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20 April 2021
First Engineer of International Commercial Cargo Tanker Convicted of Falsifying Records and Obstructing Justice in Scheme to Dump Oily Bilge in International WatersRead the Press Release
OAKLAND – A federal jury convicted Gilbert Fajardo Dela Cruz of aiding and abetting an environmental crime and obstruction of justice in connection with the intentional dumping in February of 2019 of oily bilge water from a commercial tanker, announced Acting United States Attorney Stephanie M. Hinds and U.S. Coast Guard Investigative Service Special Agent in Charge Kelly S. Hoyle. The verdict follows a two-week trial before the Honorable Jon S. Tigar, U.S. District Judge.
“The crew members of the Zao Galaxy dumped oily bilge water into the ocean and then tried to cover up the environmental damage by submitting bogus paperwork to the United States Coast Guard," said Acting U.S. Attorney Hinds. "As First Assistant Engineer of an ocean-going commercial tankship, Gilbert Dela Cruz was charged with ensuring the crew would follow the rules, not try to circumvent them. This verdict will serve as a reminder that there are stiff penalties for those who try to violate federal and international rules designed to protect our precious natural resources from polluters.”
In January of 2019, Dela Cruz, 38, a Philippine national, was the First Engineer of the M/T Zao Galaxy (Zao Galaxy), a 16,408 gross-ton, ocean-going oil tankship when it traveled from the Philippines to Richmond, Calif. The Zao Galaxy was operated by Dela Cruz’s employer, Unix Line PTE Ltd. (Unix), a Singapore-domiciled company. The Zao Galaxy, like all such large oil tanker vessels, generates “oily bilge water” when traveling. Typically, oily bilge water is collected, stored, and processed to separate the water from the oil and other wastes using a pollution prevention control device known as an Oil Water Separator and an oil-sensing device known as an Oil Content Meter. Only after passing through an Oily Water Separator that limits the amount of oil in water may oily bilge water be discharged overboard.
On February 11, 2019, United States Coast Guard examiners boarded the Zao Galaxy while it was moored in Richmond to conduct an examination. During the examination, a crewmember passed a note to an examiner requesting a meeting after the inspection so that the crewmember could “tell something” about a “magic pipe” and “damage [to the] marine environment.” After the inspection and a follow-up investigation, Unix ultimately admitted that a ship officer directed crew members to discharge oily bilge water overboard, using a configuration of drums, flexible pipes, and flanges to bypass the vessel’s oil water separator. On February 26, 2020, the company admitted the discharges were done knowingly and that they were not recorded in the Zao Galaxy’s oil record book when it was presented to the U.S. Coast Guard during the vessel’s inspection. Unix pleaded guilty to one count of violating the Act to Prevent Pollution from Ships. On March 20, 2020, Judge Tigar sentenced Unix to pay a fine of $1,650,000.00, placed Unix on probation for a period of four years, and ordered the company to implement a comprehensive Environmental Compliance Plan as a special condition of probation.
Notwithstanding these admissions, Dela Cruz denied responsibility for the environmental crimes and went to trial. In finding Dela Cruz guilty, the jury concluded Dela Cruz aided and abetted a violation of the Act to Prevent Pollution from Ships by causing the captain of the Zao Galaxy to maintain an inaccurate oil record book and that he also committed obstruction of justice.According to the evidence presented at trial, in preparation for a Coast Guard inspection in Richmond, California, Dela Cruz ordered a lower level employee who worked as his assistant to dump oily waste from the ship’s engine room directly into the ocean using a “magic pipe.” Dela Cruz then worked to conceal the dumping by not recording the movement or discharge of oily waste in the ship’s oil record book, which he was responsible for. Dela Cruz ordered that certain pieces of equipment be repainted and the “magic pipe” be hidden to avoid Coast Guard detection. During the Coast Guard’s inspection, Dela Cruz told his assistant who had dumped the oily waste overboard not to throw him “under the bus” and that they needed to get their stories straight for the Coast Guard.
A federal grand jury indicted Dela Cruz on October 24, 2019, charging him with one count of violating the Act to Prevent Pollution from Ships, in violation of 33 U.S.C. § 1908(a); one count of obstruction of justice, in violation of 18 U.S.C § 1519, and one count of obstruction of an agency proceeding, in violation of 18 U.S.C. § 1505. The jury found Dela Cruz guilty of all three counts. Dela Cruz faces a maximum of six years’ imprisonment and $250,000 for and three years of supervised release for the pollution count, 20 years’ imprisonment and $250,000 for the obstruction of justice count, and five years of imprisonment and $250,000 for the obstruction of the agency proceedings count. The court may also order an additional term of supervised release, restitution, and fines; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Tigar ordered Dela Cruz released on bond pending sentencing and scheduled the sentencing for June 11, 2021, at 9:30 a.m.
Assistant U.S. Attorneys Katherine Lloyd-Lovett and Noah Stern are prosecuting the case with assistance from Kay Konopaske. The prosecution is the result of an investigation by the United States Coast Guard Sector San Francisco and the Coast Guard Investigative Service.
Fintech CEO Pleads Guilty to Multiple Fraud Schemes, Including $7 Million COVID-19 Pandemic Loan Fraud and Securities FraudRead the Press Release
Audrey Strauss, United States Attorney for the Southern District of New York, announced today that SHENG-WEN CHENG, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” pled guilty to major fraud against the United States, bank fraud, securities fraud, and wire fraud in connection with multiple fraud schemes he perpetrated. Specifically, CHENG engaged in a scheme to fraudulently obtain over $7 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic. CHENG also solicited and obtained investments in Alchemy Coin Technology Limited and related companies controlled by CHENG through materially false and misleading statements and omissions. Finally, CHENG fraudulently obtained due diligence fees from various start-up companies as part of an advance fee scheme. CHENG pled guilty today before U.S. District Judge Alison J. Nathan and is scheduled to be sentenced on August 3, 2021, at 3:00 p.m.
U.S. Attorney Audrey Strauss said: “As he admitted, Sheng-Wen Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for small businesses financially struggling in the COVID pandemic. Cheng lied to the SBA and several banks about ownership of his companies, the number of people employed, and how any loan proceeds would be applied, using forged and fraudulent documents in the process. Cheng spent much of the money on personal luxury items. In addition, Cheng committed securities fraud by lying to investors in his blockchain-based peer-to-peer lending platform, and wire fraud by engaging in an advance fee scheme. Now Cheng awaits sentencing for his multitude of crimes.”
According to the Complaint, Information, and other documents filed in Manhattan federal court:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s Paycheck Protection Program (“PPP”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. The CARES Act also expanded the separate Economic Injury Disaster Loan (“EIDL”) Program, which provided small businesses with low-interest loans that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19.
CHENG, a Taiwanese national who entered the United States on a student visa, is a self-proclaimed “serial entrepreneur” who earned a Bachelor’s Degree from Pennsylvania State University (“Penn State”). From at least in or about April 2020 through at least on or about August 13, 2020, CHENG used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, and Wynston York LLC (collectively, the “Cheng Companies”). In connection with these loan applications, CHENG represented, among other things, that other individuals were the sole owners of the Cheng Companies and that the Cheng Companies together had over 200 employees and paid a total of approximately $1.5 million in wages to those employees on a monthly basis. In fact, however, the Cheng Companies appear to have had a total of no more than 14 employees.
In order to support the false representations in the loan applications about the number of employees at and the wages paid by the Cheng Companies, CHENG submitted fraudulent and doctored tax records that were never actually filed with the IRS and payroll records containing the forged electronic signature of a payroll company employee. CHENG also submitted a payroll summary for one of his companies that listed the names of more than 90 purported employees, several of whom are current or former athletes, artists, actors, or public figures. For example, the list of purported employee names included a co-anchor on “Good Morning America,” a former National Football League player, and a prominent former Penn State football coach who is now deceased.
Based on the fraudulent PPP loan applications submitted by CHENG, a total of more than $3.7 million in PPP loans were approved for the Cheng Companies and approximately $2.8 million in PPP loan proceeds were deposited into bank accounts solely controlled by CHENG. Instead of using the PPP loan proceeds for payroll costs, mortgage interest, rent, and/or utilities for the purported Cheng Companies as required by the PPP, CHENG transferred over $1 million abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent at least approximately $279,000 in PPP loan proceeds on personal expenses. These personal expenses included the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium used by CHENG, approximately $50,000 of furnishings for the condominium, a portion of the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.
In addition to the COVID-19 pandemic loan fraud described above, from at least in or about 2017 through at least in or about 2019, CHENG committed securities fraud by soliciting and obtaining investments in Alchemy Coin Technology Limited and related companies (“Alchemy Coin”) controlled by CHENG. These investments were obtained through materially false and misleading statements and omissions regarding Alchemy Coin’s access to capital, use of investor proceeds, the product readiness of its purported blockchain-based peer-to-peer lending platform, and the registration of its tokens as part of an initial coin offering.
Finally, from at least in or about 2018 through at least in or about 2019, CHENG committed wire fraud by fraudulently obtaining due diligence fees from various start-up companies as part of an advance fee scheme through materially false and misleading statements regarding the purpose and refundability of the fees and his interest and ability to make investments in the start-up companies.
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CHENG, 24 of New York, New York, pled guilty to one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of securities fraud and one count of wire fraud, which each carry a maximum sentence of 20 years in prison; and one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison. 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 the judge.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Small Business Administration, and the Internal Revenue Service Criminal Investigation. Ms. Strauss also thanked the United States Securities and Exchange Commission, U.S. Customs and Border Protection, and the New York State Department of Labor for their assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.
Eastern District of Texas Commemorates the 40th Anniversary of National Crime Victims’ Rights WeekRead the Press Release
BEAUMONT, Texas – The U.S. Attorney’s Office for the Eastern District of Texas joins communities nationwide in commemorating the 40th anniversary of National Crime Victims’ Rights Week (NCVRW) from April 18–24, 2021. This year’s theme, Support Victims. Build Trust. Engage Communities, emphasizes the importance of leveraging community support to help victims of crime.
“The faces of crime victims are those of our families, friends, neighbors, and community members,” said Acting U.S. Attorney Nicholas J. Ganjei. “The Eastern District of Texas is committed to upholding victims’ rights as we work to protect the safety of our communities and pursue equal justice under the law. Now is the time to redouble our efforts so that fewer Americans become victims of crime.”
NCVRW is a time to renew a commitment to serving victims of crime, acknowledge achievements made in the victim services field, and remember crime victims and survivors. For more information about this year’s NCVRW and how to assist victims in your community, please visit the NCVRW website (https://ovc.ojp.gov/program/national-crime-victims-rights-week/overview).
The Justice Department’s Office for Victims of Crime (OVC) leads communities throughout the country in their annual observances of NCVRW, during which victim advocacy organizations, community groups, and state, local, and tribal agencies traditionally host rallies, candlelight vigils, and other events to raise awareness of victims’ rights and services. For additional information about visit OVC’s efforts, please visit www.ovc.ojp.gov.
Dominican National Arrested for Fentanyl TraffickingRead the Press Release
BOSTON – A Dominican national was arrested yesterday on charges of fentanyl trafficking.
Junior Baez Sanchez, 28, was indicted on two counts of distributing more than 40 grams of fentanyl. He was detained following an initial appearance today before U.S. Magistrate Judge Jennifer C. Boal pending a detention hearing scheduled for April 26, 2021.
According to the indictment, Baez Sanchez distributed more than 40 grams of fentanyl in Chelsea on June 2, 2020 and in Malden on July 15, 2020.
The charge of distributing more than 40 grams of fentanyl provides for a mandatory minimum sentence of five years and up to 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Special assistance was provided by the Middlesex County Sheriff’s Office and Massachusetts State Police. Assistant U.S. Attorney Charles Dell’Anno of Mendell’s Major Crimes Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Department of Justice Commemorates National Crime Victims’ Rights WeekRead the Press Release
CEDAR RAPIDS, IA – The Department of Justice’s Office for Victims of Crime (“OVC”) and the United States Attorney Offices for the Northern and Southern Districts of Iowa will join communities nationwide in observing National Crime Victims’ Rights Week and celebrating victims’ rights, protections and services. This year’s observance takes place April 18-24 and is the 40th anniversary of National Crime Victims’ Rights Week.
