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26 March 2021
Mendenhall Man Pleads Guilty to Converting Federal Monies to His Own UseRead the Press Release
Jackson, Miss. – Edward Lott, 25, of Mendenhall, pled guilty today before U.S. Chief District Judge Daniel P. Jordan III to converting federal monies to his own use without authorization, announced Acting U.S. Attorney Darren J. LaMarca and Anthony Mohatt, Acting Special Agent in Charge of the United States Department of Agriculture, Office of Inspector General.
On March 4, 2014, Edward Lott applied for a loan in the amount of $24,000 with the Farm Service Agency to purchase cattle. The Farm Service Agency is an agency overseen by the United States Department of Agriculture. Lott and the Farm Service Agency entered into an agreement granting a security interest in all cattle currently owned and to be acquired by him. An inspection of Mr. Lott’s cattle operation was conducted in January 2015. At that time, 11 cows, one bull and four calves were owned as part of the operation. A follow up inspection occurred in November 2015, where no cattle were found. Mr. Lott admitted that he had sold the cattle that had been pledged as security for the loan and converted the monies for his own use without the approval of the Farm Service Agency.
Lott is scheduled for sentencing on June 30, 2021 at 9:00 a.m. and faces a maximum penalty of 5 years in prison and up to a $250,000 fine.
The investigation was conducted by the United States Department of Agriculture. The case is being prosecuted by Assistant United States Attorney Erin Chalk.
Man from California sentenced to 14 months for illegal possession of credit card making devices and counterfeit cardsRead the Press Release
ALBUQUERQUE, N.M. – Paul Osborne, 62, of Victorville, California, was sentenced on March 24 in federal court in Santa Fe to 14 months in prison for crimes that affected interstate commerce with intent to defraud. Osborne pleaded guilty on June 23, 2020.
According to his plea agreement and other court records, Osborne was in possession of devices used for the manufacture of counterfeit credit cards and counterfeit credit cards. On November 3, 2015, Osborne was a passenger in a vehicle traveling on I-40 that was stopped by New Mexico State Police (NMSP) for erratic driving. After the occupants consented to a search of the vehicle, officers found inside a credit card imprinter, a credit card embosser, a credit card reader, and over fifteen credit or debit cards. Subsequent investigation revealed that the credit card numbers were associated with other people throughout the United States. In his plea agreement, Osborne admitted to possessing those items with the intent to defraud.
Upon his release from prison, Osborne will be subject to three years of supervised release.
The New Mexico State Police investigated this case. Assistant U.S Attorney Frederick T. Mendenhall prosecuted the case.
Man Who Held up Army National Guard Convoy Charged with Armed Assault of Federal OfficersRead the Press Release
An Arizona man who held up an Army National Guard convoy at gunpoint on Monday has been federally charged, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Larry Lee Harris, 66, was charged via criminal complaint with assaulting a federal officer with a deadly weapon. He will be set for an initial appearance in federal court at a later date.
According to the complaint, Mr. Harris allegedly pointed a firearm at a three-van Army National Guard convoy engaged in official duties related to the COVID-19 national emergency.
National Guard personnel reported to police that Mr. Harris, driving a white Chevrolet pickup, began following the officers down the I-27 in Lubbock, then pulled alongside them and brandished a weapon. All three vehicles pulled over.
Mr. Harris, identifying himself as a detective, allegedly approached the National Guard vehicles with his firearm drawn. Ranting about a missing 41-year-old-woman and a 12-year-old girl, he demanded to search the vans. National Guard personnel complied. Mr. Harris searched the vans and then began to drive away.
As the National Guard convoy started to depart, Mr. Harris allegedly made an erratic U-turn and once again forced the vans to stop. He then demanded to search an engine compartment.
The National Guard called 911. The Idalou Police Department arrived on scene and took Mr. Harris into custody without incident. Inside his waistband, they found a Colt .45 semiautomatic pistol, loaded with a full magazine.
A criminal complaint is merely an allegation of wrongdoing, not evidence. Like all defendants, Mr. Harris is presumed innocent until proven guilty in a court of law.
If convicted, he faces up to 20 years in prison on the federal charge.
He is also facing state charges of aggravated assault, unlawful restraint, impersonating a public servant, unlawfully carrying a weapon, and interfering with military forces.
Homeland Security Investigations’ Dallas Field Office, the Idalou Police Department, the Texas Department of Public Safety, and the Lubbock County Sheriff’s Office conducted the investigation with the complete cooperation of the Texas National Guard. Assistant U.S. Attorneys Jeffrey Haag and Callie Woolam are prosecuting the case.
Madison Man Sentenced to 15 Months in Federal Prison Under Project EJECT for Possessing a Firearm as a Convicted FelonRead the Press Release
Jackson, Miss – John Robert Beck, 57, of Madison, was sentenced yesterday by U.S. District Judge Kristi H. Johnson to serve 15 months in federal prison, followed by 3 years of supervised release, for possessing a firearm after having been previously convicted of a felony crime, announced Acting U.S. Attorney Darren J. LaMarca and Kurt Thielhorn, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On September 25, 2018, Beck was stopped for a traffic violation by a Hinds County Sheriff’s deputy on McDowell Road in Jackson. Once stopped, Beck was asked to step outside of his car to speak with the deputy. For his safety, the deputy asked Beck if he had any weapons. Beck responded that he had a handgun on him, and a .40 caliber handgun was removed from beneath Beck’s clothes. During their ensuing conversation, the deputy learned that Beck was a convicted felon, that he had been previously convicted in the Circuit Court of Madison County of possessing a controlled substance with intent to distribute.
On February 20, 2019, Beck was charged in a federal criminal indictment and he pled guilty on December 9, 2019.
This case was investigated by the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant United States Attorney Bert Carraway.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN) and Project Guardian. EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry, and awareness. EJECT stands for “Empower Justice Expel Crime Together.” PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
Madison County Man Sentenced for Failing to Register as a Sex OffenderRead the Press Release
SYRACUSE, NEW YORK-Matthew Lamb, 48, of DeRuyter, New York, was sentenced yesterday in federal court in Syracuse, New York, to serve 18-months incarceration, to be followed by a 16-year term of supervised release in connection with his plea of guilty to two counts of failing to register and update his registration as a previously convicted sex offender, announced Acting United States Attorney Antoinette T. Bacon and David L. McNulty, United States Marshal for the Northern District of New York.
On October 7, 2020, Lamb pled guilty and admitted that he had two e-mail addresses that he failed to disclose to the New York State Division of Criminal Justice Services as required by the Sex Offender Registration and Notification Act (“SORNA”). As part of his guilty plea, Lamb admitted that from May 3, 2016 through May 13, 2019, he failed to register a Yahoo! e-mail address that he created on December 10, 2001, as required by SORNA. Further, Lamb admitted that from April 27, 2018, through May 13, 2019, he failed to register and update his registration to disclose a Google e-mail address that he created on April 16, 2019, as required by SORNA.
Lamb was required to register as a sex offender because of his federal conviction in 2012 for distribution of child pornography, receipt of child pornography and possession of child pornography. Lamb was sentenced on December 6, 2012, to serve 84-months incarceration, and a 20-year term of supervised release on that conviction.
In addition to his plea to the failure to register and update a registration as a sex offender, Lamb also admitted yesterday to violating the terms of supervised release previously imposed from his 2012 conviction. He was also sentenced yesterday to a consecutive term of 12-months incarceration for those violations.
This case was investigated by the United States Marshals Service and was prosecuted by Assistant U.S. Attorney Tamara Thomson as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc
MS-13 Gang Associate Indicted for Murder of 17-Year Old Victim in Kissena Park in QueensRead the Press Release
A superseding indictment was returned yesterday in federal court in Brooklyn charging Oscar Flores-Mejia, an associate of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, with murder in-aid-of racketeering and conspiracy to commit murder in-aid-of racketeering in connection with the April 23, 2018 murder of 17-year-old Andy Peralta in Queens, New York. Flores-Mejia was arrested on a criminal complaint in February 2021 and ordered detained pending trial. The defendant will be arraigned at a later date.
Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.
“After allegedly helping to torture and murder the teenage victim, the defendant leaned over his lifeless body and displayed the MS-13 hand sign, openly revealing his presence at the scene and linking MS-13 to this horrific crime,” stated Acting U.S. Attorney Lesko. “This Office and its federal, state and local law enforcement partners will not rest until the senseless brutality and violence of MS-13 has been eliminated and those responsible for the victim’s cruel and cold-blooded murder in Kissena Park have been held to account.” Mr. Lesko expressed his appreciation to the Queens County District Attorney’s Office and the New York City Department of Investigation for their assistance in the investigation.
“No one deserves to die simply to boost the standing of a gang member. Today’s indictment should serve as the FBI’s continuing sign to other gang members who commit violence in our neighborhoods. We work around the clock, and our connections are global. Behavior like the kind we allege today leads to a federal prison cell. Your stay will be a long one,” stated FBI Assistant Director-in-Charge Sweeney.
“The heinous details of the Flores-Mejia case and his alleged involvement in the ruthless murder of a teen in 2018 is on par with MS-13’s core values of extreme violence and control,” stated HSI Special Agent-in-Charge Fitzhugh. “Transnational criminal street gangs like MS-13 serve only to terrorize our communities and prey upon our most vulnerable youth who are often left with little choice, join the gang or face the consequence. This unfair choice ends one of two ways, jail or death. In facing this threat, HSI continues to work with its federal and local law enforcement partners to arrest and prosecute those who commit senseless violence while simultaneously working with our communities to offer a better option, a chance for a future.”
“The federal indictment announced today answers for an unspeakably violent crime and sends a message that gangs like La Mara Salvatrucha can never be tolerated. I commend our NYPD detectives, our law enforcement partners and the United States Attorney’s Office for the Eastern District of New York for bringing this important case,” stated NYPD Commissioner Shea.
According to court filings, on the evening of April 23, 2018, Peralta was lured to Kissena Park where he was ambushed in a wooded area by Flores-Mejia and two others. Peralta was believed to be a member of the 18th Street gang. Peralta had a tattoo of a crown on his chest which the defendant mistakenly believed to be a symbol of a rival gang. Peralta was repeatedly slashed, stabbed, beaten and strangled. A photograph taken of Peralta’s body depicts Flores-Mejia leaning over the victim and displaying an MS-13 hand sign.
The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Flores-Mejia faces a mandatory sentence of life imprisonment.
Today’s charges are the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the district and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by our law enforcement partners.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia E. Moore and Phil Selden and Special Assistant United States Attorney Kirk Sendlein are in charge of the prosecution.
The Defendant Charged in the Superseding Indictment:
OSCAR FLORES-MEJIA (also known as “Chamuco”)
Age: 21
Elmhurst, New YorkDefendants Previously Indicted:
JUAN AMAYA-RAMIREZ (also known as “Cadaver”)
Age: 23
Fresh Meadows, New YorkRAMIRO GUTIERREZ (also known as “Cara de Malo”)
Age: 28
Flushing, New YorkVICTOR LOPEZ (also known as “Curioso”)
Age: 22
Flushing, New YorkTITO MARTINEZ-ALVARENGA (also known as “Imprudente”)
Age: 21
Flushing, New YorkJAIRO MARTINEZ-GARCIA (also known as “Colmillo”)
Age: 22
Flushing, New YorkEMERSON MARTINEZ-LARA (also known as “Fugitivo”)
Age: 21
College Point, New YorkDOUGLAS MELGAR-SURIANO (also known as “Clemencia”)
Age: 24
Flushing, New YorkVICTOR RAMIREZ (also known as “Frijolito”)
Age: 21
Elmhurst, New YorkISMAEL SANTOS-NOVOA (also known as “Profe” and “Travieso”)
Age: 32
Flushing, New YorkE.D.N.Y. Docket Nos. 20-CR-228 (SJ)
Louisiana Construction Company Owner and Two Employees Indicted for Tax FraudRead the Press Release
A federal grand jury in New Orleans, Louisiana, returned an indictment today charging three Louisiana residents with conspiracy to defraud the IRS. One defendant, Matthew Reck, was additionally charged with making a false statement to federal agents, and the other defendants, Dawn Farrell Ruiz and David Farrell, were charged with aiding in the preparation of false returns.
According to the indictment, from 2011 to at least June 2019, Matthew Reck and Dawn Farrell Ruiz, both of St. Tammany Parish, and David Farrell, of Jefferson Parish, allegedly conspired to defraud the IRS by underreporting their individual compensation and causing to be filed false individual tax returns. Further, Reck and Ruiz allegedly caused to be filed false corporate tax returns, relating to SES Construction Consulting Group (SES) and Global Technical Solutions (Global). Reck co-owned the two construction businesses through at least December 2015, and Farrell worked as a project manager and Ruiz as a bookkeeper for both businesses. The indictment further alleges that Reck, Farrell, and Ruiz paid some workers “off the books” in cash and did not report the workers’ full compensation to the IRS. When federal agents from IRS-Criminal Investigation subsequently interviewed Reck, he allegedly falsely stated that he had no communications with the accountant for SES and Global regarding the preparation of the companies’ corporate tax returns.
The defendants are scheduled for their initial court appearance on April 9, 2021, in the U.S. District Court for the Eastern District of Louisiana. If convicted, they face a maximum penalty of five years in prison on the conspiracy charge. Reck also faces a maximum of five years in prison on the charge of making false statements to federal agents, and Farrell and Ruiz face a maximum of three years in prison on each of the charges of aiding in the preparation of a false tax return. 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 the U.S. Attorney’s Office for the Eastern District of Louisiana made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys William Montague and Parker Tobin of the Justice Department’s Tax Division and Assistant U.S. Attorney Nicholas Moses of the Eastern District of Louisiana are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Louisiana Construction Company Owner and Two Employees Indicted for Tax FraudRead the Press Release
WASHINGTON – A federal grand jury in New Orleans, Louisiana, returned an indictment today charging three Louisiana residents with conspiracy to defraud the IRS. One defendant, Matthew Reck, was additionally charged with making a false statement to federal agents, and the other defendants, Dawn Farrell Ruiz and David Farrell, were charged with aiding in the preparation of false returns.
