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29 September 2020
South Florida Lawyer Charged with Fraud Related to 1 Global Capital Investment SchemeRead the Press Release
Miami, Fl. -- A Florida attorney and former outside counsel for 1 Global Capital LLC (1 Global), has been charged today with conspiring to commit wire fraud and securities fraud in connection with an investment fraud scheme that, as alleged, impacted more than 3,600 investors in 42 different states, and involved him personally and fraudulently raising more than $100 million from investors.
Ariana Fajardo Orshan, United States Attorney, Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Kyle A. Myles, Special Agent in Charge, Federal Deposit Insurance Corporation (FDIC) Office of Inspector General, made the announcement.
Andrew Dale Ledbetter, 78, of Fort Lauderdale, Florida, is charged in an information with conspiracy to commit wire fraud and securities fraud. The case is assigned to U.S. District Judge Darrin P. Gayles of the Southern District of Florida.
According to the allegations in the information, 1 Global was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans with high interest rates to small businesses, termed merchant cash advance loans (MCAs). To fund these loans, 1 Global obtained funds from investors nationwide, offering short-term investment contracts that promised to “place” the investors’ money onto MCAs. The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid. 1 Global raised money using investment advisors and other intermediaries, with promises to these advisors of significant commissions. In many cases, according to court documents, the commissions were not fully disclosed to investors. Ledbetter was an attorney licensed in the State of Florida who worked at Law Firm #1 and acted in a fundraising capacity at 1 Global beginning in or around 2015.
Substantial questions arose during the operation of the business as to whether 1 Global was offering or selling a security and whether the investment offering was required to be registered with the U.S. Securities and Exchange Commission. These questions were raised by investors, investment advisors, and regulators. Ledbetter and Jan Douglas Atlas, a partner at Law Firm #1 who also acted as outside counsel for 1 Global, knew that if 1 Global’s investment offering were determined to be a security, it would undermine the ability of 1 Global to raise funds from retail investors and to continue to operate without substantial additional expenses and reporting requirements. Such a classification would undermine the profits and fees that Ledbetter and other principals at 1 Global would be able to obtain from 1 Global’s operations.
The information alleges that at the request of 1 Global’s principals, Atlas authored two opinion letters in 2016 containing false information that Atlas knew would be used by 1 Global to operate the business unlawfully. The opinion letters falsely described the duration of the investment, among other things, omitting the automatic renewal aspect and that the investment was being targeted toward retail, non-sophisticated investors (such as IRA account holders). According to the information, Ledbetter used and relied on Atlas’s opinion letters to continue to raise money illegally, knowing that the opinion letters falsely described the investment opportunity and were thus misleading. Ledbetter cited and used the false letters in numerous pitches and communications to investment advisors and investors.
According to the information, Ledbetter was personally involved in raising more than $100 million in investor funds that went to 1 Global, through his own pitches as well as through investment advisors he attracted to 1 Global. Over the years, Ledbetter received approximately $3 million from 1 Global, the majority of which was for commissions. Ledbetter routinely held himself out to investors and investment advisers as outside counsel to 1 Global, and also personally vouched for 1 Global in pitches and marketing materials. However, Ledbetter did not disclose the commissions that he received from 1 Global to investors, according to the information. Ledbetter also made misrepresentations to investors regarding the involvement of an outside auditing firm.
A number of individuals have entered guilty pleas in connection with the 1 Global fraud scheme. Alan G. Heide, the former 1 Global chief financial officer, was charged via information and sentenced to 60 months, in Case No. 19-60231-CR-RKA. Atlas, former outside counsel for 1 Global, was charged via information, pleaded guilty, and is awaiting sentencing in Case No. 19-60258-RKA, currently scheduled for Nov. 17, 2020. Steven Schwartz, a former director of 1 Global, was charged via information, pleaded guilty, and is awaiting sentencing in Case No. 20-60003-RKA, currently scheduled for Nov. 13, 2020. Information about the related cases can be found here: https://www.justice.gov/criminal-vns/case/1Global-Capital.
In connection with a parallel civil enforcement action, the SEC today announced the filing of civil fraud charges against Ledbetter. In related cases, the SEC previously has filed civil fraud actions, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (Sothern District of Florida) SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (Southern District of Florida), and SEC v. Jan Atlas, Case No. 19-62303-WPD (Southern District of Florida). The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (Southern District of Florida), remains pending.
A criminal information is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law
This case was investigated by the FBI’s Miami Field Office, IRS-CI, and FDIC-OIG. Special Assistant U.S. Attorney Elizabeth Young, of the Southern District of Florida, and Deputy Chief Jerrob Duffy, Principal Assistant Deputy Chief Lisa H. Miller, and Assistant Chief L. Rush Atkinson, of the Criminal Division’s Fraud Section, are prosecuting this case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture. The SEC’s Miami Regional Office is also thanked for their contributions.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case no.: 20-cr-60103.
South Florida Lawyer Charged with Fraud Related to 1 Global Capital Investment SchemeRead the Press Release
A Florida attorney and former outside counsel for 1 Global Capital LLC (1 Global), has been charged today with conspiring to commit wire fraud and securities fraud in connection with an investment fraud scheme that as alleged impacted more than 3,600 investors in 42 different states, and involved him personally and fraudulently raising more than $100 million from investors.
Andrew Dale Ledbetter, 78, of Fort Lauderdale, Florida, is charged in an information with conspiracy to commit wire fraud and securities fraud. The case is assigned to U.S. District Judge Darrin P. Gayles of the Southern District of Florida.
According to the allegations in the information, 1 Global was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans with high interest rates to small businesses, termed merchant cash advance loans (MCAs). To fund these loans, 1 Global obtained funds from investors nationwide, offering short-term investment contracts that promised to “place” the investors’ money onto MCAs. The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid. 1 Global raised money using investment advisors and other intermediaries, with promises to these advisors of significant commissions. In many cases, according to court documents, the commissions were not fully disclosed to investors. Ledbetter was an attorney licensed in the State of Florida who worked at Law Firm #1 and acted in a fundraising capacity at 1 Global beginning in or around 2015.
Substantial questions arose during the operation of the business as to whether 1 Global was offering or selling a security and whether the investment offering was required to be registered with the U.S. Securities and Exchange Commission. These questions were raised by investors, investment advisors, and regulators. Ledbetter and Jan Douglas Atlas, a partner at Law Firm #1 who also acted as outside counsel for 1 Global, knew that if 1 Global’s investment offering were determined to be a security, it would undermine the ability of 1 Global to raise funds from retail investors and to continue to operate without substantial additional expenses and reporting requirements. Such a classification would undermine the profits and fees that Ledbetter and other principals at 1 Global would be able to obtain from 1 Global’s operations.
The information alleges that at the request of 1 Global’s principals, Atlas authored two opinion letters in 2016 containing false information that Atlas knew would be used by 1 Global to operate the business unlawfully. The opinion letters falsely described the duration of the investment, among other things, omitting the automatic renewal aspect and that the investment was being targeted toward retail, non-sophisticated investors (such as IRA account holders). According to the information, Ledbetter used and relied on Atlas’s opinion letters to continue to raise money illegally, knowing that the opinion letters falsely described the investment opportunity and were thus misleading. Ledbetter cited and used the false letters in numerous pitches and communications to investment advisors and investors.
According to the information, Ledbetter was personally involved in raising more than $100 million in investor funds that went to 1 Global, through his own pitches as well as through investment advisors he attracted to 1 Global. Over the years, Ledbetter received approximately $3 million from 1 Global, the majority of which was for commissions. Ledbetter routinely held himself out to investors and investment advisers as outside counsel to 1 Global, and also personally vouched for 1 Global in pitches and marketing materials. However, Ledbetter did not disclose the commissions that he received from 1 Global to investors, according to the information. Ledbetter also made misrepresentations to investors regarding the involvement of an outside auditing firm.
A number of individuals have entered guilty pleas in connection with the 1 Global fraud scheme. Alan G. Heide, the former 1 Global chief financial officer, was charged via information and sentenced to 60 months, in Case No. 19-60231-CR-RKA. Atlas, former outside counsel for 1 Global, was charged via information, pleaded guilty, and is awaiting sentencing in Case No. 19-60258-RKA, currently scheduled for Nov. 17, 2020. Steven Schwartz, a former director of 1 Global, was charged via information, pleaded guilty, and is awaiting sentencing in Case No. 20-60003-RKA, currently scheduled for Nov. 13, 2020. Information about the related cases can be found here: https://www.justice.gov/criminal-vns/case/1Global-Capital.
In connection with a parallel civil enforcement action, the SEC today announced the filing of civil fraud charges against Ledbetter. In related cases, the SEC previously has filed civil fraud actions, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (Sothern District of Florida) SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (Southern District of Florida), and SEC v. Jan Atlas, Case No. 19-62303-WPD (Southern District of Florida). The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (Southern District of Florida), remains pending.
A criminal information is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI’s Miami Field Office, IRS-CI, and FDIC-OIG. Deputy Chief Jerrob Duffy, Principal Assistant Deputy Chief Lisa H. Miller, and Assistant Chief L. Rush Atkinson of the Criminal Division’s Fraud Section, and Special Assistant U.S. Attorney Elizabeth Young are prosecuting the case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture related to the matter. The SEC’s Miami Regional Office is also thanked for their contributions.
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.
Santa Cruz Man Charged with Federal Hate Crime for Attempting to Stab Black ManRead the Press Release
SAN FRANCISCO – Ole Hougen has been charged with a federal hate crime for attacking a black man with a knife on a street in Santa Cruz, announced U.S. Attorney David L. Anderson, Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division, and FBI Special Agent in Charge John L. Bennett.
Hougen, 44, of Santa Cruz, Calif., was charged by criminal complaint with willfully attempting to cause bodily injury by using a dangerous weapon because of a person’s actual or perceived race and color. According to the affidavit in support of the criminal complaint, Hougen confronted a 29-year-old black man who was crossing a street in Santa Cruz. Hougen took out a nine-inch knife and slashed at the man’s head, chest, and stomach multiple times while yelling racial slurs at him. At the time of the attack, Hougen was on probation for state convictions involving a racially-motivated assault on a different black man in 2018. The complaint also describes two additional racially-motivated assaults against black men committed by Hougen in 2014 and 2018.
Hougen is charged with violating Title 18, United States Code, Section 249. The charge in the complaint is merely an allegation and the defendant is presumed innocent unless proven guilty in a court of law. Hougen faces a maximum penalty of 10 years in prison if convicted.
Assistant United States Attorney Marissa Harris and Trial Attorney Michael J. Songer of the Civil Rights Division are prosecuting the case on behalf of the government. The FBI conducted the investigation with the assistance of the Santa Cruz Police Department.
