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Friday 30 April 2021
Albuquerque man arraigned on charge of being a felon in possession of a firearmRead the Press Release
ALBUQUERQUE, N.M. – Rastice Lee Burdex, 28, of Albuquerque, was arraigned on April 26 in federal court on an indictment for being a felon in possession of a firearm. A federal grand jury indicted Burdex on Sept. 10, 2020. Burdex will remain detained pending trial.
According to the indictment and other court records, on Aug. 20, 2020, Albuquerque Police stopped the vehicle in which Burdex was traveling. A search of the vehicle allegedly revealed a loaded handgun beneath the drivers’ seat.
Burdex was previously convicted of aggravated battery against a household member with a deadly weapon and aggravated assault with a deadly weapon. As a previously convicted felon, Burdex cannot legally possess a firearm or ammunition.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Burdex faces up to 10 years in prison.
The FBI Albuquerque Field Office investigated this case with assistance from the Albuquerque Police Department. Assistant U.S. Attorney Alexander M. Uballez is prosecuting the case.
Thursday 29 April 2021
Youth Soccer Association Treasurer Admits Stealing $100,000 for Personal ExpensesRead the Press Release
PITTSBURGH, PA - A Beaver County resident pleaded guilty in federal court to a charge of wire fraud, Acting United States Attorney Stephen R. Kaufman announced today.
Jenessa Tolejko, 35, of Beaver, PA 15009 pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that Tolejko, while serving as Treasurer of the Brighton Township – Beaver Soccer Association, a volunteer-run youth soccer association, improperly used $100,000 of the soccer association’s money for personal expenditures, including a cruise, other travel, goods from Amazon and LuLaRoe, and her household bills.
Judge Schwab scheduled sentencing for August 26, 2021 at 9:30 a.m. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court permitted Tolejko to remain free on bond.
Assistant United States Attorney Jeffrey R. Bengel is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the Beaver Borough Police Department conducted the investigation that led to the prosecution of Tolejko.
Woonsocket Man Sentenced for Laundering Proceeds in Transcontinental Drug Trafficking OperationRead the Press Release
PROVIDENCE – A Woonsocket man with a lengthy Rhode Island state and federal criminal record and a history of violating conditions of his probation and supervised release was sentenced today to four years in federal prison for laundering as much as $500,000 in proceeds from the trafficking of marijuana in the Woonsocket area; the marijuana was obtained from a west coast-based drug trafficking organization.
Kyle S. Minot, 31, previously admitted to the court that he employed at least five individuals to deposit the proceeds of dozens of drug sales into “feeder” bank accounts, representing payment he owed his marijuana suppliers, a California-based drug trafficking organization. “Feeder” accounts, held in fictious names, conceal the origin and ownership of the money. Each deposit was kept to just under $10,000 to avoid bank reporting laws. The proceeds were withdrawn from the accounts by members of the drug trafficking organization in California.
According to information presented to the court, Minot’s drug trafficking and money laundering activities came to light during a long-term DEA and IRS led Boston Strike Force investigation begun in the fall of 2014 into the leadership of the transcontinental marijuana trafficking and money-laundering organization. Minot was later identified as having met in nearby Massachusetts with the leader of the organization in furtherance of the scheme.
According to court documents, Minot’s role in the marijuana trafficking and money laundering organization came to light while Minot was simultaneously the subject of a wide-ranging Rhode Island State Police investigation into the criminal activities of members of a motorcycle gang code named Operation Patched Out. Minot was heard on a State Police wiretap discussing his ongoing marijuana trafficking activities and obtaining stolen equipment for use in his landscaping business. Minot was incarcerated after his arrest as a state probation violator and was later convicted in state court on 14 charges, including receiving stolen property and drug trafficking offenses. He was sentenced to five years in prison – one year to serve, the remainder suspended with probation.
At the time Minot was overheard on the State Police wiretap discussing his then-ongoing criminal activities, Minot was subject to federal supervised release, having been convicted and sentenced for firearms trafficking. Separately, while on federal supervised release in that matter, Minot was convicted in state court on drug trafficking charges and a motor vehicle offense.
Appearing today before U.S. District Court Judge Mary S. McElroy, Minot, who pled guilty on October 25, 2019, to money laundering, was sentenced to 48 months in federal prison to be followed by three years of federal supervised release, and to pay a fine of $20,000, announced Acting United States Attorney Richard B. Myrus, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division Brian D. Boyle, and Acting Special Agent in Charge of Internal Revenue Service Criminal Investigation Ramsey E. Covington.
The case was prosecuted by Assistant United States Attorney Gerard B. Sullivan.
Acting United States Attorney Myrus thanks the Woonsocket Police Department and Rhode Island State Police for their assistance in this matter.
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Woman Sentenced to 90 Months for Distributing Methamphetamine in MenomonieRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that Diana Xiong, 39, Eau Claire, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 90 months in federal prison for distribution of methamphetamine. This prison term will be followed by 4 years of supervised release.
The charges in this case stem from an investigation conducted by law enforcement in the summer of 2020. On two occasions, Xiong sold methamphetamine to a confidential informant in Menomonie, Wisconsin. She also sold the same confidential informant a firearm, although she is prohibited from possessing any firearms because she is a convicted felon.
At sentencing, Judge Peterson explained a substantial sentence was warranted because of Xiong’s consistent and disturbing pattern of drug distribution, which she continued even after serving state sentences related to distributing methamphetamine. He also noted that while Xiong was smart and capable, she had unfortunately applied those qualities to drug dealing.
Judge Peterson ordered this federal sentence to run concurrent to a state prison sentence Xiong is now serving due to revocation of state supervision. Xiong was on state supervision at the time of the offenses in this case.
The charges against Xiong were the result of an investigation conducted by the Dunn County Sheriff’s Office, West Central Drug Task Force, Drug Enforcement Administration, and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant U.S. Attorney Taylor L. Kraus.
Woman Sentenced to 24 Months for Laundering Funds from Lottery Fraud Scheme Targeting the ElderlyRead the Press Release
TUCSON, Ariz. – Shanelle Bailey, 23, a Jamaican-born women living in Provo, Utah, was sentenced yesterday by U.S. District Judge Rosemary Marquez to 24 months in prison. Bailey previously pleaded guilty to Conspiracy to Commit Money Laundering.
Bailey participated in a scheme where Jamaican-based scammers called elderly victims in the United States, claiming the victims had won a lottery. To receive their winnings, the victims were told they must first pay money for taxes and fees. Bailey’s role in this scheme was to launder the fraudulent proceeds for fellow co-conspirators in Jamaica. The loss suffered by the victims exceeded $600,000.
As part of her sentence, Bailey will also be required to pay restitution in the amount of $80,850 to the victims in the case.
The U.S. Attorney’s Office encourages the public to be wary of similar scams and to verify with law enforcement and family members before sending money after a phone solicitation.
The Internal Revenue Service – Criminal Investigation, the Federal Trade Commission, the United States Postal Inspection Service, the Federal Bureau of Investigation, Homeland Security Investigations, and the Pima County Sheriff’s Department conducted the investigation in this case. The U.S. Attorney’s Office, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-19-01275-TUC-RM(LAB)
RELEASE NUMBER: 2021-030_Bailey# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Wilmington Man Sentenced to 10 Years in Federal Prison for Receipt of A Gun and AmmunitionRead the Press Release
WILMINGTON, Del. – A Wilmington man was sentenced on April 27 to 10 years in federal prison by the Honorable Colm F. Connolly, U.S. District Judge for the District of Delaware, for receipt of a firearm and ammunition with the intent that a felony would be committed with that firearm and ammunition. David C. Weiss, U.S. Attorney for the District of Delaware, made the announcement.
According to court documents, Angel Ortiz, 36, was arrested by the New Castle County Police Department on November 29, 2018, after he got out of a car during a traffic stop, ran away, and threw a loaded firearm. The firearm was recovered and found to be a Remington 1911 .45 caliber handgun with an extended magazine. Mr. Ortiz had previously been convicted of a felony offense and was not legally permitted to possess the Remington handgun.
U.S. Attorney Weiss stated, “Violent crime destroys neighborhoods. Together with our law enforcement partners, my Office is committed to doing all we can to get guns off our community’s streets and out of the hands of individuals who illegally possess them.”
“In our fight against violent crime, every gun taken off the street is a small victory, and every gun trafficker locked up is a big one," said Rachel Byrd, Acting Special Agent in Charge of the FBI Baltimore Field Office. "The FBI and our partners are committed to working together across jurisdictions to take down the criminals wreaking such havoc in our communities.”
This case is part of Project Safe Neighborhoods (PSN), a federal program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The U.S. Department of Justice 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.
The case was investigated by the FBI-Baltimore Division’s Wilmington Resident Agency and is being prosecuted by Assistant U.S. Attorneys Maureen McCartney and Laura Hatcher.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 19-3-CFC.
Virginia Beach Couple Pleads Guilty to $31 Million Coupon Fraud SchemeRead the Press Release
NORFOLK, Va. – A Virginia Beach couple pleaded guilty this week to perpetrating a counterfeit coupon fraud scheme that cost retailers and manufacturers over $31 million in losses.
“These defendants orchestrated a nationwide scheme to make and sell counterfeit coupons, which defrauded businesses out of more than $31 million,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Counterfeiting coupons harms the entire retail industry and causes financial loss to consumers, businesses, and the economy. As this case demonstrates, those who use illegal get-rich-quick schemes to deceive others will be brought to justice.”
According to court documents, from approximately April 2017 through May 2020, Lori Ann Talens, 41, operated a complex scheme using social media sites and apps such as Facebook and Telegram to find groups of coupon enthusiasts and sell them counterfeit coupons. Lori Ann Talens, who operated online under the moniker “MasterChef,” used a computer to design, create, and produce a wide variety of counterfeit coupons in her Virginia Beach home. These counterfeit coupons were virtually indistinguishable from authentic coupons and were often created with inflated values, far in excess of what an authentic coupon would offer, in order to receive items from retail for free or for a greatly reduced price.
“Whenever someone uses the U.S. Mail to send counterfeit, illegal or improper items, Postal Inspectors will find them and bring them to justice,” said Peter R. Rendina, Postal Inspector in Charge, Washington Division of the U.S. Postal Inspection Service. “We remain committed to keeping the mail safe for our customers and our employees.”
As part of the scheme, Lori Ann Talens would ship the counterfeit coupons throughout the United States using the U.S. Postal Service and other commercial parcel delivery services. She accepted payment for the counterfeit coupons through a variety of online payment methods, including Bitcoin and Paypal. Lori Ann’s husband, Pacifico Talens, 43, was aware of the counterfeit coupon scheme, profited from it, and assisted in the operation by shipping packages of counterfeit coupons and performing other administrative tasks at the direction of his wife.
The scheme was discovered when one of the Talens’s customers reported them to the Coupon Information Center (CIC), a coalition of consumer product manufacturers dedicated to coupon integrity. The CIC purchased coupons from the Talens, confirmed they were counterfeit, and contacted the U.S. Postal Inspection Service for further investigation.
After identifying the defendants as the source of the counterfeit coupons, federal law enforcement executed a search warrant on their residence. During the search, agents seized nearly $1 million worth of counterfeit coupons from the residence. Furthermore, a review of the Talens’s computer revealed images for over 13,000 separate and distinct counterfeit coupon designs. The CIC reviewed these images and compared them to the known counterfeit coupons in circulation. The analysis concluded that coupon redemptions using the 13,000 counterfeit designs on the couple’s computer had caused approximately $31,817,997 million in losses to retailers and manufacturers.
In a separate scheme, from approximately November 2015 through February 2020, Lori Ann Talens defrauded Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Lori Ann Talens applied for benefits for each of these programs and failed to disclose either her husband Pacifico’s legitimate employment income, or their own illegitimate counterfeit coupon income. Had she disclosed this income, the Talens would not have been eligible for these benefits. The total loss to Medicaid and SNAP was approximately $43,000.
Both defendants pleaded guilty to mail fraud. Lori Ann Talens also pleaded guilty to wire fraud and health care fraud. Lori Ann Talens is scheduled to be sentenced on August 31, and she faces a maximum penalty of 50 years in prison. Pacifico Talens is scheduled to be sentenced on August 19, and he faces a maximum penalty of 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after U.S. District Judge Roderick C. Young accepted the plea.
Assistant U.S. Attorney Joseph Kosky is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:21-cr-39.
Valley drug trafficking organizer gets life in prisonRead the Press Release
BROWNSVILLE, Texas – A 40-year-old resident of Brownsville has been ordered to federal prison following his role in trafficking more than 1000 kilograms of cocaine involving $26 million in drug proceeds, announced Acting U.S. Attorney Jennifer B. Lowery.
The jury deliberated for less than three hours before convicting Rafael Villanueva Jan. 28, following a six-day trial.
Today, U.S. District Judge Fernando Rodriguez Jr., who presided over the trial and sentencing, ordered Villanueva to serve the rest of his life in federal prison. The court also ordered Villanueva to pay a $1,193,070 money judgment as repayment for the drug money he illegally laundered.
“This sentencing is the result of a long-term complex investigation lead by federal, state and local law enforcement agencies who continue to serve and protect our public and national security said Deputy Special Agent in Charge Timothy Tubbs of Homeland Security Investigations (HSI). “HSI and our counterparts will continue to protect our nation from transnational criminal organizations that seek to bring harm to our communities and our nation.”
“The sentencing of Villanueva demonstrates how we focus investigative resources against drug trafficking organizations that import large shipments of hard drugs from Mexico then deliver them to cities throughout the United States,” said Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA). “DEA and our partners remain determined to identify, dismantle and destroy drug trafficking organizations that import and spread their poison in cities across our nation.”
During trial, the jury heard from approximately 21 witnesses. They detailed Villanueva’s role as head of a drug transportation group that moved cocaine from the Rio Grande Valley and on to cities throughout the United States. He had customers in Mexico who needed transportation for cocaine to areas throughout the United States, including Houston; Chicago, Illinois; Jackson, Mississippi; as well as locations in South and North Carolina, Virginia and Georgia.
He also provided transportation for drug proceeds sold throughout the United States back to the Rio Grande Valley. The commercial vehicles were outfitted with special compartments to hide the cocaine and drug proceeds.
Several witnesses testified Villanueva hired them to move the cocaine north and the drug proceeds south. Villanueva paid them by the kilogram to transport the drugs and a percentage of the drug money coming south. Fellow drug traffickers also testified Villanueva borrowed their line of transport for the cocaine when commercial drivers he hired got arrested with loads of cocaine.
One of the witnesses was a young male who was only 16 when he started working for Villanueva.