OVC leads communities throughout the country in their annual observances of NCVRW by promoting victims’ rights and honoring crime victims and those who advocate on their behalf. This year’s theme - Support Victims. Build Trust. Engage Communities. - celebrates the contributions that we all can make toward building trust in our community’s capacity to support the healing journeys of crime victims. Trust is collective as well as individual, so we are honoring both the individual victims in our community and the groups engaged in building networks of understanding and support.
In Iowa, Acting United States Attorneys Sean Berry and Richard Westphal announced winners for five awards based on their service to victims in Iowa. In the Northern District of Iowa, the following award was announced:
- The Award for Excellence in Victim Services is presented to Cinnamon Mawdsley from the Kossuth County Attorney’s office. Ms. Mawdsley has worked as the Kossuth County Victim/Witness Coordinator for seventeen years. She has demonstrated a passion for assisting crime victims and survivors through the criminal justice process. Ms. Mawdsley also provides victim assistance training to her colleagues. Ms. Mawdsley’s great work has been recognized by the victims she supports, her co-workers in the Kossuth County Attorney’s Office, and law enforcement organizations and other allied professionals.
“For nearly two decades, Cinnamon Mawdsley has dedicated countless hours to serving crime victims and survivors,” said Acting United States Attorney Berry. “In doing so, she has set a high standard for assisting victims during a difficult process. Her work has impacted hundreds of victims, law enforcement officers, and community members.”
In the Southern District of Iowa, the following awards were announced:
- The Law Enforcement Victim Services Award is presented to
-Investigator Brady Carney of the Des Moines Police Department,
Investigator Carney’s tireless work to help multiple victims in a large-scale sex trafficking investigation was critical to supporting federal charges. His relentless efforts have not only provided evidence to support prosecution, but also invaluable assistance to victims from all over the country.
-Investigator Michael Sieren of the Ottumwa Police Department, Throughout his career, Investigator Sieren’s fierce dedication to holding violent offenders accountable was outmatched only by his unwavering concern for protecting victim’s safety. The Ottumwa community is a safer, better place as the result of Investigator Sieren’s perseverance and compassion.
-Detective Erin Costanzo of the Des Moines Police Department, As a member of the DART (Domestic Abuse Resource Team) at the Des Moines Police Department since 2006, Detective Costanzo is on the front lines of domestic abuses cases. She has regularly provided follow up investigation for state criminal prosecutions, while at the same time providing valuable access to resources and support for victims. Because of her commitment, countless victims have found a lifeline to safer and happier lives.
- The award for Excellence in Victim Services is awarded to Nicole Norton/Victim Witness Coordinator at the Story County Attorney’s Office. In their time of need, Nicole Norton has selflessly provided vital assistance to Story County victims, specifically victims of violent crime and sexual abuse. Her empathy, compassion, and willingness to go the extra mile has clearly made a difference in countless victims’ lives, and the successful prosecution of the involved criminal offenders.
“These awards proudly recognize the exceptional efforts of four individuals providing assistance to federal and state victims in the Southern District of Iowa,” said Acting United States Attorney Westphal. “Advocacy for the rights and safety of victims is a cogent reminder of the long-term human impact of these crimes. The service of these four individuals, and other state and federal victim advocates, are a vital component of our criminal justice system.”
Ronald Reagan proclaimed the first Victims’ Rights Week in 1981, putting crime victims' rights, needs, and concerns in a prominent spot on the American agenda. He also established the President's Task Force on Victims of Crime, which laid the groundwork for a national network of services and legal safeguards for crime victims.
For more information on how to create your own public campaigns to raise awareness about crime victims’ rights online and at events throughout the year, please visit: https://www.ovc.ojp.gov/
Davenport Man Sentenced to Federal Prison for Firearm ChargeRead the Press Release
DAVENPORT, Iowa — On Monday, April 19, 2021, United States District Court Judge Stephanie M. Rose sentenced Detavion Marques Levi, age 24, of Davenport, to 52 months in prison for Felon in Possession of Firearm announced Acting United States Attorney Richard D. Westphal. Levi was ordered to serve three years of supervised release to follow his prison term as well as pay $100 to the Crime Victims’ Fund.
The investigation of Levi began in June 2020 when law enforcement officials executed a search warrant on a hotel room related to a stolen vehicle. Upon search of the room, officers located Levi, a previously convicted felon, another individual, marijuana, keys to the stolen car, and a loaded firearm. Levi initially denied possessing the firearm, but then claimed he briefly handled the gun before police arrived. Levi’s fingerprint was subsequently found on the loaded magazine of the firearm. Officers located additional evidence that Levi had been dealing marijuana and been in possession of other firearms. Levi was under federal supervision for a prior gun conviction at the time of this offense.
This matter was investigated by the Bettendorf Police Department, the Davenport Police Department, and the Iowa Division of Criminal Investigations. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
DEA Announces April 24, 2021 Prescription Drug Take Back DayRead the Press Release
Acting United States Attorney Ellison C. Travis announces support of DEA’s 11th Annual Prescription Drug Take Back Day to be held on April 24, 2021. The National Prescription Drug Take Back Day is a bi-annual event that aims to provide a safe, convenient, and responsible means of disposing of prescription drugs, while also educating the general public about the potential for abuse of medications. This service is free and anonymous, no questions asked.
Per new, official CDC numbers, opioid overdose deaths have increased during the pandemic (May 2019-May 2020). 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.
DEA and its partners will collect tablets, capsules, patches, and other solid forms. Liquids, including intravenous solutions, syringes and other sharps, and illegal drugs will not be accepted. DEA will continue to accept vaping devices and cartridges at any of its drop off locations, as long as the lithium batteries are removed.
In addition to DEA’s National Prescription Drug Take Back Day, prescription drugs can be disposed of at any of the 11,000 authorized collectors at any time throughout the year. For more information, visit: https://apps2.deadiversion.usdoj.gov/pubdispsearch/spring/main?execution=e1s1.
Participating in the next DEA Take Back Day on Saturday, April 24, simply means cleaning out your medicine cabinet or anywhere you keep unused, unwanted or expired medications and dropping them off at your nearest collection site. You can learn more about the event and find a collection site at takebackday.dea.gov or call 800-882-9539.
DEA Announces 20th National Prescription Drug Take Back DayRead the Press Release
BIRMINGHAM, Ala. – United States Attorney Prim F. Escalona announces support of DEA’s 20th National Prescription Drug Take Back Day to be held on April 24, 2021. Take Back Day is a bi-annual event that aims to provide a safe, convenient, and responsible means of disposing of prescription drugs, while also educating the public about the potential for abuse of medications.
DEA’s October 2020 Take Back Day brought in a record-high amount of expired, unused prescription medications, with the public turning in close to 500 tons of unwanted drugs. Over the 10-year span of Take Back Day, DEA has brought in more than 6,800 tons of prescription drugs.
According to the Centers for Disease Control and Prevention, the U.S. has seen an increase in overdose deaths during the COVID-19 pandemic, with 87,200 Americans dying as a result of a drug overdose in a one-year period (Sept. 1, 2019 to Sept. 1, 2020), the most ever recorded in a 12-month period. The increase in drug overdose deaths appeared to begin prior to the COVID-19 health emergency, accelerating significantly during the first months of the pandemic.
“Let’s do our part to protect our loved ones by disposing of those unused, unwanted or expired prescription drugs in our possession,” U.S. Attorney Escalona said. “It is the easiest and most effective thing we can do to combat the national opioid epidemic.”
“The rate of prescription drug abuse in the United States is alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs, said DEA Special Agent in Charge Brad Byerley. “Unfortunately, these prescription drugs are most often obtained from friends and family, who leave them in home medicine cabinets. Helping people dispose of potentially harmful prescription drugs is just one way DEA is working to reduce the addiction rates and overdose deaths plaguing this country. Please do your part to keep these drugs off the streets and help spread awareness in your community.”
The public can drop off potentially dangerous prescription medications at collection sites which will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement.
DEA and its partners will collect tablets, capsules, patches, and other solid forms of prescription drugs. Liquids (including intravenous solutions), syringes and other sharp objects, and illegal drugs will not be accepted. DEA will continue to accept vaping devices and cartridges at its drop off locations provided lithium batteries are removed.
Learn more about the event at www.deatakeback.com, or by calling 800-882-9539.
DEA and U.S. Attorney’s Offices Throughout New York Promote National Prescription Drug Take Back DayRead the Press Release
NEW YORK – With opioid overdose deaths increasing during the pandemic, the Drug Enforcement Administration is holding its 20th Take Back Day on Saturday, April 24th. DEA’s October 2020 Take Back Day brought in a record-high amount of expired, unused prescription medications, with the public turning in close to 500 tons of unwanted drugs. Over the 10-year span of Take Back Day, DEA has brought in more than 6,800 tons of prescription drugs. With studies indicating a majority of abused prescription drugs come from family and friends, including from home medicine cabinets, clearing out unused medicine is essential.
According to the Centers for Disease Control and Prevention, the U.S. has seen an increase in overdose deaths during the COVID-19 pandemic, with 87,200 Americans dying as a result of a drug overdose in a one-year period (Sept. 1, 2019 to Sept. 1, 2020), the most ever recorded in a 12-month period. The increase in drug overdose deaths appeared to begin prior to the COVID-19 health emergency, accelerating significantly during the first months of the pandemic.
DEA Special Agent in Charge Ray Donovan said, “This past year was a stark reminder that public health is a priority, and while DEA is focused on enforcement we also provide important tools to stop drug abuse before it starts,” said. “Programs like Take Back Day make it easy for families to remove unused threats of abuse in their homes while encouraging discussion about the tragic dangers associated with opioid use and misuse.”
“Just as we were beginning to make great strides, we have seen a tragic increase in the number of, not only opioid overdoses, but also deaths during this global pandemic,” stated U.S. Attorney James P. Kennedy, Jr., of the Western District of New York. “The pandemic has resulted in many people spending more time alone, distanced from loved ones and friends making this year’s National Prescription Drug Take Back Day that much more important. Removing old or unused prescription medications from our medicine cabinets just might help to prevent an overdose or to reduce the chances of creating a future opioid user.”
Acting United States Attorney Antoinette T. Bacon said, “On Take Back Day, DEA makes our communities safer by collecting unneeded prescription drugs. I urge every adult to take advantage of this safe, convenient and anonymous way to empty their medicine cabinets of unused medication that could be misused by a loved one.”
“Through Drug Take Back Day, we are reminded of the ways in which the alarming opioid epidemic has exposed the hidden dangers and potential abuses of prescription drugs,” stated Acting U.S. Attorney Mark J. Lesko. “The U. S. Attorney’s Office for the Eastern District of New York is proud to be part of DEA’s mission to end prescription drug abuse and we encourage all residents to dispose of unused and expired medicines at official disposal locations.”
Audrey Strauss, U.S. Attorney for the Southern District of New York, said: “We wholeheartedly support the DEA’s Drug Take Back Day, and we encourage anyone with expired or unused prescription medications to take advantage of this program. By disposing of dangerous and potentially lethal substances safely, you can possibly prevent a tragedy.”
“It’s important to keep our own homes safe by regularly cleaning out medicine cabinets and any other areas where we store our pharmaceuticals,” said DEA Acting Administrator D. Christopher Evans. “Bringing unused or expired medications to a local collection site for safe disposal helps protect your loved ones and the environment.”
The public can drop off potentially dangerous prescription medications at collection sites which will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement.
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 will not be accepted. DEA will continue to accept vaping devices and cartridges at its drop off locations provided lithium batteries are removed.
Helping people dispose of potentially harmful prescription drugs is just one way DEA is working to reduce addiction and stem overdose deaths.
Learn more about the event at www.deatakeback.com, or by calling 800-882-9539.
