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Tuesday 12 January 2021
Insitu Inc. to Pay $25 Million to Settle False Claims Act Case Alleging Knowing Overcharges on Unmanned Aerial Vehicle ContractsRead the Press Release
Insitu Inc., headquartered in Bingen, Washington, has agreed to pay $25 million to settle allegations that it violated the False Claims Act by knowingly submitting materially false cost and pricing data for contracts with the U.S. Special Operations Command (SOCOM) and the Department of the Navy (Navy) to supply and operate Unmanned Aerial Vehicles (UAVs), the Department of Justice announced today.
“We expect companies that seek to do business with the government to provide complete and accurate information so contract prices can be negotiated on a level playing field,” said Acting Assistant Attorney General of the Justice Department’s Civil Division Jeffrey Bossert Clark. “This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been misused.”
“Taxpayers deserve to get what they paid for – especially in significant no-bid military contracts,” said U.S. Attorney Brian T. Moran for the Western District of Washington. “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”
“The Naval Criminal Investigative Service is dedicated to protecting the taxpayer’s interests and safeguarding critical services for the war fighter,” stated Charles P. King, Special Agent in Charge, NCIS Northwest Field Office. “The success of the Department of the Navy’s war fighting ability is dependent upon a sound, transparent and honest acquisition process. I want to thank the Department of Justice and our law enforcement partners for their incredible support and dedication during this investigation.”
“Defense contractors are required to obey strict standards when proposing cost and pricing data for work to be performed on government contracts,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office. “The pursuit and favorable settlement of this civil litigation is yet another example of our agents and law enforcement partners working together to uncover fraudulent activity and protect taxpayers' dollars entrusted to the DoD.”
Between Jan. 1, 2009 and Dec. 31, 2017, Insitu entered into five contracts with the Navy and two contracts with SOCOM for the supply and operation of UAVs, also known as “drones,” at various sites identified in the contracts. The settlement resolves allegations that Insitu knowingly induced the government to award it these seven, noncompetitively bid contracts at inflated prices by proposing cost and pricing data for new parts and materials in support of its contract proposal while planning to and in fact using less expensive recycled, refurbished, reconditioned, and/or reconfigured parts to perform the contracts.
The settlements resolve allegations filed in a lawsuit by D R O’Hara, a former executive of Insitu, in federal court in Seattle, Washington. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act also allows the government to intervene and take over the action, as it did in this case. O’Hara will receive $4,625,000 of the recovered funds.
The settlements were the result of a coordinated effort by the Commercial Litigation Branch (Fraud Section) of the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Western District of Washington, the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and the Defense Criminal Investigative Service.
The case is captioned United States ex rel. O’Hara v. Insitu, Inc. and The Boeing Company,Case No. C15-1527-JCC (W.D.Wash.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
High-Ranking Nuestra Familia Gang Member Pleads Guilty to Directing Drug Trafficking in Kings and Tulare Counties While Inside PrisonRead the Press Release
FRESNO, Calif. — High-ranking Nuestra Familia prison gang member Salvador Castro Jr., 50, pleaded guilty today to conspiring to distribute and to possess with intent to distribute more than 500 grams of methamphetamine, U.S. Attorney McGregor W. Scott announced.
According to court documents, Castro used a contraband cellphone from inside Pleasant Valley State Prison in Fresno County to arrange for the formation of a new street gang regiment in Kings and Tulare Counties. According to the plea agreement, Castro was recorded on a wiretap conspiring with associates outside of prison to distribute cocaine and methamphetamine. Between May 5, 2019, and May 15, 2019, Castro coordinated the transportation of approximately 10 pounds of methamphetamine from the Sacramento area to a residence in Visalia. Castro arranged for co-conspirators outside of prison to protect the narcotics during transit, and when the drugs arrived in Visalia, Castro and his co-conspirators discussed plans to distribute the methamphetamine to buyers in the Central Valley.
The case is the result of an investigation by the Kings County Gang Task Force; the Special Operations Unit – a team of agents from the California Department of Justice and the California Highway Patrol; California Department of Corrections and Rehabilitation; the FBI; the Kings County District Attorney’s Office; and the Tulare County Sheriff’s Office. Assistant U.S. Attorneys Justin Gilio, Kate Schuh, and Kimberly Sanchez are prosecuting the case.
Castro faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Hays man admits manslaughter charge after fatal crash on Fort Belknap Indian ReservationRead the Press Release
GREAT FALLS — A Hays man who admitted to drinking and driving a vehicle when it crashed and killed a passenger in 2019 on the Fort Belknap Indian Reservation pleaded guilty today to charges, Acting U.S. Attorney Leif Johnson said.
Tough Arthur Snow, 22, pleaded guilty to involuntary manslaughter. Snow faces a maximum eight years in prison, a $250,000 fine and three years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Snow was released pending further proceedings. Chief Judge Morris set sentencing for April 29.
The prosecution said in court documents that at about 6:10 a.m. on June 8, 2019, Fort Belknap Law Enforcement Services officers and emergency medical providers responded to a 911 call of a vehicle crash on the gravel road that runs through Mission Canyon on the Fort Belknap Indian Reservation.
Medical responders found two men, Snow and John Doe 1, walking on the road. Snow denied they had been in an accident and said Doe 1 was injured. Responders attended to Doe 1 and Snow left the scene on foot. Snow did not report an accident to the medical responders and did not report that anyone else was injured. Doe 1 told the medical responders there had been accident just down the road and that Snow had been the driver. A responder continued down the road and found a truck on its passenger side in a creek by the road. The truck was on top of a victim, identified as John Doe 2, who had been partially ejected and was deceased.
Law enforcement officers located Snow at his mother’s residence. Snow showed signs of impairment, claimed not to know about the crash and that he arrived home at about 5:30 a.m. after being out and drinking beer. Snow consented to a blood draw, which determined he had a blood alcohol concentration of .116 percent.
A Montana Highway Patrol crash scene investigation determined the truck was registered to Snow and that it was going too fast for the road, failed to negotiate a curve and went off the road, landing on its side in the creek. Contributing factors were speed, reckless driving and alcohol impairment.
Doe 1 reported that Snow was the driver, Doe 2 was the front passenger and that he was the rear seat passenger. Doe 1 told investigators the three of them had been drinking together that night, got into the truck and then Snow went fast and lost control. Doe 1 reported they both knew Doe 2 was dead when they walked away from the crash scene.
Assistant U.S. Attorney Ethan Plaut is prosecuting the case, which was investigated by the FBI, Fort Belknap Law Enforcement Services and Montana Highway Patrol.
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Glenpool Man Pleads Guilty to Attempted Robbery in Indian CountryRead the Press Release
A man pleaded guilty this morning to attempted robbery in Indian Country, announced U.S. Attorney Trent Shores.
Mason Ray Razo, 19, of Glenpool, pleaded guilty before Chief U.S. District Judge John E. Dowdell. Razo is an enrolled member of the Muscogee (Creek) Nation. His sentencing is set for April 12, 2021.
“My team adopted this case because of the Supreme Court’s McGirt decision and Assistant U.S. Attorney Tom Duncombe worked hard to ensure justice for the victim and accountability for a violent criminal,” said U.S. Attorney Trent Shores. “We’ve seen an increase in gun-related violent crimes over the past twelve months. Credit goes to the Glenpool Police Department, Tulsa Police Department, and Federal Bureau of Investigation for being on the front lines to stop violent criminals like Mason Razo.”
In his plea agreement, Razo admitted that on April 1, 2020 he attempted to commit robbery within the Muscogee (Creek) Reservation in the Northern District of Oklahoma. He stated that he and his codefendants went to the Tulsa home of an acquaintance, in order to take items of value by force, violence, or fear. Further, Razo stated that he brought a firearm with the intention of using it in the course of the robbery and that he wore a mask in an attempt to hide his identity.
Video footage from a door security system showed Razo and his codefendants standing outside the Tulsa home and preparing to break in. The video shows Razo attempting to break the door down but then stopping after hearing a loud noise inside. Razo and the others fled the scene before they could get inside to complete the robbery.
The FBI, Tulsa Police Department, and Glenpool Police Department conducted the investigation. Assistant U.S. Attorney Thomas E. Duncombe is prosecuting the case.
Fresno Man Sentenced to 5.5 Years in Prison for Being a Felon in Possession of a FirearmRead the Press Release
FRESNO, Calif. — U.S. District Judge Dale A. Drozd sentenced Rudy Soto, 32, of Fresno, today to five and a half years in prison for being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.
According to court documents, on May 7, 2019, Soto fled from police in a high speed chase, crashed into another vehicle, and threw a loaded gun with a round of ammunition in the chamber from the sunroof of his car. Police had recognized Soto and knew he was wanted on an active felony warrant. The pursuit and gun discovery followed. Soto was prohibited from possessing a firearm as a result of four felony convictions between 2009 and 2016 for corporal injury to a spouse or cohabitant and three for evading an officer.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fresno Police Department. Assistant U.S. Attorney Kimberly Sanchez prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see www.justice.gov/projectguardian.
Former Union Officer Admits EmbezzlementRead the Press Release
NEWARK, N.J. – The former secretary treasurer of Local 2254 of the American Federation of State, County, and Municipal Employees Union (AFSCME) today admitted embezzling $40,455 from the union’s checking and savings accounts, Acting U.S. Attorney Rachael Honig announced.
Linda Rogers, 71, of Jersey City, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging her with embezzlement from the union, located at Jersey City Medical Center (JCMC).
According to the Indictment and the plea allocution:
Rogers was employed at JCMC and held a part-time position at Local 2254 as its secretary treasurer. In that role, she had sole control over the union’s checking and savings accounts. From July 2016 through August 2017, her daughter, Jennifer Rogers, who also recently pleaded guilty to the same charges, deposited 112 unauthorized checks from Local 2254 to their joint checking and savings accounts, totaling $35,267. From October 2016 through December 2016, Linda Rogers made six wire transfers from Local 2254’s savings account, totaling $5,188, into her personal credit card account. None of the expenditures were authorized, or for legitimate union purposes.
The count to which Linda Rogers pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 25, 2021.
Acting U.S. Attorney Honig credited investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor (OIG), New York Region, under the direction of Special Agent in Charge Michael Mikulka, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Former Real Estate Developer Sentenced in Federal Court after Conspiring to Lie to a BankRead the Press Release
A former real estate developer who conspired with a bank vice president to lie to a bank for years was sentenced today to three years of probation.
Kenneth Moore, age 65, from Dubuque, Iowa, received the prison term after a February 3, 2020 guilty plea to one count of conspiracy to make a false statement to a financial institution.
Evidence and information disclosed during court hearings showed that between 2007 and 2009, Moore worked as a real estate developer in the Dubuque, Iowa, and Galena, Illinois, areas. During that time, he conspired with Dan Raduns, who was a vice president at a bank in Dubuque. Evidence showed that the two conspired to lie to the bank about how money the bank was loaning to Moore was being used. Specifically, they lied about using the money to complete a particular construction project when, instead, it was being used elsewhere. Ultimately, the bank lost over $320,000 in loans made on the construction project.
Moore was sentenced in Cedar Rapids by United States District Court Chief Judge Leonard T. Strand. Moore was sentenced to three years’ probation. He was ordered to make $332,108.80 in restitution to the victim bank. Raduns was also previously sentenced to three years’ probation and to make restitution to the victim.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation. Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 19-CR-1021.
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Former Hamilton County Deputy pleads guilty to using excessive forceRead the Press Release
CINCINNATI – Jason Mize, 34, of Cincinnati pleaded guilty in U.S. District Court today to using unreasonable force while acting under color of law.
According to plea documents, on August 20, 2016, Hamilton County Sheriff’s Office deputies arrested a 61-year-old individual and brought him to the county Justice Center for processing.
While the victim was in medical intake, Mize approached the victim from behind and told the individual to stand. Mize then pushed the victim towards a holding cell, shoving the victim with such force that the victim collided headfirst with a concrete wall. The victim suffered bodily injury, including lacerations to his scalp and a leg fracture.
Depriving an individual of their civil rights while acting under color of law is a federal crime punishable by up to 10 years in prison if bodily injury results from the act. Congress sets the maximum statutory sentence. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
David M. DeVillers, United States Attorney for the Southern District of Ohio, and Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the plea entered into today before U.S. District Judge Matthew W. McFarland. Assistant United States Attorneys Megan Gaffney Painter and Ebunoluwa Taiwo are representing the United States in this case.