The jury also heard about the search of Villanueva’s house where authorities found five guns and numerous documents showing his lavish lifestyle as well as several Lone Star cards.
The defense attempted to convince the jury the witnesses were all liars and authorities did poor work.
The jury ultimately found him guilty as charged for possession with intent to distribute five kilograms or more of cocaine and conspiracy to do so, conspiracy to launder monetary instruments, bulk cash smuggling and international money laundering.
Villanueva has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Several others have also been convicted for their respective roles.
HSI and DEA conducted the Organized Crime Drug Enforcement Task Force (OCDETF) operation known as La Camelia. 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 on the Department of Justice’s OCDETF webpage.
Assistant U.S. Attorneys Karen Betancourt, Jody Young and Paul Marian prosecuted the case.
United States Recovers $8.4 Million in Fraudulent COVID Relief Funds from FamilyRead the Press Release
Orlando, Florida – Acting United States Attorney Karin Hoppmann announces that the United States has obtained a final civil judgment ordering the forfeiture of $8,417,261.38 in proceeds from bank fraud and money laundering offenses related to COVID Relief Fraud.
According to court documents, it is alleged that in April 2020, Joshua Edwards, Joy Edwards, Evan Edwards, and Mary Jane Edwards defrauded the Small Business Administration (“SBA”) out of millions of dollars in coronavirus relief funds. Specifically, Joshua Edwards, on behalf of ASLAN International Ministry, Inc., submitted a false and fraudulent loan application seeking funds from the Paycheck Protection Program (“PPP”). Once the PPP loan was obtained, members of the Edwards family misused the funds by attempting to purchase a $3.7 million luxury home in the Four Seasons Private Residence community at Walt Disney World Resort. The remaining funds were transferred among multiple bank accounts held by the conspirators in an attempt to hide and conceal their whereabouts. Law enforcement was able to seize all of the fraudulently obtained funds before they were dissipated. A request will be made to the Department of Justice’s Money Laundering and Asset Forfeiture Section to remit the forfeited funds back to the SBA.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted March 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is 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.
This case was investigated by the United States Secret Service. It was prosecuted by Assistant United States Attorney Nicole Andrejko.
U.S. Attorney's Office, EPA and State of New York Announce Settlement with Holcim (US) Inc. to Address Environmental Violations at Cement Manufacturing FacilityRead the Press Release
ALBANY, NEW YORK - The U.S. Attorney’s Office for the Northern District of New York, the U.S. Environmental Protection Agency (EPA), and the State of New York today announced a settlement with Holcim (US) Inc. to resolve alleged violations of the federal Clean Water Act and New York State water quality regulations at its cement manufacturing facility in Ravena, New York, announced Acting United States Attorney Antoinette T. Bacon.
The settlement, set forth in a consent decree lodged with the U.S. District Court for the Northern District of New York, requires Holcim to comply with the terms of its State Pollutant Discharge Elimination System permit (Permit), pay an $850,000 civil penalty ($212,000 of which will be directed to a NYS Environmental Benefit Project improving stormwater management at Coeymans Landing Park in the Town of Coeymans, New York), and make other physical and operational improvements to the Facility.
The settlement resolves violations alleged in the complaint of the United States and the State of New York, which was filed yesterday. The complaint alleges that, between April 2015 and April 2021, the facility violated the Permit’s numeric effluent limitations 273 times for pollutants such as biological oxygen demand, fecal coliform, total suspended solids, settleable solids, pH, and temperature differential and three prior administrative consent orders issued from 2011 to 2015. The administrative orders document over 150 Permit numeric effluent limitation violations for similar pollutants as well as unauthorized discharges of an unreported sulfuric acid spill, and discharges of partially treated landfill leachate to tributaries of the Hudson River, such as Coeyman’s Creek and Hannacroix Creek. During the course of negotiations over the terms of the Consent Decree, Holcim made substantial improvements to its stormwater and leachate management practices to address the violations at issue, which resulted in the demolition and removal of two failing slurry basins, and installing an impermeable geomembrane-backed French drain along a portion of the perimeter of its landfill. Under the terms of the Consent Decree, Holcim will undertake additional measures to ensure that the Facility is fully compliant with the terms of its Permit by October of 2022.
“We are all custodians of our community’s precious environmental resources. This settlement will benefit the Hudson River, and help preserve this treasured resource for future generations,” said Acting United States Attorney Antoinette T. Bacon.
“This settlement helps protect clean water and ecosystems in the Hudson Valley for local communities and it has already improved Holcim’s compliance with critical federal and state environmental laws,” said EPA acting Region Administrator Walter Mugdan. “This case exemplifies EPA’s commitment to work with our federal and state partners to ensure entities like Holcim comply with regulations that protect public health and the environment.”
“For years, Holcim failed to live up to its legal responsibilities, repeatedly violating laws established to ensure the health of our waters,” said New York Attorney General Letitia James. “Today, we hold this company accountable for polluting our natural resources and we ensure that proper measures are taken to remediate the harm caused to our communities. My office will continue to aggressively enforce the laws that protect the health and safety of our environment and of all New Yorkers.”
“New York State has a long history of holding polluters accountable for their impacts both on our communities and the environment and I thank the U.S. Attorney and the Attorney General for their efforts to finalize this agreement that does just that,” Department of Environmental Conservation (DEC) Commissioner Basil Seggos said. “The Consent Decree announced today will help to resolve years of violations and exceedances under federal and state rules and regulations and requires a significant penalty of $850,000. And in addition to requiring actions to further clean up its operations, this agreement requires this facility to invest in an Environmental Benefit Project that will help improve the health of the Hudson River – a victory for the town of Coeymans.”
This case is being handled by Assistant U.S. Attorney John Hoggan for the United States and Assistant Attorney General Joseph Kowalczyk for the State of New York.
The consent decree is subject to a 30-day public comment period and final court approval. To view a copy of the consent decree and for information on how to submit a comment, visit www.justice.gov/enrd/Consent_Decrees.html.
Two Queens Men Plead Guilty to Multi-Million Dollar Bank Fraud and Identity Theft ConspiracyRead the Press Release
Earlier today, in federal court in Brooklyn, Abed Ahmad and his brother Alaa Ahmad, pleaded guilty before United States District Judge Eric N. Vitaliano to bank fraud conspiracy and conspiracy to commit aggravated identity theft relating to a scheme to defraud JPMorgan Chase & Co. and its customers. Abed Ahmad also pleaded guilty to conspiracy to commit money laundering and one count of aggravated identity theft.
Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), John Grasso, Special Agent-in-Charge, Social Security Administration Office of Inspector General, New York Field Office (SSA-OIG), and Cyrus Vance, District Attorney, New York County District Attorney’s Office, announced the guilty pleas.
“The defendants abused their positions of trust at JP Morgan Chase in furtherance of a sordid scheme to steal the identities of elderly and deceased customers in order to misappropriate millions in funds from their accounts,” stated Acting United States Attorney Lesko. “This Office and its law enforcement partners will spare no effort in holding the defendants to account for their brazen fraud.” Mr. Lesko expressed his grateful appreciation to the New York City Police Department’s Intelligence Bureau, U.S. Department of Veterans Affairs Office of Inspector General, and the Social Security Administration Office of Inspector General, for their work on the case.
“Out of sheer greed, the defendants abused their positions to steal from arguably the most vulnerable of banking customers,” stated IRS-CI Special Agent-in-Charge Larsen. “Their admissions today will hopefully provide some measure of closure to all of those impacted by their crimes and put them on a path to full restoration.”
“This $7 million fraud scheme was perpetrated by bank employees that misused their access to sensitive information to victimize the bank and its customers. Today’s guilty pleas highlight that HSI and our law enforcement partners will continue to use every available resource to bring those who prey on innocent victims to justice,” stated HSI Special Agent-in-Charge Fitzhugh.
“These guilty pleas are the result of a true collaborative effort between Federal and local agencies to identify this massive fraud and hold accountable those who abused their authority for personal gain. These individuals stole these funds not only from private citizens and financial institutions, but also from the Social Security Administration,” stated SSA-OIG Special Agent-in-Charge Grasso. “I want to recognize our law enforcement partners, the Manhattan District Attorney’s Office, and the United States Attorney’s Office, for their efforts leading to today’s announcement.”
“These guilty pleas put high-tech cyber thieves on notice: the Manhattan D.A.’s Office has built the expertise, resources, and seamlessly collaborative partnerships to find you, hold you accountable, and secure justice for your victims,” stated District Attorney Vance. “I thank Acting U.S. Attorney Lesko and my Office’s Cybercrime and Identity Theft Bureau for their exceptional collaboration as we continue working together to protect our residents and markets from increasingly sophisticated, large-scale frauds. I also commend my Office’s Forensic Accounting and Financial Investigations Bureau; the NYPD’s Financial Crimes Task Force, Cybercrime and Identity Theft Task Force, and Intelligence Bureau; and our federal partners at IRS and HSI for this expert, joint investigation, as well as the Veterans Affairs OIG and Social Security Administration OIG for their important work.”
As set forth in court filings and today’s proceedings, between approximately 2012 and 2017, Abed and Alaa Ahmad, both of whom worked at branches of JPMorgan Chase & Co. in Queens, used their positions at the bank to target high-dollar value customer accounts of elderly or deceased individuals that had been dormant for a period of time. After identifying these accounts, Abed and Alaa Ahmad passed the account information, as well as the personal identifying information of the account holders, to another co-conspirator, Moustafa Ayoub. Ayoub used the account information to transfer nearly $7 million of victim funds from the JPMorgan Chase accounts to other financial accounts controlled by Ayoub.
Ayoub previously pleaded guilty in January 2021 before Judge Vitaliano to conspiracy to commit bank fraud, conspiracy to commit money laundering, conspiracy to commit aggravated identity theft and aggravated identity theft. He is awaiting sentencing.
The government’s case is being handled by the Office’s National Security and Cybercrime Section, with the assistance of the New York County District Attorney’s Office. Assistant United States Attorneys Josh Hafetz, Jonathan E. Algor and Special Assistant U.S. Attorney Beth F. Potashnick are in charge of the prosecution.
The Defendants:
ABED AHMAD
Age: 37
Boca Raton, FloridaE.D.N.Y. Docket No. 21-CR-095 (ENV)
ALAA AHMAD
Age: 34
Boca Raton, FloridaE.D.N.Y. Docket No. 21-CR-228 (ENV)
MOUSTAFA AYOUB
Age: 50
Queens, New YorkE.D.N.Y Docket No. 20-142 (ENV)
Two Men Sentenced for Roles in Narcotics Distribution OffenseRead the Press Release
NEWARK, N.J. – Two men were sentenced to federal prison terms for possessing a large quantity of cocaine, Acting U.S. Attorney Rachael A. Honig announced today.
Jose Reyes, 60, of the Dominican Republic, was sentenced by videoconference before Chief U.S. District Judge Freda L. Wolfson to 57 months in prison. Ramon Fabian-Pena, aka “Rafael,” 60, of Passaic County, New Jersey, was sentenced by Judge Wolfson on April 21, 2021, to 30 months in prison.
Reyes and Fabian-Pena each previously pleaded guilty to an information charging them with one count of conspiracy to distribute cocaine and one count of possession to distribute cocaine.
According to the documents filed in this case and statements made in court:
On Jan. 7, 2020, Reyes traveled from New York to Passaic, New Jersey, to oversee the delivery of approximately six kilograms of cocaine. At the direction of Reyes, Fabian-Pena took possession of the narcotics from another individual. Law enforcement officers were conducting surveillance of the narcotics transaction and recovered a bag containing approximately six kilograms of cocaine. A lawful search of messages contained on Reyes’ cell phone revealed that Reyes coordinated the narcotics transaction.
In addition to the prison terms, Judge Wolfson sentenced each defendant to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing. She also thanked members of the Mercer County Prosecutor’s Office and the Hamilton Township Police Department for their assistance.
This investigation was conducted by a DEA New Jersey Task Force, led by the New Jersey State Police, and composed of DEA special agents and officers from various county and local police departments.
The government is represented by Assistant U.S. Attorney Cassye Cole of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
Two Armed Criminals Convicted in Separate Trials on Same Day Before Same JudgeRead the Press Release
GREENVILLE, South Carolina – Acting United States Attorney M. Rhett DeHart announced today that the United States Attorney’s Office secured two guilty verdicts in two separate cases, on the same day, in the same courtroom, and before the same judge. Specifically, separate federal juries convicted Zavien Lenoy Canada, 38, and Kendrick Omar Cobb, 31, both of Greenville, each for being a felon in possession of a firearm and ammunition.
On Monday morning, the jury trial for Canada began and continued into Tuesday morning. When the Canada jury started deliberations Tuesday, the jury trial for Cobb began. When the Canada jury reached its guilty verdict on Tuesday afternoon, the court paused the Cobb trial to enter the Canada verdict. The court then resumed the Cobb trial, and the jury found Cobb guilty later Tuesday evening.
According to court documents and evidence presented at Canada’s trial, on January 31, 2020, Canada was the passenger in a vehicle pulled over for a suspended license plate. Canada was wanted by the United States Marshals for absconding federal supervised release. Shortly upon exiting the vehicle, Canada fled on foot before being apprehended by officers of the City of Greenville Police Department. During the search of the vehicle, police found a .45 caliber pistol and a magazine loaded with .45 caliber ammunition. Canada was arrested at the scene and taken into custody. Correction officers at the Greenville County Detention Center recovered 3.55 grams of crack cocaine in Canada’s pants.
According to court documents and evidence presented at Cobb’s trial, on the afternoon of March 25, 2018, deputies with the Greenville County Sheriff’s Office conducted a search warrant at Cobb’s residence and recovered a loaded 9mm pistol under the mattress of a bed. Cobb later admitted that the gun was his.
Due to their criminal histories, both Canada and Cobb are prohibited from possessing a gun or ammunition.
Senior United States District Judge Henry M. Herlong, Jr. presided over both trials and will sentence Canada and Cobb after receiving and reviewing pre-sentence reports prepared by the United States Probation Office. Canada likely faces at least fifteen years in federal prison, and Cobb faces up to ten years in federal prison. During the trial, the court took numerous safety measures in light of the pandemic. Large, plexiglass shields separated the jurors, the movement of attorneys about the courtroom was limited, and attorneys and witnesses wore masks unless they were speaking.
“Having two trial teams argue two separate cases in the same courtroom and getting verdicts on the same day is likely a first in this district,” said Acting U.S. Attorney DeHart. “I commend the work of those trial teams and thank the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and our law enforcement partners for their work in bringing these armed criminals to justice, especially during a pandemic. I also want to acknowledge the efforts of the presiding judge, who went to great lengths to ensure the safety of the jurors, lawyers, witnesses, and others involved in the case. These verdicts show that this office will do whatever it takes to keep the people of South Carolina safe.”