According to the indictment, from 2011 to at least June 2019, Matthew Reck and Dawn Farrell Ruiz, both of St. Tammany Parish, and David Farrell, of Jefferson Parish, allegedly conspired to defraud the IRS by underreporting their individual compensation and causing to be filed false individual tax returns. Further, Reck and Ruiz allegedly caused to be filed false corporate tax returns, relating to SES Construction Consulting Group (SES) and Global Technical Solutions (Global). Reck co-owned the two construction businesses through at least December 2015, and Farrell worked as a project manager and Ruiz as a bookkeeper for both businesses. The indictment further alleges that Reck, Farrell, and Ruiz paid some workers “off the books” in cash and did not report the workers’ full compensation to the IRS. When federal agents from IRS-Criminal Investigation subsequently interviewed Reck, he allegedly falsely stated that he had no communications with the accountant for SES and Global regarding the preparation of the companies’ corporate tax returns.
The defendants are scheduled for their initial court appearance on April 9, 2021 in the U.S. District Court for the Eastern District of Louisiana. If convicted, they face a maximum penalty of five years in prison on the conspiracy charge. Reck also faces a maximum of five years in prison on the charge of making false statements to federal agents, and Farrell and Ruiz face a maximum of three years in prison on each of the charges of aiding in the preparation of a false tax return. 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 the U.S. Attorney’s Office for the Eastern District of Louisiana made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys William Montague and Parker Tobin of the Justice Department’s Tax Division and Assistant U.S. Attorney Nicholas Moses of the Eastern District of Louisiana are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Longview Brothers “Big Hub” and “Little Hub” Sentenced to Federal Prison in Separate Firearms-Related CasesRead the Press Release
SHERMAN, Texas – Two Longview brothers were sentenced to federal prison this week in separate firearms cases, announced Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas.
Thomas Ricardo “Big Hub” Hubbard, 40, pleaded guilty on January 9, 2020, to use, carrying, and possession of a firearm during and in furtherance of a drug trafficking crime. Today, he was sentenced to 104 months in federal prison by U.S. District Judge J. Campbell Barker.
Dennis Derrell “Little Hub” Hubbard, 39, pleaded guilty on October 28, 2020, to being a felon in possession of a firearm. On March 25, 2021, he was sentenced to 57 months in federal prison by U.S. District Judge Jeremy D. Kernodle. Both Hubbard brothers were also ordered to forfeit firearms and ammunition related to their offenses.
“These cases demonstrate that we will vigorously pursue felons who acquire and use firearms in their crimes,” said Acting U.S. Attorney Nicholas J. Ganjei. “The defendants were multi-convicted felons who chose to acquire and carry firearms. We will continue to partner with federal and local agencies to investigate and prosecute the most dangerous members of the criminal community.”
According to court documents and statements made in court, on January 20, 2019, a Tatum Police Officer attempted to stop Dennis “Little Hub” Hubbard on suspicion of drunk driving after Hubbard’s vehicle was seen swerving. Hubbard refused to stop and traveled several miles at low speed before finally pulling over. As the officer approached Hubbard’s vehicle, he gave Hubbard commands to exit his vehicle with his hands visible. Hubbard started to comply, but then abruptly drove away as the officer approached. After a short distance, Hubbard again pulled over and again began to comply with the officer’s instructions to exit the vehicle. However, Hubbard again drove away from the officer as he approached Hubbard’s vehicle. After a few more miles of pursuit, Hubbard entered the City of Beckville, Texas, where officers had converged to set up a roadblock at an intersection. Hubbard attempted to drive around the roadblock before he was finally boxed-in by police. Hubbard then surrendered and was arrested. A handgun and .40 caliber ammunition were located inside Hubbard’s car. Hubbard has multiple prior felony convictions.
In a separate incident, on April 8, 2019, Gregg County Organized Drug Enforcement (CODE) officers executed a search warrant at Thomas “Big Hub” Hubbard’s home and located a rifle, ammunition, 16.42 grams of PCP, 37.62 grams of “ice” methamphetamine, and 32.9 grams of crack cocaine. All of these items were located in Thomas Hubbard’s bedroom. He claimed ownership of those items in a subsequent interview and also admitted that, among other reasons, he possessed the firearm for the purpose of protecting his drug dealing activities.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Gregg County CODE Unit; the Tatum Police Department; and the Panola County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Ryan Locker.
Logan County Man Pleads Guilty to Federal Gun CrimeRead the Press Release
CHARLESTON, W.Va. – A Logan County man pled guilty today to a federal gun crime. Eddie Lee Conley, 45, pled guilty to being a felon in possession of a firearm. A federal grand jury indicted Conley in February 2021.
According to court documents and statements made in court, Conley admitted that during the early morning hours of May 15, 2020, he possessed a .38 caliber Cobra derringer-style handgun in his motel room at the Roadway Inn in Chapmanville. Conley further admitted that at the time he possessed the handgun he had previously been convicted of conspiracy to operate a clandestine drug laboratory in the Circuit Court of Logan County in 2016. Pursuant to his plea agreement, Conley also admitted that he possessed a different .38 caliber handgun in Madison on January 29, 2020.
Conley faces up to ten years in prison when sentenced on June 30, 2021.
The West Virginia State Police and the Madison Police Department conducted the investigation and received assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Nowles Heinrich is handling the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00035.
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Local man indicted for failing to pay over $1 million in income taxRead the Press Release
HOUSTON – A man is set to appear in federal court on charges he evaded the payment of income tax and committed bankruptcy fraud, announced Acting U.S. Attorney Jennifer B. Lowery.
David Felt is expected to make his initial appearance at 2 p.m. today before U.S. Magistrate Judge Sam Sheldon.
The federal grand jury returned the eight-count indictment March 25. It alleges that beginning in 1998, Felt evaded payment of over $1.2 million in income taxes he owed for select years in the 1980s and 1990s. He also allegedly failed to pay substantial amounts of income taxes he owed from 2010 to 2013.
According to the charges, Felt also used the debtor-in-possession bank account of an entity in bankruptcy proceedings to pay personal expenses for himself, his family members and to pay non-creditor businesses. He also allegedly embezzled, spent and transferred over $353,000 of property of a bankruptcy debtor’s estate. The charges allege he made the payments and transferred the property after the court had ordered the approved Chapter 11 payment plan, in violation of federal law.
Each count of tax evasion or bankruptcy fraud carries a potential penalty of up to five years in federal prison as well as a possible $250,000 maximum fine.
IRS-Criminal Investigation and the FBI conducted the investigation. Assistant U.S. Attorneys Charles J. Escher and Quincy L. Ollison are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Lenoir City Woman Sentenced to Five Years Imprisonment for Elder Fraud SchemeRead the Press Release
KNOXVILLE, Tenn. – On March 25, 2021, Christina Erin Myers, 39, of Lenoir City was sentenced by the Honorable Katherine A. Crytzer, United States District Judge for the Eastern District of Tennessee, to serve 63 months in federal prison for Myers’ wire fraud and money laundering convictions arising from her investment fraud scheme to deceive elderly victims. Myers was also ordered to pay more than $400,000 in restitution to her victims.
In 2019, Myers pleaded guilty to one count of wire fraud and one count of money laundering. In her plea agreement filed with the Court, Myers admitted to defrauding elderly victims by diverting to her own use the funds that her victims had provided to her for the purchase of real estate from Tennessee Baptist Adult Homes, marketing non-existent senior communities, and promoting fictitious investment opportunities. Myers further admitted that she failed to invest the funds as she promised and diverted those funds for her personal benefit without the knowledge or authorization of her victims. Myers also admitted to making financial transactions with the stolen funds, and that she did so to keep her fraud scheme going.
The investigation was conducted by the Internal Revenue Service – Criminal Investigation, the Lenoir City Police Department, and the Tennessee Highway Patrol.
Assistant U.S. Attorney Frank M. Dale, Jr. represented the United States in court.
###Las Vegas Woman Indicted for Straw Purchase of A FirearmRead the Press Release
LAS VEGAS, Nev. – A Las Vegas woman made her initial court appearance yesterday for allegedly lying on a federal form to make a straw purchase of a firearm, announced Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Patrick Gorman for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Chandra Bridges, 26, was charged with one count of making a false statement during the purchase of a firearm. U.S. Magistrate Judge Elayna Youchah scheduled a jury trial on May 17, 2021.
According to allegations in the indictment, on or about September 26, 2019, Bridges falsely represented to a Federal Firearms Licensee that she was the actual buyer of a Smith and Wesson Bodyguard .380 caliber pistol. But in fact, she was acquiring the firearm on behalf of another person.
If convicted, the statutory maximum penalty Bridges faces is 10 years in prison and a $250,000 fine.
An indictment merely alleges that a crime has been committed. Every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the ATF. Assistant U.S. Attorney Kimberly Sokolich is prosecuting the case.
This case is part of Project Guardian, the Department of Justice’s initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the ATF when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
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Lafourche Man Sentenced for Being a Felon in Possession of a FirearmRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced that on March 23, 2021, JAVANTI COLER, age 25, a resident of Lafourche Parish, Louisiana, was sentenced to serve 57 months in the custody of the United States Bureau of Prisons. When he is released from prison, he will be on supervised release for a period of three years. COLER pled guilty back on December 8, 2020 to being a felon in possession of a firearm.
His co-defendant Deondre Gramma, age 26, also a resident of Lafourche Parish, Louisiana, who also pled guilty to bring a felon on possession of a firearm will be sentenced later this month.
Back on April 27, 2018, COLER and Gramma were passengers in a car that was pulled over for a traffic violation in Lafouche Parish. As the officers were issuing a ticket to the driver, Gramma, who was the front seat passenger leaped from the car and tried to escape. When he was caught by the police after a brief foot chase, they located a loaded firearm in his waistband. This incident was captured on the officer’s body worn camera. Other officers observed COLER, who was the backseat passenger, exit the back seat and attempt to discard a loaded semi-automatic handgun in the high grass on the side of the road. A DNA swab of the gun was later compared to COLER’S DNA with a positive match. A criminal history check of both COLER and Gramma revealed that they were both convicted felons.
The case was investigated by the Lafourche Parish Sheriff’s Office, the Thibodeaux Police Department, The Lafourche Parish District Attorney’s Office, and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives (A.T.F.). Assistant United States Attorney Maurice Landrieu is in charge of the prosecution.
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Laramie Man Charged with Threatening State and Federal Elected OfficialsRead the Press Release
CHEYENNE - Acting United States Attorney Bob Murray announced today the unsealing of an indictment, under U.S. District Court Docket Number 21-CR-29-S, charging CHRISTOPHER KENT PODLESNIK, 51, of Laramie, Wyoming, with seven counts of transmitting threats in interstate commerce. In the indictment, a federal grand jury charged Podlesnik with leaving voicemail messages threatening various elected officials on January 28, 2021, including members of Congress.
Podlesnik made his initial appearance today by video-teleconference before the Honorable Mark L. Carman, a United States Magistrate Judge for the District of Wyoming. Podlesnik is scheduled to appear for an arraignment and detention hearing on March 30, 2021. A future jury trial should be scheduled at that time.
“As Americans, we cherish the freedoms secured by our Bill of Rights, including our freedom of speech,” said Acting U.S. Attorney Bob Murray. “However, true threats of violence are not protected by the Constitution. Working with the FBI and other partners, the United States Attorney’s Office will continue to investigate such threats and seek charges in appropriate cases.”
"The FBI remains committed to protecting the civil liberties of all Americans to include First Amendment protected speech. We are equally committed to investigating violations of federal law when speech threatens violence and physical harm to others," said FBI Denver Special Agent in Charge Michael Schneider.
Per count, a person convicted of transmitting threats in interstate commerce faces up to five years in prison, a fine of up to $250,000, and up to three years of supervised release. An indictment merely contains allegations, and every defendant is presumed innocent unless and until proven guilty.
Kansas Woman Indicted for Smuggling Heroin into Correctional CenterRead the Press Release
KANSAS CITY, Mo. – A Shawnee, Kansas, woman has been indicted by a federal grand jury for smuggling heroin to an inmate at the Western Missouri Correctional Center in Cameron, Missouri.
Juliane L. Colby, 43, was charged in a four-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on March 16, 2021. That indictment was unsealed and made public at Colby’s initial court appearance today.
The federal indictment alleges that Colby participated in a conspiracy from Aug. 1 to Aug. 10, 2019, to distribute heroin. Colby allegedly conspired with others to smuggle heroin and other contraband into the Western Missouri Correctional Center.
According to the indictment, Colby hid heroin in an envelope marked as “Legal Mail” that also contained numerous pleadings and documents from a criminal court case along with other contraband. The envelope was labelled with a return address for a law firm purportedly located in Harrisonville, Mo., the indictment says, although Colby mailed it from a post office in Shawnee.
Colby and a conspirator at the correctional center allegedly had a series of phone conversations during which they used a variety of code words to discuss the plan to mail heroin and contraband into the center.
In addition to the drug-trafficking conspiracy, the indictment charges Colby with one count of attempting to distribute heroin and two counts of using a communication facility (a cell phone and the U.S. Postal Service) to commit the drug-trafficking offenses.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Brent Venneman. It was investigated by the FBI, the U.S. Postal Inspection Service, the Cameron, Mo., Police Department, and the Missouri Department of Corrections.
Kalispell meth trafficker sentenced to 10 years in prisonRead the Press Release
MISSOULA – A Kalispell man who admitted trafficking methamphetamine he received from a California source was sentenced today to 10 years in prison and to five years of supervised release, Acting U.S. Attorney Leif Johnson said.
Kyle Sloan Reed, 24, pleaded guilty on Nov. 20, 2020 to possession with intent to distribute meth.
U.S. District Judge Dana L. Christensen presided.
In court documents filed in the case, the government alleged that in February 2019 law enforcement arrested a person, identified as John Doe, in Missoula. Doe had in his possession about 2.6 pounds of pure meth, which is the equivalent of 9,422 doses. John Doe was bringing meth to Montana from California and told officers that a portion of the meth he had was intended for Reed. Other persons cooperating with law enforcement said they saw Reed with multiple pounds of meth for distribution.
Assistant U.S. Attorney Jennifer Clark prosecuted the case, which was investigated by the Northwest Montana Drug Task Force and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Justice Department Takes Action Against COVID-19 FraudRead the Press Release
The Department of Justice announced an update today on criminal and civil enforcement efforts to combat COVID-19 related fraud, including schemes targeting the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and Unemployment Insurance (UI) programs.
