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17 February 2021
Liquor Entrepreneur Arrested for Defrauding InvestorsRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”) announced that JOSEPH CIMINO, the founder of an Orange County-based tequila company, was arrested this morning and charged with securities fraud and wire fraud arising out of his fraudulent solicitation of investments for the company. CIMINO will be presented before United States Magistrate Judge Judith C. McCarthy in White Plains federal court later today.
U.S. Attorney Audrey Strauss said: “Joseph Cimino allegedly raised nearly $1 million in investor funds for his start-up tequila company by lying about the company’s finances, and then spent a significant portion of that money to finance his own lifestyle. Now Cimino faces the sobering reality of federal securities and wire fraud charges.”
FBI Assistant Director William F. Sweeney Jr. said: “Through falsely inflating capital, misleading investors, and lying about other aspects of his tequila company, Cimino, as alleged, raised nearly $1 million in furtherance of his fraudulent scheme. While his alleged illegal activity continued over a period of four years, today’s arrest has effectively shattered any hopes he may have had of continuing to scam innocent investors.”
According to the allegations contained in the Complaint[1] unsealed today in White Plains federal court:
From 2014 to 2018, CIMINO raised approximately $935,000 from at least 25 investors ostensibly to fund a tequila company that he founded (the “Tequila Company”). Throughout this period CIMINO made numerous false and misleading representations in an effort to attract and maintain investors. For example, in multiple communications with prospective investors, CIMINO falsely inflated the amount of capital that the Tequila Company had raised from other investors, and falsely represented that certain individuals were investors in the Tequila Company, when in reality they had not invested any funds. CIMINO also fabricated or falsely inflated the Tequila Company’s sales in a number of investor communications. In December 2015, CIMINO made statements in an email to a prospective investor falsely implying that the Tequila Company already had sales, when in fact, the company’s initial sales did not occur until 2017. In July 2017, CIMINO falsely represented in an investor report and quarterly profit and loss (“P&L”) statement that the Tequila Company’s year-to-date sales totaled 3,410 cases, when its actual sales totaled only 350 cases. Then, in October 2017, CIMINO falsely represented that the Tequila Company’s year-to-date sales totaled 6,035 cases, when its actual year-to-date sales totaled barely 20 percent of that number. CIMINO further claimed to investors in October 2017 that the Tequila Company would receive reimbursement for 800 cases of tequila that were supposedly destroyed at a distributor’s warehouse in Puerto Rico as a result of Hurricane Maria. That statement was a fabrication. In reality, the Tequila Company had no insurance and none of its inventory had been destroyed in the hurricane.
In addition to deceiving investors about the Tequila’s Company’s financial condition, CIMINO used investor money for personal expenses, including groceries, pet supplies, and personal entertainment. From 2014 to 2018, CIMINO transferred approximately $472,000 of investor money from the Tequila Company into his personal bank account, and used a significant portion of those deposits for personal living expenses, contrary to the operating agreements provided to investors.
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CIMINO, age 56, of Warwick, New York, is charged with one count of securities fraud and one count of wire fraud. Each charge carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Ms. Strauss praised the investigative work of the FBI Hudson Valley White Collar Crime Task Force and Orange County Sheriff’s Office. Ms. Strauss also thanked the Securities & Exchange Commission for its assistance in the investigation.
In a related case, the Securities & Exchange Commission brought a civil action today against CIMINO in U.S. District Court in White Plains.
The criminal case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Gianforti and Daniel Loss are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations and every fact described should be treated as an allegation.
- Lexington Petty Offense Docket Cancelled
Kutztown Man Sentenced to 20 Years in Prison for Child Pornography OffensesRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that John Joseph Krasley, 52, of Kutztown, PA, was sentenced to 20 years in prison, 10 years of supervised release, and ordered to pay $30,000 total in restitution to certain victims by United States District Court Judge Edward G. Smith for receiving, accessing, transporting, and distributing child pornography.
For more than five years, between March 2013 and June 2018, Krasley trafficked in child pornography. He communicated online at all times of the day and night with other child sex offenders, distributing horrific images of children being sexually abused, and maintaining an extensive collection of videos and images. Krasley also communicated with an undercover agent and distributed graphic images mostly depicting infants, but also toddlers and pre-pubescent boys, all of whom were being sexually abused. After an extended investigation by Homeland Security Investigations, the defendant was arrested and charged by Indictment with 14 counts of child exploitation offenses. In October 2019, the defendant was convicted after trial of all charges against him.
“Child sexual exploitation is appallingly pervasive, exacerbated by the easy availability of digital media and communications,” said Acting U.S. Attorney Williams. “Every video, every image, depicts a real victim, an innocent child who will feel the scars for a lifetime. These investigations are therefore so important, and every conviction makes the community safer for children everywhere. Thanks to the tireless efforts of the investigators on this case, Krasley’s years of exploiting the victimization of children online are over.”
“We stand ready to protect our community’s most valuable asset, our children,” said Brian A. Michael, Special Agent in Charge for Homeland Security Investigations Philadelphia. “Predators who possess and distribute child sexual abuse material re-victimize innocent and vulnerable children every time a photo or video is shared. Homeland Security Investigations special agents and our law enforcement partners will relentlessly pursue child predators, in every form, and ensure those who commit these atrocious crimes are brought to justice.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Albert S. Glenn.
Judge sentences former accounting clerk for defrauding the companyRead the Press Release
ST. LOUIS – United States District Judge Henry Autrey sentenced Stephanie Baker to 12 months and one day in prison along with restitution to the victims in the amount of $192,336.74 today. The 48-year-old O’Fallon, Missouri resident pleaded guilty, in October, to three counts of mail fraud related to her former position in the accounting department of Prairie Farms Dairy Supply Company.
Baker was an employee of Prairie Farms, working in that company’s accounting department. Baker’s duties and responsibilities included applying and allocating Prairie Farms customer payments to their customer accounts. As part of her duties, Baker would routinely receive checks from Prairie Farms customers, and make accounting entries to apply those checks to each customer’s account and therefore reduce the balance owed to Prairie Farms of that particular customer account by the amount of the check received.
C.S. owned and operated a Dairy Queen restaurant franchise in southern Illinois. DQ Columbia maintained an account at Prairie Farms and purchased and received products from Prairie Farms on a regular basis. DQ Columbia was required under its franchise agreement to order and receive substantially all its food, dairy products and supplies from Prairie Farms.
Beginning in or about March, 2018 and continuing through in or about December, 2018, Baker devised, intended to devise, and knowingly participated in a scheme to defraud and obtain money from Prairie Farms and C.S., in an approximate amount of $192,336.74, by means of materially false and fraudulent pretenses, representations and promises.
Baker received and applied payments from Prairie Farms customers other than DQ Columbia to DQ Columbia’s account. DQ Columbia, therefore, received credit and a reduction it its account balance for payments that were not made by DQ Columbia, but instead were made by other Prairie Farms customers. Further, the other Prairie Farms customers who made the actual payments did not receive credit and a reduction in their own account balances. As part of her scheme, Baker misapplied approximately $143,933.74 in other customer payments to the DQ Columbia account. Baker withheld and did not mail out statements to the other Prairie Farms customers so that those other customers would not realize that their prior payments to Prairie Farms had not been credited to their accounts.
Baker falsely represented, to C.S., for DQ Columbia to continue receiving food, dairy products and supplies from Prairie Farms, C.S. needed to make cash payments personally to Baker. At Baker’s direction, C.S. met with Baker on numerous occasions and delivered cash to Baker based upon Baker’s false representations that she would deliver the cash to Prairie Farms and credit DQ Columbia’s account accordingly. In fact, Baker kept the cash she received from C.S., did not credit DQ Columbia’s account for the cash payments, and used the cash for her own personal use, including for the boarding and related expenses for show horses and other general living expenses, unrelated to the legitimate business of Prairie Farms. C.S. met with Baker on numerous occasions and made cash payments to Baker totaling approximately $48,403.00. Prairie Farms and its owners had no knowledge of the cash payments which C.S. made to Baker and received no portion of these cash payments.
Baker received numerous checks from Prairie Farms customers through the U.S. mail and as part of her scheme misapplied those payments as credits to the account of DQ Columbia. .
The Federal Bureau of Investigation investigated this case. Assistant U.S. Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.
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Judge sentences former St. Charles corporate executive for fraudulently using company’s credit cardRead the Press Release
ST. LOUIS – United States District Judge E. Richard Webber sentenced Tara Sabatini to 30 months in prison today. The 45-year-old St. Charles, Missouri resident pleaded guilty, in October, to one count of wire fraud.
Sabatini was employed as the “Senior Director of Sales” by a company located in St. Louis, Missouri that sold wholesale amounts of food to various commercial customers, typically grocery store chains. The company provided Ms. Sabatini with a company-funded corporate credit card and authorized her to use the credit card for official business, including work travel and some client expenses.
During 2017 and 2018, Sabatini used her corporate credit card to fund personal expenses, including but not limited to purchasing luxury ticket packages from a Major League Baseball team located in New York. She frequently engaged in electronic communications with New York employees of the team for ticket purchase and delivery purposes. After receiving these tickets, Sabatini attended some of the baseball games and also gave some of the tickets to her friends and family. Sabatini further sold some of the baseball tickets through an Internet service and spent the proceeds of the ticket sales on her personal expenses.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Gwendolyn Carroll is handling the case.
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Judge sentences St. Louis County man for role in fentanyl distribution ringRead the Press Release
ST. LOUIS – United States District Judge Stephen R. Clark sentenced Roman Frenchie to 60 months in prison today. The 22-year-old Overland, Missouri resident pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute fentanyl.
Beginning in 2018 and continuing until November 20, 2019, Frenchie and his co-conspirators began distributing large quantities of fentanyl in the St. Louis Metropolitan area. Their initial supplier was Juan Gonzalez, who was charged in a separate indictment with conspiracy to distribute and possess with intent to distribute both fentanyl and methamphetamine. Gonzalez continued to supply Frenchie and his co-conspirators until DEA and U.S. Marshals arrested Gonzalez in September 2019. Prior to his arrest, Gonzalez would either ship fentanyl through mail or hand-deliver the narcotics to co-conspirators who traveled to Arizona at the request of co-conspirators including Marcius Futrell. Futrell was also charged with drug conspiracy in the same case as Gonzalez. While Gonzalez and Futrell were fugitives from the charges in that indictment, they continued to conspire with Frenchie and others to distribute fentanyl.
After September 2019, Frenchie and his co-conspirators then obtained another source of fentanyl in Arizona and continued their distribution. Once the raw fentanyl arrived in the the St. Louis area, co-conspirators would "cut" or "stretch" the fentanyl with products like Dormin to increase its volume and their profit. The cut fentanyl was then put in capsules and sold by members of the conspiracy. The conspiracy was responsible for distributing in excess of four kilograms of fentanyl.
The Federal Bureau of Investigation, Drug Enforcement Administration, St. Louis County and St. Louis Metropolitan Police Department investigated this case. Assistant United States Attorney Paul D’Agrosa is handling this case.
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Johnstown Man Indicted on Drug ChargesRead the Press Release
Johnstown, PA - One resident of Johnstown, PA, has been indicted by a federal grand jury in Pittsburgh on charges of distribution and possession with the intent to distribute a quantity of a substance containing cocaine, heroin, and fentanyl, United States Attorney Scott W. Brady announced today.
The two-count Indictment named Troy Jamal Jones, age 33, as the sole defendant.
According to Indictment presented to the court, Jones was found to distribute and possess with the intent to distribute a quantity of a mixture and substance containing a detectable amount of cocaine base, in the form commonly known as crack, and a quantity of a mixture and substance containing a detectable amount of heroin and fentanyl.
The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Maureen Sheehan-Balchon is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Japanese CEO and Employees Charged in Scheme to Defraud U.S. Navy and Dump Wastewater in OceanRead the Press Release
Three Japanese nationals, including the president and chief executive officer of Yokohama, Japan-based Kanto Kosan Co. Ltd. (Kanto Kosan) were indicted by a federal grand jury Tuesday in connection with an alleged long-running scheme to defraud the U.S. Navy and pollute Japanese waters by dumping contaminated water removed from U.S. Navy ships into the ocean.
Sojiro Imahashi, the president and CEO of Kanto Kosan, Tsuyoshi Ifuku, and Yuki Yamamiya, were charged with one count of conspiracy to make false claims, to commit ocean dumping, and to commit major fraud against the U.S.; four counts of major fraud against the U.S.; and six counts of submitting false claims.
“The defendants deceived the U.S. Navy by willfully failing to satisfy the company’s obligations under $120 million in contracts with the Department of Defense that were designed, among other things, to ensure the company not only delivered the required services to the Navy, but also complied with critical environmental safeguards,” said Acting Assistant Attorney General Nicholas L. McQuaid for the Justice Department’s Criminal Division. “The Criminal Division will continue its efforts to protect the integrity of military contracting and safeguard taxpayer dollars.”
“The defendants deserve to be held fully accountable for their alleged scheme to illegally dump wastewater as it threatened the integrity of the Department of the Navy procurement process, degraded the readiness of the warfighter, and squandered taxpayer dollars and valuable investigative resources,” said NCIS Far East Field Office Special Agent in Charge Tim Mahew. “NCIS remains committed to working with DCIS and our federal and international law enforcement partners to root out crime that threatens the communities where our DON personnel live and work.”
“The alleged conduct of the defendants in this case posed a threat to the critical strategic alliance between the United States and our valuable partner nation of Japan,” said Special Agent in Charge Stanley A. Newell of the Transnational Operations Field Office for the Defense Criminal Investigative Service (DCIS). “The dedicated special agents of the DCIS, along with our investigative partners of the Naval Criminal Investigative Service, will tirelessly investigate and bring to justice anyone who swindles the Department of Defense and threatens U.S. military readiness.”
According to the indictment, from approximately 2007 to 2020, Kanto Kosan received contracts from the U.S. Navy valued at approximately $120 million, tens of millions of which related to the removal, treatment, and disposal of contaminated oily wastewater (OWW) generated by U.S. Navy ships in Yokosuka, Sasebo, and Okinawa. Under the terms of the contracts, Kanto Kosan was typically required to treat the OWW in accordance with Japanese environmental regulations prior to discharging it into the ocean.
