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Tuesday 29 September 2020
New York Man Pleads Guilty to Bank FraudRead the Press Release
CONCORD - Derrick McKenzie, 61, of Mount Vernon, New York, pleaded guilty in federal court to bank fraud, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, between approximately May 10, 2018, and May 17, 2019, McKenzie entered a number of different bank branches in New Hampshire, New York, New Jersey, Maine, Massachusetts, and Pennsylvania and made withdrawals from other people’s bank accounts. For each transaction, McKenzie used customers’ personal identification information, including their name and bank account numbers and, for some withdrawals, false drivers’ licenses that contained the bank customers’ personal identifying information and McKenzie’s photograph. In total, McKenzie withdrew approximately $111,000 and attempted to withdraw over $15,500 from other persons’ bank accounts.
McKenzie is scheduled to be sentenced on January 6, 2021.
“Fraud crimes deprive victims of their hard-earned money,” said U.S. Attorney Murray. “Those who engage in bank fraud drive up business costs and undermine public confidence in our financial system. In order to protect our community, we will not hesitate to bring federal charges against fraudsters who come to New Hampshire to commit crimes.”
“Defrauding financial institutions by using the stolen identities of victims creates significant financial losses and hardships for those involved,” said Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division. “The U.S. Postal Inspection Service will continue to conduct investigations of individuals who compromise the personal information of our customers and jeopardize the integrity the U.S. Mail.”
This matter was investigated by the United States Postal Inspection Service. The following police departments also provided assistance: the Dover, Hampstead, and North Hampton Police Departments in New Hampshire; the Andover, Burlington, Lexington, and Methuen Police Departments in Massachusetts; the Kennebunk Police Department in Maine; the New York City Police Department; and the Nutley Police Department in New Jersey. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter.
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Natick Attorney Pleads Guilty to Fraud ChargesRead the Press Release
BOSTON – A real estate developer and attorney pleaded guilty yesterday in federal court in Worcester in connection with a $2.3 million fraud scheme relating to the redevelopment of a multi-family property in Worcester.
James E. Levin, 61, of Natick, pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to defraud the United States and false claims. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Feb. 9, 2021. Levin was charged in August 2016.
From July 2010 to September 2011, Levin, as the manager of 5 May Street Apartments, LLC, applied for and obtained federal funds from the U.S. Department of Housing and Urban Development (HUD), through the City of Worcester, to rehabilitate a multi-unit apartment building at 5 May Street in Worcester. Since the City of Worcester distributes grant funds on behalf of HUD and Massachusetts Department of Housing and Community Development (DHCD), Levin submitted seven payment requests to the City for work he fraudulently claimed he completed on the building and associated costs. In the course of her job with the City of Worcester’s Housing Development Office, Levin’s co-defendant, Jacklyn Sutcivni, allegedly approved the payment requests submitted by Levin, although she knew the requests were fraudulent. It is alleged that this caused the City of Worcester to pay approximately $2,365,050 to Levin. After the City issued the payment, Sutcivni or other City officials submitted reimbursement requests to HUD or DHCD for HUD funds.
Sutcivni has pleaded not guilty and is scheduled to stand trial on May 3, 2021.
The charges of conspiracy to commit wire fraud and wire fraud each provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million, or twice the gross gain or loss, whichever is greater. The charge of conspiracy to defraud the United States provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of submission of false claims provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The indictment also seeks monetary forfeiture in the amount of $2,365,050. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney Michelle L. Dineen Jerrett of Lelling’s Springfield Branch Office is prosecuting the case.
The details contained in the indictment are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mission Man Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man convicted of Involuntary Manslaughter was sentenced on September 28, 2020, by Chief Judge Roberto A. Lange, U.S. District Court.
Steven Burning Breast, age 24, was sentenced to 37 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Burning Breast was indicted by a federal grand jury on November 13, 2019. He pled guilty on July 9, 2020.
The conviction stemmed from an incident that occurred on April 22, 2019, in Todd County, South Dakota. On that date, Burning Breast had been consuming alcohol, and was driving a car eastbound on US Highway 18. The victims, an adult male and an adult female, were passengers in the vehicle. As Burning Breast approached a curve at a high rate of speed, he lost control of the vehicle and left the roadway. The vehicle rolled multiple times, causing the victims to be ejected from the vehicle. The victims died as a result of injuries suffered in the wreck.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Bennett County Sheriff’s Office. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Burning Breast was immediately turned over to the custody of the U.S. Marshals Service.
Mexican cocaine smuggler heads to prisonRead the Press Release
LAREDO, Texas – A 49-year-old woman has been ordered to federal prison following her conviction for conspiring to import cocaine, announced U.S. Attorney Ryan K. Patrick.
Ramona Elizabeth Garcia Gonzalez pleaded guilty July 8.
Today, U.S. District Judge Marina Garcia Marmolejo handed Gonzalez a 48-month term of imprisonment. Not a U.S. citizen, she is expected to face removal proceedings following the sentence.
On Feb. 16, Gonzalez attempted entry into the United States at the Juarez-Lincoln International Bridge in Laredo driving a 2017 Nissan Versa. Upon inspection, an X-ray scan revealed anomalies concealed within her vehicle. At that time, authorities conducted a search and found several bundles of white powder hidden behind the glove box.
The bundles field tested positive for cocaine and weighed approximately 10.88 kilograms with an estimated street value of nearly $275,000.
Gonzalez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance of Customs and Border Protection. Assistant U.S. Attorney David Fawcett prosecuted the case.
Mexican National with Numerous DUI Convictions Pleads GuiltyRead the Press Release
RICHMOND, Va. – A Mexican national recently convicted of his third Driving Under the Influence charge within the previous two years pleaded guilty today to illegally reentering the United States.
According to court documents, Rafael Nepamuceno-Hernandez, 29, first illegally entered the United States in August of 2009, when he was apprehended near the border by the U.S. Border Patrol. He was subsequently prosecuted for and convicted of illegally entering the United States. Five days after his removal to Mexico, Border Patrol Agents again apprehended Nepamuceno-Hernandez in the United States, and he was later again removed to Mexico. Sometime after this second removal, Nepamuceno-Hernandez again illegally reentered the United States, and eventually made his way to Virginia. While in Virginia, Nepamuceno-Hernandez was convicted of Driving Under the Influence on three separate occasions between November of 2018 and June of 2020.
Nepamuceno-Hernandez pleaded guilty to illegal reentry, and faces a maximum penalty of two years years in prison when sentenced on Jan. 14, 2021. 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, and Lyle Boelens, Acting Director of the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO) Washington Field Office, made the announcement after Senior U.S. District Judge Robert E. Payne accepted the plea. Assistant U.S. Attorney Thomas A. Garnett is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:20-cr-62.
Mexican National Sentenced to over 20 Years in Prison for Setting Fire to Drug Smuggling Vessel During U.S. Coast Guard InterdictionRead the Press Release
Tampa, FL – U.S. District Judge Mary S. Scriven has sentenced Jesus Soto-Martinez (41, Michoacan, Mexico) to 21 years and 3 months in federal prison for conspiring to distribute and possess with the intent to distribute five kilograms or more of cocaine while onboard a vessel subject to the jurisdiction of the United States, forcibly interfering with a lawful boarding, and knowingly using fire to commit a felony offense.
Soto-Martinez had pleaded guilty on November 20, 2019.
According to court documents, on February 19, 2019, the U.S. Coast Guard (USCG) Cutter STEADFAST interdicted a go-fast vessel (GFV) carrying Soto-Martinez and his co-conspirators in international waters about 378 nautical miles south of Acapulco, Mexico. The defendants were carrying approximately 2,000 kilograms of cocaine on the GFV. During the pursuit of the vessel, Jose Varges-Merida, a co-defendant, refused to comply with the USCG commands to stop and steered the GFV in the direction of the USCG vessel carrying its law enforcement detachment, causing the USCG vessel to significantly alter course and momentarily become unstable. The coxswain was forced to make evasive maneuvers to avoid the GFV from running over the USCG vessel and its crewmen. The USCG was then able to stop the GFV by using several rounds of disabling fire.
During the boarding of the GFV, Soto-Martinez intentionally started a fire onboard the GFV by lighting one of the fuel barrels on fire. After jumping off the GFV, Soto-Martinez clung to the side of the GFV and lifted up the tarp covering the cocaine bales, seemingly in an effort to ensure the nearby fire spread to the load of drugs. Almost immediately, the fire spread out of control and eventually engulfed the entire vessel. It took 90 minutes to extinguish. The majority of the GFV was burned to the waterline and the vast majority of cocaine was burned to an unsalvageable extent.
“I am extremely grateful to our U.S. Attorney partners for helping us complete the cycle of justice,” said Rear Admiral Brian Penoyer, the 11th Coast Guard District commander. “This case demonstrates the lengths smugglers are willing to go to avoid getting caught and the dangers Coast Guard men and women face as we continue to keep these drugs off the streets and out of our homes.”
This case was investigated by the Panama Express Strike Force, an Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the United States Coast Guard Investigative Service, Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted Assistant United States Attorney Dan Baeza.
Medford Podiatrist Pleads Guilty to Possession of a Controlled Substance by FraudRead the Press Release
PORTLAND, Ore.—A Medford Podiatrist pleaded guilty today for using fraud and deception to obtain controlled substances which he used to feed his personal addiction, announced U.S. Attorney Billy J. Williams.
Patrick T. Code, 60, pleaded guilty today to a one count information charging Obtaining Possession of a Controlled Substance through Misrepresentation, Fraud, Forgery, Deception and Subterfuge.
“Substance addiction is a public safety and health crisis for this community, and no one is immune from the ravages of addiction including professionals in health care. However, the defendant’s conduct in illegally obtaining and using powerful drugs while acting as a trusted health care provider is particularly alarming”, said United States Attorney Williams. “This case was brought in order to protect the community from the ongoing risk to patients posed by the defendant’s actions.”
According to court documents, for several years between June 2016 and May 2019, the defendant wrote prescriptions for 2,876 - 50 mg tablets of tramadol and 78-10 mg tablets of zolpidem using the names of fake patients or the names and information of relatives who were not aware of the prescriptions. The defendant acquired the controlled substances from pharmacies falsely claiming the drugs were for others and used the drugs to feed his own drug addiction
Code faces a maximum sentence of 4 years in prison, a $250,000 fine and 1 year of supervised release. Code will be sentenced on December 3, 2020, before U.S. District Court Judge Ann L. Aiken.
The Drug Enforcement Administration investigated this case. It is being prosecuted by Joseph H. Huynh, Assistant U.S. Attorneys for the District of Oregon.
Massachusetts Man Who Defrauded Connecticut Art Dealer is SentencedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that HAROLD GORDON, 71, of Templeton, Massachusetts, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to five years of probation for defrauding a Connecticut art dealer.
According to court documents and statements made in court, in approximately October 2012, Gordon began communicating by phone and email with a respected art dealer and appraiser (the “victim”) in Connecticut, to induce the victim to purchase a tall antique desk, commonly known as a “secretary desk.” In these communications, Gordon falsely represented to the victim that the desk was decorated and dedicated as a Civil War memorial for a Connecticut soldier who died at the Battle of Antietam while fighting for the Union Army. These misrepresentations included Gordon’s claims that the surviving soldiers in the fallen soldier’s Connecticut regiment had crafted the desk to serve as a war memorial for the deceased soldier’s family; that other than cleaning the vintage clock, Gordon had done nothing else to refurbish or decorate the desk; and that Gordon had purchased the desk from a descendant of the deceased Connecticut soldier.
In early March 2014, the victim examined the secretary desk at Gordon’s Massachusetts residence, and then took several subsequent steps to confirm the desk’s authenticity, such as taking a portion of the desk apart. The victim then purchased the desk from Gordon for $64,500. At Gordon’s request, the victim provided the payment in three separate checks.
In February 2015, the victim sold the desk to the Wadsworth Atheneum Museum of Art in Hartford. After completing this transaction, the victim sent Gordon an additional payment of $25,000 because the victim had made a significant profit from the sale.
In February 2018, various third parties made inquiries to the victim about the authenticity of the secretary desk. The victim contacted Gordon, who admitted that he had refurbished and decorated the desk himself, created the false narrative about the desk’s history, and targeted the victim to purchase it due to the victim’s respected stature in the American folk art community. The victim then made full restitution to the Wadsworth Atheneum.
Judge Meyer ordered Gordon to pay restitution of $84,500 to the victim.
On January 29, 2019, Gordon pleaded guilty to one count of wire fraud.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Hal Chen.
Massachusetts Man Re-Sentenced to 30 Years in Prison for Conspiring to Murder U.S. Citizens, Including Police, on Behalf of ISISRead the Press Release
BOSTON – An Everett man was re-sentenced yesterday to 30 years in prison for conspiring to murder U.S. citizens, including police officers, on behalf of the Islamic State of Iraq and Syria (ISIS).