As of today, the Department of Justice has publicly charged 474 defendants with criminal offenses based on fraud schemes connected to the COVID-19 pandemic. These cases involve attempts to obtain over $569 million from the U.S. government and unsuspecting individuals through fraud and have been brought in 56 federal districts around the country. These cases reflect a degree of reach, coordination, and expertise that is critical for enforcement efforts against COVID-19 related fraud to have a meaningful impact and is also emblematic of the Justice Department’s response to criminal wrongdoing.
“The Department of Justice has led an historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” said Attorney General Merrick B. Garland. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses. We are committed to protecting the American people and the integrity of the critical lifelines provided for them by Congress, and we will continue to respond to this challenge.”
“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple – don’t,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”
“We will not allow American citizens or the critical benefits programs that have been created to assist them to be preyed upon by those seeking to take advantage of this national emergency,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are proud to work with our law enforcement partners to hold wrongdoers accountable and to safeguard taxpayer funds.”
In March 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately stood up multiple efforts dedicated to identifying, investigating, and prosecuting such fraud. Leveraging data analysis capabilities and partnerships developed through its vast experience combatting economic crime and fraud on government programs, the Justice Department’s response to COVID-19 related fraud serves as a model for proactive, high-impact white-collar enforcement, and demonstrates our agility in responding to new and emerging threats. This rapid and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing amid a national crisis and sent a forceful message of deterrence during an ongoing crisis. The multifaceted and multi-district approach to enforcement during this national health emergency continues and is expected to yield numerous additional criminal and civil enforcement actions in the coming months.
On criminal matters, the Justice Department’s efforts to combat COVID-19 related fraud schemes have proceeded on numerous fronts, including:
- Paycheck Protection Program (PPP) fraud: Prominent among the department’s efforts have been cases brought by the Criminal Division’s Fraud Section involving at least 120 defendants charged with PPP fraud. The cases involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans falsely stating they had significant payroll, to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies. Most charged defendants have misappropriated loan proceeds for prohibited purposes, such as the purchase of houses, cars, jewelry, and other luxury items. In one case, U.S. v. Dinesh Sah, in the Northern District of Texas, the defendant applied for 15 different PPP loans to eight different lenders, using 11 different companies, seeking a total of $24.8 million. The defendant obtained approximately $17.3 million and used the proceeds to purchase multiple homes, jewelry, and luxury vehicles. In another case, U.S. v. Richard Ayvazyan, et al., in the Central District of California, eight defendants applied for 142 PPP and EIDL loans seeking over $21 million using stolen and fictitious identities and sham companies, and laundered the proceeds through a web of bank accounts to purchase real estate, securities, and jewelry.
- Economic Injury Disaster Loans (EIDL) fraud: The department has also focused on fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible newly-created, shell, or non-existent businesses, and diverting the funds for illegal purposes. The department has responded, primarily through the efforts of the U.S. Attorney's Office for the District of Colorado and their partners at the U.S. Secret Service, acting swiftly to seize loan proceeds from fraudulent applications, with $580 million seized to date and seizures ongoing. The EIDL Fraud Task Force in Colorado, comprised of personnel from five federal law enforcement agencies and federal prosecutors, is investigating a broad swath of allegedly fraudulently loans and their applicants. It is working to identify individual wrongdoers and networks of fraudsters appropriate for prosecution.
- Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. Early investigation and analysis indicate that international organized criminal groups have targeted these funds by using stolen identities to file for UI benefits. Domestic fraudsters, ranging from identity thieves to prison inmates, have also committed UI fraud. In response, the department established the National Unemployment Insurance Fraud Task Force, a prosecutor-led multi-agency task force with representatives from more than eight different federal law enforcement agencies. Additionally, the department is hiring Assistant U.S. Attorneys in multiple U.S. Attorney’s Offices whose focus will be UI fraud prosecutions. Since the start of the pandemic, over 140 defendants have been charged and arrested for federal offenses related to UI fraud. In one case, U.S. v. Leelynn Danielle Chytka, in the Western District of Virginia, a defendant recently pleaded guilty for her role in a scheme that successfully stole more than $499,000 in UI benefits using the identities of individuals ineligible for UI, including a number of prisoners.
Through the department’s International Computer Hacking and Intellectual Property (ICHIP) program, ICHIP advisors have provided assistance and case-based mentoring to foreign counterparts around the globe to help detect, investigate and prosecute fraud related to the pandemic. The ICHIPs have helped counterparts combat cyber-enabled crime (e.g., online fraud) and intellectual property crime, including fraudulent and mislabeled COVID-19 treatments and sales of counterfeit pharmaceuticals. ICHIPs conducted webinars for foreign prosecutors and law enforcement in Asia, Africa, Europe, and South America on how to take down fraudulent COVID-19 websites. These webinars addressed methods for finding the registrar for a particular domain and requesting a voluntary takedown as well as the U.S. legal processes necessary for obtaining a court order that would bind a U.S. registrar. This has resulted in the take down of multiple online COVID-19 scams and significant seizures of counterfeit medicines and medical supplies such as masks, gloves, hand sanitizers and other illicit goods.
The department has also brought actions to combat coronavirus-related fraud schemes targeting American consumers. With scammers around the world attempting to sell fake and unlawful cures, treatments, and personal protective equipment, the department has brought dozens of civil and criminal enforcement actions to safeguard Americans’ health and economic security. The department has prosecuted or secured civil injunctions against dozens of defendants who sold products — including industrial bleach, ozone gas, vitamin supplements, and colloidal silver ointments — using false or unapproved claims about the products’ abilities to prevent or treat COVID-19 infections. The department has also worked to shutter hundreds of fraudulent websites that were facilitating consumer scams, and it has taken scores of actions to disrupt financial networks supporting such scams. The department is also coordinating with numerous agency partners to prevent and deter vaccine-related fraud.
The department is also using numerous civil tools to address fraud in connection with CARES Act programs. For example, in the Eastern District of California, the department obtained the first civil settlement for fraud involving the Paycheck Protection Program, resolving civil claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and the False Claims Act (FCA) against an internet retail company and its president and chief executive officer arising from false statements to federally insured banks to influence those banks to approve, and the SBA to guarantee, a PPP loan. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial institutions. The FCA is the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of government operations and functions. The FCA permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Such whistleblower complaints have been on the rise as unscrupulous actors take advantage of vulnerabilities created by the COVID-19 pandemic and the new government programs disbursing federal relief, and whistleblower cases will continue to be an essential source of new leads to help root out the misuse and abuse of taxpayer funds.
Indictments and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The unprecedented pace and tempo of these efforts is made possible only through the diligent work of a wide range of Justice Department partners, including the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, the Civil Division’s Commercial Litigation Branch (Fraud Section) and Consumer Protection Branch, U.S. Attorneys’ Offices throughout the country, and law enforcement partners from the FBI, Department of Labor Office of Inspector General, U.S. Secret Service, IRS-Criminal Investigation, Defense Criminal Investigative Service, Homeland Security Investigations, U.S. Postal Inspection Service, the Offices of Inspectors General from the Small Business Administration, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency and Federal Reserve Board, Food and Drug Administration’s Office of Criminal Investigations, Treasury Inspector General for Tax Administration, Financial Crimes Enforcement Network, Special Inspector General for Pandemic Relief, Pandemic Response Accountability Committee, OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center.
To learn more about the department’s COVID response, visit: https://www.justice.gov/coronavirus. For further information on the Criminal Division’s enforcement efforts on PPP fraud, including court documents from significant cases, visit the following website: https://www.justice.gov/criminal-fraud/ppp-fraud. For further information on the Civil Division’s enforcement efforts, visit the following website: https://www.justice.gov/civil.
To report a COVID-19-related fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) by calling the NCDF Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Justice Department Takes Action Against COVID-19 FraudRead the Press Release
The Department of Justice announced an update today on criminal and civil enforcement efforts to combat COVID-19 related fraud, including schemes targeting the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and Unemployment Insurance (UI) programs.
As of today, the Department of Justice has publicly charged 474 defendants with criminal offenses based on fraud schemes connected to the COVID-19 pandemic. These cases involve attempts to obtain over $569 million from the U.S. government and unsuspecting individuals through fraud and have been brought in 56 federal districts around the country. These cases reflect a degree of reach, coordination, and expertise that is critical for enforcement efforts against COVID-19 related fraud to have a meaningful impact and is also emblematic of the Justice Department’s response to criminal wrongdoing.
The United States Attorney's Office for the Western District of Texas is actively participating in the Department of Justice's efforts to hold accountable those who have illegally lined their pockets during the COVID-19 pandemic. This office has utilized all available legal authorities to stop coronavirus related fraud schemes, including civil injunctions to stop ongoing frauds, and criminal indictments to bring to justice those who have taken advantage of the pandemic to victimize their fellow citizens. We will continue to devote resources to addressing this abhorrent behavior, and anyone engaged in these kinds of schemes can expect to see continuing, robust criminal and civil enforcement action.
“The Department of Justice has led an historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” said Attorney General Merrick B. Garland. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses. We are committed to protecting the American people and the integrity of the critical lifelines provided for them by Congress, and we will continue to respond to this challenge.”
“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple – don’t,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”
“We will not allow American citizens or the critical benefits programs that have been created to assist them to be preyed upon by those seeking to take advantage of this national emergency,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are proud to work with our law enforcement partners to hold wrongdoers accountable and to safeguard taxpayer funds.”
“On the anniversary of the CARES Act, the U.S. Attorney’s Office for the Western District of Texas renews its commitment to pursue the fraudsters who steal from a system designed to provide help to deserving individuals and businesses suffering from the effects of the COVID-19 pandemic,” said U.S. Attorney Ashley C. Hoff. “Working closely with IRS Criminal Investigation and our other law enforcement partners, we will redouble our efforts to identify and vigorously prosecute anyone committing fraud in relation to the CARES Act financial benefit programs.”
In March 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately stood up multiple efforts dedicated to identifying, investigating, and prosecuting such fraud. Leveraging data analysis capabilities and partnerships developed through its vast experience combatting economic crime and fraud on government programs, the Justice Department’s response to COVID-19 related fraud serves as a model for proactive, high-impact white-collar enforcement, and demonstrates our agility in responding to new and emerging threats. This rapid and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing amid a national crisis and sent a forceful message of deterrence during an ongoing crisis. The multifaceted and multi-district approach to enforcement during this national health emergency continues and is expected to yield numerous additional criminal and civil enforcement actions in the coming months.
On criminal matters, the Justice Department’s efforts to combat COVID-19 related fraud schemes have proceeded on numerous fronts, including:
- Paycheck Protection Program (PPP) fraud: Prominent among the department’s efforts have been cases brought by the Criminal Division’s Fraud Section involving at least 120 defendants charged with PPP fraud. The cases involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans falsely stating they had significant payroll, to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies. Most charged defendants have misappropriated loan proceeds for prohibited purposes, such as the purchase of houses, cars, jewelry, and other luxury items. In one case, U.S. v. Dinesh Sah, in the Northern District of Texas, the defendant applied for 15 different PPP loans to eight different lenders, using 11 different companies, seeking a total of $24.8 million. The defendant obtained approximately $17.3 million and used the proceeds to purchase multiple homes, jewelry, and luxury vehicles. In another case, U.S. v. Richard Ayvazyan, et al., in the Central District of California, eight defendants applied for 142 PPP and EIDL loans seeking over $21 million using stolen and fictitious identities and sham companies, and laundered the proceeds through a web of bank accounts to purchase real estate, securities, and jewelry.
- Economic Injury Disaster Loans (EIDL) fraud: The department has also focused on fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible newly-created, shell, or non-existent businesses, and diverting the funds for illegal purposes. The department has responded, primarily through the efforts of the U.S. Attorney's Office for the District of Colorado and their partners at the U.S. Secret Service, acting swiftly to seize loan proceeds from fraudulent applications, with $580 million seized to date and seizures ongoing. The EIDL Fraud Task Force in Colorado, comprised of personnel from five federal law enforcement agencies and federal prosecutors, is investigating a broad swath of allegedly fraudulently loans and their applicants. It is working to identify individual wrongdoers and networks of fraudsters appropriate for prosecution.
- Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. Early investigation and analysis indicate that international organized criminal groups have targeted these funds by using stolen identities to file for UI benefits. Domestic fraudsters, ranging from identity thieves to prison inmates, have also committed UI fraud. In response, the department established the National Unemployment Insurance Fraud Task Force, a prosecutor-led multi-agency task force with representatives from more than eight different federal law enforcement agencies. Additionally, the department is hiring Assistant U.S. Attorneys in multiple U.S. Attorney’s Offices whose focus will be UI fraud prosecutions. Since the start of the pandemic, over 140 defendants have been charged and arrested for federal offenses related to UI fraud. In one case, U.S. v. Leelynn Danielle Chytka, in the Western District of Virginia, a defendant recently pleaded guilty for her role in a scheme that successfully stole more than $499,000 in UI benefits using the identities of individuals ineligible for UI, including a number of prisoners.
Through the department’s International Computer Hacking and Intellectual Property (ICHIP) program, ICHIP advisors have provided assistance and case-based mentoring to foreign counterparts around the globe to help detect, investigate and prosecute fraud related to the pandemic. The ICHIPs have helped counterparts combat cyber-enabled crime (e.g., online fraud) and intellectual property crime, including fraudulent and mislabeled COVID-19 treatments and sales of counterfeit pharmaceuticals. ICHIPs conducted webinars for foreign prosecutors and law enforcement in Asia, Africa, Europe, and South America on how to take down fraudulent COVID-19 websites. These webinars addressed methods for finding the registrar for a particular domain and requesting a voluntary takedown as well as the U.S. legal processes necessary for obtaining a court order that would bind a U.S. registrar. This has resulted in the take down of multiple online COVID-19 scams and significant seizures of counterfeit medicines and medical supplies such as masks, gloves, hand sanitizers and other illicit goods.
The department has also brought actions to combat coronavirus-related fraud schemes targeting American consumers. With scammers around the world attempting to sell fake and unlawful cures, treatments, and personal protective equipment, the department has brought dozens of civil and criminal enforcement actions to safeguard Americans’ health and economic security. The department has prosecuted or secured civil injunctions against dozens of defendants who sold products — including industrial bleach, ozone gas, vitamin supplements, and colloidal silver ointments — using false or unapproved claims about the products’ abilities to prevent or treat COVID-19 infections. The department has also worked to shutter hundreds of fraudulent websites that were facilitating consumer scams, and it has taken scores of actions to disrupt financial networks supporting such scams. The department is also coordinating with numerous agency partners to prevent and deter vaccine-related fraud.
