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Monday 21 December 2020
Sacramento Man Charged with Possession with Intent to Distribute Fentanyl PillsRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment Thursday against Sabian Quesada, 22, of Sacramento, charging him with possession with intent to distribute at least 40 grams of fentanyl, U.S. Attorney McGregor W. Scott announced.
According to court documents, on Nov. 13, Quesada was found to be in possession of a significant number of counterfeit oxycodone hydrochloride pills containing fentanyl, a powerful synthetic opiate known to cause overdoses and death, even in small quantities.
This case is the product of an investigation by the Federal Bureau of Investigation, the Sacramento County Sheriff’s Office, and the Sacramento County District Attorney’s Office. Assistant U.S. Attorney James Conolly is prosecuting the case.
If convicted, Quesada faces a maximum statutory penalty of 40 years in prison and a $5 million fine. In addition, the crime with which he is charged carries a statutory mandatory minimum of five years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Raleigh Man Sentenced to More Than 12 Years for Cocaine DistributionRead the Press Release
RALEIGH, N.C. – A Raleigh man was sentenced today to 151 months in prison for one-count of Distribution of a Mixture and Substance Containing a Detectable Amount of Cocaine Base (Crack).
According to court documents, Kencheul Jacques, 37, pled guilty to the charge on July 30, 2020.
On June 14, 2017, an officer with the Raleigh Police Department (RPD), was conducting an ongoing drug investigation into street-level drug sales in the Bragg Street area. On the same day, the officer utilized a confidential informant (CI) to make a controlled purchase of crack cocaine from Jacques.
The CI walked to Bragg Street and saw several males near a convenience store. When the CI asked if anyone had anything, Jacques asked the CI what he/she wanted. The CI advised that he/she wanted $40 worth of crack cocaine.
Jacques then told the CI to follow him into the store, where Jacques produced a plastic bag and removed two crack cocaine rocks. Jacques handed the CI the crack cocaine in exchange for $40. Laboratory analysis confirmed that the substance was crack cocaine.
On July 3, 2019, Raleigh Police Department officers were again conducting surveillance of the Bragg Street area. They saw a man approach Jacques, who placed something behind a fire hydrant and then handed something to the man.
The officers stopped the man and found a small amount of crack cocaine in his wallet. Behind the fire hydrant, officers found a bag containing 10.17 grams of crack cocaine.
Jacques was determined to be a Career Offender based on his record of twelve prior convictions, including convictions for Selling Cocaine, Delivering Cocaine, and Possession with Intent to Sell or Deliver Cocaine.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Federal Bureau of Investigation and the Raleigh Police Department investigated the case and Assistant U.S. Attorney Scott A. Lemmon prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-cr-00363-D.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Raleigh Fentanyl and Cocaine Dealer SentencedRead the Press Release
RALEIGH, N.C. – A Raleigh man was sentenced today to 114 months in prison for illegally possessing firearms, intending to distribute a myriad of narcotics, and possessing firearms to further his drug trafficking.
According to court documents, Laequan Chrishawn Sellers, 23, was named in a three-count Indictment filed in the Eastern District of North Carolina on November 20, 2019. Count 1 charged Possession With Intent to Distribute a Quantity of Marijuana, Cocaine, Cocaine Base (Crack), and Heroin in violation of 21 U.S.C. § 841(a)(1); count 2 charged Possession of a Firearm by a Felon, in violation of 18 U.S.C. § 922(g)(1) and 924; and count 3 charged Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of 18 U.S.C. § 924(c)(1)(A)(i).
On May 24, 2019, the Raleigh Police Department (RPD) conducted a traffic stop on a vehicle operated by Sellers. When the officer approached Sellers’ vehicle, an odor of marijuana was detected coming from inside his vehicle. When the officer directed Sellers to place his vehicle in park, Sellers fled from the traffic stop and struck the officer’s left leg with his vehicle, which knocked the officer to the ground. The officer was not seriously injured and was able to limp back to his patrol vehicle and call for assistance. Shortly thereafter, additional officers responded and searched for Sellers.
Officers subsequently located Sellers, who was driving his vehicle recklessly, at a high rate of speed. Sellers ultimately crashed his vehicle into a residential lawn, exited his vehicle with a backpack, and fled on foot. He was apprehended a short distance later. A loaded 9mm pistol, $34,803 in U.S. currency and 0.3 gram of cocaine were located inside Sellers' backpack. Officers also seized 1.36 grams of marijuana, 8.57 grams of crack cocaine, 1.91 grams of a heroin and fentanyl mixture, and a digital scale from Sellers’ person and/or vehicle.
On July 26, 2019, the RPD attempted a traffic stop on a vehicle occupied by Sellers. The driver refused to stop the vehicle and fled from law enforcement, resulting in a vehicle pursuit. After a short pursuit, the vehicle came to a stop in a business parking lot and Sellers fled from the vehicle on foot, but was apprehended a short distance later. At the time of Sellers’ arrest, he possessed $1,555 in U.S. currency. Officers seized 66 bindles of suspected heroin4, 5.72 grams of marijuana, and $191 in U.S. currency from the vehicle.
Based on the preceding, a search warrant was obtained for the residence where Sellers was living. The RPD recovered $14,075 in U.S. currency, a loaded .22 caliber rifle, a loaded AR 5.56mm rifle with a drum magazine, a loaded .45 caliber handgun, a loaded .9mm handgun with an extended magazine, an SKS 7.62mm rifle, 3.68 grams of marijuana, 39.68 grams of heroin and fentanyl mixture, 31.61 grams of cocaine, and two digital scales.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Raleigh Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated the case and Assistant U.S. Attorney Daniel W. Smith prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-cr-00463-D.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Queens Man Going to Prison for Assaulting A Federal OfficerRead 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 Adriano Roberto Nunez, 28, of Queens, NY, who was convicted of assaulting a federal officer and causing bodily injury, was sentenced to serve eight months in prison and eight months home confinement U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Caitlin M. Higgins, who handled the case, stated that on June 3, 2019, the defendant was among passengers on a bus traveling from Canada into the United States at the Peace Bridge Port of Entry. Nunez and other passengers exited the bus at a Customs and Border Patrol checkpoint in the United States for re-entry into the United States.
During a search of the defendant's belongings, a CBP officer found a bag containing gummy candies that gave off an odor consistent with marijuana. While one CBP officer performed a field test for the presence of THC, another officer asked Nunez to place his phone and passport on the table. The defendant placed his passport on the table, however, he did not place his phone on the table, instead Nunez manipulated the phone with his hands. As the CBP officer attempted to retrieve the phone from the defendant, the defendant resisted. After the officer successfully gained possession of the phone, Nunez fled into another area of the building, with officers chasing after him. The defendant fled to an area with no exit, and which point officers caught up with him. Nunez pushed and kicked at least one officer.
The sentencing is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy.
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Palmyra Man Pleads Guilty to Accessing Child PornographyRead the Press Release
BANGOR, Maine: A Palmyra man pleaded guilty today in federal court to one count of accessing child pornography with intent to view, U.S. Attorney Halsey B. Frank announced.
According to court records, from an unknown date until about April 3, 2019, Isaac Bissell, 29, accessed with intent to view multiple images of children under the age of 12 engaged in sexually explicit conduct. In December 2018, the National Center for Missing and Exploited Children received a tip that an internet user was uploading child pornography images to an internet search engine. These uploads were traced to Bissell’s home in Palmyra. During the execution of a search warrant at Bissell’s home, he admitted he had used the internet to search for and download child pornography images. A subsequent forensic review of his electronic devices revealed numerous such images.
Bissell faces a minimum of 10 years and maximum of 20 years in prison. He will also be subject to a fine of up to $250,000. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
Homeland Security Investigations and the Maine State Police Computer Crimes Unit investigated the case.
Oakland Man Charged in One of Multiple Robberies with A Firearm of U.S. Mail CarriersRead the Press Release
OAKLAND - David Leveren Quinn has been charged in a federal criminal complaint with robbery affecting interstate commerce, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nunez.
The criminal complaint alleges that between August 11, 2020, and September 25, 2020, Quinn, 31, of Oakland, committed at least six robberies or attempted robberies of United States Postal Service (USPS) letter carriers in East Oakland with one or more unknown conspirators. While the circumstances vary, the complaint alleges that in most of the robberies Quinn and one other person surveilled a USPS letter carrier and then parked near the letter carrier’s mail truck. Quinn or his co-conspirator would get out of their vehicle, confront the letter carrier, and take or attempt to take trays of mail and packages from the mail truck. In several of the robberies, Quinn or his co-conspirator carried, showed, or pointed a suspected firearm at the letter carrier during the robbery. The complaint alleges that Quinn committed the robberies, at least in part, to engage in identity theft, including by stealing unemployment benefits issued during the COVID-19 global pandemic.
The complaint specifically charges Quinn with a September 19, 2020, robbery of a USPS letter carrier near the corner of 66th Avenue and Avenal Avenue in Oakland. At around three in the afternoon, according to the complaint, a silver Infinity sedan, with its front license plate removed, parked near a letter carrier who was at the back of his mail truck retrieving mail. Quinn got out of the Infinity, approached the letter carrier, and placed a suspected firearm at the letter carrier’s right side and told him not to move. Quinn was joined by his crime partner, and they took mail trays from the mail truck and fled in the Infinity sedan.
According to the complaint, shortly after the robbery, surveillance footage from an ATM in Oakland shows Quinn using a California Employment and Development Department (EDD) debit card to withdraw $1,000 in cash. That debit card had been mailed to an address on the mail route of the letter carrier who Quinn had just robbed. The next day Quinn used the same prepaid debit card to purchase a Cadillac SUV that he used in a subsequent attempted robbery. A law enforcement search of Quinn’s phone showed that Quinn also tried to activate another EDD debit card that had been mailed to an address also on the mail route of the letter carrier that Quinn had robbed on September 19, 2020.
Quinn made his initial appearance in federal court today before United States Magistrate Judge Laurel Beeler. Quinn is in custody and his next scheduled appearance is at 10:30 am on December 22, 2020, before United States Magistrate Judge Beeler for a status hearing regarding his detention.
A complaint merely alleges that crimes have been committed, and Quinn is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Quinn faces a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross pecuniary gain to the defendant or twice the gross pecuniary loss inflicted on victims, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Noah Stern is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kay Konopaske and Kathleen Turner. The prosecution is the result of an investigation by the United States Postal Inspection service and the Oakland Police Department.
Niagara Falls Man Going to Prison for 8 Years for Unlawfully Possessing FirearmsRead 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 Tywon Stephenson, 31, of Niagara Falls, NY, who was convicted of being an unlawful user of a controlled substance in possession of a firearm, was sentenced to serve 98 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Jeremiah E. Lenihan, who is handling the case, stated that on April 24, 2017, law enforcement officers executed a state search warrant on the defendant and his residence on 17th Street in Niagara Falls. Officers had obtained video footage that was recorded in the stairway next to Stephenson’s residence showing the defendant holding a shotgun and a handgun on two separate occasions. During the execution of the search warrant, officers found the shotgun loaded with six 12-gauge shotgun shells, and the handgun. Officers also recovered a scale and a bag of marijuana.
The sentencing is the result of an investigation by the Niagara Falls Police Department, under the direction of Acting Superintendent John Faso, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito.
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Nevada Man Charged with Covid-Relief FraudRead the Press Release
LAS VEGAS, Nevada – A Nevada man was arraigned on December 18, 2020 for fraudulently obtaining approximately $1,662,170 from the Paycheck Protection Program (PPP) loan and the Economic Injury Disaster Loan (EIDL) program.
U.S. Attorney Nicholas A. Trutanich of the District of Nevada, Special Agent in Charge Aaron C. Rouse of the FBI’s Las Vegas Field Office, Special Agent in Charge Tara Sullivan of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Special Agent in Charge Weston King of the Small Business Administration’s Office of the Inspector General (SBA-OIG) made the announcement.
Bryan Robinson, 37, of Henderson, Nevada, is charged in an indictment in the District of Nevada, with two counts of wire fraud and one count of engaging in transactions in unlawful proceeds. He appeared on December 18 before U.S. Magistrate Judge Cam Ferenbach in Las Vegas.
The indictment alleges that Robinson perpetrated a scheme to submit a fraudulent EIDL application to the SBA and a fraudulent PPP loan application to a financial technology company. The SBA guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act also authorizes the SBA to provide EIDL of up to $2 million to eligible small businesses experiencing financial disruption due to the COVID-19 pandemic.
According to the indictment, Robinson submitted two fraudulent applications in the name of ATeam LLC, which is a dance company, for: (1) a PPP loan for approximately $1,502,000; and (2) an EIDL for approximately $150,000. The loan applications represented that ATeam had 37 employees, significant payroll expenses, and substantial revenue. But ATeam in fact was a dance company and did not pay any wages.
Further, the indictment alleges that Robinson did not use the funds for payroll payments. Instead, he used the funds for personal expenses and transfers to other businesses.
The CARES Act is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
The EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities, and fixed debt payments. If an applicant also obtains a loan under the PPP, then EIDL funds cannot be used for the same purpose as the PPP funds.
A federal indictment complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI, IRS-CI, and SBA-OIG investigated the case. Trial Attorney Joseph McFarlane of the Department of Justice’s Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the U.S. Attorney’s Office for the District of Nevada are prosecuting the case.
Matthew Morgan Pleads Not Guilty to Bank LarcenyRead the Press Release
The United States Attorney for the District of Vermont announced that Matthew Morgan, 51, of Burlington, pleaded not guilty today in United States District Court in Burlington to a charge of bank larceny. U.S. Magistrate Judge John M. Conroy ordered that Morgan, who is currently serving an unrelated Vermont state sentence, be detained pending trial, which has not been scheduled.
On December 3, 2020, a federal grand jury in Burlington returned a one count indictment charging Morgan with stealing money and property worth more than $1000 from Citizens Bank, a federally-insured financial institution. The charge stems from the theft of an ATM machine from the University of Vermont campus last September. At the time of the theft, the ATM machine contained about $23,000 in cash. The indictment also seeks to forfeit a 2011 Jeep Patriot automobile, which allegedly was bought with proceeds of the ATM theft.
The United States Attorney emphasizes that the charge against Morgan is merely an accusation and that he is presumed innocent unless and until he is proven guilty.
If convicted, Morgan faces up to ten years of imprisonment and a fine of up to $250,000. The actual sentence would be determined with reference to federal sentencing guidelines.
This case was investigated by the University of Vermont Police Department and the Federal Bureau of Investigation.
Morgan is represented by Assistant Federal Defender Stephen Barth. The prosecutor is Assistant U.S. Attorney Gregory Waples.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150years
Massage Parlor Owner Sentenced on Federal Prostitution ChargeRead the Press Release
KANSAS CITY, KAN. - An Overland Park woman who operated massage parlors in Olathe and Leawood was sentenced today to serve five years of federal supervised release on an interstate prostitution charge, U.S. Attorney Stephen McAllister said. In addition, she was ordered to pay a $55,000 fine.
Chunqui Wu, 62, Overland Park, Kan., pleaded guilty to one count of transportation with intent to engage in illicit sexual conduct. Wu operated three massage parlors: Alpha Massage at 116 S. Clairborne, #A, in Olathe, Kan.; A Plus Massage at 527 N. Mur-Len Road, in Olathe, Kan.; and King Spa at 13104 State Line Road in Leawood, Kan.
Wu’s plea agreement says investigators worked with an undercover confidential source who contacted Wu and asked for a job working in Wu’s massage parlors. Wu made statements indicating she allowed her employees to perform sexual services for tips. Investigators working undercover confirmed that employees in Wu’s massage parlors were offering sexual services to customers.
Wu was arrested when she went to the Kansas City International airport in Kansas City, Mo., to meet the undercover confidential source and transport her back to Kansas to work in one of Wu’s massage parlors.
McAllister commended the Olathe Police Department, the Leawood Police Department, the FBI and Assistant U.S. Attorney Kim Flannigan for their work on the case.
Las Vegas Man Faces Federal Arson Charges for Allegedly Setting Fire to A U.S. CourthouseRead the Press Release
LAS VEGAS, Nev. – A Las Vegas resident has been arrested and charged for allegedly setting fire to the Foley Federal Building and U.S. Courthouse, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada, Special Agent in Charge Patrick Gorman of the Bureau of Alcohol, Tobacco, Firearms and Explosives (San Francisco Field Division), and U.S. Marshal Gary Schofield.