David Daoud Wright, a/k/a Dawud Sharif Abdul Khaliq, a/k/a Dawud Sharif Abdul Khaliq, 31, of Everett, Mass., was re-sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to 30 years in prison and a lifetime of supervised release. In December 2017, Wright was sentenced to 28 years in prison after a federal jury convicted him of conspiracy to provide material support to ISIS, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to obstruct justice and obstruction of justice. In August 2019, the First Circuit Court of Appeals vacated count one (conspiracy to provide material support to ISIS) and affirmed the other counts. The case was remanded to the district court for re-sentencing, which took place yesterday.
“Mr. Wright is a homegrown terrorist who plotted to kill innocent Americans on behalf of ISIS, including specifically targeting police officers,” said United States Attorney Andrew E. Lelling. “He radicalized himself and others, pledged allegiance to a terrorist organization, and conspired with his now-deceased uncle to kill police officers with a combat knife. This case is a reminder of the persistent terrorism threat to our citizens and law enforcement officers.”
“ISIS soldier David Wright betrayed his country and forfeited his freedom when he conspired with others to attack and murder innocent civilians and police officers in support of a sworn, barbaric enemy of the United States. This sentence ensures they remain worlds apart,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Identifying and disrupting terrorist plots, both foreign and domestic, is the FBI’s top priority, and the round-the-clock teamwork of our partners within our Massachusetts Joint Terrorism Task Force saved innocent lives, and kept Wright’s endgame of martyrdom out of reach.”
Beginning in at least February 2015, Wright began discussing ISIS’ call to kill non-believers in the United States with his uncle, Usaamah Abdullah Rahim, and co-defendant Nicholas Alexander Rovinski. Specifically, Wright created a “martyrdom” operation cell in Massachusetts. In April 2015, Wright created a Twitter page for the “Lions of America” and published a document entitled, Internal Conquest, on the internet in which Wright called on Muslims living in the United States to kill their fellow citizens.
Wright also plotted with Rahim and Rovinski to behead U.S. citizens at the direction of ISIS, and identified a New York woman as the first beheading target. Rahim purchased three knives for this plot. In addition, Wright’s ISIS cell was in direct communication with ISIS recruiter and attack facilitator, Junaid Hussain, who provided Rahim with an encrypted document containing details about the intended victim. In August 2015, Hussain was killed in an airstrike in Raqqah, Syria.
In preparation for their attack, Wright conducted extensive research on weapons, knives, machetes, bombing making components and methods to subdue their victims. Wright also conducted research on “what tranquilizer put humans to sleep instantly” and “how to start a secret militia in the United States.”
On June 2, 2015, Wright caused a terrorist attack in Massachusetts and caused his uncle, Rahim, to be killed. Rahim was shot and killed after he attacked law enforcement officers with a large fighting knife in a Roslindale, Mass., parking lot. Two hours before Rahim attacked the police, Wright directed and encouraged Rahim to pursue martyrdom by attacking the “boys in blue.” Within minutes of learning of his uncle’s death from a family member, Wright deleted data from his laptop computer by restoring it to factory settings and deleted call logs on his cellphone that showed that he had spoken to Rahim that morning. Wright also instructed Rahim to destroy his electronic devices before attacking the police officers.
U.S. Attorney Lelling and FBI SAC Bonavolonta made the announcement. This investigation was conducted by the Boston Joint Terrorism Task Force (JTTF); Boston Police Department; Massachusetts State Police; Everett Police Department; and Customs and Border Protection. The Suffolk District Attorney’s Office and police in the United Kingdom also provided valuable assistance. The case was prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann, Chief of Lelling’s National Security Unit prosecuted the case.
Man Pleads Guilty to Sex Trafficking Women in Central IllinoisRead the Press Release
PEORIA, Ill. – Following jury selection, as his trial was about to begin, Franshon Stapleton, 47, entered pleas of guilty to sex trafficking young women in Central Illinois from 2016 to May 2018. Stapleton pleaded guilty to all the charges against him on Sept. 28, 2020, in Peoria, Ill., before U.S. District Judge James E. Shadid. Sentencing for Stapleton has been scheduled on Jan. 29, 2021.
U.S. Attorney John Milhiser stated, “I commend the strength of the victims in this case who came forward to provide critical evidence against this defendant.” Milhiser also recognized the sustained efforts by federal and local law enforcement to locate, investigate and prosecute dangerous predators and remove them from our communities.
According to court documents, in 2017 and 2018, Stapleton, of Springfield, who was residing in a motel in Champaign Ill., exploited the vulnerabilities of young women, including their drug additions and homelessness, to force them to engage in commercial sex acts. Stapleton recruited young women from Champaign, Sangamon and Peoria counties, who often were dealing with the effects of heroin and crack cocaine addictions.
Stapleton used the website BackPage, which the Department of Justice seized in April 2018, to advertise commercial sex acts to be performed by the women he recruited. Stapleton used violence and threats of violence to force the women to engage in sex with men. To coerce women into continued sex trafficking, Stapleton supplied them with drugs and threatened to send women into withdrawal sickness by withholding drugs.
Stapleton has remained in law enforcement custody since his arrest in May 2018. Stapleton faces a statutory minimum sentence of 15 years and up to life in prison for each of the four sex trafficking counts. The penalty for each of the remaining charges to which he pleaded guilty is up to five years imprisonment for engaging in a conspiracy (one count) and for use of a facility of interstate commerce in aid of a racketeering enterprise (eleven counts).
The charges are the result of an investigation by U.S. Immigration and Customs Enforcement Homeland Security Investigations; the Urbana Police Department; the Champaign County Sheriff’s Office; the Illinois State Police Forensics Laboratory; and, the Champaign Police Department with cooperation from Champaign County State’s Attorney Julia Reitz. Assistant U.S. Attorneys Elly M. Peirson and Ryan Finlen represent the government in the prosecution
Man Pleads Guilty to Robbing a Sapulpa Dollar GeneralRead the Press Release
Trentin Anton Richardson, 20, of Beggs, pleaded guilty Tuesday in federal court to one count of robbery and another count of discharging a firearm in relation to a crime of violence, announced U.S. Attorney Trent Shores.
“The Justice Department is reducing violent crime here in Tulsa and all across America. We’re doing that through our partnerships with local and federal law enforcement. Armed robber Trentin Richardson made a bad decision when he robbed a local store and discharged a gun in the process. Patrons feared for their lives. Now, he is facing the consequence for his actions,” said U.S. Attorney Trent Shores.
On June 4, 2020, Richardson used a Ruger semi-automatic pistol to rob a Dollar General in Sapulpa. Richardson, wearing a mask and gloves, entered the store, locked the door, fired one round into the ceiling, and ordered everyone inside to get on the ground. He then took money from the register and safe along with money and cell phones belonging to customers. Richardson was apprehended by officers shortly after he exited the store.
The Sapulpa Police Department, Creek County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Richard M. Cella is prosecuting the case.
Los Angeles Man Charged with Running $350 Million Ponzi SchemeRead the Press Release
SAN FRANCISCO – A criminal information was filed today in federal court alleging that Lewis Wallach, the former CEO of a Marin-based company known as Professional Financial Investors, or PFI, ran the company for years as a Ponzi scheme, announced United States Attorney David L. Anderson and Federal Bureau Investigation Assistant Special Agent in Charge Sid Patel. Wallach is charged in the information with one count of wire fraud and one count of conspiracy to commit wire fraud. Additional facts regarding the investigation and charges can be found here: https://youtu.be/M30PEgy0txo
“We allege that PFI became a classic Ponzi scheme,” said U.S. Attorney Anderson. “Money taken from new investors was allegedly used to pay existing investors while losses mounted behind the scenes. This alleged Ponzi scheme came crashing down just four months ago after the death of PFI’s founder in May 2020. We allege that for years Wallach conspired with PFI’s founder to fool investors.”
“The FBI has been working to identify victims in this Ponzi scheme,” said FBI ASAC Patel. “We may not be able to make the victims whole, but we are determined to do everything we can under the federal legal process to right these wrongs. We know this is a particularly difficult time of financial insecurity for so many Americans, and that fraudulent investments can be devastating to families and businesses.”
According to the information, PFI was a real-estate firm that owned approximately 70 properties throughout Marin and Sonoma Counties. Wallach managed PFI along with the founder of the firm, who has since deceased, the information alleges, and PFI raised more than $350 million from investors since 2015. The information alleges that from at least 2015, Wallach and the founder knew that the revenues generated by PFI properties could not meet PFI’s obligations to pay interest and distributions, but that they hid the truth from investors. To the contrary, according to the information, Wallach and the founder continued to falsely reassure investors, even during the COVID-19 pandemic, that PFI had the financial reserves to survive.
The information also alleges that from 2015 to May 2020, Wallach diverted more than $26 million from PFI for his personal benefit, including personal investments in a land development project in Texas, an office space development project in California, and oil and gas exploration and development projects, as well as payment of his personal credit cards.
An information merely alleges that crimes have been committed, and Wallach is presumed innocent until proven guilty beyond a reasonable doubt. If convicted of wire fraud or conspiracy to commit wire fraud under 18 U.S.C. §§ 1343 or 1349, Wallach faces a maximum sentence of 20 years’ imprisonment on each count, a fine of $250,000, and restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The prosecution is the result of an investigation by the Federal Bureau of Investigation. The United States Attorney’s Office and the Federal Bureau of Investigation also thank the San Francisco Regional Office of the Securities and Exchange Commission, which conducted a parallel investigation that was also announced today.
Leader of International Money Laundering Organization in Dominican Republic Arraigned on Federal ChargesRead the Press Release
NEWARK, N.J. – The leader of an international money laundering organization in the Dominican Republic was arraigned in New Jersey today after being extradited to the United States, U.S. Attorney Craig Carpenito announced.
Luis Velazquez-Cordero (a/k/a “El Pequeño”), 35, of the Dominican Republic, is charged by indictment with five counts of money laundering and conspiracy to commit money laundering for his role in laundering millions in illegal cash drug proceeds. The indictment includes a forfeiture money judgment for $80 million, representing a portion of the property involved in the money laundering scheme. Velazquez-Cordero was arrested in the Dominican Republic on July 28, 2020, and extradited to the United States. He was arraigned today by videoconference before U.S. District Judge Katherine Hayden.
Eight other defendants have been charged in New Jersey federal court with money laundering and other charges related to the same international conspiracy.
According to documents filed in this case and statements made in court:
From August 2016 through July 2020, Velazquez-Cordero directed conspirators operating in New Jersey, New York, and Florida to pick up millions in cash drug proceeds from drug trafficking organizations operating in the U.S. and exchange the cash for cashier’s checks at U.S. banks. Velazquez-Cordero provided the amount of each check, the payee, and the bank accounts into which the checks should be deposited. The checks were then deposited into the payee accounts, many of which were controlled by shell corporations and used exclusively as a means to facilitate laundering illegal drug proceeds. The scheme was designed to conceal the nature, source, ownership, and control of the illegal drug proceeds in order to avoid scrutiny by law enforcement and banking institutions, and allegedly resulted in $80 million in cash from illegal drug sales being transferred back to drug trafficking organizations in other countries.
Each count of money laundering carries a maximum penalty of 20 years in prison and a fine of $500,000 or twice the amount involved in the offense, whichever is greater.
U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson, as well as the DEA Special Operations Division; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; officers of U.S. Customs and Border Protection, under the direction of Troy Miller, New York Field Office; the Morristown, New Jersey, Police Department, under the direction of Acting Chief Darnell Richardson; the Clifton, New Jersey, Police Department, under the direction of Acting Chief Tom Rinaldi; the Passaic, New Jersey, Police Department, under the direction of Chief Luis A. Guzman; the New York City Police Department, under the direction of Commissioner Dermot Shea; the New York City Office of the Special Narcotics Prosecutor, under the direction of Special Narcotics Prosecutor Bridget G. Brennan; the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella, with the investigation leading to today’s charges. He also thanked the Dirección Nacional de Control de Drogas of the Dominican Republic (the National Directorate of Drug Control) and its President, Admiral José Manuel Cabrera Ulloa; the U.S. State Department and DOJ Office of International Affairs, for their assistance in the investigation.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of Asset Recovery & Money Laundering Unit of the Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Las Cruces man sentenced to 16 years for kidnapping and gun chargesRead the Press Release
ALBUQUERQUE, N.M. – Samuel Chavez, 61, of Las Cruces, New Mexico, was sentenced in federal court today to 16 years and eight months in prison for kidnapping and firearms charges. Chavez pleaded guilty on Nov. 18, 2019.
According to public court records, on Oct. 18, 2017, Chavez arrived at the home of his first victim, from whom he demanded $250,000 at gunpoint. When the victim was unable to pay, Chavez tied the victim and forced him to call his grandson to lure him to the home. When the second victim arrived, Chavez knocked him unconscious, tied him, and demanded money at gunpoint when the victim regained consciousness.
Chavez then left the residence to make contact with a third victim and, again, demanded money. Chavez tied the third victim, but she was able to escape and called the police.