The department is also using numerous civil tools to address fraud in connection with CARES Act programs. For example, in the Eastern District of California, the department obtained the first civil settlement for fraud involving the Paycheck Protection Program, resolving civil claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and the False Claims Act (FCA) against an internet retail company and its president and chief executive officer arising from false statements to federally insured banks to influence those banks to approve, and the SBA to guarantee, a PPP loan. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial institutions. The FCA is the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of government operations and functions. The FCA permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Such whistleblower complaints have been on the rise as unscrupulous actors take advantage of vulnerabilities created by the COVID-19 pandemic and the new government programs disbursing federal relief, and whistleblower cases will continue to be an essential source of new leads to help root out the misuse and abuse of taxpayer funds.
Indictments and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The unprecedented pace and tempo of these efforts is made possible only through the diligent work of a wide range of Justice Department partners, including the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, the Civil Division’s Commercial Litigation Branch (Fraud Section) and Consumer Protection Branch, U.S. Attorneys’ Offices throughout the country, and law enforcement partners from the FBI, Department of Labor Office of Inspector General, U.S. Secret Service, IRS-Criminal Investigation, Defense Criminal Investigative Service, Homeland Security Investigations, U.S. Postal Inspection Service, the Offices of Inspectors General from the Small Business Administration, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency and Federal Reserve Board, Food and Drug Administration’s Office of Criminal Investigations, Treasury Inspector General for Tax Administration, Financial Crimes Enforcement Network, Special Inspector General for Pandemic Relief, Pandemic Response Accountability Committee, OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center.
To learn more about the department’s COVID response, visit: https://www.justice.gov/coronavirus. For further information on the Criminal Division’s enforcement efforts on PPP fraud, including court documents from significant cases, visit the following website: https://www.justice.gov/criminal-fraud/ppp-fraud. For further information on the Civil Division’s enforcement efforts, visit the following website: https://www.justice.gov/civil.
To report a COVID-19-related fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) by calling the NCDF Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Jackson County Man Sentenced for Making a False Statement to a Federal OfficerRead the Press Release
Gulfport, Miss. – Steven Wayne Cooper, 49, of Jackson County, was sentenced yesterday by Senior U.S. District Judge Louis Guirola, Jr., to “time served” (3 months and 17 days), three years of supervised release and a $1,100 fine for willfully making a false material statement to a federal officer, announced Acting U.S. Attorney Darren J. LaMarca, and Special Agent in Charge Michael Donaldson, of the United States Forest Service.
On July 20, 2018, a uniformed U.S. Forest Service Officer conducted a traffic stop on Cooper for careless driving in Harrison County. Cooper identified himself to the Forest Service Law Enforcement Officer using the stolen identity information of Cooper’s brother. Cooper claimed that he did not have a driver’s license or other identification with him; but, purported to provide his name, social security number, date of birth and other information to the officer. At least some of the information provided was the personal information of Cooper’s brother.
Cooper was issued four misdemeanor citations, all of which were written in the name of the defendant’s brother due to the false information he gave to the Forest Service Officer. Later, the victim contacted the Government when he received the summons for the tickets and notice to appear at the Federal Central Violations Bureau (CVB)/Misdemeanor Court in Gulfport. The Forest Service investigated the victim’s complaint and the victim identified his brother from a law enforcement body cam video. The investigation revealed that a motive for Cooper to conceal his identity was that his Driver’s License had been suspended for Driving Under the Influence (DUI) at the time of his encounter with the Forest Service.
Cooper was charged in a federal criminal indictment and he pled guilty before Judge Guirola on January 20, 2020.
Acting U.S. Attorney LaMarca praised the patrol and investigative work of the U.S. Forest Service law enforcement team. Assistant United States Attorney Stan Harris was the prosecutor for the case.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on March 23 was:
Joseph Daniel Boggio, 40, of Billings, on charges of illegal receipt of firearm by person under indictment and possession of a stolen firearm. If convicted of the most serious crime, Boggio faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Boggio was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-01.
Trevor Anthony Neal Fuller, 30, of Billings, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Fuller faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Fuller was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-04.
Vanessa Faith Prettyontop, 34, of Hardin, on charges of arson. If convicted of the most serious crime, Prettyontop faces a maximum life in prison, a $250,000 fine and five years of supervised release. Prettyontop was released pending further proceedings. The FBI investigated the case. PACER case reference. 21-08.
Pleading not guilty on March 24 was:
Robert Roswald Redfield, 40, of Lodge Grass, on charges of possession with intent to distribute meth and prohibited person in possession of firearms and ammunition. If convicted of the most serious crime, Redfield faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release. Redfield was detained pending further proceedings. The Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 20-77.
Krystal Firebear, 52, of Lodge Grass, on charges of prohibited person in possession of firearms and ammunition. If convicted of the most serious crime, Firebear faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Firebear was released pending further proceedings. The Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 20-77.
Pleading not guilty on March 25 was:
Tucker James McCune, 27, of Billings, on charges of bank fraud and aggravated identity theft. If convicted of the most serious crime, McCune faces a maximum 30 years in prison, a $250,000 fine and three years of supervised release. McCune was detained pending further proceedings. The FBI and Billings Police Department investigated the case. PACER case reference. 21-13.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on March 24 was:
Wyitt Winton Williamson, 25, of Cut Bank, on charges of aggravated sexual abuse, sex abuse and sex abuse of a minor. If convicted of the most serious crime, Williamson faces life in prison, a $250,000 fine and five years of supervised release. Williamson was detained pending further proceedings. The FBI and Blackfeet Law Enforcement Services investigated the case. PACER case reference. 20-86.
Appearing on a criminal complaint on March 23 was:
Joshua Nathan Stillman, 46, of Great Falls, on a criminal complaint accusing him of receipt and distribution of child pornography. If convicted of the most serious crime, Stillman faces five years to 20 years in prison, a $250,000 fine and five years to life of supervised release. Stillman was detained pending further proceedings. The FBI investigated the case. PACER case reference. 21-27.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Individual Indicted for Offenses Related to Illegal Firearms and Drugs While Police Executed Arrest Warrant for Domestic ViolenceRead the Press Release
SAN JUAN, Puerto Rico – On March 25, 2021, a federal grand jury returned a nine-count indictment charging Francisco Rodríguez-Muñoz with offenses related to the illegal possession of guns and controlled substances, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
According to the Government’s allegations, on March 16, 2021, members of the Puerto Rico Police Bureau were executing a local arrest warrant against Francisco Rodríguez-Muñoz for violations of the Puerto Rico Domestic Violence Act. While arresting Mr. Rodríguez-Muñoz in an apartment in Hato Rey, the police found a machinegun, Ecstasy, Oxycodone, Alprazolam, and other controlled substances. The indictment charges, among other offenses, possession of a machinegun in furtherance of drug trafficking.
Assistant U.S. Attorney Juan C. Reyes-Ramos of the Violent Crimes Section is in charge of the prosecution of the case. ATF is in charge of the investigation. If convicted, the defendant faces a sentence in excess of thirty years in prison.
An indictment contains only charges and is not evidence of guilt. A defendant is presumed to be innocent unless and until proven guilty.
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Human smugglers sentenced after harboring and threatening individuals with gunRead the Press Release
McALLEN, Texas – Two men from Pharr have been ordered to federal prison for their roles in a conspiracy to harbor illegal aliens, announced Acting U.S. Attorney Jennifer B. Lowery.
Baylee Bret Lugo, 21, and Florentino Trevino II, 27, pleaded guilty Nov. 2, 2020, and Oct. 20, 2020, respectively.
Today, U.S. District Judge Micaela Alvarez handed Lugo a 46-month term of imprisonment, while Trevino was ordered to serve 33 months in prison. Each sentence will be immediately followed by three years of supervised release. At the hearing, the court found Lugo and Trevino responsible for involuntarily detaining, threatening and brandishing a firearm at four undocumented aliens at a hotel in Pharr during the course of the conspiracy on July 9, 2020.
Jesus Ricardo Garcia-Suarez, 48, a Mexican citizen who illegally resided in Mission, had also admitted guilt and was previously sentenced to a term of 18 months for his role in the offense. Not a U.S. citizen, he is expected to face removal proceedings following his incarceration.
From June 26 to July 9, 2020, Garcia-Suarez harbored four undocumented aliens at a residence in Mission. He then transported them to Trevino who was waiting at a local grocery store. Trevino subsequently drove the undocumented aliens to the Pharr hotel he had rented where he and Lugo held them against their will. During that time, Lugo brandished a firearm at them, confiscated their cell phones and money and demanded additional payment for their release.
One managed to escape and flagged down a bystander for help. Law enforcement responded to the hotel where they found Lugo and the others, as well as firearm hidden in the room. Authorities subsequently arrested Trevino as he was attempting to drive away from the hotel.
Lugo and Trevino have been and will remain in the custody pending a transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations, Border Patrol and Pharr Police Department conducted the investigation. Assistant U.S. Attorney Matthew Redavid prosecuted the case.
Houma Man Indicted for Production and Distribution of Child PornographyRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today the unsealed Indictment of STEVE C. MERGEY, age 51, of Houma, Louisiana, who was charged on Friday, March 19, 2021, in a two-count federal indictment for Production and Distribution of Child Pornography, in violation of Title 18, United States Code, Sections 2251(a) and (e) and 2252(a)(2) and (b)(1) respectively. If convicted, MERGEY faces a mandatory minimum sentence of fifteen (15) years and a maximum sentence of thirty (30) years imprisonment, and/or a fine of $250,000.00, or the greater of twice the gross gain to the defendant or twice the gross loss to any person of the offense under Title 18, United States Code, Section 3571. In addition, MERGEY faces a term of supervised release of no less than five (5) years and up to life after his release from prison.
U.S. Attorney Evans reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
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 United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the U. S. Department of Homeland Security, Houma RAC and Pittsburg Office; Terrebonne Parish Sheriff’s Office; Houma Police Department; Louisiana State Police, Criminal Investigative Division; and Oswego County Sheriff’s Office, NY with this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit.
Home Health Aide Pleads Guilty to Bank Fraud Involving Check Taken from Elderly ClientRead the Press Release
Miami, Fl. -- Jamie Jakia Cofer, a/k/a “Anna Bell,” 24, of Lake Worth, Florida, pled guilty yesterday to bank fraud, after depositing and cashing an unauthorized check that was taken from an elderly client.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office and Brian J. Smith, Chief, Juno Beach Police Department made the announcement.
According to the agreed upon factual proffer, from at least on or about January 24, 2019, through no earlier than the first quarter of 2020, Cofer worked as a home health aide (HHA) for senior citizens in the South Florida community.
On May 31, 2019, without the knowledge or consent of a senior citizen client, Cofer deposited a $4,200.00 fraudulent check, belonging to the victim, into a bank account belonging to another individual. The authorized accountholder of the bank account gave Cofer permission and authority to use her account to deposit the stolen check and access the deposited funds. Cofer withdrew funds from the account and used the proceeds she obtained from cashing the unauthorized check for her own, and others’, personal benefit.
During the course of her employment, through at least two companies and as a private HHA, Cofer victimized at least five senior citizens, including the bank fraud victim. Cofer stole the personal identifying information (PII) of her elderly clients (to include: name, date of birth, Social Security number, bank account and credit card information); gained unauthorized access to the victims' bank and credit card accounts; added herself on victims' accounts; made unauthorized and fraudulent purchases and transactions using victims' accounts (to include credit cards and a bank accounts); deposited checks; and used stolen PII to open unauthorized accounts and make fraudulent purchases. In addition, Cofer stole an iPhone and credit cards from a sixth victim.
Cofer is scheduled to be sentenced on June 3, 2021 at 10:00 a.m. by U.S. District Judge Donald M. Middlebrooks.
U.S. Attorney Fajardo Orshan commended the FBI and Juno Beach Police Department for its work on this investigation. She also thanked the Lantana Police Department and Boca Raton Police Department for their assistance.
Assistant United States Attorney Sarah J. Schall is prosecuting this case.
Anyone with information about allegations of elder fraud can report it by calling the National Elder Fraud Hotline at 1-833-FRAUD-11 or 833–372–8311.
More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative at https://www.justice.gov/elderjustice. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 20-MJ-8273 and 21-CR-80003-Middlebrooks.
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Hollygrove Man Sentenced to 87 Months for Selling NarcoticsRead the Press Release
NEW ORLEANS, LA – On March 24, 2021, United States District Judge Jane Triche Milazzo sentenced COREY JOHNSON, age 30, a resident of New Orleans, to 87 months in the Bureau of Prisons for conspiring to distribute and possess with the intent to distribute a quantity of heroin and cocaine base, in violation of Title 18, United States Code, Sections 841 and 846. JOHNSON will be on Supervised Release for three years following his release from prison. Additionally, JOHNSON was sentenced to pay an $100 special assessment fee.
JOHNSON pleaded guilty on December 30, 2020, to conspiring to distribute heroin and cocaine base with members of a drug trafficking organization based in the Hollygrove neighborhood of New Orleans, Louisiana, that operated in and around a corner grocery store. JOHNSON was intercepted multiple times on an FBI wiretap arranging to sell heroin and cocaine base to people seeking narcotics.
U. S. Attorney Evans praised the work of the Federal Bureau of Investigation’s New Orleans Gang Task Force. The prosecution is being handled by Assistant United States Attorneys Myles Ranier and Kathryn McHugh.
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Hawaiian Non-Profit Executive Pleads Guilty to Embezzling over $500,000 from AmeriCorps and Agreeing to Receive a Bribe for Administering CARES Act GrantsRead the Press Release
WASHINGTON – Hanalei Aipoalani, 42, of Waianae, Hawaii, pled guilty in federal court today to embezzling more than $500,000 from AmeriCorps and to agreeing to accept a bribe for the administration of grants under the CARES Act.
The announcement was made by Channing D. Phillips, Acting United States Attorney for the District of Columbia; Eli S. Miranda, Special Agent in Charge, FBI Honolulu Field Office; and Deborah Jeffrey, Inspector General of AmeriCorps.