The indictment alleges that Kanto Kosan, acting through the defendants, transferred OWW to treatment barges, on which Kanto Kosan was supposed to use various methods to treat and clean the OWW prior to discharging it into the ocean. To ensure that discharged OWW met Japanese environmental standards, the U.S. Navy contracts typically required Kanto Kosan to “conduct semiannually sampling and testing of effluent discharge from the treatment barge[s]. . . in a laboratory that is certified by the Japanese regulatory authority . . . and provide copies of the test results to [the U.S. Navy]. . . within five (5) working days of receiving results from the accredited Japanese laboratory.” Compliance with the environmental testing regime set out in the contracts was one of the standards by which Kanto Kosan’s performance was measured.
The indictment alleges that in approximately 2007, the defendants and others decided that, instead of properly treating the OWW, Kanto Kosan would minimally treat OWW to remove visible contaminates and then discharge the improperly treated or untreated OWW into the ocean. To circumvent the testing regime, the defendants directed that a storage tank on Kanto Kosan’s OWW treatment barges be kept filled with tap water, and then directed personnel from the environmental testing laboratories that Kanto Kosan engaged to take samples from the tanks filled with tap water. Kanto Kosan employees also added OWW to the tanks filled with tap water on occasion to avoid exposing the scheme. As a result, the U.S. Navy was deceived into believing Kanto Kosan was properly treating the OWW, and into paying its invoices.
An indictment is merely an allegation. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
NCIS and DCIS investigated the case. Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section is the nation’s leading prosecuting authority for complex procurement fraud and corruption matters.
Interpreter in Federal Criminal Investigation Charged with Disclosing Investigation and Court-Ordered Wiretap to Targeted Drug DealerRead the Press Release
SAN JOSE – Liliana Moreno, a Spanish translator hired as a contractor by the Drug Enforcement Administration (DEA) in a drug trafficking investigation, appeared today in United States District Court to face federal charges that she intentionally disclosed the investigation and its court-ordered wiretap to the investigation’s target, announced United States Attorney David L. Anderson, Department of Justice Office of the Inspector General Los Angeles Field Office Special Agent in Charge Zachary Shroyer, and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux.
“We trusted Liliana Moreno to keep her work confidential,” said U.S. Attorney Anderson. “Law enforcement needs confidentiality to protect the rights of the innocent and the guilty. We allege Moreno violated that trust.”
“Moreno jeopardized an investigation when she allegedly tipped off the subject of a court-authorized wiretap. DOJ employees and contractors who share confidential law enforcement information will be held accountable for their actions,” said Zachary Shroyer, Special Agent in Charge of the Department of Justice Office of the Inspector General Los Angeles Field Office.
“Releasing sensitive government information can have devastating consequences. Not only does it damage a case, often beyond repair, but more importantly, it also endangers the lives of those agents and officers assigned to the investigation,” said DEA Special Agent in Charge Daniel Comeaux. “In instances such as these we will ensure justice is served without delay.”
According to the federal complaint unsealed today, Moreno, age 35, of Modesto, California, worked for a private company that contracts with DEA to provide translation services. DEA regularly uses interpreters in court-authorized wiretaps to monitor and translate intercepted telephone calls in a foreign language. DEA hired Moreno as a contractor, and she promised in DEA employment contracts never to disclose any investigative information without authorization and to notify DEA if she had any personal association with a target of an investigation.
The complaint outlines that DEA assigned Moreno as the lead monitor and Spanish translator for a court-authorized wiretap in an investigation of a drug trafficking organization whose membership included numerous Spanish-speaking members. During February and March of 2018, the complaint alleges that while monitoring calls Moreno recognized an individual on a call who she knew from the individual’s romantic relationship with a friend of Moreno. DEA agents also displayed a surveillance photo and name of that individual, deemed Wire Target 2 in the complaint, in the wire room where Moreno worked. Despite this, Moreno did not notify DEA about her knowledge and association with Wire Target 2, the complaint outlines. Instead, Moreno met with her friend on March 17, 2018, and according to the complaint’s allegations, warned the friend that Wire Target 2’s calls were being intercepted in a DEA wiretap investigation and that DEA had a photo of Wire Target 2. Moreno’s friend relayed this information to Wire Target 2, and the complaint describes how Wire Target 2 and another drug-trafficking organization member thereafter discarded their wiretapped cell phones, frustrating and significantly delaying the investigation.
Moreno made her initial appearance on the complaint, which was unsealed today, before the Honorable Virginia K. DeMarchi, United States Magistrate Judge. Moreno remains out of custody on a $50,000 bond. Moreno’s next scheduled appearance is on February 19, 2021, for appointment of counsel before United States Magistrate Judge DeMarchi.
A complaint merely alleges that a crime has been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Moreno is charged with one count of unlawful disclosure of electronic surveillance, in violation of 18 U.S.C. § 2232(d). If convicted, the defendant faces a maximum sentence of 5 years in prison and a fine of $250,000. 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.
The United States Attorney’s Office Special Prosecutions Section is prosecuting the case. The prosecution is the result of an investigation by the Department of Justice Office of the Inspector General and the Drug Enforcement Administration.
Harrison County man indicted on firearms chargeRead the Press Release
ELKINS, WEST VIRGINIA – Dustin Cain Anderson, of Clarksburg, West Virginia, was indicted today on a firearms charge, U.S. Attorney Bill Powell announced.
Anderson, 26, was indicted today on one count of “Unlawful Possession of a Firearm.” Anderson, a person prohibited from having firearms, is accused of having a .22 caliber revolver in November 2020 in Upshur County.
Anderson is facing up to 10 years of incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Christopher L. Bauer is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Upshur County Sheriff’s Office investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Harrisburg Man Sentenced to 18 Months’ Imprisonment for Stealing Thousands of Dollars’ Worth of Postage StampsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Arthur Gibson, age 48, of Harrisburg, Pennsylvania, was sentenced on February 16, 2021, to 18 months’ imprisonment followed by three years of supervised release, by Chief U.S. District Court Judge John E. Jones III, for stealing government property.
According to Acting United States Attorney Bruce D. Brandler, Gibson previously pled guilty to purchasing thousands of dollars’ worth of postage stamps from post offices in the Middle District of Pennsylvania and elsewhere in July 2019. Gibson admitted that to purchase the stamps, he used personal checks, knowing that the funds in his bank account were insufficient to cover the cost of the stamps. Gibson agreed to pay restitution to the U.S. Postal Service in the amount of $22,990, which represents the value of the postage stamps that Gibson unlawfully obtained.
The case was investigated by the United States Postal Inspection Service and the Northeastern Regional Police Department. Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.
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Harrisburg Man Sentenced to 11 Years’ Imprisonment for Cumberland County Armed Bank RobberiesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on February 16, 2021, Aaron Johnson, age 30, of Harrisburg, Pennsylvania, was sentenced to 132 months’ imprisonment followed by five years on supervised release by Chief U.S. District Court Judge John E. Jones III, for armed bank robbery.
According to Acting United States Attorney Bruce D. Brandler, Johnson committed four armed bank robberies in Cumberland County between February and September 2019:
- AmeriChoice Federal Credit Union on February 15, 2019, stole $6,300;
- Centric Bank on July 12, 2019, stole $8,450;
- BB&T Bank on July 31, 2019, stole $10,079; and
- PNC Bank on August 19, 2019, stole $2,734.
Chief Judge Jones also ordered Johnson to pay restitution to the banks in the amount of $27,563.
The case was investigated by the Federal Bureau of Investigation, the Lower Allen Police Department, East Pennsboro Township Police Department, Camp Hill Borough Police Department, and the Hampden Township Police Department. Assistant U.S. Attorney Johnny Baer is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. 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.
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Hardy County man indicted on drug chargesRead the Press Release
ELKINS, WEST VIRGINIA – Matthew Curtis Delawder, of Moorefield, West Virginia, was indicted today on drug charges, U.S. Attorney Bill Powell announced.
Delawder, 37, was indicted today on three counts of “Distribution of Methamphetamine,” one count of “Possession with Intent to Distribute Methamphetamine,” and one count of “Unlawful Possession of a Firearm.” Delawder is accused of having and selling methamphetamine in Grant and Hardy Counties in October 2020. Delawder, who is prohibited from having firearms, is also accused of having .22 caliber rifle in Hardy County in February 2021.
Delawder is facing up to 20 years of incarceration and a fine of up to $1,000,000 for each of the drug counts. He is also facing up to 10 years of incarceration and a fine of up to $250,000 for the firearms 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 Stephen D. Warner is prosecuting the case on behalf of the government. The Potomac Highlands Drug Task Force, a HIDTA-funded initiative; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the West Virginia State Police investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Guilford Business Owner Sentenced for Tax EvasionRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Christopher Parker, 63, of Guilford, Vermont, was sentenced today in the United States District Court in Burlington following his conviction for tax evasion. U.S. District Judge Christina Reiss sentenced Parker to time served, to be followed by three years of supervised release including 200 hours of community service. Prior to his sentencing, Parker had paid in full the roughly $281,000 in federal income taxes due and owing which he evaded through his conduct in this case. Parker’s supervised release is also subject to special conditions requiring him to cooperate with the Internal Revenue Service in connection with any delinquent or additional taxes, interest or penalties.
Parker is the sole proprietor of Christopher M. Parker LLC, a building restoration business based in Guilford. As described in court filings and statements made on the record at his sentencing, Parker evaded taxes by understating his income to his tax preparer over several years, between 2014 and 2018. His business generated approximately $3.35 million in gross revenues during that period. However, Parker reported only approximately $2.5 million in gross revenues to the Internal Revenue Service on his income tax returns, resulting in an approximately $281,000 tax loss to the United States.
United States Attorney Christina E. Nolan commended the investigative efforts of the Internal Revenue Service’s Criminal Investigation Division.
The United States is represented in this matter by Assistant U.S. Attorney Spencer Willig. Jerome F. O’Neill of Gravel & Shea PC represents Parker.
Gang Member Sentenced to More Than 7 Years in Prison for Gun and Drug OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JASON FIGUEROA, also known as “Hood” and “Hoodie,” 31, of Hartford, was sentenced today by U.S. District Judge Kari A. Dooley to 87 months of imprisonment, followed by three years of supervised release, for crack cocaine distribution and firearm possession offenses.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI’s Northern Connecticut Gang Task Force and Hartford Police Department into the trafficking of narcotics and associated violence in Hartford’s South End by members and associates of the Almighty Latin Kings Nation (“Latin Kings”). In December 2019, investigators learned that Figueroa, a member of the Latin Kings, was distributing crack cocaine, and that he possessed several firearms at his Franklin Avenue residence. Between December 2019 and March 2020, law enforcement made six controlled purchases of crack from Figueroa.
On March 23, 2020, Figueroa was the victim of shooting on Bond Street and suffered gunshot injuries to his face. On April 8, 2020, while Figueroa was hospitalized, investigators conducted a court-authorized search of his residence and seized eight firearms, numerous rounds of ammunition, and assorted gun paraphernalia. The firearms included a handgun capable of discharging shotgun shells, and a “ghost” gun with a laser sight. Four of the firearms recovered from the residence were reported stolen.
Figueroa was arrested on April 23, 2020. While incarcerated, Figueroa was recorded on a prison call discussing retaliation for the shooting on March 23.
Figueroa’s criminal history includes two state felony firearm convictions.
Figueroa has been detained since his arrest. On November 23, 2020, he pleaded guilty to one count of possession with intent to distribute, and distribution of, cocaine base (“crack”), and one count of possession of a firearm by a convicted felon.
The FBI’s Northern Connecticut Gang Task Force includes members of the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division provided valuable assistance to the investigation.
This case was prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Former Tacoma resident sentenced to 15 years in prison for production of images of child molestationRead the Press Release
Tacoma - A former Tacoma resident, who was residing in South Bend, Indiana, at the time of his arrest, was sentenced today in U.S. District Court in Tacoma to 15 years in federal prison for production of child pornography, announced U.S. Attorney Brian T. Moran. SAMUEL PHILLIPS, 27, must register as a sex offender upon release from prison and will be supervised by federal probation for 25 years. At the sentencing hearing, U.S. District Judge Benjamin Settle said, “This involves the abuse of those who are the most vulnerable – young children…. A young child has been given a life sentence of this trauma.”
PHILLIPS pleaded guilty in September 2020. In March 2018, PHILLIPS was residing in a Tacoma apartment with a 5-year-old child, when he made video recordings of the sexual abuse. PHILLIPS relocated to Indiana in early 2019. His spouse discovered the videos on his phone. PHILLIPS was arrested by South Bend Police, who alerted the Tacoma Police Department. PHILLIPS was charged federally with production of child pornography on April 30, 2019. Charges in state court for sexual abuse of the child are pending.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by the Tacoma Police Department and FBI, with assistance from the South Bend, Indiana, Police Department.
The case was prosecuted by Assistant United States Attorneys Angelica Williams and Matt Hampton.
Former Subcontractor Sentenced for Obstruction of JusticeRead the Press Release
A former subcontractor for the U.S. Marines Corps was sentenced today to 18 months in prison for destroying records in connection with a federal investigation of bribery and procurement fraud at Marine Corps Base Camp Lejeune (MCBCL), located in Jacksonville, North Carolina, announced Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division.
The former subcontractor, William Thompson, 56, of Sneads Ferry, North Carolina, previously pleaded guilty to one count of obstruction of justice. According to documents filed with the Court, Thompson owned and operated C&D Painting and Construction, a construction company with its principal place of business in Sneads Ferry. Public Official 1 was a civilian employee of the U.S. Marine Corps who directed the procurement of information technology services and equipment to be used by the Marine Corps at MCBCL and elsewhere.
In March 2018, agents of the Naval Criminal Investigative Service (NCIS), FBI, and IRS-Criminal Investigation (IRS-CI) interviewed Thompson. During the interview, law enforcement agents informed Thompson that they were investigating an alleged bribery conspiracy concerning work that C&D Construction completed as a subcontractor at MCBCL, and about renovations that Thompson performed at Public Official 1’s residence. At the time of the interview, the investigation was covert and not known to all subjects, including Public Official 1.
On the same evening of the interview and the following morning, Thompson exchanged several text messages with Public Official 1 in which Thompson informed Public Official 1 that the FBI, NCIS, and IRS-CI were investigating Public Official 1’s involvement in contracting matters while Public Official 1 was employed by the Marine Corps. After informing Public Official 1 of the ongoing federal investigation, Thompson deleted the relevant text messages from his phone, despite knowing that the messages constituted evidence related to the federal investigation into bribery and procurement fraud at MCBCL.
This case was investigated by the FBI, Department of Defense Office of Inspector General, NCIS, Naval Audit Service, and IRS-CI.
Trial Attorney Erica O’Brien Waymack of the Criminal Division’s Public Integrity Section is prosecuting the case.
