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30 April 2021
Two Michigan Men Plead Guilty After Leading Law Enforcement on A High Speed Chase from Lewiston to DunkirkRead 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 Donyell Williams, 26, and Johnny Greer, 19, both of Michigan, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to a charge of high speed flight from an immigration checkpoint. The charge carries carry a maximum penalty of five years in prison and $250,000.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that on March 5, 2021, at approximately 9:54 p.m., defendant Williams was driving a Jeep Commander with Ohio license plates on the Lewiston-Queenston Bridge. Co-defendant Greer was a passenger in the vehicle. As the defendants drove towards the Lewiston Port of Entry, they failed to stop for federal inspection despite numerous “stop” signs posted by Customs and Border Protection. Williams instead proceeded to accelerate through a commercial truck lane and then drove around a tire deflating strip. While being pursued by CBP officers and the New York State Police, Williams drove on the I-190 south to I-90 west at speeds ranging from 95 mph to 110 mph. A few hours later, at approximately 12:30 a.m. on March 6, 2021, the Jeep Commander was located on the side of the road in the vicinity of Dunkirk, NY, and Williams and Greer were arrested.
The pleas are the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy, and the New York State Police, under the direction of Major Jennifer H. Gottstine.
Defendant Greer is scheduled to be sentenced on July 27, 2021, and defendant Williams is scheduled to be sentenced on August 25, 2021, both before Judge Sinatra.# # # #
Two Men Indicted for Allegedly Trafficking Firearms in Chicago AreaRead the Press Release
CHICAGO — Two men have been indicted by a federal grand jury in Chicago for allegedly trafficking firearms.
SCOTT TREECE, 33, of Rockford, Ill., and KYLE HALL, 21, of Skokie, Ill., illegally dealt firearms in the Northern District of Illinois from November 2020 to January 2021, according to an indictment unsealed today in U.S. District Court in Chicago. In social media postings in January, Treece offered to purchase firearms in Georgia on behalf of others and distribute the guns in the Chicago area, according to a criminal complaint against Treece previously filed in the case. In one of his social media postings, Treece allegedly posted an image of ammunition and stated, “I’m tellin y’all no bread no poles so y’all better make your minds up I already got 2 [expletive] who sent bread so.”
Treece was arrested in February after he sold a loaded handgun for $550 to a buyer who, unbeknownst to Treece, was cooperating with law enforcement, the complaint states. The transaction allegedly occurred in a retail store parking lot in Addison, Ill.
Treece and Hall pleaded not guilty today during arraignments in federal court in Chicago. Treece remains detained in federal custody, while Hall was ordered released with bond conditions.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Jasmina Vajzovic represents the government.
The indictment charges Treece with one count of dealing firearms without a license, two counts of illegally possessing firearms as a previously convicted felon, and one count of witness tampering. The witness tampering charge alleges that while in custody following his arrest, Treece instructed an individual not to speak to law enforcement about Treece’s alleged trafficking offenses and to tell another person to do the same.
Hall is charged with one count of dealing firearms without a license, and one count of knowingly selling and disposing a firearm to a convicted felon, Treece.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Witness tampering is punishable by up to 20 years in federal prison. The counts for illegal possession and selling a firearm to a convicted felon each carry a maximum sentence of ten years. Dealing firearms without a license is punishable by up to five years. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
Swampscott Financial Advisor Agrees to Plead Guilty in Theft of Former Client’s Retirement AssetsRead the Press Release
BOSTON – A Swampscott financial advisor has agreed to plead guilty to defrauding an elderly victim and her bank by stealing the victim’s retirement assets.
Felix Gorovodsky, 29, agreed to plead guilty to one count of bank fraud. Under the terms of the plea agreement, the parties have agreed to a sentence, subject to the Court’s approval, of 33 months in prison, two years of supervised release and restitution of at least $318,000.
According to the charging document, Gorovodsky served as a financial advisor for the victim. In or about July 2019, the victim terminated that advisor relationship and revoked the power of attorney she had previously granted him. Approximately nine months later, Gorovodsky accessed and liquidated the victim’s bank account, transferring more than $250,000 into his own bank account. Gorovodsky then used the victim’s stolen retirement funds for personal expenses, including paying off more than $100,000 in federal student loans. As part of the scheme, Gorovodsky forged the victim’s signature on a purported “gift letter,” which he sent to the bank in an attempt to legitimize the fraudulent transfer.
The charge of bank fraud provides for a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million. 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. The Department of Education, Office of Inspector General provided valuable assistance with the investigation. Assistant U.S. Attorney Ian Stearns of Mendell’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
Stratford Man Pleads Guilty to Federal Car Theft OffenseRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that CHRISTOPHER MULKERN, also known as “Chucky,” 21, of Stratford, pleaded guilty today before U.S. District Judge Kari A. Dooley in Bridgeport to a federal car theft offense.
According to court documents and statements made in court, the FBI, Connecticut State Police and local police have been investigating multiple car theft rings in Connecticut, and violent crimes that are being committed using stolen vehicles.
The investigation revealed that Mulkern and others have stolen numerous motor vehicles, and used the stolen vehicles to travel throughout Connecticut and to neighboring states to steal other vehicles and the valuables inside, including credit cards, cellular telephones, and firearms. Mulkern typically frequented upper middleclass neighborhoods to go “car-checking” or “jigging,” which involves an attempt to open the door of a motor vehicle and, if successful, steal the vehicle and/or valuables inside.
On December 1, 2020, Mulkern and an associate stole a Porsche Panamera from a residence in Westport, Connecticut. Shortly after midnight on December 2, law enforcement in Westerly, Rhode Island, identified the stolen Porsche and attempted to stop the car. The Porsche drove recklessly, at speeds of at least 86 mph, between Rhode Island and Connecticut, and evaded police who, for safety reasons, were forced to terminate pursuit.
At approximately 4 a.m. on December 2, Mulkern and others used the stolen Porsche to steal a Dodge Challenger from a residence in Milford, Connecticut. In the evening of December 2, Stratford Police spotted and attempted to stop the Porsche, which was being driven by Mulkern. During the pursuit, Mulkern rammed a car stopped at a red light at an intersection, drove up on the sidewalk and through the red light, and then struck a second vehicle, causing the second vehicle to flip onto its roof. Mulkern continued to drive the damaged Porsche onto I-95 into Bridgeport, where Mulkern and an associate were eventually apprehended as they attempted to enter another stolen Audi A4 that was parked on Gregory Street. A search of the stolen Audi revealed approximately 13 key fobs for other vehicles, and a search of the Porsche revealed five cellphones. In addition, Mulkern possessed two stolen credit cards, and his associate possessed a key fob for a stolen Dodge, which was subsequently located parked on Main Street in Bridgeport.
Mulkern has been detained since his arrest.
Mulkern pleaded guilty to one count of transportation of a stolen vehicle, which carries a maximum term of imprisonment of 10 years. Judge Dooley scheduled sentencing for August 2, 2021. Mulkern has also agreed to pay restitution to at least seven owners of vehicles he stole and/or damaged.
This matter is being investigated by the Federal Bureau of Investigation, the Connecticut State Police and the Stratford, Milford, Stonington, Westport, Bridgeport, New Haven, Meriden, and Westerly (R.I.) Police Departments. The case is being prosecuted by Assistant U.S. Attorney Sarah P. Karwan.
St. Francois County man pleads guilty to possession of child pornographyRead the Press Release
ST. LOUIS – Tyson Rutledge, 48, of Bonne Terre, Missouri, pleaded guilty to one count of possession of child pornography. Rutledge appeared, today, before United States District Court Judge Audrey G. Fleissig.
On July 22, 2019, Rutledge sent a message to an undercover FBI agent participating in a social media chat room. Rutledge and the undercover FBI agent began to talk about children. Rutledge asked the undercover FBI agent if the undercover FBI agent had sex with kids. Rutledge said he likes “young” and has “no limits.” Rutledge sent the undercover FBI agent a graphic image showing a minor female and her genitals.
FBI agents, after securing a federal search warrant, searched Rutledge’s home on January 15, 2020. Agents seized a laptop, three iPhones, a DVD, a CD, a HTC cell phone and iPod. During the search, Rutledge was not home, but an FBI agent spoke with him by cellphone and he agreed to meet at Rutledge’s place of employment later in the morning. Rutledge met with agents and went to the St. Francois Sheriff’s Department and participated in a recorded interview.
Agents, after examining the seized laptop and phones, discovered child pornography images. Agents also discovered histories for downloads, web searches, website visits and chats concerning the sexual exploitation of children.
Judge Fleissig has set sentencing for August 6, 2021 at 10:00 a.m.
The Federal Bureau of Investigation and St. Francois Sheriff’s Department investigated the case. Assistant United States Attorney Rob Livergood is handling the case.
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St. Clair County Man Indicted for Traveling to the Philippines for Sex with a MinorRead the Press Release
EAST ST. LOUIS, Ill. – A St. Clair County man is in federal custody today on a trio of crimes involving sex with an underage girl in the Philippines. Joseph Albert Fuchs, III, 53, of Cahokia, Illinois, is accused of knowingly traveling from his home in St. Clair County to the Philippines in
February 2018 for the purpose of engaging in a sexual act with a 14-year old girl.
The three-count indictment was returned by a federal grand jury earlier this month and charges that
Fuchs engaged in illicit sexual conduct with the victim in the Philippines while knowing that she was under 16 years old. The indictment further alleges that Fuchs enticed the girl to have sex with him through a series of Facebook chats from Nov. 2, 2017, to July 17, 2019, as well as by sending her more than $1,000 in PayPal and Xoom payments during that time.On Thursday, Fuchs appeared before United States Magistrate Judge Gilbert C. Sison and entered a not guilty plea. He is being held in custody pending a detention hearing on Monday at 10:00 a.m.
Trial is currently scheduled to begin on June 15.If convicted of the enticement charge, Fuchs faces at least 10 years and up to life in prison. The other two charges carry maximum prison terms of 30 years each. All three charges are also punishable by a fine of up to $250,000.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Homeland Security Investigations-Springfield. Assistant U.S.
Attorneys Alexandria Burns and Nathan D. Stump are prosecuting the case.This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.
Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and
Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”South Carolina Man Sentenced to Fifteen Years for Cocaine and Gun CrimesRead the Press Release
United States Attorney Sean P. Costello of the Southern District of Alabama announced that Frederick Turner, 42, of McBee, South Carolina, was sentenced today in federal court for Conspiracy to Possess with Intent to Distribute Cocaine, Possession with Intent to Distribute Cocaine, and Possession of a Firearm During a Drug Trafficking Crime.
Turner was found guilty of the charges on February 1, 2021. Turner admitted he and his co-defendant, Sylvia Guerra, traveled with 32 kilos of cocaine through the Southern District of Alabama. Specifically, the Court found that on December 20, 2019, the Baldwin County Sheriff’s Office Special Operations unit conducted a traffic stop on a tractor trailer that was being driven by Turner. During the traffic stop, Turner made several suspicious statements to the corporal who had stopped the truck. The corporal then had his K9 partner conduct a free air sniff around the vehicle. The K9 gave a response at the passenger running board, sleeper birth and passenger door. Law enforcement officers then conducted a search of the truck. During a search, a duffel bag containing 32 kilos cocaine was located on the sleeper bed and a pistol was located in a backpack on the passenger seat. A personal use amount of marijuana was also found on the person of Guerra. Turner was interviewed and ultimately admitted to accepting payment for transporting $120,000 in cash to Houston on an earlier trip and for accepting two duffel bags of cocaine for transportation to South Carolina. Turner admitted that the pistol in his truck was his.