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Connecticut Nursing Home Operator Sentenced to Prison for Embezzlement and Tax OffensesRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that CHAIM STERN, 72, of Flushing, New York, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for embezzlement and tax offenses related to his operation of nursing homes in Bridgeport and Waterbury.
According to court documents and statements made in court, Stern was the principal operator of the Bridgeport Health Care Center (“BHCC”), Bridgeport Manor, and the Rosegarden Health and Rehabilitation Center LLC (“Rosegarden”) in Waterbury, which were privately owned nursing and rehabilitation facilities. Between approximately 2011 and 2018, Stern stole approximately $4.1 million from the BHCC Pension Plan, over which he was the trustee, principally by diverting the money to a purported charity, called Em Kol Chai, which Stern controlled, as well as to himself and other entities. Also, in approximately February 2015, Stern misapplied $305,608.06 from BHCC Health Plan by diverting the money from a stop-loss insurance plan that was intended to pay for an employee health claim, and instead used it for other purposes, including Em Kol Chai, the operation of the BHCC, and for Stern’s personal use.
Stern also failed to pay millions of dollars in other health insurance claims that he was obliged to pay on behalf of his employees, resulting in many cases in debt collection action against employees by the health care providers.
In addition, from at least January 2017 through March 2018, Stern failed to, and caused BHCC and Rosegarden to fail to, pay over employment taxes it collected from BHCC and Rosegarden employees. Also, from January 2017 through June 2018, Stern failed to, and caused BHCC and Rosegarden to fail to, pay BHCC and Rosegarden’s share of employment taxes. The total tax loss resulting from Stern’s conduct is $4,356,409.85.
On January 15, 2020, Stern pleaded guilty to one count of theft or embezzlement from an employee benefit plan, one count of theft or embezzlement in connection with healthcare, and one count of willful failure to pay tax.
Stern has already made approximately $4.1 million in criminal restitution to Pension Plan, along with some lost interest as agreed upon in a related civil case. Judge Hall ordered Stern to pay restitution to participants in the Health Plan with unpaid claims, to the extent that the $2.5 million already paid by Stern and his insurance company in the related civil action do not cover all of those claims. A third-party claims administrator is currently attempting to settle all of those outstanding health claims.
Finally, Stern also has agreed to pay approximately $2.4 million in restitution to the IRS, representing the tax withholdings Stern took from employees but did not pay over to the IRS.
Stern, who is released on a $500,000 bond, is required to report to prison on May 26, 2021.
This matter was investigated by the U.S. Department of Labor – Office of Inspector General, U.S. Department of Labor – Employee Benefits Security Administration, Boston Regional Office, and Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorneys David E. Novick and Neeraj N. Patel.
Chichester Man Sentenced to 21 Months for Fentanyl TraffickingRead the Press Release
CONCORD - Travis Dunn, 31, of Chichester, was sentenced on Monday to 21 months in federal prison for distribution of fentanyl, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, on August 27, 2019, Dunn aided and abetted two co-defendants by driving them to Lawrence, Massachusetts to pick up drugs for redistribution in New Hampshire. On the return trip, the co-defendants sold fentanyl to an individual who was cooperating with Nashua Police detectives. Immediately following the drug deal, detectives arrested Dunn and the co-defendants.
Dunn previously pleaded guilty on November 19, 2020. Dunn’s codefendants also have pleaded guilty. Michael Briand, 29, of Bow, was sentenced to 22 months on December 8, 2020. Megan Judd, 27, of Bow, pleaded guilty on November 30, 2020 and was sentenced to time served.
“Fentanyl traffickers endanger our citizens and communities by peddling an extremely dangerous and addictive drug,” said Acting U.S. Attorney Farley. “Through Operation SOS, we are protecting public safety by identifying and prosecuting the drug dealers who sell fentanyl in Nashua and other communities in Hillsborough County.”
This matter was investigated by the Nashua Police Department. The case was prosecuted by Assistant U.S. Attorney Joachim H. Barth.
This case is part of Operation Synthetic Opioid Surge (S.O.S.). In July of 2018, Attorney General Jeff Sessions announced the creation of S.O.S., which is being implemented in the District of New Hampshire and nine other federal districts. The goal of S.O.S. is to combat the large number of overdoses and deaths associated with fentanyl and other synthetic opioids. In New Hampshire, the U.S. Attorney’s Office is focusing its efforts on prosecuting synthetic opioid trafficking cases arising in Hillsborough County, which includes Manchester and Nashua.
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Canadian National Sentenced to One Year Imprisonment After Pleading Guilty for Operating Fraudulent Ticket ScamRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that JOSEPH GATT, age 75, a citizen of Canada and Malta, was sentenced today by United States District Judge Greg G. Guidry to one year of imprisonment followed by three years of supervised release and payment of a $100 special assessment fee, after pleading guilty to one count of wire fraud for operating a long-term fraudulent ticket scam targeting multiple New Orleans residents. GATT was previously arrested on July 26, 2020, in Los Angeles, California, while trying to reenter the country. Although GATT was indicted in June 2018, the ten-count indictment against him was unsealed only after GATT was taken into custody. Judge Guidry also ordered GATT to repay his victims more than $95,000; he is also subject to deportation.
According to court documents, between about 2009 and October 2014, GATT resided in the New Orleans area. He purported to sell tickets to spectator professional sporting events, including Union of European Associations (UEFA) Champions League and Federation Internationale De Futbol Association (FIFA) World Cup matches. Specifically, GATT falsely claimed to have connections with FIFA and, through those connections, could purchase tickets to World Cup games at or below face value before the tickets went on sale to the general public. GATT sought investors for his fraudulent business enterprise in which he claimed to be able to purchase World Cup tickets at face value and then sell them at a higher price to individuals and groups who wished to attend the games. GATT recruited individuals, including Investors A, B, and C, to enter into a fraudulent business arrangement in which they would give him money to purchase tickets and then split the resulting profits. In total, Investors A, B, and C gave GATT over $95,000. In fact, GATT used the money for personal purchases.
When confronted, GATT wrote investors checks, ostensibly as repayment for the investments, when he knew that the account on which the checks were drawn had insufficient funds to cover the checks. GATT took other steps to disguise his scheme, make his enterprise appear legitimate, conceal the true purpose of his scheme, and dissuade Investors from reporting GATT to law enforcement authorities, including blaming his failure to repay the investors on delays caused by financial institutions and GATT himself having been defrauded.
U.S. Attorney Evans praised the work of the United States Department of Homeland Security – Homeland Security Investigations in investigating this matter. Assistant United States Attorney Jordan Ginsberg, Chief of the Public Corruption Unit, was charge of the prosecution.
Camden County Man Arrested for Wire FraudRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man was arrested by federal agents today on charges of wire fraud, Acting U.S. Attorney Rachael A. Honig announced.
Frank N. Tobolsky, 59, of Cherry Hill, New Jersey, is charged by indictment with eight counts of wire fraud in connection with a fraudulent investment scheme. He will be arraigned today before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
According to documents filed in this case and statements made in court:
Beginning in 2013, Tobolsky raised money from a victim, purportedly as an investment that would loan money to season ticket holders who owned seat licenses for a professional sports team in Philadelphia, Pennsylvania. The seat licenses would be used as collateral to secure the loans. The victim sent Tobolsky approximately $2.4 million to invest in the purported business venture. The money was not used for loans to season ticket holders. Instead, Tobolsky used a substantial portion on personal expenses.
The charges of wire fraud each carry a maximum penalty of 20 years in prison and a maximum fine of $250,000, or twice the gross loss to any victim or gain to Tobolsky, whichever is greater.
Acting U.S. Attorney Honig credited inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon Wood, with the investigation leading to the charges. She also thanked the U.S. Attorney’s Office for the District of Delaware for assisting the investigation.
The government is represented by Assistant U.S. Attorney Jeffrey Bender and Special Assistant U.S. Attorney John Crockett of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Cahokia Man Heads to Federal Prison for Identity Theft SchemeRead the Press Release
Cahokia, Ill. – Isaac Sanders, age 40, of Cahokia, Illinois, has been sentenced to serve 12 months and a day in federal prison for conspiracy to commit mail fraud and aggravated identity theft.
Sanders previously pleaded guilty to the charges in December 2020.
Sanders and his co-conspirator, Tamecia Buckley, used the stolen identities and social security numbers of real people to open utility accounts for electric and gas services at Sanders’ properties. The victims did not live there and did not consent to the scheme. The bills all came to
Sanders’ address, so the victims had no way of knowing the financial damage being wrought in their names. After bills went unpaid, and services were shut down again, Sanders would simply pay Buckley to open a new account using a different stolen identity.All told, Sanders stole, used, and discarded the identities of six different people from 2014 to
2017. On one occasion, Sanders called the utility company pretending to be the son of one victim and falsely claimed the victim was in the hospital.In addition to his term of imprisonment, Sanders was ordered to pay a $1,000 fine and full restitution in the amount of $5,213.83. His sentence also includes a three-year term of supervised release. For her roles in this and other fraud-and-identity-theft schemes, Buckley was prosecuted separately and received a 75-month prison sentence.
The investigation was conducted by the United States Postal Inspection Service.
Brockton Tax Preparer Sentenced for Tax FraudRead the Press Release
BOSTON – The owner of a tax preparation business in Brockton was sentenced today for preparing false tax returns for others as well as filing a false tax return for himself.
Jose Miguel Spinola, 51, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to two years of probation, with the first six months in home detention and ordered to pay restitution of $284,917. In December 2020, Spinola pleaded guilty to two counts of preparing false tax returns and one count of filing a false tax return.
On numerous occasions between 2014 and 2017, Spinola prepared and filed income tax returns for clients that contained false, inflated and incorrect information. Spinola added inflated and ineligible expenses to his clients’ Schedule A deductions for medical and dental expenses and unreimbursed employee business expenses, including claimed meals and entertainment, business miles and work apparel. By inflating Schedule A deductions, Spinola decreased his clients’ taxable income and effectively increased the clients’ tax refunds. Spinola informed his clients of the total tax refund they would receive from the IRS without telling the clients about the false, inflated or ineligible expenses Spinola deducted.
Acting United States Attorney Nathaniel R. Mendell and Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorney Sara Miron Bloom of Mendell’s Securities, Financial & Cyber Fraud Unit prosecuted the case.
Belmond Man Pleads Guilty to Meth ConspiracyRead the Press Release
A man who received methamphetamine by mail for redistribution pled guilty April 16, 2021, in federal court in Sioux City.
Rafael Perez-Mercado, 29, from Belmond, Iowa, was convicted of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine. During the investigation, it was also determined that Perez-Mercado was in the United States illegally.
At the plea hearing, Perez-Mercado admitted that between on or about September 2020 and continuing to on or about October 22, 2020, he and others were responsible for the distribution of over ten pounds of methamphetamine in the Wright County area. On October 8, 2020, law enforcement intercepted a package from Mexico destined to be ultimately delivered to Perez-Mercado. On October 22, 2020, law enforcement made a controlled delivery of the package to Perez-Mercado’s residence. Perez-Mercado was captured while exiting the rear of his residence as a law enforcement agent attempted to make contact with him at the front door. Law enforcement seized nine 1-pound packages of methamphetamine from a bag dropped by Perez-Mercado as he attempted to flee from the agents. Later that same day, during the execution of a search warrant at Perez-Mercado’s residence, law enforcement seized two 1-pound packages of methamphetamine from inside a statute delivered to Perez-Mercado. Law enforcement also found evidence of methamphetamine smuggling in Perez-Mercado’s garage.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Perez-Mercado remains in custody of the United States Marshal pending sentencing. Perez-Mercado faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, and at least 5 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Iowa Division of Narcotics Enforcement, Wright County Sheriff’s Office, Iowa DCI, Homeland Security Investigations/ICE, and Eagle Grove Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-3047.
Follow us on Twitter @USAO_NDIA.
