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19 March 2021
Jury Convicts Bloods Gang Member of Murder, Robbery, and Drug Trafficking ChargesRead the Press Release
NEWPORT NEWS, Va. – A federal jury convicted a Washington, D.C. man today on charges of murder with a firearm, robbery, and conspiracy to possess and distribute cocaine.
According to court records and evidence presented at trial, on January 15, 2017, Dawhan Archible, 27, and his co-conspirators, murdered Luke Michael Dudley, 23, with a firearm in the aftermath of a drug deal. Archible is a self-proclaimed “bloods boss” and admitted he has been in the Bloods gang since he was 13 years old.
“Today’s verdict represents justice for victim Luke Dudley and his family, who will forever endure the unimaginable pain and heartache of losing him,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “EDVA remains steadfast in our fight against all forms of violence, and we are grateful to our prosecutors and law enforcement partners for their tireless commitment and dedication to this case.”
On the morning of the murder, Archible traded heroin for cocaine, which he then traded with Dudley for what he believed to be Percocet pills. Following the drug transaction, Archible learned that Dudley had provided him fake drugs instead of Percocet. In response, Archible and his co-conspirators broke into Dudley’s rooming house in Newport News and confronted him. Archible directed a co-conspirator to bring a firearm. Archible shot Dudley several times with a 9mm Glock pistol and then handed the gun to his co-conspirator, who also shot Dudley.
Later that afternoon, local law enforcement officers responded to a burglary call and found Dudley deceased from 17 gunshot wounds to the head, torso, and extremities. Archible’s DNA was linked to blood recovered from the scene.
Archible faces a maximum penalty of life imprisonment on the murder charge and 20 years on each of the remaining counts when sentenced on August 10. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Steve R. Drew, Chief of Newport News Police, made the announcement after U.S. District Judge David J. Novak accepted the verdict.
Assistant U.S. Attorneys Howard J. Zlotnick, Lisa R. McKeel, and Brian J. Samuels are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-15.
Iranian Nationals Charged with Conspiring to Evade U.S. Sanctions on Iran by Disguising $300 Million in Transactions over Two DecadesRead the Press Release
LOS ANGELES – A federal criminal complaint unsealed today charges 10 Iranian nationals with running a nearly 20-year-long scheme to evade U.S. sanctions on the Government of Iran by disguising more than $300 million worth of transactions – including the purchase of two $25 million oil tankers – on Iran’s behalf through front companies in the San Fernando Valley, Canada, Hong Kong and the United Arab Emirates. In addition, a civil forfeiture complaint filed today seeks a money laundering penalty in the amount of $157,332,367.
The complaint, filed in October 2020 in United States District Court in Los Angeles, charges the defendants with one count of conspiracy to violate the Iranian Transactions and Sanctions Regulations, the Iranian Financial Sanctions Regulations and the International Emergency Economic Powers Act. The defendants are believed to be located outside of the United States.
“In a wide-ranging scheme spanning nearly two decades and several continents, the defendants conspired to abuse the U.S. financial system to conduct hundreds of millions of dollars in transactions on behalf of the Government of Iran,” said Acting United States Attorney Tracy L. Wilkison for the Central District of California. “Today’s indictment is an example of the will of federal law enforcement to bring to justice those who violate our sanctions and laws designed to strengthen our national security.”
“In a substantial civil forfeiture action filed by the Department, the defendants stand to lose over $157 million in funds involved in violations of the Iran sanctions,” said Assistant Attorney General for National Security John C. Demers. “This is only right. Through the use of front companies, money service businesses and exchanges throughout the world, the defendants worked to disguise hundreds of millions of dollars’ worth of transactions on behalf of a state sponsor of terrorism. Make no mistake, the Department of Justice will continue to deploy all tools necessary to curb the Iranian regime’s ability to use the U.S. financial system to support its malign endeavors.”
“Sanctions are imposed, in part, to thwart an adversarial country’s ability to take actions in violation of diplomatic agreements and which threaten international relations,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The charges announced today should send a message that the United States will not allow the laundering of money through American banks as a secret backdoor to conduct business and avoid the limitations imposed by sanctions.”
According to court documents, the complaint details a decades-long conspiracy to evade U.S. sanctions on Iran, a nation which the U.S. State Department has designated as a state sponsor of terrorism. During the scheme, the defendants allegedly created and used more than 70 front companies, money service businesses and exchange houses – often using the name “Persepolis” or “Rosco” – in the United States, Iran, Canada, the United Arab Emirates and Hong Kong. The defendants also allegedly made false representations to financial institutions to disguise more than $300 million worth of transactions on Iran’s behalf, using money wired in U.S. dollars and sent through U.S.-based banks.
The complaint alleges that the defendants were aware of U.S. sanctions on Iran throughout the conspiracy. In one email exchange, for example, defendants allegedly discussed the U.S. government’s efforts to disrupt Iranian Supreme Leader Ali Khamenei’s “international financial network,” an organization allegedly designed to conceal investments from the Iranian people and international regulators. In an iCloud account, one defendant saved a press report about new U.S. sanctions imposed on firms suspected of funding the Iranian Revolutionary Guard Corps.
As alleged, several defendants operated or were employed by Persepolis Financial Services Inc., an Encino-based company that facilitated the illegal transfer of U.S. dollars on Iran’s behalf from 1999 through the early 2000s. After a Persepolis Financial executive was convicted in 2003, several defendants left the country and moved to Canada and the United Arab Emirates. There, they owned, operated or were employed by additional front companies – using the names Rosco Trading, Rosco International, Persepolis and Rosco Investment – that were used for well over a decade to secretly facilitate U.S. dollar transactions on Iran’s behalf.
In addition, several defendants allegedly used a Hong Kong-based front company known as Total Excellence Ltd. to secretly buy two $25 million oil tankers on Iran’s behalf. The U.S. later sanctioned the businessman for using Iranian money to purchase oil tankers and to help Iran ship crude oil in violation of U.S. and European Union sanctions. In 2013, two defendants allegedly defrauded a financial institution in the UAE by preparing a fraudulent invoice and making false statements indicating that a transaction in U.S. dollars – processed through a New York-based bank – was undertaken on behalf of a UAE-based front company. In actuality, the true buyer was an Iranian oil and gas company, the affidavit states.
Furthermore, in 2016, several defendants allegedly conspired to wire millions of dollars through the U.S. financial system to complete a transaction with a South Korean equipment manufacturer on Iran’s behalf. During that transaction, four defendants instructed the manufacturer to not to “mention any name of Iran” in any paperwork exchanged with financial institutions processing the transaction, the affidavit alleges. In March 2017, the South Korean company sent $1 million to a front company selected by the conspirators.
Finally, in 2016, the conspirators secretly transferred thousands of dollars into Southern California on Iran’s behalf, including $66,766 that a defendant transferred to a Santa Monica-based company with a bank account held at Wells Fargo & Co., to acquire electronic equipment at the direction of a business associate at an Iran-based company, according to the affidavit.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted, the defendants would face a statutory maximum sentence of 20 years in federal prison.
The FBI is investigating the case.
Assistant U.S. Attorneys William M. Rollins of the Terrorism and Export Crimes Section, Dan G. Boyle of the Asset Forfeiture Section, and Trial Attorney David Lim of the Department of Justice’s Counterintelligence and Export Control Section are prosecuting this case.
Iranian Nationals Charged with Conspiring to Evade U.S. Sanctions on Iran by Disguising $300 Million in Transactions over Two DecadesRead the Press Release
WASHINGTON – A federal criminal complaint unsealed today charges 10 Iranian nationals with running a nearly 20-year-long scheme to evade U.S. sanctions on the Government of Iran by disguising more than $300 million worth of transactions – including the purchase of two $25 million oil tankers – on Iran’s behalf through front companies in the San Fernando Valley, Canada, Hong Kong and the United Arab Emirates. In addition, a forfeiture complaint filed today seeks a money laundering penalty in the amount of $157,332,367.
The complaint, filed in October 2020 in U.S. District Court of Los Angeles, charges the defendants with one count of conspiracy to violate the Iranian Transactions and Sanctions Regulations, Iranian Financial Sanctions Regulations and the International Emergency Economic Powers Act. The defendants are believed to be located outside of the United States. If convicted, the defendants would face a statutory maximum sentence of 20 years in federal prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
“In a substantial civil forfeiture action filed by the Department, the defendants stand to lose over $157 million in funds involved in violations of the Iran sanctions,” said Assistant Attorney General for National Security John C. Demers. “This is only right. Through the use of front companies, money service businesses and exchanges throughout the world, the defendants worked to disguise hundreds of millions of dollars worth of transactions on behalf of a state sponsor of terrorism. Make no mistake, the Department of Justice will continue to deploy all tools necessary to curb the Iranian regime’s ability to use the U.S. financial system to support its malign endeavors.”
“The FBI has a keen ability to track nefarious actors who use the U.S. financial system to evade sanctions,” said Alan E. Kohler, Jr., Assistant Director of the FBI’s Counterintelligence Division. “Our investigation revealed over 70 front companies were used by these individuals to hide their conspiracy in support of the Iranian Governments pursuit of nuclear weapons and sponsorship of terrorism.”
“In a wide-ranging scheme spanning nearly two decades and several continents, the defendants conspired to abuse the U.S. financial system to conduct hundreds of millions of dollars in transactions on behalf of the Government of Iran,” said Acting United States Attorney Tracy L. Wilkison for the Central District of California. “Today’s indictment is an example of the will of federal law enforcement to bring to justice those who violate our sanctions and laws designed to strengthen our national security.”
According to court documents, the complaint details a decades-long conspiracy to evade U.S. sanctions on Iran, a nation which the U.S. State Department has designated as a state sponsor of terrorism. During the scheme, the defendants allegedly created and used more than 70 front companies, money service businesses and exchange houses – often using the name “Persepolis” or “Rosco” – in the United States, Iran, Canada, the United Arab Emirates and Hong Kong. The defendants also allegedly made false representations to financial institutions to disguise more than $300 million worth of transactions on Iran’s behalf, using money wired in U.S. dollars and sent through U.S.-based banks.
The complaint alleges that the defendants were aware of U.S. sanctions on Iran throughout the conspiracy. In one email exchange, for example, defendants allegedly discussed the U.S. government’s efforts to disrupt Iranian Supreme Leader Ali Khamenei’s “international financial network,” an organization allegedly designed to conceal investments from the Iranian people and international regulators. In an iCloud account, one defendant saved a press report about new U.S. sanctions imposed on firms suspected of funding the Iranian Revolutionary Guard Corps.
As alleged, several defendants operated or were employed by Persepolis Financial Services Inc., an Encino-based company that facilitated the illegal transfer of U.S. dollars on Iran’s behalf from 1999 through the early 2000s. After a Persepolis Financial executive was convicted in 2003, several defendants left the country and moved to Canada and the United Arab Emirates. There, they owned, operated or were employed by additional front companies – using the names Rosco Trading, Rosco International, Persepolis and Rosco Investment – that were used for well over a decade to secretly facilitate U.S. dollar transactions on Iran’s behalf.
In addition, several defendants allegedly used a Hong Kong-based front company known as Total Excellence Ltd. to secretly buy two $25 million oil tankers on Iran’s behalf. The U.S. later sanctioned the businessman for using Iranian money to purchase oil tankers and to help Iran ship crude oil in violation of U.S. and European Union sanctions. In 2013, two defendants allegedly defrauded a financial institution in the UAE by preparing a fraudulent invoice and making false statements indicating that a transaction in U.S. dollars – processed through a New York-based bank – was undertaken on behalf of a UAE-based front company. In actuality, the true buyer was an Iranian oil and gas company, the affidavit states.
Furthermore, in 2016, several defendants allegedly conspired to wire millions of dollars through the U.S. financial system to complete a transaction with a South Korean equipment manufacturer on Iran’s behalf. During that transaction, four defendants instructed the manufacturer to not to “mention any name of Iran” in any paperwork exchanged with financial institutions processing the transaction, the affidavit alleges. In March 2017, the South Korean company sent $1 million to a front company selected by the conspirators.
Finally, in 2016, the conspirators secretly transferred thousands of dollars into Southern California on Iran’s behalf, including $66,766 that a defendant transferred to a Santa Monica-based company with a bank account held at Wells Fargo & Co., to acquire electronic equipment at the direction of a business associate at an Iran-based company, according to the affidavit.
The FBI is investigating the case.
Assistant U.S. Attorneys William M. Rollins of the Terrorism and Export Crimes Section, Dan G. Boyle of the Asset Forfeiture Section, and Trial Attorney David Lim of the Department of Justice’s Counterintelligence and Export Control Section are prosecuting this case.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on March 16 was:
Brett Williams James Jones, 27, of Lame Deer, on charges of assault with a dangerous weapon and assault resulting in serious bodily injury. If convicted of the most serious crime, Jones faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Jones was released pending further proceedings. The FBI investigated the case. PACER case reference. 20-73.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on March 17 was:
Joseph Mark Parsons Menke, 29, of Belgrade, on charges of distribution and receipt of child pornography. If convicted of the most serious crime, Menke faces a mandatory minimum five years to 20 years in prison, a $250,000 fine and five years to life of supervised release. Menke was released pending further proceedings. The Internet Crimes Against Children Task Force, Bozeman Police Department and Montana Department of Justice’s Division of Criminal Investigation investigated the case. PACER case reference. 21-04.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on March 16 was:
Kaycee Lynn Menz, 29, of Poplar, on charges of conspiracy to possess and distribute oxycodone, possession with intent to distribute oxycodone, possession with intent to distribute methamphetamine, conspiracy to commit money laundering and money laundering. If convicted of the most serious crime, Menz faces a mandatory minimum five years to 40 years in prison, a $5 million fine and four years of supervised release. Menz was detained pending further proceedings. The FBI, Drug Enforcement Administration, Roosevelt County Sheriff’s Office and Montana Highway Patrol investigated the case. PACER case reference. 21-11.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Husband and Wife Russian Nationals Plead Guilty to Bribery, Visa Fraud, Tax Charges, and Agree to Forfeit $5.9 MillionRead the Press Release
NEW BERN, N.C. – Leonid Teyf, 59, a Russian national formerly residing in Raleigh, North Carolina, pled guilty today to bribery of a public official, visa fraud, and false statements on a tax return. Tatiana Teyf, 43, pled guilty to a false statement in an immigration matter.
In December 2018, Teyf was charged in an indictment with the bribery, murder-for-hire, possession of a firearm with an obliterated serial number, harboring illegal aliens, and unlawful use of a visa procured through false claims. Teyf was also charged in a money laundering conspiracy with Tatiana Teyf and others, and several tax charges regarding the wrongful denial of the existence of overseas financial interests and the failure to file required forms in regard to the same overseas accounts.
The indictment alleged that between 2010 and 2012, Leonid Teyf received kickbacks of Russian government funds amounting to more than $150,000,000. The indictment additionally alleged that since December 2010, Leonid and Tatyana Teyf and others opened at least 70 financial accounts at four financial institutions in the names of themselves and businesses under their control and received an approximate total of $39,500,000 in 294 wire transfers. By December 2018, approximately $9 million of these funds remained in accounts within the United States and the funds were seized at that time.
The indictment further alleged Teyf knowingly used and possessed a U.S. immigrant visa which he had procured through false claims made on his I-140 application and that he and Tatiana Teyf had harbored and assisted other persons from Russia in coming to and remaining in the United States.
As otherwise alleged in publicly available documents filed in federal court by the Government, during the course of the investigation into the money laundering charges, Leonid Teyf came to believe that Tatiana Teyf was having an affair with another man. Leonid Teyf discussed with an FBI confidential source having the man murdered. Teyf also paid an employee with the United States Department of Homeland Security $10,000 to find the man and have him deported from the United States. When the deportation plan was taking a longer period of time than he expected, Leonid Teyf returned to the previously discussed murder-for-hire plan and paid the confidential source $25,000 to kill the man before the end of 2018. To assist in the commission of the murder, Leonid Teyf supplied the confidential source with a firearm on which the serial number had been removed.
Teyf entered a plea of guilty to violations of 18 U.S.C. § 201, the payment of the $10,000 bribery to the federal official, 18 U.S.C. § 1546, visa fraud, and 26 U.S.C. § 7206(1), filing a false tax return. Tatiana Teyf plead guilty to a separately filed Criminal Information, which charged a violation of 18 U.S.C. § 1015(a), making a false statement in an immigration document. Both agreed to forfeit assets in the total amount of $5,900,241 and Teyf agreed to forfeit the firearm that was provided to the confidential source. He also agreed to be judicially deported once his sentence is complete.
Pursuant to the plea, the Acting United States Attorney for the Eastern District of North Carolina agreed to dismiss the murder-for-hire, firearm, money laundering, harboring illegal aliens, and all but one of the tax charges against Teyf, and to seek a sentence of 60 months’ imprisonment for him. Pursuant to Tatiana Teyf’s plea to the charge in the Criminal Information, all charges against her in the Indictment will be dismissed and the government will not seek a term of imprisonment.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement, noting, “Attempts to subvert U.S. laws through lies and bribery cannot be tolerated. This is particularly true when such attempts are done with the intent of causing greater harm and this office stands ready to pursue these cases with every available tool. Thankfully, through the proactive work of our law enforcement partners, the violence desired was prevented.”