Chief United States District Court Judge Kristi DuBose imposed a sentence of 180 months imprisonment, consisting of 120 months on the drug charges and a consecutive sentence of 60 months on the gun charge. The judge also ordered Turner to serve a five-year term of supervised release upon his discharge from prison. Judge DuBose ordered that Turner pay $300 in special assessments. Guerra was sentenced on March 6, 2021 to 120 months for her role in the offense.
The case was investigated by the Department of Homeland Security, the Drug Enforcement Agency, and the Baldwin County Sheriff’s Office. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorneys Deborah Griffin and Kacey Chappelear.
Sinaloa Cartel Leader ConvictedRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – April 30, 2021
SAN DIEGO – Sinaloa Cartel leader Ismael Zambada-Imperial, aka “Mayito Gordo,” pleaded guilty in federal court today to drug trafficking charges following his extradition to the Southern District of California in December 2019. He also agreed to forfeit $5 million in drug trafficking proceeds.
Zambada-Imperial pleaded guilty to all charges in a superseding indictment returned by a federal grand jury in San Diego on July 25, 2014. The indictment also charges his father, the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo;” as well as another son of El Mayo, Ismael Zambada-Sicairos, known as “Mayito Flaco;” and Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the former leader of the Sinaloa Cartel along with Mayo. Zambada-Imperial was arrested by Mexican authorities in November 2014. Zambada-Garcia, Zambada-Sicairos, and Guzman-Salazar remain fugitives.
In a proceeding today before U.S. District Judge Dana M. Sabraw, Zambada-Imperial accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including cocaine, heroin, and marijuana for importation from Mexico into the United States. Zambada-Imperial also admitted to directing acts of violence for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for April 29, 2022 at 2 p.m. before Judge Sabraw.
“Zambada-Imperial’s guilty plea today sends a message to other drug kingpins operating in Mexico. There is no place to hide because our law enforcement partners will find you and work tirelessly to bring you to justice in the United States,” said Acting U.S. Attorney Randy S. Grossman. “Our investigation and prosecution of other high-level Sinaloa Cartel members is continuing and is having a significant impact on the global operations of the cartel.” Grossman praised Assistant U.S. Attorney Matthew J. Sutton, DEA agents and all law enforcement partners for their excellent work on this case.
“Because of the dedication and determination of the DEA and our law enforcement partners, today we are one step closer towards dismantling the violent Sinaloa Cartel with the guilty plea of a Sinaloa Cartel leader,” said DEA Special Agent in Charge John W. Callery. “The DEA remains confident that we will capture the remaining fugitives of this investigation and bring them to justice, along with many additional members of the Sinaloa Cartel. If the public has any information on the whereabouts of these fugitives or information on the Sinaloa cartel, we urge you to contact the DEA at (858) 616-4100.”
The Southern District of California prosecution in this case is part of a multi-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Case Number: 14CR00658-DMS
Ismael Zambada-Imperial, aka Mayito Gordo Age: 35 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and five years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and five years supervised release.
AGENCIES
Drug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Internal Revenue Service
Homeland Security Investigations
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
United States Attorney’s Office, Northern District of Illinois
Department of Treasury, Office of Foreign Asset Control
Oceanside Police Department
San Bernardino County Sheriff’s Department
National City Police Department
Chula Vista Police Department
San Diego Police Department
San Diego County District Attorney’s Office
San Diego Law Enforcement Coordination Center
Interpol
Search of Shreveport Residence Exposes Illegal Possession of Drugs and FirearmRead the Press Release
SHREVEPORT, La. - Acting United States Attorney Alexander C. Van Hook announced that Treveon T. Carter, 25, of Shreveport, Louisiana, has been sentenced by United States District Judge Donald E. Walter to 74 months (6 years, 2 months) in prison, followed by 3 years of supervised release, for illegal possession of a firearm.
On January 24, 2019, law enforcement agents searched Carter’s home in Shreveport and found marijuana, oxycodone, 20 containers of suspected THC, a digital scale and packaging material, cash, and a loaded firearm. Carter admitted to agents that the loaded firearm and drug evidence belonged to him.
Carter has a prior felony conviction for possession with intent to distribute narcotics in 2017 and knew that it was illegal for him to possess a firearm.
The ATF and Shreveport/Caddo Street Level Interdiction Unit conducted the investigation. Assistant U.S. Attorney Jessica D. Cassidy prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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Prescription Drug Take Back Day on April 24, 2021 Collects More Than 11,000 Pounds of Prescription Drugs in MarylandRead the Press Release
Baltimore, Maryland - Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office announced today that the Drug Enforcement Administration’s 20th National Prescription Drug Take Back Day held on Saturday, April 24, 2021, collected 11,536.59 pounds of potentially dangerous prescription medications at Maryland’s approximately 100 available sites. The nationwide event is held twice a year and aims to provide a safe, convenient, and responsible means of disposing of prescription drugs and educating the general public about the potential for abuse of medications.
“Pharmaceutical pills can be just as harmful as illegal drugs when they are used without proper medical supervision and without valid medical need,” said Acting U.S. Attorney Jonathan F. Lenzner. “Over the pandemic we have seen a sharp increase in overdose deaths, and the path to opioid abuse can begin in the home with unused prescription drugs. I am grateful to the Marylanders who participated in DEA’s Prescription Drug Take Back Day to get rid of unused and unneeded prescription drugs, which will help prevent drug abuse and opioid addiction. I encourage anyone who missed the event last week to visit https://takebackday.dea.gov/ to find a collection site near them to take advantage of this free and anonymous service.”
“Thousands of Maryland residents die every year due to overdose, with a significant number of those overdose deaths caused by opioids. Take Back Day provides a vital opportunity for us to fight against the opioid problem here in Maryland,” said DEA Assistant Special Agent in Charge Orville O. Greene. “Those who participated in Take Back Day and disposed of unused prescription medication, may have saved someone from addiction or overdose.”
Rates of prescription drug abuse in the United States are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.
In addition to DEA’s National Prescription Drug Take Back Day, prescription drugs can be disposed of at any of the 11,000 DEA authorized collectors at any time throughout the year, and at many local law enforcement agency sites. DEA and its partners will collect tablets, capsules, patches, and other solid forms of prescription drugs. Liquids (including intravenous solutions), syringes and other sharps, and illegal drugs are not accepted.
Given the ongoing COVID-19 public health emergency, DEA wants to ensure that the public is aware of other ways they can dispose of unwanted prescription drugs without having to leave their homes. Both the U.S. Food and Drug Administration and the Environmental Protection Agency have tips on how to safely dispose of drugs at home.
For more information on DEA’s National Prescription Drug Take Back Day, and to find a collection site in Maryland, visit https://takebackday.dea.gov/ or call 800-882-9539.
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Pennsylvania Man Going to Prison for 10 Years on Meth 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 Jerry J. Roneker, Jr., 43, of Correy, PA, who was convicted of possessing with intent to distribute 50 grams or more of methamphetamine, was sentenced to serve 120 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Misha A. Coulson, who handled the case, stated that on March 9, 2019, while on routine patrol in the Town of Chautauqua, Chautauqua County Sheriff’s Deputies observed the defendant’s vehicle, bearing Pennsylvania license plates, cross the center line of the road. After conducting a traffic stop, deputies observed a smoking pipe in the front of the vehicle. Deputies asked Roneker and a passenger to exit the vehicle at which time they noticed two large chunks of suspected methamphetamine. During a pat down of the defendant, deputies located a loaded 9mm handgun. A search of the vehicle led to the seizure of $10,210 in U.S. currency, suspected ecstasy pills, packaging materials, a digital scale, drug paraphernalia, Xanax pills, MDMA pills, Suboxone strips, and two hypodermic needles.
The sentencing is the result of an investigation by the Chautauqua County Sheriff’s Office, under the direction of Sheriff James Quattrone, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
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Owner of Dog Training School Sentenced for Defrauding V.A. of over $1.5 Million in GI Bill BenefitsRead the Press Release
A federal judge in San Antonio today sentenced 49-year-old Bradley Lane Croft, owner of Universal K-9, Inc., to 118 months of imprisonment for scheming to defraud the federal government of more than $1.5 million in Veterans Affairs GI Bill benefits to train service canines and their handlers.
In addition to the prison term, Senior U.S. District Judge David A. Ezra ordered that Croft pay $1,506,758.31 in restitution and be placed on supervised release for a period of three years after completing his prison term.
“Today’s sentence demonstrates what can happen to you if you choose to rip off one of the most important benefit programs we have for our veterans. My thanks goes to the prosecutors and our law enforcement partners who worked so hard to see justice served,” said U.S. Attorney Ashley C. Hoff.
After a bench trial in November 2019, Judge Ezra found Croft guilty on eight counts of wire fraud, four counts of aggravated identity theft, two counts of money laundering and two counts of making a false tax return. Testimony during trial revealed that beginning in 2015, Croft provided false information in applications to the Texas Veterans Commission, including instructors’ names, certifications and training documents to receive GI Bill educational benefit payments. Croft and others solicited veterans as students indicating that they could use their GI Bill benefits to pay for a dog handler’s courses that cost between $6,500.00 and $12,000.00. During the scheme, Universal K-9 filed approximately 185 fraudulent claims relating to the education of about 132 veterans totaling over $1.5 million.
“The FBI is committed to working with our partners to protect important federal programs, like the GI Bill, which serves to improve the lives of men women who sacrifice so much to serve our nation,” said FBI Special Agent in Charge Christopher Combs, San Antonio Division. “Thanks to the hard work of IRS CI, VA-OIG, the U.S. Attorney’s Office and the lead FBI investigator, a task force officer with the Texas Department of Public Safety, Croft’s fraud scheme and his betrayal of veterans has ended.”
Trial testimony also revealed that Croft submitted fraudulent income tax returns showing his 2016 reported income as $2,000 and his reported income as $2,000 for 2017. Evidence showed that Croft actually received substantially more income than what he reported to the IRS in 2016 and 2017.
“Defrauding programs such as the GI Bill, is particularly disturbing and a slap in the face to all the U.S. Service men and women who count on these programs to help improve their futures. Today’s stiff sentencing of Bradley Lane Croft, owner of Universal K-9, Inc., shows once again how harmful ‘white collar’ fraud can be,” said IRS Criminal Investigation (IRS CI) Special Agent in Charge Rick Goss, of the Houston Field Office. “IRS CI is proud to have worked with our FBI and VA-OIG counterparts to investigate and ultimately bring down Mr. Croft’s illicit scheme involving wire fraud, aggravated identify theft, money laundering, and the filing of false Federal Income tax returns.”
Judge Ezra also ordered Croft to forfeit: his San Antonio business property; approximately $239,825.73 seized from his bank accounts; approximately $4,372 seized on site at Universal K-9; a 2017 American Eagle 45T Motorhome (valued at over $450,000); a 2018 Ford F-150 King Ranch Lariat; a 2017 Dodge Ram 1500 Laramie; a 2016 Yamaha Superjet Ski; a 2008 Yamaha Waverunner Jet ski; and a 2012 Rocket International Trailer. Judge Ezra also granted the government’s motion for a money judgment in the amount of $1.3 million.
“The Post-911 GI Bill program provides critical educational and job benefits to veterans who served their country. This sentence sends a strong message that anyone who defrauds that program or veteran students will be held accountable in a court of law,” said U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG) Special Agent in Charge Jeffrey Breen, South Central Field Office. “VA-OIG thanks the U.S. Attorney’s Office, the FBI, and IRS CI for collaborating on this important case to achieve justice.”
