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4 February 2021
Fentanyl Trafficker Responsible for Overdose Death Sentenced to PrisonRead the Press Release
NORFOLK, Va. – A Portsmouth man was sentenced today to 11 years in prison for his role in a fentanyl and heroin distribution ring that led to multiple overdoses and at least one death.
According to court documents, Deshawn Jones, 29, dealt heroin and fentanyl as part of a Hampton Roads-based group that sold powerful narcotics to individuals from South Hampton Roads and the Outer Banks region of North Carolina. On November 23, 2018, Jones sold a mixture of fentanyl and heroin to C.H., who used the drugs, overdosed, and died as a result. Jones continued to sell narcotics after learning of C.H.’s death, and when police executed a search warrant at his Portsmouth home in June 2019, they found fentanyl, heroin, and a loaded semi-automatic handgun with an extended magazine.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C.; J. Phillip Webster, Chief of the Nags Head Police Department; and Kelvin L. Wright, Chief of the Chesapeake Police Department, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr.
Assistant U.S. Attorneys Andrew Bosse and William B. Jackson prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-163.
Felon with Violent Criminal History Sentenced to Prison for Gun PossessionRead the Press Release
ATHENS, Ga. – A convicted felon with a violent criminal history, arrested in Athens for illegal possession of a firearm, was sentenced to prison yesterday for his crime, said Peter D. Leary, the Acting U.S. Attorney for the Middle District of Georgia.
U.S. District Judge C. Ashley Royal sentenced Curioki Hyche, 32, of Athens, to serve 63 months in prison, to be followed by two years of supervised release, after Hyche pleaded guilty to one count possession of a firearm by a convicted felon. There is no parole in the federal system.
On August 13, 2019, a confidential informant (CI) told the Athens-Clarke County Police that Hyche was carrying a weapon. Hyche, a known felon, was filmed by store surveillance in the Triangle Plaza area hiding a firearm in nearby bushes. Police retrieved the weapon, which was a 9mm caliber semi-automatic pistol. In pleading guilty, Hyche admitted that he had possessed the pistol and that he knew he was prohibited from having a firearm because it is illegal for convicted felons to possess guns. Hyche has a prior felony conviction in Athens-Clarke County for aggravated assault.
“Felons with violent criminal histories who possess guns will face the possibility of federal prosecution,” said Acting U.S. Attorney Leary. “I want to thank the Athens-Clarke County Police Department for their work in this investigation.”
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 Athens-Clarke County Police Department. Assistant U.S. Attorney Kimberly S. Easterling prosecuted the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Federal Grand Jury Indicts Two Brothers for Allegedly Defrauding the Payroll Protection ProgramRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, NY – U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Larry Jordan, 42, of Lancaster, NY, and Sutukh El a/k/a Curtis Jordan a/k/a Hugo Hurt, 38, of Buffalo, NY, with wire and bank fraud conspiracy, bank fraud, and engaging in monetary transactions with criminally derived property, for their alleged participation in a scheme to file fraudulent loan applications seeking nearly $7,000,000 in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.
“These brothers allegedly stole more than $600,000 which was intended to assist businesses and employees that have been crippled by the pandemic,” noted U.S. Attorney Kennedy. “Their greed in the face of a national crisis has rightly landed them in federal court under indictment. We will investigate and charge anyone who seeks to use emergency federal aid as a way to try to get rich quick.”
The indictment and a previously filed complaint allege that Larry Jordan and Sutukh El conspired to submit at least eight fraudulent loan applications in an attempt to obtain nearly $7,000,000 for their company, 5 Stems Inc. In support of the fraudulent loan applications, Larry Jordan and Sutukh El allegedly made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. In furtherance of their efforts, defendants communicated over text message about some of the fraudulent loan applications. After receiving confirmation that a loan application had been approved, defendant Sutukh El sent texts to Jordan stating: “We really bout to take over the world,” and “Wow, we like Fake Rich.” Jordan replied: “We don’t even have to start paying back for 2 years,” and “Or just show what they ask us to show.” Another text from Sutukh El stated: “We’ll be in the billions by then anyway,” and “But definitely show what needs to be shown and write that (expletive) off!” The indictment and complaint allege that the fraudulent loan applications were supported by fake documents, including falsified federal tax filings. For example, included in one application was a fraudulent IRS filing that appeared to be the company’s 2019 federal unemployment tax return (FUTA) showing that the company paid nearly $3,300,000 in employee wages that year. In reality, the IRS has no record of such a filing. Finally, the brothers are accused of using fraudulently obtained loan proceeds to pay personal expenses, including the purchase of securities, home improvements, and a vehicle. To date, the government has seized more than $400,000 of the more than $600,000 that Larry Jordan and Sutukh El actually obtained through their fraudulent scheme.
The defendants were arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr., and released on conditions.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
This case was investigated by the Federal Deposit Insurance Corporation’s Office of Inspector General, under the direction of Inspector General Jay N. Lerner, and Special Agent-in-Charge Patricia Tarasca, New York Region; the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection’s Office of the Inspector General, under the direction of Inspector General Mark Bialek, and Acting Special Agent-in-Charge Stephen Donnelly, Eastern Region; the Federal Housing Finance Agency’s Office of the Inspector General, under the direction of Inspector General Laura S. Wertheimer, and Special Agent-in-Charge Robert Manchak, Northeast Region; the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia; and the Small Business Administration’s Office of Inspector General, under the direction of Special Agent-in-Charge Amaleka McCall-Brathwaite, Eastern Region. Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Kruly and Grace Carducci for the Western District of New York are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The fact that a defendant has been charged with a crime is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
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Ex-oil exec who stole more than $2 million sent to prisonRead the Press Release
HOUSTON – A 46-year-old Katy man has been ordered to federal prison after he admitted to embezzling over $2 million from a local oil services company, announced U.S. Attorney Ryan. K. Patrick.
Robert Andrew Bishop pleaded guilty Oct. 14, 2020.
Today, U.S. District Judge Keith Ellison ordered him to serve a 41-month sentence to be immediately followed by two years of supervised release. At the hearing, the court heard additional testimony from the victim that detailed the extent and length of his theft, along with the devastating effects it had on her business. In handing down the sentence, Judge Ellison noted the length of the theft and Bishop’s violation of his employer’s trust.
Bishop was the vice president of resource management at International Professional Management (IPM), an oil services company located in Houston. As part of his duties, he was in charge of securing short term loans to cover IPM’s monthly operating capital.
At the time of his plea, he admitted he would inflate the loan amount needed and then divert the excess money to fake vendor accounts he controlled.
Over the span of approximately six years, Bishop diverted roughly $2.1 million from the company’s operating expenses.
The owners of IPM discovered his fraud scheme in August 2019.
Bishop was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation. Assistant U.S. Attorney Thomas Carter prosecuted the case.
El Departamento de Justicia Resuelve la Acusación de Represalias por Parte de una Compañía de Electricista en FloridaRead the Press Release
El Departamento de Justicia anunció hoy que ha llegado a un acuerdo conciliatorio con Service Minds Inc., que opera bajo el nombre de Mister Sparky (Service Minds), una compañía que presta servicios eléctricos a clientes residenciales en Florida y Alabama. El acuerdo resuelve una acusación de que la compañía había tomado represalias contra un postulante con autorización para trabajar, en contra de la disposición antidiscriminatoria de la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés) cuando él y su esposa cuestionaron una norma que restringía la contratación únicamente a ciudadanos estadounidenses que un reclutador había declarado, erróneamente, que era la política de la compañía.
«Los empleadores no deben tomar represalias contra trabajadores que dicen lo que piensan cuando se les dice que no pueden conseguir un trabajo por no ser ciudadanos de los EE. UU.», dijo Gregory B. Friel, el Fiscal General Auxiliar Adjunto de la División de Derechos Civiles. «Estamos muy agradecidos que el postulante y su esposa se opusieron, al enterarse de lo mismo, a lo que hubiera sido una práctica ilegal».
El Departamento inició su investigación después de que una mujer presentó una denuncia en nombre de su esposo, un electricista en Ocala, Florida, que había solicitado un trabajo con Service Minds. La investigación determinó que, aunque el postulante reunía los requisitos para el puesto, un reclutador de la compañía le dijo, erróneamente, que la compañía solamente contrata a ciudadanos estadounidenses. El postulante y su esposa enviaron al reclutador información sobre la prohibición de la discriminación por motivos de estatus de ciudadanía y se opusieron a la política de la compañía. La Sección de Derechos de Inmigrantes y Empleados de la División de Derechos Civiles halló pruebas de que, según las cualificaciones del electricista y las prácticas de contratación de la compañía en el pasado, la compañía lo habría contratado si él y su mujer no hubieran formulado una objeción. Por lo general, la disposición antidiscriminatoria de la INA prohíbe que los empleadores tomen represalias contra individuos por haberse opuesto a una conducta que, en virtud de la disposición, es ilegal, o por haber ejercido otros derechos amparados por esa disposición.
Conforme los términos del acuerdo conciliatorio, entre otras cosas, Service Minds proporcionará pagos por anticipado y pagos retroactivos (los que incluyen beneficios) más los intereses aplicables, una suma que en su totalidad asciende a 24.500 $; pagará una sanción civil; capacitará a sus empleados y se someterá a la supervisión del Departamento.
La Sección de Derechos de Inmigrantes y Empleados («IER», por sus siglas en inglés) de la División de Derechos Civiles es responsable de hacer cumplir la disposición antidiscriminatoria de la INA. La ley prohíbe la discriminación por motivos de estatus de ciudadanía y nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; prácticas documentales injustas; y represalias o la intimidación.
Aquellos aspirantes o empleados que creen haber sido discriminados por motivos de su estatus de ciudadanía o nacionalidad de origen en los procesos de contratación, despido, reclutamiento o verificación de la elegibilidad para trabajar (Formulario I-9 e E-Verify) o sujetos a represalias pueden presentar una denuncia. El público también puede llamar a la línea directa de la IER para trabajadores al 1-800-255-7688; llamar a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); enviar un correo electrónico a [email protected]; inscribirse a un seminario en línea gratuito; o visitar los sitios web de la IER en inglés o español. Para recibir las últimas noticias de la IER, inscríbase a GovDelivery
Disbarred Lawyer Sentenced to 15 Years in Prison for Multimillion-Dollar Fraud Where Clients Were Victimized by Forged Judges’ SignaturesRead the Press Release
LOS ANGELES – A disbarred lawyer was sentenced today to 180 months in federal prison for stealing more than $4 million from his clients through a variety of means, including collecting fees for work he never performed.
Shant Ohanian, 38, of Burbank, was sentenced by United States District Judge John A. Kronstadt, who stated that he intends at a future date to order Ohanian to pay restitution in an amount exceeding $2.5 million. Ohanian pleaded guilty in June 2019 to one count of wire fraud and has been in federal custody since the following month, when his bond was revoked because of allegations that he was continuing to defraud his clients.
Ohanian was a licensed California lawyer from January 2012 until his disbarment in December 2017. During his legal career, Ohanian defrauded clients in need of his legal assistance in a variety of cases, including immigration applications, commercial disputes, divorce petitions and personal injury claims. In each case, Ohanian took no meaningful action on his clients’ behalf despite billing them for thousands of dollars or asking them to pay millions of dollars in litigation-related fees.
In some cases, Ohanian’s deception caused his victim clients to lose their opportunities to obtain significant financial or legal remedies because of wrongs they suffered. One client, a woman who suffered serious injuries in a fall at South Coast Plaza mall in Orange County, saw the statute of limitations expire in her case before she realized Ohanian defrauded her. Ohanian admitted to sending the victim a phony settlement agreement from the mall and, after she threatened to report him to the State Bar of California, a check for $25,000 that later turned out to have been cancelled.
In May 2012, two clients hired Ohanian to represent them in a business dispute, but he failed to take any steps to effectively litigate their claims despite telling them for six years that the case settled in their favor. Ohanian ultimately provided to them counterfeit checks totaling over $3.1 million to deceive them.
Other clients defrauded by Ohanian had sought representation for immigration-related issues. Some of them were green card applicants, while others were caught in foreign war zones and sought refugee status in the United States. In every instance, Ohanian took their money, claimed he filed the appropriate paperwork, but did nothing.
To cover his tracks for lying for years to one client who had hired Ohanian to help obtain a green card, Ohanian claimed to have sued the federal government for failure to produce the green card. Ohanian continued his deception by using counterfeit emails and court orders that included the forged signatures of a state court judge and multiple other government officials. Ohanian falsely told the client that the U.S. government had been ordered to pay over $13.5 million in damages.
In other cases, Ohanian made multiple spoofed telephone calls to a client seeking recovery of a $500,000 deposit related to a failed commercial real estate transaction for an Ontario shopping center. In these calls, Ohanian pretended to be either bank officials or government officials. During that litigation, Ohanian falsely informed the victim that the victim had prevailed in the case and would receive $7.2 million in damages plus penalties.
Ohanian’s victims suffered actual losses exceeding $4 million.
In a related case, Ohanian’s wife, Silva Sevlian Ohanian, 33, of Burbank, has been charged with one count of wire fraud. She pleaded not guilty to the charge and is currently scheduled to go to trial on September 28.
This matter was investigated by U.S. Immigration and Customs Enforcement Office of Professional Responsibility and the State Bar of California.
This case was prosecuted by Assistant United States Attorneys Aron Ketchel and J. Jamari Buxton of the Public Corruption and Civil Rights Section.
