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Tuesday 2 February 2021
Monongalia County man indicted on child pornography chargesRead the Press Release
WHEELING, WEST VIRGINIA – Jason Steven Kokinda, of Westover, West Virginia, was indicted today on a child pornography charge, U.S. Attorney Bill Powell announced.
Kokinda, 42, was indicted today on one count of “Second Offense Possession of Child Pornography” and one count of “Failure to Update Sex Offender Registry.” Kokinda, who was previously convicted of sex offenses against children and child pornography charges, is accused of having a cell phone with child pornography images in Randolph County in September 2019. He is also accused of failing to update his sex offender registration after traveling from Vermont and New Jersey to West Virginia in August 2019.
Kokinda is facing at least 10 years and up to 20 years of incarceration and a fine of up to $250,000 for the child pornography charge. He is facing up to 10 years of incarceration and a fine of up to $250,000 for the registration charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Bridgeport Police Department and the U.S. Marshal Service investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Mission Man Indicted on Firearm ChargeRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Possession of a Firearm by a Prohibited Person.
Patrick Leonard Iron Cloud, Jr., age 40, was indicted on November 10, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 29, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on October 2, 2020, in Mission, Iron Cloud, being an unlawful user of and addicted to a controlled substance, and having previously been convicted of a of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed a firearm.
The charge is merely an accusation and Iron Cloud is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Michael Elmore is prosecuting the case.
Iron Cloud was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Middle District of Pennsylvania Celebrates Black History MonthRead the Press Release
Harrisburg –The United States Attorney’s Office for the Middle District of Pennsylvania joins with the Eastern District of Virginia and other United States Attorney’s Offices across the country to honor the contributions and history of the African American community during this year’s Black History Month.
According to Acting United States Attorney Bruce D. Brandler, for over the last fifty years, the Department of Justice has established Special Emphasis Programs that try to develop a diverse and talented workforce in the Department and United States Attorney’s Offices nationwide. Today, these programs include support for racial/ethnic minorities, women, persons and veterans with disabilities, and lesbian, gay, bisexual, and transgender applicants and employees in various categories and occupations and in all organizational components throughout the Department.
This month we celebrate African Americans contributions in history. The annual tradition of Black History Month in February is commemorated by the Association for the Study of African American Life and History, which establishes a national theme for each year. The theme for 2021 is “The Black Family: Representation, Identity, and Diversity.” The theme acknowledges the rich tapestry of the African American family.
We echo the sentiment of Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia who stated, “we are deeply committed in EDVA to ensuring that all participants in the legal process—including victims, parties, and members of the Bench and Bar—are treated with respect and dignity as we seek equal justice under the law. As part of that commitment, we are dedicated to furthering our collective efforts to promote diversity and inclusion in all forms through our hiring, advancement, and community outreach practices.” His sentiments ring true. “This February we renew our own commitment in Middle District of Pennsylvania of seeking to promote the goals of diversity and inclusion in both our criminal and civil practices,” said Acting U.S. Attorney Brandler. “We will work with the Department of Justice and the all United States Attorneys Offices across the United States to fulfill this mission.”
More information about the Department of Justice’s Special Emphasis Programs and commitment to a diverse workforce can be found at https://www.justice.gov/jmd/affirmative-employment-special-emphasis-programs.
Mercer County Man Pleads Guilty in Two Bank Robberies on Pittsburgh’s South SideRead the Press Release
PITTSBURGH, PA - A former resident of Hadley, Pennsylvania, pleaded guilty in federal court to charges related to two bank robberies that occurred in the Southside neighborhood of Pittsburgh, United States Attorney Scott W. Brady announced today.
Daryle Devlin, 29, pleaded guilty to two counts before Senior United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that on October 20, 2018, and October 26, 2018, Devlin robbed the Farmers National Bank, located at 1812 East Carson Street, of a total of $4,554.
Judge Fischer scheduled sentencing for May 25, 2021 at 9:30 a.m. The law provides for a total sentence of not more than 25 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Rebecca L. Silinski is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Devlin.
Man from Lordsburg pleads guilty to federal child pornography chargesRead the Press Release
ALBUQUERQUE, N.M. – Gilbert Gallegos, 44, of Lordsburg, New Mexico, pleaded guilty in federal court on Jan. 29 to production and possession of child pornography.
According to information based on court records and statements made in open court, on April 8, 2020, Gallegos’ phone was seized and searched following a search warrant. Gallegos admitted to producing and possessing child pornographic videos on his cellphone from July 2, 2019, depicting a minor victim who is partially nude, and another video of child pornography involving two minor victims.
Gallegos is currently in custody pending sentencing. He faces 15 to 30 years in prison.
Homeland Security Investigations and the Lordsburg Police Department investigated this case. Assistant U.S. Attorney Marisa A. Ong and Dustin C. Segovia are prosecuting the case.
Man Sentenced for Conspiring to Launder Money in Methamphetamine Trafficking OperationRead the Press Release
One of three men who ran a methamphetamine trafficking and money laundering operation in Tulsa and the surrounding area was sentenced today in federal court, announced U.S. Attorney Trent Shores.
U.S. District Judge Gregory K. Frizzell sentenced Javier Passement, 55, of Tulsa, to nine years in federal prison.
“Money laundering is the lifeblood of criminal organizations. These corrupt banking transactions move dirty money all across the globe so that the criminal organization can operate outside the law,” said U.S. Attorney Trent Shores. “Thanks to our Organized Crime Drug Enforcement Task Force, a local money laundering operation with international ties has been shut down. Javier Passement and his ilk are just as responsible as the traffickers from Mexico for the methamphetamine flowing onto our streets. This nine year sentence shows that there are serious consequences for getting involved in any aspect of the drug game.”
In 2018, Passement, along with Alfredo Herrera and Domingo Aguirre, was charged with violating federal money laundering and drug conspiracy statutes. Herrera was the owner and operator of Casa Herrera, a local money remitter business that was used to launder illegal drug proceeds.
In his plea agreement, Passement admitted that from December 2015 to September 2018 he received money and sent it back to the Mexican source of supply using local money remitter businesses, including Casa Herrera. At Casa Herrera, the three men sent drug proceeds to Felix Ordaz-Miranda in Mexico, using nominee names. Ordaz-Miranda would also provide nominee names to use to list as the recipients of the wire transfers. The “fake” names were used in order to conceal the true nature of the transactions and to further the drug conspiracy by paying money owed to the source of supply. Passement stated that he generated the wire transfers under the direction of Herrera and Aguirre.
Passement further admitted that he knowingly conspired to possess with intent to distribute and to distribute 500 grams or more of a methamphetamine. Specifically, Passement received bulk quantities of methamphetamine from Ordaz-Miranda and distributed the drug to individuals identified by him throughout Tulsa and the surrounding areas.
The Organized Crime Drug Enforcement Task Force investigation, titled Operation Ripped Ice, involved the Drug Enforcement Administration, FBI, Immigration and Customs Enforcement’s Homeland Security Investigations, and Tulsa Police Department. Twenty-two individuals were charged as a result of the operation. Domingo Aguirre was convicted and sentenced to 44 months in federal prison. Alfredo Herrera passed away during the prosecution.
Assistant U.S. Attorney Joel-lyn A. McCormick prosecuted the case. AUSA McCormick serves as the lead attorney for the United States Attorney’s Organized Crime Drug Enforcement Task Forces.
Madison Man Sentenced to 130 Months for Methamphetamine DistributionRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Phillip Thomas, Madison, Wisconsin, pleaded guilty and was sentenced today by U.S. District Judge William M. Conley to 100 months in federal prison for distributing 50 grams or more of methamphetamine, and an additional 30 months for revocation of his federal supervised release. This prison term will be followed by 4 years of supervised release.
In March and April 2020, several sources reported to law enforcement that Thomas was selling various controlled substances in the Madison area. Agents with the Wisconsin Department of Justice Division of Criminal Investigation arranged a series of controlled buys with a confidential informant. The confidential informant successfully purchased crack cocaine and methamphetamine from Thomas in March 2020, and additional crack cocaine and approximately 52 grams of methamphetamine from him on April 1, 2020. During a search of Thomas’s bedroom inside a Sun Prairie apartment on April 3, 2020, agents located three firearms and additional controlled substances. That same day, Thomas was arrested and had both cocaine and heroin in his pockets.
At the time of the offense in this case, Thomas was serving a term of supervised release in connection to a 2012 federal conviction in the Western District of Wisconsin for distribution of 100 grams or more of heroin. Judge Conley revoked that supervision and sentenced Thomas to the additional 30 months in prison.
In sentencing Thomas, Judge Conley noted that the quantities of controlled substances recovered by law enforcement in the present case were likely far below what Thomas had been selling, based on his statements to law enforcement following his arrest. Judge Conley stated a significant sentence was warranted given that the defendant had resumed selling drugs following his 2018 release from prison, including selling drugs while residing at a drug treatment facility. Judge Conley commented that it appeared as though Thomas “reveled” in his continued criminal lifestyle and the power it brought him.
The charges against Thomas were the result of an investigation conducted by the Wisconsin Department of Justice Division of Criminal Investigation, Madison Police Department, Sun Prairie Police Department, Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant U.S. Attorney Taylor L. Kraus.
Jury Convicts Wilmington Man of Narcotics Distribution and Possession of a Firearm by a FelonRead the Press Release
RALEIGH, N.C. – Yesterday, a federal jury convicted Shawn Fonville, 34, of Wilmington on charges of conspiracy to distribute and possess with the intent to distribute heroin; possess with the intent to distribute a quantity of heroin; possession of a firearm in furtherance of a drug trafficking crime; and possession of a firearm and ammunition by a convicted felon.
According to court records and evidence presented at trial, Fonville was distributing narcotics from three residences in the Wilmington area. While under surveillance, Fonville and his associates were observed orchestrating purchases and distributing heroin to other individuals from the residences. Following those purchases, officers from the Wilmington Police Department received information that the defendant had traveled to New York to get additional supplies of heroin. The day after Fonville returned to his apartment in Wilmington, multiple vehicles were seen leaving his residence. Officers conducted a traffic stop on one of the vehicles. The driver, co-defendant Zabar Irick, attempted to flee, and officers observed Irick throwing bundles of heroin while fleeing. Officers secured a search warrant for the defendant’s apartment and discovered 3,000 dosage units of heroin, a loaded revolver, and over $40,000 in the defendant’s bedroom. An additional firearm was located in the center console of the defendant’s vehicle. This conduct occurred while Fonville was on federal supervised release for prior convictions of possession with intent to distribute heroin and possession of a firearm by a felon.
Fonville faces a maximum penalty of 35 years imprisonment when sentenced during the May 3, 2021 term of court.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after U.S. District Judge James C. Dever III accepted the verdict. The Federal Bureau of Investigation and Wilmington Police Department investigated the case and Assistant U.S. Attorneys J. Bradford Knott and Caroline Webb prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:18-cr-00185-D.
Judge sentences St. Louis County woman for making false statements to the Social Security Administration and defrauding Mercedes BenzRead the Press Release
ST. LOUIS – United States District Ronnie L. White sentenced Tayon Hutchins-Fowler to 12 months and one day in prison today. The 43-year-old Florissant, Missouri resident pleaded guilty, in December, to one count of making a false statement to the Social Security Administration and one count of wire fraud regarding a scheme to defraud Mercedes Benz.
Hutchins-Fowler submitted an application to the U.S. Social Security Administration for disability payments in which she claimed to be disabled and unable to work because of major depression and other conditions. In reliance on her representations, SSA paid Hutchins-Fowler periodic disability payments from November 2012 through March 2019. These SSA payments totaled approximately $200,000.
During 2012-17, Hutchins-Fowler owned a home health care business and annually received over $100,000 in income from this business during 2014, 2015, 2016 and 2017. In 2018, Ms. Hutchins Fowler made a series of false statements to SSA in order to continue to receive disability payments from SSA, telling the agency she had not worked, had not received income from working, and had difficulty with shopping, driving, understanding directions, remembering, and getting along with people.
During December 2017, Ms. Hutchins-Fowler purchased a 2018 Mercedes Benz GLC 43 automobile at a dealership located in St. Louis, Missouri, using falsified monthly bank statements, checks, corporate records and tax materials to fraudulently obtain financing for the vehicle.
"This case exemplifies the collaborative nature of our investigative work protecting Social Security’s critical programs from fraud," said Gail S. Ennis, Inspector General for the Social Security Administration. “I want to thank the FBI for working with us to bring this individual to justice, and the U.S. Attorney’s Office for its support of our investigation.”
This case was investigated by the Office of Inspector General for the Social Security Administration and the Federal Bureau of Investigation, with assistance from the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office.
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Georgia man sentenced after admitting fraud in attempt to sell 50 million non-existent N-95 face masks to foreign governmentRead the Press Release
SAVANNAH, GA: A Georgia man has been sentenced after admitting he attempted to sell 50 million non-existent facemasks to a foreign government.
