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4 December 2020
Raleigh Man Sentenced for Firearm OffenseRead the Press Release
NEW BERN, N.C. – A Raleigh man was sentenced today to 88 months in prison for being a felon in possession of a firearm.
According to court documents, Antoine Joseph Harris, 29, possessed two firearms on January 23, 2019, in Johnston County, North Carolina. Both firearms were loaded. Harris had multiple prior felony convictions. At the time of this offense, he was on supervised release for a 2014 federal conviction for being a felon in possession of a firearm, possessing a stolen firearm, and possession with intent to distribute a quantity of cocaine base (crack). Harris received a 72 months sentence on the new charge and a 16 months consecutive sentence in prison for the revocation of the supervised release.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The North Carolina State Highway Patrol and Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case and Assistant U.S. Attorney Lucy Brown prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-CR-204.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
One arrested after 2 dozen illegal aliens found in SW HoustonRead the Press Release
HOUSTON – A 36-year-old Honduran national who was illegally residing in Houston has been charged with harboring 29 individuals, announced U.S. Attorney Ryan K. Patrick.
Immigration authorities arrested Mauro Dominguez-Maldonado late Thursday, Dec. 3. He is expected to make his initial appearance Monday, Dec. 7, before U.S. Magistrate Judge Frances Stacy.
The criminal complaint, filed in federal court just moments ago, alleges Dominguez-Maldonado was in charge of watching over the aliens and performing multiple tasks in furtherance of a human smuggling operation.
According to the allegations, one of the illegal aliens had fled the Southwest Houston residence and contacted authorities. Law enforcement responded and approached the location, at which time they observed a vehicle attempting to leave, but quickly return to the house. One individual exited and allegedly went inside the residence.
Ultimately, authorities found Dominguez-Maldonado and 29 others - 28 males and one female, according to the complaint. All are allegedly from the countries of Mexico, Honduras, Guatemala, El Salvador and Cuba.
The charges further allege the residence had boarded-up windows and deadbolt locks on the inside doors.
If convicted, Dominguez-Maldonado faces up to 10 years in federal prison and a possible $250,000 maximum fine.
Immigration and Customs Enforcement’s Homeland Security Investigations and Houston Police Department conducted the investigation. Assistant U.S. Attorney Richard Bennett is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
New Jersey Attorney Sentenced to 18 Years in Prison for Money Laundering as Part of Embezzlement SchemeRead the Press Release
CAMDEN, N.J. – A New Jersey attorney was sentenced today to 216 months in prison for money laundering as part of a multi-year scheme to embezzle money from his clients, U.S. Attorney Craig Carpenito announced.
Michael W. Kwasnik, 51, previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with money laundering. Judge Kugler imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
Kwasnik was an attorney licensed in New Jersey and Pennsylvania who specialized in providing estate and financial planning services to his clients. He used his position as an attorney in estate planning to convince clients to open irrevocable family trusts to hold the client’s money and provide the client an opportunity to earn interest on their funds. Kwasnik advised potential clients that estate planning was necessary to protect assets from federal and state taxes. As part of the estate planning, Kwasnik established various trusts, typically irrevocable family trusts for clients with Kwasnik named as the trustee. For each trust, an Employer Identification Number (EIN) was obtained and a bank account in the name of the trust was opened at TD Bank. As trustee, Kwasnik had signature authority on the bank accounts.
The underlying scheme ran from late 2008 to November 2011. Kwasnik advised clients to transfer money and assets into the trusts for financial protection. In some cases, Kwasnik advised clients that he would remain as the trustee until the estates were settled, at which time the assets would be turned over to the appropriate beneficiaries.
Dozens of his clients turned over approximately $13.2 million to Kwasnik for safeguarding of their beneficiaries’ trusts. After the clients transferred funds into the trust bank accounts under Kwasnik’s control, Kwasnik immediately began transferring the money out of the trust accounts and into the bank accounts of entities that he controlled until the money was entirely depleted from the trust accounts, usually in just a matter of days. Kwasnik then used that money to conduct thousands of intermingled financial transactions and pay personal expenses for himself and others and for the operations of the entities he controlled.
In addition to the prison term, Judge Kugler sentenced Kwasnik to three years of supervised release and ordered him to pay $11.7 million in restitution.
U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Michael J. Driscoll, Philadelphia Division, 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. He also thanked Assistant U.S. Attorney Sarah Wolfe of the Eastern District of Pennsylvania for her assistance.
The government is represented by Assistant U.S. Attorney Norman Gross and Senior Trial Counsel Jason Richardson of the Camden office.
Muskogee Man Pleads Guilty to Sexual Abuse in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Joshua Townsley, age 29, of Muskogee, Oklahoma entered a guilty plea to Sexual Abuse in Indian Country, in violation of Title 18, United States Code, Sections 1151, 1152, 2242(2) and 2246(2)(A), punishable by up to life imprisonment, a fine up to $250,000.00, or both.
The Information alleged that in or about August 2020, within the Eastern District of Oklahoma, in Indian Country, the defendant, did knowingly cause and attempt to cause the victim to engage in a sexual act when the defendant well knew, at that time the victim was incapable of appraising the nature of the conduct, physically incapable of declining participation in the aforementioned sexual act, and was physically incapable of communicating unwillingness to engage in the sexual act.
The charges arose from an investigation by 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 Sarah McAmis represented the United States.
Mount Pleasant Armed Career Criminal Sentenced to More Than 15 Years for Gun PossessionRead the Press Release
Charleston, South Carolina --- United States Attorney Peter M. McCoy, Jr., announced today that Eric Martin Scott, Jr., 25, of Mount Pleasant, was sentenced to more than 15 years in federal prison after pleading guilty to being a felon in possession of a firearm.
On March 21, 2017, Scott was pulled over for a traffic offense, and a 9mm pistol was located in his car. At the time, Scott was a convicted felon and prohibited from possessing firearms. It was also established that Scott was an Armed Career Criminal because he had at least three prior serious drug felonies. This subjected him to a sentence of at least 15 years of imprisonment, and up to life.
“Keeping our communities safe is a top priority of our office,” said U.S. Attorney McCoy. “Mount Pleasant, the Lowcountry, and our State are safer knowing that this career armed criminal will remain behind bars for the foreseeable future. Our office will continue to seek harsh punishments for those with a blatant disregard for the law and who consistently put our law enforcement officers and neighbors in danger.”
United States District Court Judge David C. Norton sentenced Scott to 188 months in federal prison, to be followed by a five-year term of court-ordered supervision. There is no parole in the federal system.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Mount Pleasant Police Department, and Charleston County Sheriff’s Office. This case was prosecuted as part of the joint federal, state, and local 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.
Assistant United States Attorney Nathan Williams of the Charleston office prosecuted the case.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Minnesota Woman Sentenced for Meth Trafficking ConspiracyRead the Press Release
United States Attorney Ron Parsons announced that a St. Cloud, Minnesota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on November 23, 2020, by U.S. District Judge Charles B. Kornmann.
Sybil Maria Rogers, age 46, was sentenced to 151 months in federal prison, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Rogers was indicted by a federal grand jury on April 4, 2018. She pled guilty on August 17, 2020.
The conviction stemmed from incidents beginning at an unknown date and continuing until about July 30, 2016, when Rogers knowingly and intentionally conspired and agreed with others to distribute 500 grams or more of methamphetamine. During her involvement in the conspiracy, Rogers obtained the methamphetamine from a co-conspirator and sold it to others in South Dakota. Methamphetamine is a Schedule II controlled substance.
This case was investigated by the South Dakota Division of Criminal Investigation, the Federal Bureau of Investigation, and the Minnesota Bureau of Criminal Apprehension. Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Rogers was immediately turned over to the custody of the U.S. Marshals Service.
Michigan Woman Sentenced for Defrauding U.S. Department of Veterans Affairs of over $1.7 Million in BenefitsRead the Press Release
LAS VEGAS, Nev. – A Michigan woman was sentenced today to three years and five months in prison after pleading guilty to carrying out a scheme to defraud the U.S. Department of Veterans Affairs (VA) of more than $1.7 million in veterans benefits, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
“The defendant orchestrated a million dollar scheme to defraud the VA and to deceive the elderly veterans and surviving spouses whose names she used,” said U.S. Attorney Trutanich. “As part of the Department of Justice’s Elder Justice Initiative, our office and our partners are committed to safeguarding our seniors and prosecuting those who take advantage of them.”
Claudia Ann Merrill, 62, of Farmington Hills, MI, pleaded guilty in January 2020 to one count of mail fraud. In addition to the prison term, U.S. District Judge James C. Mahan sentenced Merrill to three years of supervised release. Merrill agreed to pay a criminal forfeiture money judgment of $1,775,271.61 and was ordered to pay $1,755,412.79 in restitution to the U.S. Department of Veterans Affairs.
According to court documents, from January 1, 2014, through October 1, 2019, Merrill carried out a scheme to defraud the VA. Merrill approached elderly veterans and surviving spouses, and falsely told them they were eligible for VA benefits. Merrill offered to fill out applications for them, and she also convinced them to sign blank application forms and provide identification documents. Merrill then submitted false applications for Veteran’s Pension and Aid and Attendance benefits in the names of these beneficiaries. As part of the scheme, Merrill altered medical records so that the beneficiaries would appear to be eligible for the benefits.
Merrill fraudulently directed benefit payments into bank accounts she controlled, without informing the beneficiaries. When veterans or their surviving spouses reached out to the VA to inquire about their benefits, Merrill often ceased contact with them, leaving the elderly veteran or surviving spouse to unravel Merrill’s fraud. In one case, Merrill sued a veteran, demanding that he pay Merrill the proceeds of her fraudulent scheme. Through the scheme, Merrill defrauded the VA of $1,755,412 in benefit payments.
This case was a joint investigation by the U.S. Department of Veterans Affairs Office of Inspector General and the FBI. Assistant U.S. Attorney Jessica Oliva prosecuted the case.
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Maryland Man Pleads Guilty to Submitting False Claim to Steal Funds Intended for Afghanistan ReconstructionRead the Press Release
A Maryland man pleaded guilty today to filing a false claim for his role in a scheme to divert hundreds of thousands of dollars in State Department funds to his own use.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, Special Inspector General for Afghanistan Reconstruction John F. Sopko, and the Department of State’s Assistant Inspector General for Investigations Michael Ryan made the announcement.
Oyetayo Fagbenro, 62, of Ellicott City, Maryland, pleaded guilty to one count of filing a false claim before U.S. District Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia. Sentencing has been scheduled for Feb. 12, 2021, before Chief Judge Howell.
As part of his guilty plea, Fagbenro admitted that he was awarded three grants to build media centers at Afghan universities, as part of the United States’ continuing efforts in Afghan reconstruction. He admitted that between September 2010 and August 2012 he received approximately $6.9 million in advances for part of the work on the projects. He further admitted that in that same period he sent approximately $1.38 million from Afghan accounts funded by the State Department to persons he knew and entities he controlled in the United States and other countries, all outside of Afghanistan.
Fagbenro admitted that about $775,000 of the funds he sent outside Afghanistan went to relatives, friends, and corporate entities he controlled with no connection to the purposes of the grants. Fagbenro further admitted that in December 2012 he filed a document with the State Department for one of the grants certifying that he had spent all the State Department funds properly and that he needed more funds to complete the project. He has admitted that those statements were both false. Fagbenro has admitted that the State Department lost about $775,000 as a result of his fraud.
The Criminal Division’s Fraud Section is the nation’s leading prosecuting authority for complex procurement fraud and corruption matters.
This case was investigated by the State Department Office of Inspector General and the Special Inspector General for Afghan Reconstruction. Trial Attorney James Gelber of the Criminal Division’s Fraud Section is prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Lynn Man Sentenced in Romance Fraud ScamRead the Press Release
BOSTON – A Lynn man was sentenced yesterday for his role in an online romance scam that robbed elder victims of more than $180,000.
Fortune Aikorogie, a/k/a Imuetinyan Aikorogie, a/k/a Fortune Aikoriogie, a/k/a Imuetinyan Aikoriogie, 33, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to one year and one day in prison and three years of supervised release. He was also ordered to pay $66,767 in restitution to two victims and to forfeit $75,500. Aikorogie pleaded guilty to one count of making a false statement to a bank, five counts of money laundering and one count of visa and passport fraud. In March 2019, Aikorogie was charged by indictment.