Council Bluffs Man Sentenced to Prison for Firearm OffenseRead the Press Release
COUNCIL BLUFFS, Iowa – Acting United States Attorney Richard D. Westphal announced that Patrick Daniel Kampe, age 56, of Council Bluffs, was sentenced on February 3, 2021, by United States District Court Judge Stephanie M. Rose to 60 months in prison to be followed by three years of supervised release for prohibited person in possession of a firearm. Kampe pleaded guilty to the charge on September 21, 2020.
On May 12, 2020, a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Task Force Officer received a tip regarding a felon with warrants living in Council Bluffs who was in possession of a firearm. Kampe was located at the targeted residence and arrested. Officers located a loaded Glock 26 9mm pistol, small amounts of methamphetamine, and drug paraphernalia in the home.
This investigation was conducted by the Council Bluffs Police Department and the ATF. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Council Bluffs Man Pleads Guilty to Coercion and Enticement of Foreign Exchange StudentsRead the Press Release
COUNCIL BLUFFS, IA—On February 3, 2021, Thomas Donald Boatright, age 52, of Council Bluffs pleaded guilty in the United States District Court for the Southern District of Iowa to four counts of coercion and enticement of a minor, announced Acting United States Attorney Richard D. Westphal.
Boatright worked as a foreign exchange coordinator and host for a program in which students from other countries enrolled in a year of high school in the United States. The students were assigned a host family to live with while they attended high school. In February 2020, a student reported that a hidden camera was discovered in Boatright’s bathroom where two minor foreign students were assigned to live as part of this program.
An investigation unveiled that Boatright used his cellular phone and computer to engage in conversations with the students prior to and after arriving in the United States that were sexual in nature. Boatright used his position as a foreign exchange coordinator and host parent to coerce and entice the students to engage in sexual activity.
Boatright is scheduled to be sentenced in Council Bluffs on June 4, 2021.
This case was investigated by the Council Bluffs Police Department, Iowa Division of Criminal Investigation Internet Crimes Against Children Task Force, and the Federal Bureau of Investigation. This case was prosecuted by the United States Attorney’s Offices for the Southern District of Iowa.
Convicted Sex Offender Sentenced to over 24 Years in Federal Prison for Transporting Child Sex Abuse VideosRead the Press Release
Orlando, Florida – U.S. District Judge Wendy W. Berger today sentenced Michael David Harrison (52, Sparks, NV) to 24 years and 4 months in federal prison for transportation of child pornography.
Harrison was found guilty by a federal jury on September 15, 2020.
According to court documents and evidence presented at trial, Harrison transported numerous videos that depicted the sexual abuse of children from his home in Nevada, to Florida, and to the Bahamas, while on a cruise in November 2019. In 2009, Harrison was convicted in California of sexually abusing several children, including a 14-year-old.
“This repeat child predator continued his abhorrent behavior, even after being convicted of the same crime,” said HSI Tampa acting Deputy Special Agent in Charge David Pezzutti. “Thanks to the work of HSI special agents and the Brevard County Sheriff’s Office, he is being held accountable for his crimes.”
This case was investigated by Homeland Security Investigations and the Brevard County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Emily C. L. Chang.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Browning man admits distributing methamphetamineRead the Press Release
GREAT FALLS — A Browning man today admitted he distributed methamphetamine on the Blackfeet Indian Reservation, Acting U.S. Attorney Leif Johnson said.
Dakoda Blu Wade Iron Shirt, 28, pleaded guilty to distribution of meth. Iron Shirt faces a minimum mandatory five years to 40 years in prison, a $5 million fine and at least four years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris ordered Iron Shirt detained pending further proceedings. Sentencing is set for May 12.
The prosecution said in court records filed in the case that on Aug. 6, 2019, a confidential source working with the Drug Enforcement Administration and FBI made a controlled purchase of meth from Iron Shirt. The transaction occurred in a parking lot in Browning. Iron Shirt sold the confidential source approximately 14 grams of meth for $600. Additional witnesses interviewed by the FBI identified Iron Shirt as a meth distributor on the Blackfeet Indian Reservation.
Assistant U.S. Attorney Ethan Plaut is prosecuting the case, which was investigated by the DEA, FBI Big Sky Safe Trails Task Force and Cut Bank Police Department.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 48% from 2013 to 2019. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Brazilian National Sentenced for Racketeering and Robbery ConspiraciesRead the Press Release
BOSTON – A member of Primeiro Comando da Massachusetts (“PCM”), a gang with Brazilian origins, was sentenced yesterday in connection with committing armed robberies and kidnapping.
Breno Henrique DaSilva, 22, a Brazilian national illegally residing in Somerville, was sentenced by U.S. District Court Judge Patti B. Saris to 108 months in prison. The defendant will face deportation proceedings upon completion of his sentence. On Oct. 15, 2020, DaSilva pleaded guilty to conspiracy to conduct enterprise affairs by a pattern of racketeering and conspiracy to commit robbery.
Henrique DaSilva was charged along with seven co-defendants in April 2019.
According to court documents, in September 2018, law enforcement began investigating members and associates of PCM, which first appeared in Massachusetts in 2017. It is alleged that members and associates of PCM were actively involved in violent crimes including the illegal sale of firearms, drug trafficking, robberies, kidnappings and armed assaults in numerous communities in Massachusetts, including Boston, Malden, Everett, Somerville, Framingham and Peabody, among others.
Henrique DaSilva admitted to committing armed robberies on Jan. 14, 2019, in Framingham and on Jan. 16, 2019, in Stoughton. In addition, he admitted to kidnapping a female victim in Peabody on Feb. 7, 2019. The gang believed that the female victim could help them target a rival gang member for violence. Henrique DaSilva and co-defendant Edson DaSilva (no relation) lured the victim out of a residence in Peabody and eventually took her to a residence in Maynard where she was held at gunpoint and threatened. A cooperating witness alerted law enforcement, who responded to the scene and eventually arrested Henrique DaSilva.
Edson DaSilva previously pleaded guilty and is scheduled to be sentenced on April 23, 2021.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. The Chelsea, Lowell, Malden, Marlborough, Somerville and Weymouth Police Departments and the Middlesex Sheriff’s Office provided assistance with the investigation.
Boston Man Pleads Guilty to Assaulting Officers with a Firearm During Civil Disorder in BostonRead the Press Release
BOSTON – A Boston man pleaded guilty today to assaulting officers with a firearm during the civil disorder in Boston early in the morning of June 1, 2020.
John Boampong, 37, pleaded guilty to one count each of interfering with a law enforcement officer during the commission of a civil disorder, receipt of a firearm by a person under indictment for a felony offense, and assaulting, resisting, or impeding certain officers or employees. U.S. District Court Judge William G. Young scheduled sentencing for June 10, 2021. Boampong was charged by criminal complaint on June 30, 2020 and has been detained since his arrest on June 1.
According to the terms of the plea agreement, Boampong will be sentenced to a term of 42 to 63 months in federal prison and three years of supervised release.
According to court documents, on the evening of May 31, 2020 and continuing through the morning of June 1, 2020, what began as a peaceful demonstration in Boston’s Back Bay neighborhood devolved into widespread acts of violence, vandalism, looting and destruction of police property, including the burning of at least one police vehicle on Tremont Street. Some protestors threw rocks, bricks and commercially-available explosives at police officers. Numerous police officers were injured.
On June 1, 2020 at approximately 3:00 am, Boampong was driving his car near the Arlington Street and Boylston Street intersection in front of a store that had been victimized by looting that evening. Police officers instructed Boampong and his passengers to leave the area. The occupants of Boampong’s car initially became verbally combative towards the officers and failed to leave the area as instructed. When Boampong reversed the car, officers told him to stop, as officers and another vehicle were in the way. However, Boampong continued driving in reverse and then drove away. Shortly thereafter, he returned to the area, parked on Providence Street, and shot at least 11 times toward officers, including a deputized federal officer. The officers took cover by bracing or ducking behind cars and other objects. Bullets broke through the windows of two apartments above ground level in a building behind some of the officers.
When officers eventually stopped Boampong’s car, they saw a Sig Sauer P230 9mm firearm lying on the floor of the front passenger-side floor mat, and a black holster underneath the driver’s seat, where Boampong had been sitting. The firearm was later examined and found to have Boampong’s fingerprint on it.
At the time, Boampong was prohibited from possessing a firearm or ammunition because he faced pending state charges carrying potential sentences exceeding one year.
The charge of assaulting federal officers provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charges of interfering with law enforcement officers during a civil disorder and being a prohibited person in receipt of a firearm or ammunition provide for a sentence of up to five 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 Division; Boston Police Acting Commissioner Gregory Long; and Suffolk County District Attorney Rachael Rollins made the announcement today. Assistant U.S. Attorney John Dawley of Lelling’s Organized Crime and Gang Unit and Assistant U.S. Attorney Scott L. Garland, Deputy Chief of Lelling’s National Security Unit, are prosecuting the case.
Boston Man Indicted on Charges of Carrying Loaded Firearm at MBTA Station in BostonRead the Press Release
BOSTON – A Boston man was indicted today by a federal grand jury in connection with illegally carrying a loaded pistol. The defendant, who allegedly also possessed armor-piercing ammunition, appears to adhere to the anti-government/anti-authority sovereign citizen ideology.
Pepo Herd El a/k/a Pepo Wamchawi Herd (El), 47, of Dorchester, was indicted on two counts of being a felon in possession of a firearm and ammunition. El was arrested on Nov. 26, 2020, and has been detained in custody since that time.
According to the charging documents, for about a year preceding his arrest, El made several firearms-related purchases online and bought chemicals that could be used to assemble explosives. Concerned that El might possess a firearm or an explosive, federal investigators began surveilling El in November 2020.
It is alleged that, on Nov. 26, 2020, El took a bus from his house in Dorchester to the Ruggles MBTA station. At Ruggles, El was detained and searched pursuant to a search warrant. During that search, law enforcement discovered that El was in possession of a loaded semi-automatic pistol, three spare magazines and more than 40 rounds of ammunition. El was also wearing a bullet-proof vest and a jacket that had “security” written on it.
During a subsequent search of El’s Dorchester residence, law enforcement officers also allegedly discovered a fifth magazine loaded with armor-piercing rounds, in addition to other ammunition.
Due to a 2004 state convictions for possessing firearms without permits and other crimes, El is prohibited from possessing firearms and ammunition.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The investigation was conducted by FBI Boston’s Joint Terrorism Task Force with substantial assistance from the Boston Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Amanda Beck and Benjamin Tolkoff of Lelling’s National Security Unit are 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.
Billings man who sold 11 stolen firearms to undercover agent sentenced to prisonRead the Press Release
BILLINGS — A Billings man who admitted selling 11 firearms he stole from a residence to an undercover agent was sentenced today to 37 months in prison and to three years of supervised release, Acting U.S. Attorney Leif Johnson said.
Rodrigo Gomez, 20, pleaded guilty on Sept. 9, 2020 to possession of stolen firearms.
U.S. District Judge Susan P. Watters presided. Judge Watters also ordered $26,470 restitution to be paid jointly and severally with a co-defendant. Gomez was detained.
The prosecution said in court documents that an undercover agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives met with Gomez and a co-defendant, Maliyah Jae Chavez, on Feb. 24, 2020 to buy 11 stolen firearms. The defendants told the agent the firearms were stolen from a residence. The guns were in a safe inside of a garage. The agent paid the defendants for the stolen firearms, which the ATF confirmed had been reported as stolen on Feb. 21, 2020. Gomez admitted to stealing the firearms and selling them.
Chavez pleaded guilty in the case and was sentenced to three years in prison.
Assistant U.S. Attorney Tom Godfrey prosecuted the case, which was investigated by the ATF.
This case is part of Project Guardian, a Department of Justice initiative launched in the fall of 2019 to reduce gun violence and enforce federal firearms laws. Through Project Guardian, the U.S. Attorney’s Office in the District of Montana is working to enhance coordination of its federal, state, tribal and local law enforcement partners in investigating and prosecuting gun crimes. In addition, Project Guardian supports information sharing and taking action when individuals are denied a firearm purchase by the National Instant Criminal Background Check System for mental health reasons or because they are a prohibited person.
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Bergen County Man Admits Bankruptcy FraudRead the Press Release
NEWARK N.J. – A Bergen County, New Jersey, man today admitted concealing assets from a bankruptcy trustee, Acting U.S. Attorney Rachael A. Honig announced.
Victor Osorio, 53, of Creskill, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of bankruptcy fraud.
According to documents filed in this case and statements made in court:
On Feb. 16, 2017, Osorio filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. In his petition and accompanying Schedules of Assets and Liabilities, Osorio declared that he did not have an ownership interest in any incorporated or unincorporated businesses. In so doing, Osorio failed to disclose that he had an ownership interest in both Business-1 and Business-2. Approximately seven months earlier, Osorio had filed a Chapter 11 bankruptcy petition for Business-1, in which he declared that he was Business-1’s sole owner. Osorio also declared that he did not own or have an interest in any checking, savings, or other financial accounts, failing to disclose a bank account in the Dominican Republic in which he had an interest.
In connection with the petition, on Feb. 24, 2017, Osorio filed amended Schedules of Assets and Liabilities, which disclosed a partial ownership interest in Business-1. That declaration was inconsistent with information contained in Business-1’s Chapter 11 bankruptcy proceeding, in which Osorio declared that he was the sole owner of Business-1. The amended schedules also failed to disclose Osorio’s ownership interest in Business-2 and the bank account in the Dominican Republic.
