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20 May 2021
Owner of a Tanker Truck Repair Company Pleads Guilty to Violating Safety Standards and Making False Statement to OSHA InvestigatorRead the Press Release
POCATELLO – Loren Kim Jacobson, 65, of Pocatello, and owner of a tanker testing and repair company, KCCS Inc., pleaded guilty to making an illegal repair to a cargo tanker in violation of the Hazardous Materials Transportation Act (HMTA) and lying to the Occupational Safety and Health Administration (OSHA), Acting U.S. Attorney Rafael M. Gonzalez, Jr. announced today. The case arose from an explosion that occurred at KCCS during a cargo tanker repair on August 14, 2018, severely injuring a KCCS employee.
According to the plea agreement, the KCCS employee’s welder flame pierced the skin of the tanker, which contained residual flammable material, resulting in the tanker exploding. After the explosion, an OSHA investigator interviewed Jacobson about the circumstances surrounding the accident, as part of an investigation into whether Jacobson had violated OSHA safety standards for cargo tanker repair work. Jacobson made a materially false statement to the OSHA investigator during that interview, namely that his employee was merely an “observer,” not an employee, and that KCCS did not have any employees. This was an important point because OSHA requirements only apply to “employers.” Jacobson lied about not having employees to evade legal repercussions and penalties for his violation of various Occupational Safety and Health Act safety standards during the repair that resulted in the explosion.
“The terrible injuries involved this case are a stark reminder of the need for workplace safety requirements and enforcement,” said Gonzalez. “I commend the investigators at OSHA, the Department of Transportation, and the Environmental Protection Agency for uncovering the evidence in this case. Working with our partners, our office will continue to hold employers accountable for criminally endangering their employees.”
Jacobson also admits in the plea agreement that he did not possess the necessary certification to conduct cargo tanker repairs that he regularly conducted. Under the HMTA, all repairs to the skin of a cargo tanker require that the repairperson hold an “R-stamp,” which can be obtained only after meeting extensive training requirements. The purpose of this requirement is to ensure that those conducting repairs on cargo tankers (which often haul flammable materials) have adequate training and expertise to do so safely. Jacobson admitted that he had a regular practice of making repairs requiring an R-stamp, despite knowing he did not have one, and that he would send employees into the cargo tankers to weld patches from the inside of the tanker so that the illegal repairs would not be visible from the outside. Jacobson did not follow OSHA safety standards for protecting employees from such dangerous “confined space entries.” According to the plea agreement, Jacobson directed his employee to conduct a hidden repair of this type on the tanker that subsequently exploded, in violation of both OSHA safety standards and the R-stamp requirement.
“The Environmental Crimes Section’s Worker Safety Initiative is designed to make sure that employers like Loren Jacobson, who shirk safety requirements and put their employees, customers, and the public at risk, are held accountable for their actions,” said Acting Assistant Attorney General Jean Williams for the Justice Department’s Environment and Natural Resources Division. “We are committed to protecting the lives and health of those who do the important work of keeping safe cargo vehicles on the road. This prosecution makes clear to others who might be tempted to ignore these certification and safety programs that they will face felony consequences for putting their employees and the public in danger. Our thanks go out to the investigators from OSHA, the Environmental Protection Agency, and the Department of Transportation who worked diligently to bring these violations to light. And our thoughts are with the victim of this horrible accident.”
“Loren Jacobson lied to Occupational Safety and Health Administration Investigators to cover up the extreme risks he had been taking with his employees,” said Special Agent in Charge Quentin Heiden of the U.S. Department of Labor - Office of Inspector General, Los Angeles. “The Department of Labor’s Office of Inspector General will continue to work with our law enforcement partners to ensure the safety of American workers.”
“Today’s guilty plea is a sober reminder that endangering the health and safety of commercial industry workers and the public by violating federal hazardous materials transportation requirements will not be tolerated,” said Special Agent in Charge Cissy Tubbs of the Department of Transportation Office of Inspector General - Western Region Office of Investigations. “We offer our sincerest condolences to the victim of the August 2018 explosion and remain steadfast in our commitment to working with our law enforcement and prosecutorial partners to hold accountable those who flaunt federal requirements to place financial gain above public safety.”
“OSHA’s mission is to ensure that every American comes home safe and sound after the day’s work,” said Boise OSHA Director David Kearns. “When an employer lies to OSHA, he passes the buck, leaving the door open to more workplace injuries and deaths. No one should be killed or injured for a paycheck. Dishonesty is not a means to protect workers. OSHA was pleased to work with our investigative partners and the Department of Justice to hold this employer criminally liable for his deceit.”
Jacobson is scheduled to be sentenced on August 25, 2021 before U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
Both the HMTA violation and the false statement offenses that Jacobson pleaded guilty to are punishable by up to five years in prison, up to three years of supervised release, and a fine of up to $250,000.
Trial Attorney Cassandra Barnum of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Josh Hurwit of the District of Idaho are prosecuting this case. The investigation was handled by the Department of Transportation, the Environmental Protection Agency, and OSHA.
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Owner of a Tanker Truck Repair Company Pleads Guilty to Lying to OSHA During Explosion InvestigationRead the Press Release
An Idaho man pleaded guilty today to lying to the Occupational Safety and Health Administration (OSHA) and to making an illegal repair to a cargo tanker in violation of the Hazardous Materials Transportation Act.
According to court documents, Loren Kim Jacobson, 66, of Pocatello, Idaho, and owner of a tanker testing and repair company, KCCS Inc., lied to OSHA during an investigation and made an illegal repair to a cargo tanker in violation of the Hazardous Materials Transportation Act. The case arose from an explosion that occurred at KCCS during a cargo tanker repair on Aug. 14, 2018, severely injuring a KCCS employee.
According to the plea agreement, the KCCS employee’s welder flame pierced the skin of the tanker, which contained residual flammable material, resulting in the tanker exploding. After the explosion, an OSHA investigator interviewed Jacobson about the circumstances surrounding the accident, as part of an investigation into whether Jacobson had violated OSHA safety standards for cargo tanker repair work. Jacobson made a materially false statement to the OSHA investigator during that interview, namely that his employee was merely an “observer,” not an employee, and that KCCS did not have any employees. This was an important point because OSHA requirements only apply to “employers.” Jacobson lied about not having employees to evade legal repercussions and penalties for his violation of various Occupational Safety and Health (OSH) Act safety standards during the repair that resulted in the explosion.
Jacobson also admits in the plea agreement that he did not possess the necessary certification to conduct cargo tanker repairs that he regularly conducted. Under the Hazardous Materials Transportation Act, all repairs to the skin of a cargo tanker require that the repairperson hold an “R-stamp,” which can be obtained only after meeting extensive training requirements. The purpose of this requirement is to ensure that those conducting repairs on cargo tankers (which often haul flammable materials) have adequate training and expertise to do so safely. Jacobson admitted that he had a regular practice of making repairs requiring an R-stamp, despite knowing he did not have one, and that he would send employees into the cargo tankers to weld patches from the inside of the tanker so that the illegal repairs would not be visible from the outside. Jacobson did not follow OSHA safety standards for protecting employees from such dangerous “confined space entries.” According to the plea agreement, Jacobson directed his employee to conduct a hidden repair of this type on the tanker that subsequently exploded, in violation of both OSHA safety standards and the R-stamp requirement.
“The Environmental Crimes Section’s Worker Safety Initiative is designed to make sure that employers like Loren Jacobson, who shirk safety requirements and put their employees, customers, and the public at risk, are held accountable for their actions,” said Acting Assistant Attorney General Jean Williams for the Justice Department’s Environment and Natural Resources Division. “We are committed to protecting the lives and health of those who do the important work of keeping safe cargo vehicles on the road. This prosecution makes clear to others who might be tempted to ignore these certification and safety programs that they will face felony consequences for putting their employees and the public in danger. Our thanks go out to the investigators from OSHA, the Environmental Protection Agency, and the Department of Transportation who worked diligently to bring these violations to light. And our thoughts are with the victim of this horrible accident.”
“Loren Jacobson lied to Occupational Safety and Health Administration Investigators to cover up the extreme risks he had been taking with his employees,” said Special Agent in Charge Quentin Heiden of the U.S. Department of Labor - Office of Inspector General, Los Angeles. “The Department of Labor’s Office of Inspector General will continue to work with our law enforcement partners to ensure the safety of American workers.”
“Today’s guilty plea is a sober reminder that endangering the health and safety of commercial industry workers and the public by violating federal hazardous materials transportation requirements will not be tolerated,” said Special Agent in Charge Cissy Tubbs of the Department of Transportation Office of Inspector General - Western Region Office of Investigations. “We offer our sincerest condolences to the victim of the August 2018 explosion and remain steadfast in our commitment to working with our law enforcement and prosecutorial partners to hold accountable those who flaunt federal requirements to place financial gain above public safety.”
“OSHA’s mission is to ensure that every American comes home safe and sound after the day’s work,” said Boise OSHA Director David Kearns. “When an employer lies to OSHA, he passes the buck, leaving the door open to more workplace injuries and deaths. No one should be killed or injured for a paycheck. Dishonesty is not a means to protect workers. OSHA was pleased to work with our investigative partners and the Department of Justice to hold this employer criminally liable for his deceit.”
“The terrible injuries involved this case are a stark reminder of the need for workplace safety requirements and enforcement,” said Acting U.S. Attorney Rafael M. Gonzalez Jr. for the District of Idaho. “I commend the investigators at OSHA, the Department of Transportation, and the EPA for uncovering the evidence in this case. Working with our partners, our office will continue to hold employers accountable for criminally endangering their employees.”
Jacobson is scheduled to be sentenced on Aug. 25 and faces a maximum penalty of five years in prison per count (10 years total). A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Trial Attorney Cassandra Barnum of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Joshua Hurwit of the District of Idaho are prosecuting this case with assistance from criminal investigators from the Environmental Protection Agency and the Department of Transportation.
Owner of Montana Construction Company Sentenced to 15 Months in Prison for Employment Tax FraudRead the Press Release
WASHINGTON – A Montana man was sentenced today to 15 months in prison for employment tax fraud.
According to court documents and statements made in court, Trennis Baer, of Great Falls, owned and operated Baer Construction based in Great Falls. Beginning in 2010 and continuing through 2018, Baer did not file quarterly employment tax returns, nor did he pay employment taxes withheld from his employees’ wages to the IRS. Baer did not comply with these legal requirements, even though the company’s outside accountant from at least 2013 on prepared employment tax returns to be filed and calculated the taxes due. In addition to spurning his employment tax obligations, Baer willfully did not file personal income tax returns for the years 2001 to 2006, 2008, and 2010 to 2018. The total tax loss to the IRS from Baer’s conduct is more than $1.5 million.
In addition to the term of imprisonment, U.S. District Judge Brian Morris ordered Baer to serve two years of supervised release and to pay approximately $935,251 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Leif M. Johnson for the District of Montana made the announcement.
IRS Criminal Investigation investigated the case.
Trial Attorneys Matthew Hoffman and Eric Taffet of the Justice Department’s Tax Division prosecuted the case.
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Owner of Montana Construction Company Sentenced to 15 Months in Prison for Employment Tax FraudRead the Press Release
A Montana man was sentenced today to 15 months in prison for employment tax fraud.
According to court documents and statements made in court, Trennis Baer, of Great Falls, owned and operated Baer Construction based in Great Falls. Beginning in 2010 and continuing through 2018, Baer did not file quarterly employment tax returns, nor did he pay employment taxes withheld from his employees’ wages to the IRS. Baer did not comply with these legal requirements, even though the company’s outside accountant from at least 2013 on prepared employment tax returns to be filed and calculated the taxes due. In addition to spurning his employment tax obligations, Baer willfully did not file personal income tax returns for the years 2001 to 2006, 2008, and 2010 to 2018. The total tax loss to the IRS from Baer’s conduct is more than $1.5 million.
In addition to the term of imprisonment, U.S. District Judge Brian Morris ordered Baer to serve two years of supervised release and to pay approximately $935,251 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Leif M. Johnson for the District of Montana made the announcement.
IRS Criminal Investigation investigated the case.
Trial Attorneys Matthew Hoffman and Eric Taffet of the Justice Department’s Tax Division prosecuted the case.
Ohio man sentenced for role in drug trafficking operationRead the Press Release
WHEELING, WEST VIRGINIA – Joseph Garth, of Bellaire, Ohio, was sentenced today to 15 months of incarceration for his role in a drug trafficking conspiracy, Acting U.S. Attorney Randolph J. Bernard announced.
Garth, also known as “Nephew,” 24, pled guilty in February 2021 to one count of “Aiding and Abetting the Distribution of Cocaine Base.” Garth admitted to selling cocaine base, also known as “crack,” in May 2020 in Ohio County.
Assistant U.S. Attorneys Shawn M. Adkins and Clayton J. Reid prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crimes Task Force, a HIDTA-funded initiative, which includes the Drug Enforcement Administration, West Virginia State Police, Ohio County Sheriff’s Office, and the Wheeling Police Department, investigated. The U.S. Marshal Service, Columbus Police Department Gang Crimes Unit, the Martins Ferry Police Department, and the Bellaire Police Department also assisted.
U.S. District Judge John Preston Bailey presided.