Former Leader of Latin Kings Department of Correction Chapter Pleads Guilty to Racketeering Conspiracy ChargesRead the Press Release
BOSTON – A former Leader of the Massachusetts Department of Correction Chapter of the Massachusetts Almighty Latin King and Queen Nation (“Latin Kings”) pleaded guilty today to racketeering charges.
Frutuoso Barros, a/k/a “King Fruity,” 40, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for June 2, 2021.
Barros admitted to his role in conspiring in February 2010 to murder two members of the Latin Kings active in the area of Lynn, Mass., who were believed to be “renegade” and not following directives issued by the gang’s national leadership in Chicago. In 2015, Barros was convicted in Essex County Superior Court for these crimes and sentenced to state prison. While he was substantively convicted in state court for those offenses, today Barros admitted that these crimes were committed in furtherance of the Latin Kings racketeering enterprise.
As detailed in court filings, the Latin Kings bring disputes and related gang violence into jails and prisons where members are incarcerated. Once in state prison, Barros’s membership in the Latin Kings continued and he took the position as Inca, or Leader, of the Latin Kings within the Massachusetts Department of Correction (MA DOC) system. In this role, Barros coordinated the operations of the Latin Kings inside MA DOC, including issuing directives of violence against individuals serving sentences and coordinating the violence that the gang committed inside of the MA DOC facilities. As part of his leadership role, Barros received information concerning the identities of those targeted for violence in the jails and prisons, locations of the targets and of incarcerated Latin Kings members, the standing of certain individuals with the gang and the status of disputes and alliances with other gangs both inside and outside of the prison system.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Barros is the 34th defendant to plead guilty in the case.
The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Joseph C. Cordeiro made the announcement today. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorneys Philip A. Mallard and Lauren Graber of Lelling’s Criminal Division are prosecuting the case.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Lackawanna County Prison Contract Employee Sentenced to One Year in Prison for Providing Drugs and Contraband to InmatesRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brenda Cruise, age 50, of Dunmore, Pennsylvania, a former contract employee with the Lackawanna County Prison, was sentenced today to one year in federal prison by U.S. District Court Judge Malachy E. Mannion, for participating in a conspiracy to provide prohibited objects, including illegal drugs, to inmates at the Lackawanna County Prison.
According to Acting United States Attorney Bruce D. Brandler, Cruise previously pled guilty to conspiracy to provide contraband to inmates in prison. Cruise admitted that during 2018, while working at the prison, she provided suboxone, marijuana, synthetic marijuana, and tobacco to inmates on several occasions and received payments totaling $1,100 for helping to smuggle the drugs and tobacco into the prison.
Judge Mannion also ordered Cruise to serve two years on supervised release following her prison sentence.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Florida Attorney Sentenced to 90 Months in Prison for Receiving Child PornographyRead the Press Release
TALLAHASSEE, FLORIDA – David Wayne Aring, formerly of Tallahassee, Florida, was sentenced yesterday afternoon to 90 months in federal prison after pleading guilty to receipt of child pornography. Aring, 49, was an attorney employed by the State of Florida’s Department of Business and Professional Regulation at the time of his arrest in January 2020. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the sentence, which was handed down on Tuesday following Aring’s guilty plea last November.
“Child pornography is an offense that violates all standards of decency and causes incalculable harm to its victims, shattering their innocence and potentially devastating their lives,” U.S. Attorney Keefe said. “Working with our law enforcement partners, we will continue to do everything in our power to stop and punish those who trade in it. Thanks to the skill and dedication of the professionals at Homeland Security Investigations and the Florida Department of Law Enforcement, that’s exactly what happened to David Aring.”
From his former Tallahassee apartment between March 26, 2017, and December 2, 2019, Aring used a peer-to-peer file sharing program to download digital images and videos depicting child pornography. Executing a search warrant at Aring’s apartment on January 7, 2020, investigators located a USB storage device hidden in the back of a sock drawer, as well as a desktop computer. Investigators determined that the USB device contained thousands of digital files that depicted various types of child pornography, including animal bestiality and bondage involving children under the age of 12 (most notably infants and toddlers). Aring’s desktop computer was forensically analyzed and was found to contain thousands of additional digitals images that depicted child pornography. Installed on the desktop computer was a peer-to-peer file sharing program that allowed its users to search for terms germane to child pornography, and the program was found to have been used to download over 17,000 files since May 6, 2018.
“We are appreciative of the diligent work of our agents and our partners in Homeland Security Investigations that led to the apprehension of this individual, and grateful for the prosecutorial action of the U.S. Attorney’s Office,” said Mark Perez, Special Agent in Charge of the FDLE Tallahassee Regional Operations Center. “Protecting the most vulnerable of our citizens will always be a priority of FDLE.”
Aring’s 90 month prison sentence will be followed by lifetime supervised release. He will also be required to register as a sex offender, and will be subject to all sex offender conditions.
This case was jointly investigated by the Florida Department of Law Enforcement and Homeland Security Investigations (HSI). Assistant United States Attorneys Justin M. Keen and Meredith Steer prosecuted the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office for the Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - U.S. v. AringFederal Judge Convicts Man of Conspiring to Steal Cash from Chicago ATMRead the Press Release
CHICAGO — A man has been found guilty in federal court of conspiring to steal cash from an automated-teller machine in Chicago during a period of civil unrest last spring.
On the evening of June 1, 2020, RICKIE FOY, 38, of Chicago, joined several others in attempting to break into a Bank of America ATM located in a grocery store parking lot at 620 W. 63rd St. in the city’s Englewood neighborhood. Over the course of approximately eight minutes, Foy and the others used various tools to try to gain access to the machine and steal cash, but they were unsuccessful. Chicago Police officers arrived at the scene and arrested Foy and two others after a foot chase.
U.S. District Judge Thomas M. Durkin on Tuesday found Foy guilty of conspiracy to commit bank theft. A one-day bench trial had been conducted last week entirely via videoconference.
The conviction is punishable by up to five years in federal prison. Judge Durkin set sentencing for May 11, 2021, at 10:00 a.m.
The guilty verdict was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and David Brown, Superintendent of the Chicago Police Department. The government is represented by Assistant U.S. Attorneys Ramon Villalpando and Matthew Madden.
Two other individuals were charged with participating in the conspiracy. They pleaded not guilty and are awaiting trial.
Dominican National Sentenced to 46 Months in Federal Prison for Role in Waterbury Drug RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that BRAYAN GONZALEZ, 26, a citizen of the Dominican Republic last residing in Waterbury, was sentenced today by U.S. District Judge Vanessa L. Bryant to 46 months of imprisonment for distributing heroin and fentanyl in and around Waterbury.
According to court documents and statements made in court, an investigation by the DEA New Haven Task Force and the Waterbury Police Department revealed that Nestor Sosa-Ortiz operated a Waterbury-based drug trafficking organization that received large quantities of heroin and fentanyl from suppliers in Connecticut and New York and distributed the narcotics throughout New Haven County. The organization used an apartment located at 330 Bishop Street in Waterbury to store kilogram-quantities of heroin and fentanyl, and to process and package the drugs for street sale.
On May 18, 2019, Sosa-Ortiz was arrested in New York City on a separate federal heroin and fentanyl trafficking charge. On that date, law enforcement intercepted a planned drug transaction and seized approximately two kilograms of fentanyl and two kilograms of heroin. Sosa-Ortiz continued to control his drug network while incarcerated by using smuggled cell phones to communicate with various co-conspirators.
During the investigation in Connecticut, Gonzalez was intercepted on calls coordinating the purchase and distribution of heroin and fentanyl. He sold the drugs to his own customers and other distributors in the greater Waterbury area.
Gonzalez and several co-defendants were arrested on October 29, 2019. On that date, investigators executed five search warrants and seized approximately six kilograms of suspected heroin/fentanyl, approximately 100,000 bags of suspected heroin/fentanyl packaged for street distribution, approximately 1,000 fentanyl pills disguised as Percocet pills, one firearm and approximately $50,000 in cash. A search of Gonzalez’s residence alone revealed approximately 117 grams of fentanyl, approximately 100 grams of heroin, numerous blue pills with “M/30” (oxycodone) markings, and items used to process and package narcotics, including a kilogram press.
Gonzalez has been detained since his arrest. On June 25, 2020, he pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, heroin and fentanyl.
Gonzalez faces immigration proceedings when he completes his prison term.
Sixteen individuals were charged as a result of this investigation. Sosa-Ortiz pleaded guilty and awaits sentencing.
This investigation has been conducted by the Drug Enforcement Administration New Haven Task Force and the Waterbury Police Department. The DEA New Haven Task Force includes participants from the U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia, Meriden, Derby, Middletown, Naugatuck and Waterbury Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Jocelyn Courtney Kaoutzanis and Lauren Clark 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.
Dominican National Sentenced for Illegal ReentryRead the Press Release
BOSTON – A Dominican national who previously resided in Lawrence was sentenced today in federal court in Boston for illegal reentry.
Melvin Villar, 56, was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to 30 months in prison and three years of supervised release. Villar will also be subject to deportation upon completion of his sentence. In September 2020, Villar pleaded guilty to one count of unlawful reentry of deported alien.
On July 23, 2019, Villar was encountered in Lawrence. Villar was previously deported on three separate occasions between 2004 and 2019. At some point after each deportation, he illegally reentered the United States. Villar was also previously convicted of illegal reentry.
United States Attorney Andrew E. Lelling; Todd M. Lyons, Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and Lawrence Police Chief Roy Vasque made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit prosecuted the case.
Convicted drug trafficker sentenced to nearly 25 years in federal prison in operation that sold large amounts of cocaine and marijuanaRead the Press Release
SAVANNAH, GA: One of the leaders of a conspiracy that imported large amounts of cocaine and marijuana into Georgia has been sentenced to nearly 25 years in federal prison.
Karteau Omar Jenkins, a/k/a “Yay,” 43, of Stone Mountain, Ga., was sentenced to 290 months in prison by U.S. District Court Judge R. Stan Baker, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. A jury in 2019 convicted Jenkins for Conspiracy to Possess with Intent to Distribute and to Distribute 500 Grams or More of Cocaine and 50 Kilograms or More of Marijuana, and Possession with Intent to Distribute 500 Grams or More of Cocaine.
After completion of his prison term, Jenkins will be required to serve five years of supervised release. There is no parole in the federal system.
“From investigation, to trial, to conviction, our law enforcement partners worked tirelessly to produce a case that provided our prosecutors with the essential tools and evidence to put Jenkins and his co-conspirators behind bars,” said Acting U.S. Attorney Estes. “This relentless pursuit in Operation Five Hole makes the community safer by removing these importers of poison from our community.”
Eugene Markeith Allen, a/k/a “Poncho,” 43, a former Savannah resident convicted of leading the drug trafficking conspiracy, awaits sentencing after a jury also convicted him in 2019 of Conspiracy to Possess with Intent to Distribute and to Distribute 500 Grams or More of Cocaine and 50 Kilograms or More of Marijuana.
Allen, a leader in the Gangster Disciples criminal street gang, was serving a life sentence at Autry State Prison for a 2006 murder conviction when he used smuggled contraband phones to direct Jenkins and other members of the extensive drug trafficking conspiracy that imported marijuana and cocaine from California into Atlanta and throughout the Savannah area.
Jenkins and Allen were among 20 defendants indicted in August 2017 in Operation Five Hole, a multi-agency investigation targeting the drug trafficking organization that hid cash proceeds from drug sales in cotton candy machines for shipment by U.S. Mail and in vehicles with hidden compartments. The operation netted the seizure of pounds of marijuana and kilos of cocaine, along with nearly $400,000 in cash and multiple firearms.
Of the other 18 defendants indicted in the conspiracy, 16 have pled guilty and have been sentenced or await sentencing, with cases dismissed against two defendants. Twelve other defendants pled guilty to federal charges related to the operation and have been sentenced.
“Not only did this extensive investigation and prosecution shut down major cocaine distributors across the state of Georgia, but it now has put one of the conspiracy leaders behind bars for a substantial amount of time,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This successful sentence could not have been achieved without the hard work and cooperation of our federal, state and local law enforcement partners, a part of the Southeast Georgia Violent Crimes Task Force.”
“Using the collective resources of local, state, and federal agencies is critical to targeting criminal organizations trafficking drugs across the country and into our community. The multi-agency cooperation throughout the investigation and prosecution of this case was essential to its success,” Director Michael G. Sarhatt of the Chatham-Savannah Counter Narcotics Team said. “CNT is proud to be a part of this joint operation which shows the strength of the law enforcement partnerships in the Chatham County area.”
The case was investigated as an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. The investigation was conducted by the FBI, the Chatham County Narcotics Unit (CNT), the Savannah Police Department, the Chatham and Effingham County Sheriffs’ Offices, the U.S. Postal Inspection Service and the U.S. Marshals Service.
The cases were prosecuted for the United States by Assistant U.S. Attorneys Noah Abrams and Frank Pennington, with assistance from Litigation Technologist Dean Athanasopoulos.
Convicted Felon Sentenced to 8+ Years in Prison for Possessing A Stolen FirearmRead the Press Release
MACON, Ga. – A convicted felon with a lengthy criminal history was sentenced to federal prison today for possessing a stolen firearm, said Peter D. Leary, the Acting U.S. Attorney for the Middle District of Georgia.
Gary Michael Buck, 39, of Ellaville, Georgia, was sentenced to serve 102 months in prison by U.S. District Judge Tilman “Tripp” Self, to be followed by three years of supervised release. Buck previously pleaded guilty to one count of possession of a stolen firearm. There is no parole in the federal system.
“It is both illegal and dangerous to possess a stolen firearm,” said Acting U.S. Attorney Leary. “This office will continue to work hard to take stolen guns off the streets and out of the hands of convicted felons. I want to thank the Perry Police Department, ATF and FBI for their work in this investigation.”
“I think this sentence makes it very clear that criminals who repeatedly break the law and continue to possess illegal firearms, will be held accountable with lengthy prison terms,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Our partnerships with federal, state and local law enforcement agencies make these arrests possible, ultimately making our communities safer.”
On May 1, 2019, a Perry Police Department officer attempted to pull Buck over for a traffic violation on I-75, eventually stopping the vehicle on the exit 135 bridge. Smelling a strong odor of marijuana coming from Buck’s car, the officer called for backup and a legal search of the vehicle was conducted. Inside Buck’s car, officers found a marijuana “blunt” in the backseat and a Hi-Point 9mm pistol on the floorboard. Buck admitted multiple times, both in recorded calls from jail and to an FBI agent, that he knew the gun was stolen. Buck has a lengthy criminal history and was most recently convicted in Sumter County (Georgia) Superior Court in February 2017 of felony burglary and possession of a firearm by a convicted felon.