San Gabriel Valley Woman Faces Federal Charges of Running Sex Trafficking Operation that Targeted Immigrant WomenRead the Press Release
LOS ANGELES – A federal grand jury today returned a superseding indictment that charges a San Gabriel Valley woman with sex trafficking five immigrant women by hiring them to work at massage parlors and forcing them to engage in commercial sex acts.
Mei Xing, 59, a.k.a. “Xing Mei,” “Anna,” and “Boss,” of San Gabriel, is charged with five counts of sex trafficking by force, fraud, or coercion. Xing previously was indicted on June 12 on one count of sex trafficking, and today’s charging document adds four additional victims.
According to the superseding indictment, from July 2016 to October 2018, Xing ran a sex trafficking operation that targeted immigrant women. An affidavit previously filed in this case alleges that Xing owned and operated several massage parlors in the San Gabriel Valley cities of El Monte and South El Monte.
The victims reported that Xing pressured them into performing commercial sex acts at the massage parlors, court papers state. Xing allegedly coerced victims by all manner of threats, including threating to report their prostitution to police, threatening to expose their immigration status, and implicitly threatening to have them murdered. Xing allegedly told the victims she could make good on her threats because of her relationships with the government, the police, and the criminal underworld, according to court documents.
Xing has been in federal custody since her arrest in this matter in April. She is expected to be arraigned on the superseding indictment in the coming weeks. A December 15 trial date previously was set in this case by United States District Judge Otis D. Wright II.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted, Xing would face a mandatory minimum sentence of 15 years in federal prison for each count and a statutory maximum sentence of life imprisonment.
The investigation was conducted by the Los Angeles Regional Human Trafficking Task Force, which included agents with the FBI and deputies with the Los Angeles County Sheriff’s Department.
This case is being prosecuted by Assistant United States Attorneys Damaris Diaz and Scott M. Lara of the Violent and Organized Crime Section.
SNM gang member pleads guilty to federal racketeering chargeRead the Press Release
ALBUQUERQUE, N.M. – Jonathan “Baby G” Gomez, a member of the Syndicato de Nuevo Mexico prison gang, pleaded guilty on Sept. 25 to a racketeer influenced and corrupt organization (RICO) indictment.
The indictment, to which Gomez pleaded guilty, details various acts and communications since 2002 in which Gomez participated in relation to his membership in the organization. As described in the indictment, those communications discussed gang business, including illicit activities, and coordinated acts of violence, some of which were facilitated, directed or ordered by Gomez.
Gomez faces 15 to 20 years in prison. The court has not set a date for the sentencing hearing.
The FBI and the New Mexico Department of Corrections investigated this case. The Las Cruces office of the U.S. Attorney’s Office for the District of New Mexico is prosecuting the case.
Rewards Offered for Capture of Three Former Venezuelan Officials Charged in Miami Federal Court with Drug Trafficking and Other CrimesRead the Press Release
Miami, Fl. – Rewards are being offered for information leading to the arrest or conviction of three former Venezuelan officials who for years have failed to personally appear in the Southern District of Florida to face publicly-filed federal drug trafficking charges.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, and Acting Special Agent in Charge Keith Weis of the U.S. Drug Enforcement Administration (DEA) Miami Field Office, made the announcement.
Pedro Luis Martin-Olivares, 53, the former Chief of Economic Intelligence of the Venezuelan Intelligence Service (Servicio Bolivariano de Inteligencia Nacional (SEBIN)), was indicted in April 2015 by a federal grand jury sitting in Miami. Martin-Olivares is charged with distributing more than five kilograms of cocaine knowing that it would be unlawfully imported into the United States, possessing with the intent to distribute more than five kilograms of cocaine on board an aircraft registered in the United States, and conspiring with others to import more than five kilograms of cocaine. (Case No. 15-cr-20299).
Rodolfo McTurk-Mora, 58, the former head of Interpol in Venezuela, was indicted in April 2013, by a Miami federal grand jury. McTurk-Mora is charged with conspiring to import more than five kilograms of cocaine into the United States and with conspiring with others to corrupt and impede the South Florida federal prosecution of (now-convicted) narcotics trafficker Jaime Alberto Marin Zamora by delaying and preventing Marin Zamora’s extradition from Venezuela to the United States. According to allegations in court records, through his official position as the head of Interpol, McTurk-Mora solicited bribes from traffickers arrested in Venezuela to prevent their extradition to the United States. (Case No. 13-cr-20930).
Jesus Alfredo Itriago, 62, the former Chief of Counter-narcotics of a main criminal investigative agency in Venezuela (Cuerpo de Investigaciones Científicas, Penales y Criminálisticas (CICPC)), was indicted on January 31, 2013, by a federal grand jury sitting in Miami on a charge of conspiring with others to import more than five kilograms of cocaine into the United States. (Case No. 13-cr-20050).
The U.S. Department of State, through its Narcotics Rewards Program, is offering rewards for information leading to the arrest and/or conviction of each defendant as follows: up to $10 million for Martin-Olivares, up to $5 million for McTurk-Mora, and up to $5 million for Itriago.
“Corrupt Venezuelan officials who lined their pockets by protecting drug traffickers from detection and arrest enabled the entry of enormous amounts of dangerous drugs into the U.S., threatening the well-being of our nation,” said U.S. Attorney Fajardo Orshan. “Whether they are former or current Venezuelan officials, whether they committed their crimes years ago or yesterday, whether we catch them tomorrow, months, or years from now, I promise one thing: The Department of Justice and its law enforcement partners will not rest until these criminals are brought to justice in the U.S.”
“The walls are closing in for Martin-Olivares, McTurk-Mora, and Itriago, all of whom face significant drug trafficking charges in the Southern District of Florida.” said DEA Miami Field Division Acting Special Agent in Charge Keith Weis. “The rewards for information leading to their whereabouts and capture will add another significant level of pressure used by our investigators and prosecutors tasked with bringing them to justice.”
DEA Miami investigated these cases. The International Narcotics and Money Laundering Unit of the U.S. Attorney’s Office for the Southern District of Florida is prosecuting them.
These were Organized Crime Drug Enforcement Task Force (OCDETF) investigations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
In March of this year, the Department of Justice announced drug trafficking, corruption, narco-terrorism, and other criminal charges against Nicolas Maduro Moros and 14 Current and Former Venezuelan Officials, including charges filed by prosecutors in the Southern District of Florida. See press release: https://www.justice.gov/usao-sdfl/pr/nicol-s-maduro-moros-and-14-current-and-former-venezuelan-officials-charged-narco
Anyone with information that may lead to the arrest and/or conviction of these fugitives can email the DEA at [email protected], or message the DEA at 1-202-681-8187 using text messages, WhatsApp, or Signal. Government officials and employees are not eligible for rewards.
An indictment is an accusation. A defendant is presumed innocent unless and until found guilty.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Red Lake Man Sentenced to 192 Months in Prison for Second Degree MurderRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of JEREMIAH KINGBIRD, 39, to 192 months in prison for second degree murder. KINGBIRD, who pleaded guilty on October 8, 2019, was sentenced today before Judge Susan Richard Nelson in U.S. District Court in St. Paul, Minnesota.
“Addressing MMIP cases is a top priority for the U.S. Attorney’s Office and for the Department of Justice,” said U.S. Attorney Erica H. MacDonald. “In this particular case, Mr. Kingbird subjected his wife to extreme physical violence before leaving her on the side of a road, exposed to below freezing temperatures. The disproportionally high rates of violence that plague Native American women is unacceptable. Today’s sentence represents justice for the victim and our commitment to putting an end to the staggering MMIP issue.”
According to the defendant’s guilty plea and documents filed in court, during the early morning hours of January 6, 2019, following a night of drinking, KINGBIRD and the victim, KINGBIRD’s wife, were traveling in a motor vehicle to their home in Ponemah, Minnesota, when KINGBIRD and the victim began to argue and engage in a physical altercation. While driving, KINGBIRD struck the victim in her head, used his hand to strangle her, and then left her on the road near Highway 1 and Old Ponemah Road in Redby.
According to the defendant’s guilty plea and documents filed in court, law enforcement found the victim, hours later, lying face down in the snow; she had severe injuries to her head and neck and was having difficulty breathing. The victim was transported to the Red Lake IHS Hospital where hospital staff were unsuccessful in reviving her. During a search of KINGBIRD’s vehicle, law enforcement observed blood on the front passenger window of the vehicle. KINGBIRD admitted to violently assaulting the victim and leaving her outside in the elements.
On November 22, 2019, Attorney General William P. Barr launched a national strategy to address missing and murdered Native Americans. When establishing the Missing and Murdered Indigenous Persons (MMIP) Initiative the Department of Justice made an initial investment of $1.5 million to hire 11 MMIP coordinators in 11 states to serve with all U.S. Attorney’s offices in those states, and others who require assistance. In addition to Minnesota, Alaska, Arizona, Montana, Oklahoma, Michigan, Utah, Nevada, Oregon, New Mexico, and Washington state were selected.
This case was the result of an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
This case was prosecuted by Special Assistant U.S. Attorney Gina L. Allery and Assistant U.S. Attorney Deidre Y. Aanstad.
Defendant Information:
JEREMIAH KINGBIRD, 39
Ponemah, Minn.
Convicted:
- Murder in the second degree, 1 count
Sentenced:
- 192 months in prison
- 5 years of supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Recompensas Ofrecidas por la Captura de Tres Ex-Funcionarios Venezolanos Acusados en el Tribunal Federal de Miami por Narcotráfico y otros CrímenesRead the Press Release
Miami, Fl. – Recompensas están siendo ofrecidas por información que lleve al arresto o convicción de tres ex-funcionarios Venezolanos quienes durante años no han cumplido con asistir en persona a sus comparecencias iniciales en el Distrito Sur de Florida para enfrentar los cargos federales de narcotráfico presentados públicamente.
La Fiscal Federal Ariana Fajardo Orshan del Distrito Sur de Florida, y el Agente Especial a Cargo Interino Keith Weis de la Sucursal de Miami de la Administración para el Control de Drogas (DEA, por sus siglas en Inglés), hicieron el anuncio.
Pedro Luis Martin-Olivares, 53, el ex-Jefe de la Inteligencia Económica del Servicio de Inteligencia de Venezuela (Servicio Bolivariano de Inteligencia Nacional (SEBIN)), fue enjuiciado en Abril de 2015 por un gran jurado federal en Miami. Martin-Olivares fue acusado de distribuir más de cinco kilogramos de cocaína sabiendo que iban a ser importados ilegalmente a los Estados Unidos, poseer con la intención de distribuir más de cinco kilogramos de cocaína a bordo de un avión registrado en los Estados Unidos, y conspirar con otros para importar más de cinco kilogramos de cocaína. (Número de caso 15-cr-20299).