At the time Chavez committed the crimes, he was in possession of ammunition, a pistol with an obliterated serial number, an unregistered silencer, and an unregistered bulletproof vest. It is a federal crime to possess a firearm with an obliterated serial number or an unregistered silencer, and, as a previously convicted felon, Chavez could not legally possess a firearm, ammunition or body armor.
In addition to his term in prison, Chavez will be subject to five years of supervised release.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. Assistant U.S. Attorney Maria Y. Armijo prosecuted the case.
Laredo eye doctor pays over $3M to resolve fraud claimsRead the Press Release
LAREDO, Texas - A South Texas doctor has agreed to pay $3,234,900.50 to resolve allegations he fraudulently submitted claims to the Medicare program for medically unnecessary tests and procedures, announced U.S. Attorney Ryan K. Patrick.
Dr. David Mora is an optometrist who owns the Mora Eye Clinic in Laredo.
The U.S. Attorney’s Office (USAO) conducted a proactive analysis of claims data and determined Mora to be one of the most significant statistical outliers in the nation for certain categories of claims.
From Jan. 1, 2013, to June 14, 2019, Mora billed Medicare for medically unnecessary punctal plug insertion, sensorimotor testing, vision therapy/orthoptics and amniotic membrane placement. Medical need did not appear to support many of the claims. The patient’s condition did not warrant the service or test or many treatments were repeated on the same patient more often than what would be medically reasonable or necessary.
As part of the settlement, Mora and the Mora Eye Clinic agreed to a three-year integrity agreement with the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). The agreement promotes compliance with the statutes, program requirements and written directives of Medicare and all other federal health care programs. Among other compliance obligations, Mora and the clinic must establish and maintain a compliance program and engage an independent review organization to perform quarterly claims reviews. The agreement also requires Mora and Mora Eye Clinic to routinely report on these obligations to DHHS-OIG.
The USAO jointly conducted the investigation with FBI and DHHS-OIG. Assistant U.S. Attorney Brad Gray handled the matter.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
Kansas Drug Trafficker Sentenced to 20 YearsRead the Press Release
KANSAS CITY, KAN. – A man who trafficked methamphetamine in the metro Kansas City area was sentenced today to 20 years in federal prison, U.S. Attorney Stephen McAllister said.
Michael Pruitt, 50, Kansas City, Kan., pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine and one count of unlawful possession of a firearm by a felon.
In his plea, Pruitt admitted he supplied methamphetamine in pound quantities to dealers who were part of a drug trafficking organization operating in metro Kansas City. Pruitt had storage units where he kept firearms and drugs that he sold. He was observed leaving a unit that was found to contain 48 firearms.
McAllister commended the Kansas Bureau of Investigation, the FBI and Assistant U.S. Attorney Sheri Catania for their work on the case.
Justice Department Settles Sexual Harassment and Race Discrimination Lawsuit Against Manager and Owners of Virginia Rental PropertiesRead the Press Release
The Justice Department today announced that Gary T. Price, a manager of rental properties in and around Harrisonburg, Virginia, together with owners of the properties, Alberta Lowery and GTP Investment Properties, LLC, will pay $335,000 to resolve allegations that Price sexually harassed multiple female tenants and discriminated in housing on the basis of race in violation of the federal Fair Housing Act.
The consent decree, which must still be approved by the court, will resolve a complaint filed today in the U.S. District Court for the Western District of Virginia alleging that Price violated the Fair Housing Act by making unwelcome sexual comments and advances toward female tenants, offering housing benefits in exchange for sexual acts, and taking or threatening adverse housing actions against women who refused his sexual demands. The complaint also alleges that Price violated the Act by using racial slurs with respect to tenants and tenants’ guests, and by prohibiting or attempting to prohibit tenants from entertaining African-American guests in their homes because of the guests’ race. Alberta Lowery and GTP Investment Properties, LLC are named as defendants in the lawsuit because they are owners of properties at which the discriminatory conduct took place and Price was acting as their agent when he engaged in the illegal acts.
“No woman should ever have to endure abusive and demeaning sexual harassment to secure housing for herself or her family, nor should any individual be subjected to vile racial harassment or other race discrimination related to housing,” said Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division. “Such conduct is both illegal and reprehensible, and the Justice Department will work vigorously and tirelessly to combat these types of discrimination and obtain relief for victims.”
“Our office has prioritized combatting sexual harassment in housing, as is evidenced in this significant investigation and resolution,” said Acting U.S. Attorney Daniel Bubar. “We will continue to seek to end this illegal practice and recognize the difficult challenges faced by women, particularly in today’s trying times, who are simply seeking to provide basic needs for their families. Today’s settlement ought to send a strong message that we will not tolerate harassment and discrimination in housing and will continue to closely partner with the Civil Rights Division to enforce the Fair Housing Act.”
Under the consent decree, the defendants will pay $330,000 to compensate eight victims of discrimination already identified by the Justice Department, together with any additional individuals who have been harmed by defendants’ discriminatory conduct. In addition, defendants must pay $5,000 as a civil penalty to vindicate the public interest. The consent decree also bars Gary Price from participating in the management of rental properties in the future and requires defendants to take other steps to prevent future discrimination.
Individuals who believe they may have been victims of sexual harassment, race discrimination or other types of housing discrimination at rental dwellings owned or managed by Gary T. Price, Alberta Lowery or GTP Investment Properties, LLC, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line toll free, at 1-833-591-0291 and, after selecting English or Spanish, press 22 to leave a message in the voicemail box related to U.S. v. Gary Price, GTP Properties, and Alberta Lowery.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of prohibited sex discrimination under this law. The Justice Department's Sexual Harassment in Housing Initiative is an effort to combat sexual harassment in housing led by the Civil Rights Division in coordination with U.S. Attorney’s Offices across the country. The Attorney General recently reaffirmed this commitment by directing the Justice Department to deploy all available enforcement tools against anyone who tries to capitalize on the COVID-19 crisis by sexually harassing people in need of housing. The goal of the department’s initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. As part of the initiative, the Justice Department developed a public service announcement and formed a joint task force with Department of Housing and Urban Development (HUD) to combat sexual harassment in housing.
Since launching the Initiative in October 2017, the Department of Justice has filed 19 lawsuits alleging sexual harassment in housing. The Justice Department has filed or settled 24 sexual harassment cases since January 2017, providing for over $3.1 million for victims of sexual harassment in housing.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt. Individuals who believe they may have been victims of sexual harassment or other forms of housing discrimination can submit a report to the Department of Justice by calling 1-800-896-7743 or visiting civilrights.justice.gov, or to the HUD by calling 1-800-669-9777 or visiting HUD’s website.
Judge sentences St. Louis man for dealing drugs and being a felon in possession of a firearmRead the Press Release
ST. LOUIS, MO – United States District Judge Ronnie L. White sentenced Miles Davis to 51 months in prison. The 36-year-old St. Louis resident pleaded guilty to one count of felon in possession of a firearm and two counts of possession with intent to distribute.
On October 9, 2019, officers from the St. Louis Metropolitan Police Department (SLMPD) were patrolling the 4000 block of Pleasant and noticed Davis watching their patrol car suspiciously. While watching the patrol car, the officers noticed Davis grab his satchel and hide between two parked cars.
Concerned Davis was either grabbing or getting rid of a weapon, one SLMPD officer got out of the patrol car and approached Davis. As the officer approached, Davis removed a handgun from the satchel and threw it under one of the parked cars. The officer ordered Davis to come from between the parked cars, handcuffed Davis and advised him of his Miranda rights. Davis told the officer that when he saw the police he was scared, because he is a convicted felon.
A computer check verified Davis was a convicted felon. The handgun recovered from under the parked car is a Hi-Pointe 9mm caliber pistol with seven rounds of ammunition. Police also found multiple bags of cocaine base (crack) and fentanyl on Davis. Davis admitted he sold drugs and sold someone drugs in exchange for the pistol.
St. Louis Metropolitan Police Department Officers investigated the case. Special Assistant United States Attorney Jennifer Szczucinski prosecuted the case for the United States Attorney’s Office as part of the Safer Streets Initiative. Missouri Attorney General Schmitt and U.S. Attorney Jeff Jensen launched the initiative in January of 2019 as an unprecedented state and federal partnership to prosecute violent crime in St. Louis.
Jersey City Police Officer Admits to Fraud Involving Off-Duty Work AssignmentsRead the Press Release
NEWARK, N.J. – A Jersey City police officer today admitted to conspiring to defraud Jersey City by obtaining compensation for off-duty work that she did not perform, U.S. Attorney Craig Carpenito announced.
Gicella Sanchez, 36, of Jersey City, pleaded guilty by videoconference before U.S. District Judge John M. Vazquez to an information charging her with one count of conspiracy to defraud a local government receiving federal funds.
According to documents filed in this case and statements made in court:
Private contractors and businesses sometimes needed to use the services of off-duty Jersey City police officers for certain projects, including work within Jersey City that could obstruct the flow of traffic. The off-duty assignments were made by a Jersey City Police Department-designated coordinator for the district in which the assignment was to be carried out. Officers receiving these off-duty assignments were required to complete and provide to the coordinator a voucher that indicated, among other things, the hours worked on particular off-duty assignments.
From November 2014 through June 2016, Sanchez conspired with another Jersey City police officer who was authorized to assign off-duty work and sign vouchers. That officer – with Sanchez’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Sanchez had completed certain off-duty assignments that she never actually performed. In other instances, Sanchez showed up to off-duty job sites, but left before her shift ended. As a result, Sanchez accepted thousands of dollars for off-duty work that she never performed.
Sanchez faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Sanchez must forfeit $9,095 in criminal proceeds she received from her role in the scheme and pay restitution of $2,490. Sentencing is scheduled for Feb. 2, 2021.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The Jersey City Police Department is cooperating with the investigation.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.
Defense counsel: Daniel J. Welsh Esq., Jersey City
JPMorgan Chase & Co. Agrees to Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries MarketsRead the Press Release
JPMorgan Chase & Co. (JPMorgan), a New York, New York-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to two distinct schemes to defraud: the first involving tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
JPMorgan entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Connecticut charging the company with two counts of wire fraud. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the Securities Exchange Commission (SEC) under a separate agreement with the SEC being announced today.
“For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution — which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains — reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”
“JPMorgan engaged in two separate years-long market manipulation schemes,” said U.S. Attorney John H. Durham of the District of Connecticut. “Not only will the company pay a substantial financial penalty and return money to victims, but this agreement requires JPMorgan to self-report violations of the federal anti-fraud laws and cooperate in any future criminal investigations. I thank the FBI for its dedication in investigating these deceptive trading practices and other sophisticated financial crimes.”
“For nearly a decade, a significant number of JP Morgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Today's deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued.”
According to admissions and court documents, between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan’s precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. In tens of thousands of instances, traders on the precious metals desk placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts. In addition, on certain occasions, traders on the precious metals desk engaged in trading activity that was intended to deliberately trigger or defend barrier options held by JPMorgan and thereby avoid losses.
One of the traders on the precious metals desk, John Edmonds, 38, of Brooklyn, New York, pleaded guilty on Oct. 9, 2018, to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing, and his sentencing, at this time, has not been scheduled before U.S. District Judge Robert N. Chatigny of the District of Connecticut. Another one of the traders on the precious metals desk, Christian Trunz, 35, of New York, New York, pleaded guilty on Aug. 20, 2019, to one count of conspiracy to engage in spoofing and one count of spoofing in connection with his precious metals futures contracts trading at JPMorgan and another financial services firm, and his sentencing is scheduled for Jan. 28, 2021, before U.S. District Judge Sterling Johnson of the Eastern District of New York.
Finally, as part of the investigation, the department obtained a superseding indictment on Nov. 15, 2019 against three former JPMorgan traders, Gregg Smith, Michael Nowak, and Christopher Jordan, and one former salesperson, Jeffrey Ruffo, in the Northern District of Illinois that charged them for their alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the precious metals futures contracts markets. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Also according to admissions and court documents, between approximately April 2008 and January 2016, traders on JPMorgan’s U.S. Treasuries desk located in New York and London engaged in a scheme to defraud in connection with the purchase and sale of U.S. Treasury futures contracts that traded on the Chicago Board of Trade, which is a commodities exchange operated by the CME Group Inc., and of U.S. Treasury notes and bonds traded in the secondary cash market (the U.S. Treasury futures, notes, and bonds, collectively, U.S. Treasury Products). In thousands of instances, traders on the U.S. Treasuries desk placed orders to buy and sell U.S. Treasury Products with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for U.S. Treasury Products.