“This is a double win for our law enforcement partners and for public safety,” said ATF Special Agent in Charge Vince Pallozzi. “These were very productive, collaborative investigations and each of these convictions takes a very dangerous offender off our streets.”
The ATF is investigating both cases with the assistance of the City of Greenville Police Department in Canada’s case and the Greenville County Sheriff’s Office in Cobb’s case.
Assistant U.S. Attorneys Justin Holloway and Ben Garner are prosecuting the Canada case, and Assistant U.S. Attorney Max Cauthen is prosecuting the Cobb case.
The cases are being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Tuscaloosa Man Sentenced to 72 Monts in Prison for Illegal Possession of a Machine GunRead the Press Release
BIRMINGHAM, Ala. – A federal judge this week sentenced a Tuscaloosa man for being a felon in possession of a machine gun, announced U.S. Attorney Prim F. Escalona and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Mickey French.
U.S. District Judge Annemarie Carney Axon sentenced Devontay Jerrod Hutt, 25, to 72 months in prison for being a felon in possession of a firearm and 72 months in prison for possessing a machine gun. Each count to be served concurrently with each other. Hutt pleaded guilty to these charges in January.
According to court documents, on December 31, 2019, Hutt had an encounter with Tuscaloosa police officers at a restaurant in Tuscaloosa. Officers received a tip that Hutt possessed a firearm. When officers arrived at the restaurant, Hutt and another individual fled, eluding officers during a foot chase. Inspecting Hutt’s vehicle from the outside, officers could see two pistols and suspected drugs in plain view in the front seat. Officers searched the car and recovered a pistol that qualified as a machine gun, a second AR-style pistol, high capacity magazines, pills, and marijuana.
“Prosecuting felons who illegally possess weapons is a priority of my office,” U.S. Attorney Escalona said. “We commend the Tuscaloosa Police Department on their work to prevent violent crime and for the quick actions of the officers in this case.”
“Removing the criminal element that used a firearm to facilitate violent crimes is a priority of ATF,” SAC French stated. “ATF’s partnerships leveraged NIBIN technology that will have a lasting impact on the community.”
The ATF along with the Tuscaloosa Police Department investigated the case, which Assistant U.S. Attorney Alan Baty prosecuted.
Tungsten Heavy Powder of San Diego Agrees to Pay $5.6 Million to Settle False Claims Act AllegationsRead the Press Release
Assistant U. S. Attorneys Joseph Purcell (619) 546-7643 and Paul Starita (619) 546-7701
NEWS RELEASE SUMMARY – April 29, 2021
SAN DIEGO – Tungsten Heavy Powder, Inc. (THP) has agreed to pay $5,641,114 to resolve allegations that it violated the False Claims Act by falsely certifying that it sourced product materials in the United States for items it manufactured under a contract with the government of Israel that was funded by the U.S. Defense Security Cooperation Agreement Agency (DSCA). THP is a San Diego-based company that manufactures and supplies tungsten products, including those used in U.S. military applications and munitions. THP provided weapons systems manufacturing articles and services to United States Department of Defense agencies and to the Government of Israel.
The United States contended that THP knowingly submitted false certifications to the United States regarding the origin and manufacture of defense articles procured by the government of Israel that were financed with United States’ grant funds paid by the Foreign Military Financing (FMF) program through the DSCA. Specifically, it is alleged that THP submitted false certifications pertaining to seven government of Israel purchase orders. With respect to these procurements, the United States alleged that THP falsely certified that tungsten that was actually sourced in China had been sourced, instead, in the United States. The United States contended that THP also falsely certified that manufacturing occurred in the United States, when in fact THP contracted with a Mexican maquiladora.
In order to promote American manufacturing, grant funds for foreign procurements are only available when the materials are sourced and manufactured in the United States by domestic companies.
“As always, we are committed to preserving the integrity of the government contracting process and to ensuring that funds fraudulently obtained are returned to the public fisc,” said Randy S. Grossman, Acting United States Attorney for the Southern District of California. Grossman praised Assistant U.S. Attorneys Paul Starita and Joseph Purcell for their excellent work on this case.
Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan Denny, Western Field Office, stated “The DCIS is committed to working with our law enforcement partners and the Department of Justice to combat those who attempt to take advantage of the military’s procurement system. Each instance of fraud or corruption has the potential to harm the military’s mission or those who serve, and needlessly wastes taxpayer money.”
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a former employee of THP, Gregory Caputo, and Global Tungsten & Powders Corporation under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. Mr. Caputo and Global Tungsten & Powders Corporation will receive seventeen percent of the settlement proceeds.
This case is captioned United States, ex rel. Gregory Caputo and Global Tungsten & Powders Corporation v. Tungsten Heavy Powder, Inc., d/b/a Tungsten Heavy Powder & Parts, Inc., Case No. 18-cv-2352-W (WVG). This matter was investigated by Assistant U.S. Attorneys Joseph Purcell and Paul Starita of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office, in coordination with Special Agents of the Defense Criminal Investigative Service and U.S. Army Criminal Investigation Division Command, and personnel from the Defense Security Cooperation Agency.
Defendant
Tungsten Heavy Powder, Inc. San Diego, CA
Agencies
Defense Criminal Investigative Service
U.S. Army Criminal Investigation Division Command
Defense Security Cooperation Agency
Tucker County woman sentenced for her role in a methamphetamine distribution operationRead the Press Release
ELKINS, WEST VIRGINIA – Donna Alyce Boyles, of Parsons, West Virginia, was sentenced today to five years of probation for her role in a methamphetamine distribution operation, Acting U.S. Attorney Randolph J. Bernard announced.
Boyles, age 54, pled guilty to one count of “Aiding and Abetting Maintaining Drug-Involved Premises” in February 2019. She admitted to maintaining a residence located at 128 Main Street in Parsons, West Virginia, to manufacture, sell or use methamphetamine.
Assistant U.S. Attorney Brandon S. Flower prosecuted the case on behalf of the government. The Mountain Region Drug & Violent Crimes Task Force investigated.
U.S. District Judge Thomas S. Kleeh presided.
Three Additional Individuals Admit Participating in $10 Million Multi-State Bank Fraud ConspiracyRead the Press Release
TRENTON, N.J. – A New York woman, an Ohio man, and a New Jersey man admitted their roles in a large-scale conspiracy to commit bank fraud in states including New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan, Acting Attorney Rachael A. Honig announced today.
Erm Ayaz, 36, of Bayside, Brooklyn, pleaded guilty today by videoconference before Chief Judge Freda L. Wolfson to an information charging her with one count of conspiracy to commit bank fraud. Syed Abbas, 32, of Westerville, Ohio, and Habib Majid, 35, of North Brunswick, New Jersey, pleaded guilty before Chief Judge Wolfson on April 27, 2021, and April 21, 2021, respectively, to informations that charged them each with one count of conspiracy to commit bank fraud.
Ayaz, Abbas, and Majid are among seven individuals that have pleaded guilty as part of the scheme.
According to documents filed in this case and statements made in court:
From 2018 through April 2020, Ayaz, Majid, Abbas, and others conspired to defraud several major banks and electronic merchant processors. They established bank accounts associated with sham entities that had no legitimate purpose and issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. The conspirators also conducted numerous fraudulent credit card and debit card transactions between shell companies to credit payee accounts and fraudulently overdraw payor accounts. Members of the conspiracy also used these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred.
Members of the criminal organization withdrew the “existing” funds (through ATMs or bank tellers) that banks and/or merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the conspirators withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.
The investigation revealed that Ayaz, Majid, Abbas, and other conspirators attempted to defraud financial institutions and merchant processors of approximately $10 million dollars and did in fact cause a loss of approximately $3.5 million.
The conspiracy charges which Ayaz, Abbas, and Majid pleaded guilty carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or loss to others, whichever is greater. Ayaz’s sentencing is scheduled for Sept. 14, 2021. Abbas’ and Majid’s sentencings are scheduled for Sept. 9, 2021.
Four co-defendants – Awaise Dar, Rana Sharif, Naveed Arif, Ali Abbas – have previously pleaded guilty to informations charging them with conspiracy to commit bank fraud in connection with the scheme.
Acting U.S. Attorney Honig credited inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins in Newark; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; the Social Security Administration Office of Inspector General, under the direction of John F. Grasso; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.
Texas Man Arrested and Charged with Sex Trafficking of A MinorRead the Press Release
Tampa, Florida – Acting United States Attorney Karin Hoppmann announces the filing of a criminal complaint charging Jamel Muldrew (32, Houston, TX) with sex trafficking of a minor, interstate transportation of a person to engage in prostitution, and enticement of a person to travel interstate for prostitution. If convicted on all counts, Muldrew faces a maximum penalty of life in federal prison.
According to the complaint, on or about April 9, 2021, law enforcement coordinated an operation in Tampa to identify and rescue victims of human trafficking, and to identify and arrest their traffickers. As part of this operation, an undercover officer arranged to engage in prostitution with a minor victim at a local hotel in exchange for $800. A male, later identified as Muldrew, then drove the minor victim to the hotel, dropped her off, and drove to nearby mall parking lot to wait. After being dropped off, the minor victim entered the hotel room where she was met by detectives. Law enforcement officers arrested Muldrew at the mall parking lot and searched him, recovering multiple fictious identity documents for both himself and the minor victim.
Subsequent investigation revealed that, from February until April 2021, Muldrew had trafficked the minor victim across the country to engage in prostitution, including in Texas, New Jersey, Maryland, North Carolina, Georgia, and ultimately Florida, where he was arrested.
A complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Homeland Security Investigations, the Hillsborough County Sheriff’s Office, and the Houston (Texas) Police Department. It will be prosecuted by Assistant United States Attorney Ilyssa M. Spergel.
Anyone who is or who knows a potential victim in this or any other case of sex trafficking or human trafficking, or who has any information regarding this or any other investigation, should contact Homeland Security Investigations toll-free Tip Line at 1-866-DHS-2423 or by completing its online tip form found at https://www.ice.gov/webform/ice-tip-form.
This case was brought as part of the Tampa Bay Human Trafficking Task Force of the Middle District of Florida, one of 13 such task forces in the country to receive grant funding from the Department of Justice’s Bureau of Justice Assistance. The Task Force is a collaboration of local, state, and federal law enforcement agents working together with organizations to detect, investigate, and prosecute human trafficking in the Tampa Bay area. This includes trafficking of minors, forced labor, transnational sex trafficking, and sex trafficking of adults by force, fraud, or coercion. More information about the Tampa Bay Human Trafficking Task Force can be found at www.justice.gov/usao-mdfl/humantrafficking. Information on the Department of Justice’s efforts to combat human trafficking can be found at www.justice.gov/humantrafficking.
Ten Members and Associates of ‘Uptop’ Street Gang Charged in Drug Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – Ten people have been charged for their roles as members and associates of “UpTop,” a Paterson, New Jersey-based street gang involved in the distribution of drugs, including heroin, fentanyl, and cocaine base, Acting U.S. Attorney Rachael A. Honig announced today.
Corey Boyd, 23; Leo Edwards, 27; Kwame Ellis, 30; Sean Morgan, 21; and Brent Staton, 20; and Kassan Drakeford, 31; all of Paterson; and Stefan Cameron, 25, of Hackensack, New Jersey, are charged by complaint with one count of conspiracy to distribute heroin, fentanyl and cocaine base. Six of the defendants were arrested this morning and are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Mark Falk. Ellis remains at large.
Also charged in the same complaint, and already in state custody on other charges, are Devin Kyle, 21; Edwin Diaz, 19; and Anthony Herring, 38, all of Paterson. They will have their initial appearances on a date to be determined.
According to the documents filed in this case and statements made in court:
The defendants are all members and associates of the UpTop street gang, which operates primarily in the Fourth Ward of Paterson. Through numerous controlled purchases of drugs, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone records, the investigation uncovered evidence that from January 2020 through April 29, 2021, the defendants conspired to distribute heroin, fentanyl and cocaine base.
UpTop derived its name from its location; its turf is colloquially described as being "up the hill" in the Fourth Ward of Paterson. Members of UpTop sell heroin that is frequently mixed with fentanyl, a potent, synthetic opioid that is approximately 50 times stronger than heroin.
Members and associates of UpTop sometimes compete with each other for narcotics customers within the gang's turf. However, the investigation has shown that UpTop members work together to ensure that outsiders are unable to distribute narcotics within the turf. Members and associates of UpTop work together to preserve and protect the power, territory, and reputation of the gang, and to hinder, obstruct, and prevent law enforcement officers from identifying their criminal activities, from apprehending offenders of the crimes, and from successfully prosecuting and punishing the offenders.
The count of conspiracy charged in the complaint carries a maximum penalty of 40 years in prison and a fine of at least $5 million, with a mandatory minimum prison sentence of five years.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; officers of the Paterson Police Department, under the direction of Police Director Jerry Speziale and Police Chief Ibrahim M. Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff’s Department, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. She also thanked the U.S. Marshals Service for their assistance with the case.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Senior Trial Counsel Francesca Liquori and Special Assistant U.S. Attorney Kendall Randolph of the Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Tax Collector Embezzled a Million Dollars from Township & School District, Filed a False Tax ReturnRead the Press Release
PITTSBURGH, PA - A Beaver County woman pleaded guilty in federal court to charges of wire fraud and filing false income tax returns, Acting United States Attorney Stephen R. Kaufman announced today.
Jeanne Bowser, 62, of Aliquippa, PA 15001 pleaded guilty to two counts before United States District Judge Robert Colville.
In connection with the guilty plea, the court was advised that Bowser was the elected tax collector for Center Township, Beaver, Pennsylvania and also collected taxes for Central Valley School District. From approximately December 2011 until approximately August 2019, Bowser embezzled $1,028,183.81 in tax payments from both the township and school district. She embezzled the funds by writing checks to herself out of a bank account that was used for tax deposits and by stealing cash tax payments. In addition to the embezzlement, the Court was further advised that Bowser filed a false income tax return for 2016 by underreporting her income.
Judge Colville scheduled sentencing for Sept. 28, 2021 at 9 a.m. The law provides for a total sentence of 23 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court released Goodwin on a $25,000 bond.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Internal Revenue Service - Criminal Investigation conducted the investigation that led to the prosecution of Bowser.
Tarrant County Man Convicted at Trial of Child Exploitation ViolationsRead the Press Release
SHERMAN, Texas – A Kennedale man was found guilty by a jury of federal child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Robert Allen Hall, 31, was found guilty of attempted coercion and enticement of a minor today by a jury following a three-day trial before U.S. District Judge Amos L. Mazzant, III.