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Former DMV Program Manager Sentenced for Bribery ConspiracyRead the Press Release
RICHMOND, Va. – A former Virginia Department of Motor Vehicles (DMV) employee was sentenced today to 28 months in prison for his role in a seven-year bribery conspiracy involving the DMV’s Virginia Rider Training Program (VRTP).
According to court documents, Bruce A. Biondo, 64, of Mechanicsville, was the former Program Manager of the VRTP, and worked for the DMV from 1988 until 2018. Beginning in at least 2011 and continuing to March 2018, Biondo accepted bribes from outside contractors, including a $15,000 payment from the sham sale of a motorcycle in 2011, additional cash payments totaling over $74,000 between February 2014 and February 2018, as well as the use of a Ford F-450 pick-up truck for personal purposes. In exchange, Biondo performed official actions to benefit the preferred VRTP contractors who provided the bribes. In particular, Biondo used his official position to steer a lucrative contract and licenses to his conspirators.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; David W. Archey, Special Agent in Charge of the FBI’s Richmond Field Office; Michael C. Westfall, Virginia State Inspector General; Colonel Gary T. Settle, Virginia State Police Superintendent; and Joseph Hill, DMV Assistant Commissioner for the Office of Enforcement and Compliance made the announcement after U.S. District Judge David J. Novak imposed the sentence.
Assistant U.S. Attorney Katherine Lee Martin and former Assistant U.S. Attorney David Maguire prosecuted this 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. 3:20-cr-18.
Former CEO of Real Estate Private Equity Investment Firm Charged with Securities FraudRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of ERIC MALLEY, the founder and former chief executive officer of real estate private equity investment firm MG Capital Management L.P. on charges of securities fraud and wire fraud for his role in a scheme to fraudulently induce hundreds of individuals to invest a total of more than $50 million in two real estate investment funds by, among other things, lying about his own prior experience and investment track record and about the nature and characteristics of those funds. MALLEY was arrested this morning in New Canaan, Connecticut, on a criminal complaint (the “Complaint”) and will be presented before a magistrate judge in the Southern District of New York.
Acting Manhattan U.S. Attorney Audrey Strauss said: “Eric Malley allegedly promised his clients that they would reap the benefits of owning equity in Manhattan real estate through his time-tested, sophisticated, debt-free investment strategy. As alleged, those promises were lies. Malley lied about his prior funds’ existence and performance, and he lied in promising clients that the funds were free of debt and leased to prominent corporate tenants. While his investors lost money, Malley enriched himself. We will continue to work with our law enforcement partners to protect investors from these types of deceptive practices.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Malley, acting as CEO of an investment firm he founded, solicited investors with material misrepresentations and lies pertaining to luxury residential real estate and several investment funds. Ultimately, the investors, many of whom had entrusted Malley with all of their retirement savings, lost nearly everything. Today’s action should serve as a reminder to fraudsters who seek to prey on unwitting investors that the FBI and our partners will not waver in our commitment to bring them to justice.”
As alleged in the Complaint unsealed today in Manhattan federal Court[1]:
MALLEY founded MG Capital Management L.P. (“MG Capital”) in approximately January 2013, and served as its chief executive officer (“CEO”) from that time until approximately December 2019. MALLEY described MG Capital as an opportunity for investors to invest in luxury residential real estate properties through limited partnership interests, and formed two real estate investment funds, MG Capital Management Residential Fund III (“Fund III”) and MG Capital Management Residential Fund IV (“Fund IV”) (collectively, “the Funds”), in approximately February 2014 and September 2017, respectively.
In connection with marketing the Funds to investors, MALLEY touted two purportedly extremely successful prior funds he had formed, Fund I and Fund II. MALLEY also assured investors that the Funds would be and were debt-free, and that the properties held by the Funds would be and were leased primarily to corporate tenants. MALLEY’s representations about the existence and performance of Funds I and II were largely fabricated. Furthermore, the Funds were not debt-free, but instead held mortgaged properties, and the properties that made up the Funds were almost entirely leased to individual, not corporate, tenants.
Investors in the Funds, many of whom invested the entirety of their retirement savings, lost all or almost all of their investments. As to Fund III, in total, approximately 60 investors invested approximately $23 million. Fund III incurred net operating losses of approximately $860,000, and its investors never received either distributions or a return of their investments. MALLEY nevertheless distributed at least approximately $278,000 to himself in his capacity as general partner. As to Fund IV, in total, approximately 275 investors invested approximately $35 million. Fund IV incurred millions of dollars in losses, and MALLEY did not disclose those losses until approximately two years into Fund IV’s operation.
In or about mid-December 2019, MALLEY stepped down from his role as CEO of MG Capital. Between in or about February 2020 and on or about March 31, 2020 – after MALLEY had become aware that the U.S. Securities and Exchange Commission (“SEC”) was investigating him – MALLEY accessed MG Capital’s server and deleted approximately 10,000 files from the server, including broker information and closing documents detailing the closing costs associated with acquisition of properties, which were used to obtain funding from the Funds’ administrators.
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MALLEY, 50, of New Canaan, Connecticut, is charged with one count of securities fraud, which carries a maximum potential sentence of 20 years in prison, and one count of wire fraud, which carries a maximum potential sentence of 20 years in prison. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the investigative work of the FBI and thanked the New York Regional Office of the U.S. Securities and Exchange Commission, which has separately filed a civil action against MALLEY and M.G. Capital Management.
This case is being handled by the Office’s Securities and Commodities Task Force. Assistant United States Attorney Elizabeth A. Hanft is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Former Attorney Pleads Guilty to Embezzlement and Tax ChargesRead the Press Release
BOSTON – A former attorney pleaded guilty yesterday to wire fraud and filing false tax returns in connection with a long-running scheme to embezzle funds from trusts for which he served as trustee.
Kevin M. Brill, 61, of Newton, pleaded guilty to six counts of wire fraud and four counts of filing false tax returns. U.S. Senior District Judge Mark L. Wolf scheduled sentencing for April 5, 2021.
From 2012 to July 2017, Brill served as a trustee for three family trusts with funds held at Morgan Stanley Bank. As trustee, Brill had fiduciary responsibilities to protect and preserve the funds of the trusts and make expenditures for the benefit of each beneficiary. As part of his embezzlement scheme, Brill created new accounts at Santander Bank through which he funneled funds he withdrew from the trust accounts. Over the course of the six-year scheme, Brill embezzled and misappropriated more than $600,000 from the various trusts and used the proceeds on personal expenses such as a personal vehicle, a vacation home in Vermont and to pay for his personal credit card expenses.
In addition, Brill failed to report his illegal income to the IRS, thereby avoiding payment of more than $169,000 that he owed in federal income taxes.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of filing false tax returns provides for a sentence of up to three years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joleen Simpson, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement. Assistant U.S. Attorney Victor A. Wild of Lelling’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
Fentanyl Distribution Leads to Prison Sentences for Two Menominee WomenRead the Press Release
Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, announced that Jacquelyn Grignon (age: 47) and Lottie Tucker (age: 38), both former residents of the Menominee Indian Reservation, recently received prison sentences in United States District Court for the Eastern District of Wisconsin in Green Bay. Tucker pleaded guilty on October 7, 2020, to Possession with Intent to Distribute Fentanyl. Grignon pleaded guilty on October 8, 2020, to Distribution of Fentanyl.
At a hearing on January 5, 2021, Tucker received a total sentence of 78 months in prison, followed by 48 months on supervised release, from Senior United States District Judge William C. Griesbach. At a hearing on January 12, 2021, Judge Griesbach sentenced Grignon to a total sentence of 48 months in prison, followed by 48 months on supervised release.
According to court documents, on or about March 20, 2020, Grignon obtained what she believed to be heroin, but which was Fentanyl, from Tucker. Grignon then used some of the Fentanyl and sold some of it to others. Two people, a 32-year old man and a 16-year old boy, overdosed on the Fentanyl they received from Grignon. The 32-year old man died at a residence on the Menominee Indian Reservation; first responders revived the 16-year old, but he required hospitalization. A search warrant at Tucker’s residence on the Menominee Indian Reservation led to the discovery of additional Fentanyl, along with methamphetamine and cocaine.
In sentencing the defendants, Judge Griesbach described the circumstances surrounding the overdoses as a “terrible injustice,” and noted the defendants spread a poison that robs people of their humanity and ruins communities. Judge Griesbach also emphasized the need to deter others who might consider engaging in the sale and distribution of controlled substances.
The Menominee Tribal Police Department and Federal Bureau of Investigation investigated the case. It was prosecuted by Assistant United States Attorney Andrew J. Maier.
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For Additional Information Contact: Public Information Officer Kenneth Gales
414-297-1700
Federal Inmates Plead Guilty to Weapon ChargesRead the Press Release
BLUEFIELD, W.Va. -- United States Attorney Mike Stuart announced that two federal inmates pled guilty to possessing weapons. Corey Fair, 27, and Rashun Evans, 23, inmates at the Federal Correctional Institution (FCI) at McDowell, both admitted to possessing a handcrafted weapon, commonly known as a “shank.”
“Bureau of Prisons staff members do an excellent job of finding and confiscating shanks, ultimately thwarting potential violence among inmates,” said United States Attorney Mike Stuart. “These cases will be prosecuted and offenders will find themselves with longer prison sentences.”
Fair admitted that on January 26, 2020, he possessed a handcrafted weapon known as a shank. A staff member at the prison found the weapon, which was a five and one-half inch piece of metal sharpened on one end, in Fair’s pocket during a random search. The staff member then recovered the weapon.
Evans admitted that on February 5, 2020, he also possessed a handcrafted weapon while he was an inmate at the FCI McDowell. A staff member at the prison found the shank hidden underneath a telephone in a common area after Evans had placed it there. The weapon was a seven inch long piece of metal sharpened on one end with a cloth handle on the other end.
Both defendants admitted that the shanks were designed and intended to be used as a weapon.
Both Fair and Evans face up to five years in prison, to be served consecutively to the sentences they are now serving. Sentencing for both defendants is set for April 29, 2021.
The case was investigated by the Federal Bureau of Prisons (BOP). Assistant United States Attorney Timothy D. Boggess is handling the prosecutions. Senior United States District Judge David A. Faber presided over the plea hearings.
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 Nos. 1:20-cr-00202 and 1:20-cr-00203.
Follow us on Twitter: SDWVNews and USAttyStuart
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El Paso Man Sentenced for Posting Threatening YouTube VideoRead the Press Release
A federal judge today sentenced an El Paso man to 21 months in federal prison for posting a threatening communication over the internet, announced U.S. Attorney Gregg N. Sofer and FBI Special Agent in Charge Luis M. Quesada, El Paso Division.
In addition to the prison term, U.S. District Judge Kathleen Cardone ordered that 43-year-old Manuel Flores be placed on supervised release for a period of three years after completing his prison term. Flores has remained in federal custody since FBI agents arrested him in Dallas on June 15, 2020.
On October 14, 2020, Flores pleaded guilty to transmitting a threatening communication. By pleading guilty, Flores admitted that in June 2020 he recorded and uploaded a video to YouTube entitled “N----- Lives Matter” in which he made threatening comments to Black Lives Matter protestors. During the video, Flores is seated and visible only from the knees down with what appears to be an AR-15 style rifle resting on his feet. Flores stated that in two days he would be travelling on I-20 Eastbound through Dallas while daring individuals representing Black Lives Matter to “stop him.” Flores further stated that “my dream is at least … take out at least 200 n------.”
“During this time of polarized political discord, peaceful protest is an important right that must be safeguarded and those who threaten to harm others, commit acts of violence, destroy property or attack law enforcement must be held accountable for their criminal behavior,” said U.S. Attorney Sofer. “Now more than ever we must respect the rule of law. The United States Attorney’s Office, along with its federal, state and local law enforcement partners will aggressively pursue those who refuse to do so. Today’s sentence should serve as a warning to anyone who would choose to threaten or harm others – you will be federally prosecuted and sent to federal prison.”
The FBI investigated this case. Assistant U.S. Attorney Ian Hanna prosecuted this case on behalf of the government.