Rodolfo McTurk-Mora, 58, el ex-Jefe de la Interpol en Venezuela, fue enjuiciado en Abril de 2013, por un gran jurado federal en Miami. McTurk-Mora es acusado de conspirar para importar más de cinco kilogramos de cocaína en los Estados Unidos y de conspirar con otros para corromper e impedir el enjuiciamiento federal en el Sur de Florida del (ahora convicto) narcotraficante Jaime Alberto Marín Zamora retrasando e impidiendo la extradición de Marín Zamora de Venezuela a los Estados Unidos. Conforme con las alegaciones en los registros de la corte, haciendo uso de su posición como jefe de la Interpol, McTurk-Mora solicitó sobornos de traficantes arrestados en Venezuela para impedir su extradición a los Estados Unidos. (Número de caso 13-cr-20930).
Jesús Alfredo Itriago, 62, el ex-Jefe de Antinarcóticos de la agencia principal de investigación criminal en Venezuela (Cuerpo de Investigaciones Científicas, Penales y Criminálisticas (CICPC)), fue enjuiciado el 31 de Enero de 2013, por un gran jurado federal en Miami por cargos de conspirar con otros para importar más de cinco kilogramos de cocaína a los Estados Unidos. (Número de caso 13-cr-20050).
El Departamento de Estado de los Estados Unidos, a través del Programa de Recompensas de Narcóticos, está ofreciendo recompensas por información que lleve al arresto y/o la convicción de cada uno de los acusados del siguiente modo: hasta $10 millones por Martin-Olivares, hasta $5 millones por McTurk-Mora, y hasta $5 millones por Itriago.
“Codiciosos y corruptos funcionarios venezolanos quienes han aceptado sobornos por proteger narcotraficantes de ser descubiertos y arrestados, han permitido la entrada de enormes cantidades de peligrosas drogas a los Estados Unidos, amenazando el bienestar de nuestra nación,” dijo la Fiscal Federal Fajardo Orshan. “Ya sean ex-funcionarios o funcionarios Venezolanos actuales, ya sea que hayan cometido los crímenes años atrás o el día de ayer, ya sea que los arrestemos mañana, en meses, o en años, yo les prometo una cosa: El Departamento de Justicia y sus agencias asociadas no descansarán hasta que la justicia Americana recaiga en estos criminales.”
“Las paredes se están cerrando para Marin-Olivares, McTurk-Mora, y Itriago, quienes enfrentan cargos de narcotráfico significativos en el Distrito Federal del Sur,” dijo el Agente Especial a Cargo Interino Keith Weis de la Sucursal de Miami de la Administración para el Control de Drogas. “Las recompensas por información que lleve a su paradero y captura agregará otro nivel de presión significativo usado por nuestros investigadores y abogados fiscales encargados de que la justicia recaiga en ellos.”
DEA Miami investigó el caso. La Unidad Internacional de Narcóticos y Lavado de Dinero de la Oficina del Fiscal Federal del Distrito Sur de Florida está enjuiciandolo.
En Marzo de este año, el Departamento de Justicia anunció narcotráfico, corrupción, narcoterrorismo, y otros cargos criminals en contra de Nicolás Maduro Moros y de 14 Ex-funcionarios y funcionarios actuales Venezolanos, incluyendo cargos presentados por abogados fiscales en el Distrito Sur de Florida. Véase el comunicado de prensa: https://www.justice.gov/usao-sdfl/pr/nicol-s-maduro-moros-and-14-current-and-former-venezuelan-officials-charged-narco
Cualquier persona que tenga información que lleve al arresto y/o convicción de estos fugivitivos pueden enviar un correo electrónico a [email protected], o enviar un mensaje a la DEA a 1-202-681-8187 via mensaje de texto, WhatsApp, o Signal. Funcionarios y empleados del gobierno no son elegibles para recibir recompensas.
Una denuncia criminal contiene alegaciones. Todo acusado es considerado inocente hasta que se demuestre su culpabilidad.
Usted puede encontrar información y documentos legales relacionados a este comunicado de prensa en la página web del Tribunal Federal del Distrito Sur de Florida, www.flsd.uscourts.gov o en http://pacer.flsd.uscourts.gov
Randolph County woman admits to meth distributionRead the Press Release
ELKINS, WEST VIRGINIA – Kerri Marie Hamrick-Satterfield, of Elkins, West Virginia, has admitted to methamphetamine distribution, U.S. Attorney Bill Powell announced.
Hamrick-Satterfield, 32, pled guilty today to one count of “Possession with Intent to Distribute Methamphetamine.” Hamrick-Satterfield admitted to having more than five grams of methamphetamine in March 2018 in Barbour County.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force and the Philippi Police Department investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Randolph County man admits to meth distribution and firearms violationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Joshua Jesse White, of Montrose, West Virginia, has admitted to drug and firearms charges, U.S. Attorney Bill Powell announced.
White, 39, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine” and one count of “Possession of a Firearm in Furtherance of a Drug Crime.” White admitted to having more than 5 grams of methamphetamine, also known as “ice” and “crystal meth” in October 2018 in Randolph County. White also admitted to having a .22 caliber revolver with him during the drug crime.
White faces at least five years and up to 40 years incarceration and a fine of up to $5,000,000 for the drug count and at least five years and up to life incarceration and a fine of up to $250,000 for the firearms count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Parmelee Man Sentenced on Firearm ChargeRead the Press Release
United States Attorney Ron Parsons announced that a Parmelee, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced on September 28, 2020, by Chief Judge Roberto A. Lange, U.S. District Court.
Justin Whiting, age 20, was sentenced to 6 months in federal prison, followed by 6 months of home confinement, 30 months of supervised release, forfeiture of firearm, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Whiting was indicted by a federal grand jury on January 14, 2020. He pled guilty on July 23, 2020.
The conviction stemmed from an incident that occurred on December 5, 2019, in St. Francis, South Dakota. On that date, Rosebud Sioux Falls Law Enforcement Services responded to a call for service from St. Francis Indian School regarding Whiting. The investigation revealed that Whiting had brought a handgun to school and that he was addicted to, and an unlawful user of, marijuana.
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 its 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 local communities to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Whiting was immediately turned over to the custody of the U.S. Marshals Service.
Owner of Medical Laboratory Sentenced to Prison for Filing False Tax ReturnsRead the Press Release
SHREVEPORT, La. – A Shreveport business owner was sentenced today to 40 months (3 years, 4 months) in prison for filing false tax returns, announced Acting United States Attorney Alexander C. Van Hook and Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to documents and information provided to the court, Robert Clifton Poimboeuf, 58, was part owner of D&G Holdings, LLC, a medical laboratory in the Shreveport area. From 2011 through 2015, Poimboeuf filed false tax returns that underreported gross receipts earned from his business. Poimboeuf concealed from his tax return preparers at least two bank accounts reflecting income earned, and falsely characterized business receipts as non-taxable loans. As a result of these actions, Poimboeuf caused a tax loss of more than $1.9 million to the Internal Revenue Service (IRS).
In addition to the term of imprisonment, United States District Judge S. Maurice Hicks, Jr. ordered Poimboeuf to one year of supervised release and to pay restitution to the IRS in the amount of $1,904,477.
Acting United States Attorney Van Hook and Principal Deputy Assistant Attorney General Zuckerman thanked special agents of the IRS-Criminal Investigation who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division, who assisted Acting United States Attorney Van Hook in the prosecution of the case.
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Operation Legend: Case of the DayRead the Press Release
Each weekday, the Department of Justice will highlight a case that has resulted from Operation Legend. Today’s case is out of the Northern District of Illinois. Operation Legend launched in Chicago on July 22, 2020, in response to the city facing increased homicide and non-fatal shooting rates.
A federal grand jury indicted a man on carjacking and firearm charges for allegedly stealing a vehicle at gunpoint in Chicago.
“Our office will use every available federal resource to vigorously pursue and prosecute violent carjackers,” said John R. Lausch, Jr., U.S. Attorney for the Northern District of Illinois. “We are committed to working with our state and local law enforcement partners to aggressively fight violent crime and protect Chicago’s neighborhoods from gun offenders.”
Elias Quinones-Figueroa, 19, of Chicago, was charged with one count of carjacking and one count of brandishing a firearm during a crime of violence.
According to court documents unsealed Friday, Sept. 25, 2020, on May 27, 2020, Quinones-Figueroa forcibly took a 2008 Chevrolet Tahoe sport-utility vehicle from a victim in the West Town neighborhood of Chicago. It is alleged Quinones-Figueroa brandished a handgun during the carjacking.
The carjacking charge is punishable by up to 25 years in federal prison, while the firearm charge carries a mandatory minimum sentence of seven years, which must run consecutive to any sentence imposed on the carjacking charge.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Background on Operation Legend
Since its inception, Operation Legend has yielded more than 3,500 local, state, and federal arrests, with more than 800 defendants charged with federal crimes.President Trump promised to assist America’s cities that have been plagued by violence. In July, Attorney General William P. Barr announced the launch of Operation Legend, a sustained, systematic and coordinated law enforcement initiative across all federal law enforcement agencies working in conjunction with state and local law enforcement officials to fight violent crime in cities across America that were experiencing an uptick in violence. Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed on June 29th in Kansas City, Missouri, while asleep in his home.
Operation Legend was launched in Kansas City, Mo., on July 8, 2020, and expanded to Chicago and Albuquerque on July 22, 2020; to Cleveland, Detroit, and Milwaukee on July 29, 2020; to St. Louis and Memphis on Aug. 6, 2020; and to Indianapolis on Aug. 14, 2020. As part of Operation Legend, Attorney General Barr has directed federal agents from the FBI, U.S. Marshals Service, DEA and ATF to surge resources to these cities to help state and local officials fighting violent crime. The Department of Homeland Security is also contributing agents to these efforts in St. Louis.
Oklahoma City Attorney Pleads Guilty to Unlawfully Possessing a Firearm While Subject to Victim Protective OrderRead the Press Release
OKLAHOMA CITY – Oklahoma City attorney Keegan Kelley Harroz, 37, has pleaded guilty today in federal court to one count of being a prohibited person unlawfully in possession of a firearm, announced U.S. Attorney Timothy J. Downing. Specifically, Harroz admitted that, on or about August 4, 2019, she possessed a firearm in violation of federal law because she was subject to a state-court victim protective order at the time she possessed the firearm.
