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28 January 2021
New York City Police Officer Charged with Production of Child PornographyRead the Press Release
A criminal complaint was filed today in federal court in Central Islip charging Carmine Simpson with the sexual exploitation of children. The charges relate to sexually explicit images and videos of children that the defendant requested and received from minors who he targeted on Twitter. Simpson was arrested today and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“Instead of protecting the community as a sworn police officer, the defendant has preyed upon and sexually exploited the most vulnerable members,” stated Acting United States Attorney DuCharme. “The protection of innocent children is a priority for the Department of Justice and this Office will continue to make every effort to ensure that those who contribute to the victimization of children will be brought to justice.” Mr. DuCharme extended his grateful appreciation to the FBI Violent Crimes Against Children Squad for its investigative work and the New York City Police Department (NYPD) for its assistance on the case.
“As a law enforcement officer, Mr. Simpson swore an oath to protect the public he served. We allege he chose instead to manipulate some of our society's most vulnerable citizens when he repeatedly enticed children to create sexually explicit videos and photos,” stated FBI Assistant Director-in-Charge Sweeney. “Much of this activity occurs through popular social media sites, so I'd ask parents and guardians to take some time to talk with your children about their online activities. You are the first line of defense in protecting our youth from predators. A moment of your time can save a lifetime of trauma. If you believe someone is trying to entice or sexually exploit your child, please report it to us by calling 1-800-CALL-FBI or going to tips.fbi.gov."
According to court filings, Simpson, a police officer with the NYPD, allegedly targeted vulnerable children on Twitter for the purpose of having them create sexually exploitative photos and videos of themselves for the defendant. Simpson often represented to his victims that he was 17 years-old, and he sent them pictures of himself where he applied a filter to alter his own appearance so that he appeared younger. Simpson communicated with at least 46 children who appear to have been between the ages of 13 and 17. On Twitter alone, Simpson obtained at least 18 photographic images and 33 videos containing sexually exploitative material from children
If convicted of sexual exploitation of a child, Simpson faces a mandatory minimum of 15 years’ imprisonment. The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Department of Justice Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Megan E. Farrell is in charge of the prosecution.
The Defendant:
CARMINE SIMPSON
Age: 26
Holbrook, New YorkE.D.N.Y. Docket No. 21-MJ-119
New Haven Man on Federal Supervised Release Charged with Drug and Gun OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned an indictment charging RONNELL ROGERS, 27, of New Haven with narcotics distribution and firearm possession offenses.
The indictment was returned on January 25 and Rogers was arrested today. He appeared via videoconference before U.S. Magistrate Judge Robert M. Spector, entered a plea of not guilty to the charges, and was ordered detained.
As alleged in the indictment, on January 17, 2021, Rogers possessed distribution quantities of heroin and crack cocaine, and a loaded Smith & Wesson .45 caliber semi-automatic pistol.
It is further alleged that Rogers’ criminal history includes state convictions for firearm, larceny and risk of injury offenses, and a federal conviction in 2019 for possession of ammunition by a convicted felon.
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.
The indictment charges Rogers with one count of possession with intent to distribute heroin and cocaine base (“crack”), which carries a maximum term of imprisonment of 20 years; one count of possession of a firearm by a convicted felon, which carries a maximum term of imprisonment of 10 years; and one count of possession of a firearm in furtherance of a drug trafficking offense, which carries a mandatory consecutive sentence of at least five years.
Rogers, who is on federal supervised release, also faces additional penalties if he is found to have violated the conditions of his supervised release.
U.S. Attorney Durham stressed that charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the New Haven Police Department. This case is being prosecuted by Assistant U.S. Attorney Sarah P. Karwan.
This prosecution has been brought though Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
New Hampshire Businessman Pleads Guilty to Spice Distribution That Resulted in Fatal OverdoseRead the Press Release
ALEXANDRIA, Va. – A Seabrook, New Hampshire man pleaded guilty today to his role in a nationwide conspiracy to distribute synthetic cannabinoids, commonly known as “spice” or “K2.”
According to court documents, William Walsh, 56, operated two shops in Seabrook—“Up N Smoke” and “The Smoking Monkey”—from which he sold retail quantities of spice, along with smoking paraphernalia such as rolling papers and glass pipes. Walsh ordered the spice that he sold in his stores from a California-based wholesale spice manufacturing and distribution operation.
At times during the conspiracy, Walsh ordered thousands of dollars of spice per week from his California-based co-conspirators, whose illicit business held itself out as Aroma Superstore. The spice was sold in packages bearing the label “Not For Human Consumption” in an attempt to avoid law enforcement scrutiny, and Walsh instructed his employees not to discuss the fact that the spice was smoked or otherwise used as a drug. The products were, in reality, intended to be consumed and induce a “high” similar to other controlled substances. The spice connected to this conspiracy caused one of the defendant’s customers, referred to in court documents as J.S., to fatally overdose.
In November 2019, law enforcement searched Up N Smoke, The Smoking Monkey, and Walsh’s residence. In the course of executing the search warrants, agents seized approximately 12 kilograms of synthetic cannabinoids packaged for distribution, and a total of more than $676,000 in cash.
Walsh pleaded guilty to one count of conspiracy to distribute Schedule I controlled substances, and he is scheduled to appear at a status hearing on March 31, 2021. He faces a maximum penalty of 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
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; Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s Washington Division; Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C.; Robert P. Mosier, Fauquier County Sheriff; and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after U.S. District Judge Rossie D. Alston Jr. accepted the plea.
Assistant U.S. Attorneys Katherine E. Rumbaugh and Bibeane Metsch are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-76.
Navajo man from Shiprock sentenced to 15 years in federal prison for second degree murderRead the Press Release
ALBUQUERQUE, N.M. – Zachariah Stanley Joe, 29, of Shiprock, New Mexico, and an enrolled member of the Navajo Nation, was sentenced on Jan. 14 in federal court to 15 years in prison.
On Oct. 31, 2019, Joe pleaded guilty to second degree murder for killing a Navajo man in Shiprock on the Navajo Indian Reservation. In his plea agreement, Joe admitted that on Jan. 3, 2019, he killed the victim in callous and wanton disregard for human life. According to the plea, while drinking alcohol Joe got into a fight with the victim at a residence in Shiprock. After locking the victim and another man out of the residence, Joe armed himself with a kitchen knife and went outside where he stabbed the unarmed victim approximately ten times in his chest, side and neck. The victim died shortly afterward.
Joe has been in federal custody since his arrest. Upon his release from prison, Joe will be subject to three years of supervised release.
The Farmington office of the FBI investigated this case with assistance from the Navajo Nation Division of Public Safety. Assistant U.S. Attorney David P. Cowen is prosecuting the case.
Nashville, Georgia Probationer Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
ALBANY, Ga. – A Nashville, Georgia felon on active probation pleaded guilty to possession of a firearm by a convicted felon, said Peter D. Leary, the Acting U.S. Attorney for the Middle District of Georgia.
Randy Todd Hughes, 35, of Nashville (Berrien County), pleaded guilty to one count possession of a firearm by a convicted felon before U.S. District Judge Louis Sands on Wednesday, January 27. Hughes faces a maximum ten years in prison, to be followed by three years of supervised release, and a $250,000 fine. A sentencing date has not been scheduled. There is no parole in the federal system.
Berrien County Sheriff’s Office deputies executed a search warrant for Hughes on October 20, 2017 at his Nashville home. A .22 caliber revolver loaded with six rounds of ammunition was found, along with an additional 34 rounds of .22 caliber ammunition. At the time of his arrest, Hughes was serving a 20-year probation sentence for aggravated assault. Hughes had also previously been convicted of the sale of cocaine in 2009. In entering his guilty plea, Hughes admitted to possessing the firearm.
“Prosecuting convicted felons with violent criminal histories who possess guns is a priority of this office,” said Acting U.S. Attorney Leary. “I want to thank the Berrien County Sheriff’s Office and ATF for their efforts in this case to keep the community safe.”
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 Berrien County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant U.S. Attorney Sonja Profit is prosecuting 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.
Muskogee Resident Pleads Guilty to Child Neglect in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Megan Leanne Tillery, age 28, of Muskogee, Oklahoma entered a guilty plea to Child Neglect In Indian Country, in violation of Title 18, United States Code, Sections 1151, 1153, and 21 Oklahoma Statute § 843.5(G), punishable by any period of any term of years of imprisonment or for life, a fine up to $250,000.00, or both.
The Indictment alleged that on or about August 2020, within the Eastern District of Oklahoma, in Indian Country, the defendant willfully and maliciously failed and omitted to provide adequate medical care, supervision, appropriate caretakers, and special care made necessary by the physical and mental condition of a child under the age of eighteen, all while the defendant was responsible for the health, safety and welfare of the child.
The charges arose from an investigation by the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Sarah McAmis represented the United States.
Muskogee County Resident Pleads Guilty to Attempted Robbery in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Phillip Lemont Jones, Jr., age 19, of Muskogee County, Oklahoma entered a guilty plea to Attempted Robbery In Indian Country, in violation of Title 18, United States Code, Sections 2111, 1151, 1153, and 2, punishable by up to 15 years’ imprisonment, a fine up to $250,000.00, or both.
The Indictment alleged that on or about July 30, 2019, within the Eastern District of Oklahoma, in Indian Country, the defendant, by force and violence and by intimidation, did attempt to take items of value from the person and presence of D.L., an Indian.
The charges arose from an investigation by the Oklahoma State Bureau of Investigation, the Bureau of Alcohol, Tobacco, and Firearms, the Haskell Police Department, the Muskogee Police Department, and the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Ryan Conway represented the United States.
Milford, Iowa Woman to Federal Prison for Meth ConvictionRead the Press Release
A woman who conspired to distribute methamphetamine and possessed stolen guns was sentenced January 28, 2021, to more than 4 years in federal prison.
Elizabeth Strang, 28, from Milford, Iowa, received the prison term after a September 17, 2020, guilty plea to possession of stolen firearms and conspiracy to distribute methamphetamine.
Evidence at the hearings showed that Strang stole 10 firearms from her boyfriend and made arrangements to sell the firearms to an individual cooperating with law enforcement. Strang further admitted that from 2019 through 2020 she and others distributed more than 250 grams of methamphetamine. On March 5, 2020, Strang was arrested on her federal firearm indictment. At the time, agents seized over 27 grams of methamphetamine from Strang’s pocket.
Strang was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Strang was sentenced to 53 months’ imprisonment. She must also serve a 4-year term of supervised release after the prison term. There is no parole in the federal system. Strang is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by Iowa Division of Narcotics Enforcement, Spencer Police Department, O’Brien County Sheriff’s Office, and Iowa Division of Criminalistics Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4020. Follow us on Twitter @USAO_NDIA.
Middlesex County Man Admits Role in Wire Fraud Scheme to Defraud InvestorsRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted participating in a fraudulent scheme that involved soliciting investments from victims for a ticket resale business, when in fact he diverted their investments for his own personal use and benefit, Acting U.S. Attorney Rachael A. Honig announced.
Jeffrey Burd, 61, of Edison, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
From January 2014 to June 2018, Burd represented to his victims that he was involved in buying tickets to high-profile concerts, sporting events, and Broadway shows and then reselling those tickets for a profit. Burd induced the victims to provide him with money that would purportedly be invested in his ticket purchase and resale activities, and he represented that the profits from the sales of those tickets would be shared among him and the victims. Burd further assured the victims that investing with him carried no risk, and he promised returns on their investments of 30 percent to 40 percent. Burd made payments to certain victims that were purportedly their profits, and made representations to certain victims that portions of their profits were being reinvested in additional ticket deals, which in turn purportedly would generate more profits for those victim. In fact, Burd did not purchase or sell any material amount of tickets with the victims’ money, and he instead used their investments for his personal expenditures. In total, Burd obtained approximately $447,000 from the victims over the course of the fraudulent scheme.
The charge of wire fraud 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 8, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Managing Partner of Investment Advisory Firm Pleads Guilty to Defrauding Clients and Investors in over $100 Million Ponzi-Like Fraud SchemeRead the Press Release
Audrey Strauss, United States Attorney for the Southern District of New York, announced that DAVID HU, a managing partner and the chief investment officer of the New York-based investment advisory firm International Investment Group (“IIG”), pled guilty today before U.S. District Judge Alvin K. Hellerstein to investment adviser fraud, securities fraud, and wire fraud offenses in connection with an over $100 million scheme to defraud IIG’s investment advisory fund clients and investors. Throughout the course of more than 10 years, HU perpetrated the scheme by, among other fraudulent actions, creating fictitious investments and overvaluing investments used to generate funds to pay off earlier investors in a Ponzi-like manner. In connection with his plea agreement, HU has also agreed to forfeit more than $129 million representing proceeds traceable to the commission of the offenses.