On August 8, 2018, federal authorities executed a search warrant at Croft’s business in San Antonio. A total of 26 canines at the business were placed into the custody of the city’s Animal Care Services.
Croft has remained in federal custody since the verdict.
The FBI, VA-OIG and IRS CI investigated this case. Assistant U.S. Attorneys Gregory J. Surovic and Fidel Esparza III prosecuted this case.
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Nottingham Man Sentenced to 72 Months for Child Pornography CrimeRead the Press Release
CONCORD - Clifford A. Bullock, 71, of Nottingham, was sentenced to 72 months in federal prison for transportation of child pornography, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, in April of 2019, law enforcement officers learned that Microsoft had detected potential child exploitation materials on a Microsoft OneDrive account with an IP address that resolved to Bullock’s address. Law enforcement officers executed a search warrant at Bullock’s residence on August 5, 2019. Pursuant to the search warrant, officers seized a computer, cellular phones and numerous items of digital media that contained a large collection of child pornography. Bullock admitted to using the internet to view and save child pornography involving girls. He further admitted to uploading and storing files on OneDrive, including child pornography images.
Bullock previously pleaded guilty on June 6, 2020. In addition to the prison sentence, Bullock must spend five years on supervised release, pay $5,100 in special assessments and $39,000 in restitution.
“Child pornography crimes exploit innocent children and cause immeasurable harm,” said Acting U.S. Attorney Farley. “In order to protect young people, we work closely with our law enforcement partners to identify and prosecute those who commit child pornography crimes in the Granite State. As Mr. Bullock has learned, child pornography crimes can lead to serious federal prison time.”
“Downloading and storing child exploitation material like that possessed by Bullock perpetuates the continued abuse and trauma experienced by the victims of these heinous crimes. Today’s sentencing removes another participant from this reprehensible industry,” said Acting Special Agent in Charge William S. Walker of the Homeland Security Investigations, Boston field office. “HSI is proud to work alongside our local law enforcement partners on the New Hampshire Internet Crimes against Children Task Force as we collectively aim to keep our children safe online and free from threat of exploitation.”
This matter was investigated by the New Hampshire Internet Crimes Against Children Task Force and Homeland Security Investigations, with assistance from the Nottingham Police Department and Exeter Police Department. The case was prosecuted by Assistant U.S. Attorney Cam Le.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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North Sioux City Man Charged with False Income Tax Returns and Tax EvasionRead the Press Release
Acting United States Attorney Dennis Holmes announced that a North Sioux City, South Dakota, man has been indicted by a federal grand jury for False Income Tax Returns and Tax Evasion.
James R. Winckler, age 58, was indicted on April 22, 2021. He appeared before U.S. Magistrate Judge Veronica L. Duffy on April 28, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in federal prison and/or a $100,000 fine, 3 years of supervised release, and up to $500 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about April 19, 2016, Winckler willfully made and subscribed a false Form 1040 for his individual 2012 tax return by understating his income.
The Indictment also alleges that Winckler willfully attempted to evade payment of income tax due for the calendar years 2015 through 2018, by failing to report any income or pay any income tax during those years.
The charges are merely accusations and Winckler is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Winckler was released on bond pending trial, which has not been set.
North Andover Woman Sentenced for Embezzling Employer’s Outgoing Vendor PaymentsRead the Press Release
BOSTON – A North Andover woman was sentenced Wednesday, April 28, 2021 in federal court in Boston in connection with embezzling over $157,000 in checks issued by her employer to company vendors.
Sharon M. Lewis, 59, was sentenced by U.S. District Court Judge George A. O’Toole Jr. to nine months in prison and three years of supervised release. Lewis was also ordered to forfeit $157,213 and to pay restitution in the same amount. In December 2020, Lewis pleaded guilty to one count of wire fraud affecting a financial institution.
In or about August 2013, Lewis began working for a Lawrence-based company as an accounts payable clerk. Among Lewis’ responsibilities was preparing company checks to pay outstanding vendor invoices. From about September 2017 to December 2019, Lewis used her position to divert dozens of signed vendor checks to herself for deposit into her personal bank account. On multiple occasions, to conceal her scheme, Lewis led vendors to believe that their missing payments had been lost in the mail. Over the course of the scheme, Lewis deposited at least 48 checks payable to company vendors, with a total value of more than $157,000. Lewis withdrew approximately one-third of that amount in cash and used the rest to pay personal debts and living expenses.
Acting United States Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney James R. Drabick of Mendell’s Securities, Financial & Cyber Fraud Unit prosecuted the case.
Niskayuna Man Sentenced for Stealing GE’s Trade SecretsRead the Press Release
ALBANY, NEW YORK – Yang Sui, age 43, of Niskayuna, New York, was sentenced today to 1 year of probation, and to pay a $5,000 fine, for stealing trade secrets.
The announcement was made by Elizabeth C. Coombe, Attorney for the United States Acting Under Authority Conferred by 28 U.S.C. § 515, and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his earlier guilty plea, Sui admitted that between about January 1, 2015 and December 21, 2017, he stole multiple electronic files that contained the General Electric Company’s trade secrets surrounding the research, development, design and manufacture of its silicon carbide metal-oxide semiconductor field-effect transistors (MOSFETs).
MOSFETs are small electronic semiconductors/switches that regulate the flow of electricity through devices; they are used in a variety of products.
Sui further admitted that in about 2017, he was developing a business plan to start his own company whose purpose was to manufacture and sell MOSFETs.
There was no evidence that Sui transferred the MOSFET trade secrets to anyone else.
This case was investigated by the FBI, and prosecuted by Assistant U.S. Attorney Rick Belliss and Trial Attorney Matthew Chang of the Department of Justice’s Counterintelligence and Export Control Section, part of the National Security Division.
Newington Man on Supervised Release Sentenced to 8 Years in Prison for Drug and Gun OffensesRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that LIONEL GARDNER, also known as “Bleek,” 36, of Newington, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 96 months of imprisonment, followed by five years of supervised release, for narcotics distribution and gun possession offenses, and for violating the conditions of his supervised release from a prior federal conviction.
According to court documents and statements made in court, in October 2015, Gardner was released from federal prison after serving a 60-month sentence for distributing crack cocaine in Hartford. On November 21, 2018, while Gardner was on federal supervised release, he was arrested on state charges by Newington Police after he sold heroin/fentanyl to a customer, and a search of his residence revealed a large quantity of fentanyl and cocaine, a stolen Glock 10mm pistol, a Smith & Wesson .357 revolver, loaded magazines, and more than $55,000 in cash.
In August 2019, investigators made controlled purchases of fentanyl and crack from Gardner while he was released on bond in his state case. Gardner was arrested on a federal criminal complaint on August 14, 2019. On that date, a search of Gardner’s Newington residence revealed approximately 105 grams of powder cocaine, 3.4 grams of crack cocaine, 667 bags of fentanyl, 8.7 grams of loose fentanyl, and $4,000 in cash.
Gardner has been detained since his federal arrest. On December 17, 2020, he pleaded guilty to one count of possession with intent to distribute 40 grams or more of fentanyl, and one count of possession of a firearm by a felon.
Gardner forfeited the seized firearms and cash.
This investigation was conducted by the FBI’s Northern Connecticut Gang Task Force and the Newington Police Department. The task force includes members of the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorney Brian P. Leaming.
This prosecution has been brought through Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
New Orleans Resident Pleads Guilty to Conspiring to Traffick Heroin with His Uncle and Six OthersRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced that KEVIN COFFIL age 25, a resident of New Orleans, Louisiana, pled guilty on April 29, 2021 to conspiring to distribute one kilogram or more of heroin. COFFIL is facing a mandatory minimum sentence of 10 years’ imprisonment, a maximum sentence of life imprisonment, a possible fine of up to $10,000,000, at least five years of supervised release upon his release from prison and a $100 mandatory special assessment fee.
According to court records, COFFIL admitted to conspiring with codefendant Arthur Johnson, his uncle, and six others to distribute heroin throughout the New Orleans area. The evidence against COFFIL includes numerous intercepted communications, including jail calls, physical surveillance, and witness statements.
U.S. District Judge Susie Morgan will sentence COFFIL on August 5, 2021. COFFIL, Arthur Johnson, and the other codefendants were charged in 2018 with conspiring to distribute heroin in the New Orleans area.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigation’s New Orleans Gang Task Force in investigating this matter. Assistant United States Attorney David Howard Sinkman is in charge of the prosecution.
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New Durham Man Sentenced to 69 Months for Drug Trafficking and Firearm ChargesRead the Press Release
CONCORD - Cowin Hillsgrove, 45, of New Durham, was sentenced to 69 months in federal prison for possession of methamphetamine with intent to distribute and possession of a firearm in furtherance of drug trafficking, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, on February 8, 2019, a Bow police officer conducted a traffic stop and arrested an individual on an active warrant for sale of heroin. The arrestee informed the officer she bought heroin and methamphetamine from Hillsgrove who was staying in a Concord hotel. She stated he sold large quantities of drugs from the hotel room and she was going to make a purchase that night.
Later that day, Concord police officers went to Hillsgrove’s hotel room. He stated he had been staying there for several weeks because his home had burned down. Hillsgrove admitted to using methamphetamine but denied selling drugs. Officers obtained a search warrant for Hillsgrove’s hotel room. The search yielded approximately 32 grams of methamphetamine, two loaded handguns and receipts for a handgun and 9mm magazines, $267 in currency, and various other items consistent with drug trafficking.
“Armed drug traffickers present a serious threat to public safety,” said Acting U.S. Attorney Farley. “While methamphetamine dealers endanger the community by selling a dangerous drug, the risk is enhanced when the drug dealers are armed. To protect the citizens of the Granite State from harm, we will not hesitate to seek substantial federal prison sentences for drug traffickers who use or possess guns.”
“DEA stands committed to keeping highly addictive drugs like methamphetamine off the streets of New Hampshire,” said DEA Special Agent in Charge Brian D. Boyle. “Today’s sentence not only holds Mr. Hillsgrove accountable for his crimes but serves as a warning to those traffickers who are contributing to the drug crisis.”
This matter was investigated by the Drug Enforcement Administration, the Concord Police Department, the Bow Police Department and the New Durham Police Department. The case was prosecuted by Assistant U.S. Attorney John S. Davis.
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NDTX Round up: April 23 – 29Read the Press Release
SENTENCING – KIRA LANE
On April 28, Kira Lane, 54, was sentenced to 5 years probation and ordered to pay $233,681.25 in restitution for access device fraud. Lane operated a catering business where he processed credit card transactions. During 2015, he used stolen credit card numbers for approximately 64 credit card transactions totaling $233,681.25. The U.S. Secret Service conducted the investigation. Assistant U.S. Attorney Jenna Rudoff prosecuted the case.
SENTENCING – LUIS PENA-ALEMAN
On April 26, Luis Pena-Aleman, 25, was sentenced to 135 months in federal prison for possession with the intent to distribute methamphetamine. In February 2019, a confidential source met a co-conspirator at an agreed location in Dallas. The co-conspirator arrived at the agreed location in a truck registered to Pena-Aleman to deliver the methamphetamine. Agents conducted a search of a storage facility located in Mesquite, Texas where they found a large quantity of methamphetamine and Pena-Aleman’s truck. The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Suzanna Etessam prosecuted the case.