“Our office is heartened by the public’s help in identifying the defendant,” said U.S. Attorney Trutanich. “We’re likewise grateful for our law enforcement partners’ efforts to investigate this case, and we will continue working closely with them to hold accountable individuals who seek to damage or destroy public property, including symbols of justice such as federal courthouses.”
“ATF takes every act of violence, including arson, very seriously,” said Special Agent in Charge Gorman. “Arson poses a threat to the community, as the path of an intentionally set fire often leads to incredible destruction. We are thankful for the public response, which helped us identify the suspect.”
“Protecting the federal judiciary is a primary duty of the U.S. Marshals Service,” said Marshal Schofield. “We do so with the ongoing unified approach by law enforcement, as was demonstrated in this case.”
Marty Clark, 32, of Las Vegas, has been charged in a federal criminal complaint with one count of arson and one count of malicious damage to federal property. He made his initial appearance on December 18, 2020 before U.S. Magistrate Judge Cam Ferenbach, who scheduled a preliminary hearing before U.S. Magistrate Judge Elayna Youchah for January 4, 2021.
The criminal complaint alleges that, on November 7, 2020, Clark intentionally set fire to the Foley Federal Building and U.S. Courthouse, located in downtown Las Vegas. According to the complaint, at approximately 3:20 a.m., Clark poured gasoline on wood framing at the building’s front entrance and set fire to the framing.
After observing flames inside the courthouse lobby, a security officer exited the building and saw Clark outside carrying a gasoline can. The security officer ordered Clark to “stop,” and attempted to detain him. Clark refused, stating “it’s my right to protest.” The security officer then tried to stop Clark from fleeing the scene, which resulted in an altercation. During the altercation, Clark dropped the gasoline can he had been holding and his glasses flew off his face. Clark was able to get into his vehicle and drive away, abandoning the gasoline can and leaving his glasses. The security officer was able to take photographs of Clark and his vehicle as he drove off.
Clark was identified after law enforcement received a tip from the public, and a DNA match was identified based on a swab taken from the glasses Clark left at the courthouse. He was arrested on December 16, 2020. If convicted, Clark faces a statutory mandatory minimum sentence of five years in prison and a statutory maximum penalty of twenty years in prison.
A criminal complaint is a formal accusation of criminal conduct for purposes of establishing probable cause, not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by ATF, Las Vegas Fire and Rescue, U.S. Marshals Service, FBI, Federal Protective Service, and the Las Vegas Metropolitan Police Department All-Hazard Regional Multi-Agency Response Section. Assistant U.S. Attorneys Lisa Cartier-Giroux and Stephanie Ihler are prosecuting the case.
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Kotzebue Man Arrested for Sex Trafficking of a MinorRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced Wally Roy Carter, 61, of Kotzebue, Alaska, has been named in a federal complaint for sex trafficking of a minor. Carter was arrested on Thursday, Dec. 17, and was ordered detained.
The complaint alleges that Carter became the subject of a federal investigation last month, when the FBI received a tip alleging a minor had been sexually abused by Carter approximately 15 times over the course of three years, with the first instance occurring when the victim was just 10 years old. Carter allegedly gave the victim money after each instance of sexual abuse, and often gave her alcohol and marijuana before or after the sexual abuse. The complaint further alleges that the sexual abuse happened in Carter’s home, his vehicle and on one occasion, Carter took her by boat to a cabin, where the victim tried to escape from Carter at least five times.
If the public has any further information regarding Carter’s activities, please contact Anchorage FBI at (907) 276-4441.
If convicted, Carter faces a mandatory minimum sentence of 15 years in prison. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation (FBI) and Anchorage Police Department (APD) Task Force Officers investigated this case collectively as part of the FBI’s Child Exploitation and Human Trafficking Task Force, with assistance from the Alaska State Troopers (AST) and Kotzebue Police Department (KPD). This case is being prosecuted by Assistant U.S. Attorney Dan Doty.
“The U.S. Attorney’s Office is focused on protecting the citizens of rural Alaska, especially young people.” said U.S. Attorney Schroder, “With the additional prosecutors provided by Attorney General Barr after his visit to Alaska in June 2019, we are charging more cases in the remote areas of the state, fulfilling his admonition that all citizens deserve public safety protection.”
“The FBI is dedicated to ensuring the safety and security of Alaska’s youth, and today’s charges send a clear message that crimes against children, in both urban and rural Alaska, will never be tolerated,” said Robert Britt, Special Agent in Charge of the FBI Anchorage Field Office. “Our collective efforts to promote public safety in rural Alaska remain steadfast, and by using a multi-agency approach, the FBI will continue to investigate, disrupt, and hold accountable those who prey upon the children of our communities.”
The investigation is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices, Project Safe Childhood combines federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Under the Rural Alaska Anti-Violence Enforcement Network (RAAVEN), the U.S. Attorney’s Office is increasing engagement, coordination, and action on public safety in Alaska Native communities.
The charges in the criminal complaint are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Indictment Charges Pair with $2 Million Fraud SchemeRead the Press Release
PEORIA, Ill. – Two former employees of a Central Illinois boat and watercraft dealership have been charged with fraud in an indictment that was unsealed today when Jeffrey D. Gibbs, 55, of Farmer City, Ill., made his initial appearance in federal court in Peoria. An initial trial date has been scheduled on March 15, 2021. Gibbs was arrested on Dec. 18, 2020; he was released following today’s hearing with conditions, including location monitoring. A summons has been issued to Kara M. Wilkey, 45, of Maroa, Ill., to make her initial appearance on Jan. 12, 2021.
Mid Illinois Boats, Inc., doing business as Clinton Marine II, operated new and used boat dealerships in East Peoria and Weldon, Ill. The indictment alleges that Gibbs and Wilkey, former employees of Clinton Marine II, operated a multifaced fraud scheme that defrauded their employer, banks, and the dealerships’ customers of more than $2 million. The pair allegedly spent the money on their own automobiles, vacations, credit cards, utilities and shopping.
The indictment alleges that from January 2014 to July 2019, Gibbs and Wilkey used their positions with Clinton Marine II, which included management of day-to-day operations, to carry out their fraud scheme. The fraud allegedly included obtaining loans on fictitious boats and on false transactions; taking out loans using forged signatures; selling boats on behalf of customers but not paying off the customers loan or remitting payment to the seller; and, collecting payment for taxes, titles and fees, but failing to pay those expenses.
The charges are the result of investigation by the Federal Bureau of Investigation with the assistance of the DeWitt County Sheriff’s Office; the Illinois Department of Natural Resources; and, the Illinois Secretary of State. Assistant U.S. Attorney Douglas F. McMeyer is representing the government in the case prosecution.
If convicted, the statutory maximum penalty for each count of wire fraud (nine counts) and mail fraud (two counts) is up to 20 years in prison; the maximum penalty for each count of bank fraud (four counts) is up to 30 years in prison; and, each count of aggravated identity theft (three counts) carries a penalty of two years in prison and requires that at least two years must be served consecutive to any sentence imposed on any other count.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.
Honduran National Pleads Guilty to Illegal Re-EntryRead the Press Release
BOSTON – A Honduran national pleaded guilty today in federal court in Worcester to illegally reentering the United States.
Milton Javier Cardona-Guevara, 34, pleaded guilty to one count of illegal re-entry into the United States after deportation. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for April 9, 2021. Cardona-Guevara was charged in November 2020.
On Aug. 13, 2006, Cardona-Guevara illegally entered the United States and was convicted of improper entry by an alien in August 2006. On Sept. 5, 2006, he was removed from the U.S. In 2008 and 2011, Cardona-Guevara was apprehended after illegally entering the United States and was deported. On Oct. 2, 2018, Cardona-Guevara was arrested in Worcester County for assault with a dangerous weapon. Cardona-Guevara admitted to immigration authorities that he had been deported three times previously. On Jan. 25, 2019, he was removed from the U.S. On Oct. 13, 2020, Cardona-Guevara was arrested in Worcester on an outstanding warrant for criminal charges and had been custody on state criminal charges until he was charged in this case.
The charging statute provides for a sentence of up to two years in prison, up to 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 and Todd Lyons, Field Office Director, Enforcement and Removal Operations, U.S. Immigration and Customs Enforcement, Boston made the announcement. Assistant U.S. Attorney John T. Mulcahy of Lelling’s Worcester Branch Office is prosecuting the case.
Grocery Store and Manager Plead Guilty to Hiring Undocumented Workers; Court Imposes $500,000 in Fines and PenaltiesRead the Press Release
Assistant U. S. Attorney Stephen H. Wong (619) 546-9464 and Jennifer McCullough 546-8773
NEWS RELEASE SUMMARY – December 21, 2020
SAN DIEGO – Zion Market and its former general manager, Timothy Moon, pleaded guilty in federal court today to knowingly hiring undocumented employees who were not authorized to work in the United States.
U.S. Magistrate Judge Michael S. Berg ordered Zion Market to pay a $500,000 fine plus special penalty assessments of $25,050. The court also ordered Moon to pay a $5,000 fine plus an additional $5,000 in special penalty assessments.
In the court-filed plea agreement, Zion Market admitted that between 2011 and 2019, about half of the market’s 100-person work force was not authorized to work in the United States, and that it had employed undocumented aliens as early as 2003, through as recently as 2019. Zion acknowledged that it realized a pecuniary gain of at least $500,000 by employing illegal aliens. Moon, the market’s manager, knew that the illegal aliens could not legally work in the United States, but hired and continued to employ the aliens as part of a pattern and practice of employing unauthorized aliens. Upon learning of the investigation, Zion took steps to comply with federal immigration and labor laws.
Under federal law, employers are required to verify the identity and employment eligibility of all individuals they hire, and to document that information using the Employment Eligibility Verification Form I-9. Homeland Security Investigations continues to focus on the criminal prosecution of employers who knowingly break the law and will continue to audit employers’ immigration forms, such as the Form I-9 that verifies employees’ authorization to work in the United States. Homeland Security Investigations will also employ civil fines to encourage compliance with the law. Worksite enforcement investigators help combat worker exploitation, illegal wages, child labor, and other crimes collateral to worksite enforcement.
“Federal labor and immigration laws protect American workers by requiring employers to hire only U.S. citizens and aliens who are authorized to work in the country,” said U.S. Attorney Robert Brewer. “Zion Market ignored those laws for over a decade, and today Zion and its general manager paid a high price for that conduct. We will continue to vigorously enforce immigration laws where we find employers engaging in a pattern or practice of hiring unauthorized individuals in reckless disregard of the law.” Brewer praised prosecutor Stephen Wong and agents with Homeland Security Investigations for their excellent work on this case.
“Today’s sentencing is an example of HSI’s commitment to the investigation of employers who knowingly break the law to exploit workers and conduct other illegal practices,” said Cardell Morant, HSI Special Agent in Charge for San Diego. “These investigations hold employers accountable by eliminating unfair advantages for companies that hire an illegal workforce, protecting jobs for those who are legally employed.”
DEFENDANTS Case Number 20-mj-3948-MSB
Zion Market Inc., 7655 Clairemont Mesa, Inc.
Timothy Moon Age: 41 San Diego, CA
SUMMARY OF CHARGES
Continuing to Employ Unauthorized Aliens – Title 8, U.S.C., Section 1324a(a)(2) and 1324(f)(1), a misdemeanor
Maximum penalty for an individual: Six months in prison and $5,000 fine
Maximum Penalty for an organization: Fine of $10,000 or not more than twice the gross pecuniary gain realized from the offense, whichever is greater
AGENCY
Homeland Security Investigations (HSI)
Government Contractor Admits Scheme to Inflate Costs on Federal Projects and Pays $11 Million to Resolve Criminal and Civil ProbesRead the Press Release
Schneider Electric Buildings Americas Inc. (Schneider Electric), a nationwide provider of electricity solutions for buildings and data centers with its principal place of business in Carrollton, Texas, will pay $11 million to resolve criminal and civil investigations relating to kickbacks and overcharges on eight federally-funded energy savings performance contracts (ESPCs), the Department of Justice announced today. Under the contracts, Schneider Electric was to install a variety of energy savings upgrades, such as solar panels, LED lighting, and insulation, in federal buildings.
As part of the criminal resolution with the U.S. Attorney’s Office for the District of Vermont (USAOVT), Schneider Electric admitted that it fraudulently charged the government nearly $1.7 million in design costs incurred on three ESPCs funded by the Department of the Navy (DON), General Services Administration (GSA), and Department of Agriculture (USDA) by disguising those costs and spreading them across un-related pricing components. Schneider Electric employees described this process as “burying” or “hiding” the costs. Schneider Electric specifically spread costs across various line items in these federal projects so that the agencies would pay the amounts without knowing they were design costs that Schneider Electric was prohibited from charging the government. Schneider Electric admitted that its conduct constituted wire fraud in violation of 18 U.S.C. § 1343. Schneider Electric executed a non-prosecution agreement related to this conduct and agreed to pay nearly $1.7 million in criminal forfeiture.
Schneider Electric further admitted that former convicted Senior Project Manager Bhaskar Patel solicited and received over $2.5 million in kickbacks from various subcontractors who worked on ESPCs issued by the DON, Coast Guard, GSA, USDA, and Department of Veterans Affairs (VA). Schneider Electric admitted that this conduct violated the Anti-Kickback Act, 41 U.S.C. § 8707.
Schneider Electric is required by its agreement with the USAOVT to cooperate fully in any and all matters relating to relevant conduct for a period of three years, to report to the USAOVT any evidence or allegation of a violation of U.S. fraud, anti-corruption, procurement integrity, or anti-kickback laws, to implement and comply with an updated corporate compliance program, and to report annually to the USAOVT on its remediation and implementation of its required compliance enhancements.
In the separate civil settlement announced today, Schneider Electric agreed to pay $9.3 million to resolve False Claims Act and Anti-Kickback Act liability for Patel’s kickback scheme and for including inflated estimates and improper costs in proposals, and overcharging federal agencies, under the eight ESPCs.
“ESPC projects can only be successful where contractors are forthright and honest with federal agencies,” said Acting Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “We will not tolerate attempts by contractors to mislead the government and line their own pockets at the expense of the very energy savings the government seeks to achieve.”
“These cases are complex and challenging, and I commend the dogged work of our Assistant U.S. Attorneys and their law enforcement agency partners to ensure that Schneider Electric’s conduct was brought to light and it was held to account,” said U.S. Attorney Christina E. Nolan. “I am proud that our small office not only successfully convicted Bhaskar Patel but went further and unraveled Schneider Electric’s broader criminal scheme of fraudulently inflating costs to boost its profits and steal from taxpayers. In reaching this resolution, we considered that Schneider Electric terminated two employees involved in the schemes and overhauled its compliance program. We also considered the shortcomings of Schneider Electric’s cooperation and its failure to timely accept responsibility.”
“Fraud is not a victimless crime,” said Michael Wiest, Special Agent in Charge of the Northeast Field Office of the Naval Criminal Investigative Service (NCIS). “It steals money from American taxpayers, damages the integrity of the Department of the Navy procurement process, degrades the readiness of the warfighter by compromising the quality of goods and services used to protect the nation, and squanders more money in the funding of criminal investigations which could have been avoided simply by individuals doing the right thing. NCIS will continue to work with our partner agencies to aggressively pursue those who perpetrate financial crimes.”
“Participation in Government contracts should not involve contractors and their employees seeking financial gain to the detriment of the U.S. Government,” said USDA Office of Inspector General (OIG) Special Agent-in-Charge Bethanne M. Dinkins. “Thanks to the hard work and tireless efforts of the investigative team, the interests and integrity of the United States and the procurement process throughout the government have been protected. The USDA Office of Inspector General appreciates the commitment of the Department of Justice and the cooperative efforts of our law enforcement partners. Our resources are well utilized when we work together to investigate those who unlawfully solicit and accept bribes and kickbacks and overcharge the U.S. Government. This resolution demonstrates that we are committed to holding contractors accountable when they choose to abuse the integrity of vital government programs designed to significantly reduce energy and operating costs and make progress toward meeting federal sustainability goals.”
