crimes during civil unrest in May 2020Read the Press Release
Seattle – A 25-year-old Seattle man was sentenced today in U.S. District Court in Seattle to 5 years in prison for arson and possession of a stolen firearm related to his conduct during civil unrest on May 30, 2020, announced Acting U.S. Attorney Tessa M. Gorman. Tyre Wayne Means, Jr., 25, will serve the sentence concurrent to a sentence in Kitsap County Superior court for burglary. At the sentencing hearing U.S. District Judge Richard A. Jones said, “Your conduct was reckless, destructive and extremely dangerous to those who were there for peaceful protest.”
“The right to peacefully protest and gather in support of social and political causes is one of the dearest and most important rights that we enjoy in the United States,” said Acting U.S. Attorney Gorman. “This defendant is one of a smaller group who chose to abuse the cover of lawful protests to carry out acts of violence. His actions risked the safety of peaceful protestors and undercut their important messages and causes.”
According to records filed in the case, just after 4 p.m. on May 30, 2020, Means, Jr., was captured on video lighting a paper towel and placing it in the back of a Seattle Police patrol car parked outside of Nordstrom on Sixth Avenue in downtown. Other persons in the crowd fed the fire with lighter fluid and other accelerants, and the vehicle was destroyed by fire. After he lit one patrol car on fire, Means, Jr., is observed on video reaching through the destroyed rear window of a different patrol car and removing a rifle bag. Means, Jr., opened the bag and looked inside. Means, Jr., is seen fighting with an unidentified man who tried to retrieve the rifle bag before Means, Jr., ran from the scene. A subsequent surveillance video on Pine Street, around the corner from where the rifle was stolen, shows Means, Jr., in a fight with another man. While Means, Jr., and the man are throwing punches, an unidentified man picks up the rifle bag and ultimately walks away. Later that day, the rifle was anonymously returned to the Seattle Police West Precinct.
Means, Jr., was identified as the suspect in the video by his distinctive clothing, jewelry, tattoos, and association with a female who also had distinctive tattoos and a significant social media presence. Means, Jr., was arrested in Bremerton, Washington, where he was meeting with his Washington State Department of Corrections probation officer.
Means, Jr., is prohibited from possessing firearms due to two felony convictions in the state of Georgia: serious injury by vehicle and obstructing law enforcement by use of threats or violence. In Washington, Means, Jr., has a felony conviction for domestic violence that includes a no-contact order–that order also prohibits him from possessing firearms.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the FBI and the Seattle Police Department.
The case was prosecuted by Assistant United States Attorney Todd Greenberg.
Costa Rican National Extradited to Eastern District of Texas and Sentenced for Conspiracy to Import Cocaine into the United StatesRead the Press Release
PLANO, Texas – A Costa Rican man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Felipe Espinoza-Cruz, 49, pleaded guilty on Feb. 3, 2021, to conspiracy to manufacture and distribute 5 kilograms or more of cocaine for distribution into the United States and was sentenced to 135 months in federal prison today by U.S. District Judge Sean D. Jordan.
“As this case demonstrates, drug smugglers will use any transportation method they can to bring their deadly wares to our shores,” said Acting U.S. Attorney Nicholas J. Ganjei. “Although the transportation network these traffickers devised and implemented was extraordinarily vast and complex, our law enforcement partners were able to identify and disrupt it, and ultimately bring the perpetrators to justice in United States courts. This case is nothing less than a tremendous win for the American people.”
“Drug trafficking, whether on one of our local street corners or on the open sea 1500 nautical miles away still impacts the safety and security of all of our lives,” said Eduardo A. Chávez, Special Agent in Charge of the DEA Dallas Field Division. “This sentence reflects our continued resolve to partner with our international law-enforcement counterparts to fight greed, violence, and drug addiction as we continue to combat the crises we face daily.”
According to information presented in court, from at least 2005 and continuing up until his indictment, Espinoza-Cruz, a resident and national of Costa Rica, was a member of a drug trafficking organization responsible for multi-ton cocaine shipments originating in Colombia and then shipped to Costa Rica, Guatemala, and Mexico for further distribution to the United States. Airplanes, go-fast boats, semi-tractor trailer trucks, and passenger vehicles were used to transport most of the cocaine shipments. A federal grand jury returned an indictment charging Espinoza-Cruz with federal drug trafficking violations on Nov. 10, 2016.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.
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Convicted Felon in Possession of Firearm Found GuiltyRead the Press Release
Memphis, TN – After a two-day trial, a federal jury has convicted Carl Clarke, 31, for being a convicted felon in possession of a firearm. Acting U.S. Attorney Joseph C. Murphy Jr., announced the guilty verdict today.
According to information presented in court, on June 3, 2018, officers with the Dyersburg Police Department reported to a residence on Cumberland Street after receiving information that Clarke was at that address and had active arrest warrants.
Officers found Clarke and three others seated in the residence with a loaded Black Taurus PT111 G2 9mm handgun on the coffee table. Clarke was arrested on the active warrants and waived his Miranda rights. Officers asked if the handgun was his and he replied, "Yeah, that’s my gun."
Clarke is a convicted felon, having previously been convicted of attempted aggravated robbery, burglary, and aggravated assault. As a result of his prior felony convictions, he is prohibited by federal law from possessing firearms or ammunition.
Sentencing is scheduled for September 10, 2021, before Chief U.S. District Judge S. Thomas Anderson where, if found to be an Armed Career Criminal, he faces not less than 15 years imprisonment.
This case was investigated by the Dyersburg Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Federal Bureau of Investigation (FBI).
Assistant U.S. Attorneys Christie Hopper and Hillary Parham are prosecuting this case on behalf of the government.
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Convicted Felon Sentenced to Serve Twelve Years in Federal Prison for Drug Dealing and Firearm PossessionRead the Press Release
OKLAHOMA CITY – Yesterday, JAMES MCWILLIE AMBROSE, 39, of Oklahoma City, was sentenced to serve twelve years in federal prison for being a felon in possession of a firearm and possessing controlled dangerous substances with intent to distribute, announced Acting U.S. Attorney Robert J. Troester.
On July 8, 2020, a six-count Superseding Indictment was filed charging Ambrose with two counts of being a felon in possession of a firearm, two counts of possessing controlled substances with intent to distribute, and two counts of possessing a firearm in furtherance of a drug trafficking crime. On November 3, 2020, pursuant to a plea agreement, Ambrose pled guilty to two counts of possessing controlled dangerous substances with intent to distribute and two counts of being a felon in possession of a firearm.
Public records reflect that Ambrose was stopped for a traffic offense on December 1, 2019. Officers performed a search of the car after observing a mason jar filled with a green substance consistent with marijuana on the passenger-side floorboard. Officers found quantities of cocaine, crack cocaine, multiple pills of methamphetamine, and a loaded .38 caliber firearm concealed behind door panels of the car. On May 20, 2020, officers arrested Ambrose on a federal warrant as he was leaving his home, and found 13.6 grams of crack cocaine and $370 in the pockets of his shorts. Law enforcement searched Ambrose’s home and seized crack cocaine, powder cocaine, heroin, a .380 caliber pistol, and .380 caliber ammunition. Before the search, Ambrose had felony crimes for trafficking in a controlled dangerous substance, possession of a controlled dangerous substance with intent to distribute, possession of drug proceeds, and felon in possession of firearm. Federal law prohibits prior convicted felons from possessing firearms or ammunition.
Yesterday, U.S. District Judge Stephen P. Friot sentenced Ambrose to serve 144 months in federal prison, followed by five years of supervised release. In announcing the sentence, Judge Friot noted the nature and circumstances of the offense and Ambrose’s criminal history.
This case is the result of investigations by the Federal Bureau of Investigation’s Oklahoma City Field Office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Oklahoma City Police Department. Assistant U.S. Attorney Ashley L. Altshuler prosecuted the case.
This case is part of Project Safe Neighborhoods and Project Guardian, the Department of Justice’s signature initiatives to reduce gun violence and enforce federal firearms laws. The local implementation of these initiatives in the Western District of Oklahoma is through "Operation 922" which prioritizes prosecution of federal gun crimes connected to domestic violence.
Reference is made to public filings for further information.
Colorado Man Pleads Guilty to Federal Hate Crime After Unprovoked Stabbing of Black ManRead the Press Release
A Colorado man pleaded guilty today to a federal hate crime for stabbing a Black man from Ontario, Oregon while the man was sitting in a fast-food restaurant.
Nolan Levi Strauss, 27, pleaded guilty to a hate crime involving an attempt to kill.
According to court documents, on the morning of Dec. 21, 2019, a man walked into an Arby’s restaurant and adjoining Pilot Travel Center in Ontario where he planned to provide documentation for a pending job application. The man sat in a booth by himself, waiting to meet with the restaurant manager, when Strauss entered the building and approached the man from behind.
Suddenly, unprovoked and without warning, Strauss stabbed the man twice in the neck. The man tried to grab Strauss’s hands and take the knife, and, in the process, managed to prevent Strauss from stabbing him again. A maintenance worker approached Strauss and directed him to drop the knife several times. Finally, the stabbing victim broke free from Strauss’s grip and ran to the other side of the restaurant before collapsing on the floor. Meanwhile, the maintenance worker used a belt to secure Strauss’s hands behind his back and waited for police to arrive.
While they waited, the worker asked Strauss why he stabbed the man. Strauss replied, “Because he was Black, and I don’t like Black people.” Strauss was arrested at the scene. He later admitted he was trying to kill the man because was he was Black.