The bankruptcy fraud charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 28, 2021.
Acting U.S. Attorney Honig credited special agents of Homeland Security Investigations and detectives of the New York City Police Department assigned to HSI’s Border Security Enforcement Task Force, under the direction of HSI Special Agent in Charge Peter C. Fitzhugh in New York, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Dara Govan, Chief of the U.S. Attorney’s Office’s Government Fraud Unit in Newark and Assistant U.S. Attorney Samantha C. Fasanello of the U.S. Attorney’s Office’s Criminal Division in Newark.
Baldwinsville Man Charged with Receiving Child PornographyRead the Press Release
SYRACUSE, NEW YORK – Richard Curtis, age 21, of Baldwinsville, New York, appeared today in federal court on charges that he received child pornography.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
According to a criminal complaint, Curtis solicited and received numerous images and videos of child pornography using the Instagram application on his cellular phone. The charges in the complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.
If convicted, Curtis faces at least 5 years and up to 20 years in prison, a term of post-release supervision of at least 5 years and up to life, and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
Curtis appeared today before United States Magistrate Judge Andrew T. Baxter and was detained pending further proceedings.
This case is being investigated by the FBI Syracuse Mid-State Child Exploitation Task Force, comprised of FBI Special Agents and Investigators of the New York State Police, Bureau of Criminal Investigation (BCI). The case is being prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown as a part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s 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 https://www.justice.gov/psc.
Arkansas Man Sentenced to Federal Prison for Possessing a Firearm as a Felon and Drug UserRead the Press Release
A man who was a felon and drug user was sentenced January 27, 2021, to more than 8 years in federal prison.
Deko Lomax, age 22, from Osceola, Arkansas, received the prison term after a September 23, 2020 guilty plea to being a felon and drug user in possession of a firearm. Lomax had been convicted of Residential Theft and Theft of Property each in 2004, Theft of Property in 2007, and Robbery in 2009, among other offense, all in Mississippi County, Arkansas.
Evidence at Lomax’s, change of plea and sentencing hearings revealed on May 7, 2020, law enforcement executed a stop of a vehicle driven by Lomax for an expired registration. Lomax told the officer he did not have a license. The officer noticed an odor of marijuana coming from the vehicle. Lomax admitted to the officer that he had smoked marijuana earlier. A search of the vehicle was conducted and a handgun and ammunition in the magazine of the firearm was located in the glove box of the vehicle.
Lomax was transported to the police department and during an interview Lomax stated he found the gun in the vehicle earlier in the day. He admitted to wiping the bullet off which he had handled. He admitted to committing previous felonies and stated his fingerprints would probably be on the firearm. While Lomax was being transported to the Law Enforcement Center for detention the officer advised Lomax that it was illegal to take contraband into the jail and that it was a felony if he did so. At the jail, correction officers located 55 bags of cocaine on Lomax’s person. The total weight of the 55 bags was 10.9 grams and field tested positive for cocaine.
Lomax was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Lomax was sentenced to 100 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Lomax is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also 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 /media/1122011/dl?inline.
The case was investigated by the Sioux City, Iowa Police Department and the U.S. Department of Justice – Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4057.
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Appleton Man Sentenced to 14 Years in Federal Prison for Robbery of Credit Union While Armed with a Short-Barreled RifleRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, announced that Xengxai Yang (age: 21), formerly of Appleton, was sentenced to 14 years in federal prison for his role in a credit union robbery. Following a bench trial in October 2020, Senior United States District Judge William C. Griesbach found Yang guilty of Armed Bank Robbery, Brandishing a Short-Barreled Rifle During a Crime of Violence, and Possession of a Short-Barreled Rifle. On February 4, 2021, Judge Griesbach imposed the following sentences:G
COUNT
CRIME
SENTENCE
One
Armed Bank Robbery
48 months in prison
Two
Brandishing a Short-Barreled Rifle During a Crime of Violence
120 months in prison, consecutive to other counts
Three
Possession of a Short-Barreled Rifle
48 months in prison, concurrent with Count One
After Yang completes his 168-month sentence, he will be on supervised release for a total of five years.
Court records revealed the following. On March 15, 2019, Yang entered a federally insured credit union on the west side of Appleton, Wisconsin. Yang wore a black plastic theater mask, sunglasses, and a black hooded sweatshirt with the hood up and his head covered. As he approached the counter, Yang pulled out a short-barreled shotgun and demanded money from the teller. Yang held the tellers at gunpoint while they gave him the money in their cash drawers. Yang placed the money in a bag and used cable ties to restrain two of the employees. Yang then left the credit union on foot. Officers with the Appleton Police Department apprehended Yang about a block away and recovered over $10,000 in cash. Yang admitted robbing the credit union, telling an Appleton detective, that he “decided to try something new today, so I robbed a bank.” The rifle used during the robbery had a barrel of 9.5 inches and was illegal for Yang to possess.
In sentencing Yang, Judge Griesbach noted the serious nature of the offense. Chief Judge Griesbach noted that the offense was “bizarre” in light of a lack of previous criminal history, but also stated “no civilized society can tolerate this.” Judge Griesbach pointed out the tremendous impact the offense had on the credit union employees and the need for the sentence to reflect that trauma. Judge Griesbach also observed the need to deter others who might consider similar actions.
The Appleton Police Department investigated the case. It was prosecuted by Assistant United States Attorney Andrew J. Maier.
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For further information contact:
Public Information Officer Kenneth Gales
(414) 297-1700
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Amherst Man Charged with Threatening Members of Congress Will Be DetainedRead the Press Release
CONCORD – In a 22-page order issued today, United States Magistrate Judge Andrea K. Johnstone ordered that Ryder Winegar, 33, of Amherst be detained pending trial, United States Attorney Scott W. Murray announced today.
Winegar was arrested on January 11, 2021. He is charged in a complaint with threatening members of Congress. The United States moved to detain the defendant, arguing that he presented a risk of flight and a danger to the community. In the order issued today, Magistrate Judge Johnstone granted the government’s motion for detention.
The complaint filed in court alleges that on December 16 and 17, 2020, Winegar left voicemails at the offices of six members of the United States Congress in the District of Columbia. In some of the messages, Winegar identified himself by name or identified his telephone number. The voicemails threatened to hang the members of Congress if they did not “get behind Donald Trump.” For example, in one message, Winegar allegedly said, “I got some advice for you. Here’s the advice, Donald Trump is your president. If you don’t get behind him, we’re going to hang you until you die.”
The charges in the complaint are only allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the U.S. Capitol Police with assistance from the United States Marshals Service, U.S. Customs and Border Protection, Federal Bureau of Investigation and the Amherst Police Department.
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3 February 2021
Worden couple admit meth trafficking crimesRead the Press Release
BILLINGS —A Worden couple admitted methamphetamine trafficking charges after drug task force investigators found 10 pounds of meth in their vehicle, Acting U.S. Attorney Leif Johnson said.
Lisa Marie Fish, 39, pleaded guilty today to conspiracy to possess with intent to distribute meth. Fish’s husband, Bo Bryan Fish, 40, pleaded guilty on Jan. 27 to possession with intent to distribute meth. Each faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release.
U.S. District Judge Susan P. Watters presided. Lisa Fish was released pending further proceedings. A sentencing date was set for June 16.
U.S. Magistrate Judge Timothy J. Cavan presided at the hearing for Bo Fish. Bo Fish was detained pending further proceedings. A sentencing date has not yet been set.
The prosecution said in court documents filed in the case that between January and March 2020, the Eastern Montana High Intensity Drug Task Force began investigating Bo and Lisa Fish for involvement in drug trafficking.
Cooperating witnesses told investigators that both defendants were involved in meth trafficking and that Bo Fish took trips to Colorado to acquire bulk quantities of meth, ranging from five to 20 pounds per trip.
The investigation led to a traffic stop in which a truck occupied by both defendants was pulled over near Worden. Lisa Fish refused to make a statement. Bo Fish told investigators there were about 10 pounds of meth in the back seat of the truck and admitted to acquiring the 10 pounds that day in Wyoming. He said he had been acquiring bulk meth from the source for about eight months. Investigators served a search warrant on the truck and the couple’s property and seized 10 pounds of meth from the vehicle and about seven ounces of meth from the property. Ten pounds of meth is the equivalent of about 36,240 doses.
While Lisa Fish did not handle the meth, she furthered the conspiracy by setting up drug deals by telephone and text message so Bo Fish could later deliver meth these people, travelling with Bo Fish to pickup meth from out of state and depositing proceeds from meth sales into bank accounts so that she and Bo Fish could access the funds.
Assistant U.S. Attorney Colin Rubich is prosecuting the case, which was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force and FBI Western Transnational Organized Crime Task Force.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 48% from 2013 to 2019. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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White Supremacist Leader Pleads Guilty in Racketeering CaseRead the Press Release
LITTLE ROCK-A Russellville man pleaded guilty today to his involvement in a racketeering and narcotics conspiracy based on his role as president of a white supremacist organization. Wesley Gullett, 31, was president of New Aryan Empire (NAE), a white supremacist group founded by inmates in the Arkansas Department of Corrections. Gullett entered a guilty plea today before United States District Judge Brian S. Miller.
Prosecutors alleged that from 2014 to 2016, Gullett and NAE associate Marcus Millsap repeatedly offered money to other NAE associates to kill Bruce Wayne Hurley, an individual who had purchased methamphetamine from Millsap. According to the charging document, NAE members believed Hurley had provided information about Millsap to law enforcement, and NAE members allegedly carried out other retaliatory acts against those who they believed had provided information to law enforcement.
In addition to the violent acts, law enforcement officials investigated the NAE’s methamphetamine trafficking organization. During the coordinated federal and state investigation, law enforcement agents made 59 controlled purchases of methamphetamine, seizing more than 25 pounds of methamphetamine, as well as 69 firearms and more than $70,000 in drug proceeds.
Gullett was originally charged in October 2017, and a federal grand jury charged him along with 51 other defendants in a Second Superseding Indictment in September 2019. Gullett pleaded guilty today to two counts of the Second Superseding Indictment: conspiracy to commit racketeering and conspiracy to possess methamphetamine with intent to distribute.
After Gullett’s plea, six remaining defendants are awaiting trial, which is currently set for September 7, 2021. All other defendants have pleaded guilty. As part of Gullett’s plea, he and prosecutors agree to jointly request a sentence of 35 years in the Bureau of Prisons. Judge Miller will determine whether to accept the plea agreement and sentence Gullett at a later date. There is no parole in the federal system.
Jonathan D. Ross, Acting United States Attorney for the Eastern District of Arkansas, together with Drug Enforcement Administration Acting Assistant Special Agent in Charge Thomas M. Fisher and Bureau of Alcohol, Tobacco, Firearms, and Explosives Acting Resident Agent in Charge Clayton Merrell, announced today’s guilty plea.
The investigation was conducted by FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration, in partnership with the Pope County Sheriff’s Office, Fifth Judicial District Drug Task Force, Russellville Police Department, Arkansas State Police, Conway Police Department, and United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys in the Eastern District of Arkansas with assistance from the Department of Justice Criminal Division’s Organized Crime and Gang Section.
# # #
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Wetzel County woman sentenced for heroin chargeRead the Press Release
WHEELING, WEST VIRGINIA – Tina Rose Yoho, of New Martinsville, West Virginia, was sentenced today to 46 months of incarceration for a drug charge, U.S. Attorney Bill Powell announced.
Yoho, age 31, pled guilty to one count of “Distribution of Heroin” in October 2020. Yoho admitted to selling heroin in June 2019 in Wetzel County.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The West Virginia State Police investigated.
U.S. District Judge John Preston Bailey presided.
Wetzel County man sentenced for drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Nicholas D. Klem, of Proctor, West Virginia, was sentenced today to 70 months of incarceration for his role in a drug trafficking operation, U.S. Attorney Bill Powell announced.
Klem, age 29, pled guilty to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Methamphetamine” in October 2020. Klem admitted to working with others to distribute methamphetamine from August 2019 to August 2020 in Marshall County and elsewhere.
Assistant U.S. Attorneys Shawn M. Adkins and Clayton J. Reid prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Marshall County Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.
Upshur County man admits to firearms chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Robert James Tiffner, of French Creek, West Virginia, has admitted to a firearms charge, U.S. Attorney Bill Powell announced.
Tiffner, 27, pleaded guilty today to one count of “Possession of Unregistered Firearm.” Tiffner admitted to having a 20 gauge shotgun that wasn’t registered to him in February 2019 in Upshur County.
Tiffner faces up to 10 years of incarceration and a fine of up to $10,000. 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 investigated.
U.S. Magistrate Judge Michael John Aloi presided.
United States Attorney Robert K. Hur to Leave Department of Justice After Serving as Chief Federal Law Enforcement Officer in Maryland Since 2018Read the Press Release
Baltimore, Maryland – United States Attorney Robert K. Hur announced today that he will resign his position as the chief federal law enforcement officer for the District of Maryland. The U.S. Attorney’s Office for the District of Maryland is one of the country’s largest and busiest, serving a population of more than six million. Mr. Hur will return to private law practice. Jonathan F. Lenzner, who has served as the First Assistant U.S. Attorney during Mr. Hur’s tenure, will become the Acting U.S. Attorney upon his departure.