Manhattan U.S. Attorney Audrey Strauss said: “Today, David Hu admitted to shirking his fiduciary responsibilities and defrauding IIG funds and investors for more than a decade, causing millions of dollars of losses. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans and used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny. He now faces a serious term of imprisonment.”
According to the allegations contained in the Information and based on statements made in Manhattan federal court:
Background of IIG
HU and a co-conspirator (“CC-1”) founded IIG in 1994. HU was a managing partner and the chief investment officer of IIG. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (“TOF”); (2) the IIG Global Trade Finance Fund, Ltd. (“GTFF”); and (3) the IIG Structured Trade Finance Fund, Ltd. (“STFF”). IIG also advised the Venezuela Recovery Fund (“VRF”), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the “IIG Funds”). In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management.
IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses. IIG’s principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Trade finance loans are used by small and medium-sized companies, typically exporters and importers, to facilitate international trade. IIG’s purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on “soft commodities,” such as coffee, agriculture, fishing, and other food products. IIG’s trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.
Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry.
IIG purported to value the trade finance loans in the IIG Funds on a regular basis. IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds.
The Scheme
From approximately 2007 to 2019, HU conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner.
The scheme HU participated in involved, among other things:
- Mismarking Defaulted Loans. HU and CC-1 caused IIG to mismark the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”). Instead of acknowledging the defaulted status of these loans, HU and CC-1 instead caused IIG to mark the Defaulted Loans at par plus accrued interest, even though HU and CC-1 knew that the borrowers’ default significantly impaired the true value of these loans. HU and CC-1 certified these false valuations and caused them to be reported to investors.
- Mismarking Distressed Loans. HU and CC-1 caused IIG to mismark multiple loans that were distressed (the “Distressed Loans”). These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments. Even though HU and CC-1 knew that the non-performing status of the loans significantly impaired their true value, they nevertheless caused IIG to continue to mark the loans at par plus accrued interest.
- Creating Fictitious Loans. With respect to TOF, in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOF’s financials, HU and CC-1 removed the Defaulted Loans from the TOF portfolio, replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the “Fake Loans”). HU and CC-1 also created or directed the creation of documents to keep in IIG’s files as purported documentation of the Fake Loans. To pass auditor scrutiny, HU and CC-1 also directed purported borrowers – sham foreign entities that were controlled by IIG’s business associates and that did not engage in actual business – to provide confirmations of the Fake Loans to auditors, including by arranging for TOF to pay a monthly fee to one purported borrower in exchange for providing false confirmations. In reality, these purported borrowers did not receive a loan from TOF, and were not expected to make any payments to TOF.
- Using a CLO Trust to Create Liquidity through Investments in Fraudulent Loans. In or about 2014, HU and CC-1 obtained approximately $220 million in bank financing to create a collateralized loan obligation trust (the “CLO Trust”), for which IIG served as an investment adviser. HU and CC-1 then engaged in various deceptive acts, using the CLO Trust, to hide TOF’s losses and generate liquidity for TOF, which was facing investor redemption requests and demands for repayment of loans that IIG had taken from international development banks. For example, in its capacity as investment adviser for the CLO Trust, IIG, through the efforts of HU and CC-1, caused the newly-created CLO Trust to purchase loans from the TOF portfolio, including Defaulted Loans, Distressed Loans, and Fake Loans, which generated liquidity for TOF. After the CLO Trust purchased loans in the TOF portfolio, IIG, through the efforts of HU and CC-1, generated additional liquidity by causing the CLO Trust to issue securitized debt instruments based on these loans, payable in various tranches to investors in the CLO Trust.
- Using the CLO Trust and Panamanian Shell Entities to Cover Up Losses. IIG, through the efforts of HU and CC-1, also caused the CLO Trust to create new fraudulent trade finance loans, and used those new fraudulent loans to cover up TOF’s losses. Specifically, HU caused the creation of shell entities domiciled in Panama (“Panamanian Shell Entities”) that were controlled by an IIG nominee. Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities. Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU and CC-1 diverted to TOF in order to pay off TOF’s various debts and obligations.
- Generating Liquidity by Selling Fraudulent Loans to a Newly-Created Funds Backed by a New Investor. In or about 2017, HU and CC-1 targeted a foreign institutional investor (“Institutional Investor-1”) to raise money for two new private IIG managed funds: GTFF and STFF. Institutional Investor-1 provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF. HU and CC-1 caused GTFF and STFF to purchase at least approximately $100 million in fake, distressed, defaulted or otherwise fraudulent loans.
- Inducing a Retail Mutual Fund to Invest in a Fictitious $6 Million Loan. In or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the “Retail Fund”). As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG. In or about February 2017, a borrower (the “Argentine Borrower”) had failed to pay the principal on an approximately $6 million loan (“Loan-1”) in which the Retail Fund had invested and which was nearing its maturity date. In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (“Borrower-1”), and further directed the funds from Borrower-1’s account to pay off the debt owed by the Argentine Borrower to the Retail Fund. To replace the funds from Borrower-1’s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the “New Loan”). HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1’s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund. To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower.
* * *
DAVID HU, 63, of West Orange, New Jersey, pled guilty to one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison. Sentencing before Judge Hellerstein has been scheduled for June 17, 2021, at 9:00 a.m.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the investigative work of the FBI and also thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Drew Skinner, Negar Tekeei, and Alex Rossmiller are in charge of the prosecution.
- Mismarking Defaulted Loans. HU and CC-1 caused IIG to mismark the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”). Instead of acknowledging the defaulted status of these loans, HU and CC-1 instead caused IIG to mark the Defaulted Loans at par plus accrued interest, even though HU and CC-1 knew that the borrowers’ default significantly impaired the true value of these loans. HU and CC-1 certified these false valuations and caused them to be reported to investors.
Man Pleads Guilty to Drug Conspiracy and Firearms ChargesRead the Press Release
A Tulsa man pleaded guilty this morning to drug conspiracy, felon in possession of a firearm, and possession of a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Trent Shores.
Charles Dean Studie, 36, pleaded guilty before U.S. District Judge John F. Heil. His sentencing is set for April 30, 2021.
“Methamphetamine continues to be Oklahoma’s most deadly drug, and Charles Studie contributed to that problem,” said U.S. Attorney Trent Shores. “The Tulsa Housing Authority Community Enhancement Unit and DEA combined forces to bring accountability to this drug trafficker. Our community is better off with Charles Studie off the streets and his methamphetamine supply cut off.”
In his plea agreement, Studie admitted that beginning in June 2019, he knowingly and intentionally conspired with others to possess methamphetamine with intent to distribute the deadly drug. He provided methamphetamine and cash to other individuals to promote and further their drug dealing operation, which was being staged out of Tulsa public housing. Studie’s participation required the participation, direction, and action of others, and all parties worked together for their shared mutual benefit. Further, Studie, a felon, admitted that beginning on November 22, 2019, he knowingly possessed a Jennings .25 auto caliber semi-automatic pistol and a Jimenez, .22 LR caliber semi-automatic pistol, in furtherance of a drug trafficking crime.
“Methamphetamine continues to negatively impact the citizens of Oklahoma. The conviction of Charles Studie is another step forward in ridding the streets of individuals who would sell this destructive drug that has destroyed Oklahoma lives for decades,” said Tulsa County Sheriff Vic Regalado. “I am proud of the work of our deputies who make up the Tulsa Housing Authority Community Enhancement Unit and I am equally proud of our partnership with the U.S. Attorney’s office and the DEA.”
Tulsa County Sheriff’s Deputies that make up the Tulsa Housing Authority Community Enhancement Unit pursued this investigation as part of their responsibility to ensure the safety and security of the families that live within the Tulsa Housing Authority complexes. The Community Enhancement Unit (CEU) was created through a partnership between the Tulsa County Sheriff’s Office and the Tulsa Housing Authority.
The Tulsa County Sheriff’s Office and Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Christopher J. Nassar and Aimee Cooper are prosecuting the case.
Man Pleads Guilty to $2.5 Million Coronavirus FraudRead the Press Release
ALEXANDRIA, Va. – A Leesburg man pleaded guilty today to fraudulently obtaining two loans for over $2.5 million under the Paycheck Protection Program (“PPP”).
“At a time when countless families and business owners nationwide are struggling to make ends meet during the ongoing pandemic, Didier Kindambu committed a multimillion-dollar bank fraud by misappropriating COVID-19 taxpayer relief funds to pay for his lavish lifestyle,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Together with our law enforcement partners, this Office will continue to prosecute and bring to justice those who seek to exploit essential pandemic recovery programs and profit from the misfortunes of others for personal gain.”
According to court documents, Didier K. Kindambu, 49, fraudulently obtained two PPP loans under a program instituted by the U.S. Congress to help businesses affected by the coronavirus pandemic continue to pay salary or wages to their employees. Kindambu carried out the scheme in connection with two businesses that he owns by creating fraudulent payroll documentation for each business, and then submitting that documentation in support of the PPP loan applications. The fraudulent documentation represented that Kindambu’s businesses had dozens of employees with millions of dollars in payroll expenses, when in fact they had few, if any, employees.
In total, Kindambu fraudulently obtained approximately $2,501,753 in loan proceeds, and he then spent those funds, in part, on items unrelated to any legitimate PPP-related expense. Those items included a Lexus automobile and Cessna aircraft; Kindambu’s personal taxes, the down-payment on a luxury residence in Leesburg, and his day-to-day living expenses; and various purchases of jewelry, clothing, accessories, and shoes.
Kindambu pleaded guilty to bank fraud and is scheduled to be sentenced on August 4, 2021. He faces a maximum penalty of 30 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); Hannibal “Mike” Ware, Inspector General of the Small Business Administration (SBA); and Jay N. Lerner, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG), made the announcement after U.S. District Judge Rossie D. Alston accepted the plea.
Assistant U.S. Attorney Matthew Burke is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-260.
Man Charged with $1.9 Million COVID-Relief FraudRead the Press Release
A Nevada man was charged in an indictment Wednesday for his alleged participation in a scheme to defraud multiple financial institutions by filing bank loan applications that fraudulently sought more than $1.9 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Nicholas A. Trutanich, U.S. Attorney of the District of Nevada; Aaron C. Rouse, Special Agent in Charge of the FBI’s Las Vegas Field Office; and Weston King, Special Agent in Charge of the SBA Office of the Inspector General’s (OIG) Western Region Office made the announcement.
Jorge Abramovs, 40, of Las Vegas, was charged in an indictment filed in the District of Nevada with five counts of bank fraud, one count of making false statements to a bank, and five counts of money laundering. Abramovs had been charged initially with bank fraud in a criminal complaint and was arrested on Jan. 17, 2021. On Jan. 22, 2021, U.S. Magistrate Judge Cam Ferenbach ordered that Abramovs be detained pending trial.
The indictment alleges that Abramovs obtained nearly $2 million in Paycheck Protection Program (PPP) loans from seven different lenders by, among other things, submitting multiple loan applications in the names of three different businesses while falsely claiming to have numerous employees earning wages. The indictment further alleges that Abramovs used the PPP funds for personal (rather than business) purposes, including purchasing a Tesla, a Bentley, two condominiums, and paying his home mortgage.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on 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.
A federal criminal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The FBI and SBA-OIG investigated the case. Trial Attorney Joseph McFarlane of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the U.S. Attorney’s Office for the District of Nevada are prosecuting the case.
The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the nine months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
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.
Man Charged with $1.9 Million COVID-Relief FraudRead the Press Release
LAS VEGAS, Nev. – A Nevada man was charged in an indictment Wednesday for his alleged participation in a scheme to defraud multiple financial institutions by filing bank loan applications that fraudulently sought more than $1.9 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Nicholas A. Trutanich, U.S. Attorney of the District of Nevada; Aaron C. Rouse, Special Agent in Charge of the FBI’s Las Vegas Field Office; and Weston King, Special Agent in Charge of the SBA Office of the Inspector General’s (OIG) Western Region Office made the announcement.
Jorge Abramovs, 40, of Las Vegas, was charged in an indictment filed in the District of Nevada with five counts of bank fraud, one count of making false statements to a bank, and five counts of money laundering. Abramovs had been charged initially with bank fraud in a criminal complaint and was arrested on Jan. 17, 2021. On Jan. 22, 2021, U.S. Magistrate Judge Cam Ferenbach ordered that Abramovs be detained pending trial.
The indictment alleges that Abramovs obtained nearly $2 million in Paycheck Protection Program (PPP) loans from seven different lenders by, among other things, submitting multiple loan applications in the names of three different businesses while falsely claiming to have numerous employees earning wages. The indictment further alleges that Abramovs used the PPP funds for personal (rather than business) purposes, including purchasing a Tesla, a Bentley, two condominiums, and paying his home mortgage.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on 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.