At sentencing, Harroz faces a maximum penalty of ten years in prison, three years of supervised release, and a $250,000.00 fine. As part of the plea agreement in this case, the parties agreed that a sentencing range of 24 to 30 months’ imprisonment would be an appropriate disposition of the case. Sentencing will take place in approximately 90 days.
This case is a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms & Explosives, with assistance from the United States Marshals Service, along with other law enforcement partners. Assistant U.S. Attorneys Matthew P. Anderson, Jacquelyn M. Hutzell, and Danielle M. Connolly are prosecuting the case.
This case is part of Project Safe Neighborhoods and Project Guardian, the Department of Justice’s signature initiatives to reduce gun violence and enforce federal firearms laws. The case is also part of "Operation 922," the district’s local implementation of Project Safe Neighborhoods and Project Guardian. "Operation 922" prioritizes firearms prosecutions connected to domestic violence, including domestic violence abusers who possess a firearm and are subject to a victim protective order or have been previously convicted of a misdemeanor crime of domestic violence.
Reference is made to court filings for further information. To download a photo of U.S. Attorney Downing, click here.
Ohio man admits to his role in drug conspiracy involving heroin, fentanyl, “crack” cocaine, and meth in WheelingRead the Press Release
WHEELING, WEST VIRGINIA – Michael Moon, of Toledo, Ohio, has admitted to his role in a drug conspiracy, U.S. Attorney Bill Powell announced.
Moon, also known as “Meezy,” 25, pled guilty today to one count of “Aiding and Abetting the Distribution of Methamphetamine within 1000 feet of a Protected Location.” Moon admitted to working with others to selling methamphetamine near Madison Elementary School in Wheeling on February 14, 2020.
Assistant U.S. Attorneys Shawn M. Adkins and Clayton J. Reid are prosecuting the case on behalf of the government. The Ohio Valley Drug and Violent Crimes Task Force, a HIDTA-funded initiative, which includes the Drug Enforcement Administration, West Virginia State Police, Ohio County Sheriff’s Office, and the Wheeling Police Department, investigated. The U.S. Marshal Service, Columbus Police Department Gang Crimes Unit, the Martins Ferry Police Department, and the Bellaire Police Department also assisted.
U.S. Magistrate Judge James P. Mazzone presided.
North Tonawanda Man Charged with COVID-19 Relief FraudRead 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 Michael Kornaker, 50, of North Tonawanda, NY, was charged by criminal complaint with wire fraud in relation to a national emergency, and aggravated identity theft. The charges carry a minimum penalty of two years in prison, a maximum penalty of 30 years, and a $1,000,000 fine.
Assistant U.S. Attorney Douglas A. C. Penrose, who is handling the case, stated that according to the complaint, the defendant was recently released from prison following a 2017 federal conviction on mail fraud and tax evasion charges, and was on supervised release. Kornaker fraudulently applied for an Economic Injury Disaster Loan (EIDL) through the U.S. Small Business Administration (SBA) between June and August 2020. The EIDL program provides funds to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of a declared disaster, including the COVID-19 pandemic. The defendant applied for and was granted $60,500 using the name and personal information of another person, without that person’s permission.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder, Jr., and was detained.
The criminal complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the Internal Revenue Service Criminal Investigation, under the direction of Special Agent-in-Charge Jonathan D. Larsen.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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North Carolina Man Charged with Fraudulently Seeking over $6 Million in COVID Relief FundsRead the Press Release
A North Carolina man was charged with fraudulently seeking over $6 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Robert J. Higdon Jr. of the Eastern District of North Carolina.
Tristan Bishop Pan, 38, of Garner, is charged with wire fraud, bank fraud, and engaging in unlawful monetary transactions.
The indictment, unsealed today, alleges that Pan perpetrated a scheme to submit fraudulent PPP loan applications to federally insured banks. The Small Business Administration (SBA) guarantees PPP loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to the allegations, Pan submitted numerous fraudulent PPP loan applications, including on behalf of entities named Pan Insurance Agency, White Walker, Khaleesi, and The Night’s Watch. The indictment alleges that, in support of the fraudulent PPP loan applications, Pan made false statements about the companies’ employees and payroll expenses. The PPP loan applications were supported by fake documents, including falsified tax filings, according to the indictment. Pan allegedly submitted fourteen PPP loan applications seeking over $6.1 million and received more than $1.7 million in benefits following approval of the Pan Insurance Agency and White Walker PPP loan applications. The government was able to seize some of the allegedly fraudulent loan benefits.
The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal indictment is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Treasury Inspector General for Tax Administration, the Federal Deposit Insurance Corporation Office of Inspector General, and the FBI, with the assistance of the Small Business Administration Office of Inspector General. Trial Attorney Justin M. Woodard of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Ethan A. Ontjes and John Harris 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.
New York Man Sentenced for Fraud Conspiracy and ID TheftRead the Press Release
ALEXANDRIA, Va. – A New York man was sentenced today to 66 months in prison for his role in acquiring and using thousands of stolen payment card numbers, as well as other personal information.
According to court documents, from at least June 2016 through at least June 2019, Vladimir Michel, 34, of Brooklyn, and his co-conspirators committed various acts of fraud that resulted in at least $2.7 million in intended losses. One of the primary ways that Michel and his co-conspirators defrauded others was by obtaining and using thousands of stolen payment card numbers. Michel and his co-conspirators acquired and shared this account information by accessing illicit websites and using email and instant messaging platforms.
Michel and members of the conspiracy monetized the stolen payment cards they acquired by using the account information to purchase high-end merchandise and then re-sell it. For purchases at retail stores, the conspirators sometimes loaded the stolen payment card information into smartphones and paid for merchandise with their smartphones’ contactless payment features. Michel and his co-conspirators conducted fraudulent transactions across the United States, including at a number of retail stores in the Eastern District of Virginia.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division; and Charles “Andy” Penn, Acting Chief of Police, Arlington County Police Department, made the announcement after sentencing by Senior U.S. District Judge Liam O’Grady.
Assistant U.S. Attorneys Alexander P. Berrang and Nathaniel Smith III prosecuted the case. Former Assistant U.S. Attorney Laura Fong also provided significant assistance in this prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-276.
New York Man Pleads Guilty to Bank FraudRead the Press Release
CONCORD - Derrick McKenzie, 61, of Mount Vernon, New York, pleaded guilty in federal court to bank fraud, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, between approximately May 10, 2018, and May 17, 2019, McKenzie entered a number of different bank branches in New Hampshire, New York, New Jersey, Maine, Massachusetts, and Pennsylvania and made withdrawals from other people’s bank accounts. For each transaction, McKenzie used customers’ personal identification information, including their name and bank account numbers and, for some withdrawals, false drivers’ licenses that contained the bank customers’ personal identifying information and McKenzie’s photograph. In total, McKenzie withdrew approximately $111,000 and attempted to withdraw over $15,500 from other persons’ bank accounts.
McKenzie is scheduled to be sentenced on January 6, 2021.
“Fraud crimes deprive victims of their hard-earned money,” said U.S. Attorney Murray. “Those who engage in bank fraud drive up business costs and undermine public confidence in our financial system. In order to protect our community, we will not hesitate to bring federal charges against fraudsters who come to New Hampshire to commit crimes.”
“Defrauding financial institutions by using the stolen identities of victims creates significant financial losses and hardships for those involved,” said Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division. “The U.S. Postal Inspection Service will continue to conduct investigations of individuals who compromise the personal information of our customers and jeopardize the integrity the U.S. Mail.”
This matter was investigated by the United States Postal Inspection Service. The following police departments also provided assistance: the Dover, Hampstead, and North Hampton Police Departments in New Hampshire; the Andover, Burlington, Lexington, and Methuen Police Departments in Massachusetts; the Kennebunk Police Department in Maine; the New York City Police Department; and the Nutley Police Department in New Jersey. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter.
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Natick Attorney Pleads Guilty to Fraud ChargesRead the Press Release
BOSTON – A real estate developer and attorney pleaded guilty yesterday in federal court in Worcester in connection with a $2.3 million fraud scheme relating to the redevelopment of a multi-family property in Worcester.
James E. Levin, 61, of Natick, pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to defraud the United States and false claims. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Feb. 9, 2021. Levin was charged in August 2016.
From July 2010 to September 2011, Levin, as the manager of 5 May Street Apartments, LLC, applied for and obtained federal funds from the U.S. Department of Housing and Urban Development (HUD), through the City of Worcester, to rehabilitate a multi-unit apartment building at 5 May Street in Worcester. Since the City of Worcester distributes grant funds on behalf of HUD and Massachusetts Department of Housing and Community Development (DHCD), Levin submitted seven payment requests to the City for work he fraudulently claimed he completed on the building and associated costs. In the course of her job with the City of Worcester’s Housing Development Office, Levin’s co-defendant, Jacklyn Sutcivni, allegedly approved the payment requests submitted by Levin, although she knew the requests were fraudulent. It is alleged that this caused the City of Worcester to pay approximately $2,365,050 to Levin. After the City issued the payment, Sutcivni or other City officials submitted reimbursement requests to HUD or DHCD for HUD funds.
Sutcivni has pleaded not guilty and is scheduled to stand trial on May 3, 2021.
The charges of conspiracy to commit wire fraud and wire fraud each provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million, or twice the gross gain or loss, whichever is greater. The charge of conspiracy to defraud the United States provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of submission of false claims provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The indictment also seeks monetary forfeiture in the amount of $2,365,050. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney Michelle L. Dineen Jerrett of Lelling’s Springfield Branch Office is prosecuting the case.
The details contained in the indictment are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mission Man Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man convicted of Involuntary Manslaughter was sentenced on September 28, 2020, by Chief Judge Roberto A. Lange, U.S. District Court.
Steven Burning Breast, age 24, was sentenced to 37 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Burning Breast was indicted by a federal grand jury on November 13, 2019. He pled guilty on July 9, 2020.
The conviction stemmed from an incident that occurred on April 22, 2019, in Todd County, South Dakota. On that date, Burning Breast had been consuming alcohol, and was driving a car eastbound on US Highway 18. The victims, an adult male and an adult female, were passengers in the vehicle. As Burning Breast approached a curve at a high rate of speed, he lost control of the vehicle and left the roadway. The vehicle rolled multiple times, causing the victims to be ejected from the vehicle. The victims died as a result of injuries suffered in the wreck.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Bennett County Sheriff’s Office. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Burning Breast was immediately turned over to the custody of the U.S. Marshals Service.