Mr. Hur took office on April 9, 2018. He tendered his resignation to the President and the Acting Attorney General today, and will conclude his service as United States Attorney on February 15, 2021.
“I thank President Trump for appointing me as United States Attorney; Senators Cardin and Van Hollen for their support; Attorneys General Sessions and Barr and Deputy Attorney General Rosenstein for leading the Department of Justice during my service; and my law enforcement partners here in Maryland, including State’s Attorneys, police chiefs and sheriffs, and federal agency heads. I will always be grateful to have served as U.S. Attorney and helped further the Office’s proud legacy of pursuing justice with integrity, and without fear or favor,” said U.S. Attorney Hur.
“Credit for the Office’s accomplishments belongs to our talented team of dedicated professionals in the U.S. Attorney’s Office and our brave law enforcement partners. I’m humbled by the bravery, creativity, and resilience that my colleagues have shown every day during my three years as U.S. Attorney. Together, we’ve worked tirelessly to bring criminals to justice, protect and provide recourse to victims and witnesses, and defend our nation against adversaries both foreign and domestic. We protected our traditions of integrity and continued our commitment to justice in the face of daunting challenges, including the longest federal government shutdown ever, tragic acts of violent extremism, and a frightening pandemic. For an attorney—especially a first-generation American like myself—representing the United States is a weighty privilege and a dream job. I have been blessed to do so.”
Under Mr. Hur’s leadership, the United States Attorney’s Office (the “Office”) has brought sophisticated and impactful cases, hired dozens of attorneys from diverse backgrounds to bring the Office to its maximum staffing level, increased diversity within the Office’s supervisory ranks, enhanced its technology and physical space, improved internal processes, and strengthened relationships with critical law enforcement and regulatory partners at the local, state, and federal levels. A summary of the Office’s achievements during Mr. Hur’s tenure follows:
Public Corruption
U.S. Attorney Hur continued the Office’s focus on public corruption, which erodes the public’s trust in its elected officials and government. During the past three years, the Office has brought and resolved charges for corruption and/or fraud against dozens of elected officials, public office holders, and public employees. Examples include:
- Former Baltimore City Mayor Catherine Pugh,
- Former Baltimore City Police Commissioner Darryl DeSousa,
- Former Maryland Delegate Cheryl Glenn,
- Former Maryland Delegate Tawanna Gaines,
- Former Maryland State Senator Nathaniel Oaks,
- Members of the Baltimore City Police Department in connection with the Gun Trace Task Force investigation, and
- Correctional officers at numerous state correctional facilities, including Eastern Correctional Institution, Jessup Correctional Institution, Maryland Correctional Institute Jessup, and Chesapeake Detention Facility.
National Security and Cybercrime
On the national security front, under Mr. Hur’s leadership, the Office protected Marylanders from significant terrorist threats, both international and domestic. The Office successfully prosecuted Christopher Hasson, a former Coast Guard officer who amassed an arsenal of weapons in preparation for violence inspired by extremist, white-supremacist views. The Office also charged Rondell Henry with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), in connection with his plans to drive a motor vehicle into crowds and inflict mass civilian casualties at National Harbor. Prosecutors in the Office also charged members of The Base, a racially motivated violent extremist group, who attended military-style training camps and planned to engage in subversive and criminal activity. Importantly, these terrorist plots were disrupted, and the individuals arrested, before any inflicting any harm or loss of life on our communities.
The Office also helped safeguard sensitive, classified information through the successful prosecution of two of the most significant breach cases in history: Harold Martin, a former National Security Agency (“NSA”) contractor who stole and retained classified material over two decades and stored it in his home and car, and Nghia Hoang Pho, a former NSA employee who removed and kept at his home massive troves of highly classified national defense information.
In recognition of the seriousness and volume of national security threats in Maryland, including cyber intrusions such as malware and ransomware, Mr. Hur created the Office’s first National Security and Cybercrime Section; doubled the number of prosecutors assigned to national security and cybercrime matters; designated the Office’s first Cybercrime Counsel to deepen expertise in and lead efforts against all manner of cyber threats; and designated prosecutors throughout the Office to become experts in such sub-fields as narcotics trafficking on the dark web and cryptocurrency.
Violent Crime and Gangs
The Office continued its commitment to reduce violent crime throughout Maryland. Together with local, state, and federal partners, the Office pursued a comprehensive strategy of violence reduction that includes proactive investigations targeting the most violent groups and clearing multiple homicides using federal racketeering statutes; federal gun prosecutions targeting repeat violent offenders; and focused deterrence programs using outreach and prisoner re-entry programs to prevent violent crime and defuse conflict before it happens.
The Office continued to secure important convictions of gang members responsible for gun violence and shooting homicides in Baltimore. These included Montana Barronette, who was sentenced to life in federal prison for participating in at least six murders and his leadership of Trained To Go, one of Baltimore’s most violent gangs; and Terrell Plummer, a member of the violent Old York Money Gang who shot and killed three-year-old McKenzie Elliott as she stood on her front porch during a gang dispute.
Under U.S. Attorney Hur’s leadership, the Office launched several initiatives aimed at curbing the historically high levels of gun violence driven by drug-trafficking organizations in Baltimore City. The Office and local, state, and federal law enforcement partners launched the Baltimore OCDETF Strike Force, aimed at disrupting and dismantling the most violent gangs and their financial infrastructure in the Baltimore metropolitan area. All Strike Force investigators work in one shared location, which is a key part of the Strike Force concept that has proven successful in other cities.
U.S. Attorney Hur also partnered with Governor Larry Hogan, Attorney General Brian Frosh, and Baltimore City State’s Attorney Marilyn Mosby to apply state funds to hire state prosecutors, who were then detailed to the U.S. Attorney’s Office to investigate and prosecute federal firearms cases in federal court. In this way, stakeholders at all levels teamed with Baltimore Police Department officers and federal agents to ensure that armed felons with significant violent criminal histories are removed from our neighborhoods, then prosecuted and sentenced in federal court.
During Mr. Hur’s tenure, the Department of Justice directed millions of dollars in grant funds to the Baltimore Police Department and to violence-reduction efforts in Baltimore. The Justice Department selected Baltimore to participate in the National Public Safety Partnership (PSP) program, a three-year engagement that seeks to leverage department assets in support of a local jurisdiction’s commitment to drive down violent crime. Through this program, local, state, and federal officials in Baltimore work collaboratively to provide training and technical assistance in areas such as crime analytics, emerging technology, and community engagement.
Under U.S. Attorney Hur’s leadership, the Office continued its decades-long focus on the fight against transnational gang La Mara Salvatrucha, also known as MS-13. Having developed nationally recognized expertise in prosecuting MS-13 members with federal racketeering statutes, Maryland AUSAs indicted dozens of defendants during the last three years from the Fultons, Parkview, Langley Park, Sailors, and Los Ghettos Criminales cliques for violence committed in Anne Arundel, Montgomery, Frederick, and Prince George’s counties in Maryland as well as in Virginia. The Office also strengthened its ties with investigators and prosecutors in El Salvador, in order to coordinate enforcement actions, share evidence and intelligence, and fight the gang on both sides of the Atlantic. U.S. Attorney Hur traveled to El Salvador to meet with counterparts and to build valuable relationships with Salvadoran law enforcement.
Fraud
The Office successfully prosecuted complex fraud matters during Mr. Hur’s tenure, obtaining justice on behalf of financial fraud victims and preventing others from being victimized. The Office strengthened its partnership with the Securities and Exchange Commission, together bringing to justice the perpetrators of two massive Ponzi schemes: Kevin Merrill and his co-conspirators were convicted of running a $550 million investment fraud scheme—one of the largest ever charged in Maryland—that defrauded investors of their life savings across the country; Merrill was sentenced to 22 years in federal prison. Former financial advisor and radio personality Dawn Bennett was sentenced to 20 years in federal prison for her conviction on 17 federal charges relating to her own $20 million Ponzi scheme.
The COVID-19 pandemic prompted fraudsters to take advantage of new opportunities to deceive members of the public, and the Office acted quickly to disrupt fraud schemes before losses mounted. In particular, the Office seized two domain names purporting to be websites of biotechnology companies developing treatments for COVID-19. These websites used similar names, trademarked logos, and graphics of actual companies to create fraudulent websites in order to obtain personal information of victims. Also, under U.S. Attorney Hur’s leadership, the Office entered into a Memorandum of Understanding (MOU) with Special Inspector General Brian D. Miller of the Office of the Special Inspector General for Pandemic Recovery (SIGPR), regarding the investigation and prosecution of fraud relating to CARES Act funding. The MOU allows the U.S. Attorney’s Office and SIGPR to enhance their cooperative efforts in investigating and prosecuting matters involving loans, loan guarantees and other investments made by the Secretary of the Treasury under the CARES Act.
U.S. Attorney Hur prioritized the development and strengthening of working relationships with Inspectors General throughout the Executive Branch, many of which investigate and refer fraud matters impacting Maryland. Mr. Hur also led the Office to join the Department of Justice Antitrust Division’s Procurement Collusion Strike Force (PCSF), which works nationwide to combat collusion, antitrust crimes and related fraudulent schemes, which undermine competition in government procurement, grant and program funding.
U.S. Attorney Hur and the Office also prioritized fraud schemes targeting elderly and vulnerable victims. The Office successfully prosecuted numerous defendants who used all manner of schemes to defraud the elderly, including obtaining and using fraudulent credit cards and falsely stating that a relative, typically a grandchild, needed money for bail, legal fees, or other expenses. During the COVID pandemic, Mr. Hur personally tried the first in-person federal jury trial in the Washington, D.C. area; the defendant was convicted of laundering the proceeds of a romance fraud scheme that used dating websites to target vulnerable and elderly victims and defraud them of millions of dollars.
Opioid Crisis
In response to Maryland’s crisis in opioid overdoses, U.S. Attorney Hur spearheaded the launch of the Office’s Synthetic Opioid Surge initiative (“S.O.S”). Pursuant to this initiative, every arrest in Baltimore City for fentanyl distribution is reviewed jointly by the State’s Attorney’s Office for Baltimore City, the U.S. Drug Enforcement Administration and the U.S. Attorney’s Office for Maryland to determine whether the case will be prosecuted in the state or federal system. Thanks to this partnership, S.O.S. prosecutions have resulted in significant federal sentences for armed, repeat offenders responsible for the distribution of substantial quantities of deadly fentanyl. The Office has also worked with State’s Attorneys throughout Maryland to target for federal prosecution narcotics traffickers who sell drugs that result in fatal overdoses, securing stiff federal sentences that disrupt the supply of fentanyl.
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President Trump nominated Mr. Hur to be United States Attorney on November 1, 2017, and the Senate confirmed him unanimously on March 22, 2018. Mr. Hur took office on April 9, 2018.
As United States Attorney, he served as a member of the Attorney General’s Advisory Committee of United States Attorneys (“AGAC”), which provides advice and counsel to the Attorney General on matters of policy, procedure, and management impacting the Offices of the United States Attorneys.
Before serving as U.S. Attorney, Mr. Hur served as the Principal Associate Deputy Attorney General with the Department of Justice in Washington, D.C. In that position, Mr. Hur was a member of the Department’s senior leadership team and the top aide to Deputy Attorney General Rod J. Rosenstein, assisting him with oversight of all components of the Department.
Mr. Hur served as an Assistant U.S. Attorney in the District of Maryland from 2007 to 2014, where he prosecuted gang violence, firearms offenses, and narcotics trafficking, as well as white-collar offenses including financial institutions fraud, public corruption, mortgage fraud, tax offenses, computer network intrusions, and intellectual property theft. He received the Attorney General’s Distinguished Service Award for superior performance and excellence as a lawyer.
Before serving as an Assistant U.S. Attorney, Mr. Hur served as Special Assistant and later Counsel to Christopher Wray, then-Assistant Attorney General in charge of the Criminal Division, where he handled counterterrorism, corporate fraud, and appellate matters.
In addition to his service with the Department of Justice, Mr. Hur was a litigation partner with a law firm in Washington, D.C., where he represented companies and individuals facing criminal and regulatory enforcement actions before the Department of Justice, the Securities and Exchange Commission, and other federal agencies, as well as related civil litigation.
Mr. Hur began his legal career as a law clerk for William H. Rehnquist, Chief Justice of the United States, and Judge Alex Kozinski of the U.S. Court of Appeals for the Ninth Circuit. He received his A.B. degree, magna cum laude with highest honors, from Harvard College. He received his J.D. from Stanford Law School, where he served as Executive Editor of the Stanford Law Review.
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Upon United States Attorney Hur’s departure, First Assistant U.S. Attorney Jonathan F. Lenzner will serve as Acting U.S. Attorney under the Vacancies Reform Act until a replacement is named.
Mr. Lenzner first joined the United States Attorney’s Office as an Assistant U.S. Attorney in 2010. He previously served as an Assistant District Attorney in the Manhattan District Attorney’s Office from 2004 to 2010. He served as an Assistant United States Attorney in Maryland until 2013, departing for a position in the private sector. Upon returning to the Office as United States Attorney, Mr. Hur appointed Mr. Lenzner his First Assistant U.S. Attorney.
“Throughout my tenure, Jon has been my principal partner and advisor, and much of the Office’s recent innovation and success are attributable to him,” Hur said. “I have utmost confidence in him. The Office and its legacy are in supremely talented and experienced hands.”