Aikorogie, a naturalized citizen from Nigeria, served as a “catcher” in an online romance scam that robbed elder victims of more than $180,000. A catcher opens bank accounts using fake identity documents, quickly withdraws funds deposited by unwitting victims and transfers the money to co-conspirators. Aikorogie used counterfeit foreign passports to open bank accounts in fake identities, quickly withdrew funds wired into those accounts by duped victims, and transferred the money to others, including a Nigerian man he did not know whom he met at a mall, with the understanding that the money was going to Nigeria. At least some of Aikorogie’s victims were led to believe that their money was going to men who had wooed them online, professing their love and even going so far as to propose marriage.
The victim, now 72 years of age, was a widow with advanced Parkinson’s disease. A fraudster contacted her over Facebook and began wooing her online and over the phone. He repeatedly told the victim that he loved her and said he had a son, whom he put on the phone to chat with the victim. The fraudster claimed to be a building engineer living in Florida and that he had been awarded a construction contract in Malaysia. After allegedly arriving in Malaysia, he began asking the victim for money for various reasons, including to pay foreign taxes, help with equipment repair, and to cover his hospital bills when he fell ill. This fraudster asked the victim to wire money to a bank account that Aikorogie had opened in the fake name of “Tinashi Chipo” using a counterfeit Zimbabwean passport sent to him by a man in Nigeria. From October to November 2016, the victim wired $55,000 into this account. Aikorogie promptly withdrew the money in cash and gave it to co-conspirators.
A second victim, now 79 years of age, was a divorced retiree who lived alone. Her only income was Social Security and a small pension. A fraudster contacted her over Facebook and began wooing her online and over the phone. He claimed to be a widower in Pennsylvania with a college-age daughter. He told the victim that he was traveling to Malaysia for work. After allegedly arriving in Malaysia, he began asking the victim for money for various reasons, including to help pay medical bills and taxes. The victim sent money using Western Union and MoneyGram. The fraudster told the victim that he needed additional money and persuaded her to sell her house, saying he would also sell his home and they would marry and buy a house together when he returned to the United States. The victim sold her house and, in December 2016, wired $20,500 of the proceeds to the “Tinashi Chipo” account opened by Aikorogie. Aikorogie promptly withdrew the money in cash and gave it to co-conspirators.
Aikorogie used counterfeit foreign passports in fictitious names to open three additional bank accounts. Altogether, seven victims wired a total of $188,600 into Aikorogie’s accounts in just six months. Federal agents found five additional counterfeit passports in different names at Aikorogie’s apartment and the address where he received his mail.
United States Attorney Andrew E. Lelling; William B. Gannon, Special Agent in Charge of the U.S. State Department’s Diplomatic Security Service, Boston Field Office; and Lawrence Police Chief Roy P. Vasque made the announcement. Assistant U.S. Attorney Christine Wichers of Lelling’s Criminal Division prosecuted the case.
The Justice Department’s extensive and broad-based efforts to combat elder fraud seek to halt the billions of dollars senior lose to fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This hotline, managed by the Justice Department’s Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies and provide resources and referrals, on a case-by-case basis. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed daily from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
Lockport Man Convicted by Federal Jury of Narcotics Conspiracy Tied to the El Chapo Mexican Drug Cartel Going to Prison for 25 YearsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that Troy R. Gillon, 46, of Lockport, NY, who was convicted of narcotics conspiracy following an eight week jury trial, was sentenced to serve 25 years in prison by U.S. District Judge Lawrence J. Vilardo.
“Make no mistake, though their operations were centered over 2,500 miles away, the reach of the harm done by the Sinaloa Cartel extended all of the way here to Western New York,” noted U.S. Attorney Kennedy. “They poured poison into our community and made millions of dollars at the expense of the health, well-being—and in some instances the lives—of those who ingested them. Those individuals, such as the defendant, who sought to profit from the Cartel’s business model as established by its leader, El Chapo, deserve a similar return on their investment as he got—a sentence which will result in him spending the rest of his life in federal prison.”
Assistant U.S. Attorney Meghan A. Tokash, who handled the prosecution of the case, stated that Gillon was a member of a transnational drug trafficking organization, led by co-defendant Herman E. Aguirre, that utilized contacts and a source of supply whose territory included Mexico, Arizona, California, and elsewhere. The source of supply was the Sinaloa Cartel, led by Joaquín “El Chapo” Guzmán and Ismael “El Mayo” Zambada.
The local organization trafficked thousands of kilograms of illegal narcotics, including heroin, fentanyl, and cocaine throughout the United States, including Lockport, Niagara Falls, and Buffalo, via the mail, individual vehicles outfitted with “trap” compartments, and on pallets loaded on tractor trailers. Members of the organization created fictitious “front” companies to launder drug proceeds including Triton Foods, Inc., Kamora Investment Enterprises, Inc. and Fresh Choice Produce, all of which were incorporated in the State of California. Another fictitious company, Corral Seafoods, LLC, registered in the State of New York, was allegedly located in Cheektowaga, NY, but proved to be completely fake.
Using these companies, Gillon and his co-defendants disguised kilogram quantities of heroin, fentanyl, and cocaine on pallets described on inventory and other documents as containing “Sea Cucumbers.” Evidence presented by the Government at trial showed that sea cucumbers are commonly found in Southeast Asia and Europe but rarely, if ever, in Western New York State. The pallets bearing the illegal narcotics were secreted in containers sealed with foam or spray insulation to avoid detection by law enforcement.
Members of the organization also utilized numerous bank accounts at local Bank of America branches to deposit illegal drug proceeds. Local members of the drug trafficking organization deposited over $19,000,000 of illegal drug proceeds into these fake seafood accounts, while California conspirators created false invoices to make it look like Western New Yorkers were buying sea cucumbers at astounding rates and quantities. The Western New York Asset Protection Manager of Wegman’s Food Markets, Inc. testified at the trial that none of its 13 Western New York stores have ever carried sea cucumbers because there is no demand for the product in Buffalo and the surrounding areas.
During the course of the investigation, law enforcement officers seized over $5,000,000 worth of illegal narcotics, including:
• 52.5 kilograms of cocaine; • 17.5 kilograms of heroin; and
• 8.5 kilograms of fentanylUsing standard dosage amounts, the seized drugs potentially represented over 1,500,000 “hits” of cocaine, and 2,700,000 “hits” of heroin and considering that two milligrams of fentanyl can be a lethal dose, enough fentanyl potentially to kill over four million people. Further evidence presented by the Government at trial revealed that after a December 2014 meeting in Buffalo, defendant Aguirre shipped 10 kilograms of fentanyl to Buffalo and defendant Gillon took possession of the 10 kilograms. Gillon sold two kilograms of the fentanyl before residents of the Lockport area started overdosing on the drug shortly after New Year’s Day, 2015. A DEA representative testified that Gillon told police that he returned the remaining eight kilograms to a co-conspirator in early March 2015 because, “People are dying off this (expletive).” The co-conspirator moved the remaining fentanyl, along with two kilograms of cocaine, and 22 kilograms of heroin, to a house on Folger Street in the City of Buffalo. On March 23, 2015, Buffalo Police seized 32 kilograms of drugs from the Folger Street location—including Gillon’s eight kilograms of fentanyl.
The investigation further determined that between June 2013 and September 2015, members of the organization additionally distributed over 5,000 pounds of cocaine, heroin, fentanyl and marijuana in the Western New York area. Approximately $20,000,000 was sent from Western New York banks to California in a two year period of time.
Herman Aguirre was also convicted at trial of narcotics conspiracy, as well as operating a continuing criminal enterprise and money laundering conspiracy, and is scheduled to be sentenced on February 23, 2021. A total of 18 defendants were charged and convicted in this case.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; Homeland Security Investigations, under the direction of Special-Agent-in Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office; the Niagara County Drug Task Force, under the direction of Sheriff Michael Filicetti; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the Lockport Police Department, under the direction of Chief Steven Abbott; the Montebello, California Police Department; the Nebraska State Patrol; and the DEA, Los Angeles.
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Justice Department Honors Nonprofit Better Block for “Outstanding Community Involvement” in PSNRead the Press Release
The U.S. Department of Justice has recognized Dallas-based nonprofit Better Block for its support of the U.S. Attorney’s Project Safe Neighborhoods (PSN) Initiative, announced U.S. Attorney Erin Nealy Cox. The Better Block Foundation, launched in 2015 by Jason Roberts, was the sole recipient of DOJ’s “Outstanding Community Involvement” PSN award, which recognizes outstanding efforts to restore safety and security to communities across the nation.
“I’m incredibly proud of my office’s partnership with Better Block. Project Safe Neighborhoods relies on innovative solutions to reduce violent crime – a philosophy Better Block embraces as well, ” said U.S. Attorney Erin Nealy Cox. “I congratulate Jason, Krista, and the Better Block staff on this honor. We look forward to continuing our important work with them to protect and enrich this neighborhood.”
Project Safe Neighborhoods, DOJ’s signature violent crime reduction initiative, brings together state, local, and federal law enforcement, nonprofits, and community stakeholders to surge resources to cities’ most violent communities. Using sophisticated data analysis, the U.S. Attorney’s Office for the Northern District of Texas zeroed in on a hotspot in Northeast Dallas, near the intersection of Route 75 and LBJ Freeway, then convened a PSN Taskforce to address it. The Task Force combines traditional law enforcement activities -- patrolling struggling neighborhoods, apprehending violent offenders, and bringing them to justice through the courts – with innovative approaches like recidivism reduction and community engagement to make a difference in hard-hit areas.
In fall 2019, the PSN Task Force partnered with Better Block to transform a blighted intersection inside the PSN hotspot into a vibrant community plaza with updated lighting, container gardens, playground equipment, and a popup lending library. The colorful plaza – funded through PSN grants and donations from TBK Bank – quickly became a gathering place for families from the community and nearby Tasby Middle School.
A prime example of Crime Prevention Through Environmental Design (CPTED), the project has had an outsized impact: The intersection, once riddled with criminal activity, has not seen a single violent crime since the plaza was erected over a year ago.
The plaza is located at the Five Points Intersection in Dallas’ Vickery Meadow. Photos of the plaza are available here. More information on the Northern District of Texas’ PSN initiative can be found here.
Justice Department Files Complaint to Stop Distribution of Unapproved, Misbranded, and Adulterated "Poly-MVA" ProductsRead the Press Release
The United States filed a civil complaint to stop a California company from distributing unapproved and misbranded drugs and adulterated animal drugs, the Department of Justice announced today.
In a complaint for permanent injunction filed Dec. 2, 2020, the United States alleged that AMARC Enterprises Inc.; Albert Lee Sanchez Jr.; and Gary L. Matson Sr. sold and distributed “Poly-MVA” and “Poly-MVA for Pets,” which the defendants claim can cure, mitigate, treat, or prevent disease, including cancer. According to the complaint, defendants’ Poly-MVA products are not generally recognized as safe and effective by qualified experts for the uses intended by the defendants in the products’ labeling. The complaint also alleges that the defendants intend for Poly-MVA to be administered intravenously. The U.S. Food and Drug Administration has previously warned defendants to cease making such claims.
“Marketing purported dietary supplements with unproven disease claims jeopardizes the public health,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “We will continue working with the FDA to stop the illegal sale of such products.”
“Patients suffering from cancer or any other disease should not be deceived into relying on unproven treatments. The sale of such unapproved products has the potential to cause delays in getting proper diagnosis and treatment,” said FDA Chief Counsel Stacy Amin. “Patients need to have confidence that the available drug products have been shown to be safe and effective for their intended use. The FDA is committed to taking decisive action against those who disregard the law and risk the public’s health by distributing unapproved drugs for their personal financial gain.”
The complaint alleges that that the disease claims defendants make for Poly-MVA and Poly-MVA for Pets lack support from published, adequate, and well-controlled clinical studies. The complaint also asserts that, because Poly-MVA’s labeling does not have adequate directions for lay users, the product is misbranded. Additionally, the complaint alleges that Poly-MVA for Pets is an adulterated new animal drug because it lacks an approved application. The Department of Justice filed the complaint in the U.S. District Court for the Southern District of California at the request of FDA.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
The case is being handled by Trial Attorney Shannon Pedersen of the Justice Department Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Seth I. Heller of the FDA’s Office of Chief Counse
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch.
Juneau Man Sentenced to Federal Prison for Drug TraffickingRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Dillinger Jay Graham, 39, was sentenced by U.S. District Judge Timothy M. Burgess to 87 months in federal prison and four years of supervised release for a drug trafficking conspiracy.
On or about April 6, 2018, Graham and another person boarded flight 67, traveling from Seattle, Washington to Juneau, Alaska. When the two passengers exited the plane in Juneau, they were immediately detained and searched by the Juneau Police Department (JPD) drug investigators who had received drug trafficking information on Graham from the Port of Seattle Police Department.