The investigation was conducted as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/archives/projectguardian.
The case was investigated by the Perry Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and FBI. Assistant U.S. Attorney Steven Ouzts prosecuted the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, U.S. Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Officer (Contractor), U.S. Attorney’s Office, at (478) 765-2362.
Convicted Felon on Supervised Release Is Sentenced to 9 1/2 for Armed RobberyRead the Press Release
CHARLOTTE, N.C. – Yakotus Odum, 31, of Gastonia, North Carolina, was sentenced late yesterday to 114 months in prison and five years of supervised release in connection with the 2018 armed robbery of a convenience store, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn Jr. presided over the hearing.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Travis Brittain of the Gastonia Police Department are joining U.S. Attorney Murray in making today’s announcement.
On September 25, 2020, a federal jury convicted Odum of Hobbs Act robbery, possession of a firearm in furtherance of a crime of violence, and possession of a firearm by a convicted felon. According to court documents, evidence presented at Odum’s trial, and court hearings, on March 31, 2018, Odum robbed a Circle K convenience store located at 516 Cox Road in Gastonia. Trial evidence established that Odum stole approximately $100 from the cash register at gunpoint. On April 14, 2018, in a second incident, Odum illegally possessed a stolen firearm. Odum was on supervised release for a previous federal felony conviction for illegal firearm possession when he committed the armed robbery.
Odum is currently in federal custody and upon designation of a federal facility he will be transferred into custody of the Federal Bureau of Prisons.
The investigation was handled by the FBI and the Gastonia Police Department. The prosecution for the government was handled by Assistant U.S. Attorney David Kelly and Special Assistant U.S. Attorney (SAUSA) Stephanie Spaugh. Ms. Spaugh is a state prosecutor with the office of the 26th Prosecutorial District and was assigned by District Attorney Spencer Merriweather to serve as a SAUSA with the U.S. Attorney’s Office in Charlotte. Ms. Spaugh is duly sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 26th Prosecutorial District and the United States Attorney’s Office.
Concrete Contractor Agrees to Settle False Claims Act Allegations for $3.9 MillionRead the Press Release
COLAS Djibouti SARL (Colas Djibouti) has agreed to resolve for $3.9 million civil allegations that it violated the False Claims Act by selling substandard concrete used to construct U.S. Navy airfields in the Republic of Djibouti, the Department of Justice announced today. Colas Djibouti, a French limited liability company, is a wholly owned subsidiary of Colas SA, a French civil engineering company.
The civil settlement announced today resolves allegations that Colas Djibouti knowingly provided contractually non-compliant concrete that did not meet gradation requirements, contained excessive alkali-silica reactive material, and contained elevated chloride content. These conditions had the potential to promote early-age cracking, surface defects, and the corrosion of embedded steel, and thus, could significantly impair the long-term durability of the concrete utilized on U.S. military bases.
In addition to the civil settlement, U.S. Attorney Robert S. Brewer for the Southern District of California announced a separate Deferred Prosecution Agreement (DPA) with Colas Djibouti pursuant to which Colas Djibouti will admit to the underlying facts and accept responsibility to a one-count information for conspiracy to commit wire fraud and pay a $12,542,002 monetary penalty, comprised of a fine, forfeiture, and restitution. The civil settlement will credit $1,957,998 of Colas Djibouti’s payment under the DPA, and require an additional payment of $1,957,998.
“Government contractors that supply substandard materials to our armed forces not only cheat the American taxpayers but also impose added costs and burdens on the military,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to ensure that those who do business with the government comply with their contractual obligations.”
“Wherever our Navy goes, we go,” said Robert S. Brewer, U.S. Attorney for the Southern District of California. “We will continue to unwaveringly protect our American warfighters from fraud, graft and corruption as they protect us from enemies foreign and domestic.”
“Our Sailors and Marines depend upon high quality products and services from our Department of the Navy contractors in order to meet the department’s world-wide mission,” said acting Secretary of the Navy Thomas W. Harker. “This outcome demonstrates that the Department of the Navy will continue to insist that our contractors must meet our high standards. This global settlement demonstrates the strong cooperation between the Department of the Navy and the Department of Justice in preventing fraud, no matter where in the world it happens.”
“Aircraft taxiways are essential to military operations, and therefore require concrete that conforms to the high standards and specifications of the Department of Defense” said Stanley A. Newell, Special Agent in Charge for the DCIS Transnational Operations Field Office. “The DCIS along with our investigative partners will vigorously root out conduct like this that threatens U.S. military readiness and harms the integrity of the DoD procurement system.”
"Protecting Navy interests is a top priority of the Naval Criminal Investigative Service. Anyone considering defrauding the Navy and U.S. taxpayers should know NCIS will aggressively pursue all such allegations, in concert with our law enforcement partners and the Department of Justice," said Todd Battaglia, Special Agent in Charge of the NCIS Europe and Africs Field Office.
This civil settlement was the result of a coordinated effort among the Civil Division's Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the Southern District of California, the DCIS, the NCIS, and the Defense Contract Audit Agency - Operations Investigative Support Division.
Except as admitted in the DPA, the claims resolved by the civil settlement are allegations only and there has been no determination of liability.
Chicago Man Sentenced to 20 Years for Producing Child PornographyRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Gerardo Junior Torres, 24, of Chicago, Illinois, was sentenced today by U.S. District Judge William M. Conley to 20 years in prison for producing child pornography. This term of imprisonment will be followed by 30 years of supervised release. Torres pleaded guilty to this charge on November 5, 2020.
On April 4, 2020, a citizen in Taylor County Wisconsin reported that a 15-year-old family member had been sexually assaulted by Torres. Numerous electronic items belonging to Torres were turned over to law enforcement at that time. Officers obtained and executed a search warrant for the defendant’s electronic devices where they found numerous images and videos of the defendant sexually assaulting both the citizen’s family member and another 7-year-old child.
Judge Conley stated that the lengthy sentence was warranted due to the defendant’s manipulation of the two victims and the severity of the repeated assaults on them. Additionally, Judge Conley expressed concern that the defendant did not grasp the seriousness of his behavior or the damage he caused the victims. Judge Conley expressed hope that now knowing the pain he caused would be motivation for the defendant to never engage in his “dark and ugly” acts again.
The charge against Torres was the result of an investigation conducted by the Taylor County Sheriff’s Office, Ladysmith Police Department, and the Wisconsin Department of Justice Division of Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Elizabeth Altman.
Chicago Man Sentenced to Nine Months’ Imprisonment for Passing Counterfeit Currency at Harrisburg Area StoresRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Anthony Derrell Manuel, age 32, of Chicago, Illinois, was sentenced on February 16, 2021, to 9 months’ imprisonment followed by one year of supervised release by United States District Court Judge Christopher C. Conner, for passing $1,700 in counterfeit United States currency.
According to Acting United States Attorney Bruce D. Brandler, Manuel previously pled guilty to passing and attempting to pass counterfeit currency and aiding and abetting the commission of this offense with three co-defendants. The offenses occurred at retail stores in Dauphin and Cumberland Counties on September 4, 2019. As part of his sentence, Manuel was ordered to pay restitution in the amount of $1,700.
The case was investigated by the United States Secret Service and the Lower Paxton Township Police Department. Assistant U.S. Attorney Christian T. Haugsby prosecuted the case.
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Carjacking in Orland Park Leads to Federal ChargeRead the Press Release
CHICAGO — A Chicago man has been arrested and charged in federal court with carjacking after he allegedly took a vehicle from a victim in Orland Park and fired a shot at a police officer who was pursuing him.
DAVID JOHNSON, 23, of Chicago, is charged with one count of carjacking in connection with the Friday evening incident. Johnson made an initial court appearance Tuesday before U.S. Magistrate Judge Jeffrey T. Gilbert and was ordered to remain detained in federal custody. A preliminary hearing was set for Feb. 26, 2021, at 11:30 a.m.
The complaint and arrest were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen DeTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; Jason Reid, Chief of the Oak Forest Police Department; David Brown, Superintendent of the Chicago Police Department; and Joseph Mitchell, Chief of the Orland Park Police Department. The government is represented by Assistant U.S. Attorneys Sheri Wong and Scott Edenfield.
According to a criminal complaint filed in U.S. District Court in Chicago, the victim on Friday evening was sitting in his car parked on the street outside of his home in Orland Park when Johnson approached, pointed a gun at the victim’s head, and demanded the key. Johnson stole the vehicle and drove it to Chicago, where he crashed into another car in the city’s Morgan Park neighborhood, the complaint states. Johnson then fled on foot and fired a shot at an Oak Forest Police officer who was pursuing him, the complaint states. Chicago Police officers arrested Johnson a short time later.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The carjacking charge is punishable by a maximum sentence of 15 years in federal prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Career Criminal Sentenced to 8 Years in Prison for Credit Card Fraud and Identity Theft OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that STEVEN A. FINKLER, also known as Andrew Finkler, 56, last residing in New Haven, was sentenced today by U.S. District Judge Stefan R. Underhill to 96 months of imprisonment, followed by three years of supervised release, for credit card fraud and identity theft offenses.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, in August 2017, Finkler stole credit cards from two of his employer’s customers and used the cards to make more than 40 fraudulent charges in Connecticut and New York. The charges included Finkler’s purchase of jewelry for his girlfriend, Apple products and electronic devices, and other high-end consumer and retail goods for either himself or his friends. The total loss to the victims was $20,867.73.
In September 2018, Finkler, using another individual’s identity, opened a membership at a fitness center with gym locations throughout Connecticut. Finkler also used the same stolen identity to create accounts with mobile device payment applications. Between September 2018 and May 2019, Finkler visited multiple gym locations and stole credit cards from lockers and other locations while the victims were located elsewhere in the gym. Using the stolen credit cards, and the mobile device payment applications, he made approximately $144,000 in fictitious charges to bank accounts that he created and controlled. He then returned the credit cards to the victims’ wallets before the victims returned to the locker room. Approximately 50 individuals were victimized through this scheme.
Judge Underhill ordered Finkler to pay restitution of $145,657.06.
Finkler has been detained since his arrest on August 15, 2019. On January 15, 2020, he pleaded guilty to one count of access device fraud (credit card fraud), one count of wire fraud, and two counts of aggravated identity theft.
Finkler has a criminal history that spans nearly 40 years and includes numerous convictions, including five prior federal convictions stemming from various fraud schemes.
This matter was investigated by the U.S. Secret Service, Connecticut Financial Crimes Task Force, and the Wallingford, Avon, North Haven, Madison, Glastonbury and Branford Police Departments. The case was prosecuted by Assistant U.S. Attorneys Sarala Nagala and Margaret Donovan.
Assistant Attorney General John C. Demers Delivers Remarks on the National Security Cyber Investigation into North Korean OperativesRead the Press Release
Today, the Justice Department is announcing charges following a significant national security cyber investigation first disclosed publicly more than two years ago.
As laid out in today’s indictment, North Korea’s operatives, using keyboards rather than guns, stealing digital wallets of cryptocurrency instead of sacks of cash, are the world’s leading bank robbers. The Department will continue to confront malicious nation state cyber activity with our unique tools and work with our fellow agencies and the family of norms abiding nations to do the same. We were together back in September 2018, when the U.S. Attorney’s Office for the Central District of California, with the assistance of the National Security Division, charged a North Korean programmer, who was working for the government of the Democratic People’s Republic of Korea (DPRK), with conspiring to conduct some of the most damaging cyberattacks ever, including the:
- November 2014 destructive attack and hack-and-dump targeting Sony Pictures Entertainment over a comedy film they did not like;
- February 2016 cyber-enabled heist of $81 million from the Bank of Bangladesh and other heists; and
- May 2017 global Wannacry 2.0 attack.
The events as described in that complaint provided the first indications that the North Korean regime would become focused on, and adept at, stealing money from institutions around the world.
Today, the Department unseals an indictment, returned by a grand jury in the Central District of California, charging the same DPRK programmer, as well as two newly-identified DPRK conspirators, with a campaign of cyber heists and extortion schemes, targeting both traditional and cryptocurrencies. The indictment adds to the list of victims since 2018, including continued cyber-enabled heists from banks on four continents targeting over $1.2 billion. It also describes in stark detail how the DPRK cyber threat has followed the money and turned its revenue generation sights on the most cutting edge aspects of international finance, including through the theft of cryptocurrency from exchanges and other financial institutions, in some cases through the creation and deployment of cryptocurrency applications with hidden backdoors. The indictment refines the attribution of this crime spree to the DPRK military intelligence services, specifically the Reconnaissance General Bureau (RGB). Simply put, the regime has become a criminal syndicate with a flag, which harnesses its state resources to steal hundreds of millions of dollars.
In a moment, you will hear more details about the charges and evidence in this case from the Acting United States Attorney for the Central District of California, the FBI, and the United States Secret Service. But, I want to take a moment to highlight the significance of these charges for the Department, the United States, and the international community: As the description of victim entities in the indictment shows, the DPRK’s malicious activities are a global problem, requiring global awareness, condemnation, and cooperative disruption. With this indictment and related disruptions, the United States continues to do its part.
First, we continue to shine a light on the global campaign of criminality being waged by the DPRK. Nation-state indictments like this are an important step in identifying the problem, calling it out in a legally rigorous format, and building international consensus.
Second, in addition to educating the U.S. public and international community about this activity, we are also targeting the networks through which the DPRK is cashing-out its ill-gotten gains. As will be described in more detail by my colleagues, the Department has obtained custody over a dual-U.S./Canadian national who organized the laundering of millions of dollars stolen by the DPRK hackers. He has admitted his role in these criminal schemes in a plea agreement, and he will be held to account for his conduct. This prosecution demonstrates the commitment of the Department to ensuring that those who conspire with the DPRK hackers will face justice. The Department was also able to seize and expects to ultimately return almost $2 million stolen by the DPRK hackers from a New York-based financial services company. This follows on similar seizure actions announced in March and August 2020, in which with the U.S. Attorney’s Office for the District of Columbia seized and froze approximately $8.5 million of cryptocurrency. These cryptocurrency seizures and prosecution of a high-level money launderer collectively represent important steps in disrupting the DPRK hackers and their money laundering networks, and illustrate the Department’s commitment to repatriating stolen funds before they reach the DPRK.