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U.S. Attorney’s Office Collects More Than $9.9 Million in Civil and Criminal Actions in Fiscal Year 2020Read the Press Release
GREENSBORO, N.C. - United States Attorney Matthew G.T. Martin announced today that the Middle District of North Carolina collected $9,991,198.58 in criminal and civil actions in Fiscal Year 2020. Of this amount, $3,442,905.31 was collected in criminal actions and $6,548,293.27 was collected in civil actions.
The Justice Department collected more than $15.9 billion in civil and criminal actions in fiscal year (FY) 2020 ending Sept. 30, 2020. The $15,988,516,670 in collections in FY 2020 represents more than five times the approximately $3.2 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period. The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $13.5 billion in payments made directly to the Justice Department, and more than $2.4 billion in indirect payments made to other federal agencies, states and other designated recipients.
“The federal prosecutors and support staff in our office work hard to protect our citizens, to safeguard precious taxpayer resources, and to collect money owed to crime victims and to the government,” said U.S. Attorney Martin. “Their diligent efforts enable us to seek justice for crime victims every day and hold accountable those who seek to profit from illegal activity.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
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U.s. Attorney’s Office Collects $105,483,842.21 in Civil and Criminal Actions in Fiscal Year 2020Read the Press Release
U.S. Attorney Christina E. Nolan announced today that the District of Vermont collected $105,483,842.21 in criminal and civil actions in Fiscal Year 2020. Of this amount, $27,111,668.98 was collected in criminal actions and $78,372,173.23 was collected in civil actions. The collections include amounts recovered in matters handled by the District of Vermont together with its federal partners at the Department of Justice and other United States Attorneys’ offices.
“The District of Vermont’s federal prosecutors and Civil Division attorneys work tirelessly to protect our citizens, to recover financial losses they sustain from criminal conduct, and to safeguard precious taxpayer resources,” said United States Attorney Christina E. Nolan. “Their efforts enabled us to achieve justice and recoup a significant amount of taxpayer dollars in Fiscal Year 2020.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
In addition to collections related to civil and criminal actions, the U.S. Attorney’s office in the District of Vermont, working with partner agencies and divisions, collected $905,520.00 in asset forfeiture actions in FY 2020. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years
Two More People Charged in Connection with Multi-State Scheme to Defraud Financial Institutions of Millions of DollarsRead the Press Release
TRENTON, N.J. - Two men were arrested today for their alleged roles in a scheme to defraud multiple financial institutions of millions of dollars, Acting Attorney Rachael A. Honig announced.
Syed Abbas, 32, of Westerville, Ohio, and Muhammad Naveed, 35, of Jersey City, New Jersey, were arrested by federal law enforcement this morning and are each charged by criminal complaint with conspiracy to commit bank fraud. Naveed is scheduled to appear later today by videoconference before U.S. Magistrate Judge Lois H. Goodman. Abbas is scheduled to appear today in Ohio federal court and have his initial appearance by videoconference before Judge Goodman on Feb. 8, 2021.
The defendants are the eighth and ninth defendants charged in the same criminal complaint in the District of New Jersey in connection with the wide-ranging conspiracy to defraud federally insured banks and merchant processors of millions of dollars. In July 2020, seven other defendants were charged in connection with the scheme.
According to documents filed in the case and statements made in court:
From March 2018 through April 2020, Abbas and Naveed conspired with each other and others to defraud several financial institutions. Abbas and Naveed and their conspirators established bank accounts associated with sham entities that had no legitimate purpose, and thereafter issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. Abbas and Naveed also conducted numerous fraudulent credit card and debit card transactions between shell companies to fraudulently credit payee accounts and fraudulently overdraw payor accounts. Abbas and Naveed would use these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization.
Abbas and Naveed withdrew the “existing” funds (through ATMs or bank tellers) that banks had credited to the payee bank accounts at the time of the fraudulent transactions. Because Abbas and Naveed withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks were left with substantial losses.
Law enforcement identified approximately 200 bank accounts used to facilitate the fraudulent schemes. Abbas, Naveed, and other conspirators’ unlawful activities attempted to cause a $10 million loss on financial institutions. The loss attributable to Abbas and Naveed exceeded $1 million.
The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.
Acting U.S. Attorney Honig credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, Newark Division; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of the Social Security Administration, under the direction of John F. Grasso; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the Department of Homeland Security, Homeland Security Investigations – Ohio Division, with the investigation leading to the arrests.
The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney's Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Men Sentenced for Their Role in a Drug ConspiracyRead the Press Release
Two men were sentenced this morning after conspiring with others to distribute methamphetamine and heroin, announced U.S. Attorney Trent Shores.
Kendrick Johnson, 38, and Marcus Collay, 45, were sentenced before Chief U.S. District Judge John E. Dowdell. Johnson received a sentence of 120 months in prison followed by five years of supervised release. His possession of 11 firearms was considered in this sentence. Collay received a sentence of 51 months in prison followed by four years of supervised release.
“It seems like every week I am making a statement about the prosecution of a methamphetamine trafficking conspiracy. This drug continues to be the scourge of our state, wrecking lives and destroying families. Thank goodness the DEA and Tulsa Police are relentless in their efforts to combat methamphetamine,” said U.S. Attorney Trent Shores. “Defendants Collay and Johnson are part of the meth problem and now they’re dealing with the consequences for their actions.”
In a blind plea, Johnson stated that he voluntarily conspired with others in a drug conspiracy that involved methamphetamine. Collay, in his written plea agreement, admitted to intentionally possessing with intent to distribute methamphetamine and heroin. Specifically, Collay stated that he supplied distribution amounts of methamphetamine and heroin to Johnson and other third parties.
The Drug Enforcement Administration and the Tulsa Police Department conducted the investigation. Assistant U.S. Attorney Joel-lyn A. McCormick is prosecuting the case. AUSA McCormick serves as the lead attorney for the United States Attorney’s Organized Crime Drug Enforcement Task Forces.
Tonawanda Man Arrested on Child Pornography Charge After Hidden Camera DiscoveredRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. — U.S. Attorney James P. Kennedy, Jr. announced today that Andrew Vallone, 44, of Tonawanda, NY, was arrested and charged by criminal complaint with attempting to produce child pornography. The charge carries a mandatory minimum penalty of 15 years in prison, a maximum of 30 years, and a $250,000 fine.
Assistant U.S. Attorney David J. Rudroff, who is handling the case, stated that according to the criminal complaint, an individual contacted the Town of Tonawanda Police Department after discovering a video depicting a child (Victim) wearing only a pair of underwear on a desktop computer belonging to the defendant. On January 23, 2021, the Tonawanda Police contacted the FBI and further investigation determined that Vallone had secreted a camera in a location which allowed him surreptitiously to film the Victim. The MicroSD card recovered from that hidden camera contained numerous images which depicted the Victim in various states of undress. Additionally, on January 29, 2021, the New York State Police contacted investigators regarding an email that Vallone sent to a mental health counselor. In the email, the defendant stated that he liked to look at younger girls and “I need help.”
The defendant will make an initial appearance before U.S. Magistrate Judge Michael J. Roemer at 2:00 p.m. this afternoon.
The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the Tonawanda Police Department, under the direction of Chief James P. Stauffiger.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Texas hospice CEO sentenced for $150M health care fraud and money laundering schemeRead the Press Release
McALLEN, Texas – A 50-year-old executive is headed to prison for falsely telling patients they had mere months to live and increasing revenue by enrolling them in hospice programs for which they were not qualified nor needed.
A federal jury in Brownsville convicted Henry McInnis, 50, Harlingen, in November 2019 of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering, obstruction of justice as well as six counts of health care fraud.
Today, U.S. District Judge Rolanda Olvera ordered him to serve a total of 15 years in federal prison.
McInnis’s co-conspirator and owner of the hospice and home health entities, Rodney Mesquias, 50, San Antonio, was also convicted following the November 2019 trial. He was later sentenced to 240 months imprisonment. Two others have pleaded guilty and are awaiting sentencing.
“McInnis, as CEO of the company, directly oversaw a reprehensible criminal scheme that involved the submission of over $150 million in fraudulent bills, the falsification of patients’ medical records, and the payment of unlawful kickbacks,” said Acting Assistant Attorney General Nicholas L. McQuaid, of the Justice Department’s Criminal Division. “The defendant preyed upon some of the most vulnerable members of our society, including many who suffered from diminished mental capacity and who were falsely and cruelly told by co-conspirators that they had only months to live. Today’s significant sentence demonstrates the department’s continued commitment to pursuing individuals, at all levels of corporate management, who engage in criminal schemes that prioritize profits over patient care.”
“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”
From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other health care services. McInnis served as the top corporate officer and administrator and oversaw the day-to-day operations of the Merida Group, a large health care company that operated dozens of locations throughout Texas.
According to evidence presented at trial, McInnis, Mesquias and Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, as well as patients with limited mental capacity who lived at group homes, nursing homes and in housing projects. In some instances, Merida Group marketers falsely told patients they had less than six months to live. They even sent chaplains to the patients based on the false pretense they were near death. The chaplains would discuss last rites and other preparations for imminent death with the patients.
In order to receive reimbursement for hospice services, Medicare requires patients to be suffering from a terminal illness expected to result in death within six months. Not only were some of the patients not expected to die within that timeframe, they were walking, driving, working and, in some instances, even coaching athletic sporting events. However, McInnis and his co-conspirators kept patients on hospice services for multiple years in order to increase revenue from Medicare. Placing patients on such palliative hospice care meant the patients were unable to obtain medical coverage for curative medical services.
In addition to placing unqualified patients on hospice care, McInnis and his co-conspirators also endeavored to keep patients who did qualify for hospice care alive for as long as possible for their own monetary gain. At trial, a co-conspirator testified and explained “the way you make money is by keeping them alive as long as possible.” The jury heard that this included engaging in surgical and other medical interventions designed to extend life through the use of medical technologies, even when such interventions were not consistent with the goals of hospice care.
McInnis had no medical training and worked previously as an electrician. However, he acted as the de facto director of nursing for the Merida Group. Witnesses at trial testified McInnis directed employees to admit unqualified patients to hospice and home health, keep unqualified patients on services for long periods of time and fired and reprimanded employees who refused to participate in the scheme.
McInnis also oversaw and enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified McInnis ordered employees to alter medical records to make it appear patients were terminally ill. In reality, some were employed or even participating in sporting events. The jury also heard that McInnis explained the purpose of the falsified records was to allow the Merida Group to pass insurance company audits.
As CEO, McInnis also adopted a policy that paid illegal kickbacks. They directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for recruitment of patients who could be placed on extremely expensive hospice services.
The evidence further established McInnis and Mesquias obstructed justice by causing the creation of false and fictitious medical records that allegedly showed patients needed the hospice services. McInnis and others tried to provide these to a federal grand jury in a failed attempt to avoid indictment. The records added false diagnostic information, making it appear patients were dying and eligible for hospice services when, in fact, they were not.
The Department of Health and Human Service – Office of Inspector General (DHHS-OIG); FBI and Texas Health and Human Services Commission conducted the investigation. Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, DHHS Centers for Medicare & Medicaid Services, working in conjunction with the DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Texas Man, Self-Proclaimed Leader of Honolulu Proud Boys Now Indicted by a Federal Grand Jury for Conspiracy to Obstruct CongressRead the Press Release
WASHINGTON, D.C. –A federal grand jury in the District of Columbia has returned an indictment charging a Hawaii man who purports to have founded the Honolulu chapter of the Proud Boys and a Texas man with conspiring to obstruct the United States Congress’ certification of the results of the 2020 U.S. Presidential Election, as well as other crimes they committed to achieve that goal. Together, and with others, the two men planned and raised money for their effort, and then traveled to Washington, D.C., where they joined a crowd that stormed past barricades and law enforcement officers to halt a Joint Session of the U.S. Congress on January 6.
John C. Demers, the Assistant Attorney General for National Security; Michael R. Sherwin, the Acting United States Attorney for the District of Columbia; and Steven D’Antuono, the Assistant Director in Charge of the Washington Field Office announced the indictment.
Nicholas DeCarlo, 30, of Burleson, Texas, and Nicholas R. Ochs, 34, of Honolulu, Hawaii, were each indicted for conspiring to commit an offense against the United States, in violation of Title 18, United States Code Section 371, that is, to corruptly obstruct, influence, or impede an official proceeding, in violation of 18 U.S.C. § 1512(c)(2); one count of theft of federal government property, in violation of Title 18, United States Code, Section 641; one count of depredation against federal government property, in violation of Title 18, United States Code, Section 1361; and three counts of unlawful entry, disorderly conduct, or violent conduct in restricted buildings or grounds, in violation of Title 18, United States Code, Section 1752(a)(1), (2), and (4).
The indictment was unsealed this afternoon. DeCarlo and Ochs previously were taken into custody on January 26 and January 7, respectively. The defendants will be arraigned before a United States District Judge.
The indictment against DeCarlo and Ochs alleges that prior to January 6, DeCarlo and Ochs agreed to travel to Washington, D.C., in order to stop, delay, and hinder the certification of the results of the November 2020 Presidential Election. To advance and finance that effort, the indictment alleges, DeCarlo and Ochs, using the Internet, raised funds to support their travel and, on January 5, did travel from their respective locations in Texas and Hawaii to Washington, D.C.