Austin Man Indicted for Robbing Pawn Shop at GunpointRead the Press Release
In Austin today, a federal grand jury charged Joe Quinonez, age 32, of Austin with armed robbery in violation of the Hobbs Act and a federal firearms charge, announced U.S. Attorney Ashley C. Hoff and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Fred J. Milanowski, Houston Division.
According to the indictment, Quinonez is charged with one count of violating the Hobbs Act or interfering with commerce by threats of violence. The indictment alleges that on January 2, 2021, Quinonez entered a Cash America Pawn store in Austin and brandished a firearm at two persons in the store while robbing the store of firearms. In addition, the indictment charges Quinonez with discharging a firearm during the robbery.
Quinonez was arrested by officers of the Austin Police Department on January 6, 2021 and has remained in police custody. Quinonez will be remanded into federal custody for his initial appearance next week.
This case is part of Operation Undaunted, a program which draws on the partnerships among federal, state and local law enforcement coupled with prosecution authorities to tackle violent crime and protect the communities of central and west Texas.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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Atlanta tax preparer charged with filing fraudulent tax returnsRead the Press Release
ATLANTA - Jean Samuel Gai has been arraigned on federal charges of aiding the filing of a false tax return. At the time, Gai was on probation in Georgia for similar tax-related offenses.
“At a time when he was already on probation for a prior tax-related charge, Gai’s allegedly returned to filing false tax returns,” said Acting U.S. Attorney Kurt R. Erskine. “It is important to check a tax professional’s background before engaging him or her to assist with filing any tax returns.”
“Often in these types of schemes, the taxpayers fall victim to leaning on the trust of their return preparers,” said IRS-Criminal Investigation Special Agent in Charge James E. Dorsey. “The charges in this case show our seriousness in holding return preparers accountable for abusing their trusted positions to fraudulently gain more client funds. Taxpayers are strongly encouraged to review their return and ask questions in order to avoid falling victim to dishonest return preparers.”
According to Acting U.S. Attorney Erskine, the charges, and other information presented in court: Gai owned and operated N.C.E. Financial Services Incorporated, a tax return business that had two locations: one in Atlanta, Georgia and the other in Riverdale, Georgia. For the 2014 through 2018 tax years, Gai prepared and filed false income tax returns for his clients that allegedly claimed false Schedule C items, false W-2 wages, and false earned income tax credits to obtain refunds that his clients were not entitled to. Gai then allegedly kept most of the fraudulent refunds for his own use. The total loss associated with Gai’s fraud is estimated at more than $600,000.
In November 2013, Gai was convicted of first-degree forgery related to stealing and cashing tax refund checks issued by the State of Georgia. Gai was sentenced to 10 years’ probation for that offense and thus was on probation at the time he allegedly committed the current federal offenses.
Jean Samuel Gai, 45, of Atlanta, Georgia, was arraigned on April 6, 2021, before U.S. Magistrate Judge Catherine M. Salinas. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Russell Phillips is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Arizona Rancher Sentenced to 41 Months for Role in Embezzlement and Wire Fraud SchemesRead the Press Release
TUCSON, Ariz. – Donald Hugh Nichols, 62, of Coolidge, Arizona, was sentenced today by U.S. District Judge Cindy K. Jorgenson to 41 months in prison. Nichols previously pleaded guilty to wire fraud.
Between 2013 and August 2017, Nichols, with the help of his son, engaged in a scheme to steal cattle from the Marana Stockyards and Livestock Market, an entity which hosts weekly livestock auctions for Arizona ranchers. As a cattle broker for third-party buyers, Nichols also illegally bid on his own cattle without the buyers’ knowledge or consent. Some of the cattle that Nichols purchased on behalf of third-party buyers were stolen from Marana Stockyards. As a result of these fraud schemes, Marana Stockyards suffered over $1 million in losses.
Nichols’ son, Seth Nichols, previously pleaded guilty for his role, and was sentenced in December 2018 to 60 months in prison.
The Federal Bureau of Investigation conducted the investigation in this case. The U.S. Attorney’s Office, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR18-01684-CKJ-BGM
RELEASE NUMBER: 2021-028_Nichols# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
19 April 2021
Warren County Man Sentenced to Federal Prison on Gun and Drug ChargesRead the Press Release
WILMINGTON, N.C. – A Norlina man was sentenced today to 108 months in prison for possession with intent to distribute 28 grams or more of cocaine base (crack) and a quantity of cocaine and marijuana, maintaining a dwelling for the purpose of manufacturing, distributing, and using any controlled substance, and felon in possession of a firearm.
According to court documents, William Leon Mayfield, 60, also known as “Moon,” sold crack cocaine to a confidential information out of a residence in Norlina on multiple occasions. Following those controlled purchases, the Warren County Sheriff’s Office obtained a search warrant for the residence and executed it on June 13, 2019. During that search, deputies found a loaded firearm, quantities of cocaine, crack cocaine, marijuana, and U.S. currency. Mayfield is a convicted felon, having been convicted of numerous drug and gun charges in and around Warren and Vance Counties.
Mayfield pled guilty to the charges on November 5, 2020.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after the sentencing by Chief U.S. District Judge Richard E. Myers, II. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Warren County Sheriff’s Office investigated the case and Assistant U.S. Attorney Robert J. Dodson prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-CR-230-M.
Virginia Truck Driver Detained in Rhode Island for Allegedly Transporting a Minor with Intent to Engage in Sexual ActivityRead the Press Release
PROVIDENCE – A Virginia truck driver detained by Naval Station Newport Police on April 2, 2021, when a routine background check conducted prior to his being allowed to enter the Navy base determined that he was wanted in Texas for felony assault of a child, appeared today in federal court in Providence on a charge of transportation of a minor with intent to engage in sexual activity.
David Romero Reyes, 50, of Stafford, Virginia, was charged in U.S. District Court in Providence after an FBI and Rhode Island State Police investigation determined that Reyes allegedly had sexual contact in several states with a 15-year-old girl who was discovered in the sleeping compartment of his tractor-trailer by Naval Station Newport Police. The girl was reported missing from her Virginia home in July 2020, when she was 14 years old.
The girl entered the United States as an unaccompanied minor in February 2020. She was detained by U.S. Customs and Border Protection and placed in a U.S. Department of Health and Human Services (HHS) facility. HHS documents found in the truck indicate that in May 2020 she was removed from a Houston, Texas, HHS-funded facility by Reyes, who, according to HHS documents, identified himself as the girl’s distant relative. An FBI and Rhode Island State Police investigation determined that Reyes is a long-time friend of the girl’s father who lives in El Salvador and a distant cousin of the girl.
According to court documents, the girl resided in the Houston, TX, area with her mother and other relatives for several weeks after leaving the immigration detention center. The young teenager eventually left Texas with Reyes and began living in Virginia with a relative of Reyes. Shortly after moving to Virginia, when it became known by a family member that Reyes and the girl allegedly had a sexual relationship, the family member reported Reyes to law enforcement. Shortly thereafter, in July 2020, the girl left the home on a bicycle and was picked up nearby by Reyes. She was reported missing and had not been seen since. According to court documents, during the week the two travelled together in trucks driven by Reyes. On weekends they stayed at hotels or at an apartment rented by Reyes.
According to court documents, during interviews with law enforcement, Reyes and the now 15-year-old admitted to traveling together and engaging in sexual contact in multiple states. Investigators determined that Reyes, using the name David Romero, traveled in or through Rhode Island on at least six dates between February 1, 2021, and April 2,2021, the date of his arrest.
Reyes, detained in state custody since his arrest, appeared today in federal court in Providence on a criminal complaint charging him with transportation of a minor with intent to engage in sexual activity and was ordered detained, announced Acting United States Attorney Richard B. Myrus, Newport Naval Station Police Chief Lieutenant Ruben Gutierrez, Special Agent in Charge of the FBI Boston Division Joseph R. Bonavolonta, and Superintendent of the Rhode Island State Police Colonel James M. Manni.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Transportation of a minor with intent to engage in sexual activity is punishable by statutory penalties of 10 years to life imprisonment and lifetime federal supervised release.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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Virginia Return Preparer Pleads Guilty to Evading Her Own TaxesRead the Press Release
A Richmond, Virginia, tax return preparer pleaded guilty today to tax evasion.
According to court documents and statements made in court, Willette J. Holland owned Tax Professionals, a return preparation firm located in Richmond, Virginia. In August 2014, the IRS contacted Holland because she did not file personal tax returns for the years 2010 through 2013. Holland then presented false returns to an IRS Revenue Agent for those years, which substantially underreported her gross receipts and taxes due. Holland additionally attempted to evade taxes for 2014 by depositing income into a bank account held in the name of a nominee, thereby concealing her earnings from the IRS. In 2015 and 2016, Holland again did not file tax returns despite being required to do so by law.
Holland is scheduled to be sentenced on July 15 and faces a maximum penalty of five years in prison. She also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorney Francine Davis and Assistant Chief Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Kaitlin Cooke for the Eastern District of Virginia are prosecuting the case.
Urbandale Man Sentenced to Twelve Years in Prison for Receipt of Child PornographyRead the Press Release
DES MOINES, IA – On April 16, 2021, United States District Court Judge Rebecca Goodgame Ebinger sentenced Joseph Mikel Cerwick, age 33, of Urbandale, to 144 months in prison for Receipt of Child Pornography announced Acting United States Attorney Richard D. Westphal. Cerwick was ordered to serve eight years of supervised release to follow his prison term, pay $9,000 in restitution, and comply with sex offender registry requirements upon his release from prison.
This investigation began in December of 2017 when the Federal Bureau of Investigation’s Child Exploitation Task Force received a tip that a video of child pornography had been sent to an individual through the Kik internet application. Following further investigation, the FBI executed a search warrant at Cerwick’s Urbandale apartment in September 2018. Police seized Cerwick’s cellular telephone which was found to contain hundreds of images of child pornography. Cerwick also received and sent a video of child pornography to other persons via the Kik app in November 2017.
This matter was investigated by the Iowa Division of Criminal Investigation’s Internet Crimes Against Children Task Force and the FBI’s Child Exploitation Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the United States Department of Justice’s “Project Safe Childhood” initiative, which was started in 2006 as a nationwide effort to combine law enforcement investigations and prosecutions, community action, and public awareness in order to reduce the incidence of sexual exploitation of children.
Any persons having knowledge of a child being sexually abused are encouraged to call the Iowa Sexual Abuse Hotline at 1-800-284-7821.
U.S. Attorney’s Office Files Fair Housing Lawsuit Against Chicopee Housing Authority and Its Executive DirectorRead the Press Release
BOSTON – The U.S. Attorney’s Office for the District of Massachusetts filed a lawsuit today alleging that the Chicopee Housing Authority and its Executive Director, Monica Blazic, violated the Fair Housing Act based on disability.
According to the complaint, the defendants violated the Fair Housing Act by failing to allow a tenant to transfer to a first floor or elevator accessible unit to accommodate her disability. The tenant has end stage renal disease and without the transfer to another unit, has been unable to receive daily in-home dialysis. The complaint alleges that the tenant applied for a transfer based on her disability in 2017, and since that time the Chicopee Housing Authority offered 10 vacant apartments – any one of which could have accommodated the tenant – to other individuals.
The matter was originally investigated by the U.S. Department of Housing and Urban Development, which, in March 2021, issued a charge against the Chicopee Housing Authority and Blazic after finding that there was probable cause of discrimination. The tenant elected to have the charge decided in federal court, authorizing the U.S. Attorney’s Office to file suit.
“Common decency and — thankfully — the Fair Housing Act both require reasonable accommodations for people with disabilities. The allegations here deserve attention, and we are happy to provide it,” said Acting U.S. Attorney Nathaniel R. Mendell.
“I deeply appreciate our partnership with the Department of Justice to fully enforce the Fair Housing Act and address the longstanding inequities that have denied persons with disabilities the dignity of accessible housing,” said Jeanine Worden, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity.
The lawsuit seeks entry of an order requiring the defendants to accommodate the tenant’s disability, pay the defendant monetary damages, and cease discrimination against any tenant based upon disability.