Graham was carrying approximately 75.5 grams of heroin and 75.4 actual grams of meth, which were purchased in Seattle and intended to distribute to others for subsequent distribution in Juneau, Alaska. In May of 2019, Graham pled guilty to the allegations in Count 1 of the indictment, a drug trafficking conspiracy to import and sell significant quantities of meth, heroin, and other drugs to the community.
Graham has two felony convictions for drugs in 2009 and a felony conviction for theft. Graham did not have any other criminal convictions between his supervision release in 2014 and this current conviction.
The South East Alaska Cities Against Drugs (SEACAD) Drug Taskforce conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Jack Schmidt.
Jamestown Woman Arrested, Charged with Sex Trafficking of Two MinorsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jasmin Osteen, 23, of Jamestown, NY, was arrested and charged by criminal complaint with two counts of sex trafficking of a minor. The charge carries a mandatory minimum penalty of 10 years in prison, and a maximum of life in prison.
“As alleged in the criminal complaint, this woman exploited two vulnerable young girls for her own financial benefit,” stated U.S. Attorney Kennedy. “The depravity of the defendant’s conduct and the harm she caused to these two minors are the stuff of which parental nightmares are made. I want to commend the members of federal, state, and local law enforcement, who, working with the tremendous child advocates serving our community, took swift and certain action to rescue these victims and to protect others from this predatory defendant.”
“The egregious acts identified as part of this investigation demonstrated a lack of regard for human life,” said Kevin Kelly, HSI Special Agent-in-Charge. “Homeland Security Investigations is committed to investigating these victim based crimes and bringing to justice those who prey on the most vulnerable in our communities.”
“This investigation and arrest are a result of interagency cooperation,” stated Chautauqua County Sheriff James B. Quattrone. “Human Trafficking is all too real and continues to victimize too many people. These investigations will continue with the help of our federal, state, and local partners. And we continue to ask for the public to report any suspicious activity as this form of slavery cannot continue.”
Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated according to the complaint, on September 23, 2020, the mother and grandmother of Minor Victim 1 reached out to the Chautauqua County Sheriff’s Office and expressed concern because Minor Victim 1 was involved in prostitution and using drugs. They also expressed concern that the defendant may have been trafficking Minor Victim 1 for sexual exploitation. The mother and grandmother provided screen shots of messages between Osteen and Minor Victim 1 talking about having sex for money. According to the complaint, Minor Victim 1 moved in with the defendant in August 2020.
On October 30, 2020, Minor Victim 1 obtained housing and services at the Safe House in Jamestown, NY, and advised staff that she was forced to have sex with multiple unknown adults in exchange for money that was given to Osteen. Staff advised the New York State Police. According to the complaint, during an interview at the Jamestown Child Advocacy Program, Minor Victim 1 stated that the defendant took her to Buffalo and other cities and rented hotel rooms for the purpose of having sex buyers engage in sexual acts with Minor Victim 1. She also stated that during one these trips to Buffalo, a second minor victim was also forced to engage in sexual activity. According to Minor Victim 1, Osteen threatened that she would be harmed if she talked about anything. During an interview with investigators, Minor Victim 2 also stated that the defendant drove her and Minor Victim 1 to a Buffalo hotel, gave them alcohol, and forced them to have sex for money.
The defendant made an initial appearance this afternoon before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and was detained.
The complaint is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Chautauqua County Sheriff’s Office, under the direction of Sheriff James B. Quattrone; the New York State Police, under the direction of Major James Hall; the Jamestown Police Department, under the direction of Acting Chief Timothy Jackson; and the Ellicott Police Department, under the direction of Chief William Ohnmeiss Jr.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Jackson Man Pleads Guilty to Narcotics TraffickingRead the Press Release
Jackson, Miss. – Gregory Wayne Haygood a/k/a “Big”, 48, of Jackson, pled guilty today before U.S. District Judge Henry T. Wingate to conspiracy to possess with intent to distribute 500 grams or more of cocaine, announced U.S. Attorney Mike Hurst and Acting Special Agent in Charge Gilbert Trill of U.S. Immigration and Customs Enforcement's Homeland Security Investigations in New Orleans.
On February 8, 2017, Haygood was charged in a multi-count indictment with conspiracy to possess with intent to distribute 500 grams or more of cocaine, possession with intent to distribute cocaine, and maintaining a place for distributing or using controlled substances. Haygood conspired to distribute cocaine by receiving the cocaine and selling it to others in Jackson and in Biloxi, Mississippi. Haygood remained at large until he was arrested in September 2019.
Haygood is scheduled for sentencing on March 4, 2021 at 9:30 a.m. and faces a maximum penalty of 40 years in prison and up to a $5,000,000 fine.
This OCDETF operation is the result of an extensive investigation targeting illegal narcotics distribution in central Mississippi involving the distribution of cocaine and marijuana. The distribution network encompassed the states of California, Texas and Mississippi.
The OCDETF program 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.
The case was a joint investigation by Homeland Security Investigations and the Mississippi Bureau of Narcotics, with assistance from the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Mississippi Highway Patrol, Jackson Police Department, and the Hinds County Sheriff’s Department. It is being prosecuted by Assistant United States Attorney Erin Chalk.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Dec. 1 was:
Hunter Quinn Braden, 21, of Billings, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Braden faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Braden was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 20-122.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Dec. 3 was:
Robert Brandon Callison, 31, of Hamilton, on charges of sexual exploitation of a child, distribution of meth to a person under 21 and felon in possession of a firearm. If convicted of the most crime, Callison faces a minimum 15 years to 30 years in prison, a $250,000 fine and five years to life of supervised release. Callison was detained pending further proceedings. The Missoula Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 20-50.
Appearing on Dec. 2 and pleading not guilty was:
Luis Alberto Rocha, 38, of Bozeman, on charges of conspiracy to distribute cocaine and possession with intent to distribute cocaine. If convicted of the most serious crime, Rocha faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Rocha was detained pending further proceedings. The FBI and Missouri River Drug Task Force investigated the case. PACER case reference. 20-31.
Appearing and pleading not guilty on Dec. 1 was:
Robert John Barker, 49, of Gatesville, Texas, on charges of wire fraud and money laundering. If convicted of the most serious crime, Barker faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release. Barker was released pending further proceedings. The FBI investigated the case. PACER case reference. 20-25.
John Gary Yorgason, 48, of Corvallis, on charges of false statement during a firearms transaction. If convicted of the most serious crime, Yorgason faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Yorgason was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 20-45.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Dec. 1 was:
Kristina Dawn Russette, 30, of Spokane, Washington, on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute meth. If convicted of the most serious crime, Russette faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Russette was detained pending further proceedings. The FBI, Chippewa Cree Law Enforcement Service and Tri-Agency Drug Task Force investigated the case. PACER case reference. 20-85.
Jeffrey Blaine Dolphay, 40, of Havre, on charges of conspiracy to possess with intent to distribute meth and possession with intent to distribute meth. If convicted of the most serious crime, Dolphay faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Homeland Security Investigations investigated the case. PACER case reference. 20-85.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Indian Trail Man Pleads Guilty to Wire Fraud for Investment SchemeRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Bryan John Cohen, 45, of Indian Trail, N.C. pleaded guilty to wire fraud, for operating an investment scheme that defrauded investors of more than $385,000. U.S. Magistrate Judge David C. Keesler presided over today’s plea hearing.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), in North Carolina, joins U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s plea hearing, from 2015 to 2020, Cohen defrauded at least 10 victims of more than $385,000, by inducing them to invest money in his purported investment businesses, OTC Bully, Ascension Trading, and Recharge Investments, and in other business ventures. Court records show that Cohen falsely represented to victim investors, most of whom were Cohen’s friends and acquaintances, that he was a financially savvy investor with a successful track record in the financial industry, and that he would invest their funds using a computer algorithm called the “Dewey System.”
As Cohen admitted today in court, to convince victims their investments were legitimate, Cohen provided them with bogus Investment Agreements that purported, among other things, that Cohen would not charge any investment fees, and that the money would be invested in a manner “expected of a reputable, experienced and competent professional investment manager.” To further lull victims-investors into thinking their investments were safe, Cohen supplied them with fake profit and loss sheets on a monthly basis, which falsely indicated the victims’ investments were growing.
Contrary to claims Cohen made to his victims, court documents show that Cohen did not invest their money as promised. Rather, Cohen used the money to pay for personal expenses and to make Ponzi-style payments to older investors using new investors’ money.
Cohen pleaded guilty to wire fraud, which carries a maximum prison term of 20 years, and a $250,000 fine. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray thanked the FBI in Charlotte, and the North Carolina Department of Public Safety, Special Operations and Intelligence Unit, for their investigation, which led to today’s guilty plea.
Assistant U.S. Attorney Maria Vento, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
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Husband, Wife Sentenced in $15 Million Embezzlement SchemeRead the Press Release
A Red Oak, Texas couple has been sentenced to a combined 18+ years in federal prison for their roles in a $15 million retirement plan embezzlement scheme, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Vantage Benefits Administrators co-owner Wendy Richie, 59, pleaded guilty in June to two counts of theft from an employee benefit plan and one count of aggravated identity theft. She was sentenced Thursday by U.S. District Judge Sam Lindsay to 132 months in federal prison and ordered to pay $12.6 million in restitution.
Her husband, Vantage co-owner Jeffrey Richie, 55, pleaded guilty to two counts of aiding and abetting theft from an employee benefit plan. He was sentenced to 87 months and ordered to pay $7.4 million in restitution.
“These defendants lined their pockets at the expense of hardworking Americans saving for retirement,” said U.S. Attorney Erin Nealy Cox. “The Northern District of Texas is committed to seeking justice on behalf of vulnerable retirees and workers setting money aside for their golden years and beyond. We are proud to hold the Richies accountable for this brazen misconduct.”
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to Department of Labor. We will continue to work with EBSA and our law enforcement partners to safeguard retirement benefits intended for American workers,” stated Steven Grell, Special Agent-in-Charge of the Dallas Region for the U.S. Department of Labor – Office of Inspector General.
The Richie’s company served as third party administrator for dozens of pension and retirement funds.
According to plea papers, Ms. Richie admitted to using fund beneficiaries’ personal information to submit $15.2 million in fraudulent distribution requests to Matrix Trust, the funds’ custodian. Instead of depositing the money into beneficiaries’ accounts, however, she transferred it into Vantage’s operating account, then into personal bank accounts.
Even after a Vantage employee confronted Mr. Richie about Ms. Richie’s conduct, Ms. Richie continued to embezzle money from the funds. At least $6.2 million of the $15.2 million Ms. Richie embezzled was taken with Mr. Richie’s knowledge, he admitted.
In total, the pair admitted to submitting more than 90 unauthorized distribution requests from 13 pension plans and 7 retirement plans from 2014 and 2017.
The Department of Labor – Office of Inspector General, the Federal Bureau of Investigation, the Department of Labor’s Employee Benefits Security Administration, and the Texas State Auditor’s Office conducted the investigation. Assistant U.S. Attorneys Nick Bunch and Christopher Stokes prosecuted the case.
Harrison County man sentenced for firearms violationRead the Press Release
ELKINS, WEST VIRGINIA – Michael Lewis Woodyard, of Clarksburg, West Virginia, was sentenced to 21 months of incarceration for a firearms charge, U.S. Attorney Bill Powell announced.
Woodyard, age 28, pled guilty to one count of “Unlawful Possession of a Firearm” in July 2020. Woodyard, who was previously convicted of a felony, admitted to having a .22 caliber pistol in August 2019 in Lewis County.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lewis County Sheriff’s Office investigated.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
U.S. District Judge Thomas S. Kleeh presided.
Hansen Sentenced to 48 Months in Federal Prison After Pleading Guilty to Financial Fraud SchemeRead the Press Release
SALT LAKE CITY – Theodore Lamont Hansen, age 50, of Highland, Utah, who pleaded guilty to money laundering and bank fraud in May in connection with a financial fraud scheme, will serve 48 months in federal prison. U.S. District Judge Robert L. Shelby imposed the sentence Thursday afternoon in U.S. District Court.
Hansen was ordered to pay $1,435,913.44 in restitution as a part of the sentence.
“Another Utah fraudster has come to justice in federal court. In this case, a repeat offender ignored a merciful opportunity to separate from a life of crime given to him by a state court. It is unfortunate that more victims had to pay such a steep price for this swindler’s federal crimes after he ignored the state court’s orders in his previous conviction. There are far too many fraudsters in Utah who are truly wolves in sheep’s clothing, and Utah investors must be more mindful when parting with their hard-earned savings,” U.S. Attorney John W. Huber said today.