The indictment further alleges that on January 6, DeCarlo, Ochs, and other individuals entered the Capitol building behind an initial wave of individuals who had stormed the Capitol building unlawfully. Thereafter, DeCarlo and Ochs traveled throughout and occupied the Capitol building, depicting their actions inside the building in real time through photographs and videos that they posted to social media. While on U.S. Capitol grounds unlawfully, DeCarlo and Ochs defaced the U.S. Capitol by scrawling onto its Memorial Door the words “MURDER THE MEDIA[.]”
Also, according to the indictment, DeCarlo and Ochs stole a pair of flexible handcuffs belonging to the United States Capitol Police.
This case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Counterterrorism Section of the DOJ’s National Security Division. The indictment is the result of an ongoing investigation by the FBI’s Washington Field Office, Honolulu Field Office, and Dallas Field Office, as well as the United States Capitol Police, along with the Media Assault Strike Force of the United States Attorney’s Office for the District of Columbia, a specialized team staffed by senior prosecutors highly experienced in investigating and prosecuting cases involving victims of violent crime and focused on potential assaults, threats, and property damage directed at members of the media.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless proven guilty. If convicted, DeCarlo and Ochs each face a maximum sentence of 20 years in prison, a fine of up to $250,000, and 3 years of supervised release.
The ATF and FBI continue to urge the public to report suspected use of explosive devices, or violent, destructive acts associated with the recent unrest. Anyone with information can call 1-888-ATF-TIPS (1-888-283-8477), email [email protected] or submit information anonymously via ReportIt.com.
The FBI is looking for individuals who may have incited or promoted violence of any kind. Anyone with digital material or tips can call 1-800-CALL-FBI (800-225-5324) or submit images or videos at fbi.gov/USCapitol.
The FBI also urges anyone with information about or anyone who witnessed any unlawful action against any member of the media to contact the FBI’s Toll-Free Tipline at 1-800-CALL-FBI (1-800-225-5324) to report potential leads. In particular, the FBI seeks help in identifying persons depicted in photos taken during assaults on media members. The FBI has posted these photos on its website at https://www.fbi.gov/wanted/capitol-violence, which can be sorted by the label “Assault on Media”, and on Twitter at https://twitter.com/FBIWFO/status/1357062685461008385 and https://twitter.com/FBIWFO/status/1354991604663255045.
The United States Attorney’s Office strongly encourages members of the press to report any instances where a reporter, journalist, photographer, videographer, or other media personnel was assaulted or threatened, or where their property was damaged or destroyed by the rioters on January 6. Such information will help secure the First Amendment rights of all press personnel. Any information, including video and photographic evidence, can be emailed to [email protected].
Statement on the Deaths of FBI Special Agents Dan Alfin and Laura SchwartzenbergerRead the Press Release
ALBANY, NEW YORK – Acting U.S. Attorney Antoinette T. Bacon issued the following statement regarding the deaths of FBI Special Agents Dan Alfin and Laura Schwartzenberger on February 2, 2021, in Sunrise, Florida:
“Our deepest condolences to the family, friends, and colleagues of FBI Special Agents Dan Alfin and Laura Schwartzenberger, two selfless public servants who dedicated their careers to protecting children.
“We feel the loss especially in the Northern District of New York, as we were fortunate to work with SA Alfin while he was stationed at FBI Albany. Over those 5 years, SA Alfin worked tirelessly to protect our community from predators. Using creative investigative techniques, SA Alfin targeted the worst predators in our area and went on to lead a national investigation. We are grateful to have worked with him and will remember his intelligence, dedication, and sense of humor. He will be missed.
“The USAO will honor SA Alfin’s and SA Schwartzenberger’s legacies by redoubling our efforts to keep the community safe, especially for children and teens who are targeted by sexual predators and human trafficking organizations.”
Springfield Woman Indicted on Charges of Fraud Related to Small Business Administration COVID-19 Disaster Loan ProgramRead the Press Release
SPRINGFIELD, Ill. – A grand jury today returned an indictment that charges a Springfield, Ill., woman, Amber L. Bolen, 41, with fraud in connection with major disaster or emergency benefits available through the Small Business Administration.
The indictment alleges that in July 2020, Bolen, of the 1900 block of Gregory Ct., submitted an application for an Economic Injury Disaster Loan for a business, known as “amber bolen,” which did not exist. The indictment alleges that Bolen made false representations on the loan application including that she owned the business, listed at the same address as her residential address, since 2013; that it was engaged in the transportation industry; and, that the business employed 11 people and had gross revenues of more than $90,000 for the 12 months prior to Jan. 31, 2020. The SBA wired approximately $41,000 in loan proceeds into Bolen’s bank account.
If convicted, the maximum statutory penalty for fraud in connection with major disaster or emergency benefits is up to 30 years in prison; the maximum penalty for wire fraud is up to 20 years in prison.
The charges were investigated by the Internal Revenue Service, Criminal Investigation Division as part of a Central Illinois Task Force directed at combatting COVID-19 related fraud. Other participating agencies in the task force include the Small Business Administration, Office of Inspector General; U.S. Secret Service; Federal Deposit Insurance Corporation, Office of Inspector General; U.S. Postal Inspection Service; U.S. Department of Labor, Office of Inspector General; and, the Federal Bureau of Investigation. Assistant U.S. Attorney Sierra Senor-Moore is representing the government in the case prosecution.
Covid-19 disaster relief and enhanced unemployment benefits are intended to help people and businesses suffering as a result of the pandemic. If members of the public suspect anyone fraudulently obtained or misused benefits, they should contact the National Center for Disaster Fraud (NDCF) Hotline at 1-866-720-5721 or submit the NCDF Web Complaint Form. The NCDF is a national coordinating agency within the Department of Justice’s Criminal Division dedicated to improving the detection, prevention, investigation, and prosecution of criminal conduct related to natural and man-made disasters and other emergencies, such as the coronavirus (COVID-19). Hotline staff will obtain information regarding complaints, which will then be reviewed by law enforcement officials. More information is available at https://www.justice.gov/disaster-fraud
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Springfield Man Sentenced for Illegal Firearm, Airport ThreatRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Missouri, man was sentenced in federal court today for illegally possessing a firearm and for making a threatening phone call that caused disruption at the Springfield National Airport.
Dustin B. Gowens, 39, was sentenced by U.S. District Judge M. Douglas Harpool to four years in federal prison without parole.
On Feb. 22, 2020, Gowens pleaded guilty to one count of being a felon in possession of a firearm and one count of maliciously conveying false information.
Gowens admitted that on Sept. 25, 2018, he was in possession of a Jimenez Arms 9mm semi-automatic pistol. A clerk at the Kum & Go gas station called police officers when he saw Gowens pull the firearm from his pants pocket. When officers arrived, Gowens was standing outside with the gun in his hand. Gowens walked away, hiding the pistol in between a cage that contained propane tanks. The officer ordered him to lie on the ground, placed him in handcuffs, then found the firearm. Gowens, who was also in possession of four methadone pills, was arrested.
A few days later, on Sept. 28, 2018, Gowens called 911 to report that there was a group at the Springfield National Airport who had taken hostages and were in possession of a bomb. The duress alarm was sounded at the airport. When police officers responded to the airport alarm, the 911 dispatcher informed them that the phone call had originated from a pay phone at the airport. Surveillance cameras captured footage of Gowens, who was still seated on a bench nearby, making the phone call. Officers approached Gowens, who admitted making the call, and arrested him.
Gowens’s actions caused substantial disruption to the airport and caused delays of two departing flights.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Gowens has prior felony convictions for aggravated burglary, tampering with a motor vehicle, and theft of merchandise. Gowens also has eight misdemeanor convictions and faces two active warrants and five pending cases in Missouri, Kansas, and Oklahoma. He has arrests or convictions in six different states.
This case was prosecuted by Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Springfield, Mo., Police Department, and the Springfield, Mo., Airport Police.
Somerset County Man Admits Defrauding Former Employer of More Than $1 MillionRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man today admitted defrauding his former employer by using the employer’s account to make unauthorized purchases of high-end electronic devices and selling those items on after-market websites, Acting U.S. Attorney Rachael A. Honig announced.
Ovais Mayet, 33, of Hillsborough, New Jersey, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
Mayet was a biological engineer with a biopharmaceutical company located in Summit, New Jersey. He was permitted to use the employer’s business account to make authorized purchases of materials and equipment for work-related purposes. Instead, Mayet used the employer’s account to purchase substantial quantities of electronic devices, which he did not and would not use in the course of his employment. Between January 2019 and March 2020, Mayet executed online purchase orders and disguised these purchases as business expenses, when, in fact, they were for his own personal gain. Mayet resold the items on after-market websites and used the proceeds to pay for personal expenses. Mayet obtained nearly $1.1 million worth of electronic devices from the fraudulent scheme.
The wire fraud charge to which Mayet pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. Sentencing is scheduled for June 7, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.
Sioux City Man Sentenced to More Than Six Years in Federal Prison for Possessing a Loaded Gun After High Speed ChaseRead the Press Release
A convicted felon who unlawfully possessed a gun was sentenced January 20, 2021, to more than six years in federal prison.
Levi Bergenske, age 22, from Sioux City, Iowa, received the prison term after an August 26, 2020 guilty plea to one count of possession of a firearm by a felon. Bergenske was previously convicted of theft 2nd degree and interference with official acts while armed with a dangerous weapon, both in Woodbury County, Iowa.
Evidence at Bergenske’s, change of plea and sentencing hearings revealed on January 17, 2019, law enforcement attempted to execute a stop of a vehicle driven by Bergenske. At the time he had five outstanding warrants for his arrest in the state of Iowa and was, as subsequent tests confirmed, under the influence of marijuana and methamphetamine. Bergenske refused to stop his vehicle and a high-speed vehicle pursuit ensued, at times exceeding speeds of 80 miles per hour on Floyd Boulevard and Outer Drive in Sioux City, Iowa. He failed to stop at a red light, drove off the roadway, and at times, drove into oncoming lanesof traffic. The Pursuit Intervention Technique (PIT maneuver) was utilized by law enforcement on Hamilton Boulevard, which immobilized Bergenske’s vehicle against a concrete sign. After Bergenske continued to resist arrest, officers utilized a baton to break the driver’s window, and extricate a still-combative Bergenske. Inside the car two handguns, ammunition, and 9 grams of methamphetamine were located. A Subsequent search of Bergenske’s home revealed a third handgun, ammunition, and another 22 grams of methamphetamine.
Bergenske has a significant criminal history. Twice before the instant offense, Bergenske violently resisted store employees’ attempts to stop him from committing a theft. He had illegally possessed a loaded firearm in the past as well.
Bergenske was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Bergenske was sentenced to 78 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Bergenske is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also 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. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: [list partners here]. For more information about Project Guardian, please see /media/1122011/dl?inline.
The case was investigated by the Sioux City, Iowa Police Department and the U.S. Department of Justice – Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-4026.
Follow us on Twitter @USAO_NDIA.
Sioux City Man Sentenced to Federal Prison for MethRead the Press Release
A man who possessed with intent to distribute methamphetamine was sentenced on January 27, 2021, to 10 years in federal prison.
Aaron Louis Bryant, age 32, from Sioux City, Iowa, received the prison term after an October 7, 2020, guilty plea to one count of possession with intent to distribute a controlled substance within 1,000 feet of a protected location.
At the guilty plea, Bryant admitted that on November 15, 2019, during a traffic stop, he got into an altercation with law enforcement. After law enforcement took defendant into custody, Bryant tossed a baggie of methamphetamine out of his pocket and made the comment “look what they threw on me.”
The baggie contained 3 smaller bags, each with methamphetamine inside. The three bags contained approximately 62 grams of actual methamphetamine. The incident happened within 1000 feet of the protected location of Dinosaur Park in Sioux City.
Bryant was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Bryant was sentenced to 120 months’ imprisonment. He must also serve a 10-year term of supervised release after the prison term. There is no parole in the federal system.
Bryant is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Mikala Steenholdt and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 20-CR-4015.
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Saratoga County Man Admits to Unlawfully Selling “Ghost Guns” and Methamphetamine DistributionRead the Press Release
ALBANY, NEW YORK – Christopher Montano, age 36, of Edinburg, New York, pled guilty today to unlawfully conspiring to deal, possess, transfer and make unregistered firearms, and to distributing methamphetamine.
The announcement was made by Acting United States Attorney Antoinette T. Bacon; John B. DeVito, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
In pleading guilty, Montano admitted that between August and October 2019, he, along with Michael Castelluccio, conspired to build and sell firearms from component parts ordered online. These firearms are commonly known as “ghost guns” because they do not have serial numbers, which makes them difficult for law enforcement to trace.
Montano admitted to conspiring to possess and transfer short-barreled rifles, which are rifles with barrels less than 16 inches long, and admitted to doing so without having filed an application with or received approval from the Secretary of the Department of the Treasury, or paying the tax required by federal law. He also admitted to selling more than 50 grams of methamphetamine.
Chief United States District Judge Glenn T. Suddaby scheduled sentencing for June 3, 2021.
Montano faces a minimum sentence of 10 years in prison, a maximum sentence of life, a fine of up to $10 million, and a term of supervised release of up to life. Montano also agreed to forfeit the proceeds he received from the sale of the methamphetamine.
Castelluccio pled guilty on November 5, 2020 to unlawfully transferring an unregistered short-barreled rifle that had machinegun capability, and is scheduled to be sentenced on April 1, 2021. Castelluccio faces a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years. Castelluccio also agreed to forfeit a pickup truck that he used to transport the firearms.
