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22 October 2020
Maryland Woman Sentenced to Federal Prison After Obstructing Justice in Cyber Fraud InvestigationRead the Press Release
United States Attorney Brandon J. Fremin announced that U.S. District Judge Brian A. Jackson sentenced Fatima Sesay, age 29, of Laurel, Maryland, to serve 16 months in federal prison following her conviction for obstruction of justice. The court also ordered Ms. Sesay to serve two years of supervised release following her release from prison.
Earlier this year, Sesay was convicted of obstruction of justice, in violation of Title 18, United States Code, Section 1503, after she made numerous statements intended to mislead and deceive a pending federal grand jury investigation into a computer fraud that affected a business in Greenwell Springs, Louisiana, among other victims. In the underlying fraud, after the victim shipped tens of thousands of dollars’ worth of its products to a customer in Amman, Jordan, the customer received a series of fraudulent e-mails directing it to send payment to an account at Wells Fargo Bank. Relying on the messages and wiring instructions, the customer wired the requested funds to the account. The Louisiana-based victim had not sent the e-mails, however, and unbeknownst to the customer, the wiring instructions were fraudulent. The Export-Import Bank of the United States (EXIM Bank) had insured the underlying transaction, and the EXIM Bank’s Office of Inspector General quickly began investigating the fraud.
The investigation eventually revealed that in July of 2016, after a series of transactions, the proceeds from the fraud were deposited into a Bank of America account that Sesay had opened in Maryland earlier that year. In fact, between November 2015 and September 2016, across dozens of suspicious transactions, nearly $500,000 had passed through accounts maintained in the defendant’s name. Federal authorities contacted Sesay and made several attempts to secure truthful information from her about her knowledge of the scheme. Instead, as Sesay has admitted, she knowingly obstructed the investigation, first by making numerous evasive and misleading statements in an interview with federal agents in January 2019, and then by providing false testimony before a federal grand jury in Baton Rouge in April 2019. The defendant repeatedly minimized the extent of her relationship with one of the subjects of the investigation and provided false information intended to divert the federal investigation into the underlying cyber fraud.
U.S. Attorney Fremin stated, “A basic underpinning of our system of justice is that participants on all sides remain open and honest. Candid participation in the criminal justice process is critical to the pursuit of justice, and those who intentionally mislead, obstruct, or lie to a grand jury in our investigations will be held accountable. This conviction and sentence clearly demonstrates how seriously we in the federal system treat those who obstruct justice. I commend our prosecutor and the Export-Import Bank of the United States – Office of Inspector General for their excellent work in this matter.”
EXIM Bank is the official export credit agency of the United States, and assists in financing the export of U.S. goods and services to international markets. Complaints and reports of waste, fraud, and abuse related to EXIM Bank programs and operations can be reported to the OIG hotline at 888-OIG-EXIM (888-644-3946) or via email at [email protected].
This matter was investigated by the Export-Import Bank of the United States – Office of Inspector General, and was prosecuted by Assistant United States Attorney Alan A. Stevens, who also serves as Senior Litigation Counsel of the Criminal Division.
Man with Out-of-State Ties Pleads Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
HARRISONBURG, Va.- Adam Kimball, a man from outside of Virginia with ties to California and South Dakota, pleaded guilty this week in U.S. District Court in Harrisonburg to conspiring to distribute methamphetamine and possessing with the intent to distribute methamphetamine, Acting United States Attorney Daniel P. Bubar announced today.
Kimball, 43, waived his right to be indicted and pleaded guilty this week to a two-count Information charging him with one count of conspiring with others to distribute 50 grams or more of actual methamphetamine and 500 grams or more of a substance containing a detectable amount of methamphetamine and one count of possession with the intent to distribute 50 grams or more of methamphetamine.
According to court documents, Kimball conspired with others to have large quantities of methamphetamine shipped into Virginia from sources outside of the Commonwealth using the United States Postal Service to various addresses in and around Winchester, Virginia. Once in possession of the methamphetamine, members of the conspiracy, including co-defendants Jerry Duncan and John O'Donnell, moved the drugs to other locations and prepared them for distribution to users.
Kimball was an active member of the conspiracy beginning in early 2019. He “hooked” his co-conspirators with an out-of-state source of supply that could deliver large quantities of methamphetamine. Kimball and his co-conspirators used a residence in the Winchester area as a base for their operations. Kimball was involved in arranging the delivery of methamphetamine from the source of supply and he was involved in the wiring of payment to the source of supply. Kimball also participated in the sale of methamphetamine.
Initially, the conspirators received one or two ounces of methamphetamine per week, but this increased over time to one-quarter-pound purchases, one-pound purchases, and ultimately multi-pound purchases from the out of state source of supply. While a member of the conspiracy, Kimball was involved in the receipt and distribution of at least two kilograms of methamphetamine.
The investigation of the case was conducted by Drug Enforcement Administration, U.S. Postal Inspection Service, Frederick County Sheriff’s Office, Front Royal PD, and Strasburg PD. Assistant United States Attorney Jeb Terrien is prosecuting the case for the United States.
Man Sentenced to 5 Years in Prison for Illegally Re-Entering U.S. After Having Been DeportedRead the Press Release
ROCKFORD — A Mexican citizen was sentenced today in federal court by U.S. District Judge Philip G. Reinhard for illegally re-entering the United States after having been deported.
JAVIER GRANADOS-LEON, 48, was sentenced to 60 months in federal prison, to be followed by three years of supervised release. Granados-Leon pleaded guilty to the illegal re-entry charge on July 21, 2020.
According to a written plea agreement, Granados-Leon admitted that he illegally re-entered the U.S. after having been previously deported to his native Mexico on March 9, 2017. Granados-Leon was arrested in Oregon, Ill.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Thomas Feeley, Director of the Chicago Field Office for U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. The government was represented by Assistant U.S. Attorney Michael D. Love.
Leader of Latin Kings in Massachusetts Pleads Guilty to Drug Conspiracy ChargesRead the Press Release
BOSTON – A leader of the Massachusetts Almighty Latin King and Queen Nation (Latin Kings) pleaded guilty today to drug conspiracy charges.
Bienvenido Nunez, a/k/a “King Apache,” 33, pleaded guilty to conspiracy to distribute cocaine base. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Feb. 11, 2021. Nunez was charged in December 2019, at which time he was identified as the Inca, or leader, of the Massachusetts Latin Kings.
Nunez admitted that he conspired with other Latin Kings members and leaders to possess cocaine base (also known as crack cocaine) with the intent to distribute it. In September 2019, Nunez conspired with others to obtain cocaine base from members of the Latin Kings in New Bedford for resale. On Sept. 29, 2019, Nunez was captured in a video recording in the basement of a Latin Kings trap house in New Bedford bagging about an amount of cocaine base for street-level distribution.
The Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
In December 2019, a federal grand jury in Boston returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Bienvenido Nunez is the sixteenth defendant to plead guilty in the case.
The charge of conspiring to distribute and possess with intent to distribute controlled substances provides for a sentence of up to 20 years in prison, a minimum of three years and up to life of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and Worcester Police Chief Steven M. Sargent made the announcement today. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorney Philip A. Mallard and Mark Grady of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
Kissimmee Accountant Pleads Guilty to Embezzling Funds from Two Different EmployersRead the Press Release
Orlando, Florida – Kavita L. Harack (34, Kissimmee) has pleaded guilty to committing wire fraud. She faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, in approximately May 2017, Harack was hired to work as an accountant in the Orlando office of a display services company. Between April 2018 and May 2019, Harack directed 74 fraudulent payments from the display services company to four bank accounts held in her or her husband’s name. Harack disguised the transfers to these personal accounts as vendor payments. After Harack was terminated by the display services company in May 2019, she was hired to work in the accounting department of a project design company in Orlando. Between July 2019 and December 2019, Harack directed four fraudulent payments from the project design company into two of her personal accounts, again disguising the transactions as vendor payments.
In total, between 2018 and 2019, Harack fraudulently paid herself $604,637.25 from accounts belonging to her employers. Harack used the funds to purchase a home, as well as home improvement projects, travel, retail purchases, restaurants, and beauty expenses.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Chauncey A. Bratt.
Justice Department Announces $5.3 Million in Awards to Support Operation LegendRead the Press Release
At a roundtable with law enforcement in Indianapolis today, Attorney General William P. Barr announced that the Department of Justice’s Office of Justice Programs (OJP) is making up to $5.3 million available in grants to support Operation Legend. Eight Legend cities - Kansas City, Mo., Albuquerque, Cleveland, Detroit, Memphis, Milwaukee, St. Louis, and Indianapolis – will be eligible for up to $500,000 in grant funding to support Real Time Crime Centers, which provide police with rapid intelligence and instant information to help identify emerging crime patterns. In addition, more than $1.3 million will fund special prosecutors who have been cross-designated to try federal firearms cases originating in Albuquerque, Memphis, St. Louis, and Kansas City, Mo.
“Keeping its citizens safe is the primary responsibility of government,” said Attorney General Barr. “Cities plagued by violent crime need the resources to tackle it, and these grant awards will help do that. On the enforcement side, Real Time Crime Centers will make policing more efficient and targeted; and on the prosecution side, Special Assistant U.S. Attorneys will help bring more federal firearms cases to justice.”
Real Time Crime Centers are a considerable financial investment for any law enforcement agency. The funding being made available to each Legend city can assist police departments in purchasing critical equipment and paying for the overtime to keep these centers staffed around the clock.
Grants to the New Mexico 13th Judicial District Attorney’s Office ($278,460); Jackson County, Missouri ($247,236); Tennessee’s 30th District Attorney General’s Office ($398,864); and the Missouri Attorney General’s Office ($397,020) will allow these four Operation Legend sites to hire full-time local prosecutors who will be empowered to try firearms cases in federal court. Prosecuting gun crimes is central to the Justice Department’s strategy under Operation Legend, a sustained, systematic and coordinated initiative in which federal law enforcement agencies work in conjunction with state and local officials to fight violent crime. Funding comes from the Bureau of Justice Assistance, a component of OJP.
“We are pleased to support the outstanding work being undertaken through Operation Legend to reduce violent crime by focusing on cases involving illegal firearms,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “The Office of Justice Programs is pleased to make these resources available to support the brave crime-fighters who work so hard to deter violence and keep our communities safe.”
The Department of Justice launched Operation Legend in July, following the murder of four-year-old LeGend Taliferro, who was shot and killed while he slept in his Kansas City home. The initiative was subsequently expanded from Kansas City to Albuquerque, Chicago, Cleveland, Detroit, Memphis, Milwaukee, St. Louis, and Indianapolis. Since the summer launch, officials in Operation Legend sites have made more than 5,500 arrests, including approximately 276 for homicide, and seized more than 2,000 firearms. Of the more than 5,500 individuals arrested, approximately 1,124 have been charged with federal offenses. More than 600 of those defendants have been charged with firearms offenses.
For more information on Operation Legend, please visit https://www.justice.gov/operationlegend.
Inmate Indicted for Sending Threatening Letter to United States SenatorRead the Press Release
ALBANY, NEW YORK – Carlo Di Padova, age 61, was indicted today for sending a letter from the Auburn Correctional Facility, addressed to a United States Senator, containing a white powdery substance and a message stating that Di Padova planned to have someone shoot the Senator in the head.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Di Padova, now housed at the New York State Correctional Facility located in Malone, New York, is charged with mailing a threatening communication and impeding, intimidating, and interfering with a federal official by threat. The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty. The powder in the letter was determined to be an innocuous substance.
Each charge filed against Di Padova carries a maximum sentence of 10 years in prison and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case is being investigated by the FBI’s Joint Terrorism Task Force (JTTF), and the New York State Department of Correction and Community Supervision, Office of Special Investigation, and is being prosecuted by Assistant U.S. Attorney Emily C. Powers.
Indictment Charges 7 Hartford Women for Participating in Victoria's Secret Theft SchemeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations (HSI) in Boston, today announced that a federal grand jury in Hartford has returned an indictment charging DEBRAN MOORE, also known as Debran Chanel, 21; SHAMONIQUE MACKEY, 21; DAIJAH FAGAN, 20; TAMIJAH HUNTER, 21; SHARNICE JACKSON, 19; LEONNA JONES, 21; and IMANI AITCHESON, 21, all of Hartford, with conspiracy and fraud offenses related to a scheme to defraud Victoria’s Secret stores in Connecticut and Massachusetts.
The indictment was returned on October 6, 2020, and was unsealed after the defendants were arrested. Each defendant is released on a $100,000 bond.
As alleged in the indictment, beginning at least as early as February 2019 and continuing through at least October 2019, the co-conspirators devised a scheme through which they stole thousands of dollars from L Brands, the parent company of Victoria’s Secret stores. As part of the scheme, the co-conspirators shoplifted merchandise from Victoria’s Secret stores in Connecticut and Massachusetts. They then returned the shoplifted Victoria’s Secret merchandise through a “No Original Receipt” return, which allowed them to obtain gift cards for Victoria’s Secret in the value of the stolen merchandise (the “Return Step”). The co-conspirators then redeemed the gift cards at Victoria’s Secret stores for merchandise that slightly exceeded the value of the gift card, so that the excess amount was charged to a debit card connected to a co-conspirator (the “Redeem Step”). They then returned the merchandise purchased in the Redeem Step, with the refund for the entire amount credited to the co-conspirator’s debit card (the “Refund Step”).
It is alleged that the loss to L Brands from this scheme exceeds $100,000.
The indictment charges each defendant with one count of conspiracy to commit wire fraud, and one count of wire fraud. Both charges carry a maximum term of imprisonment of 20 years.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the Department of Homeland Security, Homeland Security Investigations, with the assistance of the Connecticut State Police, Hartford Police Department and L Brands Loss Prevention. The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
Illinois Man Charged with Defrauding the U.S Treasury Department’s Mortgage Assistance Program in IndianaRead the Press Release
HAMMOND-Mohammed Shahbaz Khan, age 45, of Bourbonnais, Illinois was indicted for making false claims in connection with his receipt of money from the Hardest Hit Fund, a federal mortgage assistance initiative offered by the U.S. Treasury Department’s Troubled Asset Relief Program, announced U.S. Attorney Kirsch.
According to the indictment, the purpose of the Hardest Hit Fund was to help stabilize communities in states, like Indiana, that were “hardest hit” by the 2008 economic and housing market downturn. The Hardest Hit Fund program in Indiana is administered by the Indiana Housing and Community Development Authority. In order to receive this mortgage assistance, an applicant was required to be an Indiana homeowner; own only one home; and reside in that home.
The indictment alleges that Khan knowingly submitted false statements about his residency in order to obtain Hardest Hit Fund mortgage assistance on an Indiana property, while living elsewhere. Over 18-months, Khan allegedly received $29,926.46 in mortgage assistance, to which he was not entitled.
“Today, an Illinois man was charged with defrauding a long-term federal economic stability program, intended to help people stay in their homes, knowing that he did not qualify,” said Christy Goldsmith Romero, Special Inspector General of the U.S. Treasury Department’s Troubled Asset Program (SIGTARP). “We commend the Office of the U.S. Attorney for the Northern District of Indiana for standing with SIGTARP to combat fraud against homeownership preservation programs.”
The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.
If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.
This case was investigated by the U.S. Department of Treasury’s Office of Special Inspector General for the Troubled Asset Relief Program (SIGTARP). This case is being prosecuted by Assistant United States Attorney Molly Kelley.
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Identity Thief Sentenced to 75 Months in Federal PrisonRead the Press Release
Benton, Ill. –Tamecia Buckley, 37, of Cahokia, Illinois, was sentenced today to 75 months in federal prison on 7 fraud counts and 5 aggravated identity theft counts. Buckley pled guilty to the charges in July and has been in federal custody since August 2019. She will serve a three-year term of supervised release following her imprisonment on the fraud counts and a one-year term of supervised release on the aggravated identity theft counts.