Individuals who have information about discrimination and the Chicopee Housing Authority can contact the U.S. Attorney’s Office Civil Rights Unit by calling 617-748-3100 and asking for the Civil Rights Intake Specialist, or emailing [email protected].
Acting U.S. Attorney Mendell and HUD Acting Assistant Secretary Worden made the announcement today. Assistant U.S. Attorneys Gregory Dorchak and Michelle Leung of Mendell’s Civil Rights Unit are handling the matter.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
U.S. Attorney's Office Commemorates National Crime Victims' Rights WeekRead the Press Release
CHARLOTTE, N.C. – Acting U.S. Attorney William T. Stetzer joins the Department of Justice and communities nationwide in observing National Crime Victims’ Rights Week and
celebrating victims’ rights, protections and services throughout the week. This year’s observance takes place April 18-24 and features the theme, “Support Victims. Build Trust. Engage Communities.”
The Office for Victims of Crime (OVC), part of the Justice Department’s Office of Justice Programs, leads communities throughout the country in their annual observances of NCVRW by promoting victims’ rights and honoring crime victims and those who advocate on their behalf. OVC supports more than 7,000 local victim assistance programs and victim compensation programs in every state and U.S. territory. Funds for these programs come from the Crime Victims Fund, which is made up of federal criminal fines, penalties and bond forfeitures.
“National Crime Victims’ Rights Week is a time to honor and remember the millions of Americans who have suffered the shock and trauma of criminal victimization. We stand by these brave survivors and their families,” said Acting U.S. Attorney Stetzer. “This week, we also recognize and commend the thousands of victim advocates who serve crime victims with dedication and work tirelessly to advance victims’ rights, and support survivors with skill and compassion.”
The United States Attorney’s Office will commemorate the advancement of victims’ rights and highlight issues surrounding victimization by holding a Virtual Ceremony on Tuesday, April 20, 2021 at 11:00 am. This program is co-hosted by the U.S. Attorney’s Offices for the Eastern and Middle Districts of North Carolina, the Victim Services Interagency Council of North Carolina, the North Carolina Department of Justice, and the Durham and Raleigh Police Departments. The keynote speaker is Ms. Deanna Walters, a survivor of intimate partner violence whose abuser was prosecuted by this office. Ms. Walters’ story was also featured on the 2014 award winning documentary titled “Private Violence.” Those interested in joining the event can register using this link: https://usao.webex.com/usao/onstage/g.php?MTID=e0bb75a52a534a276abd6c3647b5a5d67.
For additional information about this year’s NCVRW and additional ideas on how to support victims of crime, visit OVC’s website at https://www.ovc.ojp.gov/.
U.S. Attorney's Office Commemorates National Crime Victims' Rights WeekRead the Press Release
LAS VEGAS, Nev. – The U.S. Attorney’s Office for the District of Nevada joins the Office for Victims of Crime (OVC), part of the Justice Department’s Office of Justice Programs, and communities nationwide in observing National Crime Victims’ Rights Week. This year’s observance takes place from April 18 to April 24, and features the theme: “Support Victims. Build Trust. Engage Communities.”
“During National Crime Victims’ Rights Week, our office would like to help raise awareness about crime victims’ issues and rights, and introduce our communities to the important resources and services available,” said Acting U.S. Attorney Christopher Chiou. “We stand with victims and survivors of crime — and we’re very grateful for the hard work of dedicated advocates across Nevada, for advancing the cause of victims’ rights and services.”
In 2019, 1.2 million people were victims of violent crime, according to the latest National Crime Victimization Survey from the Bureau of Justice Statistics. The Office for Victims of Crime supports more than 7,000 local victim assistance programs and victim compensation programs in every state and U.S. territory. Funds for these programs come from the Crime Victims Fund, which is made up of federal criminal fines, penalties, and bond forfeitures.
Ronald Reagan proclaimed the first Victims’ Rights Week in 1981, putting crime victims' rights, needs and concerns in a prominent spot on the American agenda. He also established the President's Task Force on Victims of Crime, which laid the groundwork for a national network of services and legal safeguards for crime victims.
For more information about this year’s National Crime Victims’ Rights Week and how to support victims of crime, please visit OVC’s website at www.ovc.ojp.gov.
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Two Former Mariners Admit to Facilitating the Bribery of a Coast Guard Employee, Three Others Sentenced for Unlawfully Receiving Mariner LicensesRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced the guilty pleas of two middlemen in a test score-fixing scheme at a United States Coast Guard exam center, bringing the total number of defendants convicted in this case to 21.
Former mariners ALEXIS BELL and MICHEAL WOOTEN pleaded guilty to conspiracy to defraud the United States. BELL and WOOTEN each admitted to acting as an intermediary between co-defendant Beverly McCrary and merchant mariners who were willing to pay for false passing exams scores. McCrary is accused of participating in the scheme while she was employed by the Coast Guard exam center and continuing after her retirement.
BELL and WOOTEN acknowledged that they would take money from mariners and then pay McCrary for the false scores. BELL and WOOTEN understood that McCrary would keep a portion of that money and use the rest to bribe another exam center employee to enter the scores. BELL admitted that, in addition to assisting eleven other mariners in obtaining false scores, he also had his own scores fixed on three occasions. WOOTEN admitted that, in addition to assisting nine other mariners in obtaining false scores, he also had his own scores fixed.
All of these false scores resulted in the Coast Guard issuing unearned licenses without the required exams being passed. The exams tested mariners' knowledge and training to safely operate under the authority of licenses, which were legally required to work various positions on vessels.
As alleged in the indictment, which was filed on November 20, 2020, Coast Guard credentialing specialist Dorothy Smith entered the false scores in this scheme. The indictment alleges that Smith accepted bribes and used a network of intermediaries, which included McCrary, BELL, and WOOTEN. Smith and McCrary are scheduled to stand trial on June 28, 2021.
U.S. Attorney Evans reiterated that the indictment's allegations against Smith and McCrary are merely charges and their guilt must be proven beyond a reasonable doubt.
The Honorable Barry W. Ashe presided over BELL’s guilty plea on April 1, 2021 and set a sentencing date of July 8, 2021. Judge Ashe took WOOTEN’s guilty plea on April 15 and set sentencing for July 22, 2021. The maximum penalty for each defendant is five years' imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
On April 15, Judge Ashe also sentenced the first three defendants to plead guilty in this case, ANTHONY BROWN, DAVID GALVAN, and CARDELL HUGHES. Each of the three had pleaded guilty to illegally obtaining a mariner license and received a sentence of one year of probation, along with 100 hours of community service.
This case is being investigated by the Coast Guard Investigative Service. Assistant U.S. Attorney Chandra Menon is in charge of the prosecution.
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Turner Falls Man Charged with Child Pornography OffensesRead the Press Release
BOSTON – A Turners Falls man was indicted last week by a federal grand jury in Springfield on child pornography charges.
Brian Cooper, 63, was charged on April 15, 2021 with four counts of distribution of child pornography, six counts of receipt of child pornography and one count of possession of child pornography. Cooper will be arraigned in federal court at a later date.
According to the indictment, between April 2018 and October 2019, Cooper distributed, received and possessed child pornography files depicting children engaged in sexually explicit conduct. In October 2019, Cooper was arrested on state court charges and has been detained since that time.
For defendants with certain qualifying prior convictions, the charges of distribution and receipt of child pornography provide for a mandatory minimum sentence of 15 years and up to 40 years in prison. The charge of possession of child pornography provides for a mandatory minimum sentence of 10 years and up to 20 years in prison. Each charge also provides for a mandatory minimum of five years and up to life of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; David E. Sullivan, Northwestern District Attorney; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement. Assistant U.S. Attorney Alex J. Grant of Mendell’s Springfield Branch Office is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Troutville Man Sentenced to Prison for Selling Stolen Night Vision Goggle ComponentsRead the Press Release
ROANOKE, Va. – Steven Rosine, a former employee at a production facility here that manufactures night vision goggles used by the U.S. military, was sentenced today in U.S. District Court in Roanoke to 18 months in federal prison for stealing night vision devices and other components and selling them over the Internet. Acting United States Attorney Daniel P. Bubar and Special Agent in Charge Raymond Villanueva for the Homeland Security Investigations (HSI) Washington, D.C. field office, made the announcement today.
Rosine, 48, pleaded guilty in September 2020 to one count of interstate transportation of stolen property.
“When Rosine stole critical defense products to sell for his own greed, he committed a serious crime,” Acting United States Attorney Bubar said today. “Today’s sentence ought to send a strong message to those who are trusted with protecting our national security infrastructure that such conduct will not be tolerated. We appreciate the hard work that went into this case by the dedicated team, including Homeland Security Investigations and the Roanoke County Police.”
“HSI has the authority and the duty to investigate crimes involving the online sale and distribution of stolen or looted property,” said Raymond Villanueva, Special Agent in Charge of the HSI Washington D.C. field office. “Working closely with the Department of Justice on these cases is vital to ensure the individuals and organizations responsible for these crimes are prosecuted.”
According to court documents, from 1996 to 2019, Rosine was employed as a production engineer at Harris Corporation’s night vision manufacturing facility in Roanoke, Va. During his employment Rosine had access to night vision devices and various components used in device manufacturing.
Between approximately 2010 and 2014, Rosine stole approximately 66 pounds of a soft metal called Indium, a crucial element used in the night vision manufacturing process. He sold the stolen Indium on the Internet to a company in California for his own personal financial gain, yielding a profit of $51,622.
Beginning in 2012 and continuing through 2018, Rosine stole various image intensifier tubes, night vision systems, and component parts from Harris Corporation. Rosine listed these items for sale on an Internet website. Rosine maintained a dedicated PayPal account, into which he deposited more than $119,000 in proceeds from his illicit sale of night vision devices.
A majority of the night vision devices sold by Rosine are classified as third generation image intensifier tubes and were manufactured using classified production data. They are categorized by the Department of State, Directorate of Defense Trade Controls (DDTC) as “Defense Articles,” which are subject to control under the International Trafficking in Arms Regulations (ITAR) and the jurisdiction of the Department of State.
The investigation of the case was conducted by Homeland Security Investigation and the Roanoke County Police Department. Assistant United States Attorney Kristin B. Johnson prosecuted the case for the United States, in coordination with William Mackie, Counterintelligence & Export Control Section, National Security Division, U.S. Department of Justice.
Three charged with aiding and assisting in the preparation of a false tax returnRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced that a federal grand jury has returned charges against three individuals in the Northern District of Ohio with aiding and assisting in the preparation of a false tax return. These are separate cases and are not related.
“Particularly during this time of year, we want the public to know that violations of our nation’s tax laws will be investigated and, when appropriate, prosecuted,” said Acting U.S. Attorney Bridget M. Brennan.
“Whether it’s return preparers filing false tax returns for their clients or an individual intentionally underreporting his income, IRS CI remains committed to using our financial expertise to vigorously investigate criminal tax allegations,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Santon BARNES, 49, of Euclid, Ohio, is charged with 23 counts of aiding and assisting in the preparation and presentation of a false and fraudulent tax return. For the tax years 2014 through 2016, BARNES is accused of preparing and submitting tax returns to the Internal Revenue Service that were false and fraudulent. BARNES is accused of deliberately reporting fictitious or inflated income, withholdings, dependents and misrepresenting Scheduled C income.
This investigation was conducted by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Michael L. Collyer.
Harry GANT, 70, of Mentor, Ohio, is charged with four counts of aiding and assisting in the preparation and presentation of a false and fraudulent tax return. According to the indictment, GANT is accused of intentionally underreporting the total income earned from the operation of his business for the tax years of 2014 through 2017 on his Individual Income Tax Return, Form 1040 for himself and his spouse.
This investigation was conducted by the Cleveland Division of the FBI and the Internal Revenue Service – Criminal Investigation. This case is being prosecuted by Assistant U.S. Attorney Megan R. Miller.