A federal criminal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The FBI and SBA-OIG investigated the case. Trial Attorney Joseph McFarlane of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the U.S. Attorney’s Office for the District of Nevada are prosecuting the case.
The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the nine months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
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.
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Long-Time Fugitive Extradited to the United States to Face Charges for Role in Scheme to Steal 94,000 Debit and Credit Cards from Michaels’ Stores in 19 StatesRead the Press Release
CAMDEN, N.J. – A California man who had fled to Mexico has been arrested for his role in a conspiracy to steal credit and debit cards from customers at approximately 80 Michaels’ Stores in 19 states and to then use that information to make fraudulent withdrawals from the bank accounts of those customers, Acting U.S. Attorney Rachael A. Honig announced today.
Jose Salazar, 44, aka “Tito,” 44, of Riverside, California, was indicted in 2015 and has been a fugitive. He was apprehended in Mexico City in September 2020 and returned last week via Philadelphia International Airport to face an indictment charging him with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Salazar made his initial appearance and arraignment today by videoconference before U.S. Magistrate Judge Karen M. Williams. He pleaded not guilty and was remanded without bail.
According to documents filed in this case and statements made in court:
The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.
The conspirators allegedly replaced POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.
In 2011, Salazar recruited individuals to participate in the conspiracy. From April 2011 to May 2011, Salazar, Angel Angulo, Crystal Banuelos, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using automated teller machines (ATMs) from hundreds of bank accounts. Banuelos pleaded guilty on Nov. 17, 2015, and was sentenced to time served and five years of probation. Angulo pleaded guilty on June 20, 2017 and was sentenced to three years in prison.
The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence.
Acting U.S. Attorney Honig credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Henry, with the investigation leading to the charges. She also thanked special agents with the U.S. Marshal Service, under the direction of Juan Mattos, and INTERPOL for their assistance. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Mexico.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Local Law Enforcement Officers Receive AwardsRead the Press Release
SHREVEPORT, La. - Acting United States Attorney Alexander C. Van Hook announced that numerous local law enforcement officers have been presented awards at the United States Court House in the Western District of Louisiana. Law enforcement professionals from the Louisiana State Police, Shreveport Police Department, Caddo Parish Sheriff’s Office, and Greenwood Police Department were presented with Meritorious Service Awards in recognition of their outstanding work and leadership in helping reduce crime in our community and in supporting the Project Safe Neighborhoods Initiative.
Meritorious Service Awards were presented to three Louisiana State Police Troopers, along with the following law enforcement professionals:
- Corporal Donald Belanger, Shreveport Police Department;
- Corporal Stacy Coleman, Shreveport Police Department;
- Officer Chandler Cisco, Shreveport Police Department;
- Corporal Rodney Medlin, Shreveport Police Department;
- Sgt. Susan E. Mendels, Shreveport Police Department;
- Corporal William Moak, Shreveport Police Department;
- Corporal Toby Morrison, Shreveport Police Department;
- Detective Jeremy Prudhome, Caddo Parish Sheriff’s Office; and
- Officer Brian Anderson, Greenwood Police Department.
Project Safe Neighborhoods (PSN) is 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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Key Member of International Cocaine Conspiracy Involving Corrupt Air Traffic Controllers and Clandestine Airstrips Extradited to U.S.Read the Press Release
LOS ANGELES – A Mexican national charged with coordinating shipments for an international drug trafficking organization that planned to smuggle tens of millions of dollars’ worth of cocaine from Colombia to Mexico for eventual sale in the United States has been extradited from Canada and is scheduled to be arraigned today on federal narcotics charges.
Miguel Hadad Facusseh, 37, a.k.a. “Greñas” and “Barbas,” arrived in Los Angeles on Wednesday evening and is expected to make his initial appearance in United States District Court this afternoon.
Hadad is one of 15 defendants charged in an indictment that describes an organization that smuggled large quantities of cocaine on aircraft, using clandestine airstrips and corrupt air traffic control officials in Colombia to avoid detection. As one of the key members of the organization, Hadad allegedly was responsible for coordinating operations from Mexico, including financing flights, supplying pilots, and setting up clandestine airstrips, according to the indictment that was filed in 2019.
Despite the corrupt air traffic controllers and former law enforcement officials in Colombia who were responsible for ensuring that aircraft coming from Mexico could enter Colombian airspace and retrieve cocaine shipments, the indictment outlines a November 5, 2017 incident in which the Colombian Air Force intercepted a plane coming from Mexico, forced it to land, and then destroyed it with machine gun fire. Near the site of the plane’s wreckage, Colombian law enforcement officers found approximately 515 kilograms (1,135 pounds) of packaged cocaine that was ready to be loaded onto the plane.
In addition to Hadad, three other defendants named in the indictment were extradited from Colombia in late 2020 – Tomas Visbal Blanco, 67; Rafael Enrique Noguera Abello, 45; and Enrique Rafael Noguera Ramirez, 38. The indictment alleges that these defendants handled logistics for the organization, including managing a stash location for the cocaine, maintaining a clandestine airstrip where the plane from Mexico was to retrieve the cocaine shipment in November 2017, and preparing for the aircraft’s refueling upon its arrival. The three Colombian nationals have pleaded not guilty to the charges in the indictment, and they are scheduled to go on trial on October 12.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The investigation into this narcotics trafficking organization is being conducted by special agents with the Drug Enforcement Administration, which received substantial assistance from the Colombia National Police’s Dirección de Investigación Criminal e Interpol (DIJIN) and Colombia’s Fiscalía General de La Nación. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force. The Justice Department’s Office of International Affairs provided substantial assistance in securing the defendants’ extradition from Canada and Colombia.
This case is being prosecuted by Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section and Chelsea Norell of the Violent and Organized Crime Section.
Kennebec County Woman Pleads Guilty to Bankruptcy and Social Security Fraud ChargesRead the Press Release
PORTLAND, Maine: A Kennebec County woman pleaded guilty today in federal court to bankruptcy fraud and Social Security fraud, U.S. Attorney Halsey B. Frank announced.
According to court records, between September and December 2019, Carol Bilodeau, 69, of Wayne, initiated two fraudulent Chapter 13 bankruptcy proceedings and submitted filings to the U.S. Bankruptcy Court in Portland containing numerous false statements. In her bankruptcy filings, Bilodeau falsely represented another person’s name, Social Security number and employment information as her own. She also used a fake email address she had created to further the bankruptcy fraud.
Bilodeau faces up to five years in prison and a fine of up to $250,000 on both charges, and up to three years of supervised release. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The FBI and the Social Security Administration’s Office of the Inspector General investigated the case.
Justice Department Seeks to Shut Down Southern Florida Tax Return PreparerRead the Press Release
The United States has filed a complaint in the U.S. District Court for the Southern District of Florida seeking to bar a Belle Glade, Florida, tax return preparer from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today.
The civil suit against Brandhi Shaw alleges that Shaw prepares returns claiming false refundable fuel credits and American Opportunity tax credits. In addition, the complaint alleges that Shaw prepares returns claiming fabricated businesses income and/or expenses, and related fictitious losses. As a result, the complaint alleges Shaw offset the amount of taxable income reported to make it appear that her customers were entitled to earned income tax credits when they were not.
For example, the complaint alleges that Shaw prepared a return for an individual who did not own a business nor tell Shaw that he or she did. As alleged in the complaint, Shaw claimed a fabricated loss of $37,413 for the non-existent business, which fraudulently reduced the amount of the individual’s taxable income and, in return, his or her reported tax liability.
The complaint further alleges that, by repeatedly underreporting tax liabilities and claiming bogus refunds on behalf of her customers, Shaw has caused her customers to incorrectly report their federal tax liabilities and underpay their taxes, resulting in lost tax revenue to the United States that could exceed $6 million. Moreover, the complaint alleges that Shaw is not and never has been an enrolled return preparer. Rather, according to the complaint, she files tax returns using another tax preparer’s personal identifying information, which makes it difficult to determine the full extent of the harm she has caused.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant (more information can also be found here). The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Files Civil Action to Shut Down Chicago-Area Tax Return PreparerRead the Press Release
The United States has filed a complaint seeking to bar a Chicago-area tax return preparer from preparing federal income tax returns for others, the Justice Department announced today.
The civil complaint against Lavon Boyd was filed in the U.S. District Court for the Northern District of Illinois and alleges that Boyd prepared federal income tax returns for Chicago-area taxpayers that significantly understated his customers’ tax liabilities by fabricating business losses. The suit alleges that Boyd fabricated or exaggerated his customers’ business expenses. The suit also charges that Boyd allegedly fabricated child care expenses on at least one of his customers’ tax returns.
According to the complaint, the Internal Revenue Service (IRS) interviewed 15 of Boyd’s customers, each of whom stated that they did not incur the business expenses reported on their returns prepared by Boyd on their behalf, nor did they give Boyd any reason to believe that such expenses were legitimate. The complaint further alleges that, by repeatedly understating his customers’ tax liabilities, Boyd has caused the United States to lose substantial tax revenue.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant (more information can also be found here). The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In addition, IRS Free File, a public-private partnership, offers free, online tax preparation and filing options on IRS-partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.
In the past decade, the Department of Justice's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jury convicts Wolf Point man of rape, assault of woman on Fort Peck Indian ReservationRead the Press Release
GREAT FALLS — A federal jury today convicted a Wolf Point man of raping and assaulting a woman near Poplar on the Fort Peck Indian Reservation in 2017, Acting U.S. Attorney Leif Johnson said.
The jury found Luke John Scott, Sr., 33, guilty of aggravated sexual abuse and of assault by striking, beating or wounding, a misdemeanor. The three-day trial began on Jan. 26.
Scott faces a maximum of life in prison, a $250,000 fine and five years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris set sentencing for March 24. Scott was detained.
Scott also is pending sentencing on March 24 in a separate case for assault resulting in serious bodily injury and felony child abuse. A federal jury convicted Scott of those crimes on Nov. 19, 2020.
“Mr. Scott poses a clear danger to women in the community. Violence, including sexual violence, faced by Native American women must stop. We will prosecute those who prey on women to the full extent of the law. I want to thank Assistant U.S. Attorney Kalah Paisley, the FBI and Fort Peck Tribal Law Enforcement for investigating and prosecuting this case,” Acting U.S. Attorney Johnson said.
At trial, the prosecution presented evidence that on July 7, 2017, Scott approached the victim, identified as Jane Doe, on the street, told her he had a bottle of vodka and that a relative was fishing by the river. The victim went with Scott to the river, where he told her that another person had paid him to get rid of her. Scott tried to choked Jane Doe and then sexually assaulted her. Jane Doe reported the assault to law enforcement and was transported to the hospital in Poplar.
Assistant U.S. Attorney Kalah Paisley is prosecuting the case, which was investigated by the FBI and Fort Peck Tribal Law Enforcement.
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Jury Convicts Inmate of Attacking BOP EmployeeRead the Press Release
A federal jury has convicted a prison inmate of attacking a Bureau of Prisons employee, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
After just over an hour of deliberations, a jury on Tuesday found 44-year-old William Lee Terrell guilty of assault of a federal officer resulting in bodily injury.
According to evidence presented at trial, Mr. Terrell was convicted in 2010 of bank robbery and ordered to serve his 235-month sentence at FCI Big Spring. On March 23, 2019, Mr. Terrell, who was on suicide watch, was placed under the observation of Human Resource Specialist Krista Coccozza.
As HR Specialist Coccozza attempted to retrieve trash from a meal he had just eaten, Mr. Terrell reached through the food slot in the door, grabbing Specialist Coccozza. He struggled with her, attempting to free the keys to the cell attached to her belt.
Additional guards responded to Coccozza’s calls for help and they were able to eventually free the keys from Terrell and secure his cell.
Specialist Coccozza suffered a bruised lung, bruised ribs, sprained wrist, sprained elbow, sprained fingers, skin abrasions, pain, and redness on her body, and was unable to return to work for a period of time due to her injuries.
Mr. Terrell now faces up to 20 additional years in federal prison. His sentencing hearing has been set for April 29.
The Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Callie Woolam and Stephen Rancourt are prosecuting the case. U.S. District Judge James Wesley Hendrix presided over the trial.