As a result of Strauss’s attack, the stabbing victim suffered two lacerations to his neck. He was evaluated in Ontario and subsequently life-flighted to a hospital in Boise, Idaho for emergency surgery.
“The defendant is being held accountable for his vicious, racially-motivated attack on a Black man who was targeted because of the color of his skin,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Racially motivated acts of violence must not be tolerated in our country today. The Civil Rights Division of the Department of Justice will continue to work with our federal, state and local partners to ensure that individuals who commit bias motivated crimes are brought to justice for their actions.”
“This crime serves as a horrifying reminder that racism and bigotry still exist and threaten the safety of communities of color,” said Acting U.S. Attorney Scott Erik Asphaug for the District of Oregon. “Hate crimes not only hurt victims, but spread fear across entire communities. This conviction should send a strong message that federal law enforcement will not tolerate hate-motivated acts of violence and will move swiftly to hold those responsible accountable.”
“Everyone deserves to go to work without fearing they will be a victim of violence because of how they look or how they live. Racist attacks like this one—powered by hate and grounded in ignorance—strike at the heart of our community,” said Kieran L. Ramsey, Special Agent in Charge of the FBI in Oregon. “We should all draw strength from our diversity and work together to protect our neighbors.”
On Sept. 17, 2020, a federal grand jury in Eugene returned a single-count indictment charging Strauss with a hate crime involving an attempt to kill.
Strauss faces a maximum sentence of life in prison. He will be sentenced on Sept. 9 before U.S. District Court Judge Michael J. McShane.
Assistant Attorney General Kristen Clarke and Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by the FBI with assistance from the Ontario Police Department, Oregon State Police, and the Malheur County District Attorney’s Office. It is being prosecuted by Gavin W. Bruce, Assistant U.S. Attorney for the District of Oregon, and Cameron A. Bell, Trial Attorney for the Civil Rights Division.
Colorado Man Pleads Guilty to Federal Hate Crime After Unprovoked Stabbing of Black ManRead the Press Release
EUGENE, Ore.—A Colorado man pleaded guilty today to a federal hate crime for stabbing a Black man from Ontario, Oregon while the man was sitting in a fast-food restaurant.
Nolan Levi Strauss, 27, pleaded guilty to a hate crime involving an attempt to kill.
According to court documents, on the morning of Dec. 21, 2019, a man walked into an Arby’s Restaurant and adjoining Pilot Travel Center in Ontario where he planned to provide documentation for a pending job application. The man sat in a booth by himself, waiting to meet with the restaurant manager, when Strauss entered the building and approached the man from behind.
Suddenly, unprovoked and without warning, Strauss stabbed the man twice in the neck. The man tried to grab Strauss’s hands and take the knife, and, in the process, managed to prevent Strauss from stabbing him again. A maintenance worker approached Strauss and directed him to drop the knife several times. Finally, the stabbing victim broke free from Strauss’s grip and ran to the other side of the restaurant before collapsing on the floor. Meanwhile, the maintenance worker used a belt to secure Strauss’s hands behind his back and waited for police to arrive.
While they waited, the worker asked Strauss why he stabbed the man. Strauss replied, “Because he was Black, and I don’t like Black people.” Strauss was arrested at the scene. He later admitted he was trying to kill the man because was he was Black.
As a result of Strauss’s attack, the stabbing victim suffered two lacerations to his neck. He was evaluated in Ontario and subsequently life-flighted to a hospital in Boise, Idaho for emergency surgery.
“The defendant is being held accountable for his vicious, racially-motivated attack on a Black man who was targeted because of the color of his skin,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Racially motivated acts of violence must not be tolerated in our country today. The Civil Rights Division of the Department of Justice will continue to work with our federal, state and local partners to ensure that individuals who commit bias motivated crimes are brought to justice for their actions.”
“This crime serves as a horrifying reminder that racism and bigotry still exist and threaten the safety of communities of color. Hate crimes not only hurt victims, but spread fear across entire communities,” said Acting U.S. Attorney Scott Erik Asphaug for the District of Oregon. “This conviction should send a strong message that federal law enforcement will not tolerate hate-motivated acts of violence and will move swiftly to hold those responsible accountable.”
“Everyone deserves to go to work without fearing they will be a victim of violence because of how they look or how they live. Racist attacks like this one—powered by hate and grounded in ignorance—strike at the heart of our community,” said Kieran L. Ramsey, Special Agent in Charge of the FBI in Oregon. “We should all draw strength from our diversity and work together to protect our neighbors.”
On Sept. 17, 2020, a federal grand jury in Eugene returned a single-count indictment charging Strauss with a hate crime involving an attempt to kill.
Strauss faces a maximum sentence of life in prison. He will be sentenced on September 9, 2021 before U.S. District Court Judge Michael J. McShane.
Assistant Attorney General Kristen Clarke and Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by the FBI with assistance from the Ontario Police Department, Oregon State Police, and the Malheur County District Attorney’s Office. It is being prosecuted by Gavin W. Bruce, Assistant U.S. Attorney for the District of Oregon, and Cameron A. Bell, Trial Attorney for the Civil Rights Division.
Cincinnati man admits to drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – David Elroy Bradshaw, of Cincinnati, Ohio, has admitted to a drug charge, Acting U.S. Attorney Randolph J. Bernard announced.
Bradshaw, 37, pleaded guilty today to one count of “Distribution of Methamphetamine within 1000 Feet of a Protected Location.” Bradshaw admitted to selling methamphetamine near Wheeling Central Catholic High School in October 2020 in Ohio County.
Bradshaw 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. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Marshall County Drug Task Force, a HIDTA-funded initiative, investigated. The Ohio Valley Drug Task Force, a HIDTA-funded initiative, assisted.
U.S. Magistrate Judge James P. Mazzone presided.
Charlestown Man Pleads Guilty to Trafficking Firearms and Being a Felon in Possession of FirearmsRead the Press Release
BOSTON – A Charlestown man pleaded guilty yesterday to trafficking more than two dozen firearms obtained from a straw purchaser in New Hampshire and illegally possessing multiple firearms.
Charles Baker, 45, pleaded guilty to one count of dealing in firearms without a license and two counts of being a felon in possession of a firearm. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Oct. 26, 2021. Baker was arrested and charged in August 2020.
From August 2018 to May of 2019, Baker acquired over 36 firearms from a straw purchaser in New Hampshire and then resold the firearms to individuals in Massachusetts, taking pictures and negotiating the prices with numerous potential buyers over text message. Many of these firearms were recovered in Massachusetts from gang members and prohibited persons. Based on photographs that proved Baked possessed certain firearms in Massachusetts, he was convicted of specifically possessing multiple firearms that were later trafficked. Due to a prior conviction, Baker is prohibited from possessing firearms and does not possess a federal license to sell firearms.
The charge of dealing in firearms without a license provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of being a felon in possession of a firearm provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, New England Field Division made the announcement. Assistant U.S. Attorney Philip A. Mallard of Mendell’s Organized Crime and Gang Unit is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
CITGO Petroleum Corp. to Pay over $19 Million for Injuries to Natural Resources Resulting from its Oil Spill at Lake Charles RefineryRead the Press Release
LAKE CHARLES, La. - Acting United States Attorney Alexander C. Van Hook announced that Houston, Texas-based CITGO Petroleum Corporation has agreed to pay $19.69 million to resolve federal and state claims for natural resource damages under the Oil Pollution Act and the Louisiana Oil Spill Prevention and Response Act.
The United States and Louisiana concurrently filed a civil complaint along with the proposed consent decree. The complaint seeks money damages under the Oil Pollution Act and Louisiana Oil Spill Prevention and Response Act for injuries to natural resources resulting from CITGO’s major oil discharge into the Calcasieu River in June of 2006 from its wastewater treatment facility at its Lake Charles refinery. The complaint alleges that CITGO discharged millions of gallons of waste (slop) oil and oily wastewater from two ten-million-gallon storm surge and wastewater tanks at its treatment facility at the Lake Charles refinery. Approximately 150 miles of shoreline were polluted with CITGO’s oil, including residential and marsh areas. The discharged oil killed birds and fish and other aquatic life, contaminated aquatic and shoreline habitats, forced the closure of the ship channel, and disrupted recreational uses of the impacted river and lakes.
"While oil and gas producers are a major source of employment in Louisiana, they have a sacred obligation to protect our environment and use our resources wisely,” stated Acting United States Attorney Alexander C. Van Hook. “This settlement sends a clear signal that those who pollute our environment will be held accountable.”
“Oil companies have a responsibility to protect our waters, people, wildlife, and diverse habitats from oil spills, and those who violate that duty will be held accountable for the harms they cause,” said Acting Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division. “We are glad to work with our federal and state natural resource partners on this major effort to help restore and enhance the environment in Louisiana.”
Of the $19,688,149.83 CITGO is required to pay under the consent decree, $19.16 million is for natural resource damages for the spill, which the federal and state trustees will jointly use to plan, design, and perform restoration projects to compensate for the harms caused by the oil spill. The consent decree also secures payment from CITGO for the trustees’ remaining unpaid injury assessment costs, which total over $528,000.
Today’s action was filed by the Department of Justice and the state on behalf of the federal and state trustees for natural resources. The designated federal trustees for the natural resources impacted by CITGO’s oil spill are the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration and the U.S. Department of the Interior’s Fish and Wildlife Service. The designated state trustees are the Louisiana Oil Spill Coordinator’s Office, Department of Public Safety & Corrections, the Louisiana Department of Wildlife and Fisheries, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality and the Louisiana Coastal Protection and Restoration Authority. The federal and state trustees have worked together to perform substantial injury assessment work and are engaged in joint restoration planning efforts.