GUILTY PLEA – OSCAR MARIO FLORES DAZA
On April 28, Oscar Mario Florez Daza, 32, pleaded guilty to conspiracy to launder money. In April 2020, Florez Daza picked up $14,800 in drug proceeds from a codefendant to launder. In May, Florez Daza picked up $40,000 in drug proceeds from a location in Oklahoma to transport them to Texas. Flores Daza faces up to 20 years in federal prison for his crimes. The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.
Mobile Man Sentenced for Role in Methamphetamine ConspiracyRead the Press Release
United States Attorney Sean P. Costello of the Southern District of Alabama announced that Alvie Mark Waltman, 48, of Mobile, was sentenced today for his participation in a conspiracy to possess with intent to distribute methamphetamine. In January of 2021, Waltman pled guilty to the conspiracy charge.
According to documents filed in connection with his guilty plea, Waltman was identified during an investigation that began with the arrest of one of the members of the conspiracy on I-10 by the Saraland Police Department. Police found methamphetamine and a gun in his vehicle. Through undercover work and an analysis of that subject’s phone, Waltman was identified as a member of the distribution network. Waltman provided $4,730 in cash to the cooperating co-conspirator to purchase additional methamphetamine for Waltman to distribute in Mobile. Waltman was arrested when he attempted to take possession of nine ounces of methamphetamine. Waltman was advised of his rights and he agreed to make a statement to investigators, admitting his involvement in the conspiracy.
United States District Court Judge Terry F. Moorer imposed a sentence of 108 months imprisonment, and ordered that Waltman serve a five-year term of supervised release when he is released from custody. Waltman was also ordered to pay a mandatory special assessment of $100. No fine was imposed.
The case was investigated by the Saraland Police Department, the Mobile County Sheriff’s Office and Homeland Security Investigations. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
Miami-Based CareCloud Health, Inc. Agrees to Pay $3.8 Million to Resolve Allegations that it Paid Illegal KickbacksRead the Press Release
MIAMI – CareCloud Health, Inc. f/k/a CareCloud Corporation (CareCloud), a Miami-based developer of electronic health records (EHR) software products and related services, has agreed to pay $3,806,966.70 to resolve allegations that it paid unlawful kickbacks to generate sales of its EHR products.
The United States alleged that CareCloud violated the False Claims Act and the Anti-Kickback Statute through its marketing referral program called the “Champions Program,” In particular, it is alleged that between January 1, 2012 and March 31, 2017, CareCloud offered and provided its existing clients cash equivalent credits, cash bonuses and percentage success payments to recommend CareCloud’s EHR products to prospective clients. Existing clients who participated in the Champions Program (“participants”) executed written agreements prohibiting them from providing negative information about CareCloud’s EHR products to prospective CareCloud clients. Prospective CareCloud clients were not told about this referral-kickback arrangement or about the contract that prohibited participants from sharing negative company information with them.
The United States alleged that CareCloud’s payments to participants violated the federal Anti-Kickback Statute. In addition, the United States alleged that CareCloud violated the False Claims Act because the kickback payments rendered false the claims submitted by CareCloud for federal incentive payments under the Medicare and Medicaid Electronic Health Records Incentive Programs (also known as Meaningful Use Programs) and the Merit-Based Incentive Payment System (also known as MIPS).
CareCloud was acquired by MTBC, Inc. (MTBC), a public company, in January 2020. CareCloud has discontinued the prior version of the marketing referral program that is the basis for this settlement.
Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the settlement.
“Product functionality, reliability, and safety should drive a medical software company’s success, not illegal kickbacks paid to promote its products,” said Acting United States Attorney Gonzalez. “There is simply no place for kickbacks in our country’s healthcare system. Companies who ignore this will be held accountable.”
“Medical software executives who unlawfully promote the capabilities of their electronic health record technology, and pay others to do the same, diminish their credibility and waste taxpayer money,” said Special Agent in Charge Pérez Aybar. “My Office will continue to investigate such actions to protect the funding for federal health care programs.”
The settlement resolves allegations in a lawsuit filed by Ada De La Vega in federal court in Miami, Florida. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act allows the government to intervene and take over the action, as it did in this case. The whistleblower share to be awarded in connection with the settlement is $803,269,97.
HHS-OIG investigated the matter. Assistant United States Attorney Matthew J. Feeley handled the litigation.
Related court documents and information may be found on the website of the District Court of the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov under case number 17-cv-23762.
Note: A copy of the settlement agreement is available
here .Macomb County Car Salesman Charged with Wire FraudRead the Press Release
A criminal complaint was unsealed today charging a Macomb Township man in a wire fraud scheme involving the trafficking in Fiat Chrysler Automobiles Employee Purchase Control Numbers (EPCNs), announced Acting United States Attorney Saima Mohsin.
Mohsin was joined in the announcement by Special Agent in Charge Vance Callender, Homeland Security Investigations (HSI), Michigan and Ohio
Charged is Apollon Nimo, 34. Nimo made his initial appearance today before U.S. Magistrate Judge Anthony P. Patti and was released on bond. A preliminary exam was set for May 21, 2021.
The criminal complaint alleges that Nimo, a salesman at Parkway Chrysler Dodge Jeep Ram in Clinton Township, improperly trafficked in, used, and sold FCA EPCNs to provide discounts to non-qualified car buyers from 2014 through the present. The EPCNs were bought and sold through private Facebook Groups. According to the complaint, it is alleged that some, if not most, of the sales conducted by Nimo included fraudulent use of EPCNs resulting in a loss to FCA of approximately $8.7 million dollars. The complaint further alleges that Nimo profited both by selling the illegally obtained EPCNs to buyers and through bonuses FCA provided to him based on the volume of his sales. Nimo had the highest number of EPCN sales nationwide for the time period of May 2018 to August 2018 and January 2019 to March 2019.
“Automobile sales play a major role in our state’s economy,” said Acting US Attorney Mohsin. “Corruption of the sort alleged in today’s complaint imposes costs on automotive manufacturers that are ultimately passed to consumers. The charges announced today are serious and reflect my office’s commitment to ensuring the integrity of this market.”
“This morning, HSI special agents arrested a top selling Fiat Chrysler Automobiles (FCA) salesman for defrauding the company of approximately $8.7 million by exploiting FCA’s employee purchase program,” said Vance Callender, HSI Special Agent in Charge for Michigan and Ohio. “HSI will continue to fight financial crime and support the integrity of American manufacturing by leveraging its unique law enforcement capabilities.”
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the special agents of Homeland Security Investigations and the Clinton Township Police Department along with assistance from Fiat Chrysler Automobiles corporate investigators. Assistant U.S. Attorney Mark Chasteen is prosecuting the case.
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Las Vegas Woman Convicted of Sending Letters Threatening to Injure Her Mother's Former Supervisor and LawyersRead the Press Release
LAS VEGAS, Nev. – A federal jury convicted a Las Vegas woman yesterday for mailing letters threatening to injure her mother’s former supervisor and members of the law firm defending the mother’s former employer, announced Acting U.S. Attorney Christopher Chiou for the District of Nevada.
According to court documents and evidence presented at the five-day trial, between August 11, 2018 and October 1, 2019, Latonia Smith, 27, sent anonymous threatening letters to her mother’s former supervisor; and attorneys and staff professionals engaged by her former employer to defend against a lawsuit Smith filed. In three of the letters, Smith wrote: “your throat will be slit you will be recorded as the blood spills from your neck and just as you gasp to take your final undeserving breath three bullets will be placed right through your skull.” In another letter, she threatened that the recipients had been “added to the hit list” and it would be the “end of lives.”
Smith was convicted of five counts of mailing threatening communications through the U.S. Mail. She faces a maximum statutory penalty of 25 years in prison, a term of supervised release, and a monetary fine. U.S. District Judge Richard F. Boulware presided over the trial. The Court has not yet scheduled a sentencing hearing.
This case was the product of an investigation by the U.S. Postal Inspection Service, with assistance from the Las Vegas Metropolitan Police Department and the Reno Police Department. The case is being prosecuted by Assistant U.S. Attorneys Steven Myhre and Daniel Clarkson.
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La Crosse Man Sentenced to 12 Years for Drug & Gun CrimesRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that Kong Vang, 31, La Crosse, Wisconsin, was sentenced yesterday by U.S. District Judge William M. Conley to 144 months in federal prison for conspiracy to distribute 50 grams or more of methamphetamine and possessing a firearm in furtherance of a drug trafficking crime. This prison term will be followed by 4 years of supervised release. Vang pleaded guilty to these charges on February 5, 2021.
On July 15, 2020, law enforcement officers were investigating an anonymous complaint that Vang and his girlfriend, Pader Yang, were selling large quantities of methamphetamine out of their residence in La Crosse, Wisconsin. Officers conducted surveillance on the residence and observed people arriving, going in and out of the garage, and then immediately returning to their cars or bicycles.
Based on these observations, and the fact that Vang was on state supervision for prior convictions involving methamphetamine trafficking, possessing a firearm as a convicted felon, and 2nd degree recklessly endangering safety, law enforcement officers searched Vang’s residence. During the search of a bedroom shared by Vang and Yang, officers located a safe containing four loaded handguns, eight bags of methamphetamine, and just under $12,000. Officers found a fifth loaded firearm elsewhere in the bedroom, and additional drugs, paraphernalia, and ammunition throughout the residence, the garage, and in a vehicle recently driven by Yang. In total, officers found approximately 254 grams of “ice” methamphetamine, and over 250 grams of marijuana.
In an interview with law enforcement, Vang admitted to using and selling methamphetamine. He admitted to being a convicted felon and knew that he was not allowed to possess firearms. Law enforcement officers later searched Vang and Yang’s cell phones and located many conversations relating to sale of methamphetamine and marijuana. Based on the evidence in the case, officers believed Vang was a pound to kilo level methamphetamine dealer.
Vang’s state supervision was revoked and Judge Conley ordered this federal sentence to run concurrently with the state prison sentences Vang is now serving following revocation. In imposing the sentence, Judge Conley referenced Vang’s prior criminal record which included convictions of violence, drug trafficking, and gun possession.
Pader Yang pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine on February 18, 2021. She is scheduled for sentencing before Judge Conley on May 11, 2021.
The charges against Vang and Yang were the result of an investigation conducted by the La Crosse Police Department, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case is being handled by Assistant U.S. Attorney Steven P. Anderson.
Justice Department Announces the Opening of Nominations for the Fifth Annual Attorney General’s Award for Distinguished Service in Community PolicingRead the Press Release
U.S. Attorney General Merrick B. Garland today announced the Department of Justice is now accepting nominations for the Fifth Annual Attorney General’s Award for Distinguished Service in Community Policing. These awards represent part of the Department of Justice’s on-going commitment to support the nation’s law enforcement officers who put their lives on the line every day to keep our communities safe.
“Effective community policing builds trust between law enforcement officers and those they serve, and that trust helps to improve public safety,” said Attorney General Garland. “These awards honor the exceptional dedication and hard work of law enforcement officers who have gone above and beyond in the performance of their duties, and departments that have excelled in their community policing efforts. Policing is a difficult job, for which extraordinary efforts often go unnoticed, and the Department of Justice is proud to publicly recognize these exemplars of community policing.”
The Attorney General’s Award recognizes individual state, local and tribal sworn, rank- and-file police officers and deputies for exceptional efforts in community policing. The awarded officers, deputies and troopers will have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in policing. Within each category, an award will be given to law enforcement agencies serving small, medium, and large jurisdictions. Those agency sizes are defined as:
- Small: agencies serving populations of fewer than 50,000
- Medium: agencies serving populations of 50,000 to 250,000
- Large: agencies serving populations of more than 250,000
By acknowledging and rewarding these efforts, the department strives to promote and sustain its national commitment to community policing and to advance proactive policing practices that are fair and effective. With the Attorney General’s Award for Distinguished Service in Community Policing, the Office of the Attorney General recognizes that the nation’s law enforcement agencies, officers, deputies, and troopers continue to work tirelessly to keep our communities safe places to live and work.