Paul Penn, 64, of Johns Creek, Ga., was sentenced to five months and 29 days of home confinement by U.S. District Court Judge R. Stan Baker after pleading guilty to Conspiracy to Commit Wire Fraud, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Judge Baker also fined Penn $1,500 and ordered him to serve three years of probation.
“If not for the vigilance of the U.S. Secret Service, Paul Penn and his co-conspirators likely would have lit the fuse on an international scandal by ripping off a friendly foreign government for more than $300 million,” said U.S. Attorney Christine. “Instead, they halted the scheme before the criminals got a dime, and prevented these crooks from profiting from pandemic fear.”
As described in court documents and testimony, Penn, through his company, Spectrum Global Holdings, LLC, agreed with unnamed co-conspirators to act as a middleman in the attempted sale of 50 million 3M Model 1860 Respirator Masks that he and his co-conspirators did not actually possess. Under the deal, Penn was to broker the sale in exchange for a cut of the $317 million sales price, which was more than 500 percent higher than the previous normal market value for N-95 masks.
Based on representations from Penn and others, the buyer, a foreign government, wired the funds to complete the purchase, which was disrupted by the U.S. Secret Service just before the transaction could be completed. All of the funds were returned to the foreign government.
“This case should serve as a strong deterrent to those considering exploiting the COVID-19 pandemic to enrich themselves through fraud. The nation’s citizens, businesses and our international partners are counting on the U.S. Secret Service and its federal law enforcement and private sector partners to safeguard it and maintain the public trust,” said Glen M. Kessler, Resident Agent in Charge of the Secret Service Savannah Office. “Tackling the threat of cyber-enabled COVID-19 scams requires an immediate response to safeguard our nation during these unprecedented times.”
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or go to justice.gov/disastercomplaintform.
U.S. Attorney Christine acclaimed the hard work of the investigatory team, led by the U.S. Secret Service, for disrupting the scheme.
The case was prosecuted for the United States by the U.S. Attorney’s Office for the Southern District of Georgia.
Former Postal Carrier Pleads Guilty to Stealing MailRead the Press Release
RENO, Nev. – A former U.S. Postal Service mail carrier pleaded guilty today to stealing mail packages, announced U.S. Attorney Nicholas A. Trutanich of the District of Nevada and Acting Special Agent in Charge Jeffrey E. Krafels of the U.S. Postal Service Office of Inspector General (USPS OIG), Western Area Field Office.
Russell Francis Marks, 58, of Reno, pleaded guilty to one count of theft of mail by a postal employee. U.S. District Judge Robert C. Jones scheduled a sentencing hearing for May 3, 2021.
According to court documents and admissions made in court, between May 1 and November 24, 2017, Marks worked as a U.S. Postal Service City Letter Carrier at the Carson City post office. Marks admitted that he stole coins from five mail packages at the post office, and sold them to a coin dealer in Santa Rosa, California. Marks obtained $31,605 from selling the stolen coins. Postal customers filed missing mail complaints, which led to an investigation by the USPS OIG.
If convicted, the statutory maximum penalty faced by Marks is five years in prison, supervised release, and a $250,000 fine.
The case was investigated by the USPS OIG. Assistant U.S. Attorney Richard Casper of the District of Nevada and Special Assistant U.S. Attorney Jeremy Robbins of the USPS OIG are prosecuting the case.
Complaints for mail crimes involving employees can be submitted at: https://www.uspsoig.gov/.
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Former Navy Chief Petty Officer and Naval Reservist Indicted for ID Theft SchemeRead the Press Release
FRESNO, Calif. — On Jan. 28, a federal grand jury in Fresno indicted Selma couple Marquis Asaad Hooper, 30, and Natasha Renee Chalk, 37, charging them with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.
According to court documents, Hooper was stationed in Japan as a chief petty officer with the Navy’s Seventh Fleet until October 2018. His wife, Chalk, was a naval reservist stationed at Naval Air Station Lemoore in California. Hooper separated from the Navy in October 2018. Shortly before Hooper’s separation was final, Hooper and Chalk fraudulently obtained access to a database containing millions of people’s personal information. The company that operates the database only grants access to legitimate businesses and government agencies and only for business or government purposes, such as police departments attempting to locate suspects or banks confirming the information in account applications.
In late August 2018, Hooper contacted the company, falsely claiming that the Seventh Fleet needed access to the database to run background checks on Navy personnel. Based on that information, the company approved the account. Hooper signed the company’s subscriber agreement, purporting to act on behalf of his fleet. In reality, Hooper was not acting on behalf of his fleet, and Hooper did not access the database for a legitimate government purpose. Instead, he added Chalk, who was not a member of his fleet, and other individuals to the database account. Over the next approximately two and a half months, Hooper and Chalk searched for tens of thousands of individuals on the database and sold the information they obtained on those individuals to third parties in exchange for bitcoin. The third parties used the information to commit identity theft.
For instance, in November 2018, a man in Gilbert, Arizona, attempted to withdraw money from another person’s bank account using a fake driver’s license created with information Hooper had retrieved from the database. The company shut down Hooper’s and Chalk’s database account in December 2018. Three months later, they tried again to get access to the database through one of Hooper’s Navy contacts stationed on the U.S.S. George Washington, docked in Newport News, Virginia. Hooper had the contact falsely state that another Navy member, L.B., was the contact’s supply officer. Hooper and Chalk then conspired to send the contact a subscriber agreement for the database, a fake driver’s license for L.B., and a fake letter from the contact’s commanding officer, all containing forged signatures.
This case is the product of an investigation by the Naval Criminal Investigative Service, the Federal Bureau of Investigation, and Homeland Security investigations. Assistant U.S. Attorneys Vincente A. Tennerelli and Joseph D. Barton are prosecuting the case.
If convicted, Hooper and Chalk face a maximum statutory penalty of 20 years in prison on the conspiracy and wire fraud charges and a mandatory two-years in prison, consecutive to any other sentence, on the aggravated identity theft charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fitchburg Man Pleads Guilty to Wide-Ranging Drug Trafficking ConspiracyRead the Press Release
BOSTON – A Fitchburg man pleaded guilty today in federal court in Worcester to his role in a wide-ranging fentanyl, heroin, crack and cocaine trafficking conspiracy.
Pedro Baez, 52, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, 280 grams or more of cocaine base (commonly known as crack cocaine) and 500 grams or more of cocaine and one count of distribution and possession with intent to distribute 400 grams or more of fentanyl, 100 grams or more of heroin and cocaine. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for May 18, 2021.
According to charging documents, following a fatal fentanyl overdose in September 2018, law enforcement began investigating a drug trafficking organization in the Fitchburg area and discovered that Baez led the organization along with his son, Anthony Baez. Court-authorized interceptions of phones used by Baez and other members of the drug trafficking organization and its suppliers revealed that Baez worked with Anthony Baez, and others, to distribute a fentanyl and heroin mixture, cocaine, and crack cocaine on a regular basis to individuals in the Fitchburg area, some of whom resold all or a portion of those drugs to their own customers.
Baez and 17 others were charged in a superseding indictment on July 22, 2020. Anthony Baez pleaded guilty and was sentenced to 13 years in prison in December 2020. Defendants Valerie Lucier and Shastaalena Blair have also pleaded guilty to the superseding indictment.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. The Fitchburg Police Department, U.S. Postal Inspection Service and the Lunenburg Police Department also provided valuable assistance. Assistant U.S. Attorney Alathea Porter of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Federal Grand Jury Charges Rochester Man with Sex Trafficking, Enticement, and Possession of Child Pornography in Superseding IndictmentRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. — U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a superseding indictment charging Peter R. Kiwitt, 62, of Rochester, NY, with sex trafficking of a minor, sex trafficking by coercion, sexual enticement of a minor, and possession of child pornography. The superseding indictment also alleges that the defendant, as a registered sex offender, faces enhanced penalties in the event he is convicted of certain of the crimes with which he is charged. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that according to the superseding indictment and a previously filed complaint, on December 10, 2018, the Monroe County Sheriff’s Office stopped a vehicle being driven by defendant. Also in the vehicle were two females, Adult Victim 1 (AV1) and Minor Victim 1 (MV1). The three were questioned regarding drug related activity but were released and eventually followed to a room at a motel in Penfield, NY. Officers went to the room and knocked on the door. Kiwitt indicated that he was dating AV1 but knew her to be a prostitute who belonged to another pimp known to law enforcement. He denied any involvement in prostitution at that time. Officers did not make any arrests at the time.
On January 23, 2019, Rochester Police Department officers responded to a residence in the City of Rochester for the report of a fatal overdose involving MV1. The owner of the apartment found MV1 deceased on his living room floor and called 911. He told officers he met MV1 through AV1, and that the night before, he brought MV1 back to his residence to engage in commercial sex acts with her.
Subsequent cell phone and Facebook searches uncovered conversations between the defendant, AV1, and MV1 regarding prostitution activities. Investigators also uncovered naked photos, some of which depicted child pornography.
In June 2017, Kiwitt was convicted in Monroe County, NY, of Possession of a Sexual Performance by a Child, and sentenced to serve 10 years’ probation, and designated as a Level 1 Sex Offender.
The defendant was arraigned before U.S. Magistrate Judge Mark W. Pedersen and was detained.
The superseding indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the Monroe County Sheriff’s Office, under the direction of Sheriff Todd Baxter.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Farrell, PA Felon Charged with Illegal Possession of a Pistol and AmmunitionRead the Press Release
PITTSBURGH, PA. - A resident of Farrell, Pennsylvania has been indicted by a federal grand jury in Pittsburgh on a charge of possession of a firearm and ammunition by a convicted felon, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Darwin Lamel Green, 38, of Farrell, Pennsylvania as the sole defendant.
According to the Indictment, on or about July 30, 2019, Green, a convicted felon, unlawfully possessed a Spikes Tactical Crusader semi-automatic rifle, Ruger semi-automatic 9-millimeter caliber pistol, and numerous rounds of ammunition. The Indictment also alleges that the defendant had been convicted in October 2013 of possession with intent to deliver a controlled substance. Federal law prohibits an individual who has been convicted of a felony from possessing a firearm or ammunition.
The law provides for a maximum total sentence of 10 years in prison, a fine of not more than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Brendan Conway and David Lew are prosecuting this case on behalf of the government.
The Federal Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, and Pennsylvania Office of Attorney General conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Escondido Man Admits to Tax Evasion Scheme with Former Chabad of Poway RabbiRead the Press Release
Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Oleksandra Johnson (619) 546-9769
NEWS RELEASE SUMMARY – February 2, 2021
SAN DIEGO – Stuart Weinstock of Escondido pleaded guilty in federal court today to filing a false tax return as part of a years’ long tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein.
Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization. For approximately eight years, Weinstock made supposed “donations” to Chabad of Poway, and Rabbi Goldstein funneled approximately 75 percent of those “donations” back to Weinstock in cash, allowing Weinstock to evade more than $100,000 in taxes.
According to Weinstock’s plea agreement, between 2010 and 2018, Weinstock provided Rabbi Goldstein with at least approximately $872,815 in checks that fraudulently described the funds as “contributions,” “donations,” or “business expenses.” Weinstock gave these “donations” to Rabbi Goldstein monthly. Rabbi Goldstein then secretly returned 75 percent of the money, or approximately $654,611, to Weinstock. To do so, Rabbi Goldstein met with Weinstock in person at Weinstock’s home or business to pick up the checks and give cash back – less the rabbi’s 25 percent cut – to Weinstock in an envelope. Weinstock then falsely claimed on his tax returns that the full amount of his fraudulent donations were tax deductible donations or business expenses, thereby fraudulently reducing his taxes. Through this scheme, Weinstock avoided over $100,000 in taxes that he should have paid to the IRS.
In his plea agreement, Weinstock also admitted that in October 2018, one of Rabbi Goldstein’s acquaintances contacted Weinstock to tell him that Rabbi Goldstein had been arrested and that Rabbi Goldstein wanted to warn Weinstock not to accept any more envelopes. Weinstock understood this as a warning that the rabbi was cooperating with law enforcement and their future interactions could be recorded.
In July 2020, Rabbi Goldstein pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million dollar tax-evasion scheme and other financial deceptions involving theft of public money. Rabbi Goldstein’s plea agreement outlined the tax evasion scheme with Weinstock.
So far, 10 people have pleaded guilty to crimes discovered in this investigation, including Weinstock and two others who have agreed to deferred prosecution agreements. Rabbi Goldstein has agreed to cooperate with the ongoing investigation. He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on April 26, 2021.