Third, the United States is empowering network defenders. As you will hear about, the prosecutors and investigators have — throughout this investigation — worked closely with victims and intended victims of the DPRK hackers, and have provided these victims with information about avoiding and remediating infections. This work continues today. Accompanying this announcement, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, with the assistance of the Department of the Treasury, are releasing a Joint Cybersecurity Advisory and Malware Analysis Report regarding the DPRK’s malicious cryptocurrency applications. The criminal investigation leading to today’s indictment obtained that information for distribution to network defenders. Further, the context provided in today’s indictment underscores the necessity of paying attention to this Advisory and its recommendation.
Fourth, the allegations in today’s indictment inform and empower the international community so that they can not only join us in condemning this activity, but also help stop it. In that regard, the European Union’s (EU) July 2020 sanctions related to the Lazarus group was a welcome development. We commend the EU for its initial efforts to impose consequences for state-sponsored malicious cyber activities. However, other nations that wish to be regarded as responsible actors on the international stage must also step up. These conspirators described in today’s indictment are alleged to have been working, at times, from locations in China and Russia. The DPRK has also utilized Chinese over-the-counter cryptocurrency traders and other criminal networks to launder the funds. Just as the United States has disrupted the DPRK’s crime spree through arrests, forfeitures, and seizures, the time is ripe for Russia and China, as well as any other country whose entities or nationals play a role in the DPRK revenue-generation efforts, to take action.
The Department’s criminal charges are uniquely credible forms of attribution — we can prove these allegations beyond a reasonable doubt using only unclassified, admissible evidence. And they are the only way in which the Department speaks. If the choice here is between remaining silent while we at the Department watch nations engage in malicious, norms-violating cyber activity, or charges these cases, the choice is obvious — we will charge them.
Before I turn this over, I’d like to thank the agents at the FBI in Los Angeles, Charlotte, and Raleigh; the Secret Service in Savannah, Los Angeles, and D.C.; and the prosecutors in Los Angeles and at the National Security Division in D.C. for stepping up to the plate to play their part.
3 North Korean Military Hackers Indicted in Wide-Ranging Scheme to Commit Cyber-attacks and Financial Crimes Across the GlobeRead the Press Release
INDICTMENTLOS ANGELES – A federal indictment unsealed today charges three North Korean computer programmers with participating in a wide-ranging criminal conspiracy to conduct a series of destructive cyber-attacks, to steal and extort more than $1.3 billion of money and cryptocurrency from financial institutions and companies, to create and deploy multiple malicious cryptocurrency applications, and to develop and fraudulently market a blockchain platform.
A second case unsealed today revealed that a Canadian-American citizen has agreed to plead guilty in a money laundering scheme and admitted being a high-level money launderer for multiple criminal schemes, including ATM “cash-out” operations and a cyber-enabled bank heist orchestrated by North Korean hackers.
“The scope of the criminal conduct by the North Korean hackers was extensive and long-running, and the range of crimes they have committed is staggering,” said Acting U.S. Attorney Tracy L. Wilkison. “The conduct detailed in the indictment are the acts of a criminal nation-state that has stopped at nothing to extract revenge and obtain money to prop up its regime.”
“As laid out in today’s indictment, North Korea’s operatives, using keyboards rather than masks and guns, are the world’s leading 21st century nation-state bank robbers,” said Assistant Attorney General John Demers of the Justice Department’s National Security Division. “The department will continue to confront malicious nation state cyber activity with our unique tools and work with our fellow agencies and the family of norms abiding nations to do the same.”
The hacking indictment filed in United States District Court in Los Angeles alleges that Jon Chang Hyok (전창혁), 31; Kim Il (김일), 27; and Park Jin Hyok (박진혁), 36, were members of units of the Reconnaissance General Bureau (RGB), a military intelligence agency of the Democratic People’s Republic of Korea (DPRK), which engaged in criminal hacking. These North Korean military hacking units are known by multiple names in the cybersecurity community, including Lazarus Group and Advanced Persistent Threat 38 (APT38). Park was previously charged in a criminal complaint unsealed in September 2018.
The indictment describes a broad array of criminal cyber activities undertaken by the conspiracy, in the United States and abroad, conducted for revenge or financial gain. The schemes alleged include:
- Targeting of and Cyber-attacks on the Entertainment Industry: The destructive cyber-attack on Sony Pictures Entertainment in November 2014 in retaliation for “The Interview,” a movie that depicted a fictional assassination of the DPRK’s leader; the December 2014 targeting of AMC Theatres, which was scheduled to show the film; and a 2015 intrusion of Mammoth Screen, which was producing a fictional series involving a British nuclear scientist taken prisoner in DPRK.
- Cyber-Enabled Heists from Banks: Attempts from 2015 through 2019 to steal more than $1.2 billion from banks in Vietnam, Bangladesh, Taiwan, Mexico, Malta and Africa by hacking the banks’ computer networks and sending fraudulent Society for Worldwide Interbank Financial Telecommunication (SWIFT) messages.
- ATM Cash-Out Thefts: Thefts through ATM cash-out schemes – referred to by the United States Government as “FASTCash” – including the October 2018 theft of $6.1 million from BankIslami Pakistan Limited (BankIslami).
- Ransomware and Cyber-Enabled Extortion: Creation of the destructive WannaCry 2.0 ransomware in May 2017, and the extortion and attempted extortion of victim companies from 2017 through 2020 involving the theft of sensitive data and deployment of other ransomware.
- Creation and Deployment of Malicious Cryptocurrency Applications: Development of multiple malicious cryptocurrency applications from March 2018 through at least September 2020 – including Celas Trade Pro, WorldBit-Bot, iCryptoFx, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale – which would provide the North Korean hackers a backdoor into the victims’ computers.
- Targeting of Cryptocurrency Companies and Theft of Cryptocurrency: Targeting of hundreds of cryptocurrency companies and the theft of tens of millions of dollars’ worth of cryptocurrency, including $75 million from a Slovenian cryptocurrency company in December 2017; $24.9 million from an Indonesian cryptocurrency company in September 2018; and $11.8 million from a financial services company in New York in August 2020 in which the hackers used the malicious CryptoNeuro Trader application as a backdoor.
- Spear-Phishing Campaigns: Multiple spear-phishing campaigns from March 2016 through February 2020 that targeted employees of United States cleared defense contractors, energy companies, aerospace companies, technology companies, the United States Department of State, and the United States Department of Defense.
- Marine Chain Token and Initial Coin Offering: Development and marketing in 2017 and 2018 of the Marine Chain Token to enable investors to purchase fractional ownership interests in marine shipping vessels, supported by a blockchain, which would allow the DPRK to secretly obtain funds from investors, control interests in marine shipping vessels, and evade U.S. sanctions.
According to the allegations contained in the hacking indictment, which was filed on December 8, 2020, in United States District Court in Los Angeles and unsealed today, the three defendants were members of units of the RGB who were at times stationed by the North Korean government in other countries, including China and Russia. While these defendants were part of RGB units that have been referred to by cybersecurity researchers as Lazarus Group and APT38, the indictment alleges that these groups engaged in a single conspiracy to cause damage, steal data and money, and otherwise further the strategic and financial interests of the DPRK government and its leader, Kim Jong Un.
“Today's unsealed indictment expands upon the FBI’s 2018 charges for the unprecedented cyber-attacks conducted by the North Korean regime,” said FBI Deputy Director Paul Abbate. “The ongoing targeting, compromise, and cyber-enabled theft by North Korea from global victims was met with the outstanding, persistent investigative efforts of the FBI in close collaboration with U.S. and foreign partners. By arresting facilitators, seizing funds, and charging those responsible for the hacking conspiracy, the FBI continues to impose risks and consequences on North Korea and hold them accountable for their criminal cyber activity.”
“This global investigation showcases the remarkable dedication necessary to disrupt a sophisticated and far-reaching state-sponsored network of cyber criminals,” said Jesse Baker, Special Agent in Charge of the Los Angeles Field Office for the Secret Service. “Thanks to the perseverance of highly trained law enforcement partners around the globe, a broad range of malicious and destructive cyber-attacks was defeated and those responsible for the intrusions will be brought to justice.”
Money Launderer Charged in California and Georgia
Federal prosecutors in Los Angeles also unsealed a case today against Ghaleb Alaumary, 37, of Mississauga, Ontario, Canada for his role as a money launderer for the North Korean conspiracy, among other criminal schemes. Alaumary agreed to plead guilty to conspiracy to engage in money laundering, a charge contained in a criminal information filed in the United States District Court in Los Angeles on November 17, 2020. Alaumary was a prolific money launderer for hackers engaged in ATM cash-out schemes, cyber-enabled bank heists, business email compromise (BEC) schemes, and other online fraud schemes. Alaumary is also being prosecuted for his involvement in a separate BEC scheme by the United States Attorney’s Office for the Southern District of Georgia.
With respect to the North Korean coconspirators’ activities, Alaumary organized crews of coconspirators in the United States and Canada to launder millions of dollars obtained through ATM cash-out operations, including from BankIslami and a bank in India in 2018. Alaumary also conspired with Ramon Olorunwa Abbas, aka “Ray Hushpuppi,” and others to launder funds from a North Korean-perpetrated cyber-enabled heist from a Maltese bank in February 2019. Last summer, the U.S. Attorney’s Office in Los Angeles charged Abbas in a separate case alleging that he conspired to launder hundreds of millions of dollars from BEC frauds and other scams.
Accompanying Mitigation Efforts
Throughout the investigation, the FBI and the Justice Department provided specific information to victims about how they had been targeted or compromised, as well as information about the tactics, techniques, and procedures (TTPs) used by the hackers with the goals of remediating any intrusion and preventing future intrusions. That direct sharing of information took place in the United States and in foreign countries, often with the assistance of foreign law enforcement partners. The FBI also has collaborated with certain private cybersecurity companies by sharing and analyzing information about the intrusion TTPs used by the members of the conspiracy.
In addition to the criminal charges, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, in collaboration with the U.S. Department of Treasury, today released a joint cybersecurity advisory and malware analysis reports (MARs) regarding North Korean cryptocurrency malware. The joint cybersecurity analysis and MARs highlight the cyber threat North Korea – which is referred to by the U.S. government as HIDDEN COBRA – poses to cryptocurrency and identify malware and indicators of compromise related to the “AppleJeus” family of malware (the name given by the cybersecurity community to a family of North Korean malicious cryptocurrency applications that includes Celas Trade Pro, WorldBit-Bot, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale). The joint cybersecurity advisory and MARs collectively provide the cybersecurity community and public with information about identifying North Korean malicious cryptocurrency applications, avoiding intrusions, and remedying infections.
The U.S. Attorney’s Office and FBI also obtained seizure warrants authorizing the FBI to seize cryptocurrency stolen by the North Korean hackers from a victim in the indictment – a financial services company in New York – held at two cryptocurrency exchanges. The seizures include sums of multiple cryptocurrencies totaling approximately $1.9 million, which will ultimately be returned to the victim.
Jon, Kim and Park are charged with one count of conspiracy to commit computer fraud and abuse, which carries a statutory maximum sentence of five years in prison, and one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison.
In relation to the case filed in Los Angeles, Alaumary has agreed to plead guilty to one count of conspiracy to commit money laundering, which carries a statutory maximum sentence of 20 years in prison.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The investigation of Jon, Kim and Park was led by the FBI’s Los Angeles Field Office, which worked closely with the FBI’s Charlotte Field Office. The United States Secret Service’s Los Angeles Field Office and Global Investigative Operations Center provided substantial assistance. The FBI’s Cyber Division also provided substantial assistance.
The investigations of Alaumary were conducted by the United States Secret Service’s Savannah Field Office, FBI’s Los Angeles Field Office, and the United States Secret Service’s Los Angeles Field Office and Global Investigative Operations Center. The FBI’s Criminal Investigative Division also provided substantial assistance.
The case against Jon, Kim and Park is being prosecuted by Assistant United States Attorneys Anil J. Antony and Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section, with substantial assistance from DOJ Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section.
Assistant United States Attorneys Antony and Shobaki are also prosecuting the case against Alaumary, in which the U.S. Attorney’s Office for the Southern District of Georgia and the Criminal Division’s Computer Crimes and Intellectual Property Section (CCIPS) provided substantial assistance. Assistant United States Attorneys Antony and Shobaki, along with Assistant United States Attorney Jonathan Galatzan of the Asset Forfeiture Section, also obtained the seizure warrants for cryptocurrency stolen from the financial services company in New York.
The Criminal Division’s Office of International Affairs provided assistance throughout these investigations, as did many of the FBI’s legal attachés, as well as foreign authorities around the world. Numerous victims cooperated and provided valuable assistance.
16 February 2021
United States Attorney Jason Dunn Announces ResignationRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced today that he has submitted his resignation to President Biden, effective at midnight on February 28, 2021 (copy of letter attached). Beginning March 1, 2021, the office will be led by Acting United States Attorney Matthew Kirsch, who currently serves as the First Assistant United States Attorney.
Shortly after announcing his resignation, United States Attorney Dunn released the following statement to the citizens of Colorado:
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My fellow Coloradans,
Today, I honored the request of the Acting Attorney General of the United States and submitted to President Biden my resignation as United States Attorney for the District of Colorado, effective at midnight on February 28, 2021.
Serving as United States Attorney has been the greatest honor of my professional life. As I reflect on my time as United States Attorney, I’d like you to know some of what the truly outstanding attorneys and staff in our office were able to accomplish.
Public safety was always our number one priority. We took on violent crime and drugs with ferocity, focusing on gun crime, gang violence, and narcotic traffickers using new and innovative techniques. We built an award winning multi-agency task force – the Regional Anti-Violence Enforcement Network (RAVEN) -- which has brought significant actions addressing violent gun crime in the Denver Metro area. We also worked with our partners at the DEA to take down multiple drug rings, bringing Drug Kingpin charges, and we targeted those who brought deadly fentanyl and other hard drugs into Colorado. Our policy of holding dealers accountable with long prison sentences for any opioid overdose death let drug dealers know we meant business.
Colorado is a huge state, and while the work we do in Denver and Aurora rightfully gets much of the attention, I’m particularly proud of what we accomplished for those of you in smaller communities in Colorado. For example, we targeted violent gangs in Pueblo and a drug trafficking ring in Montrose, bringing more than a dozen people to justice and getting them out of those communities. Similarly, I prioritized our Southern Ute and Ute Mountain Ute Indian Tribes, hired two new prosecutors in our Durango office to work on tribal cases, hosted a four-state Indian country victim’s conference, and emphasized the prosecution of violent crime against tribal women.