“The GSA Office of Inspector General is committed to protecting the integrity of the GSA’s procurement process and programs,” said Joseph Dattoria, GSA-OIG Special Agent in Charge. “This resolution is a testament to that commitment and should serve as a warning to other contractors who may consider engaging in similar conduct. We appreciate the collaborative efforts of the DOJ and our other law enforcement partners.”
“VA OIG is committed to protecting the integrity of energy savings performance contracts awarded by VA and other federal agencies,” said VA OIG Special Agent in Charge Christopher Algieri, Northeast Field Office. “We appreciate the tireless efforts of the United States Attorney’s Office, the Civil Division, and our other law enforcement partners in rooting out this and other procurement fraud.”
The United States Attorney’s Office for the District of Vermont handled the criminal investigation and resolution. The civil investigation was jointly handled by the District of Vermont and the Civil Division’s Commercial Litigation Branch (Fraud Section). The investigation was supported by the Offices of Inspector General for the VA, USDA and GSA, and the NCIS.
Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.
Former U.S. Postal Service Carrier Pleads Guilty to Federal Charge in Maryland for Making False Statements to Obtain up to $62,690 in Disability CompensationRead the Press Release
Greenbelt, Maryland – Ronald S. Repass, age 57, of Poolesville, Maryland, pleaded guilty today to the federal charge of making false statements or fraud to obtain federal employees’ disability compensation. Repass admitted that he falsely claimed that he was unable to work, even though he had worked at various jobs between June 2016 and February 2019, for which he was paid.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Imari R. Niles of the U.S. Postal Service, Office of Inspector General (OIG); and Special Agent in Charge Derek Pickle, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General (OIG).
As stated in the indictment, the Department of Labor’s Office of Worker’s Compensation Programs (“OWCP”) administered major disability compensation programs which provided wage loss benefits, medical treatment, vocational rehabilitation, and other benefits for federal government employees who became disabled during the performance of their duties.
According to the indictment, beginning in October 1989, Repass was employed by the U.S. Postal Service at the Poolesville Post Office in Montgomery County, Maryland. Repass was a rural carrier on December 5, 2014, when he filed a workers’ compensation claim after he fell and hurt his right shoulder. OWCP granted his claim on February 11, 2015, for a “right rotator cuff tear” based on a finding that Repass was not able to perform any of the routine duties of his job. Repass began receiving benefits of approximately $3,227 per month on February 22, 2015.
The Department of Labor required disabled employees to annually sign and complete a form certifying that they had not worked for the past 15 months. The disabled employees were also required to immediately report any improvement in their medical condition or any part-time or full-time employment. In 2016, 2017, and 2018, Repass signed and submitted the form stating that he had not worked for any employer, nor was he self-employed or involved in a business enterprise, despite that fact that during those years Repass worked part-time as a snow plow driver, as a service advisor at an automotive repair shop, as a field supervisor for a home improvement company, as a plumber, and he installed window blinds and mowed lawns, all in exchange for compensation.
As a result of his false representations, the government contends that Repass received as much as $62,690.44 in Worker’s Compensation payments that he was not entitled to receive.
Repass faces a maximum sentence of five years for false statements or fraud to obtain federal employees’ compensation. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Paula Xinis has scheduled sentencing for March 29, 2021, at 9:00 a.m.
United States Attorney Robert K. Hur commended the U.S. Postal Service OIG and U.S. Department of Labor OIG for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Hollis R. Weisman, who is prosecuting the case.
# # #
Former St. Albans Property Developer Sentenced to Prison for Wire FraudRead the Press Release
The United States Attorney for the District of Vermont announced that Jeremy Fairbanks, 44, formerly of St. Albans, Vermont, was sentenced on December 18, 2020 upon his guilty plea to two counts of wire fraud: one stemming from his conduct in Vermont, and one relating to a subsequent fraud in Tennessee. Fairbanks was sentenced to 10 months of imprisonment to be followed by three years of supervised release, to run concurrently on both counts. U.S. District Judge Christina Reiss also ordered that Fairbanks pay restitution totaling $155,392. Fairbanks must surrender to the U.S. Bureau of Prisons to begin his sentence on April 15, 2021.
According to court records and testimony at his sentencing, Fairbanks devised a scheme through which he defrauded a lender based in northern New York in 2016. Fairbanks obtained construction financing from that lender of over $210,000 to build and sell a house in Swanton, Vermont. However, Fairbanks had to show his lender proof of construction progress to receive payments under their loan agreement. Accordingly, he provided the lender with photographs purporting to show a house and garage on his property. In fact, the property Fairbanks financed was—and remains—a vacant lot. Fairbanks’ photographs were later found to depict structures on other properties, which Fairbanks did not own. In one instance, Fairbanks altered a photograph to make it appear that a house and garage, which were in fact on two different lots, were next to each other on the property Fairbanks had financed.
In the spring of 2019, Fairbanks obtained a mortgage to purchase a home in Gray, Tennessee. In his application for that mortgage, Fairbanks misrepresented his financial condition by, among other things, concealing the $200,000 debt he still owed on his construction loan. Fairbanks agreed to sell his home in Tennessee and to forfeit the proceeds of the sale in connection with his guilty pleas and sentences in these cases.
U.S. Secret Service agents based in Vermont and Tennessee investigated the frauds. The United States Attorney also gratefully acknowledges the assistance of Assistant U.S. Attorneys Mac Heavener and Gretchen Mohr, and paralegal Stephanie Morris, of the United States Attorney’s Office for the Eastern District of Tennessee.
The United States is represented in this matter by Assistant U.S. Attorney Spencer Willig. The defendant is represented by Timothy C. Doherty, Jr, Esq.
Former Senior Libyan Intelligence Officer and Bomb-Maker for the Muamar Qaddafi Regime Charged for the December 21, 1988 Bombing of Pan Am Flight 103Read the Press Release
Today, Attorney General William Barr, Director of the FBI, Christopher Wray, Assistant Attorney General for National Security John Demers, and Acting U.S. Attorney for the District of Columbia, Michael Sherwin, announced new charges against a former Libyan intelligence operative, Abu Agela Mas’ud Kheir Al-Marimi, aka, “Hasan Abu Ojalya Ibrahim” (Masud), for his role in building the bomb that killed 270 individuals in the destruction of Pan Am Flight 103 over Lockerbie, Scotland on Dec. 21, 1988.
“I would like to publicly and personally express my deepest thanks to the Lord Advocate of Scotland, James Wolffe, QC, for the tireless efforts of his dedicated prosecutors from The Crown Office and investigators from Police Scotland. These charges are the product of decades of hard work by investigators and prosecutors who have remained resolute in their dogged pursuit of justice for our citizens, the citizens of the United Kingdom, and the citizens of the other 19 countries that were murdered by terrorists operating on behalf of the former Muamar Qaddafi regime when they attacked Pan Am Flight 103,” said William P. Barr, Attorney General of the United States. “As to all the victims and the families, we cannot take away your pain from your loss, but we can seek justice for you. Our message to other terrorists around the world is this – you will not succeed – if you attack Americans, no matter where you are, no matter how long it takes, you will be pursued to the ends of the earth until justice is done.”
“Today’s announcement should remind the world that when Americans are harmed, the FBI and the United States government will never stop pursuing justice for our citizens, no matter where that takes us, how long it takes us to get there, or how difficult the road might be,” said FBI Director Chris Wray. “Without the thoroughness and professionalism of our FBI personnel, the Department of Justice, our Scottish partners, and the people of Lockerbie, we never would have found the trail that led us to the men responsible for this attack. We will never forget the loved ones who were lost, and we remain committed to continuing our work to achieve justice for the victims and their families.”
“Today’s unsealing of criminal charges in the Pan Am 103 case is monumental on several fronts,” said Acting U.S. Attorney Michael R. Sherwin for the District of Columbia. “First, the criminal complaint against the alleged ‘bomb maker’ signifies that the work of federal prosecutors never ends, even after several decades, until all criminal actors are held accountable. In addition, these charges remind the public of the horrific effect that acts of terrorism continue to have on victims and their families. The bombing of Pan Am 103 was historic in that it was, until the 9/11 terrorist attacks, the largest terrorist attack on U.S. civilians in history. It also remains the deadliest terrorist attack in the history of the United Kingdom – for all of these reasons we will never forget and the D.C. United States Attorney’s Office will continue to seek justice for all of the Pan Am 103 victims and their loved ones.”
December 21, 1988
Pan Am Flight 103 exploded into pieces almost instantaneously when a bomb in the forward cargo area exploded over Lockerbie, Scotland, at 7:03 p.m. local time at an altitude of 31,000 feet after 38 minutes of flight. The plane had taken off from London-Heathrow and was en route to John F. Kennedy Airport in New York.
Citizens from 21 countries were killed, of that number 190 Americans perished, including 35 Syracuse University students as they were returning home to the United States for the holidays after a semester studying abroad. 43 victims were from the United Kingdom, including 11 residents of Lockerbie, Scotland, who perished on the ground as fiery debris from the falling aircraft destroyed an entire city block where homes had peacefully stood just minutes earlier. This international terrorist attack, planned by and executed by Libyan intelligence operatives, was considered the largest terrorist attack on both the United States and the United Kingdom before the terror attacks of Sept. 11, 2001.
Immediately after the disaster, Scottish and American law enforcement undertook a joint investigation that was unprecedented in its scope, and in November 1991, it led to criminal charges in both countries, charging two Libyan intelligence operatives, Abdel Baset Ali al-Megrahi (Megrahi) and Lamen Khalifa Fhimah (Fhimah) with their roles in the bombing.
The criminal complaint filed today charges Masud with destruction of an aircraft resulting in death, in violation of 18 U.S.C. § 32(a)(1) and (a)(2), as well as destruction of a vehicle by means of an explosive resulting in death, in violation of 18 U.S.C. § 844(i). The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Criminal Complaint Allegations
According to the affidavit in support of the criminal complaint, the External Security Organization (ESO) was the Libyan intelligence service through which Libya conducted acts of terrorism against other nations and repressed the activities of Libyan dissidents abroad. Masud worked in various capacities for the ESO, including as a technical expert in building explosive devices from approximately 1973 to 2011.
According to the affidavit, Masud participated in the “Lockerbie airplane bombing,” among other plots against the United States and the west, including but not limited to, the April 5, 1986, bombing of the LaBelle Discotheque in West Berlin, Germany. Two U.S. service members were killed in that attack and scores of others left seriously injured or permanently disabled.
Planning and Executing the Bombing of Pan Am Flight 103
According to the affidavit in support of the criminal complaint, in the winter of 1988, Masud was summoned by a Libyan intelligence official to meet at that official’s office in Tripoli, Libya, where he was directed to fly to Malta with a prepared suitcase. He did so, where he was met by Megrahi and Fhimah at the airport. After Masud spent approximately three or four days in the hotel, Megrahi and Fhimah instructed Masud to set the timer on the device in the suitcase for the following morning, so that the explosion would occur exactly eleven hours later.
According to the affidavit, the suitcase used by Masud was a medium-sized Samsonite suitcase that he used for traveling. Megrahi and Fhimah were both at the airport on the morning of Dec. 21, 1988, and Masud handed the suitcase to Fhimah after Fhimah gave him a signal to do so. Fhimah then placed the suitcase on the conveyor belt. Masud then left. He was given a boarding pass for a Libyan flight to Tripoli, which was to take off at 9:00 a.m.
Three or four days after returning to Libya, Masud and Megrahi met with a senior Libyan intelligence official, who thanked them for a successful operation. Approximately three months after that, Masud and Fhimah met with Qaddafi, and others, who thanked them for carrying out a great national duty against the Americans, and Qaddafi added that the operation was a total success.
Of the 270 lost in the bombing, 190 were Americans on the aircraft. Forty-three from the United Kingdom were lost, including eleven lives on the ground in Lockerbie. The remaining victims were from the following countries: Argentina, Belgium, Bolivia, Canada, France, Germany, Hungary, India, Ireland, Israel, Italy, Jamaica, Japan, Philippines, South Africa, Spain, Sweden, Switzerland, and Trinidad and Tobago. The Department of Justice expresses its profound appreciation to the Scottish government as well as its dedicated commitment to seeking justice for all the victims of the alleged crimes.
Investigative Team
The United States side of the joint investigative team is led by the FBI’s Washington Field Office, along with prosecutors from the National Security Section of the U.S. Attorney’s Office for the District of Columbia, and the Counterterrorism Section of the Justice Department’s National Security Division. There are many agents from the FBI and prosecutors from the Department who have worked on this case over the years.
Contact Information
Victims of this crime and their families can contact the Department of Justice via e-mail at [email protected], or by telephone at +1 (202) 252-7045.
Former Senior Libyan Intelligence Officer and Bomb-Maker for the Muamar Qaddafi Regime Charged for the December 21, 1988 Bombing of Pan Am Flight 103Read the Press Release
WASHINGTON - Today, Attorney General William Barr, Director of the FBI, Christopher Wray, Assistant Attorney General for National Security John Demers, and Acting U.S. Attorney for the District of Columbia, Michael Sherwin, announced new charges against a former Libyan intelligence operative, Abu Agela Mas’ud Kheir Al-Marimi, aka, “Hasan Abu Ojalya Ibrahim” (Masud), for his role in building the bomb that killed 270 individuals in the destruction of Pan Am Flight 103 over Lockerbie, Scotland on Dec. 21, 1988.
“I would like to publicly and personally express my deepest thanks to the Lord Advocate of Scotland, James Wolffe, QC, for the tireless efforts of his dedicated prosecutors from The Crown Office and investigators from Police Scotland. These charges are the product of decades of hard work by investigators and prosecutors who have remained resolute in their dogged pursuit of justice for our citizens, the citizens of the United Kingdom, and the citizens of the other 19 countries that were murdered by terrorists operating on behalf of the former Muamar Qaddafi regime when they attacked Pan Am Flight 103,” said William P. Barr, Attorney General of the United States. “As to all the victims and the families, we cannot take away your pain from your loss, but we can seek justice for you. Our message to other terrorists around the world is this – you will not succeed – if you attack Americans, no matter where you are, no matter how long it takes, you will be pursued to the ends of the earth until justice is done.”
“Today’s announcement should remind the world that when Americans are harmed, the FBI and the United States government will never stop pursuing justice for our citizens, no matter where that takes us, how long it takes us to get there, or how difficult the road might be,” said FBI Director Chris Wray. “Without the thoroughness and professionalism of our FBI personnel, the Department of Justice, our Scottish partners, and the people of Lockerbie, we never would have found the trail that led us to the men responsible for this attack. We will never forget the loved ones who were lost, and we remain committed to continuing our work to achieve justice for the victims and their families.”
“Today’s unsealing of criminal charges in the Pan Am 103 case is monumental on several fronts,” said Acting U.S. Attorney Michael R. Sherwin for the District of Columbia. “First, the criminal complaint against the alleged ‘bomb maker’ signifies that the work of federal prosecutors never ends, even after several decades, until all criminal actors are held accountable. In addition, these charges remind the public of the horrific effect that acts of terrorism continue to have on victims and their families. The bombing of Pan Am 103 was historic in that it was, until the 9/11 terrorist attacks, the largest terrorist attack on U.S. civilians in history. It also remains the deadliest terrorist attack in the history of the United Kingdom – for all of these reasons we will never forget and the D.C. United States Attorney’s Office will continue to seek justice for all of the Pan Am 103 victims and their loved ones.”
December 21, 1988
Pan Am Flight 103 exploded into pieces almost instantaneously when a bomb in the forward cargo area exploded over Lockerbie, Scotland, at 7:03 p.m. local time at an altitude of 31,000 feet after 38 minutes of flight. The plane had taken off from London-Heathrow and was en route to John F. Kennedy Airport in New York.
Citizens from 21 countries were killed, of that number 190 Americans perished, including 35 Syracuse University students as they were returning home to the United States for the holidays after a semester studying abroad. 43 victims were from the United Kingdom, including 11 residents of Lockerbie, Scotland, who perished on the ground as fiery debris from the falling aircraft destroyed an entire city block where homes had peacefully stood just minutes earlier. This international terrorist attack, planned by and executed by Libyan intelligence operatives, was considered the largest terrorist attack on both the United States and the United Kingdom before the terror attacks of Sept. 11, 2001.