Michael HAYWOOD, age 29, of Garfield Heights, Ohio, is charged with 36 counts of aiding and assisting in the preparation and presentation of a false and fraudulent tax return. The indictment states that HAYWOOD operated a tax preparation business out of his residence and prepared tax returns for individuals. It is alleged that for the tax years of 2014 through 2017, HAYWOOD prepared and submitted tax returns for clients to the Internal Revenue Service that reported inflated deductions, fictitious credits, losses, schedules, incorrect filing statuses and claimed a tax refund that was entirely fraudulent and inaccurate.
This investigation was conducted by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Brian McDonough.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the Defendant’s sentence will be determined by the Court after review of factors unique to this case, including the Defendant’s prior criminal record, if any, the Defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
Three Indicted in ID Theft, Fraudulent Credit Card SchemeRead the Press Release
PROVIDENCE – A federal indictment returned by a grand jury on April 2, 2021, and unsealed on April 16, 2021, charges three individuals with having been in possession of dozens of fraudulent drivers’ licenses, fraudulent credit cards, equipment to produce credit cards, and lists of individuals stolen personal identifying information.
It is alleged in the indictment that Courtney Hilaire, 28, of Providence, Hugh A. Martin, 32, of Pawtucket, and Shawn K. Hilaire, 30, of Avon, MA, possessed devices and equipment used to create fraudulent credit cards with the use of stolen credit card numbers and personal identifying information, such as names, dates of birth and Social Security numbers.
According to information presented to the court following the arrest of Courtney Hilaire on April 5, 2021, a Warwick Police Department Captain discovered the three men reclined in a vehicle parked in a hotel parking lot in the early morning hours of July 3, 2020. It was determined that the license plate on the vehicle was allegedly stolen from Norwood, MA.
After removing the individuals from the vehicle, Warwick Police allegedly discovered 33 counterfeit credit cards, numerous fraudulent drivers’ licenses from multiple states, equipment used to read and transfer information onto credit card magnetic strips, listings of individuals identities and personal identifying information, and approximately $13,000 in crisp, clean $100 and $50 dollar bills.
The indictment charges the three men with conspiracy to possess fifteen or more counterfeit or unauthorized access devices, possession of fifteen or more counterfeit or unauthorized access devices, possession of device-making equipment, and aggravated identity theft.
Since the issuance of the indictment, further investigation into Courtney Hilaire’s alleged criminal activity has resulted in the return of 17-count indictment charging Courtney Hilaire with using stolen Social Security numbers and personal identifying information of numerous individuals to apply for Coronavirus Aid, Relief, and Economic Security (CARES) Act funded unemployment insurance compensation from the Pennsylvania Department of Labor and for Economic Injury Disaster Loans from the Small Business Administration.
Courtney Hilaire is currently detained in both state and federal custody at the ACI. Arrest warrants have been issued for Hugh A. Martin and Shawn K. Hilaire.
The indictment of Hugh A. Martin, Courtney Hilaire, and Shawn K. Hilaire is announced by Acting United States Attorney Richard B. Myrus, Homeland Security Investigations Acting Special Agent in Charge William S. Walker, Warwick Police Chief Colonel Bradford Connor, and Pawtucket Police Chief Tina Goncalves.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland.
The matter was investigated by Homeland Security Investigations and the Warwick and Pawtucket Police Departments.
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Texas Woman Arrested for Unemployment Fraud Related to COVID-19 PandemicRead the Press Release
BOSTON – A Texas woman was arrested last week and charged in federal court in Boston in connection with her alleged involvement in a scheme to fraudulently claim COVID-19-related unemployment assistance.
Donna Wasson, 36, of San Antonio, Texas, was charged in a criminal complaint with one count of wire fraud. Wasson will make an initial appearance in federal court in the Southern District of Texas today.
According to the charging documents, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created a temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA). PUA, administered by the Massachusetts Department of Unemployment Assistance, provides unemployment insurance benefits for individuals who are not eligible for other types of unemployment benefits (e.g., the self-employed, independent contractors, or gig economy workers).
According to the charging documents, Wasson applied for Massachusetts unemployment benefits despite residing in Texas and receiving unemployment benefits via the Texas Workplace Commission.
In addition, the complaint alleges that Wasson carried out instructions concerning other fraudulent unemployment claims from a former Massachusetts Department of Unemployment Assistance (DUA) employee, who allegedly submitted unemployment claims under multiple stolen identities and conspired with her husband to fraudulently obtain unemployment benefits to which they were not entitled.
The charge of wire fraud provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The investigation is being conducted by Homeland Security’s Investigation’s Document and Benefit Fraud Task Force (DBFTF), a specialized field investigative group comprised of personnel from various local, state, and federal agencies with expertise in detecting, deterring, and disrupting organizations and individuals involved in various types of document, identity, and benefit fraud schemes.
Acting United States Attorney Nathaniel R. Mendell; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Michael Mikulka, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations made the announcement today. Special assistance was provided by the Massachusetts Department of Unemployment Assistance, Program Integrity Unit. Assistant U.S. Attorneys Bill Abely and Dustin Chao of Mendell’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Suburban Chicago Woman Sentenced to Six and a Half Years in Prison on Federal Labor Trafficking ChargeRead the Press Release
CHICAGO — A suburban Chicago woman who trafficked numerous undocumented immigrants from Guatemala was sentenced today to six and a half years in federal prison.
CONCEPCION MALINEK, 50, of Cicero, Ill., pleaded guilty last year to one count of labor trafficking. From 2009 to 2019, Malinek assisted at least ten undocumented Guatemalan immigrants with illegally entering the U.S. and forced them to work to pay off their debt to her. Malinek threatened the victims with deportation and separation from their children to force the victims to continue to work and pay Malinek the debt she demanded from them.
In addition to the 78-month prison sentence, U.S. District Judge Edmond E. Chang ordered Malinek to pay $112,545 in restitution to the victims.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. Valuable assistance was provided by the U.S. Department of Homeland Security, U.S. Department of Labor, Cook County Sheriff’s Office, and Chicago Police Department.
“Malinek controlled her victims’ every move, knowing their whereabouts at all times, the exact amount of each paycheck she stole from them, and what levers to push and pull to keep them all in line,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum. “Malinek knew her victims were scared of deportation and separation from their loved ones far more than they dreaded the abuse and exploitive actions she imposed on them.”
If you believe you are a victim of labor trafficking, you are encouraged to contact the National Human Trafficking Hotline by calling 1-888-373-7888, or logging on to https://humantraffickinghotline.org/.
Stone Canyon Required to Divest US Salt to Acquire Morton SaltRead the Press Release
The Department of Justice announced today that Stone Canyon Industry Holdings LLC (Stone Canyon) and its portfolio company SCIH Salt Holdings Inc. (SCIH), which was previously named Kissner Group Holdings LP, will divest their entire evaporated salt business in order to proceed with their proposed acquisition of Morton Salt Inc. (Morton), among other assets. The department said that without the divestiture, the proposed acquisition would substantially lessen competition in the sale of several types of evaporated salt, including round-can table salt, pharmaceutical-grade salt, and bulk evaporated salt.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the complaint.
“Americans use and depend on evaporated salt products every day for nutritional, medical and cleaning purposes,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “Without the divestiture, this merger likely would have led to higher prices and lower quality for consumers throughout the United States. Today’s settlement will ensure that consumers, patients, and businesses continue to benefit from competition for these critical products.”
According to the complaint, Morton and SCIH’s wholly-owned subsidiary, US Salt LLC (US Salt), are two of only three producers that manufacture and distribute round-can table salt in the United States. Morton is the largest branded supplier of this pantry staple in the United States, and US Salt is the largest supplier of private-label round-can table salt in the United States. The complaint also alleges that Morton and US Salt are the only firms producing pharmaceutical-grade salt in the United States and Canada. Pharmaceutical-grade salt is a critical ingredient for dialysis treatment, intravenous saline solution, and other medical products that must meet stringent purity standards.
The complaint further alleges that Morton and US Salt are two of only three major suppliers that manufacture and distribute bulk evaporated salt in the northeastern United States. Bulk evaporated salt is used in various industries including food processing and chemical manufacturing to produce essential everyday items such as processed foods, disinfectants, soap, and bleach. The complaint alleges that the merger would eliminate competition between Morton and US Salt for all of these evaporated salt products, likely leading to higher prices, reduced supply availability, lower quality products, and longer delivery times.
To eliminate the potential for competitive harm threatened by this acquisition, Stone Canyon and SCIH have agreed to divest their US Salt subsidiary, including their refinery in Watkins Glen, New York, as well as other all other assets used in the production of its evaporated salt products. US Salt has been in operation for over 100 years and is operated as a largely independent entity within Stone Canyon and SCIH. The proposed settlement will fully preserve the competitive landscape that exists in these evaporated salt markets today, as US Salt constitutes Stone Canyon’s and SCIH’s entire business that competes in the sale of evaporated salt products, including round-can table salt, pharmaceutical-grade salt, and bulk evaporated salt.
Stone Canyon is an industrial holding company incorporated in Delaware and headquartered in Los Angeles, California. Stone Canyon acquired Kissner Group Holdings LP, which it later renamed SCIH, in April 2020.
SCIH is a Delaware corporation headquartered in Overland Park, Kansas, and had 2020 revenues of approximately $1 billion. US Salt is a subsidiary of SCIH with approximately $95 million in revenues in 2020.
K+S Aktiengesellschaft (K+S AG) is a chemical company headquartered in Kassel, Germany. In 2020, K+S AG reported revenues of approximately €3.7 billion. K+S AG’s Operating Unit Salt Americas, is a bundle of several subsidiaries that includes Morton, K+S Windsor Salt, and Sociedad Punta de Lobos.
Morton is a K+S AG subsidiary and a Delaware corporation headquartered in Chicago, Illinois. Morton generated approximately $1 billion in revenue in 2020.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Katrina Rouse, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon a finding that it serves the public interest.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Stand-up Comedian who Defrauded the Social Security Administration Receives Prison SentenceRead the Press Release
A man who defrauded the Social Security Administration out of more than $105,000 over a five-year period was sentenced on April 16, 2021, to one year and one day in federal prison.
Dustin Francis Ruzicka, age 50, from Cedar Rapids, Iowa, received the prison term after a November 10, 2020 guilty plea to Social Security disability insurance benefits fraud.
In a plea agreement, Ruzicka admitted that he knowingly failed to report his employment, his income, and improvement in function to the Social Security Administration between January 2011 and October 2016. Information from sentencing and a plea agreement showed that Ruzicka began receiving Social Security disability benefits in 1992 for plantar fasciitis and adjustment disorder. In 2004, Ruzicka started a stand-up comedy act, “Bustin Dustin,” and, in 2010, Ruzicka began working for Visalus, a dietary supplements company. Agents with the Social Security Office of Inspector General investigated Ruzicka, including by observing one of his stand-up comedy shows. During the performance, agents saw that Ruzicka was continuously on his feet and did not appear to be in any pain. When the agents identified themselves and interviewed Ruzicka at his residence several months later, he walked with a noticeable limp. On social media, Ruzicka posted about his earnings, his “entrepreneurship,” his “retirement,” and posed with his BMW.
Ruzicka was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Ruzicka was sentenced to twelve months and one day’s imprisonment. He was ordered to make $105,676 in restitution to the Social Security Administration. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Ruzicka was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Kyndra Lundquist and investigated by Social Security Administration Office of Inspector General.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-94.
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Source of Firearms for Chicago Gang Members Sentenced to 12 Years in PrisonRead the Press Release
CHICAGO — A man who trafficked firearms and re-sold them to Chicago gang members has been sentenced to 12 years in federal prison.
DAVID SANTIAGO, 39, sold firearms and narcotics out of his residence in the Chicago Lawn neighborhood on Chicago’s Southwest Side. Many of the guns were sold to individuals whom Santiago knew were members of Chicago street gangs. During one sale that was surreptitiously recorded by an individual cooperating with law enforcement, the individual discussed how he intended to give a firearm to younger members of a gang, to which Santiago responded that he was going to provide one to the “guys” as well.