“This was a deceptive, carefully-planned scheme and the victims are honest taxpayers,” said U.S. Attorney Robert Brewer. “Those who cheat the system by exploiting the tax-exempt status of non-profits and religious organizations will be held to account for their illegal conduct.” Brewer praised prosecutors Michelle Wasserman and Oleksandra Johnson and FBI and IRS agents for their excellent work on this case.
“Mr. Weinstock admitted that he broke the law and cheated the United States out of over $100,000, and in so doing, he also cheated honest taxpayers who pay their fair share,” said Special Agent in Charge Ryan L. Korner. “Mr. Weinstock’s tax evasion scheme spanned eight years, exploiting charitable giving laws and abusing a tax-exempt religious organization. IRS Criminal Investigation will pursue all who defraud the U.S. Treasury and we are committed to working with our law enforcement partners to uphold the law and protect our Nation’s tax and financial systems.”
“This years-long fraud and tax evasion scheme brought to light by this investigation has resulted in ten guilty pleas, including defendant Stuart Weinstock and previously convicted Rabbi Yisroel Goldstein,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office. “Dedicated FBI agents uncovered and worked diligently to piece together a complex financial scheme perpetrated by those who exploited a non-profit and religious organization to cheat a system designed to benefit those in need. As shown in this case, the FBI, working with our IRS and DOJ partners, will bring justice to those who commit fraud and cheat honest taxpayers.”
Stuart Weinstock is next scheduled to appear at a sentencing hearing on April 26, 2021 at 9 a.m. before Judge Bashant.
SUMMARY OF CHARGES Case Number 21CR0042-BAS
Stuart Weinstock Age: 64 Escondido, CA
Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)
Maximum Penalty: Three years in prison
PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Case Number 20CR1916-BAS Age: 58 Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Alexander Avergoon, Case Number 19CR2955-BAS Age: 44 San Diego
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison
Aggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prison
Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prison
Bruce Baker, Case Number 20CR1912-BAS Age: 74 La Jolla
Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Bijan Moossazadeh, Case Number 20CR1893-BAS Age: 63 San Diego
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Yousef Shemirani, Case Number 20CR1895-BAS Age: 74 Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Boris Shkoller, Case Number 20CR1913-BAS Age: 83 Del Mar
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Mendel Goldstein, Case Number 20CR2772-BAS Age: 63 Brooklyn, NY
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Rotem Cooper, Case Number 20CR3968-BAS Age: 54 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
Igor Shtilkind, Case Number 20CR3955-BAS Age: 55 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
INVESTIGATING AGENCIES
Internal Revenue Service
Federal Bureau of Investigation
Defendant Sentenced to Federal Prison for Threatening Agents with FirearmRead the Press Release
In San Antonio today, U.S. District Judge Fred Biery sentenced 45-year-old Luther Otis Foster IV, to a total of 90 months in federal prison followed by five years of supervised release for pointing a shotgun at federal agents during the execution of a search warrant at his Bandera County residence, announced U.S. Attorney Gregg N. Sofer and Drug Enforcement Administration Special Agent in Charge Steven S. Whipple, Houston Division.
According to court records, DEA agents executed a search warrant at Foster’s residence in Lakehills on July 21, 2016. Agents announced their presence and entered the residence. Upon entry, Foster leveled a shotgun at the agents and threatened them. Foster was shot and then taken to a nearby hospital for treatment. Inside Foster’s residence, agents discovered a large number of growing marijuana plants and discarded marijuana plant stalks.
“Pointing a weapon at or threatening a federal agent is never a wise choice,” stated U.S. Attorney Sofer. “It is fortunate that no one lost their life in this incident. Unfortunately, today in Florida, a similar scenario ended in heartbreaking tragedy. We should never forget the dangers our law enforcement officers face every day.”
On November 15, 2018, Foster pleaded guilty to one count of possession of a firearm in furtherance of a drug trafficking crime and four counts of assaulting a federal officer with a dangerous weapon.
The DEA investigated this case together with the Bandera County Sheriff’s Office and the Texas Department of Public Safety. Assistant U.S. Attorney John Gibson prosecuted this case on behalf of the government.
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Corporate insider sent to prisonRead the Press Release
CORPUS CHRISTI, Texas – A 42-year-old San Antonio man has been ordered to federal prison after he admitted to wire fraud that resulted in a loss of $1,878,615.84, announced U.S. Attorney Ryan K. Patrick.
Robert Morales Munguia Jr. pleaded guilty July 28, 2020.
Today, U.S. District Judge David Morales handed Munguia a 24-month sentence to be immediately followed by three years of supervised release. He was further ordered to pay a $1,878,615.84 in restitution. At the hearing, the court heard additional testimony from the victim describing the effect of the fraud on the corporation.
Munguia knowingly submitted false work orders to his company in order to receive gifts and payments from outside vendors. He also admitted he knew the work would never be completed.
From Feb. 27, 2015, until April 12, 2018, Munguia worked as an environmental specialist at a Texas-based corporation. During that time, he conspired with outside contractors to bill for 68 false work orders that were never completed. In return, he received various gifts and cash.
As a result of the scheme, the company paid almost $2 million.
Mungui was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The Secret Service conducted the investigation. Assistant U.S. Attorney (AUSA) Robert Thorpe and former AUSA Jeremy C. Fugate prosecuted the case.
Complaint Seeks Forfeiture of Iranian Oil Aboard Tanker Based on Connection to Terror GroupRead the Press Release
WASHINGTON – The United States filed a forfeiture complaint in the U.S. District Court for the District of Columbia alleging that all oil aboard a Liberian-flagged vessel, the M/T Achilleas (Achilleas), is subject to forfeiture based on U.S. terrorism forfeiture laws.
The complaint alleges a scheme involving multiple entities affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC) and the IRGC-Qods Force (IRGC-QF) to covertly ship Iranian oil to a customer abroad. Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, falsified documents, and other means, and provided a fraudulent bill of lading to deceive the owners of the Achilleas into loading the oil in question.
The complaint alleges in part that the oil constitutes the property of, or a “source of influence” over, the IRGC and the IRGC-QF, both of which have been designated by the United States as foreign terrorist organizations. The documents allege that profits from oil sales support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad.
“The U.S. Attorney’s Office for the District of Columbia will continue working with our law enforcement partners to stem the flow of illicit oil from Iran’s Islamic Revolutionary Guard Corps and Qods Force,” said Acting U.S. Attorney Michael R. Sherwin. “We will use all available tools, including our jurisdiction to seize and forfeit assets located abroad, to combat funding for terrorists and those who would do harm to the United States.”
“The forfeiture complaint filed today serves as a reminder that the IRGC and IRGC-QF continue to exert significant control over the sale of Iranian oil,” said Assistant Attorney General John C. Demers for the National Security Division. “As we have demonstrated in the past, the department will deploy all tools at its disposal to ensure that the IRGC and IRGC-QF cannot use profits from the sale of Iranian oil to fund terrorism and other activities that threaten the safety and security of all Americans.”
“This latest civil forfeiture action exemplifies the remarkable work of this multi-agency task force that works tirelessly toward furthering our shared goal of protecting the homeland from regimes that threaten our national security,” said Special Agent in Charge Peter C. Fitzhugh for the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), New York. “This investigation sends a message that the attempted circumvention of U.S. sanctions by the IRGC-QF will not be tolerated. HSI will continue to work with our partners and utilize the full scope of our authorities to disrupt the attempts of hostile countries and regimes to generate profits from oil sales used to support terrorism and the proliferation and delivery of weapons of mass destruction.”
“Iran uses profits from its petroleum sector to fund the malign activities of the IRGC-QF, a designated terrorist group,” said Special Agent in Charge Michael F. Paul of the FBI’s Minneapolis Field Office. “The FBI will continue to prioritize the enforcement of sanctions, and we applaud the efforts of our agents and partners on this investigation.”
A civil forfeiture complaint is merely an allegation. The United States bears the burden of proving that the oil in question is subject to forfeiture in a civil forfeiture proceeding. Funds successfully forfeited with a connection to a state sponsor of terrorism may in whole or in part be directed to the United States Victims of State Sponsored Terrorism Fund (http://www.usvsst.com/) after the conclusion of the case.
HSI New York and the FBI’s Minneapolis Field Office are leading the investigation of Iranian petroleum shipments. Assistant U.S. Attorneys Michael P. Grady and Brian P. Hudak of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney David Lim of the Counterintelligence and Export Control Section of the National Security Division are prosecuting the case, with support from Paralegal Specialist Brian Rickers and Legal Assistant Jessica McCormick of the U.S. Attorney’s Office for the District of Columbia. The Money Laundering and Asset Recovery Section’s Program Operations Staff of the Justice Department’s Criminal Division has provided extensive assistance throughout the investigation.
Columbus man indicted on methamphetamine chargeRead the Press Release
WHEELING, WEST VIRGINIA – Devante Crutez Taylor, of Columbus, Ohio, was indicted today on a drug charge, U.S. Attorney Bill Powell announced.
Taylor, 28, was indicted today on one count of “Possession with Intent to Distribute 50 Grams or More of Methamphetamine.” Taylor is accused of having 50 grams or more of methamphetamine in August 2019 in Ohio County.
The government is also seeking the forfeiture of $3,638 in cash found with Taylor that is believed to be proceeds from drug sales.
Taylor is facing at least 10 years and up to life incarceration and a fine of up to $10,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Wheeling Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Clinton Pharmacist Sentenced to 10 Years in Federal Prison for Conspiracy to Commit Health Care FraudRead the Press Release
Jackson, Miss. – Marco Bisa Hawkins Moran, 45, of Clinton, Mississippi, was sentenced today by U.S. District Judge Keith Starrett to 120 months in federal prison followed by 3 years of supervised release for conspiring to commit health care fraud, announced Acting U.S. Attorney Darren J. LaMarca, Special Agent in Charge Michelle Sutphin of the Federal Bureau of Investigation in Mississippi, Special Agent in Charge James Dorsey of IRS Criminal Investigation (IRS-CI), Special Agent in Charge Cynthia Bruce of Defense Criminal Investigative Services (DCIS) Southeast Field Office, and Director Steven Maxwell of the Mississippi Bureau of Narcotics (MBN).
Moran was also ordered to pay a monetary judgment of $12,195,740, restitution in the amount of $22,096,697, and a $20,000 fine.
Between 2014 and 2016, Moran, as co-owner of Medworx Compounding and Custom Care Pharmacy, participated in a scheme to defraud TRICARE and other health care benefit programs, including those that provided coverage to employees of the City of Jackson, Mississippi. In total, the pharmacies submitted $22,068,144 in fraudulent claims to Tricare and other health care benefit programs. As part of the scheme, Moran and his co-conspirators, among other things, adjusted prescription formulas to ensure the highest reimbursement, paid marketers and physicians kickbacks and bribes to obtain prescriptions for high-yield compounded medications irrespective of whether they were medically necessary, and routinely waived and/or reduced the collection of copayments.
Moran was charged in a Criminal Information and pled guilty before Judge Starrett on September 13, 2018.
The FBI’s Jackson Field Office investigated the case with assistance from the IRS-CI, DCIS, and MBN. Principal Assistant Deputy Chief Dustin M. Davis and Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi prosecuted the case.
Cleveland man sentenced to 10 years for cocaine distributionRead the Press Release
WHEELING, WEST VIRGINIA – Clarence Maceo Carter, Jr., of Cleveland, Ohio, was sentenced today to 120 months of incarceration for a drug charge, U.S. Attorney Bill Powell announced.
Carter, also known as “Moe,” age 34, pleaded guilty to one count of “Possession with Intent to Distribute Cocaine Base” in July 2020. Admitted to having cocaine base, also known as “crack,” in Ohio County in February 2020.
Later testing of drugs found in Carter’s possession indicated 26 grams of fentanyl, enough to kill 8,000 people
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Ohio Valley Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the Wheeling Police Department investigated.
U.S. District Judge John Preston Bailey presided.
Chicago Man Charged in Federal Court with CarjackingRead the Press Release
CHICAGO — A Chicago man has been charged in federal court with carjacking for allegedly violently taking a vehicle from a victim last summer.
OMARION FRANKLIN, 18, carjacked an Infiniti G35 sedan from a victim in Skokie on July 12, 2020, according to an indictment returned Monday in U.S. District Court in Chicago. The indictment charges Franklin with one count of carjacking, which is punishable by up to 15 years in federal prison.
Franklin is currently in law enforcement custody. Arraignment in U.S. District Court in Chicago has not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. Valuable assistance was provided by the Cook County State’s Attorney’s Office, Skokie Police Department, and Chicago Police Department. The government is represented by Assistant U.S. Attorney Michael Kelly.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Cherokee County Domestic Violence Offender Sentenced for Possessing FirearmRead the Press Release
TYLER, Texas – A 53-year-old Rusk, Texas man has been sentenced to prison for a federal firearms violation in the Eastern District of Texas, announced Acting United States Attorney Nicholas J. Ganjei.