Original case indictment here: https://www.justice.gov/usao-ndwv/pr/26-charged-drug-conspiracy-involving-heroin-fentanyl-crack-cocaine-and-meth-wheeling
North Suburban Businessman Guilty of Evading More Than $2.4 Million in Federal and State Income TaxesRead the Press Release
CHICAGO — A north suburban businessman pleaded guilty today to willfully evading more than $2.4 million in income taxes.
ANTHONY D. PANICO, 68, of Libertyville, pleaded guilty to one count of tax evasion. The conviction is punishable by up to five years in federal prison. U.S. District Judge John Z. Lee set sentencing for Aug. 31, 2021.
Panico owned Libertyville-based AP Capital Management LLC, and he operated, controlled, or was otherwise associated with several other business entities. From 2010 to 2017, he received more than $9.2 million of income for which he was required to file returns and pay taxes. Panico admitted in a plea agreement that he willfully failed to file federal or state income tax returns for each of those years, resulting in a total federal and state tax loss of approximately $2,462,934.
Panico admitted that he attempted to conceal his receipt of income by the creation and use of multiple entities, the use of nominees, misidentifying the use of funds he obtained from banks, paying personal expenses from corporate entities he controlled, and using various trust and nominee entities to acquire real estate and other assets. Several of the entities used by Panico also failed to file tax returns, the plea agreement states.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera D. Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Jay N. Lerner, Inspector General of the Federal Deposit Insurance Corp.’s Office of Inspector General. The government is represented by Assistant U.S. Attorney Patrick J. King, Jr.
North Carolina Man Sentenced to 78 Months for Money Laundering and Filing False Tax Return in Tobacco Smuggling SchemeRead the Press Release
A North Carolina man was sentenced today to 78 months in prison for conspiring to commit money laundering and filing a false tax return.
According to court documents and other information presented in court, Phil Howard, 55, arranged on at least 221 different occasions for cut-rag tobacco to be transported by trucks from Wilson, North Carolina, to an area on or near the Akwesasne Mohawk Nation Reservation (Akwesasne Reservation) as part of a conspiracy to smuggle the tobacco into Canada without paying Canadian federal excise duties and provincial taxes. The Akwesasne Reservation straddles the U.S.-Canadian border on both banks of the St. Lawrence River. Co-conspirators then smuggled the cut-rag tobacco over the St. Lawrence River and transported it to the Kahnawake Mohawk Nation Reservation in Quebec. Ultimately, the cut-rag tobacco was manufactured into contraband cigarettes.
In all, the conspiracy smuggled more than six million pounds of cut-rag tobacco into Canada, resulting in a tax loss to Canada exceeding $600,000,000. For his role, Howard received payment in the form of cash and cigarettes, as well as in the form of wires. In total, Howard laundered more than $2 million dollars in criminal proceeds. He further failed to report his criminal profits on his tax returns, including by filing false returns for tax years 2014 to 2018. This resulted in a tax loss to the United States of more than one million dollars.
In addition to his tobacco smuggling and tax fraud schemes, the court today applied an obstruction of justice enhancement at sentencing because Howard provided false testimony under oath to a federal grand jury that was investigating federal crop insurance fraud as part of a joint investigation by the U.S. Department of Agriculture’s Office of Inspector General (USDA-OIG) and the IRS.
In addition to the term of imprisonment, U.S. District Judge James C. Dever III ordered Howard to serve three years of supervised release and to pay approximately $1,062,192 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney G. Norman Acker III for the Eastern District of North Carolina made the announcement.
USDA-OIG and IRS Criminal Investigation investigated the case, with assistance from Canadian Border Services Agency – Enforcement and Intelligence Operations Division, Intelligence Section; the Surete du Quebec Police; the Buffalo Homeland Security Investigations (HSI) Office and HSI Massena’s Border Enforcement Security Task Force; Bureau of Alcohol, Tobacco, Firearms, and Explosives, Charlotte Field Division; and the U.S. Attorneys’ Offices for the Northern District of New York and the Western District of New York.
Former Assistant U.S. Attorney Banumathi Rangarajan and Assistant U.S. Attorney Susan Menzer of the Eastern District of North Carolina, along with Trial Attorney Will Guappone of the Tax Division, prosecuted the case.
New York Couple Indicted for Romance Fraud ScamRead the Press Release
ALEXANDRIA, Va. – A federal grand jury returned an indictment today charging a New York City man and woman with wire and mail fraud as part of a social media scheme that defrauded elderly victims out of over $660,000.
“The defendants allegedly impersonated military servicemembers, diplomats, and others to deprive elderly victims of their retirement savings,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Working with our law enforcement partners, EDVA will aggressively pursue the perpetrators of scams that prey on vulnerable members of our communities.”
According to the indictment, from at least September 2019 through April 2021, Linda Mbimadong, 29, and Richard Broni, 31, along with other unnamed co-conspirators, targeted elderly victims on social media and email by impersonating romantic love interests, diplomats, military personnel, and more. The pair, and other co-conspirators, tricked victims into mailing them cashier’s checks, wiring funds, and sending Apple computer products and other items of value.
According to the indictment, Victim #1 was a 78-year-old man who lost $580,000 to the scheme. He had set up an iFlirt account, an online dating application, on his cell phone for the purpose of communicating with women. A member of the conspiracy began communicating with him on the app as part of the scheme to defraud, transitioning the conversations to Google Hangouts and text messages around September 2019. Victim #2 was a 74-year-old woman who lost approximately $80,000 to the scheme from her retirement savings. A member of the conspiracy contacted Victim #2 on Facebook and transitioned the conversation with her to email and text messages around March 2021.
Posing as a young widow who had inherited gold bars, or as a diplomat assisting people in dire straits overseas, Mbimadong, Broni, and other co-conspirators allegedly tricked elderly victims into sending the conspirators large sums of money. Victims were also allegedly directed to purchase brand new Apple MacBooks and mail them to a conspirator. Mbimadong and Broni allegedly received cashier’s checks and wires directly from victims, which they allegedly deposited and shared among the co-conspirators.
Mbimadong and Broni are charged with wire fraud and conspiracy to commit mail and wire fraud. Additionally, Mbimadong is charged with making false statements to law enforcement during the investigation. If convicted of the conspiracy or fraud charges, they both face a maximum penalty of 20 years in prison. If convicted of the false statement charge, Mbimadong faces a maximum penalty of five 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, and James A. Dawson, Special Agent in Charge of the FBI Washington Field Office Criminal Division, made the announcement.
Assistant U.S. Attorney Russell L. Carlberg and Special Assistant U.S. Attorney Amelia Medina are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:21-cr-98.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
New Orleans Man Sentenced for Firearms and Ammunition ViolationRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced on that Tuesday, May 18, 2021, that TYREET JOURNEE, age 29, a resident of New Orleans, Louisiana was sentenced following his earlier plea of guilty to a one-count indictment. In the indictment, JOURNEE is charged with possession of firearms and ammunition by a convicted felon in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
On January 29, 2020, the New Orleans Police Department arrested JOURNEE, who was wanted by the department for aggravated assault with a firearm in violation of state law. JOURNEE fled from officers who attempted to detain him. Once detained and arrested, a search of his person revealed that JOURNEE possessed a .32 caliber Smith and Wesson revolver in his pants pocket. Also, officers recovered a backpack observed in JOURNEE’s possession. A search of the backpack revealed that JOURNEE possessed a Century International Arms, Inc. model Romarm Cugir Draco, 7.62x39mm caliber, AK-47 pistol. Ammunition for both firearms was located inside of the backpack. JOURNEE is a convicted felon and is prohibited from possessing firearms and ammunition.
United States District Court Judge Greg G. Guidry sentenced JOURNEE to serve a term of imprisonment of seventy (70) months. The sentence will run concurrent with a sentence imposed by the Orleans Parish Criminal District Court for a parole violation which JOURNEE sustained while on parole for a state drug violation. JOURNEE was placed on supervised release for a period of three (3) years. While a fine was not imposed, JOURNEE was ordered to pay a mandatory special assessment fee of $100.00.
The case was investigated by the New Orleans Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Brittany Reed of the Violent Crime/Strike Force Unit of the U.S. Attorney’s Office.
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New Orleans Man Pleads Guilty to Multiple Firearm Violations Including Possession of Machine GunsRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on Thursday, May 13, 2021, LLOYD WASHINGTON, age 25, a resident of New Orleans, Louisiana pled guilty in a three-count Indictment. In Count 1, WASHINGTON is charged with Possession of Firearms and Ammunition by a Convicted Felon in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). In Count 2, WASHINGTON is charged with Possession of Machine Guns in violation of Title 18, United States Code, Sections 922(o) and 924(a)(2). In Count 3, WASHINGTON is charged with Possession of Non-Registered Firearms in violation of Title 26, United States Code, Sections 5841, 5861(d), and 5871.
On July 20, 2020, New Orleans Police Department (“NOPD”) officers were dispatched to a call for service regarding an illegal discharge of a firearm at 4122 Eagle Street, New Orleans, Louisiana. Residents who lived next door to WASHINGTON reported a bullet entering their residence. No residents were struck by the bullet. Responding officers observed the trajectory of the points of entry and exit and concluded that the bullet likely originated from WASHINGTON’s residence.
Upon arriving at WASHINGTON’s residence, officers observed him standing inside. The officers detained WASHINGTON while they conducted their investigation.
While searching the exterior of WASHINGTON’s residence, officers discovered two firearms with loaded with magazines: a Ruger model LCP, .380 caliber pistol, bearing serial number 371320740; and a Glock model 22, .40 caliber pistol, bearing serial 00841MPD and equipped with a Glock switch converter. The firearms were located on the top of a concrete slab. Officers also observed a black bag containing a third weapon, a Zastava model PAP M92 PV, 7.62x39 caliber pistol, bearing serial number M92PV068277, loaded with two magazines taped together.
Officers elected to interview WASHINGTON. WASHINGTON admitted that he was in possession of a firearm and that the firearm accidentally discharged while in his possession. When asked about the three firearms located in the alley of his residence, WASHINGTON admitted that he owned and maintained possession of the firearms. When asked if he possessed additional firearms, WASHINGTON admitted that he was in possession of additional firearms inside of his residence.
NOPD obtained a search warrant for WASHINGTON’s residence. During the search of the residence, the following items, including firearms and ammunition, were located: (1) a .40 caliber magazine with 4 live rounds of ammunition; (2) a box of .38 special ammunition containing 9 live rounds; (3) a box of .380 caliber ammunition containing 7 live rounds; (4) one 7.62x39mm magazine with an unknown number of live rounds; (5) one clear plastic bag containing multiple caliber rounds of ammunition; (6) a red duffle bag containing a rifle scope and a pistol grip; (7) a Glock model 17, 9mm caliber pistol, bearing serial number BHBZ225; (8) a Glock switch convertor; (9) a box with live 9mm rounds; (10) a 7.62x39mm circle drum loaded with an unknown number of live rounds; (11) a box with 13 live 9mm rounds; (12) a Plainfield Machine Co., Paratrooper, .30 caliber rifle, bearing serial number 43211; (13) an Izhmash model IJ70-17A, .380 caliber pistol, bearing serial number BTK3233; (14) a Heritage Mfg. Inc. model Rough Rider, .22 caliber pistol, bearing serial number R36814; and (15) a Taurus model PT24/7 G2, .40 caliber pistol, bearing serial number SIM30213.
WASHINGTON is a convicted felon and is prohibited from possessing firearms and ammunition.
WASHINGTON faces a maximum sentence of 10 years imprisonment, a fine up to $250,000.00, a period of supervised release up to 3 years, and a mandatory special assessment fee of $100.00 for each charge.
United States District Court Jude Carl Barbier will sentence WASHINGTON on August 19, 2021.
This case was investigated by the New Orleans Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Brittany Reed of the Violent Crime/Strike Force Unit of the U.S. Attorney’s Office.
New Hampshire Roofing Contractor Charged with Filing a False Tax ReturnRead the Press Release
BOSTON – A New Hampshire roofing contractor was charged yesterday in federal court in Boston in connection with failing to report income from his roofing and siding business to the Internal Revenue Service (IRS).
Ronald McPhail, 53, of Windham, N.H., was charged with one count of filing a false tax return.
According to the charging documents, McPhail owed more than $700,000 in income taxes to the IRS after he failed to report more than $7.1 million in revenues and approximately $2.43 million in income from his roofing and siding business on his federal tax returns for tax years 2014 through 2019. To conceal his scheme, McPhail allegedly cashed customer checks without first depositing them and withheld information concerning these checks and other business revenues from his tax preparers.
The charge of filing a false tax return provides for a sentence of up to three years in prison, one year of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorney Seth B. Kosto, Deputy Chief of Mendell’s Securities, Financial & Cyber Fraud 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.
New Cumberland Man Indicted for Drug TraffickingRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on May 19, 2021, Edward McCreath, age 35, of New Cumberland, Pennsylvania, was indicted by a federal grand jury with possession with the intent to distribute crack cocaine.
According to Acting United States Attorney Bruce D. Brandler, the indictment alleges that on or about July 17, 2018, in Dauphin County, McCreath possessed with intent to distribute 28 grams and more of a mixture and substance containing a detectable amount of cocaine base (crack).