During the investigation law enforcement seized 16 firearms, including rifles and semi-automatic handguns, as well as more than 100 grams of heroin. Santiago purportedly obtained many of the firearms in Kansas and boasted to the Chicago buyers that the guns were “clean” and “brand new.”
Santiago pleaded guilty last year to two counts of illegal possession of firearms. Santiago had previously been convicted of multiple felonies, including four cases involving domestic violence, and was not lawfully allowed to possess a firearm.
U.S. District Judge Robert M. Dow, Jr., imposed the 12-year sentence Thursday after a hearing in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; and David Brown, Superintendent of the Chicago Police Department.
“Santiago was running an illegal gun store from his bedroom,” Assistant U.S. Attorney Timothy J. Storino argued in the government’s sentencing memorandum. “The over-proliferation of firearms in this city and the easy access of firearms in the hands of persons who should not have them has a direct correlation to the cyclical gun violence epidemic in Chicago.”
Holding illegal firearm possessors accountable through federal prosecution is also a centerpiece of Project Guardian and Project Safe Neighborhoods, the Department of Justice’s violent crime reduction strategies. In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Sioux City Man Pleads Guilty to Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine pled guilty April 15, 2021, in federal court in Sioux City.
Brett Michael Walking Eagle, 41, from Sioux City, Iowa, was convicted of conspiracy to distribute methamphetamine within 1000 feet of a protected location.
At the plea hearing, Walking Eagle admitted that on or about December 2, 2019, he and an individual cooperating with law enforcement agreed that Walking Eagle would either sell or coordinate the sale of approximately 6 ounces of methamphetamine to the cooperating individual. In return, Walking Eagle requested roughly a half ounce of the 6 ounces for himself. Walking Eagle instructed the individual cooperating with law enforcement to travel to the Boys and Girls Home parking lot, in Sioux City, Iowa to meet with another person who would provide the methamphetamine.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Walking Eagle remains in custody of the United States Marshal pending sentencing. Walking Eagle faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 80 years’ imprisonment, a $10,000,000 fine, and at least 8 years of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Patrick T. Greenwood and was investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4086.
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Senior NASA Employee Pleads Guilty to COVID-19 Related Loan FraudRead the Press Release
ALEXANDRIA, Va. – A Senior Executive Service (SES) employee of the National Aeronautics and Space Administration (NASA) pleaded guilty today to submitting fraudulent applications for over $350,000 in COVID-19 economic relief loans and benefits.
“Despite holding a senior executive position at NASA, the defendant applied for over $350,000 in fraudulent loans and benefits,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “In doing so, he essentially treated COVID-19 relief programs as a personal piggy bank, using funds intended to provide pandemic relief for small businesses and the unemployed to pay down his credit card debt, pay off loans for a residential pool and minivan, and pay a dog-breeder, among other personal expenses. EDVA will continue to hold accountable individuals who exploit a national economic crisis in order to unlawfully enrich themselves at the expense of those in genuine need due to the pandemic.”
According to court documents, Andrew Tezna, 36, of Leesburg, fraudulently submitted three loan applications to two financial institutions (totaling $272,284) under the Paycheck Protection Program (PPP), a federal initiative designed to help businesses pay their employees and meet their basic expenses during the COVID-19 pandemic. Tezna also submitted two Economic Injury Disaster Loan Program applications to the Small Business Administration (totaling $69,500), and he applied for COVID-related unemployment benefits from Virginia, ostensibly for his mother-in-law, who was retired and did not qualify for the benefits (totaling $15,950). In support of the fraudulent PPP loan applications, Tezna submitted fabricated IRS tax returns and fraudulently claimed payroll expenses that did not exist.
“People’s greed, especially when it involves fraudulently obtaining funds meant to help those in need, is truly disappointing,” said Darrell J. Waldon, IRS-CI Acting Special Agent in Charge of the Washington D.C. Field Office. “We will continue to work with our agency counterparts to ensure all are held accountable.”
Tezna successfully obtained over $285,000 from the PPP loans and unemployment benefits. The bulk of the money came from PPP loans applied for in his and his mother-in-law’s names for businesses that did not exist. He then spent the funds, among other things, to pay off a personal loan for a residential pool, to pay off a personal loan for a minivan, to pay off personally incurred credit card debt, for a down payment on a new car, and to pay a dog-breeder. In addition, Tezna also admitted to filing a false Financial Disclosure Report with NASA.
“As a NASA senior executive, the Agency placed a great deal of trust in Tezna. Taking advantage of the CARES Act to fraudulently obtain PPP loans not only violated the Agency’s trust, but the trust of American people that sought assistance for the legitimate needs of their struggling businesses,” said Special Agent in Charge Mark J. Zielinski, NASA Office of Inspector General, Eastern Field Office.
Tezna pleaded guilty to bank fraud and is scheduled to be sentenced on July 16. He faces a maximum penalty of 30 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Darrell J. Waldon, IRS-CI Acting Special Agent in Charge of the Washington D.C. Field Office, and Special Agent in Charge Mark J. Zielinski, NASA Office of Inspector General, Eastern Field Office, made the announcement after Senior U.S. District Judge Claude M. Hilton accepted the plea.
Assistant U.S. Attorneys Kimberly M. Shartar and Jamar K. Walker are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:27-cr-77.
Second Individual Charged with Fixing Wages for Health Care Workers and Obstructing FTC InvestigationRead the Press Release
A federal grand jury in the Eastern District of Texas returned a superseding indictment charging two Texas men with conspiring to fix prices by lowering rates paid to certain health care workers and then conspiring and endeavoring to obstruct a Federal Trade Commission (FTC) investigation of their conduct.
According to court documents, Neeraj Jindal and John Rodgers violated the Sherman Act by agreeing with co-conspirators in 2017 to pay lower rates to certain physical therapists and physical therapist assistants in north Texas, including the Dallas-Fort Worth metropolitan area. At the time, Jindal was the owner and Rodgers was a clinical director of a Texas-based therapist staffing company providing in-home physical therapy services. The superseding indictment alleges their company paid lower rates for several months after entering into the agreement.
Additionally, Jindal and Rodgers are charged with conspiring to obstruct and make false statements in proceedings before the FTC and endeavoring to obstruct those proceedings. According to the superseding indictment, Jindal and Rodgers conspired and then made false and misleading statements and withheld and concealed information during the FTC’s investigation to determine whether their company or other therapist staffing companies violated the Federal Trade Commission Act. The superseding indictment follows an indictment against Jindal returned in December 2020.
“The charges announced today underscore the Antitrust Division’s ongoing commitment to enforcing antitrust laws, particularly when the victims are American workers who deserve the benefits of competitive wages, mobility, and competition among employers for their services,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department's Antitrust Division. “This prosecution also demonstrates how seriously we take our obligation to protect the integrity of investigations into anticompetitive conduct, whether those investigations are conducted by the Department of Justice or another agency.”
“Wage-fixing agreements are, at their core, an attempt to artificially rig the labor market to depress wages and deprive workers of competitive salaries and benefits,” said Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas. “The present charges demonstrate that the Department of Justice and its partner agencies will not stand by and allow the exploitation of American workers and the manipulation of the market.”
“Today’s charges should serve as a warning to those who choose to engage in corrupt practices at the expense of hard-working Americans,” said Assistant Director Calvin Shivers of the FBI's Criminal Investigative Division. “The FBI is committed to working closely with our law enforcement partners to uncover corruption and bring the individuals responsible to justice.”
A violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million. The charged obstruction offenses carry a statutory maximum penalty of five years imprisonment and a $250,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Washington Criminal I Section is prosecuting the case, which was investigated with the assistance of the Antitrust Division’s Washington Criminal II Section and the FBI’s International Corruption Unit.
The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Roseville Woman Pleads Guilty to Stealing Unemployment BenefitsRead the Press Release
SACRAMENTO, Calif. — Andrea M. Gervais, 44, of Roseville, pleaded guilty today to theft of government money in a scheme involving 97 fraudulent Pandemic Unemployment Assistance (PUA) claims in the names of persons other than her own, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, at least 10 of 97 fraudulent PUA claims were processed for payment, and nearly $200,000 in unemployment insurance and PUA benefits were paid out to Gervais’s Roseville address in the form of Bank of America debit cards. The potential value of all fraudulent 97 claims associated with the scheme exceeded $2 million.
The investigation began when federal agents discovered that someone had filed a PUA claim using the identity of a sitting U.S. senator for approximately $21,000. This fraudulent claim was processed for payment, and Gervais received an EDD debit card in the senator’s name. Agents further discovered that Bank of America ATM cameras captured Gervais on multiple occasions withdrawing cash from at least seven of the EDD debit cards, and at least one captured transaction showed Gervais using the debit card issued to the senator.
“Gervais defrauded California’s unemployment system by fraudulently collecting nearly $200,000 in Pandemic Unemployment Assistance. Her conduct further exacerbated the distribution of unemployment benefits at a time when so many Americans are in desperate need of this assistance. We will continue to work with our law enforcement partners to protect the integrity of DOL programs,” said Quentin Heiden, Special Agent-in-Charge, Los Angeles Region, U.S. Department of Labor Office of Inspector General.
This case is the product of an investigation by the U.S. Department of Labor – Office of the Inspector General, the Federal Bureau of Investigation, and the California Employment Development Department – Investigation Division. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.
Gervais remains on pretrial release as she awaits sentencing. She is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on Aug. 9. Gervais faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Providence Man Indicted for CARES Act FraudRead the Press Release
PROVIDENCE – A federal grand jury in Providence on Friday returned a 17-count indictment charging a local man, who used the moniker “Mr. Vacation,” with using stolen Social Security numbers and personal identifying information of numerous individuals to apply for Coronavirus Aid, Relief, and Economic Security (CARES) Act funded unemployment insurance compensation from the Pennsylvania Department of Labor and for Economic Injury Disaster Loans from the Small Business Administration.
It is alleged in the indictment that beginning in March 2020, Courtney Hilaire, 28, obtained from the Internet personal identifying information, Social Security numbers, and dates of birth of numerous individuals, then accessed commercial public records data bases to obtain additional information about the identity of his victims. In July 2020, using the stolen identities, Hilaire filed a least six applications for unemployment insurance payments from the State of Pennsylvania. On at least seven occasions beginning in August 2020, Hilaire withdrew fraudulently obtained CARES Act unemployment funds from bank accounts he accessed through ATMs in Rhode Island.
It is also alleged in the indictment that Hilaire, using the moniker “Mr. Vacation,” solicited the assistance of another individual to defraud the Small Business Administration by fraudulently seeking CARES Act Economic Injury Disaster Loans, a program which provides economic relief to small businesses that have experienced a temporary loss of revenue during the pandemic. It is alleged that Hilaire filed at least twenty-eight fraudulent applications with the Small Business Administration for Economic Injury Disaster Loans if he was not entitled to receive.
Hilaire, charged with conspiracy to commit wire fraud, 14 counts of wire fraud, and two counts of aggravated identity theft, is the latest individual charged in federal court in Providence with allegedly running schemes to defraud CARES Act programs. Earlier this month, the United States Attorney’s Office publicly detailed investigations and charges brought against fraudsters who collectively have targeted more than $31 million in CARES Act funding.
To date, the United States Attorney’s Office in Rhode Island has charged 24 individuals with allegedly defrauding state unemployment agencies in Rhode Island and elsewhere and the Small Business Administration, of CARES Act relief funds made available to assist American families and business in need due to the pandemic. Several investigations are ongoing.
The indictment of Courtney Hilaire is announced by Acting United States Attorney Richard B. Myrus, Homeland Security Investigations Acting Special Agent in Charge William S. Walker, Warwick Police Chief Colonel Bradford Connor, and Pawtucket Police Chief Tina Goncalves.
A federal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The investigation that resulted in an indictment being brought against Hilaire for CAREs Act fraud was conducted by the Warwick Police Department, Pawtucket Police Department Special Squad, and Homeland Security Investigations.
The case is being prosecuted by Assistant United States Attorney William F. Ferland.