Mexican cocaine smuggler heads to prisonRead the Press Release
LAREDO, Texas – A 49-year-old woman has been ordered to federal prison following her conviction for conspiring to import cocaine, announced U.S. Attorney Ryan K. Patrick.
Ramona Elizabeth Garcia Gonzalez pleaded guilty July 8.
Today, U.S. District Judge Marina Garcia Marmolejo handed Gonzalez a 48-month term of imprisonment. Not a U.S. citizen, she is expected to face removal proceedings following the sentence.
On Feb. 16, Gonzalez attempted entry into the United States at the Juarez-Lincoln International Bridge in Laredo driving a 2017 Nissan Versa. Upon inspection, an X-ray scan revealed anomalies concealed within her vehicle. At that time, authorities conducted a search and found several bundles of white powder hidden behind the glove box.
The bundles field tested positive for cocaine and weighed approximately 10.88 kilograms with an estimated street value of nearly $275,000.
Gonzalez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance of Customs and Border Protection. Assistant U.S. Attorney David Fawcett prosecuted the case.
Mexican National with Numerous DUI Convictions Pleads GuiltyRead the Press Release
RICHMOND, Va. – A Mexican national recently convicted of his third Driving Under the Influence charge within the previous two years pleaded guilty today to illegally reentering the United States.
According to court documents, Rafael Nepamuceno-Hernandez, 29, first illegally entered the United States in August of 2009, when he was apprehended near the border by the U.S. Border Patrol. He was subsequently prosecuted for and convicted of illegally entering the United States. Five days after his removal to Mexico, Border Patrol Agents again apprehended Nepamuceno-Hernandez in the United States, and he was later again removed to Mexico. Sometime after this second removal, Nepamuceno-Hernandez again illegally reentered the United States, and eventually made his way to Virginia. While in Virginia, Nepamuceno-Hernandez was convicted of Driving Under the Influence on three separate occasions between November of 2018 and June of 2020.
Nepamuceno-Hernandez pleaded guilty to illegal reentry, and faces a maximum penalty of two years years in prison when sentenced on Jan. 14, 2021. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Lyle Boelens, Acting Director of the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO) Washington Field Office, made the announcement after Senior U.S. District Judge Robert E. Payne accepted the plea. Assistant U.S. Attorney Thomas A. Garnett is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:20-cr-62.
Mexican National Sentenced to over 20 Years in Prison for Setting Fire to Drug Smuggling Vessel During U.S. Coast Guard InterdictionRead the Press Release
Tampa, FL – U.S. District Judge Mary S. Scriven has sentenced Jesus Soto-Martinez (41, Michoacan, Mexico) to 21 years and 3 months in federal prison for conspiring to distribute and possess with the intent to distribute five kilograms or more of cocaine while onboard a vessel subject to the jurisdiction of the United States, forcibly interfering with a lawful boarding, and knowingly using fire to commit a felony offense.
Soto-Martinez had pleaded guilty on November 20, 2019.
According to court documents, on February 19, 2019, the U.S. Coast Guard (USCG) Cutter STEADFAST interdicted a go-fast vessel (GFV) carrying Soto-Martinez and his co-conspirators in international waters about 378 nautical miles south of Acapulco, Mexico. The defendants were carrying approximately 2,000 kilograms of cocaine on the GFV. During the pursuit of the vessel, Jose Varges-Merida, a co-defendant, refused to comply with the USCG commands to stop and steered the GFV in the direction of the USCG vessel carrying its law enforcement detachment, causing the USCG vessel to significantly alter course and momentarily become unstable. The coxswain was forced to make evasive maneuvers to avoid the GFV from running over the USCG vessel and its crewmen. The USCG was then able to stop the GFV by using several rounds of disabling fire.
During the boarding of the GFV, Soto-Martinez intentionally started a fire onboard the GFV by lighting one of the fuel barrels on fire. After jumping off the GFV, Soto-Martinez clung to the side of the GFV and lifted up the tarp covering the cocaine bales, seemingly in an effort to ensure the nearby fire spread to the load of drugs. Almost immediately, the fire spread out of control and eventually engulfed the entire vessel. It took 90 minutes to extinguish. The majority of the GFV was burned to the waterline and the vast majority of cocaine was burned to an unsalvageable extent.
“I am extremely grateful to our U.S. Attorney partners for helping us complete the cycle of justice,” said Rear Admiral Brian Penoyer, the 11th Coast Guard District commander. “This case demonstrates the lengths smugglers are willing to go to avoid getting caught and the dangers Coast Guard men and women face as we continue to keep these drugs off the streets and out of our homes.”
This case was investigated by the Panama Express Strike Force, an Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the United States Coast Guard Investigative Service, Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted Assistant United States Attorney Dan Baeza.
Medford Podiatrist Pleads Guilty to Possession of a Controlled Substance by FraudRead the Press Release
PORTLAND, Ore.—A Medford Podiatrist pleaded guilty today for using fraud and deception to obtain controlled substances which he used to feed his personal addiction, announced U.S. Attorney Billy J. Williams.
Patrick T. Code, 60, pleaded guilty today to a one count information charging Obtaining Possession of a Controlled Substance through Misrepresentation, Fraud, Forgery, Deception and Subterfuge.
“Substance addiction is a public safety and health crisis for this community, and no one is immune from the ravages of addiction including professionals in health care. However, the defendant’s conduct in illegally obtaining and using powerful drugs while acting as a trusted health care provider is particularly alarming”, said United States Attorney Williams. “This case was brought in order to protect the community from the ongoing risk to patients posed by the defendant’s actions.”
According to court documents, for several years between June 2016 and May 2019, the defendant wrote prescriptions for 2,876 - 50 mg tablets of tramadol and 78-10 mg tablets of zolpidem using the names of fake patients or the names and information of relatives who were not aware of the prescriptions. The defendant acquired the controlled substances from pharmacies falsely claiming the drugs were for others and used the drugs to feed his own drug addiction
Code faces a maximum sentence of 4 years in prison, a $250,000 fine and 1 year of supervised release. Code will be sentenced on December 3, 2020, before U.S. District Court Judge Ann L. Aiken.
The Drug Enforcement Administration investigated this case. It is being prosecuted by Joseph H. Huynh, Assistant U.S. Attorneys for the District of Oregon.
Massachusetts Man Who Defrauded Connecticut Art Dealer is SentencedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that HAROLD GORDON, 71, of Templeton, Massachusetts, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to five years of probation for defrauding a Connecticut art dealer.
According to court documents and statements made in court, in approximately October 2012, Gordon began communicating by phone and email with a respected art dealer and appraiser (the “victim”) in Connecticut, to induce the victim to purchase a tall antique desk, commonly known as a “secretary desk.” In these communications, Gordon falsely represented to the victim that the desk was decorated and dedicated as a Civil War memorial for a Connecticut soldier who died at the Battle of Antietam while fighting for the Union Army. These misrepresentations included Gordon’s claims that the surviving soldiers in the fallen soldier’s Connecticut regiment had crafted the desk to serve as a war memorial for the deceased soldier’s family; that other than cleaning the vintage clock, Gordon had done nothing else to refurbish or decorate the desk; and that Gordon had purchased the desk from a descendant of the deceased Connecticut soldier.
In early March 2014, the victim examined the secretary desk at Gordon’s Massachusetts residence, and then took several subsequent steps to confirm the desk’s authenticity, such as taking a portion of the desk apart. The victim then purchased the desk from Gordon for $64,500. At Gordon’s request, the victim provided the payment in three separate checks.
In February 2015, the victim sold the desk to the Wadsworth Atheneum Museum of Art in Hartford. After completing this transaction, the victim sent Gordon an additional payment of $25,000 because the victim had made a significant profit from the sale.
In February 2018, various third parties made inquiries to the victim about the authenticity of the secretary desk. The victim contacted Gordon, who admitted that he had refurbished and decorated the desk himself, created the false narrative about the desk’s history, and targeted the victim to purchase it due to the victim’s respected stature in the American folk art community. The victim then made full restitution to the Wadsworth Atheneum.
Judge Meyer ordered Gordon to pay restitution of $84,500 to the victim.
On January 29, 2019, Gordon pleaded guilty to one count of wire fraud.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Hal Chen.
Massachusetts Man Re-Sentenced to 30 Years in Prison for Conspiring to Murder U.S. Citizens, Including Police, on Behalf of ISISRead the Press Release
BOSTON – An Everett man was re-sentenced yesterday to 30 years in prison for conspiring to murder U.S. citizens, including police officers, on behalf of the Islamic State of Iraq and Syria (ISIS).
David Daoud Wright, a/k/a Dawud Sharif Abdul Khaliq, a/k/a Dawud Sharif Abdul Khaliq, 31, of Everett, Mass., was re-sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to 30 years in prison and a lifetime of supervised release. In December 2017, Wright was sentenced to 28 years in prison after a federal jury convicted him of conspiracy to provide material support to ISIS, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to obstruct justice and obstruction of justice. In August 2019, the First Circuit Court of Appeals vacated count one (conspiracy to provide material support to ISIS) and affirmed the other counts. The case was remanded to the district court for re-sentencing, which took place yesterday.
“Mr. Wright is a homegrown terrorist who plotted to kill innocent Americans on behalf of ISIS, including specifically targeting police officers,” said United States Attorney Andrew E. Lelling. “He radicalized himself and others, pledged allegiance to a terrorist organization, and conspired with his now-deceased uncle to kill police officers with a combat knife. This case is a reminder of the persistent terrorism threat to our citizens and law enforcement officers.”
“ISIS soldier David Wright betrayed his country and forfeited his freedom when he conspired with others to attack and murder innocent civilians and police officers in support of a sworn, barbaric enemy of the United States. This sentence ensures they remain worlds apart,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Identifying and disrupting terrorist plots, both foreign and domestic, is the FBI’s top priority, and the round-the-clock teamwork of our partners within our Massachusetts Joint Terrorism Task Force saved innocent lives, and kept Wright’s endgame of martyrdom out of reach.”
Beginning in at least February 2015, Wright began discussing ISIS’ call to kill non-believers in the United States with his uncle, Usaamah Abdullah Rahim, and co-defendant Nicholas Alexander Rovinski. Specifically, Wright created a “martyrdom” operation cell in Massachusetts. In April 2015, Wright created a Twitter page for the “Lions of America” and published a document entitled, Internal Conquest, on the internet in which Wright called on Muslims living in the United States to kill their fellow citizens.
Wright also plotted with Rahim and Rovinski to behead U.S. citizens at the direction of ISIS, and identified a New York woman as the first beheading target. Rahim purchased three knives for this plot. In addition, Wright’s ISIS cell was in direct communication with ISIS recruiter and attack facilitator, Junaid Hussain, who provided Rahim with an encrypted document containing details about the intended victim. In August 2015, Hussain was killed in an airstrike in Raqqah, Syria.