In an earlier related Clean Water Act enforcement trial spearheaded by the United States on behalf of the Environmental Protection Agency, the district court determined that the cause of this avoidable disaster was CITGO’s gross negligence in the operation and maintenance of its wastewater treatment facility and the lack of adequate storage and treatment capacity. CITGO had been improperly using the tanks to accumulate oil, sludge, and oily wastewater at its treatment facility for years. Due to the lack of proper operations and the inadequate storage and treatment capacity at the facility, the tanks overflowed during a rainstorm. At least 54,000 barrels of slop oil (2,268,000 gallons) and untold millions of gallons of oily wastewater breached the faulty secondary containment berm around the tanks and flowed into the waterways, including the adjacent Indian Marais waterway, the Calcasieu River, and the Calcasieu Estuary.
The court found that CITGO “does not appear to have recognized the importance of compliance, pollution control, environmental responsibility, and the overall duty imposed on businesses to operate safely.” The court found that CITGO’s oil spill was “massive, excessive, and a tragedy” and that CITGO “failed to inform the Coast Guard of the true nature of the incident.” CITGO was ordered to perform substantial corrective actions to improve its wastewater treatment facility’s storage and treatment capacity and operations, to pay a state penalty of $3 million to the Louisiana Department of Environmental Quality for the discharge and chronic violations of the company’s discharge permit, and to pay a federal Clean Water Act civil penalty of $81 million. Under a separate criminal plea agreement, CITGO paid a $13 million criminal fine.
The proposed consent decree is subject to a 30-day public comment period and court review and approval.
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CITGO Petroleum Corp. Will Pay over $19 Million for Injuries to Natural Resources Resulting from its Oil Spill at its Refinery in Lake Charles, LouisianaRead the Press Release
Houston, Texas-based CITGO Petroleum Corporation has agreed to pay $19.69 million to resolve federal and state claims for natural resource damages under the Oil Pollution Act and the Louisiana Oil Spill Prevention and Response Act.
The United States and Louisiana concurrently filed a civil complaint along with the proposed consent decree. The complaint seeks money damages under the Oil Pollution Act and the Louisiana Oil Spill Prevention and Response Act for injuries to natural resources resulting from CITGO’s major oil discharge into the Calcasieu River in June of 2006 from its wastewater treatment facility at its Lake Charles refinery. The complaint alleges that CITGO discharged millions of gallons of waste (slop) oil and oily wastewater from two ten-million-gallon storm surge and wastewater tanks at its treatment facility at the Lake Charles refinery. Approximately 150 miles of shoreline were polluted with CITGO’s oil, including residential and marsh areas. The discharged oil killed birds and fish and other aquatic life, contaminated aquatic and shoreline habitats, forced the closure of the ship channel, and disrupted recreational uses of the impacted river and lakes.
“Oil companies have a responsibility to protect our waters, people, wildlife and diverse habitats from oil spills, and those who violate that duty will be held accountable for the harms they cause,” said Acting Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division. “We are glad to work with our federal and state natural resource partners on this major effort to help restore and enhance the environment in Louisiana.”
“While oil and gas producers are a major source of employment in Louisiana, they have a sacred obligation to protect our environment and use our resources wisely,” stated U.S. Attorney Alexander C. Van Hook for the Western District of Louisiana. “This settlement sends a clear signal that those who pollute our environment will be held accountable.”
Of the $19,688,149.83 CITGO is required to pay under the consent decree, $19.16 million is for natural resource damages for the spill, which the federal and state trustees will jointly use to plan, design and perform restoration projects to compensate for the harms caused by the oil spill. The consent decree also secures payment from CITGO for the trustees’ remaining unpaid injury assessment costs, which total over $528,000.
Today’s action was filed by the Department of Justice and the State on behalf of the federal and State trustees for natural resources. The designated federal trustees for the natural resources impacted by CITGO’s oil spill are the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration and the U.S Department of the Interior’s Fish and Wildlife Service. The designated state trustees are the Louisiana Oil Spill Coordinator’s Office, Department of Public Safety & Corrections, the Louisiana Department of Wildlife and Fisheries, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality and the Louisiana Coastal Protection and Restoration Authority. The federal and state trustees have worked together to perform substantial injury assessment work and are engaged in joint restoration planning efforts.
In an earlier related Clean Water Act enforcement trial spearheaded by the United States on behalf of the Environmental Protection Agency, the district court determined that the cause of this avoidable disaster was CITGO’s gross negligence in the operation and maintenance of its wastewater treatment facility and the lack of adequate storage and treatment capacity. CITGO had been improperly using the tanks to accumulate oil, sludge and oily wastewater at its treatment facility for years. Due to the lack of proper operations and the inadequate storage and treatment capacity at the facility, the tanks overflowed during a rainstorm. At least 54,000 barrels of slop oil (2,268,000 gallons) and untold millions of gallons of oily wastewater breached the faulty secondary containment berm around the tanks and flowed into the waterways, including the adjacent Indian Marais waterway, the Calcasieu River and the Calcasieu Estuary.
The court found that CITGO “does not appear to have recognized the importance of compliance, pollution control, environmental responsibility, and the overall duty imposed on businesses to operate safely.” The court found that CITGO’s oil spill was “massive, excessive, and a tragedy” and that CITGO “failed to inform the Coast Guard of the true nature of the incident.” CITGO was ordered to perform substantial corrective actions to improve its wastewater treatment facility’s storage and treatment capacity and operations, to pay a state penalty of $3 million to the Louisiana Department of Environmental Quality for the discharge and chronic violations of the company’s discharge permit, and to pay a federal Clean Water Act civil penalty of $81 million. Under a separate criminal plea agreement, CITGO paid a $13 million criminal fine.
The proposed consent decree is subject to a 30-day public comment period and court review and approval.
Boone County Man Sentenced to 126 Months for Armed Methamphetamine TraffickingRead the Press Release
COVINGTON, Ky.— Larry Ray Clemons, 40, of Burlington, Ky., was sentenced to 126 months in federal prison on Thursday, by U.S. District Judge David Bunning, after pleading guilty to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking.
According to Clemons’ guilty plea agreement, on August 31, 2020, law enforcement executed a search warrant at his address and found 13.74 grams of methamphetamine and cash in his pants pockets. Law enforcement also found an additional 46.74 grams of methamphetamine, a loaded 9mm handgun, additional cash, and a digital scale in the residence. Clemons admitted that he intended to distribute the methamphetamine and that he possessed the firearm for protection in his drug trafficking.
Clemons was previously convicted of illegal possession of a controlled substance, in 2018. Clemons pleaded guilty to the federal charges in March.
Under federal law, Clemons must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for four years.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; J. Todd Scott, Special Agent in Charge, DEA, Louisville Field Office; and Sheriff Michael Helmig, Boone County Sheriff’s Office, announced the sentence.
The investigation was conducted by the DEA and the Boone County Sheriff’s Office. The United States was represented by Assistant U.S. Attorney Amanda Harris.
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Billings man sentenced to prison for illegal firearm possessionRead the Press Release
BILLINGS – A Billings man was sentenced today to 30 months in prison to be followed by three years of supervised release for selling a firearm while on state probation for previous felony convictions, Acting U.S. Attorney Leif M. Johnson said.
Wayne Jennings Cooper, 36, pleaded guilty on Jan. 26 to prohibited person in possession of a firearm.
U.S. District Judge Susan P. Watters presided.
In court documents filed in the case, the government alleged that on Dec. 19, 2019, Bureau of Alcohol, Tobacco, Firearms and Explosives agents learned from a confidential informant that Cooper wanted to sell firearms and drugs. An investigation determined that Cooper had previous felony convictions that prohibited him from possessing firearms and that he was on state probation. During a controlled purchase set up by the agents, Cooper sold an individual a .380 caliber, semi-automatic pistol along with a loaded magazine. Cooper also provided the individual with what was purported to be five grams of methamphetamine but turned out to be a cutting agent.
Assistant U.S. Attorney Julie R. Patten prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is part of Project Guardian, a Department of Justice initiative launched in the fall of 2019 to reduce gun violence and enforce federal firearms laws. Through Project Guardian, the U.S. Attorney’s Office in the District of Montana is working to enhance coordination of its federal, state, tribal and local law enforcement partners in investigating and prosecuting gun crimes. In addition, Project Guardian supports information sharing and taking action when individuals are denied a firearm purchase by the National Instant Criminal Background Check System for mental health reasons or because they are a prohibited person.
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Billings man sentenced to 10 years in prison for trafficking methamphetamine, heroin from Laurel machine shopRead the Press Release
BILLINGS – A Billings man who admitted to trafficking methamphetamine and heroin from a machine shop in Laurel was sentenced today to 10 years in prison and to five years of supervised release, Acting U.S. Attorney Leif M. Johnson said.
Anthony Scott Walter, 40, pleaded guilty on Nov. 17, 2020 to possession with intent to distribute controlled substances.
U.S. District Judge Dana L. Christensen presided.
In court documents, the government alleged that in July 2019, law enforcement agents met with a source of information who reported that Walter, and co-defendant, Lisa Emmett, were selling heroin and meth out of a machine shop in Laurel. Agents conducted a series of controlled buys of meth and heroin from Walter using a confidential source. In August 2019, law enforcement intercepted a package destined for Walter’s business address, obtained a search warrant and found 465.1 grams of meth, which is about one pound, and 61.1 grams of heroin, similar to “China white.” Lab testing determined the meth was 99 percent pure and that the substance identified as China white was determined to be 51. 6 grams of fentanyl. Agents made a controlled delivery of the package, and Walter took possession of it. Emmett pleaded guilty in the case and is pending sentencing.