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecution is assigned to Assistant U.S. Attorney Christian T. Haugsby.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The 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.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
McCreath faces a maximum penalty of up to 40 years’ imprisonment, a fine of up to $5,000,000, and a term of supervised release of up to life. Under the Federal Sentencing Guidelines, the Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offenses; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New Bern Gang Member Receives 114-Month Sentence for Drug DistributionRead the Press Release
RALEIGH, N.C. – A New Bern man was sentenced yesterday to 114 months in prison for the distribution of cocaine, cocaine base (crack), heroin, and methamphetamine. On December 28, 2020, Jajuan Rashad Harrell pled guilty to one charge of distribution of a controlled substance.
According to court documents and other information presented in court, Harrell distributed several narcotics during operations conducted by law enforcement in Pamlico County. These controlled purchases happened over a years’ time, in which Harrell sold cocaine, cocaine base (crack), heroin, and methamphetamine. Investigators conducted these operations as part of a larger effort by state and federal authorities to root out drug activity in Pamlico County.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Pamlico County Sheriff’s Office, Homeland Security Investigations, and the District Attorney’s Office for the Prosecutorial District 4 assisted with the investigation of the case, and Assistant U.S. Attorneys J.D. Koesters and Lucy Brown prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:20-CR-23-M.
Narcotics Dealer Charged in Manhattan Federal Court with Causing Overdose Death from FentanylRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment today charging MICHAEL KELLEHER with distributing fentanyl that resulted in the death of a victim (the “Victim”) on May 19, 2020, in the Bronx, New York. KELLEHER and his codefendant MARK GONZALEZ are also charged with participating in a conspiracy to distribute and possess with intent to distribute fentanyl, and using and carrying a firearm in connection with a drug trafficking offense. KELLEHER was previously charged by a criminal complaint and arrested on March 5, 2021. GONZALEZ was arrested this morning and will be presented before United States Magistrate Judge Robert W. Lehrburger tomorrow. The case is assigned to United States District Judge Victor Marrero.
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Michael Kelleher and Mark Gonzalez peddled lethal fentanyl, and Kelleher sold the dose that caused the death of a victim. Working with the NYPD we will continue to combat the epidemic of lethal opioids.”
NYPD Commissioner Dermot Shea said: “Opioids have a well-known history of causing overdoses, destroying lives, and devastating communities. That’s why the NYPD and its law enforcement partners work tirelessly to rid our city of these and other deadly drugs and work tirelessly to prosecute those who sell them. I want to thank the investigators and prosecutors who worked on this investigation. It is their work that brings some measure of justice to this family who lost their loved one to a senseless overdose.”
According to the allegations in the Indictment, the underlying complaint for KELLEHER, and information in the public record[1]:
On May 19, 2020, the Victim was found dead in his home in the Bronx, New York. Following an investigation by the NYPD, law enforcement agents identified KELLEHER as the dealer who sold the Victim pure fentanyl, which resulted in his death. Following the Victim’s death, law enforcement officers acting in an undercover capacity purchased additional quantities of fentanyl from KELLEHER, and his supplier, GONZALEZ, which were packaged exactly like those found in the Victim’s residence on the day of his death. KELLEHER and GONZALEZ also sold a firearm with a defaced serial number to an undercover law enforcement agent.
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KELLEHER, 35, and GONZALEZ, 43, both of the Bronx, New York, are each charged with conspiracy to distribute and possess with intent to distribute 400 grams and more of mixtures and substances containing a detectable amount of fentanyl, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years, and with use, carrying, and possession of a firearm in connection with a drug trafficking offense, which carries a mandatory minimum consecutive sentence of five years. KELLEHER is also charged with narcotics distribution resulting in the death of the Victim, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 20 years in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Ms. Strauss praised the outstanding investigative work of the NYPD. This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorney Michael R. Herman is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint, and the description of the Indictment and Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Monongalia County man sentenced for his role in a drug trafficking operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Daniel Meadows, of Morgantown, West Virginia, was sentenced today for his role in a drug trafficking conspiracy, Acting U.S. Attorney Randolph J. Bernard announced.
Meadows, 49, was sentenced to two years of probation, with the first eight months in home confinement. Meadows pleaded guilty in October 2020 to one count of “Unlawful Use of Communication Facility.” Meadows admitted to using a to distribute drugs in March 2020 in Monongalia County.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Drug Enforcement Administration, the Mon Metro Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the Monongalia County Sheriff’s Office investigated.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.
Senior U.S. District Judge Irene M. Keeley presided.
Related press release: https://www.justice.gov/usao-ndwv/pr/seventeen-people-charged-heroin-and-crack-cocaine-distribution-operation
Modesto Woman Charged with Submitting 121 Stimulus Check Claims Using PII Obtained Through Her Imprisoned SonRead the Press Release
SAN FRANCISCO – Sheila Denise Dunlap was arraigned in federal court today on an indictment charging her with conspiracy to commit wire fraud and aggravated identity theft, announced Acting United States Attorney Stephanie M. Hinds, Internal Revenue Service Criminal Investigation Acting Special Agent in Charge Michael Daniels, and Treasury Inspector General for Tax Administration J. Russell George.
Dunlap, 50, of Modesto, is charged with engaging in a wire fraud conspiracy from March 2020 through July 2020 involving the fraudulent filing for Economic Impact Payment (EIP) payments, commonly known as stimulus checks. EIP payments were included as one of the provisions of the CARES Act signed into law on March 27, 2020, to address the economic fallout of the COVID-19 pandemic in the United States. This provision of the CARES Act provided that individuals who made less than $99,000 on their 2019 tax returns and those whose income was sufficiently low that a tax return filing was not required (known as non-filers) were eligible to receive EIP funds. EIP payments amounted to as much as $1,200 per adult and $500 for a qualifying child.
According to the indictment, Dunlap conspired with her son to obtain the personal identifiable information (PII) of others and used that PII to apply for EIP funds. Her son is imprisoned in San Quentin State Prison. Dunlap communicated with him through telephone and text messaging. The indictment alleges Dunlap’s son sent Dunlap the PII of fellow prisoners and others and, in or around April 2020, he coordinated with an unknown third party to email Dunlap a spreadsheet containing the PII of 9,043 individuals. Dunlap and her son devised a strategy that the first applications should use the PII of the youngest adults on the list as they were more likely to be tax non-filers and thereby qualify for EIP funds. According to the indictment, Dunlap used the PII to file 121 claims for stimulus checks, with all applications directing payment to her bank account. On May 28, 2020, five EIPs in the amount of $1,200 each were electronically deposited into Dunlap’s bank account, each as a payment to a different individual. Dunlap immediately withdrew the funds and used them for personal expenses. In total, Dunlap filed claims for $145,200 in EIP payments.
Dunlap is charged with one count of wire fraud conspiracy, in violation of 18 U.S.C. § 1343 and 18 U.S.C. § 1349. The charge carries a maximum statutory penalty of 20 years in prison and a fine of $250,000 or not more than the greater of twice the gross gain or twice the gross loss. Dunlap is also charged with one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A, which carries a penalty of two years imprisonment and a maximum fine of $250,000. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The charges are merely allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Dunlap was arraigned today on the indictment before United States Magistrate Judge Thomas S. Hixson. Her next appearances are scheduled for May 27, 2021, at 10:30 a.m. for a hearing regarding release conditions before Magistrate Judge Hixson and a status hearing on May 28, 2021, at 11 a.m. before United States District Judge Susan Illston. She is out of custody on bond.
Annie Hsieh is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Llessica Chan Fierro, along with Ralph Banchstubbs and Maribel Gallegos. The prosecution is the result of an investigation by IRS-CI and TIGTA.
Mexican National Pleads Guilty to Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man pleaded guilty in federal court today to his role in a drug-trafficking conspiracy in which he sold more than 14 kilograms of methamphetamine and 30 firearms to an undercover federal agent.
Jose Alvarado, 28, a citizen of Mexico, pleaded guilty before U.S. District Judge Brian C. Wimes to one count of conspiracy to distribute methamphetamine from Aug. 15 to Dec. 4, 2019, and one count of possessing a firearm in furtherance of a drug-trafficking crime.
By pleading guilty today, Alvarado admitted that he met with an undercover federal agent on six separate occasions and sold the undercover agent a total of approximately 471 grams of methamphetamine and 30 firearms. The undercover agent offered to purchase a Springfield Armory 9mm handgun on Oct. 23, 2019, but Alvarado declined to sell the firearm. Alvarado explained that it was his personal firearm he used to defend himself and his residence.
Alvarado agreed to sell a larger quantity of methamphetamine to the undercover agent. On Dec. 4, 2019, Alvarado and the undercover agent met at Alvarado’s residence. Co-defendant Victor Gomez-Rendon, 30, a citizen of Mexico residing in Kansas City, Mo., arrived at the residence and delivered 14 kilograms of methamphetamine. Alvarado and Gomez-Rendon were arrested. The Springfield Armory 9mm handgun was found in Alvarado’s bedroom.
Gomez-Rendon has pleaded guilty to his role in the drug-trafficking conspiracy and awaits sentencing.
Under federal statutes, Alvarado is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant 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 United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Byron H. Black. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Safe Neighborhoods
The U.S. Attorney’s Office is partnering with federal, state, and local law enforcement to specifically identify criminals responsible for significant violent crime in the Western District of Missouri. A centerpiece of this effort is Project Safe Neighborhoods, a program that brings together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone. Project Safe Neighborhoods is an evidence-based program that identifies the most pressing violent crime problems in the community and develops comprehensive solutions to address them. As part of this strategy, Project Safe Neighborhoods focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Manchester Man Arrested for Multiple Armed RobberiesRead the Press Release
CONCORD - Hector Rivera Ayala, 32, of Manchester, has been charged in federal court with robbing a bank and four gas stations, Acting United States Attorney John J. Farley announced today.
According to court documents, Rivera Ayala was arrested on Wednesday in Massachusetts. Rivera Ayala is charged by complaint with committing a series of armed robberies in Manchester. The complaint alleges that Rivera Ayala robbed four gas stations between December 2, 2019, and December 21, 2019. The complaint further alleges that he robbed a bank on December 21, 2019, where he allegedly stole over $160,000.
Rivera Ayala is scheduled to appear before a United States Magistrate Judge later today.
The charges in the complaint are only allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This matter was investigated by the Federal Bureau of Investigation and the Manchester Police Department. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter.
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Man Pleads Guilty to Carjacking and Federal Gun OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced on Tuesday, May 18, 2021, that DONTE MOORE, an Orleans Parish resident, pled guilty as charged to a two-count superseding bill of information for carjacking, in violation of 18 U.S.C. § 2119(1) and for using and carrying a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(i).
At sentencing, MOORE faces up to a maximum term of imprisonment of fifteen (15) years, a maximum fine of up to $250,000 as to count one. As to count two, MOORE faces a consecutive statutory minimum of five years imprisonment up to a maximum of life in prison and a fine of up to $250,000. MOORE additionally faces a term of supervised release after imprisonment for a period of up to five (5) years as to both counts. MOORE’s sentencing is scheduled for Tuesday, August 31, 2021, before U.S. District Court Judge Susie Morgan.
The case was investigated by the New Orleans Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Elizabeth Privitera, Chief of the Violent Crime Unit.
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Man Charged with Attempted Kidnapping of Woman in BayamónRead the Press Release
SAN JUAN, Puerto Rico – A federal grand jury returned an indictment charging Darrel Meléndez-Rivera with an attempted kidnapping of a woman in Bayamón, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
According to the Government’s allegations, in July 2020, a couple withdrew money from a Banco Popular on Chardón Avenue in San Juan. They then went to a restaurant in Bayamón. After they finished eating, the woman walked to a car, while her husband was paying the bill. Meléndez-Rivera grabbed the woman and tried to push her into a van. She resisted and fell to the ground, screaming for help. Meléndez-Rivera then grabbed the woman’s purse. The van ran over one of the woman’s legs before driving away.
Assistant U.S. Attorney Jeanette Collazo of the Violent Crimes and National Security Section is in charge of the prosecution of the case. The Federal Bureau of Investigation is in charge of the investigation. If convicted, the defendant faces a sentence of up to twenty years in prison.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Malden Woman Pleads Guilty to Bank Fraud and Aggravated Identity TheftRead the Press Release
BOSTON – A Malden woman pleaded guilty last week in connection with a scheme to embezzle more than $795,000 from her employer.
Kayla Figelski, 32, pleaded guilty to seven counts of bank fraud and one count of aggravated identity theft. U.S. District Court Chief Judge F. Dennis Saylor IV scheduled sentencing for Sept. 15, 2021. Figelski was indicted in January 2020.
Figelski admitted to stealing at least $796,747 from her employer, a law firm in Malden, by forging checks to herself from her employer’s checking accounts, including conservatorship, trust and estate administration accounts her employer maintained for its elderly clients and their estates. Figelski deposited the checks into her own account, from which she withdrew the funds, or directly cashed the checks.