In preparation for their attack, Wright conducted extensive research on weapons, knives, machetes, bombing making components and methods to subdue their victims. Wright also conducted research on “what tranquilizer put humans to sleep instantly” and “how to start a secret militia in the United States.”
On June 2, 2015, Wright caused a terrorist attack in Massachusetts and caused his uncle, Rahim, to be killed. Rahim was shot and killed after he attacked law enforcement officers with a large fighting knife in a Roslindale, Mass., parking lot. Two hours before Rahim attacked the police, Wright directed and encouraged Rahim to pursue martyrdom by attacking the “boys in blue.” Within minutes of learning of his uncle’s death from a family member, Wright deleted data from his laptop computer by restoring it to factory settings and deleted call logs on his cellphone that showed that he had spoken to Rahim that morning. Wright also instructed Rahim to destroy his electronic devices before attacking the police officers.
U.S. Attorney Lelling and FBI SAC Bonavolonta made the announcement. This investigation was conducted by the Boston Joint Terrorism Task Force (JTTF); Boston Police Department; Massachusetts State Police; Everett Police Department; and Customs and Border Protection. The Suffolk District Attorney’s Office and police in the United Kingdom also provided valuable assistance. The case was prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann, Chief of Lelling’s National Security Unit prosecuted the case.
Man Pleads Guilty to Sex Trafficking Women in Central IllinoisRead the Press Release
PEORIA, Ill. – Following jury selection, as his trial was about to begin, Franshon Stapleton, 47, entered pleas of guilty to sex trafficking young women in Central Illinois from 2016 to May 2018. Stapleton pleaded guilty to all the charges against him on Sept. 28, 2020, in Peoria, Ill., before U.S. District Judge James E. Shadid. Sentencing for Stapleton has been scheduled on Jan. 29, 2021.
U.S. Attorney John Milhiser stated, “I commend the strength of the victims in this case who came forward to provide critical evidence against this defendant.” Milhiser also recognized the sustained efforts by federal and local law enforcement to locate, investigate and prosecute dangerous predators and remove them from our communities.
According to court documents, in 2017 and 2018, Stapleton, of Springfield, who was residing in a motel in Champaign Ill., exploited the vulnerabilities of young women, including their drug additions and homelessness, to force them to engage in commercial sex acts. Stapleton recruited young women from Champaign, Sangamon and Peoria counties, who often were dealing with the effects of heroin and crack cocaine addictions.
Stapleton used the website BackPage, which the Department of Justice seized in April 2018, to advertise commercial sex acts to be performed by the women he recruited. Stapleton used violence and threats of violence to force the women to engage in sex with men. To coerce women into continued sex trafficking, Stapleton supplied them with drugs and threatened to send women into withdrawal sickness by withholding drugs.
Stapleton has remained in law enforcement custody since his arrest in May 2018. Stapleton faces a statutory minimum sentence of 15 years and up to life in prison for each of the four sex trafficking counts. The penalty for each of the remaining charges to which he pleaded guilty is up to five years imprisonment for engaging in a conspiracy (one count) and for use of a facility of interstate commerce in aid of a racketeering enterprise (eleven counts).
The charges are the result of an investigation by U.S. Immigration and Customs Enforcement Homeland Security Investigations; the Urbana Police Department; the Champaign County Sheriff’s Office; the Illinois State Police Forensics Laboratory; and, the Champaign Police Department with cooperation from Champaign County State’s Attorney Julia Reitz. Assistant U.S. Attorneys Elly M. Peirson and Ryan Finlen represent the government in the prosecution
Man Pleads Guilty to Robbing a Sapulpa Dollar GeneralRead the Press Release
Trentin Anton Richardson, 20, of Beggs, pleaded guilty Tuesday in federal court to one count of robbery and another count of discharging a firearm in relation to a crime of violence, announced U.S. Attorney Trent Shores.
“The Justice Department is reducing violent crime here in Tulsa and all across America. We’re doing that through our partnerships with local and federal law enforcement. Armed robber Trentin Richardson made a bad decision when he robbed a local store and discharged a gun in the process. Patrons feared for their lives. Now, he is facing the consequence for his actions,” said U.S. Attorney Trent Shores.
On June 4, 2020, Richardson used a Ruger semi-automatic pistol to rob a Dollar General in Sapulpa. Richardson, wearing a mask and gloves, entered the store, locked the door, fired one round into the ceiling, and ordered everyone inside to get on the ground. He then took money from the register and safe along with money and cell phones belonging to customers. Richardson was apprehended by officers shortly after he exited the store.
The Sapulpa Police Department, Creek County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Richard M. Cella is prosecuting the case.
Los Angeles Man Charged with Running $350 Million Ponzi SchemeRead the Press Release
SAN FRANCISCO – A criminal information was filed today in federal court alleging that Lewis Wallach, the former CEO of a Marin-based company known as Professional Financial Investors, or PFI, ran the company for years as a Ponzi scheme, announced United States Attorney David L. Anderson and Federal Bureau Investigation Assistant Special Agent in Charge Sid Patel. Wallach is charged in the information with one count of wire fraud and one count of conspiracy to commit wire fraud. Additional facts regarding the investigation and charges can be found here: https://youtu.be/M30PEgy0txo
“We allege that PFI became a classic Ponzi scheme,” said U.S. Attorney Anderson. “Money taken from new investors was allegedly used to pay existing investors while losses mounted behind the scenes. This alleged Ponzi scheme came crashing down just four months ago after the death of PFI’s founder in May 2020. We allege that for years Wallach conspired with PFI’s founder to fool investors.”
“The FBI has been working to identify victims in this Ponzi scheme,” said FBI ASAC Patel. “We may not be able to make the victims whole, but we are determined to do everything we can under the federal legal process to right these wrongs. We know this is a particularly difficult time of financial insecurity for so many Americans, and that fraudulent investments can be devastating to families and businesses.”
According to the information, PFI was a real-estate firm that owned approximately 70 properties throughout Marin and Sonoma Counties. Wallach managed PFI along with the founder of the firm, who has since deceased, the information alleges, and PFI raised more than $350 million from investors since 2015. The information alleges that from at least 2015, Wallach and the founder knew that the revenues generated by PFI properties could not meet PFI’s obligations to pay interest and distributions, but that they hid the truth from investors. To the contrary, according to the information, Wallach and the founder continued to falsely reassure investors, even during the COVID-19 pandemic, that PFI had the financial reserves to survive.
The information also alleges that from 2015 to May 2020, Wallach diverted more than $26 million from PFI for his personal benefit, including personal investments in a land development project in Texas, an office space development project in California, and oil and gas exploration and development projects, as well as payment of his personal credit cards.
An information merely alleges that crimes have been committed, and Wallach is presumed innocent until proven guilty beyond a reasonable doubt. If convicted of wire fraud or conspiracy to commit wire fraud under 18 U.S.C. §§ 1343 or 1349, Wallach faces a maximum sentence of 20 years’ imprisonment on each count, a fine of $250,000, and restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The prosecution is the result of an investigation by the Federal Bureau of Investigation. The United States Attorney’s Office and the Federal Bureau of Investigation also thank the San Francisco Regional Office of the Securities and Exchange Commission, which conducted a parallel investigation that was also announced today.
Leader of International Money Laundering Organization in Dominican Republic Arraigned on Federal ChargesRead the Press Release
NEWARK, N.J. – The leader of an international money laundering organization in the Dominican Republic was arraigned in New Jersey today after being extradited to the United States, U.S. Attorney Craig Carpenito announced.
Luis Velazquez-Cordero (a/k/a “El Pequeño”), 35, of the Dominican Republic, is charged by indictment with five counts of money laundering and conspiracy to commit money laundering for his role in laundering millions in illegal cash drug proceeds. The indictment includes a forfeiture money judgment for $80 million, representing a portion of the property involved in the money laundering scheme. Velazquez-Cordero was arrested in the Dominican Republic on July 28, 2020, and extradited to the United States. He was arraigned today by videoconference before U.S. District Judge Katherine Hayden.
Eight other defendants have been charged in New Jersey federal court with money laundering and other charges related to the same international conspiracy.
According to documents filed in this case and statements made in court:
From August 2016 through July 2020, Velazquez-Cordero directed conspirators operating in New Jersey, New York, and Florida to pick up millions in cash drug proceeds from drug trafficking organizations operating in the U.S. and exchange the cash for cashier’s checks at U.S. banks. Velazquez-Cordero provided the amount of each check, the payee, and the bank accounts into which the checks should be deposited. The checks were then deposited into the payee accounts, many of which were controlled by shell corporations and used exclusively as a means to facilitate laundering illegal drug proceeds. The scheme was designed to conceal the nature, source, ownership, and control of the illegal drug proceeds in order to avoid scrutiny by law enforcement and banking institutions, and allegedly resulted in $80 million in cash from illegal drug sales being transferred back to drug trafficking organizations in other countries.
Each count of money laundering carries a maximum penalty of 20 years in prison and a fine of $500,000 or twice the amount involved in the offense, whichever is greater.
U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson, as well as the DEA Special Operations Division; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; officers of U.S. Customs and Border Protection, under the direction of Troy Miller, New York Field Office; the Morristown, New Jersey, Police Department, under the direction of Acting Chief Darnell Richardson; the Clifton, New Jersey, Police Department, under the direction of Acting Chief Tom Rinaldi; the Passaic, New Jersey, Police Department, under the direction of Chief Luis A. Guzman; the New York City Police Department, under the direction of Commissioner Dermot Shea; the New York City Office of the Special Narcotics Prosecutor, under the direction of Special Narcotics Prosecutor Bridget G. Brennan; the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella, with the investigation leading to today’s charges. He also thanked the Dirección Nacional de Control de Drogas of the Dominican Republic (the National Directorate of Drug Control) and its President, Admiral José Manuel Cabrera Ulloa; the U.S. State Department and DOJ Office of International Affairs, for their assistance in the investigation.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of Asset Recovery & Money Laundering Unit of the Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Las Cruces man sentenced to 16 years for kidnapping and gun chargesRead the Press Release
ALBUQUERQUE, N.M. – Samuel Chavez, 61, of Las Cruces, New Mexico, was sentenced in federal court today to 16 years and eight months in prison for kidnapping and firearms charges. Chavez pleaded guilty on Nov. 18, 2019.