Assistant U.S. Attorney Julie R. Patten prosecuted the case, which was investigated by the Drug Enforcement Administration and Eastern Montana High Intensity Drug Trafficking Area Task Force.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Behavioral Health Specialist Sentenced to 15 Years in Federal Prison for Enticing A Minor Hopsital Patient for Sex, and Attempting to Obstruct His ProsecutionRead the Press Release
EAST ST. LOUIS, Ill. – Ricardo D. Minor, 40, of Cahokia, Illinois, will be spending 15 years in federal prison for enticing a minor to have sex with him. Minor was sentenced to 180 months’ imprisonment for enticement of a minor; traveling with intent to have sex with a minor; and attempting to obstruct his prosecution. Minor will also serve ten years of supervised release after release from prison.
According to court documents, the crimes occurred between June 14, 2017 and September 3, 2017, while Minor was working as a Behavioral Health Specialist at a local hospital and the victim was a patient. Minor admitted that he used his cell phone and internet to contact the victim to have sex with him on several occasions in homes in Collinsville, Illinois, and Cahokia, Illinois. Minor was also a driver for Uber and would take the victim with him on trips to have sex. The Court also heard evidence regarding other allegations of criminal and inappropriate sexual contact by Minor, including with patients receiving therapy at the same hospital.The obstruction charge was based upon Minor’s activity between August 2017 and November 27, 2017. During this time, he attempted to obstruct his prosecution by contacting the victim and witnesses to get them to lie regarding his criminal conduct. One witness was asked to call the family of the victim to get the family not to pursue charges.
The Court in sentencing Minor said that his conduct was “reprehensible” and noted that the 15-year sentence of imprisonment was needed to deter further criminal conduct.
After the sentencing U.S. Attorney Steven D. Weinhoeft said, “This case is so egregious because the defendant preyed on a vulnerable victim who he knew was receiving behavioral health treatment.” He cautioned parents that, “The case serves to highlight how important it is for parents to monitor their children’s internet and cell phone usage because sexual predators rely on their cell phones to gain access to victims.”
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.”
The case was investigated by the Collinsville Police Department, the St. Louis County Police Department and the FBI. Assistant United States Attorney Angela Scott prosecuted the case.
Baltimore Man Sentenced to Eight Years in Federal Prison for Conspiracy to Distribute and Possess with the Intent to Distribute at least 100 Grams of HeroinRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III, sentenced Robert Bascom, age 48, of Baltimore, Maryland to eight years in federal prison, followed by five years of supervised release, for conspiracy to distribute and possess with the intent to distribute 100 grams of heroin.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Chief Melissa R. Hyatt of the Baltimore County Police Department; and Chief Lisa D. Myers of the Howard County Police Department.
According to his plea agreement, from May 2020 to February 23, 2021, Bascom conspired with others to distribute, and to possess with the intent to distribute one kilogram or more of heroin in Maryland and elsewhere. Bascom made at least four trips to visit co-conspirators in New York in furtherance of the conspiracy. As part of the conspiracy, Bascom also stored and distributed kilogram quantities of heroin and fentanyl at his Baltimore residence.
As detailed in his plea agreement, on February 17, 2021, investigators observed a co-conspirator carry a book bag and black shopping bag into Bascom’s residence. Thereafter, investigators entered the residence pursuant to a judicially authorized search and seizure warrant. Upon law enforcement’s entry, a co-conspirator attempted to flee the apartment. Investigators observed the co-conspirator’s black and grey book bag on the living room couch as well as bundles of U.S. currency and rubber bands spread out on the floor. Investigators eventually located Bascom and his co-conspirator inside of the apartment.
As a result of the executed search warrant, law enforcement seized 1,079.3 grams of quinine (a drug cutting agent), 24.2 grams of diphenhydramine (another drug cutting agent), four cell phones, one tablet, miscellaneous paperwork, and $24, 422 hidden in numerous locations inside of the apartment. Agents also discovered a drug tally and debt ledger within the co-conspirator’s book bag. DEA agents believe the ledger is documentation of drug quantities distributed to individuals as well as client debts and transactions.
Investigators also recovered over 100 grams of heroin, more than one kilogram of fentanyl, large quantities of drug cutting agents, and drug paraphernalia from Bascom’s co-conspirator’s residences.
Bascom agreed that it is reasonably foreseeable to him that members of the conspiracy distributed one kilogram or more of heroin.
Acting United States Attorney Jonathan F. Lenzner praised the DEA, HSI, the Maryland Transportation Authority Police Department, the Howard County Police Department and the Baltimore County Police Department for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Zachary B. Stendig and James G. Warwick, who prosecuted the case.
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Baltimore Man Facing Federal Indictment for Two Carjackings, an Armed Robbery and for Brandishing a Firearm During Each CrimeRead the Press Release
Baltimore, Maryland – A federal grand jury has returned an indictment charging Deontay Williams, age 25, of Baltimore, Maryland, with two counts of carjacking, an armed commercial robbery, and three counts of using, carrying and brandishing a firearm during and in relation to a crime of violence. The indictment was returned on June 16, 2021.
The indictment was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Acting Special Agent in Charge Rachel Byrd of the Federal Bureau of Investigation, Baltimore Field Office; and Commissioner Michael Harrison of the Baltimore Police Department.
According to the six-count indictment, between April 1, 2020 and April 10, 2020, Williams committed two carjackings and an armed robbery of a business, each time brandishing a gun.
Specifically, the indictment alleges that on April 1, 2020, Williams, brandishing a gun, took a white 2020 Toyota Corolla from an individual by force, violence, and intimidation and with the intent to cause death and serious bodily harm.
On April 10, 2020, Williams allegedly robbed a cab driver in Baltimore, taking property from the driver by means of actual and threatened force and violence. The indictment alleges that Williams brandished a gun during the robbery. That same day, Williams allegedly carjacked a 2002 Ford E-150, threatening the driver at gunpoint in order to take the vehicle.
If convicted, Williams faces a maximum sentence of 15 years in prison for each of the two counts of carjacking; a maximum sentence of 20 years in federal prison for the robbery; and a minimum mandatory sentence of seven years in prison and a maximum of life in prison, consecutive to any other sentence, for each of the three counts of using, carrying, and brandishing a firearm during and in relation to a crime of violence. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. Williams will have an initial appearance in U.S. District Court in Baltimore at a later date. Williams is currently detained on unrelated state charges.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (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.
Acting United States Attorney Jonathan F. Lenzner commended the FBI and the Baltimore Police Department for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney John W. Sippel, Jr., who is prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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25 Indicted for Drug Trafficking in Western PA and BeyondRead the Press Release
PITTSBURGH - Twenty-five individuals have been named in two separate, but related, Indictments for trafficking multiple drugs, including heroin, fentanyl, methamphetamine, cocaine and cocaine base, Acting United States Attorney Stephen R. Kaufman announced today. The defendants were arrested today following a year-long investigation into drug trafficking in Mercer and Lawrence Counties and beyond.
“We undertook this investigation with a single goal in mind—to significantly improve public safety,” said Acting U. S. Attorney Kaufman. “People deserve to feel safe in their homes and in their neighborhoods. Removing these drug traffickers from our streets will help to restore quality of life to the law-abiding citizens of Mercer and Lawrence counties.”
“Today’s arrests reflect the continuing effort to rid our communities of dangerous drugs and drug-related violent crime activity,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “We remain dedicated to aggressively investigating those who don’t think twice about committing a crime in the community they live and putting others lives at risk. Our communities need to know this is a joint effort and couldn't be done without the help of state, local and federal partners.”
“These defendants stand accused of trafficking multiple potentially deadly street drugs such as fentanyl, heroin, methamphetamine, cocaine, and crack cocaine. Their alleged drug-trafficking activities included the distribution of crack cocaine in the vicinity of protected areas such as playgrounds, schools, and public housing facilities” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “These indictments reflect the collective efforts of local, state, and federal law enforcement working together to disrupt drug-traffickers that seek to poison and destroy our communities.”
"While 12 Pennsylvanians are dying from opioid overdoses every day, these defendants peddled dozens of kilos of devastating poisons, including heroin and cocaine, into our communities to make a buck," said Pennsylvania Attorney General Josh Shapiro. "Thanks to this yearlong investigation with our local, state, and federal law enforcement partners, we have been able to take down more than two dozen violent drug traffickers."
The first indictment names the following individuals as defendants:
- London Pinkins, age 26, of Sharon, Pennsylvania;
- Jimmy Gadson, age 34, of Sharon, Pennsylvania;
- Harold Hooten, age 44, of Hermitage, Pennsylvania;
- Torlando Hopson, age 32, of Farrell, Pennsylvania;
- Alphonse Johnson, age 39, currently incarcerated;
- Amanda Karwowski, age 29, of Grove City, Pennsylvania, currently incarcerated;
- Michael Love, age 43, of Jackson Center, Pennsylvania;
- Katlyn McGirr, age 29, of Hermitage, Pennsylvania;
- Kenneth Miller, age 59, of Farrell, Pennsylvania;
- Nicholas Ostheimer, age 23, of Sharon, Pennsylvania;
- Eugene Phillips, age 29, of Farrell, Pennsylvania, currently incarcerated;
- Quinton Pinkins, age 36, of Farrell, Pennsylvania;
- Joseph Pumphrey, age 62, of Hermitage, Pennsylvania;
- Courtney Purdy, age 30, of Mercer, Pennsylvania;
- Jeronte Robinson, age 26, of Hermitage, Pennsylvania;
- Jammar Shelton, age 42, of Masury, Ohio;
- James West, age 45, of Brackenridge, Pennsylvania;
- Khiry Whiteside, age 30, of Farrell, Pennsylvania;
- Denzel Williams, age 27, of Farrell, Pennsylvania;
- Jermall Johnson, age 24, of Erie, Pennsylvania;
- Jackie Bell, age 29, of Columbus, Ohio; and
- Albert Cummings, age 41, of Cleveland, Ohio.