Documents in the case reveal that for about a five-year period, Buckley used the identities of real people, some of whom were elderly females, without their permission to purchase a car, lease cellular telephones (which she sold for cash), and activate utility services, causing losses over
$325,000. In sentencing Buckley, United States District Judge Staci M. Yandle acknowledged the emotional harm aggravated identity theft victims experience, stating that many people “don’t consider how serious it is.”United States Attorney Steven D. Weinhoeft praised the investigative work of the United States
Postal Inspection Service, the Federal Bureau of Investigation, the Illinois State Police, the
Germantown Police Department, the Richmond Heights Police Department, the Fairview Heights Police
Department, and the Cahokia Police Department for their work in this investigation.U.S. Attorney Weinhoeft also acknowledged that in 2018, 14.4 million Americans became identity theft victims. 1 This averages out to about 1 out of every 15 Americans or a new victimization every two seconds.2 “If you believe you have been a victim of identity theft, I encourage you to contact your local police department and submit a report,” Weinhoeft said.
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1 See https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime.
2 See https://clark.com/technology/theres-a-new-victim-of-identity-theft-every-two-seconds-heres-the-best-way-to- protect-yourself-online/.Husband Sentenced to over 15 Years in Prison for Human Trafficking Convictions Related to Forced Labor of Foreign NationalsRead the Press Release
SACRAMENTO, Calif. — Following his wife’s sentencing, Satish Kartan, 46, currently residing in Sacramento, was sentenced today to 15 years and eight months in prison for forced labor violations. In addition, U.S. District Judge Morrison C. England Jr. ordered $15,657 be paid in restitution to three victims, in part to cover their back wages and other losses.
On March 14, 2019, after an 11-day trial, a federal jury found Kartan and his wife, Sharmistha Barai, 40, guilty of conspiracy to obtain forced labor and two counts of obtaining forced labor. Kartan was also found guilty of one count of fraud in foreign labor contracting. On Oct. 2, Barai was sentenced to 15 years and eight months in prison for forced labor violations.
Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division; U.S. Attorney McGregor W. Scott; Matthew Perlman, Special Agent in Charge of the U.S. Department of State’s Diplomatic Security Service (DSS), San Francisco Field Office; Sean Ragan, Special Agent in Charge of the FBI Sacramento Field Office; and Tatum King, Special Agent in Charge, Homeland Security Investigations for San Francisco and Northern California made the announcement.
“Kartan earned his sentence by the systematic abuse and exploitation of vulnerable women for the benefit of his wife and family,” said U.S. Attorney Scott. “He verbally abused multiple victims, withheld basic sustenance from them, and physically intimidated them. Today’s sentence will send a loud message to others engaged in human trafficking and labor. Moreover, it will give Kartan’s victims the peace of mind that he will never be able to abuse them again.”
“The United States abolished slavery and involuntary servitude more than 150 years ago,” said Assistant Attorney General Eric Dreiband for the Justice Department's Civil Rights Division. “Yet, inhuman forced labor and deprivations of liberty and dignity persist because human traffickers proliferate modern-day slavery, and endeavor to exploit their fellow human beings for profit and other gruesome purposes. The sentence imposed today sends a stern message that human trafficking and forced labor will not be tolerated in the United States. The defendant’s role in this scheme to compel the victims into servitude for up to 18 hours a day, with minimal pay, through intimidation, threats, and violence, is an unconscionable and illegal criminal violation of the victims’ individual rights, freedom, and dignity. The Civil Rights Division remains committed to pursuing justice relentlessly on behalf of victims of human trafficking and prosecuting perpetrators to the fullest extent of the law.”
“Those engaged in the heinous crime of forced labor will face severe consequences for their actions,” said SAC Perlman of the Diplomatic Security Service, San Francisco Field Office. “The Diplomatic Security Service and our partner agencies will continue to aggressively pursue and prosecute those who commit visa fraud to exploit others for their own personal gain.”
“Victims of labor trafficking are often unaware of how to get help and that services are available to help them after they are recovered,” said SAC Ragan of the FBI Sacramento Field Office. “The FBI is committed to working with our law enforcement partners and investigating allegations of human trafficking and to break the cycle of force, fraud, or coercion that has bound victims to their traffickers. To be successful, we need your help. Please report alleged human trafficking to law enforcement or submit a tip to tips.fbi.gov.”
“This sentencing is a success in the fight against the heinous crime of human trafficking in our region and our dedication to bring these criminals to justice,” announced Tatum King, Special Agent in Charge Homeland Security Investigations (HSI) NorCal. “We are grateful to our law enforcement partners, especially the Stockton Police Department, USDOJ’s Civil Rights Division, the U.S. Attorney’s Office, DSS, and the FBI, for their unwavering efforts not only in this investigation, but in our continued fight to disrupt and dismantle human trafficking networks worldwide. We also are appreciative of the critical work that community-based organizations provide in bringing these heinous violations to light as well as the critical resources they provide to victims to assist in their recovery.”
According to court documents and evidence presented at trial, between February 2014 and October 2016, Kartan and Barai hired workers from overseas to perform domestic labor in their home in Stockton. In advertisements seeking workers on the internet and India-based newspapers, the defendants made false claims about the wages and conditions of employment. Once the workers arrived at the defendants’ Stockton residence, Kartan and Barai compelled them to work up to 18 hours a day with limited rest and nourishment. Few of them were paid any wage. As part of the conspiracy, the couple kept the domestic workers from leaving and coerced them to continue working by threatening them, by creating an atmosphere of fear, control, and disempowerment, and at times by physically hitting or burning them. When a victim resisted or expressed a desire to leave, the threats and abuse became worse.
This case was the product of an investigation by Homeland Security Investigations (HSI), the FBI, and the State Department’s Diplomatic Security Service. The Stockton Police Department provided the initial investigation and later assistance with victim services. Assistant U.S. Attorneys Jason Hitt and Katherine Lydon prosecuted the case with the assistance of the Civil Rights Division’s Human Trafficking Prosecution Unit.
The Eastern District of California (Sacramento) is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team, through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Husband Sentenced to 188 Months in Prison for Human Trafficking Convictions Related to Forced Labor of Foreign NationalsRead the Press Release
The Justice Department today announced that former Stockton, California resident Satish Kartan, 46, was sentenced today to 188 months in prison for forced labor violations. In addition, U.S. District Judge Morrison C. England Jr. ordered $15,657 be paid in restitution to three victims, in part to cover their back wages and other losses.
On March 14, 2019, after an 11-day trial, a federal jury found Kartan and his wife, Sharmistha Barai, 40, guilty of conspiracy to obtain forced labor and two counts of obtaining forced labor. Kartan was also found guilty of one count of fraud in foreign labor contracting. On Oct. 2, Barai was sentenced to 15 years and eight months in prison for forced labor violations.
“The United States abolished slavery and involuntary servitude more than 150 years ago,” said Assistant Attorney General Eric Dreiband for the Justice Department's Civil Rights Division. “Yet, inhuman forced labor and deprivations of liberty and dignity persist because human traffickers proliferate modern-day slavery, and endeavor to exploit their fellow human beings for profit and other gruesome purposes. The sentence imposed today sends a stern message that human trafficking and forced labor will not be tolerated in the United States. The defendant’s role in this scheme to compel the victims into servitude for up to 18 hours a day, with minimal pay, through intimidation, threats, and violence, is an unconscionable and illegal criminal violation of the victims’ individual rights, freedom, and dignity. The Civil Rights Division remains committed to pursuing justice relentlessly on behalf of victims of human trafficking and prosecuting perpetrators to the fullest extent of the law.”
“Kartan earned his sentence by the systematic abuse and exploitation of vulnerable women for the benefit of his wife and family,” said U.S. Attorney McGregor W. Scott for the Eastern District of California. “He verbally abused multiple victims, withheld basic sustenance from them, and physically intimidated them. Today’s sentence will send a loud message to others engaged in human trafficking and labor. Moreover, it will give Kartan’s victims the peace of mind that he will never be able to abuse them again.”
“Those engaged in the heinous crime of forced labor will face severe consequences for their actions,” said Matthew Perlman, Special Agent in Charge (SAC) of the U.S. Department of State’s Diplomatic Security Service (DSS), San Francisco Field Office. “The Diplomatic Security Service and our partner agencies will continue to aggressively pursue and prosecute those who commit visa fraud to exploit others for their own personal gain.”
“Victims of labor trafficking are often unaware of how to get help and that services are available to help them after they are recovered,” said SAC Sean Ragan of the FBI Sacramento Field Office. “The FBI is committed to working with our law enforcement partners and investigating allegations of human trafficking and to break the cycle of force, fraud, or coercion that has bound victims to their traffickers. To be successful, we need your help. Please report alleged human trafficking to law enforcement or submit a tip to tips.fbi.gov.”
“This sentencing is a success in the fight against the heinous crime of human trafficking in our region and our dedication to bring these criminals to justice,” said Tatum King, SAC, Homeland Security Investigations (HSI) for San Francisco and Northern California. “We are grateful to our law enforcement partners, especially the Stockton Police Department, Justice Department's Civil Rights Division, the U.S. Attorney’s Office, DSS, and the FBI, for their unwavering efforts not only in this investigation, but in our continued fight to disrupt and dismantle human trafficking networks worldwide. We also are appreciative of the critical work that community-based organizations provide in bringing these heinous violations to light as well as the critical resources they provide to victims to assist in their recovery.”
According to court documents and evidence presented at trial, between February 2014 and October 2016, Kartan and Barai hired workers from overseas to perform domestic labor in their home in Stockton. In advertisements seeking workers on the internet and India-based newspapers, the defendants made false claims about the wages and conditions of employment. Once the workers arrived at the defendants’ Stockton residence, Kartan and Barai compelled them to work up to 18 hours a day with limited rest and nourishment. Few of them were paid any wage. As part of the conspiracy, the couple kept the domestic workers from leaving and coerced them to continue working by threatening them, by creating an atmosphere of fear, control, and disempowerment, and at times by physically hitting or burning them. When a victim resisted or expressed a desire to leave, the threats and abuse became worse.
This case was the product of an investigation by HSI, the FBI, and DSS. The Stockton Police Department provided the initial investigation and later assistance with victim services. Assistant U.S. Attorneys Jason Hitt and Katherine Lydon prosecuted the case with the assistance of the Civil Rights Division’s Human Trafficking Prosecution Unit.
The Eastern District of California (Sacramento) is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team, through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Houston Woman Sentenced to 5 Years in Federal Prison for Role in Opioid Pill Mill that Shipped Narcotics from California to TexasRead the Press Release
LOS ANGELES – A Texas woman was sentenced today to 60 months in federal prison for her leading role in an opioid buy-back scheme in which a doctor at a Los Angeles clinic prescribed opioids to “patients” who sold the narcotics back to the clinic, which later sold drugs on the black market in California and Texas.
Angela Gillespie-Shelton, a.k.a. “Boss Lady,” and “Angotti,” 54, of Houston, was sentenced by United States District Judge John A. Kronstadt, who also ordered her to pay a $10,000 fine. Gillespie-Shelton pleaded guilty on May 21 to one count of conspiracy to distribute controlled substances and one count of conspiracy to engage in money laundering.
From October 2012 to January 2015, Gillespie-Shelton and her co-conspirators ran Southfork Medical Clinic, located in the Harvard Heights neighborhood of Los Angeles. At the time, Gillespie-Shelton primarily was based in Texas, but she frequently traveled to California.
The conspiracy’s purpose was to sell prescriptions for narcotics in exchange for cash, and to later acquire those same drugs from the clinic’s “patients,” ship the narcotics to Texas and then sell them on the black market. The prescriptions were for drugs including oxycodone and hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”).
At the clinic, Gillespie-Shelton’s co-conspirator – Dr. Madhu Garg, 69, of Glendora – saw “patients” and regularly prescribed them the narcotics, when both Gillespie-Shelton and Garg knew that the customers did not have any actual or legitimate medical need for them.
After the “patients” filled the prescriptions, Gillespie-Shelton and her co-conspirators bought the drugs from them and shipped the drugs to Texas.
In Texas, Gillespie-Shelton used two pharmacies that she controlled as a front to sell on the black market the drugs shipped from the Los Angeles clinic. Under Gillespie-Shelton’s control, the pharmacies in Texas also filled false or fraudulent prescriptions and received kickbacks from the fake prescriptions. Gillespie-Shelton’s co-conspirators also stole a physician’s identity to issue falsified prescriptions to obtain additional narcotics.
In addition, Gillespie-Shelton laundered more than $1 million from the diversion schemes through numerous accounts. She used some of the money to further the narcotics trafficking conspiracy, which included paying rent for the Southfork Clinic and a stash house in Los Angeles, as well as paying Garg more than $200,000 for writing the illegal prescriptions.
In February 2016, Garg pleaded guilty to illegally distributing oxycodone and money laundering, and she later served an 18-month prison sentence.
“[Gillespie-Shelton and her co-conspirators] made hundreds of thousands of dollars profiting off the Opioid Crisis,” prosecutors wrote in their sentencing memorandum. “The sheer amount of money [they] made over the course of this conspiracy shows that this was a crime borne of greed where the criminals trafficked lethal drugs despite the undeniable havoc they wreaked on their community.”
The case against Gillespie-Shelton was investigated by the Drug Enforcement Administration, IRS Criminal Investigation, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the California Department of Justice, and the Texas Department of Public Safety. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force.
This matter was prosecuted by Assistant United States Attorney Chelsea Norell of the International Narcotics, Money Laundering, and Racketeering Section.
Houston Man Sentenced to Federal Prison on Drug Trafficking ChargesRead the Press Release
LAFAYETTE, La. – A Houston, Texas man was sentenced today by United States District Judge Robert R. Summerhays to 42 months (3 years, 6 months) in prison followed by 4 years of supervised release for his role in smuggling cocaine to the Opelousas and Eunice areas.
Kevin Robertson, 53, was charged in a June 19, 2019 indictment with conspiracy to possess with intent to distribute cocaine. Robertson pled guilty to the charge on December 9, 2019.
Louisiana State Police Troopers conducted a traffic stop of the vehicle that Robertson was driving on Interstate 20 near Lake Charles on April 20, 2019. According to information presented to the court, law enforcement officers conducted a search of Robertson’s vehicle and found seven ounces of crack cocaine, one kilogram of cocaine, and other controlled substances, and he was arrested.
This prosecution is part of a larger investigation conducted by the Drug Enforcement Administration through its Southwest Louisiana HIDTA Task Force and Organized Crime and Drug Enforcement Task Forces. The Louisiana State Police Narcotics Division initiated the investigation, and Special Agents with DEA, as well as Task Force Officers assigned to the Southwest Louisiana HIDTA Task Force, completed the investigation. In addition to the above conviction and sentence, the investigation resulted in the dismantling of a drug trafficking organization in Ville Platte, Louisiana. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
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Head of Merchant Bank Pleads Guilty in Connection with Multimillion-Dollar Securities Fraud SchemeRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, announced today that CRAIG ZABALA, the chairman, chief executive officer, and president of Concorde Group Holdings Inc. (“Holdings”), pled guilty before U.S. District Judge J. Paul Oetken to conspiracy to commit securities fraud and wire fraud stemming from a scheme to defraud investors in Holdings, a purported merchant banking firm. Among other illicit activity, ZABALA fraudulently induced at least 17 investors to invest at least approximately $4.38 million based on false and misleading statements, by failing to use investors’ funds as promised, including to build Holdings’ purported business by investing in and buying other financial services companies, and by converting investors’ money to his own use, including to repay other investors in a Ponzi-like fashion.