Immediately after the disaster, Scottish and American law enforcement undertook a joint investigation that was unprecedented in its scope, and in November 1991, it led to criminal charges in both countries, charging two Libyan intelligence operatives, Abdel Baset Ali al-Megrahi (Megrahi) and Lamen Khalifa Fhimah (Fhimah) with their roles in the bombing.
The criminal complaint filed today charges Masud with destruction of an aircraft resulting in death, in violation of 18 U.S.C. § 32(a)(1) and (a)(2), as well as destruction of a vehicle by means of an explosive resulting in death, in violation of 18 U.S.C. § 844(i). The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Criminal Complaint Allegations
According to the affidavit in support of the criminal complaint, the External Security Organization (ESO) was the Libyan intelligence service through which Libya conducted acts of terrorism against other nations and repressed the activities of Libyan dissidents abroad. Masud worked in various capacities for the ESO, including as a technical expert in building explosive devices from approximately 1973 to 2011.
According to the affidavit, Masud participated in the “Lockerbie airplane bombing,” among other plots against the United States and the west, including but not limited to, the April 5, 1986, bombing of the LaBelle Discotheque in West Berlin, Germany. Two U.S. service members were killed in that attack and scores of others left seriously injured or permanently disabled.
Planning and Executing the Bombing of Pan Am Flight 103
According to the affidavit in support of the criminal complaint, in the winter of 1988, Masud was summoned by a Libyan intelligence official to meet at that official’s office in Tripoli, Libya, where he was directed to fly to Malta with a prepared suitcase. He did so, where he was met by Megrahi and Fhimah at the airport. After Masud spent approximately three or four days in the hotel, Megrahi and Fhimah instructed Masud to set the timer on the device in the suitcase for the following morning, so that the explosion would occur exactly eleven hours later.
According to the affidavit, the suitcase used by Masud was a medium-sized Samsonite suitcase that he used for traveling. Megrahi and Fhimah were both at the airport on the morning of Dec. 21, 1988, and Masud handed the suitcase to Fhimah after Fhimah gave him a signal to do so. Fhimah then placed the suitcase on the conveyor belt. Masud then left. He was given a boarding pass for a Libyan flight to Tripoli, which was to take off at 9:00 a.m.
Three or four days after returning to Libya, Masud and Megrahi met with a senior Libyan intelligence official, who thanked them for a successful operation. Approximately three months after that, Masud and Fhimah met with Qaddafi, and others, who thanked them for carrying out a great national duty against the Americans, and Qaddafi added that the operation was a total success.
Of the 270 lost in the bombing, 190 were Americans on the aircraft. Forty-three from the United Kingdom were lost, including eleven lives on the ground in Lockerbie. The remaining victims were from the following countries: Argentina, Belgium, Bolivia, Canada, France, Germany, Hungary, India, Ireland, Israel, Italy, Jamaica, Japan, Philippines, South Africa, Spain, Sweden, Switzerland, and Trinidad and Tobago. The Department of Justice expresses its profound appreciation to the Scottish government as well as its dedicated commitment to seeking justice for all the victims of the alleged crimes.
Investigative Team
The United States side of the joint investigative team is led by the FBI’s Washington Field Office, along with prosecutors from the National Security Section of the U.S. Attorney’s Office for the District of Columbia, and the Counterterrorism Section of the Justice Department’s National Security Division. There are many agents from the FBI and prosecutors from the Department who have worked on this case over the years.
Contact Information
Victims of this crime and their families can contact the Department of Justice via e-mail at [email protected], or by telephone at +1 (202) 252-7045.
Former Santa Maria Resident Admits to Killing Elephant SealRead the Press Release
LOS ANGELES – A one-time resident of Santa Barbara County pleaded guilty today to a federal criminal charge for fatally shooting an elephant seal on a beach near San Simeon.
Jordan Gerbich, 30, formerly of Santa Maria, now a resident of Utah, pleaded guilty via videoconference to a single-count information charging him with taking a marine mammal.
Gerbich admitted in his plea agreement that he drove to an elephant seal viewing area adjacent to the Piedras Blancas Marine Reserve and Monterey Bay National Marine sanctuary near San Simeon on September 28, 2019. Gerbich brought a .45-caliber pistol and, aided with a flashlight, used the firearm to shoot and kill a northern elephant seal. The next day, the elephant seal was discovered on the beach with a bullet hole in its head.
Northern elephant seals are a protected species under the Marine Mammal Protection Act. They live up and down North America’s Pacific coast and haul out on land in areas called rookeries. These rookeries are typically populated with elephant seals year-round, but populations vary throughout the year based on breeding and molting cycles.
United States District Judge Dale S. Fischer has scheduled an April 12, 2021 sentencing hearing, at which time Gerbich will face a statutory maximum sentence of one year in federal prison.
This matter was investigated by the National Oceanic and Atmospheric Administration’s Office of Law Enforcement with substantial assistance provided by the California Department of Fish and Wildlife.
This case is being prosecuted by Assistant United States Attorney Heather C. Gorman of the Environmental and Community Safety Crimes Section.
Former Philadelphia City Controller’s Office Employee Sentenced to 22 Months in Prison for Bribery SchemesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jeffrey Blackwell, 47, of Philadelphia, PA, was sentenced today to 22 months in prison, three years of supervised release, and ordered to pay $25,612 in restitution by United States District Court Judge Chad F. Kenney for misusing his official position with the Philadelphia City Controller’s Office to enrich himself by soliciting and accepting bribes, and for committing additional tax crimes.
Blackwell pleaded guilty in August 2020 to charges of honest services wire fraud, filing a false tax return, and two counts of failure to file a tax return. A former City of Philadelphia employee in the Investigations Division of the Office of the City Controller, the defendant committed a series of frauds between 2013 and 2015, accepting more than $20,000 in bribes for city services.
Blackwell solicited bribes from at least five individuals who were seeking permits or contracts from the City. One of the individuals owned a furniture store and paid Blackwell for permits to park a storage container on the street. The second person was renovating a house and paid Blackwell for permits to allow that renovation. The third person owned a construction business and paid Blackwell to obtain a plumbing permit. The fourth person owned an auto body shop and paid Blackwell in the hope of getting a license to buy and sell cars, as well as a City contract to install decals on police vehicles. The fifth person, who was cooperating with the FBI at the time, told Blackwell that he needed permits from the City to renovate a house. The defendant also filed a fraudulent 2012 federal income tax return that falsely deducted travel expenses and falsely claimed a dependent; finally, he failed to file a return as required by law for tax years 2013 and 2014.
“During my tenure as U.S. Attorney, we have made it a top priority to uncover and prosecute public corruption in Philadelphia wherever it exists,” said U.S. Attorney McSwain. “Jeffrey Blackwell used his public position to enrich himself to the detriment of all Philadelphians who expect and deserve honest services from the City’s employees. Today’s sentence puts Mr. Blackwell where he belongs – in prison.”
“Jeffrey Blackwell figured he’d boost his city salary by taking bribes and kickbacks on the side,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In doing so, he undermined the mission and integrity of the controller’s office where he worked and deprived Philadelphians of the honest government services they deserve. Public corruption does so much damage to people’s trust in the system, at every level. That’s why the FBI is committed to holding crooked public employees like Blackwell accountable.”
“Mr. Blackwell ignored his duties to provide honest services to the citizens of Philadelphia and to file accurate tax returns; instead he solicited bribes, lied, and cheated on his taxes,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “Today, his greed landed him in prison. Those contemplating similar behavior have been put on notice about the consequences of such criminal conduct.”
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, with assistance from the Philadelphia Office of Inspector General. It is being prosecuted by Assistant United States Attorney David J. Ignall.
Former Law Enforcement Officer Pleads Guilty to Federal Charge for Possession of Child PornographyRead the Press Release
Greenbelt, Maryland – Anthony Michael Mileo, age 54, of Huntingtown, Maryland, pleaded guilty today to the federal charge of possession of child pornography. At the time of his indictment in January 2020, Mileo was a Corporal with the Maryland National Capital Park Police Department and was a K9 handler.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore; Colonel Woodrow W. Jones III, Superintendent of the Maryland State Police; and Calvert County State’s Attorney Robert Harvey.
According to his plea agreement, on August 7, 2019, the Maryland State Police (MSP) Computer Crimes Unit received a referral from the National Center for Missing and Exploited Children (NCMEC) regarding the possession of child sexual abuse material. The cybertip indicated that video files documenting child sexual abuse were uploaded to a document storage application account. The document storage application provided the contents of the account to investigators. The content included over a dozen video files depicting child sexual abuse and provided the IP address associated with the transfer of videos depicting child sexual abuse to the account on July 1, 2019.
As detailed in the plea agreement, investigators learned that the e-mail address was associated with Mileo and the IP addresses were associated with an Internet Service Provider account located at Mileo’s address in Calvert County, Maryland. On September 5, 2019, MSP obtained a search warrant for the contents of the e-mail account which revealed approximately 71 video files depicting child sexual abuse, including prepubescent minors and images depicting children in bondage being sexually abused. The video files included a series of known victims of child abuse identified through NCMEC. The e-mail account also contained non-contraband material, including employment information associated with Mileo.
On November 7, 2019, members of the MSP and HSI executed a search warrant at Mileo’s residence and recovered three cellular telephones. Mileo admitted during the plea hearing today that the files he uploaded depicting the sexual abuse of children could be accessed from any device with an Internet connection, including the cellular telephones recovered by investigators. For example, Mileo uploaded the document storage application onto his personal iPhone, which allowed him to access the images of child sexual abuse he had previously uploaded to the application.
Mileo previously faced related charges in Calvert County, but those charges were dismissed in favor of federal prosecution.
Mileo and the government have agreed that, if the Court accepts the plea, Mileo will be sentenced to between 48 months and 78 months in federal prison. U.S. District Judge Paula Xinis has scheduled sentencing for February 17, 2021, at 10:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
United States Attorney Robert K. Hur commended HSI Baltimore and the Maryland State Police Internet Crimes Against Children Task Force for their work in the investigation and thanked the Office of the State’s Attorney for Calvert County for its assistance. Mr. Hur thanked Assistant U.S. Attorney Timothy F. Hagan, who is prosecuting the federal case.
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Former Houston Independent School District Employee Sentenced in College Admissions CaseRead the Press Release
BOSTON – A former employee of the Houston Independent School District was sentenced today in connection with her involvement in a scheme to use bribery and fraud to facilitate cheating on the ACT and SAT exams.
Niki D. Williams, 46, of Houston, Texas, was sentenced by U.S. District Court Judge Indira Talwani to one year of probation and ordered to pay forfeiture of $12,500. The government recommended a sentence of six months in prison and one year of supervised release. In September 2020, Williams pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud and honest services wire fraud and mail fraud.
Williams administered the SAT and ACT exams at the public high school in Houston where she worked. In exchange for bribe payments directed to her by co-conspirators William “Rick” Singer and Martin Fox, and in violation of her duty of honest services to the ACT and the College Board, Williams allowed another co-conspirator, Mark Riddell, to secretly take ACT and SAT tests in place of the children of Singer’s clients or to replace their exam answers with his own corrected answers. Williams then returned the falsified exams to the ACT and College Board for scoring.
Singer, Riddell and Fox previously pleaded guilty and are cooperating with the government’s investigation.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Joleen Simpson, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Mark Deckett, Resident Agent in Charge of the Department of Education, Office of Inspector General made the announcement today. Assistant U.S. Attorneys Justin D. O’Connell, Leslie A. Wright, Kristen A. Kearney, Stephen E. Frank and Karin M. Bell of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Greene Co. Sheriff's Lieutenant Pleads Guilty to Stealing FBI MoneyRead the Press Release
LITTLE ROCK—A former Green County Sheriff’s Lieutenant has pleaded guilty to stealing over $30,000 used in a ruse undercover drug operation. Allen Scott Pillow, 56, of Paragould, pleaded guilty today to one count of theft of government funds. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, announced the guilty plea. Pillow entered his plea earlier today before United States District Judge Lee P. Rudofsky.
After receiving information that former Lieutenant Pillow might be abusing his role with the Greene County Sheriff’s Office, FBI Special Agents and Task Force Officers conducted a ruse narcotics investigation and sought Pillow’s help with the investigation. On November 4, 2019, FBI parked a rental vehicle in a commercial parking lot in Paragould and staged a glass drug pipe in the vehicle along with a red backpack containing $76,000. The cash was divided into ten bundles of $7,600 each, and investigators recorded the serial numbers.
After staging the vehicle, two FBI Task Force Officers contacted Pillow on his cell phone and asked him to respond to the scene. The officers relayed to Pillow that they began a narcotics investigation in Tennessee and now needed Pillow’s help as the target had traveled into Arkansas. Pillow traveled to the scene in his Sheriff’s Department vehicle, searched the staged rental vehicle, and recovered the glass pipe, backpack, and currency.
Later that day, Pillow called the FBI officers and informed them that the backpack had contained $45,600, leading agents to believe Pillow had taken four bundles of $7,600 each, totaling $30,400 of stolen FBI funds. Agents obtained a search warrant for Pillow’s residence and found $2,300 in his possession and $27,820 in a safe in his attic. The serial numbers on the discovered currency matched the original FBI serial numbers. The remaining $280 in stolen funds was not located.
“The vast majority of law enforcement officers are honorable men and women who put their lives on the line every day to preserve our liberty and safety,” United States Attorney Cody Hiland said. “On the very rare occasion that we encounter corruption within law enforcement, we will take every action necessary to root it out. Our office will hold accountable any officer who violates the public trust so that we may uphold the integrity of a profession that deserves our gratitude and respect.”
“The appalling criminal actions of former Lt. Scott Pillow revealed his lack of integrity and greed,” said FBI Little Rock Special Agent in Charge Diane Upchurch. “Quite simply, he betrayed his brothers and sisters in law enforcement. Officers who are sworn to protect and serve are held to a higher standard, and FBI Little Rock will continue to uphold Arkansans’ trust in law enforcement.”
Pillow was indicted in November 2019, and Judge Rudofsky will sentence Pillow at a later date. Theft of government funds is punishable by up to 10 years’ imprisonment, a fine of not more than $250,000, and not more than three years of supervised release. The case was investigated by the FBI and prosecuted by Assistant United States Attorney Erin O’Leary.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Five Tied to Millions of Dollars in Telemarketing Fraud ConvictedRead the Press Release
PROVIDENCE – United States Attorney Aaron L. Weisman today announced that his office recently convicted the fifth India-based telemarketing fraudster in the past three months who, like the others, was investigated and arrested by the FBI and charged by the U.S. Attorney’s Office for participating in telemarketing fraud schemes that targeted and defrauded Americans of millions of dollars, the majority of them vulnerable to fraud schemes due to age or infirmity.
The five, all Indian nationals, participated in telemarketing schemes that operated out of call centers in India, such as “Tech Support” and “Refund Fraud” schemes, often obtaining personal identifying and banking information from victims' computers through remote access applications or from victims themselves. The information was used to access victims’ bank accounts in order to steal or misappropriate their funds.
“Preying upon vulnerable men and women for financial gain by means of telemarketing is not only repellant, but violative of federal law; and, as demonstrated by the convictions announced today, law enforcement has no imperative but, and will not hesitate, to hold such defendants fully accountable to criminal process,” commented United States Attorney Aaron L. Weisman.
“These five men pilfered millions of dollars from unsuspecting victims all over the country, most of them senior citizens, leaving them in financial ruin without any recourse for recovery,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Their conduct in this case is reprehensible, and this is just one example of our commitment to stopping financial scams and holding the people behind them accountable for their actions, no matter where they are.”
The most recent defendant to be convicted is 29-year-old Sahil Narang. On December 11, 2020, Narang pled guilty to conspiracy to commit wire fraud and ten counts of wire fraud, admitting that over a nine-month period beginning in August 2018, he routed nearly 20,000 “Tech Fraud” scheme calls to call centers in India. Many of the callers hung-up shortly after making contact with a call center operator. However, approximately 7,524 callers remained on the line with call center operators for more than 20 minutes. The intended loss to victims was between $1.5 million and $3 million.
Narang also admitted to participating in a “Refund Scheme” by obtaining the phone number of victims already victimized by the “Tech Fraud” scheme. Narang sold those numbers to fraudsters interested in exploiting those victims for more money through the “Refund Fraud” scheme. Additionally, in exchange for providing bank account information for use by Refund Fraudsters, he collected a portion of the money routed through the accounts, usually fifty to sixty percent. A sentencing date has not yet been scheduled by the court.