Aipoalani pled guilty to embezzlement and agreeing to take a bribe. Both charges carry a statutory maximum of 10 years and financial penalties. Under the federal sentencing guidelines, Aipoalani faces a likely recommended sentence of between 70 and 87 months in prison. The Honorable Reggie B. Walton took the plea and scheduled sentencing for June 24, 2021.
“The United States Department of Justice will prosecute, to the fullest extent of the law, those individuals who choose to abuse their positions of power to enrich themselves at the cost of the American people,” said Acting U.S. Attorney Phillips.
“The defendant conspired to enrich himself with taxpayer dollars intended to support at-risk communities in Hawai’i, he victimized legitimate volunteers and others by stealing their identities to perpetrate multiple fraud schemes, and he submitted falsified documentation and certifications to the government, all to the detriment of their community. Our investigation also disrupted an ongoing scheme to steal much-needed pandemic relief funds. I commend U.S. Attorney’s Office and the Federal Bureau of Investigation for their partnership on this case,” said Deborah Jeffrey, Inspector General of AmeriCorps
“Programs such as AmeriCorps are designed to impact the nation in the most positive ways. Their goal is to help others and to meet the critical needs of the communities they serve”, said Special Agent in Charge Eli S. Miranda. “AmeriCorps trusted Hanalei Aipoalani with their mission in the State of Hawai’i and were ultimately betrayed. Aipoalani exploited his position and intentionally stole funds meant for the betterment of the community for his own selfish entitlements. The FBI will never stand for this and will enthusiastically identify and pursue anyone who violates the public’s trust.”
AmeriCorps is a federally funded network of national service programs that address critical community needs like increasing academic achievement, mentoring youth, fighting poverty, sustaining national parks, preparing for disasters, and more. AmeriCorps’ national service members commit to service for a set period of time, usually a year, in exchange for a living allowance, funding to be used for college tuition, and other benefits.
From December 2014 through May 2019, Aipoalani embezzled more than $527,000 from a non-profit that hosted an AmeriCorps program, by submitting false claims for payments to AmeriCorps members and directing those payments into his own bank accounts and by creating fraudulent invoices from non-profits for reimbursement by AmeriCorps. As part of his embezzlement, Aipoalani used at least nine inactive or former AmeriCorps’ members’ names, without their knowledge or consent, to fraudulently claim living allowances and other payments, which he then diverted to his own use.
As part of his plea, Aipoalani admitted to conspiring with his wife, Angelita Aipoalani, to enroll Angelita Aipoalani as an AmeriCorps member, even though she did not perform AmeriCorps service activities, and to cause a second non-profit to pay Angelita Aipoalani more than $69,000 for no compensable work. Aipoalani also admitted to engaging in a scheme to fraudulently obtain AmeriCorps education awards for Angelita Aipoalani.
Angelita Aipoalani has been separately charged with conspiring to embezzle from Americorps.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was passed by Congress and signed into law in or about March 2020, provided financial relief to individuals, businesses, states, and localities suffering the economic effects of the COVID-19 pandemic. Among other relief programs, the CARES Act created a $150 billion Coronavirus Relief Fund ("CRF") to be distributed to states, localities, and tribal governments to support expenditures incurred due to COVID-19. Government entities that received money from the CRF could use the funds, among other things, to make grants to small businesses to reimburse the costs of business interruption caused by required closures and to provide economic relief for those suffering employment interruption.
In August 2020, Aipoalani was hired to serve as Honolulu City and County’s Department of Community Service’s CARES Program Administrator and was responsible for administering CRF programs. In that capacity, Aipoalani agreed to accept a financial benefit from an applicant who filed two fraudulent applications for CARES Act Funds under the agreement that Aipoalani would influence the approval of the grant applications and would receive a financial benefit in return for the approvals.
The FBI, the Inspector General for AmeriCorps, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the AmeriCorps program and programs under the CARES Act. If you are aware of fraud, waste, or abuse affecting AmeriCorps or any of its programs, contact the AmeriCorps Office of Inspector General Hotline at 1-800-452-8210 or [email protected].
In announcing the plea, Acting U.S. Attorney Phillips, Special Agent in Charge Miranda, and Inspector General Jeffrey commended the work of those who investigated the case from the FBI’s Honolulu Field office and the Inspector General for AmeriCorps. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia including Assistant U.S. Attorneys Leslie A. Goemaat and Peter Lallas of the Fraud Section, Amanda Vaughn of the Public Corruption and Civil Rights Section, former Assistant U.S. Attorney Bianca Forde, and Paralegal Specialists Mariela Andrade, Stephanie Frijas, and Joseph McClanahan.
Hartford Man Sentenced to 55 Months in Federal Prison for Gun Trafficking, Drug DealingRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that STANDFORD SMITH, also known as “Pops,” 32, of Hartford, was sentenced today by U.S. District Judge Alvin W. Thompson to 55 months of imprisonment, followed by four years of supervised release, for his role in a gun trafficking ring and for distributing crack cocaine.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
This matter stems from an investigation headed by the ATF and East Hartford Police Department into drug trafficking and related acts of violence by a group of individuals operating out of the Mayberry Village housing complex in East Hartford.
According to court documents and statements made in court, sometime in or before 2014, Daniel Vazquez, of East Hartford, and others were robbed at gunpoint while they were attempting to purchase marijuana that they intended to redistribute. On July 6, 2016, Vazquez saw the person who had robbed him driving a car at the intersection of Tolland Street and Moore Avenue in East Hartford and shot at him. Vazquez was arrested on that date, and a search of his residence revealed a Ruger LC93 9mm handgun, which he had used in the shooting, and a Taurus 9mm handgun. The two firearms were traced to Minot, North Dakota.
The investigation revealed that after a member of the drug trafficking organization, Courtney Johnson, had moved from East Hartford to North Dakota in 2015, Lawrence Christie, of East Hartford, and others traveled to North Dakota to sell narcotics and to obtain firearms. In June 2016, Smith drove to North Dakota with Christie and other associates. On June 26, 2016, Smith and his associates forcibly stole a firearm from an individual in Minot. Smith and his associates also used counterfeit currency to purchase firearms from sellers who had advertised the guns for sale on a website. Smith and an associate then drove back to Connecticut with three of the firearms they had illegally obtained.
Christie contacted Vazquez and asked him to drive from Connecticut to North Dakota to assist him in their criminal activity. Christie and Vazquez then transported five firearms they had illegally acquired in North Dakota to Connecticut. Two of these five guns were found in Vazquez’s residence on July 6, 2016.
In late 2016, Smith again traveled to North Dakota and acquired another handgun.
To date, investigators have traced at least nine firearms that were obtained in North Dakota and transported to Connecticut. Some of the guns have been used in shootings in the Hartford area.
Smith was arrested on June 21, 2018, and was subsequently released on bond. On July 5, 2018, he was again arrested after he was found in possession of crack cocaine that he intended to distribute.
Smith has been detained since July 5, 2018. On October 30, 2020, he pleaded guilty to one count of conspiracy to unlawfully transport firearms in interstate commerce, and one count of possession with intent to distribute cocaine base (“crack”) while on pre-trial release.
Vazquez, Christie and Johnson pleaded guilty to related charges. On March 5, 2019, Vazquez was sentenced to 84 months of imprisonment, and on March 12, 2020, Christie was sentenced to 100 months of imprisonment. Johnson awaits sentencing.
This investigation has been conducted by the ATF and East Hartford Police Department, with the assistance of the Connecticut Department of Correction and the Minot (N.D.) Police Department. The case is being prosecuted by Assistant U.S. Attorney Patricia Stolfi Collins.
Hale County Man Sentenced to Three Years in Prison for Possessing Multiple Stolen Firearms in Furtherance of a Drug-Trafficking CrimeRead the Press Release
United States Attorney Sean P. Costello of the Southern District of Alabama announced that Eugene Garrett, 43, of Greensboro, Alabama, was sentenced in federal court for possessing multiple stolen firearms in furtherance of a drug-trafficking crime. Garrett pleaded guilty to the charge in September of 2020.
In connection with his guilty plea, Garrett admitted that on December 21, 2019, he possessed ten firearms—seven of which had been reported stolen—in his camper in Greensboro. Many of the firearms recently had been stolen from gun stores in the Tuscaloosa, Alabama area in December 2019. In close proximity to the firearms, agents located hundreds of rounds of assorted ammunition, 27 bags of marijuana, loose marijuana, digital scales, and plastic baggies. Garrett admitted that each of the firearms belonged to him, that he was a convicted felon who was not supposed to possess firearms, and that the drugs, scales, and related paraphernalia seized from his camper also belonged to him. Garrett said he sold marijuana on the side and admitted that his possession of the firearms was in furtherance of a drug-trafficking crime.
United States District Court Judge Terry F. Moorer imposed a sentence of 36 months’ incarceration, to be followed by a five-year term of supervised release. During that time, Garrett will undergo testing and treatment for substance abuse. The court did not impose a fine, but the judge ordered Garrett to pay $100 in special assessments.
This case was investigated by the Greensboro and Tuscaloosa Police Departments, the Hale County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Justin Roller.
Guilderland Man Sentenced to 300 Months for Child Sexual ExploitationRead the Press Release
ALBANY, NEW YORK – Blake Spears, age 40, of Westmere, Town of Guilderland, New York, was sentenced today to 300 months in prison for sexually exploiting a child.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Spears admitted that on December 1, 2018, he used his phone to video-record himself masturbating while standing over a sleeping child. He also admitted to using a phone messaging application to distribute, to others, videos depicting the sexual abuse of other children.
In imposing sentence, United States District Judge Mae A. D’Agostino found that Spears was a repeat and dangerous sex offender, and had repeatedly exploited a minor. She also imposed a 20-year term of supervised release, to begin after the 300-month term of imprisonment, and ordered Spears to pay $8,000 in restitution to individuals whose abuse was depicted in images that Spears possessed.
This case was investigated by the FBI and its Child Exploitation Task Force, which includes members of federal, state and local law enforcement agencies, including the Colonie Police Department and New York State Police. The case was prosecuted by Assistant U.S. Attorney Michael Barnett.
The case was prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Gregg County Man Sentenced for Trafficking Nearly Two Kilograms of MethamphetamineRead the Press Release
TYLER, Texas – A Longview, Texas man was sentenced to federal prison today for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.
Allen Martez Anthony, 30, pleaded guilty on June 25, 2020, to distribution of methamphetamine and was sentenced to 188 months in federal prison today by U.S. District Judge J. Campbell Barker.
“This case illustrates how effective we can be at disrupting narcotics trafficking when our state and local law enforcement officers coordinate with federal agencies like the DEA,” said Acting U.S. Attorney Nicholas J. Ganjei. “The U.S. Attorney’s Office is fully committed to supporting the efforts of our drug task forces and the local, state and federal agents who are working tirelessly to rid our communities of addictive narcotics like methamphetamine.”
According to information presented in court, on October 8, 2019, Anthony was stopped along Interstate 20 in Smith County, Texas. During the traffic stop, a police canine alerted to the presence of narcotics in Anthony’s vehicle. A subsequent search revealed 1,958 grams of methamphetamine hidden inside the car. Anthony was indicted by a federal grand jury on December 15, 2020, and charged with drug trafficking violations.
This case was investigated by the U.S. Drug Enforcement Administration and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.
Grayson County Man Receives Life Sentence for Drug Trafficking EnterpriseRead the Press Release
SHERMAN, Texas – A Sherman, Texas man was sentenced to federal prison today for drug trafficking and firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.
Tyton Hester, 30, pleaded guilty on June 30, 2020, to conspiracy to possess with intent to manufacture and distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. Today, he was sentenced to life in federal prison by U.S. District Judge Amos Mazzant.
“Today’s sentence sends a strong message to those who would seek to profit from the trafficking of illegal narcotics,” said Acting U.S. Attorney Nicholas J. Ganjei. “We will continue to collaborate with all of our law enforcement partners to stem the flow of deadly drugs into the United States.”
“Mr. Hester furthered the plague of drug trafficking with a pattern of menacing and intimidating behaviors that victimized vulnerable individuals and jeopardized the lives of children in order to obfuscate his illegal activities,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “Today’s life sentence should send comfort to the greater community of Sherman that the FBI, along with our federal and local partners, continues to work diligently to remove dangerous criminals from our streets.”
According to information presented in court, in 2018, law enforcement officials received information that a major drug distributor was conducting operations in Sherman, Texas, and southern Oklahoma. Hester was identified as a multi-kilogram distributor of methamphetamine, cocaine, heroin, and Xanax. Hester, who ran his drug trafficking activities out of a mechanic shop in Sherman, recruited down-on-their-luck individuals to help with the narcotics trafficking. He offered them food, shelter, and drugs in exchange for conducting drug deals and securing his “trap house.” To appear less suspicious Hester also had these individuals, including children, accompany him on trips to Dallas where his sources of supply were located.
Hester was indicted by a federal grand jury in May 2018. He proceeded to trial and was found guilty by a jury on June 30, 2020.
Ultimately, eight other members of Hester’s operation were also indicted. Hester is the final defendant to be sentenced. The others had previously pleaded guilty and collectively received sentences totally more than 100 years in federal prison.
Grand Island Man Sentenced for Receipt and Distribution of Child PornographyRead the Press Release
Acting United States Attorney Jan Sharp announced that Max Rookstool, 18, of Grand Island, Nebraska, was sentenced today in Lincoln by Chief United States District Judge John M. Gerrard for possession of child pornography. Rookstool was sentenced to 10 years in prison and will serve 12 years on supervised release. There is no parole in the federal system. After serving his prison sentence, Rookstool will be required to register as a sex offender. Rookstool was also ordered to pay $8,000 in special assessments.
In December 2019, Homeland Security Investigations (HSI) was contacted by the Grand Island Police Department (GIPD) regarding an ongoing child pornography investigation indicating that a male student at Grand Island Northwest High School was using fraudulent social media accounts to solicit nude photographs of other males at the high school by pretending to be a female high school student. The investigation revealed that Rookstool was the student who created the fraudulent accounts and he would then use the photographs sent by the students to extort and seek more sexually explicit images.
During the investigation, law enforcement determined that Rookstool had also been in contact with Brian Mohr, a teacher at his high school. Between July 2019, and December 2019, Rookstool sent approximately 41 nude images constituting child pornography as defined by federal law to Mohr through a phone app.