As part of the DPA, JPMorgan, and its subsidiaries JPMorgan Chase Bank, N.A. (JPMC) and J.P. Morgan Securities LLC (JPMS) have agreed to, among other things, continue to cooperate with the Fraud Section and the U.S. Attorney’s Office for the District of Connecticut in any ongoing or future investigations and prosecutions concerning JPMorgan, JPMC, JPMS, and their subsidiaries and affiliates, and their officers, directors, employees and agents. As part of its cooperation, JPMorgan, JPMC, and JPMS are required to report evidence or allegations of conduct which may constitute a violation of the wire fraud statute, the anti-fraud, anti-spoofing and/or anti-manipulation provisions of the Commodity Exchange Act, the securities and commodities fraud statute, and federal securities laws prohibiting manipulative and deceptive devices. In addition, JPMorgan, JPMC, and JPMS have also agreed to enhance their compliance program where necessary and appropriate, and to report to the government regarding remediation and implementation of their enhanced compliance program.
The department reached this resolution with JPMorgan based on a number of factors, including the nature and seriousness of the offense conduct, which spanned eight years and involved tens of thousands of instances of unlawful trading activity; JPMorgan’s failure to fully and voluntarily self‑disclose the offense conduct to the department; JPMorgan’s prior criminal history, including a guilty plea on May 20, 2015, for similar misconduct involving manipulative and deceptive trading practices in the foreign currency exchange spot market (FX Guilty Plea); and the fact that substantially all of the offense conduct occurred prior to the FX Guilty Plea.
JPMorgan received credit for its cooperation with the department’s investigation and for the remedial measures taken by JPMorgan, JPMC, and JPMS, including suspending and ultimately terminating individuals involved in the offense conduct, adopting heightened internal controls, and substantially increasing the resources devoted to compliance. Significantly, since the time of the offense conduct, and following the FX Guilty Plea, JPMorgan, JPMC, and JPMS engaged in a systematic effort to reassess and enhance their market conduct compliance program and internal controls. These enhancements included hiring hundreds of new compliance officers, improving their anti-fraud and manipulation training and policies, revising their trade and electronic communications surveillance programs, implementing tools and processes to facilitate closer supervision of traders, taking into account employees’ commitment to compliance in promotion and compensation decisions, and implementing independent quality assurance testing of non-escalated and escalated surveillance alerts. Based on JPMorgan’s, JPMC’s and JPMS’ remediation and the state of their compliance program, the department determined that an independent compliance monitor was unnecessary.
Today, the CFTC announced a separate settlement with JPMorgan, JPMC, and JPMS in connection with a related, parallel proceeding. Under the terms of that resolution, JPMorgan agreed to pay approximately $920 million, which includes a civil monetary penalty of approximately $436 million, as well as restitution and disgorgement that will be credited to any such payments made to the department under the DPA. Also, the SEC announced today a separate settlement with JPMS in connection with a related, parallel proceeding regarding trading activity in the secondary cash market for U.S. Treasury notes and bonds. Under the terms of that resolution, JPMS agreed to pay $10 million in disgorgement and a civil monetary penalty of $25 million.
The FBI’s New York Field Office investigated this case. Assistant Chief Avi Perry and Trial Attorney Matthew F. Sullivan of the Fraud Section and Assistant U.S. Attorney Jonathan Francis of the District of Connecticut prosecuted the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/jpmorgan-dpa or call (888) 549-3945.
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.
JPMorgan Chase & Co. Agrees to Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries MarketsRead the Press Release
JPMorgan Chase & Co. (JPMorgan), a New York, New York-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to two distinct schemes to defraud: the first involving tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
JPMorgan entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Connecticut charging the company with two counts of wire fraud. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the Securities Exchange Commission (SEC) under a separate agreement with the SEC being announced today.
“For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution — which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains — reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”
“JPMorgan engaged in two separate years-long market manipulation schemes,” said U.S. Attorney John H. Durham of the District of Connecticut. “Not only will the company pay a substantial financial penalty and return money to victims, but this agreement requires JPMorgan to self-report violations of the federal anti-fraud laws and cooperate in any future criminal investigations. I thank the FBI for its dedication in investigating these deceptive trading practices and other sophisticated financial crimes.”
“For nearly a decade, a significant number of JP Morgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Today's deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued.”
According to admissions and court documents, between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan’s precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. In tens of thousands of instances, traders on the precious metals desk placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts. In addition, on certain occasions, traders on the precious metals desk engaged in trading activity that was intended to deliberately trigger or defend barrier options held by JPMorgan and thereby avoid losses.
One of the traders on the precious metals desk, John Edmonds, 38, of Brooklyn, New York, pleaded guilty on Oct. 9, 2018, to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing, and his sentencing, at this time, has not been scheduled before U.S. District Judge Robert N. Chatigny of the District of Connecticut. Another one of the traders on the precious metals desk, Christian Trunz, 35, of New York, New York, pleaded guilty on Aug. 20, 2019, to one count of conspiracy to engage in spoofing and one count of spoofing in connection with his precious metals futures contracts trading at JPMorgan and another financial services firm, and his sentencing is scheduled for Jan. 28, 2021, before U.S. District Judge Sterling Johnson of the Eastern District of New York.
Finally, as part of the investigation, the department obtained a superseding indictment on Nov. 15, 2019 against three former JPMorgan traders, Gregg Smith, Michael Nowak, and Christopher Jordan, and one former salesperson, Jeffrey Ruffo, in the Northern District of Illinois that charged them for their alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the precious metals futures contracts markets. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Also according to admissions and court documents, between approximately April 2008 and January 2016, traders on JPMorgan’s U.S. Treasuries desk located in New York and London engaged in a scheme to defraud in connection with the purchase and sale of U.S. Treasury futures contracts that traded on the Chicago Board of Trade, which is a commodities exchange operated by the CME Group Inc., and of U.S. Treasury notes and bonds traded in the secondary cash market (the U.S. Treasury futures, notes, and bonds, collectively, U.S. Treasury Products). In thousands of instances, traders on the U.S. Treasuries desk placed orders to buy and sell U.S. Treasury Products with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for U.S. Treasury Products.
As part of the DPA, JPMorgan, and its subsidiaries JPMorgan Chase Bank, N.A. (JPMC) and J.P. Morgan Securities LLC (JPMS) have agreed to, among other things, continue to cooperate with the Fraud Section and the U.S. Attorney’s Office for the District of Connecticut in any ongoing or future investigations and prosecutions concerning JPMorgan, JPMC, JPMS, and their subsidiaries and affiliates, and their officers, directors, employees and agents. As part of its cooperation, JPMorgan, JPMC, and JPMS are required to report evidence or allegations of conduct which may constitute a violation of the wire fraud statute, the anti-fraud, anti-spoofing and/or anti-manipulation provisions of the Commodity Exchange Act, the securities and commodities fraud statute, and federal securities laws prohibiting manipulative and deceptive devices. In addition, JPMorgan, JPMC, and JPMS have also agreed to enhance their compliance program where necessary and appropriate, and to report to the government regarding remediation and implementation of their enhanced compliance program.
The department reached this resolution with JPMorgan based on a number of factors, including the nature and seriousness of the offense conduct, which spanned eight years and involved tens of thousands of instances of unlawful trading activity; JPMorgan’s failure to fully and voluntarily self‑disclose the offense conduct to the department; JPMorgan’s prior criminal history, including a guilty plea on May 20, 2015, for similar misconduct involving manipulative and deceptive trading practices in the foreign currency exchange spot market (FX Guilty Plea); and the fact that substantially all of the offense conduct occurred prior to the FX Guilty Plea.
JPMorgan received credit for its cooperation with the department’s investigation and for the remedial measures taken by JPMorgan, JPMC, and JPMS, including suspending and ultimately terminating individuals involved in the offense conduct, adopting heightened internal controls, and substantially increasing the resources devoted to compliance. Significantly, since the time of the offense conduct, and following the FX Guilty Plea, JPMorgan, JPMC, and JPMS engaged in a systematic effort to reassess and enhance their market conduct compliance program and internal controls. These enhancements included hiring hundreds of new compliance officers, improving their anti-fraud and manipulation training and policies, revising their trade and electronic communications surveillance programs, implementing tools and processes to facilitate closer supervision of traders, taking into account employees’ commitment to compliance in promotion and compensation decisions, and implementing independent quality assurance testing of non-escalated and escalated surveillance alerts. Based on JPMorgan’s, JPMC’s and JPMS’ remediation and the state of their compliance program, the department determined that an independent compliance monitor was unnecessary.
Today, the CFTC announced a separate settlement with JPMorgan, JPMC, and JPMS in connection with a related, parallel proceeding. Under the terms of that resolution, JPMorgan agreed to pay approximately $920 million, which includes a civil monetary penalty of approximately $436 million, as well as restitution and disgorgement that will be credited to any such payments made to the department under the DPA. Also, the SEC announced today a separate settlement with JPMS in connection with a related, parallel proceeding regarding trading activity in the secondary cash market for U.S. Treasury notes and bonds. Under the terms of that resolution, JPMS agreed to pay $10 million in disgorgement and a civil monetary penalty of $25 million.
The FBI’s New York Field Office investigated this case. Assistant Chief Avi Perry and Trial Attorney Matthew F. Sullivan of the Fraud Section and Assistant U.S. Attorney Jonathan Francis of the District of Connecticut prosecuted the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/jpmorgan-dpa or call (888) 549-3945.
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.
Husband and Wife Indicted and Arrested for Health Care FraudRead the Press Release
SAN JUAN, Puerto Rico – On September 24, 2020, a Federal Grand Jury in the District of Puerto Rico returned two separate indictments charging Robert Crespo Zamora and Carmen J. Pagán Domínguez with health care fraud, aggravated identity theft, conspiracy to commit health care fraud, obstruction of a criminal investigation related to health care offenses, and mail fraud conspiracy, announced W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico. The Office of Inspector General for the United States Department of Health and Human Services (HHS-OIG) led the investigation with the collaboration of the United States Postal Inspection Service (USPIS). The indictments were unsealed today upon the arrest of the two defendants by federal law enforcement officers from the HHS-OIG and USPIS.
A first indictment alleges that, from in or about November 2015, through in or about May 2020, defendants Carmen J. Pagán Domínguez and Robert Crespo Zamora, enriched themselves by causing the submission of at least one thousand two (1,002) false and fraudulent claims for non-invasive cardiovascular studies to Medicare, in the amount of $259,147.71. Cardiology Medical Group (CMG) and Cardiology Medical Services (CMS) received approximately $132,312.15 for the fraudulently submitted claims. During the scheme, Carmen J. Pagán Domínguez, the owner and biller for CMG and CMS, and Robert Crespo Zamora, a cardiovascular technician, caused the submission of claims to Medicare for non-invasive cardiovascular studies allegedly performed by two cardiologists, even though those services were not provided by said physicians.
According to a second indictment, from in or about January 2020, through in or about May 2020, defendants Robert Crespo Zamora and Carmen J. Pagán Domínguez enriched themselves by causing the submission of at least three hundred (300) false and fraudulent non-invasive cardiovascular studies claims to Medicare in the amount of $439,890.00. Cardiovascular Prophylaxis & Evolution (CPE) received approximately $249,272.00 for the fraudulently submitted claims. During the scheme, Robert Crespo Zamora, the owner and cardiovascular technician for CPE, and Carmen J. Pagán Domínguez, biller for CPE, caused the submission of claims for non-invasive cardiovascular testing, purportedly performed to Medicare beneficiaries, although defendants knew said testing services were not medically necessary, and the test results were never interpreted by a cardiologist, licensed physician, or any other qualified health care provider.
“The submission of false claims to federal health care benefit programs is unacceptable and a waste of taxpayer funds,” said U.S. Attorney W. Stephen Muldrow. “Today’s arrests show the Department of Justice’s and its law enforcement partners’ firm commitment to protect public funds and to safeguard the well-being of Medicare and Medicaid beneficiaries.”
“Health care professionals must be held to a high standard of ethical behavior,” said Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”). “Along with our law enforcement partners, HHS-OIG will continue to ensure that those individuals and entities that bill federal health care programs do so in an honest manner.”
“United States Postal Inspectors will continue to aggressively investigate criminals who use the USPS and its products for illegal gain. We are committed to working with our law enforcement partners to investigate and bring to justice those who commit these types of offenses, and especially the impact that these financial crimes have on individuals, businesses, and government agencies alike,” said James V. Buthorn Inspector in Charge, USPIS Newark Division, San Juan Field Office.
If found guilty, the defendants face maximum sentences of: (a) up to ten years in prison for charges relating to health care fraud, conspiracy to commit health care fraud, and mail fraud conspiracy; (b) up to five years imprisonment for the obstruction of a criminal investigation related to health care offenses; and (c) a mandatory two-year consecutive term in prison for aggravated identity theft.
The case was investigated by the HHS-OIG and USPIS, and will be prosecuted by Assistant U.S. Attorney José Ruiz Santiago, Criminal Health Care Fraud Coordinator at the United States Attorney’s Office.
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent, unless and until proven guilty.