All of the 22 defendants are charged in Count 1 with conspiring to distribute and possess with intent to distribute 40 grams or more of fentanyl, 100 grams or more of heroin, 28 grams or more of cocaine base, a quantity of cocaine, and a quantity of methamphetamine from June 2020 to June 2021. Count 2 charges London Pinkins and Phillips with conspiring to launder drug trafficking proceeds from February 2021 to June 2021. Counts 3 (Williams), 17 (Alphonse Johnson), 23 (Karwowski), and 24 (London Pinkins) charge several defendants with possession with intent to distribute and/or distribution of 28 grams or more of cocaine base, a quantity of cocaine, and/or a quantity of methamphetamine.
Counts 4 (Ostheimer), 6-8 (Ostheimer and Gadson), 14 (Cummings), 15 (Gadson), 19-22 (West, Gadson, Shelton, and London Pinkins), and 25-28 (Purdy and Quinton Pinkins) charge several defendants with possession with intent to distribute and/or distribution of a quantity of fentanyl, heroin, cocaine base, and/or cocaine within 1,000 feet of a playground, school, and public housing. Counts 5 (Ostheimer), 9-13 (London Pinkins, Gadson, Bell, McGirr), 16 (Gadson), and 18 (Williams) charge several defendants with possession with intent to distribute and/or distribution of a quantity of fentanyl, heroin, cocaine base, cocaine, and/or methamphetamine.
The law provides for a maximum total sentence of at least five years and up to 40 years in prison and a fine of up to $5,000,000 for each of the crimes charged in Counts 1, 3, 17, 23, and 24. The law provides for a maximum total sentence for Count 2 of up to 20 years in prison and a fine of up to $500,000 (or twice the value of the property involved in the transaction, whichever is greater).
The law provides for a maximum total sentence for each of Counts 4, 6-8, 14, 15, 19-22, and 25- 28 of at least one year and up to 40 years in prison and a fine of up to $2,000,000. The maximum sentence for Counts 5, 9-13, 16, and 18 is up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentences imposed would be based upon the seriousness of the offenses and the prior criminal histories of the defendants.
The second indictment names the following individuals as defendants:
- Forrest Gilmore, age 25, of New Castle, Pennsylvania;
- Melvin Dorsey-Pace, age 28, of New Castle, Pennsylvania; and
- Rayjzon Sams, 28, age of Farrell, Pennsylvania.
The seven-count Indictment charges the defendants in Count 1 with conspiring to distribute 28 grams or more of cocaine base and a quantity of cocaine from June 2020 to June 2021. Counts 2 (Gilmore), 4 (Dorsey-Pace), 5 (Sams), and 7 (Sams) charge possession with intent to distribute and distribution of a quantity of cocaine base within 1,000 feet of a playground, school, and public housing. Count 3 charges Gilmore with possessing with intent to distribute and distribution of 28 grams or more of cocaine base on September 17, 2020. Count 6 charges Sams with possessing with intent to distribute and distribution of a quantity of cocaine on April 18, 2021.
The law provides for a maximum total sentence of at least five years and up to 40 years in prison and a fine of up to $5,000,000 for each of the crimes charged in Counts 1 and 3 of the Indictment. The law provides for a maximum total sentence for each of Counts 2, 4, 5, and 7 of at least one year and up to 40 years in prison and a fine of up to $2,000,000. The law provides for a maximum total sentence of up to 20 years in prison and a fine of up to $1,000,000 for the crime charged in Count 6 of the Indictment. Under the Federal Sentencing Guidelines, the actual sentences imposed would be based upon the seriousness of the offenses and the prior criminal histories of the defendants.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Federal Bureau of Investigation, the Drug Enforcement Administration, and the Pennsylvania Office of Attorney General’s Bureau of Narcotics Investigations led the investigation. The Pennsylvania State Police, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Lawrence County Drug Task Force, the Mercer County Drug Task Force, the New Castle Police Department, the Sharon Police Department, the Hermitage Police Department, and the Farrell Police Department also assisted in the investigation resulting in the return of the Indictments in this case.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
16 June 2021
“Violent Menace” in Cedar Rapids Sentenced to Nearly a Decade in PrisonRead the Press Release
A man with multiple prior convictions for domestic violence was sentenced today to more than nine years in federal prison.
Nyle Brocks, age 28, from Cedar Rapids, Iowa, received the prison term after a guilty plea to possessing a firearm after being convicted of domestic violence. Statements at sentencing indicated that Brocks participated in stealing the gun prior to his unlawful possession of it and also violently resisted arrest.
At sentencing, the judge noted that Brocks had 16 prior state court convictions for violent offenses and was both a “violent menace” and an “extreme danger.” The judge further found that “every day Brocks was out of circulation was a slightly safer day for society in Cedar Rapids.”
Brocks was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Brocks was sentenced to 115 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. Brocks is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The case was prosecuted by Assistant United States Attorney Jake Schunk and investigated by the Cedar Rapids Police Department and the Federal Bureau of Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-00068-CJW-MAR.
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Woman Sentenced to 198 Months in Prison for Teaching and Distributing Information About Weapons of Mass DestructionRead the Press Release
A New York woman was sentenced today to 198 months, about 16 and a half years, in prison for her role in planning a terrorist attack in the United States.
Noelle Velentzas, 33, of Queens, was convicted of teaching or distributing information pertaining to the making and use of an explosive, destructive device, or weapon of mass destruction in furtherance of a planned federal crime of violence. Co-defendant Asia Siddiqui pleaded guilty on Aug. 23, 2019 and was sentenced to 15 years in prison in January 2020.
“As part of her plan goal to wage violent jihad, Velentzas and her co-defendant Asia Siddiqui researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” said Assistant Attorney General John C. Demers of the Justice Department’s National Security Division. “With the sentence imposed by the court, Velentzas has been held accountable for her crimes. The Attorney General recently reminded us that we must remain vigilant against threats from international terrorism, and we are grateful for those agents, analysts and prosecutors who were and brought Velentzas to justice before she could carry out her plans.”
“The defendant expressed her support for foreign terrorist organizations like al-Qaeda and the Islamic State of Iraq and al-Sham by learning how to build bombs and other explosive devices and targeting members of law enforcement for terror,” said Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York. “Today’s sentence imposes a just punishment on the defendant for her planned horrific crimes. Counterterrorism and protecting the American people remain among the highest priorities of the Department of Justice, and this Office, together with the FBI, the NYPD and our Joint Terrorism Task Force partners, will continue to exercise extreme vigilance to incapacitate terrorists.”
According to court documents, between approximately 2013 and 2015 Velentzas and her co-defendant planned to build a bomb for use in a terrorist attack in the United States. In furtherance of their plan, the defendants taught each other chemistry and electrical skills directly related to creating explosives and building detonating devices; studied the explosives used in past terrorist attacks including the Boston marathon bombing, the Oklahoma City bombing and the 1993 World Trade Center attack; researched how to make plastic explosives and build car bombs; shopped for and acquired materials to be used in an explosive device; and assessed potential targets of an attack, focusing on law enforcement and military-related targets.
While engaging in these activities, Velentzas repeatedly expressed her support for promoting and waging violent jihad and her desire to commit acts of violence. Velentzas claimed that Osama bin Laden was her hero, and expressed praise for the September 11th attacks as well as Mohammed Shnewer, who was convicted of plotting a terrorist attack against members of the armed services at Fort Dix in New Jersey.
At the time that Velentzas and Siddiqui were arrested in 2015, law enforcement officers searched their residences and found tools of the trade for a terrorist attack, including propane gas tanks, soldering tools, car bomb instructions and jihadist literature, machetes and knives.
The FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD and over 50 other federal, state and local agencies, investigated the case.
Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorneys Craig R. Heeren, Jennifer M. Sasso, Josh Hafetz and Jonathan E. Algor of U.S. Attorney’s Office for the Eastern District of New York prosecuted the case.
Wellington Man Sentenced to Nine Years for Transportation, Possession and Distribution of Child PornographyRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced that William D. Schaffer, 53, of Wellington, was sentenced today to nine years imprisonment and five years of supervised release by U.S. District Court Judge Patricia A. Gaughan. Schaffer previously pleaded guilty to transportation of child pornography, possession of child pornography and receipt and distribution of visual depictions of real minors engaged in sexually explicit conduct.
As set out in court documents, law enforcement officers with Homeland Security Investigations (HSI) executed a search warrant at the residence belonging to Schaffer on June 30, 2020, after receiving information from Yahoo! that an email address associated with Schaffer had been used to upload images of child pornography. Upon entering the residence, law enforcement officers encountered Schaffer and located his laptop, which was, at the time, displaying two images of child pornography.
After searching the rest of the residence, law enforcement officers seized numerous laptop computers, hard drives and iPhone devices belonging to Schaffer. A forensic search of the devices found in the residence and online accounts belonging to Schaffer showed that he had amassed a collection of 2,267 images and 257 videos of child pornography. In addition, investigators determined that Schaffer had used a mobile messaging application to trade images of child pornography with others and amassed a large collection in a cloud storage account.