A defendant’s sentence is imposed by a judge based on the statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the ATF and HSI, as well as the Schenectady County and Montgomery County Sheriff’s Offices. The case is being prosecuted by Assistant U.S. Attorney Alexander Wentworth-Ping.
This case is 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/ag/project-guardian-memo-2019/download
Receiving, distributing child pornography sends Great Falls man to prisonRead the Press Release
GREAT FALLS — A Great Falls man who admitted downloading and sharing child pornography with his cell phone was sentenced today to eight years and six months in prison and to five years of supervised release, Acting U.S. Attorney Leif Johnson said.
Derek Wallace Johnson, 41, pleaded guilty on Sept. 23, 2020 to distribution of child pornography and receipt of child pornography.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris ordered Johnson to pay $12,000 restitution and continued Johnson’s detention.
The prosecution said in court documents that in October 2019, Homeland Security Investigations in Great Falls received information that a suspect had uploaded possible child pornography in April 2019. An investigation determined that the uploaded image depicted a child engaged in sexually explicit conduct and led to Johnson as the suspect. Investigators served a search warrant on Johnson's residence. Johnson, who was present for the search, told officers he had lost his cell phone a few days earlier, but an agent found it hidden between the box spring and mattress in Johnson's bedroom.
After initially being untruthful, Johnson admitted he had participated in online activity involving child pornography and admitted to hiding his phone. He also said he had about 1,000 videos and images of child pornography in an encrypted app on his phone. Johnson told officers he downloaded child pornography in Kik chat rooms and shared files with others seeking images in chat rooms.
Agents searched Johnson's phone and determined it contained almost 2,700 image files and more than 500 video files of child pornography. Johnson distributed child pornography in April 2019 and had downloaded or received child pornography from December 2016 to November 2019.
Assistant U.S. Attorney Cyndee Peterson prosecuted the case, which was investigated by the Montana Internet Crimes Against Children Task Force, Homeland Security Investigations and the Great Falls Police Department.
This case was initiated under the Department of Justice’s Project Safe Childhood initiative, which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children.
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Raleigh County Woman Sentenced to a Total of 54 Months in Prison for Conspiracy to Obstruct Justice and Health Care FraudRead the Press Release
Defendant’s husband also pled guilty in January for his role in the conspiracy to fake her death at the New River Gorge
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Julie M. Wheeler received a sentence of 12 months and one day for her role in a federal conspiracy to obstruct justice. Wheeler’s sentence was ordered to be served consecutively to her 42 month sentence previously imposed for her federal health care fraud conviction. The consecutive sentence increases Julie Wheeler’s total sentence of incarceration to 54 months of federal incarceration. In a separate criminal hearing last month, Rodney Wheeler pled guilty to the federal felony offense of conspiracy to obstruct justice. Rodney Wheeler faces up to five years of incarceration, a $250,000 fine, and three years of supervised release when he is sentenced on April 5, 2021.
“Julie Wheeler faked a traumatic death to avoid her judgment day with the courts. While she was found hiding in a closet she was also hiding from justice. The scheme put many lives at risk and wasted valuable resources,” said United States Attorney Mike Stuart. “By conspiring to avoid her federal sentence for health care fraud, she, with the aid of her husband, only made matters worse. Julie added another year to her sentence and Rodney now has a federal felony conviction for which he will soon be sentenced.”
In a case that garnered national media attention, Rodney and Julie Wheeler conspired to fake her death at the New River Gorge to avoid her federal court sentencing for health care fraud. To fake her death, Rodney Wheeler and another family member placed a 911 call on May 31, 2020, claiming Julie Wheeler had fallen from the Grandview Overlook in the New River Gorge in West Virginia. The overlook is a steep cliff with a series of ledges leading down to the New River. This 911 call prompted a massive search and rescue operation with hundreds of volunteers, law enforcement, and professional search and rescue personnel looking for Julie Wheeler at the base of the overlook and the surrounding area. Helicopters, rescue dogs, and repelling experts also scoured the area looking for her. Additional false statements were given to state and federal investigators by Rodney Wheeler as part of the conspiracy, including statements to National Park Service officers and the United States Probation Office. The purpose of these statements was to continue the Wheelers’ ruse that she had fallen and was missing. In reality, she was hiding in her own home and planning to go into permanent hiding with her husband.
After two days of searching, the West Virginia State Police located Julie Wheeler hiding in a closet inside her home. Once removed from her closet, Rodney and Julie Wheeler were both taken into custody. In statements to state and federal investigators, Rodney Wheeler and Julie Wheeler admitted they conspired to fake her disappearance to avoid Julie Wheeler’s pending federal sentencing in a health care fraud case.
Instead of avoiding her federal sentencing hearing for health care fraud, Julie Wheeler was incarcerated and subsequently sentenced on June 30, 2020, to 42 months in prison and three years of supervised release for health care fraud relating to her overbilling a VA program for spina bifida care. She was also ordered to pay restitution in the amount of $289,055.07 for the overbilling scheme. The Federal Bureau of Investigation (FBI) and the Veterans Affairs - Office of Inspector General (VA-OIG), the Office of Veterans Affairs (VA), and the United States Department of Health and Human Services - Office of Inspector General (HHS-OIG) conducted the investigation of the underlying health care fraud.
The National Park Service and the West Virginia State Police conducted the criminal investigation concerning the conspiracy to obstruct justice. The United States Probation Office in the Southern District of West Virginia also conducted an independent investigation of Julie Wheeler’s disappearance and conduct related to the obstruction. The Raleigh County Prosecuting Attorney’s Office also assisted with the investigation and the Wheelers are both presently charged with numerous felony and misdemeanor offenses in Raleigh County Circuit and Magistrate Courts relating to the false reporting of an emergency.
Senior United States District Judge John T. Copenhaver, Jr. presided over the plea and sentencing hearings. Assistant United States Attorney Erik S. Goes is handling the prosecutions.
The investigation was also conducted by members of the United States Attorney’s Healthcare Fraud Abuse, Recovery and Response Team (ARREST), an innovative approach linking civil and criminal enforcement efforts together in a comprehensive attack on healthcare fraud. United States Attorney Mike Stuart announced the formation of ARREST in February 2019. All health care related cases in the Southern District of West Virginia, whether they are the subject of criminal or civil investigation or enforcement, are directed through ARREST. Included within the purview of the team are the Opioid Fraud and Abuse Detection Unit, Affirmative Civil Enforcement Unit, Appalachian Regional Prescription Opioid (ARPO) Strike Force, Medicare and Medicaid Fraud, and Asset Forfeiture efforts related to all healthcare matters.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:20-cr-00145.
Follow us on Twitter: SDWVNews and USAttyStuart
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Puerto Rico U.S. Attorney’s Office and IRS-Criminal Investigation Warn Taxpayers About New Wave of Covid-19 Scams as Second Round of Economic Impact Payments Is DeliveredRead the Press Release
SAN JUAN, PUERTO RICO-- U.S. Attorney W. Stephen Muldrow and Tyler R. Hatcher, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, made the announcement today in an effort to prevent taxpayers from falling victim to criminals.
In the last several months, IRS-CI has seen a variety of Economic Impact Payment (EIP) scams and other financial schemes designed to steal money and personal information from taxpayers. Criminals are taking advantage of the second round of Economic Impact Payments – as well as the approaching filing season – to trick honest taxpayers out of their hard-earned money.
“As the second round of economic impact payments are delivered, we continue to provide guidance to taxpayers about tax and COVID-19 related scams. We remain vigilant with our law enforcement partners to investigate and bring to justice those who exploit the ongoing public health crisis in order to enrich themselves. I urge citizens to remain alert and to be skeptical of any telephone calls, e-mails, or websites that request personal information or banking information, while promising money or services that seem too good to be true,” said U.S. Attorney W. Stephen Muldrow.
Tyler R. Hatcher, Acting Special Agent in Charge of the IRS-CI Miami Field Office warned, “Economic relief efforts are meant to assist those in most need who have been affected by the COVID-19 pandemic. Criminals think these funds are an easy target to take advantage of innocent people. But we have other plans for those who try to prey on the public, and we are committed to hold them accountable for their criminal actions. Report any phone calls, emails, or text messages asking for your personal information or offering a deal that seems too good to be true.”
Some common COVID-19 scams include:
- Text messages asking taxpayers to disclose bank account information under the guise of receiving the $1,200 Economic Impact Payments.
- Phishing schemes using email, letters and social media messages with key words such as “Coronavirus,” “COVID-19,” and “stimulus” in varying ways. These communications are blasted to large numbers of people and aim to access personally identifying information and financial account information (including account numbers and passwords).
- The organized and unofficial sale of fake at-home COVID-19 test kits (as well as offers to sell fake cures, vaccines, pills, and professional medical advice regarding unproven COVID-19 treatments).
- Fake donation requests for individuals, groups and areas heavily affected by the disease.
- Bogus opportunities to invest in companies developing COVID-19 vaccines while promising that the “company” will dramatically increase in value as a result.
Although criminals are constantly changing their tactics, taxpayers can help protect themselves by acting as the first line of defense. The best way to avoid falling victim to a scam is knowing how the IRS communicates with taxpayers. The IRS does not send unsolicited texts or emails. The IRS does not call people with threats of jail or lawsuits, nor does it demand tax payments on gift cards.
IRS-CI continues investigating hundreds of COVID-19-related cases with law enforcement agencies domestically and abroad and educating taxpayers about scams.
COVID-19 scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at 1-866-720-5721 or submitted through the NCDF Web Complaint Form. The NCDF is a national coordinating agency within the Department of Justice’s Criminal Division dedicated to improving the detection, prevention, investigation and prosecution of criminal conduct related to natural and man-made disasters and other emergencies.
Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Reports can be made online at TIPS.TIGTA.GOV.
Taxpayers who receive unsolicited emails or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, should forward the message to [email protected]. Taxpayers are encouraged not to engage potential scammers online or on the phone.
To learn more about COVID-19 scams and other financial schemes visit IRS.gov. Official IRS information about COVID-19 and Economic Impact Payments can be found on the Coronavirus Tax Relief page, which is updated frequently.
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Previously convicted felon from Albuquerque charged with firearm possessionRead the Press Release
ALBUQUERQUE, N.M. – Antonio Barraza, 31, of Albuquerque, appeared in federal court on Jan. 22 on a charge of being a felon in possession of a firearm. Barraza will remain detained pending trial.
According to a criminal complaint, on Aug. 10, 2020, a Bernalillo County Deputy Sheriff made a law enforcement stop on Barraza’s vehicle relating to an active arrest warrant. After the deputy identified and arrested Barraza, an inventory of items in his vehicle allegedly revealed a pistol underneath the driver’s seat.
Barraza has six previous felony convictions. As a previously convicted felon, Barraza cannot legally possess firearms or ammunition. If convicted, Barraza faces up to 10 years in prison.
A complaint is only an allegation. A defendant is considered innocent unless and until proven guilty.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bernalillo County Sheriff’s Department investigated this case. Assistant U.S. Attorney Jim Tierney is prosecuting the case.
Pittsburgh Felon Indicted on Federal Drug and Gun ChargesRead the Press Release
PITTSBURGH, PA. - One resident of Pittsburgh, PA, has been indicted by a federal grand jury in Pittsburgh on charges of violating various federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today.
The two-count Indictment named Evan Andrews, 27, as the sole defendant.
According to Indictment, Andrews is accused of possessing with the intent to distribute 28 grams or more of cocaine base, in the form commonly known as crack, and possessing a firearm while a convicted felon on September 23, 2020.
The law provides for a minimum sentence of five years in prison and a maximum total sentence of 50 years in prison, a fine of $5,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Douglas C. Maloney is prosecuting this case on behalf of the government.
The Drug Enforcement Administration (DEA) and the Allegheny County Sheriff’s Office 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.
Palmer Man Sentenced to 24 months for Wire FraudRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that a Palmer man was sentenced to serve 24 months in prison for Wire Fraud, in violation of 18 U.S.C. § 1343.
Faunus Michael Doney, fka Christopher Michael Wold, 37, of Palmer, was sentenced by United States District Court Judge Joshua M. Kindred to serve 24 months in prison, followed by 3 years of supervised release. He was also ordered to pay $377, 946.14 in restitution to the victims of his fraudulent scheme. Doney pleaded guilty to Wire Fraud on September 22, 2020.
According to a Felony Information filed in August of 2020, Doney devised and participated in a scheme that defrauded three victims beginning in August 2018 and continuing until at least June 2019. Additional court documents reveal that Doney, a licensed insurance broker in Alaska, worked for a life insurance and annuity company based in Iowa. Doney was responsible for marketing life insurance and annuities to new and existing clients in Alaska, many of whom were elderly and purchased those products to secure income in retirement or for estate planning. Doney travelled throughout Alaska and hosted seminars designed to encourage elderly Alaskans to invest in his products. Although Doney was aware that the three victims identified in the Information had limited retirement savings, he convinced them to invest much of their savings with him by promising significant guaranteed returns. In reality, there were no investments: Doney simply redirected the victims’ funds to his personal and business accounts, created fictitious balance sheets, account statements, and other doctored evidence and to allay his victims’ concerns.
In imposing prison time, Judge Kindred remarked that he hoped the sentence would send a message to Doney and others that fraudulent conduct on this scale will be met with serious consequences.