The public is encouraged to report suspected instances of health care fraud to the HHS OIG Hotline at 1-800-HHS-TIPS (1-800-447-8477) or https://oig.hhs.gov/fraud/report-fraud/index.asp
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Holyoke Man Sentenced for Heroin DistributionRead the Press Release
BOSTON – A Holyoke man was sentenced yesterday in federal court in Springfield for distributing heroin.
Jayson Quinones, 35, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 14 months in prison and three years of supervised release. In May 2020, Quinones pleaded guilty to distributing and possessing with intent to distribute heroin.
Quinones sold heroin on Oct. 7, 2019 in Holyoke. The arrest was the result of a multi-agency investigation into heroin trafficking in Holyoke dubbed “Operation Open Air.”
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Holyoke Police Chief Manny Febo made the announcement. Assistant United States Attorney Todd E. Newhouse of Lelling’s Springfield Branch Office prosecuted the case.
Heroin Sale Near Truck Stop Results in Prison SentenceRead the Press Release
A man who distributed heroin near a truck stop was sentenced today to more than three years in federal prison.
Orlando Wash, age 30, from Cedar Rapids, Iowa, received the prison term after a May 21, 2020 guilty plea to one count of distribution of heroin near a truck stop after having been previously convicted of a felony drug offense.
At the guilty plea and sentencing hearings, information showed that Wash sold heroin in the Cedar Rapids area from 2016 through 2019. Specifically on November 8, 2018, Wash sold heroin to an individual working for the Cedar Rapids Police Department near a truck stop located near I-380 in Cedar Rapids. Wash admitted he was responsible for possessing of a firearm during the period he was selling heroin.
Wash was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Wash was sentenced to 41 months’ imprisonment. He must also serve a six-year term of supervised release after the prison term. There is no parole in the federal system.
Wash is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Patrick Reinert and investigated as part of the Northern Iowa Heroin Initiative and the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice by Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation and the Cedar Rapids Police Department. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 19-CR-00127. Follow us on Twitter @USAO_NDIA.
Hatch man pleads guilty to hostage takingRead the Press Release
ALBUQUERQUE – Mario Balcazar, 23, of Hatch, New Mexico, pleaded guilty in federal court on Sept. 24 to a charge of hostage taking. Balcazar remains in custody pending a sentencing hearing.
According to the plea agreement, on or about May 9, Balcazar picked up an illegal alien on the United States side of the United-States-Mexico border and drove her to his residence in Doña Ana County, New Mexico. Balcazar then detained the victim until her family paid him $1,500.
Balcazar faces up to life in prison and a five-year mandatory term of supervised release of supervised release.
Homeland Security Investigations and the U.S. Border Patrol investigated this case. Assistant U.S. Attorneys Rachel Feuerhammer, Luis A. Martinez, and Nicole Hammond are prosecuting the case.
Guilty plea for man accused of importing cocaine hidden in Savannah shipmentRead the Press Release
SAVANNAH, GA: The second of two men charged in June 2019 after more than 45 pounds of cocaine were seized from a Savannah shipment has admitted guilt to a federal drug trafficking charge.
Jimmy Alexander Pujols, a/k/a “El Gallo,” 35, pled guilty to Possession with Intent to Distribute 5 Kilograms or More of Cocaine in U.S. District Court, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The co-defendant in the case, Fausto Mendez Ramos, a/k/a “Rudy Reyes Polanco,” 40, earlier pled guilty to Conspiracy to Import a Controlled Substance. Each of the charges carries a penalty of up to life in prison, and there is no parole in the federal system.
“Safeguarding the integrity of the vital shipments coming through Savannah includes identifying and intercepting illicit and illegal items hidden among the thousands of containers entering the city each day,” said U.S. Attorney Christine. “We commend the outstanding work of the local and federal law enforcement agencies who caught these traffickers attempting to smuggle poison for distribution into our communities.”
The shipment was intercepted in June 2019 by Agents from the U.S. Drug Enforcement Administration (DEA), in conjunction with Homeland Security Investigations (HSI), Customs and Border Protection (CBP) and the Richmond County Sheriff’s Office, and with assistance from the Augusta Fire Department. Investigators seized packages containing 21.3 kilos of cocaine while serving a federal search warrant at an Augusta warehouse holding a shipping container that had been transported from Savannah. Pujols and Ramos, who arrived to oversee the operation of transferring the hidden packages of drugs from the container to a truck for shipment to Florida, were taken into custody.
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Division commented on the plea, “This guilty plea is a direct result achieved because of the dedicated efforts between local, state and federal law enforcement. The distribution of cocaine and the negative impact continues to plague many communities. These communities are much safer today because another drug trafficker has been removed from the streets.”
“Drug abuse is a significant public health concern throughout the country,” said James Long, Savannah CBP Acting Area Port Director. “Through vigorous enforcement efforts, CBP will continue to intercept narcotics and prevent it from reaching our communities.”
This case is being prosecuted by Assistant U.S. Attorney and Organized Crime Drug Enforcement Task Force Coordinator Marcela C. Mateo, and Assistant U.S. Attorney E. Greg Gilluly Jr.
Ghost Gun and Machine Gun Conversion Device Dealer Pleads GuiltyRead the Press Release
ALEXANDRIA, Va. – A Fairfax man pleaded guilty today to dealing in firearms without a license.
According to court documents, Davud Sungur, 20, has never had a federal firearms license. Beginning around March 2019 through March 2020, Sungur engaged in the business of dealing in firearms through the repetitive purchase and resale of firearms. Among the firearms that he sold and advertised for sale were homemade pistols devoid of serial numbers or other unique identifiers, commonly known as "ghost guns." Sungur explained to prospective customers that he charged a premium for such pistols because he made them, because they lacked serial numbers, and because they could not be linked to any previous criminal activities.
“Ghost guns appeal to criminals because they are untraceable,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “I want to be clear: If you engage in the business of selling firearms without a license or produce illegal firearms, you have a federal problem and will be held accountable.”
According to court documents, Sungur also sold weapons on multiple occasions to undercover detectives with the Fairfax County Police Department’s Organized Crime & Intelligence Bureau, who had learned he was selling firearms. Over the course of four separate transactions, he sold detectives more than 1,000 rounds of ammunition, magazines, and numerous firearms – some of which were "ghost guns" – in exchange for cash. On two of these occasions, Sungur also sold detectives 3D-printed machine gun conversion devices that, after installation, enabled semi-automatic firearms to fire fully-automatically. Following his arrest, Homeland Security Investigations executed a search warrant at his residence and discovered that he was in possession of additional materials and kits used to manufacture ghost guns, additional ammunition, additional magazines, a 3D printer, and an additional firearm.
“Not only was this defendant not licensed to sell firearms, but the weapons he sold were often illegally produced or obtained, and at times stripped of their serial numbers. This activity clearly indicates that the defendant was knowingly selling to individuals who could not legally possess a firearm, or may have been engaged in criminal activity,” said Ashan M. Benedict, Special Agent in Charge of ATF’s Washington Field Division. “Today’s plea puts a needed end to the defendant’s reckless disregard for both the law and the consequences of selling illegal weapons.”
Sungur pleaded guilty to dealing in firearms without a license. He faces a maximum penalty of five years in prison when sentenced on December 16. 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.
“Sungur manufactured and altered firearms to make them either untraceable or more dangerous, deliberately attempting to evade regulations intended to keep the public safe,” said Raymond Villanueva, Special Agent in Charge for Homeland Security Investigation’s Washington, D.C. Field Office. “Thanks to the work of our law enforcement partners, he can no longer distribute and profit from his illicit firearms in our communities.”
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. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., made the announcement after U.S. District Judge Anthony J. Trenga accepted the plea.
Assistant U.S. Attorney John C. Blanchard and Special Assistant U.S. Attorney Sara A. Hallmark are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-162.
Garner Man Charged with Fraudulently Seeking over $6 Million in Covid Relief FundsRead the Press Release
RALEIGH, N.C. – A Garner man was charged with fraudulently seeking over $6 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Robert J. Higdon Jr. of the Eastern District of North Carolina.
Tristan Bishop Pan, 38, of Garner, is charged with wire fraud, bank fraud, and engaging in unlawful monetary transactions.
The indictment, unsealed today, alleges that Pan perpetrated a scheme to submit fraudulent PPP loan applications to federally insured banks. The Small Business Administration (SBA) guarantees PPP loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to the allegations, Pan submitted numerous fraudulent PPP loan applications, including on behalf of entities named Pan Insurance Agency, White Walker, Khaleesi, and The Night’s Watch. The indictment alleges that, in support of the fraudulent PPP loan applications, Pan made false statements about the companies’ employees and payroll expenses. The PPP loan applications were supported by fake documents, including falsified tax filings, according to the indictment. Pan allegedly submitted fourteen PPP loan applications seeking over $6.1 million and received more than $1.7 million in benefits following approval of the Pan Insurance Agency and White Walker PPP loan applications. The government was able to seize some of the allegedly fraudulent loan benefits.
The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal indictment is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Treasury Inspector General for Tax Administration, the Federal Deposit Insurance Corporation Office of Inspector General, and the FBI, with the assistance of the Small Business Administration Office of Inspector General. Assistant U.S. Attorneys Ethan A. Ontjes and John Harris and Trial Attorney Justin M. Woodard of the U.S. Department of Justice Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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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.
Gang Member Sentenced for Distributing Crack Cocaine in Public Housing DevelopmentRead the Press Release
BOSTON – A man identified as a member of the Heath Street Gang was sentenced yesterday for distributing crack cocaine in a public housing development.
Michael Pridgen, 36, was sentenced by U.S. District Court Judge Richard G. Stearns to 54 months in prison and six years of supervised release, during which time Pridgen will be prohibited from the geographic area of Boston in which he was convicted of selling drugs. In May 2020, Pridgen pleaded guilty to two counts of distribution and possession with intent to distribute crack cocaine, one count of possession with intent to distribute crack cocaine and fentanyl and one count of distribution and possession with intent to distribute crack cocaine in a public housing development.
Pridgen distributed crack cocaine in and around the Mildred C. Hailey Apartments, formerly known as the Bromley Heath Housing Development, in Boston on multiple occasions in the spring and summer of 2019. In a June 5, 2019, incident Pridgen stored crack cocaine and a digital scale in an electrical box affixed to the wall in the stairwell of the public housing complex. At the time of his arrest on Sept. 10, 2019, Pridgen was found on a bench in a courtyard at the Mildred C. Hailey Apartments, in possession of distribution-quantity of crack cocaine and fentanyl. Although Pridgen has been identified by law enforcement as a member of the Heath Street Gang, he was living in Westborough at the time of these incidents.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Gross made the announcement today.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Former Wall Street Trader Sentenced to More Than 5 Years in Prison for Running A Ponzi SchemeRead the Press Release
Audrey Strauss, Acting United States Attorney for the Southern District of New York, announced that PAUL A. RINFRET was sentenced in Manhattan federal court today to 63 months in prison for participating in a Ponzi scheme in which he obtained approximately $19 million in total from victims through a variety of lies and misrepresentations. RINFRET pled guilty to one count of wire fraud and one count of securities fraud on October 8, 2019, before U.S. District Judge Gregory H. Woods, who also imposed today’s sentence.
Acting Manhattan U.S. Attorney Audrey Strauss said: “Today, Paul Rinfret was brought to justice for callously lying to investors. Rinfret told investors his investment returns were excellent, when in fact he failed to invest investor funds as promised, generated losses when he did invest, and diverted the majority of investor funds to his personal use and to repay investors in a Ponzi-like fashion. We will continue to aggressively pursue frauds like this one, which caused millions of dollars in losses, in order to preserve investor confidence in our capital markets.”
According to the allegations contained in the Complaint and the Indictment:
From at least 2016 through 2019, RINFRET engaged in a scheme to defraud potential and actual investors in an entity called Plandome Partner s L.P. for his own personal gain and for the gain of his family members. RINFRET offered potential investors the ability to invest in Plandome Partners through the purchase of limited partnership interests. In soliciting investments, RINFRET falsely represented to potential and actual investors (the “Victims”) that he would use all of their investment funds to trade futures contracts tied to the Standard & Poor’s 500 index using a propriety trading algorithm he had developed, taking for himself a fee equivalent to 25% of the net profits on the trades.
Through his fraudulent scheme, RINFRET obtained approximately $19 million in total from approximately six Victims on the false claim that he would utilize their investment funds for trading. RINFRET’s lies and misrepresentations were varied and many. For example, RINFRET claimed that Plandome Partners traded through certain brokerage accounts, one of which simply did not exist, and two of which were not open at a time when RINFRET claimed to be trading in those accounts.
Further, RINFRET used only a small portion of the Victims’ invested funds to engage in actual trading. Instead, RINFRET used most of the Victims’ money to purchase luxury goods and high-end vacation rentals for himself and family members. For example, RINFRET used the Plandome Partners account to spend almost $50,000 on a luxury Hamptons vacation rental, more than $40,000 on jewelry, and tens of thousands of dollars on the event venue where his son held his engagement party.