The deadline for nominations is May 28, 2021, at 8 p.m. EDT. More information and the application for nominees can be found at: https://www.justice.gov/ag/policing-award.
Jury Convicts Palm Bay Man of Transporting and Possessing Child Sex Abuse MaterialRead the Press Release
Orlando, Florida – A federal jury has found Xzavier Scholtens (20, Palm Bay) guilty of one count of transporting and one count of possessing child sex abuse material. Scholtens faces a maximum penalty of 20 years in federal prison and a lifetime term of supervised release for each offense. His sentencing hearing is scheduled for July 20, 2021.
Scholtens had been indicted on May 27, 2020.
According to testimony and evidence presented at trial, this case arose from an online undercover operation conducted by Homeland Security Investigations agents in McAllen, Texas. The operation targeted individuals who were using a particular online social media platform to trade or distribute child sex abuse images.
On November 19, 2019, Scholtens sent an online message to one of the undercover agents and offered to “trade.” After a brief discussion, Scholtens sent a hyperlink that led to a cloud storage folder containing 12 videos. These videos depicted the sexual abuse of children, ranging from infants to pubescent teenagers.
This case was investigated by Homeland Security Investigations in McAllen, Texas and Rockledge, Florida. It is being prosecuted by Assistant United States Attorney Emily C. L. Chang.
This is another case 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.
Jury Convicts Former Virginia Beach Investment Advisor and Williamsburg Attorney of $25 Million Nationwide Investment FraudRead the Press Release
NORFOLK, Va. – A federal jury convicted two individuals today for their roles in a nationwide investment fraud scheme that resulted in over $25 million in losses to more than 300 victims, most of whom were elderly.
“As proven during a five-week trial, these defendants and their co-conspirators defrauded hundreds of unsuspecting investors out of over $25 million, draining their retirement accounts and leaving a trail of financial and emotional devastation for the victims,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “The jury’s verdicts bring us one step closer to securing justice for the victims of these damaging, manipulative, and life-altering schemes. Our Office is deeply appreciative to the trial team and our law enforcement partners for their tireless work in unraveling this complex fraud and ensuring these defendants are held accountable."
According to court records and evidence presented at trial, Daryl Bank, 51, of Port St. Lucie, Florida, ran an investment fraud scheme from approximately January 2012 through July 2017, based in the Tidewater area and Port St. Lucie, and operating across the country. Bank and his co-conspirators—including attorney Billy Seabolt, 56, Raeann Gibson, 49, of Florida, and Roger Hudspeth 51, of Suffolk—deceived hundreds of unsuspecting investors, most of whom were at or near retirement age, by convincing them to invest in companies owned and controlled by Bank. At Bank’s direction, co-conspirators stole significant portions of investment contributions to fund their criminal enterprise and Bank’s lavish lifestyle.
In 2010, Bank, then a registered securities broker, was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). Undeterred, Bank created a private equity company called Dominion Private Client Group (Dominion) and continued to sell unregistered securities on his own and through insurance salesmen across the country. Billy Seabolt served as Dominion’s legal counsel and was involved in the development of many of the fraudulent investments and corporations.
The conspirators made material misrepresentations and omissions to sell illiquid, highly speculative investment vehicles. Based on these fraudulent representations, unsuspecting investors cashed out of 401(k) and other retirement accounts to invest in Bank’s investment vehicles, without knowing that Bank immediately transferred 20%–70% of the investors’ funds to companies that he controlled in the form of purported “fees.” As a result of this investment fraud scheme, the victims suffered losses in excess of $25 million.
Bank was convicted of conspiracy, mail and wire fraud, selling unregistered securities, securities fraud, and money laundering. He faces a maximum penalty of over 300 years in prison when sentenced on September 20. Seabolt was convicted of conspiracy and mail fraud, and he faces a maximum penalty of 75 years in prison when sentenced on September 15. 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.
Gibson pleaded guilty to conspiracy and was sentenced to 10 years in prison in February 2020. Hudspeth pleaded guilty to investment advisor fraud and money laundering and was sentenced to over 12 years in prison in May 2018.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; Darrell J. Waldon, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after U.S. District Judge Raymond A. Jackson accepted the verdicts. The U.S. Attorney’s Office extends its appreciation to the Virginia State Corporation Commission’s Division of Securities.
Assistant U.S. Attorneys Melissa E. O’Boyle, Elizabeth M. Yusi, and Andrew Bosse prosecuted the case.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local, and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-126.
Jacksonville Man Sentenced to 60 Years in Federal Prison for Producing Photos of Himself as He Sexually Assaulted an 11-Year-Old ChildRead the Press Release
Jacksonville, Florida – Chief United States District Judge Timothy J. Corrigan has sentenced Columbus Donavan Jeffrey (44, Jacksonville) to 60 years in federal prison for photographing his sexual assaults of a child and distributing those pictures to others using the internet. Jeffrey was also ordered to serve a lifetime term of supervised release, register as a sex offender, and pay $24,000 in restitution to child victims.
Jeffrey had pleaded guilty on December 10, 2020.
According to court documents, the National Center for Missing and Exploited Children (NCMEC) received information from a company that hosts an online social messaging application (app). Specifically, on May 3, 2019, a user named “hideme1977,” subsequently identified as Jeffrey, used the app to upload several photos to the internet. These photos, taken by Jeffrey, depicted him sexually abusing an 11-year-old child. NCMEC referred this matter to the Jacksonville Sheriff’s Office (JSO) for investigation.
On October 3, 2019, JSO detectives and other officers executed a search warrant at Jeffrey’s residence, where he admitted he had used the “hideme1977” user name on the app. JSO detectives were also able to identify and locate the child shown in the photos, who stated that Jeffrey had sexually abused the child on at least three separate occasions in 2019.
JSO conducted a forensic examination of Jeffrey’s cellphone which revealed: images of the same child being sexually abused by Jeffrey on two other dates in 2019; online messages showing Jeffrey used the internet to share the sexual assault photos with others; and that Jeffrey maintained a collection of 635 images and 57 videos depicting the sexual abuse of other minors, including several depicting the rape of infants and toddlers.
“Predators who exploit innocent children are among the most evil criminals in society, and the acts committed by this defendant are among the most egregious that we have investigated.” said Rachel L. Rojas, Special Agent in Charge of the FBI Jacksonville Division. “This case proves that the FBI Jacksonville Division is fully committed to holding child predators accountable for their actions, and we remain dedicated to ensuring that criminals like him cannot bring harm to the most vulnerable members of our communities ever again. We are thankful for the partnership of the Jacksonville Sheriff’s Office in the relentless effort to seek justice for these victims. Be assured our work will not end here.”
This case was investigated by the Jacksonville Sheriff’s Office and the Federal Bureau of Investigation, with assistance from the National Center for Missing and Exploited Children. It was prosecuted by Assistant United States Attorneys D. Rodney Brown and Kelly S. Karase.
This is another case 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.
Jackson Man Sentenced under Project EJECT to 30 Months in Prison for Illegally Selling a GunRead the Press Release
Jackson, Miss. – Michael Mays a/k/a Michael Mayes, 35, of Jackson, was sentenced today by U.S. District Tom S. Lee to 30 months in prison and a $1500 fine for knowingly selling a firearm to a felon, announced Acting U.S. Attorney Darren J. LaMarca and Special Agent in Charge Michelle Sutphin of the Federal Bureau of Investigation in Mississippi.
According to court documents, on or about July 19, 2018, Mays knowingly sold a firearm in Jackson to a convicted felon.
The Federal Bureau of Investigation investigated the case.
Assistant U.S. Attorney Lynn Murray 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). 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. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on April 27 was:
Dennis Wayne Householder, Jr., 38, of Billings, on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute meth. If convicted of the most serious crime, Householder faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Householder was detained pending further proceedings. The FBI Transnational Organized Crime Task Force and the Eastern Montana High Intensity Drug Trafficking Area Task Force investigated the case. PACER case reference. 21-22.
Appearing on April 29 and pleading not guilty was:
Stacey Lee Milch, 39, of Billings, on charges of conspiracy to commit wire fraud, wire fraud and aggravated identity theft. If convicted of the most serious crime, Milch faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud charges and a mandatory two years in prison consecutive to any other sentence, a $250,000 fine and one year of supervised release on the aggravated identity theft charge. Milch was detained pending further proceedings. The U.S. Secret Service and the Billings Police Department investigated the case. PACER case reference. 21-23.
Appearing on April 30 and pleading not guilty was:
Josue Mikael Nunez, 21, of Carrollton, Georgia, on charges of conspiracy to possess with intent to distribute meth and possession with intent to distribute meth. If convicted of the most serious crime, Nunez faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Nunez was detained pending further proceedings. The FBI and the Eastern Montana High Intensity Drug Trafficking Area Task Force investigated the case. PACER case reference. 21-24.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on April 28 was:
Robert Raymond Fasuga, 39, of Helena, on charges of conspiracy to distribute and to possess with intent to distribute, possession with intent to distribute meth and possession of a stolen firearm. If convicted of the most serious crime, Fasuga faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Fasuga was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lewis and Clark County Sheriff’s Office investigated the case. PACER case reference. 21-03.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on April 30 was:
Harold Goodson Hill, 36, of Helena, on charges of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth, and interstate transportation of stolen property. If convicted of the most serious crime, Hill faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Hill was detained pending further proceedings. The FBI, U.S. Postal Service, Russell Country Drug Task Force, Gallatin County Sheriff’s Office, Broadwater County Sheriff’s Office, Missouri Highway Patrol and Sioux Falls Police Department investigated the case. PACER case reference. 21-19.
Appearing on April 29 and pleading not guilty was:
Tammy Lynn Lapie, 55, of Great Falls, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Lapie faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Lapie was released pending further proceedings. The Drug Enforcement Administration and the Great Falls Police Department investigated the case. PACER case reference. 21-27.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Indy Man Sentenced to 27 Years for Drug Dealing and Money LaunderingRead the Press Release
INDIANAPOLIS - An Indianapolis man was sentenced to 27 years for dealing methamphetamine and heroin, and an additional 20 years for money laundering. The sentences will run concurrently.
According to court documents, in late November 2018, George West, 36, of Indianapolis was traveling on I-70 in Hancock County. West had committed several traffic violations and a deputy with the Hancock County Sheriff’s Office initiated a traffic stop. West provided the deputy false identification and became combative with the deputy. West ran from the deputy and ended up back at the car he was driving. West attempted to drive from the scene and in doing so struck the deputy with the car. The deputies were able to stop West, but he continued to struggle with the deputies and at one point tried to unholster the deputy’s gun.
A K9 officer was at the scene and his K9 partner alerted that Wests vehicle may contain an illegal substance. During a subsequent search of the vehicle, deputies found approximately three pounds of methamphetamine. West admitted to possessing the drugs and said he had more at his apartment. During the execution of a search warrant of West’s apartment, officers found four loaded firearms, approximately 500 grams of heroin, over 300 grams of methamphetamine, and other items related to illegal drug trafficking.
The investigators also determined that between May 2017 and November 2018, West purchased money orders every month with his illegal drug proceeds to pay rent at the apartment he used for his drug dealing. To conceal the laundering of his drug profits, West utilized another person to sign the lease to the apartment and placed their name on the money orders he used to pay the rent. That amount totaled over $29,000.