U.S. District Judge Louise W. Flanagan accepted the plea. The investigation of this case was conducted by agents of the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, Homeland Security Investigations, and the Raleigh Police Department.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case 5:18-cr-00452-FL.
Harvey Man Pleads Guilty to Clean Water Act Violation from 2016 Oil SpillRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that JAMES TASSIN, age 50, of Harvey, pled guilty on March 18, 2021 to violating the Clean Water Act in connection with an oil spill in 2016.
According to court documents, TASSIN was a marsh buggy operator working on the Chenier Ronquille Barrier Island Restoration Project, which was overseen by contractors working for the National Oceanic and Atmospheric Administration (“NOAA”). The project took place where Louisiana’s coastal wetlands meet the Gulf of Mexico, near several oil and gas pipelines, including Bay Marchand-to-Ostrica-to-Alliance (“BOA”) pipelines, which ran underneath and parallel to the dike on northern side of the island.
Months after the project began, the site manager at the project instructed TASSIN to dig an access channel for crew boats that was different from the access channel in the project plans provided by NOAA. This new access channel ran directly over the BOA pipelines, which were clearly marked at the time. TASSIN worked on that new access channel over multiple days.
On September 5, 2016, TASSIN drove his marsh buggy through the newly deepened access channel and struck one of the BOA pipelines, causing it to leak oil that created a sheen in the surrounding water in Bay Long. When TASSIN reported the spill to his supervisors, the site manager instructed TASSIN to use his marsh buggy to obscure the evidence that he had been deepening the unauthorized access channel, and TASSIN did so.
“The defendant in this case recklessly violated regulations designed to protect the environment and then tried to hide his actions,” said Christopher Brooks, Special Agent in Charge of EPA’s Criminal Enforcement Program in Louisiana. “Today’s guilty plea demonstrates that we will hold violators responsible for breaking our environmental laws.”
“Today’s announcement is a clarion call for stewardship and accountability in the pipeline transportation system,” said Todd Damiani, Special Agent-in-Charge, Southern Region, Department of Transportation Office of Inspector General. “Together with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to pursue those who knowingly disregard laws and regulations intended to protect our Nation’s natural resources.”
“The Department of Commerce OIG is dedicated to working with our partners to curb fraud, waste and abuse, especially when projects receiving NOAA funding result in environmental hazards,” said Duane Townsend, Special Agent in Charge, U.S Department of Commerce, Office of Inspector General.
TASSIN faces up to one year in prison, a fine of up to $100,000, and up to one year of supervised release following any term of imprisonment. Judge Susie Morgan set the sentencing hearing for June 22, 2021.
The case was investigated by the Environmental Protection Agency’s Criminal Investigation Division, the Department of Transportation’s Office of Inspector General, and the Department of Commerce’s Office of Inspector General. Assistant U.S. Attorney Nicholas D. Moses is in charge of the prosecution.
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Grand Jury - March 2021Read the Press Release
Acting United States Attorney Jan W. Sharp announced the federal Grand Jury for the District of Nebraska has returned 22 unsealed Indictments charging 24 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Simon Carcamo Sevilla, age 31, is charged in a three-count Indictment. Count I charges the defendant with use of an identification document not lawfully issued on or about September 5, 2019. The maximum possible penalty if convicted is 10 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count II charges the defendant with misuse of a Social Security number on or about September 5, 2019. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count III charges the defendant with illegal reentry after deportation on or about February 25, 2021. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a one-year term of supervised release, and a $100 special assessment.
* Brandon D. Carr, age 35, of Omaha, is charged with felon in possession of a firearm on or about February 23, 2021. The maximum possible penalty if convicted is 10 years’ imprisonment, $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Crispin Cruz-Trejo, age 38, is charged with illegal reentry after deportation on or about March 3, 2021, following an aggravated felony conviction. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Derrick G. Dawdy, age 36, of Ashland, Nebraska, is charged in a three-count Indictment. Count I charges the defendant with embezzlement of mail by postal employee on or about September 1, 2020 and on or about December 28, 2020. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count II charges the defendant with theft from mail by postal employee on or about September 1, 2020 and on or about December 28, 2020. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count III charges the defendant with delay of mail by postal employee on or about September 1, 2020 and on or about December 28, 2020. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment.* David A. Foreman, age 53, of Omaha, is charged in a two-count Indictment. Count I charges the defendant with distribution of methamphetamine on or about December 18, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, $1,000,000 fine, a three-year term of supervised release, $100 special assessment. Count II charges the defendant with possession with intent to distribute 50 grams or more of methamphetamine (actual) between on or about December 18, 2020. The maximum possible penalty if convicted is life imprisonment, a $20,000,000 fine, a ten-year term of supervised release, and a $100 special assessment. There is also an allegation to forfeit United States currency seized on or about December 20, 2020.
* Sanjuana Garcia-Ramirez, age 38, of Lexington, Nebraska, is charged with possession with intent to distribute 50 grams or more of methamphetamine on or about January 5, 2021. The maximum possible penalty if convicted is 40 years’ imprisonment, $5,000,000 fine, a four-year term of supervised release, $100 special assessment.
* Patrick R. Graves, age 34, is charged in a six-count Indictment. Counts I through III charge the defendant with bank fraud on or about September 2020 and continuing through on or about November 2020. The maximum possible penalty if convicted is 30 years’ imprisonment, a $1,000,000 fine, a five-year term of supervised release, and a $100 special assessment for each count. Count IV charges the defendant with aggravated identity theft on or about November 16, 2020. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count V charges the defendant with aggravated identity theft on or about November 18, 2020. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a one-year term of supervised release, and a $100 special assessment. Count VI charges the defendant with identity theft on or about November 18, 2020. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Jeffry A. Hogan, age 39, of Colorado Springs, Colorado, is charged in a four-count Indictment. Count I charges the defendant with conspiracy and possession with intent to distribute 500 grams or more of methamphetamine on or about June 1, 2020 and continuing to on or about February 12, 2021. The maximum possible penalty if convicted is life imprisonment, $20,000,000 fine, ten-year term of supervised release, and a $100 special assessment. Count II charges the defendant with possession with intent to distribute 50 grams or more of methamphetamine on or about February 12, 2021. The maximum possible penalty if convicted is life imprisonment, $10,000,000 fine, an eight-year term of supervised release, $100 special assessment. Count III charges the defendant with using, carrying, and possessing a firearm during and in furtherance of a drug trafficking crime between on or about February 12, 2021 The maximum possible penalty if convicted is life consecutive imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count IV charges the defendant with use felon in possession of a firearm between on or about February 12, 2021 The maximum possible penalty if convicted is 10 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. There is also an allegation to forfeit United States currency seized on or about February 12, 2021.
* Jourdain Hyman St. Cyr, age 35, of Winnebago, Nebraska, is charged with assaulting, resisting, or impeding certain officers or employees on or about March 4, 2021. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Kelly J. Jablonski, age 41, of Lincoln, Nebraska, is charged in a two-count Indictment. Count I charges the defendant with conspiracy and possession with intent to distribute 500 grams or more of methamphetamine on or about June 1, 2020 and continuing to on or about February 12, 2021. The maximum possible penalty if convicted is life imprisonment, $10,000,000 fine, five-year term of supervised release, and a $100 special assessment. Count II charges the defendant with possession with intent to distribute 500 grams or more of methamphetamine on or about February 12, 2021. The maximum possible penalty if convicted is life imprisonment, $10,000,000 fine, a five-year term of supervised release, $100 special assessment. There is also an allegation to forfeit United States currency seized on or about February 12, 2021.
* Kevin N. Jacoway, age 32, of Omaha, and Timothy A. Fox, age 34, of Omaha, are charged in a three-count Indictment. Count I charges Jacoway and Fox with distribution and receipt of child pornography on or about August 28, 2020 and on or about February 23, 2021. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count II charges Jacoway with possession of child pornography on or about December 2, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count III charges Fox with possession of child pornography on or about December 2, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment.
* Brenden J. Joray, age 23, of Papillion, Nebraska, is charged in a three-count Indictment. Count I charges Joray with transportation of a minor with intent to engage in criminal sexual activity on or about January 30, 2021 and on or about February 17, 2021. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count II charges the defendant with travel in interstate commerce for the purpose of engaging in any illicit sexual conduct on or about January 30, 2021 and on or about February 17, 2021. The maximum possible penalty if convicted is 30 years’ imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count III charges the defendant with enticement of a minor to engage in any sexual activity on or about November 1, 2020 and on or about February 17, 2021. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment.
* Jose O. Maes, age 36, of Colorado Springs, Colorado, is charged with conspiracy and possession with intent to distribute 500 grams or more of methamphetamine on or about June 1, 2020 and continuing to on or about February 12, 2021. The maximum possible penalty if convicted is life imprisonment, $20,000,000 fine, ten-year term of supervised release, and a $100 special assessment. There is also an allegation to forfeit United States currency seized on or about February 12, 2021.
* Dywan Meredith, age 29, of Omaha, is charged with felon in possession of a firearm on or about January 14, 2021. The maximum possible penalty if convicted is 10 years’ imprisonment, $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Jose Vidal Navarro-Gonzalez, a/k/a Jose Navarro, age 46, is charged in a two-count Indictment. Count I charges the defendant with possession with intent to distribute 500 grams or more of methamphetamine on or about February 22, 2021. The maximum possible penalty if convicted is life imprisonment, $10,000,000 fine, a five-year term of supervised release, $100 special assessment. Count II charges the defendant with use possess firearm with drug trafficking on or about February 22, 2021. The maximum possible penalty if convicted is life imprisonment consecutive, a $250,000 fine, a five-year term of supervised release, and a $100 special assessment.
* Bruce A. Nelson, age 53, of Orleans, Nebraska, is charged in a three-count Indictment. Count I charges Nelson with counterfeiting and forging obligations or securities on or about August 1, 2020, and September 7, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count II charges the defendant with passing or uttering counterfeit obligations or securities on or about August 31, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment. Count III charges the defendant with passing or uttering counterfeit obligations or securities on or about September 4, 2020. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
* Joseph T. Pearce, II, age 39, of Plainview, Nebraska, is charged in a three-count Indictment. Count I charges Pearce with filing a false tax return on or about April 13, 2015. The maximum possible penalty if convicted is 3 years’ imprisonment, a $100,000 fine, a one-year term of supervised release, and a $100 special assessment. Count II charges the defendant with filing a false tax return on or about April 11, 2016. The maximum possible penalty if convicted is 3 years’ imprisonment, a $100,000 fine, a one-year term of supervised release, and a $100 special assessment. Count III charges the defendant with filing a false tax return on or about April 20, 2017. The maximum possible penalty if convicted is 3 years’ imprisonment, a $100,000 fine, a one-year term of supervised release, and a $100 special assessment.
* Gregorio Ramirez-Silva, age 34, is charged with illegal reentry after deportation on or about March 12, 2021. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a one-year term of supervised release, and a $100 special assessment.
* Janis Strautkalns, age 48, of Lincoln, Nebraska, is charged in a fourteen-count Indictment. Counts I through X charge Strautkalns with failure to pay over withholding & FICA taxes on or about September 30, 2016 and continuing through December 31, 2018. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment each count. Counts XI through XIV charge the defendant with failure to file tax return on or about 2015 through 2018. The maximum possible penalty if convicted is 1 year’ imprisonment, a $100,000 fine, a one-year term of supervised release, and a $100 special assessment.
* Carney Turner, a/k/a Tez, age 40, is charged in a five-count Indictment. Count I charges Turner with sex trafficking of a minor on or about November 17, 2020 through February, 2021. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count II charges the defendant with sex trafficking of a minor on or about August 1, 2020 through October 31, 2020. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count III charges the defendant with sex trafficking of a minor on or about January 1, 2020 through September 25, 2020. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count IV charges the defendant with coercion and enticement of a minor on or about August 1, 2020 through October 31, 2020. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. Count V charges the defendant with coercion and enticement of a minor on or about January 1, 2020 through September 25, 2020. The maximum possible penalty if convicted is life imprisonment, a $250,000 fine, a life term of supervised release, and a $100 special assessment. There is also an allegation to forfeit United States property seized in Counts I through III.
* Joseph Ward, Jr., age 44, of Phoenix, Arizona, and Vickie M. Ward, a/ka Vickie M. Cloyd, age 41, of Phoenix, Arizona, are charged in an eight-count Indictment. Counts I and II charge Joseph and Vickie with conspiracy to commit bank fraud on or about April 11, 2017, and June 13, 2017. The maximum possible penalty if convicted is 30 years’ imprisonment, a $1,000,000 fine, a three-year term of supervised release, and a $100 special assessment. Counts III through VIII charge the defendants with wire fraud on or about May 17, 2017 through June 13, 2017. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a three-year term of supervised release, and a $100 special assessment each count.
* Clifford Wright, III, age 31, of Omaha, is charged with felon in possession of a firearm on or about July 23, 2020. The maximum possible penalty if convicted is 10 years’ imprisonment, $250,000 fine, a three-year term of supervised release, and a $100 special assessment.
Fremont Man Sentenced to 18 Months in Prison and Ordered to Forfeit $1.7 Million for Smuggling Illegal High-Intensity Discharge HeadlightsRead the Press Release
OAKLAND – Chu-Chiang Ho, a/k/a Kevin Ho was sentenced today in United States District Court to 18 months in prison and ordered to forfeit $1.7 million for illegally importing automobile headlights for years that he knew failed to meet U.S. safety standards, announced Acting United States Attorney Stephanie M. Hinds, Homeland Security Investigations NorCal Special Agent in Charge Tatum King, and Customs and Border Protection San Francisco Director of Field Operations Richard F. Di Nucci. The sentence was handed down by the Honorable Jon S. Tigar, United States District Judge.
Ho, 44, of Fremont, admitted he was aware that the headlights and headlight kit parts he imported from China violated U.S. safety laws because they emit a much brighter light than conventional headlights and create a public safety hazard. In his plea agreement, Ho admitted that in October 2005 he reported to the National Highway Transportation Safety Administration that the High-Intensity Discharge (HID) lights he imported from China were too bright and did not meet regulatory photometric requirements. Ho also claimed he discontinued the sale of all illegal headlights. Instead, for the next 13 years he smuggled these illegal parts into the United States and sold them through websites he controlled, including HIDExtra.com, kalex.us, and opt7.com.
Ho also admitted in his plea agreement that he acted to conceal his scheme. He worked with suppliers to mischaracterize the merchandise he imported in documents provided to U.S. Customs and Border Protection to deceive that agency into believing the merchandise was legal. Ho also changed company names numerous times to avoid detection and listed a variety of family members as corporate officers of his companies despite maintaining his control over the business at all times.
Ho admitted that he profited from his scheme and used the proceeds of the illegal HID Kits to assist in his purchase of various properties in the Bay Area. He admitted that at least $1.7 million in proceeds from his sales is traceable to products he illegally smuggled into the United States.
A federal grand jury indicted Ho on March 14, 2019, charging him with seven counts of smuggling illegal headlights into United States, in violation of 18 U.S.C. § 545. Under the plea agreement, Ho pleaded guilty to one count and the United States dismissed the remaining charges.
In addition to sentencing Ho to a prison term of 18 months and to forfeit $1.7 million, U.S. District Judge Jon S. Tigar also sentenced Ho to a three year period of supervised release to follow his prison term. The defendant remains out of custody on bond and was ordered to surrender to begin his sentence on April 27, 2021.
Assistant U.S. Attorneys Thomas R. Green and Chris Kaltsas are prosecuting the case with the assistance of Noble Hughes and Kay Konopaske. The prosecution is the result of an investigation by the U.S. Department of Homeland Security, Homeland Security Investigations and Customs and Border Protection, with the assistance of the Customs and Border Protection Office of Assistant Chief Counsel, San Francisco, and counsel for the U.S. Trade Fraud Task Force.
Four Defendants Charged with Voter Registration FraudRead the Press Release
RALEIGH, N.C. – Federal criminal cases were unsealed today charging four defendants with making false claims of U.S. citizenship in order to register to vote in the 2016 general election.
The cases stem from an investigation led by the U.S. Attorney’s Office for the Eastern District of North Carolina that has resulted in charges against 24 defendants over the last 18 months. The charges include making false claims of U.S. citizenship in order to register to vote, naturalization fraud, and fraud and misuse of visas, permits, and other documents as it relates to the registration to vote, and false statements in immigration proceedings. Two defendants are charged with illegally voting in the 2016 general election.
Each defendant is charged individually and there are no charges of conspiracy.
The investigation of these cases was conducted by agents of Homeland Security Investigations under the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina.
The U.S. Attorney’s Office would like to express its appreciation to the U.S. Department of Homeland Security for their support in the investigation.
Former UCLA Soccer Coach Sentenced in College Admissions CaseRead the Press Release
BOSTON – The former men’s soccer coach at the University of California – Los Angeles (UCLA), was sentenced today in connection with his involvement in a scheme to use bribery and fraud to facilitate the admission of applicants to UCLA.