When RINFRET did actually engage in trading with Victims’ funds, he generated losses. But, to prevent his Victims from seeking a return of their money, and to induce additional investments, RINFRET falsely reported excellent investment performance results to the Victims through false and fraudulent monthly account statements that RINFRET typically emailed to the Victims. RINFRET also sent fabricated brokerage account statements to the Victims.
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In addition to the prison term, RINFRET, 71, of Manhasset, New York, was sentenced to two years of supervised release, ordered to pay forfeiture in the amount of $20,268,268, and to pay $12,290,803 in restitution to his victims.
Ms. Strauss praised the investigative work of Homeland Security Investigations and also thanked the Securities and Exchange Commission for its assistance in the investigation.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Robert L. Boone is in charge of the case.
Former Registered Broker Pleads Guilty to Participating in a Multi-Million Dollar Securities Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Joshua Turney, formerly a registered broker at Global Arena Capital Corp. (“Global”), a now defunct brokerage firm located in New York City, pleaded guilty before United States District Judge Eric N. Vitaliano to conspiracy to commit securities fraud for engaging in unauthorized trading in his customers’ accounts. When sentenced, Turney faces up to five years in prison, as well as restitution, criminal forfeiture and a fine.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty plea.
“With today’s guilty plea, Turney has been held accountable for abusing the trust of his customers and for engaging in unauthorized trades to unjustly enrich himself,” stated Acting United States Attorney DuCharme. “This Office will continue to work vigilantly alongside our law enforcement partners to protect the integrity of financial markets.” Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office (SEC), for its significant cooperation and assistance during the investigation.
“The scheme Turney and his co-conspirators are accused of today is fairly straightforward. As alleged, they pushed through more than $100 million in customer trades, most of which were unauthorized, for the sole purpose of generating commission for themselves. In Turney’s case, reaping the benefits of his proceeds, however, won’t be quite as simple now that he’s been charged with a federal crime,” stated FBI Assistant Director-in-Charge Sweeney.
According to court filings and facts presented at the plea hearing, between April 2015 and June 2015, shortly before Global ceased operations, Turney and his co-conspirators engaged in a scheme to defraud Global customers by purchasing and selling securities without the customers’ prior authorization or knowledge. Approximately 4,500 trades were executed in approximately 360 customer accounts during this time period, most of which were unauthorized. The principal value of these transactions was approximately $106 million, and the trades generated over $2.44 million in commissions and fees for Global.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Shannon C. Jones is in charge of the prosecution.
The Defendant:
JOSHUA TURNEY
Age: 41
San Diego, CaliforniaE.D.N.Y. Docket No.-20 CR-359 (ENV)
Former Professional Trustee of Sacramento-Based Trust Sentenced to 30 Months in Prison for Fraud and Money LaunderingRead the Press Release
SACRAMENTO, Calif. — Loretta Darlene Stewart-Cabrera, also known as Loretta Dexter, 55, of Sacramento, was sentenced today by U.S. District Judge Kimberly J. Mueller to 30 months in prison for wire fraud and money laundering, U.S. Attorney McGregor W. Scott announced.
According to court documents, Stewart-Cabrera was a professional fiduciary who served as the trustee of a trust that owned a Sacramento property. After the trust grantor died in December 2012, Stewart-Cabrera executed a scheme to obtain and spend the trust assets. Stewart-Cabrera did this by selling the trust’s property, only distributing to the trust beneficiaries approximately $30,000 of the more than $300,000 she received from the sale of the property, and spending the remaining money without the permission or knowledge of the trust beneficiaries. She used a portion of the trust funds to gamble and dine in Las Vegas casinos, pay family members, and purchase merchandise.
This case was the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.
Former Plainfield Resident Resentenced to 300 Months in PrisonRead the Press Release
CONCORD – Edward Brown, 78, formerly of Plainfield, was sentenced to serve 300 months in federal prison at a resentencing hearing, United States Attorney Scott W. Murray announced today.
In 2009, Brown was convicted of a series of offenses arising from his role in leading an armed standoff with the United Marshals Service after his conviction and sentencing for tax-related charges. Brown was initially sentenced to 444 months of imprisonment for his role in the standoff. Because of new legal precedent from the United States Supreme Court, one of Brown's convictions was no longer valid. Brown was therefore entitled to resentencing.
At the resentencing hearing today, United States District Judge George Singal, the original trial judge, imposed a 300-month sentence.
“We are grateful that the Court recognized the seriousness of this defendant’s crimes and chose to impose a substantial and appropriate sentence,” said U.S. Attorney Murray. “This defendant’s armed standoff created a dangerous situation that could have resulted in bloodshed. This 300-month sentence sends the clear message that such conduct is unacceptable and that those responsible will be held accountable.”
This case was investigated by the United States Marshals Service with substantial assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Internal Revenue Service, the New Hampshire State Police, the Plainfield Police Department, the Lebanon Police Department, and the Sullivan County Sheriff’s Office.
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Former Indiana state senator and gaming executive indicted for violations of federal campaign finance lawsRead the Press Release
INDIANAPOLIS – Acting United States Attorney John Childress and Assistant Attorney General Brian Rabbitt of the Justice Department’s Criminal Division announced today that a federal grand jury sitting in the Southern District of Indiana returned an indictment charging a former Indiana state senator and gaming executive with violations of federal campaign finance laws, false statements, and falsification of records, for making illegal corporate contributions and conduit contributions to fund the congressional campaign of the former state politician.
Darryl Brent Waltz, 47, of Greenwood, Indiana, was charged with one count of conspiracy to make conduit contributions, false statements and to obstruct justice, one count of making and receiving conduit contributions, one count of obstruction of justice, and two counts of making false statements related to a scheme to route contributions through conduit donors to his 2016 congressional campaign, in violation of federal campaign finance law.
John S. Keeler, 71, of Indianapolis, Indiana, was charged with one count of conspiracy to make illegal corporate contributions, false statements and to obstruct justice, one count of making illegal corporate contributions, one count of obstruction of justice, and one count of making false statements related to a scheme to make corporate contributions to Waltz’s 2016 congressional campaign, in violation of federal campaign finance law.
According to the indictment, Waltz, a former Indiana state senator, was a candidate in the 2016 primary election for the office of the U.S. House of Representatives representing the Ninth District of Indiana. Keeler, the vice president and general counsel of what was then known as New Centaur, LLC arranged with Kelley Rogers, a Maryland-based political consultant for the 2016 Waltz congressional campaign, to cause New Centaur, LLC to transfer thousands of dollars from its accounts to Rogers, who then contributed that money to Waltz’s 2016 congressional campaign.
To conceal the true nature of the payments as illegal corporate contributions, Keeler and Rogers agreed that Rogers would create phony invoices and agreements that purported to reflect services to be performed for New Centaur, LLC, by Rogers. Upon receiving the payments from New Centaur, LLC, Rogers recruited several straw donors, including Waltz, to each contribute $2,700 to Waltz’s campaign, the maximum permitted under federal law at the time. The straw donors were reimbursed by Rogers using the money from New Centaur, LLC.
Rogers also transferred a large portion of the New Centaur, LLC money to Waltz, who recruited additional straw donors to each donate $2,700 to his campaign. Waltz either reimbursed or paid these straw donors in advance. Waltz and Keeler concealed these illegal contributions from campaign officials, causing them to unwittingly file materially false reports with the Federal Election Commission.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Trial Attorneys William Gullotta and John Taddei of the Criminal Division’s Public Integrity Section, and Brad Shepard and MaryAnn Mindrum of the U.S. Attorney’s Office for the Southern District of Indiana.
Former Indiana State Senator and Gaming Executive Indicted for Violations of Federal Campaign Finance LawsRead the Press Release
A federal grand jury sitting in the Southern District of Indiana returned an indictment charging a former Indiana state senator and a gaming executive with violations of federal campaign finance laws, false statements, and falsification of Federal Election Campaign (FEC) records in connection with a series of illegal corporate contributions and conduit contributions they made to fund the congressional campaign of the former state politician.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, Acting U.S. Attorney John E. Childress of the Southern District of Indiana, and Acting Assistant Director James A. Dawson of the FBI’s Washington Field Office made the announcement.
Darryl Brent Waltz, 47, of Greenwood, Indiana, was charged with one count of conspiracy to make conduit contributions, false statements and to falsify FEC records, one count of making and receiving conduit contributions, one count of falsifying FEC records, and two counts of making false statements related to a scheme to route contributions through conduit donors to his 2016 congressional campaign, in violation of federal campaign finance law.
John S. Keeler, 71, of Indianapolis, Indiana, was charged with one count of conspiracy to make illegal corporate contributions, false statements and to falsify FEC records, one count of making illegal corporate contributions, one count of falsification of FEC records, and one count of making false statements related to a scheme to make corporate contributions to Waltz’s 2016 congressional campaign, in violation of federal campaign finance law.
According to the indictment, Waltz, a former Indiana state senator, was a candidate in the 2016 primary election for the office of the U.S. House of Representatives representing the Ninth District of Indiana. Keeler, the vice president and general counsel of what was then known as New Centaur LLC arranged with Kelley Rogers, a Maryland-based political consultant for the 2016 Waltz congressional campaign, to cause New Centaur LLC to transfer thousands of dollars from its accounts to Rogers, who then contributed that money to Waltz’s 2016 congressional campaign. To conceal the true nature of the payments as illegal corporate contributions, Keeler and Rogers agreed that Rogers would create phony invoices and agreements that purported to reflect services to be performed for New Centaur LLC, by Rogers. Upon receiving the payments from New Centaur LLC, Rogers recruited several straw donors, including Waltz, to each contribute $2,700 to Waltz’s campaign, the maximum permitted under federal law at the time. The straw donors were reimbursed by Rogers using the money from New Centaur LLC. Rogers also transferred a large portion of the New Centaur LLC money to Waltz, who recruited additional straw donors to each donate $2,700 to his campaign. Waltz either reimbursed or paid these straw donors in advance. Waltz and Keeler concealed these illegal contributions from campaign officials, causing them to unwittingly file materially false reports with the Federal Election Commission.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case is being investigated by the FBI and is being prosecuted by Trial Attorneys William Gullotta and John Taddei of the Criminal Division’s Public Integrity Section, and Brad Shepard and MaryAnn Mindrum of the U.S. Attorney’s Office for the Southern District of Indiana. Significant assistance was provided by the FBI’s Indianapolis Field Office.
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.
Former IRS Employee Sentenced for Stealing Tax RefundsRead the Press Release
KANSAS CITY, Mo. – A former IRS employee was sentenced in federal court today for stealing tax refunds.
Tamara R. Miller, 40, of Kansas City, Missouri, was sentenced by U.S. District Judge Greg Kays to two years and two months in federal prison without parole.
On Jan. 23, 2020, Miller pleaded guilty to two counts of theft of government funds. Miller specifically admitted to stealing refunds from two taxpayers, totaling $5,214.
Miller was employed by the IRS as a data transcriber at the Kansas City Service Center. As part of her duties, Miller handled individual income tax returns received by mail at the Kansas City Service Center.
Miller selected tax returns on which the “Refund” section did not show a routing number or account number for a direct deposit to a financial institution (indicating the taxpayer elected to have the refund paid by a U.S. Treasury check). Miller used taxpayers’ means of identification, including names and Social Security numbers, shown on their tax returns to apply for accounts at online banks that issued prepaid debit cards. If Miller succeeded in opening an online account with a taxpayer’s means of identification, she entered the routing number and account number for the fraudulently created account in the “Refund” section of the taxpayer’s Form 1040. Miller had access to the fraudulently created account; the taxpayer did not know the account existed.
As an alternative means of fraudulently altering taxpayers’ returns, Miller entered the routing and account numbers for an existing online account to which she had access in the “Refund” section of the Forms 1040, thereby falsely representing that the taxpayer elected to have the refund amount deposited directly to that account.
Miller caused the fraudulently altered Forms 1040 to be submitted and processed for payment of the refund amounts requested by the taxpayers. The refund amounts were subsequently deposited directly to accounts controlled by Miller and accessible to Miller.
This case was prosecuted by Assistant U.S. Attorney Tom Larson. It was investigated by the U.S. Treasury Inspector General for Tax Administration.
Former Fort Drum Soldier Sentenced to 30 Months for Burglarizing North Country Firearms DealersRead the Press Release
SYRACUSE, NEW YORK - Rian Patterson, age 23, a former U.S. Army solider previously stationed at Fort Drum, New York, was sentenced today to serve 30 months in federal prison for the burglaries of two federally licensed firearms dealers in Northern New York, announced Acting United States Attorney Antoinette T. Bacon and John B. DeVito, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
As part of his previous guilty plea, Patterson admitted to stealing five (5) long guns during the burglary of a licensed federal firearms dealer in Gouverneur, New York, on September 14, 2019, and to the burglary of a second licensed federal firearms dealer in De Kalb Junction, New York, on September 29, 2019, during which five (5) handguns were stolen. All stolen firearms were recovered during the investigation of these crimes. Patterson also admitted to knowingly possessing stolen firearms taken during those burglaries in his barracks at Fort Drum, including one firearm with an obliterated serial number.