We also confronted domestic terrorism head-on and addressed the scourge of white supremacy. We prevented the bombing of a synagogue in Pueblo, and stopped a potential serious hate crime when we charged a Boulder man with possession of child pornography and highlighted the fact that he possessed Nazi propaganda and “hunting guides” with instructions on where to find Jews and Muslims. And when peaceful protests in Denver turned violent this summer, we stood with our fellow law enforcement officers in enforcing the rule of law. Likewise, when violence hit our nation’s Capitol building on January 6, we did our part to ensure that Coloradans responsible for that violence were also held accountable. We defended the right to peacefully protest in both cases, but we aggressively applied the rule of law when political speech crossed into lawlessness and violence. And we did so without regard to any political or social cause underlying these crimes.
We also took on tough civil rights issues, prosecuting a police officer who sexually assaulted a vulnerable woman in his care, and made sure that justice was served for the victims of the deadly Planned Parenthood shooting in Colorado Springs by adding federal charges when the state process stalled. During difficult moments, I reached out to communities of faith rocked by violence at home and abroad, and helped them plan how to protect their houses of worship.
During all of this, our state and nation were in the grips of a horrific opioid epidemic. I focused our office’s efforts to attack the problem on all fronts. Along the way, we had to overcome resistance from some surprising places, but were ultimately able to bring one of the nation’s largest opioid lawsuits against the biggest corporation in America for its unlawful conduct in distributing these powerful prescription drugs. At the same time, I advocated against government sponsored injection sites that could lead our fellow Coloradans into a life of addiction, while prosecuting those who distributed illicit drugs resulting in death, or who stole drugs intended for patients.
We’ve also worked to keep companies and government officials honest, standing up for the millions of consumers whose data was sold to fraudsters, rooting out corruption in government contracting, filing a criminal charge against a judge who obstructed a federal investigation, and holding a former government official accountable. We even used a federal law for only the third time in U.S. history to charge a Gambian man with torturing people in his home country on behalf of that country’s president.
I am also very proud of the role we played with our federal and state law enforcement and election partners to ensure a secure 2020 election. Working with the FBI, Homeland Security, the Colorado Secretary of State’s office and others, we established an election security team that helped deliver the most secure election in Colorado’s history. I celebrated our state’s accomplishment by honoring these federal and state officials with the U.S. Attorney’s Award of Excellence in December. These individuals made sure that Coloradans were able to vote free of violence or intimidation, and that our election systems were free from intrusion or manipulation by domestic or foreign actors. At the end of the day, Coloradans could vote freely and be sure that their votes were counted accurately.
Finally, it is important to note that all of this success came at what was undoubtedly one of the most difficult times in the history of this office. Soon after I became U.S. Attorney, we faced the longest federal government shutdown in history, where our employees were either furloughed without pay or had to work for a month not knowing if they would get paid for their efforts. This was later followed by a global pandemic and economic crash that shut down our courts at the same time crime was surging, put employees at risk of contracting a deadly disease in order to keep the community safe, and forced all of us to do our jobs remotely. And yet our office never missed a beat, rose to the occasion, and ensured that justice was always served.
Even with all our successes, the best part of my time as U.S. Attorney has simply been working side-by-side with the dedicated public servants of this office. When I became U.S. Attorney, I set out three guiding principles: professionalism, legal excellence, and integrity. I am proud to say that not a day went by where I didn’t believe we were living up to the full potential of those ideals. The employees of this office are some of the finest public servants in America. They work long hours and fight every day to keep Colorado safe, to stand up for the rule of law, and to protect our nation’s interests. They operate with unwavering integrity and without political ideology or favor to any individual. I thank them for their service and friendship, and I hope they and all of you know that I tried to lead the office in the same way.
With warmest regards and justice always,
Jason R. Dunn
United States Attorney for the District of Colorado
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U.S. Attorney W. Stephen Muldrow Statement on Retirement of the Honorable Carmen Consuelo CerezoRead the Press Release
United States Attorney W. Stephen Muldrow issued the following statement on the retirement of U.S. District Court Judge Carmen Consuelo Cerezo:
“I remember with great fondness and respect having appeared before the Honorable Judge Cerezo over twenty years ago when I served as an Assistant U.S. Attorney. Now, as United States Attorney for the District of Puerto Rico and on behalf of this Office, I extend our heartfelt appreciation for Judge Cerezo’s commitment to justice and fairness, as well as her tireless years of dedicated public service in our Federal Court. For 40 years, Judge Cerezo distinguished herself as an exceptional and principled jurist, leader, and public servant. Her extraordinary contributions have left an enduring mark on the District Court and Puerto Rico will be forever grateful for her service.”
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U.S. Attorney Michael Bailey Announces ResignationRead the Press Release
PHOENIX, Ariz. – U.S. Attorney Michael Bailey announced his resignation as the chief federal law enforcement officer in Arizona, effective at 11:59 p.m. on February 28, 2021.
“It has been a true privilege to serve this great country and the people of Arizona as United States Attorney,” said U.S. Attorney Michael Bailey, “this office’s responsibilities, like Arizona itself, are vast and unique. I am proud of our efforts to keep the border secure, to fight violent crime on tribal lands, to safeguard our national security, to combat the international drug trade, and to protect every Arizonan from those who would defraud them.”
Under Bailey’s leadership, the District of Arizona redoubled its efforts to secure the border. Bailey supplemented the office’s border enforcement resources and expanded felony prosecutions of individuals who reenter the country illegally after deportation. Bailey was the first U.S. Attorney to publicly report the monthly numbers of criminal immigration prosecutions and the collective criminal history of those being prosecuted.
Bailey also worked closely with Arizona’s 22 federally recognized tribes to fight violent crime on tribal lands. To focus on solving the problem of missing and murdered indigenous persons cases confronting many of our Native American communities, Bailey hired a specialist to coordinate intergovernmental cooperation, with the goal of resolving the longstanding case backlog across the state.
On the national security front, Bailey’s office prosecuted a variety of threats to our national security, including a radiological threat to the Scottsdale Fashion Square mall, the illegal export of defense articles and other sensitive technology to China, and multiple cases of defendants offering support to ISIS or al-Qaeda.
To combat the increased risk of fraud during the coronavirus pandemic, Bailey appointed a COVID-19 Fraud Coordinator and joined with Arizona Attorney General Brnovich and the FBI to launch a federal, state, and local task force to combat coronavirus-related fraud. The office also continued its elder justice efforts, advocating on behalf of seniors who were defrauded by caregivers or scammers. Those efforts included the prosecution of foreign lottery schemes that victimized seniors across the country.
In addition to targeting international cartels with prosecutions for drug trafficking and money laundering, Bailey’s office confronted fentanyl overdoses by holding individual dealers accountable for overdose deaths resulting from their sale of drugs.
"U.S. Attorney Bailey has been an incredible partner in our mission to protect the American public," said Sean Kaul, Special Agent in Charge of the FBI Phoenix field office. "Throughout his time as U.S. Attorney, Mr. Bailey has been dedicated to ensuring the safety of the citizens in our community and relentless in his pursuit of justice for victims of crime. There is no doubt his work has made a positive impact on our community. It's been a privilege to work with U.S. Attorney Bailey and we thank him for his service."
“Throughout my years of working with Mike, not only as our federal chief prosecutor in Arizona, but as someone I relied on for counsel and guidance, he consistently demonstrated his commitment to HSI’s public safety and national security mission as he prioritized community safety and championed the rights of crime victims.” said Scott Brown, special agent in charge for HSI in Arizona. “It’s been an absolute pleasure to have worked alongside such an accomplished and well-respected United States Attorney.”
Bailey was nominated to serve as the United States Attorney for the District of Arizona on February 12, 2019, and was unanimously confirmed by the United States Senate on May 23, 2019. Before his appointment, Bailey served for four-and-a-half years as the Chief Deputy to Arizona Attorney General Mark Brnovich. Bailey thanks AG Brnovich, whose support and friendship made this appointment possible. Bailey also thanks United States Senators Flake and Kyl for expediting the appointment process, and Senators McSally and Sinema for their support of his nomination and/or confirmation.
“With truly impressive leaders at the helm of each of our federal law enforcement agency partners, and with a U.S. Attorney’s Office staff of 325 men and women who are fully committed to the rule of law and the pursuit of justice,” said United States Attorney Bailey, “I depart confident that my successor will hit the ground running. Arizona’s future is bright.”
RELEASE NUMBER: 2021-007_USA Bailey Resignation
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.U.S. Attorney Kenji M. Price ResignsRead the Press Release
HONOLULU, Hawaii – Today, U.S. Attorney for the District of Hawaii Kenji M. Price announced, “Last Friday, I sent a letter to the President offering my resignation, effective February 21, 2021. Serving as U.S. Attorney for the District of Hawaii—the chief federal law enforcement officer in the District—is a privilege that I will forever cherish. The career attorneys, professional staff, and contactors in my office do tremendous work day-in and day-out enforcing the law and defending the interests of the United States in civil litigation. Throughout the COVID-19 pandemic, they conducted (and continue to conduct) their affairs with the courage, character, and professionalism that exemplifies the finest traditions of the U.S. Department of Justice. I truly stand on the shoulders of giants, and look forward to hearing about the fantastic work that my office will continue to do in the months and years to come, working hand in glove with our state and local partners and the broader federal law enforcement community.”
U.S. Attorney Announces Intent to Resign and Highlights Office AccomplishmentsRead the Press Release
The Honorable Christina E. Nolan, U.S. Attorney for Vermont, announced she will tender her resignation, effective February 28, 2021. U.S. Attorney Nolan assumed the position on November 27, 2017, following the bipartisan recommendation of Senator Patrick Leahy and Governor Phil Scott; the President’s nomination; and unanimous confirmation by the U.S. Senate. U.S. Attorney Nolan stated: “I am deeply grateful to have had the opportunity for the last 11 years to work for Vermonters in the fight for justice with the talented and good people of the U.S. Attorney’s Office – its criminal and civil Assistant U.S. Attorneys, administrative staff, and support staff – and to have led this outstanding group since November 2017. Together, we secured justice, promoted public safety, and vindicated victims’ rights on behalf of Vermonters and the American people. It has been the honor and privilege of a lifetime to have been a part of this effort, and I am certain the U.S. Attorney’s Office will continue to accomplish impactful results in the years to come.”
U.S. Attorney Nolan’s tenure was marked by unity, teamwork, and mutual support within and across the Divisions of the Vermont USAO. From that foundation flowed strong partnerships with community stakeholders and federal, state, local, and county law enforcement; historic office growth and transformation; increased productivity; new programmatic initiatives; and pathbreaking criminal and civil casework. The USAO’s achievements of the last three years, a sampling of which are catalogued here, occurred against the strong headwinds of the longest government shutdown and the coronavirus pandemic.
Administrative
The USAO for Vermont, one of the smallest USAOs in the country, underwent unprecedented growth and restructuring, acquiring five new full-time employee positions: three for Assistant U.S. Attorneys and two for litigation support specialists. To compliment these additions, the USAO created two new supervisory positions: a Supervisory Paralegal with responsibility for supervising support staff personnel, and a Deputy Criminal Chief with responsibility for oversight of drug prosecutions.
Casework and Initiatives
The USAO implemented a variety of new programmatic initiatives and its productivity spiked, with 224 defendants charged in Fiscal Year (FY) 2019 – representing a 51% increase over FY 2018; the highest number of defendants charged in a FY since 2010; and the largest annual increase in the number of defendants charged since 2008 (the earliest year for which data is readily available). In FY 2020, despite drastically scaled back court and law enforcement operations due to the pandemic, the USAO charged nearly the same number of defendants as in FY 2018.
Drug Trafficking and Firearms
The USAO devoted at least half its prosecutorial resources to matters involving drug trafficking, firearms, and violence, and prioritized deployment of resources to all counties of Vermont which have been hard-hit by these crimes. In 2019, the USAO orchestrated three separate geographically-targeted coordinated “surges” of federal, state, and local law enforcement to conduct firearms and drug trafficking arrests. These operations occurred in Brattleboro and surrounding areas, the Northeast Kingdom, and Rutland and surrounding areas. The USAO also partnered with law enforcement for Operation “Fury Road,” an 18-month enforcement action along Interstate 91, spanning October 2018 to February 2020, and netting 82 federal arrests for federal firearms and drug trafficking crimes, the seizure of 128 unlawfully possessed firearms, 7,511 rounds of ammunition, and kilograms of heroin, fentanyl, and cocaine base. The USAO also prosecuted drug trafficking organizations of international significance, with ties to Canada, Mexico, and Peru, among other locations. The office also prosecuted, and assisted state and local prosecutors with, numerous shootings and homicide cases, some of them drug related.
Recognizing that Vermont’s drug addiction crisis demands a holistic response, focused on both supply and demand reduction, the USAO partnered with U.S. Attorney Nolan’s former defendant, Justin Goulet, to create the short documentary, Face of Recovery, which tells the story of Mr. Goulet’s addiction, federal prosecution for drug and firearms crimes, and remarkable recovery from addiction. U.S. Attorney Nolan and Mr. Goulet screened the film at schools and community venues to highlight the dangers of drug use and encourage addicted individuals to seek treatment.
The USAO launched an outreach program to state and local law enforcement concerning federal firearms crimes that can be charged against domestic violence offenders. In 2020, the USAO increased federal prosecutions of domestic violence offenders by 100% from the previous year.
Human Trafficking
The USAO convicted Brian Folks for human trafficking and related crimes involving his physical and sexual abuse of vulnerable, young women in Vermont, many of whom suffered traumatic upbringings. Folks – who had a prior manslaughter conviction and controlled his Vermont victims through violence and withholding drugs – was sentenced on September 21, 2020 to 22.5 years in prison.
In 2020, the USAO, which co-chairs the Vermont Human Trafficking Task Force (HTTF), was instrumental in establishing in central Vermont a recovery house and related programing for women recovering from violence and trauma, such as human trafficking. The USAO partnered with HTTF members, the nonprofit Jenna’s Promise, the recovery services community, and law enforcement to launch the program, which is the first of its kind in Vermont and unique in the country for its length of stay and continuum of support services.
Child ExploitationThe USAO allocated substantial resources to combatting child exploitation, focusing on contact and recidivist offenders. In May 2019, the USAO partnered with the federal and state law enforcement to conduct a sweep of arrests of nine child exploitation offenders residing across the state. In 2020, the USAO charged a first-of-its-kind case involving allegations that a Vermont man and Venezuelan woman committed a series of child sexual exploitation offenses, as well as conspiracy to commit kidnapping and murder abroad. The defendants are presumed innocent unless and until proven guilty.