“While sexual predators are actively looking for their child victims, we are also actively looking for those predators,” said Acting U.S. Attorney Nicholas J. Ganjei. “Our law enforcement officers, federal agents, and prosecutors are dedicated to keeping the Eastern District of Texas safe from those who seek to destroy our greatest resource, our children.”
According to the court documents and testimony at trial, Hall reached out to and communicated with an individual he believed to be a 14-year-old child via a social media application. The two chatted between Feb 5, 2019 and May 21, 2019. These chats were sexually charged and contained graphic descriptions of the sex acts Hall wanted to perform on the minor child. On May 21, 2019, Hall traveled from Kennedale to a location in Collin County to meet the child.
A federal grand jury returned an indictment charging Hall with federal violations on June 12, 2019. Under federal statutes, Hall faces up to life in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is 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 U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by the Plano Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Marisa Miller and Lesley Brooks.
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Stoughton Man Charged with Illegal Possession of FirearmsRead the Press Release
BOSTON – A Stoughton man was arrested yesterday and charged with illegal possession of firearms.
Michael Robert Moura, 27, was charged by criminal complaint with one count of possession of a firearm by a prohibited person. Following an initial appearance before Magistrate Judge Marianne B. Bowler in federal court in Boston, Moura was detained pending a detention hearing set for May 3, 2021.
As alleged in charging documents, due to an April 2020 conviction in Worcester County punishable by more than one year in prison, Moura is prohibited from possessing firearms and ammunition. Despite this prohibition, Moura endeavored to purchase a firearm over several months in 2020, and again in February 2021. On the morning of April 28, 2021, Moura succeeded. He purchased a Glock handgun, an assault rifle, pistol and rifle magazines, and over 100 rounds of ammunition in a parking lot in Brockton. Moura was arrested by federal agents and the handgun, rifle, ammunition, and magazines were seized.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. The case is being investigated by the FBI’s Joint Terrorism Task Force (JTTF), in cooperation with the Bureau of Alcohol, Tobacco, Firearms and Explosives, New England Field Division and the Brockton and Stoughton Police Departments. Assistant U.S. Attorney Benjamin Tolkoff of Mendell’s National Security Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Sparta Man Pleads Guilty to Receiving Child PornographyRead the Press Release
Sparta, Ill. – Kory R. Schulein (37), of Sparta, Illinois, pleaded guilty today to knowingly
receiving child pornography over the internet. A federal grand jury returned the single-count
indictment against Schulein last October.
Schulein first came to the attention of law enforcement in 2018 during an FBI investigation of
child pornography on the dark web. Agents were able to track his IP address and executed a federal
search warrant at his home on Oct. 1, 2019.The National Center for Missing and Exploited Children confirmed the identities of children
depicted in over 2,500 images and 100 videos found on Schulein’s laptop computer and two external
hard drives. According to court documents, Schulein downloaded the child pornography from 2016 to
2019.At the conclusion of today’s plea hearing, Schulein was remanded into federal custody pending his
sentencing hearing, which is set for Aug. 11, 2021, at 1:30 p.m. at the federal courthouse in East
St. Louis. He faces 5-20 years in prison on the charge. His sentence will be determined by United
States District Judge Stephen P. McGlynn after consideration of the federal sentencing guidelines
and other statutory factors.The investigation was conducted by FBI-Springfield, with assistance from the United States Marshals
Service.The case is being prosecuted by Assistant U.S. Attorney Nathan D. Stump and Trial Attorneys Jessica
Urban and Alicia Bove with the Justice Department’s Child Exploitation and Obscenity Section.Southern Ohio woman charged with embezzling more than $700k from employerRead the Press Release
CINCINNATI – A federal grand jury has charged a Sardinia, Ohio, woman with stealing more than $700,000 from the family-owned business for which she worked.
Tina Coday-Townes, 48, was arrested by federal agents today and appeared in federal court in Cincinnati at 1:30pm. Her case was unsealed at her initial appearance.
According to court documents, Coday-Townes previously served as the office manager for Custom Built Crates in Clermont County. In that role, the defendant was responsible for accounts payable and bookkeeping, including inputting and sending data to a third-party payroll company.
The indictment alleges that from 2013 until 2019, Coday-Townes wrote checks using an employers’ signature stamp from Custom Built Crates’ operating accounts to pay off her personal credit cards. She also allegedly made false entries into the accounting database, indicating the checks were to vendors rather than to her personal credit cards.
Coday-Townes also allegedly entered overtime hours for herself, even though she was ineligible for overtime as a salaried employee.
In total, it is alleged the defendant stole $700,666.21 from her employee over the course of six years.
Coday-Townes is charged with wire fraud, a federal crime punishable by up to 20 years in prison, and aggravated identity theft, which carries an additional mandatory sentence of two years in prison.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio, and Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the charges. Assistant United States Attorney Ashley N. Brucato is representing the United States in this case.
An indictment is merely an allegation, and all defendants are presumed innocent unless proven guilty in a court of law.
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Serial Fraudster Sentenced to Four Years in Federal Prison for Conspiracy to Commit Bank Fraud and Aggravated Identity TheftRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Boaz Salmon Bratton-Bey, age 38, of Owings Mills, Maryland, to four years in federal prison, followed by three years of supervised release, for federal bank fraud conspiracy and aggravated identity theft charges. Judge Russell ordered that the first year of supervised release must be spent in a half-way house or residential reentry program. During the time Bratton-Bey was perpetrating these fraud schemes, he was on supervised release from a previous federal fraud conviction.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Chief Melissa R. Hyatt of the Baltimore County Police Department; and Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service - Washington Division.
According to his guilty plea, Bratton-Bey and his co-conspirators committed numerous acts of bank fraud using the stolen personal identifying information (“PII”) of individual victims, without the victims’ knowledge or permission.
Specifically, on June 5, 2019, Bratton-Bey and his co-conspirators executed an “instant credit” scheme in which a co-conspirator, Terrell Meadows, used a fictitious driver’s license bearing the image of Meadows and the personal information of an individual victim to obtain a store credit card at a home improvement store. The credit application contained the name, date of birth, Social Security Number, and other personally identifying information (PII) of a real person who did not consent to the use of his PII. The credit application was approved and a credit card with a $12,000 line of credit was issued in temporary form instantaneously. Transaction records indicate that on June 5 and June 6, 2019, the account was used to make a total of four purchases at four different store locations totaling in $5,988.14. Bratton-Bey and Meadows used a U-Haul truck to load and carry away the fraudulently obtained goods.
After one month of the truck rental, Bratton-Bey failed to provide payment and return the U-Haul truck, which caused the truck to be reported as stolen. During a traffic stop, The Baltimore County Police located the truck, identified the driver as Bratton-Bey, and retrieved fraudulently obtained14 credit cards featuring 14 different names of real individuals.
Following the seizure of those credit cards, investigators obtained bank records from financial institutions which showed that these cards had been used to commit fraudulent transactions, totaling at least $6,822.03 in actual fraud and at least $1,046.85 in attempted fraud. Records obtained from U-Haul revealed that Bratton-Bey paid a total of $4,039.91 for the rental of the U-Haul truck using fraudulent credit cards issued to real persons. The total loss amount from the U-Haul rental and the cards recovered from Bratton-Bey following the traffic stop was $12,652.73.
According to his plea agreement, investigators executed a search warrant at Bratton-Bey’s apartment on July 25, 2019. During the course of the search warrant, Law enforcement located counterfeit identification documents bearing photographs of Bratton-Bey and other individuals, credit/debit cards issued to individuals or entities other than Bratton-Bey, mail and financial correspondence addressed to individuals other than Bratton-Bey, and several cell phones and other electronic devices. Investigators recovered at least 12 credit/debit cards issued to individuals other than Bratton-Bey. Investigators also found Bratton-Bey’s real driver’s license, along with a fictitious driver’s license that included Bratton-Bey’s picture and his alias, “Boa Salmon” and a fictitious social security card for the “Boa Salmon” alias. The items recovered from Bratton-Bey’s apartment also included four other counterfeit identifications in the form of fictitious driver’s licenses bearing the PII of real victims, including counterfeit driver’s licenses for Pennsylvania and New York, in addition to Maryland. The total loss amount from the accounts related to the cards recovered from Bratton-Bey’s apartment was $40,222.30.
Judge Russell previously sentenced conspirator Terrell Meadows, age 32, of Rosedale, Maryland, to six months in prison, followed by three years of supervised release, for his role in the bank fraud conspiracy.
Bratton-Bey was previously convicted in U.S. District Court in Maryland for bank fraud conspiracy, access device fraud, and aggravated identity theft. For that case, he was sentenced to 102 months in federal prison in July 2012.
Acting United States Attorney Jonathan F. Lenzner praised the Baltimore County Police Department and the U.S. Postal Inspection Service for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Daniel A. Loveland, Jr. and Tamera Fine, who prosecuted the case.
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Second rapper scammer sentenced to prison for conspiracy that cheated hotels, studios, limo servicesRead the Press Release
AUGUSTA, GA: An Augusta man has been sentenced to more than eight years in federal prison for his role in a scheme to steal hospitality services by claiming to be part of a famed rap group.
Walker Washington, 53, of Augusta, was sentenced to 100 months in prison by U.S. District Court Judge Dudley H. Bowen after pleading guilty to Conspiracy to Commit Wire Fraud, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. Washington also was ordered to pay nearly $300,000 to 19 businesses defrauded in the scheme, and must serve three years of supervised release after completion of his prison term. There is no parole in the federal system.
Co-defendant Aaron Barnes-Burpo, 29, of Crestview, Fla., previously was sentenced to 84 months in prison after also pleading guilty, and also must pay restitution to the businesses victimized in the scheme.
“These two flim-flam artists and their phony entourage lived large for several weeks by scamming hospitality providers,” said Acting U.S. Attorney Estes. “We commend the skeptical hotel clerk who saw through the scam and alerted law enforcement, bringing this scheme to a halt.”
In court documents and testimony, Washington and Barnes-Burpo admitted that they falsely portrayed themselves as affiliated with the Roc Nation production company and the hip-hop group Wu-Tang Clan as early as September 2019, and used those fictitious representations along with fraudulent and stolen credit cards to rent luxury limousines and defraud hotels, caterers and production studios of thousands of dollars in goods and services in multiple cities, primarily in the Southeast.
The scam unraveled Nov. 21, 2019, when staff at the Fairfield Inn and Suites in Augusta became suspicious and alerted the FBI and the Richmond County Sheriff’s Office.
“These two scammers will have plenty of time to figure out if their few weeks of unearned fame was worth several years in prison,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “With this sentence, law enforcement and the victims of their scam, have spoken loudly that we won’t tolerate anyone who takes anything they do not earn or deserve.”
The case was investigated by the FBI and other state and local authorities, and prosecuted for the United States by Assistant U.S. Attorney Patricia G. Rhodes.
San Marino Man Who Drove Truck into Protesters Agrees to Plead Guilty to Illegally Obtaining, Transporting and Possessing FirearmsRead the Press Release
LOS ANGELES – A San Gabriel Valley man who drove his truck into a crowd of peaceful demonstrators last year in Pasadena has agreed to plead guilty to a series of federal firearms offenses, including illegally obtaining and transporting weapons, and possessing short-barreled rifles.
Benjamin Jong Ren Hung, 28, a San Marino resident who also has a home in Lodi, entered into a plea agreement with prosecutors that was filed today in United States District Court. Hung agreed to plead guilty to 11 felony offenses – including conspiracy, transporting and receiving firearms across state lines, making false statements during purchases of firearms, and possession of unregistered firearms – charged in a superseding information that was also filed today.
Hung admitted to participating in a multi-year conspiracy to make false statements to firearms dealers in Oregon and to illegally transport those firearms to California. Hung provided cash to a co-conspirator in Oregon to buy handguns for Hung and to falsely state that the co-conspirator was the actual buyer, rather than Hung. The co-conspirator then delivered the firearms to Hung in California. In his plea agreement, Hung admitted that he engaged in the scheme to obtain the firearms and “evade California’s firearms registration laws.”
Hung also admitted to making false statements to firearms dealers in Washington in connection with his purchase of four rifles and one shotgun in March 2020. When he purchased the firearms, Hung falsely attested that he was a resident of Washington, rather than California, which was material because, as Hung admitted in the plea agreement, “the firearms dealers were not legally permitted to sell firearms to California residents.” Hung also agreed to plead guilty to illegally transporting those firearms to California.
Hung further admitted he illegally possessed three unregistered short-barreled semiautomatic rifles, which authorities seized from his residence in Lodi in September 2020.
In the plea agreement, Hung admitted bringing one of his illegally obtained firearms, a Glock 26 9mm handgun, to counterprotest in Old Town Pasadena against a group who had gathered on May 31, 2020, to protest against inequitable treatment of minorities by police, including the death of George Floyd at the hands of a police officer in Minneapolis. Hung, who was driving a customized Dodge pickup truck with vanity license plates reading “WAR R1G,” accelerated toward an intersection where the protest was taking place, sounded a train horn installed on the truck, came to a stop, and then continued through the intersection. As he drove past the demonstrators, Hung caused the truck to emit a large amount of exhaust in what is sometimes called “coal rolling.” No protesters were injured during the incident.
Hung was detained by local police following his confrontation with the demonstrators, and the FBI then took over the investigation.
A date for Hung to appear in court to formally enter the guilty pleas has not yet been set.
This matter was investigated by the FBI’s Los Angeles Joint Terrorism Task Force, FBI civil rights squads and the Pasadena Police Department.
This case is being prosecuted by Assistant United States Attorneys Frances S. Lewis of the Public Corruption and Civil Rights Section, and David T. Ryan of the Terrorism and Export Crimes Section.
Salvadoran National Sentenced to 20 Years in Federal Prison for Distributing Child Pornography, Failing to Register as Sex OffenderRead the Press Release
SANTA ANA, California – A Salvadoran national – who was previously deported after being convicted of sexually abusing a minor – was sentenced today to 240 months in federal prison for distributing child pornography on Facebook’s Messenger after he illegally reentered the United States.
Jose Ramon Aguilar-Moreno, 52, of Fontana, was sentenced by United States District Judge David O. Carter.
Aguilar-Moreno pleaded guilty in July 2020 to one count of distribution of child pornography and one count of failure to register as a sex offender.
In August 2002, Aguilar-Moreno was convicted in San Bernardino County Superior Court of committing lewd and lascivious acts on a minor. Following his deportation in June 2003, he unlawfully returned to the United States in 2016. Since that time, he failed to register as a sex offender in California or anywhere else in the United States, which was required because of his 2002 conviction.