The charge of bank fraud provides a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million. The charge of aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. Valuable assistance was provided by the Malden Police Department. Assistant U.S. Attorney Kristen A. Kearney of Mendell’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
Lincoln Man Sentenced for COVID-Related EPA ViolationRead the Press Release
Acting United States Attorney Jan Sharp announced that Brandon Weber, age 47, of Lincoln, was sentenced May 20, 2021 by United States Magistrate Judge Cheryl R. Zwart to one year of probation for the Unlawful Sale of an Unregistered Pesticide. Weber was ordered to pay a $300 fine.
The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136 et seq., regulates the distribution, sale, and use of all pesticides in the United States, including antimicrobial pesticides. Antimicrobial pesticides are substances used to destroy or suppress the growth of harmful microorganisms – such as the coronavirus that causes COVID-19 – on inanimate objects and surfaces. All pesticides distributed or sold in the United States must be registered by the Environmental Protection Agency (“EPA”). Registrants of antimicrobial pesticide products that claim to control microbes that pose a threat to public health must additionally submit efficacy data to support these public health claims.
On April 5, 2020, Weber posted an advertisement on Craigslist for a product he advertised as “Ionic Colloidal Silver.” The April 5, 2020, advertisement’s title was “Disinfectant to help with Homemade Mask - $15.” On April 6, 2020, Weber posted a second advertisement titled “Disinfectant*-Antibacterial – Ionic Colloidal Silver – 20ppm - $15.” Both advertisements were made for the geographic location of the Lincoln, Nebraska area. The listings claimed the ionic colloidal silver product could “be sprayed on your homemade mask material and when the germs come in contact with the ionic silver particles, the silver destroys their DNA structure and kills them.” The ads further stated, “[t]he added benefit of using this type of disinfectant is that the microscopic silver ions remain on the material to kill future germs when contact is made. Just respray as you feel necessary.” Additionally, the listings referenced a document titled “EPA-Registered Ionic Silver Disinfectant Effective Against 2009 H1N1 Flu Strain.”
On April 16, 2020, an undercover agent with the EPA contacted Weber to set up a controlled purchase of the “Ionic Colloidal Silver” product. The undercover agent met with Weber on April 17, 2020, to purchase five one-gallon bottles of the ionic colloidal silver product at a cost of $40 per gallon for a total of $200. During this meeting, Weber told the undercover agent he was producing this product at his home and could produce five to ten gallons per day. Weber instructed the undercover agent to spray the product directly onto cloth masks or clothes and that the product could be used as a hand sanitizer. Weber gave the undercover agent documentation and a list of reference materials. The documents included one study, entitled “Antibacterial activity of silver-killed bacteria: the ‘zombies’ effect” and a compilation of various product advertisements with the title “This article is provided for referance [sic] use only to explain how ionic silver works as a [sic] antibacterial.” That same day, Weber delivered a one-quart sample of the “Ionic Colloidal Silver” to the Nebraska State Patrol along with reference materials about the product. Weber knew this product was not registered with the EPA.
On April 22, 2020, a search warrant was executed at Weber’s residence in Lincoln, Nebraska. During the execution of the search warrant, law enforcement located a machine to manufacture the “Ionic Colloidal Silver” product and other products associated with the manufacture of the product. Weber was interviewed and admitted to posting the advertisements to sell the “Ionic Colloidal Silver,” selling the “Ionic Colloidal Silver” to the undercover agent and distributing a sample to the Nebraska State Patrol.
The “Ionic Colloidal Silver” product that was sold by Weber to the undercover agent was submitted to the EPA’s National Enforcement Investigations Center (NEIC) for testing. The NEIC found that the concentration of silver was greater than the 20ppm of total silver that Weber represented.
“The defendant in this case put personal profit above the safety of consumers by marketing and selling an unregistered disinfectant over the Internet,” said Lance Ehrig, Special Agent in Charge of EPA’s Criminal Investigation Division in Nebraska. “EPA and our law enforcement partners will continue to focus efforts on stopping the sale of these illegal products. Consumers can help protect themselves by visiting epa.gov/coronavirus for a list of EPA approved disinfectant products.”
This case was investigated by the Environmental Protection Agency-Criminal Investigation Division. EPA-CID was assisted by the Federal Bureau of Investigation, Homeland Security Investigations, and the Internal Revenue Service during the execution of the search warrant at Weber’s residence.
Lebanon Man Indicted for Drug Trafficking and Firearms OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on May 19, 2021, Jorge Roque, Jr., age 34, of Lebanon, Pennsylvania, was indicted by a federal grand jury for drug trafficking and firearms offenses.
According to Acting United States Attorney Bruce D. Brandler, the indictment charges Roque with possession with the intent to distribute cocaine, methamphetamine, and heroin on or about December 19, 2020, in Lebanon County. The indictment also charges Roque with being in possession of a firearm in furtherance of drug trafficking, and with possession of a firearm by a convicted felon.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Christian T. Haugsby is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state, and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The 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.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Upon conviction, Roque faces a maximum penalty of up to life imprisonment, a fine of up to $1,000,000, and a term of supervised release of up to life. Under the Federal Sentencing Guidelines, the Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offenses; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Kerrville VA Medical Center Pharmacy Technician Arrested for Stealing Prescribed Narcotics from the U.S. MailRead the Press Release
SAN ANTONIO – Federal authorities have charged a pharmacy technician at the Veterans Affairs Medical Center in Kerrville (VAMC) with stealing hydrocodone and oxycodone prescriptions from the VAMC mailroom and from mailboxes at some 40 locations in Kerrville, Ingram and Center Point.
A federal criminal complaint charges 35-year-old Kerrville resident Scott M. Brown with one count of theft of U.S. Mail. According to the complaint, the Kerr County Sheriff’s Office received several theft reports from victims beginning in March 2021. Victims reported that their prescriptions sent from the VAMC were missing. According to the complaint, Brown allegedly stole packaged narcotics from inside the VAMC mailroom as well as residential mailboxes between March and April 2021.
U.S. Attorney Ashley C. Hoff; Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, Houston Field Office; U.S. Postal Inspection Service (USPIS) Inspector in Charge Adrian Gonzalez, Houston Division; U.S. Department of Veterans Affairs Office of Inspector General (VAOIG) Special Agent in Charge Jeffrey Breen, South Central Field Office; and Kerr County Sheriff L.L. Leitha made today’s announcement.
Upon conviction, Brown faces up to five years in federal prison. He remains in custody awaiting a detention hearing scheduled for 10:45 a.m. on Monday in San Antonio before U.S Magistrate Judge Henry Bemporad.
The DEA, USPIS, VAOIG and the Kerr County Sheriff’s Office are investigating this case. Assistant U.S. Attorney Priscilla Garcia is prosecuting this case.
A criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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Kent, Washington, man pleads guilty to sexual abuse of 14-year-oldRead the Press Release
Tacoma – A 36-year-old Kent, Washington, man pleaded guilty today in U.S. District Court in Tacoma to sexual abuse for an August 2020 sexual assault on a 14-year-old child, announced Acting U.S. Attorney Tessa M. Gorman. Defendant Christopher James Kuna was at a gathering with family and close friends in Olympic National Park when he provided alcohol to the victim and committed the sexual assault. Kuna is scheduled to be sentenced by U.S. District Judge Benjamin H. Settle on August 17, 2021.
According to the plea agreement, Kuna was a trusted family friend of the victim and the victim’s family. During the evening hours of August 24 and early morning of the 25th, Kuna plied the victim with alcohol causing intoxication to such an extent that the victim vomited. Kuna then sexually assaulted the victim. Because he was more than 20-years older and much larger than the victim, the victim was fearful of resisting Kuna. Kuna told the victim he had been thinking about the assault for a long time.
A trusted family friend assisted the family in making a report to local law enforcement. Upon realizing jurisdiction lay within a national park, local law enforcement referred the matter to the National Park Service Investigative Division who took over the investigation.
Under the terms of the plea agreement, the government will not recommend a sentence above 87 months in prison. Judge Settle is not bound by the recommendation and can impose any sentence allowed by law. The maximum penalty is life in prison.
Kuna will be required to register as a sex offender following any prison term.
The case was investigated by the National Park Service and the FBI.
The case is being prosecuted by Assistant United States Attorneys Angelica Williams, Jonas Lerman, and Hilary Stuart.
Jefferson County Man Sentenced to 6 ½ Years in Prison for Possession of Child PornographyRead the Press Release
BIRMINGHAM, Ala. – A federal judge today sentenced a Jefferson County man on child exploitation charges, announced United States Attorney Prim F. Escalona and Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr.
United States District Judge Madeline Hughes Haikala sentenced James Curtis Brasher, 49, of Warrior, to 78 months in prison followed by 15 years of supervised release for possession of child pornography. Brasher was also ordered to pay $69,000.00 in restitution to the victims. Brasher pleaded guilty to this charge in November 2020.
According to the plea agreement, Brasher accessed the Darknet through the use of the Tor application to view and obtain child pornography. A forensic examination of the digital devices located at Brasher’s residence revealed over 58,000 images of child pornography, including images of children under the age of 12 years old, and child erotica. This conviction will require Brasher to register as a sex offender in accordance with the Sex Offender Registration and Notification Act (SORNA).
FBI Birmingham's Child Exploitation Human Trafficking Task Force (CEHTTF) investigated the case, with the assistance of the Alabama Law Enforcement Agency and Warrior Police Department. Assistant United States Attorney R. Leann White prosecuted the case.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 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 (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Jackson Man Pleads Guilty to Wire Fraud Scheme Designed to Fraudulently Obtain GI Bill Funds from the U.S. Department of Veterans AffairsRead the Press Release
Jackson, Miss. – A Jackson man pled guilty today before U.S. District Judge Carlton W. Reeves to two counts of wire fraud in a scheme to steal federal funds, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jeffrey Breen with the U.S. Department of Veterans Affairs Office of Inspector General.
Anthony Kelley, 59, of Jackson, owns Trendsetters Barber College in Jackson, Mississippi. Trendsetters was certified by the VA and Mississippi’s State Approving Agency to offer courses which would be covered by GI Bill benefits for veterans enrolled in the school’s programs. Beginning at least as early as October 2016 and continuing through March 2019, Kelley offered a Master Barber course that was not an accredited course of study approved by the state’s Board of Barber Examiners. Kelley fraudulently represented that this course was an approved course of study and, as a result, was allowed to collect GI Bill money from veterans enrolled in the program. At least two veterans were enrolled in the Master Barber program using their GI Bill benefits and, as a result, the VA made interstate wire transfers of federal funds to Kelley based on his fraudulent representations.
“The VA Office of Inspector General (OIG) is committed to protecting the Post-9/11 GI Bill and other critical programs that provide benefits to our nation’s veterans,” said Department of Veterans Affairs OIG Special Agent in Charge Jeffrey Breen of the South Central Field Office. “The defendant’s guilty plea is a reflection of the hard work and dedication of the U.S. Attorney’s Office staff and the VA OIG case agent that led to the successful outcome of this important investigation.”
An Information was filed against Kelley on April 22, 2021 charging him with two counts of wire fraud.
Kelley will be sentenced on August 24, 2021 and faces a maximum penalty of 20 years in prison on each count.
The Department of Veterans Affairs Office of Inspector General investigated the case. The case is being prosecuted by Assistant United States Attorney Andrew W. Eichner.
Jackson Man Charged in Bankruptcy Fraud SchemeRead the Press Release
Jackson, Miss. – A Jackson man has been indicted by a federal grand jury for fraud related to filing in bankruptcy court, announced Acting U.S. Attorney Darren J. LaMarca and FBI Special Agent in Charge Michelle Sutphin.
Jon Darrell Seawright, 49, of Jackson, appeared before U.S. Magistrate Judge F. Keith Ball today for an initial appearance and arraignment on the indictment. The case is currently scheduled to go to trial on June 28, 2021 before United States District Judge Henry T. Wingate in Jackson.
Seawright is charged with one count of Bankruptcy Filing in Furtherance of a Fraud.
According to the indictment, on January 18, 2019, at 3:30 p.m., Seawright signed and emailed to an insurance agent a completed Insurance Proposal stating that “there are no pending or anticipated bankruptcy, receivership or insolvency proceedings involving” the insured company ALEXANDER SEAWRIGHT TRANSPORTATION LLC, and “there are no known or anticipated circumstances which will impair” ALEXANDER SEAWRIGHT TRANSPORTATION LLC’s “ability to fulfill its obligations under” its insurance contract. In fact, as Seawright well knew, a Petition for Bankruptcy had already been filed on that date, January 18, 2019, at 11:13 a.m.
The indictment further alleges that the fraud consisted of deceiving the insurers and financers into committing to the insurance policies, which, after the bankruptcy court filing, they would be barred by the bankruptcy laws from cancelling or recovering payment from Seawright and his company. The business of ALEXANDER SEAWRIGHT TRANSPORTATION LLC centered on trucking, and ALEXANDER SEAWRIGHT TRANSPORTATION LLC could not stay in business and make money without insurance for its cargos and insurance for its trucks. Without property damage insurance coverage, ALEXANDER SEAWRIGHT TRANSPORTATION LLC would be unable to operate its tractors and trailers in interstate commerce.
A public hearing in the United States Bankruptcy Court in March 2019, resulted in a Bankruptcy Court order releasing the insurers from the contract commitment. The bankruptcy case of ALEXANDER SEAWRIGHT TRANSPORTATION has since then been converted to a Chapter 7 liquidation of the company.