According to public court records, on Oct. 18, 2017, Chavez arrived at the home of his first victim, from whom he demanded $250,000 at gunpoint. When the victim was unable to pay, Chavez tied the victim and forced him to call his grandson to lure him to the home. When the second victim arrived, Chavez knocked him unconscious, tied him, and demanded money at gunpoint when the victim regained consciousness.
Chavez then left the residence to make contact with a third victim and, again, demanded money. Chavez tied the third victim, but she was able to escape and called the police.
At the time Chavez committed the crimes, he was in possession of ammunition, a pistol with an obliterated serial number, an unregistered silencer, and an unregistered bulletproof vest. It is a federal crime to possess a firearm with an obliterated serial number or an unregistered silencer, and, as a previously convicted felon, Chavez could not legally possess a firearm, ammunition or body armor.
In addition to his term in prison, Chavez will be subject to five years of supervised release.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. Assistant U.S. Attorney Maria Y. Armijo prosecuted the case.
Laredo eye doctor pays over $3M to resolve fraud claimsRead the Press Release
LAREDO, Texas - A South Texas doctor has agreed to pay $3,234,900.50 to resolve allegations he fraudulently submitted claims to the Medicare program for medically unnecessary tests and procedures, announced U.S. Attorney Ryan K. Patrick.
Dr. David Mora is an optometrist who owns the Mora Eye Clinic in Laredo.
The U.S. Attorney’s Office (USAO) conducted a proactive analysis of claims data and determined Mora to be one of the most significant statistical outliers in the nation for certain categories of claims.
From Jan. 1, 2013, to June 14, 2019, Mora billed Medicare for medically unnecessary punctal plug insertion, sensorimotor testing, vision therapy/orthoptics and amniotic membrane placement. Medical need did not appear to support many of the claims. The patient’s condition did not warrant the service or test or many treatments were repeated on the same patient more often than what would be medically reasonable or necessary.
As part of the settlement, Mora and the Mora Eye Clinic agreed to a three-year integrity agreement with the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). The agreement promotes compliance with the statutes, program requirements and written directives of Medicare and all other federal health care programs. Among other compliance obligations, Mora and the clinic must establish and maintain a compliance program and engage an independent review organization to perform quarterly claims reviews. The agreement also requires Mora and Mora Eye Clinic to routinely report on these obligations to DHHS-OIG.
The USAO jointly conducted the investigation with FBI and DHHS-OIG. Assistant U.S. Attorney Brad Gray handled the matter.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
Kansas Drug Trafficker Sentenced to 20 YearsRead the Press Release
KANSAS CITY, KAN. – A man who trafficked methamphetamine in the metro Kansas City area was sentenced today to 20 years in federal prison, U.S. Attorney Stephen McAllister said.
Michael Pruitt, 50, Kansas City, Kan., pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine and one count of unlawful possession of a firearm by a felon.
In his plea, Pruitt admitted he supplied methamphetamine in pound quantities to dealers who were part of a drug trafficking organization operating in metro Kansas City. Pruitt had storage units where he kept firearms and drugs that he sold. He was observed leaving a unit that was found to contain 48 firearms.
McAllister commended the Kansas Bureau of Investigation, the FBI and Assistant U.S. Attorney Sheri Catania for their work on the case.
Justice Department Settles Sexual Harassment and Race Discrimination Lawsuit Against Manager and Owners of Virginia Rental PropertiesRead the Press Release
The Justice Department today announced that Gary T. Price, a manager of rental properties in and around Harrisonburg, Virginia, together with owners of the properties, Alberta Lowery and GTP Investment Properties, LLC, will pay $335,000 to resolve allegations that Price sexually harassed multiple female tenants and discriminated in housing on the basis of race in violation of the federal Fair Housing Act.
The consent decree, which must still be approved by the court, will resolve a complaint filed today in the U.S. District Court for the Western District of Virginia alleging that Price violated the Fair Housing Act by making unwelcome sexual comments and advances toward female tenants, offering housing benefits in exchange for sexual acts, and taking or threatening adverse housing actions against women who refused his sexual demands. The complaint also alleges that Price violated the Act by using racial slurs with respect to tenants and tenants’ guests, and by prohibiting or attempting to prohibit tenants from entertaining African-American guests in their homes because of the guests’ race. Alberta Lowery and GTP Investment Properties, LLC are named as defendants in the lawsuit because they are owners of properties at which the discriminatory conduct took place and Price was acting as their agent when he engaged in the illegal acts.
“No woman should ever have to endure abusive and demeaning sexual harassment to secure housing for herself or her family, nor should any individual be subjected to vile racial harassment or other race discrimination related to housing,” said Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division. “Such conduct is both illegal and reprehensible, and the Justice Department will work vigorously and tirelessly to combat these types of discrimination and obtain relief for victims.”
“Our office has prioritized combatting sexual harassment in housing, as is evidenced in this significant investigation and resolution,” said Acting U.S. Attorney Daniel Bubar. “We will continue to seek to end this illegal practice and recognize the difficult challenges faced by women, particularly in today’s trying times, who are simply seeking to provide basic needs for their families. Today’s settlement ought to send a strong message that we will not tolerate harassment and discrimination in housing and will continue to closely partner with the Civil Rights Division to enforce the Fair Housing Act.”
Under the consent decree, the defendants will pay $330,000 to compensate eight victims of discrimination already identified by the Justice Department, together with any additional individuals who have been harmed by defendants’ discriminatory conduct. In addition, defendants must pay $5,000 as a civil penalty to vindicate the public interest. The consent decree also bars Gary Price from participating in the management of rental properties in the future and requires defendants to take other steps to prevent future discrimination.
Individuals who believe they may have been victims of sexual harassment, race discrimination or other types of housing discrimination at rental dwellings owned or managed by Gary T. Price, Alberta Lowery or GTP Investment Properties, LLC, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line toll free, at 1-833-591-0291 and, after selecting English or Spanish, press 22 to leave a message in the voicemail box related to U.S. v. Gary Price, GTP Properties, and Alberta Lowery.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of prohibited sex discrimination under this law. The Justice Department's Sexual Harassment in Housing Initiative is an effort to combat sexual harassment in housing led by the Civil Rights Division in coordination with U.S. Attorney’s Offices across the country. The Attorney General recently reaffirmed this commitment by directing the Justice Department to deploy all available enforcement tools against anyone who tries to capitalize on the COVID-19 crisis by sexually harassing people in need of housing. The goal of the department’s initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. As part of the initiative, the Justice Department developed a public service announcement and formed a joint task force with Department of Housing and Urban Development (HUD) to combat sexual harassment in housing.
Since launching the Initiative in October 2017, the Department of Justice has filed 19 lawsuits alleging sexual harassment in housing. The Justice Department has filed or settled 24 sexual harassment cases since January 2017, providing for over $3.1 million for victims of sexual harassment in housing.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt. Individuals who believe they may have been victims of sexual harassment or other forms of housing discrimination can submit a report to the Department of Justice by calling 1-800-896-7743 or visiting civilrights.justice.gov, or to the HUD by calling 1-800-669-9777 or visiting HUD’s website.
Judge sentences St. Louis man for dealing drugs and being a felon in possession of a firearmRead the Press Release
ST. LOUIS, MO – United States District Judge Ronnie L. White sentenced Miles Davis to 51 months in prison. The 36-year-old St. Louis resident pleaded guilty to one count of felon in possession of a firearm and two counts of possession with intent to distribute.
On October 9, 2019, officers from the St. Louis Metropolitan Police Department (SLMPD) were patrolling the 4000 block of Pleasant and noticed Davis watching their patrol car suspiciously. While watching the patrol car, the officers noticed Davis grab his satchel and hide between two parked cars.
Concerned Davis was either grabbing or getting rid of a weapon, one SLMPD officer got out of the patrol car and approached Davis. As the officer approached, Davis removed a handgun from the satchel and threw it under one of the parked cars. The officer ordered Davis to come from between the parked cars, handcuffed Davis and advised him of his Miranda rights. Davis told the officer that when he saw the police he was scared, because he is a convicted felon.
A computer check verified Davis was a convicted felon. The handgun recovered from under the parked car is a Hi-Pointe 9mm caliber pistol with seven rounds of ammunition. Police also found multiple bags of cocaine base (crack) and fentanyl on Davis. Davis admitted he sold drugs and sold someone drugs in exchange for the pistol.
St. Louis Metropolitan Police Department Officers investigated the case. Special Assistant United States Attorney Jennifer Szczucinski prosecuted the case for the United States Attorney’s Office as part of the Safer Streets Initiative. Missouri Attorney General Schmitt and U.S. Attorney Jeff Jensen launched the initiative in January of 2019 as an unprecedented state and federal partnership to prosecute violent crime in St. Louis.
Jersey City Police Officer Admits to Fraud Involving Off-Duty Work AssignmentsRead the Press Release
NEWARK, N.J. – A Jersey City police officer today admitted to conspiring to defraud Jersey City by obtaining compensation for off-duty work that she did not perform, U.S. Attorney Craig Carpenito announced.
Gicella Sanchez, 36, of Jersey City, pleaded guilty by videoconference before U.S. District Judge John M. Vazquez to an information charging her with one count of conspiracy to defraud a local government receiving federal funds.
According to documents filed in this case and statements made in court:
Private contractors and businesses sometimes needed to use the services of off-duty Jersey City police officers for certain projects, including work within Jersey City that could obstruct the flow of traffic. The off-duty assignments were made by a Jersey City Police Department-designated coordinator for the district in which the assignment was to be carried out. Officers receiving these off-duty assignments were required to complete and provide to the coordinator a voucher that indicated, among other things, the hours worked on particular off-duty assignments.
From November 2014 through June 2016, Sanchez conspired with another Jersey City police officer who was authorized to assign off-duty work and sign vouchers. That officer – with Sanchez’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Sanchez had completed certain off-duty assignments that she never actually performed. In other instances, Sanchez showed up to off-duty job sites, but left before her shift ended. As a result, Sanchez accepted thousands of dollars for off-duty work that she never performed.
Sanchez faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Sanchez must forfeit $9,095 in criminal proceeds she received from her role in the scheme and pay restitution of $2,490. Sentencing is scheduled for Feb. 2, 2021.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The Jersey City Police Department is cooperating with the investigation.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.
Defense counsel: Daniel J. Welsh Esq., Jersey City
JPMorgan Chase & Co. Agrees to Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries MarketsRead the Press Release
JPMorgan Chase & Co. (JPMorgan), a New York, New York-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to two distinct schemes to defraud: the first involving tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
JPMorgan entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Connecticut charging the company with two counts of wire fraud. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the Securities Exchange Commission (SEC) under a separate agreement with the SEC being announced today.