“Heroin and methamphetamine are dangerous drugs that continue to ravage our communities,” said Acting U.S. Attorney John E. Childress. “Putting those who infect our streets with these terrible drugs behind bars has been and will continue to be a top priority of this office.”
This investigation was a collaborative effort between several law enforcement agencies. The IRS-Criminal Investigation, Homeland Security Investigation, DEA, Indianapolis Metropolitan Police Department, and the Pro-Active Criminal Enforcement Team (PACE) from Hancock and Henry Counties investigated the case.
Assistant U.S. Attorney Michelle Brady, who prosecuted the case for the government said West must also serve 5 years supervised release after his imprisonment.
Independence Man Pleads Guilty to Illegal Firearms, Drug TraffickingRead the Press Release
KANSAS CITY, Mo. – An Independence, Missouri, man has pleaded guilty in federal court to multiple charges of illegally possessing firearms, including stolen firearms, and drug trafficking.
Brandon L. Hill, 33, pleaded guilty before U.S. District Judge Greg Kays on Thursday, April 29, to three counts of being a felon in possession of a firearm, two counts of possessing a stolen firearm, four counts of possessing a controlled substance, three counts of possessing a firearm in furtherance of a drug-trafficking crime, and one count of possessing methamphetamine with the intent to distribute.
According to the plea agreement, Hill was arrested by Kansas City, Mo., police officers on three separate occasions. He was in possession of firearms and illegal drugs on each of those occasions, and attempted to flee from officers on two occasions.
On March 31, 2019, officers saw Hill driving a 2001 Buick Regal that had been taken in an armed robbery carjacking a few days earlier. As Hill drove out of a gas station parking lot at 2601 Swope Parkway, officers attempted to close the distance between themselves and Hill. Hill began driving erratically and at a high rate of speed. He left the road at 49th and Walrond Avenue and ran from the vehicle. He was taken into custody a short time later. Officers found a Taurus 9mm semi-automatic handgun (reported as stolen) tucked in his pants, a Smith & Wesson 9mm semi-automatic handgun in his pants pocket, and a Sig Sauer .380-caliber semi-automatic handgun wrapped in fabric and tucked under his groin. Officers also found a baggie of methamphetamine and a baggie of cocaine in Hill’s pockets.
Hill had earlier been arrested on March 26, 2019. Officers stopped a Ford Ranger truck that was being driven by another person, with Hill a passenger, because it’s license plates belonged to a different vehicle. The driver of the vehicle had eight active warrants, and both the driver and Hill were directed to get out of the truck. Officers brought Hill to the rear of the truck to conduct a frisk, but he resisted multiple orders to put his hands behind his back and bladed his body away from the officer. Hill then turned and ran across the street. An officer pursued him and tackled him to the ground. Hill was then placed under arrest, and officers found methamphetamine and cocaine in his pockets. Officers also found a Glock 9mm semi-automatic pistol with a 33-round, extended magazine in the area where Hill ran from the officers. Officers found a Zastava 7.62x39mm semi-automatic rifle and an AK-47 magazine in the truck. Both the rifle and the Glock contained Hill’s DNA.
Hill’s earliest arrest in this case occurred on Jan. 19, 2019, when police officers conducted a car check on a 2005 GMC Yukon, which had an expired temporary license plate, near 5215 Olive Street. Hill was a passenger in the vehicle. When the driver reached inside her purse for her identification and handed it to a police officer, a baggy that contained methamphetamine fell on the ground and the driver said, “Uh-oh.” She was placed under arrest. She had another baggie of methamphetamine inside her purse. Officers also removed Hill from the passenger seat and detained him in handcuffs. Inside the vehicle, officers found a Smith & Wesson 9mm semi-automatic pistol (which had been reported stolen) stuffed between the passenger seat, where Hill was sitting, and the center console. Officers also found a baggie of cocaine and a glass vial that smelled of PCP in Hill’s pockets.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Hill has prior felony convictions for drug trafficking, unlawful use of a weapon, burglary, and assault.
Under the terms of the plea agreement, Hill is subject to a sentence of at least 20 years in federal prison without parole, up to a sentence of 25 years in federal prison without parole. 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. Attorneys Brad K. Kavanaugh and Sean T. Foley and Special Assistant U.S. Attorney Sarah J. Rasalam. It was investigated by the Kansas City, Mo., Police Department.
Illinois Man Pleads Guilty to Two Bank RobberiesRead the Press Release
BOSTON – An Illinois man pleaded guilty in federal court in Boston on Wednesday, April 28, 2021 in connection with a Massachusetts bank robbery and an Illinois bank robbery.
Eugene Davis, 54, of Chicago, Ill., pleaded guilty to two counts of bank robbery. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Sept. 9, 2021.
In July 2019, Davis was indicted on the Massachusetts bank robbery. In March 2021, Davis was charged in the Northern District of Illinois with an unrelated bank robbery, and the case was recently transferred to this District for plea and sentencing purposes.
According to the charging documents, Davis robbed a branch of the East Boston Savings Bank in South Boston on June 3, 2019. Davis walked into the bank pulling a suitcase and handed a handwritten demand note to the teller. The note said that there was a bomb in the bag, that everyone was going to die and to please put all the money into Davis’s hand. The teller took $6,055 cash out of the teller drawer and gave it to Davis who placed it in his shirt and walked out of the bank. Davis was apprehended later that day and ultimately confessed to committing the bank robbery and to writing the note used in the bank robbery.
On May 22, 2019, Davis robbed a Chase Bank in Chicago, Ill. Davis entered the bank pulling a wheeled suitcase and handed the teller a demand note. The note stated that Davis had a bomb, demanded money and threatened that no dye packs be included or they would all die. The teller provided approximately $3,460 in cash to Davis who then departed the bank with the money.
The charging statute provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Division; Emmerson Buie, Jr., Special Agent in Charge of the Federal Bureau of Investigations, Chicago Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Boston Police Acting Commissioner Gregory Long made the announcement. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Mendell’s Major Crimes Unit is prosecuting the case.
Honduran National Sentenced for Illegal Re-entryRead the Press Release
BOSTON – A Honduran national was sentenced yesterday in federal court in Worcester for illegally reentering the United States.
Milton Javier Cardona-Guevara, 34, was sentenced by U.S. District Court Judge Timothy S. Hillman to three months in prison. Upon completion of his sentence, Cardona-Guevara will be placed into removal proceedings and deported to Honduras.
In December 2020, Cardona-Guevara pleaded guilty to one count of illegal re-entry into the United States after deportation.
On Aug. 13, 2006, Cardona-Guevara illegally entered the United States and was convicted of improper entry by an alien in August 2006. He was subsequently deported in September 2006. In 2008 and 2011, Cardona-Guevara was apprehended after illegally entering the United States and again deported. On Oct. 2, 2018, Cardona-Guevara was arrested in Worcester County for assault with a dangerous weapon. Cardona-Guevara admitted to immigration authorities that he had been deported three times previously. In January 2019, he was removed from the U.S. On Oct. 13, 2020, Cardona-Guevara was arrested in Worcester on an outstanding warrant for criminal charges and had been custody on state criminal charges until he was charged in this case.
Acting United States Attorney Nathaniel R. Mendell and Todd Lyons, Field Office Director, Enforcement and Removal Operations, U.S. Immigration and Customs Enforcement, Boston made the announcement. Assistant U.S. Attorney John T. Mulcahy of Mendell’s Worcester Branch Office prosecuted the case.
Honduran Man Pleads Guilty to Unlawful ReentryRead the Press Release
Gulfport, Miss. – A Honduran national pleaded guilty today to the crime of unlawful reentry by an alien who was previously deported after conviction of a felony, announced Acting U.S. Attorney Darren J. LaMarca and Michael J. Harrison, Acting Chief Patrol Agent of the Border Patrol’s New Orleans Sector.
According to court documents, Marcio Bonilla-Romero, 38, was arrested after a traffic stop by the U.S. Border Patrol on Interstate 10 in Jackson County on August 27, 2020. Bonilla-Romero provided the agent with a Honduran passport and told the agent that he did not have a driver's license. The agent returned to his vehicle to run record checks and learned that Bonilla-Romero had an extensive criminal history, as well as an active Felony Warrant issued in Harris County, Texas, with full extradition. The agent placed Bonilla-Romero under arrest for the Texas felony warrant.
Bonilla-Romero was extradited to Harris County, Texas. However, investigation continued in the Southern District of Mississippi. It was discovered that Bonilla-Romero may have been removed in 2002 under the name Jose Morales-Gonzalez (listed as a citizen of Mexico). It also was learned that Bonilla-Romero was in fact the same person as Morales-Gonzalez and had been removed in 2002 and again in 2015. Officials confirmed that Bonilla-Romero and Morales-Gonzalez were in fact the same person. Officials also confirmed that Bonilla-Romero, under the alias of Jose Morales-Gonzalez, had been removed from the United States to Mexico on May 15, 2002, and again on July 17, 2002.
Bonilla-Romero pleaded guilty to unlawful reentry by an alien deported or removed after conviction of a felony. He is scheduled to be sentenced on Friday, July 30, 2021 at 9:30 a.m. He faces a maximum penalty of ten years in prison, followed by three years of supervised release, and up to a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Bonilla-Romero also faces Department of Homeland Security proceedings regarding removal from the U.S. following completion of any prison sentence.
The U.S. Border Patrol and the Jackson County Sheriff’s Office worked the case, which is being prosecuted by Assistant U.S. Attorney Stan Harris.
Harrisburg Man Indicted for Possession of A Firearm as A Convicted FelonRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on April 28, 2021, James Patterson, age 40, of Harrisburg, Pennsylvania, was indicted by a federal grand jury with possession of a firearm as a convicted felon.
According to Acting U.S. Attorney Bruce D. Brandler, the indictment alleges that on October 8, 2020, in Dauphin County, Pennsylvania, Patterson was in possession of a Charter Arms .38 caliber handgun and three rounds of ammunition after previously having been convicted of a felony offense.
The matter was investigated by the Harrisburg Police Department’s Street Crimes Unit and the Community Policing Unit, along with the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Paul J. Miovas, Jr. is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department 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 enforcement and the local community to develop effective, locally-based strategies to reduce 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.
The maximum penalty for this offense is 10 years of imprisonment, a term of 3 years of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Gypsum Man Pleads Guilty to Filing a False Tax ReturnRead the Press Release
GRAND JUNCTION — The U.S. Attorney’s Office for the District of Colorado announces that Trenton Switzer, age 40, of Gypsum, CO pleaded guilty for willfully making and subscribing a false tax return.
According to the filed information and the stipulated facts in the plea agreement, Switzer created a nonprofit corporation in Colorado called the Church of Divine Sovereignty. During the 24 hours that this corporation legally existed, Switzer obtained an Employer Identification Number and opened a bank account in its name. Later, Switzer deposited $250,000 in the account and informed his return preparer that these deposits were charitable contributions. After determining that Switzer’s “Church of Divine Sovereignty” did not qualify as a charitable organization, the preparer advised Switzer that the payments were not deductible. Despite these warnings, Switzer nevertheless signed and personally filed his 2015 U.S. Federal Tax Return, falsely claiming a $250,000 charitable contribution deduction.
Fraud and false statements in a tax return carry a sentence of up to three years in prison, one year of supervised release, and a fine of up to $250,000. As part of the plea agreement, Switzer has agreed to pay restitution of $241,964.71, plus penalties and interest to the IRS.