Jorge Salcedo, 48, of Dana Point, Calif., was sentenced by U.S. District Court Judge Indira Talwani to eight months in prison, one year of supervised release and forfeiture in the amount of $200,000. In January 2021, Salcedo agreed to plead guilty to one count of conspiracy to commit federal programs bribery.
In 2016, Salcedo agreed with William “Rick” Singer, Ali Khosroshahin – a former head coach of women’s soccer at the University of Southern California – and others to facilitate the admission of a student to UCLA as a purported women’s soccer recruit. Salcedo emailed the UCLA women’s soccer coaches the student’s transcript, test scores, and a fake soccer profile that he had received from Singer and Khosroshahin. When UCLA compliance officers questioned how the applicant had been discovered and whether she actually played soccer, Salcedo created a fake backstory, resulting in her subsequent admission as a recruited walk-on for the women’s soccer team. Salcedo was paid a bribe of $100,000 for his actions.
In 2018, Salcedo agreed with Singer and Khosroshahin to “recruit” the son of another client of Singer’s to the UCLA men’s soccer team despite the fact that the student did not play soccer competitively. In the recruitment paperwork, Salcedo falsely reported that he had seen the student play in China and that he planned to offer him a 25% scholarship. The student was subsequently admitted to UCLA as a student-athlete on the men’s soccer team with a 25% scholarship. In exchange, Salcedo accepted a $100,000 bribe from Singer.
Salcedo also agreed with Singer to recruit another student in return for $100,000.
Singer and Khosroshahin previously pleaded guilty in connection with their roles in the offense. They have not yet been sentenced.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Ramsey E. Covington, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Mark Deckett, Resident Agent in Charge of the Department of Education, Office of Inspector General made the announcement today. Assistant U.S. Attorneys Justin D. O’Connell, Leslie A. Wright, and Kristen A. Kearney of Mendell’s Criminal Division prosecuted the case.
The details contained in the court documents are allegations and the remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Employee of Federal Reserve Board Pleads Guilty to Theft of Government PropertyRead the Press Release
Greenbelt, Maryland – Venkatesh Rao, age 67, of Bethesda, Maryland, pleaded guilty on March 18, 2021 to theft of government property from his former employer, the Board of Governors of the Federal Reserve System (Federal Reserve Board or FRB).
The guilty plea was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Special Agent in Charge John T. Perez of the Federal Reserve Board Office of Inspector General.
According to his guilty plea, in 2019, the Federal Reserve Board notified Rao that it considered his work performance to be unsatisfactory and Rao made a decision to voluntarily separate from the Board. Over the course of five weekend days in November 2019, Rao entered the FRB building in Washington, D.C. approximately 16 times and printed more than 50 restricted government documents from his workstation and avoided FRB restrictions on the emailing and electronic copying of restricted materials. Rao removed the restricted documents, which contained proprietary information used by the FRB to conduct bank stress tests, from the FRB building and stored the materials at his home.
Rao faces a maximum sentence of one year in federal prison for theft of government property. U.S. Magistrate Judge Gina L. Simms has scheduled sentencing for May 28, 2021.
Acting United States Attorney Jonathan F. Lenzner commended the Federal Reserve Board Office of Inspector General for its work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Harry M. Gruber and Peter J. Martinez, who are prosecuting the case.
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Former Correctional Officer Pleads Guilty to Role in Bribery and Drug Smuggling ConspiracyRead the Press Release
A North Carolina man pleaded guilty today to smuggling drugs and other contraband into Caledonia Correctional Institution in exchange for bribe payments.
According to court documents, Kenneth Farr, 47, of Rocky Mount, worked as a correctional officer at Caledonia Correctional Institution, a state prison in Halifax County. On at least six occasions in 2018, Farr used his position to smuggle contraband, including marijuana, tobacco, and what he believed to be oxycodone pills, to inmates in the prison. In exchange for smuggling the contraband, Farr received payments ranging from $300 to $500 in cash or via a mobile application and pocketed at least $2,200 from inmates and their associates.
Farr pleaded guilty to one count of conspiracy to use a facility in interstate commerce in furtherance of unlawful activity. He is scheduled to be sentenced in mid-June and faces a maximum of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Special Agent in Charge Robert R. Wells of the FBI’s Charlotte Field Office made the announcement.
The FBI is investigating the case, with significant assistance from the North Carolina Department of Public Safety.
Trial Attorneys Rebecca M. Schuman and Lauren E. Britsch of the Criminal Division’s Public Integrity Section are prosecuting the case.
Former Casino Employee Sentenced to Three Years in Federal PrisonRead the Press Release
Jackson, Miss. – Darren Nickey, 31, a former employee of the Pearl River Resort – Silver Star Casino was sentenced today by U.S. District Judge Henry T. Wingate to 36 months in prison, followed by three years of supervised release, for theft by an employee of a gaming establishment on Indian lands, announced Acting United States Attorney Darren J. LaMarca. Nickey was also ordered to pay restitution in the amount of $18,340.
From March 2016 through May 2016, on three separate occasions, Nickey embezzled over $1,000 at a time from cash recyclers in the Casino. Because he worked as a cashier in the retail store on the premises, Nickey had access to the cash recycler to stock his cash register. He also made use of colleagues’ log-in passwords to hide the cash thefts. Further investigation revealed that Nickey had repeated the thefts to total $18,340 in over 40 withdrawals.
Nickey was indicted on December 12, 2018 on three counts of theft from the Silver Star Casino. He pled guilty before Judge Wingate on February 19, 2019.
Acting U.S. Attorney Darren J. LaMarca stated, “Federal law imposes severe penalties for crimes committed in licensed gaming establishments. The great potential for misconduct in these settings calls for constant vigilance and self-discipline of those entrusted with the casinos’ operation.”
Acting U.S. Attorney LaMarca commended the work of the Choctaw Police Department of the Mississippi Band of Choctaw Indians, who investigated the case. The case was prosecuted by Assistant United States Attorneys Theodore Cooperstein and Kevin Payne.
Foreign Nationals Sentenced for Roles in Transnational Cybercrime EnterpriseRead the Press Release
Two foreign nationals — one Russian, the other Macedonian — were sentenced today for their role in the Infraud Organization, a transnational cybercrime enterprise engaged in the mass acquisition and sale of fraud-related goods and services, including stolen identities, compromised credit card data, computer malware, and other contraband.
Sergey Medvedev, aka “Stells,” “segmed,” and “serjbear,” 33, of Russia, pleaded guilty in the District of Nevada to one count of racketeering conspiracy in June 2020 and was sentenced today to 10 years in prison. According to court documents, Medvedev was a co-founder of Infraud along with Syvatoslav Bondarenko of Ukraine. From November 2010 until Infraud was taken down by law enforcement in February 2018, Medvedev was an active participant in the Infraud online forum, operating an “escrow” service to facilitate illegal transactions among Infraud members. For several years, Medvedev served as Infraud’s administrator, handling day-to-day management, deciding membership, and meting out discipline to those who violated the enterprise’s rules.
Marko Leopard, aka “Leopardmk,” 31, of North Macedonia, pleaded guilty in the District of Nevada to one count of racketeering conspiracy in November 2019 and was sentenced today to five years in prison. According to court documents, Leopard joined Infraud in June 2011, offering his services as an “abuse immunity” web hoster to Infraud members who wished to create websites to sell contraband. Unlike a legitimate host, Leopard would knowingly cater to websites offering illegal goods and services, ignoring any abuse reports from internet users. He hosted a number of sites for Infraud members in this fashion, providing the infrastructure that allowed his co-conspirators to profit off of their criminal activities.
“Dismantling a cybercrime organization like Infraud requires aggressive pursuit of not only those who steal, sell, and use personal data, but also those who provide the infrastructure that allows cybercrime organizations to operate,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Today’s sentences should serve as a warning to any web host who willingly looks the other way for a quick buck — and that the United States will hold these bad actors accountable, even when they operate behind a computer screen halfway across the world.”
“While criminal operators lurk in the deepest corners of the internet, they ultimately do not escape the reach of law enforcement,” said Special Agent in Charge Francisco Burrola of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Las Vegas. “We will continue to aggressively investigate, disrupt, and dismantle hidden illegal networks that pose a threat in cyberspace. HSI and our partners are at the forefront of combating cyber financial crimes and illicit activities spread by online criminals looking for financial gain.”
Infraud was a criminal enterprise that existed to enrich its members and associates through a myriad of criminal acts of identity theft and financial fraud. Infraud facilitated the sale of contraband by its members, including counterfeit documents, stolen bank account and credit account information, and stolen personal identifying information. Members and associates of Infraud operated throughout the world and the United States, to include Las Vegas. The enterprise, which boasted over 10,000 members at its peak and operated for more than seven years under the slogan “In Fraud We Trust,” is among the largest ever prosecuted by the Department of Justice.
Infraud was responsible for the sale and/or purchase of over 4 million compromised credit and debit card numbers. The actual loss associated with Infraud was in excess of $568 million USD.
HSI Las Vegas and the Police Department of Henderson, Nevada, investigated the case. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Croatia.
Deputy Chief Kelly Pearson and Trial Attorneys Chad McHenry and Alexander Gottfried of the Justice Department’s Organized Crime and Gang Section prosecuted the case.
Florida Return Preparers Charged with Defrauding the IRSRead the Press Release
A federal grand jury in Fort Lauderdale returned an indictment on Tuesday, March 16, 2021, charging two tax preparers with conspiring to defraud the United States and preparing false tax returns. The defendants made their initial court appearance before U.S. Magistrate Judge Patrick M. Hunt today.
According to the indictment, Nikency Alexis owned and operated Unity Tax & Financial Services, a return preparation business in Broward County. From 2011 through at least 2016, Alexis and Thony Guillaume, a return preparer at Unity Tax, allegedly conspired to defraud the IRS by preparing returns for clients that fraudulently increased their clients’ tax refunds. The returns allegedly falsely claimed business and education expenses that the clients did not in fact incur. The indictment also charges that Alexis made false statements on his own personal income tax returns.
If convicted, each defendant faces a maximum sentence of five years in prison on the conspiracy charge and three years in prison on each count of preparing false tax returns for their clients. Alexis also faces a maximum sentence of three years in prison on each count related to his own false tax returns. In addition, the defendants face a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida made the announcement.
Special agents of IRS-Criminal Investigation are investigating the case.
Trial Attorney Lauren Archer of the Tax Division and Assistant U.S. Attorney Deric Zacca are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Federal Jury Convicts Former Mayor of Portage, Ind., on Bribery ChargeRead the Press Release
CHICAGO — A federal jury today convicted the former mayor of Portage, Ind., on a bribery charge for soliciting and pocketing money in connection with the awarding of city contracts.
The jury in U.S. District Court in Hammond, Ind., convicted JAMES SNYDER, 43, of Portage, Ind., on one count of bribery. Evidence at the two-week trial revealed that while serving as mayor, Snyder corruptly solicited and received $13,000 from a business that received more than $1.125 million in city contracts. The conviction is punishable by up to ten years in federal prison.
Snyder was also convicted following a prior trial in 2019 of obstructing and impeding collection efforts of the IRS. He faces a maximum sentence of three years in prison on that charge. Sentencing for both charges is set for July 1, 2021.
The verdict today was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Paul Keenan, Special Agent-in-Charge of the Indianapolis Field Office of the FBI; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. The Indiana State Police provided valuable assistance. The government was represented at trial by Assistant U.S. Attorney Jill R. Koster of the Northern District of Indiana, and Assistant U.S. Attorney Ankur Srivastava of the Northern District of Illinois. The prosecution was supervised by the U.S. Attorney’s Office for the Northern District of Illinois upon recusals by supervisory personnel from the U.S. Attorney’s Office for the Northern District of Indiana.
Erie Woman Purchased Guns for Prohibiter PossessorRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of violating federal firearms laws, Acting United States Attorney Stephen R. Kaufman announced today.
Treasure Ann Gray, 40, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from March 9, 2020, to July 21, 2020, Gray conspired with two co-defendants to violate federal straw purchase laws and acquired firearms for a co-defendant who was prohibited from possessing firearms based on prior criminal convictions.
Judge Cercone scheduled sentencing for July 20, 2021 at 1:00 p.m. The law provides for a total sentence of 5 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.
Pending sentencing, the court continued Gray on bond.
Assistant United States Attorney Paul S. Sellers is prosecuting this case on behalf of the government.
The Pennsylvania State Police, Conewango Police Department, and Homeland Security Investigations conducted the investigation that led to the prosecution of Gray. 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.
Eleven plead guilty to running multi-year mortgage fraud schemeRead the Press Release
ATLANTA – Eleven defendants have pleaded guilty to conspiracy to defraud the United States in a mortgage fraud scheme spanning more than four years and resulting in the approval of more than 100 mortgages based on fabricated documents and false information. Many of the loans are insured by the Federal Housing Administration (FHA) resulting in claims being paid for mortgages that have defaulted.
“These defendants brazenly manipulated the real estate lending process by using their knowledge of the system,” said Acting U.S. Attorney Kurt Erskine. “Mortgage fraudsters threaten the soundness of the real estate market in our community and divert critical resources away from those borrowers who properly qualify for loans. Rooting out bad actors who attempt to abuse the system for their own personal gain makes the mortgage lending system safer and fairer for everyone.”
“These defendants who dragged down our economy by using deception, will now be sentenced and forced to reimburse the victims of their conspiracy,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is committed to combating such criminal activity to protect our citizens and the real estate market from predators who are most interested in pocketing money that they have no right to.”
“These offenders engaged in blatant criminal acts with the sole purpose of enriching themselves at the cost of a federal housing program designed to assist millions of American homebuyers. Their fraudulent undertaking strikes at the fiscal integrity of the FHA and we will work diligently in conjunction with our law enforcement partners to hold them accountable” said Wyatt Achord, Special Agent in Charge, HUD Office of Inspector General.
“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA. We are proud to have partnered with the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.
According to Acting U.S. Attorney Erskine, the charges, and other information presented in court: The defendants participated in a conspiracy in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.
Listing agents Eric Hill and Robert Kelske represented a major nationwide homebuilder and helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud. The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.
Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent. The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer. Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment. Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers. Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.
In another aspect of the scheme, real estate agent Anthony Richard falsely claimed to represent homebuyers as their selling agent in order to receive commissions from the home sales. In reality, Richard had never even met the homebuyers he claimed to represent. To avoid detection, he often notified closing attorneys that he would be unable to attend the closing and sent wire instructions for the receipt of his commissions. When Richard received his unearned commissions, he kicked back the majority of the commissions to Hill or Kelske for enabling him to be added to the deal, keeping a small share for his role in the scheme.
The following defendants have pleaded guilty to conspiring to defraud the United States:
• Eric Hill, 50, of Tyrone, Georgia
• Robert Kelske, 52, of Smyrna, Georgia
• Fawziyyah Connor, 41, of Tyrone, Georgia
• Stephanie Hogan, 57, of Norcross, Georgia
• Jerod Little, 42, of McDonough, Georgia
• Renee Little, 33, of McDonough, Georgia
• Maurice Lawson, 36, of Powder Springs, Georgia
• Todd Taylor, 54, of Fairburn, Georgia
• Paige McDaniel, 49, of Stockbridge, Georgia
• Donald Fontenot, 52, of Locust Grove, Georgia
• Anthony Richard, 44, of Locust Grove, Georgia
These defendants have agreed to pay restitution to the victims of their conspiracy, including the Department of Housing and Urban Development, which insures many of the residential mortgages in the United States. Sentencing hearings have been set for these defendants before U.S. District Judge Mark H. Cohen.
A twelfth defendant, Cephus Chapman, 49, of Warner Robins, Georgia is awaiting trial. Members of the public are reminded that the indictment only contain charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation, Department of Housing and Urban Development Office of Inspector General, and Federal Housing Finance Agency Office of Inspector General.
Assistant U.S. Attorneys Alison Prout and Ryan Huschka are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
California supplier for eastern Montana methamphetamine ring sentenced to 121 months in prisonRead the Press Release
BILLNGS – A California man convicted in a methamphetamine distribution ring that supplied pounds of the drug to the Sidney area was sentenced today to 121 months in prison and five years of supervised release, Acting U.S. Attorney Leif Johnson said.
Marc Buetow, 53, of San Diego, California, pleaded guilty on Oct. 22, 2020 to possession with intent to distribute meth.
U.S. District Judge Susan P. Watters presided. Buetow was detained.
In court documents filed in the case, the government alleged that Buetow reportedly had a drug connection to the Mexican Cartel, would receive meth from his connection and supply individuals in California and Montana. Buetow was involved in supplying multiple pounds of meth to the Sidney area and eastern Montana from October 2015 through at least November 2017. Buetow became a significant source of meth for a Sidney distributor, who received 10 pounds in 2016 and another two to three pounds in 2017. Ten pounds of meth is the equivalent of 36,240 doses. In exchange for the meth, the Sidney distributor sent money to Buetow and eventually deposited money into accounts Buetow had at banks in Sidney and in North Dakota. Buetow received approximately $52,000 from these transactions.