In November, Chirag Sachdeva, 30, was sentenced to 33 months in federal prison for his role as a “Tech Fraud” telemarketer fraudster. He pled guilty on September 14, 2020, to seven counts of wire fraud.
In February, FBI agents arrested Abrar Anjum, 34, prior to his boarding a flight to India. On August 24, 2020, Anjum pleaded guilty to conspiracy to commit wire fraud. He is scheduled to be sentenced on January 11, 2021.
Manish Kumar, 32, was arrested by FBI agents on August 24, 2019, as he deplaned in New York City from a flight from India, for his participation in two telemarketing schemes and for credit card fraud. Kumar pled guilty on November 5, 2020, to conspiracy to commit wire fraud, four counts of wire fraud, and two counts of aggravated identity theft. He is scheduled to be sentenced on January 20, 2021.
Himanshu Asri, 33, pleaded guilty on December 3, 2020, to wire fraud, conspiracy to commit wire fraud, and telemarking wire fraud. He admitted that he had 325 callers routed to call centers in India where call center operators falsely reasserted to victims that malware had been detected on their computers, and offered the victims purported computer protection services in exchange for payment. He is scheduled to be sentenced on February 18, 2021.
The cases are being prosecuted by Assistant U.S. Attorney Milind M. Shah in front of U.S. District Court Chief Judge John J. McConnell, Jr.
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Eastern Connecticut Drug Trafficker Sentenced to 25 Years in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that CARLOS DELGADO, also known as “Los,” 51, of Mansfield, was sentenced today by U.S. District Judge Janet C. Hall to 300 months of imprisonment, followed by five years of supervised release, for drug trafficking and firearm possession offenses.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to the evidence presented during a trial in this matter, in 2018, the Drug Enforcement Administration’s Hartford Task Force and Willimantic Police Department initiated a joint federal, state and local law enforcement investigation targeting an eastern Connecticut drug trafficking organization headed by Delgado. The investigation revealed that Delgado was coordinating the shipment of kilogram quantities of cocaine through the U.S. Mail from Puerto Rico to various locations in eastern Connecticut. Delgado and his associates distributed the drugs and then mailed cash proceeds from narcotics sales back to individuals in Puerto Rico. During the investigation, investigators seized a package containing nearly one kilogram of cocaine that had been mailed from Puerto Rico to Delgado, and two packages containing $26,860 and $9,900 in cash, respectively, that Delgado had mailed to addresses in Puerto Rico. Trial evidence established that Delgado had received more than 10 packages, each containing at least one kilogram of cocaine, from Puerto Rico.
Further investigation revealed that Delgado also received cocaine from a source in the Dominican Republic, and that he received heroin from a source in Mexico.
Delgado was arrested on a federal criminal complaint on July 9, 2018. On that date, a search of Delgado residence, vehicle and a third location revealed more than one kilogram of heroin, narcotics packaging materials, five firearms, ammunition, and approximately $74,000 in cash.
Delgado has been detained since his arrest.
On January 21, 2020, a jury found Delgado guilty of one count of conspiracy to distribute, and to possess with intent to distribute, five kilograms or more of cocaine; and one count of possession with intent to distribute one kilogram or more of heroin. The jury found Delgado not guilty of one count of possession of a firearm in furtherance of a drug trafficking crime. On January 22, 2020, the jury found Delgado guilty of one count of possession of firearms by a previously convicted felon.
Delgado’s criminal history includes state convictions for narcotics, assault, burglary, larceny and other offenses, and a federal conviction in 2004 for trafficking in stolen credit card account numbers. He was sentenced to 37 months of imprisonment for the federal offense, and a subsequent 18 months of imprisonment for violating the conditions of his federal supervised release.
This matter was investigated by the Drug Enforcement Administration’s Hartford Task Force, Willimantic Police Department, U.S. Postal Inspection Service, Bureau of Alcohol, Tobacco, Firearms, and Explosives and Connecticut State Police. The DEA Task Force includes participants from the Bristol, East Hartford, Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Willimantic and Windsor Locks Police Departments, and the Food and Drug Administration.
This case was prosecuted by Assistant U.S. Attorneys Natasha M. Freismuth and Patrick F. Caruso through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Council Bluffs Man Sentenced to Prison for Methamphetamine OffenseRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on December 15, 2020, James Michael Willett, Sr., age 48, of Council Bluffs, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 135 months in prison for conspiracy to distribute methamphetamine. Willett was ordered to serve ten years of supervised release to follow his prison term and pay a $100 special assessment to the Crime Victims’ Fund. Willet pleaded guilty to the offense on August 04, 2020.
The Southwest Iowa Narcotics Task Force opened an investigation on Willett and other co-conspirators for distributing methamphetamine in the Council Bluffs metro area in 2019. On November 5, 2019, staff at a hotel in Omaha, Nebraska, contacted law enforcement after an employee observed drugs in a room where Willet had been staying. Law enforcement searched the room and located methamphetamine, fentanyl, and marijuana.
The investigation was conducted by the Council Bluffs Police Department, Omaha Police Department, Iowa Division of Narcotics Enforcement, and the Southwest Iowa Narcotics Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Felon Pleads Guilty to Aggravated Assault of a Federal Employee and Discharge of a Firearm During a Crime of ViolenceRead the Press Release
Memphis, TN – Bernard Jones, 35, has pled guilty to aggravated assault of a federal employee and discharge of a firearm during a crime of violence. D. Michael Dunavant, U.S. Attorney announced the guilty plea today.
According to information presented in court, on September 4, 2019, at approximately 7:30 p.m., Jones was in the process of committing the crime of burglary of a motor vehicle. Meanwhile, the victim, a U.S. Postal Service employee, was preparing to take First Class mail from the Jet Cove Annex to the Memphis Processing & Distribution Center in downtown Memphis. While loading the mail into his USPS staff vehicle, the victim, observed someone moving around inside his personal vehicle parked approximately 50 yards away in the employee parking lot at the Memphis Priority Mail Annex. The victim drove the staff vehicle near his pickup truck and saw the defendant exit his pickup truck.
The defendant shot multiple times at the victim as he escaped in his postal vehicle. As the victim drove away, the defendant followed him in a Nissan Sentra and continued to shoot. During the course of the investigation, United States Postal Inspectors determined two bullets struck the hood and several other locations on the postal vehicle. Law enforcement located two 9MM Luger shell casings from the shooting scene. The suspect, along with a female accomplice, fled the scene in a blue Nissan Sentra. Postal Inspectors later identified Bernard M. Jones as the shooter. Jones, a convicted felon, is also a member of the Gangsters Disciples Street Gang, and as a result of his prior felony conviction history, is prohibited by federal law from possession of firearms or ammunition.
Sentencing is scheduled for March 24, 2021, before U.S. District Court Judge Sheryl Lipman. For the aggravated assault offense, Jones faces a sentence of up to 20 years in federal prison followed by three years supervised release and a fine of $250,000. For the firearm offense, he faces a mandatory minimum consecutive sentence of 10 years and up to life imprisonment; a $ 250,000 fine and 5 years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "This office takes very seriously our duty to protect the safety of United States Postal Service employees and the sanctity and security of the U.S. Mail. This case reflects our commitment to hold offenders accountable for brazen and disturbing acts of violence that endanger and victimize federal employees. We commend the outstanding investigative work of the USPIS in this case."
"Protecting the safety of our USPS employees is the United States Postal Inspection Service’s most important mission. Postal Inspectors will stop at nothing to identify those responsible for assaulting postal employees and will bring them to justice," said Tommy D. Coke, U.S. Postal Inspector In Charge of the Atlanta Division.
The United States Postal Inspection Service (USPIS) investigated this case.
Assistant U.S. Attorney Wendy K. Cornejo is prosecuting this case on behalf of the government.
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Colorado Springs Man Sentenced to More Than 16 Years in Federal Prison for Dealing Methamphetamine, Heroin, and CocaineRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Jesse Santiago Anaya, age 36, of Colorado Springs, was sentenced to serve 200 months (16.6 years) in federal prison, followed by 5 years on supervised release, for distributing controlled substances and conspiring with others to distribute controlled substances. The FBI and the Colorado Springs Police Department joined in this announcement.
According to court documents, the Colorado Springs Police Department and Federal Bureau of Investigation began investigating Anaya for selling cocaine in nightclubs and strip clubs in Colorado Springs. An undercover detective purchased cocaine from Anaya and one of Anaya’s associates, who was also indicted for distributing cocaine and conspiring with Anaya. In his plea agreement, Anaya admitted that the conspiracy to distribute cocaine began while he was still on supervised release for a prior federal felony conviction. Over the course of the conspiracy, Anaya distributed between 500 grams and 15 kilograms of cocaine. As a manager within the cocaine conspiracy, Anaya directed others to carry out drug transactions. For this, Anaya received a larger portion of the profit from cocaine sales than the other participants. During the course of the investigation, Anaya also sold 1,341.4 grams of methamphetamine and 83.4 grams of heroin.
“Getting drug dealers off the street makes a real difference to the communities we serve,” said U.S. Attorney Jason Dunn. “We are committed to making our communities safe for all Coloradans. Disrupting drug organizations is a key part of that strategy and we commend our law enforcement partners for their dedication to this effort.”
“The success of this investigation and today’s sentencing of Jesse Anaya is largely attributable to the collaborative effort of federal, state, and local law enforcement, specifically the Southern Colorado Safe Streets Task Force and Colorado Springs Metro Vice, Narcotics, and Intelligence Division,” said FBI Denver Special Agent in Charge Michael Schneider. “We will continue to work together to address violent drug traffickers within our communities and bring justice to those who are harmed.”
“We want to sincerely thank the Federal Bureau of Investigation and the United States Attorney’s Office, not only for their partnership, but also for their dedication to help make our community a safer place. This case took perseverance, commitment, and a steadfast determination. I am extremely proud of everyone who worked the investigation, as there is no doubt their efforts will make a difference in Colorado Springs,” said Colorado Springs Police Chief Vince Niski.
Anaya was first charged by Criminal Complaint on May 3, 2019. He was indicted by a federal grand jury on May 9, 2019. On January 9, 2020, he pleaded guilty to distributing methamphetamine and to a conspiracy to distribute cocaine. He was sentenced on December 21, 2020.
This case was investigated by the FBI and Colorado Springs Police Department. Anaya was prosecuted by Assistant U.S. Attorney Peter McNeilly.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Number 19-cr-234.
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Chillicothe Man Pleads Guilty to His Role in $142 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – A Chillicothe, Missouri, man pleaded guilty in federal court today to his role in a $142 million scheme to sell non-organic grain as though it was organic.
Steven N. Whiteside, 57, pleaded guilty before U.S. Magistrate Judge Jill A. Morris to a federal information that charges him with falsely signing documents related to the fraud scheme. Whiteside pleaded guilty to making or giving a false official certificate or writing, a class A misdemeanor punishable by up to 12 months' imprisonment and a fine up to $100,000.
Randy Constant, also of Chillicothe, the leader of the fraud scheme, was sentenced on Aug. 16, 2019, to 10 years and two months in federal prison without parole in a related case that was prosecuted in the Northern District of Iowa. John Burton of Clarksdale, Missouri, and three farmers from Nebraska, all of whom who supplied Constant with non-organic grain, were also sentenced to federal prison for their roles in a scheme to defraud customers across the United States.
Constant admitted the fraudulent scheme involved at least $142,433,475 in grain sales, and the vast majority of those sales were fraudulent. From 2010 to 2017, Constant misled customers into thinking they were buying certified organic grain when the grain he was selling was not organic. Constant admitted falsely telling customers the grain he sold was grown on his certified organic fields in Nebraska and Missouri when the grain was not organic either because he purchased the grain from other growers, the certified organic fields were sprayed with unauthorized chemicals, or organic grain was mixed with non-organic grain. As part of the plea, Constant also agreed to forfeit $128,190,128 in proceeds from the fraudulent scheme.
Constant’s grain was mostly used as animal feed, primarily for chickens and cattle. That livestock was then sold as organic meat or products from the livestock were sold as organic products. Because of Constant’s fraud, most of the livestock that was fed his grain was not organic, causing thousands of consumers to purchase what they thought was organic meat for a premium price across the country.
By pleading guilty today, Whiteside admitted that he signed a document on May 30, 2015, falsely claiming that he owned or farmed certain parcels of land when he actually had no affiliation or control of the property. Whiteside falsely attested in a Land Use History Verification that no chemicals had been used on the property in the preceding three years. The Land Use History Verification is a form used in conjunction with an application to have land certified as organic as part of the U.S. Department of Agriculture’s National Organic Program. In order for grain to be certified as organic, the grain must have been grown through approved methods and without the use of certain substances, including synthetic chemicals, and produced and handled in compliance with the program.
At the same time Whiteside signed the document, it was co-signed by Constant, who was identified on the document as the applicant seeking the certification for the land. In addition to being the identified applicant, Constant also purchased non-organic grain from Whiteside and employed Whiteside as part of Constant’s fish farm operation.
For purposes of calculating loss for sentencing purposes, the government agreed that any calculation should only include amounts related to Whiteside's grain sales to Constant or sales from grain grown on the land identified in the Land Use History Verification. The government agreed the loss calculation for Whiteside should not include other amounts, including amounts attributable to grain Constant purchased from other farmers, which comprised the significant majority of the $140 million loss figure.
More information about the case in the Northern District of Iowa is available at:
https://www.justice.gov/usao-ndia/pr/field-schemes-fraud-results-over-decade-federal-prison-leader-largest-organic-fraud
https://www.justice.gov/usao-ndia/pr/missouri-man-sentenced-nearly-two-years-prison-his-role-field-schemes-organic-grain
This case is being prosecuted by Special Assistant U.S. Attorney Bradley Cooper. It was investigated by the FBI and the U.S. Department of Agriculture – Office of Inspector General.
Chicago Man Charged with Derecho Benefits FraudRead the Press Release
Tavonte Donnell Stewart, age 23, from Chicago, Illinois, has been charged with one count of derecho benefits fraud. The charge is contained in a complaint unsealed today in United States District Court in Cedar Rapids.
The complaint alleges that, on or about September 15, 2020, Stewart applied for disaster benefits from FEMA arising out of the severe derecho storm in Iowa on August 10, 2020. Stewart is alleged to have claimed in his application that his primary residence at the time of the derecho was in Cedar Rapids, when in truth he was residing in the Chicago area where he was on federal supervised release for a felony counterfeiting conviction. When FEMA contacted a representative of a property management firm about the address in Cedar Rapids, the manager stated that the property in question was not occupied at the time of the storm and had suffered only minor roof damage from the derecho.
If convicted, Stewart faces a possible maximum sentence of 30 years’ imprisonment, a $250,000 fine, and five years of supervised release.
Stewart appeared today in federal court in Chicago and was held without bond. Stewart’s next appearance for a detention hearing is set for December 23, 2020.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Department of Homeland Security, Office of Inspector General. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 20-CR-114.
Follow us on Twitter @USAO_NDIA.
Brooklyn Man Arrested for $1.9 Million Paycheck Protection Program FraudRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Leon Miles with wire fraud in connection with his scheme to obtain over $1.9 million from the Paycheck Protection Program (PPP) which Congress created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Miles was arrested this morning and will make his initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG); and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the arrest and charge.
“At a time when so many are suffering from the devastating economic effects of the ongoing pandemic, Miles allegedly enriched himself at the taxpayers’ expense, stealing funds that were intended by Congress to keep businesses afloat and workers on payroll,” stated Acting United States Attorney DuCharme. “Together with our agency partners, this Office will bring to justice those who take advantage of a global crisis to commit such crimes.”
“We continue to see people taking advantage of the Paycheck Protection Program, which was created to provide emergency financial assistance to businesses who need it during the pandemic,” stated FBI Assistant Director-in-Charge Sweeney. “ This type of criminal behavior is a slap in the face to all of those who play by the rules, especially while so many in our communities are suffering from the financial fallout of the pandemic. The FBI will continue to aggressively pursue those who are using the money from this taxpayer funded economic relief program to pad their own pockets. If you know of similar instances of fraud, please call us at 1-800-CALL-FBI.