Eastern District of California Obtains Nation’s First Civil Settlement for Fraud on Cares Act Paycheck Protection ProgramRead the Press Release
SACRAMENTO, Calif. — The first civil settlement to resolve allegations of fraud against the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security (CARES) Act has been entered into today by the Department of Justice, U.S. Attorney McGregor W. Scott announced.
SlideBelts Inc., an internet retail company and debtor in bankruptcy, and Brigham Taylor, the company’s president and CEO, have agreed to pay the United States a combined $100,000 in damages and penalties to resolve allegations that they committed fraud. SlideBelts also repaid the Paycheck Protection Program funds it received.
The CARES Act was enacted on March 29, 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 provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program. In April 2020, Congress authorized over $300 billion, and in December 2020, Congress authorized nearly $285 billion in additional Paycheck Protection Program funding.
As part of the settlement, Taylor and SlideBelts admitted that they made false statements to federally insured banks that SlideBelts was not in bankruptcy in order to influence those banks to approve, and the Small Business Administration (SBA) to guarantee, a Paycheck Protection Program loan to SlideBelts. As a result of their false statements, SlideBelts received a Paycheck Protection Program loan for $350,000. Months later, in response to demands by the United States, SlideBelts returned the Paycheck Protection Program funds to the lender. Taylor and SlideBelts also admitted that their statements caused false claims to be made to the SBA in connection with the Paycheck Protection Program loan. This settlement resolves claims that Taylor’s and SlideBelts’ misconduct violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
The False Claims Act allows the government to recover damages and penalties for the presentation of false claims for payment to the United States. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial institutions.
“The defendants made false statements to multiple banks in order to obtain a Paycheck Protection Program loan that should have been disbursed to an honest small business suffering financially from the economic effects of the COVID-19 pandemic,” said U.S. Attorney Scott. “The Department of Justice and our partners at the SBA will use all tools at our disposal, including civil fraud statutes, to aggressively pursue those who exploit federal programs intended to help those in need during this national emergency.”
“This is a critical time for our nation’s small businesses,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Greed has no place in SBA programs that are intended to provide assistance to the nation’s small businesses struggling with the pandemic’s challenges. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
Assistant U.S. Attorney Matthew R. Belz handled the case for the United States. The investigation was conducted with the Office of the Inspector General for the United States Small Business Administration.
Drug Dealing Doctor Sentenced to 71 Months in Federal PrisonRead the Press Release
Dr. Richard Samuel Piazza, D.O. Wrote Illegal Prescriptions for Thousands of Opioid Pills
GRAND RAPIDS, MICHIGAN — U.S. Attorney Andrew Birge announced today that Dr. Richard Samuel Piazza, D.O., 63, of Grand Rapids, Michigan, was sentenced to 71 months in federal prison for writing illegal opioid prescriptions. U.S. District Judge Janet T. Neff imposed the sentence. She also sentenced him to 3 years of supervised release. In September 2020, Dr. Piazza pled guilty to three counts of distribution of controlled substances, in violation of 21 U.S.C. § 841(a), related to writing opioid prescriptions for no legitimate medical reason. He wrote illegal prescriptions for thousands of opioids in exchange for cash or a kickback of some of the pills. Judge Neff described his behavior as “an attack on the integrity of the medical profession.”
“Dr. Piazza stands convicted of the same offenses we charge against street corner drug dealers,” U.S. Attorney Birge said. “Those who feed the opioid crisis by writing prescriptions for no legitimate medical purpose deserve to be treated this way under the law. In some ways, Dr. Piazza’s behavior was worse than that of a street dealer, because his status as a doctor gave his actions a false appearance of legitimacy.”
The case was investigated by the Drug Enforcement Administration, the Internal Revenue Service, the Michigan State Police, and the Lake County Sheriff’s Office. Assistant United States Attorney Clay Stiffler prosecuted the case.
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Door County Man Indicted on Production of Child Pornography ChargesRead the Press Release
Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, announced that on January 12, 2021, a federal grand jury returned a two-count indictment against Christopher J. Kone (age: 36) of Sturgeon Bay, Wisconsin.
Kone faces two counts alleging that he engaged in the production of child pornography in violation of Title 18, United States Code, Section 2251(a).
If convicted of the charges, Kone faces a mandatory 15 years’ imprisonment and up to 30 years’ imprisonment as to each count.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006, by the U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt
This case was investigated by the Door County Sheriff’s Office, the Wisconsin Department of Justice - Division of Criminal Investigation, with the assistance of the Door County District Attorney’s Office. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
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Public Information Officer Kenneth Gales
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Department of Justice Issues Positive Business Review Letter to Companies Developing Plasma Therapies for Covid-19Read the Press Release
The Department of Justice announced today that it has no intention to challenge proposed efforts by Baxalta US Inc., Emergent BioSolutions Inc., Grifols Therapeutics LLC, and CSL Plasma Inc. (together, the “Requesting Parties”) to assist the Biomedical Advanced Research and Development Authority (BARDA) in designing quality standards for collecting COVID-19 convalescent plasma.
“This public-private collaboration will support innovation to develop life-saving medicines to treat COVID-19,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The department continues to stand ready to advise and assist whenever businesses meeting the exigent challenges of the pandemic face complex questions of antitrust law.”
As the department’s business review letter explains, convalescent plasma is taken from individuals who have had and recovered from COVID-19. The convalescent plasma can be given to patients directly, through infusion, or used to make hyperimmune globulin (HIg) therapies. The Requesting Parties aim to assist BARDA in the development of quality assurance parameters so that COVID-19 convalescent plasma collected by blood banks for direct transfusion under Project Warp Speed can be repurposed for use in the development and manufacture of each Party’s HIg therapies targeting COVID-19. The department believes these efforts are procompetitive to the extent that they will facilitate the more efficacious deployment of critical therapies for COVID-19, which could, in turn, improve the health and safety of Americans. The Requesting Parties have also put in place safeguards that minimize the risk their conduct will lessen competition.
This is the sixth expedited COVID-19 business review letter issued by the department since the department and the Federal Trade Commission first set out an expedited, temporary review procedure in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”). In April 2020, the department issued expedited business review letters to certain distributors of personal protective equipment (PPE) as well as the pharmaceuticals distributor AmerisourceBergen. Over the next several months, the department issued additional expedited business review letters to the National Pork Producers Council, certain manufacturers of monoclonal antibodies for use in COVID-19 vaccines and therapies, and a voluntary membership association of beauty salons.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].
Denouncing Violence; Reporting Information Regarding the January 6, 2020 Attack Upon the U.S Capitol & Self Help Tips for Coping in the AftermathRead the Press Release
Spokane – William D. Hyslop, U.S. Attorney for the Eastern District of Washington, issued the following statement:
The January 6, 2021, mob attack upon the United States Capitol was a shameful and reprehensible affront to our democracy, and I condemn it in the strongest possible way. Our Constitution protects the rights of free speech and assembly, but it does not protect mob violence, threats to harm public officials, assaults on law enforcement officers, or damage to government buildings. Those who engage in these behaviors commit serious crimes, and our criminal justice system will hold them accountable.
The United States Attorneys across the Nation work closely with our law enforcement partners, including the U.S. Attorney’s Office in the District of Columbia and the Federal Bureau of Investigation, to ensure that any individuals who were involved in criminal activity at the U.S. Capitol are brought to justice.
Anyone with information regarding the events of January 6 should contact the Federal Bureau of Investigation: https://tips.fbi.gov/digitalmedia/aad18481a3e8f02 .
Likewise, the January 6, 2021 event has been traumatizing to many. Recognizing the mental health impact of this terrible day, the National Mass Violence and Victimization Resource Center (NMVVRC) has developed “Twelve Self-help Tips for Coping in the Aftermath of the Attack on the U.S. Capitol,” which can be accessed via the NMVVRC website at this link: http://nmvvrc.org/TipSheets/Self-Help%20Tip%20Sheet.pdf A copy is also accessible at the website for the United States Attorney for the Eastern District of Washington: /media/1114276/dl?inline
The NMVVRC was established in 2017 through a cooperative agreement with the U.S. Department of Justice, Office for Victims of Crime. The mission of the NMVVRC is to improve community preparedness and the nation’s capacity to serve victims recovering from mass violence through research, planning, training, technology, and collaboration.
Crips Gang Member Sentenced to 100 Months in Prison in Connection with Attempted Murder as Part of RICO ConspiracyRead the Press Release
NEWARK, N.J. – A member of the New Jersey Grape Street Crips was sentenced today to 100 months in prison for his role in an attempted murder charged as part of a RICO conspiracy, as well as narcotics trafficking, acting U.S. Attorney Rachael A. Honig announced.
Sean Hills, a/k/a “Half A Brain,” a/k/a “Half,” a/k/a “Rydaman,” 29, of Newark, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an indictment that charged him with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy and distribution of cocaine. Judge Arleo imposed the sentence by videoconference today.
Since 2015, more than 80 members of the New Jersey Grape Street Crips have been convicted federally in connection with multiple murders, attempted murders, shootings, drug trafficking, firearms charges, and witness intimidation as part of a coordinated investigation by the FBI, the Drug Enforcement Administration (DEA), and local law enforcement partners.
According to documents filed in this case and statements made in court:
Hills is a long-time member of the New Jersey Grape Street Crips who has the gang’s senior hierarchy tattooed on his face. On Dec. 15, 2012, Hills repeatedly shot Victim-1 near the area of South 14th Street and 14th Avenue, an area that Hills and other gang members were trying to take over as part of their drug-trafficking territory. As part of the sentencing, the Court also considered a shooting Hills committed on Feb. 1, 2013, when he shot Victim-2 numerous times. Both victims survived the attacks. Hills was additionally sentenced for separate instances of possession with intent to distribute of cocaine. In addition to the prison term, Judge Arleo sentenced Hills to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing. She also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for assistance.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the Criminal Division and Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.
Couple Sentenced for Obtaining $1.7 Million in Military Health Care Kickback SchemeRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that KIMBERLY HOMRIGHAUSEN, age 44, and RICHARD HOMRIGHAUSEN, age 37, were sentenced on January 7, 2021 by United States District Judge Barry W. Ashe for conspiracy to pay and receive kickbacks related to compounded medications paid for by TRICARE, a federally funded health care benefit program that serves United States military personnel and their families. At their guilty pleas, the defendants admitted to paying kickbacks to TRICARE beneficiaries to induce them to obtain compounded medications, costing TRICARE a total of approximately $9 million. To conceal the kickbacks, the defendants created a purported non-profit that paid off the beneficiaries under the guise of “grants” to thank them for their military service.
Judge Ashe sentenced RICHARD HOMRIGHAUSEN to two years’ imprisonment, KIMBERLY HOMRIGHAUSEN to one year and one day imprisonment and 3 years of supervised release for both defendants. Judge Ashe also ordered both defendants to pay restitution in the amount of $1,754,518—the amount of money they obtained through the scheme.
“The Defense Criminal Investigative Service and our investigative partners are committed to seeking out and fully investigating companies that utilize improper billing to deprive military families of precious resources,” said Special Agent in Charge Cynthia A. Bruce, DCIS, Southeast Field Office. “Billing healthcare programs for medically unnecessary medications not only undermines the viability of those programs, it exploits all citizens."
U.S. Attorney Strasser praised the work of the Defense Criminal Investigative Service, the Department of Homeland Security - Homeland Security Investigations, the Federal Bureau of Investigation, the United States Postal Service - Office of Inspector General, and the Department of Veterans Affairs - Office of Inspector General in investigating this matter. Assistant United States Attorney Chandra Menon was in charge of the prosecution.
Convicted Hacker Charged with Fraud and Identity Theft Committed While Incarcerated in Federal PrisonRead the Press Release
SAN FRANCISCO - A federal complaint was unsealed today charging Ardit Ferizi with wire fraud and aggravated identity theft, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge Rachel L. Rojas, of the Jacksonville, Florida, FBI Division.
Ardit Ferizi, 25, a Kosovo citizen, last resided in Malaysia before being brought to the Eastern District of Virginia (EDVA) in 2016 to face federal criminal charges. Ferizi pleaded guilty to unauthorized access of computer information and to providing material support to a foreign terrorist group by providing personally identifiable information of United States government personnel to the Islamic State of Iraq and al-Sham (ISIS). He was sentenced to 20 years incarceration in the federal Bureau of Prisons.