Assistant U.S. Attorneys Zeno Baucus and Bryan Dake prosecuted the case, which was investigated by the FBI.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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California Men Plead Guilty to Conspiracy to Commit Bank FraudRead the Press Release
CONCORD - Vahan Aghajanyan, 25, of Glendale, California, and Garnik Saroyan, 26 of Sun Valley, California, pleaded guilty in federal court on Thursday to conspiracy to commit bank fraud, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, in October of 2018, Aghajanyan and Saroyan traveled from California to New Hampshire and Maine to use fraudulent debit cards encoded with other persons’ bank account information to make ATM withdrawals and purchase postal money orders. On October 31, 2018, postal employees in New Hampshire and Maine reported suspicious transactions involving the two men. The York, Maine police department located and stopped their vehicle. Three cell phones were seized from the men and a federal search warrant was sought to search the phones. A search of the phones revealed a map of post office locations in New Hampshire and photographs of Aghajanyan holding stacks of cash and postal money orders.
Bank records and surveillance videos showed that, on at least 15 occasions, Aghajanyan or Saroyan used a fraudulent debit card to check the balance of a bank account at an ATM. Subsequently, the card was used to purchase a postal money order at a post office in New Hampshire. Records confirm that between October 25, 2018, and October 31, 2018, the two men withdrew at least $2,673 from other persons’ bank accounts and purchased at least 35 postal money orders worth more than $22,000 using fraudulent debit cards.
Aghajanyan and Saroyan are scheduled to be sentenced on June 24, 2021.
“As this case shows, fraudsters may use sophisticated schemes, including fraudulent debit cards, to steal money from innocent victims,” said Acting U.S. Attorney Farley. “This criminal conduct can impact victims in many ways and will not be tolerated. I want to thank the law enforcement officers whose work put a stop to this fraud scheme before it could impact more victims.”
This matter was investigated by the United States Postal Inspection Service with assistance from the York, Maine, Police Department. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter.
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Bloods Gang Leader Sentenced to 10 Years in Prison for Murder Conspiracy on Long IslandRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Jonathan Mayzick, also known as “J-Reck,” a leader of the Nine Trey Gangster set of the Bloods street gang based in Hempstead, New York, was sentenced by United States District Judge Sandra J. Feuerstein to 10 years’ imprisonment for conspiring to murder rival gang members. The charge arose out of the defendant’s participation in a year-long war with the rival Outlaws street gang in the “Heights” neighborhood of Hempstead. Judge Feuerstein ordered the sentence imposed today to run consecutively to a 13 ½-year federal prison term that was imposed in 2018 after Mayzick pled guilty to distributing narcotics. As a result, Mayzick will serve a total of 23 ½ years in prison.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.
“Mayzick was a leader of a murderous street gang that, in its thirst for revenge, engaged in a shooting rampage that terrorized the community and put the public at risk for over a year,” stated Acting U.S. Attorney DuCharme. “Today’s lengthy sentence reflects the tireless efforts of this Office and its law enforcement partners to bring an end to senseless violence and loss of life and eradicate gangs like the Bloods.”
Mr. DuCharme expressed his grateful appreciation to the FBI’s Long Island Gang Task Force, the NCPD’s Gang Investigations Squad and the Firearms Section of the Suffolk County Crime Laboratory for their outstanding investigative work on the case.
“Violent criminals engage in turf battles without any thought about the communities they endanger. Think again. The agencies which compose the FBI Long Island Gang Task Force put our communities first, and we will work round-the-clock to remove and hold violent offenders accountable. Today’s sentence is the community’s message back that violent behavior comes with consequences, and offenders who break federal law should be prepared for a lengthy stay in federal prison,” stated FBI Assistant Director-in-Charge Sweeney.
“Today’s announcement of another gang member going to jail is a clear reminder that these types of illegal activity will never be tolerated in Nassau County, stated NCPD Commissioner Ryder. “The arrest and sentencing comes after a lengthy and extensive investigation and I would like to thank the dedicated members of law enforcement for a job well done. We continue to work with our local, state and federal partners to keep our neighborhoods, communities and residents safe.”
Mr. DuCharme expressed his grateful appreciation to the FBI’s Long Island Gang Task Force, the NCPD’s Gang Investigations Squad and the Firearms Section of the Suffolk County Crime Laboratory for their outstanding investigative work on the case.
Between September 2013 and November 2014, Mayzick, along with members of the Nine Trey, engaged in multiple shootings in retaliation for the September 2013 murder of Dante Quinones, a Bloods associate, by Outlaws member Pedro Merchant. Four individuals were shot by the Bloods: one was shot in the arm, another was shot in the chest and an associate of the Outlaws was shot in the testicles. When gang members attempted to kill the leader of the Outlaws on the front porch of his home, a teenage girl was shot in the face. In addition, the homes of several Outlaws members were sprayed with bullets.
While the gang war was ongoing, Mayzick and his fellow Nine Trey members operated a crack cocaine trafficking business in the Hempstead area. In January 2018, following his plea of guilty, Mayzick was sentenced by United States District Judge Denis R. Hurley to 162 months’ imprisonment for conspiring to distribute crack cocaine.
The government’s investigation into the Bloods and Outlaws gang war has led to the arrest and conviction of nine members and associates of the Nine Trey Gangster Bloods and six members and associates of the Outlaws. Mayzick is the final defendant to be sentenced. The defendants previously sentenced include:
- Bloods member Billy McLen, who was sentenced to 15 years’ imprisonment following his guilty plea to attempted murder in-aid-of racketeering and discharging a firearm during a crime of violence;
- Bloods members Khalil Brown and Naree Barnes, who were each sentenced to 10 years’ imprisonment following their guilty pleas to discharging firearms during a crime of violence for shooting at a rival gang member on October 21, 2014.
- Bloods member Jovan Ramirez, who was sentenced to 10 years’ imprisonment following his guilty plea to conspiracy to distribute and possess with intent to distribute cocaine base;
- Bloods member Philip Saunders, who was sentenced to 12 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in a May 9, 2014 assault of a rival gang member;
- Bloods associate Johnathan Winslow, who was sentenced to 13 years’ imprisonment following his guilty plea to conspiracy to distribute and possess with intent to distribute cocaine base;
- Bloods associate Rashon Campbell, who was sentenced to 5 years’ imprisonment following his guilty plea to conspiracy to distribute cocaine base;
- Outlaws member Alton Gore, who was sentenced to 15 years’ imprisonment following his guilty plea to assault in aid of racketeering and discharging a firearm in connection with a crime of violence;
- Outlaws member Pedro Merchant, who was sentenced to 20 years’ imprisonment for the September 11, 2013 firearm-related murder of Dante Quinones; and
- Outlaws associate Everett Brown, who was sentenced to 15 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in one of three shootings of rivals’ homes committed by the gang on August 19, 2014.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.
The Defendant:
JONATHAN MAYZICK (also known as “J-Reck”)
Age: 32
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-429 (S-2) (SJF
Berlin Man Sentenced to 6 Years in Prison for Drug and Gun OffensesRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, today announced that RANDY TEXIDOR, 31, of Berlin, was sentenced yesterday by U.S. District Judge Stefan R. Underhill to 72 months of imprisonment, followed by three years of supervised release, for fentanyl distribution and gun possession offenses.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, in 2017, the FBI’s Northern Connecticut Gang Task Force and Hartford Police Department received information that Texidor was distributing significant quantities of heroin. Between October and December 2017, investigators made eight controlled purchases of escalating quantities of heroin and/or fentanyl from Texidor. The investigation revealed that Texidor and an associate used an apartment on Wadsworth Street in Hartford to process, package and store heroin. On February 13, 2018, a court-authorized search of the apartment revealed approximately 92 grams of fentanyl, 23 grams of heroin, 500 dose bags of suspected heroin/fentanyl, items used to process and package narcotics, a .380 caliber pistol, and $5,981 in cash.
Texidor has been detained since his arrest on February 13, 2018. On October 30, 2020, he pleaded guilty to one count of possession with intent to distribute fentanyl, and one count of possession of a firearm in furtherance of a drug trafficking crime.
The FBI’s Northern Connecticut Gang Task Force includes members of the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
This case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Bar owner charged with fraudulently receiving funds from CARES Act programRead the Press Release
LAREDO, Texas - A 44-year-old Bryan resident has been charged with one count of wire fraud, announced Acting U.S. Attorney Jennifer B. Lowery.
Keith Anton Johnson is set to make his initial appearance today before U.S. Magistrate Judge Sam Sheldon at 2 p.m.
The indictment, returned March 10, alleges Johnson fraudulently received $123,500 in Payroll Protection Program (PPP) funds from the Small Business Administration as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to the indictment, Johnson owned and operated KJR Entertainment Holdings LLC in conjunction with others from January 2020 through July 2020. The primary concern of KJR Entertainment was the operation of a bar and live music venue in Bryan known as Southerns, according to the charges.
Johnson allegedly submitted required payroll information purporting to be that of current employees to justify the basis for a PPP loan. On these forms, he allegedly attested to an employee’s current status when, in fact, the one-time employee had quit in January 2020, according to the charges.
The indictment alleges Johnson was ineligible for the funds due to a pending indictment in a separate case.
PPP application forms required the applicant to acknowledge program rules and to certify and attest to various qualifiers. One such question referred to an applicant’s criminal charges. Johnson answered no, even though he knew he was currently facing charges in Harris County, according to the indictment.
The CARES Act is a federal law enacted March 27, 2020, to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in United States Small Business Administration (SBA)-guaranteed and forgivable loans to small businesses through the PPP.
Businesses must use PPP loan proceeds for certain permissible expenses, such as payroll costs, interest on mortgages, rent and utilities. Interest and principal on PPP loans can be entirely forgiven if the business spent the loan proceeds on these expense items within a designated period of time.
If convicted, Johnson faces up to 20 years in prison and a possible $250,000 maximum fine.
The FBI and Harris County Precinct One Constables Office conducted the investigation. Assistant U.S. Attorney Thomas Carter is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Apex Man Sentenced to 109 Months Imprisonment for Bank Fraud ConspiracyRead the Press Release
NEW BERN, N.C. – An Apex man was sentenced today to 109 months in prison for his role in a bank fraud conspiracy that caused a total loss of over $800,000 to at least 22 financial institutions.
According to court documents, Jamal Mohammad Eleidy, Age 59, and others conspired to commit bank fraud against various financial institutions while Eleidy resided in the Eastern District of North Carolina and engaged in the United States naturalization process. Specifically, Eleidy and his co-conspirators defrauded various financial institutions by opening credit accounts using various synthetic identities, making charges to those accounts by using cash advances and other transactions, and allowing those accounts to remain delinquent with no intention to repay the outstanding debt. On the date of his naturalization ceremony, Eleidy used one of those synthetic identities to purchase gas for his travel to the ceremony. Eleidy’s sophisticated scheme spanned the course of four years and involved the establishment of shell companies, the rental of various properties, and the laundering of money from the synthetic identity accounts into those owned by Eleidy.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The Federal Bureau of Investigation and United States Postal Inspection Service investigated the case. Assistant U.S. Attorney Banumathi Rangarajan and Special Assistant U.S. Attorney Tamika Moses prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-CR-133-FL-1.
Albany and Bronx Men Charged with Conspiring to Distribute Fentanyl and CocaineRead the Press Release
ALBANY, NEW YORK – Ramion Burt, age 44, of Albany, and Marion Frampton, aka “Marion Framton III,” age 41, of the Bronx, New York, were charged yesterday with conspiring to distribute and possessing with intent to distribute fentanyl and cocaine.
The announcement was made by Acting United States Attorney Antoinette T. Bacon; New York State Police Superintendent Keith Corlett; and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
An indictment returned yesterday alleges that Burt and Frampton conspired to distribute over 40 grams of fentanyl, and cocaine, and possessed over 40 grams of fentanyl, and cocaine, with intent to distribute in Greene County on February 26, 2021. The indictment also alleges that Burt has two prior serious drug felony convictions and that Frampton has a prior serious drug felony conviction and a prior serious violent felony conviction.
The charges in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
Burt and Frampton were arrested by the New York State Police in Catskill, New York, on February 26, 2021, and charged by federal complaint on March 4, 2021. They appeared before United States Magistrate Judge Daniel J. Stewart on March 10, 2021, and were ordered detained pending trial.
If convicted, Burt and Frampton each face at least 10 years and up to life in prison, and a post-imprisonment supervised release term of at least 8 years and up to life.
This case is being investigated by the New York State Police and FBI, and is being prosecuted by Assistant U.S. Attorney Cyrus P.W. Rieck.
Acting U.S. Attorney and FBI Special Agent in Charge Condemn Anti-Asian Bias and DiscriminationRead the Press Release
PORTLAND, Ore.—The U.S. Attorney’s Office for the District of Oregon and the FBI Portland Field Office condemn recent acts of violence against Asian Americans and Pacific Islanders.
“Recent acts of violence targeting Asian Americans and Pacific Islanders are a tragic reminder that our country has much work to do to achieve the promise of equal protection and justice for all,” said Scott Erik Asphaug, Acting U.S. Attorney for the District of Oregon. “Hate-motivated crimes against anyone will not be tolerated. Federal law enforcement will continue to use every available tool and resource to identify and prosecute these crimes whenever and wherever they occur.”
“Asian American and Pacific Islander families in Oregon make up an important part of our cultural identity and heritage, past and present,” said Kieran L. Ramsey, Special Agent in Charge of the FBI in Oregon. “They—like every other community in our state—deserve respect and the ability to live, work, and raise their children without fear. The people of the FBI stand with them, and we will thoroughly investigate any violations of federal law, including threats or acts of violence based on race or ethnicity.”
Recent reports of hate-related activity in our state are deeply concerning to members of our law enforcement community. Beyond local reports, Oregonians have likely seen an increase in news reports and social media posts about alleged hate crimes and harassment across the country. These reports have caused many in our community to fear for their safety.
Under federal law, acts of bias are unlawful if they involve violence, threats, or deprive people of their civil rights. A hate crime is a violent act against a person committed because of the person’s actual or perceived race, color, religion, national origin, gender, sexual orientation, gender identity, or disability. Victims and witnesses of crime are not responsible for determining whether an action rises to the level of a hate crime, and we encourage reports to law enforcement officers trained to investigate.
Federal law also protects against discrimination based on race and national origin in several important areas of daily life, including but not limited to:
- Housing, see www.justice.gov/crt/fair-housing-act-1.
- Immigration and Employee Rights, see www.justice.gov/crt/immigrant-and-employee-rights-section.
- Public Accommodations, see www.justice.gov/crt/title-ii-civil-rights-act-public-accommodations.
- Educational Opportunities, see www.justice.gov/crt/types-educational-opportunities-discrimination.
These basic civil rights take on special significance during the ongoing COVID-19 pandemic. More information about these and other federal civil rights protections is available at www.civilrights.justice.gov/#your-rights.
If you or someone you know have been physically harmed or otherwise believe you are the victim of a crime, please call 911. You can also contact the FBI Portland Field Office by calling (503) 224-4181, or by submitting a tip online at www.tips.fbi.gov.
If you or someone you know have been the victim of unlawful discrimination in housing, employment, places of public accommodation, educational opportunities, or other areas, the Department of Justice may be able to help. You can report violations online via the Civil Rights Reporting Portal at www.civilrights.justice.gov or by calling the U.S. Attorney’s Office for the District of Oregon at (503) 727-1000.
Abel Nazario-Quiñones, PR Senator and Former Mayor of Yauco Sentenced to 18 Months for False StatementsRead the Press Release
SAN JUAN, P.R. – Today, Abel Nazario-Quiñones, former senator and former mayor of the municipality of Yauco, Puerto Rico, was sentenced by United States District Court Judge Joseph N. Laplante to serve 18 months in prison, announced United States Attorney W. Stephen Muldrow.
On March 22, 2020, after a twelve-day jury trial, Abel Nazario-Quiñones, was found guilty of 23 counts of false statements and 5 counts of wire fraud. The U.S. Department of Labor (DOL) Office of Inspector General (OIG) and the FBI were in charge of the investigation.
“The significant prison sentence imposed on Abel Nazario Quiñones should cause other public officials to think twice about circumventing laws that promote transparency in our government,” said United States Attorney Muldrow. “I am immensely proud of our prosecution team and our law enforcement partners for this successful outcome.”
“Today’s sentencing affirms the U.S. Department of Labor, Office of Inspector General’s commitment to ensuring that workers receive the wages they have rightfully earned and to investigate those who obstruct the Department’s efforts to ensure the integrity of its programs. Abel Nazario-Quiñones, the former Mayor of Yauco, Puerto Rico betrayed the public’s trust when he engaged in a scheme to deprive Yauco municipal employees their wages and then made false statements to the Wage and Hour Division to continue the fraud. This office stands committed to working with our law enforcement partners to combat these types of criminal activity,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor, Office of Inspector General.
“The evil of corruption is the basis for some of the most urgent problems our society faces today,” said Rafael Riviere-Vázquez, Special Agent in Charge of the FBI. When our government leaders behave in a way that undermines the institutions they are meant to serve, the people lose all respect for the rule of law. Therefore, every act of corruption, must be punished, otherwise, this evil continues to spread through the very fabric of our society. This case is an example of the fruits of this mission, which is far from over and remains our top priority.”