“Fraudsters that have pursued personal gain at the expense of taxpayers will be brought to justice,” stated SBA OIG Special Agent-in-Charge McCall-Brathwaite. “Greed has no place in SBA’s programs that are intended to provide assistance to the nation’s small businesses struggling with the pandemic challenges. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“While most Americans are struggling during this pandemic, we see criminals over and over again trying to live out their dreams of a lavish lifestyle,” stated IRS-CI Special Agent-in-Charge Larsen. “Miles allegedly submitted a PPP loan application for nearly $2 million while claiming false information. He allegedly used these funds, in part, to purchase luxury vehicles. These types of actions hurt our people, our government and our country. IRS Criminal Investigation and our law enforcement partners will continue collaborating until every misappropriated PPP loan is accounted for and criminals are brought to justice.”
The CARES Act is a federal law enacted on March 29, 2020 to provide emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. The PPP provided for forgiveness of the loan if recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.
As alleged in the complaint, in May 2020, Miles submitted an application for a $1,904,593.00 PPP loan on behalf of a limited liability company he owns in Brooklyn, New York, falsely claiming that the company had 50 employees and a total average monthly payroll of $761,838.00. In support of these claims, Miles submitted fraudulent personal and business tax returns and tax forms that were never filed with the IRS. In fact, he reported to the IRS no taxable income during the relevant period, and his company filed no tax returns and reported no wages paid to employees. The loan proceeds were disbursed to the defendant’s personal savings account, and within days he had withdrawn hundreds of thousands of dollars, a portion of which he used to purchase a 2020 Bentley Continental for approximately $250,000 and a 2020 Cadillac Escalade for approximately $100,000.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Robert M. Pollack with assistance from Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Section.
The Defendant:
LEON MILES
Age: 51
Brooklyn, New YorkE.D.N.Y. Docket No. 20-MJ-1234
Bristow Man Pleads Guilty to Assaulting his Domestic PartnerRead the Press Release
A Bristow man pleaded guilty this morning to assault resulting in substantial bodily injury to a spouse, intimate partner, or dating partner in Indian Country, announced U.S. Attorney Trent Shores.
Bobby Brian Thompson, 29, pleaded guilty before U.S. District Judge John F. Heil.
“Bobby Thompson beat his domestic partner with his fists before strangling her. Tragically, experience tells us that domestic abuse often begins with verbal threats and then escalates to extreme violence, such as this. I view domestic violence prosecution as homicide prevention,” said U.S. Attorney Trent Shores. “The investigators and victim advocates at the Bristow Police Department and FBI worked together to both bring this domestic abuser to justice and provide support to the victim.”
In his plea agreement, Thompson admitted that on or about June 11, 2020, in Bristow, Oklahoma, he assaulted his dating partner. Specifically, he admitted to striking the victim with his fists and strangling her. The victim suffered substantial bodily injury as a result of his assault upon her. Thompson further stated in his plea that he is a member of the Cherokee Nation.
Thompson’s sentencing is set for March 22, 2021.
The FBI and Bristow Police Department conducted the investigation. Assistant U.S. Attorney Richard M. Cella is prosecuting the case
Berkeley County woman admits to drug chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – Kristina Gilmore, of Martinsburg, West Virginia, has admitted to drug charges, U.S. Attorney Bill Powell announced.
Gilmore, also known as “Diamond,” 25, pled guilty to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin, Fentanyl, and Cocaine Base” and one count of “Aiding and Abetting Distribution of Heroin and Fentanyl Mixture.” Gilmore admitted to working with others to distribute heroin, fentanyl, and cocaine base in February 2020 in Berkeley County and elsewhere.
Gilmore faces up to 20 years of incarceration and a fine of up to $1,000,000 for each count. 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 Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Bureau for Alcohol, Tobacco, Firearms & Explosives and the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
These charges are the result of investigations supported by the Organized Crime Drug Enforcement Task Force (OCDETF) under the Attorney General-led Synthetic Opioid Surge (SOS)/Special Operations Division (SOD) Project Clean Sweep. This initiative seeks to reduce the supply of synthetic opioids in “hot spot” areas previously identified by the Attorney General of the United States, thereby reducing drug overdoses and drug overdose deaths, and identify wholesale distribution networks and sources of supply operating nationally and internationally.
OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
U.S. Magistrate Judge Robert W. Trumble presided.
Atlanta Tax Professionals Plead Guilty to Promoting Syndicated Conservation Easement Tax Scheme Involving More Than $1.2 Billion in Fraudulent Charitable DeductionsRead the Press Release
Stein Agee of Canton, Georgia, and Corey Agee of Atlanta, Georgia, appeared before U.S. Magistrate Judge W. Carleton Metcalf and pleaded guilty for their roles in a wide-ranging abusive tax scheme to defraud the IRS, the Department of Justice announced today.
According to court documents, from at least 2013 through 2019, S. Agee and C. Agee, then partners at an Atlanta accounting firm, marketed, promoted, and sold together with co-conspirators, investments in fraudulent syndicated conservation easement (SCE) tax shelters. The SCE tax shelters were designed to produce tax deductions for high-income taxpayers through partnerships that purported to make “real estate investments.” In truth, the partnerships were a sham, lacking economic substance and serving no legitimate business purpose. The placement of conservation easements over the real estate was a foregone conclusion, which fraudulently enabled the investors to shelter their income from the IRS with no economic risk and to claim substantial tax deductions to which they were not entitled. S. Agee, C. Agee, and their co-conspirators marketed the SCE tax shelters by promising investors that for every $1 invested in the partnership, the investor would receive more than $4 in charitable tax deductions.
“The defendants’ and their co-conspirators' criminal conduct enabled their clients to claim more than $1.2 billion in fraudulent tax deductions and generated hundreds of millions of dollars of tax loss to the United States,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department's Tax Division. “Their convictions signal just the beginning of the department’s prosecutive efforts. Taxpayers engaging in such schemes, and the lawyers, accountants, appraisers and other professionals that enable them, should understand that they will be held fully to account for their fraudulent conduct.”
“Each year, millions of law-abiding Americans painstakingly file accurate tax returns and pay timely their tax obligations, which support important government services our communities rely on,” said U.S. Attorney R. Andrew Murray for the Western District of North Carolina. “As the defendants admitted in court today, their tax shelter scheme helped wealthy clients skirt their tax responsibilities and avoid paying their fair share. Such actions not only increase the tax burden on honest taxpayers; they are a violation of our federal tax laws. Today’s guilty pleas send a strong message that tax professionals who promote, and benefit from, illegal tax shelters will be investigated and prosecuted accordingly.”
“Two defendants pleaded guilty today in the first-ever criminal case by IRS-CI involving conservation easements,” said Commissioner Charles Rettig of the IRS. “It should be considered the next step in the IRS’ battle against abusive SCEs. The defendants and their co-conspirators used conservation easement donations to personally enrich themselves and allow wealthy tax clients to evade their tax obligations. The charges and guilty pleas demonstrate that participation in abusive SCEs will not be tolerated. Once again, the IRS recommends that anyone who participated in an abusive SCE consult independent counsel about coming into compliance.”
Conservation easements were created by Congress to be a key tool used for protecting environmentally and historically important land. The donated conservation easement typically restricts the use or development of land in order to protect its conservation value. When legitimately created and used in compliance with the Internal Revenue Code, the conservation easement can both protect the environment and provide tax incentives. By contrast, abusive SCEs are designed to game the system and generate inflated and unwarranted tax deductions, often by using inflated appraisals of undeveloped land and partnerships devoid of legitimate business purpose.
According to court documents, S. Agee and C. Agee additionally solicited investors after the end of the tax year and advised them to backdate payments and documents to make it appear that the “investments” were timely made before the end of the tax year. S. Agee and C. Agee also prepared and assisted in the preparation of false tax returns for clients who agreed to invest in the SCE shelters. In exchange for their promotion of the abusive SCE tax shelters, between 2013 and 2019, S. Agee and C. Agee each received more than $1.7 million in commissions.
S. Agee and C. Agee both pleaded guilty to one count of conspiracy to defraud the United States which carries a maximum penalty of five years in prison. They also face a period of supervised release, restitution, and monetary penalties.
U.S. Attorney Murray, Principal Deputy Assistant Attorney General Zuckerman, and IRS Commissioner Rettig, thanked special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who are conducting the investigation, as well as Assistant U.S. Attorneys Daniel Bradley and Caryn Finley, and Tax Division Trial Attorneys Brittney Campbell and Grace Albinson, who are prosecuting the case.
Atlanta Tax Professionals Plead Guilty to Promoting Syndicated Conservation Easement Tax Scheme Involving More Than $1.2 Billion in Fraudulent Charitable DeductionsRead the Press Release
CHARLOTTE, N.C. – On Monday, December 21, 2020, Stein Agee, 42, of Canton, Georgia and Corey Agee, 38, of Atlanta, Georgia, appeared before U.S. Magistrate Judge W. Carleton Metcalf and entered guilty pleas to conspiracy charges related to their roles in a wide-ranging scheme to defraud the IRS with respect to the assessment and collection of U.S. individual income taxes, announced United States Attorney for the Western District of North Carolina R. Andrew Murray, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Commissioner Charles Rettig of the IRS.
According to court documents, from at least 2013 through at least December of 2019, S. Agee and C. Agee, then partners at an Atlanta accounting firm, conspired with others to develop, market, promote, and sell investments in fraudulent syndicated conservation easement (SCE) tax shelters to high-income taxpayers.
“The defendants’ and their co-conspirators' criminal conduct enabled their clients to claim more than $1.2 billion in fraudulent tax deductions and generated hundreds of millions of dollars of tax loss to the United States,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department's Tax Division. “Their convictions signal just the beginning of the department’s prosecutive efforts. Taxpayers engaging in such schemes, and the lawyers, accountants, appraisers and other professionals that enable them, should understand that they will be held fully to account for their fraudulent conduct.”
“Each year, millions of law-abiding Americans painstakingly file accurate tax returns and pay timely their tax obligations, which support important government services our communities rely on,” said U.S. Attorney Murray. “As the defendants admitted in court today, their tax shelter scheme helped wealthy clients skirt their tax responsibilities and avoid paying their fair share. Such actions not only increase the tax burden on honest taxpayers; they are a violation of our federal tax laws. Today’s guilty pleas send a strong message that tax professionals who promote, and benefit from, illegal tax shelters will be investigated and prosecuted accordingly.”
“Two defendants pleaded guilty today in the first-ever criminal case by IRS-CI involving conservation easements,” said Commissioner Charles Rettig of the IRS. “It should be considered the next step in the IRS’ battle against abusive SCEs. The defendants and their co-conspirators used conservation easement donations to personally enrich themselves and allow wealthy tax clients to evade their tax obligations. The charges and guilty pleas demonstrate that participation in abusive SCEs will not be tolerated. Once again, the IRS recommends that anyone who participated in an abusive SCE consult independent counsel about coming into compliance.”
Congress created the option to deduct the value of a donated conservation easement from an individual’s taxable income as a tool for the protection of environmentally and historically important land. A conservation easement restricts the future use or development of a parcel of land in order protect its conservation value. When created and used in a legitimate way, in compliance with the Internal Revenue Code, a conservation easement can both protect the environment and provide tax incentives to the landowner. In contrast, abusive SCE tax shelters are designed to game the system and to generate inflated and unwarranted tax deductions, often through the procurement of inflated appraisals for the undeveloped land and through the sale of interests in partnerships devoid of any legitimate business purpose beyond the transfer of tax benefits.
Here, the Agees’ co-conspirators designed the SCE tax shelters to produce large pass-through tax deductions for high-income taxpayers who bought shares in partnerships and LLCs that purported to make “real estate investments” in plots of land. In reality, however, these “investment” transactions lacked economic substance and served no legitimate business purpose beyond the purchase and sale of tax benefits. The placement of conservation easements over the real estate purchased by the “investment” partnerships—as opposed to the development of the real estate, or any other approach to generating a profit—was always a foregone conclusion, and the co-conspirators marketed the opportunities to their clients as straightforward tax transactions designed to reduce the clients’ tax liabilities. For example, S. Agee and C. Agee marketed the SCE tax shelters by promising investors that, for every $1 invested in the partnership, the investor would receive more than $4 in “charitable” tax deductions, with no economic risk.
Furthermore, according to court documents, S. Agee, C. Agee, and their co-conspirators often solicited investors after the end of the relevant tax year, and advised them to fraudulently backdate payments and documents so it would appear that their “investments” in the SCE tax shelters were, in fact, in compliance with applicable tax laws. S. Agee and C. Agee also prepared and assisted in the preparation of false tax returns for clients who agreed to invest in the SCE shelters. In exchange for their promotion of the abusive SCE tax shelters, between 2013 and 2019, S. Agee and C. Agee each received more than $1.7 million in commissions from the developer of the SCE tax shelters.
S. Agee and C. Agee both pleaded guilty to one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison.
U.S. Attorney Murray, Principal Deputy Assistant Attorney General Zuckerman, and IRS Commissioner Rettig, thanked special agents of IRS-Criminal Investigation and the United States Postal Inspection Service, who are conducting the investigation, as well as Assistant United States Attorneys Daniel Bradley and Caryn Finley, and DOJ-Tax Division Trial Attorneys Brittney Campbell and Grace Albinson, who are prosecuting the case.
Atlanta Businessman Charged in $1,900,000 Bribery Scheme involving U.S. Marine Corps ReserveRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Peter G. Strasser announced that Darrel Fitzpatrick, aged 30, has been charged by a Bill of Information with Conspiracy to Commit Bribery, in violation of Title 18, United States Code, Sections 371 and 201(b)(1). If convicted, Fitzpatrick faces up to five years imprisonment, followed by three years of supervised release, a $250,000 fine, and a mandatory special assessment of $100.
According to the Bill of Information, in 2019 Darrel Fitzpatrick was a senior account manager at Company A, a bus brokerage company that provided transportation to the United States Marine Corps Reserves. That same year, Fitzpatrick started a competing transportation brokerage company called National Charter Express.
In 2019, Fitzpatrick agreed to pay kickbacks to Erik Martin, a civilian employee of the United States Marine Corps Reserves, in exchange for Martin directing business to Company A, and then later, National Charter Express.
The conspiracy resulted in at least $1,900,000 in transportation contracts being corruptly awarded to companies associated with Fitzpatrick. In exchange for steering contracts to Fitzpatrick, Martin agreed to accept over $250,000 in bribes.
U. S. Attorney Strasser praised the work of the Defense Criminal Investigative Service (DCIS), the Naval Criminal Investigative Service (NCIS), and the United States Secret Service for their investigation in this case. The prosecution is being handled by Assistant United States Attorney Myles Ranier.
U. S. Attorney Strasser stated that a Bill of Information is only an allegation, and that the defendant is presumed innocent until he pleads guilty or is found guilty by a jury or judge.
Acting Manhattan U.S. Attorney Announces Settlement with Substance Abuse Treatment Center and Its Owner for Enrolling Patients Through Kickbacks and Using Falsified Patient Admissions FormsRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health, Office of Inspector General (“HHS-OIG”), announced today a $6 million settlement of a civil healthcare fraud lawsuit against A.R.E.B.A.-CASRIEL, Inc. d/b/a ADDICTION CARE INTERVENTIONS CHEMICAL DEPENDENCY TREATMENT CENTERS (“ACI”), a substance abuse treatment provider in New York City, and STEVEN YOHAY, ACI’s primary owner and former CEO. This settlement resolves allegations that ACI and YOHAY provided kickbacks and engaged in fraudulent conduct in connection with the enrollment of Medicaid beneficiaries into ACI’s inpatient treatment program. Specifically, the Government’s complaint alleges that ACI’s drivers targeted homeless individuals and offered them food, cash, money to purchase drugs, and/or alcohol in order to induce them to enroll in ACI’s inpatient treatment program. The lawsuit further alleges that ACI paid an individual a kickback in the form of a sham job for which she was compensated more than $75,000 to induce her to refer patients to ACI programs. The lawsuit also alleges that ACI used medical admissions forms containing photocopied physician signatures to make it appear that new patients had been evaluated by a qualified health care professional as required by law.