Acting U.S. Attorney Audrey Strauss said: “Craig Zabala admitted in court that he defrauded investors of more than $4 million through a purported financial services firm he controlled. Zabala lied to investors about how much money had been raised, who had invested, how close the firm was to an IPO, and how he would use investors’ money – most of which he took for his own use or to pay off investors in Ponzi-like fashion.”
According to the allegations in the Complaint, the Information filed today, and other proceedings in this case:
CRAIG ZABALA was the chairman, CEO, and president of various affiliated and intertwined purported financial services companies: Holdings, Concorde Group, Inc. (“Group”), Blackhawk Capital Group BDC, Inc. (“Blackhawk”), DBL Holdings, LLC, d/b/a “Drexel Burnham Lambert” (“DBL”), Concorde Investment Managers, LLC (“CIM”), and Concorde Europe, Ltd. (“Concorde Europe”). In or about August 2019, FINRA barred ZABALA from the broker-dealer industry, including because of his failure to cooperate with a FINRA investigation.
Holdings was a Delaware corporation formed in or about 2015, with an office in Jersey City, New Jersey, and a mailing address in New York, New York. Holdings purported to provide financial services, including merchant banking, investment banking, asset management, and securities brokerage services, to entrepreneurs, investors, and businesses in the middle market, meaning small to mid-sized companies with revenue and market capitalizations of less than $1 billion, in North America, Europe, and Asia. Holdings’ purported affiliates included Group, DBL, Blackhawk, CIM, and Concorde Europe. ZABALA was a majority owner of Holdings.
Group was a Delaware corporation formed in or about 1995, based in New York, New York, that purported to provide the same types of financial services as Holdings. Group’s purported affiliates included DBL, Blackhawk, CIM, and Concorde Europe. ZABALA was a majority owner of Group. Between in or about 2001 and in or about 2014, Group purportedly raised approximately $18 million from investors.
From at least in or about 2015 through in or about 2020, ZABALA and others perpetrated a scheme to defraud at least approximately 17 investors out of at least approximately $4.38 million in Holdings notes, warrants, and equity, almost all of whom invested in a private offering by Holdings of $25 million in senior secured notes with attached warrants paying 13 percent interest (the “Holdings Offering”).
ZABALA and others falsely represented that the proceeds from the offerings would be used to grow Holdings’ purported business by investing in and buying other financial services companies. In truth and in fact, and as ZABALA well knew, Holdings did not make any investments in or buy other companies.
ZABALA and others falsely represented to Holdings investors that Holdings had raised nearly $25 million in the Holdings Offering. In truth and in fact, and as ZABALA well knew, Holdings only raised a few million dollars.
ZABALA and others falsely represented to Holdings investors that the family office of a wealthy German family had invested millions of dollars in Holdings. In truth and in fact, and as ZABALA well knew, this family office never invested in, and never committed to invest in, Holdings.
ZABALA and others falsely represented to Holdings Investors that Holdings would soon have an initial public offering (“IPO”), which would result in large profits to Holdings investors. In truth and in fact, and as ZABALA well knew, Holdings was not close to an IPO.
ZABALA converted at least approximately 70 percent of the approximately $4.38 million in Holdings investor funds in the form of cash withdrawals and other transfers to himself, payments to his girlfriend, payments of his personal credit card bills, and repayment of Group investors in a Ponzi-like fashion.
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ZABALA, 68, pled guilty to one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison. The charge also carries a maximum fine of $250,000, or twice the gross gain or loss from the offenses. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ZABALA also agreed to forfeit $4,380,000 and to pay restitution in the amount of $4,380,000. ZABALA is scheduled to be sentenced by Judge Oetken on February 5, 2021 at 11:00 a.m.
Ms. Strauss praised the outstanding work of the United States Postal Inspection Service’s New York Division, and also thanked the SEC and Financial Industry Regulatory Authority for their assistance and cooperation in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Joshua A. Naftalis is in charge of the prosecution.
Guilty Verdict in First MDGA Jury Trial Since COVID-19 Precautions BeganRead the Press Release
COLUMBUS, Ga. – A federal jury has returned a guilty verdict in the first convened jury trial in the Middle District of Georgia since COVID-19 precautions took effect, said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia.
Ernesto Rivera-Rodriguez, 55, of Cataula, Harris County, Georgia, was found guilty of one count of transmitting threats in interstate commerce. His trial, which began on Monday, October 19 before U.S. District Judge Clay Land, concluded with a guilty verdict today. Rivera-Rodriguez faces a maximum five years in prison. A sentencing date has not been set. There is no parole in the federal system.
As the trial was to take place during the COVID-19 pandemic, the Court developed a plan to protect USAO personnel, defense counsel, the defendant, witnesses, jurors and court personnel by requiring the use of masks, spreading individuals out within the courtroom and diligently sanitizing all areas. In addition, witnesses wore clear masks and plexiglass barriers were used. Jurors were seated in the gallery in order to remain at safe distances, and witnesses sat socially distanced in the jury box. Jury selection was conducted in two groups, as opposed to the usual one gathering, to ensure people were socially distanced and safe.
“There were many precautions put in place to ensure that both a safe and a fair trial was conducted here in the Middle District of Georgia,” said U.S. Attorney Peeler. “This guilty verdict holds the defendant accountable for terrorizing the hard-working employees of the timeshare company and the hard-working men and women of the Polk County Sheriff’s Office. Our office will vigorously prosecute those who choose to threaten others while hiding behind a telephone or a computer. I want to thank all involved for ensuring justice was served today.”
According to facts entered into court, Rivera-Rodriguez was vacationing at a timeshare property he owned in Orlando, Florida in November 2017, when he was arrested by Polk County, Florida deputies for misdemeanor possession of marijuana, to which he pled guilty. Rivera-Rodriguez, a former Marine, then threatened to kill the police officers involved in his arrest. Shortly after his arrest, Rivera-Rodriguez became involved in a dispute with the timeshare company and again made multiple threats, including stating that he would take an AR-15 to the timeshare and kill employees if he was not refunded $75,000. In one of multiple, legally recorded threats, Rivera-Rodriguez told a timeshare employee, “Please don’t make me go over there and start spilling blood over there in Orlando, because I will take it out on the people over there.” Rivera-Rodriguez added, “I will go to Florida and take it out on someone over there, and if that cop shows up, I’m taking his (profanity) head off, too.” The FBI spoke with Rivera-Rodriguez on numerous occasions, but he refused to stop making the threats. Ultimately, Rivera-Rodriguez was indicted and detained. According to a family member, Rivera-Rodriguez had a concealed weapon permit and “was always armed.”
The case was investigated by FBI and the Polk County, Florida Sheriff’s Office. Assistant U.S. Attorney Mel Hyde is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Guild Mortgage Company of San Diego to Pay Almost $25 Million to Resolve Allegations it Knowingly Caused False ClaimsRead the Press Release
Assistant U. S. Attorney Joseph Price (619) 546-7642
NEWS RELEASE SUMMARY – October 22, 2020
SAN DIEGO – Guild Mortgage Company has agreed to pay the United States $24.9 million to resolve allegations that it violated the False Claims Act and the common law by knowingly breaching material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), the Department of Justice announced today. Guild Mortgage Company is headquartered in San Diego, California, with branches across the United States.
“Ensuring the integrity of federal lending programs is important to keeping those programs financially sound,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “Together, with our partners at HUD, we have worked hard to hold accountable FHA lenders that knowingly and materially violate program requirements that help Americans achieve the dream of home ownership.”
“As this settlement demonstrates, we are committed to holding mortgage lenders accountable when they choose to abuse the integrity of vital government programs that are designed to assist homeownership,” said U.S. Attorney Robert Brewer. “We also commend the whistleblower for coming forward, exposing these wrongs, and working with the government investigative team.”
“The United States is committed to providing Americans opportunities to own their own homes,” said Acting U.S. Attorney for the District of Columbia Michael R. Sherwin. “This settlement reflects the diligent work of officials from the Department of Justice and HUD to ensure that the programs that provide those opportunities are operated with integrity and in accordance with requirements established by law.”
“The Federal Housing Administration insurance program is a critical tool that helps hardworking Americans achieve their dream of homeownership. Any abuse of that program is unacceptable and the bad actors will be held accountable,” said Rae Oliver Davis, U.S. Department of Housing and Urban Development, Inspector General. “This case highlights the effectiveness and the importance of whistleblower programs.”
Participants in the FHA mortgage insurance program, like Guild Mortgage Company, can originate and underwrite mortgages without first having the government review the loans for compliance with the agency’s underwriting and origination requirements. If an FHA-insured loan defaults, the holder of the loan can then recover from the United States for certain losses. Lenders must follow FHA rules designed to ensure that only mortgages that meet key credit and underwriting criteria are insured by the government.
The settlement announced today resolves allegations that Guild Mortgage Company knowingly approved ineligible loans that later defaulted and resulted in claims to FHA for mortgage insurance, failed to comply with material program rules that require lenders to maintain quality control programs to prevent and correct underwriting deficiencies, and failed to self-report materially deficient loans that it identified.
The agreement resolves allegations brought by the former head of quality control at Guild Mortgage Company, Kevin Dougherty, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The Act permits the United States to intervene in such a lawsuit, as it did in part here. Dougherty will receive $4,980,000 as his share of the government’s recovery.
The investigation, litigation, and settlement were the result of a coordinated effort among the Commercial Litigation Branch of the Department of Justice’s Civil Division, the U.S. Attorney’s Offices for the District of Columbia and the Southern District of California, HUD, and HUD-OIG.
The qui tam case is captioned United States ex rel. Dougherty v. Guild Mortgage Company, Civ. A. No. 16-2909 (S.D. Cal.).
The claims asserted against the defendant are allegations only, and there has been no determination of liability.
Grand Jury Returns 6 IndictmentsRead the Press Release
MADISON, WIS. -- A federal grand jury in the Western District of Wisconsin, sitting in Madison, has returned the following indictments. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
Columbus Man Charged with Defrauding Financial Institution
Michael Eisenga, 49, Columbus, Wisconsin, is charged with engaging in a scheme to defraud Alliant Credit Union, a financial institution in Rolling Meadows, Illinois from August 2016 to January 2019. The indictment alleges that Eisenga, as the operator of CCC Lot 2, a limited liability company with a principal place of business in Columbus, made a false statement in an application for a mortgage loan from Alliant Credit Union for commercial property in Columbus.
The indictment alleges that Eisenga represented to Alliant that CCC Lot 2 had secured Festival Foods Inc. as a tenant for the property through a 20-year lease agreement and that another company, Supervalue Holdings, Inc., had guaranteed the lease. The indictment alleges that Eisenga provided Alliant with two signed documents he represented to be the lease with Festival Foods Inc. and the guarantee from Supervalue Holdings, Inc., but that neither of these documents were genuine. Alliant approved CCC Lot 2 for the loan and paid out loan proceeds of approximately $6.9 million in March 2018.
The indictment further alleges that as part of the scheme to defraud, after CCC Lot 2 defaulted on the loan, Eisenga provided Alliant with a document purporting to be an agreement terminating CCC Lot 2’s lease with Festival Foods Inc., but the document was not genuine.
If convicted, Eisenga faces a maximum penalty of 30 years in federal prison. The charge against him is the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Meredith Duchemin is handling the prosecution.
Man Charged with Defrauding Defense Department, Identity Theft & Money Laundering
Craig Klund, 57, Yankton, South Dakota, formerly of Chippewa Falls, Wisconsin, is charged in a 19-count indictment with a scheme to defraud the U.S. Department of Defense (DoD). The indictment alleges that Klund obtained money from DoD contracts under false pretenses by shielding his true identity from the DoD, and not disclosing the fact that he was the person bidding and winning DoD contracts. The indictment charges Klund with 10 counts of wire fraud, three counts of false statements, two counts of identity theft, and four counts of money laundering. The indictment alleges that:
- Klund created fake identities and formed multiple shell companies that listed fake addresses and fake contact persons in an effort to hide his identity, and that he attempted to engage in bid rigging by using his various shell corporations to bid on the same defense contracts in an effort to make it look like the DoD was receiving multiple competitive bids from different defense contractors, when in fact, the bids were coming from Klund;
- Klund supplied nonconforming parts to the DoD, which were being used in important military applications;
- Klund failed to deliver parts that he contracted with DoD to provide, but submitted invoices to DoD seeking payment for parts that were never shipped;
- Klund lied to various DoD inspectors about his true identity;
- Klund used, without lawful authority, a means of identification of real persons in an effort to hide his identity as the person who was actually running his shell companies;
- Klund created shell companies after two of his other companies were disbarred from participating in the U.S. government procurement program in 2015;
- In 2018, Klund relocated his business operations from Chippewa Falls to South Dakota in an effort to conceal and evade his criminal activity from the DoD;
- Klund took steps to conceal his criminal activity from the U.S. government by not reporting any of his DoD gross receipts to the IRS; and
- Klund engaged in money laundering as a way to disguise his receipt and control of the DoD proceeds paid to his shell companies.
The indictment alleges that Klund used at least 10 different shell companies and was awarded government contracts valued at over $4,000,000 from 2013 to 2018.
If convicted, Klund faces a maximum penalty of 20 years in federal on each wire fraud charge, five years on each false statement charge, 10 years on each money laundering charge, and a mandatory minimum of two years on each identity theft charge. Federal law requires that a sentence imposed on the identity theft charges be served consecutive to any other sentence imposed.
The charges against Klund are the result of an investigation by the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigation Service; U.S. Air Force, Office of Special Investigations; U.S. Army, Criminal Investigation Division, Major Procurement Fraud Unit; U.S. Naval Criminal Investigative Service; U.S. General Services Administration, Office of Inspector General, Office of Investigations; and IRS Criminal Investigation. Assistant U.S. Attorney Daniel Graber is handling the prosecution.
Minnesota Man Charged with Violating Endangered Species Act
Chang Xiong, 46, Oakdale, Minnesota, is charged with three counts of purchasing wildlife knowing that it had been transported in violation of the Endangered Species Act. The indictment alleges that in July 2016, September 2017, and December 2018, Xiong purchased rhinoceros feet.
If convicted, Xiong faces a maximum penalty of five years in federal prison on each count. The charges against him are the result of an investigation by the U.S. Fish and Wildlife Service, Office of Law Enforcement. Assistant U.S. Attorney Daniel Graber is handling the prosecution.
McFarland Woman Charged with Drug Crimes Involving Methamphetamine
Tara Blum, 29, McFarland, Wisconsin, is charged with four counts of distributing methamphetamine and two counts of possessing methamphetamine with intent to distribute. The indictment alleges that these offenses occurred between July 22 and September 9, 2020. The indictment alleges that one of the distributions involved 50 grams or more of methamphetamine, and that on September 9, Blum possessed 500 grams or more for distribution.
If convicted, Blum faces a maximum penalty of 20 years in federal prison on three of the distribution charges, a mandatory minimum of five years and a maximum of 40 on the charge involving 50 grams or more of methamphetamine, and a mandatory minimum of 10 years and a maximum of life on the charge involving 500 grams or more. The charges against Blum are the result of an investigation by the Dane County Narcotics Task Force. Assistant U.S. Attorney Robert Anderson is handling the prosecution.
Madison Man Charged with Possessing Crack Cocaine for Distribution
DeAndre Bishop, 42, Madison, Wisconsin, is charged with possessing 28 grams or more of crack cocaine with the intent to distribute. The indictment alleges that he possessed the crack cocaine on August 3, 2020.
If convicted, Bishop faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison. The charge against him is the result of an investigation by the Waunakee Police Department. Assistant U.S. Attorney David Reinhard is handling the prosecution.