Israeli National Pleads Guilty to Bail JumpingRead the Press Release
CONCORD - Boaz BenMoshe, 58, of Israel, pleaded guilty in federal court on Wednesday to bail jumping, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, in November 2006, a federal grand jury charged BenMoshe with conspiracy to launder monetary instruments and conspiracy to engage in unlicensed wholesale distribution of prescription drugs. After an initial appearance hearing on January 29, 2007, BenMoshe was released on conditions including his promise to notify the pretrial services officer of any plans to change his residence and to travel outside of the Central District of California and the District of New Hampshire. On January 9, 2009, BenMoshe pled guilty to conspiracy to engage in unlicensed wholesale distribution of prescription drugs. The Court accepted his guilty plea and permitted him to continue on the same conditions of release pending sentencing. The sentencing hearing was scheduled for June 23, 2009. On or about April 29, 2009, in violation of his conditions of release, BenMoshe moved to Israel and failed to appear for his sentencing hearing on June 23, 2009.
On December 16, 2009, a federal grand jury charged BenMoshe with bail jumping for his failure to appear at his sentencing hearing.
In August of 2020, BenMoshe was extradited from Israel to the United States to face the charges pending against him in New Hampshire.
BenMoshe is scheduled to be sentenced in both cases on April 1, 2021.
“This prosecution demonstrates that defendants cannot flee from the United States to escape responsibility for their crimes,” said U.S. Attorney Murray. “BenMoshe violated his promise to appear in court for sentencing and spent years avoiding the ultimate judicial reckoning for his crime. Through hard work and diligence, the U.S. Marshals located this fugitive and he was extradited back to New Hampshire to face the consequences of his 2009 guilty plea and his flight from justice. Other criminal defendants should take note that efforts to flee from justice will not succeed.”
“The arrest and subsequent extradition of BenMoshe is a testament to the collaborative work of the US Marshals Service and the US Attorney’s Office for the District of New Hampshire,” said Nick Willard, U.S. Marshal for the District of New Hampshire. “We are also grateful for the cooperation of the Israeli authorities who worked closely with the Deputy Marshals for a safe and professional transfer into our custody.”
This matter was investigated by the United States Marshals Service. The underlying criminal case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Cam Le and Special Assistant U.S. Attorney Sarah Hawkins.
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Inmate Sentenced to Another Year for SORNA ViolationRead the Press Release
ERIE, Pa. – An inmate at the Pamunkey Regional Jail in Hanover, Virginia pleaded guilty and was sentenced in federal court to 13 months in jail on his conviction of failure to register under SORNA, United States Attorney Scott W. Brady announced today.
United States District Judge Susan Paradise Baxter imposed the sentence on Jeremy Christopher Ester, 42.
According to information presented to the court, Ester traveled from Virginia, without the permission of his probation officer, to Erie, Pennsylvania, where he stayed for months before his arrest and knowingly failed to register as a sex offender in Pennsylvania as required by the Sex Offender Registration and Notification Act.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Marshals Service for the investigation leading to the successful prosecution of Ester.
Individual Sentenced for Postage Stamp SchemeRead the Press Release
Tampa, Florida – U.S. District Judge Thomas P. Barber has sentenced Edward Morgan (49), a/k/a Edward Croce, a/k/a Edward Carrera, to six years and six months in federal prison for theft of government funds. As part of his sentence, the court also entered a money judgment of $405,935.76, the proceeds of the theft.
Morgan had pleaded guilty on September 27, 2019.
According to court documents, beginning in November 2016 and continuing through the date of his arrest in May 2019, Morgan used fictitious checks at hundreds of United States Post Office locations in Florida and other states—Alabama, Arizona, California, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, and Virginia—to purchase stamps. Morgan then converted the stamps to cash by reselling them to unsuspecting third parties, usually businesses or stamp traders. To further the scheme, Morgan often posed as a business professional during his visits to the post offices, wearing business attire and referencing his “job.” During the course of the scheme, Morgan used the personal identifying information of a real person, P.T. (now deceased), as well as the fictitious names Edward Carrera and Edward Croce. He stole more than $400,000 in stamps and other services from the United States Post Office.
This case was investigated by United States Postal Inspection Service. It was prosecuted by Assistant United States Attorneys Rachel K. Jones and Suzanne Nebesky.
Indictment Charges Vermilion County Man with Child Sexual Exploitation, Trafficking Child PornographyRead the Press Release
PEORIA, Ill. – A Hoopeston, Ill., man, Dalton M.C. Burmeister, 27, has been indicted on charges of child sexual exploitation and trafficking of child pornography. The indictment alleges that in September 2020, Burmeister exploited children under the age of six to engage in sexual activity and to create an image of the conduct and that he trafficked images of child pornography.
Burmeister was previously charged by criminal complaint and was arrested on Dec. 22, 2020. U.S. Magistrate Judge Eric I. Long ordered that Burmeister remain detained in the custody of the U.S. Marshals Service.
If convicted, the statutory penalty for each count of child sexual exploitation (four counts) is 15 to 30 years in prison; for distribution (three counts) and receiving (one count) child pornography, the penalty is five to 20 years in prison. For possession of child pornography (one count), the statutory penalty is up to 20 years in prison.
Assistant U.S. Attorney Elly M. Peirson represents the government in the prosecution. The charges are the result of investigation by the Illinois State Police and the Illinois Internet Crimes Against Children Task Force.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Illinois Man Sentenced to over 21 Years in PrisonRead the Press Release
HAMMOND-Jeremiah Ellis, 34, of Blue Island, Illinois, was sentenced by United States District Court Judge Philip P. Simon following his guilty plea to Counts 1 through 5 of the Superseding Indictment, announced Acting U.S. Attorney Bell.
Mr. Ellis was sentenced to 261 months in prison followed by 3 years of supervised release
Ellis entered a guilty plea to bank robbery, discharging a firearm during a crime of violence, and brandishing a firearm during a crime of violence. According to documents in the case, on March 29, 2014, Ellis and co-defendant Ashley Patterson robbed First Merchant’s Bank in East Chicago, Indiana. Ellis and Patterson ran into the bank with their guns drawn, held bank employees and customers at gunpoint, and got away with approximately $10,000. Ellis fired shots at officers as Patterson drove them away from the bank after the robbery.
Ellis committed two other armed robberies in Hammond before police caught him. He robbed a Marathon gas station of $1,800 on March 19, 2014, and a Mobil gas station of approximately $1,000 on January 26, 2014.
This case was investigated by the Federal Bureau of Investigation GRIT Task Force with the assistance of Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant United States Attorneys Jennifer Chang and Molly Kelley.
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Illegal Alien Who Stole Identity for Employment in the U.S. Sentenced to Federal PrisonRead the Press Release
A man from Mexico who re-entered the United States illegally and stole another’s identity for purposes of employment was sentenced January 27, 2021 to two years in federal prison.
Heriberto Arellano-Almontes, age 57, from Mexico, received the prison term after a July 22, 2020, guilty plea to aggravated identity theft.
In a plea agreement, Arellano-Almontes admitted that he is an alien citizen of Mexico. Arellano-Almontes was previously removed from the United States to Mexico on or about May 5, 2004. On August 17, 2019, Arellano-Almontes was arrested by law enforcement in Crawford County, Iowa, for Operating a Motor Vehicle While Intoxicated. Arellano-Almontes was found to be employed at Midwest Industries, Inc., in Ida Grove, Iowa, utilizing another’s identity where he filed an I-9 Employment Eligibility Form and W-4 Tax Withholding Form with Midwest Industries on April 11, 2016. He also presented a State of Missouri Identification Card and a social security card under the same identity.
On October 2, 2019, Arellano-Almontes was found illegally residing in Crawford County, Iowa. Arellano-Almontes also has a prior felony conviction for possession of methamphetamine from 2003 out of the District Court for Colfax County, Nebraska.
Arellano-Almontes was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. He was sentenced to 24 months’ imprisonment. He also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Arellano-Almontes 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 Kevin Fletcher and Ron Timmons, and investigated by U.S. Immigration and Customs Enforcement (ICE).
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4021.
Follow us on Twitter @USAO_NDIA.
Greenfield Man Pleads Guilty to Possession of an Unregistered FirearmRead the Press Release
CONCORD - Alexander Arsenault, 35, of Greenfield, pleaded guilty in federal court on Wednesday to possession of an unregistered firearm, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on December 1, 2018, a device exploded in an empty vehicle parked outside of a home in Greenfield, New Hampshire. The vehicle was severely damaged and law enforcement recovered a match near the driveway of the home. Investigators seized items believed to be from the device that damaged the vehicle and determined that a homemade bomb consisting of a low explosive main charge and a non-electrical fusing system was used for the explosion.
Upon further investigation, law enforcement learned that Arsenault had disputes with the owners of the vehicle and that he had previously purchased items consistent with the items found at the scene of the explosion. A search of Arsenault’s home yielded a typed out document about how to answer law enforcement questions regarding the destruction of a vehicle. A records search revealed that Arsenault has never registered a firearm as required under the National Firearms Act.
Arsenault is scheduled to be sentenced on May 18, 2021.
“By creating and detonating a homemade bomb, the defendant severely damaged a vehicle and jeopardized lives,” said U.S. Attorney Murray. “I am grateful to the FBI and the law enforcement officers whose hard work identified the Mr. Arsenault and led to this prosecution. We will always work closely with our law enforcement partners to identify and prevent threats to public safety.”
“Annoyed by what he believed to be excessive noise coming from his neighbor’s home, Alex Arsenault knowingly and willingly made a home-made explosive bomb, detonated it on their property, and put his fellow citizens in fear for their lives,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The quick and decisive action by the FBI’s Joint Terrorism Task Force, and our partners at the Greenfield Police Department, averted an already hazardous situation from spiraling dangerously out of control.”
This matter was investigated by the Federal Bureau of Investigation with assistance from the Greenfield Police Department. The case is being prosecuted by Assistant U.S. Attorney Anna Krasinski.
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Great Falls methamphetamine trafficker sentenced to 12 years in prisonRead the Press Release
GREAT FALLS — A Great Falls woman who admitted trafficking methamphetamine after law enforcement found five pounds of the drug and a gun in her vehicle was sentenced today to 12 years in prison and five years of supervised release, Acting U.S. Attorney Leif Johnson said.
Opal Inez Cox, 40, pleaded guilty on Oct. 6, 2020 to conspiracy to possess with intent to distribute meth and to possession of a firearm in furtherance of a drug trafficking crime.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris ordered Cox detained.
The prosecution said in court documents that law enforcement learned Cox was distributing meth in Montana and stopped her vehicle as she returned to the state from Las Vegas, Nevada, in December 2019. Law enforcement found about five pounds of meth and a 9mm pistol hidden together in the center console of the car. Five pounds of meth is the equivalent of 18,120 doses.
Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the Montana Division of Criminal Investigation, FBI, IRS and Drug Enforcement Administration.
This case is part of Project Guardian, the U.S. Department of Justice’s recent initiative to reduce gun violence and enforce federal firearms laws, and Project Safe Neighborhoods, the USDOJ’s initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 48% from 2013 through 2019. Through these initiatives, 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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Grand jury indicts two men charged in connection with use of a firearm in furtherance of drug trafficking conspiracy resulting in death of victimRead the Press Release
ST. LOUIS – A federal grand jury indicted 25-year-old Cevone Weeden and 35-year-old Herschell Perkins on one count, each, of discharge of one or more firearms in furtherance of the commission of a drug trafficking crime causing death. The same federal grand jury also indicted Weeden on one count of conspiracy to distribute and possess, with the intent to distribute, controlled substances, including fentanyl.
According to charging documents, on or about August 20, 2020, Weeden coordinated with an associate to learn the whereabouts of the victim, who had robbed Weeden of a quantity of narcotics two days prior during a drug deal. Upon learning of the victim’s location on North Hampton Avenue near I-64, Weeden contacted Perkins, who drove the two to this location.
Weeden and Perkins proceeded to drive to various parking lots and side streets in the victim’s immediate vicinity. Shortly before the shooting, Perkins removed the license plates from his vehicle and Weeden turned his phone off. Just after 8:00 p.m., Perkins pulled his vehicle onto a side street across from the victim’s location, at which point Weeden emerged from this same location, crossed Hampton Avenue on foot and shot the victim multiple times while he sat in his vehicle. Weeden then returned to Perkins’ vehicle and the two fled the area.
The defendants face a maximum punishment of life in prison, death, and/or a fine of up to $250,000.
Charges set forth in the indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The St. Louis Metropolitan Police Department, along with the Drug Enforcement Administration, investigated the case. Assistant United States Attorney Geoffrey Ogden is handling the case.
Grand Jury Returns 3 IndictmentsRead the Press Release
MADISON, WIS. – A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
Hudson Man Charged with Drug Offenses Involving Methamphetamine
Kevin J. Bell, 41, Hudson, Wisconsin, is charged with distributing methamphetamine on October 16 and December 1, 2020. The indictment alleges that the October 16 distribution involved 50 grams or more of methamphetamine.