"Fraudsters are very good at what they do. They are extremely convincing and will work hard to gain your trust. Driven by greed, many reoffend," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "The FBI will aggressively investigate these crimes, but we urge the public to do their part too. When considering investment opportunities, do your due diligence and ask some tough, detailed questions about a person’s financial history. The public is also encouraged to check court records and the state’s White Collar Crime Offender Registry online at utfraud.com."
“Mr. Hansen has made a lifestyle of fraud – whether it was fraud against investors or fraud against a financial institution. The IRS, working with our law enforcement partners, have finally put an end to his lifestyle of fraud,” IRS Special Agent in Charge Tara Sullivan said.
As a part of a plea agreement reached with federal prosecutors, Hansen admitted that he devised a scheme to defraud an individual of $1 million using fraudulent promises and omitting material facts. Hansen convinced the victim of the scheme, identified as E.L. in the plea agreement, to give him the money by representing he would use the funds to purchase full ownership of Seven Peaks Water Park in Provo. Hansen told E.L. he would return the money if the transaction could not be completed within 24 hours. In exchange for the investment, E.L. was promised $23.5 percent ownership in the waterpark.
Hansen admitted that he used the $1 million for things inconsistent with his representations and never returned the money to E.L. For example, he used $28,000 for a purchase from RC Automotive.
The bank fraud conviction stems from a large check-kiting scheme involving Bank of the West and Deseret First Credit Union. The check-kiting involved at least 10 different companies and got so complicated in the end that Hansen and a colleague would go to Bank of the West every morning to sort out each transaction. The bank, according, to the sentencing memo, discovered the kite and put an end to it. Bank of the West was left with a loss of more than $1.6 million. Hansen asked an elderly friend to cover the loss, but the friend would only agree to pay a portion of the amount, taking the loss amount down to $585,913.44.
In a sentencing memorandum, federal prosecutors told the court that “Hansen is a prodigious fraudster whose only real occupation is convincing others to give him money and property.” Hansen was convicted by the State of Utah for selling unregistered securities and placed on probation for 36 months. As a part of his conditions of release, Hansen was required to disclose to any prospective investor in writing that he had approximately $45 million in outstanding judgments against him – some thing he did not do in the case prosecuted by federal prosecutors.
Gary Man Sentenced to 144 Months ImprisonmentRead the Press Release
HAMMOND-Victor Wiggins, 38, of Gary, Indiana, was sentenced by Judge Philip P. Simon to 144 months imprisonment following his guilty plea to one count of Conspiracy to distribute 5 grams or more of methamphetamine, announced U.S. Attorney Kirsch.
According to documents filed in this case, from at least May 2018 continuing to September 7, 2018, in Gary, Indiana, Victor Wiggins conspired with others to distribute at least five grams of methamphetamine. Wiggins led the conspiracy and recruited others into it. Wiggins has three prior felony convictions and was on supervised release for one of those convictions when he committed this crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and was prosecuted by Assistant United States Attorneys Thomas M. McGrath and Jill Koster.
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Former West Virginia University professor sentenced for wire fraud and tax fraudRead the Press Release
CLARKSBURG – Dr. Qingyun Sun, of Morgantown, West Virginia, was sentenced today to three years of probation, with the first four months on home confinement, after defrauding West Virginia University and filing a false tax return, both offenses arising out of his official travel to China, U.S. Attorney Bill Powell announced.
Sun, age 58, pleaded guilty to a two-count information charging him with wire fraud and filing a false tax return in July 2020. Sun was a Chinese National employed by WVU as an associate professor and the associate director of the United States-China Energy Center at the University. As a part of his employment at WVU, through the West Virginia Development Office, he also acted as the Governor’s assistant for China affairs. He was also employed by Synfuels Americas Corporation, an energy conversion technology provider of coal-to-liquids and gas-to-liquids processes located in Sterling, Virginia, but headquartered in Beijing, China. From July 2011 to May 2015, Peabody Energy Generation Holding Company based in St. Louis, Missouri, paid consulting fees to Energy United LC, a consulting business Sun established in 2005. The scheme involved Sun’s operation of his consulting business through Energy United.
In 2015, Sun traveled to China on behalf of WVU and the WV Development Office to prepare for an upcoming visit to China by WVU representatives and to lead a West Virginia industrial delegation for a coal expo in Beijing. Sun booked both a coach flight and a business class flight for this trip, submitting a request for reimbursement to WVU for the coach flight, and submitting a request for reimbursement to Synfuels Americas for the business flight. Sun only used the business class ticket for his trip.
In 2014, Sun filed a joint income tax return with his wife, grossly overstating his business-related travel expenses, when a large sum of those travel expenses were paid for by a State Purchasing Card, or reimbursed to him by WVU and Peabody Energy. He also failed to state any financial interest in, or authority over, a financial account in a foreign country. Sun had an interest in numerous financial accounts in China.
As a part of the plea agreement, Sun has agreed to pay restitution in the amount of $6,233.12 in full to WVU. Sun is no longer employed by WVU.
Sun was also ordered to pay for the four months of home confinement monitoring as a part of his sentencing.
Assistant U.S. Attorney Jarod J. Douglas prosecuted the case on behalf of the government. The FBI and the Internal Revenue Service investigated. WVU cooperated in the investigation of this case.
Senior U.S. District Judge Irene M. Keeley presided.
Former Supervisor at Long Island Drug Manufacturer Pleads Guilty to Theft of Medical ProductsRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Gregory Settino pleaded guilty to theft of medical products from his employer, a drug manufacturer in Suffolk County. When sentenced, Settino faces up to 20 years in prison, restitution to his former employer and a fine of up to $250,000. Today’s proceeding took place before United States District Judge Joanna Seybert.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jeffrey Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations, New York Field Office (FDA-OCI), announced the guilty plea.
“With today’s guilty plea, Settino has been held accountable for stealing from his then-employer thousands of bottles of an injectable drug administered to horses, which he resold to trainers and vets potentially endangering the health of horses at New York racetracks because the stolen drugs were not handled properly,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute those who jeopardized drug safety.”
“The FDA works to ensure that veterinary drugs are safe and effective so that animals remain healthy. When drugs are taken out of the legitimate supply chain, there is no longer any assurance that they are safe or effective,” stated FDA-OCI Special Agent-in-Charge Ebersole. “The FDA remains committed to investigating and bringing to justice those who endanger the health of animals.”
As set forth in court filings and facts admitted in court, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York. In January 2019, Luitpold was renamed American Regent. One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States. Between 2012 and January 2020, Settino stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000. Settino’s conduct potentially endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs. At times, Settino transported the drugs in shoeboxes stored in his car. At all times, the drugs were handled in violation of the FDA regulated supply chain.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.
The Defendant:
GREGORY SETTINO
Age: 58
Bethpage, New YorkE.D.N.Y. Docket No. 20-CR-340 (JS)
Former Leaders of the DC Trust, a Non-Profit Dedicated to Helping Children, Charged with Using Organization's Funds for Personal GainRead the Press Release
WASHINGTON – Edward Davies, 49, and Earl Hamilton, 50, the former executive director and director of operations and finance of the DC Children and Youth Investment Trust Corporation (“DC Trust”), have been charged with using DC Trust funds to make hundreds of personal purchases, for expenses such as meals, automobile repairs, and personal travel for themselves, their family members, and their friends, announced Acting U.S. Attorney Michael R. Sherwin.
In an indictment unsealed today in the U.S. District Court for the District of Columbia, the grand jury charged that from late 2012 through early 2016, Davies and Hamilton, who are both currently residing in the Chicago area, engaged in a scheme to defraud the DC Trust by using the organization’s credit cards and debit card to make personal expenditures, by lying to the Trust’s accountants about the nature of these purchases, and by hiding from the board of directors the exorbitant monthly bills that resulted. Davies and Hamilton each stand charged with four counts of wire fraud and one count of credit card fraud. The indictment alleges that Davies used the organization’s credit card to pay for such extravagances as a $2,000 partial down payment for a new car; a Thanksgiving trip to New York, where he used Trust funds to pay for a hotel room in Times Square and a massage for two; and round-trip airfare, car rental, and lodging for himself, a girlfriend, and two of their children to visit Napa Valley, California. Hamilton is charged with using the Trust’s credit card to purchase multiple airline tickets for himself and his wife to fly to Florida, and a $700 Norditrac machine, among other personal expenditures.
The DC Trust was a non-profit organization, created in 1999, to serve as an intermediary to connect philanthropists, government leaders, youth advocates, and representatives from the business community in order to support programs to benefit the children of the District of Columbia. The organization was dissolved in late 2016, reportedly to cover debts from exorbitant spending on and by staff, including the misuse of organization credit cards.
An indictment is merely a finding of probable cause by the grand jury. All criminal defendants are presumed innocent until proven guilty.
The D.C. Office of the Inspector General, the FBI’s Washington Field Office, and the U.S. Department of Education Office of the Inspector General have been investigating this case. The case is being prosecuted by the Public Corruption and Civil Rights Section of U.S. Attorney’s Office for the District of Columbia. Assistant U.S Attorney Kathryn Rakoczy is litigating the case, with assistance from Paralegal Specialist Amanda Rohde.
Former Illinois Attorney Sentenced to 18 Months in Prison for Tax Evasion in Connection with Legal Fees from Tobacco LitigationRead the Press Release
CHICAGO — Former Illinois attorney EDWARD R. VRDOLYAK was sentenced today to 18 months in federal prison for assisting another lawyer in evading taxes on income received from a multi-billion dollar legal settlement with tobacco companies.
U.S. District Judge Robert M. Dow, Jr., imposed the sentence after a hearing in federal court in Chicago. Vrdolyak, 82, of Chicago, pleaded guilty last year to one count of tax evasion.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorney Amarjeet S. Bhachu and Special Assistant U.S. Attorney Michael T. Donovan.
Vrdolyak admitted in a plea agreement that he assisted another lawyer, co-defendant DANIEL P. SOSO, in evading federal income taxes owed by Soso. The income was derived from attorney fees received in connection with a $9.2 billion settlement between the State of Illinois and a number of tobacco companies in the 1990s. At the time of the settlement, Vrdolyak and Soso were licensed Illinois attorneys. The pair collected legal fees from the settlement pursuant to agreements with one of the attorneys that represented the State of Illinois. Pursuant to these agreements, Vrdolyak made payments to Soso between 2000 and 2005 of approximately $1,925,830, representing Soso’s agreed-upon share of the fees from the litigation.
In August 2005, the IRS served a notice of levy on Vrdolyak, which required the turnover of all salary, wages and other amounts owed to Soso. Over the next two years, Vrdolyak received approximately $262,854 due Soso, but he concealed receipt of these funds from the IRS, knowing such concealment would assist Soso in evading the payment of taxes and assessments. Vrdolyak admitted in the plea agreement that he later caused approximately $170,242 to be paid to Soso instead of remitting the funds to the IRS.
Soso, of Alsip, also pleaded guilty to tax evasion. Judge Dow in March sentenced Soso to two years in prison.
Florida man admits to exporting firearms, ammunition and explosive materials through McAllenRead the Press Release
McALLEN, Texas – A 44-year-old man has entered a guilty plea to aiding and abetting the export of defense articles from the United States, announced U.S. Attorney Ryan K. Patrick
Brett McGinnis, of Ormond Beach, Florida, admitted he mailed ammunition, firearms and firearms parts, or caused them to be mailed, to co-conspirators in McAllen who then would export them into Mexico.
From on or about May 12 through Sept. 13, 2018, law enforcement seized over 6,000 rounds of various caliber ammunition, 1,100 saw links (5.56mm), 35 firearm magazines, three firearms, multiple upper and lower receivers and other firearms accessories that were intended to be illegally exported to Mexico. McGinnis had attempted to provide some to co-conspirators. Each of these items were designated defense articles requiring a license to export into Mexico.
McGinnis also admitted to shipping 60 practice M781 grenade cartridges (40mm) and firearms prior to May 2018 that were intended to be exported into Mexico. M781 practice rounds are considered explosive materials requiring a federal explosives license to transport.
McGinnis did not possess such a license to transport explosives or to export defense articles.
U.S. District Judge Micaela Alvarez accepted the plea and has set sentencing for Feb. 12, 2021.At that time, McGinnis will face up to 10 years in prison and a possible $250,000 maximum fine.
McGinnis was permitted to remain on bond pending sentencing.