Acting U.S. Attorney Sharp noted that the scheme employed by Rookstool is common in sextortion cases. He added, “Here, students thought they were sending sexually explicit photos to who they believed to be an interested girl only to be extorted into sending more explicit images.”
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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by Homeland Security Investigations and the Grand Island Police Department.
Gainesville Man Sentenced to 70 Years for Sexual Exploitation of a MinorRead the Press Release
SPRINGFIELD, Mo. – A Gainesville, Missouri, man was sentenced in federal court today for coercing a minor victim to engage in illicit sexual activity.
Tracy Todd Presson, 55, was sentenced by U.S. District Judge Stephen R. Bough to 70 years in federal prison without parole. The court also sentenced Presson to spend the rest of his life on supervised release following incarceration.
On July 6, 2020, Presson pleaded guilty to one count of the sexual exploitation of a minor and to one count of the coercion of a minor. Presson admitted that he produced child pornography, using a child victim, identified in court documents as Jane Doe 1, by recording him and Jane Doe 1 engaging in sexually explicit activity on multiple occasions. Presson also admitted that he used FaceTime to coerce and entice Jane Doe 1 to engage in sexually explicit activity.
When law enforcement officers executed a search warrant at Presson’s residence on Oct. 3, 2018, they found a SanDisk 32GB SD card that contained child pornography, including images and videos of Jane Doe 1 engaged in sexually explicit activity.
This case was prosecuted by Assistant U.S. Attorneys Ami Harshad Miller and Byron Black. It was investigated by Homeland Security Investigations, the Southwest Missouri Cyber Crimes Task Force, the Ozark County, Mo., Sheriff’s Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Four inmates and conspirator charged with drug trafficking and bribery at state prisonRead the Press Release
ROME, Ga. - Jeffery Deroy Lewis, an inmate at Valdosta State Prison, along with Octavius Henry, Alexis Jay Stokley, and Khalid Eugene Mouton, inmates at Hays State Prison, and an accomplice, Jessica Corley Stokley, have been indicted and arraigned on federal drug trafficking and bribery charges stemming from a scheme to smuggle narcotics into Hay State Prison by bribing corrections officer Voltaire Peter Pierre.
“These inmates allegedly smuggled drugs and other contraband into the prison, putting guards and fellow inmates in danger,” said Acting U.S. Attorney Kurt R. Erskine. “By using hidden cell phones to coordinate with conspirators, they sent and received payments via payment apps and prepaid cards, and allegedly bribed at least one prison official to allow illegal drugs to enter the prison community.”
“Prisons should be a place of rehabilitation, not a place to continue committing crimes,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Illegal cell phones have emboldened inmates and their associates to engage in criminal conduct, sometimes with the help of law enforcement officials. It threatens both inmates and staff and the FBI will pursue these investigations no matter who is involved.”
“These defendants being charged demonstrate the collaborative efforts of state and federal partners to dismantle this conspiracy. The officer violated his oath and the public’s trust by contributing to this criminal activity within the prison system,” said Vic Reynolds, Director, Georgia Bureau of Investigation.
According to Acting U.S. Attorney Erskine, the charges, and other information presented in court: From approximately June 2018 through October 2018, the defendants allegedly conspired to smuggle drugs, including methamphetamine, cocaine base (i.e., crack cocaine), and marijuana, along with other contraband into Hays State Prison.
The inmates allegedly communicated via contraband cell phones and through coded email messages sent via the prison email system with conspirators outside the prison to arrange for drugs and other contraband to be dropped at the home of Pierre, a Hays State Prison corrections officer who later smuggled the packages into prison for distribution to inmates. The inmates then transmitted drug payments and bribe payments to Pierre through a combination of prepaid debit cards and a payment app.
Voltaire Peter Pierre pleaded guilty to trafficking methamphetamine, crack cocaine, and marijuana on October 17, 2019.
Jeffery Deroy Lewis, a/k/a “2500,” 30, of Atlanta, Georgia, Octavius Henry, a/k/a “Forever,” a/k/a Robert Barrow, 33, of Atlanta, Georgia, Alexis Jay Stokley, 41, of Atlanta, Georgia, and Jessica Corley Stokley, 38, of Atlanta, Georgia, were arraigned on March 9, 2021, before U.S. Magistrate Judge Walter E. Johnson on charges of conspiracy to possess with intent to distribute controlled substances, possession with intent to distribute controlled substances, and conspiracy to commit bribery after being indicted by a federal grand jury on February 16, 2021. Khalid Eugene Mouton, a/k/a Michael Howard, 42, of Atlanta, Georgia, is pending arraignment.
Members of the public are reminded that the indictment only contains charges. The defendants are 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 Federal Bureau of Investigation and Georgia Bureau of Investigation.
Assistant U.S. Attorneys Ryan M. Christian and Calvin A. Leipold, III are prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
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.
Four East Texas Felons Sentenced to Prison for Federal Firearms ViolationsRead the Press Release
TYLER, Texas – Four men were sentenced to prison today for federal firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.
U.S. District Judge J. Campbell Barker imposed the following sentences after the defendants pleaded guilty:
Patrick Odell Session, 27, of Carthage, Texas, was sentenced to 84 months for felon in possession of a firearm;
Cory Tederrel Dawkins, 43, of Longview, Texas, was sentenced to 72 months for felon in possession of a firearm;
Isaiah Bodate Pierce, 29, of Longview, Texas, was sentenced to 72 months for felon in possession of a firearm; and
Tramaine Keishone Robinson, 22, of Carthage, Texas, was sentenced to 37 months for felon in possession of a firearm.
“Prohibiting the possession of firearms by convicted felons illegally in our country is a critical component of keeping our communities safe,” said Acting U.S. Attorney Nicholas J. Ganjei. “The Eastern District of Texas remains committed to keeping the guns out of the hands of the most dangerous members of our society.”
According to information presented in court, the defendants were prohibited from possessing firearms under federal law because of prior felony convictions. Law enforcement encountered the defendants on separate dates following traffic stops that resulted in the discovery of firearms and, in several instances, other criminal contraband such as controlled substances and distribution paraphernalia. In addition to being prohibited from possessing firearms, several of the defendants were also identified by law enforcement as documented gang members. The defendants were separately indicted by a federal grand jury and charged with violations of federal firearms laws.
These cases were prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Federal Bureau of Investigation; the Longview Police Department; and the Tatum Police Department and prosecuted by Assistant U.S. Attorney Lucas Machicek.
Fort Myers Business Owner Convicted at Trial for COVID Relief FraudRead the Press Release
Fort Myers, Florida – A federal jury today found Casey David Crowther (35, Fort Myers) guilty of bank fraud, making a false statement to a lending institution, and two counts of money laundering. Crowther faces a maximum penalty of 30 years in federal prison for the bank fraud and false statement charges, and up to 10 years in federal prison for each money laundering charge. A sentencing date has not yet been set.
According to evidence presented at trial, Crowther obtained a $2.1 million Paycheck Protection Program (PPP) loan by falsely stating that he intended to use the money to make payroll and pay for rent and utilities for his company Target Roofing and Sheet Metal, Inc. However, Crowther intended to use the money to enrich himself and, once the loan was obtained, quickly used the proceeds to make a series of personal purchases including a nearly $700,000 boat and a $100,000 payment to a former business partner. Crowther concealed the scheme by providing false explanations for the expenditures to his bank, calling the boat “equipment” and the payment to his partner as “payroll.” To ensure that he did not need to pay the loan back under the terms of the PPP program, Crowther added multiple family members to his company’s payroll who did not actually perform work. Crowther also created 39 fake employees, along with fake identification documents including Social Security cards, in an attempt to show that his company was using the funds appropriately on payroll.
Prior to trial, Crowther had pleaded guilty to one count of bank fraud and one count of making a false statement to a financial institution related to a mortgage fraud scheme. In that scheme, Crowther created false bank statements to justify a loan he had used to purchase a nearly $1.3 million waterfront house in St. James City, Florida.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorney Trent Reichling and Michael V. Leeman.
Former Teacher Sentenced for Possessing Child PornographyRead the Press Release
Acting United States Attorney Jan Sharp announced that Brian A. Mohr, 38, of Grand Island, Nebraska, was sentenced today in Lincoln by Chief United States District Judge John M. Gerrard for possession of child pornography. Mohr was sentenced to 76 months in prison and then begin a seven-year term of supervised release. There is no parole in the federal system. Mohr will also be required to register as a sex offender. Mohr was also ordered to pay $8,600 in special assessments.
In December 2019, Homeland Security Investigations (HSI) was contacted by the Grand Island Police Department (GIPD) regarding an ongoing child pornography investigation indicating that a male student at Grand Island Northwest High School was using fraudulent social media accounts to solicit nude photographs of other males at the high school by pretending to be a female high school student. The male student would then use the photographs sent by the students to extort and seek more sexually explicit images.
During the investigation, law enforcement determined that the male student had been in communication with Mohr, a teacher at Grand Island Northwest High School. Between July 2019, and December 2019, the male student sent approximately 41 nude images constituting child pornography as defined by federal law to Mohr through a phone app.
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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by Homeland Security Investigations and the Grand Island Police Department.
Former Southern Maryland Settlement Agents Facing Federal Charges for Embezzling Funds from Unsuspecting ClientsRead the Press Release
Greenbelt, Maryland – A federal criminal complaint has been filed charging Brian Edward Steuart, age 52, of Huntingtown, Maryland, and Jamie Lynn Alford (formerly known as Jamie Lynn Steuart), age 44, of Port Republic, Maryland, with conspiracy to commit wire fraud affecting a financial institution, in connection with an alleged scheme to siphon off a portion of closing funds they collected while acting as settlement agents in certain real estate transactions. The criminal complaint was filed on March 18, 2021, and was unsealed at the defendant’s initial appearance today.
The criminal complaint was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Mark P. Higgins of the Federal Housing Finance Agency (FHFA), Office of Inspector General (OIG); and Acting Special Agent in Charge Shawn Rice of the Department of Housing and Urban Development (HUD), Office of Inspector General (OIG).
According to the affidavit filed in support of the criminal complaint, Steuart and Alford were husband and wife from June 2008 until September 2017. Beginning in August 2011, Steuart and Alford were settlement agents for Company 1, a title and settlement company located in Prince Frederick, Maryland, which closed real estate transactions for properties in Maryland and Virginia. Steuart and Alford were responsible for closing mortgage loans used to purchase or refinance properties, reviewing property titles, issuing title insurance, facilitating closings, and ensuring that the land records were properly filed and recorded. Steuart and Alford also had a fiduciary duty to all parties involved in each real estate transaction, including to accurately account for, collect, and disburse settlement funds from the seller, the buyer, and the lender, in order to close a transaction.
The affidavit alleges that Steuart and Alford violated their fiduciary duty by embezzling funds from unsuspecting clients during real estate closings from at least 2011 to 2017, from both buyers and sellers, from Company 1, and even from a deceased seller’s estate. The fraud was typically accomplished by inflating or inventing various fees or taxes, creating false entries in settlement documents, and creating forged or altered checks. Steuart and Alford allegedly wrote checks to themselves, wrote checks payable to each other, or were jointly made the payee on checks. The affidavit alleges that the defendants deposited the fraudulently obtained funds directly into joint accounts for the benefit of both of them.
According to the affidavit, in order to conceal their fraudulent activities from individuals inside and outside Company 1, Steuart and Alford falsified the settlement statements and altered or fabricated bank statements. The fabricated bank statements allegedly had beginning and ending balances that were significantly lower than the true amounts according to the actual bank records. In addition, information such as the date or amount for deposits, withdrawals, credits, or checks were allegedly also inaccurate and there were checks added or missing in some of the fabricated statements.
As detailed in the affidavit, between 2011 and 2017 Steuart received a total of $735,825.63 from Company 1—both lawfully and unlawfully. However, he allegedly reported his salary to the State of Maryland for that time period to be only $208,168.50. Between 2011 and 2016 Alford allegedly received a total of $653,537.91 from Company 1 for all sources—both lawful and unlawful. However, she allegedly reported her salary to the State of Maryland for that time period to be only $302,462.50.
If convicted, Steuart and Alford each face a maximum sentence of 30 years in federal prison for wire fraud affecting a financial institution. 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. At today’s initial appearance in U.S. District Court in Greenbelt, U.S. Magistrate Judge Timothy J. Sullivan ordered that the defendants be released pending trial.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Jonathan F. Lenzner commended the FHFA OIG and the HUD OIG for their work in the investigation and thanked the Calvert County Sheriff’s Office, the Maryland State Police, and the Anne Arundel County Police Department for their assistance. Mr. Lenzner thanked Assistant U.S. Attorneys Michael Morgan and Erin B. Pulice, who are prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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Former Police Chief Indicted in Machine Gun SchemeRead the Press Release
Indianapolis – Acting U.S. Attorney John E. Childress announced today that Dorian LaCourse, 65, of Milford, Ohio, was indicted by a federal grand jury for his role in a scheme to use his position as Chief of Police for the Addyston Police Department in Addyston, Ohio, to help two federally licensed firearms dealers in Indiana acquire hundreds of machine guns. LaCourse was indicted on charges of conspiracy and making false statements to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Childress also announced today that the two Indiana gun dealers, Johnathan Marcum, 33, of Laurel, Indiana, and Christopher Petty, 57, of Lawrenceburg, Indiana, have been charged with conspiracy for their roles in the machine gun scheme.
“Federal laws regulating the purchase, transfer or possession of firearms exist to promote public safety,” said Childress. “When people violate those laws, they unacceptably threaten the safety of others. This office will vigorously pursue those who commit federal firearms offenses, regardless of who they are. We expect better from our public servants, and when police officers violate the law, they can expect to be investigated and prosecuted like any other citizen. I am confident that LaCourse’s criminal choices do not represent the vast majority of law enforcement in this country.”
According to the Indictment, LaCourse and the two Indiana firearms dealers exploited a law enforcement exception to the general federal ban on fully automatic machine guns. The Village of Addyston, Ohio, has approximately 1,000 residents, and the Addyston Police Department has up to 10 officers, most of whom were part-time. However, according to the Indictment, between 2015 and 2019, LaCourse signed multiple letters and other official documents as Chief of Police falsely claiming to the ATF and others that the Addyston Police Department was interested in purchasing or receiving demonstrations of machine guns.