If convicted, Bell faces a mandatory minimum penalty of 5 years and a maximum of 40 years in federal prison on the charge alleging distribution of 50 grams or more of methamphetamine, and a maximum penalty of 20 years on the other distribution charge. The charges against him are the result of an investigation by the West Central Drug Task Force; Buffalo, Chippewa, Clark, and Eau Claire County Sheriffs’ Offices; Eau Claire Police Department; Eau Claire County District Attorney’s Office; and the Drug Enforcement Administration. Assistant U.S. Attorney Steven Anderson is handling the prosecution.
Mauston Man Charged with Drug & Gun Crimes
Jerry Scheerer, 27, Mauston, Wisconsin, is charged with distributing methamphetamine and being a felon in possession of a firearm. The indictment alleges that on November 3, 2020, Scheerer distributed 5 grams or more of methamphetamine and possessed a revolver.
If convicted, Scheerer faces a mandatory minimum penalty of 5 years and a maximum of 40 years in federal prison on the drug charge and a maximum of 10 years on the gun charge. The charges against him are the result of an investigation by the Mauston Police Department; Sauk and Juneau County Sheriffs’ Offices; Wisconsin Department of Justice Division of Criminal Investigation; Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Taylor Kraus is handling the prosecution.
Dane County Man Charged with Making False Statement During Purchase of Firearm
Andre Gonzales, 21, Oregon, Wisconsin, is charged with making a false statement to a federally licensed firearms dealer while purchasing a firearm. The indictment alleges that on July 14, 2020, Gonzales stated that he was the actual buyer of a 9mm handgun, when he was not the actual buyer.
If convicted, Gonzales faces a maximum penalty of 5 years in federal prison. The charge against him is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Madison, Fitchburg and Oregon Police Departments. Assistant U.S. Attorney Meredith Duchemin is handling the prosecution.
Grand Jury Indicts Danville Sex Offender for Alleged Violation of the Sex Offender Registration and Notification ActRead the Press Release
PEORIA, Ill. – The grand jury yesterday returned an indictment that charges David W. Morlan, 66, of Danville, Ill., with failure to register and update his address as required by the federal Sex Offender Notification and Registration Act (SORNA.)
The indictment against Morlan alleges that from June to December 2020, Morlan, a convicted sex offender, failed to update his registration. Morlan was arrested on Jan. 8, 2021, and charged in a criminal complaint. The affidavit filed in support of the complaint alleges that Morlan was convicted in Vermilion County, Ill., in September 2006, for aggravated criminal sexual abuse of a minor, a five-year-old victim. Further, the indictment alleges that Morlan, who had registered his address in Indiana, was living in Danville, Ill., but had not updated his registration.
During a court appearance on Jan. 13, 2021. before U.S. Magistrate Judge Eric I. Long, in Urbana, Morlan was ordered to remain detained in U.S. Marshals Service custody.
If convicted, the penalty for violation of the Sex Offender Registration and Notification Act is up to 10 years in prison.
Assistant U.S. Attorney Elly M. Peirson is representing the government in the prosecution which was investigated by the U.S. Marshals Service and the Danville Police Department.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Georgia Woman Sentenced for Conspiracy to Distribute HeroinRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that on GLORIA NAVARRO, age 47, of Loganville, Georgia, was sentenced by United States District Judge Jane Triche Milazzo on January 27, 2021 after previously pleading guilty to drug offenses.
Specifically, NAVARRO previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute one kilogram or more of heroin, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(A), and 846.
According to court records, NAVARRO and others conspired to distribute heroin in the New Orleans metropolitan area and elsewhere.
Judge Milazzo sentenced NAVARRO to 210 months of imprisonment, 5 years of supervised release, and a $100 special assessment.
U.S. Attorney Strasser praised the work of the Department of Homeland Security, Homeland Security Investigations in investigating this matter. Assistant United States Attorney Jonathan L. Shih is in charge of the prosecution.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (“OCDETF”). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
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Former West Boylston Nurse Pleads Guilty to Tampering with Hydromorphone and MeperidineRead the Press Release
BOSTON – A former nurse pleaded guilty today in federal court in Boston to tampering with opioids intended for emergency department patients at a hospital where he worked and then attempting to conceal his crime by replacing the diverted narcotics with saline.
Mark Croft, 48, of West Boylston, pleaded guilty to one count of tampering with a consumer product and one count of acquiring a controlled substance by deception and subterfuge. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for May 20, 2021.
While working at a Massachusetts hospital in January 2016, Croft administered hydromorphone and meperidine – both Schedule II controlled substances – to emergency department patients in need of pain relief. Between Jan. 5 and Jan. 14, 2016, Croft tampered with carpujects – syringe devices used to administer injectable fluid medication – containing hydromorphone and meperidine by accessing the automated dispensing machine (ADM) in the hospital’s emergency department.
Specifically, Croft used his credentials to access the ADM and removed carpujects containing hydromorphone and meperidine. He then used syringes to puncture the carpujects and removed portions of the hdyromprohone and meperidine for his own use. In some instances, Croft replaced the medication he removed with saline in an attempt to conceal his conduct. To avoid detection, Croft later put the carpujects with the diluted medication back in the ADM where they remained available for nurses to unwittingly use on patients. Croft also used his credentials to enter a “return to stock” transactions in the ADM, making it falsely appear that no medications had been removed from the carpuject.
The charge of tampering with a consumer product provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. The charge of obtaining a controlled substance by misrepresentation, fraud, deception and subterfuge provides for a sentence of up to four years in prison, one year of supervised release and a fine of up to $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; Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Monica Bharel MD, MPH, Commissioner of the Massachusetts Department of Public Health made the announcement today. Assistant U.S. Attorney Patrick Callahan of Lelling’s Healthcare Fraud Unit is prosecuting the case.
Former Union President and Benefit Funds Administrator Charged with EmbezzlementRead the Press Release
NEWARK, N.J. –The former president of a New Jersey local union and administrator of two union affiliated benefit funds made her initial appearance today on charges that she embezzled from the union and two union-affiliated employee benefit funds, Acting U.S. Attorney Rachael A. Honig announced.
Dorothy McBride, 74, of Montville, New Jersey, was charged by complaint with one count each of embezzlement of labor union assets and embezzlement from employee benefit plans. She allegedly embezzled approximately $100,000 from a local union affiliated with the Communications Workers of America (CWA), of which she was president, and approximately $534,470 from the Welfare Fund and the Pension Fund, of which she was administrator. McBride made her initial appearances today by videoconference before U.S. Magistrate Judge Leda Dunn Wettre and was released on $250,000 unsecured bond.
According to the documents filed in this case and statements made in court:
McBride had control over the union’s and the funds’ bank accounts. From at least 2015 through June 2018, she made routine payments to her personal credit card accounts from the bank accounts of the union and employee benefit funds for expenditures that were not authorized or for legitimate union or fund purposes. McBride caused the pension fund to direct monthly payments for pension benefits to a personal account of hers for a benefit that she was ineligible to receive and that the pension fund was not obligated to pay out.
The charges of embezzlement of labor union assets and embezzlement from employee benefit plans each carry a statutory maximum sentence of five years in prison and a maximum $250,000 fine, or twice the gain or loss from the offense.
Acting U.S. Attorney Honig credited the investigators of the U.S. Department of Labor, Employee Benefits Security Administration, under the direction of Regional Director Thomas Licetti of the New York Regional Office; investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor – Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Michael Mikulka, with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Marion High School Guidance Counselor IndictedRead the Press Release
FORT WAYNE – Ryan Christian Vermilion, age 46, of Marion, Indiana was charged with production of child pornography by way of a single count Grand Jury Indictment, announced Acting U.S. Attorney Gary T. Bell.
According to documents in this case, from on or about January 26, 2020 through February 18, 2020, Mr. Vermilion allegedly enticed a minor to send him sexually explicit pictures. Also alleged is that the victim met the defendant through cross-platform social media sites, engaging in chat and photo sharing while believing the defendant was an ill teenage boy.
The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.
If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.
This case is a result of an investigation by the Federal Bureau of Investigation with the assistance of the Indiana State Police and Wells County Sheriff’s Department This case is being prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
Parents are strongly encouraged to speak with their children about similar conversations and contact the FBI at 317-595-4000 if anything similar is found on any of their devices.
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Former Federal Aviation Administration employee sentenced for severing air traffic communicationsRead the Press Release
HONOLULU, Hawaii – A federal judge today sentenced Joelyn DeCosta, 48, of Honolulu, Hawaii, to two years of probation and a $5000 fine for willfully and maliciously interfering with the working and use of a communication system operated and controlled by the United States, in violation of Title 18, United States Code, Section 1362.
According to documents and information presented in court, DeCosta was an Airway Transportation Systems Specialist for the Federal Aviation Administration, and had worked for the F.A.A. for approximately 26 years. On January 4, 2019, she willfully and maliciously severed communications between Air Traffic Control in Honolulu and aircraft flying in U.S. airspace above and around Honolulu, in an area known as Sector 4, which covers flights between Oahu and Maui, Lanai, Moloka’i, Kaho’olawe, and the Big Island. The main and standby communication lines between Hawaii Air Traffic Control and pilots of approximately six planes during one incident and approximately four planes during a second incident were affected by the outages. In total, pilots could not hear instructions from Air Traffic Control for a total of two minutes, as a result of the outages caused by the defendant.
The defendant had previously pled guilty pursuant to a plea agreement. As part of her plea agreement, she resigned from the F.A.A. before sentencing. As a result, she lost her retirement benefits, which were estimated to have been worth in excess of $500,000.
One of the pilots of an aircraft affected by the outage spoke as a victim at the sentencing. He emphasized the danger to himself and the 40 passengers onboard his aircraft posed by the outage.
“The United States Attorney’s Office takes any threat to the safety of the air travelling public very seriously, and will vigorously enforce federal criminal laws against any federal employee who abuses their position and, in doing so, puts air travelers in harm’s way,” said U.S. Attorney Kenji M. Price.
“Employees of the Federal Aviation Administration (FAA) are entrusted with safely overseeing the busiest and most complex air transportation system in the world. Key to that trust is maintaining an uncompromising level of integrity in their work, which many FAA personnel do,” said Cissy Tubbs, Special Agent-in-Charge, Western Region, Department of Transportation, Office of Inspector General - Investigations. “Today’s sentencing demonstrates our commitment to working with our law enforcement partners and the U.S. Attorney’s Office to detect and prevent those willing to compromise the safety of the National Airspace System and the traveling public.”
The case was investigated by the Department of Transportation, Office of Inspector General, and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Marc A. Wallenstein.
Former DeKalb County Sergeant sentenced for possessing equipment to make fraudulent credit cards and ID’sRead the Press Release
ATLANTA - Claude Goines has been sentenced to prison for running a fake credit card and ID lab. Goines operated a carding lab where he manufactured fraudulent credit cards and driver's licenses while he was on a work release program related to an earlier fraud conviction.
“Identity theft and credit card fraud has become an all too common problem,” said Acting U.S. Attorney Bobby L. Christine. “The actions of thieves like Goines can severely damage citizens’ lives and credit. In some cases, it can take years to repair. We encourage all citizens to monitor their credit for any suspicious activity, and if they find any, to contact law enforcement immediately.”
“It is clear that Goines was determined to continue to hurt citizens by stealing their identities to line his own pockets,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Particularly disturbing is the fact that he is a former law enforcement officer sworn to protect citizens.”
“This sentencing should send the message, to other identity thieves and fraudsters, that crime doesn’t pay. This type of crime has quickly become a serious threat to our communities because of how much damage they can do so quickly,” said Special Agent in Charge Katrina W. Berger, who oversees Homeland Security Investigations (HSI) operations in Georgia and Alabama. “Goines, a repeat offender and former member of law enforcement, thought he could get away with his crimes and prosper, but thanks to the hard work and vigilance of HSI and its law enforcement partners he was wrong.”
“Unfortunately, some people have a difficult time breaking their cycle of criminal behavior,” said U.S. Secret Service Special Agent in Charge Steve Baisel. “Goines, and others like him, seem to find the lure of victimizing others greater than the potential consequences of their actions. We will not stop our efforts to bring to justice those who prey on others.”
According to U.S. Attorney Christine, the charges and other information presented in court: Claude Goines is a former detention officer at the DeKalb County Sheriff’s Office in Decatur, Georgia, where he rose to the rank of sergeant. While he was on a work release program related to an earlier fraud conviction, Goines operated a carding lab where he manufactured fraudulent credit cards and driver's licenses.
When federal agents executed a search of the lab, Goines was present while counterfeit cards were being produced. The lab contained multiple laptops, USB storage devices, cell phones, printers, blank card stock, security holograms for driver’s licenses of several U.S. states, two handguns, and other related items. Goines imported fraudulent holograms to be used with the fake Georgia driver's licenses he produced.