Rhinelander Man Charged with Being a Felon in Possession of Ammunition
Dustin LaPuma, 26, Rhinelander, Wisconsin, is charged with being a felon in possession of ammunition. The indictment alleges that he possessed 9mm ammunition on August 10, 2020.
If convicted, LaPuma faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Oneida County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Chadwick Elgersma is handling the prosecution.
Goldman Sachs Resolves Foreign Bribery Case and Agrees to Pay over $2.9 BillionRead the Press Release
The Goldman Sachs Group, Inc. (Goldman Sachs or the Company), a global financial institution headquartered in New York, New York, and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over one billion dollars in bribes to high-ranking government officials in Malaysia and Abu Dhabi to obtain lucrative business for Goldman Sachs, underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees. Goldman Sachs will pay more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere.
Earlier today, in federal court in Brooklyn, Goldman Sachs entered into a deferred prosecution agreement with the United States Attorney’s Office for the Eastern District of New York and the Department of Justice’s Criminal Division, Fraud Section and Money Laundering and Asset Forfeiture Sections (the Department) in connection with a criminal information filed in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA. GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA.
Previously, Tim Leissner, the former Southeast Asia Chairman and a Participating Managing Director of Goldman Sachs, pleaded guilty to conspiracy to violate the FCPA and conspiracy to commit money laundering. Ng Chong Hwa, also known as “Roger Ng,” former Managing Director of Goldman and Head of Investment Banking for GS Malaysia, has been charged with conspiracy to violate the FCPA and conspiracy to commit money laundering. Ng was extradited from Malaysia to face these charges and is scheduled for trial in March 2021. All four cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York.
In addition to these criminal charges, the Department has recovered, or assisted in the recovery of, an additional over $1 billion in assets associated with and traceable to the 1MDB money laundering and bribery scheme.
Seth DuCharme, Acting U.S. Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Federal Bureau of Investigation, New York Field Office (FBI), Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS-CI), made the announcement.
“Over a period of five years, Goldman Sachs participated in a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees, all to the detriment of the people of Malaysia and the reputation of American financial institutions operating abroad,” stated Acting U.S. Attorney DuCharme. “Today’s resolution, which includes a criminal guilty plea by Goldman Sachs’ subsidiary in Malaysia, demonstrates that the Department will hold accountable any institution that violates U.S. law anywhere in the world by unfairly tilting the scales through corrupt practices.”
“The conduct that Goldman Sachs admitted to today—engaging in a scheme to bribe high ranking public officials of a foreign country to obtain lucrative underwriting and other business related to 1MDB—erodes public confidence in the integrity of American business,” stated Acting Assistant Attorney General Rabbitt. “Today’s resolution demonstrates the Department’s commitment to combatting corruption and ensuring that no institution or individual is above the rule of law in the United States, no matter their business, their profits, or their profile.”
“When government officials and business executives secretly work together behind the scenes for their own illegal benefit, and not that of their citizens and shareholders, their behavior lends credibility to the narrative that businesses don't succeed based on the quality of their products, but rather their willingness to play dirty. Greed eventually exacts an immense cost on society, and unchecked corrupt behavior erodes trust in public institutions and government entities alike. This case represents the largest ever penalty paid to U.S. authorities in an FCPA case. Our investigation into the looting of funds from 1MDB remains ongoing. If anyone has information that could assist the case, call us at 1-800-CALLFBI,” stated FBI Assistant Director-in-Charge Sweeney.
“1MDB was established to drive strategic initiatives for the long-term economic development of Malaysia. Goldman Sachs admitted today that one billion dollars of the money earmarked to help the people of Malaysia was actually diverted and used to pay bribes to Malaysian and Abu Dhabi officials to obtain their business,” stated IRS-CI Special Agent-in-Charge Korner. “Today’s guilty pleas demonstrate that the law applies to everyone, including large investment banks like Goldman Sachs. IRS Criminal Investigation will work tirelessly alongside our law enforcement partners to identify and bring to justice those who engage in fraud and deceit around the globe. When the American financial system is misused for corruption, the IRS will take notice and we will take action.”
According to Goldman’s admissions and court documents, between approximately 2009 and 2014, Goldman conspired with others to violate the anti-bribery provisions of the FCPA by engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to government officials in Malaysia and Abu Dhabi in order to obtain and retain business for Goldman from 1MDB, a Malaysian state-owned and state-controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. Specifically, Goldman admitted to engaging in the bribery scheme through certain of its employees and agents, including Leissner, Ng and a former executive who was a Participating Managing Director and held leadership positions in Asia (Employee 1), in exchange for lucrative business and other advantages and opportunities. These included, among other things, securing Goldman’s role as an advisor on energy acquisitions, as underwriter on three lucrative bond deals with a total value of $6.5 billion, and a potential role in a highly anticipated and even more lucrative initial public offering for 1MDB’s energy assets. As Goldman admitted—and as alleged in the indictment pending in the Eastern District of New York against Ng and Low—in furtherance of the scheme, Leissner, Ng, Employee 1, and others conspired to pay bribes to numerous foreign officials, including high-ranking officials in the Malaysian government, 1MDB, Abu Dhabi’s state-owned and state-controlled sovereign wealth fund, International Petroleum Investment Company (IPIC), and Abu Dhabi’s state-owned and state-controlled joint stock company, Aabar Investments PJS (Aabar).
Goldman admitted today that, in order to effectuate the scheme, Leissner, Ng, Employee 1 and others conspired with Low Taek Jho (also known as “Jho Low”) to promise and pay over $1.6 billion in bribes to Malaysian, 1MDB, IPIC and Aabar officials. The co-conspirators allegedly paid these bribes using more than $2.7 billion in funds that Low and other members of the conspiracy diverted and misappropriated from the bond offerings underwritten by Goldman. Leissner, Ng and Low also retained a portion of the misappropriated funds for themselves and other co-conspirators. Goldman, through Leissner, Ng, Employee 1 and others, used Low’s connections to advance and further the bribery scheme, ultimately ensuring that 1MDB awarded Goldman a role on three bond transactions between 2012 and 2013, known internally at Goldman as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.”
Goldman also admitted that, although employees serving as part of Goldman’s control functions knew that any transaction involving Low posed a significant risk, and although they were on notice that Low was involved in the transactions, they did not take reasonable steps to ensure that Low was not involved. Goldman further admitted that there were significant red flags raised during the due diligence process and afterward—including but not limited to Low’s involvement—that either were ignored or only nominally addressed so that the transactions would be approved and Goldman could continue to do business with 1MDB. As a result of the scheme, Goldman received approximately $606 million in fees and revenue, and increased its stature and presence in Southeast Asia.
Under the terms of the agreements, Goldman will pay a criminal penalty and disgorgement of over $2.9 billion. Goldman also has reached separate parallel resolutions with foreign authorities in the United Kingdom, Singapore, Malaysia, and elsewhere, along with domestic authorities in the United States. The department will credit over $1.6 billion in payments with respect to those resolutions.
The department reached this resolution with Goldman based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department; the nature and seriousness of the offense, which included the involvement of high-level employees within the Company’s investment bank and others who ignored significant red flags; the involvement of various Goldman subsidiaries across the world; the amount of the bribes, which totaled over $1.6 billion; the number and high-level nature of the bribe recipients, which included at least 11 foreign officials, including high-ranking officials of the Malaysian government; and the significant amount of actual loss incurred by 1MDB as a result of the co-conspirators’ conduct. Goldman received partial credit for its cooperation with the department’s investigation, but did not receive full credit for cooperation because it significantly delayed producing relevant evidence, including recorded phone calls in which the Company’s bankers, executives, and control function personnel discussed allegations of bribery and misconduct relating to the conduct in the statement of facts. Accordingly, the total criminal penalty reflects a 10 percent reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
Low has also been indicted for conspiracy to commit money laundering and violate the FCPA, along with Ng, E.D.N.Y. Docket No. 18-CR-538 (MKB). Low remains a fugitive. The charges in the indictment as to Low and Ng are allegations, and those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by the FBI’s International Corruption Unit and IRS-CI. The prosecution is being handled by the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section. Assistant U.S. Attorneys Jacquelyn M. Kasulis, Alixandra E. Smith and Drew G. Rolle of the Eastern District of New York and Trial Attorneys Katherine Nielsen, Nikhila Raj, Jennifer E. Ambuehl, Woo S. Lee, Mary Ann McCarthy, Leo Tsao and David Last of the Criminal Division are prosecuting the case. Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures. The Justice Department’s Office of International Affairs of the Criminal Division provided critical assistance in this case.
The Department also appreciates the significant assistance provided by the U.S. Securities and Exchange Commission, the Board of Governors of the Federal Reserve System including the Federal Reserve Bank of New York, and the New York State Department of Financial Services, the United Kingdom Financial Conduct Authority and Prudential Regulation Authority, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Monetary Authority of Singapore, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg, the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, and the Malaysian Anti-Corruption Commission. The department also expresses its appreciation for the assistance provided by the Ministry of Justice of France; the Attorney General’s Chambers of the British Virgin Islands; the Attorney General’s Office of the Bailiwick of Guernsey; and the Federal Office of Justice of Germany.
The Defendants:
THE GOLDMAN SACHS GROUP, INC.
E.D.N.Y. Docket No. 20-CR-437
GOLDMAN SACHS (MALAYSIA) SDN. BHD.
E.D.N.Y. Docket No. 20-CR-438
Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay over $2.9 BillionRead the Press Release
The Goldman Sachs Group Inc. (Goldman Sachs or the Company), a global financial institution headquartered in New York, New York, and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees. Goldman Sachs will pay more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere.
Goldman Sachs entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA. GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA.
Previously, Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, pleaded guilty to conspiring to launder money and to violate the FCPA. Ng Chong Hwa, also known as “Roger Ng,” former managing director of Goldman and head of investment banking for GS Malaysia, has been charged with conspiring to launder money and to violate the FCPA. Ng was extradited from Malaysia to face these charges and is scheduled to stand trial in March 2021. The cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York.
In addition to these criminal charges, the department has recovered, or assisted in the recovery of, in excess of $1 billion in assets for Malaysia associated with and traceable to the 1MDB money laundering and bribery scheme.
“Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combatting corruption and protecting the U.S. financial system.”
“Over a period of five years, Goldman Sachs participated in a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees, all to the detriment of the people of Malaysia and the reputation of American financial institutions operating abroad,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “Today’s resolution, which includes a criminal guilty plea by Goldman Sachs’ subsidiary in Malaysia, demonstrates that the department will hold accountable any institution that violates U.S. law anywhere in the world by unfairly tilting the scales through corrupt practices.”
“When government officials and business executives secretly work together behind the scenes for their own illegal benefit, and not that of their citizens and shareholders, their behavior lends credibility to the narrative that businesses don’t succeed based on the quality of their products, but rather their willingness to play dirty,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Greed eventually exacts an immense cost on society, and unchecked corrupt behavior erodes trust in public institutions and government entities alike. This case represents the largest ever penalty paid to U.S. authorities in an FCPA case. Our investigation into the looting of funds from 1MDB remains ongoing. If anyone has information that could assist the case, call us at 1-800-CALLFBI.”
“1MDB was established to drive strategic initiatives for the long-term economic development of Malaysia. Goldman Sachs admitted today that one billion dollars of the money earmarked to help the people of Malaysia was actually diverted and used to pay bribes to Malaysian and Abu Dhabi officials to obtain their business,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office. “Today’s guilty pleas demonstrate that the law applies to everyone, including large investment banks like Goldman Sachs. IRS Criminal Investigation will work tirelessly alongside our law enforcement partners to identify and bring to justice those who engage in fraud and deceit around the globe. When the American financial system is misused for corruption, the IRS will take notice and we will take action.”
According to Goldman’s admissions and court documents, between approximately 2009 and 2014, Goldman conspired with others to violate the FCPA by engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials in Malaysia and Abu Dhabi in order to obtain and retain business for Goldman from 1MDB, a Malaysian state-owned and state-controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. Specifically, the Company admitted to engaging in the bribery scheme through certain of its employees and agents, including Leissner, Ng, and a former executive who was a participating managing director and held leadership positions in Asia (Employee 1), in exchange for lucrative business and other advantages and opportunities. These included, among other things, securing Goldman’s role as an advisor on energy acquisitions, as underwriter on three lucrative bond deals with a total value of $6.5 billion, and a potential role in a highly anticipated and even more lucrative initial public offering for 1MDB’s energy assets. As Goldman admitted — and as alleged in the indictment pending in the Eastern District of New York against Ng and Low — in furtherance of the scheme, Leissner, Ng, Employee 1, and others conspired to pay bribes to numerous foreign officials, including high-ranking officials in the Malaysian government, 1MDB, Abu Dhabi’s state-owned and state-controlled sovereign wealth fund, International Petroleum Investment Company (IPIC), and Abu Dhabi’s state-owned and state-controlled joint stock company, Aabar Investments PJS (Aabar).
Goldman admitted today that, in order to effectuate the scheme, Leissner, Ng, Employee 1, and others conspired with Low Taek Jho, aka Jho Low, to promise and pay over $1.6 billion in bribes to Malaysian, 1MDB, IPIC, and Aabar officials. The co-conspirators allegedly paid these bribes using more than $2.7 billion in funds that Low, Leissner, and other members of the conspiracy diverted and misappropriated from the bond offerings underwritten by Goldman. Leissner, Ng and Low also retained a portion of the misappropriated funds for themselves and other co-conspirators. Goldman admitted that, through Leissner, Ng, Employee 1 and others, the bank used Low’s connections to advance and further the bribery scheme, ultimately ensuring that 1MDB awarded Goldman a role on three bond transactions between 2012 and 2013, known internally at Goldman as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.”
Goldman also admitted that, although employees serving as part of Goldman’s control functions knew that any transaction involving Low posed a significant risk, and although they were on notice that Low was involved in the transactions, they did not take reasonable steps to ensure that Low was not involved. Goldman further admitted that there were significant red flags raised during the due diligence process and afterward — including but not limited to Low’s involvement — that either were ignored or only nominally addressed so that the transactions would be approved and Goldman could continue to do business with 1MDB. As a result of the scheme, Goldman received approximately $606 million in fees and revenue, and increased its stature and presence in Southeast Asia.
Under the terms of the agreements, Goldman will pay a criminal penalty and disgorgement of over $2.9 billion. Goldman also has reached separate parallel resolutions with foreign authorities in the United Kingdom, Singapore, Malaysia, and elsewhere, along with domestic authorities in the United States. The department will credit over $1.6 billion in payments with respect to those resolutions.
The department reached this resolution with Goldman based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department; the nature and seriousness of the offense, which included the involvement of high-level employees within the Company’s investment bank and others who ignored significant red flags; the involvement of various Goldman subsidiaries across the world; the amount of the bribes, which totaled over $1.6 billion; the number and high-level nature of the bribe recipients, which included at least 11 foreign officials, including high-ranking officials of the Malaysian government; and the significant amount of actual loss incurred by 1MDB as a result of the co-conspirators’ conduct. Goldman received partial credit for its cooperation with the department’s investigation, but did not receive full credit for cooperation because it significantly delayed producing relevant evidence, including recorded phone calls in which the Company’s bankers, executives, and control function personnel discussed allegations of bribery and misconduct relating to the conduct in the statement of facts. Accordingly, the total criminal penalty reflects a 10 percent reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
Low has also been indicted for conspiracy to commit money laundering and violate the FCPA, along with Ng, E.D.N.Y. Docket No. 18-CR-538 (MKB). Low remains a fugitive. The charges in the indictment as to Low and Ng are merely allegations, and those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by the FBI’s International Corruption Unit and IRS-CI. The prosecution is being handled by the Criminal Division’s Fraud Section and the Money Laundering and Asset Recovery Section (MLARS), and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York. Trial Attorneys Katherine Nielsen, Nikhila Raj, Jennifer E. Ambuehl, Woo S. Lee, Mary Ann McCarthy, Leo Tsao, and David Last of the Criminal Division, and Assistant U.S. Attorneys Jacquelyn M. Kasulis, Alixandra Smith and Drew Rolle of the Eastern District of New York are prosecuting the case. Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures. The Justice Department’s Office of International Affairs of the Criminal Division provided critical assistance in this case.