This investigation was conducted by the Department of Homeland Security, Homeland Security Investigations. This case was prosecuted by Assistant U.S. Attorney Carol M. Skutnik.
Wasilla Doctor Pleads Guilty to Illegal Distribution of NarcoticsRead the Press Release
ANCHORAGE – A Wasilla, Alaska, medical doctor pleaded guilty to illegally dispensing and distributing controlled substances to patients in his medical practice at the Camelot Family Health clinic where he specialized in family medicine and pain management.
According to court documents, David Chisholm, 64, illegally prescribed his patients thousands of pills of highly addictive controlled substances, including oxycodone, methadone, hydrocodone, morphine, tramadol, fentanyl, hydromorphone and buprenorphine. An extensive undercover investigation revealed that Chisholm routinely distributed the controlled substances without administering a medical exam and without a legitimate medical purpose. The investigation also found that Chisholm’s prescription of these controlled substances was one of the significant contributing factors in the accidental deaths of five patients.
“An Alaska medical doctor who swore an oath to do no harm, instead spread the scourge of addiction in our communities by writing bogus prescriptions,” said Acting U.S. Attorney Bryan Wilson of the District of Alaska. “This office will spare no effort in combatting the illegal distribution of addictive drugs and hold medical professionals like the defendant accountable for their actions.”
“Dr. Chisholm’s irresponsible prescribing habits are an abuse of his medical license and endangered our citizens while continuing to fuel the opioid epidemic that is a clear and present danger to our nation’s health and security,” said Frank A. Tarentino III, DEA Special Agent in Charge. “Physicians like Dr. Chisholm who used his position to traffic opioids is really a drug trafficker with a prescription pad and he must be held responsible for his reckless prescribing practices. We will continue to work with our local, state and federal law enforcement partners in the opioid and overdose prevention awareness campaign and relentless pursuit of all those involved in the trafficking of opioids.”
Chisholm’s plea agreement requires that he surrender his Alaska State medical license.
Chisholm will be sentenced at a later date and faces a maximum penalty of 20 years in prison, up to $1,000,000 fine and three years of supervised release. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI) and the Alaska State Board of Pharmacy are investigating the case.
Assistant U.S. Attorney Chris Schroeder is prosecuting the case.
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Washington, D.C. Man Sentenced to Nearly Five Years in Federal Prison for Stealing Firearms from a Gun StoreRead the Press Release
Baltimore, Maryland – U.S. District Judge Stephanie A. Gallagher sentenced Xyavion Lawrence, age 20, of Washington, D.C. to 57 months in federal prison, followed by three years of supervised release, for theft of firearms from a federal firearms licensee’s inventory.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Melissa R. Hyatt of the Baltimore County Police Department.
According to his plea agreement, on August 8, 2019 at 1:09 a.m. Baltimore County Police officers responded to a burglary that had occurred at a licensed gun store in Essex, Maryland.
A subsequent review of the gun store’s surveillance footage revealed that Lawrence and a co-conspirator arrived at the gun store in, what was later determined to be, a stolen vehicle, 30 minutes prior to law enforcements arrival. After repeatedly backing the vehicle into the front door of the gun store, Lawrence broke into the front window, retrieved several firearms from within the store, and threw the stolen firearms to his co-conspirator. Lawrence and his co-conspirator returned to the vehicle and fled from the scene.
Shortly after the burglary, Lawrence broadcasted a social media video which captured Lawrence holding several firearms in the same clothing, mask, and gloves Lawrence wore during the burglary. Law enforcement matched Lawrence’s clothing and identifying forearm tattoo to the gun store’s surveillance footage. Additionally, the firearms captured in Lawrence’s video had the same strings tied around the trigger guard as the firearms sold in the gun store.
As stated in his plea agreement, Lawrence was wearing an ankle-monitoring device during the burglary. Location data from Lawrence’s ankle monitor placed Lawrence at the gun store at the time of the burglary.
During Lawrence’s arrest on August 10, 2019, Lawrence possessed a .22 revolver, one of the stolen firearms from the gun store.
Lawrence admitted he stole a total of six firearms from the licensed gun store.
Acting United States Attorney Jonathan F. Lenzner praised the ATF and Baltimore Police Department for their work in the investigation. Mr. Lenzner thanked Special Assistant U.S. Attorney Richard P. Gallena who prosecuted the case.
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USPS Mail Carrier Arraigned for Conspiring to Possess with Intent to Distribute Controlled Substances, Receiving Bribes, and Conspiring to Defraud United StatesRead the Press Release
NEWARK, N.J. – A U.S. Postal Service (USPS) mail carrier was arraigned today on charges of conspiring to possess with intent to distribute controlled substances, receiving bribes as a public official, and conspiring to defraud the United States, Acting U.S. Attorney Rachael A. Honig announced.
Emerson Pavilus, 46, of Union, New Jersey, was charged May 24, 2021, in a three-count indictment with conspiring to possess with intent to distribute cocaine and marijuana, receiving bribes as a public official, and conspiring to defraud the United States.
According to documents filed in this case:
Pavilus was a mail carrier at the USPS Post Office in Flanders, New Jersey. From 2015 through June 2020, Pavilus received cash payments from at least two individuals in exchange for helping them to ship controlled substances, including cocaine and marijuana, and other illicit materials through the mail. Among other things, Pavilus provided his conspirators with addresses in Flanders to which parcels could be shipped, intercepted those parcels from the mail stream, and personally delivered those parcels to conspirators at addresses other than those listed on the parcels.
The narcotics offense carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 40 years in prison, and a maximum fine of $5 million. The bribery charge is punishable by a maximum potential penalty of 15 years in prison and a maximum fine of $250,000 or twice the gross gain from the offense, or three times the monetary equivalent of the bribe amount, whichever is greatest. The conspiracy to defraud the United States charge carries a maximum potential penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain from the offense, whichever is greater.
Acting U.S. Attorney Honig credited members of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, the USPS Office of Inspector General, Northeast Area Field Office, under the direction of Special Agent in Charge Matthew Modafferi, and the U.S. Postal Inspection Service, in Newark, under the direction of Acting Inspector in Charge Rodney M. Hopkins, with the investigation leading to the charges. She also thanked the Irvington Police Department for their assistance.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The government is represented by Assistant U.S. Attorney Mark J. Pesce of the U.S. Attorney’s Office’s OCDETF/Narcotics Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Trotwood woman sentenced to prison for accepting Social Security payments, COVID-19 stimulus money on behalf of deceased brotherRead the Press Release
DAYTON, Ohio – Karen Lamb, 61, of Trotwood, Ohio, was sentenced in U.S. District Court to six months in prison followed by six months in home detention for stealing Social Security benefits and COVID-19 stimulus money in the name of her deceased brother. Lamb was also ordered to repay the money she stole.
According to court documents, Lamb fraudulently obtained nearly $223,000 in Social Security payments and $1,200 in COVID-19 stimulus money.
Lamb’s brother died in 2004, when he was a recipient of Social Security benefits. Lamb did not notify Social Security or the bank of her brother’s death, and instead continued to receive his payments into a shared bank account. Lamb updated the address associated with the bank account to her own physical address.
“This sentence demonstrates that concealing someone’s death to gain access to their Social Security’s benefits is a Federal crime, and one that the Social Security Administration (SSA) Office of the Inspector General (OIG) will continue to fight,” said Andrew Boockmeier, Special Agent-in-Charge of the SSA OIG Chicago Field Division. “The collaborative efforts of our auditors and investigators uncovered this nearly 16-year ruse. I thank the United States Attorney’s Office and Special Assistant U.S. Attorney Timothy Landry for working with us to hold this individual accountable.”
The theft in this case was detected through an audit by the SSA’s Office of Inspector General. The United States Secret Service also assisted with this case.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio, announced the sentence imposed yesterday by Senior U.S. District Court Judge Thomas M. Rose. Special Assistant United States Attorney Timothy Landry is representing the United States in this case.
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Statement from Acting U.S. Attorney Bridget M. BrennanRead the Press Release
“The importance of diversity of thought and experiences to the police reform process cannot be overstated,” said Acting U.S. Attorney Bridget M. Brennan. “Professor Ayesha Bell Hardaway was an integral part of this dialogue, bringing a unique combination of local knowledge and legal expertise. Her presence on the Monitoring Team facilitated the progress and successes we have seen to date, and we were disappointed to learn of her resignation.”
Sporting Goods Company Changes Policy Following ADA AllegationRead the Press Release
KANSAS CITY, KAN.– Scheels All Sports Inc., located in Overland Park, Kansas, agreed to create a new policy as part of a settlement following allegations the company violated the Americans with Disabilities Act. Scheel’s new ADA policy (1) prohibits discrimination against people with disabilities, (2) does not impose eligibility criteria that tends to screen out individuals with disabilities, and (3) provides reasonable modifications to Scheels’ policy, practices, and procedures as necessary to avoid discriminating against individuals with disabilities. Under the settlement, the company will also pay $1,000 in compensatory damages to the complainant, train its staff on the new ADA policy, create an ADA liaison, and allow the U.S. Attorney’s Office - District of Kansas to monitor its conduct for three years.
The allegations stem from a discrimination complaint filed in 2019 by an 18-year-old woman with Down Syndrome. An investigation revealed that during a high school outing at Scheels, a Ferris wheel attendant refused to allow her to ride with a classmate because of her disability. He cited a company policy requiring individuals with disabilities to be accompanied by an adult. Although a teacher assured the attendant as well as managers the complainant could safely ride with her classmate, the staff refused service because of her disability.