Switzer pleaded guilty before U.S. Magistrate Judge Gordon P. Gallagher on April 26, 2021, in Grand Junction. He is scheduled to be sentenced on July 7, 2021, before U.S. District Court Judge Christine M. Arguello.
This matter was investigated by IRS-CI and is being prosecuted by Assistant United States Attorney Jeremy Chaffin.
Case No. 21-cr-00093-CMA-GPG
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Gretna Resident Pleads Guilty to Possessing 66 Kilograms of Cocaine and $3.9 Million in Drug Proceeds Seized at His Stash House and HomeRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today that DORIAN WILLIAMS, age 47, of Gretna, Louisiana, pled guilty to possessing with intent to distribute five kilograms or more of cocaine and engaging in money laundering of profits from his drug trafficking. Agents seized approximately 66 kilograms of cocaine and about $3.9 million in drug proceeds hidden inside his Gretna stash house and home.
As part of his guilty plea, WILLIAMS agreed to forfeit nearly $5 million in drug proceeds, real estate properties in New Orleans purchased with drug proceeds, and two cars. WILLIAMS faces up to life imprisonment, a fine of $10,000,000, at least five years of supervised release following any term of imprisonment and a $200 special assessment fee. United States District Judge Jane Triche Milazzo will sentence WILLIAMS on August 11, 2021.
According to court documents, Drug Enforcement Administration agents from the New Orleans Field Division identified WILLIAMS in early 2020 as a supplier of kilogram quantities of cocaine to other drug dealers in the New Orleans metropolitan area. Agents also identified multiple addresses associated with WILLIAMS in the Jefferson Parish, Louisiana area.
Agents conducted surveillance on two of these properties – WILLIAMS’s stash house (“Stash House”) and home, both in Gretna. On November 19, 2020, agents conducted an investigatory stop on WILLIAMS’s vehicle. Following the advisement of his Miranda Rights, which he waived, WILLIAMS provided verbal and written consent to search his Stash House and home. Agents discovered approximately twenty-one (21) kilograms of cocaine in hidden drawer compartments inside a wooden TV cabinet in the Stash House, and approximately forty-five (45) kilograms of cocaine and $3.9 million in drug proceeds in WILLIAMS’s home. The Government and WILLIAMS have agreed that WILLIAMS was responsible for possessing with intent to distribute between 50 kilograms and 150 kilograms of cocaine.
In addition, according to court documents, from on or about February 20, 2019 through on or about February 17, 2020, WILLIAMS used approximately $667,500 in proceeds from his cocaine trafficking to purchase seven real estate properties in New Orleans. Doing business as GO GET IT ENTERPRISES, LLC, a Louisiana-based company, WILLIAMS laundered the proceeds of his drug dealing operations in violation of 18 U.S.C. § 1957(a) by purchasing and then developing these seven real estate properties with profits generated from his cocaine sales. WILLIAMS sold six of these seven properties for a profit.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
U.S. Attorney Evans praised the work of the Drug Enforcement Administration, Jefferson Parish Sheriff’s Office, Hammond Police Department, New Orleans Police Department, and Slidell Police Department in investigating this matter. Assistant United States Attorney David Howard Sinkman is in charge of the prosecution.
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Fort Myers Woman Pleads Guilty to Financial Aid Fraud and Wire FraudRead the Press Release
Fort Myers, Florida – Elaine M. Levidow (60, Fort Myers) has pleaded guilty to five counts of wire fraud and one count of fraud involving Department of Education Financial Aid. She faces a maximum penalty of 20 years in federal prison for each count of wire fraud and up to 5 years’ imprisonment for the financial aid fraud. A sentencing date has not yet been set.
According to the plea agreement, beginning in approximately July 2017 and continuing through April 2019, Levidow devised and perpetrated a scheme to defraud the United States Department of Education of more than $90,000 in Title IV Federal Student Assistance (FSA), the primary federal loan and grant funds available to students attending college and career schools. The United States Department of Education requires that the Title IV funds be applied only to specific allowable charges, which include: tuition, mandatory fees, and room and board contracted by the participating institutions of higher education.
As the owner and Chief Executive Officer of The Training Domain, Inc., located in Fort Myers, Levidow used a website to market her company as offering business software application courses to make individuals more employable. As a part of the scheme, Levidow knowingly enrolled students that did not have a high school diploma or GED certificate, making them ineligible to receive FSA funds, and she assisted them in applying for FSA funds. In one instance, Levidow knowingly enrolled a student who was a felon serving a life term in a Florida State prison, assisting him in obtaining FSA funds even though he was ineligible.
In other instances, Levidow applied for FSA loans on behalf of students without telling them, then caused those FSA funds to be wired to Training Domain even though it was not entitled to them.
Levidow admitted to agents that she knew many if not all the students did not have a high school diploma or a GED, but she enrolled them anyway. Further, she admitted that she staged a fictitious class, during an accreditation visit, with students who did not attend class and whom she paid to be there to make it appear she was actually holding classes.
Further, although Levidow’s business, Training Domain, was represented to be an educational institution, she did not use FSA funds to pay for students’ tuitions since her business did not actually hold required classes. Instead, Levidow used the FSA funds to pay for her own personal expenses.
This case was investigated by The United States Department of Education, Office of Inspector General. It is being prosecuted by Assistant United States Attorney Yolande G. Viacava.
Former federal training officer admits assault on federal employeeRead the Press Release
BRUNSWICK, GA: A former federal training officer has admitted assaulting a fellow Customs and Border Protection employee at the Federal Law Enforcement Training Centers in Glynco, Ga.
Roberto Baptiste, 37, of Brunswick, pled guilty in U.S. District Court to an Information charging him with Assault on a Federal Officer or Employee, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. The charge carries a statutory penalty of up to eight years in prison, followed by three years of supervised release and financial penalties of up to $250,000. There is no parole in the federal system.
“All workers have a right to do their jobs without fear of harassment or assault,” said Acting U.S. Attorney Estes. “This prosecution sends a clear message that such violations will not be tolerated.”
As described in the plea agreement accepted by U.S. District Court Judge Lisa Godbey Wood, Baptiste admitted that on Nov. 5, 2018, at the Federal Law Enforcement Training Centers near Brunswick, he “forcibly assaulted, intimidated, and interfered with” a fellow Customs and Border Protection (CBP) employee.
A sentencing date has not yet been set.
“DHS employees are held to the highest standards of professional conduct,” said Inspector General Joseph V. Cuffari, “There is no place among the dedicated professionals of DHS for individuals who cannot respect the law or their colleagues.”
The case was Investigated by the Department of Homeland Security Office of Inspector General, and prosecuted for the United States by Southern District of Georgia Assistant U.S. Attorneys Jennifer J. Kirkland and Joshua S. Bearden.
Former Spa Owner Pleads Guilty for Using Cosmetic Fillers Not Approved for Distribution in the United StatesRead the Press Release
A woman who operated a Tulsa spa pleaded guilty today in federal court for using medical devices, also known as cosmetic fillers, on patients that were not approved by the U.S. Food and Drug Administration (FDA), announced Acting U.S. Attorney Clint Johnson.
Elisa Kaye Sanders, 61, of Tulsa, pleaded guilty to misdemeanor fraud relating to misbranded devices.
Sanders admitted that on March 10, 2017, she administered the medical devices Juvederm® Ultra 4 and Juvederm® Ultra with Lidocaine to a patient. These specific devices are not approved by the FDA for distribution in the United States and are considered adulterated under the Food, Drug, and Cosmetic Act. Sanders failed to tell the patient she was using unapproved fillers. According to court documents, Sanders purchased the fillers from unauthorized sources and was previously advised by the FDA that purchasing these prescription devices from unauthorized sources was illegal.
Sanders was a majority owner and operator of L’Chaim Medical Spa, previously known as Enhance Skin and Body Medical Spa. The business is no longer in operation.
The Food and Drug Administration, Office of Criminal Investigations conducted the investigation. Assistant U.S. Attorneys Shannon Cozzoni and Scott Proctor are prosecuting the case.
Former Odessa Firefighter Admits Accessing and Possessing Child PornographyRead the Press Release
Jeremy Lee Barrera, a 36-year-old former firefighter with the Odessa Fire Department (OFD), admitted in federal court today to possessing child pornography and using his cell phone on the OFD network to access an online chat room where several videos were posted which depicted child pornography.
Appearing before U.S. Magistrate Judge Ronald Griffin in Midland, Barrera pleaded guilty to one count of possession of child pornography. According to court documents, HSI agents conducting an online child sex exploitation investigation identified two local IP addresses used by an account registered to a “Ray Jones” to enter an encrypted online group chat whose members were viewing child pornography. One IP address was registered to OFD Station #2; the other was registered to Barrera’s residence. Based on that information, agents executed a search warrant at Barrera’s residence on January 25, 2021. During that search, agents seized the defendant’s cell phone. A subsequent forensics examination of the cell phone revealed the presence of multiple videos and images depicting minors engaged in sexually explicit activity. The forensics examination of the cell phone also discovered approval remarks by the defendant about child pornography posted in the chat room as well as requests for additional links to child pornography which he communicated in multiple chats using the moniker “Ray Jones”.
“Individuals, such as Barrera, who send or receive child pornography revictimize children each time these illegal images are distributed online,” said Homeland Security Investigations (HSI) Special Agent in Charge Erik P. Breitzke, El Paso Division. “Child exploitation is one of the most serious crimes HSI investigates, because of the lasting physical and psychological damage inflicted on innocent and vulnerable victims, and we will continue to pursue these perpetrators and ensure serious consequences for their heinous crimes.”
Barrera is currently in federal custody. He faces up to 20 years in federal prison. A sentencing date has yet to be scheduled.
U.S. Attorney Ashley C. Hoff and HSI Special Agent in Charge Breitzke made the announcement.
HSI, together with the Odessa Police Department, investigated this case. Assistant U.S. Attorney Shane Chriesman is prosecuting 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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Former Jackson Police Officer Sentenced for Obstruction of a Federal InvestigationRead the Press Release
Jackson, Miss. – Mark Anthony Coleman, 58, a former Jackson Police Officer, was sentenced today by United States District Judge Tom S. Lee to 30 months in prison, followed by 3 years of supervised release, for destroying evidence of his involvement with a 16-year old female, announced Acting United States Attorney Darren J. LaMarca, Michelle Sutphin, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi, and Mississippi Attorney General Lynn Fitch.
Coleman was charged in a federal criminal indictment on July 14, 2020 and he pled guilty before Judge Lee on January 21, 2021.
The Federal Bureau of Investigation, the Mississippi Attorney General’s Office and the Jackson Police Department investigated the case.
Assistant U.S. Attorney Glenda R. Haynes prosecuted the case.
Former Financial Advisor Sentenced to 78 Months in Prison for Role in $2 Million Ponzi Scheme Targeting Elderly InvestorsRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey man, was sentenced today to 78 months in prison for engaging in a $2 million Ponzi scheme targeting elderly investors and for subscribing to a false tax return, Acting U.S. Attorney Rachael A. Honig announced.