On February 1, 2019, Senator Abel Nazario-Quiñones was charged in a 37-count superseding indictment with making false statements and wire fraud. According to the superseding indictment, in May 2013, during a routine audit of the Municipality’s records, the Puerto Rico Comptroller’s Office discovered that municipal employees were required to work two voluntary hours per day. This issue was referred to the DOL Wage and Hour Division (WHD), which determined that this voluntary work requirement was a violation of the Fair Labor Standards Act.
In February 2015, Nazario-Quiñones signed a Back Wage Compliance Payment Agreement with the DOL Wage and Hour Division (WHD) in which he agreed to pay back wages totaling $588,961.43 to 177 municipal employees for the period of August 1, 2012 to July 31, 2014, according to a predetermined schedule listing each employee who was owed wages, the amount they were owed, and the date by which each employee had to be paid. The Agreement allowed the Municipality until February 2018 to complete all the payments.
In August 2016, during their next routine audit of the Municipality’s records, the Puerto Rico Comptroller’s Office learned that, although employees had been receiving lump sum payments according to the terms of the Agreement, the Municipality unilaterally began withholding the employees’ regular wages without the knowledge or consent of the DOL WHD. This issue was referred to the DOL WHD which, in November 2016, referred it to the DOL Office of Inspector General (OIG).
The DOL OIG ultimately identified 30 contract municipal employees who, by the end of his mayoral term in 2016, Nazario-Quiñones had certified were paid their back wages pursuant to the Agreement. The DOL OIG also determined that those 30 contract municipal employees, after receiving the wages to which they were entitled under the Agreement, had their regular pay with-held for certain periods of time at the direction of Nazario-Quiñones, while he provided various explanations to the employees as to why they were receiving these lump sum checks.
During trial, the government was able to prove that Nazario-Quiñones falsely certified to the Department of Labor that he would not retaliate against the employees for accepting the payment, when in fact he directed the payroll department to withhold earnings of these employees for varying lengths of time, despite their continued work for the municipality.
The case was prosecuted by Assistant United States Attorneys Scott Anderson and Myriam Fernández, and investigated by Special Agent Frances Agenjo from the DOL-OIG with assistance from Special Agent David Torres from the FBI and Virgilio Pabón from the Puerto Rico Comptroller’s Office.
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14 Defendants Sentenced to 74+ Years in Forest Park Healthcare FraudRead the Press Release
Fourteen defendants convicted in the Forest Park Medical Center bribery scam have been sentenced to a combined 74+ years in federal prison and ordered to pay a total of $82.9 million in restitution, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Seven defendants – Wilton McPherson “Mac” Burt, Jackson Jacob, Douglas Sung Won, Michael Bassem Rimlawi, Shawn Mark Henry, Mrugeshkumar Shah, and Iris Kathleen Forrest – were convicted at trial in April 2019, and were sentenced this week by U.S. District Judge Zack Zouhary. Ten other defendants pleaded guilty prior to trial, and one, who was granted a mistrial, pleaded guilty after trial.
“Patient needs, not physician finances, should dictate where, when, and how patients are treated. Money should never be allowed to influence medical decisions,” said Acting U.S. Attorney Prerak Shah. “We believe the stiff sentences handed down this week send a strong deterrent message: Violate anti-kickback laws, and you will face consequences.”The $200 million scheme was designed to induce doctors to steer lucrative patients – particularly those with high-reimbursing, out-of-network private insurance – to the now defunct hospital.
Most of the kickbacks, which totaled more than $40 million, were disguised as consulting fees or “marketing money” doled as a percentage of surgeries each doctor referred to Forest Park.
Instead of billing patients for out-of-network co-payments, instituted by insurers to de-incentivize the high costs associated with out-of-network treatment, Forest Park allegedly assured patients they would pay in-network prices. Because they knew insurers wouldn’t tolerate such practices, they concealed the patient discounts and wrote off the difference as uncollected “bad debt.”
Hospital manager Alan Andrew Beauchamp – who pleaded guilty in August 2018 to one count of conspiracy to pay healthcare bribes and one count of commercial bribery under the Travel Act, then testified for the government during his coconspirators’ trial – admitted that Forest Park “bought surgeries,” and then “papered it up to make it look good.” Mr. Beauchamp was sentenced Friday afternoon to 63 months in federal prison.
Other defendants were sentenced as follows:
- Wilton “Mac” Burt, Forest Park’s managing partner, was found guilty on 10 of 12 counts, including one count of conspiracy, two counts of paying kickbacks, six counts of commercial bribery in violation of the Travel Act, and one count of money laundering. He was sentenced Wednesday to 150 months in federal prison.
- Jackson Jacob, owner of the shell companies through which some of the bribes were routed, was found guilty on four of 14 counts, including conspiracy and three counts of paying kickbacks. He was sentenced Wednesday to 96 months in federal prison.
- Dr. Douglas Won, a spinal surgeon, was found guilty on one of two counts, conspiracy. He was sentenced Thursday to 60 months in federal prison.
- Dr. Michael Rimlawi, a spinal surgeon who partnered with Won, was found guilty on three of four counts, including conspiracy and two counts of receiving kickbacks. He was sentenced Thursday to 90 months in federal prison.
- Dr. Shawn Henry, a spinal surgeon who invested in FMPC, was found guilty on three of three counts, including conspiracy, commercial bribery, and money laundering. He was sentenced Wednesday to 90 months in federal prison.
- Dr. Mrugeshkumar Shah, a pain management doctor, was found guilty on four of four counts, including conspiracy, two counts of paying kickbacks, and one count of commercial bribery. He was sentenced Thursday to 42 months in federal prison.
- Iris Forrest, a nurse who recruited and preauthorized worker’s comp requests, was convicted on two of two counts, including conspiracy and paying kickbacks. She was sentenced Wednesday to 36 months in federal prison.
- Israel Ortiz, the founder of Kortmed, a company that fills out preauthorization for worker’s comp patients, pleaded guilty in February 2017 to conspiracy to pay and receive healthcare kickbacks. He was sentenced Thursday to 12 months in federal prison.
- Dr. Wade Neal Barker, a bariatric surgeon who co-founded Forest Park in 2008, pleaded guilty in October 2018 to one count of conspiracy to pay health care bribes and one count of paying illegal remuneration in violation of the Travel Act. He was sentenced Thursday to 60 months in federal prison.
- Andrew Jonathan Hillman, a co-owner of Hospital Business Concepts, a surgeon brokerage, pleaded guilty in October 2018 to conspiracy to pay and receive healthcare bribes. He was sentenced in December 2019 to 60 months in federal prison.
- Dr. Frank Gonzalez, a chiropractor who referred patients to Forest Park in return for bribes, pleaded guilty in August 2018 to conspiracy to pay and receive healthcare kickbacks. He was sentenced Friday to 21 months in federal prison.
- Semyon Narosov, a co-owner of Hospital Business Concepts, pleaded guilty in October 2018 to conspiracy to pay and receive healthcare bribes. He was sentenced in July 2020 to 51 months in federal prison.
- Dr. Richard Toussaint Jr., an anesthesiologist who co-founded Forest Park in 2008, pleaded guilty in March 2017 to one count of conspiracy to pay health care bribes and one count of paying illegal remuneration in violation of the Travel Act. He was sentenced in August 2020 to 60 months in federal prison.
- Carli Adel Hempel, who pleaded guilty in July 2019 to conspiracy to misapply property of a health care benefit program, was sentenced in October 2020 to three years’ probation.
- Kelly Wade Loter and Andrea Kay Smith, who both pleaded guilty to misprision of a felony (failure to report a felony), were sentenced in January 2020 to three and five years’ probation, respectively.
The Forest Park prosecution is one of the first cases in the nation to use the federal Travel Act to prosecute healthcare fraud.
In addition to the $82.9 million restitution, the government plans to collect more than $25.5 million in money judgments against those convicted in the Forest Park scheme.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Defense - Defense Criminal Investigative Service, the U.S. Office of Personnel Management Office of Inspector General, and Internal Revenue Service Criminal Investigation, with assistance from the Food and Drug Administration and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Andrew Wirmani, Kate Pfeifle (fmr), Marcus Busch, Mark Tindall (fmr), and Gail Hayworth prosecuted the case.
- Wilton “Mac” Burt, Forest Park’s managing partner, was found guilty on 10 of 12 counts, including one count of conspiracy, two counts of paying kickbacks, six counts of commercial bribery in violation of the Travel Act, and one count of money laundering. He was sentenced Wednesday to 150 months in federal prison.
18 March 2021
uBiome Co-Founders Charged with Federal Securities, Health Care Fraud ConspiraciesRead the Press Release
SAN FRANCISCO – A federal grand jury handed down a 33-page indictment today charging Zachary Schulz Apte and Jessica Sunshine Richman with multiple federal crimes including conspiracy to commit securities fraud, conspiracy to commit health care fraud, money laundering, and related offenses in connection with alleged schemes to defraud health insurance providers and investors raise to capital for now-bankrupt microbiome testing company uBiome.
The announcement was made by Acting U.S. Attorney Stephanie M. Hinds, Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, U.S. Postal Inspection Service (USPIS) Inspector in Charge Rafael Nuñez; U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan; Defense Criminal Investigative Service (DCIS) Western Field Office Special Agent in Charge Bryan D. Denny; U.S. Department of Veterans Affairs, Office of Inspector General (VA OIG) Special Agent in Charge is Jason P. Root; Amtrak Office of the Inspector General Special Agent In Charge, Western Field Office, Thomas M. Hopkins; Office of Personnel Management Office of Inspector General (OPM-OIG) Deputy Inspector General Performing the Duties of the Inspector General Norbert E. Vint.
According to the indictment, Apte, 36, and Richman, 46, both of whom resided in San Francisco at relevant times, co-founded uBiome in October 2012. Initially, uBiome offered a direct-to-consumer service, called “Gut Explorer,” which allowed an individual to submit a fecal sample that uBiome would analyze in its laboratory and produce a report comparing the customer’s microbiome to the microbiomes of others who had submitted fecal samples to uBiome, all for less than $100. The indictment describes how the defendants eventually expanded uBiome’s business model to include development and marketing of “clinical” tests regarding the gut and vaginal microbiomes, which tests would ostensibly be used by medical professionals to make medical decisions and as to which uBiome would seek reimbursement from health insurance providers in amounts up to nearly $3,000. The indictment alleges that Apte’s and Richman’s efforts to have uBiome develop clinical tests that could be billed to insurance companies were intended to attract large-scale venture capital investment. By late 2015, shortly before it raised millions of dollars in its “Series B” fundraising round, uBiome began to market a “clinical” version of a test. Thereafter, the indictment alleges that Apte and Richman caused uBiome to employ various methods to secure health care provider orders for its clinical gut test and clinical vaginal test, including by having its Chief Medical Officer review test requests from customers and endeavoring to build a network of health care providers external to uBiome.
“The innovation that emerges from our Bay Area companies is unparalleled,” said Acting U.S. Attorney Hinds, “but all innovation must exist within the boundaries of the law. Today’s indictment alleges that in their efforts to move fast to drive business and investment capital to their microbiome start up, defendants turned a blind eye to compliance and pursued at all costs a path designed to bring the greatest investment in their company. The indictment alleges defendants bilked insurance providers with fraudulent reimbursement requests, a practice that inevitably would result in higher premiums for us all. Further, defendants cashed out on the investment that flowed into the company to benefit themselves. Today’s indictment is a cautionary tale about the importance of robust compliance programs rather than lip service, and the importance of honesty with investors.”
“This was the result of a very complex investigation conducted by the FBI and our federal and state partners,” said FBI Special Agent in Charge Fair. “This indictment illustrates that the heavily regulated healthcare industry does not lend itself to a ‘move fast and break things’ approach, but rather to an approach of compliance and accountability.”
“The United States Postal Inspection Service has a long history of successfully investigating complex fraud cases,” said USPIS Inspector in Charge Nuñez. “Anyone who engages in deceptive practices should know they will not go undetected and will be held accountable. The collaborative investigative work on this case conducted by Postal Inspectors, our law enforcement partners, and the United States Attorney’s Office illustrates our efforts to protect American consumers and businesses.”
“The announced indictment is a crucial step forward in holding accountable those who, among other things, allegedly engaged in fraudulent schemes against TRICARE, the Department of Defense’s healthcare system for military members and their families,” said DCIS Special Agent in Charge Denny. “DCIS will continue to work with its law enforcement partners to see this matter through in order to protect the best interests of the Department of Defense and the American public.”
“This indictment demonstrates the VA OIG’s unwavering commitment to safeguard the integrity of the programs that support our nation’s veterans and their families” said VA OIG Special Agent in Charge Root.
“We are very proud of this well-coordinated, joint effort—a true partnership between the U.S. Attorney’s Office and multiple investigative agencies like Amtrak’s Office of Inspector General,” said Amtrak OIG Special Agent in Charge Hopkins. “Because of this joint effort and efforts like it, we continue to achieve success across the country in bringing justice to those who target Amtrak’s health care plan, its employees and their dependents.”
“The OPM OIG is committed to investigating unscrupulous providers that take advantage of the system and defraud the American taxpayer,” said OPM OIG Deputy Inspector General Vint.
The indictment describes how the defendants ultimately adopted several fraudulent practices with respect to its clinical tests. Specifically, according to the indictment, the defendants developed, implemented, and oversaw practices designed to deceive approving health care providers and reimbursing insurance providers regarding tests that were not validated and not medically necessary. Further, the indictment alleges the defendants falsified documents and lied about and concealed material facts when insurance providers asked questions to which truthful answers would reveal the fraudulent nature of uBiome’s billing model. The indictment alleges such practices included (1) fraudulently submitting reimbursement claims for re-tests or re-sequencings of archived samples (referred to internally at uBiome as “upgrades”); (2) utilizing a captive network of doctors and other health care providers who fraudulently were given partial and misleading information about the test requests they were reviewing; (3) fraudulently submitting reimbursement claims with respect to tests that had not been validated under applicable federal standards and/or for which patient test results had not yet been released; (4) manipulating dates of service to conceal uBiome’s actual testing and marketing practices from insurance providers, and to maximize billings; (5) fraudulently not charging patients for patient responsibility required by insurers, and instead, in some cases, incentivizing them with gift cards, and then making false or misleading statements about, or concealing, those practices from insurance providers; and (6) falsifying documents, using the identity of doctors and other health care providers without their knowledge or authorization, and lying to insurance providers in response to requests for information, overpayment notifications, requests for recoupment of billings, denials of reimbursement requests, or audits investigating uBiome’s billing practices. The indictment alleges that, between 2015 and 2019, uBiome submitted more than $300 million in reimbursement claims to private and public health insurers. Of these reimbursement claims, uBiome was paid more than $35 million.
The indictment also includes allegations that defendants oversaw an effort to deceive and mislead investors about various aspects of uBiome’s business during its Series B and Series C fundraising rounds, which occurred primarily in 2016 and 2018, respectively. Specifically, the indictment alleges defendant misled investors about (1) the success of uBiome’s business model in terms of revenues and reimbursement rates; (2) the threats to future revenues represented by uBiome’s failure to collect patient responsibility, marketing of upgrades, and reliance a captive group of health care providers to generate orders; and (3) the lack of clinical utility and acceptance in the medical community of uBiome’s tests. The indictment alleges that the defendants failed to disclose to investors, and otherwise concealed from investors, that “not only were insurance providers’ questions about and responses to uBiome’s billing practices calling uBiome’s entire business model into question, but [defendants] had had to falsify documents and lie to insurance providers in order to attempt to keep them at bay.” The indictment alleges that Apte and Richman induced investors to invest more than $64 million in uBiome stock during the Series B and Series C fundraising rounds and, furthermore, that Apte and Richman together sold investors more than $12 million of their personal uBiome during those rounds.
In addition to these charges, the indictment contains allegations that defendants engaged in aggravated identity theft and engaging in transactions with the proceeds of the specified unlawful activities of wire fraud and securities fraud (i.e., money laundering). With respect to the identity theft charges, the indictment provides examples of how defendants used the names and personal information of various health care providers to create documents for submission to health insurance companies with respect to certain uBiome customers during and in relation to the conspiracy and scheme to defraud those insurers. With respect to money laundering, the indictment alleges Apte used more than $10,000 of proceeds of the scheme to defraud investors to make a $2,250,000 payment ostensibly to a law firm for a retainer and to deposit $500,000 into a bank account. Also with respect to money laundering, the indictment alleges Richman used more than $10,000 of proceeds of the scheme to defraud investors to make payments related to real property in Washington State and Florida, to purchase an annuity from a life insurance company, to pay a law firm $2,000,000 ostensibly for a legal retainer, and to transfer funds in the amount of $900,000 intended as partial payment for the purchase of a residence in south Florida.