Affirmative Civil Enforcement and White-Collar Crime
The USAO garnered national attention for its unprecedented civil and criminal enforcement actions against companies involved in fraudulently billing federal healthcare programs and corrupting the doctor-patient relationship through kickbacks. In February 2019, the USAO reached a $57.25 million civil settlement with an electronic health records company (EHR), Greenway Health, LLC, to resolve claims it obtained federal government incentive payments by deceiving the government concerning its software’s capabilities. In January 2020, another EHR, Practice Fusion, reached an agreement with the USAO to pay $145 million to resolve its criminal and civil liability for accepting kickbacks from Purdue Pharma L.P. and other pharmaceutical companies, in exchange for embedding alerts in its software to cause doctors to write medically unnecessary prescriptions for those pharmaceutical companies’ products. In October 2020, Purdue pled guilty to a federal felony, admitting it paid Practice Fusion a kickback in exchange for its installation of a prompt in its software intended to cause doctors to prescribe medically unnecessary prescriptions for Purdue’s oxycontin and other extended release opioid pills. Under its plea agreement with the USAO and other offices of the Justice Department, Purdue agreed to pay more than $8 billion to globally resolve its criminal and civil liability in the Practice Fusion matter and other cases under investigation by the federal government.
In May 2019, the USAO charged three individuals associated with the EB-5 visa program in the Northeast Kingdom, alleging the largest fraud in Vermont history. In August 2020, Ariel Quiros, pled guilty to three of the federal fraud offenses. The other two defendants are presumed innocent unless and until proven guilty.
Law Enforcement Relationships
Prior to the pandemic, U.S. Attorney Nolan traveled on a quarterly basis to meet with State’s Attorneys in their counties, resulting in strengthening of communication and partnership between federal and state prosecutors. In 2018, the USAO began hosting an annual Law Enforcement Awards Ceremony to honor the outstanding work of Vermont law enforcement officers, and an annual two-day International Law Enforcement Conference in Burlington for Canadian and Vermont law enforcement officers. The office also launched a quarterly Law Enforcement Newsletter distributed to partner agencies in Vermont and Canada.
Responsibilities in Washington, D.C. and Nationwide
U.S. Attorney Nolan brought the voice of Vermont to Washington as one of about a dozen U.S. Attorneys selected to sit on the Attorney General’s Advisory Committee (AGAC), which advised the Attorney General on all aspects of civil and criminal law enforcement policy. She devoted special attention to controlled substances and domestic violence, chairing the AGAC’s Controlled Substances Subcommittee (CSS) and sitting on its Domestic Violence Working Group. In April 2018, in her capacity as Chair of the CSS, U.S. Attorney Nolan testified before the U.S. Senate Judiciary Committee, urging Congress to adopt stronger penalties for those who deal fentanyl and fentanyl analogues, and asking that it pass legislation permanently outlawing fentanyl analogues. In 2020, U.S. Attorney Nolan was tapped to cochair a nationwide DOJ initiative to combat sexual harassment in housing.
Acting U.S. Attorney
Upon U.S. Attorney Nolan’s departure, her First Assistant U.S. Attorney Jonathan Ophardt will become Vermont’s Acting U.S. Attorney. Mr. Ophardt has served almost six years with the USAO as an Assistant U.S. Attorney and more than eight years with the Department of Justice. He will serve as Acting U.S. Attorney until a successor is appointed by the President and confirmed by the Senate.
U.S. Attorney Andrew Murray Announces DepartureRead the Press Release
CHARLOTTE, N.C. – Andrew Murray, United States Attorney for the Western District of North Carolina (WDNC), announced today that he will be stepping down as U.S. Attorney, effective midnight on Sunday, February 28, 2021. Upon Mr. Murray’s departure, First Assistant United States Attorney William (Bill) Stetzer will serve as Acting U.S. Attorney.
“It has been a privilege to serve the people of the Western District and I am grateful for the opportunity to have worked with such an extraordinary group of consummate, dedicated and experienced public servants. I am proud of our accomplishments and our collective hard work to protect communities across the district and to seek justice.”
U.S. Attorney Murray was appointed by President Trump and confirmed by the U.S. Senate in November 2017. Under U.S. Attorney Murray’s leadership, the Office has prosecuted cases involving gangs, violent crime, firearms, domestic and international drug trafficking, immigration, human trafficking, child exploitation, investment fraud, elder fraud, COVID-19 fraud, securities and banking fraud, tax fraud, healthcare fraud and cybercrime. The office has also successfully litigated numerous affirmative civil enforcement actions and has reached significant civil settlements involving False Claims Act and antitrust violations. The office’s civil litigation practice has also seen notable successes in civil forfeiture and the defense of federal employees and agencies sued in federal court. During his time as U.S. Attorney, Mr. Murray has supervised complex litigations and has overseen high profile cases, including the $3 billion settlement with Wells Fargo over unscrupulous sales practices; the antitrust settlement with Atrium, the largest hospital system in North Carolina; and the criminal prosecution of United States v. Lindberg et al., one of North Carolina’s most prominent bribery cases involving public officials.
During his tenure, U.S. Attorney Murray has focused on establishing strategies to reduce violent crime by implementing the Justice Department’s reinvigorated Project Safe Neighborhoods (PSN) initiative. PSN is a collaborative effort by federal, state and local law enforcement, prosecutors and communities to prevent and deter gang and gun violence. In addition to criminal prosecutions, under U.S. Attorney Murray’s direction, the office has worked closely with local and state law enforcement agencies and non-government organizations to ensure they receive federal PSN grants, to assist in their work to reduce violent crime in their communities.
U.S. Attorney Murray has also focused on combating the heroin and opioid epidemic and its devastating effects on communities. During U.S. Attorney Murray’s tenure, the office concentrated on investigating and prosecuting high-level Drug Trafficking Organizations (DTOs) and drug traffickers operating on the Dark Web. The district also formed the Heroin Education Action Team (HEAT), to heighten awareness and educate the public about the increased danger of heroin and opioid addiction.
In March 2019, U.S. Attorney Murray also announced the district’s Elder Justice Initiative (EJI), to combat the neglect, abuse, and financial exploitation of seniors. Since the inception of EJI, the office has actively engaged in efforts to investigate and prosecute financial scams impacting seniors, hold training seminars for older adults and caretakers on how to identify and respond to elderly exploitation and financial schemes, and promote greater coordination with federal state and local law enforcement partners to combat elder financial exploitation and abuse.
While serving as U.S. Attorney, Mr. Murray has successfully led the Office through significant challenges, including the longest-ever government shutdown and the devastating coronavirus pandemic. Since the onset of the pandemic, U.S. Attorney Murray has balanced the need for employee safety while effectively protecting and keeping the citizens of the Western District protected and safe without a reduction in productivity. Throughout the pandemic, U.S. Attorney Murray also has directed the office’s criminal and civil prosecutors to remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the crisis and to concentrate on stopping bad actors from exploiting important government-funded COVID relief programs.
U.S. Attorney Murray said, “Despite considerable difficulties, we have increased the Office’s workforce with additional prosecutors and support staff, and we have steadfastly continued to handle high-volume cases and fulfill our mission. Our accomplishments are a testament to the hard work of the men and women in this Office. It has been a privilege to have served with such dedicated colleagues and I have the utmost respect for their commitment to the pursuit of justice.”
U.S. Attorney Murray has also worked closely with federal, state, and local law enforcement counterparts to improve the intake process of cases for federal criminal prosecution. Under U.S. Attorney Murray’s direction, the office created a collaborative program wherein Assistant U.S. Attorneys are assigned to specific District Attorney’s (DA’s) Offices in WDNC and are paired with state prosecutors from that DA’s office. This symbiotic relationship serves to maximize information sharing and expedite the triage of joint jurisdiction cases to ensure that the most appropriate prosecution path is pursued to protect the public and obtain justice.
“The collective goal of all law enforcement officers and prosecutors is to protect law-abiding citizens and hold law-breakers accountable for their actions. I have spent over 30 years as a public servant, both in the civilian and military sectors, and I can say with certainty that the talented men and women of the U.S. Attorney’s Office who have chosen a career in public service have a deep commitment to the people they serve and to our country. It has been a privilege and an honor to have served with each and every one of them. I could not have been more blessed than to have led such a selfless team that strives every day to simply do what is right and just.”
Two Queens Residents Charged with Selling U.S. Savings Bonds that had been Stolen from an Elderly WomanRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that a federal grand jury in Hartford returned an indictment today charging JHANANNIE SINGH, also known as “Jasmine” and “Sharmala Persaud,” 51, and GLEN CAMPBELL, also known as “Nick,” 39, both citizens of Guyana residing in Queens, New York, with offenses relating to the theft of numerous U.S. Savings Bonds from an elderly woman who had purchased the bonds for her grandchildren and other family members.
As alleged in court documents and statements made in court, Singh stole numerous U.S. Savings Bonds from an elderly woman for whom she provided home health services. The victim had purchased the bonds for her grandchildren and other relatives. After the victim died, Singh contacted Campbell, who enlisted the help of another individual to redeem the stolen bonds at a financial institution and provide Singh and Campbell with a portion of the proceeds. Between October 2020 and January 2021, as part of an undercover investigation, law enforcement coordinated the purchase of more than 100 savings bonds, with face values ranging from $50 to $1,000, from Singh and Campbell. Campbell traveled to Connecticut to complete the transactions.
Singh and Campbell were arrested on criminal complaints on January 29, 2021. They are released on bonds in the amount of $250,000 and $100,000, respectively.
The indictment charges Singh and Campbell with one count of conspiracy, an offense that carries a maximum term of imprisonment of five years; three counts of exchanging, receiving, or concealing stolen U.S. Saving Bonds, an offense that carries a maximum term of imprisonment of 10 years on each count, and one count of transportation of stolen property, an offense that carries a maximum term of imprisonment of 10 years.
U.S. Attorney Durham stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Tara E. Levens and Michael S. McGarry.
The Justice Department has established a National Elder Fraud Hotline to provide services to seniors who may be victims of financial fraud. The Hotline is staffed by experienced case managers who can provide personalized support to callers. Case managers assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll-free number is 833-FRAUD-11 (833-372-8311).
Two Former Bureau of Prisons Officials Plead Guilty to Bribery Scheme at Federal Prison in PetersburgRead the Press Release
RICHMOND, Va. – A North Carolina man, formerly employed by the Bureau of Prisons at Federal Correctional Institution (FCI) Petersburg, pleaded guilty today to taking bribes to allow for the introduction of contraband into the prison. Today’s guilty plea follows a former correctional officer’s plea last week for taking bribes as part of the same scheme.
“Stephen Taylor and Shanice Bullock flagrantly violated their positions of trust as federal prison officials by engaging in a bribery scheme inside FCI Petersburg instead of safeguarding the security of the facility and protecting its inmates,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Our Office will continue to seek equal justice under the law and hold accountable government officials who corrupt their oaths and betray the public’s trust.”
According to court documents, Stephen Taylor, 48, then a case manager at FCI Petersburg, received over $17,000 in Walmart-2-Walmart transfers from an inmate’s mother from March 2018 to March 2019. In return, Taylor permitted the introduction of contraband items into the prison—namely Suboxone, marijuana, cellular telephones, and tobacco. In addition, Taylor received contraband and sums of cash from the inmate’s girlfriend.
In addition to Taylor, former correctional officer Shanice Bullock, 28, of South Hill, Va., pleaded guilty on February 9 for her role in the same prison bribery scheme. Specifically, Bullock took bribes from the same inmate’s mother to facilitate the introduction of Suboxone, marijuana, heroin, cigarettes, and cellular telephones into FCI Petersburg.
Taylor is scheduled to be sentenced on August 6, and he faces a maximum penalty of 15 years in prison. Bullock will be sentenced on August 11 and faces a maximum penalty of 15 years 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.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Christopher R. Derrickson, Acting Special Agent in Charge of the FBI’s Richmond Field Office; and Russell W. Cunningham, Special Agent in Charge, Department of Justice Office of the Inspector General, Washington Field Office, made the announcement after U.S. District Judge David J. Novak accepted the plea.
Assistant U.S. Attorneys Kenneth Simon Jr. and Michael C. Moore 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. 3:20-cr-125.
Tulsa Man Sentenced for CyberstalkingRead the Press Release
A Tulsa man was sentenced this morning in federal court after he violated a protective order by sending harassing and threatening emails and messages to a female victim, announced U.S. Attorney Trent Shores.
Parris Deshaunte Evitt, 30, of Tulsa, previously pleaded guilty before Chief U.S. District Judge John E. Dowdell on November 4, 2020. In his plea agreement, Evitt admitted to sending harassing and intimidating messages from a variety of accounts. Evitt’s course of conduct included repeated threats to the victim’s physical safety and privacy.
Today, Judge Dowdell sentenced Evitt to 46 months of imprisonment for cyberstalking a prior intimate partner in violation of a protective order. Judge Dowdell also sentenced Evitt to 3 years supervised release following imprisonment, and ordered Evitt to pay restitution for hotel costs the victim incurred after she was forced to flee her home in order to try to hide from Evitt.
Between October 2018 and continuing until October 2020, Evitt used email, Facebook, and text messages to control and threaten the victim. However, his abuse of the victim had started years before. Between 2012 and 2019, Evitt was convicted on 5 different occasions for physically abusing the victim including strangulation, assault, and interfering with reporting. Evitt was also on state supervision at the time of the current offenses.
“When a court order frustrated Parris Evitt’s ability to domestically abuse his partner, he resorted to cyberstalking in an effort to continue the torment and terror,” said U.S. Attorney Trent Shores. “Cowardly acts of cyberstalking and digital threats are no match for a courageous victim whose testimony helped law enforcement and prosecutors break the cycle of violence. Domestic abusers like Evitt should be held accountable to the fullest extent of the law. The scars of physical abuse and emotional pain can last a lifetime.”
The victim in this case appeared via Zoom this morning to make a personal statement and share the impact Evitt’s cyberstalking has had on her life. She explained that Evitt had destroyed her sense of security and became emotional when she discussed Evitt’s statement that he would rather see her dead than happy. She also stated, “the longer he is away from my children and I, the more time we have to try and heal and move on with our lives, if that is even possible.” After Judge Dowdell sentenced Evitt, he asked Evitt if he had really listened to the victim and noted the egregiousness of Evitt’s conduct.