The IRS-Criminal Investigation (IRS-CI conducted the investigation leading to the successful prosecution in this case, with support from the Federal Bureau of Investigation (FBI), and the State of Alaska Division of Insurance. This case was prosecuted by Assistant U.S. Attorney James Klugman.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10% of older Americans every year. Together with our federal, state, local and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans. To learn more about the Elder Abuse Financial Exploitation Resources, visit the DOJ Elder Abuse Resource Roadmap.
Norwich Man Sentenced to 57 Months in Prison for Firearm Offense Stemming from New London ShootingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that TREMAINE DOWDELL, 27, of Norwich, was sentenced today by U.S. District Judge Janet Bond Arterton to 57 months of imprisonment, followed by three years of supervised release, for a federal firearm offense stemming from an assault and shooting in New London in 2019.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, on September 14, 2019, Dowdell and three associates assaulted a man outside of the H&T Mart on Ocean Avenue in New London. The H&T Mart was open and had customers coming in and out of the store. Surveillance video captured Dowdell and three others physically attack the victim outside the storefront. Later, video footage showed Dowdell remove a gun from his pants and fire a single shot toward the victim of the assault, who was standing near the front door of the store. The bullet missed the victim. When police arrived a short time later, officers found a .40 caliber cartridge casing at the location where Dowdell fired the gun.
Dowdell’s criminal history includes state felony convictions for larceny, burglary and failure to appear offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On October 3, 2019, a federal grand jury in New Haven returned an indictment charging Dowdell with one count of possession of ammunition by a convicted felon. After actively evading law enforcement, Dowdell was found and arrested at a residence in Sprague on November 5, 2019. He possessed a loaded .25 caliber handgun with an obliterated serial number and approximately 33 grams of crack cocaine, which agents found floating in a toilet tank, at the time of his arrest.
Dowdell has been detained since his arrest. On July 2, 2020, Dowdell pleaded guilty to one count of possession of ammunition by a convicted felon.
This matter was investigated by the New London Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation, with the assistance of the Norwich Police Department and Connecticut State Parole. The case was prosecuted by Assistant U.S. Attorneys Nathaniel J. Gentile and Sarah P. Karwan, in coordination with the New London State’s Attorney’s Office.
Nine Muskegon Men Arrested on Federal Drug Trafficking ChargesRead the Press Release
One Defendant Remains at Large
GRAND RAPIDS, MICHIGAN — U.S. Attorney Andrew Birge announced that, yesterday morning, law enforcement arrested nine residents of Muskegon, Michigan on multiple federal drug trafficking charges, including selling methamphetamine, heroin, fentanyl, and crack cocaine.
Approximately 35 federal, state, and local law enforcement officers executed the arrest warrants and multiple search warrants throughout Muskegon and Muskegon Heights. Investigators seized approximately 339 grams of suspected methamphetamine, 113 grams of fentanyl, 93 grams of heroin, and small quantities of cocaine and crack cocaine. Investigators also seized six handguns, jewelry worth approximately $20,000, and more than $20,000 in cash.
The men arrested and their charges include:
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Zachary John Kennedy, a/k/a “Zeus” (age 31) – one count of distribution of 50 grams or more of methamphetamine and one count of aiding and abetting in the distribution of 50 grams or more of methamphetamine;
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Brent Wilkerson, a/k/a “Pay” (age 28) – one count of distribution of 50 grams or more of methamphetamine and four counts of distribution of heroin;
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Delando Johnson, a/k/a “Fox” (age 28) – three counts of distribution of heroin;
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Carl Johnson, a/k/a “Orangebone,” a/k/a “Bones” (age 42) – three counts of distribution of cocaine base (crack) and one count of aiding and abetting in the distribution of cocaine base (crack);
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Courtney Harris, a/k/a “Money” (age 31) – one count of distribution of cocaine base (crack);
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Daris Jefferson, a/k/a “Smoove” (age 32) – one count of distribution of heroin;
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Alezay Coleman, a/k/a “Zay” (age 23) – one count of possession with the intent to distribute heroin, fentanyl, and 50 grams or more of methamphetamine; and
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Malik Jones-Smith, a/k/a “9” (age 25) – four counts of distribution of controlled substances, including heroin, fentanyl, and methamphetamine.
Distribution of controlled substances is generally punishable by up to 20 years in prison and a fine of up to $1,000,000. Distribution of 50 grams or more of methamphetamine, however, is punishable by a mandatory minimum sentence of 10 years and up to life in prison and a fine of up to $10,000,000.
Law enforcement also arrested Corey Andre Chandler (age 29), who, along with his co-defendant Darrell Jonathon Martin II (age 37), has been indicted by a Federal Grand Jury for conspiracy to distribute methamphetamine and for possession of methamphetamine with the intent to distribute it. Martin and Chandler stand accused of trafficking in large quantities of methamphetamine between April 2019 and July 2020. Both men face up to life in prison if convicted on the charged counts.
Yesterday’s arrests are part of Operation Interstate Zeus, an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation that began in 2019 and has been led by the Drug Enforcement Administration (DEA) and members of Michigan State Police’s West Michigan Enforcement Teams (WEMET). Approximately 35 law enforcement agents from across state and federal agencies participated in the arrests, including the DEA, WEMET, other Michigan State Police officers and narcotics teams, Muskegon City Police, the Muskegon Heights Police Department, the United States Marshals Service, and the Michigan Department of Corrections, with assistance from the United States Attorney’s Office for the Western District of Michigan and the Muskegon County Prosecutor’s Office.
OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
With the exception of Chandler and Martin, the charges against the arrestees stem from criminal complaints. Under the United States Constitution, the government must present felony cases to a grand jury and obtain indictments to proceed with prosecution. The charges in the complaints and indictment are merely accusations and are not evidence of guilt. The defendants are presumed innocent unless and until proven guilty in a court of law. The government has the burden of proving guilt beyond a reasonable doubt.
Law enforcement continues to search for Martin. Members of the public with information as to Martin’s whereabouts are encouraged to contact the United States Marshals Service at (616) 456-2438.
Darrell Jonathon Martin, 37, of Muskegon, Michigan, wanted on a federal arrest warrant.###
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New York Hedge Fund Founder Pleads Guilty to Bankruptcy Fraud in Connection with Neiman Marcus BankruptcyRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York announced today that DANIEL KAMENSKY, the founder and manager of New York-based hedge fund Marble Ridge Capital (“Marble Ridge”), pled guilty to one count of bankruptcy fraud in connection with his scheme to pressure a rival bidder to abandon its higher bid for assets in connection with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could obtain those assets for a lower price. KAMENSKY pled guilty before United States District Judge Denise Cote.
U.S. Attorney Audrey Strauss said: “Daniel Kamensky abused his position as a committee member in the Neiman Marcus Bankruptcy to corrupt the process for distributing assets and take extra profits for himself and his hedge fund. Kamensky predicted in his own words to a colleague: ‘Do you understand…I can go to jail?’… ‘this is going to the U.S. Attorney’s Office.’ His fraud has indeed come to the U.S. Attorney’s Office and now has been revealed in open court.”
As alleged in the Complaint, the Information, and statements made in court:
DANIEL KAMENSKY was the principal of Marble Ridge, a hedge fund with assets under management of more than $1 billion that invested in securities in distressed situations, including bankruptcies. Prior to opening Marble Ridge, KAMENSKY worked for many years as a bankruptcy attorney at a well-known international law firm, and as a distressed debt investor at prominent financial institutions.
The Neiman Marcus Bankruptcy
Neiman Marcus, an American chain of luxury department stores with stores located across the United States, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) in May 2020. At the outset of the bankruptcy, Marble Ridge, through KAMENSKY, applied to be on the Official Committee of Unsecured Creditors (the “Committee”) and was thereafter appointed to be a member of the Committee. As a member of the Committee, KAMENSKY had a fiduciary duty to represent the interests of all unsecured creditors as a group.
During the bankruptcy process, the Committee had negotiated with the owners of Neiman Marcus to obtain certain securities, known as MyTheresa Series B Shares (the “MYT Securities”), and ultimately, the Committee was successful in coming to a settlement to obtain 140 million shares of MYT Securities for the benefit of certain unsecured creditors of the bankruptcy estate. In July 2020, KAMENSKY was negotiating with the Committee for Marble Ridge to offer twenty cents per share to purchase MYT Securities from any unsecured creditor who preferred to receive cash, rather than MYT Securities, as part of that settlement.
KAMENSKY’s Fraudulent Scheme
On July 31, 2020, KAMENSKY learned that a diversified financial services company headquartered in Manhattan, New York (the “Investment Bank”) had informed the Committee that it was interested in bidding a price between thirty and forty cents per share—substantially higher than KAMENSKY’s bid—to purchase the MYT Securities from any unsecured creditor who was interested in receiving cash.
That afternoon, KAMENSKY sent messages to a senior trader at the Investment Bank (“IB Employee-1”) telling him not to place a bid, and followed those messages up with a phone call with IB Employee-1 and a senior analyst of the Investment Bank (“IB Employee-2,” and collectively the “Employees”). During that call, KAMENSKY asserted that Marble Ridge should have the exclusive right to purchase MYT Securities, and threatened to use his official role as co-chair of the Committee to prevent the Investment Bank from acquiring the MYT Securities. KAMENSKY also stated that Marble Ridge had been a client of the Investment Bank in the past but that if the Investment Bank moved forward with its bid, then Marble Ridge would cease doing business with the Investment Bank.
The Investment Bank thereafter decided to not make a bid to purchase MYT Securities and informed the legal advisor to the Committee of its decision. The Investment Bank further told the legal advisor they made that decision because KAMENSKY—a client of the Investment Bank—had asked them not to.
Advisors to the Committee informed counsel for Marble Ridge of their call with the Employees, and after speaking with KAMENSKY, counsel for Marble Ridge falsely informed the advisors that KAMENSKY had not asked the Employees not to bid, but instead had told them to place a bid only if they were serious. Later that evening, KAMENSKY contacted IB Employee-1 and attempted to influence what IB Employee-1 would tell others, including the Committee and law enforcement, about KAMENSKY’s attempt to block the Investment Bank’s bid for the MYT Securities. KAMENSKY said at the outset of the call, in substance, “this conversation never happened.” During the call, KAMENSKY asked IB Employee-1 to falsely say that IB Employee-1 had been mistaken and KAMENSKY had actually suggested that the Investment Bank only bid if it was serious, and made comments including the following: “Do you understand…I can go to jail?” “I pray you tell them that it was a huge misunderstanding, okay, and I’m going to invite you to bid and be part of the process.” “But I’m telling you…this is going to the U.S. Attorney’s Office. This is going to go to the court.” “[I]f you’re going to continue to tell them what you just told me, I’m going to jail, okay? Because they’re going to say that I abused my position as a fiduciary, which I probably did, right? Maybe I should go to jail. But I'm asking you not to put me in jail.”
During a subsequent interview with the Office of the United States Trustee, which was conducted under oath and in the presence of counsel, KAMENSKY stated that his calls to IB Employee-1 were a “terrible mistake” and “profound errors in lapses of judgment.”
After this series of events, Marble Ridge resigned from the Committee and has advised its investors that it intended to begin winding down operations and returning investor capital.
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KAMENSKY, 48, of Roslyn, New York, pled guilty to one count of bankruptcy fraud, which carries a maximum sentence of five years in prison. Sentencing has been scheduled for May 7, 2021.
U.S. Attorney Strauss praised the work of the FBI. Ms. Strauss further thanked the Office of United States Trustee and the Securities and Exchange Commission for their cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Richard Cooper and Daniel Tracer are in charge of the prosecution.
Navajo man pleads guilty to sexually abusing a childRead the Press Release
ALBUQUERQUE, NM – Larry Nathaniel, 64, an enrolled member of the Navajo Nation, pleaded guilty in federal court in Albuquerque on Feb. 2 to a charge of Abusive Sexual Contact in Indian Country.
A grand jury previously returned an indictment against Nathaniel on Sept. 25, 2019. According to the indictment and other court records, Nathaniel committed the offense in San Juan County on the Navajo Nation on or about Feb. 24, 2019. Nathaniel held down the victim by the arm and touched her genitalia. At the time of the assault, the victim was ten years old.
Nathaniel is currently in custody pending sentencing. He faces five to 10 years in prison.
The FBI investigated this case with assistance from the Navajo Nation Police Department. Assistant U.S. Attorney Allison Jaros is prosecuting the case.
Monroe Man Sentenced on Federal Firearms ChargesRead the Press Release
MONROE, La. – Acting United States Attorney Alexander C. Van Hook announced today that a Monroe, Louisiana man has been sentenced on federal firearms charges. United States District Judge Terry A. Doughty sentenced Jeremy Martin, 51, to 107 months and 15 days in prison, followed by 3 years of supervised release for possession of a firearm by a convicted felon.
On April 10, 2019, deputies from the Union Parish Sheriff’s Office searched a home in Downsville, Louisiana, where Martin lived and found a rifle in a case next to Martin’s bed. Martin has previous felony convictions in California for attempted murder (1998) and possession of narcotic controlled substance for sale (2007). In addition, Martin was convicted in Louisiana of possession of controlled substance and attempted illegal carrying of weapons while in possession of a controlled substance (2019). Martin knew that as a convicted felon, he was prohibited from possessing any type of firearm. He plead guilty in federal court to the instant offense of illegal possession of a firearm on October 15, 2020.
The ATF and Union Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Robert F. Moody prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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