Larry Van Butcher, a.k.a. “Red,” pleaded guilty on Oct. 29, 2020, to being a prohibited person in possession of a firearm and was sentenced to 21 months in federal prison by United States District Judge Jeremy D. Kernodle today.
“Domestic violence offenses represent a significant public safety concern in our communities, and, in the most tragic circumstances, result in a pattern of abuse and escalating violence,” said Acting United States Attorney Nicholas Ganjei. “Restricting domestic violence offenders from possessing the tools to perpetrate similar or more severe crimes is a priority for the Department of Justice.”
According to information presented in court, on Nov. 5, 2019, Butcher was interviewed by law enforcement about illegal drug and firearms activities occurring at his residence. After confessing to using methamphetamine and marijuana as well as possessing numerous firearms, Butcher admitted that he had been previously convicted in Cherokee County, Texas, for the misdemeanor offense of Assault Family Violence, which is a crime of domestic violence resulting in a federal prohibition on possessing firearms. Butcher advised that he knew he was prohibited from possessing firearms and could not purchase firearms for himself. Law enforcement officers then traveled to Butcher’s residence and seized 20 firearms, including two that had been reported stolen. Butcher was indicted by a federal grand jury on June 18, 2020, and charged with federal firearms violations.
This case is a 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 un 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. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the Texas Department of Public Safety; the Smith County Sheriff’s Office; and the Tyler Police Department. This case was investigated by and is prosecuted by Assistant United States Attorney Lucas Machicek.
Champaign Man Pleads Guilty to Inciting RiotRead the Press Release
URBANA, Ill.– A Champaign, Ill., man, Shamar N. Betts, 20, today pleaded guilty to inciting a riot in Champaign, Ill., that began on May 31 and continued overnight to June 1, 2020. Sentencing has been scheduled on June 14, 2021.
In court today, before U.S. Magistrate Judge Eric I. Long, Betts admitted to his role in inciting the riot that began at Market Place Mall and spread to area businesses and moved to the commercial area of North Prospect Ave.:
On May 31, 2020, at 10:31 a.m., Betts posted a statement to Facebook and attached a flyer of a stock image of a burning vehicle overlaid with a date and time: “RIOT @ MarketPlace Mall, Time: 3.” The flyer listed items to bring including “friends, family, posters, bricks, bookbags, etc.” In a post accompanying the flyer, Betts wrote, in part, “We gotta put Champaign/Urbana on the map - expletive – gone hear and fear us too. SLIDE let’s get busy.”
Before 3:00 p.m., Champaign Police Department officers went to Market Place Mall to attempt to prevent a riot. When officers arrived, approximately 50 to 75 people had gathered. The group continued to grow in number, and at approximately 3:12 p.m., the group began breaking out windows at businesses located in the mall, including Old Navy and Macy’s, and looting merchandise from within. Betts is pictured in video footage of the riot exiting the Old Navy store with a handful of clothing items.
During the riot, Betts also used his cell phone to make and post a Facebook Live video. The video depicts Betts carrying multiple items, including numerous pairs of khaki pants with Old Navy tags attached. Betts is heard in the video repeatedly stating, “We out here…” In another video, taken by a bystander, Betts is seen carrying multiple items, including khaki pants, and walking from Old Navy. As Betts walked by the bystander, he stated, “I started this s---.” Betts also used his cell phone during the riot to instigate others to join or to brag about starting the riot including statements such as “I started this,” and “Are you sliding to my riot?”
Dozens of off-duty officers were called to the riot where there were multiple assaults of officers and intense confrontations with the police by the group. This activity continued throughout the night and into the early morning hours of June 1, 2020. By the end of the night, approximately 50 businesses in the area had been vandalized and / or looted, including multiple small businesses that were set to reopen on June 1, after being shut down due to the COVID-19 pandemic.
Further, Betts admitted that after the riot, he fled to Mississippi where he used his cell phone to conduct internet searches such as, “can police find your location by logging in messenger,” “can police track your facebook,” and “what are charges for starting a riot.”
Betts was arrested in Mississippi on June 5, 2020, by the U.S. Marshals Service Gulf Coast Regional Fugitive Task Force.
The Champaign Police Department and the Federal Bureau of Investigation, Springfield Division, conducted the investigation in coordination with the Champaign County State’s Attorney’s Office. Supervisory Assistant U.S. Attorney Eugene L. Miller is representing the government in the prosecution.
For the offense of inciting a riot, the statutory penalty is up to five years in prison, a fine of up to $250,000, and three years of supervised release following imprisonment.
Following today’s hearing, Betts was remanded to the custody of Champaign County, where he is being held on related burglary charges.
Canton Felon Sentenced to 30 Months for Possessing Firearm under Project EJECTRead the Press Release
Jackson, Miss. – Xavier D. Cooper, 27, of Canton, was sentenced today by Senior U.S. District Court Judge David C. Bramlette III to 30 months in prison, followed by 3 years of supervised release, for being a felon in possession of a firearm, announced Acting U.S. Attorney Darren LaMarca and Special Agent in Charge Michelle A. Sutphin of the Federal Bureau of Investigation. Cooper was also ordered to pay a $1500 fine.
On May 22, 2017, during a traffic stop in Clinton, Mississippi, Clinton Police Department officers discovered Cooper was in possession of a Romarm/Cugir semi-automatic pistol, coupled with an extended magazine and a round “drum” magazine. Cooper had been previously convicted of felonies in both Copiah and Hinds Counties.
Cooper was indicted on March 5, 2019 and pled guilty before Judge Bramlette on October 27, 2020.
This case was investigated by the Clinton Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Andrew W. Eichner.
This case was 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.
Broken Arrow Resident Pleads Guilty to Robbery in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Conrad Edward Nedd, age 36, of Broken Arrow, Oklahoma entered a guilty plea to Robbery In Indian Country, in violation of Title 18, United States Code, Sections 2111, 1151 and 1153, punishable by not more than 15 years imprisonment, a fine up to $250,000.00, or both.
The Indictment alleged that on or about May 29, 2020, within the Eastern District of Oklahoma, in Indian Country, the defendant, an Indian, by force, violence, and intimidation, did take and attempt to take items of value from K.H.’s person and presence.
The charges arose from an investigation by the Wagoner County Sheriff’s Office the Broken Arrow Police Department, and the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Special Assistant United States Attorney Robert Reeves represented the United States.
Bozeman doctor sentenced, fined $150,000 for illegal drug dispensing at weight loss clinicsRead the Press Release
BILLINGS — A Bozeman doctor who admitted illegally dispensing appetite suppressants without seeing clients at clinics in Bozeman and Billings was sentenced today to three years of probation and fined $150,000, Acting U.S. Attorney Leif Johnson said.
Dr. Ronald M. Buss, 71, pleaded guilty on Oct. 1, 2020 to an information charging him with two counts of unlawful dispensing and distribution of controlled substances by registrant, a misdemeanor.
U.S. Magistrate Judge Timothy J. Cavan presided. Judge Cavan further prohibited Dr. Buss from personally dispensing or prescribing three weight loss drugs involved in the case for the duration of his probation.
Court documents filed by the prosecution said that in 2009, Buss became the medical director for Go Figure, a weight loss clinic in Bozeman, and a year later became the director for Go Figure in Billings. Buss is registered with the Drug Enforcement Administration and is authorized to dispense controlled substances.
Go Figure prescribed three types of weight loss drugs: Phendimetrazine and Benzphetamine, both Schedule III controlled substances, and Phentermine, a Schedule IV controlled substance.
In August 2016, the Billings DEA received information from a pharmacist that Go Figure was illegally dispensing these appetite suppressants from its clinic. In July 2016, Buss began pre-signing prescriptions for Go Figure staff to complete. An employee at the Billings clinic told investigators Buss pre-signed prescriptions for new and current clients, and that staff would choose one of the three drugs and complete the written prescription.
At the Bozeman clinic an employee told law enforcement that she was a "consultant" who met with patients and prescribed controlled substances on blank, pre-signed prescriptions from Buss. Patients confirmed to DEA investigators that they rarely, if ever, met with Buss.
When interviewed, Buss admitted to investigators to pre-signing blank prescriptions and not seeing patients until after they started taking the drugs. Buss claimed that was only way to run the practice effectively.
Assistant U.S. Attorney Karla Painter prosecuted the case, which was investigated by the Drug Enforcement Administration.
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Beaver, PA Man Charged with Making a False Statement to a Firearms DealerRead the Press Release
PITTSBURGH, PA – A resident of Beaver, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of violating federal firearm laws, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Calvin Brady, Jr., age 24, of Beaver, Pennsylvania, as the sole defendant.
According to the Indictment, on December 12, 2020, Brady, Jr. knowingly made a false statement to a federally licensed firearms dealer in order to purchase firearms for others.
The law provides for a maximum total sentence of not more than ten years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan J. McKenna is prosecuting this case on behalf of the government.
The Federal Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the Indictment in this case. This case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bandidos member gets enhanced federal sentence after obstructing justiceRead the Press Release
McALLEN, Texas – A 53-year-old Los Ebanos resident has been ordered to federal prison for his role in a conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick along with Acting Special Agent in Charge Craig Larrabee of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
Benito Lopez III aka Chamuco, identified as a member of the Bandidos Outlaw Motorcycle Organization, pleaded guilty Feb. 3, 2020.
Today, U.S. District Judge Micaela Alvarez handed him an 82-month term of imprisonment to be immediately followed by three years of supervised release. The court found Lopez responsible for smuggling 25-99 undocumented aliens over the course of a four-month conspiracy. Additionally, he had created a substantial risk of death or serious bodily injury based on the conditions in which he housed the undocumented aliens. Judge Alvarez enhanced the sentence, finding Lopez obstructed justice by providing detailed confidential information to co-conspirators regarding the investigation. He was also in possession of firearms and used minors during and in furtherance of the conspiracy.
At the hearings, which took place over the course of two days – Nov. 3, 2020, and today - the court heard how Lopez seriously jeopardized an ongoing investigation into an organization capable of smuggling hundreds of undocumented aliens through the Los Ebanos area. The court also heard testimony regarding the extensive surveillance system he utilized to conduct counter-surveillance of law enforcement in order to further the conspiracy.
In handing down the sentence, Judge Alvarez noted how Lopez endangered others, both during the conspiracy and while on bond. She stated she needed to impose a sentence to promote respect for the rule of law and deter his future criminal conduct.
“HSI is dedicated to working closely with all of our law enforcement partners to effectively identify, arrest and prosecute individuals involved in exploiting people,” said Larrabee. “Criminals who illegally smuggle people into and throughout the country place personal profit ahead of public safety. For this reason, HSI will continue to utilize its broad authorities to dismantle human smuggling organizations."
On Oct. 1, 2019, authorities conducted surveillance on what they suspected to be an alien stash house located across the street from the Rio Grande river in Los Ebanos. There, they observed several suspected undocumented aliens fleeing from the location. Law enforcement quickly apprehended a total of seven of the individuals, all determined to be aliens illegally present in the United States.
At that time, they identified Lopez as the caretaker of the stash house where he held them in a 5-by-8 foot dilapidated bathroom with no electricity, anything to eat or drink or running water for approximately 12 hours before they managed to escape.
Law enforcement arrested Lopez at the stash house on Oct. 4 for his role in the conspiracy. He he was paid for each undocumented alien successfully crossed from Mexico and out of the Los Ebanos area.
Lopez has been in custody since he violated his conditions of release where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI and Border Patrol conducted the investigation. Assistant U.S. Attorney Matthew Redavid prosecuted the case.
Baltimore Drug Dealer Sentenced to 30 Years in Federal Prison for a 2017 Execution-Style Murder Linked to Drug Turf WarRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Cortez Weaver, a/k/a Corty and Tez, age 29, of Baltimore, Maryland, to 30 years in federal prison, followed by five years of supervised release, for possessing, brandishing, and discharging a firearm in furtherance of a drug trafficking crime, resulting in the death of Maurice Finney.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Commissioner Michael Harrison of the Baltimore Police Department.
“Disputes between rival drug gangs lead to many shootings and murders in Baltimore City,” said United States Attorney Robert K. Hur. “Drug traffickers must know that gun crime will lead to federal time, which has no parole—ever. We will continue to work with our law enforcement partners to remove those who would commit violence from our community.”
“Turf war gang violence is a serious threat to our communities and we are using the power of partnerships to combat and thwart that threat,” said Jennifer C. Boone, Special Agent in Charge of the FBI Baltimore Field Office. “The lengthy federal sentence Cortez Weaver received today sends a strong message that the FBI and our law enforcement partners will not tolerate illegal guns, drugs and violence on our streets.”
According to Weaver’s guilty plea, Weaver was a member of a drug trafficking organization (DTO) that distributed heroin and crack cocaine in the Abington Avenue area of Baltimore. Beginning in approximately mid-July 2017, the Abington Avenue DTO became involved in a dispute with a rival DTO over who could sell drugs at a gas station at the intersection of Baltimore Street and Hilton Avenue. As a result of the dispute, on July 14, 2017, a member of the rival DTO shot and killed a member of the Abington Avenue DTO.