According to the complaint, Ferizi’s sentence was reduced in December 2020 to time-served, plus 10 years of supervised release to be served in Kosovo, following the granting of a motion for compassionate release by an EDVA federal judge. Ferizi was awaiting deportation when the FBI determined he continued his criminal activities and had committed multiple new federal offenses while incarcerated at the Federal Correctional Institute in Terre Haute, Indiana.
“We allege Ferizi provided access to personal information of U.S. citizens, even as he was serving his prison sentence for providing similar information to ISIS,” said U.S. Attorney Anderson. “Ferizi’s alleged criminal conduct continued in prison notwithstanding his petition for an early prison release.”
"Ardit Ferizi is an admitted criminal who endangered the lives of over 1,000 Americans by sharing their personal information with members of a dangerous terrorist organization," said Special Agent in Charge Rojas, in charge of the FBI Jacksonville Division. “The FBI has never wavered in our commitment to seek justice for his innocent victims, and we will continue to vigorously investigate him and anyone else who is intent on harming our nation and citizens.”
According to an FBI agent’s affidavit filed in support of the criminal complaint, in 2017 and 2018 Ferizi had been involved in multiple fraudulent schemes from prison by coordinating with a family member who was operating Ferizi’s email accounts while Ferizi was incarcerated. Ferizi instructed the family member to “keep my email alive and not expiring” and passed his email addresses and passwords on to his family member. The FBI was able to determine that at least one email account included large databases of stolen personally identifiable information, extensive lists of stolen email accounts, partial credit card numbers, passwords, and other confidential information. According to the complaint affidavit, the databases of stolen personal information were the fruits of Ferizi’s criminal hacking activity. Based on an IP address resolving to Kosovo, login activity to Ferizi’s other e-mail accounts, and other investigative information, it was determined the family member downloaded the databases of stolen information to liquidate the proceeds of Ferizi’s previous criminal hacking activity.
In the course of these new crimes, Ferizi and his family member are alleged to have used electronic services of Google, PayPal, and Coinbase, each of which is located in the Northern District of California. The affidavit further alleges that Ferizi continued to communicate with others to further this scheme while in custody. It is alleged that electronic communications were used to further the scheme and that personal data and information used belonged to real individuals who were victimized.
Ferizi is charged with one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, and one count of wire fraud in violation of Title 18, United States Code, Section 1343. If convicted of wire fraud, he faces a maximum penalty of 20 years in prison and a fine of $250,000. If convicted of aggravated identity theft, he faces a mandatory penalty of 2 years in prison in addition to the punishment imposed for a wire fraud conviction. 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 imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Ferizi currently is in federal custody and will be transported to the Northern District of California to face the new federal charges. His initial federal court appearance to face the new charges has not yet been scheduled.
The Corporate Fraud Strike Force of the Northern District of California U.S. Attorney’s Office is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation Jacksonville and Washington field offices.
Clay County Man Indicted in Nationwide Mortgage Fraud SchemeRead the Press Release
Jacksonville, Florida – United States Attorney Maria Chapa Lopez announces the return of an indictment charging Brian Roy Lozito (51, Orange Park) with conspiracy to commit wire fraud and 12 counts of wire fraud. If convicted, Lozito faces a maximum penalty of 20 years in federal prison on each count and payment of restitution to the victims he defrauded. Lozito was arraigned on the charges on January 11, 2021. His trial is set for March 1, 2021.
According to the indictment, Lozito owned and managed American Investigative Services (AIS). AIS purported to offer consumers mortgage auditing services in exchange for a fee. Lozito and his conspirators solicited customers nationwide through mailings and telephone calls. In these solicitations, Lozito and AIS employees under his direction made false and fraudulent representations to consumers, including that AIS would perform “forensic audits” of mortgage documents in order to uncover evidence of deficiencies in the mortgage documents. Lozito claimed AIS would obtain quitclaim deeds and other remedies, so the mortgage holders would be relieved of their mortgage debt and own their properties free and clear. If AIS could not help the consumer, Lozito promised to refund their money. In reality, AIS did not perform the services paid for by consumers and did not refund money to consumers. Money collected from consumers went to bank accounts controlled by Lozito, and he spent the money.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the U.S. Secret Service (Jacksonville Field Office) and the Office of the Florida Attorney General – Consumer Protection Division, with assistance from the Clay County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.
Career Criminal Indicted on Fentanyl PossessionRead the Press Release
BOSTON – A Brockton man was indicted by a federal grand jury yesterday in connection with fentanyl and cocaine possession.
Dedrick Lindsey, 37, was charged in a superseding indictment with one count of possession with intent to distribute fentanyl and cocaine. Lindsey was previously indicted on one count of possession of a firearm by a convicted felon.
Lindsey was arrested on state charges on July 19, 2018, after law enforcement found a .25 caliber pistol, 18 grams of fentanyl and 10.5 grams of cocaine in his possession. Lindsey is prohibited from possessing a firearm due to previous drug convictions, which are all punishable by more than a year in prison.
The charge of possession with intent to distribute fentanyl and cocaine provides for a sentence of up to 20 years in prison, a minimum of three years of supervised release and a fine of up to $1 million. The charge of being a felon in possession of a firearm provides for a sentence of up to 10 years in prison, a minimum of one year and up to three years of supervised release and a fine of up to $250,000. As an armed career criminal, Lindsey is subject to a mandatory minimum sentence of 15 years and up to life in prison, five years of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Plymouth County District Attorney Timothy J. Cruz made the announcement. Assistant U.S. Attorney Elysa Wan of Lelling’s Office is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Canton Woman Pleads Guilty to Role in BEC SchemeRead the Press Release
BOSTON – A Canton woman pleaded guilty yesterday in federal court in Boston in connection with a business email compromise (BEC) scheme.
Bintu Toure, 26, pleaded guilty to wire fraud and money laundering conspiracy. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for April 16, 2021. Toure was charged in September 2019 for her role in the scheme.
Toure is the second individual to be convicted in connection with this scheme, following the guilty plea of Yannick Minang a/k/a “Africa” last year.
Toure conspired with others to open numerous bank accounts in Massachusetts in the name of sham companies, as part of a BEC scheme. A BEC scheme is a sophisticated scam often targeting businesses involved in wire transfer payments. The fraud is carried out by compromising and/or “spoofing” legitimate business email accounts through social engineering or computer intrusion techniques, to cause employees of the victim company (or other individuals involved in legitimate business transactions) to transfer funds to accounts controlled by the scammers.
Through the use of fraudulent invoices and spoofed email accounts, Toure conspired to trick the victims of the scheme into wiring hundreds of thousands of dollars to bank accounts under her control. Toure and her co-conspirators then transferred funds from the accounts on to others located overseas.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the amount involved in the transaction, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement. Assistant U.S. Attorney William B. Brady, of Lelling’s Criminal Division and Jordi de Llano, Deputy Chief of Lelling’s Securities & Financial Fraud Unit, are prosecuting the case.
Canadian Man Arrested at the Peace Bridge with over One-Half Ton of Suspected MarijuanaRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Xiao Liu, 27, a resident of Canada, was arrested and charged by criminal complaint with possessing with intent to distribute 100 kilograms or more of marijuana, and importation of marijuana into the United States. The charges carry a maximum penalty of 40 years in prison.
Assistant U.S. Attorney Richard Antoine, who is handling the case, stated that according to the complaint, on January 10, 2021, a Customs and Border Protection Officer encountered the defendant in the commercial truck processing lane at the Peace Bridge Port of Entry. Liu was driving a commercial truck bearing Ontario license plates and stated that he was hauling a shipment of wax. The officer asked the defendant to open the sleeper cab curtain, which he did, but only partially. Unable to see inside, the officer again asked Liu to open the curtain and back up a few feet so he could see into the sleeper cab. Liu complied and the officer observed black bags filling the sleeper cab from the floor to the ceiling. When questioned, the defendant stated that the bags belonged to a friend and he was taking them to Buffalo. Liu was referred to X-ray inspection for further processing.
A scan of the tractor trailer revealed a large anomaly in the bunk area of the tractor. An officer then physically inspected the tractor cab. Upon entering the cab, the officer immediately detected a smell consistent with marijuana, and observed hockey bags stacked from the floor to the ceiling in the bunk area of the tractor cab. The officer opened one bag and noticed multiple vacuum sealed bags of a green leafy substance, suspected to be marijuana. Liu was taken into custody at that time. CBO officers then offloaded a total of 30 hockey bags which included 1,139 vacuum sealed bags of suspected marijuana weighing approximately 1,281 pounds.
The complaint is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Burlington County Man Admits Role in Camden Drug Trafficking OrganizationRead the Press Release
CAMDEN, N.J. – A Burlington County, New Jersey, man today admitted his role in a drug-trafficking organization that distributed heroin and cocaine in Camden, Acting U.S. Attorney Rachael A. Honig announced.
Dwight Williams, 29, of Mount Holly, New Jersey, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiracy to possess and possess with intent to distribute heroin and cocaine
According to documents filed in this case and statements made in court:
An investigation led by the FBI used surveillance tactics, confidential informants, consensual recordings, over 40 controlled drug purchases, record checks, a GPS vehicle tracker, and several court-authorized wiretaps to uncover the operations a drug-trafficking organization based on the 500 block of Pine Street in Camden.
Williams and 15 other members of the drug-trafficking conspiracy – Ronnie Lopez, Nelson Salcedo, Carlos Perez, Paul Salcedo, Waldemar Garcia, William Carrillo, Elisa Rivera, Ramon Velez, David Velez, Naeem Sadler, Jasmin Velez, Jameel Byng, Kaliel Johnson, Meylin Troncoso, and Jose Agron – have now pleaded guilty in this case.
The charges against three other defendants remain pending, and they are presumed innocent unless and until proven guilty.
The count to which Williams pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. Sentencing is scheduled for May 17, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sheriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of Chief William P. Monaghan; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorneys Sara A. Aliabadi and Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
Buffalo Man Pleads Guilty to Cocaine ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Saan Thompson, 41 a/k/a Duke, of Buffalo, NY, pleaded guilty before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. to conspiring to possess with intent to distribute, and distributing, 500 grams or more of cocaine. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine.
Assistant U.S. Attorneys Laura A. Higgins and Richard Antoine, who are handling the case, stated that between July 2019, and January 10, 2020, the defendant conspired with others to sell cocaine. Thompson utilized a residence at 189 May Street in Buffalo to store and distribute bulk quantities of cocaine and crack cocaine base to other individuals, including co-defendants, Louis Gilbert, Antoine Gilbert, and Ronnie Charleston. The defendant also stored proceeds of his drug trafficking activities at his Shirley Avenue residence in Buffalo.
On August 5, 2020, a search warrant was executed at the defendant’s residence. Investigators seized $28,355 in cash, approximately 234 grams of marijuana, and a digital scale. That same day, investigators also executed a search warrant at 189 May Street and seized 1,000 grams of cocaine, five bags of crack cocaine, two additional bags of cocaine, a digital scale, packaging and drug-processing materials.
Charges remain pending against Louis Gilbert, Antoine Gilbert, and Ronnie Charleston. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.The plea is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Erie County Sheriff’s Office, under the direction of Sheriff Timothy Howard; and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.
Sentencing will be scheduled at a later date.
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Brownsville Felon Sentenced to Prison for Manufacturing and Selling Explosive MaterialRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of KENNETH RAY MILLER, 58, to 22 months in prison for manufacturing and dealing in explosive material. MILLER, who pleaded guilty on September 8, 2020, was sentenced earlier today before Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota.
According to MILLER’s guilty plea and documents filed with the court, in the spring of 2019, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was notified of a Popular Science magazine article about MILLER manufacturing pyrotechnics on his property in Brownsville, Minnesota. MILLER, a convicted felon, is prohibited from possessing firearms and manufacturing and dealing in explosive material.
According to MILLER’s guilty plea and documents filed with the court, from 2013 to March 3, 2020, he manufactured and sold smoke generating devices containing electric igniters (also known as electric matches) and a chlorate explosive mixture to customers across the country. MILLER admitted that he did not have a license, permit, exemption or other authorization from the ATF to possess or use the electric matches or chlorate explosive mixtures.