“Scheels’ former policy and practice was inconsistent with the ADA, which prohibits eligibility criteria that screen out individuals with disabilities from fully and equally enjoying goods and services,” said Acting U.S. Attorney Duston Slinkard. “Moreover, any screening policy must be based on legitimate safety requirements, and not on mere speculation, stereotypes, or generalizations about individuals with disabilities.”
Assistant U.S. Attorneys Andrea Taylor and Tyson Shaw investigated the matter.The claims resolved by the settlement are allegations only and there has been no determination of liability.
###Southwest Virginia Man Sentenced for Dealing Firearms Without a LicenseRead the Press Release
ABINGDON, Va. – A Pound, Virginia man, who illegally sold firearms without a license was sentenced yesterday to eight months in federal prison.
James Michael Boggs, 66, pleaded guilty in March 2021 to one count of willfully engaging in the business of selling firearms without a license.
According to court documents, in October 2019 the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) began an investigation of firearm sales at the Indian Mountain Trade Center to identify and monitor individuals who appeared to be in the business of dealing firearms without a Federal Firearms License (FFL). Investigators with the ATF observed Boggs, and others, regularly selling firearms to Trade Center attendees. During the time of these sales, Boggs did not possess a Federal Firearms License, which is required to engage in the business of dealing firearms.
Boggs sold firearms to an undercover agent on three occasions, including nine handguns, a shotgun, and an AR-style rifle. During their interactions, the undercover agent told Boggs that the agent would be transporting the firearms to Newport News, Virginia to resell them to individuals who could not legally purchase firearms.
Acting U.S. Attorney Daniel P. Bubar made the announcement.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Virginia State Police investigated the case.
Assistant United States Attorneys Zachary T. Lee and Whit D. Pierce prosecuted the case for the United States.
Six Defendants Charged in a 15-Count Racketeering Indictment Against OTB Criminal Street GangRead the Press Release
DES MOINES – Six members and associates of the OTB Criminal Street Gang have been charged in a federal indictment. A Federal Grand Jury charged members and associates with various crimes, including attempted murder in aid of racketeering; using, carrying, and discharging a firearm during and in relation to a crime of violence; felon in possession of a firearm; drug user in possession of a firearm; possession of a firearm with an obliterated serial number; and witness tampering. In total, six members and associates of OTB, a Des Moines-based street gang, have been charged with four separate shootings against rival gang members that occurred between May 2020 and December 2020.
Those arrested on federal charges include Raekwon Malik Patton a/k/a Kwon and Nutt; Fabrece Jamar Bower Turner a/k/a Fab and Vell; Braden Craig Shafer a/k/a Stickup; Austin James Mallory; Yuri Perren Green Jr. a/k/a YG; and Jordan Marie Wilkerson.
Six other members of the OTB Street Gang were previously charged with federal drug and firearms violations. Specifically, on December 3, 2020, Logan James Elmquist was sentenced to 60 months in federal prison after pleading guilty to possession of a firearm with an obliterated serial number. On February 18, 2021, Marcus De Shawn Ford was sentenced to 96 months in federal prison after pleading guilty to being a felon in possession of a firearm. On April 28, 2021, Javontay Dequan Johnson was sentenced to 41 months in federal prison after pleading guilty to possession with intent to distribute methamphetamine and MDMA and drug user in possession of a firearm. On March 11, 2021, Robert John Manuel Jr. pleaded guilty to being a drug user in possession of a firearm. Manuel Jr.’s sentencing in federal court is set for July 9, 2021. On March 29, 2021, Montreel Robinson pleaded guilty to being a felon in possession of a firearm. Robinson’s sentencing in federal court is set for August 24, 2021. On July 28, 2020, Dejon Gene Watley pleaded guilty to being a prohibited person in possession of a firearm and possession of a firearm with an obliterated serial number. Watley’s sentencing in federal court was set for December 8, 2020; however, he failed to appear for sentencing and remains a fugitive.
Acting United States Attorney Richard D. Westphal of the Southern District of Iowa, as well as Des Moines Police Department Chief Dana Wingert, made the announcement.
“All members of this community deserve to live free from the fear of being victimized by the individual and repeated acts of violence by these criminal gangs and their rivals,” said Acting U.S. Attorney Westphal. “We will continue to make community safety one of our highest priorities, and work hand in hand with our local law enforcement and prosecution partners to aggressively prosecute those individuals who are the primary drivers of violent crime.”
Des Moines Police Chief Dana Wingert stated, “This is another example of local and federal partners working collectively to actively pursue the most violent criminals in our community. In recent years, this continuous pursuit has resulted in numerous significant arrests and prosecutions, the impact of which cannot be overstated. The feeling of safety in your neighborhood is a basic necessity that we are committed to protecting. Those who compromise the quality of life for our citizens through violent crime should be prepared for a similar outcome to this most recent indictment. As partners, we remain vigilant in this effort.”
It is alleged in the indictment the OTB Street Gang is a criminal enterprise that engaged in racketeering activity, namely offenses involving controlled substances and acts involving murder. The OTB Street gang and its members are alleged to have preserved and protected the profits of the gang through the threatened or physical use of violence and kept victims and witnesses in fear of the street gang through these threats of violence. In addition, it is alleged the OTB Street Gang provided support to gang members who were incarcerated for gang-related activities; and retaliated against acts of violence perpetrated against the street gang including acts of violence against rival gangs known as the C-Block and C-Block-affiliated street gangs. The OTB Street Gang allegedly operated and conducted their affairs through a series of rules and policies; and initiated new members through the practice of having them discharge a firearm at, and hit, another person. It is alleged that members and associates of the OTB Street Gang managed the procurement, transfer, use, concealment, and disposal of firearms to protect gang-related personnel and operations, and to deter, eliminate, and retaliate against other rival street gangs. It is alleged that members agreed to distribute drugs, recruited juveniles to commit acts for the gang’s benefit, and agreed or conspired to commit acts of violence, including acts involving murder, against rival gangs.
The charges in the indictment carry maximum penalties of between 10 years and life imprisonment. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines. There is no parole in the federal court system.
The public is reminded that charges contain only accusations and are not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt
The investigation was conducted by the Des Moines Police Department, Crimes Against Persons and Intelligence Sections. The case is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa, with assistance from the Polk County Attorney’s Office, as part of Project Safe Neighborhoods, a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.
Senior Nasa Scientist Sentenced to Prison for Making False Statements Related to Chinese Thousand Talents Program Participation and ProfessorshipRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York (“USAO”), announced that MEYYA MEYYAPPAN, a senior National Aeronautics and Space Administration (“NASA”) scientist, was sentenced today to 30 days in prison for making false statements to the Federal Bureau of Investigation (“FBI”), NASA’s Office of Inspector General (“NASA OIG”), and the USAO. MEYYAPPAN pled guilty on January 13, 2021, before U.S. District Judge P. Kevin Castel, who also imposed today’s sentence.
U.S. Attorney Audrey Strauss said: “As a senior NASA scientist with access to sensitive and confidential U.S. government technologies and intellectual property, Meyya Meyyappan was understandably subject to restrictions regarding outside employment and compensation. When questioned by the FBI and NASA, Meyyappan gave false statements regarding his employment by a Chinese government-funded program that recruited individuals with access to foreign technologies and intellectual property. The privilege of access to cutting edge U.S. technologies and intellectual property comes with the critical responsibility of protecting their secrecy. Meyyappan betrayed that trust, by failing to disclose his foreign activities and then compounding his mistakes by lying to the FBI and NASA. He has now been sentenced to time in federal prison for his unlawful conduct.”
According to the allegations in the Information and other proceedings in this case:
From in or about 1996 through in or about 2021, MEYYAPPAN was employed by NASA, an independent U.S. government agency responsible for the civilian space program, as well as aeronautics and aerospace research. Beginning in or about 2006, MEYYAPPAN was the Chief Scientist, Exploration Technology at the Center for Nanotechnology, at NASA’s Ames Research Center at Moffett Field in Silicon Valley, California.
In his position at NASA, MEYYAPPAN was subject to certain statutory, regulatory, and agency restrictions and reporting requirements regarding, among other things, outside employment, travel, and compensation. Notwithstanding these prohibitions, MEYYAPPAN participated in China’s Thousand Talents Program, a program established by the Chinese government to recruit individuals with access to or knowledge of foreign technology or intellectual property, and held professorships at universities in China, South Korea, and Japan, and failed to disclose these associations and positions to NASA and the U.S. Office of Government Ethics.
On or about October 27, 2020, MEYYAPPAN was interviewed by the FBI, NASA OIG, and the USAO, in New York, New York. During that proffer session, MEYYAPPAN falsely stated, among other things, that he was not a member of the Thousand Talents Program and that he did not hold a professorship at a Chinese university. In truth and in fact, MEYYAPPAN was a member of the Thousand Talents Program and held a professorship at a Chinese university, funded by the Chinese government.
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MEYYAPPAN, 66, of Pacifica, California was also ordered to pay a fine of $ 100,000.
Ms. Strauss praised the outstanding work of the FBI and NASA OIG.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Joshua A. Naftalis is in charge of the prosecution.
Saratoga Springs Man Pleads Guilty to Misusing a Social Security Number to Obtain Unemployment Insurance BenefitsRead the Press Release
ALBANY, NEW YORK – Markhwan Berning, age 37, of Saratoga Springs, New York, pled guilty today to misusing a social security number.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Nikitas Splagounias, Acting Special Agent in Charge, New York Region, United States Department of Labor, Office of Inspector General (DOL-OIG).