Immigration and Customs Enforcement’s Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Roberto Lopez Jr. is prosecuting the case.
Felon Charged with Possessing Firearm in Shooting Incident on Bragg BoulevardRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment yesterday charging Earnest Demonte Smith with knowingly being a felon in possession of a firearm.
According to the indictment, Smith, aged 22, was traveling by car in the area of North Bragg Boulevard and Manchester Road in Spring Lake, North Carolina on May 18, 2020. Smith saw a man in another vehicle, whom he recognized because of a prior dispute, and began repeatedly shooting into that vehicle with a 9mm semiautomatic pistol. The vehicle into which Smith fired carried a total of 4 passengers, including a 2-year-old child. No one was injured in the shooting.
Smith is charged with being a felon in possession of a firearm, under 18 U.S.C. § 922(g). If convicted, he faces a maximum penalty of 10 years in prison. If Smith is deemed by the Court to be an Armed Career Criminal, he will face a minimum sentence of 15 years and a maximum potential sentence of life imprisonment, upon conviction for the offense charged in the Indictment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The North Carolina Department of Public Safety (DPS) Special Operations and Intelligence Unit, Spring Lake Police Department and the Bureau of Alcohol Tobacco Firearms & Explosives (ATF) are investigating the case and Assistant U.S. Attorney Evan Rikhye is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Federal Transfer Center Inmate Sentenced to Serve Additional 78 Months in Federal Prison for Assaulting a Federal Bureau of Prisons OfficerRead the Press Release
OKLAHOMA CITY – WILLIAM STANLEY, 59, of Massachusetts, an inmate at the Federal Transfer Center, has been sentenced to serve 78 additional months in federal prison for the assault of a Federal Bureau of Prisons officer causing bodily injury, announced U.S. Attorney Timothy J. Downing.
While an inmate at the Federal Transfer Center in Oklahoma City, Stanley kicked a correctional officer in the leg while the officer was escorting Stanley to the Special Housing Unit. The assault resulted in injury to the officer’s right hip, ultimately requiring a total right hip replacement.
On August 20, 2019, a federal grand jury returned a one-count Indictment charging Stanley with assault on a federal officer causing bodily injury. On January 13, 2020, Stanley pled guilty to the charges of the Indictment.
On November 30, 2020, U.S. District Judge Patrick R. Wyrick sentenced Stanley to serve 78 months (6.5 years) to run consecutively to his ongoing prison term, followed by three years of supervised release. In imposing the sentence, Judge Wyrick noted Stanley’s history of violence within the federal prison system and his previous assault convictions in Massachusetts.
This case is the result of investigations by the FBI and the Federal Bureau of Prisons. Assistant U.S. Attorney Ashley Altshuler prosecuted the case.
Reference is made to public filings for more information. To download a photo of U.S. Attorney Downing, click here.
Federal Authorities Arrest El Paso Police Officer for Providing Assistance to Drug DealerRead the Press Release
In El Paso today, federal authorities arrested 23-year-old El Paso police officer Monica Garcia for allegedly helping a local drug distributor to further his criminal enterprise, announced U.S. Attorney Gregg N. Sofer; Drug Enforcement Administration (DEA) Special Agent in Charge Kyle Williamson, El Paso Division; and El Paso Police Chief Greg Allen.
A three-count federal grand jury indictment unsealed today charges Garcia and 44-year-old Fred Saenz with conspiracy to possess with intent to distribute cocaine; conspiracy to unlawfully use a communication facility; and conspiracy to maintain a drug involved premise. The indictment also charges Saenz with one count of possession with intent to distribute over 500 grams of cocaine.
According to court records, on November 10, 2020, DEA and the El Paso Police Department (EPPD) executed two search warrants at two different residences in El Paso utilized by Saenz to conduct drug trafficking activity. Agents and officers seized approximately $14,450.00 at one residence and approximately 1.2 kilograms of cocaine at the second residence. Saenz was arrested at that time based on a federal criminal complaint. Further investigation revealed that Garcia used her law enforcement access with EPPD to conduct counter-surveillance measures for Saenz, including running license plates on vehicles associated with undercover operations.
“Law enforcement officers must he held to the highest standards,” said U.S. Attorney Sofer. “The U.S. Attorney’s Office is committed to ensuring that any public official who violates the law is brought to justice, and we will always devote the necessary resources to ensure that this important part of our mission is carried out effectively.”
“The defendant is alleged to have committed serious crimes, which are compounded by the fact that she was sworn to uphold the law,” stated DEA Special Agent in Charge Williamson. “Although this is an isolated case, the charged conduct still unfairly tarnishes the proud reputation of the thousands of law enforcement officers in the El Paso area who put their lives on the line every day to protect our residents and their communities.”
“All El Paso Police Department employees are sworn to uphold the law and are held to the highest of standards. The men and women of the El Paso Police Department are dedicated to serving the community and are appalled at the actions of this individual. Every officer takes an oath and I want to ensure the community that any officer who violates that oath will be dealt with sternly and swiftly. We also thank DEA for their cooperation in investigating this case,” said El Paso Police Chief Allen.
Conspiracy to unlawfully use a communication facility calls for up to four years in federal prison upon conviction. Conspiracy to maintain a drug involved premise calls for up to 20 years in federal prison upon conviction. Saenz faces between five and 40 years in federal prison upon conviction of the drug related charges. Garcia faces up to 20 years in federal prison upon conviction of the drug related charges.
Garcia and Saenz remain in federal custody at this time.
The DEA and the EPPD’s Narcotics Unit and Special Investigations Unit are investigating this case. Assistant U.S. Attorneys Michael Williams and Steven Spitzer are prosecuting this case on behalf of the government.
It is important to note that a federal grand jury indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Federal Appeals Court Upholds Conviction of Former Ocean County Law Firm Partner on Tax and Loan FraudRead the Press Release
NEWARK, N.J. – A federal appeals court today upheld the conviction of George Gilmore, a former partner in an Ocean County, New Jersey, law firm, on charges of failing to pay over payroll taxes to the IRS and making false statements in a loan application, Attorney for the United States Rachael A. Honig announced.
Gilmore, 71, of Toms River, New Jersey, a former equity partner and shareholder at Gilmore & Monahan P.A., was convicted in April 2019 on two counts of failing to pay over payroll taxes withheld from employees to the IRS and one count of making false statements on a bank loan application submitted to Ocean First Bank N.A. He was sentenced Jan. 22, 2020, to one year and one day in prison.
In the non-precedential ruling written by Judge Thomas Hardiman for a three-judge panel of the U.S. Court of Appeals for the Third Circuit, the court rejected four separate claims raised by Gilmore. It agreed with the government that the trial judge properly excluded expert psychiatric testimony supporting Gilmore’s claim that a “hoarding” disorder made him spend lavishly on personal expenses rather than make timely payments to the IRS. Gilmore contended that testimony would have negated his intent to commit the charged tax crimes. The court also rejected Gilmore's challenges to the jury instructions and sufficiency of evidence.
The government was represented on appeal by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office’s Special Prosecutions Division and Steven G. Sanders of the Appeals Division. The government was represented at trial by Deputy U.S. Attorney Matthew J. Skahill; Assistant U.S. Attorney Jihee G. Suh of the Special Prosecutions Division; and Trial Attorney Thomas F. Koelbl of the U.S. Department of Justice, Tax Division.
Durable Medical Equipment Manufacturer and Orthotics Provider Agree to Pay $1.59 Million to Resolve False Claims Act AllegationsRead the Press Release
BOSTON – National durable medical equipment manufacturer Joint Active Systems, Inc. (JAS) has agreed to pay $1.5 million, and orthotics and prosthetics clinic chain New England Orthotics & Prosthetics, LLP (NEOPS) has agreed to pay $90,000, to resolve allegations that they violated the False Claims Act by improperly charging the government for custom fabricated orthotics. NEOPS, which has locations throughout New England and New York, filed for bankruptcy in 2017, and is now under new ownership.
“Joint Active Systems and New England Orthotics & Prosthetics engaged in multiple calculated schemes to enrich themselves by submitting false claims to government healthcare programs and overcharging the government for their devices,” said United States Attorney Andrew E. Lelling. “Today’s result is another example of this office’s commitment to take action against health care providers that defraud the government and American taxpayers.”
“Submitting claims to government health insurance programs for unnecessary devices drains resources from legitimate patient care,” said Phillip Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold those accountable that seek to enrich themselves at the expense of these taxpayer-funded programs.”
“It is vitally important that we protect our government funded health care programs against fraud of any kind. Today’s settlement is the result of years of hard work by the FBI and our partners to make sure these companies are held accountable for trying to bilk taxpayers for custom fabricated orthotics that were not medically necessary, and not custom made,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI will continue to aggressively pursue these cases to protect these important programs for those who really need them.”
The government contends that JAS recruited NEOPS to improperly bill state Medicaid programs in Connecticut, Massachusetts and Rhode Island for JAS devices when JAS did not have participation agreements with those programs. The federal government jointly finances those Medicaid programs. Under the arrangement, NEOPS billed those programs for JAS devices as custom-fabricated orthotics when the devices were neither orthotics nor custom-fabricated, and when custom-fabricated devices were not medically necessary. As part of the arrangement, NEOPS claimed to the Medicaid programs that it treated the patients receiving the JAS devices when, in fact, JAS-affiliated sales representatives measured, fitted and delivered the devices to the patients. The JAS-affiliated sales representatives lacked the training and certifications necessary to provide custom-fabricated orthotics under certain state regulations. After submitting false claims for the devices, NEOPS received reimbursement from the Massachusetts, Connecticut and Rhode Island Medicaid programs, and remitted a portion of that reimbursement back to JAS. Through this arrangement, NEOPS often made hundreds of dollars per patient, despite providing no treatment.
The government also contends that JAS billed the Medicare program for custom-fabricated orthotics when the devices which JAS billed to Medicare did not qualify as orthotics. JAS did this despite having received coding guidance from a Medicare contractor that the devices did not meet Medicare’s definition of “orthotic.”
Lastly, the government contends that JAS overcharged the Department of Veterans Affairs (VA) for its devices under the terms of a contract that it entered into with the VA. The contract required JAS to sell its devices to the VA at a substantially better price than JAS offered to any commercial customer. Despite the contract’s terms, JAS knowingly failed to provide the VA with discounts that JAS provided to other commercial customers. As a result, JAS charged VA medical centers nationwide more for its devices—300% more in many instances—than the contract required.
“Companies who overcharge VA despite their contractual obligation to the contrary undermine VA’s procurement processes,” said VA OIG Special Agent in Charge Christopher F. Algieri, Northeast Field Office. “This settlement underscores VA Office of Inspector General’s commitment to working with our law enforcement partners to safeguard the integrity of VA’s programs and operations.”
“Ensuring the integrity of TRICARE, the healthcare system for military members and their families, is a top priority for the Defense Criminal Investigative Service (DCIS),” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “Today's settlement is the result of our commitment to work with the United States Attorney's Office and our law enforcement partners to investigate the submission of false claims.”
Two former NEOPS employees brought allegations against JAS and NEOPS as part of a whistleblower lawsuit. Under the qui tam provisions of the False Claims Act, private individuals, known as relators, can sue on the government’s behalf for false claims and share in any recovery. In connection with today’s announced settlement, the relators will receive 17 percent of the recovery.
U.S. Attorney Lelling, HHS OIG SAC Coyne, FBI Boston SAC Bonavolonta, VA OIG SAC Algieri and DCIS SAC Hegarty made the announcement today. This matter was handled by Assistant U.S. Attorneys Brian M. LaMacchia and Evan Panich of Lelling’s Affirmative Civil Enforcement Unit.
Drug User in Possession of a Firearm Sentenced to Federal Prison as Part of “Operation Crime Driver” in Tipton CountyRead the Press Release
Memphis, TN – Isca Johnson, 24 of Covington, Tennessee has been sentenced to 21 months in federal prison for being an unlawful drug user in possession of a firearm. This case was developed as part of the first "Operation Crime Driver" in Tipton County. D. Michael Dunavant, U.S. Attorney announced the sentence today.