As detailed in his plea agreement, on July 17, 2017, Weaver and another member of the Abington Avenue DTO went to the gas station to retaliate against members of the rival DTO. There, they encountered Maurice Finney, a/k/a Mitch. Weaver murdered Finney, shooting him in the head at close range with a .40-caliber handgun. Weaver also attempted to murder Victim 2, chasing him across Hilton Avenue while firing multiple shots at him. Meanwhile, Weaver’s co-conspirator attempted to murder Victim 3, shooting him multiple times with a 9mm handgun and causing life-threatening injuries. The shootings were captured on surveillance cameras at the gas station. Afterward, Weaver sent his co-conspirator a text message directing him to burn the clothes he had been wearing during the incident.
In November 2018, a confidential informant (CI) met with Weaver and recorded the conversation. During their recorded conversation, Weaver confessed that he had killed Maurice Finney and described the murder using specific details that were consistent with the surveillance footage and other physical evidence recovered during the investigation. For instance, Weaver explained that he wore a “scully cap” and “skipped down on” the victim (which was corroborated by the surveillance footage), and that he shot the victim “one time” using a “40” (which was corroborated by the physical evidence from the scene).
During the same recorded conversation, the CI told Weaver about a potential robbery of a drug stash house. Weaver agreed to carry out the robbery, stating that he had been committing other such robberies with another member of the Abington Avenue DTO. Weaver showed the CI a .45-caliber firearm and talked about owning other firearms, including a “357” and a “40.” Unbeknownst to Weaver, the robbery opportunity was a fiction and the drug stash house did not exist.
In January 2019, Weaver was introduced to an undercover Baltimore Police Officer (the UC) posing as a drug dealer who wanted to rob his source of supply of three kilograms of heroin. During the meeting, which was recorded, Weaver confirmed his desire to commit the robbery, and described another drug robbery he had committed in the recent past. Weaver also stated that he intended to kill the individuals who were guarding the stash location. Weaver told the UC, “Nobody coming out of there alive . . . All I gotta do is get in and waste ‘em.” Weaver had two additional meetings with the UC to discuss the robbery logistics, including how to break down and distribute the heroin they planned to steal. Weaver brought co-conspirators to both of these meetings, and they also agreed to assist with the robbery.
On March 7, 2019, Weaver and three co-conspirators met the UC to commit the robbery. Weaver and the co-conspirators were arrested. Law enforcement searched Weaver and his vehicle, recovering a loaded .357 revolver, 11 pink-top vials of suspected cocaine, a mask, and gloves. From the co-conspirators and their vehicle law enforcement recovered two masks, a 9mm handgun loaded with 10 rounds of ammunition, including a round in the chamber, and two pairs of gloves.
Weaver admitted that from at least July 2017 through March 7, 2019, he conspired to distribute heroin and crack cocaine in Baltimore, and that it was foreseeable to Weaver that the members of the conspiracy would distribute between three and eight kilograms of heroin.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
United States Attorney Robert K. Hur commended the FBI and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Christina A. Hoffman and Peter J. Martinez, who prosecuted the case.
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Acting Attorney General Monty Wilkinson Issues Statement on the Shootings of FBI Special Agents in FloridaRead the Press Release
This morning FBI Special Agent Daniel Alfin and Special Agent Laura Schwartzenberger were killed in the line of duty and three other agents were wounded while executing a federal court-ordered search warrant in a crimes against children investigation in Sunrise, Florida. Acting Attorney General Monty Wilkinson issued the following statement:
“We mourn the tragic loss of two of our FBI colleagues who were killed today in the line of duty,” said Acting Attorney General Monty Wilkinson. “Our thoughts are with their families and loved ones and with their three colleagues who were shot in today’s devastating events. On this dark day, we pay tribute to the brave men and women of the FBI who put their lives on the line every day in support of our mission. We will never forget the ultimate sacrifice made by these special agents.”
16 Plead Guilty in Coast Guard Test Score-Fixing SchemeRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced the guilty pleas of 16 defendants related to a test score-fixing scheme at a United States Coast Guard exam center.
The Honorable Barry W. Ashe accepted the pleas on January 20, 27, and 28, 2021, with each of the following defendants pleading guilty to unlawfully receiving an officer-level mariner license: JONATHAN ABBEY, RAFAEL ATKINS, ANTHONY BROWN, CHARLES FRANKS, JERRY FUDGE, DAVID GALVAN, JUSTIN GANDY, CARDELL HUGHES, EDWARD JONES, BRANDON MACK, HUGO MARQUEZ, MILES MARTS, DEVERICK MORROW, OCTAVIAN RICHARDS, ANTWAINE TRAVIS, and ROBERT WINTERS.
As admitted during their guilty pleas, these defendants obtained licenses by paying for false Coast Guard exam scores. The exams were designed to test their knowledge and training to safely operate under the authority of the licenses.
According to court filings, the fraudulently obtained licenses included, among others, those authorizing mariners to serve as the master of vessels of any tonnage in any waters, to serve as the chief mate of vessels of any tonnage in any waters, and to serve as the first assistant engineer of vessels of any horsepower in any waters. The master, also known as the captain, is the officer having command of a vessel and is ultimately held responsible for the safety of the crew, vessel, cargo and all aspects of the vessel’s operation. The chief mate of a vessel is the officer in charge of the deck department and is typically is responsible for navigation, keeping watch of the bridge, cargo, stability calculations, being the medical person in charge, and assuming command of the vessel if the master is unable to fulfill his duties. The first assistant engineer of a vessel is typically responsible for the upkeep of machinery, the manning and supervision of the engine room, and keeping watch of the engine room.
As alleged in the indictment, these defendants’ false scores were entered by Coast Guard credentialing specialist DOROTHY SMITH. The indictment alleges that SMITH accepted bribes in exchange for entering passing test scores and used a network of intermediaries to connect her to license applicants. The United States Attorney’s Office reiterated that the indictment’s allegation against SMITH is merely a charge and her guilt must be proven beyond a reasonable doubt.
Judge Ashe set sentencing dates for April and May, 2021. The maximum penalty for each conviction is five years’ imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
This case is being investigated by the Coast Guard Investigative Service. Assistant U.S. Attorney Chandra Menon is in charge of the prosecution.
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Monday 1 February 2021
Youngstown man charged with possession of explosive devices and illegal firearmRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced today that a federal grand jury in Cleveland returned a three-count indictment charging Oliver Smith, age 51, of Youngstown, Ohio, with possession of explosive devices, felon in possession of a firearm and possession of an unregistered silencer.
“This defendant allegedly possessed multiple, functional improvised explosive devices that presented a significant and unacceptable threat to others,” said Acting U.S. Attorney Bridget M. Brennan. “We are incredibly grateful to law enforcement for safely locating and securing these devices before anyone was seriously injured or killed.”
"This individual acquired dangerous explosive materials and firearms which he was prohibited from possessing,” said FBI Special Agent in Charge Eric B. Smith. “As in this case, the FBI encourages the public to report information like this to law enforcement and to stay alert for suspicious or criminal activity."
According to court documents, in October of 2020, the Adult Parole Authority (APA) and law enforcement agents learned that the defendant allegedly had in his possession a firearm with an attached silencer at his Youngstown-area residence. At the time of the incident, the defendant was on Community Control under the supervision of the APA related to a previous conviction of drug possession and was prohibited from possessing a firearm due to a previous conviction of aggravated assault.
Law enforcement agents conducted a home visit and searched the defendant’s residence under the authority of the APA. The affidavit in support of the criminal complaint states that during the search, law enforcement officers located and seized multiple rounds of ammunition and a firearm with an attached silencer that was not registered in the National Firearms Registration and Transfer Record, as required by law.
After learning more information about additional potential weapons in the defendant’s residence, law enforcement agents with the FBI executed a second search of the property. Officers recovered two arrows, which were allegedly modified and filled with explosive powder, wrapped in tape with nails, and tipped with detonators. Upon examination by FBI agents trained in explosive devices, these arrows were determined to be functional and could explode on impact.
Additionally, agents recovered two devices allegedly filled with explosive powder and ball bearings. Upon examination by FBI agents trained in explosive devices, these devices were determined to be functional and would explode upon electrical initiation, propelling the ball bearings as shrapnel.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
This case was investigated by the APA and the FBI. This case is being prosecuted by Assistant United States Attorney Duncan T. Brown.
Wilmington Daycare Owner Federally Indicted on Financial ChargesRead the Press Release
WILMINGTON, Del. – A federal grand jury returned an indictment on January 26, 2021, charging the owner and operator of a Wilmington daycare center with one count of wire fraud, one count of theft of government money, and three counts of tax evasion.
According to the indictment, Brenda Mathis, 56, inflated attendance records for her daycare center, L.J.’s Playpen Academy, Inc., to increase subsidies and payments she received from two federally-funded programs: Purchase of Care and Delaware Stars for Early Success. The Purchase of Care Program helps eligible, low-income families pay for childcare by providing subsidies to a daycare provider of the families’ choice. The Delaware Stars for Early Success Program disperses payments to daycare providers based on the quality of service.
According to the indictment, Ms. Mathis also under-reported the income from the daycare center, including the income received from these programs, on corporate tax returns for tax years 2015 through 2017.
Ms. Mathis is charged with one count of Wire Fraud, one count of Theft of Government Money, and three Counts of Tax Evasion. If convicted on the Wire Fraud count, Ms. Mathis faces a maximum penalty of 20 years in prison and a $250,000 fine. If convicted on the Theft of Government Money count, Ms. Mathis faces a maximum penalty of 10 years in prison and a $250,000 fine. The Tax Evasion counts each carry a maximum penalty of 5 years in prison and a $250,000 fine. A federal district court judge will determine any sentence after taking into account the U.S. sentencing guidelines and other statutory factors.
David C. Weiss, U.S. Attorney for the District of Delaware, made the announcement and gave the following comment, “The defendant is charged with defrauding and stealing from federally-funded programs designed to ensure that families in Delaware receive affordable and high quality care for their children. She further increased her ill-gotten gains by failing to pay taxes on the stolen money. My office is committed to prosecuting those who illegally collect government funds for their own benefit, especially when those funds are stolen from programs meant to help Delaware’s children.”
"Tax violations have been erroneously referred to as victimless crimes, but it's the honest law-abiding citizen who is harmed when people try to shirk their tax liability," said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “Today, Brenda Mathis stands accused of doing just that; attempting to evade her tax liabilities. Those Americans who file accurate tax returns and pay their fair share can be assured that the government will hold accountable those who don't."
"The Department of Health and Human Services provides federal funding for daycare services to help children and their families," said HHS-OIG Special Agent in Charge Maureen Dixon. “HHS-OIG will continue to work with our law enforcement partners to ensure the integrity of these important federal grant programs.”
USDA Office of Inspector General, Special Agent-in-Charge Bethanne M. Dinkins stated, “Those who are involved in fraud and abuse of USDA feeding programs will be investigated by our office to the fullest extent. Our joint investigation with the U.S. Department of Health and Human Services, OIG, IRS Criminal Investigation, and FBI identified those who sought to profit through illegal schemes. The USDA Office of Inspector General will continue to dedicate investigative resources, working with our law enforcement and prosecutorial partners, to protect the integrity of these programs and bring to justice those who commit fraud.”
“When people steal from programs like these, social service programs suffer across the state of Delaware and tax payers’ funds are illegally diverted to those seeking to enrich themselves personally,” said Jennifer C. Boone, Special Agent in Charge of the FBI Baltimore Field Office. “The FBI is grateful for the cooperation and hard work of the many agencies in this case and we will continue to work together to aggressively target fraud in public programs.”
This case was investigated by IRS Criminal Investigation, U.S. Health and Human Services Office of the Inspector General, U.S. Department of Agriculture Office of the Inspector General and the FBI. This case is being prosecuted by Assistant U.S. Attorneys Lesley F. Wolf and Ruth E. Mandelbaum.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the U.S. District Court for the District of Delaware or on PACER.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Westerly Station Included in Justice Department Settlement with Amtrak over Disability Access: $2.25 Million Fund AvailableRead the Press Release
Amtrak has begun accepting claims for monetary compensation for people with mobility disabilities who traveled or wanted to travel from or to one of the 78 stations listed below, including the Westerly, Rhode Island station. Claims must be submitted by May 29, 2021.
On Dec. 2, 2020, the Department of Justice and Amtrak, the National Railroad Passenger Corporation, entered into an agreement to resolve the department’s findings of disability discrimination in violation of the Americans with Disabilities Act (ADA). Under the agreement, Amtrak will fix inaccessible stations and pay $2.25 million to victims hurt by inaccessibility at the 78 stations listed below.