"The federal Bankruptcy Courts exist to safeguard the interests of both creditors and debtors as they make their best efforts to work out equitable settlement plans. To manipulate the protections of bankruptcy law and wield them in the service of fraud in business perverts our system of justice," said Acting U.S. Attorney Darren J. LaMarca.
The case is being investigated by the Federal Bureau of Investigation. The criminal case is being prosecuted by Assistant United States Attorney Theodore Cooperstein.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Irvington Zoning Officer Admits Attempted ExtortionRead the Press Release
NEWARK, N.J. – An employee of the Township of Irvington Building and Construction Department (TIBCD) today admitted soliciting corrupt payments from a man posing as a land developer in New York and New Jersey in exchange for securing the necessary documentation and approvals required to obtain building permits for a property in Irvington, New Jersey, Acting U.S. Attorney Rachael A. Honig announced.
Derrick James, 60, of Irvington, New Jersey, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with one count of attempted extortion under color of official right. James remains on bail pending sentencing on this charge.
According to documents filed in the case and statements made in court:
From September 2018 to December 2018, while employed as a zoning officer with TIBCD, James represented to a cooperating witness who posed as a land developer in New York and New Jersey that James could facilitate the acquisition of the necessary permits for the proposed rehabilitation of a certain residential property in Irvington. The TIBCD processed the issuance of permits for construction, renovations, and alterations to building structures in Irvington in accordance with the New Jersey Uniform Construction Code, which required that contractors registered and licensed with the State of New Jersey perform certain residential construction. The TIBCD also required the seal of a licensed New Jersey contractor on building, plumbing, and electrical permit applications to issue permits. James met with the cooperating witness on two occasions, during which he accepted a total of approximately $1,500 in cash payments from the cooperating witness. During the meetings, James outlined a corrupt arrangement whereby in exchange for a $1,000 payment and a further $1,000 payment per permit, James would arrange for licensed New Jersey contractors to place their official seals on permit applications for the Irvington property. James further guaranteed that an Irvington inspector would inspect the property and grant the necessary approvals. James told the cooperating witness that the cooperating witness’ payments would also be passed on to the licensed New Jersey contractors and Irvington inspector that James recruited to the scheme.
The count of attempted extortion under color of official right carries a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the Special Prosecutions Division.
Iowa Man Sentenced to 20 Years for Distribution of a Controlled Substance Resulting in Serious Bodily InjuryRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Doon, Iowa, man convicted of Distribution of a Controlled Substance Resulting in Serious Bodily Injury was sentenced on May 17, 2021, by U.S. District Judge Karen E. Schreier.
Rylan Wayne Walth, a/k/a “Rylan Conrad,”, age 34, was sentenced to 240 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Walth was indicted by a federal grand jury on October 6, 2020. He pled guilty on March 4, 2021.
The conviction stemmed from an incident on or about September 8, 2019, when Walth, knowingly and intentionally distributed fentanyl and said fentanyl resulted in the serious bodily injury of a victim. The victim smoked the fentanyl provided by Walth and sustained an overdose, which was reversed by the administration of Narcan. Fentanyl is a Schedule II controlled substance.
This case was investigated by the Sioux Falls Police Department and the Homeland Security Investigations. Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Walth was immediately turned over to the custody of the U.S. Marshals Service.
Indiana Man Going to Prison for 10 Years on Child Pornography ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Dakota Casey, 29, of Lafayette, Indiana, who was convicted of transportation of child pornography, was sentenced to serve 120 months in prison by U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorneys Meghan A. Tokash and Laura A. Higgins, who handled the case, stated that on June 27, 2018, the defendant attempted to enter Canada from the United States using the Peace Bridge. Officials from Canada Border Services Agency (CBSA) discovered images of child pornography involving three minor victims on defendant’s cell phone. The defendant was refused entry into Canada, and he and his phone were turned over to U.S. authorities. In addition, between 2017, and June 27, 2018, Casey communicated with minors under the age of 18 years of age via the internet. Knowing that each was under the age of 16, the defendant requested that four victims take and send him child pornography images of themselves. Some of the images Casey persuaded two of the victims to produce portrayed sadistic conduct.
The sentencing is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly. Additional assistance was provided by the Canada Border Services Agency.
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High Speed Chase and Shooting at Police Leads to Federal Prison SentenceRead the Press Release
RALEIGH, N.C. – A Johnston County man was sentenced today to 120 months in prison and three years of supervised release for possession of a firearm by a convicted felon. On October 22, 2020, without a plea agreement, Justin Lynn Chapman pled guilty to the indictment which charged conduct that concluded on November 30, 2018.
According to court documents and other information presented in court, on November 30, 2018, troopers with the North Carolina State Highway Patrol (SHP) in Raleigh, North Carolina, conducted a traffic stop on a vehicle for a false license plate. The vehicle pulled off to the shoulder of the road; however, as the trooper approached the driver, the vehicle drove away.
The vehicle passed several vehicles in no passing zones, ran numerous stop signs, traveled left of center, and reached speeds of 110 mph. During the pursuit, the passenger, Chapman, partially exited the vehicle’s sunroof with a firearm and fired five shots at the pursuing patrol vehicle. As the vehicle fled down rural roads, Chapman continued to exit the sunroof and fired an additional nine shots toward the patrol vehicles. The SHP requested assistance from the Johnston County Sheriff’s Office in Smithfield, North Carolina, who deployed stop sticks on the roadway. The fleeing vehicle’s tires were punctured and after a short distance the vehicle came to a stop.
Chapman fled the vehicle and after a brief man hunt was captured. A search of Chapman’s person recovered a 9mm handgun with a 30-round extended magazine. Chapman was interviewed subsequent to his arrest and admitted to discharging his weapon at the patrol vehicle.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The North Carolina State Highway Patrol, the Johnston County Sheriff’s Office, and The Bureau of Alcohol, Tobacco, Firearms, And Explosives investigated the case and Assistant U.S. Attorney Daniel W. Smith prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-CR-00376-D.
Harrison County man sentenced for firearms and drug chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – John Soloman Banish, Jr., of West Milford, West Virginia, was sentenced today to 51 months of incarceration for firearms and drug charges, Acting U.S. Attorney Randolph J. Bernard announced.
Banish, 25, pled guilty in November 2020 to one count of “Unlawful Possession of a Firearm” and one count of “Possession with Intent to Distribute Methamphetamine.” Banish, a person prohibited from having a firearm because of a prior conviction, had a 9mm pistol and a .380 caliber pistol in April 2020 in Harrison County.
Assistant U.S. Attorney Sarah E. Wagner prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and West Virginia State Police investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Harrison County Man Pleads Guilty to Firearms OffenseRead the Press Release
Gulfport, Mississippi – Lon Edward Preston, Jr., of Harrison County, Mississippi pleaded guilty today to knowingly possessing a firearm after having been previously been committed to a mental institution, announced Acting U.S. Attorney Darren J. LaMarca of the Southern District of Mississippi and Kurt Thielhorn, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”.)
According to court documents, on March 19, 2020, local law enforcement officers were notified that Preston had made threats to come to another individual’s home and that police were going to be forced to kill him on the front lawn. Surveillance video showed Preston driving by the individual’s home. Law enforcement officers then stopped Preston near the home. At that time, Preston was in the possession of three firearms.
A subsequent investigation revealed that in January of 2018, Preston was committed to a mental institution. Therefore, he was prohibited from possessing firearms. Additionally, he had previously been indicted in state court for his involvement in an alleged aggravated assault, where it was alleged that he shot someone in December of 2018.
Law enforcement officials were also able to determine that between September of 2019 and March of 2020, Preston had engaged in a course of conduct through which he attempted to harass or intimidate the individual who contacted police on March 19, 2020. This course of conduct included using text messages, I-messages, voice mails, and various communication devices to threaten to kill and/or harm the individual, often in graphic terms.
Preston pleaded guilty today and is scheduled for sentencing on August 17, 2021 at 1:30 p.m. He faces a maximum penalty of ten years in prison.
The D’Iberville Police Department, Harrison County Sheriff’s Department, and ATF investigated the case.
Assistant U.S. Attorneys Jonathan Buckner and Erica Rose are prosecuting the case.
Gulfport Man Sentenced for Firearms OffenseRead the Press Release
Gulfport, Miss. – A Gulfport, Mississippi man was sentenced today to 33 months in prison for being a convicted felon in possession of a firearm, announced Acting U.S. Attorney Darren J. LaMarca of the Southern District of Mississippi and Michelle Sutphin, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi.
According to court documents, on October 20, 2020, Biloxi Police Officers conducted a traffic stop on a vehicle driven by Marquise Spanks, 30, of Gulfport. A subsequent search of the vehicle resulted in the discovery two firearms, one of which was stolen. Spanks was previously convicted of felony possession of a controlled substance in 2014 and is prohibited from possessing a firearm.
Spanks was taken into custody. After being advised of his Miranda Rights, Spanks admitted to previously purchasing the firearms.
The FBI and Biloxi Police Department investigated the case.
Assistant U.S. Attorney Jonathan Buckner prosecuted 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.
Grand Island Man Pleads Guilty to Aggravated Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Timothy L. Mulvey, 34, of Grand Island, pleaded guilty before U.S. District Judge Richard J. Arcara to two counts of aggravated bank robbery, which carries a maximum penalty of 50 years in prison, and a $250,000 fine.
Assistant U.S. Attorney Joshua Violanti, who is handling the case, stated that on June 27, 2018, the defendant entered the Northwest Savings Bank on Grand Island Boulevard on Grand Island and, wearing a disguise, approached the teller, displayed in his waistband a dangerous weapon that looked like a handgun, and demanded cash. Mulvey said to the teller, “you have 15 seconds to give me everything you have” and followed up stating “50’s and 100’s.” The victim teller passed the defendant approximately $2,044.00 in United States currency and Mulvey exited the bank. Thereafter, on July 11, 2018, the defendant entered the M&T Bank on Military Road in Niagara Falls. Wearing a disguise and carrying a bag, Mulvey approached the teller and demanded cash. The defendant told the victim teller “you have 30 seconds to give me everything” and pulled a dangerous weapon that looked like a black gun halfway out of his bag. The victim teller passed the defendant approximately $913.00 in United States currency, and Mulvey exited the bank.
At the time of the bank robberies, Mulvey was on New York State parole. After the robbery, he met with his parole officer, Niagara Falls Police detectives, and members of the FBI for multiple interviews. During those interviews, the defendant provided conflicting and false information regarding his whereabouts on July 11, 2018. Mulvey also provided his cellphone to law enforcement and consented to its download. However, the defendant, with the assistance of his then girlfriend, attempted remotely to erase the phone while it was in the possession of law enforcement. When confronted about the wiping of his phone, Mulvey falsely blamed his employer.
Between July 2018 and July 2019, while in the custody, the defendant’s telephone calls were subject to recording and monitoring. On July 22, 2018, Mulvey called his then girlfriend from jail and instructed her to search in the basement insulation of their shared residence and to take whatever she found and “Go find a dumpster somewhere and throw everything out.” The defendant told his girlfriend that New York State parole had planted something in the basement insulation “probably near the washer and dryer.” The girlfriend found a black gun wrapped in clear plastic and a black rectangular cartridge in the insulation of the basement ceiling. After discovering those items, the girlfriend went to Mulvey’s parents’ house and gave the gun to the defendant’s father, co-defendant Lawrence Mulvey. Soon thereafter, that gun, which had been used in the robbery of the M&T Bank on July 11, 2018, was thrown away.
Mulvey made several other phone calls related to the investigation of the bank robberies to his then girlfriend, mother (co-defendant Cheryl Mulvey), and others. On a September 27, 2018, recorded jail call, the defendant instructed his girlfriend that if she were to speak to law enforcement again, she should tell them that she was drunk and coerced to give her prior statement. During a March 2, 2019, recorded jail call, Mulvey and his mother discussed Cheryl Mulvey’s pending grand jury appearance. The defendant stated, “You have the right to plead the Fifth. You don’t have to say anything to these people if you don’t want to.” On other calls during March 2019, Mulvey and his mother discussed his girlfriend and her relationship to the investigation. During one call, the defendant asked Cheryl Mulvey after her grand jury appearance, “Well, they, you made it pretty clear that she was drinking during this time, right?”
Charges remain pending against Mulvey’s parents Lawrence and Cheryl, and his sister Kelsey for their roles in this case. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty. Kelsey Mulvey, a former nurse at Roswell Park Cancer Center, previously pleaded guilty in a separate case to tampering with a consumer product for stealing controlled medications from medication dispensing machines and is awaiting sentencing.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, the Erie County Sheriff’s Office, under the direction of Sheriff Timothy Howard, and the Niagara Falls Police Department, under the direction of Superintendent John Faso.
Timothy Mulvey is scheduled to be sentenced on September 2, 2021, before Judge Arcara.
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Four Men Charged for Large-Scale Distribution of Synthetic Cannabinoids Through Multiple WebsitesRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), announced the unsealing of an Indictment charging NIAZ KHAN, NOEL SANABRIA, ANDRE GOMES, and PATRICK PATTERSON with conspiracy to distribute and possess with intent to distribute synthetic cannabinoids and to distribute controlled substances using the internet. The case has been assigned to United States District Judge J. Paul Oetken.