Claude Goines, 35, of Lilburn, Georgia, has been sentenced to two years, six months in prison to be followed by three years of supervised release. Goines was convicted on these charges on October 28, 2020, after he pleaded guilty to charges of access device fraud and possession of device-making equipment.
This case was investigated by the U.S. Secret Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and Federal Bureau of Investigation.
Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Atlantic City Mayor Sentenced to One Month in Prison, 11 Months of Home Confinement, for Defrauding Contributors to Youth Basketball TeamRead the Press Release
CAMDEN, N.J. – The former mayor of Atlantic City was sentenced today to 30 days in prison and 11 months of home confinement for defrauding contributors to a youth basketball team out of more than $86,000, Acting U.S. Attorney Rachael Honig announced.
Frank Gilliam, 49, of Atlantic City, New Jersey, previously pleaded guilty to an information charging him with wire fraud. U.S. District Judge Joseph H. Rodriguez imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
Gilliam was the co-founder of AC Starz Basketball Club (AC Starz), a non-profit that he incorporated to operate a youth basketball team. While serving as a member of the Atlantic City Council and later, as mayor of Atlantic City, Gilliam solicited donations for AC Starz from various individuals and entities under the false pretense that the contributions were for a youth basketball team and/or school supplies for underprivileged children. Gilliam instead used most of the money for personal expenses – including luxury clothing, expensive meals, and trips – that were completely unrelated to the operation of a youth basketball team. In total, Gilliam defrauded the contributors out of $86,790.
In addition to the prison term, Judge Rodriguez sentenced Gilliam to three years of supervised release, ordered him to pay restitution to his victims in the amount of $86,790 and ordered him to perform 200 hours of community service.
Acting U.S. Attorney Rachael Honig credited special agents of the FBI Atlantic City Resident Agency and FBI Atlantic City Public Corruption Task Force, which includes the Atlantic County and Cape May County Prosecutor’s Offices and the Atlantic City Police Department, under the direction of FBI Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division.
Fitchburg Man Pleads Guilty to Fentanyl, Crack Cocaine and Cocaine ConspiracyRead the Press Release
BOSTON – A Fitchburg man pleaded guilty today to his role in a fentanyl and crack cocaine trafficking conspiracy. The defendant sold drugs to customers in the Fitchburg area and had associates sell drugs on his behalf.
Alberto Nunez, 46, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute 28 grams or more of cocaine base (commonly known as crack cocaine), fentanyl and cocaine. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for May 10, 2021. Nunez was charged by federal criminal complaint in February 2020.
From approximately November 2019 to February 2020, Nunez conspired with others to distribute and to possess with intent to distribute cocaine base, fentanyl and cocaine in Worcester County and elsewhere in Massachusetts. As part of a federal investigation into drug trafficking in the Fitchburg area in September 2018, Nunez was identified as a drug dealer who regularly distributed fentanyl and cocaine base to multiple drug customers. Nunez delivered the drugs to his customers himself and also had multiple associates deliver fentanyl and cocaine base to customers on his behalf. Most of Nunez’s customers were drug users, but some further distributed the drugs they purchased from Nunez.
The charge of conspiracy to distribute 28 grams or more of cocaine base, fentanyl and cocaine provides for a sentence of at least five years and up to 40 years in prison, at least four years of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. The Fitchburg and Lunenburg Police Departments also provided valuable assistance with the investigation. Assistant U.S. Attorney Alathea Porter of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
Federal Judge Sentences Three Methamphetamine TraffickersRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Kenneth D. Bell handed down sentences ranging from 120 to 144 months in prison, to three individuals for their involvement in a methamphetamine trafficking ring, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Judge Bell sentenced the defendants as follows:
- Christy Lee Latham, 43, of West Jefferson, N.C. was sentenced to 144 months in prison, followed by five years of supervised release. Latham pleaded guilty to methamphetamine trafficking conspiracy and distribute and possession with intent to distribute methamphetamine. Latham’s sentence was enhanced due to her violation of her conditions of supervised release for a prior federal methamphetamine trafficking conviction.
- Joshua Dean Lipford, 33, of Trade, Tennessee, was sentenced to 138 months in prison and five years of supervised release. Lipford pleaded guilty to methamphetamine trafficking conspiracy.
- Chasty Elaine Hinson Stallings, 40, of Morganton, N.C., was sentenced to 120 months in prison and five years of supervised release. Stallings pleaded guilty to two counts of possession with intent to distribute methamphetamine and one count of possession of firearm by felon.
A fourth defendant, Heather Renee Arnold pleaded guilty on December 23, 2020, to possession with intent to distribute methamphetamine and is awaiting sentencing.
According to court documents and today’s sentencing hearing, in September 2019, Stallings was a part of a methamphetamine trafficking ring operating in Caldwell County and elsewhere. Over the course of the investigation Stallings was found in possession of 730 grams of 97.9% pure methamphetamine and a firearm. According to court records, between February and March 2020, in Ashe and Watauga Counties, and elsewhere, law enforcement seized more than 750 grams of methamphetamine with purity greater than 94% from Arnold, Latham, and Lipford.
This case is the result of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Dixie Crystal.” According to court documents, since 2015, more than 220 individuals have been prosecuted as a result of the Dixie Crystal investigation. Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars. Over the course of the investigation, law enforcement seized far in excess of 100 kilograms of crystal methamphetamine, $1,000,000 in U.S. currency and other assets, and dozens of firearms. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement, U.S. Attorney Murray recognized the following federal, state and local agencies which partnered in Operation Dixie Crystal, and thanked them for their continued cooperation and support: the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); North Carolina State Bureau of Investigation (NC SBI); Alexander County Sheriff’s Office; Ashe County Sheriff’s Office; Boone Police Department; Caldwell County Sheriff’s Office; Hickory Police Department; Jefferson Police Department; North Wilkesboro Police Department; Watauga County Sheriff’s Office; Wilkesboro Police Department; and Johnson County Sheriff’s Office, Tennessee.
The prosecutions are being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Federal Court Permanently Bars Southern Florida Tax Preparer from Preparing ReturnsRead the Press Release
A federal court in the Southern District of Florida has permanently enjoined a West Palm Beach tax return preparer and her business from preparing federal income tax returns for others, the Justice Department announced today. According to the court’s order, it issued the injunction in response to violations of a prior order in the case that had allowed the preparer and her business to prepare returns subject to certain restrictions.
In April 2017, the United States filed a complaint against Lena D. Cotton and Professional Accounting LDC LLC, that alleged the defendants prepared returns with improper education credits, manipulated filing statuses, and improper vehicle deductions, among other issues. In November 2017, the court permanently enjoined both defendants from this and other specific conduct and required defendants to engage a “neutral monitor” to “determin[e] and/or secur[e] compliance” with injunction.
In an August 2019 order, the court held Cotton and Professional Accounting LDC in contempt of the November 2017 order and “imposed additional limits on [d]efendants’ operations[,]” including restrictions on the number and type of returns they could prepare. The order stated that “[t]hese new restrictions are [d]efendants’ final opportunity” and that the remedy for any further violations “shall be a permanent ban on tax return preparation.”
On Jan. 27, 2021, the court issued an order holding defendants in contempt a second time. According to the order, defendants “have attempted to circumvent the terms of the injunction” and subsequent orders “and have, in some cases, violated the restrictions placed upon them by those [o]rders.” In particular, the court found that Cotton and Professional Accounting LDC “in effect . . . employ[ed] and overs[aw]” other individuals and entities who prepared prohibited returns out of Professional Accounting LDC’s West Palm Beach office, with Cotton and Professional Accounting LDC “retaining a great deal of the profits.” In light of previous violations by Cotton and Professional Accounting LDC, the court found that “any remedy short of a permanent injunction on return preparation is inadequate.”
In addition, the court barred Cotton and Professional Accounting LDC from selling their customer lists to certain non-party individuals or entities, citing the “significant risk” that any such sale could be an “attempt to perpetuate” the “fraudulent schemes” employed by defendants. According to the order, defendants “in effect . . . employ[ed] and overs[aw]” these non-parties and both “individually and through [the non-parties]” attempted to evade and/or violate the restrictions imposed by the injunction and ensuing orders. The order states, “the evidence tends to support a finding that [the non-parties] were aware of” the restrictions that had been placed on defendants and that “most of them worked in active concert or participation” with defendants.
The order specifically names the following individuals and entities: Anthony Boone, Donellar Wims-Boone, Latesha Temple, Melissa Morgan-Wright, Kelly Dunlop, Matthew Dunlop, Richard Wise, Professional Accounting by R&K, Professional Accounting by MM, and Temple Financial Solutions. The order finds that Morgan-Wright founded Professional Accounting by MM. It further finds that Wise and Kelly Dunlop formed Professional Accounting by R&K, and that Matthew Dunlop and Wims-Boone are also “involved with” that entity. Additionally, the order finds that Temple formed Temple Financial Solutions, and Boone prepared tax returns using Temple Financial System’s federal preparer identification. According to the order, Boone, Wims-Boone, Temple, Morgan-Wright, and Kelly and Matthew Dunlop all “previously worked in some capacity for [defendants],” and Wise is a former customer.
According to the order, defendant Cotton referred customers to Temple Financial Solutions, Professional Accounting by MM, and Professional Accounting by R&K, all three of which operated out of defendant Professional Accounting LDC’s office. The order notes that “[a]s of May 13, 2020, approximately 80% of the returns filed in 2020” by the non-parties “were for customers that previously used [d]efendants as their return preparer.” The order notes that “customers who previously had returns prepared by [d]efendants may have thought they were returning to [d]efendants’ business.” In addition, according to the order, defendants “retained a great deal of the profits” on the returns prepared by the non-parties and at least some of the non-parties were compensated by defendants like employees.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant (more information can also be found here). The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Department of Justice’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Emotet Botnet Disrupted in International Cyber OperationRead the Press Release
WASHINGTON – The Justice Department today announced its participation in a multinational operation involving actions in the United States, Canada, France, Germany, the Netherlands, and the United Kingdom to disrupt and take down the infrastructure of the malware and botnet known as Emotet. Additionally, officials in Lithuania, Sweden, and Ukraine assisted in this major cyber investigative action.
“The Emotet malware and botnet infected hundreds of thousands of computers throughout the United States, including our critical infrastructure, and caused millions of dollars in damage to victims worldwide,” said Acting Deputy Attorney General John Carlin. “Cyber criminals will not escape justice regardless of where they operate. Working with public and private partners around the world we will relentlessly pursue them while using the full arsenal of tools at our disposal to disrupt their threats and prosecute those responsible.”
According to an unsealed search warrant affidavit, Emotet is a family of malware that targets critical industries worldwide, including banking, e commerce, healthcare, academia, government, and technology. Emotet malware primarily infects victim computers through spam email messages containing malicious attachments or hyperlinks. Emails were designed to appear to come from a legitimate source or someone in the recipient’s contact list. Once it has infected a victim computer, Emotet can deliver additional malware to the infected computer, such as ransomware or malware that steals financial credentials. Ransomware, in particular, has increased in scope and severity in the past year, harming businesses, healthcare providers, and government agencies even as the country has struggled to respond to the pandemic.
“The coordinated disruption of Emotet was a great success for the FBI and our international partners,” said FBI Director Christopher Wray. “The FBI utilized sophisticated techniques, our unique legal authorities, and most importantly, our worldwide partnerships to significantly disrupt the malware. The operation is an example of how much we can achieve when we work with our international law enforcement partners to combat the cyber threat. The FBI remains committed, now more than ever, to imposing risk and consequences on cyber criminals to put an end to this type of criminal activity.”
The computers infected with Emotet malware are part of a botnet (i.e., a network of compromised computers), meaning the perpetrators can remotely control all the infected computers in a coordinated manner. The owners and operators of the victim computers are typically unaware of the infection.
“Cybercrime transcends physical and political boundaries and costs U.S. citizens and businesses billions each year,” said U.S. Attorney Matt Martin of the Middle District of North Carolina. “That was certainly true with Emotet. Now, more than ever, international collaboration is an imperative as we employ a technically and legally sophisticated approach to thwart cybercriminals in whatever corner of the globe they are found. This investigation will be a paradigm for effective international law enforcement cooperation directed at global cybercrime, and we applaud the FBI and the international law enforcement partners who contributed to the effort to take down this global threat.”
According to the affidavit, in 2017, for example, the computer network of a school district in the Middle District of North Carolina was infected with the Emotet malware. The Emotet infection caused damage to the school’s computers, including but not limited to the school’s network, which was disabled for approximately two weeks. In addition, the infection caused more than $1.4 million in losses, including but not limited to the cost of virus mitigation services and replacement computers. From 2017 to the present, there have been numerous other victims throughout North Carolina and the United States, to include computer networks of local, state, tribal, and federal governmental units, corporations, and networks related to critical infrastructure.