Under the settlement approved December 17 by U.S. District Judge Vernon S. Broderick, ACI agreed to pay $3 million, and YOHAY personally agreed to pay an additional $3 million. Of the $6 million total, $2.4 million is being paid to the United States and the remaining amount is being paid to the State of New York. The amount paid by ACI is based on the Office’s assessment of ACI’s ability to pay based on the financial information it provided.
ACI and YOHAY admitted and accepted responsibility for conduct alleged in the Government’s complaint as further described below. YOHAY also agreed to divest ownership and control of ACI, and ACI agreed to implement procedures designed to ensure that its patient transportation services comply with legal requirements. In addition, YOHAY has entered into a Voluntary Exclusion Agreement with HHS-OIG, under which he will be excluded from participation in Medicaid and other federal healthcare programs for a period of 15 years.
Acting U.S. Attorney Audrey Strass said: “ACI and Steven Yohay engaged in unscrupulous and illegal practices – including hiring drivers to scour the streets for potential patients – to fill the beds at their facilities and maximize the payments they received from Medicaid. This Office will continue to act aggressively to ensure that substance abuse treatment providers and those who run them are held accountable when they cheat the system to fraudulently obtain federal health care funds.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “ACI and Stephen Yohay operated a fraud scheme that targeted some of the most vulnerable people in our society and diverted valuable Medicaid funds that millions of New Yorkers depend on for vital services. This settlement should send a message that this behavior will not be tolerated, and we will hold those that attempt to steal from federal health care programs accountable for their actions.”
The Complaint filed in Manhattan federal court alleges three forms of illegal conduct:
First, from January 2014 to December 2019, ACI and YOHAY improperly induced Medicaid beneficiaries to be admitted into ACI’s inpatient treatment program by employing drivers, who were compensated based in part on the volume of patients they recruited for admission into the treatment program, to solicit and transport potential new patients to ACI’s facility. The drivers routinely targeted homeless individuals and sometimes offered them food, cash, money to purchase drugs, and/or alcohol to persuade them to enroll in the program. The drivers were expected to pick up a certain number of potential patients in order to be eligible for a pay raise. Most of the new enrollments into ACI’s inpatient program resulted from the ACI drivers’ solicitation efforts.
Second, in October 2012, ACI created a sham part-time Spanish “translator” position so that it could employ an individual whose real job was primarily to provide a stream of patient referrals. The individual was simultaneously employed at an organization that refers individuals to substance abuse clinics. ACI placed the individual on its payroll to receive referrals to its treatment programs. The individual translated only a few times, even though she remained on the payroll until March 2017 and was paid more than $75,000.
Third, from July 2012 through July 2013, ACI admitted Medicaid patients into its inpatient treatment program who were not evaluated by a qualified health care professional to determine the appropriate level of care, as required by applicable state law. ACI staff fraudulently created medical forms containing a photocopied physician’s signature to make it appear that a physician had conducted the evaluation. The falsified forms were used to support claims for reimbursement, for the indicated level of care, from Medicaid.
In the settlement agreement, ACI and YOHAY admit, acknowledge, and accept responsibility for the following conduct:
Role of Drivers:
- From January 2014 to December 2019, ACI employed drivers who were involved in identifying, recruiting, and providing transportation services for new patients who were admitted into ACI’s inpatient treatment program. During the relevant period, ACI employed approximately five to 10 drivers at any given time.
- ACI drivers rode in unmarked vehicles and picked up individuals, who were often homeless, from a wide range of locations, including parks, train stations, shelters, hospitals, under bridges, and from other substance abuse treatment centers.
- ACI financially incentivized its drivers to bring in new patients. ACI paid the driver who brought in the most new patients during the relevant period an annual salary of more than $200,000, as well as a bonus consisting of thousands of dollars.
- ACI’s management, including YOHAY, were made aware of allegations that certain ACI drivers gave some potential new patients money, drugs, and/or alcohol to induce them to enroll in ACI’s inpatient program. However, ACI and YOHAY failed to investigate these allegations adequately or take appropriate corrective actions in response.
Use of Paid Employee to Make Patient Referrals:
- In October 2012, ACI created a part-time “translator” position and hired an individual to fill the position who was simultaneously employed at an organization that refers individuals to substance abuse clinics, like ACI, for treatment as an alternative to incarceration.
- Throughout the course of her employment with ACI, the individual provided ACI managers with lists of individuals who were being referred by the organization to ACI for substance abuse services.
- Although the individual was hired to be a “translator,” she rarely was asked by ACI to provide any translation services. The individual translated for ACI only a few times in 2012, and thereafter, she did not perform any translation services for ACI but continued to be paid by ACI until 2017.
Medical Assessments Not Completed by Physicians:
- From July 2012 through July 2013, ACI admitted certain patients into its inpatient program who were not properly evaluated by a qualified health professional as required.
- During the relevant period, ACI admissions staff, who were not qualified health professionals, conducted the patient assessment and completed the admissions criteria forms. These forms, which were part of a patient’s file used to support claims for reimbursement from Medicaid, contained a photocopy of a physician’s signature.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
Ms. Strauss thanked HHS-OIG, the Medicaid Fraud Control Unit of the New York State Attorney General’s Office, and the New York State Office of Addiction Services and Supports for their assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Kirti Vaidya Reddy is in charge of the case.
Acting Manhattan U.S. Attorney Announces $40.5 Million Settlement with Durable Medical Equipment Provider Apria Healthcare for Fraudulent Billing PracticesRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Scott Lampert, the Special Agent in Charge for the New York Office of the Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”), Patrick J. Hegarty, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, Office of Personnel Management Office of the Inspector General (“OPM OIG”), announced today a $40.5 million settlement of a fraud lawsuit against Apria Healthcare Group, Inc. and its affiliate, Apria Healthcare LLC (together, “Apria”), a large durable medical equipment (“DME”) provider with approximately 300 branch offices located throughout the United States. The lawsuit alleges, among other claims, that Apria submitted false claims to federal health programs, including Medicare and Medicaid, seeking reimbursement for the rental of costly non-invasive ventilators (“NIVs”) to program beneficiaries who were not using the NIVs such that the devices were not medically necessary or that involved the improper waiver of patient co-insurance payments.
Under the settlement, which was approved on December 18 by U.S. District Judge Edgardo Ramos, Apria agreed to pay a total sum of $40.5 million, with $37,632,789.89 being paid to the United States and the remaining amount to be paid to various states. As part of the settlement, Apria also made extensive factual admissions regarding its conduct.
Acting U.S. Attorney Audrey Strauss said: “It is critical to the financial integrity of federal health programs like Medicare and Medicaid that reimbursements are made only for medically necessary items and services. DME providers like Apria have an obligation to ensure that the equipment and devices they rent to patients are medically necessary. When companies knowingly disregard that obligation to maximize their profits, this Office will hold them accountable for their fraudulent conduct.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Apria’s conduct compromised the integrity of the Medicare and Medicaid programs, and needlessly increased the financial burden on taxpayers. Along with our law enforcement partners, HHS-OIG will continue to ensure that those individuals and entities that bill federal health care programs improperly are held accountable for their actions.”
DCIS Special Agent in Charge Patrick J. Hegarty said: “The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of TRICARE, the healthcare system for military members and their families. Charging TRICARE for DME that was not necessary betrays the public’s trust. This settlement demonstrates our partnership with HHS-OIG, OPM-OIG and the U.S. Attorney’s Office to investigate fraudulent schemes that impact TRICARE and put its beneficiaries at risk.”
OPM OIG Deputy Inspector General Norbert E. Vint said: “The OPM OIG is committed to fighting all forms of health care fraud. As demonstrated by this settlement, providers that exploit federal health care programs by submitting false claims will be held accountable.”
As alleged in the complaint filed by the United States, Apria decided in 2014 to prioritize the expansion of its NIV rental business because health care programs like Medicare paid as much as $1,400 per month to cover NIVs, a type of complex respiratory equipment that can dynamically adjust the pressure level of air delivery. That expansion, however, came at the cost of Apria’s compliance with the basic medical necessity requirement of federal health programs. Specifically, while Apria knew that it was responsible for monitoring patients’ utilization of their NIVs and to stop billing when NIVs were no longer being used, it did not have enough staff, or “respiratory therapists,” to conduct such monitoring. As a result, Apria routinely billed Medicare and other programs when it did not know whether NIVs were still being used by patients and, therefore, remained medically necessary. Further, even when Apria had information indicating that patients were no longer using their NIVs, it often continued to bill the federal health programs.
As further alleged, Apria engaged in two other types of improper practices to obtain more NIV orders and higher profits. First, Apria improperly billed federal health programs for certain NIV rentals that were being used in a setting called PAC mode to provide bi-level pressure support therapy, which was available from a less expensive device called VPAP RAD and did not qualify for reimbursement at the NIV rate. Second, Apria improperly waived co-pays for a number of Medicare and TRICARE beneficiaries to induce them to rent NIVs. For example, Apria employees offered to waive co-pays to convince patients to rent NIVs from Apria instead of competitors. Further, Apria also waived co-pays without making the required individualized assessment of financial need. As a result of those three widespread improper practices, Apria submitted thousands of false claims to federal health programs for NIV rentals and fraudulently received millions of dollars in reimbursements.
As part of the settlement, Apria admitted, acknowledged, and accepted responsibility for, among others, the following conduct:
NIV Continued Use Conduct
- Apria relied on the respiratory therapists (“RTs”) in its branches to monitor patients’ usage of their NIV devices. Further, Apria’s NIV promotional materials indicated that Apria’s RTs would regularly visit NIV patients to assess whether they used their NIV devices in accordance with their physicians’ instructions.
- The RTs at Apria’s branches, however, often did not conduct regular visits to NIV patients to confirm that patients were using their NIVs as directed by their physicians. A January 2017 internal analysis, for example, found that in December 2016, Apria’s RTs failed to complete more than half of the visits to NIV patients mandated by Apria’s NIV clinical procedures at all three of Apria’s operational zones.
- Apria continued to seek payments from federal health programs for NIV rentals each month even though its RTs frequently failed to conduct in-home visits to verify that patients were still using their NIVs.
- In addition, when it had information from the RT visits indicating that patients had stopped using their NIVs, Apria often did not take steps to stop seeking payments from federal health programs or to determine if the NIV rentals were still medically necessary.
PAC Mode Conduct
- In 2015, Apria encouraged its sales staff to actively urge physicians to order the Astral NIVs in PAC mode. When they urged physicians to order the Astral NIVs in PAC mode, Apria’s salespeople frequently did not tell the physicians that PAC mode therapy was also available through the VPAP RAD at a lower monthly cost.
- On a number of occasions, this resulted in Apria renting the more expensive Astral NIVs to patients with the PAC mode therapy orders, including patients covered by federal health programs, even though the less expensive VPAP RADs may have met those patients’ medical needs.
Co-Pay Waiver Conduct
- Managers at a number of Apria’s branches directed salespeople at those branches to routinely discuss the availability of co-pay waivers with NIV patients, including before the patients raised concerns about their ability to make these payments. In a number of cases, those managers also authorized salespeople to offer co-pay waivers to persuade patients to rent NIVs from Apria instead of other DME suppliers.
- During the Covered Period, Apria gave full co-pay waivers to hundreds of NIV patients without making an assessment as to whether those patients could have afforded some portion of their co-pay responsibilities.
* * *
- As a result of the admitted conduct, Apria received reimbursements from the federal health programs for some NIV rental claims that did not comply with all of those programs’ billing rules and guidance.
In connection with this settlement, Apria also entered into a Corporate Integrity Agreement with HHS-OIG, which requires Apria to implement board oversight, a claims review process by an Independent Review Organization, and other compliance steps designed to foster adherence to federal health care program requirements and thereby protect the programs.
This settlement arises from a whistleblower case filed by three former Apria employees under the qui tam provisions of the False Claims Act, which allow private persons – known as “relators” – to file civil cases on behalf of the United States and share in the recovery.
Acting U.S. Attorney Strauss thanked the Washington State Medicaid Fraud Control Unit for its extensive collaboration in the investigation and resolution of this case, and also praised the outstanding investigative work of the HHS-OIG, DCIS, and OPM-OIG.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Li Yu and Steven Kochevar and former Assistant U.S. Attorney Casey Lee have handled the case.
Sunday 20 December 2020
Two Albany Men Arrested on Heroin and Fentanyl ChargeRead the Press Release
ALBANY, NEW YORK – David Colon, age 39, and Adalberto Gonzalez, age 56, both of Albany, were ordered detained yesterday after being arrested on Tuesday and charged with possession with the intent to distribute heroin laced with fentanyl.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Ray Donovan, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division.
Both Colon and Gonzalez appeared yesterday before United States Magistrate Judge Christian F. Hummel and were ordered detained pending trial. The charges in the complaint are merely accusations. The defendants are presumed innocent unless and until proven guilty.
The charges filed against Colon and Gonzalez carry a maximum sentence of 20 years in prison, a fine of up to $1 million, and a term of supervised release of at least 3 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the DEA, Albany County Sheriff’s Office, Albany Police Department, Colonie Police Department, and the Troy Police Department, and is being prosecuted by Assistant U.S. Attorney Rachel Williams.
Fugitive Vladimir Natera Abreu Arrested in the Dominican RepublicRead the Press Release
SAN JUAN, Puerto Rico – Today, Vladimir Natera-Abreu and Joset Rivera-Verdejo were arrested by the Dominican National Police and were later deported to Puerto Rico. The defendants were fugitives since February 2019, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
Defendant Natera-Abreu was one of the main leaders in the drug trafficking organization known as “Las FARC,” (Las FuerzasArmadas Revolucionarias de Cantera). “Las FARC” operated out of the Barrio Obrero Ward, including, but not limited to El Guano sector, Playita sector, William Street, Eleven Street, Cantera sector, and the Public Housing Projects Villa Kennedy, Las Casas, El Mirador, and Las Margaritas, all located in Santurce, since in or about 2006. The goal of “Las FARC” was to maintain control of all the drug trafficking activities within the Santurce area by the use of force, threats, violence, and intimidation.
Natera-Abreu and Rivera-Verdejo had been previously charged in a seven-count indictment for conspiracy to possess with intent to distribute narcotics, aiding and abetting in the possession and distribution of heroin, crack, cocaine, and marihuana, and possession of a firearm in furtherance of drug trafficking. The charged drug conspiracy included 75 defendants.
Assistant U.S. Attorneys Alberto López-Rocafort and Teresa S. Zapata-Valladares are in charge of the prosecution of the case. The FBI was in charge of the investigation of the case. If convicted the defendant faces a mandatory minimum sentence of 15 years, and up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
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8 Individuals Charged for Drug Trafficking from Puerto Rico to New YorkRead the Press Release
SAN JUAN, Puerto Rico – On December 3, 2020, a federal grand jury in the District of Puerto Rico returned a three count indictment charging five men and three women, who are members of a drug trafficking organization, with conspiracy to possess with intent to distribute controlled substances, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. The Drug Enforcement Administration (DEA) in conjunction with the Airport Investigations and Tactical Team (AirTAT) were in charge of the investigation. AirTAT identifies, locates, disrupts, dismantles, and prosecutes transnational crime organizations using the airports in Puerto Rico to smuggle narcotics, weapons, human cargo, counterfeit documents, illegal proceeds, and other contraband.
“This investigation demonstrates the collaborative effort to identify, target and dismantle drug trafficking organizations involved in transporting narcotics from Puerto Rico to the U.S. mainland,” said W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico. “The U.S. Attorney’s Office will continue to work with our law enforcement partners to attack this problem and deter the use of Puerto Rico as a transshipment location.”
DEA Caribbean Division Special Agent in Charge, A.J. Collazo said that “We will continue to utilize all our inter-agency resources towards the disruption and dismantlement of these drug trafficking organizations whatever modality they utilize.”
The indictment alleges that in 2018, the defendants, together with other persons known and unknown to the Grand Jury conspired to obtain, transport, and distribute narcotics, including cocaine, from Puerto Rico to New York. This drug trafficking organization is a network of recruiters, coordinators, and transporters traveling from the District of Puerto Rico to the continental United States via commercial flights with narcotics for wholesale distribution, all for significant financial gain and profit.