The Addyston Police Department and Village of Addyston had no intention of purchasing machine guns or receiving demonstrations of machine guns. Instead, these allegedly false statements were a pretense to gain ATF approval for Marcum and Petty to acquire machine guns, which they re-sold to other federally licensed firearms dealers at a profit—of which LaCourse got a portion. According to the Indictment, LaCourse received 11 checks payable to him totaling over $11,500.
In four instances, LaCourse falsely claimed on ATF forms and other documents that the Addyston Police Department was the actual purchaser of machine guns, including two bulk purchases of a total of 18 guns from German manufacturer Heckler & Koch. On one document required by the German government, which pertained to the importation of the machine guns into the United States, LaCourse is alleged to have falsely stated that the Addyston Police Department was the “end-user” of the guns. In reality, according to the Indictment, Marcum purchased the guns for the purpose of re-selling them—Marcum paid for them, picked them up from the Addyston Police Department when they arrived, and promptly re-sold them at a profit of over $8,000 each.
In all, the Indictment alleges that through their scheme, LaCourse’s false statements and representations induced the ATF to approve the purchase or importation of approximately 200 fully automatic machine guns. The types of guns acquired ranged from smaller submachine guns to automatic assault rifles, to belt-fed machine guns for military use. One of those guns was an M2 .50 caliber belt-fed heavy machine gun, which according to the Indictment, is a vehicle- or ship-mounted weapon that is effective against lightly armored vehicles and low-flying aircraft.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
“No matter who you are, it is a crime to make false statements to acquire firearms and allow them into the hands of those who cannot legally possess them,” stated Roland H. Herndon, Jr., Special Agent in Charge of ATF’s Columbus Field Division. “LaCourse, Marcum, and Petty all used their positions and knowledge of the system to illegally transfer fully automatic weapons for profit, with no regard for any potential impact that might have on our communities.”
According to Assistant United States Attorneys Nick Linder and William L. McCoskey, who are prosecuting this case for the government, LaCourse faces up to 5 or 10 years in prison on each charge if indicted and convicted. Marcum and Petty each face up to 5 years.
An indictment is merely a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in court.
In November of 2020, Acting United States Attorney John E. Childress renewed a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s enduring commitment to investigating and prosecuting those who engage in fraud and violate the public trust. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Sections 5.1 and 5.3.
Former Elementary School Teacher Pleads Guilty to Sending Suspicious Powder Mailings to Elementary Schools Throughout Central FloridaRead the Press Release
Tampa, Florida – Acting United States Attorney Karin Hoppmann announces that Maria Bassi Lauro (66, Davenport) has pleaded guilty in connection with sending threatening mailings containing suspicious powder to elementary schools throughout central Florida. Lauro faces a maximum penalty of 15 years in federal prison.
According to the
plea agreement , beginning in August 2018, Lauro sent threatening mailings to employees at four Central Florida elementary schools where she had worked as a teacher: Citrus Ridge Academy and Four Corners Charter School in Davenport, Groveland Elementary School in Groveland, and Laurel Elementary School in Poinciana. All four of the mailings contained a suspicious powder, and three of the mailings included notes indicating they were “punishment.” Law enforcement and HAZMAT-trained personnel responded to each of the schools after employees opened the mailings and found the unidentified powder. Ultimately, after testing, authorities determined each of the mailings contained sodium bicarbonate, more commonly known as baking soda.Lauro had effectively been fired for poor performance from each of the schools to which she sent the mailings, and each victim who received one of the letters had played a role in her performance review at and/or her terminations.
In her plea agreement, Lauro admitted she had sent the mailings because she was upset with each victim and school. Additionally, she admitted she sent the mailings with the intent to threaten each victim and cause them to believe he or she had been exposed to a deadly biological toxin.
This case was investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force. It is being prosecuted by Assistant United States Attorney Daniel George.
Former Child Protective Officer Convicted After Four-Day Federal Trial for Receipt and Possession of Child PornographyRead the Press Release
Greenbelt, Maryland – A federal jury has convicted Haitian national Jean Buteau Remarque, age 40, of Greenbelt, Maryland, of two counts of receipt of child pornography and one count of possession of child pornography. The jury returned its verdict late on March 25, 2021.
The verdict was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; and Colonel Woodrow W. Jones III, Superintendent of the Maryland State Police.
According to testimony presented at his four-day trial, Remarque previously held positions at the International Bureau of Children’s Rights in Montreal, Canada, and as a Child Protective Officer for the United Nations in Africa. In May 2018, law enforcement received information that Remarque was engaging in sexually explicit conversations with a 15-year-old female. In addition, Remarque was believed to have sexually explicit images of prepubescent minors on his cell phone. On July 17, 2018, a federal search warrant was executed at Remarque’s residence in Greenbelt. Investigators recovered an external hard drive that contained files that had been copied from one of Remarque’s phones. The evidence presented at trial proved that on November 16 and November 22, 2017, Remarque received sexually explicit images of minors. Further, the evidence showed that the files included a collection of approximately 100 images of child pornography, including sexually explicit images depicting prepubescent minors.
As a result of his conviction, upon his release from prison, Remarque will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Remarque faces a minimum mandatory sentence of five years in prison and a maximum of 20 years in prison for each of the two counts of receipt of child pornography, and a maximum of 10 years in prison for possession of child pornography. U.S. District Judge Stephanie A. Gallagher has not yet scheduled a sentencing date.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
Acting United States Attorney Jonathan F. Lenzner commended HSI and the Maryland State Police for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Timothy Hagan and Special Assistant U.S. Attorney Danbee Kim, who are prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md/project-safe-childhood and https://www.justice.gov/usao-md/community-outreach.
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Former CEO and Founder of Technology Company Sentenced for his Role in Investment-Fraud SchemeRead the Press Release
A Virginia man was sentenced today to more than eight years in prison for his involvement in a fraud scheme resulting in millions of dollars of losses to investors.
Daniel Boice, 41, of Alexandria, pleaded guilty to one count of securities fraud and one count of wire fraud on Dec. 3, 2020. According to court documents, beginning in 2015, Boice fraudulently solicited investments in Trustify, an Arlington-based company that Boice promoted as the “Uber” of private investigator services. Boice raised more than $18 million from over 250 individual and corporate investors by, among other things, falsely overstating Trustify’s financial performance. To secure investor capital, Boice inflated Trustify’s monthly and annual revenues in detailed fraudulent financial statements and investor presentations, and he fabricated large corporate business relationships to support his false statements about Trustify’s growth. In addition, Boice created a fake email account to pose as a prominent potential investor, and he then used the account to send a fraudulent email to successfully convince an investment firm to invest nearly $2 million in Trustify.
Boice also made false statements to investors about the amount of investor funds that he would personally receive, while diverting a substantial amount of the investor money to his own benefit. Boice personally derived at least $3.7 million in proceeds from the fraud, including several million dollars in transfers from Trustify to bank accounts under his control and in personal charges on credit cards paid with Trustify funds. Boice diverted Trustify funds, for example, to secure the down payment on a $1.6 million house in Alexandria and a $1 million beach house in New Jersey, as well as to pay for a chauffeur, house manager, and various luxury items. Boice also used Trustify funds to pay for family vacations, private jet trips, and over $100,000 for premium seats at sporting events.
In 2019, faced with declining revenues and the consequences of Boice’s diversion of company assets for his personal expenditures, Trustify was placed into corporate receivership by the Delaware Chancery Court. The company’s collapse led to over $18 million in losses to investors and over $250,000 in unpaid wages and associated costs for Trustify’s employees.
Additionally, Boice was ordered to pay $18,131,742.21 in restitution and forfeit $3.7 million.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Raj Parekh of the Eastern District of Virginia; and Special Agent in Charge James A. Dawson of the FBI’s Washington Field Office Criminal Division made the announcement.
The FBI’s Washington Field Office investigated the case with assistance from the Virginia State Corporation Commission.
Trial Attorney Blake Goebel of the Justice Department’s Fraud Section and Assistant U.S. Attorney Russell L. Carlberg of the U.S. Attorney’s Office for the Eastern District of Virginia prosecuted the case.
Former CEO and Founder of Tech Start-Up Sentenced for $18 Million Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – The CEO and co-founder of Trustify Inc., a privately-held technology start-up company that connected customers with private investigators, was sentenced to over eight years in prison today for conducting a fraudulent scheme that led to the company’s collapse and resulted in over $18 million in losses to more than 250 individual and corporate investors.
“By spinning an elaborate web of lies, Boice fraudulently induced victims to invest over $18 million in his company so that he could misappropriate millions of those dollars to fund his lavish lifestyle and personal aggrandizement,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “This case demonstrates that we will hold corporate executives accountable when they cast aside their fiduciary duties for personal financial gain.”
According to court documents, beginning in 2015, Daniel Boice, 41, of Alexandria, fraudulently solicited investments in Trustify, an Arlington-based company that Boice promoted as the “Uber” of private investigator services. Boice raised more than $18 million from over 250 individual and corporate investors by, among other things, falsely overstating Trustify’s financial performance. To secure investor capital, Boice inflated Trustify’s monthly and annual revenues in detailed fraudulent financial statements and investor presentations, and he fabricated large corporate business relationships to support his false statements about Trustify’s growth. In addition, Boice created a fake email account to pose as a prominent potential investor, and he then used the account to send a fraudulent email to successfully convince an investment firm to invest nearly $2 million in Trustify.
Boice also made false statements to investors about the amount of investor funds that he would personally receive, while diverting a substantial amount of the investor money to his own benefit. Boice personally derived at least $3.7 million in proceeds from the fraud, including several million dollars in transfers from Trustify to bank accounts under his control and in personal charges on credit cards paid with Trustify funds. Boice diverted Trustify funds, for example, to secure the down payment on a $1.6 million house in Alexandria and a $1 million beach house in New Jersey, as well as to pay for a chauffeur, house manager, and various luxury items. Boice also used Trustify funds to pay for family vacations, private jet trips, and over $100,000 for premium seats at sporting events.
In 2019, faced with declining revenues and the consequences of Boice’s diversion of company assets for his personal expenditures, Trustify was placed into corporate receivership by the Delaware Chancery Court. The company’s collapse led to over $18 million in losses to investors and over $250,000 in unpaid wages and associated costs for Trustify’s employees.
Boice was sentenced today to 97 months in prison, followed by three years of supervised release. In addition, he was ordered to pay $18,131,742.21 in restitution and $3.7 million in forfeiture.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis, III.
Acting U.S. Attorney Parekh also commended the Philadelphia Regional Office of the Securities and Exchange Commission and the Virginia State Corporation Commission, which conducted a parallel civil investigation of Boice and Trustify.
Assistant U.S. Attorney Russell L. Carlberg and Trial Attorney Blake Goebel of the Justice Department’s Fraud Section prosecuted 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. 1:20-cr-167.
Florida Man Sentenced for Wire Fraud ConspiracyRead the Press Release
BOSTON – A Florida man was sentenced today in federal court in Boston in connection with the fraudulent abuse of the U.S. Postal Service’s (USPS) Informed Delivery electronic notification system.
Fred Alcius, 34, of Lauderhill, Fla., was sentenced by U.S. District Court Judge Indira Talwani to 25 months in prison, three years of supervised release and ordered to pay over $177,000 in restitution joint and severally with other defendants. In December 2020, Alcius pleaded guilty to one count of conspiracy to commit wire fraud and two counts of aggravated identity theft.
In June 2019, Alcius was indicted along with co-defendant Lucson Appolon, who previously pleaded guilty and was sentenced to two years in prison. Co-conspirators Peter Belony and Kevens Louis were previously sentenced to 24 and 27 months in prison, respectively.
Informed Delivery is a free electronic notification service provided by the USPS that gives residential and P.O. Box customers the ability to digitally preview their incoming mail and manage their packages.
The defendants accessed victims’ personal identifying information, including names, Social Security numbers, dates of birth, and addresses on the “dark web” and then used the information to open credit cards in the victims’ names. The defendants then subscribed to Informed Delivery using the victims’ personal identifying information and a fraudulent email address created to track the delivery of credit cards to the victims’ residential mailboxes. The defendants subsequently intercepted the credit cards at the victims’ mailboxes before the victims could receive them and used those credit cards at ATMs and to purchase gift cards and other items for resale at Apple and Walmart, among other retail establishments. The defendants traveled to states along the East Coast in furtherance of the fraud, including Maine and Massachusetts.
Acting United States Attorney Nathaniel R. Mendell and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney Mackenzie A. Queenin of Mendell’s Securities, Financial & Cyber Fraud Unit and Raquelle Kaye of Mendell’s Asset Recovery Unit prosecuted the case.
Federal law enforcement leaders address hate crimes and racism targeting the AAPI communityRead the Press Release
ATLANTA – Acting U.S. Attorney Kurt R. Erskine and Chris Hacker, Special Agent in Charge of FBI Atlanta are condemning bigotry, racism, and hatred against the Asian American and Pacific Islander (AAPI) community and issuing a call for people to report potential discriminatory incidents immediately.
“We are deeply troubled by the acts of violence and harassment against our Asian American neighbors, family, and friends in this district,” said Acting U.S. Attorney Kurt R. Erskine. “We will not tolerate discrimination or criminal acts against people based on their real or perceived race or ethnicity and will continue to examine all evidence related to the shooter’s motivation in order to determine whether these horrific murders violated federal hate crime laws. Federal law enforcement in this district is committed to the safety of the members of our AAPI community and we urge the public to report potential racial discrimination and hate crimes to law enforcement so we can address these illegal acts.”
“FBI Atlanta and The U.S. Attorney's Office have reached out to Atlanta's AAPI community, among other groups who have been targeted historically because of their race, to assure them they have an ally with law enforcement agencies and that individuals affected know their rights,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Investigating civil rights/hate crimes is among the FBI's highest priorities. FBI Atlanta is dedicated to addressing every single allegation, and we strongly encourage anyone who believes their civil rights were violated to report it, so that we can determine whether a crime occurred.”
With respect to the tragic and horrific shooting of eight victims in Atlanta, the FBI, the USAO for the Northern District of Georgia, and the Civil Rights Division are fully supporting the state investigation into the tragic events of March 16th, while independently assessing whether the shootings involved a federal hate crime. Experienced civil rights prosecutors and agents are assessing all of the evidence and will continue to examine all evidence related to the shooter’s motivation.