In pleading guilty, Berning admitted that between May and July 2020, he obtained unemployment insurance benefits, including federal pandemic-related benefits, by falsely presenting to the New York State Department of Labor a fake social security number as his own.
At sentencing, Berning faces a maximum of 5 years in prison, a term of supervised release of up to 3 years, and a maximum $250,000 fine. Berning is scheduled to be sentenced on October 16, 2021, by Senior United States District Judge Lawrence A. Kahn. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by DOL-OIG, with assistance from the Federal Bureau of Investigation and the New York State Department of Labor, Office of Special Investigations, and is being prosecuted by Assistant U.S. Attorney Joshua R. Rosenthal.
This case is being investigated as part of the Department of Justice’s COVID Fraud Task Force. To learn more about the Department’s efforts to stop illegal COVID-19-related activity, visit www.justice.gov/coronavirus. The public is urged to report suspected fraud schemes related to COVID-19 to the National Center for Disaster Fraud (NCDF) hotline by phone at (1-866-720-5721) or via an online reporting form available at: www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
San Francisco CEO Pleads Guilty to Swindling Banks and Investors Out of More Than $3.5 MillionRead the Press Release
SAN FRANCISCO – Andrew Chapin pleaded guilty today in federal court to wire fraud, bank fraud and securities fraud, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
Chapin, 33, of San Francisco, started a company in Boston that he moved to San Francisco in 2016 and renamed Benja Inc. Chapin was CEO of Benja. Benja was a digital advertising company that provided “shoppable media” by placing digital advertisements for companies with overstocked goods on websites which allowed shoppers to purchase products in the advertisement itself without being redirected to another website.
According to his plea agreement, from June 2019 to September 2020 Chapin was looking for additional investors and lines of credit for Benja. He told creditors and prospective investors that Benja generated $6,200,000 and $13,200,000 in revenue in 2018 and 2019, respectively, and had signed large contracts with numerous well-known national companies to place advertisements for their excess inventory. He admitted today in his plea agreement that he had no contracts with these companies, he falsified Benja’s revenue, and he impersonated corporate representatives, or caused their impersonation, to bolster the appearance of company relationships that did not exist.
Chapin detailed in his plea agreement that he submitted false information about Benja to a victim bank to obtain lines of credit totaling $5,000,000. In one example, Chapin took advances on a line of credit and used the money to pay off creditors and investors as well as his personal credit cards, and he also transferred money to his cryptocurrency exchange account.
Chapin also admitted he made false statements to induce venture capital firms to invest in Benja. His false statements led to investments of $1,000,000 from a venture capital firm and $1,800,000 from a SAFE (simple agreement for future equity) fundraising round from multiple investors. To obtain these investments, he fabricated documents to reflect Benja had millions in revenue and account receivables from companies that never contracted with Benja.
In one example in his plea agreement, Chapin described that on March 23, 2020, he directed a New York venture capital firm to Benja’s virtual data room that displayed a spreadsheet showing Benja’s total 2019 revenue had exceeded $13,000,000 and listed contracts with well-known national sportswear companies that represented more than $7,000,000 of Benja’s total 2019 income. However, Chapin admitted today that Benja had no contracts with the national sportswear companies and that he fabricated the spreadsheet. Chapin further admitted that for reference calls from the venture capital firm, he paid a Benja employee to impersonate a national running shoe company’s representative and instructed another individual to impersonate a national sportswear company’s representative. The venture capital firm relied on these representations and invested $1,000,000 in Benja. Chapin used that money to pay off a creditor.
Chapin also admitted defrauding individual investors. For example, in his plea agreement Chapin stated that in November 2018 he emailed false financial statements to an individual investor reflecting Benja had over $4,000,000 in revenue in 2018. Chapin further told the individual investor that a St. Louis, Missouri, venture capital firm was considering a $1,500,000 investment in Benja, although Chapin already knew the firm had declined to invest in Benja. Chapin also had a person impersonate the St. Louis venture capital firm’s manager during a reference call with the individual investor. In the call, the impersonator told the individual investor that a third party had verified Benja’s financials and had also made customer reference calls about Benja that were positive. Chapin admitted he then provided false contact information for the St. Louis venture capital firm’s manager that allowed Chapin – not the venture capital firm’s manager – to respond to the individual investor’s questions about Chapin’s shareholder agreement. The individual investor signed the shareholder’s agreement, purchasing 1,278 shares of common stock in Benja for $100,000. Chapin admits he used that money to pay personal credit card bills and to transfer the funds to his personal bank and cryptocurrency exchange accounts.
Chapin agreed in his plea agreement that from June 2019 through September 2020, the total loss amount attributable to his fraud scheme exceeded $3,500,000.
Chapin was originally charged by federal complaint on November 23, 2020, and later by information on May 27, 2021. He pleaded guilty today before United States District Judge Maxine M. Chesney to bank fraud in violation of 18 U.S.C. § 1344, wire fraud in violation of 18 U.S.C. § 1343, and securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5. He remains out of custody on bond.
Chapin’s sentencing hearing is scheduled for October 6, 2021, before United States District Judge Maxine M. Chesney in San Francisco. For bank fraud under 18 U.S.C. § 1344, Chapin faces a maximum sentence of 30 years imprisonment and a fine of $1,000,000. For wire fraud under 18 U.S.C. § 1343, he faces a maximum sentence of 20 years imprisonment and a fine of $250,000. For securities fraud under 15 U.S.C. § 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5, he faces a maximum sentence of 20 years imprisonment and a fine of $5,000,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The prosecution is the result of an investigation by the Federal Bureau of Investigation. The United States Attorney’s Office and the Federal Bureau of Investigation thank the San Francisco Regional Office of the Securities and Exchange Commission, which conducted a parallel investigation.
Russian National Convicted of Charges Relating to Kelihos BotnetRead the Press Release
A federal jury in Connecticut convicted a Russian national on Tuesday for operating a “crypting” service used to conceal “Kelihos” malware from antivirus software, enabling hackers to systematically infect victim computers around the world with malicious software, including ransomware.
According to court documents and evidence introduced at trial, Oleg Koshkin, 41, formerly of Estonia, operated the websites “Crypt4U.com,” “fud.bz” and others. The websites promised to render malicious software fully undetectable by nearly every major provider of antivirus software. Koshkin and his co-conspirators claimed that their services could be used for malware such as botnets, remote-access trojans, keyloggers, credential stealers and cryptocurrency miners.
“The defendant designed and operated a service that was an essential tool for some of the world’s most destructive cybercriminals, including ransomware attackers,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department's Criminal Division. “The verdict should serve as a warning to those who provide infrastructure to cybercriminals: the Criminal Division and our law enforcement partners consider you to be just as culpable as the hackers whose crimes you enable — and we will work tirelessly to bring you to justice.”
In particular, Koshkin worked with Peter Levashov, the operator of the Kelihos botnet, to develop a system that would allow Levashov to crypt the Kelihos malware multiple times each day. Koshkin provided Levashov with a custom, high-volume crypting service that enabled Levashov to distribute Kelihos through multiple criminal affiliates. Levashov used the Kelihos botnet to send spam, harvest account credentials, conduct denial of service attacks, and distribute ransomware and other malicious software. At the time it was dismantled by the FBI, the Kelihos botnet was known to include at least 50,000 compromised computers around the world.
“By operating a website that was intended to hide malware from antivirus programs, Koshkin provided a critical service that enabled other cyber criminals to infect thousands of computers around the world,” said Acting U.S. Attorney Leonard C. Boyle for the District of Connecticut. “We will investigate and prosecute the individuals who aid and abet cyber criminals as vigorously as we do the ones who actually hit the ‘send’ button on viruses and other malicious software.”
“Koshkin and his associates knowingly provided crypting services designed to help malicious software bypass anti-virus software,” said Special Agent in Charge David Sundberg of the FBI’s New Haven Division. “The criminal nature of the Crypt4U service was a clear threat to the confidentiality, integrity, and availability of computer systems everywhere. We at the FBI will never stop pursuing those like Koshkin for perpetrating cyber crimes and threats to the public at large.”
Koshkin was arrested in California in September 2019 and has been detained since his arrest. He faces a maximum penalty of 15 years in prison and is scheduled to be sentenced on Sept. 20.
Koshkin’s co-defendant, Pavel Tsurkan, is charged with conspiring to cause damage to 10 or more protected computers, and aiding and abetting Levashov in causing damage to 10 or more protected computers.
Levashov was arrested by the Spanish National Police in April 2017 and extradited to the United States. In September 2018, he pleaded guilty to one count of causing intentional damage to a protected computer, one count of conspiracy, one count of wire fraud, and one count of aggravated identity theft.
The FBI’s New Haven Division investigated the case through its Connecticut Cyber Task Force.
Assistant U.S. Attorney Edward Chang of District of Connecticut, and Senior Counsel Ryan K.J. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case with assistance from the Criminal Division’s Office of International Affairs. The Estonian Police and Border Guard Board also provided significant assistance.
This case is part of the Department of Justice’s Ransomware and Digital Extortion Task Force, which was created to combat the growing number of ransomware and digital extortion attacks. As part of the Task Force, the Criminal Division, working with the U.S. Attorneys’ Offices, prioritizes the disruption, investigation, and prosecution of ransomware and digital extortion activity by tracking and dismantling the development and deployment of malware, identifying the cybercriminals responsible, and holding those individuals accountable for their crimes. The department, through the Task Force, also strategically targets the ransomware criminal ecosystem as a whole and collaborates with domestic and foreign government agencies as well as private sector partners to combat this significant criminal threat.