Johnson’s arrest was part of "Operation Crime Driver", a joint federal, state and local law enforcement anti-violence initiative led by the District Attorney General’s Office for the 25th Judicial District, and conducted between February and May 2019, where law enforcement targeted offenders wanted on arrest warrants for violent criminal offenses in Tipton County, Tennessee. Johnson was among 6 defendants from the first phase of "Operation Crime Driver" to be indicted in federal court in October, 2019 for various drug and gun offenses. https://www.justice.gov/usao-wdtn/pr/operation-crime-driver-targets-violent-criminals-tipton-county
According to information presented in court, on May 3, 2019, Tipton County Sheriff’s deputies encountered Johnson as they smelled marijuana emanating from his apartment. He gave consent to search, and deputies found marijuana, alprazolam, a loaded handgun, and ammunition. He admitted to owning the items and to being a regular user of illicit drugs. Johnson was charged in federal court in Memphis with possession of a firearm while being an unlawful user of a controlled substance.
On December 9, 2019, Johnson pled guilty to being an unlawful drug user in possession of a firearm, a violation of 18 U.S.C. § 922(g)(3).
On November 30, 2020, U.S. District Court Senior Judge Jon McCalla sentenced Johnson to 21 months in federal prison followed by two years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Studies amply demonstrate the connection between chronic drug abuse and violent crime, and illuminate the nexus between Congress’s attempt to keep firearms away from habitual drug abusers and its goal of reducing violent crime. We are pleased to join with our federal, state and local law enforcement partners to focus on the priority areas of firearms and narcotics cases that impact public safety in our rural communities, and we are glad to support this successful joint operation by adopting these cases for federal prosecution."
Other defendants sentenced in Operation Crime Driver include:
• Danny Muex, 32, of Tipton County was sentenced to 40 months in federal prison for being a felon in possession of a firearm. https://www.justice.gov/usao-wdtn/pr/tipton-county-probationer-arrested-during-operation-crime-driver-sentenced-federal
• Maurice Nash, A/K/A "Monster," 47, of Atoka, TN was sentenced to 210 months in federal prison for being a convicted felon in possession of a firearm. https://www.justice.gov/usao-wdtn/pr/tipton-county-armed-career-criminal-sentenced-over-17-years-federal-prison
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Tipton County Sheriff’s Office investigated this case.
Special Assistant U.S. Attorney Sean G. Hord prosecuted this case on behalf of the government. SAUSA Hord is currently assigned from the 25th Judicial District Attorney’s Office.
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Defense Contractor and Employees Plead Guilty to Fraud SchemeRead the Press Release
NEWPORT NEWS, Va. – A Hampton-based business owner and four employees have all pleaded guilty to engaging in an extensive procurement fraud scheme involving millions of dollars in government contracts targeting the Department of Defense and other federal government agencies.
According to court documents, from 2011 to 2018, Iris Kim, Inc., (aka I-Tek) owner Beyung S. Kim, 61, of Newport News, and employees Seung Kim, 30, of Newport News, Dongjin Park, 53, of Yorktown, Chang You, 61, of Yorktown, Pyongkon Pak, 53, of Toano, and Li-Ling Tu, 57, of China, engaged in a conspiracy and scheme related to certain government contracts for which I-Tek acted as a supplier of goods, including items for the U.S. Marine Corps, U.S. Army, U.S. Coast Guard, and the National Guards of various states, among other agencies.
These government contracts had certain set-aside preferences and source of good requirements. The conspirators acted to defraud the U.S. and commit other substantive offenses by fraudulently importing goods into the U.S. that were made in China, in violation of the terms of these contracts. They then falsely relabeled these goods as if they were made in the U.S. Kim and his employees also acted through a separate nominee company to conceal the importing of goods from China and installed a nominee officer of I-Tek in order to be able to fraudulently qualify for certain set-aside contracts. The conspirators also submitted false documents and further falsely classified the value of the goods imported into the U.S. so as to avoid higher duties and taxes.
The five conspirators are scheduled to be sentenced mid-March. Each defendant faces a maximum term of five to seven 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations; Chris Dillard, Acting Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; and Gregory Scovel, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after U.S. District Judge David J. Novak accepted the pleas.
Assistant U.S. Attorneys Brian J. Samuels and D. Mack Coleman, and Trial Attorney Matthew P. Mattis of the Justice Department’s Criminal Division are prosecuting the case.
The Defense Contract Audit Agency, the U.S. Small Business Administration’s Office of Inspector General, the U.S. Coast Guard Investigative Services, the U.S. Customs and Border Patrol Regulatory Audit and Agency Advisory Services, Office of Trade, and the U.S. Department of State Office of Inspector General all provided significant assistance to this case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-47.
Cleveland real estate developer indicted for embezzlement of project fundsRead the Press Release
U.S. Attorney Justin Herdman announced today that a federal grand jury sitting in Toledo has returned a nine-count indictment charging Arthur Fayne, age 58, of Aurora, with wire fraud. The defendant is accused of orchestrating and executing two schemes to defraud separate businesses and embezzling the funds for personal use, including gambling at a casino, which resulted in the loss of over $1 million.
According to the indictment, the defendant was the owner of Business Development Concepts (BDC), an organization that provided training and business consultation services to start-ups and existing companies. In addition, BDC managed construction projects and the purchase of equipment, supplies and inventory.
The defendant also served as Vice President and a board member on a for-profit subsidiary (Subsidiary 1) of a nonprofit corporation (Nonprofit 1) that operated as a federally qualified health center network of community health centers and provided primary care medical services for adults and children in the Cleveland, Ohio area. In this capacity, the defendant had the authority to enter into contracts on behalf of Nonprofit 1.
In June of 2016, a construction management and general contracting company headquartered in Cleveland (Company 1) entered into a contract with Nonprofit 1 to serve as the construction manager and general contractor on a project to redevelop a vacant building in the city of Cleveland into a grocery store and community center with health care offices.
The defendant executed this contract on behalf of Nonprofit 1 and, under the terms of the contract, BDC and Subsidiary l would serve as Nonprofit l 's authorized representatives. In addition, Subsidiary 1 and Nonprofit 1 were to issue payments to BDC, which the defendant was to disburse to Company 1.
The indictment states that from December of 2016 through March of 2018, the defendant caused Nonprofit 1 and Subsidiary 1 to pay $2,629,740.38 to BDC to be disbursed to Company 1 as compensation for work on the project.
It is alleged that the defendant distributed only $1,870,634.46 to Company 1. Instead of distributing the remaining $759,105.92 to Company 1, the defendant is accused of diverting these funds to BDC for his personal use, which included gambling at a casino. To further the scheme, the defendant allegedly caused to be created and submitted falsified invoices to Subsidiary l and Nonprofit 1 for money owed to Company 1.
The indictment states that from 2016 to 2018, Nonprofit 1 separately made payments to BDC for services and expenses in overseeing the project and others. The defendant is accused of accessing some funds from BDC at a casino and losing approximately $1 million on separate occasions.
Additionally, the indictment states that the defendant devised a second scheme to defraud a subcontractor on the redevelopment project. On or about June 28, 2018, the defendant caused a subcontractor on the project to make a $125,923.86 wire transfer to a bank account owned by the defendant's wife. These funds were allegedly used for personal use, which included gambling at a casino.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
This case was investigated by the Cleveland Division of the FBI. The U.S. Attorney’s Office for the Northern District of Ohio would like to acknowledge and thank the Cuyahoga County Prosecutor’s Office for its cooperation with this matter. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Chicago Man Sentenced to More Than a Year in Prison for Illegally Structuring Nearly $350,000Read the Press Release
CHICAGO — A Chicago man was sentenced today to 14 months in federal prison for illegally structuring nearly $350,000 in cash deposits in an effort to evade federal reporting requirements.
In 2015 and 2016, ANTUANE KING made at least 37 deposits of less than $10,000 each at seven financial institutions, including the Chicago Firefighters Credit Union. The deposits were structured in an effort to evade federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000. After making all of the structured cash deposits, King later combined all of the money to purchase three residences in the south suburbs of Chicago.
A federal jury earlier this year convicted King, 49, on two counts of structuring a currency transaction. U.S. District Judge Jorge L. Alonso imposed the sentence after a hearing in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.
“The structuring laws are in place for a good reason: they help law enforcement ferret out serious criminal activity that could otherwise go undetected,” Assistant U.S. Attorneys Christopher V. Parente and Esther S. Mignanelli argued in the government’s sentencing memorandum. “The defendant knew he was committing a crime each time he went to a bank and structured the cash deposits.”
Bronx Man Charged with Scheme to Steal Checks and Defraud BanksRead the Press Release
NEWARK, N.J.– A Bronx, New York, man was charged for his participation in a scheme to steal and alter checks from the mail and engage in bank fraud, U.S. Attorney Craig Carpenito announced today.
Claude Anthony Burnett, 23, is charged by complaint with one count of bank fraud conspiracy and one count of conspiracy to receive and possess stolen mail. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Michael A. Hammer.
According to documents filed in this case and statements made in court:
From at least February 2020 to November 2020, Burnett and others conspired to steal checks from mailboxes in and around Morris, Essex, Somerset, and Passaic counties, alter the stolen checks, and deposit the altered checks into bank accounts controlled by Burnett and his conspirators. To date, the investigation has identified over 140 checks with a face value of over $600,000 that have been stolen, altered, and deposited in accounts controlled by Burnett and his conspirators.
The count of bank fraud conspiracy carries a maximum sentence of 30 years in prison and a fine of $1 million; the count of conspiracy to receive and possess stolen mail carries a maximum sentence of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater.
U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service Newark Division, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Vijay Dewan of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Bow Man Sentenced to 30 Months for Fentanyl TraffickingRead the Press Release
CONCORD - Michael Briand, 29, of Bow, was sentenced to 30 months in federal prison for fentanyl trafficking, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on August 27, 2019, a cooperating individual told Nashua Police Detectives that Briand and an accomplice were selling fentanyl in Nashua. At the direction of detectives, the cooperator arranged to buy a quantity of fentanyl from Briand and his accomplice, Megan Judd. They were transported to the transaction by Travis Dunn. The deal took place in the bathroom of a fast food restaurant in Nashua and Briand took custody of the money in the transaction. Following the sale, detectives arrested Briand, Judd, and Dunn.
Briand previously pleaded guilty on August 5, 2020. Judd and Dunn also have pleaded guilty. Judd has already been sentenced and Dunn is scheduled to be sentenced on March 1, 2021.
“Fentanyl traffickers sell a deadly substance that endangers the health and safety of their customers as well as the general public,” said U.S. Attorney Murray. “Through Operation SOS, we are working closely with the Nashua Police Department to target and prosecute the drug dealers who are engaged in this hazardous and illegal activity. Traffickers in Nashua who persist in selling fentanyl should understand that they are destined to spend time in federal prison.”
This matter was investigated by the Nashua Police Department’s Narcotics Intelligence Division and Problem-Oriented Policing Unit.
The case is being prosecuted by Assistant U.S. Attorney Joachim H. Barth.
This case is part of Operation Synthetic Opioid Surge (S.O.S.). In July of 2018, Attorney General Jeff Sessions announced the creation of S.O.S., which is being implemented in the District of New Hampshire and nine other federal districts. The goal of S.O.S. is to combat the large number of overdoses and deaths associated with fentanyl and other synthetic opioids. In New Hampshire, the U.S. Attorney’s Office is focusing its efforts on prosecuting synthetic opioid trafficking cases arising in Hillsborough County, which includes Manchester and Nashua.
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Baltimore Cocaine Dealer Pleads Guilty, Sentenced to 10 Years in Federal PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Antoine Coles, age 33, of Baltimore, yesterday to 10 years in federal prison, followed by three years of supervised release, after Coles pleaded guilty to possession with intent to distribute cocaine.
The guilty plea and sentence were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.
According to Coles’ plea agreement, on September 25, 2019, Baltimore Police officers on patrol in the 2100 block of West Lexington Street in Southwest Baltimore approached a group of men who were running a power line out of a vacant home. Coles was sitting on a stoop nearby holding a marijuana blunt. When an officer approached him to conduct a pat down, Coles stood up, clenched his right hand in a fist around his cell phone, and punched the officer in his jaw.
As detailed in his plea agreement, immediately after striking the officer, Coles ran away, dropping a spare magazine as he fled. Coles was quickly apprehended by other officers. While attempting to arrest Coles, detectives recovered a handgun from Coles’ waistband, loaded with 12 rounds of .45 caliber ammunition, including a round in the chamber. A search of Coles after his arrest recovered 11 blue-top vials, each containing cocaine. Coles admitted that he intended to distribute the cocaine.
United States Attorney Robert K. Hur praised the ATF and Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael Goldsticker, who prosecuted the case.
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Bakersfield Man Indicted for Unauthorized Transfers of more than $450,000 from A Victim’s Bank Account to a Brokerage Account He ControlledRead the Press Release
FRESNO, Calif. — Ramon Armendariz, Jr., 33, of Bakersfield, was indicted on Oct. 15, 2020, and charged with multiple counts of wire fraud, bank fraud, and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.