The department also appreciates the significant assistance provided by the U.S. Securities and Exchange Commission; the Board of Governors of the Federal Reserve System, including the Federal Reserve Bank of New York; the New York State Department of Financial Services, the United Kingdom Financial Conduct Authority; the United Kingdom Prudential Regulation Authority; the Attorney General’s Chambers of Singapore; the Singapore Police Force-Commercial Affairs Division; the Monetary Authority of Singapore; the Office of the Attorney General and the Federal Office of Justice of Switzerland; the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg; the Attorney General’s Chambers of Malaysia; the Royal Malaysian Police; and the Malaysian Anti-Corruption Commission. The department also expresses its appreciation for the assistance provided by the Ministry of Justice of France; the Attorney General’s Office of the Bailiwick of Guernsey and the Guernsey Economic Crime Division.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
MLARS’s Kleptocracy Asset Recovery Initiative, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, seeks to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.
Relevant court documents will be uploaded throughout the day and available at the following links: The Goldman Sachs Group Inc. and Goldman Sachs Sdn. Bhd.
Fort Wayne Man Sentenced to 201 Months in PrisonRead the Press Release
FORT WAYNE--Damien Thomas, age 40, of Fort Wayne, Indiana, was sentenced by United States District Judge Holly A. Brady after his plea of guilty to possessing multiple controlled substances with intent to distribute and possessing a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Kirsch.
Thomas was sentenced to 201 months in prison followed by 5 years of supervised release.
According to documents in this case, Thomas sold fentanyl and cocaine to another individual, and on or about April 30, 2018, Thomas possessed in his residence almost a kilogram of heroin, over a half-kilogram of crystal methamphetamine, and large quantities of cocaine, fentanyl, and marijuana. Thomas also possessed two pistols, a rifle, and over 1,300 rounds of ammunition in furtherance of his drug trafficking activity.
“Mr. Thomas’ sentence illustrates our collective mission to rid our communities of violent drug offenders who put our residents in harm’s way,” said FBI Indianapolis Special Agent in Charge Paul Keenan. “Working with our law enforcement partners, we will continue to identify and investigate these operators and put them out of business.”
This case was investigated by the Federal Bureau of Investigation, with the assistance of the Fort Wayne Police Department, the Indiana State Police, and the Allen County Sheriff’s Department. This case was handled by Assistant United States Attorney Anthony Geller.
Former elementary teacher admits to explicit sexual conversations originating via CraigslistRead the Press Release
CORPUS CHRISTI, Texas – A 27-year-old Odom man has entered a guilty plea to transferring obscene materials to a minor, announced U.S. Attorney Ryan K. Patrick.
Lazaro Benito Rocha admitted today that he had responded to an ad on Craigslist advertising a “good time” with a teenage girl. He continued communicating with whom he thought was a 14-year-old female which soon escalated into conversations of an explicit sexual nature via text messaging.
Using his cell phone, Rocha eventually sent a photograph of his genitals.
The investigation revealed he was a part-time elementary music teacher at the Incarnate Word Academy in Corpus Christi.
U.S. District Judge David S. Morales will impose sentencing Jan. 25, 2021. At that time, Rocha faces up to 10 years in federal prison as well as a possible $250,000 maximum fine.
The Corpus Christi Police Department’s Internet Crimes Against Children Task Force, Texas Department of Public Safety and Immigration and Custom’s Enforcement’s Homeland Security Investigations conducted the investigation.
Assistant U.S. Attorney Sara Popejoy is prosecuting the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Former U.S. Army Reservist Sentenced to 40 years in Prison for Sex Trafficking and a Related OffenseRead the Press Release
U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina sentenced Xaver M. Boston, 31, of Charlotte, North Carolina, today to serve 40 years in prison and 30 years of supervised release. Judge Conrad also ordered Boston to pay $354,000 in restitution and $25,000 pursuant 18 U.S.C. 3014 and the Justice for Victims of Trafficking Act of 2015. A federal jury in Charlotte previously convicted Boston on Oct. 11, 2018, of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise.
Evidence presented during the three-day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited young women and one teenager by promising to provide them with a place to live and heroin or other opioids. Boston then advertised the victims on Backpage.com for prostitution and collected the proceeds for his own profit.
Evidence presented at trial showed that Boston used violence to control and coerce the victims. Testimony revealed that on multiple occasions, Boston choked one victim and punched and slapped other victims. He also used a pistol to strike one victim in the face, breaking her nose.
“The seriousness of today’s sentence reflects the extent to which the defendant in this case used physical violence and opioids to control and exploit the young vulnerable victims of his crime,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Civil Rights Division is committed to fighting human trafficking and committed to working with our federal and state partners to provide justice to the victims of this vile crime.”
“Boston used fear, coercion and violence against young women to build a depraved sex trafficking criminal enterprise, robbing his victims of the most basic standards of human dignity. I could not be more pleased with his lengthy sentence,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “My office will continue to work with our law enforcement counterparts to hold accountable those who engage in this illegal, dehumanizing trade, and partner with community organizations to ensure victims receive the support they need on their path to recovery.”
“It takes an especially heinous person to physically, psychologically, and sexually abuse someone,” said Robert R. Wells, Special Agent in Charge of the FBI Charlotte Field Office. “Xaver Boston's victims truly believed he was there to help. There is no way of knowing the long term damage he caused to their lives, but we do know for certain he will pay with a lengthy federal prison sentence.”
The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Special Litigation Counsel Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Former U.S. Army Reservist Sentenced to 40 Years in Prison for Sex Trafficking and A Related OffenseRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina sentenced Xaver M. Boston, 31, of Charlotte, North Carolina, today to serve 40 years in prison and 30 years of supervised release. Judge Conrad also ordered Boston to pay $354,000 in restitution and $25,000 pursuant 18 U.S.C. 3014 and the Justice for Victims of Trafficking Act of 2015. A federal jury in Charlotte previously convicted Boston on Oct. 11, 2018, of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise.
Evidence presented during the three-day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited young women and one teenager by promising to provide them with a place to live and heroin or other opioids. Boston then advertised the victims on Backpage.com for prostitution and collected the proceeds for his own profit.
Evidence presented at trial showed that Boston used violence to control and coerce the victims. Testimony revealed that on multiple occasions, Boston choked one victim and punched and slapped other victims. He also used a pistol to strike one victim in the face, breaking her nose.
“The seriousness of today’s sentence reflects the extent to which the defendant in this case used physical violence and opioids to control and exploit the young vulnerable victims of his crime,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Civil Rights Division is committed to fighting human trafficking and committed to working with our federal and state partners to provide justice to the victims of this vile crime.”
“Boston used fear, coercion and violence against young women to build a depraved sex trafficking criminal enterprise, robbing his victims of the most basic standards of human dignity. I could not be more pleased with his lengthy sentence,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “My office will continue to work with our law enforcement counterparts to hold accountable those who engage in this illegal, dehumanizing trade, and partner with community organizations to ensure victims receive the support they need on their path to recovery.”
“It takes an especially heinous person to physically, psychologically, and sexually abuse someone,” said Robert R. Wells, Special Agent in Charge of the FBI Charlotte Field Office. “Xaver Boston's victims truly believed he was there to help. There is no way of knowing the long term damage he caused to their lives, but we do know for certain he will pay with a lengthy federal prison sentence.”
The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case was prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Special Litigation Counsel Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Former Selma Police Department Officer Pleads Guilty to Obstruction of Justice ChargesRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces that Matthew Blaine Till, 33, a former officer of the Selma Police Department, pled guilty before United States District Judge Jeffrey U. Beaverstock on September 25, 2020 to three felony counts of obstruction of justice by corrupt persuasion of a witness.
At his plea hearing, Till admitted the following facts:
On April 30, 2020, Till used force against a citizen while on duty as a Selma police officer. On multiple occasions thereafter, Till instructed a fellow law-enforcement officer not to say anything to anyone—including a federal agent—regarding a phone call Till had received from his wife shortly before the use-of-force incident. Till admitted that he gave those instructions with the intent to hinder, delay, or prevent the communication to a federal law-enforcement officer of information relating to the possible commission of a federal civil-rights violation. As part of his plea agreement, Till will no longer be able to work in local, municipal, state or federal law enforcement, nor as a corrections officer or private security guard. Judge Beaverstock has scheduled sentencing for December 28, 2020. Till faces up to twenty years in prison.
Till has pending state criminal charges in Dallas County, Alabama. On September 29, 2020, a state grand jury returned a three-count indictment against Till, charging him with second-degree assault, a felony, first-degree unlawful imprisonment, a misdemeanor, and obstructing governmental operations, a misdemeanor. An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until and unless he or she is proven guilty at trial.
The Federal Bureau of Investigation and the Office of the Alabama Attorney General investigated this case. Assistant United States Attorneys Justin Roller and Deborah Griffin prosecuted the federal case in coordination with the Dallas County District Attorney’s Office, which is prosecuting the state case.
Former Inmate Charged with Conspiring to Use Drones to Smuggle Contraband into Fort Dix Federal PrisonRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man has been charged with conspiring to use drones to smuggle contraband, including tobacco, cell phone chargers, and a cell phone, into the federal correctional facility at Fort Dix, U.S. Attorney Craig Carpenito announced today.
Johansel Moronta, 27, of Linden, New Jersey, an inmate at Fort Dix from April 2018 to March 2019, was charged by complaint, unsealed today, with one count of conspiring to smuggle contraband into the prison and to defraud the United States and one count of being a federal inmate possessing and obtaining, and attempting to possess and obtain, contraband. Moronta will be scheduled to appear on a date to be determined by the court.
Three other men, Adrian Goolcharran, a/k/a “Adrian Ahoda” and “Adrian Ajoda,” Nicolo Denichilo, and Jason Arteaga Loayza, a/k/a “Juice,” previously have been charged with participating in the scheme to use drones to smuggle contraband into Fort Dix.
According to the documents filed in this case and statements made in court:
The U.S. Department of Justice, Office of Inspector General (DOJ-OIG) obtained evidence that in October 2018, while incarcerated at the federal prison at Fort Dix, Moronta participated, along with Arteaga, a former Fort Dix inmate, Goolcharran, and others, in a scheme to use unmanned aircrafts, or drones, to deliver contraband to inmates. Moronta’s role in the scheme was to coordinate the drone drops with Goolcharran and Arteaga from within the prison, and then retrieve the contraband after the drone, piloted by Goolcharran, had dropped the contraband inside the facility.
On Oct. 30, 2018, at approximately 1:40 a.m., Fort Dix officers observed a drone with fishing line hovering above the rooftop of an inmate housing unit. Officers found Moronta leaving a bathroom in the area where the bag of contraband dropped from the drone had been found, along with bolts that secured an open rooftop hatch used to access the delivery. Officers also found a cell phone that Moronta used to coordinate drone drops with Arteaga and Goolcharran. The phone contained numerous text messages and phone calls exchanged between Moronta, Goolcharran and Arteaga in the days leading up to the drop. On Oct. 27, 2018, Moronta sent a text message to Goolcharran referring to himself as “Joe [expletive] in fort dix on the rooftop.” On Oct. 30, 2018, at 12:07 a.m., Moronta sent a text message to Goolcharran asking “U in the area,” and Goolcharran responded “Yea.,” likely meaning that Goolcharran was near Fort Dix and available to make the drone drop. At 12:36 a.m., Goolcharran messaged Moronta “How we lookin,” and Moronta responded a few minutes later with “It ok.” Moronta also sent messages to Arteaga at 12:57 a.m., stating “Two trip,” likely referring to the number of drone flights planned, and “Same cop from last week,” likely referring to the corrections officer on duty.
Moronta also coordinated other drone drops with Arteaga and Goolcharran. Location data from Goolcharran’s cell phone confirmed that Goolcharran’s cell phone was in the Fort Dix area during the early morning hours of October 24, 2018, and began to depart the area by about 1:54 a.m. that same morning. In addition, evidence obtained from Moronta’s cell phone revealed numerous communications between Moronta, Arteaga, and Goolcharran on Oct. 23 and Oct. 24, 2018, showing the three men coordinating multiple drone drops.
The offenses charged in the complaint carry a maximum penalty of five years in prison and maximum fine of $250,000 for the conspiracy count and one year in prison and $100,000 maximum fine for the possessing or obtaining contraband count.
U.S. Attorney Carpenito credited agents of DOJ-OIG, New York Field Office, under the direction of Special Agent in Charge Guido Modano; DOJ-OIG’s Cyber Investigations Office, under the direction of Special Agent in Charge Keith Bonanno; the U.S. Air Force Office of Special Investigations, Detachment 307 under the direction of Superintendent Jonathan Jackson; and the U.S. Department of Transportation – Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Douglas Shoemaker, with the investigation leading to the charges.
He also thanked Federal Bureau of Prisons personnel at Fort Dix, under the direction of Warden David Ortiz; agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; investigating agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney; and officers with the Pemberton Borough Police Department, under the direction of Chief Edward Hunter; the Pemberton Township Police Department, under the direction of Chief David Jantas; and Chesterfield Township Police Department, under the direction of Chief Kyle Wilson, for their assistance.
The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey J. Manis of the Office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaints are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Five Charged in Connection with COVID-Relief Fraud SchemeRead the Press Release
Five individuals were charged in an indictment unsealed today for their alleged participation in a scheme to file fraudulent loan applications seeking more than $1.1 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Matthew D. Krueger of the Eastern District of Wisconsin.
Thomas Smith, 46, of Milwaukee, Wisconsin, Stephen Smith, 42, of Milwaukee, Wisconsin, Samuel Davis Jr., 40, of Chicago, Illinois, Robert Hamilton, 59, of Milwaukee, Wisconsin, and Jonathan Henley, 52, of Chicago, Illinois were charged in an indictment filed in the Eastern District of Wisconsin with bank fraud and money laundering.
The indictment alleges that the defendants submitted several fraudulent PPP loan applications to a federally insured financial institution and the SBA in the names of businesses with no actual operations or employees. In the applications, the defendants allegedly misrepresented the number of employees and payroll expenses. To support the fraudulent applications, the indictment alleges that the defendants submitted fake tax documents. The defendants are alleged to have fraudulently sought over $1.1 million in PPP loan funds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. SBA’s Office of Inspector General (OIG), the FBI, the Federal Deposit Insurance Corporation OIG, and IRS-Criminal Investigation. Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Felon who brought gun to Savannah protest enters guilty plea to federal firearms chargeRead the Press Release
SAVANNAH, GA: A previously convicted felon found carrying a gun after a Savannah protest has pled guilty to a federal firearms charge.
Arkeem Collins, 24, of Savannah, pled guilty in U.S. District Court to Possession of a Firearm by a Convicted Felon, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The plea subjects Collins to a possible penalty of up to 10 years in prison, and there is no parole in the federal system.
“Protests this spring throughout the Southern District were peaceful,” said U.S. Attorney Christine. “As this prosecution demonstrates, we will not tolerate those who violate the law under the guise of exercising constitutional rights.”
According to court documents and testimony, Savannah Police officers on May 31 were enforcing a citywide curfew, declared by the mayor after a protest march in the city. Collins was captured after running from officers, who found a pistol in his pocket. In his plea agreement, Collins admits knowing that as a previously convicted felon he is prohibited from possessing firearms.