Daniel Rivera, 51, of Hillsborough, New Jersey, a former financial advisor, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging him with one count of wire fraud and one count of subscribing to a false tax return. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From 2008 through 2017, Rivera solicited primarily elderly investors to invest their money in a company called Robbins Lane Properties Inc. Rivera represented to investors that Robbins Lane was a company staffed by experienced real estate professionals that invested in real estate ventures. Rivera told investors that by investing in Robbins Lane, senior investors would share in the company’s investment portfolio by lending it money to invest in real estate. Rivera further promised investors that they would receive a guaranteed monthly income, and that the company’s rate of return was based on secure real estate investments in the company’s portfolio. In reality, Robbins Lane had no employees, no real estate portfolio, and the monies used to pay investors as a purported return on their investments was from funds he received from other investors. Rivera also used funds sourced from investors to pay his personal and unrelated business expenses, including paying his child’s college tuition and sorority fees.
During the course of the fraudulent scheme, on March 5, 2014, Rivera filed with the IRS a federal income tax return that underreported his taxable income by $33,276.
In addition to the prison term, Judge Thompson sentenced Rivera to three years of supervised release and ordered him to pay restitution of $1.47 million to his victims and $284,863 to the IRS.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit in Newark.
Former CEO of Connecticut Non-Profit Admits Embezzling $683KRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and David Sundberg, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that MICHAEL MEAKEM, 59, of Norwich, waived his right to be indicted and pleaded guilty today in New Haven federal court to one count of wire fraud stemming from an embezzlement scheme.
According to court documents and statements made in court, Meakem was the president and chief executive officer of the Center for Financial Training (“CFT”), a Farmington-based non-profit organization that provided continuing education to employees in the financial services industry. Between approximately 2013 and 2020, Meakem embezzled at least $683,202 from CFT’s credit card accounts and bank accounts and used the funds on personal expenses, including alimony payments, meals, cruises, other vacations, and gambling at Connecticut’s casinos.
Wire fraud carries a maximum term of imprisonment of 20 years. Meakem is scheduled to be sentenced by U.S. District Judge Michael P. Shea on August 3, 2021.
Meakem was ordered released by Magistrate Judge Sarah A.L. Merriam on a $100,000 bond pending sentencing.
This investigation has been conducted by the Federal Bureau of Investigation, with assistance from the Norwich Police Department. The case is being prosecuted by Assistant U.S. Attorney Jonathan N. Francis, and the government was represented at today's hearing by Law Student Intern Clio Koller.
Former CEO of Live Well Financial Convicted in Connection with $200 Million Bond Fraud SchemeRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that MICHAEL HILD, the founder and former chief executive officer of Live Well Financial, Inc. (“Live Well”), was convicted today of securities fraud, wire fraud, and bank fraud charges in connection with a scheme to fraudulently inflate the value of a portfolio of bonds owned by Live Well in order to induce various securities dealers and at least one financial institution into loaning more money to Live Well – through repurchase (“repo”) agreements and collateralized loans – than they otherwise would have had they known the actual value of Live Well’s bond portfolio. The scheme allowed Live Well to grow its bond portfolio exponentially, from approximately 20 bonds with a stated value of approximately $50 million in 2014 to approximately 50 bonds with a stated value of over $500 million by the end of 2016. In May 2019, in conjunction with an effort to wind down the company, Live Well wrote down the value of its portfolio by over $200 million.
Manhattan U.S. Attorney Audrey Strauss said: “As a unanimous jury found, Michael Hild obtained millions of dollars in secured loans for Live Well Financial by grossly inflating the value of bonds used as collateral. Hild deceived a third-party pricing service by providing it with inflated marks, resulting in the pricing service publishing valuations for the bonds far in excess of market value. Lenders were hoodwinked into lending far more than they otherwise would have. The house of cards came crashing down with the unwinding of Live Well and the revelation to lenders that the bond portfolio had been overvalued by $200 million. Now, Michael Hild awaits sentencing for his crimes.”
According to the evidence presented during the trial:
Live Well’s Bond Portfolio and Repurchase Agreements
Live Well was a Richmond, Virginia-based company that originated, serviced, and securitized government-guaranteed reverse mortgages known as Home Equity Conversion Mortgages (“HECMs”). In or about 2014, Live Well acquired a portfolio of approximately 15 bonds, each entitling the holder to receive a portion of the interest payments, but not the principal payments, from a particular pool of reverse mortgages (“HECM IO bonds.”). Live Well purchased the HECM IO bond portfolio for approximately $50 million. At the same time that Live Well purchased the HECM IO bond portfolio, HILD established within Live Well a New York City-based trading desk to manage and grow Live Well’s bond portfolio.
Live Well financed the acquisition and growth of its bond portfolio through a series of loans in which Live Well used its bond portfolio as collateral. The majority of Live Well’s lenders were securities dealers whose lending arrangements with Live Well were structured as bond repurchase agreements, also known as “repo agreements.” A repo agreement is a short-term loan in which both parties agree to the sale and future repurchase of an asset within a specified contract period. The seller sells the asset to the lender with a promise to buy it back at a specific date and at a price that includes an interest payment. Functionally, a repo agreement is a collateralized loan in which title of the collateral is transferred to the lender. When the loan is repaid by the borrower, the collateral is returned to the borrower through a repurchase. Additionally, at least one of Live Well’s lenders was an FDIC-insured bank, and its lending arrangement with Live Well was structured as a secured loan, with certain bonds held as collateral by a third-party custodian.
The Scheme to Mismark the Bond Portfolio
Live Well’s financing agreements with all but one of the lenders required that any bond that Live Well sought to borrow against be priced by a third-party pricing source in order to determine the market value of the bond as of the measurement date. The lenders then used the value of the bond, coupled with the application of a haircut of generally 10% to 20%, to determine the amount of money to lend Live Well.
The lenders generally relied on a particular widely utilized subscription service (the “Pricing Service”) to price various securities. In or about September 2014, HILD and his co-conspirators embarked on a scheme to cause the Pricing Service to publish valuations for the bonds that far exceeded actual market prices. By doing so, the conspirators induced the lenders to extend credit to Live Well far in excess of the prices for which the bonds could be sold in the market. The inflated prices were based on a set of market assumptions that the conspirators called “Scenario 14.”
HILD was aware that if the lenders had known that the Pricing Service was publishing bond prices that did not reflect fair value, meaning the price at which a lender could sell the bond in the market if necessary to recoup its capital, they would have refused to use those prices in determining how much money to loan to Live Well. To prevent the Pricing Service and the lenders from learning that the prices did not reflect market value, HILD directed his co-conspirators at Live Well to take steps to conceal their provision of inflated marks to the Pricing Service. Ultimately, due to the asset overvaluation and the purchase of additional bonds using the capital generated by the scheme, Live Well grew the purported value of its bond portfolio to over $500 million by December 2016.
In addition to using the liquidity generated by the scheme to expand Live Well’s bond portfolio, in or about September 2016, HILD used $18 million generated from the repo lenders to buy out the preferred stockholders in Live Well. The elimination of the preferred stockholders gave HILD control of the company and allowed him to substantially increase his personal compensation. Accordingly, HILD’s compensation jumped from approximately $1.4 million in 2015, to approximately $5 million in 2016, approximately $9.7 million in 2017, and over $8 million in 2018.
In or about late 2018, the chief financial officer of Live Well resigned after HILD refused to reduce the compensation he was receiving from the company. In or about May 2019, the company’s interim chief financial officer informed HILD that he would not sign the company’s interim financial statements because he believed that the company’s carrying value for the HECM IO bond portfolio was significantly overstated. In or about May 2019, Live Well announced that it would cease operations and unwind. After the announcement of Live Well’s closing, Live Well’s interim chief financial officer provided a balance sheet to Live Well’s lenders showing that Live Well had reduced the value of its bond portfolio by over $200 million.
* * *
HILD, 46, of Richmond, Virginia, was convicted of five counts: one count of conspiracy to commit securities fraud; one count of conspiracy to commit wire and bank fraud; one count of securities fraud; one count of wire fraud; and one count of bank fraud. Count One carries a maximum sentence of five years in prison, Counts Two, Four, and Five each carry a maximum sentence of 30 years in prison, and Count Three carries a maximum sentence of 20 years in prison. The charges also contain a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
HILD is scheduled to be sentenced at 10:00 a.m. on August 20, 2021, by U.S. District Judge Ronnie Abrams, who presided over the trial.
Ms. Strauss praised the investigative work of the FBI and also thanked the Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jordan Estes and Scott Hartman are in charge of the prosecution.
Florida woman admits to bankruptcy fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Heather Lynn Pratt, of Fort Myers, Florida, has admitted to bankruptcy fraud, Acting U.S. Attorney Randolph J. Bernard announced.
Pratt, 32, pleaded guilty to one count of “Fraudulent Concealment of Bankruptcy Assets.” At the time of the offense, Pratt was employed by Emerald Grande, LLC and had access to the finances of the Florida-based company. Emerald Grande was operating two La Quinta Inn & Suites in West Virginia, one in Elkview and the other in Summersville, as well as a commercial property in Charleston known as the Kanawha Landing Property. Emerald Grande was a debtor in a bankruptcy case filed and pending in Clarksburg United States Bankruptcy Court.
Pratt admitted to concealing more than $145,000 she embezzled from the operating account of the LaQuinta Inn & Suites in Summersville from the bankruptcy trustee, when in fact, that money belonged to the debtor, Emerald Grande, LLC.
As a part of the plea agreement, Pratt will be required to pay restitution in the amount of $145,386.93 to the U.S. Bankruptcy Trustee.
Pratt is facing up to five years of incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jarod J. Douglas is prosecuting the case on behalf of the government. The FBI investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Felon Admits Possessing Handgun in GrotonRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that JONATHAN COLON, 29, formerly of Meriden, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to possession of a firearm by a felon.
According to court documents and statements made in court, on March 5, 2018, Colon was arrested at a hotel in Groton where he possessed a Springfield Armory .45 caliber semiautomatic handgun.
Colon’s criminal history includes a state felony conviction for a robbery offense. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Judge Underhill scheduled sentencing for August 10, 2021, at which time Colon faces a maximum term of imprisonment of 10 years. Colon is released pending sentencing.
This investigation has been conducted by the Federal Bureau of Investigation, Town of Groton Police Department and New London Police Department. The case is being prosecuted by Assistant U.S. Attorney Lauren C. Clark.
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 neighborhoods safer for everyone.
Federal Jury Convicts Jacksonville Man of Tax Fraud for Preparing Fraudulent Tax ReturnsRead the Press Release
Jacksonville, Florida – A federal jury has found Paul Berkins Moise guilty of 14 counts of filing false returns on behalf of (unknowing) clients and 3 counts of filing false tax returns on behalf of himself. Moise faces a maximum penalty of three years in federal prison for each count. The United States will also seek restitution for the tax losses arising out of the fraud. Moise’s sentencing hearing is scheduled for August 9, 2021.
Moise had been indicted on February 6, 2019.
According to testimony and evidence presented at trial, Moise owned and operated a tax preparation business in Jacksonville. Between February 2013 and March 2017, Moise defrauded the IRS by filing returns for his clients in which he grossly inflated deductions for state and local sales taxes, unreimbursed employee expenses, and gifts to charity by cash or check.
For example, on one tax return, Moise claimed a sales tax deduction of $5,883 for a client who had a gross income of $43,476. In order for that client to claim a sales tax deduction that large, the client would have had to have made taxable purchases totaling $89,926 (including the tax) -- or more than twice the client’s claimed gross income.
Trial evidence also showed that Moise grossly underreported his own income on tax returns he filed for himself for the years 2013, 2014, and 2015. On his 2013 return, Moise reported $10,160 in income when he actually earned at least $83,848 that year. On his 2014 return, Moise reported $2,695 in income when he actually earned $252,652 that year. On his 2015 return, Moise reported $10,255 in income when he actually earned $234,936 that year.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Arnold B. Corsmeier.