According to court documents, Armendariz unlawfully obtained personal identifying information and bank account information of the victim, S.L., which he used to open a brokerage account in the victim’s name. Armendariz used S.L.’s personal bank accounts to fund the brokerage account. Armendariz listed himself as an authorized check writer on the brokerage account in order to access the funds when the transfers to the brokerage account were completed. Armendariz’s scheme unraveled when S.L. discovered the unauthorized transfers and notified the financial institution, resulting in a freeze of the funds in the brokerage account.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Melanie L. Alsworth is prosecuting the case.
If convicted, Armendariz faces a maximum statutory penalty of 20 years in prison on each count of wire fraud, up to 30 years in prison on each count of bank fraud, and a mandatory consecutive sentence of two years in prison on the aggravated identity theft. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Armed Career Criminal Sentenced to over 19 Years in Prison for Firearm PossessionRead the Press Release
GAINESVILLE, FLORIDA – James Wilkerson, 43, of Citra, Florida, was sentenced on December 1, 2020, to a total of 19 and a half years in federal prison after a federal jury convicted him of possessing a firearm as a convicted felon on July 24, 2020. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the sentence.
“The threat posed to our communities by this violent career criminal has been eliminated,” said U.S. Attorney Keefe. “This sentence not only fits the defendant’s history of crime, but it is also key to protecting public safety. The collaborative efforts of our partners in the Gainesville Gun Violence Initiative continue to yield impactful results, and we will continue working tirelessly to make North Florida safer.”
On October 30, 2018, in response to a number of violent crimes occurring in a vacant lot in northeast Gainesville, Gainesville Police Department (GPD) detectives were conducting follow-up investigation in relation to an unsolved homicide when they observed Wilkerson and another person sitting under a tent in the vacant lot. The detectives approached the tent and made contact with Wilkerson, who was clenching one of his hands, as if he was concealing something. The detectives also noticed the odor of marijuana as they approached the tent. Wilkerson refused to comply with lawful commands from the detectives and began to resist their attempts to detain him for further investigation. After a brief struggle, Wilkerson was detained and a small baggie of drugs was recovered.
Detectives then searched the area where Wilkerson had been sitting and located a loaded .32 caliber pistol amongst some trash, which would have been immediately adjacent to Wilkerson’s feet. Wilkerson, a convicted felon, was arrested for possession of a firearm by a convicted felon.
DNA forensic analysis conducted by the Florida Department of Law Enforcement crime lab was instrumental in proving that the firearm belonged to Wilkerson.
Additional investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) revealed that Wilkerson had multiple prior felony convictions, including aggravated assault, robbery with a firearm, trafficking in cocaine, and possession of cocaine. Due to his criminal record, Wilkerson qualified as an Armed Career Criminal, which allowed for an enhanced sentence, including a fifteen year minimum mandatory term of imprisonment.
“As a felon, with several prior convictions for violent crimes, this sentence will remove this individual from our streets and put him in federal prison where he will serve a lengthy sentence,” said ATF Special Agent in Charge Craig W. Saier.
This sentencing resulted from the collaborative work of the Gainesville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Chris Elsey.
The GPD Detectives Division notes, “This sentence is another example of how the Gainesville Gun Violence Initiative is benefiting our neighbors and making our City safer. As our Department continues to seek ways to curb gun violence in Gainesville, we are grateful for our local, state, and federal partners that work tirelessly to bring these violent criminals to justice.”
The Gainesville Gun Violence Initiative (GVI) was established in April, 2019, by the United States Attorney’s Office for the Northern District of Florida in an effort to stem the escalating gun violence in Gainesville and the surrounding area. As GVI partners, the State Attorney’s Office for the Eighth Judicial Circuit, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the U.S. Marshals Service, the Florida Department of Law Enforcement, the Gainesville Police Department, the Alachua County Sheriff’s Office, the Alachua Police Department, the University of Florida Police Department, and the Florida Department of Corrections share this commitment to protecting public safety.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - U.S. v. WilkersonArizona man sentenced to one year in prison for illegally possessing a firearmRead the Press Release
ALBUQUERQUE, N.M. – Carlton Craig Sandoval, 39, of Window Rock, Arizona, and a member of the Navajo Nation, was sentenced to 12 months and 1 day in prison on Dec. 2 after pleading guilty to being a felon in possession of a firearm and ammunition in Indian Country.
On Jan. 1, police encountered Sandoval after responding to a 911 call from Navajo, New Mexico, reporting a fight outside a group of homes. Officers found Sandoval at the scene sitting in the driver’s seat of a vehicle, where he refused to comply with officers’ inquiries and requests. An officer observed an open beer can and a rifle on the front passenger seat. The officers arrested Sandoval, who was prohibited from possessing firearms based on previous felony convictions.
Sandoval pleaded guilty on June 3. Upon his release from prison, Sandoval will be subject to three years of supervised release.
The FBI investigated this case with assistance from the Window Rock Police Department. Assistant U.S. Attorney Alexander Flores prosecuted the case.
17 Charged in Lancaster-Based Federal Drug Conspiracy and Firearms Case after Multi-Year InvestigationRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced today that federal, state, and local law enforcement officers charged 16 individuals in federal court for their roles in a drug trafficking organization that operated out of the Midlands region of South Carolina. An additional defendant was charged in a related case with violations of federal firearms laws. Charges against the 17 follow federal charges against five additional defendants in related cases, four of whom have been convicted.
A joint team of more than 55 federal, state, and local law enforcement officers made eight arrests in the case today. Four defendants were already in custody, and five defendants remain at large. The arrested defendants were arraigned before the Honorable Shiva V. Hodges, United States Magistrate Judge, in Columbia.
The charges follow a more than two-year long investigation by federal, state, and local law enforcement into a fentanyl, heroin, and methamphetamine distribution ring in the Lancaster area. The investigation resulted in the seizure of various quantities of fentanyl, heroin, and methamphetamine, 16 firearms, and ammunition.
“Operations like these leave our communities safer and more stable than they were before; the people of South Carolina deserve nothing less,” said U.S. Attorney McCoy. “We will continue to work tirelessly with our federal, state, and local partners to dismantle large-scale, organized drug-dealing organizations, which cause untold levels of harm to end users, their families, and their communities.”
“This focused and collaborative effort was designed to make a long-lasting impact on the level of gun violence and criminal activity in Lancaster County,” said ATF Special Agent in Charge Vince Pallozzi. “Along with our law enforcement partners, we have taken a number of violent individuals out of the community throughout this investigation and made significant progress in on-going efforts to decrease gun violence.”
“Today was a good day in Lancaster County,” said Sheriff Barry S. Faile. “Our Drug Task Force agents, along with agents from several of our state and federal partners, have been working for many months on investigating this alleged wide-ranging conspiracy. I appreciate the help we got from all quarters in bringing this operation to a close.”
The indictment charges 47 counts alleging violations of federal narcotics, firearm, and counterfeit laws for conduct spanning from February 2017 to present. Specifically, the indictment returned by a federal Grand Jury alleges defendants distributed, and possessed with intent to distribute, fentanyl, heroin, and methamphetamine, and that some defendants violated federal firearms laws including by possessing or using firearms in furtherance of drug trafficking crimes.
The following defendants have been charged in the Indictment for conduct related to their alleged roles in the drug trafficking organization:
- Clarence Grover Kirk III, 38, of Rock Hill;
- William Earl Belk, 29, of Lancaster;
- Celeste Allen Pardue, 47, of Lancaster;
- Rachell Nichole House, 32, of Lancaster;
- Berry Allen McIlwain Jr., 30, of Lancaster;
- Richard Hopkins, 30, of Lancaster;
- Christopher Lynn Love, 44, of Lancaster;
- Scott Charles Catledge Jr., 27, of Lancaster;
- Dustin Robert Barton, 33, of Lancaster;
- Ezekiel T. Williams, 23, of Lancaster; and
- Larry Christopher Craig, 50, of Lancaster.
In a related case, Dennis Lee Williams, 29, of Lancaster, was charged with violating federal firearms laws.
The case was a joint investigation by the ATF and Lancaster County Sheriff’s Office, who were assisted by Homeland Security Investigations (HSI), South Carolina Law Enforcement Division (SLED), Lancaster Police Department, and the Sixth Circuit Solicitor’s Office.
This case is being prosecuted as part of the joint federal, state, and local 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.
Assistant U.S. Attorneys Justin B. Holloway, Elliott B. Daniels, Winston I. Marosek, and Michael O’Mara of the Columbia and Greenville offices are prosecuting the case.
The United States Attorney stated that all charges against these defendants are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
13 Arrested in Connection with an LSD, Fentanyl and Methamphetamine Trafficking and Money Laundering Scheme Occurring in the West Campus Area of the University of Texas at AustinRead the Press Release
Federal, state and local authorities have arrested 13 individuals, including current and former University of Texas (UT) students, charged in connection with trafficking LSD, fentanyl and methamphetamine pills to UT students in Austin.
That announcement was made today by U.S. Attorney Gregg N. Sofer; Drug Enforcement Administration (DEA) Special Agent in Charge Steven S. Whipple, Houston Division; FBI Special Agent in Charge Christopher Combs, San Antonio Field Office; Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Richard D. Goss, Houston Field Office; Travis County Sheriff Sally Hernandez; Austin Police Chief Brian Manley; and Lakeway Police Chief Todd Radford.
Those arrested include: 23-year-old Varun Prasad of Austin; 26-year-old Charles Zenker of Houston; 68-year-old Benny Daneshjou of Austin; 26-year-old Ashley Larue of Austin; 21-year-old Drew Zarate of Austin; 32-year-old Christopher Edwards of Portland, Ore.; 21-year-old Jacob Schelling of Cypress; 22-year-old Madison Scott of Houston; 21-year-old Adrian Andreescu of Plano; 21-year-old Nikit Shingari of Austin; 21-year-old Nolan Fogleman of Austin; 23-year-old Samuel Parry of Austin; and 27-year-old Brandon Carpenter of Austin. All of the defendants are charged with conspiracy to possess with intent to distribute a controlled substance. Prasad, Daneshjou, Larue and Zarate are also charged with conspiracy to commit money laundering.
The defendants allegedly conspired to distribute LSD, fentanyl and methamphetamine in the Austin metropolitan area and other locations since April 2019 and also allegedly conspired to launder the financial proceeds of unlawful activities.
Search warrants executed yesterday in conjunction with arrest warrants resulted in the seizure of large quantities of fentanyl, Adderall pills, Alprazolam (Xanax), LSD, marijuana and psilocybin (hallucinogenic mushrooms). Investigators also seized several firearms and approximately $100,000 in U.S. currency. Prior to yesterday’s enforcement action, law enforcement officers arrested four other subjects and seized quantities of fentanyl methamphetamine, heroin, cocaine, LSD, MDMA, Benzodiazepine and other opioids during this investigation. Approximately $163,000 in assets and U.S. currency were also seized.
“Make no mistake about it. These are not pills being carefully manufactured and tested by trusted, regulated pharmaceutical companies. During the course of this investigation, two of the targets died from drug overdoses,” said U.S. Attorney Sofer. “When unsuspecting college kids and other drug seekers put these pills in their mouths, they are playing Russian roulette. They are gambling that profit-seeking drug dealers did not place lethal doses of unknown chemicals or fentanyl in these pills.”
“Drug overdose is a leading cause of preventable, injury-related deaths in our nation. This coordinated law enforcement operation dismantled an enterprise responsible for the distribution of counterfeit pharmaceuticals that contained fentanyl and methamphetamine, but were clandestinely manufactured to mimic the prescription pharmaceuticals Oxycodone and Adderall. We caution people to never consume pharmaceuticals unless under licensed medical care and sourced from a licensed pharmacy. A miniscule amount, as small as a couple grains of salt, of some of these illicit drugs can result in death,” said DEA Special Agent in Charge Whipple.
The Austin Tactical Diversion Squad, a law enforcement task force targeting criminal pharmaceutical diversion and counterfeit drug trafficking in Central Texas, conducted this investigation dubbed Operation Spider Web. Partner agencies include DEA, FBI, IRS-CI, Austin Police Department, Travis County Sheriff’s Office, Lakeway Police Department, Cedar Park Police Department and the Texas National Guard Joint Counterdrug Task Force.
“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said IRS-CI Special Agent in Charge Goss. “Without these ill-gotten gains, the traffickers cannot finance their organizations. By following the money trail, Special Agents with the IRS are able to assist our law enforcement partners with dismantling drug trafficking organizations and those that facilitate their activities.”