In sum, the defendants are charged with the following crimes and face the following maximum penalties:
Offense
Statute
Maximum Statutory Penalty (per count)
Conspiracy to Commit Health Care Fraud
(one count, each defendant)
18 U.S.C. § 1349
20 years
Health Care Fraud
(14 counts, each defendant)
18 U.S.C. § 1347
20 years
Aggravated Identity Theft and Aiding and Abetting
(six counts, each defendant)
18 U.S.C. § 1028A & 2
Two years, consecutive to underlying sentence
Conspiracy to Commit Wire Fraud and Securities Fraud
(one count, each defendant)
18 U.S.C. § 371
5 years
Wire Fraud and Aiding and Abetting
(10 counts, each defendant)
18 U.S.C. § 1343 & 2
20 years
Fraud in Connection with the Purchase and Sale of Securities
(nine counts, each defendant)
15 U.S.C. §§ 78j(b), 78ff;
17 C.F.R. § 240.10b-5;
18 U.S.C. § 2
20 years
Engaging in Monetary Transactions with Proceeds of Specified Unlawful Activity
(Apte, two counts; Richman, four counts)
18 U.S.C. § 1957
10 years
The court may order additional terms of supervised release, as well as additional monetary penalties and restitution. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
An indictment merely alleges that crimes have been committed, and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The defendants’ initial federal court appearances have not yet been scheduled.
The case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District of California. The prosecution is the result of an investigation by the FBI, USPIS, HHS-OIG, DCIS, VA-OIG, Amtrak-OIG; OPM-OIG; and the U.S. Department of Labor, Employee Benefits Security Administration, with assistance from the California Department of Justice Division of Medi-Cal Fraud & Elder Abuse and the California Department of Insurance. The U.S. Attorney’s Office and all the federal law enforcement agencies also thank the San Francisco Regional Office of the Securities and Exchange Commission (SEC). The SEC conducted a parallel investigation that was also announced today.
Williamsport Man Pleads Guilty to Wire FraudRead the Press Release
WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Benjamin Butler, age 33, of Williamsport, Pennsylvania, pled guilty on March 17, 2021, before U.S. District Court Judge Matthew W. Brann to wire fraud.
According to Acting United States Attorney Bruce D. Brandler, Butler engaged in a kiting scheme in September and October of 2015, whereby he used multiple credit accounts to fraudulently pay off $18,850 of credit card charges by using the temporary credit on one card to pay off another account even though he did not have the funds to ultimately cover such a payment.
The charges stem from an investigation by the Federal Bureau of Investigation and the Department of Justice Office of the Inspector General. Assistant United States Attorney Geoffrey W. MacArthur is prosecuting the case.
A sentence following a finding of guilt is imposed by the court after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Butler is facing a maximum of thirty years of incarceration and a $250,000 fine. Under the Federal Sentencing Guidelines, the court is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Wheaton Man Sentenced to Seven Years in Federal Prison for Conspiracy to Distribute and Possess with Intent to Distribute Heroin and Cocaine BaseRead the Press Release
Greenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced Thomas Lee Keyes, a/k/a “Mac,” a/k/a “Richard Lee Dantzler,” a/k/a “Mark Anton Johnson,” age 56, of Wheaton, Maryland, to seven years in federal prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin and cocaine base. Judge Messitte ordered that Keyes’ federal sentence is to be served consecutive to the 15-year sentence Keyes is currently serving a for a state burglary and firearm conviction.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Interim Chief Hector Velez of the Prince George’s County Police Department.
According to his plea agreement, from February 2014 to July 2017, Keyes conspired with others to possess and distribute quantities of heroin and cocaine base (“crack”) in Maryland and the District of Columbia. Keys distributed heroin and crack from his residence in Hyattsville, Maryland, and later from a condominium unit in Beltsville, Maryland, and from hotels in College Park, Maryland. At the hotels, Keyes and others rented rooms where they used, stored, and sold drugs. At times, Keyes hand delivered the narcotics to customers at their homes. From April 2015 to January 2017, Keyes sold at least 595 grams of heroin and 457 grams of crack sporadically amongst four individuals. One individual bought $300 of narcotics on almost a daily basis.
Keyes was arrested by law enforcement on June 20, 2017 at a hotel in College Park. Keyes acknowledges that the distribution of at least 700 grams of heroin and at least 225 grams of cocaine base were foreseeable to him during the time of the conspiracy.
Acting United States Attorney Jonathan F. Lenzner praised the ATF, the FBI, and the Prince George County Police Department for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Jennifer R. Sykes and Daniel C. Gardner, who prosecuted the case.
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Waterbury Man Sentenced to 5 Years in Federal Prison for Distributing FentanylRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that ADRIAN FLEMMING, also known as “Gordo,” 25, of Waterbury, was sentenced today by U.S. District Judge Janet C. Hall to 60 months of imprisonment, followed by four years of supervised release, for distributing fentanyl.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, on January 14, 2020, Waterbury Police attempted to stop Flemming’s car after they received information that he planned to conduct a large narcotics transaction in Waterbury. Flemming fled on foot for a short distance before being apprehended. A search of Flemming’s person and car revealed 2,190 dose bags containing a mixture of fentanyl and heroin, a quantity of marijuana, and nearly $2,000 in cash.
On October 26, 2020, Flemming pleaded guilty to one count of possession with intent to distribute 40 grams or more of fentanyl.
Flemming, who is released on a $50,000 bond, is required to report to prison on April 26, 2021.
This investigation was conducted by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Waterbury Police Department. The case was prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Michael J. Gustafson.
United States Reaches Proposed Settlement with Ranch Owner to Restore Creek and Wetlands and Pay Damages for TrespassRead the Press Release
The U.S. Department of Justice, U.S. Environmental Protection Agency (EPA) and Bureau of Land Management (BLM) announced that they have reached a proposed settlement with John Raftopoulos, Diamond Peak Cattle Company LLC and Rancho Greco Limited LLC (collectively, the defendants) to resolve violations of the Clean Water Act (CWA) and the Federal Land Policy and Management Act (FLPMA) involving unauthorized discharges of dredged or fill material into waters of the United States and trespass on federal public lands in northwest Moffat County, Colorado.
On Oct. 22, 2020, the United States filed suit in federal district court alleging that beginning in approximately 2012, and as recently as approximately 2015, the defendants discharged dredged or fill material into Vermillion Creek and its adjacent wetlands in order to route the creek into a new channel, facilitate agricultural activities and construct a bridge. These alleged unauthorized activities occurred on private land owned by the defendants and on public land managed by BLM, constituting a trespass in violation of the FLPMA. Vermillion Creek and its adjacent wetlands are waters of the United States and may not be filled without a CWA Section 404 permit from the U.S. Army Corps of Engineers (Corps), which was not obtained. EPA develops and interprets the policy, guidance and environmental criteria the Corps uses in evaluating permit applications.
“This proposed settlement will result in restoration of important waters in the arid west, deter future similar violations of the Clean Water Act and help ensure accountability and a level playing field,” said Acting Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division.
“The U.S. Attorney’s Office and Department of Justice will take all necessary steps to protect our precious waters, wetlands, and wildlife,” said Acting United States Attorney Matt T. Kirsch for the District of Colorado. “Western rivers are a treasure and require protection from all threats, including damage to their vital creeks, streams, and tributaries.”
“Unauthorized dredging and filling of waters of the U.S. will not be tolerated,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “With this action, EPA is ensuring the proper restoration of vital creek and wetland resources.”
“This proposed settlement will allow the public lands impacted to begin the process of recovery for the future use and benefit of all the public,” said BLM Colorado State Director Jamie Connell.
The United States’ lawsuit further contended that the defendants’ alleged trespass also included unauthorized irrigation, removal of minerals and destruction of numerous cottonwood trees on federal public land. The fill and related activities on BLM lands were conducted without BLM authorization. The defendants’ trespass actions not only interfered with the public’s right to current enjoyment of federal public lands, but also jeopardized the future health and maintenance of these lands for use by all.
Under a proposed settlement filed in the U.S. District Court for the District of Colorado to resolve the lawsuit, the defendants agreed to: pay a $265,000 civil penalty for CWA violations; pay $78,194 in damages and up to $20,000 in future oversight costs for trespass on public lands managed by BLM; remove the unauthorized bridge constructed on public lands; restore approximately 1.5 miles of Vermillion Creek to its location prior to defendants’ unauthorized construction activities; restore the 8.47 acres of wetlands impacted adjacent to the creek; and plant dozens of cottonwood trees to replace those previously removed from federal lands. Additionally, under the terms of the proposed settlement, the defendants will place a deed restriction on their property to protect the restored creek and wetlands in perpetuity.
This proposed settlement will repair important environmental resources damaged by the defendants. The portions of Vermillion Creek and its adjacent wetlands impacted by the defendants’ unauthorized activities provided aquatic and wildlife habitat, runoff conveyance and groundwater recharge. The straightening of Vermillion Creek contributed to erosion of the bed and banks of the stream and detrimental sediment deposition downstream of the channelization. Browns Park National Wildlife Refuge, which provides important habitat for the endangered Colorado pikeminnow, is located at the confluence of Vermillion Creek and the Green River, approximately one mile downstream from the impacted area. Similarly, the destruction of numerous cottonwood trees located adjacent to the creek eliminated nesting, perching, and roosting habitat for raptor species, including bald eagle, golden eagle and red-tailed hawk. Cottonwood galleries with riparian vegetation also provide nesting habitat for a variety of migratory birds.
The proposed settlement, which is subject to a 30-day public comment period and final court approval, is available for review at: https://www.justice.gov/enrd/consent-decrees
For more information on the Clean Water Act, visit EPA's compliance web page: http://www.epa.gov/compliance. Help EPA protect our nation's land, air, and water by reporting violations: http://www.epa.gov/tips/
For more information on Section 404 of the Clean Water Act please visit: https://www.epa.gov/cwa-404/permit-program-under-cwa-section-404.
United States Reaches Proposed Settlement with Ranch Owner to Restore Creek and Wetlands and Pay Damages for TrespassRead the Press Release
DENVER – The U.S. Department of Justice, U.S. Environmental Protection Agency (EPA) and Bureau of Land Management (BLM) announced that they have reached a proposed settlement with John Raftopoulos, Diamond Peak Cattle Company LLC and Rancho Greco Limited LLC (collectively, the defendants) to resolve violations of the Clean Water Act (CWA) and the Federal Land Policy and Management Act (FLPMA) involving unauthorized discharges of dredged or fill material into waters of the United States and trespass on federal public lands in northwest Moffat County, Colorado.
On October 22, 2020, the United States filed suit in federal district court alleging that beginning in approximately 2012, and as recently as approximately 2015, the defendants discharged dredged or fill material into Vermillion Creek and its adjacent wetlands in order to route the creek into a new channel, facilitate agricultural activities and construct a bridge. These alleged unauthorized activities occurred on private land owned by the defendants and on public land managed by BLM, constituting a trespass in violation of the FLPMA. Vermillion Creek and its adjacent wetlands are waters of the United States and may not be filled without a CWA Section 404 permit from the U.S. Army Corps of Engineers (Corps), which was not obtained. EPA develops and interprets the policy, guidance and environmental criteria the Corps uses in evaluating permit applications.
“This proposed settlement will result in restoration of important waters in the arid west, deter future similar violations of the Clean Water Act and help ensure accountability and a level playing field,” said Acting Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division.
“The U.S. Attorney’s Office and Department of Justice will take all necessary steps to protect our precious waters, wetlands, and wildlife,” said Acting United States Attorney Matt Kirsch for the District of Colorado. “Western rivers are a treasure and require protection from all threats, including damage to their vital creeks, streams, and tributaries.”
“Unauthorized dredging and filling of waters of the U.S. will not be tolerated,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “With this action, EPA is ensuring the proper restoration of vital creek and wetland resources.”
“This proposed settlement will allow the public lands impacted to begin the process of recovery for the future use and benefit of all the public,” said BLM Colorado State Director Jamie Connell.
The United States’ lawsuit further contended that the defendants’ alleged trespass also included unauthorized irrigation, removal of minerals and destruction of numerous cottonwood trees on federal public land. The fill and related activities on BLM lands were conducted without BLM authorization. The defendants’ trespass actions not only interfered with the public’s right to current enjoyment of federal public lands, but also jeopardized the future health and maintenance of these lands for use by all.
Under a proposed settlement filed in the U.S. District Court for the District of Colorado to resolve the lawsuit, the defendants agreed to: pay a $265,000 civil penalty for CWA violations; pay $78,194 in damages and up to $20,000 in future oversight costs for trespass on public lands managed by BLM; remove the unauthorized bridge constructed on public lands; restore approximately 1.5 miles of Vermillion Creek to its location prior to defendants’ unauthorized construction activities; restore the 8.47 acres of wetlands impacted adjacent to the creek; and plant dozens of cottonwood trees to replace those previously removed from federal lands. Additionally, under the terms of the proposed settlement, the defendants will place a deed restriction on their property to protect the restored creek and wetlands in perpetuity.
This proposed settlement will repair important environmental resources damaged by the defendants. The portions of Vermillion Creek and its adjacent wetlands impacted by the defendants’ unauthorized activities provided aquatic and wildlife habitat, runoff conveyance and groundwater recharge. The straightening of Vermillion Creek contributed to erosion of the bed and banks of the stream and detrimental sediment deposition downstream of the channelization. Browns Park National Wildlife Refuge, which provides important habitat for the endangered Colorado pikeminnow, is located at the confluence of Vermillion Creek and the Green River, approximately one mile downstream from the impacted area. Similarly, the destruction of numerous cottonwood trees located adjacent to the creek eliminated nesting, perching, and roosting habitat for raptor species, including bald eagle, golden eagle and red-tailed hawk. Cottonwood galleries with riparian vegetation also provide nesting habitat for a variety of migratory birds.
Case number: 20-cv-03166-SKC
The proposed settlement, which is subject to a 30-day public comment period and final court approval, is available for review at: https://www.justice.gov/enrd/consent-decrees
For more information on the Clean Water Act, visit EPA's compliance web page: http://www.epa.gov/compliance. Help EPA protect our nation's land, air, and water by reporting violations: http://www.epa.gov/tips/
For more information on Section 404 of the Clean Water Act please visit: https://www.epa.gov/cwa-404/permit-program-under-cwa-section-404.
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Two felons admit guilt in scheme to steal thousands in COVID-19 unemployment insurance fundsRead the Press Release
SAVANNAH, GA: Two Florida residents have admitted they colluded in a scheme to steal pandemic unemployment funds.
Tamesha Lashelle Brown, 41, of Dade City, Fla., and Malik Abdul McCaully, 43, of Tampa, pled guilty in U.S. District Court to Informations charging each of them with conspiring to commit various offenses, including mail fraud, wire fraud, bank fraud, disaster relief fraud, and access device fraud, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. The charge carries a maximum statutory penalty of up to five years in federal prison, along with substantial financial penalties and up to three years of supervised release. There is no parole in the federal system.
“COVID-19 relief funds approved by Congress were intended specifically to help unemployed citizens struggling financially during the pandemic,” said Acting U.S. Attorney Estes. “These defendants created a scheme to steal those funds for their own enrichment – but that scheme came to an end in Georgia.”
As described in court documents and testimony, Brown and McCaully were both convicted felons who obtained personal identifying information of other individuals, without those individuals’ knowledge or consent, and then used that information to file fraudulent applications for unemployment assistance, including with the State of Pennsylvania. The two posed as the applicants when communicating with banks distributing the payments. After fraudulently obtaining bank cards preloaded with more than $100,000 in unemployment insurance funds, Brown and McCaully travelled to various ATMs in Pennsylvania, withdrawing thousands of dollars.
The two came to the attention of law enforcement in the early morning hours of Oct. 3, 2020, when a vehicle driven by McCaully sped from an attempted traffic stop by Jasper County, S.C., sheriff’s deputies on Interstate 95. McCaully eventually crashed the vehicle in Pooler, Georgia, and he — and his passenger, Brown — were taken into custody. Inside the vehicle, law enforcement recovered more than $20,000 in cash, dozens of prepaid debit cards issued by states’ unemployment insurance funds in the names of others, as well as several false identifications that the two had used.
“It is disheartening to see the willingness of some individuals to take advantage of people in need during a national and world crisis,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Their personal greed affects every taxpaying citizen, in particular those who need help most. The FBI will make every effort to make sure federal funds are used as intended.”
The FBI, the U.S. Secret Service, and the U.S. Department of Labor Office of Inspector General, with the assistance of the Pooler Police Department, Port Wentworth Police Department, and the Georgia State Patrol investigated the case. It was prosecuted for the United States by the U.S. Attorney’s Office for the Southern District of Georgia.
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.
Two Mexican Nationals Residing in Bakersfield Plead Guilty to Selling 12 Pounds of MethamphetamineRead the Press Release
FRESNO, Calif. — Cesar Larios-Ortega, 40, a Mexican national residing in Bakersfield, pleaded guilty today to conspiracy to distribute methamphetamine, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, during two meetings in May 2019, Larios-Ortega and co‑defendant Rodolfo Cardenas-Lara, 43, also a Mexican national residing in Bakersfield, sold 12 pounds of methamphetamine to a customer at a negotiated price of $1,750 per pound.
This case is the product of an investigation by Homeland Security Investigations. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.