KHAN, SANABRIA, GOMES, and PATTERSON were arrested this morning. KHAN, SANABRIA, and GOMES will be presented later today in Manhattan federal court before United States Magistrate Judge Robert W. Lehrburger. PATTERSON will be presented tomorrow in San Francisco federal court before United States Magistrate Judge Thomas S. Hixson.
Manhattan U.S. Attorney Audrey Strauss said: “Trafficking of synthetic cannabinoids – sometimes called K2 or Spice – poses a serious threat to public health and safety. Packaged attractively to appeal to teenagers and young adults, synthetic cannabinoids are in reality toxic concoctions that can be very dangerous to consume. As alleged, the defendants used websites they operated to distribute massive quantities of synthetic cannabinoids throughout the United States. Thanks to our law enforcement partners, the defendants have been arrested and their dangerous business has been dismantled.”
NYPD Commissioner Dermot Shea said: “Whether synthetic cannabinoids are trafficked on the street or through the internet, the NYPD and our law enforcement partners will work to stop the source of these dangerous substances and hold accountable those responsible for the sales. I thank and commend the detectives of the NYPD’s Intelligence Bureau, members of the U.S. Attorney’s Office for the Southern District, the New York Field Office of Homeland Security Investigations, and the United States Postal Inspection Service whose dedication resulted in these charges and ended this national trafficking operation.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said: “Smokable synthetic cannabinoids (SSCs) are unlawful and their usage has caused serious medical issues to include overdose deaths. As alleged, the defendants blatantly disregarded public safety while hiding behind a website in an effort to make a quick profit. HSI will continue to work with its law enforcement partners to protect the American public, arrest these individuals, seize their assets, and take down websites that advertise the sale of narcotics.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Synthetic cannabinoids contain psychoactive chemicals that can result in hallucinations and pose other dangers. The accused in this case may have thought their alleged criminal drug enterprise would go undetected by law enforcement. Today’s arrests should send a strong message to drug traffickers that Postal Inspectors and their law enforcement partners will vigorously investigate and bring them to justice.”
According to the allegations in the Indictment[1]:
From February 2019 until May 2021, KHAN, SANABRIA, GOMES, and PATTERSON operated a scheme to distribute massive quantities of smokeable synthetic cannabinoids (“SSC”), colloquially referred to as “K2” or “Spice,” containing controlled substances and/or a controlled substance analogue, throughout the United States.
KHAN, SANABRIA, GOMES, and PATTERSON sold SSC through at least four different websites that they operated, namely K2HerbStore.com, HerbalPlug.com, LegalAromaTherapy.com, and LegalHerbalSmack.com (collectively, the “Websites”). The SSC the defendants sold through the Websites included dried, shredded plant material onto which synthetic cannabinoid chemicals had been sprayed. The SSC distributed by the scheme was branded with colorful graphics and distinctive names, including “Train Wrecked,” “Scooby Snax Kush,” “Bizarro,” “AK 47,” “Hi5 Triple X,” “Evil Santa,” “Krazy Turkey,” “Sexy Monkey,” “W.T.F.,” and “COVID-19 Coronavirus Limited Edition.”
In an effort to conceal their criminal activity and advertise their illegal products, KHAN, SANABRIA, GOMES, and PATTERSON used names for certain of the Websites that falsely represented that their SSC products were “legal.” The defendants also sometimes misleadingly described their SSC products publicly as “not for human consumption,” “potpourri,” “herbal incense,” and “legal aroma therapy,” when, in fact, the defendants intended that the SSC would be consumed by drug users and they knew that their conduct was unlawful.
Over the course of the scheme, KHAN, SANABRIA, GOMES, and PATTERSON shipped thousands of packages of SSC through the United States mail from the Bronx, New York, to customers in all 50 states and the District of Columbia, which contained a total of hundreds of kilograms of SSC. The defendants earned more than approximately $1 million from their illegal marketing and sale of SSC during the course of the scheme.
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KHAN, 34, of Queens, New York, SANABRIA, 57, of the Bronx, New York, GOMES, 38, of Queens, New York, and PATTERSON, 32, of the Bronx, New York, are each charged with conspiracy to distribute and possess with intent to distribute controlled substances and a controlled substance analogue, and to distribute controlled substances using the internet, which carries a maximum sentence of 20 years. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Ms. Strauss praised the outstanding investigative work of the NYPD, HSI, and the USPIS. The long-term investigation of this case was partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”), a federal grant program that invests in law enforcement partnerships to build safe and healthy communities.
This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Rebecca T. Dell and Robert B. Sobelman are in charge of the prosecution.
The charge contained in the Indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Four Defendants Charged in Coast-To-Coast Bank Fraud ConspiracyRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Patrick J. Freaney, Deputy Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), Philip R. Bartlett, Inspector-in-Charge of the United States Postal Inspection Service’s New York Division (“USPIS”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the indictment of DRAMION COOMBS, OLUFEMI NATHANIEL ITIOWE, TANZANIA HOGAN, and DEIBI SANCHEZ for conspiracy to commit bank fraud, bank fraud, and aggravated identity theft, in connection with a scheme to order bank checks in the names of multiple victims and then fraudulently deposit those checks drawn from the victims’ accounts into accounts that the defendants controlled. All four defendants were arrested pursuant to a complaint and presented before United States Magistrate Judges on April 20, 2021. ITIOWE and SANCHEZ were arrested in New York, COOMBS was arrested in Pennsylvania, and HOGAN, was arrested in California.
U.S. Attorney Audrey Strauss said: “As alleged, Dramion Coombs, Olufemi Nathaniel Itiowe, Tanzania Hogan, and Deibi Sanchez conspired to defraud multiple banks of nearly $1 million by obtaining the identities of other people and cashing fraudulent checks from their bank accounts. Thanks to the terrific investigative work of our law enforcement partners, these defendants are now facing prosecution for their alleged crimes.”
Deputy Special Agent in Charge Patrick J. Freaney said: “The U.S. Secret Service, alongside our valued partners from the New York City Police Department and the U.S. Postal Inspection Service, continue to prioritize financial fraud investigations. In this instance, the accused allegedly utilized social engineering techniques to gain access to numerous bank accounts to make fraudulent deposits totaling nearly $1 million. This case illustrates the perils of social engineering and highlights the importance of authentication practices and procedures to better secure financial and personal information.”
Police Commissioner Dermot Shea said: “These defendants allegedly orchestrated a nationwide cyber scheme to stalk victims and steal their money. But the United States Secret Service and the United States Postal Service, together with our NYPD detectives and the prosecutors of the United States Attorney’s Office in the Southern District of New York, meticulously tracked their digital moves to piece together this important case and ensure justice will be served.”
Inspector-In-Charge Bartlett said: “These individuals engaged in an old school low tech check/bank fraud scam. While their scheme was unsophisticated, they managed to steal hundreds of thousands of dollars from financial institutions. Their crimes would have continued had it not been for the collaborative efforts of law enforcement.”
According to the allegations in the Indictment[1] unsealed today:
Between at least September 2018 and November 2018, COOMBS, ITIOWE, HOGAN, and SANCHEZ executed schemes to defraud financial institutions of more than $890,000. They did so by depositing false and fraudulent checks drawn from the accounts of at least three different New York victims into banks located in New York and California. In addition, between at least December 2019 and July 2020, COOMBS deposited multiple additional false and fraudulent checks into his own bank account and deposited checks into a separate bank account that he opened in the name of another individual.
COOMBS, 37, of East Stroudsburg, Pennsylvania, is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison, two counts of bank fraud, which each carry a maximum sentence of 30 years in prison, and two counts of aggravated identity theft, which each carry mandatory minimum sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
ITIOWE, 47, of Brooklyn, New York, HOGAN, 47, of Canoga Park, California, and SANCHEZ, 48, of Bronx, New York, are charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison, one count of bank fraud, which carries a maximum sentence of 30 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the United States Secret Service, New York City Police Department, and United States Postal Inspection Service for their outstanding investigative work.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Brandon D. Harper is in charge of the prosecution.
The charges in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Michigan Resident Admits Hacking UPMC HR Databases and Stealing Employees’ Personal InformationRead the Press Release
PITTSBURGH, PA - A Michigan man pleaded guilty today to hacking the human resources databases of the University of Pittsburgh Medical Center and stealing Personally Identifiable Information (PII) of more than 65,000 UPMC employees, Acting United States Attorney Stephen R. Kaufman announced today.
Justin Sean Johnson, aka TheDearthStar and Dearthy Star on the dark web, 30, of Detroit, Michigan, pleaded guilty to Counts 1 and 39 of a 43-count Indictment before Chief United States District Judge Mark R. Hornak. Johnson was indicted by a federal grand jury in Pittsburgh on May 20, 2020, and the case was unsealed on June 18, 2020 following his arrest.
In connection with the guilty plea, the court was advised that Johnson, known on the dark web as TheDearthStar and Dearthy Star, infiltrated and hacked into the UPMC human resource server databases in 2013 and 2014 and stole sensitive PII and W-2 information belonging to tens of thousands of UPMC employees. The information was sold by Johnson on dark web forums for use by conspirators, who promptly filed hundreds of false 1040 tax returns in 2014 using UPMC employee PII. These false 1040 filings claimed hundreds of thousands of dollars of false tax refunds, which they converted into Amazon.com gift cards, which were then used to purchase Amazon merchandise which was shipped to Venezuela.
Additionally, Johnson, from 2014 through 2017 stole and sold nearly 90,000 additional (non-UPMC) sets of PII to buyers on dark web forums, which could be used to commit identity theft and bank fraud.
The scheme resulted in approximately $1.7 million in false tax return refunds.
The law provides for a maximum sentence of five years in prison and a fine of not more than $250,000 for the conspiracy to defraud the United States; and a mandatory 24 months in prison and a fine of not more than $250,000 for each count of aggravated identity theft. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Pending sentencing the Court ordered Johnson remain detained.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
Agents from the Internal Revenue Service-Criminal Investigation, the United States Secret Service, the United States Postal Inspection Service and Homeland Security Investigations conducted the investigation leading to the prosecution of Johnson.
Former Managing Director and Two Former Loan Officers Plead Guilty for Roles in Widespread Bank-Fraud SchemeRead the Press Release
The former managing director of residential lending and two former loan officers of a financial institution headquartered in Southfield, Michigan, pleaded guilty to participating in a years-long scheme to originate fraudulent residential-mortgage loans through the bank’s low-documentation Advantage Loan Program.
According to court documents and statements made in court, YiHou Han, 39, of San Francisco, California, Hao Liang “Frank” Hu, 48, of Chino Hills, California, and Amy Lu, 33, of Brea, California, each caused the submission of fraudulent loan applications to the financial institution, referred to as Financial Institution A, under the Advantage Loan Program, which resulted in the origination of loans. Han served as a senior loan officer, and eventually as the managing director of residential lending, at Financial Institution A, while Hu and Lu served as residential-loan officers. At various times during the conspiracy that ran from 2011 until 2019, Han, Hu, and Lu falsified and caused to be falsified borrowers’ income and debt-to-income ratios, job titles, employment histories, and supporting documents, among other things. As part of the scheme, they instructed borrowers to fabricate deposit histories and to transfer funds to third parties, who would then transfer the funds back to the borrowers as “gifts” in order to conceal the true source of the funds and to promote the underlying fraud scheme. Han, Hu, and Lu also knowingly facilitated the approval of loans to borrowers involved in money laundering and tax evasion.
As part of her guilty plea, Han admitted that she and her co-conspirators undermined Financial Institution A’s ability to implement effective anti-money laundering controls to monitor, investigate, and report potentially suspicious activity involving Advantage Loan Program borrowers. Han further admitted that her falsification of documents and material information about borrowers’ qualifications for the Advantage Loan Program was done with the knowledge and encouragement of members of Financial Institution A’s senior management in order to increase the volume of loans originated under the Advantage Loan Program, which in turn increased the bank’s revenue and the co-conspirators’ personal commissions.
During the conspiracy, Han originated at least 1,288 Advantage Loans, Hu originated at least 825 Advantage Loans, and Lu originated at least 358 Advantage Loans, representing a total of at least 2,471 loans and more than $876 million in credit extend by Financial Institution A. Han, Hu, and Lu admitted that the overwhelming majority of these loans were based on one or more fraudulent actions and that primarily as a result of the origination of these fraudulent loans Han earned approximately $3,381,355.26 in commissions, Hu earned approximately $2,519,488.98 in commissions, and Lu earned approximately $990,847.58 in commissions.
Han pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud, while Lu previously pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud, and Hu previously pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud. Han is scheduled to be sentenced on Aug. 18, 2021, while Lu and Hu are scheduled to be sentenced on June 28, 2021, and June 27, 2022, respectively. Lu faces a maximum sentence of five years in prison, and Hu and Han each face a maximum sentence of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office; Inspector in Charge Delany De Léon-Colón of the Criminal Investigation Group of the U.S. Postal Inspection Service (USPIS); Acting Special Agent in Charge Francis Mace of the Office of Inspector General for the Federal Deposit Insurance Corporation (FDIC-OIG), San Francisco Region; and Special Agent in Charge Scott K. Redington of the Office of Inspector General – Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (CFPB), San Francisco Western Division, made the announcement.