“The Emotet malware quickly elevated to one of the top cyber threats in the world,” said Special Agent in Charge Robert R. Wells of the FBI Charlotte Field Office. “The strong relationships with international law enforcement partners were critical to the success of this FBI investigation which began with a small North Carolina school system that did the right thing and quickly contacted their local FBI office for help.”
According to the U.S. Cybersecurity & Infrastructure Security Agency (CISA), Emotet infections have cost local, state, tribal, and territorial governments up to $1 million per incident to remediate. More information about the malware, including technical information for organizations about how to mitigate its effects, is available from CISA here: https://us-cert.cisa.gov/ncas/alerts/TA18-201A.
According to the affidavit, foreign law enforcement agents, working in coordination with the FBI, gained lawful access to Emotet servers located overseas and identified the Internet Protocol addresses of approximately 1.6 million computers worldwide that appear to have been infected with Emotet malware between April 1, 2020, and Jan. 17, 2021. Of those, over 45,000 infected computers appear to have been located in the United States.
Foreign law enforcement, working in collaboration with the FBI, replaced Emotet malware on servers located in their jurisdiction with a file created by law enforcement, according to the affidavit. This was done with the intent that computers in the United States and elsewhere that were infected by the Emotet malware would download the law enforcement file during an already-programmed Emotet update. The law enforcement file prevents the administrators of the Emotet botnet from further communicating with infected computers. The law enforcement file does not remediate other malware that was already installed on the infected computer through Emotet; instead, it is designed to prevent additional malware from being installed on the infected computer by untethering the victim computer from the botnet.
The scope of this law enforcement action was limited to the information installed on infected computers by the Emotet operators and did not extend to the information of the owners and users of the computers.
According to the affidavit, in coordination with foreign law enforcement officials, FBI personnel also gained lawful access to an Emotet distribution server located overseas and identified several servers worldwide that were used to distribute the Emotet malware. These servers were typically compromised web servers belonging to what appear to be unknowing third parties. The perpetrators uploaded the Emotet malware to the servers through unauthorized software applications. Victims who clicked on spam email messages containing malicious attachments or hyperlinks would then download the initial Emotet malware file from a distribution server.
In addition, according to the affidavit, FBI personnel notified more than 20 U.S.-based hosting providers that they hosted more than 45 IP addresses that had been compromised by the perpetrators associated with the Emotet malware and botnet. FBI Legal Attachés further notified authorities in more than 50 countries that hosting providers in their respective jurisdictions hosted hundreds of IP addresses that were compromised by Emotet.
The U.S. Attorney’s Office for the Middle District of North Carolina, the FBI Charlotte Division, and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with Europol and Eurojust who were an integral part of coordination and messaging, and investigators and prosecutors from several jurisdictions, including the Royal Canadian Mounted Police, France’s National Police and Judicial Court of Paris, Germany’s Federal Criminal Police and General Public Prosecutor’s Office Frankfurt/Main, Lithuanian Criminal Police Bureau, Netherlands National Police and National Public Prosecution Office, Swedish Police Authority, National Police of Ukraine and Office of the Prosecutor General of Ukraine, and the United Kingdom’s National Crime Agency and Crown Prosecution Service. The Justice Department’s Office of International Affairs and the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) also provided significant assistance. CCIPS Senior Counsel Ryan K.J. Dickey and Assistant U.S. Attorneys Eric Iverson and Anand Ramaswamy of the Middle District of North Carolina led the U.S. efforts.
More information about the operation is available by clicking: Eurojust/Europol. In addition, the Dutch National Police have created the following website to check whether your email address has been compromised by the administrators of Emotet: https://www.politie.nl/emocheck.
In September 2020, FBI Director Christopher Wray announced the FBI’s new strategy for countering cyber threats. The strategy focuses on imposing risk and consequences on cyber adversaries through the FBI’s unique authorities, world-class capabilities, and enduring partnerships. Victims are encouraged to report the incident online with the Internet Crime Complaint Center (IC3) www.ic3.gov. For more information on ransomware prevention, visit: https://www.ic3.gov/Home/Ransomware.
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Emotet Botnet Disrupted in International Cyber OperationRead the Press Release
The Justice Department today announced its participation in a multinational operation involving actions in the United States, Canada, France, Germany, the Netherlands, and the United Kingdom to disrupt and take down the infrastructure of the malware and botnet known as Emotet. Additionally, officials in Lithuania, Sweden, and Ukraine assisted in this major cyber investigative action.
“The Emotet malware and botnet infected hundreds of thousands of computers throughout the United States, including our critical infrastructure, and caused millions of dollars in damage to victims worldwide,” said Acting Deputy Attorney General John Carlin. “Cyber criminals will not escape justice regardless of where they operate. Working with public and private partners around the world we will relentlessly pursue them while using the full arsenal of tools at our disposal to disrupt their threats and prosecute those responsible.”
According to an unsealed search warrant affidavit, Emotet is a family of malware that targets critical industries worldwide, including banking, e‑commerce, healthcare, academia, government, and technology. Emotet malware primarily infects victim computers through spam email messages containing malicious attachments or hyperlinks. Emails were designed to appear to come from a legitimate source or someone in the recipient’s contact list. Once it has infected a victim computer, Emotet can deliver additional malware to the infected computer, such as ransomware or malware that steals financial credentials. Ransomware, in particular, has increased in scope and severity in the past year, harming businesses, healthcare providers, and government agencies even as the country has struggled to respond to the pandemic.
“The coordinated disruption of Emotet was a great success for the FBI and our international partners,” said FBI Director Christopher Wray. “The FBI utilized sophisticated techniques, our unique legal authorities, and most importantly, our worldwide partnerships to significantly disrupt the malware. The operation is an example of how much we can achieve when we work with our international law enforcement partners to combat the cyber threat. The FBI remains committed, now more than ever, to imposing risk and consequences on cyber criminals to put an end to this type of criminal activity.”
The computers infected with Emotet malware are part of a botnet (i.e., a network of compromised computers), meaning the perpetrators can remotely control all the infected computers in a coordinated manner. The owners and operators of the victim computers are typically unaware of the infection.
“Cybercrime transcends physical and political boundaries and costs U.S. citizens and businesses billions each year,” said U.S. Attorney Matt Martin of the Middle District of North Carolina. “That was certainly true with Emotet. Now, more than ever, international collaboration is an imperative as we employ a technically and legally sophisticated approach to thwart cybercriminals in whatever corner of the globe they are found. This investigation will be a paradigm for effective international law enforcement cooperation directed at global cybercrime, and we applaud the FBI and the international law enforcement partners who contributed to the effort to take down this global threat.”
According to the affidavit, in 2017, for example, the computer network of a school district in the Middle District of North Carolina was infected with the Emotet malware. The Emotet infection caused damage to the school’s computers, including but not limited to the school’s network, which was disabled for approximately two weeks. In addition, the infection caused more than $1.4 million in losses, including but not limited to the cost of virus mitigation services and replacement computers. From 2017 to the present, there have been numerous other victims throughout North Carolina and the United States, to include computer networks of local, state, tribal, and federal governmental units, corporations, and networks related to critical infrastructure.
“The Emotet malware quickly elevated to one of the top cyber threats in the world,” said Special Agent in Charge Robert R. Wells of the FBI Charlotte Field Office. “The strong relationships with international law enforcement partners were critical to the success of this FBI investigation which began with a small North Carolina school system that did the right thing and quickly contacted their local FBI office for help.”
According to the U.S. Cybersecurity & Infrastructure Security Agency (CISA), Emotet infections have cost local, state, tribal, and territorial governments up to $1 million per incident to remediate. More information about the malware, including technical information for organizations about how to mitigate its effects, is available from CISA here: https://us-cert.cisa.gov/ncas/alerts/TA18-201A.
According to the affidavit, foreign law enforcement agents, working in coordination with the FBI, gained lawful access to Emotet servers located overseas and identified the Internet Protocol addresses of approximately 1.6 million computers worldwide that appear to have been infected with Emotet malware between April 1, 2020, and Jan. 17, 2021. Of those, over 45,000 infected computers appear to have been located in the United States.
Foreign law enforcement, working in collaboration with the FBI, replaced Emotet malware on servers located in their jurisdiction with a file created by law enforcement, according to the affidavit. This was done with the intent that computers in the United States and elsewhere that were infected by the Emotet malware would download the law enforcement file during an already-programmed Emotet update. The law enforcement file prevents the administrators of the Emotet botnet from further communicating with infected computers. The law enforcement file does not remediate other malware that was already installed on the infected computer through Emotet; instead, it is designed to prevent additional malware from being installed on the infected computer by untethering the victim computer from the botnet.
The scope of this law enforcement action was limited to the information installed on infected computers by the Emotet operators and did not extend to the information of the owners and users of the computers.
According to the affidavit, in coordination with foreign law enforcement officials, FBI personnel also gained lawful access to an Emotet distribution server located overseas and identified several servers worldwide that were used to distribute the Emotet malware. These servers were typically compromised web servers belonging to what appear to be unknowing third parties. The perpetrators uploaded the Emotet malware to the servers through unauthorized software applications. Victims who clicked on spam email messages containing malicious attachments or hyperlinks would then download the initial Emotet malware file from a distribution server.
In addition, according to the affidavit, FBI personnel notified more than 20 U.S.-based hosting providers that they hosted more than 45 IP addresses that had been compromised by the perpetrators associated with the Emotet malware and botnet. FBI Legal Attachés further notified authorities in more than 50 countries that hosting providers in their respective jurisdictions hosted hundreds of IP addresses that were compromised by Emotet.
The U.S. Attorney’s Office for the Middle District of North Carolina, the FBI Charlotte Division, and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with Europol and Eurojust who were an integral part of coordination and messaging, and investigators and prosecutors from several jurisdictions, including the Royal Canadian Mounted Police, France’s National Police and Judicial Court of Paris, Germany’s Federal Criminal Police and General Public Prosecutor’s Office Frankfurt/Main, Lithuanian Criminal Police Bureau, Netherlands National Police and National Public Prosecution Office, Swedish Police Authority, National Police of Ukraine and Office of the Prosecutor General of Ukraine, and the United Kingdom’s National Crime Agency and Crown Prosecution Service. The Justice Department’s Office of International Affairs and the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) also provided significant assistance. CCIPS Senior Counsel Ryan K.J. Dickey and Assistant U.S. Attorneys Eric Iverson and Anand Ramaswamy of the Middle District of North Carolina led the U.S. efforts.
More information about the operation is available by clicking: Eurojust/Europol. In addition, the Dutch National Police have created the following website to check whether your email address has been compromised by the administrators of Emotet: https://www.politie.nl/emocheck.
In September 2020, FBI Director Christopher Wray announced the FBI’s new strategy for countering cyber threats. The strategy focuses on imposing risk and consequences on cyber adversaries through the FBI’s unique authorities, world-class capabilities, and enduring partnerships. Victims are encouraged to report the incident online with the Internet Crime Complaint Center (IC3) www.ic3.gov. For more information on ransomware prevention, visit: https://www.ic3.gov/Home/Ransomware.
Documents and Resources Related to the Disruption of the Emotet Malware and Botnet
Electronic Health Records Technology Vendor to Pay $18.25 Million to Resolve Kickback AllegationsRead the Press Release
A national electronic health records (EHR) technology vendor based in Watertown, Massachusetts, athenahealth Inc. (Athena), has agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act by paying unlawful kickbacks to generate sales of its EHR product, athenaClinicals, the Justice Department announced today.
In a complaint filed in conjunction with today’s settlement, the United States alleged that Athena violated the False Claims Act and the Anti-Kickback Statute through three marketing programs. First, Athena invited prospective and existing customers to “Concierge Events,” providing free tickets to and amenities at sporting, entertainment, and recreational events, including trips to the Masters Tournament and the Kentucky Derby with complimentary travel and luxury accommodations, meals, and alcohol. Second, Athena paid kickbacks to its existing customers under a “Lead Generation” program designed to identify and refer new prospective clients to Athena. Under this program, Athena paid up to $3,000 to existing customers for each new client that signed up for Athena services, regardless of how much time, if any, the existing customer spent speaking to or meeting with the new client. Finally, Athena entered into deals with competing vendors that were discontinuing their EHR technology offerings to refer their clients to Athena. Under such deals, Athena paid remuneration to the competitor based on the value and volume of practices that were successfully converted into Athena clients.
“This resolution demonstrates the department’s continued commitment to hold EHR companies accountable for the payment of unlawful kickbacks in any form,” said Acting Assistant Attorney General Brian Boynton for the Department of Justice’s Civil Division. “EHR technology plays an important role in the provision of medical care, and it is critical that the selection of an EHR platform be made without the influence of improper financial inducements.”