“The defendant had no business carrying a firearm given his previous criminal conduct,” said Beau Kolodka, Assistant Special Agent in Charge of the Atlanta Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). “ATF's partnership with the Savannah Police Department will continue to focus on getting illegally possessed firearms off our streets.”
“We are pleased with the federal assistance we received in this investigation leading to the prosecution of an armed convicted felon," said Savannah Police Chief Roy W. Minter Jr. "Convicted felons should never be in possession of a firearm. Part of our mission is to aggressively address possession of firearms by persons in our community who are convicted felons.”
The case was investigated by the ATF and the Savannah Police Department, and is being prosecuted for the United States by Assistant U.S. Attorney Joshua S. Bearden.
Federal Prosecutors to Serve as District Election Officers for Seven California Counties During November 3 General Election PeriodRead the Press Release
LOS ANGELES – United States Attorney Nicola T. Hanna announced today that Assistant United States Attorneys Lindsey Greer Dotson and Thomas F. Rybarczyk will serve as District Election Officers for the Central District of California during this year’s general election period, which culminates on Election Day on November 3.
As the District Election Officers, AUSAs Dotson and Rybarczyk will oversee the handling of complaints related to election fraud and voting rights concerns occurring in the counties of Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara and San Luis Obispo. If complaints are received, the AUSAs will coordinate with the FBI Field Office in Los Angeles to investigate them and will consult with the Department of Justice in Washington, D.C.
The Justice Department has an important role in deterring interference or discrimination at the polls and election fraud, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible voting rights violations and election fraud while the polls are open through Election Day.
Federal law prohibits crimes such as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.
For example, actions designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.
The FBI will have special agents available across the country to receive allegations of election fraud and other election abuses on Election Day. Agents at the FBI’s Los Angeles Field Office, which serves the same seven counties as the United States Attorney’s Office, can be reached by the public at (310) 477-6565.
In order to respond to complaints of election fraud or voting rights concerns up to and including November 3, and to ensure that such complaints are directed to the appropriate authorities, AUSAs Dotson and Rybarczyk will be on duty while the polls are open.
Complaints about possible violations of the federal voting rights laws can also be made directly to the DOJ’s Civil Rights Division in Washington, D.C., by phone at (800) 253-3931 or TTY (202) 305-0082. Individuals may also report complaints by email to [email protected] and by a complaint form on the Justice Department’s website: www.justice.gov/crt/votercomplaint.
Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. These complaints should also be reported to the Justice Department after local authorities have been contacted.
Forrest Fenn Treasure Hunter Indicted for Damage to Yellowstone National ParkRead the Press Release
A man claiming to have been seeking the elusive Forrest Fenn treasure has been indicted by a federal grand jury after he was found digging in the historic Fort Yellowstone Cemetery. RODRICK DOW CRAYTHORN was indicted on September 16, 2020 on charges of excavating or trafficking in archeological resources and injury or depredation to United States property.
Count one of the indictment alleges Craythorn did knowingly and unlawfully excavate, remove, damage, alter and deface, and attempt to excavate, remove, damage, alter, and deface archeological resources, in particular the Fort Yellowstone Cemetery in Yellowstone National Park between October 1, 2019 and May 24, 2020.
The second count alleges Craythorn, during the same period, did willfully damage, injure, and commit depredation against property belonging to the United States. Craythorn was reported to have been searching for Forrest Fenn’s treasure in the Fort Yellowstone Cemetery when these acts allegedly occurred.
Forrest Fenn, an art dealer and author from Santa Fe, hid a treasure chest containing gold, rare coins, jewelry, and gemstones somewhere in the Rocky Mountains. The Fenn treasure spurred a decade long search. Treasure hunters used clues from a book Fenn had written to scour the west hoping to find the fortune. The chest was eventually located in Wyoming in June, 2020. Forrest Fenn passed away several months later.
Craythorn, 52, of Syracuse, Utah, made his initial appearance in Federal Court on October 22, 2020 before Chief Federal Magistrate Judge Kelly H. Rankin and entered a plea of not guilty to both counts. He is set for trial on December 14, 2020 in U.S. District Court in Casper, Wyoming. An indictment is an allegation and Craythorn is presumed innocent until convicted.
Five Charged in Connection with COVID-Relief Fraud SchemeRead the Press Release
Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, joins Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division in announcing five individuals were charged in an indictment based upon their alleged participation in a scheme to file fraudulent loan applications seeking more than $1.1 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Thomas Smith, Stephen Smith, and Robert Hamilton, all of Milwaukee, Wisconsin, and Samuel Davis, Jr., and Jonathan Henley, of Chicago, Illinois were charged in an indictment filed in the Eastern District of Wisconsin with bank fraud and money laundering.
The indictment alleges that the defendants submitted several fraudulent PPP loan applications to a federally insured financial institution and the SBA in the names of businesses with no actual operations or employees. In the applications, the defendants allegedly misrepresented the number of employees and payroll expenses. To support the fraudulent applications, the indictment alleges that the defendants submitted fake tax documents. The indictment alleges that the defendants fraudulently sought over $1.1 million in PPP loan funds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.
One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. SBA’s Office of Inspector General (OIG), the FBI, the Federal Deposit Insurance Corporation OIG, and IRS-Criminal Investigation. Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Eastern District of Kentucky Federal Prosecutor and Victim Witness Coordinator Recognized by Western District U.S. AttorneyRead the Press Release
LEXINGTON, Ky. – Russell Coleman, United States Attorney for the Western District of Kentucky, is pleased to announce that Eastern District of Kentucky Assistant U.S. Attorney Todd Bradbury and Victim Witness Coordinator Jenny Parker are the latest recipients of the U.S. Attorney’s Law Enforcement Award.
“Tackling Kentucky’s drug epidemic requires law enforcement professionals with a laser beam focus on saving lives and serving victims; collaborating across agency and even jurisdictional lines,” said Western District of Kentucky U.S. Attorney Russell Coleman. “Our Commonwealth is blessed by having such public servants, and we are blessed to have such colleagues, as AUSA Bradbury and Ms. Parker.”
The Award commendations presented by U.S. Attorney Coleman to AUSA Bradbury and Victim Witness Coordinator Parker recognize their extraordinary service in support of education, investigation, and the prosecution of overdose cases throughout the 53 counties of the Western District.
AUSA Bradbury counseled with Western District federal prosecutors and their law enforcement partners as they formulated a plan to address overdose cases in the District. Furthermore, he routinely made himself available as a resource over the last several years to discuss best practices in investigating and prosecuting drug overdose cases which resulted in death or serious injury.
Victim Witness Coordinator Jenny Parker provided insight and guidance in the development and operational aspects of the Western District’s Drug Threat Team which focuses on educating school age children about the dangers associated with drug abuse. Ms. Parker’s expertise in the planning and execution of the Eastern District’s nationally recognized Heroin Education and Action Team (HEAT) program proved instrumental in the successful development and operation of the Western District’s Drug Threat Team.
The United States Attorney’s Office for the Western District of Kentucky is honoring the extraordinary efforts of its federal, state, and local law enforcement partners. Additional awards will be presented during the coming months.
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Dominican National Sentenced to Prison for Illegally Possessing FirearmRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that WILLIAN LEONARDO SANCHEZ MATA, 33, a citizen of the Dominican Republic last residing in Hartford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 37 months of imprisonment for illegally possessing a firearm.
According to court documents and statements made in court, this matter stems from an investigation conducted by the Drug Enforcement Administration’s Hartford Task Force into a drug trafficking organization that was distributing heroin and fentanyl in and around Hartford. After investigators made controlled purchases of fentanyl from a member of the organization, they obtained a search warrant for an apartment on Crown Street in Hartford.
On October 23, 2019, investigators searched the Crown Street apartment and seized a loaded .380 caliber Smith and Wesson handgun with an obliterated serial number from Sanchez Mata’s bedroom. Investigators also seized approximately 100 grams of fentanyl, as well as items used to process and package narcotics for street sale, from other locations within the apartment.
The investigation revealed that Sanchez Mata had illegally entered the U.S. twice and was unlawfully residing in the country.
Sanchez Mata has been detained since his arrest on October 23, 2019. On June 3, 2020, he pleaded guilty to one count of possession of a firearm by an alien who is illegally in the U.S.
Sanchez Mata faces immigration proceedings when he completes his prison term.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Domestic Violence Awareness Month featured grant and organizationRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced today’s Department of Justice, Office on Violence Against Women featured grant and grant recipient.
“This year, we provided STOP grants to 46 organizations in Indiana,” said Devon McDonald, ICJI Executive Director. “This funding will go a long way to shore up our criminal justice system and works to, not only hold offenders accountable, but also help victims of domestic violence and sexual assault navigate the legal system.”
STOP Violence Against Women Formula Grant Program
The STOP (Services, Training, Officers, Prosecutors) Violence Against Women Formula Grant Program (STOP Formula Grant Program) was authorized by the Violence Against Women Act (VAWA) of 1994 and reauthorized by subsequent legislation. The STOP Formula Grant Program encourages partnerships between law enforcement, prosecution, courts, and victim services organizations to enhance victim safety and hold offenders accountable in cases of domestic violence, dating violence, sexual assault, and stalking. The goal of the grant program is to develop and strengthen law enforcement, prosecution, and court strategies to combat violent crimes against women and to develop and strengthen victim services, including community-based, culturally specific services, in cases involving domestic violence, dating violence, sexual assault, and stalking.
For more information about this grant, contact the Office on Violence Against Women at 202/307-6026 and ask for the Outreach and Communications Division.
Department of Justice is Combatting COVID-19 Fraud but Reminds the Public to Remain VigilantRead the Press Release
WASHINGTON — The Department of Justice is reminding members of the public to be vigilant against fraudsters who are using the COVID-19 pandemic to exploit American consumers and organizations and to cheat disaster relief programs. In particular, the department is warning the public about scams perpetrated through websites, social media, emails, robocalls, and other means that peddle fake COVID-19 vaccines, tests, treatments, and protective equipment, and also about criminals that fabricate businesses and steal identities in order to defraud federal relief programs and state unemployment programs.
“A pandemic is a time when people should come together to pursue the common good, but sadly there are some who instead use it as an opportunity to deceive and thieve,” said Deputy Attorney General Jeffrey A. Rosen. “From the outset, the Justice Department has acted quickly to detect, investigate, and prosecute wrongdoing relating to this crisis. Pursuing these criminals and deterring would-be bad actors will remain a priority for the foreseeable future.”
At the direction of Attorney General William Barr on March 16, 2020, the Department of Justice mobilized to safeguard Americans from coronavirus-related fraud and other illegal activity. On March 18, Deputy Attorney General Rosen instructed the National Center for Disaster Fraud (NCDF) to take coronavirus-related complaints from the public and facilitate information sharing among law enforcement partners and regulators, like the Federal Trade Commission and the Federal Drug Administration. The Deputy Attorney General also tasked U.S. Attorneys to appoint Coronavirus Fraud Coordinators in each judicial district, and many U.S. Attorneys also established state-wide and regional task forces to improve federal, state, and local law enforcement coordination. On March 24, following the President’s invocation of his authorities under the Defense Production Act, the Attorney General formed the DOJ Hoarding & Price Gouging Task Force, which is a nationwide effort to deter, detect, and prosecute hoarding and profiteering in the sale of health and medical resources essential to combatting the spread of COVID-19. Memoranda from the Attorney General and Deputy Attorney General prescribing these measures may be found at www.usdoj.gov/coronavirus/DOJresponse.
To date, the NCDF has received more than 76,000 tips concerning COVID-19-related wrongdoing. Similarly, the FBI’s Internet Crime Complaint Center has also received more than 20,000 tips regarding suspicious websites and media postings. These tips, as well as reports made directly to the offices of U.S. Attorneys, FBI field offices, and other law enforcement agencies, have led to federal law enforcement opening hundreds of investigations.
The department charged its first COVID-19-related fraud case on March 25, and since then, the department has filed criminal charges in 33 cases across the country involving scam vaccines, treatments, or testing or price gouging in the sale of scarce medical supplies. Additionally, the department has initiated civil actions in 11 cases to enjoin fraudulent coronavirus schemes targeting consumers, including cases against defendants marketing ozone gas, silver-ion solution, and bleach-based solution as treatments.
The department has also focused on prosecuting bad actors who have exploited federal relief programs enacted on March 27 under the CARES Act that are intended to assist hard-hit Americans and businesses. In particular, the department has charged 65 defendants in 50 separate cases to date that relate to the Paycheck Protection Program (PPP). The total intended loss to the PPP in those cases is more than $227 million. The defendants in these cases include those brazen enough to submit PPP loan applications for fabricated businesses named after “Game of Thrones” characters and to spend PPP loan proceeds on exotic cars, boats, and expensive jewelry.
The department has coordinated closely with the Department of Labor Office of Inspector General (DOL-OIG) and various other federal law enforcement agencies to stand up the U.S. Department of Justice National Unemployment Insurance Fraud Task Force.
(See https://www.justice.gov/file/1319301/download.) This task force is charged with investigating numerous fraud schemes targeting the unemployment insurance programs of state workforce agencies, which have been distributing additional Pandemic Unemployment Assistance funds provided for under the CARES Act. To date, the department has charged fraud or money laundering in 12 cases relating to unemployment insurance, and has also been supporting DOL-OIG’s efforts to mitigate the threats that transnational criminal organizations and other identity thieves continue to pose to the important benefits programs on which unemployed Americans rely. The department’s leadership has been crucial in organizing and focusing the whole of federal law enforcement on this important issue, including by leveraging the capabilities and resources of the International Organized Crime Intelligence and Operations Center and by hiring additional prosecutors to investigate and charge these schemes.
Moving forward, the department also is concerned about, and will aim to deter and prevent, attempts by wrongdoers to prey upon potential victims by leveraging news about anticipated approval of a COVID-19 vaccine or about the potential enactment of new disaster relief bills that extend or expand upon CARES Act relief.
The department encourages the public to continue to report wrongdoing relating to the pandemic to the NCDF and to remain vigilant against bad actors looking to exploit this national emergency. To report a scam relating to COVID-19, or if you have information on hoarding or price gouging of critical supplies necessary to respond to the spread of COVID-19, you can report it without leaving your home by calling the NCDF Hotline at 866-720-5721 or via the NCDF Web Complaint Form, available at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Dallas Man Pleads Guilty After Placing Hoax Bomb on RailroadRead the Press Release
A Dallas man plead guilty today to charges in connection with placing a hoax bomb on a Dallas railroad track, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Mark Ashley Robert, 37, plead guilty to one count of false information and hoaxes before Magistrate Judge Irma Carrillo Ramirez via VTC.
According to court documents, during the early morning hours of December 21, 2018, Mr. Robert admitted to placing a device (as seen in the photo below) on the Kansas City Rail Line railroad tracks in Dallas.
A railroad conductor noted a red and green flashing LED light in the middle of the tracks while operating on the railroad. The conductor observed what appeared to be a box wrapped in electrical tape with a nine-volt battery attached to the side of the device.
The Dallas Police Department Bomb Squad responded to the scene to assess the device. Upon examination, law enforcement authorities determined that the box, placed by Mr. Robert, appeared to resemble an improvised explosive device (IED). As a result, officers rendered the device safe.
Law enforcement submitted the remaining parts of the device to the FBI for latent print examination. Through the course of that examination, Mr. Robert’s fingerprints were recovered.
Mr. Robert now faces up to 5 years in federal prison and up to a $250,000 fine. A sentencing date has been set for March 5, 2021.
This investigation was conducted by the FBI’s Dallas Field Office and the Dallas Police Department with the assistance of the Kansas City Southern Railway Company. Assistant U.S. Attorney Tiffany Eggers is prosecuting this case.