In June 2018, Aguilar-Moreno used the name “Abel Aguilar” on the Messenger application to distribute three videos that depicted minors engaged in sexually explicit conduct.
Law enforcement in June 2019 executed a search warrant at Aguilar-Moreno’s residence – which was across the street from an elementary school – and discovered over 900 still image and more than 1,200 videos of child pornography on his cell phones. Aguilar-Moreno’s child pornography “collection spans the gamut and is documentation of some of the most demeaning abuse inflicted on victims of child pornography,” prosecutors wrote in a sentencing memo filed with the court.
In the sentencing memo, prosecutors noted that Aguilar-Moreno also used WhatsApp to welcome individuals to “the world of child pornography” as he solicited the exchange of images and videos. Aguilar-Moreno chatted with individuals in at least 14 countries, meaning “His reach and impact truly was global,” prosecutors wrote.
In addition to the prison sentence, Judge Carter ordered Aguilar-Moreno to pay $60,000 in restitution to the victims depicted in the child pornography in this case.
Homeland Security Investigations and the United States Marshals Service investigated this matter.
Assistant United States Attorney Eli A. Alcaraz of the Riverside Branch Office prosecuted this case.
SAP Admits to Thousands of Illegal Exports of its Software Products to Iran and Enters into Non-Prosecution Agreement with DOJRead the Press Release
Note: A full copy of the non-prosecution agreement can be viewed
here.To learn more about what the Justice Department is doing to deter and hold to account those who violate export controls and sanctions laws, visit www.justice.gov/nsd. A full copy of the Voluntary Self Disclosure (VSD) Policy can be found here.
WASHINGTON – Software company, SAP SE, headquartered in Walldorf, Germany, has agreed to pay combined penalties of more than $8 million as part of a global resolution with the U.S. Departments of Justice (DOJ), Commerce and Treasury. In voluntary disclosures the company made to the three agencies, SAP acknowledged violations of the Export Administration Regulations and the Iranian Transactions and Sanctions Regulations. As a result of its voluntary disclosure to DOJ, extensive cooperation and strong remediation costing more than $27 million, DOJ’s National Security Division (NSD) and the U.S. Attorney’s Office for the District of Massachusetts entered into a Non-Prosecution Agreement with SAP. Pursuant to that agreement, SAP will disgorge $5.14 million of ill-gotten gain.
“Today’s first-ever resolution pursuant to the Department’s Export Control and Sanctions Enforcement Policy for Business Organizations sends a strong message that businesses must abide by export control and sanctions laws, but that when they violate those laws, there is a clear benefit to coming to the Department before they get caught,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “SAP will suffer the penalties for its violations of the Iran sanctions, but these would have been far worse had they not disclosed, cooperated, and remediated. We hope that other businesses, software or otherwise, we heed this lesson.”
“Today, SAP has admitted to thousands of export violations spanning six years that violated the U.S. embargo against Iran and endangered the national security of the United States,” said Acting U.S. Attorney Nathaniel Mendell for the District of Massachusetts. “This settlement should serve as a strong deterrent message to others that the release of software and sale of product and services on the internet are subject to U.S. export laws and regulations.”
“This action demonstrates that the Office of Export Enforcement will continue to leverage our unique authorities to enforce our nation’s export control laws and to deter new violations. Violators of the EAR will be held accountable through criminal or civil penalties, or both when appropriate,” said Special Agent in Charge William Higgins for the Commerce Department’s Office of Export Enforcement, Boston Field Office. “These laws are designed to protect U.S. Foreign Policy and National Security and will be vigorously investigated.”
“By supplying Iran with millions of dollars’ worth of illegally exported software and services, SAP circumvented U.S. economic sanctions against Iran—pressure that is intended to end Iran’s malign behavior. However, it was SAP that first uncovered and reported this sanctions violation, and we would like to thank them for working hard to enhance their compliance program to prevent future violations,” said Special Agent in Charge Joseph R. Bonavolonta for the FBI’s Boston Division. “Let this case be a lesson to others that it’s better to self-report and own up to one’s mistakes than undermine U.S. foreign policy and adversely affect our national security.”
“Among HSI’s priorities is the commitment to ensuring that sensitive U.S. products, to include software, are not illegally exported to embargoed destinations, such as Iran,” said Acting Special Agent in Charge William S. Walker for Homeland Security Investigations, Boston. “It will continue to be incumbent upon U.S. companies to guarantee that foreign subsidiaries dealing in their products remain in compliance with U.S. sanctions and export control regulations. HSI will continue to coordinate with our law enforcement partners to safeguard sensitive technologies produced in the United States from ending up in the hands of our adversaries.”
Beginning in approximately January 2010 through approximately September 2017, SAP, without a license, willfully exported, or caused the export, of its products to Iranian users. SAP’s violations occurred in two principle ways.
First, between 2010 and 2017, SAP and its overseas partners released U.S-origin software, including upgrades or software patches more than 20,000 times to users located in Iran. Certain SAP senior executives were aware that neither the company nor its U.S.-based content delivery provider used geolocation filters to identify and block Iranian downloads, yet for years the company did not remedy the issue. The vast majority of the Iranian downloads went to 14 companies, which SAP partners in Turkey, United Arab Emirates, Germany and Malaysia knew were Iranian-controlled front companies. The remaining downloads went to several multinational companies with operations in Iran, which downloaded SAP’s software, updates, or patches from locations in Iran.
Second, from approximately 2011 to 2017, SAP’s Cloud Business Group companies (CBGs) permitted approximately 2,360 Iranian users to access U.S.-based cloud services from Iran. Beginning in 2011, SAP acquired various CBGs and became aware, through pre-acquisition due diligence as well as post-acquisition export control-specific audits, that these companies lacked adequate export control and sanctions compliance processes. Yet, SAP made the decision to allow these companies to continue to operate as standalone entities after acquiring them and failed to fully integrate them into SAP’s more robust export controls and sanctions compliance program.
While this conduct constituted serious violations of U.S. law involving the release of U.S. origin technology and software through cloud servers and online portals, this Non-Prosecution Agreement recognizes the importance of voluntary self-disclosure and cooperation with the government. DOJ and the District of Massachusetts reached this resolution with SAP based upon its voluntary self-disclosure as well as SAP’s extensive internal investigation and cooperation over a three-year period. During this time, SAP worked with prosecutors and investigators, producing thousands of translated documents, answering inquiries and making foreign-based employees available for interviews in a mutually agreed upon overseas location. SAP also timely remediated and implemented significant changes to its export compliance and sanctions program, spending more than $27 million on such changes over the last four years, including, among other things detailed in the NPA: (1) implementing GeoIP blocking; (2) deactivating thousands of individuals users of SAP cloud based services based in Iran; (3) transitioning to automated sanctioned party screening of its CBGs; (4) auditing and suspending SAP partners that sold to Iran-affiliated customers; and (5) hiring of experienced U.S.-based export controls staff, and (6) conducting more robust due diligence at the acquisition stage by requiring new acquisitions to adopt GeoIP blocking and requiring involvement of the Export Control Team before acquisition.
Concurrently with this agreement, SAP is entering into administrative agreements with the Department of Commerce, Bureau of Industry and Security (BIS) and the Department of the Treasury, Office of Foreign Assets Control (OFAC). Among other things, the BIS settlement agreement requires SAP to conduct internal audits of its compliance with U.S. export control laws and regulations and produce audit reports to BIS for a period of three years.
The Department encourages companies to voluntarily self-disclose all potentially willful violations of the statutes implementing the U.S. government’s primary export control and sanctions regimes — the Arms Export Control Act (AECA), the Export Control Reform Act (ECRA), and the International Emergency Economic Powers Act (IEEPA), — directly to NSD. The VSD Policy, absent aggravating factors, creates a presumption in favor of a non-prosecution agreement and limits any monetary payment to an amount equal to the gains from the illegal conduct.
Deputy Chief of Export Controls and Sanctions Elizabeth Cannon and Senior Trial Attorney Heather Schmidt for NSD’s Counterintelligence and Export Controls Section, and Assistant U.S. Attorney B. Stephanie Siegmann, Chief of District of the Massachusetts’ National Security Unit oversaw the investigation and negotiated this agreement.
SAP Admits to Thousands of Illegal Exports of Its Software Products to Iran and Enters into Non-Prosecution Agreement with DOJRead the Press Release
BOSTON – SAP SE, a global software company headquartered in Waldorf, Germany, has agreed to pay combined penalties of more than $8 million as part of a global resolution with the Departments of Justice, Commerce, and the Treasury.
In voluntary disclosures the Company made to the three agencies, SAP acknowledged violations of the Export Administration Regulations and the Iranian Transactions and Sanctions Regulations. As a result of its voluntary disclosure to DOJ, extensive cooperation, and remediation costing more than $27 million, United States Attorney’s Office for the District of Massachusetts and DOJ’s National Security Division entered into a Non-Prosecution Agreement with SAP. Pursuant to that agreement, SAP will disgorge $5.14 million of ill-gotten gain.
Beginning in approximately January 2010 and continuing through approximately September 2017, SAP, without a license, willfully exported, or caused the export, of its products to Iranian users. SAP’s violations occurred in two principle ways.
First, between 2010 and 2017, SAP and its overseas partners released its U.S-origin software, including upgrades, and/or software patches more than 20,000 times to users located in Iran. SAP senior management was aware that neither the Company nor its U.S.-based Content Delivery Provider used geolocation filters to identify and block Iranian downloads, yet for years the Company did nothing to remedy the issue. The vast majority of the Iranian downloads went to 14 companies, which SAP Partners in Turkey, United Arab Emirates, Germany, and Malaysia knew were Iranian-controlled front companies. The remaining downloads went to several multinational companies with operations in Iran, which downloaded SAP’s software, updates, and/or patches from locations in Iran.
Second, from approximately 2011 to 2017, SAP’s Cloud Business Group companies (CBGs) permitted approximately 2,360 Iranian users to access U.S.-based cloud services from Iran. Beginning in 2011, SAP acquired various CBGs and became aware, through pre-acquisition due diligence as well as post-acquisition export control-specific audits, that these companies lacked adequate export control and sanctions compliance processes. Yet, SAP made the decision to allow these companies to continue to operate as standalone entities after acquiring them and failed to fully integrate them into SAP’s more robust export controls and sanctions compliance program.
While this conduct constituted serious violations of U.S. law involving the release of U.S. origin technology and software through cloud servers and online portals, this Non-Prosecution Agreement recognizes the importance of voluntary self-disclosure and cooperation with the government. DOJ and the District of Massachusetts reached this resolution with SAP based upon its voluntary self-disclosure as well as SAP’s extensive internal investigation and cooperation over a three-year period. During this time, SAP worked with prosecutors and investigators, producing thousands of translated documents, answering inquiries, and making foreign-based employees available for interviews in a mutually agreed upon overseas location. AP also timely remediated and implemented significant changes to its export compliance and sanctions program, spending more than $27 million on such changes, including, among other things detailed in the NPA: (1) implementing GeoIP blocking; (2) deactivating thousands of individuals users of SAP cloud based services based in Iran; (3) transitioning to automated sanctioned party screening of its CBGs; (4) auditing and suspending SAP partners that sold to Iran-affiliated customers; and (5) conducting more robust due diligence at the acquisition stage by requiring new acquisitions to adopt GeoIP blocking and requiring involvement of the Export Control Team before acquisition.
Concurrently with this agreement, SAP is entering into Administrative Agreements with the Department of Commerce, Bureau of Industry and Security (“BIS”) and the Department of the Treasury, Office of Foreign Assets Control (“OFAC”). Among other things, the BIS settlement agreement requires SAP to conduct internal audits of its compliance with U.S. export control laws and regulations, and produce audit reports to BIS for a period of three years.
“Today, SAP has admitted to thousands of export violations spanning six years that violated the U.S. embargo against Iran and endangered the national security of the United States,” said Acting U.S. Attorney Nathaniel Mendell. “This settlement should serve as a strong deterrent message to others that the release of software and sale of product and services on the internet are subject to U.S. export laws and regulations.”
“Today’s first-ever resolution pursuant to the Department’s Export Control and Sanctions Enforcement Policy for Business Organizations sends a strong message that businesses must abide by export control and sanctions laws, but that when they violate those laws, there is a clear benefit to coming to the Department before they get caught,” said Assistant Attorney General John C. Demers for the National Security Division. “SAP will suffer the penalties for its violations of the Iran sanctions, but these would have been far worse had they not disclosed, cooperated, and remediated. We hope that other businesses, software or otherwise, we heed this lesson.”
“This action demonstrates that the Office of Export Enforcement will continue to leverage our unique authorities to enforce our nation’s export control laws and to deter new violations. Violators of the EAR will be held accountable through criminal, civil penalties, or both when appropriate,” said William Higgins, Special Agent in Charge of the Department of Commerce’s Office of Export Enforcement, Boston Field Office. “These laws are designed to protect U.S. Foreign Policy and National Security and will be vigorously investigated.”
“By supplying Iran with millions of dollars’ worth of illegally exported software and services, SAP circumvented U.S. economic sanctions against Iran—pressure that is intended to end Iran’s malign behavior. However, it was SAP that first uncovered and reported this sanctions violation, and we would like to thank them for working hard to enhance their compliance program to prevent future violations,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Let this case be a lesson to others that it’s better to self-report and own up to one’s mistakes than undermine U.S. foreign policy and adversely affect our national security.”
“Among HSI’s priorities is the commitment to ensuring that sensitive U.S. products, to include software, are not illegally exported to embargoed destinations, such as Iran,” said William S. Walker, Acting Special Agent in Charge for Homeland Security Investigations, Boston. “It will continue to be incumbent upon U.S. companies to guarantee that foreign subsidiaries dealing in their products remain in compliance with U.S. sanctions and export control regulations. HSI will continue to coordinate with our law enforcement partners to safeguard sensitive technologies produced in the United States from ending up in the hands of our adversaries.”
Acting U.S. Attorney Mendell, Assistant Attorney General John Demers, SAC William Higgins, SAC Bonavolonta, and Acting SAC William Walker made the announcement today. Assistant U.S. Attorney B. Stephanie Siegmann, Chief of Mendell’s National Security Unit; Elizabeth Cannon, Deputy Chief of Export Controls and Sanctions, National Security Division; and Heather Schmidt, Senior Trial Attorney, National Security Division, oversaw this investigation and negotiated this agreement.