The defendants indicted are:
Jaime Antonio Nieto-Irizarry
Frankie Javier Piñero-Miranda
Elena García-Muñíz
Sergio Rosario-Cruz
José Luis Acevedo-Atilano
Jaime David Ruiz-Delgado
Tiffany Michelle Zayas-Román
Saraí Denisse Rivera-Díaz
Assistant U.S. Attorneys Jawayria Z. Auchter and Richard T. Passanisi from the Transnational Organized Crime Section arein charge of the prosecution of the case. If convicted, the defendants face a minimum sentence of 10 years in prison and a maximum sentence of life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until proven guilty.
This investigation is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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Friday 18 December 2020
West Texas Child Predator Sentenced to Life in Federal PrisonRead the Press Release
A west Texas child predator was sentenced yesterday to life in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Michael Don Billups, 56, pleaded guilty in January to interstate transportation of a minor with intent to engage in criminal sexual activity. He was sentenced yesterday afternoon before U.S. District Judge James Wesley Hendrix.
“Mr. Billups committed heinous acts of sexual abuse against the most vulnerable in our society,” said U.S Attorney Erin Nealy Cox. “While no prison term can undo the pain and suffering Mr. Billups has caused, today’s life sentence sends a strong message that child sexual exploitation will be punished to the fullest extent of the law.”
“The FBI is dedicated to protecting the communities we serve from child predators,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “We will continue working with our partners to pursue individuals who commit horrific acts of child exploitation.”
According to court documents, Billups befriended a family while living in New Mexico. Over a period of time, Billups earned the family’s trust and, on occasion, the family’s minor children were allowed to stay at Billups’ residence overnight.
During the summer of 2019, Billups requested to take two of the children on vacation to Florida and Alabama. While at Billups son’s residence in Alabama, Billups sexually assaulted one of the minors.
In October 2019, the family moved from New Mexico to Lubbock, Texas. Shortly thereafter, one of the minor children outcried to his mother stating that Billups had been sexually assaulting him for several years at locations in New Mexico, Texas, and in Alabama.
According to court documents, the parents questioned a second sibling who informed them that he had observed activities between Billups and his sibling that confirmed the outcry.
To avoid detection, Billups told the minors not to tell anyone because it would make him feel sad. He also purchased toys and games for boys.
The FBI’s Dallas Field Office and the Lubbock Police Department conducted the investigation. Assistant U.S. Attorney Sean Long prosecuted this case.
West Seneca Man Arrested After Investigators Seize Suspect Heroin or Fentanyl from His ResidenceRead 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 Michael Prewitt, 51, of West Seneca, NY, was arrested and charged by criminal complaint with possession with the intent to distribute heroin and fentanyl. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Richard Antoine, who is handling the case, stated that according to the complaint, on December 16, 2020, law enforcement officers executed a federal search warrant at the defendant’s Slade Avenue residence in West Seneca. During that search, officers seized approximately 1332 grams of suspected heroin or fentanyl, two mechanical presses, commonly used to shape narcotics into bricks, packaging materials, two digital scales, and approximately $18,000 in cash.
In 2003, Prewitt was convicted in federal court of being a felon-in-possession of a firearm and sentenced to serve 37 months in prison.
The defendant made an initial appearance before U.S. District Judge H. Kenneth Schroeder, Jr. and was detained.
The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; 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.
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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Virginia Man Arrested for Online Sextortion SchemeRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Terrell Ashby, 22, of Williamsburg, VA, was arrested and charged by Complaint for cyberstalking a young woman residing in Delaware County, PA in connection with a “sextortion” scheme.
According to the Complaint, in August 2020, Terrell Ashby used a social-media platform to contact a 20 year-old woman (the victim). Ashby, using the online moniker “Jason Brandon,” sent a message to the victim offering her a large sum of money and enticing her to communicate with him on another electronic messaging application. The victim agreed and subsequently engaged in a nude video chat with the defendant.
Unbeknownst to the victim, Ashby recorded portions of their video chat, and subsequently sent her multiple messages demanding $40 in exchange for deleting a nude photo he had captured of her. Specifically, he wrote, in part, “When you send the $40 I will delete your nudes offline” and “Just send the $40 and you’re good lol[.] We aren’t good until you send the $40[,] simply send the $40 and I’ll delete it[.]” The victim then paid the $40 by transferring money via an online payment platform to an account provided by Ashby.
However, that was not the end of Ashby’s alleged abuse of the victim. The defendant then sent the victim multiple messages demanding all of the money in her bank account. In these messages, Ashby threatened to disseminate the nude photos of the victim to her college and other social media friends and followers if she did not pay him more money. For example, Ashby wrote, in part: “Your expose page is being created right now and I’m also going to tag your college[.] I’ll end you[.] I’m not someone you want to [expletive] with[,] go tell your father that… Just [sent] your nudes to [name redacted][.] Already exposed you whore[.] Your life is over[.] You’re dumb if you thought this was over its not over until my $134 is sent[.] I’ll make sure our whole school sees your nudes[.]”
As a result of the defendant’s alleged conduct, the victim became distraught and ingested a number of prescription pills in an attempt to calm her emotional distress. She was rushed to an emergency room in an ambulance and ultimately recovered. While she was hospitalized, Ashby began advertising the nude photos of the victim using various online accounts. For example, the defendaNt posted a photo of the victim on a social-media platform, using an account named “[name redacted]sextape” with the following caption: “Everyone [message] me to see [the victim] nudes … she [video chatted] me naked I have the full [video chat] call saved [message] me to see everyone.”
Ashby was arrested at his residence in Williamsburg, Virginia this morning and is expected to appear before a magistrate judge in the Eastern District of Virginia later this afternoon.
“As detailed in the Complaint, Ashby’s alleged exploitation and manipulation of this victim are abhorrent,” said First Assistant U.S. Attorney Williams. “Protect yourself and avoid falling victim to this type of scheme. And if you have been victimized, know that you are not alone and should not be shamed into silence. Please come forward so that we can investigate and prosecute the offenders. These criminals are counting on your silence to get away with it; don’t let them.”
“Terrorizing someone with threats to release their explicit images is unconscionable,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Imagine the emotional toll it takes on a victim, living in fear of being so personally exposed. Unfortunately, the FBI is seeing more and more sextortion cases, with people of all ages targeted. It’s not some sick game, it’s a crime, and the FBI will continue to unmask these cyber predators and hold them firmly accountable.”
If convicted, the defendant faces a maximum possible sentence of 5 years’ imprisonment, 3 years’ supervised release, and a $250,000 fine.
The case was investigated by the Philadelphia FBI, and is being prosecuted by Assistant United States Attorney Sarah Wolfe. The FBI and U.S. Attorney’s Office in the Eastern District of Virginia also provided assistance in the investigation.
A criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Virginia Defense Contractor Pleads Guilty to Federal Charges in Maryland for Illegally Selling Chinese-Made Body Armor and Related Goods to Federal Agencies and for Illegal Possession of a FirearmRead the Press Release
Greenbelt, Maryland – Arthur Morgan, age 67, of Lorton, Virginia, pleaded guilty today to a federal wire fraud charge, in connection with federal contracts to provide helmets, body armor, and other items to military and other federal entities. Morgan also pleaded guilty to illegal possession of a firearm by a prohibited person, a charge which was originally brought in U.S. District Court for the Eastern District of Virginia, but was transferred to Maryland.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; United States Attorney for the Eastern District of Virginia G. Zachary Terwilliger; Special Agent in Charge Eric D. Radwick of the General Services Administration (GSA) Office of Inspector General; Special Agent in Charge Ashan Benedict of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Washington Field Division; Special Agent in Charge Alison F. Zavada, Naval Criminal Investigative Service; and Assistant Inspector General for Investigations Michael Ryan of the U.S. Department of State Office of Inspector General.
According to his plea agreement, Morgan was the Chief Executive Officer of Surveillance Equipment Group Inc. (SEG) and its relevant division, SEG Armor, both of which Morgan managed from Lorton, Virginia. The GSA enters into government-wide contracts with commercial firms to provide supplies and services that are available for use by federal agencies worldwide. All GSA contracts are subject to the Trade Agreements Act (TAA), which requires that all products listed on GSA contracts must be manufactured or “substantially transformed” in a “designated country.” China is not a designated country under the TAA. Contractors were not allowed, under these GSA contracts, to supply products that did not comply with the TAA. Any such products would have been disqualified from eligibility under the contract. Further, a contractor’s failure to certify that its products complied with the TAA would have disqualified the contractor from eligibility for the contract. A contractor who falsely certified that a product was TAA compliant could not lawfully seek payment from the United States for that product.
As detailed in his plea agreement, Morgan falsely certified that the ballistic vests, helmets, riot gear, and other items he offered for sale under his federal contract were from designated countries, specifically, Hong Kong and the United States. While representing that none of SEG’s products offered to federal agencies under the relevant contract were manufactured in China, Morgan knowingly provided products that Morgan knew had been manufactured in China, in violation of the TAA and the contract. SEG received multiple federal government orders under the contract between 2003 and 2019. Between September 15, 2014 and August 29, 2019, approximately six federal government agencies placed at least 11 orders for ballistic and other law enforcement/security equipment from SEG—which SEG sourced from China in violation of the TAA, as part of the scheme to defraud— totaling approximately $658,866.92.
For example, the U.S. Navy placed an order with SEG for helmets, and Morgan had a series of e-mail communications with Navy contracting personnel in Indian Head, Maryland, including concerning SEG’s inability to meet the agreed-upon delivery schedule. In his e-mails, Morgan falsely advised the Navy contracting personnel that SEG had a factory in southern Virginia, that the helmets for the order “were in production” there, and that the delays were due to a backorder of materials needed for the helmets. To the contrary, the helmets that Morgan provided under the U.S. Navy order originated from China before Morgan sent them to the Navy, in violation of the TAA and the contract. Specifically, Morgan admitted that these products were manufactured by Chinese Company 1, from which Morgan knowingly ordered them.
On February 16, 2016, and March 10, 2016, the Defense Finance and Accounting Service paid SEG $127,069.60 and $191,990.28, respectively, for the U.S. Navy order. For all of the orders, federal government agencies paid SEG at least approximately $488,976.92.
On December 17, 2019, law enforcement executed search warrants at Morgan’s residence in Lorton; at the Louisa, Virginia property that his wife owned and which Morgan had claimed housed SEG’s manufacturing operation; at one of Morgan’s storage units in Mineral, Virginia; and at a rental warehousing location in Springfield, Virginia. Law enforcement recovered: a 12-gauge shotgun; a 9mm semi-automatic firearm with two magazines; a .380-caliber semi-automatic firearm with two magazines; a .38-caliber five-shot revolver, with two speed loaders; 315 rounds of various caliber ammunition; a 30-round 9mm extended magazine; four ballistic vests; five ballistic plates; three black ballistic helmets; one “SEG Armor” ballistic vest manufactured in China; and personal use marijuana with accompanying paraphernalia. At the time that Morgan possessed the firearms, ammunition, and body armor, he had been convicted of at least one crime of violence, specifically, second-degree murder, assault with the intent to murder, rape or rob, and use of a handgun in a crime of violence, in the Circuit Court for Prince George’s County, Maryland on June 1, 1982. As a result of this conviction, Morgan was prohibited from possessing firearms, ammunition, or body armor.
Morgan faces a maximum sentence of 20 years in federal prison for wire fraud and a maximum of 10 years in federal prison for being a felon in possession of firearms and ammunition. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge George J. Hazel has scheduled sentencing for March 15, 2021, at 10:00 a.m.
United States Attorney Robert K. Hur commended the GSA OIG, the State Department OIG, the ATF, the NCIS, and the U.S. Attorney’s Office for the Eastern District of Virginia for their work in this investigation and prosecution, and recognized the Army Major Procurement Fraud Unit, the Defense Criminal Investigative Service, Homeland Security Investigations, the FBI, the Air Force Office of Special Investigations, and the Coast Guard Investigative Service for their assistance. Mr. Hur thanked Assistant U.S. Attorney Elizabeth Wright, who is prosecuting the case.
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Violent Felon and Sex Offender Pleads Guilty to Firearms ChargesRead the Press Release
NORFOLK, Va. – A man previously convicted of numerous violent felonies and who is a registered sex offender pleaded guilty today to being a felon in possession of a firearm and possessing a firearm in furtherance of a drug-trafficking crime.
According to court documents, Edward Jamaal Taylor, 38, of Suffolk, was arrested based on evidence that he had allegedly assaulted and kidnapped at gunpoint a witness in a federal drug-trafficking case. Police officers then searched Taylor’s car and recovered a handgun equipped with a laser sight and loaded with a large-capacity magazine, which matched the victim’s description of the firearm used in the abduction. The officers also recovered eight ounces of marijuana and a double-bladed knife from the car. After his arrest, Taylor admitted to owning the gun, possessing the drugs with intent to distribute them, and “possibly hitting” the victim while “recklessly waiving his gun around” during an argument, after which he “assisted” the victim to two different locations.
Taylor has seven convictions for violent felonies, including two for robbery, two for possessing a firearm in connection with a felony offense, two for abduction, and one for rape.
Taylor is scheduled to be sentenced on April 16, 2021. He faces a mandatory minimum sentence of five years and a maximum of life in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Al Chandler, Interim Chief of Suffolk Police; and Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after U.S. District Judge Arenda Wright Allen accepted the plea.
Assistant U.S. Attorneys William B. Jackson and William D. Muhr are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-93.
Vallejo Man Indicted for Firearms OffensesRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment Thursday against Michael Ray Pitre Jr., 35, of Vallejo, charging him with being a felon in possession of firearms, and possession of an unregistered short barrel rifle, U.S. Attorney McGregor W. Scott announced.
According to court documents, the execution of federal search warrants of Pitre’s person, residences, and vehicles led to the discovery of a non-serialized machine gun, a short barrel rifle, and a pistol. The machine gun, which was located in his truck, was loaded with a 60-round extended magazine and was placed on top of a bag containing a mask, additional extended magazines and ammunition, and two tracking devices.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Oakland Police Department. Assistant U.S. Attorney Adrian T. Kinsella is prosecuting the case.
If convicted, faces a maximum statutory penalty of 10 years in prison on each charge, a $250,000 fine for the felon in possession charge, and a $10,000 fine for the possession of an unregistered firearm charge. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
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.
Upper Peninsula Methamphetamine Co-Conspirators Sentenced to PrisonRead the Press Release
MARQUETTE, MICHIGAN — Three Houghton County co-conspirators have been sentenced to prison for their role in conspiring to distribute more than 50 grams of crystal methamphetamine in the Upper Peninsula.
Ryan Lee Timko, 34, of Houghton, Michigan, was sentenced by U.S. District Judge Paul L. Maloney to 192 months in prison for his role in the conspiracy. Jeremy Joseph Brusso, 37, formerly of Atlantic Mine, Michigan, was sentenced by Chief U.S. District Judge Robert J. Jonker to 132 months in prison for his role in the conspiracy. Nicholas Patrick Cornish, 29, formerly of Calumet, Michigan, was sentenced by Chief U.S. District Judge Robert J. Jonker to 120 months in prison for his role in the conspiracy.
Timko, Brusso, and Cornish travelled to the Lower Peninsula to get crystal methamphetamine to redistribute in the U.P. Over the course of the conspiracy, they brought over a pound of methamphetamine into the Upper Peninsula.
These sentences were the culmination of a long-term investigation by the Upper Peninsula Substance Enforcement Team (UPSET) into crystal methamphetamine distribution in the west end of the Upper Peninsula. Homeland Security Investigations, Customs and Border Protection Laboratory and Scientific Services Directorate, the Michigan State Police, the Bureau of Indian Affairs, the Houghton County Sheriff’s Office, and the Houghton City Police assisted UPSET during the course of the investigation.
The Upper Peninsula continues to struggle with individuals, like these defendants, bringing methamphetamine into the U.P. Those who choose to engage in this conduct are on notice of the serious consequences for bringing this dangerous drug into our communities,” said U.S. Attorney Andrew Birge.
“Dangerous drugs like crystal methamphetamine destroy communities and families,” said D/Lt. Timothy Sholander, Michigan State Police – UPSET Commander. “We hope the sentences handed down in this case serve as a reminder to other drug dealers that the distribution of methamphetamine is a losing game and that the men and women on UPSET will continue to fight to support the communities and families in Michigan’s Upper Peninsula.”
Assistant U.S. Attorneys Ted Greeley and Alexis Sanford prosecuted the case.
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