We have increased our outreach to the AAPI community in the wake of last week’s tragic events. The U.S. Attorney’s Office and the FBI, along with other members of federal, state and local law enforcement, met with leaders of the AAPI community within 24 hours after the tragic shootings in the Atlanta area, and have this week, participated in a listening session in Doraville, Georgia with AAPI representatives. “Our outreach efforts will continue while reinforcing the message that we all stand together with the AAPI community to aggressively address incidents of anti-Asian bias in our district,” said Erskine.
There is a significant disparity between hate crimes that actually occur and those reported to law enforcement. It is critical to report hate crimes not only to show support for those directly impacted, but also to reinforce the message that our community will not tolerate these kinds of crimes. Reporting also enables law enforcement to fully understand the scope of the problem in a community and assign resources toward preventing and addressing crimes of bias and hate.
President Biden on January 26 issued the “Presidential Memorandum Condemning and Combating Racism, Xenophobia, and Intolerance Against Asian Americans and Pacific Islanders in the United States.” The memorandum mandates that the Attorney General explore opportunities to support, consistent with applicable law, the efforts of state and local agencies, as well as AAPI communities and community-based organizations, to prevent discrimination, bullying, harassment, and hate crimes against AAPI individuals, and expand collection of data and public reporting regarding hate incidents against such individuals.
The Justice Department’s Civil Rights Division enforces federal anti-discrimination laws, and the U.S. Attorney’s Office has dedicated units that prosecute civil rights violations in its Criminal Division and enforce civil rights laws in its Civil Division. The Civil Division of the U.S. Attorney’s Office also investigates non-criminal instances of discrimination.
If you or someone you know are in immediate danger, please call 911. If you believe you have been the target or victim of a hate crime or other violation of your civil rights, please contact the FBI Atlanta Field Office by calling (770) 216-3000 or submitting a tip online at https://www.fbi.gov/tips
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.
Essex County Felon Sentenced Three Years in Prison for Firearm PossessionRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man previously convicted of multiple felonies was sentenced today to 36 months in prison for possessing a firearm and ammunition, Acting U.S. Attorney Rachael A. Honig announced.
Sharif Clarke, 39, of Irvington, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to count one of an indictment charging him with being a felon in possession of a weapon. Judge Martinotti imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
On Dec. 3, 2018, Clarke possessed a Glock .40-caliber handgun loaded with nine rounds of Remington ammunition. At that time, Clarke had previously been convicted in Essex County Superior Court of resisting and eluding arrest and of possession of a controlled substance on school property, both of which are felonies.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
In addition to the prison term, Judge Martinotti also sentenced Clarke to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the leadership of Special Agent in Charge Charlie J. Patterson, and the Newark Department of Public Safety, under the leadership of Public Safety Director Anthony F. Ambrose, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Cybercrime Division in Newark.
Elkhorn City Attorney Indicted for Bank Fraud and Filing a False Tax ReturnsRead the Press Release
LONDON, Ky. — An Elkhorn City, Ky., man was indicted Thursday, on charges of bank fraud and filing false tax returns.
A federal grand jury sitting in London returned the indictment charging Timothy Belcher, 55, with seven counts of bank fraud and three counts of filing false tax returns.
The indictment alleges that Belcher used his position as an attorney to misappropriate money from a client’s escrow account, over a period of years, and that he failed to report those funds as income on his federal tax returns.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, FBI Louisville Field Office; and Bryant Jackson, Special Agent in Charge, IRS – Criminal Investigation, jointly announced the indictment.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrea Mattingly Williams.
A date for Belcher to appear in court has not yet been scheduled. He faces up to 30 years in prison and a maximum fine of $1,000,000 on the bank fraud charges and up to three years in prison and a maximum fine of $250,00 on the false tax return charges. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
East Stroudsburg Financial Planner Sentenced to 17½ Years of Imprisonment for Scheme to Defraud His ClientsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Anthony Diaz, age 52, formerly of East Stroudsburg, Pennsylvania, was sentenced to 210 months’ imprisonment and three years of supervised release by United States District Court Judge Malachy E. Mannion for wire fraud and mail fraud offenses. He was taken into custody immediately after the sentencing to begin serving the term of imprisonment.
According to Acting United States Attorney Bruce D. Brandler, Diaz was convicted on January 30, 2020 following a 12-day jury trial, of seven counts of wire fraud and four counts of mail fraud, all stemming from the same scheme.
The evidence presented at trial showed that from approximately 2008 through April 2015, Diaz owned and operated Financial Planners Group of America, a financial planning business in East Stroudsburg and Scotrun, Pennsylvania. Diaz persuaded his clients to invest in high risk, illiquid “alternative investment products,” including real estate investment trusts, business development companies, oil and gas drilling companies, and equipment leasing companies.
A dozen of Diaz’s former clients testified at trial that Diaz convinced them to invest their life savings in the alternative investments through a series of false representations, including that the investments were low-risk, with guaranteed protection of principle and guaranteed rates of return, and that the investments were liquid, giving investors access to their funds in an emergency. Evidence introduced at trial showed that the investments were high-risk and speculative, with no guarantees, and that in some instances, investors lost all of their money. Evidence at trial also showed that the investments had lengthy holding periods, with no access to funds, and that could be extended indefinitely at the unilateral discretion of the investment company. Some witnesses testified to having invested money over a decade ago that they still could not liquidate.
At trial, jurors saw extensive client documentation bearing false information about the clients’ assets, risk tolerance, investment experience, and investment objectives. Clients testified that Diaz regularly had them sign blank documents, with the promise that missing information would be filled in by his office. Former employees of Diaz testified that he ordered them to add false information to the account forms, inflating clients’ assets, risk tolerance, and investment experience to qualify them as suitable investors for the alternative investments.
Jurors also learned that Diaz was terminated by five broker-dealers and permitted to resign by a sixth broker-dealer. Clients who asked about the frequent changes to new broker-dealers were told that it was for their benefit. Diaz’s former employees testified that they were ordered to conceal his firings and lie to the clients about his changes between broker-dealers.
Jurors also learned that Diaz was suspended by the Certified Financial Planners Board of Standards in 2013, and under investigation by the Financial Industry Regulatory Authority and the Pennsylvania Department of Banking, both of whom ultimately barred Diaz from the securities industry in 2015. Diaz’s clients testified that he failed to disclose his suspension from the Certified Financial Planners Board of Standards, and concealed the nature and severity of the regulatory investigations.
Various industry witnesses testified that Diaz earned commissions on the alternative investments that were often double, or even quadruple the commissions earned on more conventional investments, such as stocks, bonds, and mutual funds. Documents at trial showed that Diaz regularly earned in excess of $1.5 million in commissions annually. Witnesses described how Diaz spent his money on expensive automobiles, a dozen properties across the United States, and frequent vacations to exotic locales.
Labeling Diaz a “sophisticated criminal,” Judge Mannion highlighted how Diaz “lied through his teeth” when testifying at trial, and emphasized the gravity and volume of his offense. In pronouncing the sentence, Judge Mannion also noted that Diaz had made “no showing of remorse” and queried, “Are you such a con man that you don’t know you’re a con?” Diaz faced an enhanced sentence under the advisory Sentencing Guidelines for the sophisticated nature of his scheme, the substantial financial hardship caused to numerous victims, for supervising the criminal activity of others, for violating securities regulations as an investment advisor, and for obstructing justice by committing perjury at trial.
At sentencing, dozens of former clients of Diaz submitted victim impact statements, and several told Judge Mannion about how Diaz invested their family’s retirement savings in illiquid investments, which they were unable to use in times of need. Diaz stipulated in advance of sentencing that he had caused actual and intended losses of between $1.5 million and $3.5 million to the victims to testified at trial alone. Judge Mannion ordered Diaz to pay restitution of $1,020,840 to those victims.
“While it is true that violent crimes have a devastating impact on victims, it is also true that financial crimes sometimes have an equal, if not greater impact on victims’ lives,” stated Acting U.S. Attorney Brandler. “Unlike physical injuries that can heal in time, losing one’s life savings as one nears retirement is not something many can recover from. Corrupt financial planners like Mr. Diaz who line their own pockets at the expense of their clients will be aggressively prosecuted and receive significant jail sentences, as today’s proceedings prove. Hopefully the significant sentence imposed today on Mr. Diaz will give his victims some sense of justice and deter others from engaging in similar crimes in the future. I want to commend the prosecutors and the numerous law enforcement agents who worked tirelessly to bring this case to a successful conclusion.”
“Anthony Diaz took advantage of inexperienced investors who trusted him with their life savings,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Spouting a legion of lies, he convinced his clients to invest their money not in their own best interests, but in risky ways that generated Diaz himself millions of dollars in commissions. The harm done here was significant — retirement delayed, tuition money lost, lives turned upside down — all in service of one man’s greed. Today’s lengthy sentence doesn’t right those wrongs. But it does ensure Diaz won’t be victimizing anyone else like this.”
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Phillip Caraballo and Robert O’Hara prosecuted the case.
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EDVA Seizes Seven Websites Used to Collect Personal Information and Illegally Profit from the COVID-19 PandemicRead the Press Release
ALEXANDRIA, Va. – The U.S. Attorney's Office for the Eastern District of Virginia announced today the seizure of seven websites as part of ongoing efforts by Homeland Security Investigations (HSI) to combat online fraud schemes that seek to exploit the increased interest in vaccines, treatments, and employment opportunities associated with the COVID-19 pandemic.
According to court records, the United States obtained court authorization to seize four domains that purported to be the legitimate websites of Pfizer, Inc. (“Pfizer”)—specifically, “pfizermx.com,” “pfizer-vaccines.com,” “pfizerstockrate.com,” and “pfizerksa.com.” In addition, the government seized three websites claiming to be associated with the United Nations International Children’s Emergency Fund (UNICEF)—specifically, “unicefcovid19relief.com,” “unicefeverychild.com,” and “unicefinternship.com.” Although each of the seized domains purported to be the legitimate websites of either Pfizer or UNICEF, the sites instead appeared to have been designed to obtain the personal information of website visitors for nefarious purposes, such as fraud or phishing attacks.
“The online fraud and phishing schemes that were embedded within these seven sham websites sought to capitalize on the misfortunes of others during the global pandemic,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “We urge the public to safeguard your sensitive personal information at all times, including from these fraudulent COVID-19 schemes. EDVA and our law enforcement partners will continue to aggressively seek justice for vulnerable community members who are preyed upon by these scammers.”
“The COVID-19 pandemic has created significant opportunities for fraudsters to take advantage of individuals seeking information, cures, or vaccines to protect themselves and others. The websites seized in these cases are alleged to be simply masquerading as legitimate COVID-related sites to steal personal information for potentially nefarious purposes,” said Special Agent in Charge Raymond Villanueva for HSI’s Washington, D.C. field office. “We urge the public to use extreme caution sharing any personal information online, especially in regards to COVID-19 vaccines, treatments, personal protective equipment or with unsolicited employment opportunities.”
According to the affidavits filed in support of these seizures, HSI identified and opened investigations into the seized domains between December 2020 and February 2021 after learning of their use in fraud schemes through notifications from the affected entities, and through an ongoing operation by HSI’s Cyber Crimes Center (C3) targeting malicious websites.
The domains “pfizermx.com,” “pfizerksa.com,” “pfizer-vaccines.com,” and “pfizerstockrate.com,” were used in websites that fraudulently displayed the registered trademarks of Pfizer and BioNTech SE (“BioNTech”) to facilitate apparent phishing schemes geared towards exploiting the increased interest in Pfizer and BioNTech-related products, including the Pfizer/BioNTech COVID-19 vaccine. The websites associated with pfizermx.com and pfizerksa.com presented themselves as Spanish and Arabic-language websites for Pfizer, respectively, and purported to facilitate orders of Pfizer products. Likewise, the website associated with “pfizer-vaccines.com” falsely presented itself as an online platform for obtaining information on the COVID-19 virus and Pfizer/BioNTech vaccine, while the website associated with “pfizersotckrate.com,” appeared to present itself as an online platform for advertising trading and stock options for Pfizer.
In reality, none of these websites appear to serve a legitimate purpose. Each instead used names, logos, and graphics of Pfizer and, in some instances BioNTech, as part of an apparent effort to trick visitors into submitting sensitive information. For instance, the websites using the domains pfizermx.com and pfizer-vaccines.com attempted to deceive individuals interested in obtaining information on the COVID-19 vaccine into contacting fraudulent phone numbers and email addresses that Pfizer did not control. The websites associated with the domains pfizerksa.com and pfizerstockrate.com similarly sought to trick visitors into submitting personal information to the perpetrators through the website, including bank account information through pfizerksa.com.
The websites associated with “unicefcovid19relief.com,” “unicefeverychild.com,” and “unicefintern ship.com” likewise leveraged the trademarks of UNICEF to facilitate apparent phishing schemes geared towards exploiting the increased interest in helping individuals who need assistance during the COVID-19 pandemic. Notably, the websites associated with each of these seized domains falsely claimed to offer employment opportunities associated with distributing COVID-19 relief funds, and the sites encouraged interested employees to submit personal information. According to the affidavit supporting the seizure warrant, each of these seized domains appeared to have been designed to collect the personal identifying information of website visitors for use in criminal schemes, such as fraud or phishing attacks, and to enlist unwitting victims in money laundering schemes.
The seizure of these seven domains by the government will prevent third parties from acquiring the names and using them to commit additional crimes. Individuals visiting those sites now will see a message indicating that the site has been seized by the federal government, and visitors will be redirected to another site for additional information.
Federal law enforcement agencies are united in their efforts to fight against COVID-19 fraud. HSI has identified tips to recognize and report COVID-19 fraud, and additional information and resources are available from the Department of Justice and the U.S. Attorney’s Office (EDVA). If you believe you are a victim of a fraud or attempted fraud involving COVID-19, you may also call the National Center for Disaster Fraud Hotline at 1-866-720-5721.
The seizure of the domain names was announced by Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.
Acting U.S. Attorney Parekh commended the HSI Cyber Crimes Center, HSI Intellectual Property Rights Center (IPRC), and the HSI Washington Field Office for their work in these investigations.
The government is represented by Special Assistant U.S. Attorney Aarash Haghighat in these matters.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.