On Feb. 5, Cardenas-Lara pleaded guilty to the conspiracy and is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on May 7. Larios-Ortega is scheduled to be sentenced by Judge Drozd on June 11. The defendants face a mandatory minimum statutory penalty of at least 10 years in prison, a maximum term of life in prison, and a $10 million fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Two Bank Insiders Plead Guilty to Fraudulent Loan Scheme and Bank BriberyRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that codefendants HERODE CHANCY and MICHAEL ALBARELLA, who at the time of offense were employed as a managers at a Manhattan branch of a national bank (“Bank-1”), have pled guilty before United States District Judge Lewis J. Liman in connection with their respective roles in a loan fraud and bank bribery scheme. CHANCY pled guilty on March 12, 2021, to conspiracy to commit wire and mail fraud, and ALBARELLA pled guilty today to bank bribery.
U.S. Attorney Audrey Strauss said: “Bank employee Herode Chancy engaged in a scheme to obtain over $1 million in commercial loans for fake businesses, and his co-worker Michael Albarella then accepted a bribe to open a bank account using a stolen identity for the purpose of laundering a portion of the stolen money. Chancy and Albarella now await sentencing for their fraudulent and corrupt acts.”
According to the allegations in the Complaint, Indictment, and statements made in court:
From at least in or about March 2019 up to and including at least in or about March 2020, CHANCY and Adedayo Ilori conspired to fraudulently obtain business loans from a third-party commercial lender with the intent not to repay the loans – i.e., with the intent to “bust out” the loans. CHANCY and Ilori together submitted eight fraudulent business loan applications for a total of $1,025,000 in business loans. The business loan applications submitted by CHANCY and Ilori included doctored bank statements and listed the identities of other persons as the loan applicants, including stolen identities. CHANCY and Ilori also opened bank accounts using the identities of those other persons in order to receive the loan payments from the third-party commercial lender. CHANCY and Ilori subsequently conspired with ALBARELLA, another bank manager at Bank-1, to open a bank account using a stolen identity to launder approximately $200,000 of the expected proceeds of the loan scheme. ALBARELLA opened the bank account at Bank-1 using the stolen identity provided by CHANCY and Ilori, and ALBARELLA accepted a $10,000 bribe to open the bank account.
CHANCY and Ilori believed that the underwriter for the third-party commercial lender was participating in the scheme and agreed to pay the underwriter a “commission” for the underwriter’s role in the scheme. In reality, however, the underwriter was an undercover law enforcement officer.
* * *
CHANCY, 41, of Bellerose, New York, pled guilty to one count of conspiracy to commit wire and mail fraud, which carries a maximum penalty of 20 years in prison. CHANCY also admitted that he conspired to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). CHANCY will be sentenced by Judge Liman on July 9, 2021, at 2:00 p.m.
ALBARELLA, 35, of Floral Park, New York, pled guilty to one count of bank bribery, which carries a maximum penalty of 30 years in prison. ALBARELLA will be sentenced by Judge Liman on June 28, 2021, at 2:00 p.m.
Ilori is charged with: (1) conspiracy to commit mail and wire fraud, (2) wire fraud, (3) mail fraud, and (4) conspiracy to commit money laundering, each of which carries a maximum penalty of 20 years in prison, and (5) aggravated identity theft, which carries a mandatory term of two years in prison, to be served consecutively to any other term of imprisonment.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the outstanding investigative work of the New York FBI’s Eurasian Organized Crime Task Force and Homeland Security Investigation’s El Dorado Task Force.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Tara M. La Morte and Cecilia E. Vogel are in charge of the prosecution.
The allegations against Ilori in the Complaint and Indictment are merely accusations, and Ilori is presumed innocent unless and until proven guilty.
Twelve Indicted for Drug Trafficking in San Antonio AreaRead the Press Release
Twelve San Antonio residents face federal drug trafficking charges, announced U.S. Attorney Ashley C. Hoff and Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, Houston Division.
A federal grand jury indictment unsealed today charges the following defendants with conspiracy to possess with intent to distribute a controlled substance:
Francisco Garza aka “Pancho,” 52, of San Antonio; Joe Angel Villarreal aka “Compadre,” 55, of San Antonio; Frank Zepeda aka “Pancho,” 51, of San Antonio; Jose Tabares, 53, of San Antonio; Matthew Villa, 51, of San Antonio; Michelle Zamarripa, 59, of San Antonio; Jacqueline Alvarez, 57, of San Antonio; Rodger Hernandez aka “Rocky,” 43, of San Antonio; Jay Haggard, 34, of San Antonio; Oscar Heredia, 37, of San Antonio; Jason Gutierrez aka “Big Mac,” 37, of San Antonio; and
Jacob Sanchez, 21, of San Antonio.The indictment alleges that the defendants conspired in 2020 to distribute methamphetamine and cocaine. The indictment also charges Haggard with one count of being a felon in possession of a firearm, namely a Taurus semi-automatic pistol on August 28, 2020. According to court records, Haggard was convicted in 2006 and sentenced to four years imprisonment for aggravated robbery in Bexar County.
Yesterday, federal, state and local authorities arrested nine defendants. Hernandez, Haggard and Heredia were already in custody. During today’s arrests authorities seized approximately two kilograms of cocaine, over 30 pounds of hydroponic marijuana, methamphetamine, three handguns and approximately $235,000. Prior to today, authorities seized approximately 21 kilograms of cocaine, 100 kilograms of methamphetamine, a firearm and approximately $124,000 along with other assets attributable to this organization.
“The arrests made yesterday in San Antonio conclude a comprehensive investigation by the DEA along with our law enforcement partners into the criminal activities of a drug trafficking organization, who were responsible for transporting and distributing methamphetamine and cocaine into our communities,” said DEA Special Agent in Charge Comeaux. “Nothing is more important than the safety and security of our citizens. The DEA will continue to relentlessly pursue any individual or organization that threatens the well-being and stability of our communities.”
All the defendants, excepting Gutierrez, face between 10 years and life in federal prison upon conviction of conspiracy to possess a controlled substance with intent to distribute. Gutierrez faces between five and 40 years upon conviction. Haggard faces up to 10 years in federal prison upon conviction of being a felon in possession of a firearm.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
DEA, San Antonio Police Department, Texas Department of Public Safety Criminal Investigation Division, U.S. Marshals Service, Bexar County Sheriff’s Office, U.S. Customs and Border Protection, Internal Revenue Service Criminal Investigation and Kendall County Sheriff’s Office conducted this Organized Crime Drug Enforcement Task Force (OCDETF) investigation called Operation Dirty Confidential.
The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering operationsprimarily responsible for the nation’s illegal drug supply.
Tulsa Man Convicted of Abusive Sexual Contact with a MinorRead the Press Release
A Tulsa man pleaded guilty today in federal court for sexually abusing a minor, announced Acting U.S. Attorney Clint Johnson.
Oscar Manuel Cabrera-Westerheidy, 37, of Tulsa, pleaded guilty to abusive sexual contact with a minor under 12 years of age in Indian Country and abusive sexual contact with a minor between 12 and 16 years of age in Indian Country.
“Oscar Cabrera-Westerheidy took advantage of a position of trust and sexually abused this child for nine years. Thankfully, in an act of courage done to protect others, she spoke out against her abuser,” said Acting U.S. Attorney Clint Johnson. “I am proud of the prosecutors in my office and our partners at the FBI and Tulsa Police Department who brought this predator to justice.”
Cabrera-Westerheidy admitted that from January 2011 through August 2020, he sexually abused a child for his own sexual gratification. The victim disclosed the abuse to a parent out of concern that the defendant was caring for other children.
U.S. District Judge Claire V. Eagan set sentencing for June 17, 2021.
The FBI and Tulsa Police Department conducted the investigation. Assistant U.S. Attorney Chantelle D. Dial is prosecuting the case. Ms.Dial is a prosecutor from the U.S. Attorney’s Office in the Western District of Washington. She volunteered to assist prosecution efforts here in the Northern District of Oklahoma due to increased jurisdictional responsibilities regarding crimes involving Native American victims or defendants and that occur within the Muscogee (Creek) Nation and Cherokee Nation Reservations. Ms. Dial recently extended six more months to assist with the mission.
Swiss Hacker indicted for conspiracy, wire fraud, and aggravated identity theftRead the Press Release
Seattle – A prolific Swiss computer hacker, TILL KOTTMANN, 21, was indicted today by a grand jury in the Western District of Washington for computer intrusion and identity and data theft activities spanning 2019 to the present. KOTTMANN, aka “deletescape” and “tillie crimew,” who initially was charged in September 2020, remains in Lucerne, Switzerland, and has received notice of pending U.S. charges.
“Stealing credentials and data, and publishing source code and proprietary and sensitive information on the web is not protected speech–it is theft and fraud,” said Acting U.S. Attorney Tessa M. Gorman. “These actions can increase vulnerabilities for everyone from large corporations to individual consumers. Wrapping oneself in an allegedly altruistic motive does not remove the criminal stench from such intrusion, theft, and fraud.”
According to the indictment, since 2019, KOTTMANN and coconspirators have hacked dozens of companies and government entities and posted the private victim data of more than 100 entities on the web.
Specifically, the indictment alleges that KOTTMANN used a variety of hacking techniques and predominantly targeted “git” and other source code repositories belonging to private companies and public sector entities. KOTTMANN cloned the source code, files, and other confidential and proprietary information, which at times included hard-coded administrative credentials, access keys, and other means of further system or network access. KOTTMANN then used such means of access to further infiltrate the internal infrastructure of victims and copy additional files, records, and information.
KOTTMANN then published, or “leaked,” victim data obtained through the actors’ and others’ hacking conduct. The FBI recently seized a website domain operated by KOTTMANN and used by KOTTMANN’s group to publish hacked data. In order to recruit others, grow the scheme, and further promote the hacking activity and KOTTMANN’s own reputation in the hacking community, KOTTMANN actively communicated with journalists and over social media about computer intrusions and data theft.
The indictment alleges various examples of hacks KOTTMANN committed. For instance, in February 2020, KOTTMANN illegally accessed computers belonging to a security device manufacturer located in the Western District of Washington and stole proprietary data. Likewise, in April 2020, KOTTMANN victimized the manufacturer of tactical equipment. In the latter instance, KOTTMANN improperly used the credentials of an employee to access illegally the manufacturer’s source code databases. In August, KOTTMANN hacked a Washington state agency and a U.S. government contractor and stole source code related to various web applications. And, more recently, in January 2021, KOTTMANN similarly conducted cyberattacks on an automobile manufacturer and a financial investment company. KOTTMANN published data stolen through these hacks, among many others, on KOTTMANN’s website and used social media to promote the hacking activity and the theft and release of proprietary information.
On Friday, March 12, 2021, authorities in Switzerland executed search warrants related to the criminal activity.
“A cyber-criminal could be anywhere in the world. Thanks to our foreign partnerships, international borders won't provide a haven for their illegal activities,” said Donald Voiret, FBI Special Agent in Charge, Seattle. “This indictment demonstrates the FBI’s commitment to working with our partners around the globe to disrupt and dismantle criminal enterprises that target Americans and their businesses.”
Conspiracy to commit computer fraud and abuse is punishable by up to 5 years in prison. Wire fraud and conspiracy to commit wire fraud are punishable by up to 20 years in prison. Aggravated identity theft is punishable by a mandatory minimum 24 months in prison to run consecutive to any sentence imposed on other counts of conviction.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI Seattle Cyber Task Force. The case is being prosecuted by Assistant United States Attorneys Steven Masada and Jehiel Baer with assistance from DOJ’s Office of International Affairs (OIA), as well as Canton of Luzerne Police, the Canton of Luzerne Prosecutor's Office, and the Swiss Federal Office of Justice.
kottmann_indictment_filed.pdfSussex County Man Charged with $1.9 Million Paycheck Protection Program Fraud SchemeRead the Press Release
NEWARK, N.J. – A Sussex County, New Jersey, man was charged for his role in fraudulently obtaining federal Paycheck Protection Program (PPP) loans totaling $1.9 million, Acting U.S. Attorney Rachael A. Honig announced.
John Jhong, 51, of Sparta, New Jersey, is charged by complaint with one count of bank fraud, one count of false representation of a Social Security number and one count of money laundering. Jhong is scheduled to make his initial appearance by videoconference this afternoon before U.S. Magistrate District Judge Leda Dunn Wettre.
According to documents filed in this case and statements made in court:
Jhong submitted 10 fraudulent PPP loan applications to several lenders on behalf of 10 purported businesses. The PPP is overseen by the Small Business Administration designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about their average monthly payroll expenses and number of employees. Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages. PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period after receiving the proceeds.
Jhong’s PPP applications allegedly contained false and fraudulent representations to the participating lenders, including documentation purporting to be from the IRS. In fact, according to IRS records, none of the tax documents Jhong submitted with the PPP loan applications were ever filed with the IRS. Jhong also fabricated the existence of numerous business partners. In some instances, the personal identifying information for Jhong’s purported business partners belonged to individuals who had been deceased for over a decade.
Based on Jhong’s alleged misrepresentations, the lenders approved Jhong’s PPP loan applications and provided Jhong’s purported business with $1.9 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Jhong then converted a portion of the proceeds into a cashier’s check that was used to fund a business account.
The count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. The count of false representation of Social Security number carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. The count of money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.
Acting U.S. Attorney Rachael Honig credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt. She also thanked the Sparta Township Police for their assistance.
The government is represented by Assistant U.S. Attorney Olajide A. Araromi of the U.S. Attorney’s Office, Government Fraud Unit, in Newark, and Trial Attorney Chad M. Davis of the Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Substantial Prison Term Imposed for Fentanyl DistributorsRead the Press Release
Spokane – Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Josue Medina-Perez, age 24 and Francisco Delgado, age 35, both from Phoenix, Arizona, were sentenced March 17, 2021, after admitting to being members of a drug trafficking organization responsible for trafficking Fentanyl-laced pills into the Eastern District of Washington. They each pled guilty to Conspiracy to Distribute 400 grams or more of Fentanyl. Senior United States District Judge Edward Shea sentenced Josue Medina to a 96-month term of imprisonment, to be followed by a 5-year term of court supervision after release from federal prison and Francisco Delgado to a 10-year term of imprisonment, to be followed by a 4-year term of court supervision after release from federal prison.
According to information disclosed during court proceedings, Medina-Perez and Delgado were identified as members of a drug trafficking organization tied directly to Sinaloa Mexico, operating in the Phoenix, Arizona area. Medina-Perez and Delgado were identified as one of the first major sources of Fentanyl-laced pills in Eastern Washington and were responsible for transporting and distributing more than 5,000 to 10,000 pills per week beginning in 2017. These Fentanyl-laced pills are made to appear to be prescription medication. Fentanyl, an extremely potent opioid, is largely responsible for the marked increase in drug overdoses and deaths in Eastern Washington. As Judge Shea noted during the sentencing hearing, Fentanyl is the most dangerous and insidious drug facing our community today and, based upon the quantity of pills sold by Medina-Perez and Delgado and their negative impact on this community, these lengthy sentences were appropriate.
Joseph H. Harrington said, “The United States Attorney’s Office for the Eastern District of Washington will aggressively prosecute cases involving fentanyl distribution, and the sentence imposed in this case demonstrates that fentanyl dealers will be held accountable for their illegal conduct. I commend the outstanding investigative work of our federal, state, and local law enforcement partners.”
Today’s enforcement action is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes. This OCDETF investigation is being conducted by the U.S. Drug Enforcement Administration.
This case was investigated by the Spokane Resident Office of the Drug Enforcement Administration in partnership with the Kennewick, Pasco and Richland Police Departments. This case was prosecuted by Stephanie Van Marter, an Assistant United States Attorney for the Eastern District of Washington.
State Department Employee Sentenced to Prison for Trafficking in Counterfeit Goods from U.S. EmbassyRead the Press Release
EUGENE, Ore.— A U.S. Department of State employee and his spouse were sentenced today for their roles in an international conspiracy to traffic in counterfeit goods from the U.S. Embassy in Seoul, Republic of Korea.
Gene Leroy Thompson Jr., 54, was sentenced to 18 months in federal prison and three years’ supervised release. Thompson Jr.’s wife, Guojiao “Becky” Zhang, 40, was sentenced to three years’ supervised release to include 8 months of home detention. Thompson Jr. and Zhang were also ordered to forfeit a combined total of $229,302 and pay $740 in restitution.
Thompson and Zhang previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods on Dec. 20. 2020.
According to court documents, Thompson Jr. was an Information Programs Officer employed by the Department of State at the U.S. Embassy in Seoul, a position that required him to maintain a security clearance. Zhang resided with him in Seoul. Between September 2017 and December 2019, Thompson Jr. and Zhang sold counterfeit goods on a variety of e-commerce platforms.
Thompson Jr. and Zhang conspired with one another to sell counterfeit Vera Bradley handbags from e-commerce accounts to persons throughout the United States. Thompson Jr. used his State Department computer to create numerous accounts on a variety of e-commerce platforms. Once Thompson Jr. created these accounts, Zhang took primary responsibility for operating the accounts, communicating with customers, and procuring counterfeit merchandise to be stored in Oregon. Thompson Jr. and Zhang also directed a co-conspirator in Oregon to ship items to purchasers across the United States.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon; and Assistant Director Ricardo Colón of the U.S. Department of State’s Diplomatic Security Service (DSS) made the announcement.