This case was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Houston County Sheriff’s Office, the St. Paul Police Department, the U.S. Environmental Protection Agency, the Minnesota Department of Natural Resources, and the Minnesota Department of Public Safety (State Fire Marshal).
Assistant U.S. Attorney Emily A. Polachek prosecuted the case.
Defendant Information:
KENNETH RAY MILLER, 58
Brownsville, Minn.
Convicted:
- Manufacturing and dealing explosive materials, 1 count
Sentenced:
- 22 months in prison
- Three years of supervised release
- Prohibited from buying, selling, using, or possessing pyrotechnic materials
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Brazilian National Sentenced for Firearms TraffickingRead the Press Release
BOSTON – A Brazilian national, who previously resided in Malden, was sentenced yesterday for immigration and firearms crimes.
Vanderlei Rodrigues DeAraujo, a/k/a Neneco, 43, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 18 months in prison and two years of supervised release. Upon completion of his sentence, DeAraujo will be placed into removal proceedings and deported to Brazil.
On Sept. 30, 2020, DeAraujo pleaded guilty to one count of dealing in firearms without a license, two counts of being an alien in possession of a firearm and ammunition and one count of illegal reentry of a previously deported alien. DeAraujo was arrested on May 29, 2019 and has been in federal custody since.
On Aug.11, 2011, DeAraujo, who was determined to be illegally present in the United States, was deported to Brazil. Sometime after his removal, DeAraujo illegally reentered the United States and between Sept. 6, 2018 and Jan. 28, 2019, DeAraujo illegally sold two semi-automatic firearms and ammunition.
United States Attorney Andrew E. Lelling; Todd Lyons, Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Jonathan Davidson, Special Agent in Charge of the U.S. Department of State’s Diplomatic Security Service, Boston Field Office made announcement. Valuable assistance was provided by Homeland Security Investigations in Boston; the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and the Malden Police Department. Assistant U.S. Attorneys Kenneth G. Shine and Lindsey Weinstein of Lelling’s Major Crimes Unit prosecuted the case.
Boston Man Pleads Guilty to Possession of Child PornographyRead the Press Release
BOSTON – A Boston man pleaded guilty yesterday in connection with surreptitiously filming boys in the restrooms at Boston Latin School (BLS).
Eric Tran Thai, 36, pleaded guilty to two counts of possession of child pornography. Thai was arrested on March 11, 2019 by criminal complaint and indicted later that month. U.S. District Court Judge William G. Young scheduled sentencing for May 13, 2021.
According to the charging documents, on Feb. 6 and Feb. 27, 2018, two separate Boston College students reported to the police that they had been videotaped without their knowledge or consent while they were using the men’s restrooms on the Boston College campus. Following the Feb. 27, 2018, report, police located and spoke with Thai on campus. Thai was placed under arrest on state charges and his bag was subsequently searched; in it, police found several covert camera devices, including faux smoke detectors, a water bottle containing a small cube recording device, and a pair of sunglasses outfitted with a built-in camera. Those charges are currently pending in Middlesex County Superior Court.
Following Thai’s arrest, a search of his home was executed where dozens of devices including computer hard drives, thumb drives, covert and regular cameras, computers, iPads, cell phones and multiple SD and Sim cards were recovered. Investigators found several electronic folders labeled BU, MIT, Harvard, Northeastern, Bunker Hill, Boston Latin High School, and several different malls, airports and foreign country locations. Thai was charged federally for the child pornography located in the Boston Latin folders, which contained approximately 45 surreptitiously-recorded videos of male students in various states of dress using the urinals and stalls in the boys’ bathroom. The videos appear to have been created on approximately 10 separate dates between February and December 2017, all after school hours.
In general, the videos show Thai sitting in a bathroom stall at Boston Latin High School recording individuals in adjacent stalls or at the urinals through various secret recording methods. In some videos, Thai appears to hold a camera over the top of the partition between the bathroom stalls and videotaping from overhead. In other instances, he appears to hide a small camera inside of his backpack, place the backpack on the bathroom floor and videotape individuals in the adjacent bathroom stall from under the stall’s partition. While recording, it appears that Thai would simultaneously view what the camera was recording on a cellphone or a tablet device in his possession.
The charges of possession of child pornography provide for a sentence of up to 10 years in prison, a minimum of five years and up to a lifetime of supervised release and a fine of up to $250,000. According to the terms of the plea agreement, the government will recommend a sentence of between 108 and 180 months in prison. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Middlesex District Attorney Marian T. Ryan; Boston Police Commissioner William G. Gross; and Boston College Police Chief William B. Evans made the announcement. Assistant U.S. Attorney Anne Paruti, Lelling’s Project Safe Childhood Coordinator and Deputy Chief of the Major Crimes Unit, is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Boeing owned drone maker to pay $25 million to settle False Claims Act allegations it used recycled parts on military projectsRead the Press Release
Seattle –Insitu Inc., headquartered in Bingen, Washington, has agreed to pay $25 million to settle allegations that it violated the False Claims Act by knowingly submitting materially false cost and pricing data for contracts with the United States Special Operations Command (SOCOM) and the Department of the Navy (Navy) to supply and operate Unmanned Aerial Vehicles (UAVs), the Department of Justice announced today.
“We expect companies that seek to do business with the government to provide complete and accurate information so contract prices can be negotiated on a level playing field,” said Acting Assistant Attorney General of the Justice Department’s Civil Division Jeffrey Bossert Clark. “This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been misused.”
Between January 1, 2009, and December 31, 2017, Insitu entered into five contracts with the Navy and two contracts with SOCOM for the supply and operation of UAVs, also known as “drones,” at various sites identified in the contracts. The settlement resolves allegations that Insitu knowingly induced the government to award it these seven, noncompetitively bid contracts at inflated prices by proposing cost and pricing data for new parts and materials in support of its contract proposal while planning to and in fact using less expensive recycled, refurbished, reconditioned, and/or reconfigured parts to perform the contracts.
“Taxpayers deserve to get what they paid for – especially in significant no-bid military contracts,” said U.S. Attorney Brian T. Moran. “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”
“The Naval Criminal Investigative Service is dedicated to protecting the taxpayer’s interests and safeguarding critical services for the war fighter,” stated Charles P. King, Special Agent in Charge, NCIS Northwest Field Office. “The success of the Department of the Navy’s war fighting ability is dependent upon a sound, transparent and honest acquisition process. I want to thank the Department of Justice and our law enforcement partners for their incredible support and dedication during this investigation.”
“Defense contractors are required to obey strict standards when proposing cost and pricing data for work to be performed on government contracts,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office. “The pursuit and favorable settlement of this civil litigation is yet another example of our agents and law enforcement partners working together to uncover fraudulent activity and protect taxpayers' dollars entrusted to the DoD.”
The settlements resolve allegations filed in a lawsuit by D R O’Hara, a former executive of Insitu, in federal court in Seattle, Washington. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. O’Hara will receive $4,625,000 of the recovered funds.
The settlements were the result of a coordinated effort by the Commercial Litigation Branch (Fraud Section) of the Civil Division of the Department of Justice, the United States Attorney’s Office for the Western District of Washington, the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and the Defense Criminal Investigative Service.
The case is captioned United States ex rel. O’Hara v. Insitu, Inc. and The Boeing Company,Case No. C15-1527-JCC (W.D.Wash.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
Assistant United States Attorney Kayla Stahman handled the matter for the U.S. Attorney's Office, Western District of Washington and DOJ's Commercial Litigation Branch was represented by Senior Trial Attorney Don Williamson.
Aroostook County Man Pleads Guilty to Federal Drug Importation ChargeRead the Press Release
BANGOR, Maine: An Aroostook County man pleaded guilty today in federal court to importing methamphetamine into the United States from Canada, U.S. Attorney Halsey B. Frank announced.
According to court records, on November 19, 2019, Lance Labreck, 25, of Hamlin, drove a snowmobile from the U.S. across the international border into Canada. Later that evening, he returned to the U.S. via snowmobile, carrying with him approximately 55 grams of methamphetamine he had obtained in Canada. When stopped by Border Patrol Agents, he admitted to possessing the methamphetamine and bringing it back over the international border into the U.S.
Labreck faces at least 10 years and up to life in prison. He also faces a $10 million fine and at least five years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
Homeland Security Investigations, the U.S. Border Patrol and the U.S. Drug Enforcement Administration investigated the case.
Amherst Man Arrested for Threatening Members of CongressRead the Press Release
CONCORD – Ryder Winegar, 33, of Amherst, was arrested on a federal complaint charging him with threating members of Congress, United States Attorney Scott W. Murray announced today.
The complaint filed in court alleges that on December 16 and 17, 2020, Winegar left voicemails at the offices of six members of the United States Congress in the District of Columbia. In some of the messages, Winegar identified himself by name or identified his telephone number. The voicemails threatened to hang the members of Congress if they did not “get behind Donald Trump.” For example, in one message, Winegar allegedly said, “I got some advice for you. Here’s the advice, Donald Trump is your president. If you don’t get behind him, we’re going to hang you until you die.”
Winegar was arrested on January 11, 2021, in Boston and is scheduled to appear before a federal magistrate judge later today.
The charges in the complaint are only allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the U.S. Capitol Police with assistance from the United States Marshals Service, U.S. Customs and Border Protection, and the Amherst Police Department.
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Adel Woman Pleads Guilty to Maintaining A Drug PremisesRead the Press Release
ALBANY, Ga. – An Adel, Georgia, woman is facing up to 20 years in prison for maintaining a drug premises, said Peter D. Leary, the Acting U.S. Attorney for the Middle District of Georgia.
Kiera Keann Cooksey, 29, of Adel, pleaded guilty to one count using or maintaining a drug premises before U.S. District Judge Louis Sands today. Cooksey faces a maximum 20 years in prison, to be followed by five years of supervised release and a $500,000 fine. A sentencing date has not been scheduled. There is no parole in the federal system.e
Cooksey admitted in her signed plea agreement that she knowingly used and maintained her Adel residence for the purpose of distributing cocaine, crack cocaine and marijuana between March 30, 2017 and May 12, 2017. According to the plea agreement, Adel Police Department officers, working with a Confidential Informant (CI), began an investigation into the sale of illegal narcotics at Cooksey’s residence. Four controlled purchases were conducted at the residence. On May 11, 2017, officers executed a search warrant, arresting Cooksey and a co-defendant, Frederick Moore, aka “Iron Man,” 32, of Adel. Officers found ten packages of cocaine weighing approximately 232 grams stuffed in a toilet, cocaine base, marijuana, drug paraphernalia and a firearm.
“The penalty is steep for individuals who knowingly use their home to facilitate the distribution of illegal drugs—a maximum 20 years in prison, without parole,” said Acting U.S. Attorney Leary. “I want to thank the Adel Police Department and the DEA for their work investigating this case.”
Federal charges remain pending against co-defendant Moore: one count of conspiracy to possess with intent to distribute marijuana, one count of distribution of marijuana, one count of possession with intent to distribute cocaine and cocaine base, one count of possession of a firearm by a convicted felon and one count of possessing a firearm during and in relation to a drug trafficking crime. An indictment is only an allegation of criminal conduct. Moore is presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt.
The investigation was conducted by the Adel Police Department and the Drug Enforcement Administration (DEA). The case is being prosecuted by Assistant U.S. Attorney Sonja Profit. Questions can be directed to Pamela Lightsey, Public Information Officer, U.S. Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Officer (Contractor), U.S. Attorney’s Office, at (478) 765-2362.
Acting United States Attorney for the District of Columbia Michael R. Sherwin's Statement Condemning Violence against the Media and Inviting the Report of Such ViolenceRead the Press Release
WASHINGTON - The United States Attorney’s Office for the District of Columbia, along with its law enforcement partners, is aware of reports of violence, including assaults, threats, and property damage, against members of the press while they were engaged in covering events unfolding at the United States Capitol on January 6. Such violence will not be tolerated. We are resolutely committed to upholding the freedoms guaranteed by the First Amendment, including speech, peaceful assembly, and press, and we will investigate, prosecute, and hold accountable anyone who attempts to obstruct or curtail these freedoms through violence or intimidation.