In addition to his term of imprisonment, the court also sentenced Patterson to three (3) years of post-imprisonment supervised release and ordered him to pay a restitution to the victims.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the U.S Army Criminal Investigation Division (ARMY CID), the St. Lawrence County Sheriff’s Department, and the New York State Police, and was prosecuted by Assistant U.S. Attorney Thomas Sutcliffe.
This case was brought pursuant to 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.
Former Construction Executive Pleads Guilty to Tax Evasion in Connection with Bribery SchemeRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, announced that ANTHONY GUZZONE, a former Director of Global Construction at Bloomberg, LLC (“Bloomberg”), pled guilty today to charges of evading taxes on more than $1.45 million in bribes he received from building sub-contractors. In related proceedings, co-conspirator Michael Campana, a subordinate construction manager at Bloomberg, was sentenced on July 24, 2020, by U.S. District Judge Denise L. Cote to 24 months in prison, for evading taxes on more than $420,000 in the same scheme. In addition, Ronald Olson and Vito Nigro, two managers of a construction contractor that performed projects for Bloomberg, were separately charged in July 2020 for evading taxes on more than $1.4 million and $1.8 million, respectively, in bribes that they received in the same scheme. Olson pled guilty to those charges on July 29, 2020, before U.S. District Judge P. Kevin Castel.[1]
Acting U.S. Attorney Audrey Strauss said: “Bribery and tax evasion each impose hidden, unfair costs on the law-abiding public. The sort of criminality admitted to by Anthony Guzzone imposes that burden widely, on customers, on employers, and on taxpayers. Guzzone now awaits sentencing for his crime.”
According to the four criminal Informations filed in these federal cases, as well as other public documents and recent court proceedings:
Between 2010 and 2017, GUZZONE was the Director of Global Construction at Bloomberg, a global financial firm that was engaged in various building projects in New York City and elsewhere, while Olson and Nigro were executives at a construction contractor that performed projects for Bloomberg. For most of that time, beginning in 2013, Campana was also a construction manager at Bloomberg. Each of the defendants participated in a scheme to obtain bribes from construction sub-contractors, who paid kickbacks to the defendants in exchange for being awarded various construction contracts and sub-contracts performed for Bloomberg.
In all, the defendants are charged with failing to pay taxes, between 2010 and 2017, on bribes exceeding $5.1 million. The defendants received such bribes in various forms, including millions of dollars in cash, as well as construction labor and materials for work on their individual homes and properties, and the direct payment of personal expenses. Such personal expenses included charges related to Campana’s 2017 wedding, such as approximately $40,000 paid by sub-contractors to a catering hall in New Jersey, over $13,000 to a photography studio, and over $23,000 to a travel agent for airline tickets purchased in connection with Campana’s honeymoon. Each of the defendants evaded federal income tax on this bribery income, by failing to declare it on income tax returns for various years between 2010 and 2017.
* * *
GUZZONE, 51, of Middletown, New Jersey, pled guilty today to a single count of tax evasion for the tax years 2010 through 2017. GUZZONE is scheduled to be sentenced on January 7, 2021, at 2:00 p.m., before United States District Judge Lewis J. Liman.
Olson, 53, of Massapequa, New York, pled guilty on July 29, 2020, to a single count of tax evasion for the tax years 2011 through 2017.
Nigro, 59, of Middletown, New Jersey, was charged on July 16, 2020, with a single count of tax evasion for the tax years 2011 through 2017.
The charges against GUZZONE, Olson, and Nigro each carry a maximum sentence of five years in prison, a maximum fine of $250,000 or twice the gross gain or loss from the offense, and an order of restitution. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judges.
Campana, 34, of Tuckahoe, New York, pled guilty to a tax evasion charge on November 26, 2019, for the tax years 2014 thought 2017, and was sentenced on July 24, 2020, to 24 months in prison, three years of supervised release, restitution of $155,000 in unpaid taxes (which he has repaid), and a fine of $10,000.
Ms. Strauss praised the excellent work of the Internal Revenue Service.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney David Raymond Lewis, and Stanley J. Okula, Senior Litigation Counsel of the Tax Division of the Department of Justice, are in charge of the prosecution.
[1] In addition, all four defendants have been charged in New York State Supreme Court for participating in the underlying bribery scheme. Nigro and Campana have pled guilty in that case and are awaiting sentencing.
Former CFO of Boston Grand Prix Indicted in Fraud and Tax SchemeRead the Press Release
BOSTON – The former Chief Financial Officer (CFO) of the Boston Grand Prix was arrested today on charges that he failed to report income that he received from serving as executive with the Boston Grand Prix organization on his federal tax returns and for a scheme to defraud equipment and small business financing companies.
John F. Casey, 56, of Ipswich, was indicted on eight counts of wire fraud, one count of aggravated identity theft, three counts of money laundering and three counts of filing false tax returns. Casey was arrested this morning and will make an initial appearance at 3:30 today before U.S. Magistrate Judge Donald J. Cabell.
As alleged in the indictment, Casey became the CFO of the Boston Grand Prix in January 2015. The Boston Grand Prix organization made payments to or on behalf of Casey totaling approximately $308,292 in 2015 and $601,073 in 2016 which Casey failed to include in the gross income he claimed on his personal tax returns for those years.
The indictment also alleges that Casey owned an ice rink in Peabody between October 2013 and June 1, 2016. Between October 2014 and October 2016, Casey obtained over $743,000 in funds from equipment financing companies, purportedly for the purchase of equipment for the ice rink. In addition, in August 2016, more than two months after he sold the Peabody rink, Casey obtained over $145,000 in small business loans for the rink business. In order to secure the financing, Casey allegedly submitted materially false documents and information, including fake invoices for the equipment, bank records purporting to show deposits into Casey’s accounts related to the Peabody rink, falsely inflated personal and corporate tax returns, and personal financial statements falsely claiming ownership and value of various assets. Casey also allegedly submitted a fake Deed of Sale containing a forged signature in support of one of his loan applications. Relying on Casey’s false statements, the financing companies provided funding to Casey in amounts and on terms they otherwise would not have made. Most of the funds provided by the victim companies were never repaid.
Casey is also charged with laundering the proceeds of his fraud scheme, and with failing to include the income from his fraud scheme on his 2014, 2015 and 2016 personal federal tax returns.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of the greater of either $250,000 or twice the gross gain or loss. The charge of aggravated identity theft provides for a consecutive sentence of two years in prison, one year supervised release and a fine of the greater of either $250,000 or twice the gross gain or loss. The charge of unlawful monetary transactions provides for a sentence of up to10 years in prison, three years of supervised release and a fine of the greater of either $250,000 or twice the value of the criminally derived property. The charge of filing false tax returns provides for a sentence of up to three years in prison, one year of supervised release and a fine of the greater of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joleen Simpson, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of Lelling’s Criminal Division is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Firearms trafficker attempts to smuggle guns to HaitiRead the Press Release
ATLANTA - Jacques Mathieu has pleaded guilty to attempting to export 12 firearms and approximately 36,000 rounds of ammunition to Haiti by concealing the contraband in a car he intended to ship to the island.
“Firearms traffickers help fuel violence on our streets and outside the United States,” said U.S. Attorney Byung J. “BJay” Pak. “Alert agents found the weapons and ammunition and stopped the shipment before it reached its intended destination.”
“Firearms trafficking poses a very serious threat to the safety of our communities in the U.S. and abroad,” said Arthur Peralta, Special Agent in Charge of ATF in Atlanta. “Jacques Mathieu’s attempts to illegally export firearms is a significant concern for the people of Haiti and we will do everything we can do to stop these illegal firearms from falling into the wrong hands.”
“Special Agents of the Office of Export Enforcement are committed to combating the illicit smuggling of firearms and ammunition internationally,” said P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement (OEE) at the Department of Commerce, Bureau of Industry of Security. “Firearms and ammunition illegally exported from the United States often end up in the hands of violent criminals and harm the most vulnerable communities, in this case in the Republic of Haiti. OEE is committed to aggressively investigating international firearms smuggling networks and working with our law enforcement partners to bring violators to justice.”
According to U.S. Attorney Pak, the charges and other information presented in court: In September 2019, Mathieu, a Haitian national, attempted to ship a 2007 Suzuki Grand Vitara to Haiti via the Port of Palm Beach, Florida. He reported on export shipping documents that the car contained 12 boxes of used clothing. However, Customs and Border Patrol (CPB) and Bureau of Industry and Security, Office of Export Enforcement agents searched the car and discovered 12 firearms and approximately 36,000 rounds of ammunition concealed in the boxes.
Jacques Mathieu, 51, of Tucker, Georgia pleaded guilty to the offense of attempting to export firearms and ammunition to the Republic of Haiti. Sentencing is scheduled for January 8, 2021, at 10:00 a.m., before U.S. District Judge Michael L. Brown.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Department of Commerce, Bureau of Industry of Security.
Assistant U.S. Attorney Jennifer Keen is prosecuting the case.
This case is being brought as part of Project Safe Neighborhoods (PSN). In keeping with the Attorney General’s mission to reduce violent crime, the Northern District of Georgia’s PSN program focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
This case was also brought as part of Project Guardian, a national Department of Justice initiative to reduce gun violence and enforce federal firearms laws, including those related to firearms trafficking. More information about Project Guardian can be found here: https://www.justice.gov/projectguardian.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Fifth Person Admits Trafficking Oxycodone and Xanax Pills as Part of Gloucester City Drug RingRead the Press Release
CAMDEN, N.J. – A Gloucester City, New Jersey, man today admitted conspiring to distribute oxycodone pills and selling Xanax pills, making him the fifth person to plead guilty for his role in a drug trafficking ring operating in and around Gloucester City and Camden, U.S. Attorney Craig Carpenito announced today.
Marcus Rushworth, 47, of Gloucester City, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to distribute and possess with intent to distribute oxycodone and distributing a quantity of Xanax.
According to documents filed in this case and statements made in court:
Rushworth admitted that on multiple occasions from January 2020 to March 2020, he worked with Rocco DePoder to sell oxycodone and Xanax to customers in and around Gloucester City. Rushworth also obtained a quantity of Xanax from DePoder on Feb. 17, 2020, in order to sell to a drug customer. Rushworth was charged along with 17 others in March 2020 in connection with an investigation by the FBI into the illegal distribution of prescription drugs, including high dosage oxycodone pills, to customers in Gloucester City and Camden.
The drug conspiracy charge carries a potential penalty of 20 years in prison and the distribution charge carries a potential penalty of five years in prison. Sentencing is scheduled for Feb. 5, 2021.
Four other defendants – Kenneth Rushworth, 59, of Gloucester City, a relative of Marcus Rushworth, Wayne Muse, 74, of Lindenwold, New Jersey, Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood, New Jersey, and Steven Walker, 47, of Camden – previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs.
U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to the charges.
He also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration (DEA) for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden office and Sara F. Merin of the Newark office.
Felon and Drug User Sentenced to Fifteen Years in Federal Prison for Unlawfully Possessing a FirearmRead the Press Release
A Cedar Rapids man who unlawfully possessed a firearm was sentenced yesterday to fifteen years in federal prison.
Carlos Dejuan Hutchinson, age 41, from Cedar Rapids, Iowa, received the prison term after pleading guilty to possession of a firearm by a prohibited person.
Information disclosed at sentencing showed that, on October 12, 2019, Hutchinson was the front-seat passenger in a truck that was stopped by police. Hutchinson and the driver were both removed from the truck. Officers found a pistol in the right rear pocket of Hutchinson’s pants. Hutchinson was arrested and placed in the back of a police car, where he attempted to ditch a methamphetamine pipe. At the guilty plea, Hutchinson admitted he possessed the firearm while he was an unlawful user of methamphetamine and after he had previously been convicted of three burglaries. He faced a fifteen-year mandatory minimum sentence because of his three prior burglary convictions.
Hutchinson was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Hutchinson was sentenced to 180 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Hutchinson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Dillan Edwards and investigated by the Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation and the Cedar Rapids Police Department.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see /media/1122011/dl?inline.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00129.
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Felon Pleads Guilty to Possessing Firearm After Shots Fired Call in Cedar RapidsRead the Press Release
A felon who was found in possession of a firearm following a shots fired call pled guilty today in federal court in Cedar Rapids.
Kendall J. Willis, age 25, from Chicago, Illinois, was convicted of one count of being a prohibited person in possession of a firearm.