Rochester Man Pleads Guilty to Stealing Thousands of Dollars in SSI and SNAP BenefitsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Mensur Odzakovic, 49, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci to wire fraud. The charge carries a maximum penalty of 20 years prison and a fine of $250,000.
Assistant U.S. Attorney Kyle P. Rossi, who is handling the case, stated that between 2007 and March 2020, the defendant fraudulently collected Social Security Income (SSI) and Supplemental Nutrition Assistance Program (SNAP, formerly food stamp) benefits. The SSI and SNAP programs use federal tax money to assist low-income and disabled individuals by providing supplemental income and funds for the purchase of food, among other things. Odzakovic claimed in government applications that he was not employed and had no source of income in order to collect SSI and SNAP benefits. However, the defendant was continuously employed at a Rochester area restaurant earning cash wages. If reported, Odzakovic’s wages would have disqualified him from receiving SSI and SNAP benefits or would have reduced the amount of benefits that he could have received.
As a result, between 2007 and March 1, 2020, the defendant unlawfully collected $53,315.14 in SSI payments and $32,986.00 in SNAP benefits, for a total of $86,301.14.
The plea is the result of an investigation by the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent-in Charge Bethanne M. Dinkins; the Social Security Administration, Office of Inspector General, under the direction of Special Agent-in-Charge, John F. Grasso; and the Monroe County Department of Social Services, under the direction of Commissioner Corinda Crossdale.
Sentencing is scheduled for July 29, 2021, before Judge Geraci.
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Revere Man Sentenced for Money Laundering and Cocaine ChargesRead the Press Release
BOSTON – A Revere man was sentenced in federal court in Boston yesterday for cocaine possession and attempting to launder money to Colombia.
Jairo Agudelo, 34, was sentenced by U.S. District Court Judge Leo T. Sorokin to 57 months in prison and three years of supervised release. In December 2020, Agudelo pleaded guilty to money laundering conspiracy, substantive money laundering and possession with intent to distribute cocaine.
In February 2019, investigators seized approximately $200,000 in cash from Agudelo when he attempted to launder drug proceeds from Massachusetts to Colombia. When investigators executed a search warrant at a Revere apartment used by Agudelo as a stash house for his cocaine distribution, they located approximately 400 grams of cocaine, as well as drug packaging materials and over $11,000 in cash.
Acting United States Attorney Nathaniel R. Mendell; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division made the announcement today. Critical assistance was provided by the Boston Police Department; Massachusetts State Police; Revere Police Department; U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations; and the United States Marshals Service. Assistant U.S. Attorneys Lauren A. Graber and Jared C. Dolan of Mendell’s Narcotics and Money Laundering Unit prosecuted the case.
This investigation, dubbed “Operation Týr,” 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.
Randolph County woman sentenced for methamphetamine chargeRead the Press Release
ELKINS, WEST VIRGINIA – Melissa Ann Slayton, of Elkins, West Virginia, was sentenced today to 100 months of incarceration for methamphetamine distribution, Acting U.S. Attorney Randolph J. Bernard announced.
Slayton, 36, pleaded guilty to one count of “Possession with Intent to Distribute More Than Five Grams of Methamphetamine” in October 2020. She admitted to having more than five grams of methamphetamine, also known as “crystal meth” and “ice,” in November 2019 in Randolph County.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug & Violent Crimes Task Force investigated.
U.S. District Judge Thomas S. Kleeh presided.
Pass Christian Man pleads guilty to being a Felon in Possession of a FirearmRead the Press Release
Gulfport, Mississippi – A Pass Christian, Mississippi man pleaded guilty today to being a convicted felon in possession of a firearm, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Kurt Thielhorn with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
According to court documents, Mason Charles Brown, 32, when encountered by law enforcement officers on November 10, 2020, knowingly possessed a firearm, and had previously been convicted of a crime which is punishable by imprisonment for a term exceeding one year.
Brown pleaded guilty to the one-count indictment alleging he was a previously convicted felon knowingly possessing a firearm. He is scheduled to be sentenced on July 29, 2021, and faces a maximum penalty of not more than 10 years in prison. If the Court deems Brown qualifies as an Armed Career Criminal, however, he faces a maximum penalty of not less than fifteen (15) years imprisonment to life. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Harrison County Sheriff’s Office Narcotics Division and The Bureau of Alcohol, Tobacco, Firearms and Explosives are investigating the case.
Assistant U.S. Attorney Andrea Jones is prosecuting the case.
Operation Second Wave Update: Huntington Man Sentenced to Federal Prison for Methamphetamine ConspiracyRead the Press Release
CHARLESTON, W.Va. – A Huntington man was sentenced to 36 months in federal prison for conspiracy to distribute methamphetamine. Jimmie Lee Coleman, 35, was prosecuted as part of “Operation Second Wave,” which dismantled a poly-drug network operating in Kanawha and Fayette counties.
According to court documents, Coleman admitted selling more than a 1.5 pounds of methamphetamine as part of his role in the organization.
Other defendants, including Carol Belton, Sammy Joe Fragale, Sr., Larry Martin, Rashawn Miller, and Jason Terrell have pleaded guilty and are awaiting sentencing. Gregory Woods was sentenced to 184 months in federal prison on February 8, 2021. Sammy Joe Fragale, II, was sentenced on January 6, 2021 to 42 months in federal prison. Steven Matthew Bumpus, Roger Jarea Drake, and Tonya Simerly are awaiting court dates to enter guilty pleas. Craig Redman and Ronald Lee Thomas III are scheduled for trial on June 1, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement. Assistant United States Attorney Joshua C. Hanks handled the prosecution.
The Federal Bureau of Investigation (FBI), the Central West Virginia Drug Task Force (CWVDTF), the Kanawha County Sheriff’s Department, the Charleston Police Department, the United States Postal Inspection Service (USPIS) and the Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation with assistance from the Drug Enforcement Administration (DEA), who led the investigation of Sammy Joe Fragale, Sr., and Sammy Joe Fragale II, also prosecuted as part of the Second Wave investigation.
Senior United States District Judge David A. Faber imposed the sentence.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case Nos. 2:21-cr-00045 (Miller), 2:20-cr-00153 (Woods), and 2:20-cr-00154 (Terrell et al).
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O'Fallon Man Pleads Guilty to PPP Loan FraudRead the Press Release
O’Fallon, Ill. – Jason Spengler (45), of O’Fallon, Illinois, pleaded guilty today to one count of
making a false statement on a federal loan application. According to court documents, Spengler
committed the felony offense last year when he filed for assistance from the Paycheck
Protection Program (“PPP”) without disclosing that his business, Spengler Plumbing Company, was in
bankruptcy.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted in March 2020 to
provide emergency financial assistance to Americans who were suffering the economic effects caused
by the COVID-19 pandemic. One source of relief provided by the CARES Act was the federal PPP loan
program. Administered by the Small Business Administration (SBA), the program provided
loans to help qualifying businesses during the COVID-19 crisis.Debtors in bankruptcy were not eligible for PPP loans. The first question on the loan application
asked, “Is the Applicant ... presently involved in any bankruptcy?” Above this
question, the application explained that the loan would not be approved if the applicant answered
“Yes.”When Spengler applied for a PPP loan last year, Spengler Plumbing was in bankruptcy. But Spengler
checked “No” on the application, falsely certifying to the lender and the SBA that Spengler
Plumbing was not in bankruptcy. Because of this false statement, Spengler Plumbing was awarded a
$487,095 PPP loan in April 2020.As a debtor in bankruptcy, Spengler Plumbing was also required by law to obtain prior authorization
from the bankruptcy court before incurring any new unsecured debt. But Spengler applied for the
government loan without notifying the bankruptcy judge, thereby evading the safeguards put in place
by both the SBA and the bankruptcy court.“Together with U.S. Attorney Steve Weinhoeft and our law enforcement partners, we will continue to
pursue fraud and abuse in bankruptcy cases,” stated Nancy J. Gargula, U.S. Trustee for Region
10. The U.S. Trustee Program is the component of the Justice Department that protects the integrity
of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy
laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Indiana,
and Peoria, Illinois.Sentencing is set for August 18, 2021, at the federal courthouse in East. St. Louis. The charge
carries
a maximum sentence of five years in prison and a fine of up to $250,000.This case was referred to the U.S. Attorney’s Office for prosecution by the U.S. Trustee for Region
10, in collaboration with the Southern District of Illinois Bankruptcy Fraud Working Group.
The investigation was conducted by the Small Business Administration – Office of the Inspector
General. The case is being prosecuted by Assistant United States Attorney Peter T. Reed.Northern Nevada Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
RENO, Nev. – A Fernley resident pleaded guilty today to using encrypted applications and online aliases to distribute child pornography, announced Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Aaron C. Rouse for the FBI.
According to court documents, Benjamin D. Morrow, 36, used various encrypted messaging applications and numerous online aliases and email address, including foreign email service providers, to distribute unsolicited images and videos of minors engaged in sexually explicit conduct. He used encrypted applications to conceal his identity and avoid detection by law enforcement. Morrow distributed child pornography to at least 182 recipients. The images and videos depict prepubescent minors under 12 years old engaged in masochistic and sadistic material.
During the execution of a search warrant at Morrow’s residence, law enforcement seized several electronic devices belonging to him. A forensic analysis of the seized devices revealed approximately 119,371 images of child pornography and 4,945 videos of child pornography.
Morrow pleaded guilty to two counts of distribution of child pornography. He is scheduled to be sentenced on August 16, 2021. The maximum statutory penalty for each count is 20 years in prison.
The case was investigated by the FBI, Nevada Attorney General’s Office, Washoe County Sherriff’s Office, Lyon County Sherriff’s Office, Reno Police Department, Carson City Sherriff’s Office, and the Naval Criminal Investigative Service. Assistant U.S. Attorney Andolyn Johnson is prosecuting the case.
The 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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood and for information about internet safety education, please visit www.justice.gov/psc.
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North Pole Man Sentenced for Illegal Hunting and Fraudulent Subsistence PermitsRead the Press Release
FAIRBANKS – Robert J. Albaugh, 58, of North Pole, Alaska, was sentenced yesterday in U.S. District Court in Fairbanks for violating the Lacey Act and other federal laws stemming from the illegal hunting of caribou and moose after fraudulently obtaining federal subsistence permits.
Albaugh previously pled guilty to a misdemeanor violation of the Lacey Act and another federal law prohibiting false statements on subsistence hunting permit applications. Albaugh was sentenced by Senior U.S. District Judge Ralph R. Beistline to pay a fine of $5,000 and serve 30 months of federal probation, during which Albaugh is prohibited from hunting, fishing or trapping anywhere in the world.
According to the plea agreement, between 2002 and 2018, the defendant and his wife applied for and received a combined sixty-three federal subsistence hunt permits for Game Management Unit (GMU) 13, located south of Delta Junction, Alaska, by falsely certifying to the Bureau of Land Management (BLM) that he and his wife were “rural residents” of Delta Junction. In truth, the defendant knew that he and his wife were residents of North Pole and thus did not qualify as rural residents eligible to obtain federal subsistence hunt permits. The defendant and his wife took and transported a combined 23 caribou and one moose in violation of the Lacey Act and other federal regulations.
In 1980, Congress passed the Alaska National Interest Lands Conservation Act (ANILCA), which protects the subsistence needs of rural Alaskans. The Federal Subsistence Management Program is a multi-agency effort to provide the opportunity for a subsistence way of life by rural Alaskans on federal public lands and waters while maintaining healthy populations of fish and wildlife. Subsistence fishing and hunting provide a large share of the food consumed in rural Alaska. Nowhere else in the United States is there such a heavy reliance upon wild foods. This dependence on wild resources is cultural, social and economic. Alaska’s indigenous inhabitants have relied upon the traditional harvest of wild foods for thousands of years and have passed this way of life, its culture and values down through generations. Subsistence has also become important to many non-Native Alaskans, particularly in rural Alaska.
In issuing the sentence, Judge Beistline noted the importance of protecting Alaska’s natural resources and “respecting the wildlife in our state.” He also noted the importance of deterring the defendant and others from similar future violations.
The Bureau of Land Management Office of Law Enforcement and Security conducted the investigation following a separate investigation of the Albaughs by the Alaska Wildlife Troopers for Taking of Wildlife Closed Season. This case was prosecuted by Assistant U.S. Attorney Ryan D. Tansey for the U.S. Attorney’s Office, District of Alaska.
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New York Man Pleads Guilty to $4 Million Extortion SchemeRead the Press Release
WASHINGTON – Robert Evans, 33, of New York, N.Y., pled guilty today to participating in a $4 million extortion, fraud, and money laundering scheme with his ex-common-law wife and members of his family, including his parents. The guilty plea was announced by Acting U.S. Attorney Channing D. Phillips and James A. Dawson, Special Agent in Charge of the FBI Washington Field Office Criminal Division.
In April 2018, a federal grand jury indicted Evans, his common-law ex-wife Gina Rita Russell, his brothers Tony John Evans and Corry Blue Evans, and his parents Archie Kaslov and Candy Evans on various charges related to the scheme. With the exception of Corry Blue Evans, each defendant has pled guilty.
As part of the scheme, a New York woman conspired with Robert Evans, Russell, Tony John Evans, Corry Blue Evans, and Kaslov to extort money and gold bars from a Maryland man, which caused the man to embezzle funds from his employer between January 2017 and March 2017. The man converted embezzled funds to cash and gold bars. He delivered the money and gold bars to New York drop-off locations, including a hotel room, believing the funds were going to mobsters to whom the New York woman owed money. At one point during the scheme, Tony John Evans spoke to the man on the phone and threatened him by asking if he needed to remind the man where his kids went to school and where the man lived.
In reality, all of the funds the man embezzled and delivered to New York went to members of the Evans-Kaslov family. Among other things, Robert Evans arranged the logistics of a $500,000 cash payment, which involved renting hotel rooms, retrieving the cash after the Maryland man delivered it, and taking the cash to a co-conspirator’s residence.
Like Robert Evans, Tony John Evans and Russell pled guilty to interference with interstate commerce by extortion, in violation of 18 U.S.C. § 1951. Tony John Evans was sentenced to five years in prison and is currently serving his sentence. Russell has not yet been sentenced.
Kaslov pled guilty to conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371, and admitted to driving family members around New York with cash obtained from the scheme, selling gold bars for cash, and traveling to Texas to purchase a Rolls Royce Phantom Drophead for more than $300,000 in cash. In January 2020, Kaslov and Candy Evans sold that Rolls Royce in New Jersey for $120,000.