The United States Attorney’s Office invites members of the press to report any instances where a reporter, journalist, photographer, videographer, or other member of the press or broadcast media was the victim of an assault, threat, or property damage during the events of January 6 at the United States Capitol. Such information, to include video and photographic evidence, can be emailed to [email protected]. As appropriate, a prosecutor or law enforcement agent may follow up for further information.
We will spare no effort to bring to justice all those who committed lawless and violent acts of any kind, including against members of the media.
Acting Manhattan U.S. Attorney Announces Settlement of Civil Forfeiture Claims Against over $50 Million Laundered Through Black Market Peso ExchangeRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Timothy J. Shea, the Acting Administrator of the U.S. Drug Enforcement Administration (“DEA”), and Susan A. Gibson, the Special Agent in Charge of the New Jersey Division of the DEA, announced today that the United States has settled a civil forfeiture action against assets of Sefira Capital LLC (“Sefira”) and 31 subsidiary corporations, which own high-end commercial and residential real estate throughout the United States. The Government’s complaint, which was filed on January 8, 2021, alleged that the defendant corporations accepted millions of dollars of narcotics proceeds laundered through the shadow financial system commonly known as the Black Market Peso Exchange, for investment in various real estate ventures.
In the stipulation of settlement filed with U.S. District Judge Andrew L. Carter Jr. today, which is still subject to approval by the Court, the defendant corporations agree to forfeit $29 million to resolve the Government’s claims, representing approximately $22.5 million previously seized from Sefira and its subsidiaries, and an approximately $6.5 million payment in lieu of the forfeiture of certain real estate interests. As part of the settlement, Sefira agreed to conduct reasonable due diligence on future investors, and not to accept investment funds from any source other than the actual investor.
In a related civil forfeiture action, the Government filed today a proposed judgment of forfeiture with U.S. District Judge George B. Daniels, covering $23.2 million seized from Hampus Assets, Inc., and Kaunas Assets Corp. in connection with their acceptance of millions of dollars of narcotics proceeds laundered through the Black Market Peso Exchange. Hampus Assets and Kaunas Assets previously entered into a settlement consenting to the forfeiture of the funds, agreeing to conduct reasonable due diligence on future deposits into bank accounts under their control, and to refrain from conducting certain cross-border money transfers.
Acting Manhattan U.S. Attorney Audrey Strauss said: “The Black Market Peso Exchange facilitates the laundering of vast sums of drug trafficking proceeds generated in the U.S., enabling the conversion of U.S. dollars into the currencies of drug trafficking organizations’ countries. The forfeiture filings announced today signal not only the surrender of more than $50 million in laundered proceeds, but also the agreement of corporate defendants to exercise due diligence to ensure they are not assisting in or facilitating money laundering.”
DEA Acting Administrator Timothy J. Shea said: “The alleged laundering of millions of dollars of illicit proceeds shows the incredible profit generated by ruthless drug cartels who only care about money and power, not the suffering of Americans or devastated communities left behind. The DEA’s unique ability to infiltrate money laundering organizations is essential to illuminating the global networks used to repatriate drug proceeds around the globe. Money is the lifeblood of the cartels, and DEA, together with our law enforcement partners, is committed to identifying, targeting, and prosecuting these organizations to protect the American people.”
The Government lawsuits alleged as follows:
The Black Market Peso Exchange allows drug trafficking organizations to transfer narcotics proceeds from the United States to the country in which they operate while concealing the source and nature of the funds. Drug trafficking organizations will sell bulk United States currency earned from their drug operations in the U.S. to money laundering brokers at a discount, in exchange for payment in the home country or countries of the drug trafficking organization in their local currency. To finance the transactions, the brokers will purchase bulk currency in the local currency of the drug trafficking organizations, typically from individuals who wish to transfer money to the United States while avoiding the banking system. The brokers pay these individuals by depositing the U.S. dollar drug proceeds into U.S.-based shell accounts, and then transferring them to accounts controlled by the individuals, or for their benefit.
As part of an investigation of international money laundering, the DEA used confidential sources to facilitate transactions on the Black Market Peso Exchange to uncover persons engaged in illegal activity and develop evidence for criminal prosecutions. As part of the DEA undercover operation, confidential sources bought narcotics proceeds on the Black Market Peso Exchange, and then transferred those funds to U.S.-based accounts in the United States at the direction of money laundering brokers.
Sefira is a Florida-based boutique investment company that has raised over $100 million in capital from various investors (“Sefira Investors”) to invest in real estate projects primarily in the Southeastern United States. From 2016 to 2019, Sefira or its subsidiaries received millions of dollars in criminal proceeds from certain Sefira Investors as part of an effort by drug trafficking organizations and others to launder the criminal proceeds through the Black Market Peso Exchange.
Between January 2018 and January 29, 2019, the DEA transferred millions of dollars of narcotics proceeds to certain Sefira subsidiaries at the instruction of money-laundering brokers. These funds were wired from DEA undercover accounts that were not titled in the name of, or under the control of, any particular Sefira Investor. Sefira accepted these funds without inquiring as to the source of ownership of these accounts or funds.
In addition, millions of dollars of criminal proceeds were used to fund other Sefira Investors’ investments in Sefira. Sefira ignored similar red flags for those investments, including discrepancies between the purported investment amount and the actual amount Sefira received from Sefira Investors, as well as discrepancies between the purported Sefira Investors and the entities sending the investments to Sefira.
Between July 2018 and February 2019, Hampus Assets received millions of dollars from a shell company used to transfer narcotics proceeds on the Black Market Peso Exchange. These deposits came in large amounts in rapid succession and did not follow an observable business pattern. In October 2018, Hampus Assets transferred a portion of these proceeds to Kaunas Assets Corp.
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Ms. Strauss praised the outstanding investigative work of Special Agents from the DEA New Jersey, Enforcement Group 2.
This case is being handled by the Office’s Narcotics and Money Laundering and Transnational Criminal Enterprises Units. Assistant United States Attorneys Aline R. Flodr, Stephanie Lake, and Sheb Swett are in charge of the case.
Acting AG and Five Country Statement on the Temporary Derogation to the ePrivacy Directive to Combat Child Sexual Exploitation and AbuseRead the Press Release
Acting Attorney General Jeffrey A. Rosen joined the Home Affairs, Interior, and Security Ministers of Australia, Canada, New Zealand, and the United Kingdom in issuing the following statement:
“We, the Home Affairs, Interior, and Security Ministers of Australia, Canada, New Zealand, the United Kingdom and the United States of America (‘the Five Countries’), are proud of our collective work alongside our European partners to combat online child sexual exploitation and abuse. Together, we have taken the lead in working with the world’s largest technology companies to develop new and better ways to protect children from the production and circulation of child sexual abuse material, grooming, live-streamed abuse, and all other forms of sexual abuse occurring on online platforms.
In this statement, we highlight how from December 21 2020, the ePrivacy Directive, applied without derogation, will make it easier for children to be sexually exploited and abused without detection – and how the ePrivacy Directive could make it impossible both for providers of internet communications services, and for law enforcement, to investigate and prevent such exploitation and abuse. It is accordingly essential that the European Union adopt urgently the derogation to the ePrivacy Directive as proposed by the European Commission in order for the essential work carried out by service providers to shield endangered children in Europe and around the world to continue.
Without decisive action, from December 21, 2020 internet-based messaging services and e-mail services captured by the European Electronic Communications Code’s (EECC) new, broader definition of ‘electronic communications services’ are covered by the ePrivacy Directive. The providers of electronic communications services must comply with the obligation to respect the confidentiality of communications and the conditions for processing communications data in accordance with the ePrivacy Directive. In the absence of any relevant national measures made under Article 15 of that Directive, this will have the effect of making it illegal for service providers operating within the EU to use their current tools to protect children, with the impact on victims felt worldwide.
We note the European Parliament Committee on Civil Liberties, Justice and Home Affairs’ (LIBE) voted on December 7, 2020 in favor of the Temporary derogation from certain provisions of Directive 2002/58 as regards the use of technologies by number-independent interpersonal communications service providers for the processing of personal data and other data for the purpose of combatting child sexual abuse online. We now urge the Presidency of the Council, the European Commission and the European Parliament to come to a rapid agreement at Trilogue on a final text that ensures that this important work can continue as it does today.
The European Union has a unique role to play in the global fight against online child sexual exploitation. It is essential that the European Union adopt measures that ensure not only the legal authority, but also the practical ability, for providers to use tools to detect online child sexual exploitation. For example, a requirement that tools have false positives less than 1:50 billion would prevent the use of some of the most common and effective tools used today to rescue children. Without that ability the Union places its own Strategy for a More Effective Fight against Child Sexual Abuse in jeopardy.
In July 2020, we welcomed the launch of the European Union (EU) Strategy for a More Effective Fight against Child Sexual Abuse. In particular, we were pleased to see the EU commit to ‘propose the necessary legislation to tackle child sexual abuse online effectively, including by requiring relevant online services providers to detect known child sexual abuse material and to report that material to public authorities.’
These commitments strongly align with the Voluntary Principles to Counter Online Child Sexual Exploitation and Abuse, which were developed by the Five Countries in close consultation with six leading platforms. We launched the Voluntary Principles in March 2020 to provide a framework for the technology industry to combat online child sexual exploitation and abuse—they are intended to drive both individual company efforts and collective industry action. But those Voluntary Principles are predicated upon the continuation of companies’ legal and technical ability to identify and take action against child sexual abuse content and activity on their platforms.
Certain providers of communications services already voluntarily use specific technologies to detect, report, and remove child sexual abuse material on their services. United States-based electronic service providers are legally obliged to report instances of child sexual abuse to the National Center for Missing and Exploited Children (NCMEC). In 2019, these electronic service providers made 16.9 million reports to NCMEC, comprising 69.1 million videos, images and files. The number of reports in 2020 is expected to eclipse previous years, with NCMEC President and Chief Executive Officer John F. Clark noting, in his letter of November 2020 to Members of the European Parliament, that ‘[i]n the first nine months of 2020, more than 52 million child sexual abuse files have been reported to NCMEC, and more than 2.3 million of these files involve an offender or a child victim in the EU’.
The vast majority of NCMEC reports come from direct messaging services and are usually generated as a result of platforms’ use of automated hashing measures (such as PhotoDNA), grooming indicators, artificial intelligence and other technologies to identify and report child sexual abuse material. The Commission’s proposals for a temporary derogation address the unintended consequences of the EECC and ensures companies can continue to use highly effective tools to detect, report and remove child sexual abuse material online until at least the end of 2022.
We are now calling upon friends and partners in the EU to carry out their responsibility to protect not only European children, but also children around the world whose abuse will be shared among EU citizens that providers will be blind to stop. We therefore urge you, on behalf of children around the world, to allow the work that is being done to protect them from sexual abuse and exploitation to continue.
We look forward to continuing to work with you as your closest international partners in tackling child sexual exploitation and abuse, both in our respective countries and around the world.”
Signatories,
Jeffrey A. Rosen, Acting Attorney General of the United States
Rt Hon Priti Patel MP, Secretary of State for the Home Department for the United Kingdom
The Hon Peter Dutton MP, Minister for Home Affairs for Australia
The Hon Jan Tinetti, Minister of Internal Affairs for New Zealand
The Hon Bill Blair, Minister of Public Safety and Emergency Preparedness for Canada
Accountant Sentenced to Prison for Tax Evasion and Obstruction OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that LOUIS DeMAIO, 70, of Guilford, was sentenced today by U.S. District Judge Janet Bond Arterton to 30 months of imprisonment, followed by one year of supervised release, for tax evasion and obstruction 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, DeMaio was employed as an accountant in East Haven and, from approximately 2010 to 2018, also operated Almatt LLC, a temporary employment agency that provided day laborers to construction companies. Although DeMaio listed an individual (“Individual A”) on paper as the owner of Almatt, Almatt was effectively owned and run by DeMaio.
As part of Almatt’s operating procedures, Almatt invoiced construction companies for the cost of labor provided and, from the payments received from the companies, paid the employees for services rendered. Almatt and DeMaio then provided the employees with W-2 forms reflecting that Almatt had undertaken required federal tax withholdings. However, Almatt and DeMaio failed to withhold taxes and subsequently failed to pay over those withholdings to the IRS. Almatt also never filed yearly income tax returns or quarterly 941 forms reflecting federal withholding and payroll taxes owed.