To be eligible for monetary compensation, an individual must:
- Have a mobility disability;
- Be harmed physically or emotionally because of accessibility issues, including, for example, inaccessible parking; steep slopes or steps to get to the station; lack of directional signs; toilet rooms with inaccessible entrances, stalls, or sinks; high ticket counters; deteriorated platforms; and narrow routes at stations, at one or more the stations listed below between July 27, 2013, and Dec. 2, 2020;
- Have lived at, visited, or desired to visit a place closer to one or more of the stations listed below than an accessible, alternative Amtrak station; and
Submit a claim form and declaration by mail, fax, email or online to the claims administrator by no later than May 29, 2021. Help is available from the settlement administrator for those who are unable to complete the claim form due to a disability.
Questions about making claims should be directed to the settlement administrator by any of the following methods:
Online: AmtrakDisabilitySettlement.com
Email: [email protected]
Telephone (toll-free): 1-888-334-6165
TTY Telephone (toll-free): 1-866-411-6976
Questions about making claims should be directed to the settlement administrator by any of the following methods:
• Online: AmtrakDisabilitySettlement.com
• Email: [email protected]
• Telephone (toll-free): 1-888-334-6165
• TTY Telephone (toll-free): 1-866-411-6976
Under the agreement, Amtrak has committed to make its intercity rail stations accessible, prioritizing stations with the most significant barriers to access. Over the next 10 years, Amtrak will design at least 135 stations to be accessible, complete construction at 90 of those stations, and have at least 45 more under construction. Amtrak will also train staff on ADA requirements and implement an agreed-upon process for accepting and handling ADA complaints. As part of this commitment, Amtrak recently established an Office of the Vice President of Stations, Properties & Accessibility to coordinate its compliance with the ADA.
The 78 stations are:
• Tuscaloosa, Alabama
• Yuma, Arizona
• Fort Morgan, Colorado
• Glenwood Springs, Colorado
• Granby, Colorado
• Old Saybrook, Connecticut
• Windsor, Connecticut
• Windsor Locks, Connecticut
• Newark, Delaware
• Gainesville, Georgia
• Jesup, Georgia
• Toccoa, Georgia
• Centralia, Illinois
• Effingham, Illinois
• Gilman, Illinois
• Homewood, Illinois
• Mattoon, Illinois
• Plano, Illinois
• Princeton, Illinois
• Rantoul, Illinois
• Summit, Illinois
• Connersville, Indiana
• Crawfordsville, Indiana
• Elkhart, Indiana
• Hammond-Whiting, Indiana
• Waterloo, Indiana
• Burlington, Iowa
• Creston, Iowa
• Mount Pleasant, Iowa
• Newton, Kansas
• Topeka, Kansas
• Maysville, Kentucky
• South Shore-South Portsmouth, Kentucky
• Lake Charles, Louisiana
• Aberdeen, Maryland
• Cumberland, Maryland
• Niles, Michigan
• Detroit Lakes, Minnesota
• St. Cloud, Minnesota
• Staples, Minnesota
• Picayune, Mississippi
• Kirkwood, Missouri
• La Plata, Missouri
• Poplar Bluff, Missouri
• Cut Bank, Montana
• East Glacier Park, Montana
• Malta, Montana
• Holdrege, Nebraska
• Elko, Nevada
• Hudson, New York
• Plattsburgh, New York
• Port Henry, New York
• Devils Lake, North Dakota
• Coatesville, Pennsylvania
• Downingtown, Pennsylvania
• Johnstown, Pennsylvania
• Lewistown, Pennsylvania
• Parkesburg, Pennsylvania
• Westerly, Rhode Island
• Dillon, South Carolina
• Alpine, Texas
• Marshall, Texas
• McGregor, Texas
• Helper, Utah
• Castleton, Vermont
• Montpelier, Vermont
• Ashland, Virginia
• Clifton Forge, Virginia
• Petersburg, Virginia
• Richmond Staples Mill Road, Virginia
• Bingen-White Salmon, Washington
• Kelso-Longview, Washington
• Wishram, Washington
• Charleston, West Virginia
• Harpers Ferry, West Virginia
• Hinton, West Virginia
• Columbus, Wisconsin
• Tomah, Wisconsin
This action was brought by the Disability Rights Section of the Justice Department’s Civil Rights Division. To read the settlement agreement, please click here, and to read the complaint, please click here.
For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
The U.S. Attorney’s Office for the District of Rhode Island is committed to investigating alleged violations of the Americans with Disabilities Act. Those interested in learning more about architectural barriers to access under the Americans with Disabilities Act may access www.ada.gov, visit the web site of the United States Attorney’s Office for the District of Rhode Island at www.justice.gov/usao-ri/civil-rights-enforcement, or call the Department of Justice’s toll-free information line at (800) 514-0301 or (800) 514-0383 (TTY). Information about filing a complaint, including instructions for filing a complaint online, can be found at www.ada.gov/filing_complaint.htm.
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Walton, Indiana Woman SentencedRead the Press Release
SOUTH BEND – Arielle Griffis, age 31, of Walton, Indiana, was sentenced by United States District Court Judge Damon R. Leichty upon her plea of guilty to being a felon in possession of a firearm, announced Acting U.S. Attorney Bell.
Griffis was sentenced to 100 months of in prison followed by 3 years of supervised release.
According to documents in this case, in January of 2020, Griffis was wanted on a warrant when she led law enforcement on a high-speed car chase. During the chase, she threw a firearm and methamphetamine out of the car. Griffis has several prior serious drug convictions.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant U.S. Attorney Frank E. Schaffer.
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U.S.-Based Promoter of Foreign Cryptocurrency Companies Charged in over $11 Million Securities Fraud SchemeRead the Press Release
A California man was charged in a complaint unsealed today for his alleged participation in a coordinated cryptocurrency and securities fraud scheme that used purported digital currency platforms and foreign-based financial accounts.
John DeMarr, 55, of Santa Ana, was charged in a complaint filed in the Eastern District of New York with one count of conspiracy to commit securities fraud. DeMarr made his initial appearance this afternoon before U.S. Magistrate Judge John D. Early of the Central District of California. Judge Early referred the case to the Eastern District of New York for further proceedings.
“The indictment alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”
“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.”
“Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage costing investors millions,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”
“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” said Special Agent in Charge Ryan Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “John DeMarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ DeMarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”
As alleged in the complaint, between 2017 and 2018, DeMarr conspired with others to defraud numerous victims of $11.4 million by inducing them to invest in their companies, “Start Options” and “B2G,” based on materially false and misleading representations. Start Options purported to be an online investment platform that provided cryptocurrency mining, trading, and digital asset trading services. B2G was purportedly an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trade digital and fiat currencies “on a secure, comprehensive platform.”
According to the allegations, however, both Start Options and B2G were fraudulent. In approximately December 2017, DeMarr and others began offering securities in the form of investment contracts to U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars, or Euros. To participate, investors had to deposit their funds for a specified contract period, after which they could purportedly withdraw their money at a significant profit.
Among other things, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and renovations to DeMarr’s home in California.
Similarly, according to the complaint, Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, as alleged in the indictment, the athlete had no involvement with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad.
As alleged, in or about late January 2018, rather than permitting Start Options investors to withdraw money from their accounts after the requisite time period, DeMarr and others required investors to roll over their accounts into an unregistered “initial coin offering,” or ICO, of B2G, the second of the two fraudulent companies in which DeMarr was involved. Among other fraudulent misrepresentations, DeMarr and others falsely told investors that the ICO would raise capital for the company to build an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trading. In truth, investors never actually received any digital tokens and funds from the offering were not used to develop the B2G platform.
According to the complaint, DeMarr and others also paid various promoters, including an actor famous for martial arts films made in the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate an “8000%” return for investors within one year, and that he was a participant in the ICO. DeMarr and others also created false press releases and whitepapers about B2G, fabricated B2G account statements, and refused to allow investors to withdraw their money.
As alleged in the complaint, DeMarr staged his own disappearance to avoid facing disgruntled B2G investors. DeMarr instructed others to release statements asserting that DeMarr had been assaulted and went missing in Montenegro, and telling B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. In truth, however, DeMarr did not disappear in Montenegro and instead was believed to be residing in California.
The charge in the complaint is based on allegations, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI and IRS-CI. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta, and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
U.S.-Based Promoter of Foreign Cryptocurrency Companies Charged in over $11 Million Securities Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, a complaint was unsealed charging John DeMarr with conspiracy to commit securities fraud for his alleged participation in a cryptocurrency and securities fraud scheme. DeMarr was arrested this morning in Santa Ana, California, and will make his initial appearance this afternoon in U.S. District Court for the Central District of California.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Kristi Koons Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the arrest and charge.
“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” stated Acting U.S. Attorney DuCharme. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.” Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.
“The complaint alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” stated Acting Assistant Attorney General McQuaid. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”
"Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage, costing investors millions," stated FBI Assistant Director-in-Charge Johnson. "Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”
“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” stated IRS-CI Special Agent-in-Charge Korner. “John Demarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ Demarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”
As alleged in the complaint, DeMarr, a promoter of several digital asset-related companies, conspired with others to defraud victims by inducing them to invest in two of his companies, “Start Options” and “B2G,” that purported to be online investment platforms providing digital asset trading services. Investments were accepted in Bitcoin, U.S. dollars or Euros for a specified contract period based on DeMarr’s false and misleading representations of significant profits, which he bolstered with bogus celebrity endorsements, false press releases and fabricated account statements. Instead of investing the funds in “Start Options” and” B2G,” DeMarr diverted the funds into other accounts he controlled and spent the money on a lavish lifestyle he maintained, which included the purchase of expensive jewelry, a Porsche and the remodeling of his California home.
Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, in fact, the athlete had no involvement with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars’ worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad.
According to the complaint, DeMarr and others paid various promoters, including an actor famous for appearing in martial arts films of the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate a massive return for investors within one year, and that he was a participant in the ICO.
In May 2018 to avoid facing disgruntled B2G investors, DeMarr attempted to feign his disappearance by directing others to release statements claiming that he had been assaulted to avoid facing disgruntled B2G investors. DeMarr directed others to release statements claiming that DeMarr had been assaulted and was missing in Montenegro, and instructing B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. Since his alleged disappearance, DeMarr has been residing in California.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta, and David C. Pitluck of the Eastern District of New York, assisted by EDNY Criminal Investigator Martin Sullivan, with Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section are prosecuting the case, Assistant U.S. Attorney Laura D. Mantell of the Eastern District’s Civil Division is handling forfeiture matters.
The Defendant:
JOHN DEMARR
Age: 55
Santa Ana, CaliforniaE.D.N.Y. Docket No.: 21-MJ-128
U.S. Attorney’s Office Collects Nearly $53 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2020Read the Press Release
WHEELING - U.S. Attorney Bill Powell announced today that the Northern District of West Virginia collected $52,693,826.90 in criminal and civil actions in Fiscal Year 2020. Of this amount, $443,308.84 was collected in criminal actions and $52,250,518.10 was collected in civil actions.
“Protection of the public involves more than prosecuting criminal defendants. Criminal forfeitures, civil collections, and civil judgements are very important, but often difficult, tasks. I commend my staff on the resolve to ensure that the public treasury saw this significant benefit,” said Powell.
The Justice Department collected more than $15.9 billion in civil and criminal actions in fiscal year (FY) 2020 ending Sept. 30, 2020. The $15,988,516,670 in collections in FY 2020 represents more than five times the approximately $3.2 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period. The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $13.5 billion in payments made directly to the Justice Department, and more than $2.4 billion in indirect payments made to other federal agencies, states and other designated recipients.
In 2020, the Northern District of West Virginia secured a $50 million settlement from Wheeling Hospital, Inc. The hospital agreed to pay the United States a total of $50,000,000 to resolve claims that it violated the False Claims Act by knowingly submitting claims to the Medicare program that resulted from violations of the Physician Self-Referral Law and the Anti Kickback Statute. The settlement was announced and paid in September 2020. Read more here: https://www.justice.gov/usao-ndwv/pr/west-virginia-hospital-agrees-pay-50-million-settle-allegations-concerning-improperIn a criminal action, former pharmacist Scott Tingler of Morgantown was ordered to pay more than $1.845 million in a money judgement and more than $500,000 in restitution to the IRS and former employees for his drug distribution and tax crimes. He was sentenced to 121 months in prison in January 2020.
Two Youngstown-area physicians indicted for health care fraud and kickback schemes; third charged by bill of informationRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced today that a grand jury sitting in Cleveland, Ohio returned an eleven-count indictment charging Samir Wahib, age 53, of Canfield, and Joni Canby, age 62, of Poland, for their roles in a scheme to defraud Medicare and Medicaid and obtain reimbursement for testing that was not medically necessary.