Candy Evans pled guilty to tampering with a witness by corrupt persuasion or misleading conduct, in violation of 18 U.S.C. § 1512(b)(3). As part of her guilty plea, she admitted that once the FBI launched its investigation, she counseled the New York woman whom the Maryland man met on Backpage to lie to people, including the FBI. In October 2017, two days after the FBI executed search warrants at various Evans-Kaslov family members’ residences, Candy Evans called an FBI special agent who was investigating the case and told him that Kaslov and two of her other sons had not done anything illegal, which she acknowledged was false, and that it was just Tony John Evans, Russell, and the New York woman who had committed the crimes. In November 2017, Candy Evans also instructed Russell to lie to the FBI. Kaslov and Candy Evans are scheduled to be sentenced on June 10, 2021.
The maximum sentence for interference with interstate commerce by extortion is twenty years in prison. Under federal sentencing guidelines, however, the likely recommended sentence for Robert Evans on that charge is 57 to 71 months in prison. The Honorable Emmet G. Sullivan, who accepted his guilty plea, scheduled sentencing for September 30, 2021.
In announcing the guilty plea, Acting U.S. Attorney Phillips and Special Agent in Charge Dawson commended the work of those who investigated the case from the FBI’s Washington Field Office. They expressed appreciation for assistance provided by the U.S. Department of Justice Office of the Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Diane Lucas and Arvind Lal, who are assisting with forfeiture issues, Paralegal Specialist Stephanie Frijas, former Paralegal Specialists Brittany Phillips, Joshua Fein, Jessica Mundi, and Kristy Penny, and Forensic Accountant Bryan Snitselaar.
Finally, they commended the work of Assistant U.S. Attorneys David Kent and Kondi Kleinman, who investigated and are prosecuting the case.
New Jersey Man Sentenced to More Than Five Years in Federal Prison for $3.5 Million Bank Fraud SchemeRead the Press Release
Baltimore, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Mehul Khatiwala, age 37, of Voorhees, New Jersey, to 63 months in federal prison, followed by four years of supervised release, for conspiracy to commit bank fraud and for three counts of bank fraud, in connection with schemes to fraudulently obtain a total of approximately $15 million in loans from Cecil Bank to purchase hotels and a multifamily residential property, resulting in losses of more than $3.5 million. Judge Chasanow also ordered Khatiwala to pay a $50,000 fine and to forfeit and pay restitution of $3,593,801.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Robert Manchak of the Federal Housing Finance Agency (FHFA), Office of Inspector General; Special Agent in Charge Shimon R. Richmond of the Federal Deposit Insurance Corporation-Office of Inspector General(FDIC-OIG); Special Inspector General Christy Goldsmith Romero of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Inspector General Hannibal “Mike” Ware of the Small Business Administration - Office of Inspector General.
“Mehul Khatiwala will now serve more than five years in federal prison for fraudulently obtaining more than $15 million in loans. Khatiwala’s criminal behavior stole millions of dollars from the victims, which included not only the bank that made the loans, but the American taxpayers whose tax dollars guaranteed the loans,” said Acting U.S. Attorney Jonathan F. Lenzner. “All of us in federal law enforcement are committed to investigating and prosecuting this type of costly fraud.”
According to his plea agreement, from February 2011 through January 2014, Khatiwala and two co-conspirators executed a scheme to defraud Cecil Bank, the Small Business Administration (SBA), and other financial institutions by misrepresenting material facts in order to obtain financing for the purchase of two hotels and a multifamily residential property. Khatiwala defaulted on the loans, causing losses to Cecil Bank and the SBA of more than $3.5 million. According to the indictment and information presented at today’s plea hearing, on December 23, 2008, Cecil Bank’s holding company, Cecil Bankcorp, Inc., received an $11.5 million bailout from the Troubled Asset Relief Program (TARP).
Specifically, beginning in approximately April 2011, Khatiwala and Conspirator A made plans to apply for a $5 million loan at Cecil Bank to purchase the Memphis Airport Hotel in Memphis, Tennessee, as well as a $1.6 million loan to renovate that hotel. In order to obtain a loan, Khatiwala concealed Conspirator A’s 80% ownership of the borrowing entity because Conspirator A had already reached his legal lending limit at Cecil Bank. In May 2011, Cecil Bank’s Board of Directors approved the $5 million loan, with the condition that it be guaranteed by the SBA. The SBA required Khatiwala, as the purported 100% owner of the borrowing entity, to show that he had equity in the borrowing entity, or cash on hand of approximately $1.8 million. Conspirator B, who was an employee at another bank, falsely verified that Khatiwala had over $2 million on deposit at the co-conspirator’s bank. Khatiwala admitted that he signed and submitted this statement, which he knew to be false. The SBA approved its 75% guarantee of the $5 million loan funded by Cecil Bank. The loan went into default in January 2015.
In 2007, Khatiwala and the other owners of the Best Western Hotel in York, Pennsylvania, refinanced a loan for the property in the amount of $6.635 million. In early 2010, Khatiwala and his co-owners became delinquent on the loan and began discussions with the loan servicing company. In August 2011, Khatiwala reached an agreement with the loan servicer to accept a discounted payoff of $3.625 million on the unpaid principal balance of approximately $6.6 million. Khatiwala submitted fraudulent documentation and a fraudulent settlement statement to the loan servicer showing that the funds were being provided by a private lender. In fact, Khatiwala had arranged for the sale of the hotel to related parties for the sum of $4.3 million.
As early as April 2011, prior to the time Khatiwala made the misrepresentations to the loan servicer to negotiate the payoff, he began implementing the second step of his short-sale fraud scheme by arranging the sale of the hotel to Person B and one of Khatiwala’s employees. Khatiwala fraudulently obtained a $3.225 million loan from Cecil Bank, which was guaranteed by the SBA. During the loan application review and underwriting process performed by Cecil Bank and the SBA, Khatiwala submitted false documents as to the ownership of the selling and purchasing entities, as well as false financial statements for the purchasers. Khatiwala knew that the funds paid at closing would come from Khatiwala’s own personal bank account and other businesses, not from the purchasers, as was falsely represented to the bank and the SBA, in order to obtain approval of the loan. As a result of this short-sale fraud, the original holder of the note on the Best Western Hotel lost $675,000, which instead went to Khatiwala.
Finally, Khatiwala admitted that beginning in February 2011, he negotiated the purchase of a multifamily residential property in Perryville, Maryland. In order to obtain the loan, he established a company to serve as the borrowing and purchasing entity, representing to Cecil Bank that Persons A and B, a husband and wife, were the 100% owners of the company, and Khatiwala was the manager. In fact, Conspirator A owned 50% of the company and agreed to serve as guarantor on the loan. The bank approved a $7,122,500 loan for the purchase of the property with Persons A and B as the 100% owners of the purchasing entity. On about March 28, 2011, several days before settlement, Khatiwala e-mailed to Conspirator A an Amended and Restated Operating Agreement reflecting Conspirator A’s 50% interest in the property and his agreement to indemnify Persons A and B for any loss, cost, liability or expense arising in connection with any enforcement of Cecil Bank’s rights under the loan guarantee agreement. Khatiwala, Conspirator A, and Persons A and B signed the Amended Agreement; however, that material fact and document were never disclosed to Cecil Bank before or after the settlement, thus concealing Conspirator A’s ownership interest in the property. As early as February 2012, the loan payments of approximately $29,000 per month became delinquent and the loan went into default. Cecil Bank ultimately sold the note to a private lender for $3.252 million in lieu of foreclosure, incurring a loss of $3,583.170.
Acting United States Attorney Jonathan F. Lenzner commended the FHFA, the FDIC-OIG, SIGTARP, and the SBA-OIG, for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Martin J. Clarke and Harry M. Gruber, who prosecuted the case.
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Navajo man sentenced to three years in prison for assaultRead the Press Release
ALBUQUERQUE, N.M. – Mark Anthony Hill, 33, of Smith Lake, New Mexico, and an enrolled member of the Navajo Nation, was sentenced on April 28 in federal court to three years in prison for assault resulting in serious bodily injury in Indian Country. Hill pleaded guilty to the crime on Dec. 14, 2020.
According to the plea agreement and other court records, Hill assaulted the victim on Aug. 23, 2020, in McKinley County, New Mexico, on the Navajo Nation. Hill pushed the victim to the ground and struck him with his fists. Hill then retrieved a baseball bat and struck the victim in the head and torso causing serious injuries, including fractures to the victim’s jaw, skull and nasal passage, a torn left ear and a dislocated shoulder. After being airlifted to a Level 1 Trauma Center in Albuquerque, the victim needed surgery and two days of medical care for injuries sustained in the assault.
Upon his release from prison, Hill will be subject to three years of supervised release.
The Crownpoint District of the Navajo Nation Police Department investigated the case. Assistant U.S. Attorney Thomas J. Aliberti prosecuted the case.
Natchez Man Pleads Guilty to Possessing a Firearm as a Convicted Felon Under Project EJECTRead the Press Release
Jackson, Miss – A Natchez man pleaded guilty today to possessing a firearm after having previously been convicted of a felony, announced Acting U.S. Attorney Darren J. LaMarca of the Southern District of Mississippi and Special Agent in Charge Kurt Thielhorn with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
According to court documents, Albert Burnell Chatman, 26, pled guilty to house burglary on May 20, 2019, in Adams County Circuit Court. He was sentenced to 7 years in the custody of the Mississippi Department of Corrections, but those 7 years were suspended, and Chatman was ordered to supervised probation. On July 24, 2019, Chatman’s truck was searched by his probation officer and a Glock handgun was found. On June 10, 2020, Chatman was indicted by a federal grand jury for possessing a firearm as a convicted felon.
Chatman is scheduled to be sentenced on July 29, 2021, and faces a penalty of up to 10 years in prison and up to $250,000 in fines. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Mississippi Department of Corrections, Natchez Police Department, and Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated the case.
Assistant U.S. Attorney Bert Carraway is prosecuting the case.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN) and Project Guardian. EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry, and awareness. EJECT stands for “Empower Justice Expel Crime Together.” PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
Multiple Defendants Sentenced in a Major Compounding Pharmacy Fraud ConspiracyRead the Press Release
TUSCALOOSA, Ala. – This week, Chief U.S. District Judge L. Scott Coogler sentenced two dozen defendants who were part of a major conspiracy to commit health care fraud, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, United States Postal Inspector in Charge, Houston Division, Adrian Gonzalez, and Internal Revenue Service Criminal Investigation Special Agent in Charge James E. Dorsey.
The defendants sentenced included an array of company executives and managers, a prescriber, billers, and sales representatives. Among those sentenced this week were:
John Jeremy Adams, 40, of Panama City Beach, Florida, the president and CEO of Global Compounding Pharmacy (Global), who directed the fraud and made millions from it, was sentenced to 170 months in prison on one count of conspiring to commit health care fraud and mail fraud, 19 counts of health care fraud, one count of conspiring to pay kickbacks to a prescriber, and 8 counts of spending the proceeds of health care fraud. Adams pleaded guilty to the charges in May 2020.
James A Mays, III, 45, of Winfield, Ala., was sentenced to 102 months in prison on one count of conspiring to commit health care fraud and mail fraud, twelve counts of health care fraud, and three counts of money laundering based on spending the proceeds of health care fraud. Mays was the pharmacist who handled Global’s compounding operation and made millions during the conspiracy. Mays pleaded guilty to the charges in February 2021.
Jessica Linton, 38, of Clearwater, Florida, was sentenced to 132 months in prison on one count of conspiracy, thirteen counts of health care fraud, three counts of mail fraud, and seven counts of aggravated identity theft. Linton was the manager in charge of Global’s billing center; she altered and added prescriptions, billed insurers for medically unnecessary prescriptions, and helped hide the fraud from auditors. In February 2021, a federal jury convicted Linton of these charges.
John Gladden, 51, of Tallahassee, Florida, was sentenced to 64 months in prison on one count of conspiracy, six counts of health care fraud, one count of mail fraud, and one count of aggravated identity theft. Gladden, a district manager for Global during most of 2015, directed his sales representatives to get medically unnecessary prescriptions for themselves and their family members and profited from the scheme. In February 2021, a federal jury convicted Gladden of these charges.
Phillip Marks, 52, of St. Augustine, Florida, was sentenced to 36 months in prison on one count of conspiracy and twelve counts of health care fraud. Marks served as a manager of the sales managers and, in 2015, pressured subordinates to get unnecessary prescriptions for themselves and their family members. Marks made more than $400,000 during his time at Global. He pleaded guilty to the charges in September 2018.
“The health care fraud conspiracy and scheme executed by these defendants caused health insurance companies to lose millions of dollars,” U.S. Attorney Escalona said. “These defendants manipulated the system for their own personal gain without regard for patient need or medical necessity. I applaud our prosecutors and law enforcement partners for their commitment and hard work on this complex investigation and prosecution.”
The sentencings came after an extensive investigation into a prescription drug billing scheme involving a Haleyville, Ala.-based pharmacy, Northside Pharmacy, doing business as Global Compounding Pharmacy. More than two dozen defendants pleaded guilty to charges, and two additional defendants went to trial in February 2021.
From 2013 to 2016, this large-scale conspiracy billed insurers for massive quantities of medically unnecessary prescription drugs. The scheme involved directing employees to get medically unnecessary drugs for themselves, family members, and friends, changing prescriptions to add non-prescribed drugs because insurance would pay for them, automatically refilling prescriptions regardless of patient need, routinely waiving and discounting co-pays to induce patients to get and keep medically unnecessary drugs, and billing for drugs without patients’ knowledge. When prescription drug administrators attempted to police this conduct, the conspirators hid their fraud and obstructed detection efforts—including by lying to auditors and diverting their billing through affiliated pharmacies. The scheme targeted multiple health insurance plans, including the pharmacy’s Blue Cross Blue Shield of Alabama plan, as well as plans providing health insurance to the elderly, disabled, members of the military, and veterans—Medicare, TRICARE, and CHAMPVA, among others.
The scheme resulted in pharmacy benefit managers paying Global nearly $50 million in claims in just a two-year period. Global received more than $13 million from prescriptions written by prescribers who were either paid cash to write them or whose spouses worked as Global sales reps. One nurse practitioner who wrote prescriptions was paid kickbacks in paper bags filled with thousands of dollars in cash and left in her car. Global also received over $8.4 million for prescriptions Global employees got for themselves—including from doctors they had never seen as patients. In some cases, Global was paid as much as $30,000 or more for a single tube of compounded cream.
The FBI, HHS-OIG, DCIS, USPIS, and IRS-CI investigated the cases. Assistant U.S. Attorneys J.B. Ward, Edward Canter, and Don Long prosecuted the case. The U.S. Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, aided in the investigation.