In addition, DeMaio issued hundreds of thousands of dollars of checks from Almatt made out to himself and to family members who did not work at the business. From 2010 through 2018, DeMaio and his family received more than $2.5 million from Almatt. DeMaio failed to report any of these distributions on his federal personal income tax returns.
In 2015, the IRS initiated a civil examination of Almatt, and then expanded the examination to evaluate the completeness of DeMaio’s personal income tax returns. When the IRS confronted DeMaio about his failure to report income paid to him by Almatt, DeMaio fabricated a story that a substantial portion of the payments he received from Almatt were loan repayments from Individual A. DeMaio also provided an IRS revenue agent with a false notarized document that DeMaio had created to support his story. When the civil investigation was referred to IRS Criminal Investigation, DeMaio confirmed the fake loan repayment story in an interview with IRS special agents.
The investigation revealed that DeMaio underreported his income by more than $2.5 million. The tax loss as a result of DeMaio’s criminal conduct is $1,132,398.
Judge Arterton ordered DeMaio to pay full restitution, as well as interest and penalties.
On August 11, 2020, DeMaio pleaded guilty to one count of tax evasion and one count of obstructing and impeding the due administration of Internal Revenue laws.
DeMaio, who is released on a $100,000 bond, is required to report to prison on May 12, 2021.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Monday 11 January 2021
Wheeling man admits to drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Devon Alexander Bertram, of Wheeling, West Virginia, has admitted to a drug charge, U.S. Attorney Bill Powell announced.
Bertram, also known as “VON,” 31, pled guilty to one count of “Distribution of Cocaine Base within 1000 Feet of a Protected Location.” Bertram admitted to selling cocaine base or “crack” near The Linsly School in March 2020 in Ohio County.
Bertram faces at least one and up to 40 years of incarceration and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Ohio Valley Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge James P. Mazzone presided.
Wheeling Man Sentenced to 15 Years in Federal Prison for Conspiracy to Produce Child PornographyRead the Press Release
BLUEFIELD, W.Va. – United States Attorney Mike Stuart announced today that Randall Lee Peggs, also known as “Randy Peggs,” 57, of Wheeling, was sentenced to 15 years in federal prison for conspiracy to produce child pornography. Upon completion of his prison sentence, the defendant will serve a 20 year term of supervised release. Peggs also was ordered to pay $42,900 in restitution to the child victim, which will be joint and several with his codefendant, Elizabeth Haway. Last month, Haway was sentenced to 20 years in prison.
“Egregious,” said United States Attorney Mike Stuart. “The heinous acts of Peggs and co-conspirator, Elizabeth Haway, have caused lifelong trauma to the young victim in this case. They will now be behind bars, away from West Virginia children, for the next 15 and 20 years, respectively.”
Peggs previously admitted that he began talking with codefendant Elizabeth Haway, of Princeton, on Facebook in November 2018. Over the course of several months, Peggs and Haway conspired to produce child pornography of a female minor child. The majority of their communications occurred on Facebook Messenger. Peggs encouraged Haway to record and send him nude videos of the female minor child. Ultimately, Haway recorded a video of the female minor child that showed the child nude and sent the video to Peggs via Facebook in February 2019.
This case was investigated by the Mercer County Sheriff’s Department, the Federal Bureau of Investigation (FBI) and the FBI’s Violent Crimes Against Children Task Force. Senior United States District Judge David A. Faber imposed the sentence. Assistant United States Attorney Kristin F. Scott handled the prosecution.
This case is being prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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. 1:19-cr-00304.
- Follow us on Twitter: SDWVNews and USAttyStuart
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Virginia man sentenced for drug traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Damanya Terelle Carter, of Front Royal, Virginia, was sentenced to 12 months of incarceration for his role in a drug distribution operation, U.S. Attorney Bill Powell announced.
Carter, 38, pled guilty to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine Hydrochloride” in September 2020. Carter admitted to working with others to distribute cocaine hydrochloride in Jefferson County and elsewhere from February to March 2019.
Assistant U.S. Attorney Lara Omps-Botteicher prosecuted the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Judge Gina M. Groh presided.
Veterans Affairs Respiratory Therapist sentenced to prison for stealing and selling medical suppliesRead the Press Release
Seattle — A respiratory therapist at the Veterans Affairs Medical Center (VAMC) in Seattle was sentenced today in U.S. District Court in Seattle to three months in prison and nine months of home confinement for theft of government property, announced U.S. Attorney Brian T. Moran. GENE WAMSLEY, 42, of Bonney Lake, Washington, admits stealing a ventilator and other respiratory medical equipment in the midst of the COVID-19 pandemic and selling it for his own gain. At the sentencing hearing, U.S. District Judge James L. Robart said, “This is an extremely serious offense, quite independent of the COVID-19 pandemic, this was exploiting patients.”
“This type of fraud strikes at the heart of our efforts to care for our elderly—especially our veterans,” said U.S. Attorney Brian Moran. “Stealing money is bad enough, but stealing equipment needed for life-saving therapies shocks the conscience.”
According to records filed in the case, the investigation began in January 2020 when VAMC reported two bronchoscopes, used for examining a patient’s airway, went missing from the hospital. A third bronchoscope was reported missing in April 2020. In all, WAMSLEY admits stealing and selling three bronchoscopes worth over $100,000 for just $15,750. WAMSLEY sold the scopes to a Florida resident via eBay. When WAMSLEY’s home was searched in June, law enforcement seized a fourth bronchoscope and a $6,000 sleep apnea device called a WatchPat that had been stolen from the VA Medical Center.
Further investigation revealed that in April 2020, WAMSLEY also stole a $9,950 respirator and sold it via eBay to an Ohio man for just $6,000. Records from online sales indicate WAMSLEY sold five ventilators—three of which were stolen from the VA.
In their sentencing memo prosecutors wrote that WAMSLEY was involved in the care of COVID-19 patients during the pandemic. Therefore, his “decision to steal respiratory therapy devices for personal monetary gain is rather confounding as he was an eyewitness to the tremendous suffering of those inflicted. By repeatedly stealing equipment from a population of ill veterans at such a critical point in time, Mr. Wamsley violated not only federal law, but ethical obligations held by nurses since the inception of the profession.”
The total loss to the United States from the thefts is $132,291; WAMSLEY was ordered to pay that amount in restitution.
The case was investigated by the Veterans Affairs Office of Inspector General (VA-OIG). The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
U.S. Attorney’s Office in Memphis Collects $65,969,200.04 for U.S. Taxpayers and Victims in 2020Read the Press Release
Memphis, TN – United States Attorney D. Michael Dunavant announced today that the U.S. Attorney’s Office for the Western District of Tennessee collected a total of $65,969,200.04 in criminal and civil actions during Calendar Year 2020. Of that amount, $1,314,912.06 was collected through civil actions and $64,654,287.98 stemmed from fines and restitution ordered as part of criminal convictions.
One case that generated significant collection efforts was United States of America v. SK Engineering & Construction Co. Ltd. (SK), which generated $60,578,847.08 in criminal fines, the largest fine ever imposed against a criminal defendant in the Western District of Tennessee. On June 10, 2020, SK Engineering, one of the largest engineering firms in the Republic of Korea, pleaded guilty to one count of wire fraud in connection with a fraudulent scheme to obtain U.S. Army contracts through payments to a U.S. Department of Defense contracting official and the submission of false claims to the U.S. government. SK was also ordered to pay $2,601,883.86 in restitution to the U.S. Army, and serve three years of probation, during which time SK agreed not to pursue U.S. federal government contracts.
U.S. Attorney D. Michael Dunavant said, "Protection of the United States Treasury and taxpayer resources is a core value and critical mission for this office and the Department of Justice. Equally as important is the priority of collecting restitution for victims of crime in order to punish offenders and provide justice for the harm and loss suffered by victims. I commend the outstanding work of our Criminal Division, Civil Division, and Financial Litigation Unit in aggressively pursuing and effectively collecting this significant total amount on behalf of victims of crime and the United States in 2020."
The U.S. Attorneys’ Offices, along with the U.S. Department of Justice’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Calendar year 2020 collections include recovery of government money lost to criminal fraud and other misconduct, and recovery of money lost by victims as a result of individual and corporate misconduct. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Health and Human Services, Internal Revenue Service, the Department of Education, and the Department of Veterans Affairs.
Total civil collections were reduced in 2020 because of the COVID-19 pandemic, which resulted the suspension of many civil collections, such as student loans, SBA loans and all Social Security Treasury Offset Program (TOP) payments.
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U.S. Attorney Robert M. Duncan, Jr. Announces ResignationRead the Press Release
LEXINGTON, Ky. – United States Attorney Robert M. Duncan, Jr. has announced his resignation, effective midnight, Sunday, January 24, 2021. Following his resignation, he will enter the private practice of law in Lexington.
“It has been a true honor and privilege to lead this Office, an office that has a demonstrated commitment to fairness and justice, and a long history of handling tough and important cases,” stated Duncan. “I began my career in this Office nearly sixteen years ago as an Assistant United States Attorney and have been blessed to work with many talented and dedicated men and women along the way. I would like to thank my colleagues in the Office for their hard work and commitment in support of our mission. We are fortunate to have so many dedicated and professional attorneys and support staff, who make our Office successful.”
“Throughout my career, I have also been privileged to work with our law enforcement partners at the federal, state, and local levels. These brave men and women selflessly serve and protect the citizens of the Eastern District of Kentucky and beyond. I have been honored to partner with them in the protection of the public and the pursuit of justice.”
“I am proud of the work we have undertaken during my tenure as United States Attorney – important work on behalf of the citizens of the Eastern District of Kentucky. In partnership with our law enforcement colleagues, we have implemented efforts to reduce violent crime; we have fought to disrupt the flow of deadly drugs, including opioids and methamphetamine, into our communities; we have combatted fraud and public corruption; we have sought justice for victims; and we have endeavored to faithfully enforce the law.”
“We’ve implemented these efforts despite several challenges, including the longest federal government shutdown in history and a global pandemic that has upended our lives. While there is always more to be done, I am proud of what we have accomplished.”
Under Duncan’s leadership, the Office marked noteworthy achievements in violent crime enforcement, controlled substances enforcement, combatting public corruption and fraud, and its significant change in staff. Some of these achievements include the following:
Violent Crime – The Office worked in conjunction with federal, state, and local partners, to reinforce its commitment to holding offenders accountable for the commission of violent criminal acts and unlawful possession of firearms, including armed drug trafficking, armed robberies, and shootings. From Fiscal Year 2018 through Fiscal Year 2020, the Office prosecuted a total of 525 defendants throughout the District, as part of the Project Safe Neighborhoods or Project Guardian programs. Critically, the majority of those convicted of federal firearms related crimes received a federal sentence of greater than five years in prison.
As part of the commitment to address violent crime, Duncan spearheaded the creation of the Fayette County Violent Crime Task Force, a joint, multi-jurisdictional effort to combat violent crime and drug trafficking in Lexington. The Task Force was formed as part of the Department of Justice’s Project Safe Neighborhoods initiative, which focuses enforcement efforts on the most violent offenders and coordinates with locally-based prevention and reentry programs in an effort to achieve lasting reductions in crime. From January 2018 to the present, 70 cases have been prosecuted federally as part of the Fayette County Violent Crime Task Force, along with countless prosecutions by state authorities.
Controlled Substances – The Office prioritized the controlled substance enforcement, aggressively prosecuting transnational criminal organizations supplying drugs to eastern Kentucky, continuing its aggressive prosecution of overdose cases caused by drugs (particularly opioids), and targeting opioid related healthcare fraud for prosecution.
Included in this effort, the Office participated in several Department of Justice initiatives, including the Appalachian Regional Prescription Opioid Strike Force, aimed at identifying medical professionals who commit acts of opioid related healthcare fraud, and the Synthetic Opioid Surge program, which provided resources to combat fentanyl trafficking in Fayette County. In eastern and southeastern Kentucky, the Office partnered with federal, state, and local law enforcement to vigorously prosecute methamphetamine trafficking and its related violence.