DEA Announces 19th National Prescription Drug Take Back DayRead the Press Release
WASHINGTON – DEA is holding its 19th National Prescription Drug Take Back Day on Saturday, Oct. 24 at locations across the country. The nationwide event aims to provide a safe, convenient, and responsible means of disposing of prescription drugs, while also educating the general public about the potential for abuse of medications.
Rates of prescription drug abuse in the United States are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.
Collection sites will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement.
“The initiative – now in its tenth year – addresses a vital public safety and public health issue,” said DEA Acting Administrator Timothy Shea. “Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Together with our partners, we are not only holding National Prescription Drug Take Back Day, but offering other ways to dispose of unwanted, unused, and expired prescription medications.”
“Even in the midst of the pandemic, DEA’s nineteenth take-back event will allow Americans to safely and properly dispose of their unwanted/unused prescription medications,” said the Special Agent in Charge of the DEA Atlanta Field Division Robert J. Murphy. “Collection sites will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement. DEA will work hand-in-hand with a number of law enforcement, Tribal and community partners, all in effort to stem the tide of prescription drug abuse.”
“Many people don’t know how to properly dispose of old medication. So, it is either disposed of improperly, which can seriously damage the environment, or not discarded, which can cause medications to all too often end up in the wrong hands,” said United States Attorney for the Eastern District of North Carolina Robert J. Higdon, Jr. “DEA is providing an important public service. I encourage everyone to get rid of their old, unused and unneeded prescription medicine in the proper way. DEA is making it easier for all of us and I thank them again for this twice a year effort.”
North Carolinians participating in the United States Drug Enforcement Administration’s (DEA’s) 18th National Prescription Drug Take-Back Day Initiative (NTBI) held on Saturday, October 26, turned in 38,541 pounds of unwanted or expired medications for safe and proper disposal at sites set up throughout the state. This was the highest amount ever collected during the previous 17 Rx drug take back events. Given the ongoing COVID-19 public health emergency, DEA wants to ensure that the public is aware of other ways they can dispose of unwanted prescription drugs without having to leave their homes. Both the U.S. Food and Drug Administration and the Environmental Protection Agency have tips on how to safely dispose of drugs at home.
In addition to DEA’s National Prescription Drug Take Back Day, prescription drugs can be disposed of at any of the 11,000 DEA authorized collectors at any time throughout the year. For more information, visit: https://apps2.deadiversion.usdoj.gov/pubdispsearch/spring/main?execution=e1s1.
DEA also encourages the public to reach out to their local law enforcement to find out if they have any permanent drug disposal locations throughout their local community.
DEA and its partners will collect tablets, capsules, patches, and other solid forms. DEA will also accept vape pens or other e-cigarette devices from individual consumers, only after the batteries are removed from the devices. If the battery cannot be removed, individual consumers can check with large electronic chain stores who may accept the vape pen or e-cigarette devices for proper disposal. Liquids, including intravenous solutions, syringes and other sharps, and illegal drugs cannot be dropped off. This service is free and anonymous, no questions asked.
For more information on DEA’s National Prescription Drug Take Back Day, and to find a collection site near you, visit www.deatakeback.com.
DEA Announces 19th National Prescription Drug Take Back DayRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced today that the Drug Enforcement Administration (DEA) is holding its 19th National Prescription Drug Take Back Day on Saturday, October 24, at locations across South Carolina. The nationwide event aims to provide a safe, convenient, and responsible means of disposing of prescription drugs, while also educating the general public about the potential for abuse of medications.
Rates of prescription drug abuse in the United States are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.
Collection sites will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement. Here in South Carolina, collection site locations include the following:
- Greenville Memorial Hospital, at 701 Grove Road in Greenville, sponsored by the Greenville Health System Police Department;
- Florence County Sheriff’s Office, at 6719 Friendfield Road in Effingham;
- Walgreens in Conway, at 1601 Church Street, sponsored by the Conway Police Department;
- Grand Strand Medical Center, at 809 82nd Parkway in Myrtle Beach, sponsored by the Myrtle Beach Police Department;
- City of Columbia Police Department, at 1 Justice Square in Columbia;
- Richland County Sheriff’s Department, at 5623 Two Notch Road in Columbia;
- CVS in Lexington, at 5608 Sunset Boulevard, sponsored by the Lexington Police Department;
- Clyburn Center in Aiken, at 1000 Clyburn Place, sponsored by the Aiken Department of Public Safety;
- Tidewater Pharmacy in Mt. Pleasant, at 421 Johnnie Dodds Boulevard, sponsored by the Mt. Pleasant Police Department; and
- Charleston’s Lowcountry Senior Center, at 865 Riverland Drive in Charleston, sponsored by the Charleston Police Department.
“The initiative – now in its tenth year – addresses a vital public safety and public health issue,” said DEA Acting Administrator Timothy Shea. “Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Together with our partners, we are not only holding National Prescription Drug Take Back Day, but offering other ways to dispose of unwanted, unused, and expired prescription medications.”
“Even in the midst of the pandemic, DEA’s nineteenth take-back event will allow Americans to safely and properly dispose of their unwanted/unused prescription medications,” said the Special Agent in Charge of the DEA Atlanta Field Division Robert J. Murphy. “Collection sites will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement. DEA will work hand-in-hand with a number of law enforcement, Tribal and community partners, all in effort to stem the tide of prescription drug abuse.”
South Carolinians participating in last year’s National Prescription Drug Take-Back Day turned in 11,124 pounds of unwanted or expired medications for safe and proper disposal at sites set up throughout the state. Given the ongoing COVID-19 public health emergency, DEA wants to ensure that the public is aware of other ways they can dispose of unwanted prescription drugs without having to leave their homes. Both the U.S. Food and Drug Administration and the Environmental Protection Agency have tips on how to safely dispose of drugs at home.
In addition to DEA’s National Prescription Drug Take Back Day, prescription drugs can be disposed of at any of the 11,000 DEA authorized collectors at any time throughout the year.
DEA also encourages the public to reach out to their local law enforcement to find out if they have any permanent drug disposal locations throughout their local community.
DEA and its partners will collect tablets, capsules, patches, and other solid forms. DEA will also accept vape pens or other e-cigarette devices from individual consumers, only after the batteries are removed from the devices. If the battery cannot be removed, individual consumers can check with large electronic chain stores who may accept the vape pen or e-cigarette devices for proper disposal. Liquids, including intravenous solutions, syringes and other sharps, and illegal drugs cannot be dropped off. This service is free and anonymous, no questions asked.
For more information on DEA’s National Prescription Drug Take Back Day, and to find a collection site near you, visit www.deatakeback.com.
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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.
- Greenville Memorial Hospital, at 701 Grove Road in Greenville, sponsored by the Greenville Health System Police Department;
Crime Family Associate Admits Cocaine DistributionRead the Press Release
TRENTON, N.J. – An alleged crime family associate today admitted possessing cocaine with the intent to distribute, U.S. Attorney Craig Carpenito announced.
Jason Vella, 39, of Toms River, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of possession of cocaine with intent to distribute.
On Sept. 19, 2019, investigators from the Ocean County Prosecutors Office executed a search warrant on Vella’s residence and recovered in excess of 150 grams of cocaine, drug paraphernalia, $2,295 in cash and pieces of jewelry.
The charge of possession of cocaine with intent to distribute is punishable by a maximum of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 26, 2021.
U.S. Attorney Carpenito credited the members of the FBI’s Organized Crime Task Force under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and investigators from the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley Billhimer, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O=Malley of the U.S. Attorney=s Office’s Organized Crime/Gangs Unit in Newark.
Coordinated Opioid Fentanyl Outreach Initiative for the Tri-Cities Communities AnnouncedRead the Press Release
Kennewick, Wash., - Today, United States Attorney William Hyslop and DEA Special Agent in Charge Keith Weis announced a coordinated Opioid Fentanyl Outreach initiative by federal, state and local law enforcement agencies, community leaders, prevention specialists and school superintendents. They were joined at the announcement by Kennewick Police Chief Ken Hohenberg and Dr. Traci Pierce, Superintendent of the Kennewick School District.
The Opioid Fentanyl Outreach Project addresses the public safety and public health threats caused by the increasing influx of deadly fentanyl into the Tri-Cities and throughout the Eastern District of Washington. This initiative has a multi-pronged approach with the focus on educating our communities and directing resources through community outreach and prevention efforts.
United States Attorney Hyslop stated, “Our communities, our residents, our parents, and our youth are all faced with the growing and continued influx of deadly fentanyl into Eastern Washington. Very small amounts in a fentanyl-laced pill can kill a person. We are now seeing it here in the Tri-Cities, and sadly, we are now witnessing deaths in our high school and young adult populations. Dangerous counterfeit pills killing Americans are manufactured in mass quantities by drug trafficking organizations based in Mexico. In response, law enforcement at the federal, state and local levels have increased efforts to investigate and prosecute drug trafficking groups for importing and distributing this lethal narcotic in the Tri-Cities, Spokane, and Yakima areas. However, this is much greater than just a law enforcement issue; it is now a critical community issue that everyone must address.”
Keith Weis, Special Agent in Charge of the Drug Enforcement Administration stated, “Now, it is more important than ever that we all come together as a call for action to save lives. Per the CDC, in 2019 more than 71,000 lives were lost in the United States as a result of drug overdoses. Of this number, approximately 51% of the deaths can be attributed to fentanyl and other synthetic opioids. Alarmingly, DEA seizures of fentanyl in Eastern Washington have increased almost 200% over the 2019 to 2020 time period. A lethal dose of fentanyl is estimated to be about two milligrams, but can vary based on an individual’s body size, tolerance, amount of previous usage and other factors. Additionally, fentanyl can be lethal when it is airborne or even when touched and absorbed through the skin.”
As part of the Opioid Fentanyl Outreach Project, community, law enforcement, and educational leaders have come together in Tri-Cities, Spokane, and Yakima to address this issue. Plans are underway with media engagement pieces, town halls and presentations. On October 7th, 2020, DEA Diversion in partnership with the Department of Health and Human Services held a virtual conference with hundreds of health care professionals in Washington providing information and support during the pandemic and raising awareness on the ongoing opioid crisis.
On October 12, 2020, a 12 week media awareness campaign was launched in the Eastern District of Washington, “You Can Save Lives” knowing the warning signs of counterfeit fentanyl pills keeps your loved ones and the community safe. Viewers can obtain a variety of resources at
https://www.getsmartaboutdrugs.gov/ https://vimeo.com/user96937699/dl/469641512/a59c2c8768
Community forums and parent discussions are being organized. School Superintendents throughout the region are collaborating on educational lessons and presentations, with a focus on student involvement to spread the message. A special video about the fentanyl problem is being produced and will be available.
Another resource available to educators and the community is DEA Red Ribbon Week, the nation’s oldest and largest drug prevention awareness program. Red Ribbon Week is celebrated annually October 23-31. This year’s theme is “Be Happy, Be Brave, Be Drug Free.” You can learn more about DEA Red Ribbon and ways to get involved through programs and contests by visiting https://www.dea.gov/redribbon Other outreach efforts are being added as they are planned.
This Saturday, October 24, 2020, National Drug Take Back Day will be recognized. The Tri-Cities is sponsoring socially distanced “Drug Take Back” sites from 10:00 a.m. to 2:00 p.m.. More information about Drug Take Back Day and locations in the Tri-Cities are available at https://deatakeback.com
The Opioid Fentanyl Outreach Strategy Committee Benton/Franklin County Members include:
William D. Hyslop, United States Attorney
Keith Weis, DEA Special Agent in Charge
Mark Haigh, DEA Assistant Special Agent in Charge
Korey Bearden, DEA Supervisor
Stephanie Van Marter, Assistant United States Attorney
Peter Orth, FBI Supervisory Senior Resident Agent – Yakima/Tri-Cities Resident Agency
Dr. Amy Person, Health Officer – Benton-Franklin Health District
Dave Zabell, City Manager – City of Pasco
Marie Mosley, City Manager – City of Kennewick
Cindy Reents, City Manager – City of Richland
Chief John Bruce, Richland Police Department
Chief Ken Hohenberg, Kennewick Police Department
Chief Ken Roske, Pasco Police Department
Sheriff Jim Raymond, Franklin County
Shawn Sant, Prosecutor – Franklin County
Sheriff Jerry Hatcher – Benton County
Andy Miller, Prosecutor and Deputy Prosecutor Julie Long-Franklin County Prosecutor’s Office
Darcy Weisner, Superintendent – ESD 123
Dr. Traci Pierce, Superintendent – Kennewick School District
Dr. Shelley Redinger, Superintendent – Richland School District
Michelle Whitney, Superintendent – Pasco School District
Lt. Aaron Clem, Kennewick Police Department – Youth Services
Mayor Brent Gerry, City of West Richland
Chief Ben Majetich, West Richland Police Department
Convicted Felon from Lafayette Sentenced for Possessing Firearm and AmmunitionRead the Press Release
LAFAYETTE, La. – Acting United States Attorney Alexander C. Van Hook announced that Jeremy Rubin, 32, of Lafayette, Louisiana, was sentenced today by United States District Judge Robert R. Summerhays to 52 months (4 years, 4 months) in prison, followed by 3 years of supervised release. Rubin pleaded guilty on July 24, 2020 to being a convicted felon in possession of a firearm and ammunition.
The charge stems from a domestic disturbance call that Lafayette City Police Department officers responded to on August 19, 2018. The caller advised that her boyfriend had threatened her, directed her into a bedroom, placed a handgun to her head and threatened her life. Law enforcement officers arrived at the residence where the call had been placed and questioned Jeremy Rubin about the incident. Rubin denied having a firearm and denied consent for law enforcement officers to search his vehicle. A search warrant was obtained and officers found the firearm and ammunition in a case bearing Rubin’s name in the vehicle. Further investigation by law enforcement officers revealed that the firearm had been reported stolen.
Rubin has a previous felony conviction for first degree robbery (2008). Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of a firearm or ammunition.
The ATF and Lafayette City Police Department conducted the investigation. Assistant U.S. Attorney Jamilla A. Bynog prosecuted the case.
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Convicted Felon Who Adheres to the “Sovereign Citizen” Movement Is Sentenced to More Than 15 Years in Prison on Drug and Gun ChargesRead the Press Release
ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced Jerrell Tito Bowman, 35, of Asheville, to 185 months in prison and eight years of supervised release on drug and gun charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Asheville Resident Office, Vincent C. Pallozzi, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, Chief David Zack of the Asheville Police Department, and Sheriff Quentin Miller of the Buncombe County Sheriff’s Office join U.S. Attorney Murray in making today’s announcement.
According to plea documents and statements made in court, in March 2018, officers with Buncombe County’s Anti-Crime Task Force (BCAT) became aware that Bowman was trafficking narcotics in the Asheville area. On March 21, 2018, while executing a search warrant, law enforcement recovered narcotics from Bowman’s apartment and vehicle, including Fentanyl, cocaine, crack cocaine, heroin, marijuana, and other drug paraphernalia, approximately $15,000 in cash, and a loaded firearm. Bowman was previously convicted of state drug and gun offenses, including Assault with a Deadly Weapon Inflicting Serious Injury, and he is prohibited from possessing a firearm or ammunition.
Bowman has been in federal custody since September 2019. While in federal custody, Bowman, through an individual acting as his representative, has filed numerous court documents demonstrating that he adheres to the sovereign citizen movement whose followers believe that they are only answerable to their interpretation of common law and not subject to government statutes or proceedings.
On June 29, 2020, Bowman pleaded guilty to possession with intent to distribute cocaine, crack cocaine, heroin, Fentanyl, and marijuana, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a felon.