The FBI, USPIS, FDIC-OIG, and OIG-Board of Governors of the Federal Reserve System and CFPB investigated the case.
Trial Attorneys Kevin Lowell and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case.
Former Clarksville School Nurse Facing Federal Charges in Child Pornography InvestigationRead the Press Release
NASHVILLE – A criminal complaint unsealed today charged a former Clarksville, Tennessee school nurse with attempted production of child pornography, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee.
Leon B. Hensley, 40, formerly of Clarksville and currently living in Lake Whales, Florida, was arrested this morning near his home in Florida. He will make an appearance before a U.S. Magistrate Judge in Tampa later today.
According to the criminal complaint, from August 2017 through November 8, 2019, Hensley was employed as a nurse at North East High School (NEHS) in Clarksville. In November 2019, the Clarksville Police Department (CPD) received a referral from the Tennessee Department of Children Services advising that Hensley sent a digital image, via text message, of a nude adult female to a minor female in the Clarksville area. Hensley had been communicating with the minor female via text and asked her to help him with a photo shoot by posing for photos.
During the follow-on investigation by the CPD and a search of his phone, several images were discovered depicting the sexual exploitation of children. During a subsequent search warrant for Hensley’s house, numerous electronic devices were seized, including a small covert video camera. The initial examination of Hensley’s phone lead to the discovery of nude images which were identified as female students at NEHS. Due to the enormous amount of imagery on Hensley’s devices, the United States Secret Service joined the investigation and conducted a more thorough forensic examination of Hensley’s electronic devices. This examination located several imagery files depicting what appeared to be unidentified minor females photographed surreptitiously by a hidden camera while using a restroom. Other imagery files depict unidentified females in hospital examination rooms, pre-operation or post operation rooms, and nude females in tanning beds.
Last month, HSI agents joined the investigation and to date, more than 700 imagery files have been discovered of minor females in a single bathroom in various stages of undress and/or utilizing the bathroom facilities. The images appear to have been taken by a hidden or concealed camera. The camera was positioned in such a manner as to capture or attempt to capture the lewd and lascivious display of the genitalia and positioned in the same location in all of the images. The camera was positioned directly across and in front of the toilet seat, at toilet seat level. Further investigation determined that the bathroom depicted in the images is the private student bathroom in the nurse’s station at NEHS. Other images found geolocate to Tennova Hospital in Clarksville, where Hensley was employed prior to his employment at NEHS.
The investigation is continuing and to date, more than 40 victims are suspected to be students at NEHS and range in age from 12-17.
Hensley faces a mandatory minimum of 15 years, and up to life in prison if convicted.
This case is being investigated by Homeland Security Investigations; the U.S. Secret Service; the FBI; and the Clarksville Police Department. Assistant U.S. Attorneys Monica Morrison and Carrie Daughtrey are prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Former CEO of Real Estate Private Equity Investment Firm Pleads Guilty to $58 Million Securities FraudRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that ERIC MALLEY, the founder and former chief executive officer of real estate private equity investment firm MG Capital Management L.P., pled guilty today to a securities fraud scheme in which he fraudulently induced hundreds of individuals to invest a total of approximately $58 million in two real estate investment funds by, among other things, lying about his own prior experience and investment track record and about the nature and characteristics of those funds. MALLEY pled guilty before United States District Judge Edgardo Ramos.
U.S. Attorney Audrey Strauss said: “As Eric Malley has now admitted, he lied to his victims to induce them to invest approximately $58 million in his investment funds, promising victims they would reap the benefits of owning equity in Manhattan real estate and falsely touting his prior experience. Those lies continued for years, all while Malley enriched himself. As today’s plea demonstrates, our Office remains committed to protecting investors from investment professionals’ deceptive and fraudulent conduct.
According to the allegations contained in the Complaint and the Information and based on statements made in Manhattan federal court:
MALLEY founded MG Capital Management L.P. (“MG Capital”) in approximately January 2013, and served as its chief executive officer and chief investment officer from that time until approximately December 2019. During that time, MALLEY formed two real estate investment funds (collectively, “the Funds”) – MG Capital Management Residential Fund III (“Fund III”), in approximately February 2014, and MG Capital Management Residential Fund IV (“Fund IV”), in approximately September 2017.
MALLEY promised, when soliciting investors and throughout the life of the Funds, that the Funds would provide investors with the opportunity to own an equity interest in hundreds of luxury income-producing properties across Manhattan, following a debt-free investment strategy informed by sophisticated proprietary analytics that MALLEY had developed over the course of his career in real estate. MALLEY touted two purportedly extremely successful prior funds he had formed, Fund I and Fund II; assured investors that the Funds would be and were debt-free; and represented that the properties held by the Funds would be and were leased primarily to corporate tenants, including, among others, well known technology companies and a prominent university based in New York City. But MALLEY’s representations were false. His claims about the existence and performance of Funds I and II were largely fabricated; the Funds were not debt-free, but instead held mortgaged properties; the properties that made up the Funds were almost entirely leased to individual, not corporate, tenants; and the Funds held far fewer properties than MALLEY had represented.
Through these and other fraudulent misrepresentations and omissions throughout the life of the Funds, MALLEY induced approximately 335 investors to invest a total of approximately $58 million in the Funds. The Funds together incurred millions of dollars in losses, yet MALLEY distributed at least $278,000 to himself in his capacity as general partner in connection with Fund III, and did not disclose Fund IV’s losses until approximately two years into Fund IV’s operation.
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MALLEY, 50, of New Canaan, Connecticut, pled guilty to one count of securities fraud, which carries a maximum potential sentence of 20 years in prison. The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing has been scheduled for September 16, 2021, at 11:00 a.m.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation and thanked the New York Regional Office of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Task Force. Assistant United States Attorney Elizabeth A. Hanft is in charge of the prosecution.
Felon with multiple convictions charged with possessing a firearm, also possessed a meat cleaver and a daggerRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Rafael Ortiz, 44, of Ascutney, Vermont appeared today in federal court after being charged with being a felon in possession of a firearm. Ortiz was ordered detained by United States Magistrate Judge Kevin Doyle pending a detention hearing currently scheduled for Monday.
According to court records and other information presented in court, on May 19, 2021, law enforcement officers were searching for Rafael Ortiz because he had multiple outstanding warrants for Vermont state charges, including warrants for aggravated assault with a deadly weapon, assault and robbery with a weapon, and eluding law enforcement officers. While in Lyndon, Vermont, officers saw Ortiz walking and attempted to arrest him. Officers instructed Ortiz multiple times to raise his hands and get on the ground. Ortiz refused and ran from the officers. During his flight, Ortiz pulled a black firearm from his waistband and tossed it into some nearby bushes. An officer’s body camera footage captured Ortiz throwing his gun. Eventually, officers caught and arrested Ortiz, and found Ortiz to be in possession of a meat cleaver and a dagger. The firearm Ortiz discarded was identified as a Sig Sauer P320 9-millimeter handgun with an obliterated serial number.
On May 20, 2021, Ortiz was charged via criminal complaint with possession of a firearm by a convicted felon. The United States Attorney emphasizes that the charges in the complaint are accusations, and that the defendant is presumed innocent unless and until proven guilty.
Acting United States Attorney Jonathan A. Ophardt stated: “The United States Attorney’s Office and our law enforcement partners are focused on apprehending violent criminals plaguing our communities. Federal firearm statutes remain key tools in addressing potential violence before it occurs, and holding individuals accountable for criminal conduct with firearms. I am greatly appreciative of the investigatory efforts of the Vermont Drug Task Force and the Vermont State Police, as well as the vital assistance of the St. Johnsbury Police Department.”
Caledonia County State’s Attorney Jessica Zaleski stated: “Thank you to our local, State and Federal law enforcement for working collaboratively to apprehend Mr. Ortiz. It is this type of collaboration that allows us to best serve the community and get dangerous offenders out of the neighborhoods of Caledonia County.”
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian/.
The United States is represented in this matter by Assistant U.S. Attorney Jeffrey W. Davis. Assistant Federal Public Defender David McColgin represents the defendant.
Federal Jury Convicts Itasca County Man for Vehicular Assault on White Earth ReservationRead the Press Release
ST. PAUL, Minn. – A federal jury convicted an Itasca County man today on charges of assaulting an individual with his vehicle, resulting in serious bodily injury, announced Acting U.S. Attorney W. Anders Folk.
Kevin Roger Doerr, 35, was convicted on one count of assault with a dangerous weapon and one count of assault resulting in serious bodily injury.
“Today, a jury held Mr. Doerr accountable for assaulting an individual and terrorizing a small, quiet community,” said Acting U.S. Attorney W. Anders Folk. “I commend the work of the prosecution team and our investigative partners who pursued justice in this case.”
According to court documents and evidence presented at trial, on April 7, 2020, Doerr was driving erratically through Elbow Lake Village on the White Earth Indian Reservation. Neighbors called 911 to report that a silver Chevrolet Monte Carlo, driven by Doerr, was trying to run people over and chasing people through the neighborhood. When law enforcement arrived, they found a chaotic scene with neighbors outside and two badly injured victims whom Doerr had hit with his vehicle. Law enforcement took Doerr into custody and the victims were airlifted to the hospital.
A sentencing date has yet to be scheduled. At sentencing, a federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
This case is the result of an investigation conducted by the White Earth Police Department, the Becker County Sheriff’s Office, the FBI Headwaters Safe Trails Task Force and the Mahnomen County Sheriff’s Office.
Special Assistant U.S. Attorney Gina L. Allery and Assistant U.S. Attorney Deidre Y. Aanstad tried the case.
Federal Grand Jury B Indictments Announced- MayRead the Press Release
Acting United States Attorney Clint Johnson today announced the results of the May 2021 Federal Grand Jury B.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged violations of federal law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Bryce Martin Agnew. Aggravated Sexual Abuse of a Minor in Indian Country. (21-CR-224) Agnew, 77, of Bartlesville, is charged with knowingly engaging in a sexual act with a minor under the age of 12, on July 9, 2009. The FBI and Bartlesville Police Department are the investigative agencies.
David Abel Alvarado. Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country. (21-CR-232) Alvarado, 19, of Tulsa, is charged with assaulting a victim on April 26, 2021, by stabbing the victim in the chest. The FBI and Tulsa Police Department are the investigative agencies.
Lucas Wayne Armentor. Assault of an Intimate/Dating Partner by Strangling and Suffocating in Indian Country (Count 1); Assault by Striking, Beating, and Wounding (Misdemeanor) (Counts 2 and 4); and Kidnapping in Indian Country (Count 3). (21-CR-218) Armentor, 37, of Skiatook, is charged with strangling and suffocating an intimate partner on March 27, 2021. He is further charged with striking, beating and wounding the female victim on March 27, 2021, and April 30, 2021. Finally, he is charged with kidnapping the victim on April 30, 2021. The FBI and Skiatook Police Department are the investigative agencies.
Denim Lee Blount; Hunter Lee Hobbs. Conspiracy to Carry, Use, Brandish, and Discharge a Firearm During and in Relation to a Crime of Violence; Attempted Carjacking; Carrying, Using Brandishing, and Discharging a Firearm During and in Relation to a Crime of Violence. (21-CR-233) On May 8, 2021, at 10:29 pm, two men later identified as Hobbs and Blount approached a man who was attempting to hook up his vehicle and trailer. The victim stated that one of the defendants pointed a shotgun at him and the other pointed a rifle at him. According to court documents, the two ordered the victim to get out of his vehicle, and when the victim refused, both men allegedly shot him. The two then fled west in a dark colored SUV, leaving the victim and his vehicle behind. The victim was transported to St. Francis Hospital for non-life threatening injuries. The FBI, Tulsa Police Department, and U.S. Marshals Service are the investigative agencies.
Eric Tyrone Bradford. First Degree Murder in Indian Country; Causing Death by Using and Discharging a Firearm During and in Relation to Crimes of Violence. (21-CR-234) Bradford, 44, is charged with shooting and killing Daniel Watashe on April 30, 2016. He is further charged with using and discharging a firearm during and in relation to crimes of violence- First Degree Murder and Second Degree Murder in Indian country. The FBI and Tulsa Police Department are the investigative agencies.
Travas Ramon Estrada. Assault of an Intimate/Dating Partner by Strangling and Suffocating in Indian Country; Assault Resulting in Substantial Bodily Injury to an Intimate/Dating Partner in Indian Country; Kidnapping in Indian Country. (21-CR-219) Estrada, 44, of Tulsa, is charged with strangling and suffocating his intimate partner on April 24, 2020. He is also charged with assaulting the woman repeatedly by striking her in the head and throwing her against the wall, which resulted in substantial bodily injury. Finally, the defendant is charged with kidnapping the victim between April 24, 2020, and April 29, 2020. The FBI and Tulsa Police Department are the investigative agencies.
Jock O’Dell Gray. Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country. (21-CR-235) Gray, 41, of Jay, is charged with assaulting a female victim with a machete on April 21, 2021. The FBI and Delaware County Sheriff’s Office are the investigative agencies.