“Across the country, physicians rely on electronic health records software to provide vital patient data. Kickbacks corrupt the market for health care services and risk jeopardizing patient safety,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”
“If the benefits of Electronic Health Records are to be fully realized, patients must be confident providers have selected the most effective system – not the one paying the largest kickbacks. Time and again, we’ve seen fraudulent activity undermine the integrity of medical decisions, subvert the health marketplace, and waste taxpayer dollars,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold accountable those who provide illegal incentives in order to influence the decision-making of health care providers.”
“It is illegal for companies to extend invitations to all-expense-paid sporting, entertainment, and recreational events, and other perk-filled offers to its prospective customers to win business and boost their bottom line through illegal kickback schemes,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s agreement by Athena to pay $18.25 million should send a strong message to anyone thinking about engaging in this type of illegal activity. The FBI will continue to work with our law enforcement partners to do everything in our power to safeguard our government health care programs and the taxpayers picking up the bill.”
The settlement resolves allegations in a lawsuit filed by Geordie Sanborn and a separate lawsuit filed by Cheryl Lovell and William McKusick; both matters are pending in federal court in Boston, Massachusetts. The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act allows the government to intervene and take over the action, as it did in these two cases. The whistleblower share to be awarded in connection with the settlement has not been determined.
The government’s pursuit of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
This matter is being handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Department of Veterans Affairs, Office of Inspector General; and the U.S. Postal Service, Office of Inspector General. The two lawsuits are captioned United States ex rel. Sanborn. v. athenahealth, Inc., No. 17-cv-12125 (D. Mass.) and United States ex rel. Lovell and McKusick v. athenahealth, Inc., No. 17-cv-12543 (D. Mass.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Eight defendants sentenced for distribution of methamphetamine in Operation Night TrainRead the Press Release
GAINESVILLE, Ga. – Eight defendants have been sentenced for conspiracy to distribute methamphetamine, possession with the intent to distribute methamphetamine, and money laundering as part of Operation Night Train, a long-term Organized Crime Drug Enforcement Task Forces (OCDETF) investigation in Gainesville, Georgia.
“Methamphetamine continues to plague our communities,” said Acting U.S. Attorney Bobby L. Christine. “This prosecution demonstrates that our federal, state, and local partners remain committed to taking these dangerous drug dealers off of our streets. We are grateful to the many law enforcement agencies who partnered with us on these cases.”
“Because of the results of this case our communities are safer and other drug traffickers in Georgia have been put on notice that we will not tolerate their efforts to spread these dangerous drugs,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “They will face the combined force of our federal, state and local law enforcement partners.”
“Georgians deserve to live in a safe and drug-free environment. We will continue to work diligently with all of our partners to investigate and dismantle drug trafficking organizations that threaten the safety of our communities,” said Vic Reynolds, Director, Georgia Bureau of Investigation.
According to Acting U.S. Attorney Christine, the charges and other information presented in court: Teofilo Carlos Santana Medrano ran a multi-kilogram methamphetamine distribution organization in the Gainesville, Georgia, area. He was supplied by Maria Maldonado and Salome Urieta Jaimes. Santana distributed methamphetamine to other members of his organization.
Eight defendants in the case have been sentenced after pleading guilty:
- Timothy Barnes, 53, of Jasper, Georgia, was sentenced on January 28, 2021, to 11 years, eight months in prison, to be followed by 10 years of supervised release. Barnes was convicted on September 8, 2020, after he pleaded guilty to possession with the intent to distribute methamphetamine.
- Teofilo Carlos Santana Medrano, 29, of Gainesville, Georgia, was sentenced on October 14, 2020, to 18 years in prison to be followed by five years of supervised release. Santana was convicted on February 19, 2020 after he pleaded guilty to conspiracy to distribute methamphetamine.
- Michael Johnny Davis, 57, of Canton, Georgia, was sentenced on October 26, 2020, to four years, nine months in prison to be followed by six years of supervised release. Davis was convicted on July 23, 2020, after he pleaded guilty.
- Maria Isabel Gonzalez Maldonado, a/k/a Lili, 38, of Atlanta Georgia, was sentenced on November 20, 2020, to eight years, one month in prison to be followed by five years of supervised release. Maldonado was convicted on March 19, 2020, after she pleaded guilty to conspiracy to possess methamphetamine.
- John Johnson, 50, of Mershon, Georgia, was sentenced on November 20, 2020, to three years, eight months in prison to be followed by four years of supervised release. Johnson was convicted on August 13, 2020, after he pleaded guilty to possession with the intent to distribute methamphetamine.
- Mitchell Lingerfelt, 45, of Ball Ground, Georgia, was sentenced on October 29, 2020, to five years, three months in prison to be followed by seven years of supervised release. Davis was convicted on July 23, 2020, after he pleaded guilty to conspiracy to possess methamphetamine with the intent to distribute and possession with the intent to distribute methamphetamine.
- Carlos Neftali Lemus Salmeron, 29, of Lawrenceville, Georgia, was sentenced on August 14, 2020, to six years in prison to be followed by five years of supervised release. Salmeron was convicted on September 3, 2019, after he pleaded guilty to possession with the intent to distribute methamphetamine.
- Salome Urieta Jaimes, a/k/a “Gucci”, 39, of Guerrero, Mexico was sentenced on August 14, 2020, to nine years, two months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $200.00. Jaimes was convicted on January 31, 2020, after he pleaded guilty to possession with the intent to distribute methamphetamine and money laundering.
The remaining defendant, Lesli Arroyo Alvarado, 24, of Lawrenceville, Georgia, pleaded guilty to possession with the intent to distribute methamphetamine on July 2, 2020. She fled prior to her sentencing. Anyone with information regarding her whereabouts is asked to contact to the FBI.
This case is being investigated by the Federal Bureau of Investigation, the FBI North Georgia Major Offenders Task Force, the Department of Homeland Security Investigations, the Georgia Bureau of Investigation, the Hall County Sheriff’s Office, the Rhea County, Tennessee, Sherriff’s Office, the GBI Appalachian Regional Drug Enforcement Office, the Georgia National Guard Counter Drug Task Force, and the Georgia Department of Public Safety.
Assistant U.S. Attorney Calvin A. Leipold, III and former Assistant U.S. Attorney William McKinnon prosecuted the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Duplin County Methamphetamine Trafficker Receives 90 Months in Federal PrisonRead the Press Release
WILMINGTON, N.C. – Ashley Shackelford, 35, of Duplin County, was sentenced yesterday to 90 months imprisonment for: (1) Conspiracy to Possess with the Intent to Distribute and Distribute 500 grams of a mixture and substance containing Methamphetamine; and (2) Possess with the Intent to Distribute of 500 grams of a mixture of substance containing Methamphetamine.
The evidence presented in court revealed that on June 30, 2020, the Drug Enforcement Administration, (DEA) working with the Duplin County Narcotics Detectives, received information that Shackelford had recently been in possession of several ounces of methamphetamine and a firearm at her residence. Agents developed additional information that Shackelford and another person were traveling to Atlanta, Georgia to pick up two pounds of methamphetamine and then returning to Eastern North Carolina. On July 1, 2020, Sampson County Detectives stopped a car driven by Shackelford with a passenger in Newton Grove. Detectives found more than a kilogram and half of methamphetamine in the car. During the investigation law enforcement discovered that Shackelford had assisted in the delivery of more than two and a half kilograms of methamphetamine from Atlanta to Eastern North Carolina during 2020.
Additionally, in separate investigations, in February 2020, Mount Olive Police Officers conducted two controlled purchases of an ounce of methamphetamine on each occasion from Shackelford at her residence. On December 2, 2017, Wayne County Sheriff’s Deputies conducted a consensual search of Shackelford’s residence and found approximately 4 ounces of methamphetamine.
The investigation was part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets. This OCDETF focuses on a Multi-State Drug Trafficking Organization and Gang Activity that has been responsible for the distribution of large quantities of extremely pure methamphetamine throughout the United States.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after the sentencing before Chief U.S. District Judge Richard E. Myers II. The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Duplin, Sampson and Wilson County Sheriffs’ Offices and the Mount Olive Police Department took part in the investigation. Assistant U.S. Attorney Timothy Severo prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:20-cr-00130-M-2.
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Drug Treatment Clinic Owner Indicted for Drug TraffickingRead the Press Release
KANSAS CITY, Mo. – The owner of an Olathe, Kansas, clinic that treats opioid addiction has been indicted by a federal grand jury for drug trafficking.
Trevor J. Robinson, 44, of Olathe, Kansas, was charged in a five-count indictment returned by a federal grand jury on Tuesday, Jan. 26. Robinson was arrested today and remains in federal custody pending a detention hearing.
Robinson owned and operated Nuvista, LLC, a Suboxone (opioid addiction) clinic in Olathe.
The federal indictment charges Robinson with one count each of possessing with the intent to distribute methamphetamine, cocaine, heroin, fentanyl, and ecstasy.
On Oct. 22, 2020, Robinson was allegedly in possession of the illegal drugs when he was stopped by Kansas City police officers while driving his 2014 Maserati. When Robinson was arrested on an outstanding warrant, officers found a plastic bag containing 15 white round pills imprinted with “M30” in his front right pocket and $900 in his wallet. A subsequent search of his vehicle revealed a grey backpack on the front passenger’s seat. The backpack contained a digital scale, plastic bags containing approximately 1.5 kilograms of methamphetamine, plastic bags containing cocaine and heroin, several plastic bags containing various pills, including MDMA/ecstasy, a plastic bag containing marijuana, $12,548 in cash, and a leather-bound ledger notebook.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ashleigh A. Ragner. It was investigated by the Kansas City, Mo., Police Department, the FBI, and the Northeast Kansas Drug Task Force.
Department of Justice Announces Arrests in Conspiracy and Dog Fighting Ring InvestigationRead the Press Release
An indictment was unsealed today charging 11 individuals on a 136-count federal indictment including violations of drug conspiracy, drug possession, and drug possession with the intent to distribute, and violations of the dog fighting prohibitions of the federal Animal Welfare Act, and conspiracy to commit the same.
The defendants include: Jarvis Lockett, 40, of Warner Robins, Georgia; Derrick Owens, 37, of Woodland, Georgia; Christopher Raines, 50, of Talbotton, Georgia; Armard Davis, 41, of Fort Valley, Georgia; Jason Carter, 38, of Phoenix City, Alabama; Shaquille Bentley, 26, of Roberta, Georgia; Bryanna Holmes, 24, of Fort Valley, Georgia; Vernon Vegas, 49, of Suwanee, Georgia; Lekey Davis, 45, of Talbotton, Georgia; Kathy Ann Whitfield, 61, of Columbus, Georgia; and Rodrick Walton, 40, of Shiloh, Georgia.
“As this case demonstrates, we continue to aggressively prosecute dog fighters and those who work together to support and further their inhumane criminal activities,” said Jean Williams, Deputy Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “We thank our federal and local law enforcement partners who made this operation possible.”
“Dog fighting is brutal and illegal; it is particularly troubling when combined with drug trafficking,” said Peter D. Leary, Acting U.S. Attorney for the Middle District of Georgia. “We will investigate and prosecute individuals who engage in these criminal acts and seek justice for all of their victims. I thank our law enforcement partners for their hard work on this significant investigation.”
The indictment alleges that defendants Lockett, Owens, Raines, A. Davis, Carter, Bentley, Holmes, Vegas, L. Davis, and Whitfield were involved in a conspiracy between May 2019 and February 2020 to possess with intent to distribute five kilograms or more of cocaine and 28 grams or more of cocaine base. Lockett is charged in separate counts with distribution of cocaine base and cocaine, and possession with the intent to distribute cocaine base and cocaine. A. Davis and Holmes are charged in separate counts with possession with intent to distribute cocaine base and cocaine. Walton is charged in a separate count with possession of cocaine.
The indictment further alleges that defendants Lockett, Owens, Raines, A. Davis, and Walton were involved in a conspiracy to sponsor and exhibit dogs in a dog fight, and possess, train, transport, deliver, and receive dogs for the purpose of having the dogs participate in a dog fight. The indictment outlines dog fights the defendants are alleged to have attended between May 2019 and February 2020, as well as discussions between the co-conspirators about training and matching up their dogs for fighting. In addition, the defendants are separately charged with possession of dogs for purposes of having the dogs participate in dog fights as follows: Lockett – 15 counts; Raines – 40 counts; Owens – 44 counts, Walton – 18 counts; A. Davis – nine counts.
This matter is being investigated by the Drug Enforcement Administration and the U.S. Department of Agriculture-Office of Inspector General with assistance from the U.S. Marshals Service, Southeast Regional Fugitive Task Force, and local law enforcement agencies. Senior Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney William Keyes are prosecuting the case.
A federal criminal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.