Public Corruption and Fraud – The Office maintained its longstanding commitment to prioritizing public corruption, partnering with the FBI and others to identify and prosecute cases of corruption involving federal, state, and local offices. Notable cases included the prosecution of Gerald Lundergan and Dale Emmons, for illegal campaign contributions; Beth Sallee, the former Jackson County Treasurer, for wire fraud and identity theft; and Lexington businessman Wayne Wellman, for obstruction of justice related to a bribery investigation.
Similarly, the Office prosecuted many complex fraud schemes, including cases involving the exploitation of elderly individuals and romance scams, and used affirmative civil enforcement efforts, under the False Claims Act (a federal law that prohibits the submission of false or fraudulent claims to the federal government), to hold individuals and entities accountable for committing fraud against the government, including healthcare fraud and other efforts to defraud, waste, and abuse federal funds.
Office Administration – The Office also hired 16 new Assistant United States Attorneys, to prosecute cases and represent the government in civil litigation, and nearly twenty support staff personnel, to support the Office’s litigation efforts. These hires represent approximately a third of the Office’s total employees.
More generally, the Office saw increases in federal prosecutions during Duncan’s tenure. The Office saw increases in the total number of criminal defendants prosecuted (by more than 18 percent from Fiscal Years 2017 to 2018, and 27 percent from Fiscal Years 2018 to 2019) and continued to prosecute significant numbers of defendants, despite the challenges of the COVID-19 pandemic. The Office has also achieved meaningful recoveries for the government and victims of crime. Over the past three years, the Office has collected and received judgments for more than $92 million in criminal penalties, civil recoveries, forfeited assets, and restitution.
Duncan was appointed by President Trump as the twenty-third presidentially appointed United States Attorney for the Eastern District of Kentucky. Duncan was unanimously confirmed by the United States Senate, on November 9, 2017, and he was sworn in as United States Attorney on November 21, 2017.
As United States Attorney, Duncan also served nationally, as the Chairman of the Heroin-Opioid Working Group for the Attorney General’s Advisory Committee, providing advice and recommendations about policy initiatives to combat the opioid crisis across the country. He also served on the Controlled Substances Subcommittee; the Management, Budget, and Personnel Subcommittee, and the Law Enforcement Coordination Subcommittee for the Attorney General’s Advisory Committee. More recently, he served as a member of the Department of Justice’s eLitigation Steering Committee, working to enhance discovery practices and procedures across the federal law enforcement community, as a representative for United States Attorneys across the country.
Prior to his nomination, Duncan had served for more than a decade as an Assistant United States Attorney, in the Eastern District of Kentucky. Beginning in 2011 and continuing until his appointment as United States Attorney, Duncan focused on the prosecution of Organized Crime Drug Enforcement Task Force cases, working with federal, state, and local law enforcement personnel to disrupt and dismantle complex drug trafficking and money laundering organizations operating in eastern Kentucky and elsewhere. From 2007 to 2013, Duncan also served as coordinator of the office’s Project Safe Neighborhoods Program. During his career as a federal prosecutor, Duncan handled a wide array of criminal and appellate matters, including violent crime, immigration offenses, public corruption, white-collar offenses, environmental crime, and child exploitation offenses. Duncan also served as the Professional Responsibility Officer for the office.
Prior to becoming a federal prosecutor, Duncan served as a law clerk to Senior United States District Court Judge Henry R. Wilhoit, Jr., in Ashland. Duncan grew up in Inez, in Martin County, along the Commonwealth’s border with West Virginia. Duncan graduated from Sheldon Clark High School, in 1996. He then graduated from Centre College in Danville, in 2000, with a B.A. in English and minor in History. Duncan received his J.D., in May 2003, from the University of Kentucky College of Law.
“I was raised in Kentucky, went to school in Kentucky, and have spend the majority of my legal career working with law enforcement and prosecuting cases in Kentucky,” said Duncan. “Having the opportunity to serve Kentucky, as the United States Attorney for the Eastern District of Kentucky, has been an enormous honor and privilege.”
Law enforcement officials offered the following comments about U.S. Attorney Duncan’s leadership of the Office.
“I have had the pleasure of working with USA Rob Duncan since my appointment as United States Marshal in February of 2018,” said Norman E. Arflack, United States Marshal for the Eastern District of Kentucky. “Rob’s dedication to law enforcement and to the citizens of the Eastern District of Kentucky is unparalleled. As a result of his leadership many of the most violent offenders in the Eastern District of Kentucky have been successfully prosecuted. His professionalism and leadership will be greatly missed. I wish him the best in his next undertaking whatever that may be.”
“Throughout my time serving in the FBI's Louisville Field Office, the collaborative efforts of USA Duncan and his entire office have been nothing short of extraordinary. I want to personally thank USA Duncan for his steadfast commitment to justice and his unwavering partnership in effectively leading the Eastern District of Kentucky,” said James Robert Brown, Jr., Special Agent in Charge, FBI, Louisville Field Office.
“It’s been an absolute pleasure serving with Rob Duncan; as the United States Attorney for Kentucky’s Eastern District, he’s been a great partner to the Drug Enforcement Administration and the people of the Eastern District are safer for his efforts,” said Special Agent in Charge J. Todd Scott, head of DEA’s Louisville Division. “Rob’s more than just a professional colleague, he’s also become a personal friend.”
“I am grateful for the opportunity to have served,” said Duncan. “While leaving the Office is definitely bittersweet, I am excited to start a new chapter. I am confident that the Office will continue its outstanding work, enforcing the law and pursuing justice on behalf of the people of the Eastern District of Kentucky.”
The Eastern District of Kentucky encompasses the 67 easternmost counties in the Commonwealth, has a population of approximately 2.2 million, and includes the cities of Lexington, Covington, Frankfort, Ashland, Pikeville, Somerset, and London. The United States Attorney oversees a staff of approximately 110, including 49 Assistant U.S. Attorneys, and is responsible for prosecuting federal crimes and defending the United States in civil litigation, in the Eastern District of Kentucky.
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U.S. Attorney Condemns Violence at U.S. CapitolRead the Press Release
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – January 11, 2021
SAN DIEGO – U.S. Attorney Robert Brewer issued the following statement:
On January 6, 2021, a mob attacked the United States Capitol. This was a shameful and reprehensible affront to our democracy, and I condemn it in the strongest possible way. Our Constitution protects the rights of free speech and assembly, but it does not protect mob violence, threats to harm public officials, assaults on law enforcement officers, or damage to government buildings. Those who engage in these behaviors commit serious crimes, and our criminal justice system will hold them accountable.
We will work closely with our law enforcement partners, including the U.S. Attorney’s Office in the District of Columbia, to ensure that any individuals from San Diego or Imperial counties who were involved in criminal activity at the U.S. Capitol are brought to justice. If we determine that federal charges should be brought in this District, we will aggressively prosecute all such matters.
Anyone with information regarding the events of January 6 should contact the Federal Bureau of Investigation: https://tips.fbi.gov/digitalmedia/aad18481a3e8f02.
Two Huntington Men Sentenced to Federal Prison for Gun CrimesRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Mike Stuart announced that two Huntington men were sentenced to federal prison for gun crimes.
Jeffrey L. Hodgens, 42, was sentenced to 30 months in federal prison for theft of a firearm. He previously pled guilty and admitted that on March 24, 2019, he entered a vehicle that was parked in the 1100 block of 4th Avenue in Huntington where he located a Colt, 5.56 mm rifle. Hodgens stole the rifle and admitted that he subsequently traded it to another person in Huntington in exchange for methamphetamine. When the rifle was later recovered, it was determined that the rifle was capable of firing as a fully automatic machinegun. The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Huntington Police Department. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams handled the prosecution.
Craig Eatmon, also known as “Fresh,” 41, was sentenced to 15 months in prison for being a felon in possession of a firearm on two separate occasions. Eatmon admitted that on May 19 and June 17 of 2019, he sold a firearm at Tri-State Pawn and Jewelry on 4th Avenue in Huntington. At the time he sold the firearms, he had been convicted of a drug related felony and malicious destruction of property in Wayne County, Michigan. As a result of those convictions, Eatmon was prohibited from possessing the firearms. The ATF conducted the investigation. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Greg McVey handled the prosecution.
These cases were prosecuted as part of the Project Safe Neighborhoods (PSN) program, 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.
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 Nos. 3:19-cr-00297 (Hodgens) and 3:20-cr-00104 (Eatmon).
Follow us on Twitter: SDWVNews and USAttyStuart
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Suburban Chicago Man Pleads Guilty to Laundering Proceeds from Telemarketing Scheme That Defrauded Elderly VictimsRead the Press Release
CHICAGO — A suburban Chicago man has pleaded guilty in federal court to laundering cash proceeds from a telemarketing scheme that defrauded elderly victims.
HIRENKUMAR P. CHAUDHARI, 27, of Des Plaines, Ill., pleaded guilty on Jan. 6, 2021, to one count of money laundering. The conviction is punishable by up to 20 years in federal prison. U.S. District Judge Sara L. Ellis set sentencing for April 1, 2021.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; J. Russell George, Inspector General of the Treasury Department Inspector General for Tax Administration; William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Gail S. Ennis, Inspector General of the Social Security Administration; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Rick D. Young.
Chaudhari admitted in a plea agreement that he used a phony Indian passport, false name, and false address to open multiple bank accounts in the United States to receive money from victims of the telemarketing scheme. The scheme involved phone calls from people falsely claiming to be associated with, among other agencies, the Social Security Administration and U.S. Department of Justice, stating that a victim’s identity had been stolen and that it was necessary to transfer money to various bank accounts, including the accounts opened by Chaudhari. One of the victims was an elderly woman from Massachusetts who transferred a total of more than $900,000 from her bank and retirement accounts to accounts controlled by Chaudhari or others.
On April 19, 2018 – one day after Chaudhari opened an account and received a $7,000 transfer from the Massachusetts victim – Chaudhari entered a bank branch in Chicago and withdrew $6,500, the plea agreement states. Chaudhari admitted in the plea agreement that he engaged in this financial transaction knowing that the money represented proceeds of unlawful activity.
If you believe you or someone you know is a victim of elder fraud, complaints may be filed with the Federal Trade Commission online at www.ftccomplaintassistant.gov, or by calling 877-FTC-HELP. More information about the Department of Justice’s efforts to help seniors is available at its Elder Justice Initiative webpage.
Stroudsburg Man Sentenced to 114 Months’ Imprisonment for Heroin and Cocaine TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Eddie Pace, age 46, of Stroudsburg, Pennsylvania, was sentenced to 114 months’ imprisonment followed by eight years on supervised release on January 8, 2020, by U.S. District Court Judge Malachy E. Mannion, for drug trafficking. The sentence consists of 102 months’ imprisonment for conspiracy and 12 months’ imprisonment for violating supervised release.
According to Acting United States Attorney Bruce D. Brandler, Pace previously pled guilty to participating in the conspiracy during 2012 through March 2015. Pace was a leader of the drug conspiracy and possessed a firearm in connection with the offense. The conspiracy involved over 100 grams of heroin and more than 500 grams of cocaine (quantity of heroin involved in the conspiracy exceeded 4,000 retail bags).
Pace was one of seven defendants charged in the case. Others previously sentenced in the case were:
- Myron Owens—140 months;
- Daryl Trent—90 months;
- Anton Woodson—63 months;
- William Young—60 months;
- Shawnette Isaac—30 months; and
- Catherine Abbey—12 months.
The matter was investigated by the Federal Bureau of Investigation (FBI), the Pennsylvania State Police, the Scranton Police Department, and local police in Monroe County. Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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Statement of U.S. Attorney KennedyRead the Press Release
“Since late Wednesday, my Office has been working around the clock with both the Buffalo and Washington Field Offices of the Federal Bureau of Investigation, to pursue all leads, to gather evidence, and to bring to justice those who committed crimes at the Capitol Building in Washington, DC. Any suggestion, direct or implied, that there is undue delay, a political purpose, or race-based reason why charges have not yet been filed against any Western New York resident is incorrect, unfounded, and frankly, offensive. I think most people recognize the danger inherent in advocating for a criminal justice system that is more concerned with getting things done quickly than getting them done correctly. As U.S. Attorney, I have refused—and will continue to refuse—to succumb to political pressure or to serve any factional interest. My job is to do my best to get things right and to see to it that the law and justice are the only interests served by me and those who work so hard in this Office.”