The case was investigated by the DSS Office of Special Investigations with assistance from the U.S. Postal Inspection Service. The case is being prosecuted by Senior Counsel Frank Lin of the Criminal Division’s Computer Crime and Intellectual Property Section, Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section, and Assistant U.S. Attorney Amy Potter of the District of Oregon.
SpaceX Engineer Pleads Guilty to Insider TradingRead the Press Release
Tampa, Florida – James Roland Jones, a/k/a “MillionaireMike” (33, Hermosa Beach, CA), has pleaded guilty to conspiracy to commit securities fraud. Jones faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, from 2016 until at least 2017, Jones conspired with another to commit securities fraud. Jones, using the moniker “MillionaireMike,” purchased personally identifiable information (“PII”) on the dark web, including names, addresses, dates of birth, and social security numbers. He used this information, in part, to open and/or operate accounts for the purpose of conducting financial transactions based on material, non-public information related to publicly traded securities, more commonly known as “insider information.”
In April 2017, an FBI undercover employee provided Jones with purported insider information related to a publicly traded, U.S. company (“U.S. Company 1”). From April 18, 2017, until May 4, 2017, Jones and a conspirator conducted numerous securities transactions based on this purported insider information.
In June 2017, Jones gained control of an investment account that had been fraudulently opened in the name of J.L.M. (“the J.L.M. Account”). In July 2017, Jones revealed to the FBI undercover employee that Jones had insider information related to a second publicly-traded, U.S. company (“U.S. Company 2”). From July 14, 2017, until July 26, 2017, Jones and the conspirator conducted numerous securities transactions based on this purported insider information, including some of which that were executed using the J.L.M. Account.
On March 18, 2021, the Securities and Exchange Commission announced (https://www.sec.gov/news/press-release/2021-51) that it had also charged Jones with related conduct in the United States District Court for the Southern District of Indiana.
The criminal case was investigated by the Federal Bureau of Investigation (Houston and Tampa Divisions). It is being prosecuted by Assistant United States Attorney Carlton C. Gammons.
School Owners Indicted for Conspiracy, Fraud, Identity Theft, and Money LaunderingRead the Press Release
Jackson, Miss. – Nancy W. New, 67, of Jackson, Mississippi, and her son, Zachary W. New, 38, were indicted by a federal grand jury in a seventeen-count indictment charging them with conspiracy to defraud, wire fraud, aggravated identity theft and money laundering, announced Acting United States Attorney Darren J. LaMarca; Michelle A. Sutphin, Special Agent-in-Charge, Federal Bureau of Investigation in Mississippi; Derrick Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General; Anthony Mohatt, Acting Special Agent-in-Charge, U.S. Department of Agriculture, Office of Inspector General; Rafiq Ahmad, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General; and Shad White, Auditor, Mississippi Office of the State Auditor.
According to the indictment, Nancy New and Zachary New submitted fraudulent reimbursement claims for the salaries of teachers at New Summit School in Jackson to the Mississippi Department of Education under the Mississippi Adequate Education Program. As a result, New Learning Resources, Inc., a for-profit company owned by Nancy New and Zachary New, fraudulently obtained in excess of two million dollars ($2,000,000) to which it was not entitled. Nancy W. New and Zachary W. New personally benefited from this scheme to defraud.
As set forth in the indictment, these fraudulent reimbursement claims included:
- false claims that individuals who no longer worked at New Summit School had continued to work there as teachers;
- false claims that individuals who were working at New Summit School in another capacity were working as teachers;
- a false claim that at least one individual who had never worked at New Summit School worked as a teacher there;
- false claims that the experience level and certification level of teachers at New Summit School were higher than they actually were, resulting in reimbursement at an artificially higher salary level;
- false claims that students who no longer attended New Summit School continued to attend school there; and
- false claims that individuals who had never attended New Summit School in Jackson were full-time students attending school at New Summit School.
The indictment alleges that, in one instance, Nancy New and Zachary New laundered approximately $250,000 of the fraudulently obtained reimbursement money through different bank accounts they controlled before finally using the proceeds to purchase a house.
Nancy New and Zachary New had their initial court appearance before United States Magistrate Judge F. Keith Ball in Jackson today at 1:00 p.m. The News are scheduled for trial in May before United States District Judge Carlton W. Reeves in Jackson. If convicted, they each face up to 210 years in federal prison and up to a $4,000,000 in fines.
The case was investigated by agents with the FBI Jackson Division; U.S. Department of Health and Human Services, Office of Inspector General; U.S. Department of Agriculture, Office of Inspector General; U.S. Department of Labor, Office of Inspector General; and the Mississippi Office of the State Auditor. The case is being prosecuted by Assistant United States Attorney Dave Fulcher.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. Every defendant is presumed innocent until proven guilty in a court of law.
Russian National Pleads Guilty to Conspiracy to Introduce Malware into a U.S. Company’s Computer NetworkRead the Press Release
A Russian national pleaded guilty in federal court today for conspiring to travel to the United States to recruit an employee of a Nevada company into a scheme to introduce malicious software into the company’s computer network.
According to court documents and admissions made in court, from July 15, 2020, to Aug. 22, 2020, Egor Igorevich Kriuchkov, 27, conspired with others to recruit an employee of a large U.S. company to transmit malware provided by the conspirators into the company’s computer network. Once the malware was installed, Kriuchkov and his co-conspirators would use it to exfiltrate data from the company’s computer network and then extort the company by threatening to disclose the data.
As part of the conspiracy, Kriuchkov traveled from Russia to California through New York. On numerous occasions between Aug. 1, 2020, and Aug. 21, 2020, Kriuchkov traveled from California to Nevada in an attempt to entice the employee to participate in this hacking scheme, offering to pay the employee with Bitcoin if the employee transmitted the malware. After meeting with Kriuchkov, the employee reported his conduct to the victim company, which promptly contacted the FBI. The FBI then thwarted the scheme.
“The swift response of the company and the FBI prevented a major exfiltration of the victim company’s data and stopped the extortion scheme at its inception,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “This case highlights the importance of companies coming forward to law enforcement, and the positive results when they do so.”
“This case highlights our office’s commitment to protecting trade secrets and other confidential information belonging to U.S. businesses — which is becoming even more important each day as Nevada evolves into a center for technological innovation,” said Acting U.S. Attorney Christopher Chiou for the District of Nevada. “Along with our law enforcement partners, we will continue to prioritize stopping cybercriminals from harming American companies and consumers.”
“This is an excellent example of community outreach resulting in strong partnerships, which led to proactive law enforcement action before any damage could occur,” said Special Agent in Charge Aaron C. Rouse of the FBI’s Las Vegas Field Office.
Kriuchkov pleaded guilty to one count of conspiracy to intentionally cause damage to a protected computer and is scheduled to be sentenced May 10.
The investigation was led by the FBI Las Vegas Field Office with the assistance of the FBI Los Angeles Field Office, the FBI Sacramento Field Office, and the Washoe County Sheriff’s Office in Nevada.
The case is being prosecuted by Senior Counsel C.S. Heath and Trial Attorney Thomas Dettore of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Richard Casper of the District of Nevada.
Russian National Pleads Guilty to Conspiracy to Introduce Malware into A U.S. Company’s Computer NetworkRead the Press Release
LAS VEGAS, Nev. – A Russian national pleaded guilty in federal court today for conspiring to travel to the United States to recruit an employee of a Nevada company into a scheme to introduce malicious software into the company’s computer network.
According to court documents and admissions made in court, from July 15, 2020, to Aug. 22, 2020, Egor Igorevich Kriuchkov, 27, conspired with others to recruit an employee of a large U.S. company to transmit malware provided by the conspirators into the company’s computer network. Once the malware was installed, Kriuchkov and his co-conspirators would use it to exfiltrate data from the company’s computer network and then extort the company by threatening to disclose the data.
“The swift response of the company and the FBI prevented a major exfiltration of the victim company’s data and stopped the extortion scheme at its inception,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “This case highlights the importance of companies coming forward to law enforcement, and the positive results when they do so.”
“This case highlights our office’s commitment to protecting trade secrets and other confidential information belonging to U.S. businesses — which is becoming even more important each day as Nevada evolves into a center for technological innovation,” said Acting U.S. Attorney Christopher Chiou for the District of Nevada. “Along with our law enforcement partners, we will continue to prioritize stopping cybercriminals from harming American companies and consumers.”
“This is an excellent example of community outreach resulting in strong partnerships, which led to proactive law enforcement action before any damage could occur,” said Special Agent in Charge Aaron C. Rouse of the FBI’s Las Vegas Field Office.
As part of the conspiracy, Kriuchkov traveled from Russia to California through New York. On numerous occasions between Aug. 1, 2020, and Aug. 21, 2020, Kriuchkov traveled from California to Nevada in an attempt to entice the employee to participate in this hacking scheme, offering to pay the employee with Bitcoin if the employee transmitted the malware. After meeting with Kriuchkov, the employee reported his conduct to the victim company, which promptly contacted the FBI. The FBI then thwarted the scheme.
Kriuchkov pleaded guilty to one count of conspiracy to intentionally cause damage to a protected computer and is scheduled to be sentenced May 10.
The investigation was led by the FBI Las Vegas Field Office with the assistance of the FBI Los Angeles Field Office; the FBI Sacramento Field Office; and the Washoe County Sheriff’s Office in Nevada.
The case is being prosecuted by Senior Counsel C.S. Heath and Trial Attorney Thomas Dettore of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Richard Casper of the District of Nevada.
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Russell Co. Woman Pleads Guilty to $499,000 Unemployment Fraud SchemeRead the Press Release
ABINGDON, Va. – Leelynn Danielle Chytka pleaded guilty today in U.S. District Court in Abingdon, Va., to charges that she conspired with others to defraud the government of more than $499,000, commit mail fraud, and commit aggravated identify theft, Acting United States Attorney Daniel P. Bubar and Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General announced today.
Chytka, 28, of Russell County, Virginia, waived her right to be indicted and pleaded guilty today to a four-count Information charging her with one count of conspiracy to defraud the government, one count of conspiracy to commit mail fraud with respect to benefits authorized and paid in connection with a presidentially declared major disaster or emergency, one count of aggravated identity theft, and one count of distribution of suboxone.
“Over the past year, Virginians have endured one of the worst pandemics our country has ever seen. During this time, jobless claims in the Commonwealth dramatically increased, as unemployment spiked. While some struggled to make ends meet, this defendant and her co-conspirators worked to defraud an unemployment system which exists as a safety net for those in need,” Acting United States Attorney Daniel P. Bubar said today. “They filed multiple fraudulent unemployment claims in an effort to collect almost $500,000 in benefits they were not entitled to—benefits that could have gone to Virginians that needed it. I am grateful to the Department of Labor and the Internal Revenue Service – Criminal Investigation, the Norton Police Department, and the Russell County Sheriff’s Office for their diligence in bringing this conspiracy to justice.”
“Pandemic unemployment insurance benefits are a lifeline for those individuals who are qualified and in need. The Defendant along with her co-conspirators, engaged in a scheme to defraud the Virginia Employment Commission by filing for unemployment insurance using the identities of individuals, many of whom were incarcerated and not entitled to receive benefits. The Office of Inspector General will continue to work diligently with the U.S. Attorney’s Office, the Virginia Employment Commission, and our law enforcement partners to protect the integrity of the unemployment insurance system from those who choose to exploit the program,” said Jonathan Mellone, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
Chytka admitted today to leading a conspiracy to commit fraud against the United States in connection with a scheme involving the filing of fraudulent claims for pandemic unemployment benefits.
According to court documents, Chytka, and others, conspired to collect personal identification information of more than 35 co-conspirators, including 15 inmates in the custody of the Virginia Department of Corrections, and to file fraudulent claims of pandemic-related unemployment.
Over the course of nine months, Chytka filed fraudulent claims for at least 37 individuals, with a total actual loss to the United States of at least $499,000.
The investigation of the case was conducted by the Department of Labor-Office of the Inspector General and the Internal Revenue Service – Criminal Investigation, the Norton Police Department, and the Russell County Sheriff’s Office. Assistant United States Attorney Daniel J. Murphy is prosecuting the case for the United States.
Registered Sex Offender Sentenced to 10 Years for Possessing Image and Videos Depicting the Sexual Exploitation of MinorsRead the Press Release
PITTSBURGH - A resident of Natrona Heights, Pennsylvania, has been sentenced in federal court to 10 years’ imprisonment and 10 years’ supervised release on his conviction of Possession of Material Depicting the Sexual Exploitation of a Minor, Acting United States Attorney Stephen R. Kaufman announced today.
United States District Judge Marilyn J. Horan imposed the sentence on Jack Ulrich, Jr., age 43.
According to information presented to the court, Ulrich, Jr., on October 12, 2018, unlawfully possessed more than 100 photographs and videos in computer graphics files, which depicted minors, some of whom were under the age of 12 years, engaged in sexually explicit conduct. Ulrich admitted to possessing and sharing the sexually exploitive material with other individuals using, among other applications, Chatous, Facebook, and Dropbox. At the time of the offense, Ulrich was a registered sex offender, having been convicted in 2006 of a sex offense involving minors in the Court of Common Pleas of Westmoreland County, Pennsylvania.
Prior to imposing sentence, Judge Horan stated that a 10-year term of imprisonment served the purposes of deterrence, just punishment, and protection of the public.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
Acting United States Attorney Kaufman commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Ulrich, Jr.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Raleigh County Pharmacist Sentenced to More Than 11 Years in Prison for Fraud SchemeRead the Press Release
BECKLEY, W.Va. – A Raleigh County pharmacist was sentenced today to 135 months in federal prison for her role in a fraud scheme which cost victims over $2 million in losses. She was also ordered to pay over $2.5 million in restitution to the victims and serve a term of three years of supervised release.
According to court documents and admissions at the plea and sentencing hearings, Natalie P. Cochran, 40, of Daniels, owner of Technology Management Solutions (TMS) and Tactical Solutions Group (TSG) in Beckley, knowingly defrauded and took money and property from individuals, a financial institution and several other companies from approximately June 2017 through at least August 22, 2019. She persuaded them to invest in TMS and TSG and in phony government contracts by making false misrepresentations regarding her and her companies’ experience and purported success as government contractors. Cochran convinced at least 11 people to invest approximately $2.5 million in alleged government contracts. The investors paid through personal checks, cashier’s checks and wire transfers. She also convinced an investor to send $511,920 through a wire transfer from North Carolina. Cochran never invested the money she received from victims, instead she put it into her personal and business bank accounts for personal purposes unrelated to the investments. Cochran admitted to using investor funds to make numerous purchases over $10,000, including withdrawing more than $37,500 to purchase a 1965 Shelby Cobra. She also admitted to knowing that at least one of her investors suffered a financial hardship as a result of her scheme. As part of this scheme, Cochran used some investors’ funds to pay other investors a partial return on their investment.
Cochran pled guilty to wire fraud and money laundering charges on September 21, 2020. Pursuant to her plea agreement, she also agreed to forfeit her interest to the United States in the assets she obtained through her fraudulent activities, including two pieces of real property, a 1965 Shelby Cobra, multiple vehicles, jewelry and nearly $45,000 seized from her business’ bank account.
“I want to commend the victims for the remarkable courage they displayed throughout the investigation and prosecution of this case,” said Acting United States Attorney Lisa G. Johnston. “I also want to thank the West Virginia State Police , the United States Secret Service, the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG) and Assistant United States Attorneys Kathleen Robeson and Greg McVey who worked tremendously hard to ensure that the defendant was held accountable for the significant harm she inflicted on the victims.”
“The West Virginia State Police is proud that today we were able to secure justice for the numerous victims impacted by the selfish criminal conduct of Natalie Cochran,” said West Virginia State Police Lieutenant Timothy Bledsoe. “While this sentence does not undo the harm that Cochran brought upon each victim, we feel that our investigative efforts worked to ensure that she was held accountable for her criminal actions related to the operation of her Ponzi scheme.”
“The results of this investigation demonstrate the Secret Service’s commitment to protecting our nation’s financial institutions and citizens of West Virginia,” said U.S. Secret Service Resident Agent in Charge Robert W. Pyle. “We will continue to work with local, state, and federal law enforcement agencies to bring offenders to justice. We would like to thank the West Virginia State Police and the FDIC-OIG for their cooperation and partnership in this case.”
“Today’s sentencing recognizes the importance of holding the defendant responsible for lying to a financial institution and investors, and fraudulently inducing them to finance her companies and fake government contracts,” said FDIC Inspector General Jay N. Lerner. “ The defendant then, in turn, purchased luxury items for her personal use with the illicit proceeds. The FDIC Office of Inspector General remains committed to working with the U.S. Attorney and our law enforcement partners to bring to justice those who commit such flagrant offenses, and to help preserve the integrity of the banking sector.”
United States District Judge Frank W. Volk imposed the sentence.
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. 5:19-cr-00247.
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