Lee Owen Hallford. Assault With a Dangerous Weapon, with Intent to do Bodily Harm in Indian Country; Failure to Register as a Sex Offender. (superseding, 21-CR-23) Hallford, 39, of Tulsa, is charged with assaulting a male with a knife on Jan. 27, 2021. He is further charged with failing to register as a sex offender. The FBI and Tulsa Police Department are the investigative agencies.
Weston James Hill; Rayna Shianne Parkerson. Possession of Methamphetamine with Intent to Distribute; Possession of Heroin with Intent to Distribute. (21-CR-236) Hill, 29, of Broken Arrow, and Parkerson, 23, of Coweta, are charged with knowingly possessing with intent to distribute 50 grams or more of a methamphetamine. The two are further charged with knowingly possessing with intent to distribute heroin. The Drug Enforcement Administration and Broken Arrow Police Department are the investigative agencies.
Arnold Dean Howell Jr.; Katherine Elaine Freeman. First Degree Murder in Indian Country. (superseding) (21-CR-121) Howell, 30, and Freeman, 33, are charged with aiding and abetting one another when killing Michael Mondier by stabbing him to death during the perpetration of a robbery on April 13, 2015. The FBI, Oklahoma State Bureau of Investigation, Creek County Sheriff’s Office, and Sapulpa Police Department are the investigative agencies.
Jeffrey Arch Jones. Aggravated Sexual Abuse of a Child in Indian Country (counts 1 and 3); Abusive Sexual Contact of a Child in Indian Country (count 2). (superseding) (21-CR-23) Jones, 31, allegedly engaged in sex acts with a minor under 12 years of age from Sept. 29, 2015 to Sept 28, 2016. He is also charged with abusive sexual contact of a second child under the age of 12 from Oct. 9, 2014, to Sept. 30, 2016. Finally, he is charged with engaging in sex acts with the second child from Oct. 9, 2014, through Sept. 30, 2016. The Broken Arrow Police Department and FBI are the investigative agencies.
Thomas Anthony Pearce. Coercion or Enticement of a Minor; Production of Child Pornography in Indian Country; Possession of Child Pornography in Indian Country; Distribution of Marijuana. (21-CR-237) According to court documents, Pearce, 53, of Glenpool, coerced a minor to engage in sexual activity from Feb. 3-Feb 8, 2021. During the same time, Pearce also coerced the minor to engage in sexually explicit conduct for the purpose of producing images. Pearce is also charged with possessing and knowingly accessing child pornography. Finally, Pearce is charged with distributing marijuana to the minor. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Jenks Police Department conducted the investigation.
Robert Ray Sheets. Accessory After the Fact to First Degree Murder in Indian Country. (21-CR-240) Sheets, 42, of Owasso, is charged with assisting Tommy Alexander Jones and Wesley Johnston in order to hinder and prevent the offenders’ apprehension after they allegedly committed first degree murder. The crime occurred in October 2018. The FBI, Tulsa Police Department and Tulsa County Sheriff’s Office are the investigative agencies.
Gerald Smith. First Degree Burglary in Indian Country (count 1); Kidnapping in Indian Country (counts 2 and 3); Assault Resulting in Substantial Bodily Injury to an Intimate/Dating Partner in Indian Country (count 4); Robbery in Indian Country (count 5). (21-CR-225) On May 4, 2021, Smith, 27, of Tulsa, is alleged to have forcibly opened a locked sliding door at a former girlfriend’s apartment and entered without permission. He then threatened the victim and told her she needed to get him a hotel room. Due to previous violent acts, the victim went with the defendant, taking her young child with her. Once at the hotel, the woman attempted to escape with her child but was unable. Smith then beat the woman, striking her in the head repeatedly which resulted in substantial bodily injury. Then the defendant allegedly drove off in the victim’s vehicle. The FBI and Tulsa Police Department are the investigative agencies.
Louden Dewayne Swaim. Felon in Possession of a Firearm and Ammunition. (21-CR-238) Swaim, 35, of Bluejacket, is charged with being a felon in possession of a GForce Arms 12-gauge shotgun; Smith & Wesson .223 rifle; and 116 rounds of ammunition. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Craig County Sheriff’s Office are the investigative agencies.
Aleta Necole Thomas. False Statement to a Financial Institution (counts 1-5). (21-CR-239) Thomas, 42, of Tulsa, is charged with lying to five different banks for the purpose of securing multiple loans as part of the Paycheck Protection Program, which is administered by the Small Business Administration. Some of the false businesses Thomas allegedly used to apply for the loans were Lead Us Kids Home Daycare, Coming Correction Community Ministries, Coming Correct Community Ministries II, and Lead Us Kids Daycare II. The Office of Inspector General Board of Governors of the Federal Reserve System; U.S. Department of Treasury Inspector General for Tax Administration, and Small Business Administration Office of Inspector General; are the investigative agencies.
Clinton Kyle Veley. Felon in Possession of a Firearm and Ammunition; Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country. (21-CR-220) Veley, 39, of Nowata, is charged with being a felon in possession of a Rock Island Armory M5 12-gauge pump action shotgun and ammunition. He is further charged with assaulting a man on Oct. 14, 2020, by using the shotgun to strike the victim in the face, causing severe lacerations. The FBI, Nowata Police Department and Cherokee Nation Marshal Service conducted the investigation.
Kevin White. First Degree Murder in Indian Country. (21-CR-222) White,62, is charged with the first degree murder of Donald Iwanski by repeatedly beating him with a metal pipe on Feb. 4, 1995. The FBI is the investigative agency.
Edgar Gene Willhite. Assault Resulting in Serious Bodily Injury in Indian Country. (21-CR-226) Willhite, 57, of Tulsa, is charged with assaulting a man by punching him, causing the victim to fall. The assault resulted in substantial bodily injury. The FBI and Tulsa Police Department are the investigative agencies.
Steven Dale Worcester. Conveying False and Misleading Information Concerning an Explosive Device. (21-CR-221) Worcester is charged with conveying false and misleading information about an explosive when he made statements to a city of Tulsa bus driver that “you better get off now and call somebody because I have a bomb.” The FBI and Tulsa Police Department are the investigative agencies.
Farrell, PA Woman Distributed 11 Images of Child Sexual ExploitationRead the Press Release
PITTSBURGH - A former resident of Farrell, Pennsylvania, pleaded guilty in federal court to a charge of Distribution of Material Depicting the Sexual Exploitation of a Minor, Acting United States Attorney Stephen R. Kaufman announced today.
Mary Jacobs, age 28, pleaded guilty to one count before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that from February 27, 2017 through February 28, 2017, Jacobs distributed approximately 11 still images depicting the sexual exploitation of a minor to an individual using "Skout", an online chat forum. Jacobs had been communicating online with the individual for a short period and she acknowledged producing the images at his request. The child victim had not yet attained the age of 12 years.
Judge Bissoon scheduled sentencing for September 14, 2021. The law provides for a total sentence of not less than five and not more than 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, Jacobs remains in custody.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Pennsylvania State Police conducted the investigation that led to the prosecution of Jacobs.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Fairfield Felon Arrested for Two Counts of Possessing AmmunitionRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment against Lawrence Guerain Fleming, 37, of Fairfield, charging him with two counts of being a felon in possession of ammunition, Acting U.S. Attorney Phillip A. Talbert announced. The indictment was unsealed following Fleming’s arrested on May 19.
According to court documents, on Feb. 1, 2020, Fleming lost control of his motorcycle and crashed on Highway 50 in Sacramento County. A witness stopped to help Fleming, and Fleming asked the witness to conceal a ghost gun loaded with eight rounds of ammunition. When the police arrived, the witness told them about the firearm. A warrant was later issued for Fleming’s arrest. On March 17, 2021, police officers stopped Fleming for speeding and arrested him on this warrant. During the arrest, Fleming told officers he had a weapon on his person. This weapon was also a ghost gun and was loaded with a high-capacity magazine containing 14 rounds. A search of Fleming’s car during his federal arrest on May 19 led to the discovery of a third ghost gun, also loaded with an extended magazine, in the trunk of his vehicle.
Fleming cannot lawfully possess a firearm or ammunition because he has a prior federal felony conviction in the Northern District of California for assaulting a United States Postal Service carrier with a firearm. Fleming pleaded guilty to this offense on Oct. 21, 2005.
This case is the product of an investigation by the California Highway Patrol, the Fairfield Police Department, the Sacramento County District Attorney’s Office, the Solano County District Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the FBI’s Solano County Violent Crimes Task Force. Assistant U.S. Attorneys Alstyn Bennett and Adrian T. Kinsella are prosecuting the case.
If convicted, Fleming faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The 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. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
El Paso Man Sentenced to 30 Years in Federal Prison for Production of Child PornographyRead the Press Release
EL PASO – A federal judge today sentenced 25-year-old El Paso resident Javier Ivan Rubio Morales to 30 years in federal prison for production of child pornography.
In addition to the prison term, Senior U.S. District Judge David Briones ordered that Rubio pay $30,000 in restitution and be placed on supervised release for a period of 10 years after completing his prison term.
“The significant sentence imposed today demonstrates that we will simply not tolerate this despicable and harmful conduct,” said U.S. Attorney Ashley C. Hoff. “Working with our partners in law enforcement, we will continue to identify, apprehend and remove child predators from our communities.”
On February 11, 2021, Rubio pleaded guilty to one count of production of child pornography. By pleading guilty, Rubio admitted that for approximately two years beginning in May 2018, he coerced two minor females, ages six and seven initially, to engage in sexually explicit conduct so that he could produce visual depictions of such conduct using his cell phone.
According to court records, federal and state authorities executed a search warrant at the defendant’s residence on May 22, 2020, and seized multiple electronic items. A forensics examination of the seized items revealed the presence of multiple images and videos depicting the minors engaged in sexually explicit acts with an adult male.
“This repugnant exploitation of innocent children has no place in society. HSI will vigorously pursue anyone involved in sexually abusing minor victims and producing visual depictions of the sexual abuse. We will work tirelessly to prevent the exploitation of children to the fullest extent of the law,” said Homeland Security Investigations (HSI) Special Agent in Charge Erik P. Breitzke, El Paso. “HSI is committed to collaborating with our law enforcement partners to aggressively investigate these types of cases to ensure predators are found in our communities and face justice.”
Rubio has remained in federal custody since his arrest in May 2020.
The HSI Cyber Crimes Group, with assistance from the El Paso County Sheriff’s Office, investigated this case. Assistant U.S. Attorney Herbert Bunton prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Eagle Butte Man Indicted on Drug ChargeRead the Press Release
Acting United States Attorney Dennis Holmes announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Possession with Intent to Distribute a Controlled Substance.
Allen Michael Garreau, age 37, was indicted on May 11, 2021. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 14, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of five years up to life in federal prison and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on March 16, 2021, in Eagle Butte, Garreau did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine.
The charge is merely an accusation and Garreau is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Garreau was released on bond pending trial. A trial date has not been set.
Denver, N.C. Man Pleads Guilty to Federal Charges for Defrauding His Former Employer of More Than $4 MillionRead the Press Release
CHARLOTTE, N.C. – Michael Guzman, 43, of Denver, N.C., appeared before U.S. District Judge David S. Cayer and pleaded guilty to federal charges for defrauding his former employer of more than $4 million, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins Acting U.S. Attorney Stetzer in making today’s announcement.
According to the filed criminal information to which Guzman pleaded guilty, other documents filed in this case and statements made in court, from June 2019 to May 2020, Guzman executed a scheme to defraud his employer, identified in court documents as Company A, of more than $4 million, by improperly auctioning off Company A’s assets and funneling the proceeds through shell companies he formed to perpetuate the fraud.
According to plea documents, Guzman was employed by Company A from March 2008 until the company fired him for his conduct in May 2020. Company A is a large equipment rental company headquartered in Fort Mill, S.C., that rents out on-road and off-road machinery for construction and other purposes. During the relevant timeframe, Guzman worked for Company A as a Fleet Operations Manager, and was responsible for, among other things, the disposal of aged equipment, also known as assets.
As Guzman admitted in court today, during the relevant time period, he arranged for approximately 398 assets of Company A to be auctioned off through an online auction house that buys and sells used heavy construction equipment, referred to in court document as Company B. To perpetuate the fraud, Guzman represented to Company B that the assets were owned by Guzman’s shell companies, Second Life Equipment LLC and All Seasons Sales and Service, when in fact the majority of the assets were still owned by Company A. In his capacity as a Fleet Operations Manager, Guzman was able to hide the scheme from Company A by manipulating internal company records.
According to court documents, Guzman arranged for the proceeds of the sales to be sent to a bank account that he controlled, and used the fraudulent proceeds to buy a condominium in South Carolina, a plot of land in New York, an RV vehicle, a boat, and multiple cars and trucks.
Guzman pleaded guilty to wire fraud, which carries a maximum prison term of 20 years, and money laundering, which carries a statutory maximum of up to 10 years in prison. Guzman has also agreed to pay forfeiture money judgment in the amount of at least $4,044,475, which is the amount constituting the proceeds of the violations in the charging document, and to forfeit assets purchased with fraud proceeds, as well as monies in multiple bank accounts.
Guzman was released on bond following his guilty plea. A sentencing date has not been set.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked the FBI for their investigation which led to today’s guilty plea.
Assistant U.S. Attorney Maria Vento, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.