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Portsmouth Woman Pleads Guilty to Fraud Schemes Targeting VeteransRead the Press Release
NEWPORT NEWS, Va. – A Portsmouth woman pleaded guilty today to wire fraud and aggravated identity theft in connection with a scheme to defraud veterans.
“This defendant has been brought to justice for orchestrating numerous fraudulent schemes against veterans who honorably served their country,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “For those who steal, misappropriate, and divert funds that belong to our country’s veterans, this case sends a strong message that you will be prosecuted and held accountable for your inexcusable conduct.”
According to court documents, Rita Copeland, 59, operated an entity known as “Veteran Services of the Commonwealth.” Copeland purported to provide caregiving, contracting, and rental assistance services to various veterans from 2016 through 2020. Copeland caused a number of victims to apply for Home Improvements and Structural Alterations (HISA) grants through the U.S. Department of Veterans Affairs. Such grant payments are to be used for certain designated improvements to the residences of veterans. Copeland failed to perform all of the promised work and used a portion of these payments to her own benefit, contrary to the designated purposes of the funds.
Copeland also diverted the income and retirement fund payments of another veteran to a bank account that she had opened. In addition, Copeland fraudulently obtained and diverted loan funds and used the credit and debit cards of this elderly victim. Finally, Copeland engaged in a rental fraud scheme, purporting to link veterans and others with landlords, but then diverting rental and security deposit payments to her own benefit.
Copeland pleaded guilty to one count of wire fraud and one count of aggravated identity theft, and she is scheduled to be sentenced on August 27. She faces a maximum penalty of 20 years for wire fraud and a mandatory consecutive term of two years for aggravated identity theft. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; and Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs, made the announcement after Senior U.S. District Judge Henry E. Hudson accepted the plea.
Assistant U.S. Attorney Brian Samuels is prosecuting the case.
This case is being investigated by the FBI’s Norfolk Division’s Peninsula Resident Agency.
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. 4:20-cr-63.
Pocahontas County man admits to firearms chargesRead the Press Release
ELKINS, WEST VIRGINIA – Julian N. Waddell, of Durbin, West Virginia, has admitted to firearms charges, Acting United States Attorney Randolph J. Bernard announced.
Waddell, 37, pleaded guilty today to two counts of “Unlawful Possession of a Firearm.” Waddell, a person who isn’t permitted to have a firearm because of a prior conviction, admitted to having three revolvers, a shotgun, and a semi-automatic rifle in April and July 2019 in Pocahontas County.
Waddell is facing up to 10 years of incarceration and a fine of up to $250,000 for each of the charges. 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 Christopher L. Bauer is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms & Explosives and the Mountain Region Drug Task Force investigated.
U.S. Magistrate Michael John Aloi presided.
Pittsfield Man Charged with Child Pornography OffensesRead the Press Release
BOSTON – A federal grand jury in Springfield last week indicted a Pittsfield man on child pornography charges.
Benjamin Shacar, 34, was indicted on April 15, 2021 on 10 counts of receipt of child pornography and one count possession of child pornography. Shacar was charged by criminal complaint in March 2021.
According to charging documents, between August 2020 and March 2021, Shacar allegedly received and possessed child pornography. Law enforcement agents executed a search warrant at Shacar’s residence and uncovered a thumb drive containing multiple files depicting children engaged in sexually explicit conduct. During an on-scene interview, Shacar allegedly admitted that he viewed and downloaded child pornography from the internet.
The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and up to 20 years in prison. The charge of possession of child pornography provides for a sentence of up to 10 years in prison. Each charge also provides for a mandatory minimum of five years and up to life of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Hampden County Sheriff Nicholas Cocchi; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Pittsfield Police Chief Michael J. Wynn made the announcement. Assistant U.S. Attorney Alex J. Grant of Mendell’s Springfield Branch Office is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Ohio man sentenced for drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Anthony A. Shuster, Jr., of Caldwell, Ohio, was sentenced today to 70 months of incarceration for drug and firearms charges, Acting United States Attorney Randolph J. Bernard announced.
Anthony Shuster, also known as “Tiny,” 35, pled guilty to one count of “Distribution of More than 50 Grams of Methamphetamine” in September 2020. Shuster admitted to selling more than 50 grams of methamphetamine, also known as “crystal meth” and “ice,” in January 2019 in Ritchie County.
Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Ohio Man Admits Posing as Teen, Receiving Explicit Videos from Minor and Posting Them on TikTokRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that BRIAN GRINNELL, 36, of Lakewood, Ohio, pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to distribution of child pornography.
According to court documents and statements made in court, in March 2020, Grinnell posed as a 15-year-old girl and met a female, who at the time was under the age of 12, on Omegle, an online chat website and mobile application that allows users to interact with strangers. Shortly thereafter, he began communicating with the minor victim on Snapchat. Grinnell told the minor victim to take sexually explicit photos and videos of herself and send them to Grinnell over Snapchat. After the minor victim began to feel threatened by Grinnell, she unfriended and blocked Grinnell’s account.
Grinnell subsequently contacted a friend of the minor victim on TikTok and stated that unless the minor victim got in touch with him, he would post a video of the minor victim naked on TikTok. Grinnell then posted sexually explicit videos of the minor victim on TikTok. When a friend of the minor victim, who is also a minor, begged Grinnell not to post additional videos of the minor victim, Grinnell stated “I want a video of you begging me to not put them up. And you have to be topless in the video. If you don’t want any more of your friend stuff going out.” After the friend told Grinnell that they would call the police, Grinnell responded “How are they gonna find me?” Grinnell then proceeded to post another video of the minor victim on TikTok.
Grinnell has been detained since his arrest on September 23, 2020.
Judge Shea scheduled sentencing for July 19 at which time Grinnell faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.
This investigation has been conducted by the Federal Bureau of Investigation and the New Canaan Police Department, with assistance from the Cuyahoga County (Ohio) Prosecutor’s Office and Cuyahoga County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorneys Tara E. Levens and Sarala V. Nagala through the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Ocean County Insurance Producer Admits $1.5 Million Health Care Fraud Against Blue Cross Blue ShieldRead the Press Release
NEWARK, N.J. – An Ocean County, New Jersey, insurance producer today admitted filing false statements in connection with the delivery of $1.5 million in fraudulent claims by Blue Cross Blue Shield health care affiliates, Acting U.S. Attorney Rachael A. Honig announced today.
Jonas Knopf, 65, of Lakewood, New Jersey, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information charging him with one count of making false statements related to a health care benefits program.
According to documents filed in this case and statements made in court:
Starting in 2009, Knopf was chief executive officer of Madison Financial Services (MFS) in Lakewood and a licensed insurance producer – a person who is licensed to sell insurance products. MFS was the parent company of two sham companies created by Knopf and others solely for the purpose of marketing health insurance coverage to people who were not, in fact, his employees. These companies purported to be located and doing business in Pennsylvania and created the appearance of employment status for hundreds of individuals, largely Lakewood residents, who were seeking health care coverage through BCBS benefit plans. The fraud lasted until March 2013, when the Pennsylvania Department of Insurance caused Knopf to surrender his Pennsylvania insurance producer’s license and cease operation in the state.
Knopf used false personal information, including false addresses, dates of birth, marital status and employment functions, to give BCBS the impression that his clients were actually employees being paid for services rendered. In total, the scheme caused the health care insurers to pay out $1.5 million in fraudulent claims.
The count of making false statements relating to a health care benefit program carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the gross gain or twice the gross loss from the offense, whichever is greater. Sentencing is scheduled for Aug. 19, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent In Charge George M. Crouch Jr. in Newark; special agents of the U.S. Department of Labor, Office of Inspector General, Office of Investigations, New York Region, under the direction of Special Agent in Charge Michael Mikulka; and Investigators of the U.S. Department of Labor, Employee Benefit Security Administration, under the direction of Regional Director Thomas Licetti, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Tracey Agnew of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit in Newark.
Norwalk Man Pleads Guilty to Federal Tax ChargeRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and Ramsey E. Covington, Acting Special Agent in Charge of IRS Criminal Investigation in New England, today announced that ROBERT T. COLGAN, 60, of Norwalk, waived his right to be indicted and pleaded guilty today before U.S. District Judge Victor A. Bolden to a federal tax offense.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, Colgan controlled a business known as Colgan Financial Group, Inc. (“CFG”), and he employed a bookkeeper to maintain CFG’s books and a return preparer to assist him in the preparation of both CFG’s corporate tax returns and his personal income tax returns. Colgan used CFG funds to pay for personal expenditures, but directed his bookkeeper to record the payments as a loan in CFG’s books. As a result, Colgan’s personal income tax returns for the 2013 through 2017 tax years underreported his income and resulted in a tax loss of more than $250,000.
Colgan pleaded guilty to one count of filing of a false tax return, an offense that carries a maximum term of imprisonment of three years. He is released pending sentencing, which is not scheduled.
This investigation is being conducted by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
Norfolk Man Convicted of Visa Fraud, Other Immigration Crimes, and Tampering with a WitnessRead the Press Release
NEW BERN, N.C. – A federal jury convicted a Norfolk, Virginia man Friday on charges of visa fraud related to a sham marriage and other immigration crimes along with trying to obstruct the testimony of a witness in an official proceeding.
According to court records and evidence presented at trial, Joshua Kwame Asane, 46, a citizen of Ghana, was indicted on July 22, 2020, for conspiracy to commit marriage fraud, marriage fraud, visa fraud, false statements in immigration proceedings, and tampering with a witness.
Evidence presented at the trial revealed that the marriage between Asane and a U.S. soldier stationed at Fort Bragg, North Carolina, was arranged by Asane’s brother (Ebenezer Asane, who was previously indicted for conspiracy to commit marriage fraud, has plead guilty and is awaiting sentencing). Asane and the soldier were married in Cumberland County, North Carolina.
Thereafter, Asane and the soldier submitted fraudulent applications to United States Citizenship and Immigration Services (USCIS) requesting Asane’s adjustment of status as a lawful permanent resident in the United States. Asane and the soldier were interviewed at the USCIS office in Norfolk, Virginia. Both attested under oath they were married in good faith. As a result of the interview, USCIS found indicators of fraud, and referred the case to USCIS, Fraud Detection and National Security, and Homeland Security Investigations (HSI) for investigation.
In a split decision the jury found Asane guilty of visa fraud, false statements in immigration proceedings, and tampering with a witness, and not guilty of conspiracy and marriage fraud.
Asane faces maximum penalties of twenty-five years of imprisonment and a fine of $250,000 for his convictions of visa fraud, false statements in immigration proceedings, and witness tampering when scheduled for sentencing for the term of court commencing on September 7, 2021.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after U.S. District Judge Louise W. Flanagan accepted the verdict. The case was investigated by the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina led by Homeland Security Investigations and assisted by US Army Criminal Investigation Division, and USCIS’s Fraud Detection and National Security, Assistant U.S. Attorney Gabriel J. Diaz is prosecuting the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No.5:20-CR-00349-FL-1 & 5:19-CR-423-1FL.
New York Man Charged with Abusive Sexual Contact on AirplaneRead the Press Release
NEWARK, N.J. – A New York man made his initial appearance today for alleged abusive sexual contact with a female passenger on a flight to Newark Liberty International Airport, Acting U.S. Attorney Rachael A. Honig announced.
Ryan Manuella, 28, of Cheektowaga, New York, is charged by criminal complaint with one count of abusive sexual contact on an airplane. He had his initial appearance by videoconference before U.S. Magistrate Judge Jessica S. Allen in Newark federal court and was detained.
According to the complaint:
While on an April 16, 2021, flight from Denver, Colorado, to Newark, Manuella moved to a vacant center seat next to a female passenger, who was sitting in a window seat. Manuella was unknown to the victim. While seated next to the victim, Manuela touched her on the groin and inner thigh without her permission.
The abusive sexual contact charge carries a maximum term of two years in prison and a $250,000 fine.
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 officers of the Port Authority Police Department, under the direction of Superintendent of Police Edward Cetnar, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Hayden M. Brockett of the Health Care Fraud Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.