“We value the relationship we have with our federal partners, and through our collaborative efforts have removed a significant amount of illegal drugs off the streets of Austin. This has potentially saved many people from the dangers and risks associated with illegal drug use and furthers our mission of keeping Austin residents safe,” stated Austin Police Chief Manley.
“We are honored to serve alongside such professional agencies to combat illicit drug distribution in our various communities. This case is emblematic of the partnerships it takes in today’s times to successfully investigate and prosecute these types of complex crimes,” stated Lakeway Police Chief Radford.
Upon conviction of the drug conspiracy charge, the defendants face between 10 years and life in federal prison. Upon conviction of the money laundering conspiracy charge, the defendants face up to 20 years in federal prison.
Assistant U.S. Attorneys Mark Marshall and Robert Almonte are prosecuting this case on behalf of the government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Drug overdose deaths and opioid-involved deaths continue to increase in the U.S. Deaths from drug overdose are up among both men and women, all races and adults of nearly all ages with more than three out of five drug overdose deaths involving an opioid. More than 130 people die every day in the U.S. after overdosing on opioids while methamphetamine continues to be one of the most commonly misused stimulant drugs in the world and is the drug that most contributes to violent crime.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
3 December 2020
Workrite Companies to Pay $7.1 Million to Settle Alleged Furniture OverchargesRead the Press Release
Ergonomic office furniture maker Workrite Ergonomics LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. (collectively, Workrite), have agreed to pay $7.1 million to resolve allegations under the False Claims Act that they overcharged the federal government for office furniture under General Services Administration (GSA) contracts, the Department of Justice announced today.
“Companies that do business with the United States are expected to charge the government appropriately for their services,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “We will continue to protect the American taxpayers and hold accountable those who misuse federal funds.”
“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California. “Contractors that overcharge the American taxpayer will be held accountable.”
“American taxpayers deserve fair prices and accurate information from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa. “I appreciate the hard work and dedication that led to this significant recovery.”
“The settlement is a positive outcome that holds Workrite accountable for its questionable business practices,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service (DCIS), Western Field Office. “This is but one example of the law enforcement and oversight communities’ on-going, joint efforts to be good stewards of American taxpayer dollars.”
This settlement relates to a contract under which Workrite provided office furniture to government entities from 2009 to 2017 through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government with a streamlined process to procure commonly used commercial goods and services. The settlement resolves allegations that Workrite did not fulfill its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and did not subsequently extend lower prices to government customers as required by the GSA contract’s price reduction clause.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Michael J. Franchek, of Park City, Utah, a former Workrite sales manager. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Franchek will receive approximately $1.27 million from the settlement proceeds.
The settlement with Workrite was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, the GSA’s Office of the Inspector General, the Department of State’s Office of Inspector General, the DCIS, the Defense Contract Audit Agency, and the U.S. Department of Veterans Affairs’ Office of Inspector General.
The lawsuit is captioned United States ex rel. Franchek v. Workrite Ergonomics, LLC, No. 16-cv-02789 (N.D. Cal.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Workrite Companies to Pay $7.1 Million to Settle Alleged Furniture OverchargesRead the Press Release
SAN FRANCISCO – Ergonomic office furniture maker Workrite Ergonomics LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. (collectively, Workrite), have agreed to pay $7.1 million to resolve allegations under the False Claims Act that they overcharged the federal government for office furniture under General Services Administration (GSA) contracts, the Department of Justice announced today.
“Companies that do business with the United States are expected to charge the government appropriately for their services,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “We will continue to protect the American taxpayers and hold accountable those who misuse federal funds.”
“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California. “Contractors that overcharge the American taxpayer will be held accountable.”
“American taxpayers deserve fair prices and accurate information from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa. “I appreciate the hard work and dedication that led to this significant recovery.”
“The settlement is a positive outcome that holds Workrite accountable for its questionable business practices,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service (DCIS), Western Field Office. “This is but one example of the law enforcement and oversight communities’ on-going, joint efforts to be good stewards of American taxpayer dollars.”
This settlement relates to a contract under which Workrite provided office furniture to government entities from 2009 to 2017 through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government with a streamlined process to procure commonly used commercial goods and services. The settlement resolves allegations that Workrite did not fulfill its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and did not subsequently extend lower prices to government customers as required by the GSA contract’s price reduction clause.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Michael J. Franchek, of Park City, Utah, a former Workrite sales manager. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Franchek will receive approximately $1.27 million from the settlement proceeds.
The settlement with Workrite was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, the GSA’s Office of the Inspector General, the Department of State’s Office of Inspector General, the DCIS, the Defense Contract Audit Agency, and the U.S. Department of Veterans Affairs’ Office of Inspector General.
The lawsuit is captioned United States ex rel. Franchek v. Workrite Ergonomics, LLC, No. 16-cv-02789 (N.D. Cal.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Wirt County Woman Sentenced to Prison for Bank FraudRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Melissa Evans, 49, of Palestine, was sentenced to 21 months in prison for bank fraud. She will also pay a total of $145,000 in restitution.
“Evans stole from her employer for four years,” said United States Attorney Mike Stuart. “Now, in addition to repaying her employer, she’ll be spending almost two years in federal prison.”
Evans worked as the financial coordinator for a dental practice in Parkersburg. Over the course of four years, Evans stole checks mailed to the dental practice from insurance groups and fraudulently deposited the stolen checks into her bank account, instead of the dental practice’s bank account. Throughout her scheme, Evans fraudulently appropriated more than 300 checks and embezzled more than $120,000.
The United States Secret Service and the Parkersburg Police Department conducted the investigation. United States District Judge Irene C. Berger imposed the sentence. Assistant United States Attorney Kathleen Robeson handled the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00026.
Follow us on Twitter: SDWVNews and USAttyStuart
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Western New York Man with Alleged Ties to White Supremacist Group Charged with Being A Felon in Possession of FirearmsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal criminal complaint, charging Stephen Reed Pattison, 31, of Hilton, NY, with being a felon-in-possession of firearms, was unsealed today. The charge carries a maximum penalty of 10 years in prison.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that according to the criminal complaint, Pattison was arrested in Western New York, on October 30, 2020, by the United States Marshals Task Force. The basis for defendant’s arrest was a parole absconder warrant from a 2016 conviction that he had in the State of Missouri for Domestic Assault in the Second Degree. In the months preceding his arrest, the defendant aggressively and sometimes violently expressed his disagreement with local protests relating to the deaths of George Floyd and Daniel Prude in a series of Facebook posts. Pattison also expressed his support of white supremacist groups and is believed to be associated with a local “Blood and Honour” group in the Rochester, a white supremacist group that is affiliated with a neo-Nazi organization known as “Combat 18.” Following his arrest as a parole absconder, investigators obtained search warrants for both the defendant’s cell phone as well as his residence on Church Road, in Hilton. During the execution of those warrants, evidence suggesting his involvement with white supremacist organizations was developed and various firearms were seized from the residence.
Pattison made his initial appearance today before U.S. Magistrate Judge Marian W. Payson and was detained.
The complaint is a result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, the United States Marshals Service, under the direction of Marshal Charles Salina, the Brighton Police Department, under the direction of Chief David Catholdi; the New York State Police, under the direction of Major Barry Chase; the Monroe County Sheriff's Office, under the direction of Sheriff Todd Baxter; the Rochester Police Department, under the direction of Chief Cynthia Herriott-Sullivan; and the Aureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York FIeld Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Weakley County Man Sentenced to Federal Prison for Conspiring with Others to Distribute over 500 Grams of MethamphetamineRead the Press Release
Jackson, TN - Justin Tyler Bynum, 32, of South Fulton, Tennessee, has been sentenced to 100 months in federal prison for conspiring with others to possess with the intent to distribute over 500 grams of methamphetamine. D. Michael Dunavant, U.S. Attorney announced the sentence today.
According to information presented in court, on April 25, 2018, when deputies with the Weakley County Sheriff’s Department attempted a traffic stop on Bynum's vehicle, he turned into a driveway, stopped his vehicle, and fled on foot. Deputies eventually caught Bynum and recovered approximately an ounce of methamphetamine. Bynum later admitted to selling methamphetamine for the previous four months, in the amount of at least two ounces per week.
On June 25, 2019, Bynum pled guilty to conspiring with others to distribute and possess with the intent to distribute over 500 grams of methamphetamine.
Bynum has an extensive criminal history, including his current offense, which involved his distribution of approximately 900 grams of methamphetamine, prior burglary, theft and vandalism convictions that occurred a few years before his current offense.
On December 1, 2020, Chief U.S. District Judge S. Thomas Anderson sentenced Bynum to 100 months in federal prison followed by five years of supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Methamphetamine that is trafficked in and through West Tennessee is increasing in dangerous purity, and continues to destroy individuals, families, and communities. Drug dealers who profit from the pain, addiction, violence and death caused by these dangerous substances deserve proper punishment, and this sentence does just that."
This is the third sentencing in a case involving multiple defendants, including Justin Tyler Bynum, Keith Norris, Robert Thomas, Charles Settles, and Solomon Clay on charges of conspiracy to distribute actual methamphetamine. On August 6, 2019, Robert Thomas was sentenced to 108 months in federal prison followed by 5 years supervised release for his role in the conspiracy. https://www.justice.gov/usao-wdtn/pr/martin-tennessee-man-sentenced-108months-imprisonment-conspiracy-distribute
On July 13, 2020, Norris was sentenced to 280 months in federal prison followed by five years supervised release. https://www.justice.gov/usao-wdtn/pr/weakley-county-man-sentenced-23-years-federal-prison-conspiracy-distribute
This case was investigated by the Weakley County Sheriff’s Office and the Tennessee Bureau of Investigation.
Assistant U.S. Attorneys Jerry Kitchen and Josh Morrow prosecuted this case on behalf of the government.
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Vitol Inc. Agrees to Pay over $135 Million to Resolve Foreign Bribery CaseRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to pay a combined $135 million to resolve the Justice Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and to resolve a parallel investigation in Brazil.
The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department.
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Pursuant to its agreement with the department, Vitol’s total criminal penalty is $135 million. The department will credit $45 million – approximately one third of the total criminal penalty – against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance their compliance programs; and to report to the department on the implementation of their compliance programs.
According to the company’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five other Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.”
Vitol also admitted to a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to officials in Ecuador and Mexico.
In furtherance of this bribery scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy – all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the department recently unsealed charges against a Houston-based former Petrobras official who received bribes in association with the scheme, and who pleaded guilty to one count of conspiracy to commit money laundering on Feb. 8, 2019, in the Eastern District of New York. In addition, the department recently unsealed charges against one of the intermediaries involved in the Brazil scheme, who pleaded guilty on Sept. 22, 2017, to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on Sept. 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case. The U.S. Marshals Service and Justice Department’s Office of International Affairs provided assistance in the investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Vitol Inc. Agrees to Pay over $135 Million to Resolve Charges for Bribery Schemes in Latin AmericaRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to a combined total criminal penalty of $135 million to resolve bribery charges with law enforcement authorities in the United States and Brazil. The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), made the announcement.
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” stated Acting United States Attorney DuCharme. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Rabbitt. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said FBI Assistant Director-in-Charge Johnson. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the government in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement, Vitol will pay a total criminal penalty to the United States of $135 million. The Department of Justice will credit $45 million—approximately one third of the total criminal penalty—against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to: (i) continue to cooperate with the department in any ongoing investigations and prosecutions relating to the charged conduct, including conduct of individuals, (ii) enhance their compliance programs, and (iii) report to the department on the implementation of their compliance programs.
According to the Vitol’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five additional Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye” and “Beb.”
Finally, Vitol admitted to participating in a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to those officials. In furtherance of this scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy—all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the government recently unsealed charges against Houston-based former Petrobras official Rodrigo Berkowitz, who pleaded guilty in the Eastern District of New York on February 8, 2019 to one count of conspiracy to commit money laundering. In addition, the government recently unsealed charges against one of the intermediaries involved in the Brazil scheme, Luiz Eduardo Andrade, who pleaded guilty on September 22, 2017 to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on September 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The government’s investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor of the Eastern District of New York, and Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell and Clayton P. Solomon, are prosecuting the case. The Criminal Division’s Office of International Affairs provided assistance in the investigation.
The Defendants:
VITOL INC.
RODRIGO BERKOWITZ
Age: 41
Country of Origin: BrazilJAVIER AGUILAR
Age: 46
Country of Origin: MexicoLUIZ EDUARDO ANDRADE
Age: 61
Country of Origin: Brazil