Michelle Kapon, age 41, of Youngstown, was also named in the indictment, but charged separately in a bill of information for conspiring with Wahib and Canby to accept kickbacks from Wahib.
“These defendants are physicians accused of orchestrating a scheme to defraud a tax-payer funded health care benefit program created to assist vulnerable populations,” said Acting U.S. Attorney Bridget M. Brennan. “Their alleged conduct, which included kickbacks and medically unnecessary testing, was designed specifically to enrich themselves. We are grateful for the hard work of the investigating agencies who, like us, are dedicated to bringing allegations of fraud and illegal kickbacks before the Court.”
“The payment of kickbacks is a corrupt and illegal practice that inappropriately influences an individual or entity’s capacity to make unbiased decisions, which is of particular concern in the health care environment,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General - Chicago Region. “Kickbacks can result in the overutilization of diagnostic testing and other services that ultimately lead to an increase in program costs, waste valuable tax-payer dollars, and can expose patients to medically unnecessary services. The OIG will continue to work with our law enforcement partners to ensure that those who choose to engage in this type of practice are held accountable.”
“These doctors schemed and defrauded a taxpayer-funded program that assists individuals in obtaining needed healthcare,” said FBI Special Agent in Charge Eric B. Smith. “Healthcare fraud is a concern to all of us; our tax dollars should be utilized responsibly, not to line the pockets of greedy physicians. The FBI will continue to work with our partners to ensure healthcare fraud is rooted out and those responsible answer in a court of law”
“Subjecting patients to unnecessary tests is bad medicine,” Ohio Attorney General Dave Yost said. “Stealing from taxpayer-funded healthcare while doing so is criminal, and that’s when we, and our federal law enforcement partners, come in.”
The indictment charges defendants Wahib and Canby with conspiring with Kapon to solicit, receive, offer and pay kickbacks in connection with a federal health care program; and it charges Wahib and Canby with conspiracy to commit health care fraud and health care fraud. Defendant Wahib is also charged with obstruction of a criminal investigation of federal health care offenses, as well as four additional counts of paying kickbacks in connection with a federal health care program. Defendant Canby is charged with two additional counts of receipt of kickbacks in connection with a federal health care program.
At the time of the allegations, Wahib was a Doctor of Osteopathic Medicine and an obstetrics and gynecological (“OBGYN”) specialist; Canby was a Doctor of Osteopathic Medicine and an OBGYN specialist and Kapon was a Doctor of Medicine. All three physicians were licensed in the State of Ohio and practiced medicine in the Youngstown area.
According to the indictment, Wahib is accused of conspiring, from March of 2014 through January of 2017, to pay kickbacks to Canby and Kapon to induce them to order gonorrhea and chlamydia testing to be performed by Wahib on specimens of Canby’s and Kapon’s patients. Wahib allegedly then billed and was paid by the federal government for this testing. Wahib and Canby are also accused of conspiring, through this scheme, to test Canby’s and Wahib’s patients when it was medically unnecessary to do so.
The indictment alleges that Wahib paid Canby and Kapon per specimen that they sent to him for testing. Wahib would then submit claims for reimbursement through the Medicaid and Medicare programs. Furthermore, Wahib allegedly provided Kapon, who was not an OBGYN specialist, with compensation in kind in the form of supervision of her OBGYN treatment of patients at a Youngstown-area hospital.
Wahib allegedly paid kickbacks with checks drawn on his business checking account, which he attempted to disguise as “physician coverage” by noting this on the memo line of the checks. Wahib intended to make these checks appear that they were payment for Canby and Kapon having treated Wahib’s patients when he was unavailable. The indictment further states that an employee and relative of Wahib, working on his behalf, provided Canby and Kapon with the necessary supplies to collect and retrieve the specimens. That employee would also retrieve the specimens from Canby’s and Kapon’s offices and perform testing of the specimens on a specialized machine at Wahib’s medical office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the United States Department of Health and Human Services - Office of Inspector General, the FBI, and the Healthcare Fraud section of the Ohio Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney Brendan O’Shea, and Special Assistant U.S. Attorney Jonathan Metzler of the Ohio AG’s Office.
Two Women Indicted on Charges Stemming from $100 Million Home Health Care Fraud and Money Laundering SchemeRead the Press Release
BOSTON – Two women were arrested yesterday and charged in connection with a $100 million home health care fraud scheme. The government also filed a civil action seeking forfeiture of five properties and 40 financial accounts and investments involved in a scheme to launder the ill-gotten gains.
Faith Newton, 52, of Westford, and Winnie Waruru, 41, of Lowell, were each indicted on one count of conspiracy to commit health care fraud; one count of health care fraud – aiding and abetting; and one count of conspiracy to pay and receive kickbacks. Newton was also indicted on one count of money laundering conspiracy and seven counts of money laundering. In addition, Waruru was indicted on two counts of making false statements and one count of making a false statement in a health care matter. Newton and Waruru were arrested yesterday and will make an initial appearance in federal court in Boston today at 1:30 p.m.
According to the indictment, from January 2013 to January 2017, Newton was part owner and operator of Arbor Homecare Services LLC. Waruru was a Licensed Practical Nurse employed as a home health nurse at Arbor. It is alleged that Newton and Waruru engaged in a conspiracy to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to induce referrals. Newton then allegedly laundered the ill-gotten gains.
Specifically, it is alleged that Arbor, through Newton and others, failed to train staff, billed for home health services that were never provided or were not medically necessary and billed for home health services that were not authorized. Arbor, through Newton and others, developed employment relationships as way to pay kickbacks for patient referrals, regardless of medical necessity requirements. They also entered sham employment relationships with patients’ family members to provide home health aide services that were not medically necessary and routinely billed for fictitious visits that Newton knew did not occur. As alleged in the civil complaint, Newton either directly or through Arbor, targeted particularly vulnerable patients who were low-income, on disability and/or suffering from depression and/or addiction.
According to the indictment, Waruru and Arbor billed MassHealth for Waruru’s skilled nursing visits, many of which she did not perform. Waruru also passed cash payments from Newton to an Arbor patient to retain that patient.
Newton allegedly used the laundered proceeds of the $100 million scheme to purchase multiple homes and a Maserati and to fund investment accounts, a lavish lifestyle and numerous financial transactions. The civil forfeiture case seeks to forfeit to the United States five properties in Westford, North Andover, Chelmsford and Dracut and to forfeit the contents of 40 bank accounts and/or investments.
The charges of health care fraud, conspiracy to commit health care fraud, money laundering conspiracy and money laundering each provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000 or twice the amount of the money involved in the laundering. The conspiracy to pay kickbacks, make false statements and make false statement in health care matter each provide for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Phillip M. Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorneys Rachel Y. Hemani of Lelling’s Health Care Fraud Unit and David G. Lazarus, Chief of Lelling’s Asset Recovery Unit, are prosecuting the cases.
The details contained in the court documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Virginia Men Sentenced for Unlawfully Transporting Waterfowl into the United States from CanadaRead the Press Release
Bismarck – United States Attorney Drew Wrigley announced, on February 1, 2021, United States Magistrate Judge Clare Hochhalter sentenced Larry Gene Childers, Jr., age 52 of Seaford, VA, on an offense of Unlawful Transport of Wildlife in Foreign Commerce (Lacey Act Violation), to two years probation and that this term of probation restrict Childers’ hunting privileges for a period of six months. Judge Hochhalter also sentenced Childers to pay a $7,500.00 fine to the Lacey Act Reward Account.
On October 17, 2019, Childers unlawfully transported 171 pounds of unidentifiable migratory waterfowl meat, approximately 207 birds, into the United States from Canada through the North Dakota Portal Port of Entry, in violation of Alberta, Canada law. During a search of Childers’ vehicle, United States Customs and Border Protection Officers located the 171 pounds of waterfowl meat in Childers’ truck after Childers stated on a customs declaration form that he was not bringing "meats, animals, animal/wildlife products" into the United States.
On March 11, 2020, codefendant Daniel Lusk, age 32, of Williamsburg, VA, pleaded guilty to Unlawful Transport of Wildlife in Foreign Commerce and, on November 9, 2020, was sentenced by Judge Hochhalter to 18 months’ probation for his role in this offense.
"This is an outrageous offense against all sport hunters and others who enjoy the splendor of North America’s migratory bird resource," said USA Drew Wrigley, "the regulation on such violations is aimed at preserving and enhancing the treasured outdoor experiences."
This case was investigated by the United States Fish and Wildlife Service and United States Customs and Border Protection, and was prosecuted by Assistant United States Attorney Jonathan J. O’Konek.
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Tacoma tax preparer pleads guilty to tax fraud schemeRead the Press Release
Tacoma, Washington – A 51-year-old Lakewood, Washington, man pleaded guilty today in U.S. District Court in Tacoma to aiding in preparation and presentation of false tax returns for his multi-year fraudulent tax preparation scheme, announced U.S. Attorney Brian T. Moran. REED, Jr., created “Just Us Tax Services” and later merged it with “Young’s Tax Services.” The companies filed tax returns fraudulently claiming inflated amounts of Earned Income Tax Credits (EITC) in order to increase clients’ tax refunds and therefore the fee they would receive for tax preparation. CLEO J. REED, Jr., admits operating the tax fraud scheme even after his father was sentenced to prison for the same conduct. Sentencing is scheduled for May 10, 2021 in front of U.S. District Judge Benjamin H. Settle.
According to records filed in the case, in 2011 and 2012, even as REED Jr.’s father’s tax preparation business was under investigation for preparing fraudulent returns, REED, Jr., opened and operated “Just Us Tax Service” so that his father could continue filing tax returns on behalf of clients, by filing them in the name of a tax preparation firm that was different than the name of the tax preparation firm the IRS was investigating. After opening Just Us Tax Services to assist his father, REED, Jr., also started filing fraudulent tax returns on behalf of some clients, however. In doing so, he used the same fraudulent technique utilized by his father’s tax preparation business.
When the IRS terminated REED Jr.’s tax preparation registration, he had an acquaintance open and register “Young’s Tax Service” in 2014 and continued filing tax returns with fraudulent entries for Earned Income Tax Credit. REED, Jr., filed the false returns from his home and from Everyday Essentials, the marijuana dispensary he owned and operated in Puyallup.
The total amount of tax loss to which REED, Jr., is admitting criminal liability is $39,899. REED, Jr., has agreed to make restitution to the IRS in that same amount. The IRS may still assess interest and civil tax penalties.
On October 31, 2013, the United States District Court Judge Benjamin H. Settle sentenced REED, Jr.’s father, CLEO REED, Sr., to a term of 30 months’ imprisonment for his role in the scheme. While he waited to report to prison, REED, Sr., told former clients that he was turning the tax preparation business over to his son as a result of both the criminal investigation of REED, Sr., and his failing health.
Aiding in preparation and presentation of false tax returns is punishable by up to three years in prison.
The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Arlen Storm.
State Lawmaker Indicted for Stem Cell Fraud Scheme, Illegally Distributing Prescription DrugsRead the Press Release
U.S. Attorney Tim Garrison announces a federal indictment against Patricia DergesSPRINGFIELD, Mo. – An elected Missouri state representative has been indicted by a federal grand jury for a fraud scheme in which she made false claims about a supposed stem cell treatment marketed through her clinics in southern Missouri, and for illegally providing prescription drugs to clients of those clinics.
“This defendant abused her privileged position to enrich herself through deception,” said U.S. Attorney Tim Garrison. “The indictment alleges she lied to her patients and she lied to federal agents. As an elected official and a health care provider, she deserves to be held to a high standard. This grand jury indictment exposes her deception and holds her accountable for her actions.”
Patricia “Tricia” Ashton Derges, 63, of Nixa, Missouri, was charged in a 20-count indictment returned under seal by a federal grand jury in Springfield, Mo. The indictment was unsealed and made public today following Derges’s self-surrender and initial court appearance.
This investigation began as a result of false or misleading statements made by Derges in April 2020 to a Springfield television station regarding her potential use of stem cells to treat COVID-19. Derges was elected in November 2020 as a Missouri state representative in District 140 (Christian County). Derges, who is not a physician but is licensed as an assistant physician, operates three Ozark Valley Medical Clinic locations in Springfield, Ozark, and Branson, Mo.
“We place our hope and our trust in health care providers and government officials,” said Timothy Langan, Special Agent in Charge of FBI Kansas City. “The defendant’s actions are not only a betrayal of that trust, but her actions erode the very core of our confidence in a system we rely on. Derges vowed to do no harm as a health care professional and was elected to serve the people, not deceive them. She used her position for personal gain and damaged the public’s trust.”
“Medical professionals who knowingly abuse their power by prescribing medications, without ensuring they are for legitimate medical purposes, take advantage of the public’s trust,” said Inez Davis, St. Louis Division Diversion Program Manager for the Drug Enforcement Administration. “With the support of our enforcement partners, DEA will investigate to the maximum extent of our ability to ensure these individuals are prevented from risking lives within our communities.”