The FBI conducted the investigation. Assistant U.S. Attorney Chantelle D. Dial prosecuted the case. Ms. Dial is a prosecutor from the U.S. Attorney’s Office in the Western District of Washington. She volunteered to assist prosecution efforts here in the Northern District of Oklahoma due to the increased volume of cases since the Supreme Court’s ruling which stated the Creek Nation Reservation had never been officially disestablished by Congress. The United States and the Muscogee (Creek) Nation have jurisdiction of all cases that occur on the reservation involving Native American victims or defendants.
Three Men Charged in Conspiracy to Distribute Fentanyl, Methamphetamine and Cocaine into New JerseyRead the Press Release
NEWARK, N.J. – Three New York men have been charged in connection with a conspiracy to distribute fentanyl, methamphetamine and cocaine in New Jersey from locations in Manhattan, Acting U.S. Attorney Rachael A. Honig announced today.
Juan Carlos Merced Moreno, aka “Samuel,” 43; Antonio Hidalgo, aka “Cacona,” 43, and Jose Miguel Abreu, aka “Pelu,” 26, all from Manhattan, are charged by complaint with one count of conspiracy to distribute 400 grams or more of suspected fentanyl, 500 grams or more of suspected methamphetamine, and 500 grams or more of suspected cocaine. Merced Moreno appeared by videoconference today before U.S. Magistrate Judge Cathy L. Waldor and was detained. Hidalgo is in custody on other charges and Abreu is at large.
According to documents filed in this case and statements made in court:
In February 2019, law enforcement officials began investigating a drug trafficking organization based in Hudson County, New Jersey, and intercepted telephone calls made by its members. Officials learned of a fentanyl pill press based being operated by Moreno, Hidalgo and Abreu in the Washington Heights neighborhood of Manhattan. Based on intercepted telephone calls and surveillance between November 2020 and January 2021, law enforcement officials learned the defendants supplied fentanyl pills to the New Jersey drug trafficking organization, which subsequently distributed them throughout New Jersey. Law enforcement believes that the three defendants supplied approximately at least 25,000 fentanyl pills to the New Jersey organization.
Law enforcement officials began to intercept telephone calls made and received by Moreno and Hidalgo, as well as telephone calls between the two men and Abreu, and identified various residences and stash locations in Manhattan associated with the DTO-NY. On Jan. 29, 2021, law enforcement officials executed search warrants on Moreno’s residence, Hidalgo’s residence, Abreu’s residence and other stash and manufacturing locations. They recovered: 5.4 kilograms of a suspected combination of methamphetamine and fentanyl; 1.7 kilograms of suspected methamphetamine in a crystalized rock form; 1.6 kilograms of suspected methamphetamine pills; 1.5 kilograms of suspected fentanyl pills; 1.3 kilograms of suspected cocaine; 788 grams of suspected fentanyl in brick form; two pill presses; four scales; and $11,180. The seized narcotics have an estimated street value of $700,000.
The drug distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a maximum $10 million fine.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Homeland Security Investigations, New York City Airport Border Enforcement Security Taskforce, under the direction of Peter C. Fitzhugh; special agents from U.S. Department of Homeland Security, Homeland Security Investigations – Newark, under the direction of Special Agent in Charge Jason J. Molina; members of the New York Police Department, under the direction of Commissioner Dermot F. Shea; and investigators and assistant prosecutors from the Hudson County Prosecutor’s Office, under the direction of Hudson County Prosecutor Esther Suarez, with the investigation leading to the charges and arrests.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Taunton Man Charged with Fentanyl TraffickingRead the Press Release
BOSTON – A Taunton man was indicted today by a federal grand jury on Boston in connection with drug trafficking activities involving fentanyl.
Carlos Rivera, 46, was indicted on one count of conspiracy to distribute and to possess with intent to distribute 40 grams or more of fentanyl and three counts of distribution and possession with intent to distribute fentanyl. Rivera was previously charged by criminal complaint and arrested on Jan. 29, 2021. He has been in federal custody since his arrest.
According to court documents, between September 2020 and January 2021, Rivera and his co-conspirator engaged in four separate sales of fentanyl to a cooperating witness in Taunton.
The charge of conspiracy to distribute and to possess with intent to distribute 40 grams or more of fentanyl carries a mandatory minimum sentence of five years and up to 40 years in prison, at least four years of supervised release and a fine of up to $5 million. The charges of distribution of and possession with intent to distribute fentanyl carry a sentence of up to 20 years in prison, at least three years of supervised release and a fine of up to $1 million. 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 Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division made the announcement today. Valuable assistance was provided by the Taunton Police Department. Assistant U.S. Attorney Stephen W. Hassink of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Shiprock man sentenced to two years in prison for assaulting a federal officerRead the Press Release
ALBUQUERQUE, N.M. – Derrick Begay, 33, of Shiprock, New Mexico, an enrolled member of the Navajo Nation, was sentenced on Feb. 10 in federal court to two years in prison followed by 3 years of supervised release for assault upon a federal officer involving physical contact.
According to Begay’s plea agreement and other court records, on Jan. 22, 2020, a federal special agent with the Bureau of Indian Affairs made contact with Begay on the side of a road in Shiprock on the Navajo Nation. The agent lawfully requested that Begay exit his vehicle, but Begay did not comply. At one point Begay lunged out of his vehicle and hit the agent in the face. Begay got back into his vehicle and fled the scene with law enforcement in pursuit. Begay reached speeds in excess of 100 mph. The weather was poor and there were school buses on the roadway so law enforcement called off the pursuit. Begay was arrested on May 1, 2020.
The Farmington office of the FBI investigated this case along with assistance from the Bureau of Indian Affairs and the Navajo Nation Police Department. Assistant U.S. Attorney David P. Cowen prosecuted the case.
Red Lake Woman Pleads Guilty to Child EndangermentRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of MARTHA ANN SMITH, 69, to one count of felony child endangerment. SMITH, who was charged by felony information on January 26, 2021, pleaded guilty this morning before Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. A sentencing date will be scheduled at a later time.
According to the defendant’s guilty plea and documents filed with the court, SMITH endangered a minor child in her foster care on multiple occasions at her residence on the Red Lake Indian Reservation. SMITH admitted that on the evening of October 10, 2019, through the morning of October 11, 2019, SMITH tightly bound the 5-year-old child’s wrists and ankles to the sides of a highchair and forced the child to remain shackled to the high chair throughout the night. As a result of the shackling, the child suffered bruising and lacerations on her wrists and ankles as well as mental and emotional trauma. SMITH further admitted that she neglected and endangered the child on multiple occasions during the time the child was under SMITH’s foster care, since the child was approximately three months old.
This case is the result of an investigation conducted by the FBI and the Red Lake Police Department.
Assistant U.S. Attorneys Chelsea A. Walcker and Lindsey Middlecamp are prosecuting the case.
Defendant Information:
MARTHA ANN SMITH, 69
Red Lake, Minn.
Convicted:
- Child endangerment, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Raleigh Man Sentenced to More Than 12 Years in Federal Prison for Robbing Raleigh BB&T BankRead the Press Release
WILMINGTON, N.C. – A Raleigh man was sentenced today to 151 months in prison for committing a bank robbery against the BB&T Bank located at 3000 Duraleigh Road, Raleigh.
According to court documents and information presented in court today, on April 5, 2019, Anthony Wayne Alston, 57, entered the BB&T bank on Duraleigh Road in Raleigh wearing a trench coat and a stocking mask over his face, and approached the teller counter. Alston placed his finger to his mouth to signal to the victim teller to be quiet and jumped over the teller counter. Alston removed $3,354 in United States currency from the victim teller’s cash drawer, placed the currency into a bag, and jumped back over the counter before fleeing from the bank.
Investigators with the Raleigh Police Department quickly located Alston’s vehicle travelling on I-440 and attempted to conduct a traffic stop. The vehicle engaged in several evasive driving maneuvers and continued to flee from police at a high rate of speed. The vehicle exited I-440 via the Six Forks Road exit at a high rate of speed and collided with another vehicle. Alston fled from the vehicle on foot but was soon apprehended. A total of $3,354 in United States currency was recovered from a plastic bag discovered near where Alston was apprehended.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Richard E. Myers II.
The Raleigh Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration investigated the case and Assistant U.S. Attorney Daniel W. Smith prosecuted the case.
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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. 5:20-CR-00261-M.
Placida Couple Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
Tampa, Florida – United States Attorney Maria Chapa Lopez announces that Samuel Lawrence and Julee Lawrence have pleaded guilty to one count of conspiracy to defraud the United States and to impede and impair the ability of the Internal Revenue Service to ascertain and collect employment tax revenue. Each faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Samuel Lawrence owned and managed Innovative Marine Structures, LLC, a marine construction company operating in the Middle District of Florida. His wife, Julee Lawrence, handled payroll and other duties for the company. Beginning in January 2014 and continuing through September 2016, the couple engaged in a conspiracy to impede the IRS by cashing large corporate checks at a local bank and using those funds to pay certain employees of their company in cash and by failing to report the employment of those employees on federal tax forms. As a result of those actions, the couple caused their payroll company to fail to report and pay to the IRS the required federal employment taxes due from the payment of those employees’ wages. The total amount of employment taxes that the company should have paid to the IRS on those employees’ wages was approximately $238,483.
This case was investigated by the IRS - Criminal Investigation. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Owner of Sport Supplement Company Sentenced for Unlawful Distribution of Steroid-Like DrugsRead the Press Release
A North Carolina sport supplement company owner was sentenced to one year and one day in federal prison after pleading guilty to introducing unapproved new drugs into interstate commerce, the Department of Justice announced.
Brian Michael Parks, 47, of Apex, North Carolina, and MedFitRX Inc, now known as MedFit Sarmacuticals Inc., a sport supplement company based in Cary, North Carolina, previously pleaded guilty in U.S. District Court for the Western District of Virginia to one count of distributing unapproved new drugs with the intent to mislead and defraud the Food and Drug Administration (FDA) and consumers.
In pleading guilty, Parks admitted that from approximately June 2017 to September 2019, he and his company unlawfully distributed Selective Androgen Receptor Modulators (SARMs) and other substances that the FDA has not approved, including Ostarine (MK-2866), Ligandrol (LGD-4033), and Testolone (RAD-140). SARMs are synthetic chemicals designed to mimic the effects of testosterone and other anabolic steroids.
The FDA has long warned against the use of SARMs like those found in MedFit products, including stating in a publicly available 2017 warning letter to another firm that SARMs have been linked to life-threatening reactions including liver toxicity, and have the potential to increase the risk of heart attack and stroke. In connection with his sentence, Parks also forfeited $350,000.
“Bypassing the FDA drug approval process puts consumers at risk,” said Acting Assistant Attorney General Brian Boynton of the Justice Department’s Civil Division. “The department will continue to work with the FDA to investigate and prosecute the illegal distribution of supplements that contain dangerous ingredients.”
“When Parks marketed drugs masquerading as dietary supplements that had not been approved by the FDA, he sidestepped important safeguards to protect the public, and committed a serious crime,” said Acting U.S. Attorney Daniel P. Bubar of the Western District of Virginia. “Our office will continue to closely partner with the FDA to ensure safety and effectiveness in our drug supply.”
“‘Sports supplements’ that are manufactured and distributed outside the FDA’s oversight and that contain unapproved and possibly toxic ingredients endanger the health of unsuspecting consumers,” said Assistant Commissioner for Criminal Investigations Catherine A. Hermsen, FDA Office of Criminal Investigations. “Today’s actions represent our continued commitment to pursuing and bringing to justice those who mislead the public and intentionally attempt to subvert the regulatory functions of the FDA through the distribution of unapproved and potentially dangerous products.”
In pleading guilty, Parks also admitted that he intended to mislead and defraud the FDA and consumers by omitting ingredients on MedFitRX product labels, falsely claiming MedFitRX was licensed and registered to sell these new drugs, importing raw drug ingredients with the intent to avoid regulatory scrutiny, and misrepresenting MedFitRX products as “dietary supplements” or “sports supplements” to create the impression that they were safe and legal to use.
Assistant U.S. Attorney Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia and Trial Attorney Speare Hodges of the Civil Division’s Consumer Protection Branch prosecuted the case. This matter was investigated by the FDA’s Office of Criminal Investigations.
Northampton County Man Sentenced to 4 ½ Years for Bilking Family, Friends & Fraternity Brothers out of over $1 Million in Phony Stock SchemeRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Robert McCabe, 76, of Bangor, PA, was sentenced by United States District Court Judge Jeffrey L. Schmehl to four and a half years in prison, three years of supervised release, and ordered to pay $1,111,582 in restitution to more than 50 victims for defrauding them through an extensive fraudulent investment scheme.
In September 2020, the defendant was charged by Information with 21counts of various frauds, including securities fraud, wire fraud and mail fraud. McCabe, a former stockbroker who went to prison in the 1980s for securities-related fraud, pleaded guilty to these charges in November.
As part of his guilty plea, and in connection with his sentencing, the defendant admitted that for almost ten years, from September 2010 until June 2020, he defrauded life-long friends, fraternity brothers from Phi Kappa Psi fraternity at Lafayette College, and even his wife by promising to sell them “founders shares” of Esperion Therapeutics, Inc. McCabe claimed to have acquired shares of Esperion through a corporation he owned, McCabe Properties, Inc., at a very low price – approximately $2.67 per share. Over the course of nearly a decade, the defendant took in more than $1 million from more than 50 investors who thought they were getting in on the ‘ground floor’ of Esperion, by selling to them almost 387,000 phony “founders shares.” If McCabe had possessed these “founders shares” in reality, his investors would have made a fortune, as shares of Esperion peaked at more than $38 per share recently. McCabe’s investors believed they were soon going to be able to cash out their fortunes, but they were stalled at every opportunity by various misrepresentations the defendant made regarding a purported inability to liquidate their holdings. Ultimately, the defendant’s victims uncovered his fraud in June 2020, at which point he admitted to them that he had been lying all along.
“McCabe is a life-long, recidivist fraudster who preyed upon his own family and friends for nearly a decade,” said Acting U.S. Attorney Williams. “Even after being convicted of fraud previously, the defendant chose to orchestrate this scheme to defraud his victims out of more than $1 million. This type of financial fraud has devastating consequences for the victims and must be aggressively prosecuted at every turn.”
“McCabe brutally exploited the trust his lifelong friends and even his spouse placed in him,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI is committed to bringing justice to those, like McCabe, that dare to rob individuals of their hard-earned life savings. Today’s sentence cannot erase the harm McCabe caused his friends and loved ones, but we are pleased that the sentence included full restitution to McCabe’s victims. The FBI will continue to work with its law enforcement and private sector partners to investigate those who engage in similar greed-based schemes.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.