Evidence at a prior hearing showed that on May 21, 2020, a call was made to the Cedar Rapids 911 line. The caller reported shots fired at an apartment complex on North Towne Court in Cedar Rapids. Police officers arrived at the scene and spoke with multiple witnesses. One witness saw two individuals, one of whom was later identified as Willis, walk into an apartment after the shots were fired. The witness saw that each individual was holding a handgun. Officers searched the ground near where the shots were fired and found three 9mm shell casings. Willis and Johnson then left the apartment that witnesses had seen them enter and were detained. During a later search of that apartment, officers found marijuana, drug packaging, and two 9mm pistols, one of which had an extended magazine. Ballistics testing determined that two of the shell casings found outside the apartment were fired by one of the pistols and that the other shell casing had been fired by the other pistol. Willis had previously been convicted of felony armed robbery charge in Chicago in 2014.
Sentencing before United States District Court Judge C.J. Williams will be set after a presentence report is prepared. Willis remains in custody of the United States Marshal pending sentencing. Willis faces a possible maximum sentence of ten years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see /media/1122011/dl?inline.
This case was made possible by investigative leads generated from the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) National Integrated Ballistic Information Network (NIBIN). NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms. NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles. For more information on NIBIN, visit https://www.atf.gov/firearms/national-integrated-ballistic-information-network-nibin.
The case is being prosecuted by Assistant United States Attorney Dan Chatham and investigated by the Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20‑CR‑00058‑CJW‑MAR.
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Española man sentenced to 30 years for sexually abusing a child in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Kevin Vigil, 54, of Española, New Mexico, was sentenced to 30 years in prison on Sept. 22 for sexually abusing a six-year-old child.
A federal jury in Santa Fe, New Mexico, returned a guilty verdict against Vigil on Aug. 23, 2019, following a five-day trial before U.S. District Judge Martha Vazquez.
The minor victim and the victim’s parents had been visiting Vigil at his home within the exterior boundaries of Ohkay Owingeh tribal lands on the evening of February 3, 2018, and spent the night there. In the early hours of February 4, Vigil assaulted the victim as she lay between Vigil and her mother. The mother immediately confronted Vigil, left his house, sought medical attention for the victim, and reported the abuse to law enforcement.
A Sexual Assault Nurse Examiner (SANE) exam showed that the victim’s injuries were “fresh” and that those injuries were consistent with penetration or attempted penetration. The victim had to be sedated because she was in so much pain. As part of the SANE exam, DNA evidence was collected from the victim as well as from Vigil. An analysis of that evidence revealed presence of Vigil’s DNA on the victim and on her underwear from the night of the offense.
This case was investigated by the Santa Fe office of the FBI. The case was prosecuted by Assistant U.S. Attorneys Kyle Nayback and Allison Jaros.
Doctor Sentenced to Prison for Illegally Prescribing Oxycodone, Failing to Pay Employee TaxesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that that Dr. SHEIKH AHMED, 57, of Orange, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to six months of imprisonment, followed by three years of supervised release, for illegally prescribing oxycodone and failing to pay employee withholding taxes to the IRS.
According to court documents and statements made in court, Ahmed is a pediatrician who operated a medical practice, under the name East Hartford Medical Center, at 580 Burnside Avenue in East Hartford. Despite being a pediatrician, Ahmed’s practice did not only focus on children. Between December 2017 and May 2018, Ahmed prescribed controlled substances, including Oxycodone, to two individuals outside the scope of professional medical practice. The individuals paid Ahmed $500 to issue prescriptions for 30-day supplies of Oxycodone, and Ahmed agreed to increase the patients’ dosage in the future, without discussion as to the medical justification for the increase. Ahmed counseled the patients about the need to increase dosages gradually to avoid scrutiny from pharmacies regarding the prescribed medications. Ahmed also had the patients bypass normal financial intake procedures and took cash payments directly from the patients. Ahmed failed to perform sufficient examinations to assess the patients’ pain levels prior to issuing the prescriptions.
The investigation also revealed that Ahmed failed to pay over to the Internal Revenue Service $117,893 in employee withholding taxes from five of his businesses, including East Hartford Medical Center, between 2013 and 2016.
Ahmed was arrested on November 28, 2018. On November 8, 2019, he pleaded guilty to one count of prescribing outside the scope of medical practice, and one count of willful failure to pay withholding taxes.
Ahmed has made full restitution to the IRS.
Ahmed, who is released on a $200,000 bond, is required to report to prison on November 10.
This investigation was conducted by the DEA’s New Haven Tactical Diversion Squad, the Internal Revenue Service – Criminal Investigation Division, and the Medicaid Fraud Control Unit of the Chief State’s Attorney. The case was prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Christopher W. Schmeisser.
Department of Justice Awards More than $92 Million to Support Offenders Returning to CommunitiesRead the Press Release
The Department of Justice’s Office of Justice Programs today announced awards totaling more than $92 million to reduce recidivism among adults and juvenile offenders returning to their communities after confinement.
OJP’s Bureau of Justice Assistance (BJA), National Institute of Justice (NIJ) and Office of Juvenile Justice and Delinquency Prevention (OJJDP) awarded grants to jurisdictions, research institutions and other organizations in support of proven science-based approaches to reintegrate offenders into communities.
President Trump is a staunch supporter of providing a second chance to incarcerated individuals reentering our communities. In 2018, he signed into law the First Step Act, including reauthorization of the Second Chance Act, the biggest piece of criminal justice reform legislation to be enacted in more than a decade. He also directed the establishment of the Federal Interagency Council on Crime Prevention and Improving Reentry and tapped Pastor Tony Lowden to be its executive director. President Trump has declared April as Second Chance Month for the past four years, and these awards represent his Administration’s commitment to assisting people in America’s prisons and detention facilities who have earned the opportunity to take their places back in society.
“Former offenders are ultimately responsible for their own successes and failures, but our criminal and juvenile justice systems have an important role to play in preparing them for the obstacles that lie before them,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “I’m very pleased to make these resources available to help offenders get back on their feet and contribute to the prosperity of their communities and the betterment of our nation. I saw these programs work first hand in my time as a judge and am so grateful for the hard-working people who are helping our reentering population.”
Fiscal Year 2020 reentry and recidivism reduction grants awarded include the following:
- More than $71.4 million under BJA’s grant programs designed to help communities develop and implement comprehensive and collaborative strategies to address the challenges posed by reentry and recidivism.
- More than $11.2 million under OJJDP’s Second Chance Act suite of grant programs to support reentry services for detained juveniles and incarcerated parents with children under the age of 18.
- More than $9.3 million under NIJ’s reentry research and evaluation programs, which support rigorous research to advance understanding about reoffending and the success of reentry strategies, programs and practices. This includes evaluating innovative reentry initiatives that specifically focus on juveniles, young adults and adults with a moderate-to-high risk of reoffending.
For a complete list of individual grant programs, amounts to be awarded, and the jurisdictions that will receive funding, visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/reentryfactsheet.pdf.
Additional information about FY 2020 grant awards made by the Office of Justice Programs can be found online at the OJP Awards Data Webpage.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
Convicted Sex Offender Sentenced to 105 Months for CarjackingRead the Press Release
PHOENIX, Ariz. – On Friday, Christopher Daniel Jones, 26, of Camp Verde, Arizona, was sentenced by United States District Judge Michael T. Liburdi to 105 months in federal prison, followed by three years of supervised release. Jones previously pleaded guilty to Carjacking on February 26, 2020.
On July 27, 2019, Jones, an enrolled member of the Gila River Indian Community and a convicted sex offender, snuck into the victim’s parked van at a gas station located on the Yavapai-Apache Nation. When the victim returned to the van, Jones was hiding in the back. Wielding a knife, Jones moved toward the front of the van and forced the victim to drive, holding the knife to the victim’s body. The victim jumped out of the van, and Jones drove it away, resulting in a law enforcement pursuit that ended with Jones’s apprehension about 75 miles away. Investigation revealed that Jones had an active warrant, was on supervised release in two separate Failure to Register as a Sex Offender cases, and had recently escaped from Behavioral Systems Southwest.
The investigation in this case was conducted by the Yavapai-Apache Nation Police Department, the Phoenix Police Department, and the United States Marshals Service. The prosecution was handled by Christina Covault and Kiyoko Patterson, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-19-8265-PHX-MTL
RELEASE NUMBER: 2020-075_Christopher Jones# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Convicted Fraudster Charged with Devising New Scheme While Serving Federal Sentence for Another SchemeRead the Press Release
SALT LAKE CITY – A Felony Information filed in federal court charges Christopher D. Hales, 39, of Lehi with wire fraud conspiracy and money laundering conspiracy in connection with a financial fraud scheme he and other co-conspirators devised while Hales was in a halfway house serving a sentence for another federal fraud case.
The charges allege the new scheme resulted in a loss to investors of at least $7 million. An initial appearance and change of plea hearing for Hales is scheduled for Oct. 6, 2020, before U.S. Magistrate Judge Daphne A. Oberg.
Hales was convicted of bank fraud in April 2011 as a part of a mortgage fraud case. He was sentenced to 90 months in federal prison and ordered to pay $12,719,236 in restitution. He violated terms of his supervised release in 2016 and he was sentenced to another 30 months in federal prison.
“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.
According to the Felony Information, Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Nevada Secretary of State records show Sindakit Software LLC was formed on Aug. 6, 2018, by a co-conspirator (CC1) known to federal prosecutors. CC1 was listed as the sole officer. CC1 was listed on the Sindakit Software bank account as the manager and was the only authorized signor.
The Information alleges Hales and CC1 conspired to defraud investors and potential investors by inducing them to purchase investments in a sports betting software. Hales purported to own a sports betting software that “beat the house” to convince investors to give him money to place sports bets. In furtherance of the conspiracy, the indictment alleges Hales made a variety of false statements of material facts to investors and potential investors, including representing that 100 percent of investor funds would be used to place sports bets when, in fact, Hales diverted nearly all investor funds received to his and CC1’s personal use, and to make payments to other investors.
Hales also told them he was Chris Christian, when in fact, he was Christopher Hales, a convicted felon on supervised release. Investors were also told Hales would match all investor funds, when in reality he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales also told investors that the sports betting was producing a rate of return for investors of around 10 percent a week – an amount made up by Hales to entice investors to provide funds. He also represented that there were potential buyers willing to purchase the software he developed for tens of millions of dollars, when there were actually no buyers, according to the Felony Information.
In furtherance of the conspiracy, Hales failed to disclose to investors that they did not actually own an algorithm or a sports betting software and that they were laundering investor funds through transfers in and out of the Sindakit Software account. Sports betting account statements provided to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements. They also did not disclose that part of the investors’ money was used to pay commissions to those introducing investors to Sindakit or that they were using investment money from newer investors to pay promised winnings to earlier investors in what is commonly recognized as a Ponzi scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.
Chinese National Sentenced for Laundering Millions for Mexican Drug CartelsRead the Press Release
A Chinese national was sentenced today to five years in prison and ordered to forfeit more than $4.2 million for laundering drug proceeds generated by large-scale cocaine trafficking in the United States.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division; U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia; Special Agent in Charge Wendy C. Woolcock for the U.S. Drug Enforcement Administration’s (DEA) Special Operations Division; Special Agent in Charge Jeffrey T. Scott of DEA's Louisville, Kentucky Field Division; Chief Jason Crosby of the Criminal Investigations Division of the U.S. Department of State’s Diplomatic Security Service (DSS); and Special Agent in Charge James Gibbons of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Chicago, Illinois made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema for the Eastern District of Virginia.
According to court documents, Xueyong Wu, 40, cultivated relationships with Latin American drug trafficking organizations to transport and launder their United States-based drug proceeds. Much of this money was repatriated to Mexico through a complex series of international financial transactions. Wu received a percentage of the money involved in these transactions as compensation for organizing these laundering activities. Much of this money was generated through movement of cocaine or payment for cocaine that took place within the Eastern District of Virginia.
Trial Attorneys Steve Sola and Kerry Blackburn of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Michael P. Ben’Ary and David A. Peters prosecuted 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.
Chinese National Sentenced for Laundering Millions for Mexican Drug CartelsRead the Press Release
ALEXANDRIA, Va. – A Chinese national was sentenced today to five years in prison and ordered to forfeit more than $4.2 million for laundering drug proceeds generated by large-scale cocaine trafficking in the United States.
According to court documents, Xueyong Wu, 40, cultivated relationships with Latin American drug trafficking organizations to transport and launder their United States-based drug proceeds. Much of this money was repatriated to Mexico through a complex series of international financial transactions. Wu received a percentage of the money involved in these transactions as compensation for organizing these laundering activities. Much of this money was generated through movement of cocaine or payment for cocaine that took place within the Eastern District of Virginia.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Wendy C. Woolcock, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Special Operations Division; Jeffrey T. Scott, Special Agent in Charge of DEA's Louisville, Kentucky Field Division; Jessica Moore, Chief of the Criminal Investigations Division of the U.S. Department of State’s Diplomatic Security Service (DSS); and James Gibbons, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Chicago, Illinois made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.
Assistant U.S. Attorneys Michael P. Ben’Ary and David A. Peters, along with Trial Attorneys Steve Sola and Kerry Blackburn of the Justice Department Criminal Division’s Money Laundering and Asset Recovery Section prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-15.