“Ms. Derges knowingly provided false information and made false claims about the medical treatment she was providing, and these falsehoods may have significant consequences for the patients she served,” said Curt L. Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold accountable individuals who abuse their positions of power to prey on unsuspecting individuals.”
Wire Fraud Scheme
The federal indictment charges Derges with eight counts of wire fraud related to five specific victims (identified by their initials).These five victims were among those who lost a total of nearly $200,000 in the fraud scheme, which lasted from December 2018 to May 2020.
During this time, Derges exclusively obtained amniotic fluid, which she marketed under the name Regenerative Biologics, from the University of Utah. Derges advertised Ozark Valley Medical Clinic as a “Leader in … Regenerative Medicine,” including stem cells, and marketed her “stem cell” practice through seminars, media interviews, and social media. The federal indictment cites an August 2019 seminar in which Derges told her audience that the amniotic fluid she used in her stem cell practice was a “stem cell shot” and that it contained “mesenchymal stem cells.” According to the indictment, Derges made similar claims in personal consultations.
In fact, however, the amniotic fluid Derges administered to her patients did not contain mesenchymal stem cells, or any other stem cells. The amniotic fluid she obtained from the University of Utah was a sterile filtered amniotic fluid allograft (a tissue graft comprised of human amniotic membrane and amniotic fluid components derived from placental tissue). The amniotic fluid allograft was “acellular,” meaning it did not contain any cells, including stem cells.
Despite being told that the University of Utah’s amniotic fluid allograft was “acellular” and did not contain mesenchymal stem cells, Derges allegedly continued to tell her patients and the public that the amniotic fluid allograft contained stem cells.
Derges administered amniotic fluid, which she falsely claimed contained stem cells, to patients who suffered from, among other things, tissue damage, kidney disease, chronic obstructive pulmonary disease (COPD), Lyme disease, erectile dysfunction, and urinary incontinence. In an April 11, 2020, Facebook post Derges wrote of amniotic fluid allograft: “This amazing treatment stands to provide a potential cure for COVID-19 patients that is safe and natural.”
The University of Utah sold its amniotic fluid allograft to Derges for approximately $244 per milliliter and $438 for two milliliters. Derges charged her patients $950 to $1,450 per milliliter. In total, Derges’s patients paid her approximately $191,815 for amniotic fluid that did not contain stem cells.
The Controlled Substances Act
The federal indictment charges Derges with 10 counts of distributing Oxycodone and Adderall over the internet without valid prescriptions.
The indictment alleges that Derges, without conducting in-person medical evaluations of the patients, wrote electronic prescriptions for Oxycodone and Adderall for patients and transmitted them to pharmacies over the internet.
Because none of the assistant physicians whom Derges employed at Ozark Valley Medical Clinic could prescribe Schedule II controlled substances, the indictment says, it was the standard practice of the assistant physicians to see a patient and later communicate to Derges the controlled substances they wanted her to prescribe to their patients. Derges, allegedly without conducting an in-person medical evaluation of the patients, wrote electronic prescriptions for the patients and transmitted the prescriptions over the internet to pharmacies.
False Statements
The federal indictment charges Derges with two counts of making false statements to federal agents investigating this case in May 2020.
Derges allegedly told agents that the amniotic fluid allograft that she used in her practice contained mesenchymal stem cells, which she knew was false. Derges also allegedly told federal agents that she had not treated a patient for urinary incontinence with amniotic fluid allograft, which she knew was false.
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.
Assistant Physician
Derges is not a physician but is licensed as an assistant physician. An assistant physician is a mid-level medical professional in the state of Missouri. Under Missouri law, medical school graduates who have not been accepted into a residency program but have passed Step 1 and Step 2 of the United States Medical Licensing Examination may apply to become an assistant physician. State law mandates that assistant physicians practice pursuant to a collaborative practice arrangement with a licensed physician.
Derges obtained her medical degree from the Caribbean Medical University of Curacao in May 2014 but was not accepted into a post-graduate residency program. Derges was licensed as an assistant physician by the state of Missouri on Sept. 8, 2017.
This case is being prosecuted by Assistant U.S. Attorney Shannon Kempf. It was investigated by the FBI, Health and Human Services – Office of Inspector General, and the DEA.
Derges Indictment.pdfSmith County Lawyer Guilty of Employment Tax ViolationsRead the Press Release
TYLER, Texas – A Tyler, Texas attorney pleaded guilty today to federal employment tax violations announced Eastern District of Texas Acting United States Attorney Nicholas J. Ganjei.
John Bennett White IV, 60, pleaded guilty to an information charging him failure to pay employment taxes today before U.S. Magistrate Judge K. Nicole Mitchell.
“Mr. White withheld taxes from his employees’ paychecks but repeatedly failed to turn those funds over to the IRS,” said Acting United States Attorney Nicholas Ganjei. “White instead chose to pocket his employees’ tax payments to fund his lifestyle. This sort of conduct harms every taxpayer, not only because of the lost public revenue, but also because of the expense of recovering the lost funds from individuals such as White.”
According to court documents and statements made in court, White was an attorney and firm manager for a Tyler law firm, J. Bennett White, P.C., where White had significant control over the finances of the firm and had a duty to account for and pay over the employment taxes on behalf of the firm’s employees to the IRS.
Between the second quarter of 2007 and the fourth quarter of 2015, White made sporadic and partial efforts to pay his firm’s employment tax liabilities. For multiple quarters during the same period White caused employment taxes to be withheld from the law firm’s employees’ wages, but willfully failed to fully pay those trust fund taxes of to the IRS. White filed Forms 941 reporting the law firm’s employment taxes for each of these quarters. White paid the full amount owed the IRS for 24 of those 38 quarters. White made partial payments on 10 occasions and no payment for seven quarters. In total, White caused a tax loss of over $300,000. Instead of paying employment taxes, White paid other creditors and his own personal expenses.
Under federal statutes, White faces up to five years in federal prison at sentencing. The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is being investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ryan Locker.
Quebec Man Indicted by A Federal Grand Jury for Multi-Million Dollar Fraud Scheme Targeting Elderly VictimsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Martin Hogan, 52, of Montreal, Quebec, CA, with conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and international money laundering conspiracy. The charges carry a maximum of 30 years in prison, and a $250,000 fine.
“We will not allow anyone, including foreign actors, illegally enrich themselves by preying on our elderly,” stated U.S. Attorney Kennedy. “Criminals who defraud and threaten U.S. citizens by phone will not escape justice by placing their calls from outside our country. As this case shows, we will find you, and we will bring you to justice.”
IRS-Criminal Investigation Special Agent in Charge Jonathan D. Larsen said, “Telemarketing schemes that attempt to take advantage of the elderly as evidenced in the indictment of Mr. Hogan are among the most reprehensible, and IRS Criminal Investigation remains committed to using the resources of our agents and financial expertise to bring these criminals to justice along with our law enforcement partners.”
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that between September 2015 and March 2020, the defendant conspired with multiple co-defendants to defraud elderly victims using a fraudulent telemarketing scheme.
According to the indictment, Hogan would place telephone calls from Canada to victims in the United States and tell victims that they had won the Canadian lottery. However, before collecting their winnings, victims had to first pay the taxes, brokerage fee, and/or custom fees due in connection with the winnings. Victims were instructed by the defendant and others to pay these taxes, brokerage fees, and/or custom fees by wire transferring funds to a bank account in Rochester, NY, controlled by co-defendant Bernard Perkins, or by mailing funds to Perkins or addresses in the United States controlled by co-defendants Anthony Laughing, Jr., Cory LaPlant and others.
After receiving funds from victims, defendants Bernard Perkins, Anthony Laughing, Jr., and Cory LaPlant would keep a small portion of the funds and then pay co-defendants Devlin Laughing and Brenda Garrow to smuggle the remaining funds from the United States to the defendant Hogan in Canada.
As a result of this fraudulent telemarketing scheme, defendant Hogan and his co-defendants caused approximately 37 victims over the age of 55 to mail approximately 200 packages and wire transfer funds totaling approximately $2 million.
The defendant was extradited from Jamaica to the United States and was arraigned this morning before U.S. Magistrate Judge Mark W. Pedersen. Hogan is being held pending a detention hearing on March 1, 2021, at 10:00 a.m.
Defendants Bernard Perkins, Anthony Laughing, Jr., Devlin Laughing, and Cory LaPlant, were previously convicted and are awaiting sentencing. Defendant Brenda Garrow was previously convicted and sentenced to three years probation.
The indictment is the result of an investigation by Homeland Security Investigations, Border Enforcement Security Task Force, under the direction of Special Agent-in-Charge Kevin Kelly, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office. The Justice Department’s Office of International Affairs provided substantial assistance in securing the defendant’s extradition from Jamaica.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Pain Clinic Pays More Than $1.6 Million to Settle False Claims Act and Kickback AllegationsRead the Press Release
Fort Myers, FL – United States Attorney Maria Chapa Lopez announces that Collier Anesthesia Pain, LLC, a pain management clinic located in Fort Myers, Florida, and Tampa Pain Relief Center, Inc., have agreed to pay $1,665,000 to resolve allegations that they violated the False Claims Act and Anti-Kickback Statute. As part of the settlement, the United States contends that Collier Anesthesia and Tampa Pain engaged in an illegal kickback scheme by causing affiliated surgery centers to waive copayments for surgical facility fees in order to induce patients to receive injection procedures. Additionally, the United States contends that Collier Anesthesia and Tampa Pain knowingly submitted false claims by improperly billing for evaluation and management services and psychological testing services.
“Kickback arrangements have no place in federal healthcare programs,” said United States Attorney Chapa Lopez. “This settlement reflects our continuing efforts to target improper payment schemes and our intention to advocate for the proper care of government-funded healthcare program beneficiaries.”
“Providers that submit false claims squander Federal health care funds and compromise the integrity of the Federal health care program,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, OPM OIG. “This settlement demonstrates our commitment to ensuring that all taxpayer funds are spent appropriately.”
This settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida, the Defense Criminal Investigative Service, the U.S. Department of Health and Human Services Office of Inspector General, and the U.S. Office of Personnel Management Office of the Inspector General. The investigation was led by Assistant U.S. Attorneys Randy Harwell and David P. Sullivan.
The claims resolved by the settlement are allegations only and there has been no determination of liability. The civil settlement resolves the following captioned case: United States, et al. v. Wayne Isaacson, M.D., et al., 2:17-cv-352-TPB-NPM.
Omaha Man Sentenced to 221 Months for Child PornographyRead the Press Release
United States Attorney Joe Kelly announced that John A. Duncan, age 37, of Omaha, Nebraska, was sentenced today to 221 months’ imprisonment for receipt and distribution of child pornography by Senior United States District Judge Joseph F. Bataillon. There is no parole in the federal system. After his release from prison, Duncan will be on supervised release for life and will be required to register as a sex offender. In addition, the terms of Duncan’s supervised release prohibit him from having any contact with children under the age of 18, unless it is approved by the United States Probation Office. He was ordered to pay $22,000 in restitution.
An investigation conducted by the FBI determined that in July of 2019, Discord, Inc., a digital file sharing application, reported that between February 9, 2019 and March 3, 2019, several files of minors under the age of 12 engaging in sexually explicit conduct were distributed at various times to other users of that application. Discord captured multiple Internet Protocol (IP) addresses and an associated email account that was used to upload the images of the minors. The FBI obtained information related to the IP addresses and email account, which ultimately identified Duncan as being associated with the Discord account at the time the child pornography was distributed. The FBI further determined that Duncan resided in Omaha, Nebraska.
The FBI executed a federal search and seized Duncan’s cellular phone. Forensic analysis of the cellular phone found 42 images of minors engaging in sexually explicit conduct, including the specific images of minors engaging in sexually explicit conduct that were identified in the Discord application distributions. Duncan admitted that he distributed the child pornography from Omaha.
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 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 www.projectsafechildhood.gov.
This case was investigated by the Omaha FBI's Child Exploitation and Human Trafficking Task Force.
Ohio Man Sentenced to Federal Prison for Meth DistributionRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Mike Stuart announced today that Marvin Keaton, 39, of Columbus, Ohio, was sentenced to 57 months in prison for distribution of methamphetamine.
“Meth is a scourge on our communities,” said United States Attorney Mike Stuart. “But each and every day, in partnership with law enforcement, we take meth dealers off the streets and hold them accountable.”
Keaton admitted that on February 25, 2020, he met a person on the 1900 block of 12th Avenue in Huntington and sold them 10.159 grams of methamphetamine in exchange for $200. On March 3, 2020, Keaton sold the same person 20.837 grams of methamphetamine in exchange for $400.
The Huntington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted the investigation. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Greg McVey handled 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. 3:20-cr-00112.
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