In making today’s announcement, U.S. Attorney Murray commended the Asheville Police Department, the Buncombe County Sheriff’s Office, the DEA, and the ATF in Asheville for their investigation of this case.
Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville prosecuted the case.
Clarkston Business Owner and Federal Government Contracting Officer Indicted for Bribery SchemeRead the Press Release
Spokane – Today, William D. Hyslop, United States Attorney for the Eastern District of Washington, announced the indictment of Christopher Hamilton Clemens, 39, of Clarkston, Washington, Hamilton’s West LLC, a Clarkston, Washington business owned and operated by Clemens, and Calandra Charging Eagle, 52, of Albuquerque, New Mexico, in connection with a federal bribery scheme. The Indictment charges Defendant Clemens with Bribery of a Public Official, in violation of 18 U.S.C. § 201(b)(1), and charges Defendant Charging Eagle with Accepting a Bribe as a Public Official, in violation of 18 U.S.C. § 201(b)(2). The Indictment also charges all three defendants with conspiracy to defraud the United States and theft of government property. All the charges in the Indictment are felonies.
According to the Indictment, Defendant Charging Eagle was a contracting official at the Department of Interior’s Bureau of Indian Affairs (“BIA”), in its Albuquerque, New Mexico office. BIA is a federal agency that, among other things, provides funding and oversight for improvement projects on American Indian land and facilities. Defendant Hamilton’s West, a government contracting company owned and operated by Defendant Clemens, competed and sought to compete for BIA and other federal government contracts.
The Indictment alleges that through her position as a contracting official at BIA, Charging Eagle had access to internal and confidential BIA estimates and other information regarding potential contracts, and had a role in approving contracts, modifications, and invoices. The Indictment charges that between June and October 2018, Clemens and Charging Eagle engaged in a bribery scheme in which Clemens agreed to pay a $10,700 debt owed by Charging Eagle to the Sandia Resort and Casino, a resort, casino, and event center located in Albuquerque. In return, the Indictment charges, Charging Eagle agreed to use her position to steer BIA contracts, including an over half-million dollar contract to provide lightning protection improvements at the Navajo Nation’s Pine Hill School in New Mexico, to Clemens and his companies. The Indictment also charges that in return for the bribe, Charging Eagle provided Clemens and his companies with inside confidential information regarding BIA’s procurement process, including, but not limited to, providing Clemens and his companies with the Independent Government Cost Estimate and other confidential and internal BIA information in order to provide Clemens and his companies with an unfair competitive advantage in obtaining the Pine Hill School lightning protection contract and other BIA contracts.
United States Attorney Hyslop said “the integrity of the federal procurement process is critical to ensuring that public funds are used appropriately and that precious and limited funds are used for improvements of tribal schools and facilities.” Hyslop continued, “I commend the excellent work of both the Department of Interior Office of Inspector General and the Small Business Administration Office of Inspector General in investigating this scheme. We will continue to work with our law enforcement partners to investigate and prosecute individuals and companies that misuse the federal contracting process.”
The bribery charges, if proved, carry a maximum penalty of a 15-year term of imprisonment; up to a $250,000 fine; and up to a 3-year term of court supervision following any term of imprisonment. The theft of government property and conspiracy charges, if proved, carry a maximum penalty of 10 and 5 years of incarceration, respectively.
An Indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
This investigation was conducted by the U.S. Department of Interior Office of Inspector General and Small Business Administration Office of Inspector General. This case is being prosecuted by Dan Fruchter and Tyler H.L. Tornabene, Assistant United States Attorneys for the Eastern District of Washington.
hamilton_et._al._indictment.pdfCharlotte Man Is Charged with CyberstalkingRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte has returned a criminal indictment charging Amir Salvatore Khayyat, 27, of Charlotte, with cyberstalking and making interstate threats, for sending his victim hundreds of harassing and threatening emails and voicemails, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Robert R. Wells, Special Agent in Charge of the FBI in North Carolina, joins U.S. Attorney Murray in making today’s announcement.
According to allegations in the indictment, in 2017, Khayyat met the victim, identified in court documents as “Jane Doe.” Jane Doe is a licensed clinical psychologist and a credentialed mental health service provider, who met Khayyat in her professional capacity. As alleged in the indictment, from April 2019 to October 2020, Khayyat engaged in an extensive cyberstalking and threats campaign targeting Jane Doe. For approximately 18 months, Khayyat allegedly sent Jane Doe hundreds of harassing emails, including unsolicited sexual imagery, from multiple email addresses, and left numerous harassing voicemails on Jane Doe’s office phone line. Many of the harassing emails and voicemails contained express or implicit threats to harm Jane Doe and law enforcement officers. The indictment further alleges that Khayyat continued to harass and threaten Jane Doe even after she obtained a state court order forbidding Khayyat from communicating with her.
Khayyat is currently in federal custody. The cyberstalking charge and the communicating interstate threats charge each carry a maximum penalty of five years in prison and a $250,000 fine.
The charges against Khayyat are allegations. The defendant is innocent until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Murray thanked the FBI and the Charlotte-Mecklenburg Police Department for their investigation of this case.
Assistant United States Attorney Matthew Warren, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
CBL/BFL Associate Going to Prison for 9 Years on Racketeering, Drug, and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Mikel Lowe, aka L-O, 25, of Buffalo, NY, who was convicted of racketeering conspiracy, possessing with intent to distribute crack cocaine, and possessing firearms in furtherance of drug trafficking crimes, was sentenced to serve 108 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorneys Paul C. Parisi and Seth T. Molisani, who handled the case, stated between 2010 and August 28, 2018, the defendant was an associate with the CBL/BFL Gang, which stands for, among other things, “Cash Been Long” and “Brothers for Life.” He conspired with several other associates to sell drugs, commit robbery, retaliate against witnesses, and commit assault. CBL/BFL operated within a specifically defined geographic area on the East side of Buffalo. Gang members and associates engaged in drug trafficking to generate income and violent crimes to maintain control over their territory.
On January 8, 2012, the defendant, brandishing a firearm, approached Victim A at a gas station on Jefferson Avenue and demanded Victim A’s property. Victim A complied and provided defendant with jewelry that Victim A was wearing. Victim B, having witnessed the foregoing incident, subsequently testified about it in Buffalo City Court. Thereafter, in March of 2012, Victims A and B were traveling in a vehicle in the Towne Gardens neighborhood when the defendant began following them in a separate vehicle, displayed a firearm in violation of a Buffalo City Court order of protection, and threatened to cause physical injuries to Victims A and B because of their status as witnesses to the January robbery.
Between March 2015 and 2017, an individual working with investigators met the defendant in the City of Buffalo at various locations, such as the Towne Gardens, for the purposes of purchasing heroin. The individual met the defendant on an almost daily basis and purchased at least .1 grams of heroin on each occasion and purchased one gram of heroin at least 100 times.
On February 28, 2017, the defendant was in the Towne Gardens when Buffalo Police Officers observed him with a loaded 9mm firearm. The officers chased Lowe and arrested him. In addition to the firearm, the defendant was found in possession of quantities of a mixture of heroin and fentanyl and crack cocaine, and packaging for the distribution of heroin and fentanyl.
On June 8, 2017, FBI agents attempted to arrest Lowe. Agents surrounded 1190 East Lovejoy Street in Buffalo and knocked to announce their presence. Soon after, an agent observed an object being thrown from 1190 East Lovejoy toward the building next door. The defendant was arrested and 1190 East Lovejoy was searched. Agents recovered two boxes of 9mm ammunition, a quantity of marijuana, a .45 caliber pistol, two digital scales, a blender, a scale clap, a bottle of Vitablend, commonly used to mix narcotics, packaging material for heroin and marijuana, a razor blade. On the roof of the building next door, agents recovered a shotgun with ammunition. The recovered pistol contained a DNA profile that matched Lowe’s DNA profile. The recovered shotgun contained a DNA profile mixture of three individuals and the defendant could not be excluded from the mixture.
Lowe is one of 13 members and associates of the CBL/BFL Gang to be convicted in this case. He is the 11th to be sentenced.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the New York State Police, under the direction of Major James Hall; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; the Cheektowaga Police Department, under the direction of Chief Michael Sliwinski; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Bureau of Alcohol Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Lackawanna Police Department, under the direction of Chief Mark Packard; the U.S. Marshals Service, under the direction of Marshal Charles Salina; and the Erie Crime Analysis Center. Additional assistance was provided by the Erie County District Attorney’s Office, under the direction of District Attorney John Flynn.
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Bronx Man Sentenced to Five Years in Prison for Conspiring to Distribute CocaineRead the Press Release
NEWARK, N.J. – A Bronx, New York, man was sentenced today to 60 months in prison for conspiring to distribute 500 grams or more of cocaine, U.S. Attorney Craig Carpenito announced.
Steven Justo, 33, previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In August 2019, Justo conspired with others to distribute cocaine in New Jersey. Justo and a conspirator travelled from the Bronx into Bergen County, New Jersey, to deliver approximately two kilograms of cocaine before being identified and arrested by agents with the U.S. Drug Enforcement Administration.
In addition to the prison term, Judge Wigenton sentenced Justo to four years of supervised release.
U.S. Attorney Carpenito credited special agents with the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
Box Elder man admits meth trafficking crime in scheme to smuggle drugs into Cascade County jailRead the Press Release
GREAT FALLS – A Box Elder man accused in a scheme to smuggle methamphetamine into the Cascade County Detention Center by having inmates hide the drug inside their bodies admitted a drug trafficking charge today, U.S. Attorney Kurt Alme said.
Franklin Troy Caplette, 36, pleaded guilty to possession with intent to distribute meth. Caplette faces a maximum 20 years in prison, a $1 million fine and at least three years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Sentencing was set for Feb. 11, 2021. Caplette was detained.
The prosecution said in court documents that in May 2019, while Caplette was incarcerated at the Cascade County Detention Center, detectives began to investigate a drug smuggling scheme. Caplette arranged for people outside of the jail to bond out inmates, provide the defendants with drugs to conceal in their rectums and have the defendants smuggle the drugs back into the jail.
When defendants returned to the jail and were placed in the booking room, they told detention officers who their enemies were at the jail so they could get placed into the right pod to distribute the drugs.
In June 2019, a judge temporarily released Caplette to attend a relative's funeral on the Rocky Boy's Indian Reservation and directed him to return by 5 p.m. the next day.
While on release, Caplette spoke by cell phone with jail inmates and told one inmate he was "coming in hot." Detectives waited at the jail for Caplette, who arrived late. While Caplette went to the booking area, Caplette's wife told detectives that they never made it to the funeral and instead went to other places before returning to Great Falls.
Detectives served a warrant on Caplette to search his body for drugs and took him to an emergency room for an x-ray. The x-ray showed three oblong-shaped objects in Caplette's abdomen. Caplette eventually passed the bags. An analysis determined that one of the bags contained meth, while two of the bags contained tobacco.
Other inmates told detectives that Caplette was in charge of contraband entering the jail and that he would use young inmates to be runners to bring back drugs into jail, where they would have parties at night.
Assistant U.S. Attorney Jessica Betley is prosecuting the case, which was investigated by the Russell Country Drug Task Force, Drug Enforcement Administration, Great Falls Police Department and Cascade County Sheriff's Office.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 36% from 2013 to 2018. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Bounty Hunter Felon Convicted of Unlawful Possession of a Firearm, AgainRead the Press Release
Memphis, TN – After a three-day jury trial with proper COVID-19 health and safety protocols, Jeremy Fields, 35, was found guilty as charged for being a convicted felon in possession of a firearm. D. Michael Dunavant, U.S. Attorney announced the guilty verdict in what was the second post-COVID-19 federal trial held in Memphis.
According to information presented in court, on March 28, 2019, U. S. Probation and Parole Officers conducted a home inspection at the residence of Jeremy Fields, a convicted felon, who was on supervised release for possessing a firearm and body armor in conjunction with his duties as a bounty hunter. During the search, officers observed suspicious items in the home that led them to believe Fields was still engaged in the bounty hunting business. They discovered a handgun in a case containing Fields’ bounty hunter ID and badge, handcuffs, and two holsters, along with other personal documents in Fields’ bedroom.
Fields explained to the officers that the gun must belong to his brother (friend) Julian Williams, 36. When Williams arrived, he initially told officers nothing in the home belonged to him. After some time on the scene, Williams mentioned he stayed with Fields previously and might have left a gun there some time ago. At trial, Williams took the stand and told the jury that he did not know Fields was a convicted felon. He said he left his gun under Fields' bed in the case without telling Fields it was there. The jury rejected that defense, and found Fields guilty as charged in the indictment.
Sentencing is set for December 18, 2020 before U.S. District Court Judge Samuel H. Mays, where Fields faces a possible sentence of up to 10 years in federal prison followed by up to 3 years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Convicted felons who possess firearms are an inherent danger to community, and in this case, this offender stubbornly continued to possess a firearm despite his prior felony conviction history and his supervised probation status. Fields has demonstrated his refusal to accept responsibility for his criminal conduct, and as a result of this guilty verdict, he will now face a significant consequence for his brazen recidivism."
U.S. Probation and Parole, the Bureau of Alcohol, Firearms and Explosives (ATF), the Memphis Police Department – Crump Station and Project Safe Neighborhoods (PSN) Task Force investigated the case.
The Project Safe Neighborhoods initiative is a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. In 2017, PSN was reinvigorated as part of the Justice Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
Assistant U.S. Attorneys Neal Oldham and Jennifer Musselwhite are prosecuting this case on behalf of the government.
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Boston Man Indicted for Illegal Possession of a Loaded Semi-Automatic PistolRead the Press Release
BOSTON – A Boston man was indicted yesterday for being a felon in possession of a loaded 9mm semi-automatic pistol.
Tyrone Goforth, 40, was indicted by a federal grand jury on one count of being a felon in possession of a firearm and ammunition. Goforth was charged by criminal complaint in September 2020 and is currently in custody.
According to charging documents, on July 31, 2020, Goforth possessed a Sig Sauer P938 9mm semi-automatic pistol loaded with five rounds of 9mm ammunition. Due to a prior conviction, Goforth is prohibited from possessing firearms, and does not possess a federal license to sell firearms.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William Gross made the announcement. Lelling’s Organized Crime and Gang Unit is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Bellaire man ordered to pay $9.5 million in restitutionRead the Press Release
HOUSTON – A 61-year-old purported “investment advisor” has been ordered to serve the maximum sentence for his conviction of wire fraud, announced U.S. Attorney Ryan K. Patrick.
William Andrew Hightower pleaded guilty Oct. 19, 2019.
Today, U.S. District Judge Gray Miller ordered him to serve 188 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the court heard from some of the victims who described how he stole retirement funds and their life savings. Judge Miller further ordered Hightower to pay a total of $9.5 million to the people victimized by his scheme.
Hightower was president of Hightower Capital Group (HCG) which he founded in 2010 and held himself out to be an investment advisor. However, he concealed the fact that the Financial Industry Regulatory Authority (FINRA) had barred him from acting as a broker or associating with a broker-deal firm in October 2015.
Hightower conducted a Ponzi scheme – taking money from clients from 2013-2018 and making false promises regarding their investments. He falsely told them their money was being invested in various projects, such as restaurants, movies, insurance contracts and more.
Hightower met most of his investors through referrals from other investors, family and friends. He lulled clients with misleading portfolios by presenting investment programs with purported high returns in a short period of time.
On some occasions, Hightower would make monthly payments to investors. They falsely believed their money was being properly invested. Some even re-invested additional funds with Hightower.
Hightower fraudulently used investor monies to pay back other investors, pay his credit cards, fund his company and/or to enrich his own lifestyle.
Previously released on bond, he was ordered into custody after the hearing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady prosecuted the case.