Member of New Bedford Latin Kings Sentenced for Being a Felon in Possession of a Firearm Following Robbery and Shooting InvestigationsRead the Press Release
BOSTON – A member of the New Bedford Chapter of the Almighty Latin King and Queen Nation (“Latin Kings”) was sentenced yesterday for being a felon in possession of a firearm and ammunition following an investigation into an armed robbery in New Bedford and a shooting in Boston in April 2020.
Ramon Martinez, a/k/a “King Razor,” 26, was sentenced by U.S. District Court Judge Denise J. Casper to 40 months in prison and three years of supervised release. In November 2020, Martinez pleaded guilty to being a felon in possession of a firearm.
On April 30, 2020, an individual in New Bedford was robbed and punched by two men who were in a black Ford Fusion. The men put a knife to the victim’s back and stole his wallet and motorized scooter. Martinez was later identified as one of the robbers.
Also on April 30, 2020, police responded to a report of shots fired in the area of Callender Street in Boston where three .45 caliber casings were recovered. Martinez’s SnapChat account included postings related to this shooting incident.
On May 7, 2020, police witnessed Martinez exit a residence on Crapo Street in New Bedford and walk to the rear of a black Ford Fusion. They observed Martinez open the trunk and quickly close it, and then get into a nearby vehicle. Officers stopped the vehicle, placed Martinez under arrest for the April 30 armed robbery and located a set of keys for the Ford Fusion. In the trunk of the Fusion, police recovered a Glock Model 30S .45 caliber firearm with four rounds of ammunition. Ballistics testing matched the Glock Model 30S to the casings recovered on Callender Street.
Due to prior felony convictions, Martinez is prohibited from possessing firearms.
A plea hearing pertaining to the New Bedford armed robbery charges is scheduled for May 19, 2021 in Bristol County Superior Court. The case is being prosecuted by the Bristol County District Attorney’s Office.
Acting United States Attorney Nathaniel R. Mendell; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, New England Field Division; New Bedford Police Chief Joseph C. Cordeiro; and Boston Police Acting Commissioner Gregory Long made the announcement. Valuable assistance was also provided by the Bristol County District Attorney’s Office. Assistant U.S. Attorney Philip A. Mallard of Mendell’s Organized Crime and Gang Unit prosecuted the case.
McKeesport Grocery Store Owner Sentenced to Prison for Food Stamp Fraud and Money Laundering ConspiracyRead the Press Release
PITTSBURGH, PA - A resident of Glassport, PA, has been sentenced in federal court to 27 months’ imprisonment, to be followed by a two-year term of supervised release, on his conviction of Conspiracy, Food Stamp Fraud, and Money Laundering Conspiracy, Acting United States Attorney Stephen R. Kaufman announced today.
United States District Judge William S. Stickman imposed the sentence on Sin Y Sit, 46, of 502 Marie Street, Glassport, PA 15045.
According to information presented to the court, beginning in and around March 2014, and continuing until May 2017, the defendant engaged in acts of food stamp fraud and money laundering conspiracy. Sin Y Sit and his wife Qiao Jiang owned and operated Mei A. Asian Grocery in McKeesport, PA. Sit and Jiang allowed customers to unlawfully exchange food stamp credits under the USDA’s S.N.A.P. program for cash (the defendants paid out fifty cents on a dollar) and other ineligible grocery items, such as tobacco. The amount of fraud during the term of the conspiracy is between $250,000 and $550,000. The defendant also engaged in financial transactions involving cash withdrawals of money which had been transferred into the store’s business account by the USDA to reimburse the defendant and his store for the food stamp credits which had been scanned by the defendant and his customers at the store during the fraudulent transactions. The cash withdrawn by the defendant was then used by the defendant at his store to pay more customers in the unlawful use of the food stamp credits..
Assistant United States Attorney Shaun E. Sweeney prosecuted this case on behalf of the government.
Acting United States Attorney Kaufman commended the U.S. Department of Agriculture Office of Inspector General, Department of Homeland Security Investigations, and Internal Revenue Service Criminal Investigation for the investigation leading to the successful prosecution of Sin Y Sit.
Massachusetts Woman Pleads Guilty to Drug TraffickingRead the Press Release
CONCORD – Arnetta Harris, 60, of Fitchburg, Massachusetts, pleaded guilty in federal court on Tuesday to one count of aiding and abetting the distribution of a controlled substance, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, on April 14, 2018, Harris sold crack cocaine to another individual who in turn sold the crack cocaine to an undercover officer. Shortly after the sale, officers conducted a traffic stop of the vehicle Harris was driving and a search revealed crack cocaine in a DVD case located in the footwell of the car. After her arrest, Harris admitted that she drove another individual to conduct the drug transaction. She further confirmed the DVD case was used in the drug transaction.
Harris is scheduled to be sentenced on August 31, 2021.
Harris is one of eleven individuals charged in this drug trafficking case. All have pleaded guilty. Several members of the conspiracy have received substantial prison sentences. Melvin Nooks, Jr. was sentenced on April 2, 2020, to 120 months. George Cruz was sentenced on July 30, 2020, to 63 months. Mallory Nooks was sentenced on February 25, 2020, to 60 months. Marvin Morrison was sentenced on May 13, 2020, to 15 months. Don Johnson was sentenced on February 13, 2020, to 42 months. Isaiah Kinard pleaded guilty on December 18, 2019, Lawrence Fortenberry pleaded guilty on January 7, 2020, William Greenleaf pleaded guilty on January 14, 2020, and Melvin Stanford pleaded guilty on April 9, 2021. They are all awaiting sentencing.
“Drug trafficking endangers public health and safety in our communities,” said Acting U.S. Attorney Farley. “Working closely with our law enforcement partners, we are targeting the organizations that distribute dangerous drugs in Nashua and throughout the Granite State. While this organization has been dismantled, we continue to work each day to identify and target other criminal organizations that threaten our citizens.”
“Arnetta Harris and her criminal cohorts thought they were above the law and could traffic crack cocaine in the neighborhoods of Nashua without getting caught. The hard work of the NH Safe Streets Gang Task Force in dismantling this organization and disrupting the flow of dangerous drugs to our area has paid off, but there is much more work to be done to ensure that other criminal enterprises don’t try to fill the void left by this one,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
The case was a collaborative investigation that involved the FBI New Hampshire Safe Streets Gang Task Force; the Nashua Police Department; the New Hampshire State Police; the Manchester Police Department; New Hampshire Probation and Parole; DEA; Massachusetts State Police Department; Portsmouth Police Department and the Federal Protective Service. The United States Marshals Service also assisted in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Georgiana MacDonald and Anna Krasinski.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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Maryland Tax Preparer Sentenced to More Than Two Years in Federal Prison for Preparing False Returns and Aggravated Identity TheftRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Maria Espinal, age 53, of Montgomery Village, Maryland, yesterday to 27 months in federal prison, followed by one year of supervised release, for aiding and assisting in filing false tax returns and for aggravated identity theft. Judge Chuang also ordered Espinal to pay restitution in the amount of $106,066.
The sentence was announced by Acting U.S. Attorney for the District of Maryland Jonathan F. Lenzner; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Acting Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Comptroller Peter Franchot.
According to court documents and statements made in court, Maria Espinal owned and operated a tax return preparation business located in Gaithersburg, Maryland. From 2011 through 2017, Maria Espinal prepared and filed fraudulent tax returns on behalf of her clients with the Internal Revenue Service (IRS) and the Comptroller of Maryland that claimed tax refunds to which the clients were not entitled. To generate a fraudulent refund, Espinal altered legitimate Forms W-2 in the names of third parties and replaced the third party’s name with her client’s name. As a result, her client claimed the third-party’s withholdings as his or her own, which generated fraudulent tax refunds.
In addition, Espinal displayed a sign on her office wall that read in Spanish “If you have lost your [identification] number or passport we have these people” and which listed the identifying information for several individuals. Espinal used the personal identifying information for one of those individuals to obtain a fraudulent refund on behalf of another client. Espinal also filed a tax return using another individual’s personal identifying information to generate a fraudulent refund that Espinal deposited into her own personal bank account.
Acting U.S. Attorney Lenzner and Acting Deputy Assistant Attorney General Goldberg thanked IRS - Criminal Investigation and the Office of the Comptroller of Maryland for their work in the investigation, and commended Assistant United States Attorney Erin Pulice and Carl Brooker, formerly a Trial Attorney with the Tax Division and now an Assistant United States Attorney in the Southern District of California, who prosecuted the case.
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Manchester Man Pleads Guilty to Access Device FraudRead the Press Release
CONCORD - Hayder Lefta, 24, of Manchester, pleaded guilty in federal court to six counts of access device fraud, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, while working as a customer service representative at the Manchester Boston Regional Airport in 2018 and 2019, Lefta copied the credit card numbers of customers he served at the airport. He then used those credit card numbers, without authorization, to purchase airline flights and meals for himself and for friends, to pay for hotels for his personal leisure travel, and for other personal expenses.
Lefta is scheduled to be sentenced on August 17, 2021. The defendant’s plea agreement requires him to pay restitution to the victims of the offense.
“Crimes that involve the theft of credit card numbers or other personal information have serious consequences for their victims,” said Acting U.S. Attorney Farley. “In order to seek justice for victims, we will work closely with our law enforcement partners to identify and prosecute those who commit fraud crimes.”
“This individual stole customer information he was entrusted with safeguarding through his employment to commit fraud, stealing from unsuspecting members of the public. Homeland Security Investigations takes financial fraud schemes seriously and is committed to working with our law enforcement partners to investigate and seek prosecution,” said acting Special Agent in Charge William S. Walker for the Homeland Security Investigations Boston field office.
This matter was investigated by Homeland Security Investigations, the Federal Air Marshal Service, and the Londonderry Police Department. The case is being prosecuted by Assistant U.S. Attorney Georgiana L. MacDonald.
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Man Pleads Guilty to Selling Counterfeit VapesRead the Press Release
A Texas man pleaded guilty today to selling counterfeit vape pens imported from China, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Christopher Andrew Reyes, 23, of The Colony, pleaded guilty Thursday to conspiracy to import drug paraphernalia.
“This defendant imported thousands of potentially dangerous black-market vaping devices,” said Acting U.S. Attorney Prerak Shah. “Given the alarming incidence of lung injuries stemming from unregulated THC vapes, we knew could not allow any more of these devices onto our streets.”
“The distribution of these black-market vaping devices is not only illegal, but could prove lethal to those who consume vape materials purchased from unregulated sources, said Ryan L. Spradlin, Special Agent in Charge Homeland Security Investigations (HSI) Dallas. “These illicit items are a significant health threat in our communities and should not be available in the open market.”
According to court documents, Mr. Reyes admitted that he allowed employees of a vaping shop on Harry Hines Boulevard to order counterfeit THC vaping products online using his bank card. (Tetrahydrocannabinol, or THC, is the psychoactive compound found in marijuana.)
In September 2019, U.S. Customs & Border Protection agents intercepted a shipment of 2,400 counterfeit THC vaping devices addressed to Mr. Reyes and bound for his home. The vaping devices, which were sent from China and routed through DFW International Airport, bore the counterfeit trademark of a popular THC vape brand, “Cookies.” Agents estimated that at least five additional shipments of vaping products had been sent to Mr. Reyes.
In plea papers, the defendant admitted that after receiving the packages, he sold the contents back to the vaping shop for profit. His bank statements, which show large purchases from Chinese e-commerce company Alibaba (an online retailer similar to Amazon), backed up his admissions.
Mr. Reyes now faces up to three years in federal prison. His sentencing is set for Thursday, Aug. 26.
Following a rash of lung injuries related to counterfeit vaping devices, the CDC urged the public to avoid THC-containing vapes, especially those purchased from unreliable online retailers. For more information, consult the CDC’s E-Cig FAQ.
Homeland Security Investigations and the Food & Drug Administration’s Office of Criminal Investigations conducted the investigation with the assistance of Customs & Border Protection. Assistant U.S. Attorney Phelesa Guy prosecuted the case alongside Trial Attorneys Patrick Runkle and Speare Hodges of the Justice Department’s Consumer Protection Branch.
Law Firms Representing Purdue Pharma Agree to Relinquish $1 Million in Settlement with U.S. Trustee ProgramRead the Press Release
The Department of Justice’s U.S. Trustee Program (USTP) has entered into a settlement with three law firms representing Purdue Pharma (Purdue) in its ongoing bankruptcy cases. The firms are Skadden, Arps, Slate, Meagher & Flom LLP; Wilmer Cutler Pickering Hale and Dorr LLP; and Dechert LLP (the Firms).
The settlement, which is subject to approval by the Bankruptcy Court for the Southern District of New York, resolves the USTP’s concerns about the adequacy of the Firms’ disclosures in the Purdue bankruptcy cases. Under the settlement, the Firms, collectively, will relinquish $1 million in fees earned in the cases and are required to supplement their prior disclosures so that the court and other parties can make a determination as to their sufficiency.
According to the USTP, the Firms failed to adequately disclose a Joint Defense and Common Interest Agreement (the Agreement) between Purdue and the Sackler families that created obligations for the Firms to the Sacklers related to the defense against hundreds of lawsuits involving potentially billions of dollars of liability related to the manufacture, sale, and distribution of the prescription pain medication OxyContin. During the course of the bankruptcy cases, Purdue invoked the Agreement to avoid turning over documents to the official committee of unsecured creditors as it conducted its review of the debtors’ conduct.
“These disclosure violations are particularly concerning because a central question in these cases has been the independence of Purdue from the Sackler families,” said USTP Director Cliff White. “This agreement reflects the USTP’s ongoing efforts to police law firms and other bankruptcy professionals who fail to disclose connections that may raise questions about their ability to perform their duties free of conflicts of interest.”
Due to the multiplicity of interests in a bankruptcy case, the Bankruptcy Code and Bankruptcy Rule 2014 mandate that law firms and other professional firms disclose their connections to other parties in a case. The USTP reviews applications to employ firms that seek payment from a chapter 11 bankruptcy estate under sections 327 and 1103 of the Bankruptcy Code and advocates for strict compliance with the law to ensure that the interests of all stakeholders are protected. Where there has been a failure to disclose a connection in an application, even when inadvertent, the bankruptcy court may remedy the failure to disclose by, among other remedies, requiring all or part of the fees earned by counsel to be disgorged. In this settlement, the parties have agreed to disgorgement.
The USTP’s work on this matter has been handled by U.S. Trustee William Harrington, Assistant U.S. Trustee Linda Riffkin, Associate General Counsel for Chapter 11 Practice Nan Eitel, and Trial Attorney Paul Schwartzberg.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more information on the Program at: https://www.justice.gov/ust.