“For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution — which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains — reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”
“JPMorgan engaged in two separate years-long market manipulation schemes,” said U.S. Attorney John H. Durham of the District of Connecticut. “Not only will the company pay a substantial financial penalty and return money to victims, but this agreement requires JPMorgan to self-report violations of the federal anti-fraud laws and cooperate in any future criminal investigations. I thank the FBI for its dedication in investigating these deceptive trading practices and other sophisticated financial crimes.”
“For nearly a decade, a significant number of JP Morgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Today's deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued.”
According to admissions and court documents, between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan’s precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. In tens of thousands of instances, traders on the precious metals desk placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts. In addition, on certain occasions, traders on the precious metals desk engaged in trading activity that was intended to deliberately trigger or defend barrier options held by JPMorgan and thereby avoid losses.
One of the traders on the precious metals desk, John Edmonds, 38, of Brooklyn, New York, pleaded guilty on Oct. 9, 2018, to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing, and his sentencing, at this time, has not been scheduled before U.S. District Judge Robert N. Chatigny of the District of Connecticut. Another one of the traders on the precious metals desk, Christian Trunz, 35, of New York, New York, pleaded guilty on Aug. 20, 2019, to one count of conspiracy to engage in spoofing and one count of spoofing in connection with his precious metals futures contracts trading at JPMorgan and another financial services firm, and his sentencing is scheduled for Jan. 28, 2021, before U.S. District Judge Sterling Johnson of the Eastern District of New York.
Finally, as part of the investigation, the department obtained a superseding indictment on Nov. 15, 2019 against three former JPMorgan traders, Gregg Smith, Michael Nowak, and Christopher Jordan, and one former salesperson, Jeffrey Ruffo, in the Northern District of Illinois that charged them for their alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the precious metals futures contracts markets. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Also according to admissions and court documents, between approximately April 2008 and January 2016, traders on JPMorgan’s U.S. Treasuries desk located in New York and London engaged in a scheme to defraud in connection with the purchase and sale of U.S. Treasury futures contracts that traded on the Chicago Board of Trade, which is a commodities exchange operated by the CME Group Inc., and of U.S. Treasury notes and bonds traded in the secondary cash market (the U.S. Treasury futures, notes, and bonds, collectively, U.S. Treasury Products). In thousands of instances, traders on the U.S. Treasuries desk placed orders to buy and sell U.S. Treasury Products with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for U.S. Treasury Products.
As part of the DPA, JPMorgan, and its subsidiaries JPMorgan Chase Bank, N.A. (JPMC) and J.P. Morgan Securities LLC (JPMS) have agreed to, among other things, continue to cooperate with the Fraud Section and the U.S. Attorney’s Office for the District of Connecticut in any ongoing or future investigations and prosecutions concerning JPMorgan, JPMC, JPMS, and their subsidiaries and affiliates, and their officers, directors, employees and agents. As part of its cooperation, JPMorgan, JPMC, and JPMS are required to report evidence or allegations of conduct which may constitute a violation of the wire fraud statute, the anti-fraud, anti-spoofing and/or anti-manipulation provisions of the Commodity Exchange Act, the securities and commodities fraud statute, and federal securities laws prohibiting manipulative and deceptive devices. In addition, JPMorgan, JPMC, and JPMS have also agreed to enhance their compliance program where necessary and appropriate, and to report to the government regarding remediation and implementation of their enhanced compliance program.
The department reached this resolution with JPMorgan based on a number of factors, including the nature and seriousness of the offense conduct, which spanned eight years and involved tens of thousands of instances of unlawful trading activity; JPMorgan’s failure to fully and voluntarily self‑disclose the offense conduct to the department; JPMorgan’s prior criminal history, including a guilty plea on May 20, 2015, for similar misconduct involving manipulative and deceptive trading practices in the foreign currency exchange spot market (FX Guilty Plea); and the fact that substantially all of the offense conduct occurred prior to the FX Guilty Plea.
JPMorgan received credit for its cooperation with the department’s investigation and for the remedial measures taken by JPMorgan, JPMC, and JPMS, including suspending and ultimately terminating individuals involved in the offense conduct, adopting heightened internal controls, and substantially increasing the resources devoted to compliance. Significantly, since the time of the offense conduct, and following the FX Guilty Plea, JPMorgan, JPMC, and JPMS engaged in a systematic effort to reassess and enhance their market conduct compliance program and internal controls. These enhancements included hiring hundreds of new compliance officers, improving their anti-fraud and manipulation training and policies, revising their trade and electronic communications surveillance programs, implementing tools and processes to facilitate closer supervision of traders, taking into account employees’ commitment to compliance in promotion and compensation decisions, and implementing independent quality assurance testing of non-escalated and escalated surveillance alerts. Based on JPMorgan’s, JPMC’s and JPMS’ remediation and the state of their compliance program, the department determined that an independent compliance monitor was unnecessary.
Today, the CFTC announced a separate settlement with JPMorgan, JPMC, and JPMS in connection with a related, parallel proceeding. Under the terms of that resolution, JPMorgan agreed to pay approximately $920 million, which includes a civil monetary penalty of approximately $436 million, as well as restitution and disgorgement that will be credited to any such payments made to the department under the DPA. Also, the SEC announced today a separate settlement with JPMS in connection with a related, parallel proceeding regarding trading activity in the secondary cash market for U.S. Treasury notes and bonds. Under the terms of that resolution, JPMS agreed to pay $10 million in disgorgement and a civil monetary penalty of $25 million.
The FBI’s New York Field Office investigated this case. Assistant Chief Avi Perry and Trial Attorney Matthew F. Sullivan of the Fraud Section and Assistant U.S. Attorney Jonathan Francis of the District of Connecticut prosecuted the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/jpmorgan-dpa or call (888) 549-3945.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
JPMorgan Chase & Co. Agrees to Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries MarketsRead the Press Release
JPMorgan Chase & Co. (JPMorgan), a New York, New York-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to two distinct schemes to defraud: the first involving tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
JPMorgan entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Connecticut charging the company with two counts of wire fraud. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the Securities Exchange Commission (SEC) under a separate agreement with the SEC being announced today.
“For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution — which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains — reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”
“JPMorgan engaged in two separate years-long market manipulation schemes,” said U.S. Attorney John H. Durham of the District of Connecticut. “Not only will the company pay a substantial financial penalty and return money to victims, but this agreement requires JPMorgan to self-report violations of the federal anti-fraud laws and cooperate in any future criminal investigations. I thank the FBI for its dedication in investigating these deceptive trading practices and other sophisticated financial crimes.”
“For nearly a decade, a significant number of JP Morgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Today's deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued.”
According to admissions and court documents, between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan’s precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. In tens of thousands of instances, traders on the precious metals desk placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts. In addition, on certain occasions, traders on the precious metals desk engaged in trading activity that was intended to deliberately trigger or defend barrier options held by JPMorgan and thereby avoid losses.
One of the traders on the precious metals desk, John Edmonds, 38, of Brooklyn, New York, pleaded guilty on Oct. 9, 2018, to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing, and his sentencing, at this time, has not been scheduled before U.S. District Judge Robert N. Chatigny of the District of Connecticut. Another one of the traders on the precious metals desk, Christian Trunz, 35, of New York, New York, pleaded guilty on Aug. 20, 2019, to one count of conspiracy to engage in spoofing and one count of spoofing in connection with his precious metals futures contracts trading at JPMorgan and another financial services firm, and his sentencing is scheduled for Jan. 28, 2021, before U.S. District Judge Sterling Johnson of the Eastern District of New York.
Finally, as part of the investigation, the department obtained a superseding indictment on Nov. 15, 2019 against three former JPMorgan traders, Gregg Smith, Michael Nowak, and Christopher Jordan, and one former salesperson, Jeffrey Ruffo, in the Northern District of Illinois that charged them for their alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the precious metals futures contracts markets. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Also according to admissions and court documents, between approximately April 2008 and January 2016, traders on JPMorgan’s U.S. Treasuries desk located in New York and London engaged in a scheme to defraud in connection with the purchase and sale of U.S. Treasury futures contracts that traded on the Chicago Board of Trade, which is a commodities exchange operated by the CME Group Inc., and of U.S. Treasury notes and bonds traded in the secondary cash market (the U.S. Treasury futures, notes, and bonds, collectively, U.S. Treasury Products). In thousands of instances, traders on the U.S. Treasuries desk placed orders to buy and sell U.S. Treasury Products with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for U.S. Treasury Products.
As part of the DPA, JPMorgan, and its subsidiaries JPMorgan Chase Bank, N.A. (JPMC) and J.P. Morgan Securities LLC (JPMS) have agreed to, among other things, continue to cooperate with the Fraud Section and the U.S. Attorney’s Office for the District of Connecticut in any ongoing or future investigations and prosecutions concerning JPMorgan, JPMC, JPMS, and their subsidiaries and affiliates, and their officers, directors, employees and agents. As part of its cooperation, JPMorgan, JPMC, and JPMS are required to report evidence or allegations of conduct which may constitute a violation of the wire fraud statute, the anti-fraud, anti-spoofing and/or anti-manipulation provisions of the Commodity Exchange Act, the securities and commodities fraud statute, and federal securities laws prohibiting manipulative and deceptive devices. In addition, JPMorgan, JPMC, and JPMS have also agreed to enhance their compliance program where necessary and appropriate, and to report to the government regarding remediation and implementation of their enhanced compliance program.
The department reached this resolution with JPMorgan based on a number of factors, including the nature and seriousness of the offense conduct, which spanned eight years and involved tens of thousands of instances of unlawful trading activity; JPMorgan’s failure to fully and voluntarily self‑disclose the offense conduct to the department; JPMorgan’s prior criminal history, including a guilty plea on May 20, 2015, for similar misconduct involving manipulative and deceptive trading practices in the foreign currency exchange spot market (FX Guilty Plea); and the fact that substantially all of the offense conduct occurred prior to the FX Guilty Plea.
JPMorgan received credit for its cooperation with the department’s investigation and for the remedial measures taken by JPMorgan, JPMC, and JPMS, including suspending and ultimately terminating individuals involved in the offense conduct, adopting heightened internal controls, and substantially increasing the resources devoted to compliance. Significantly, since the time of the offense conduct, and following the FX Guilty Plea, JPMorgan, JPMC, and JPMS engaged in a systematic effort to reassess and enhance their market conduct compliance program and internal controls. These enhancements included hiring hundreds of new compliance officers, improving their anti-fraud and manipulation training and policies, revising their trade and electronic communications surveillance programs, implementing tools and processes to facilitate closer supervision of traders, taking into account employees’ commitment to compliance in promotion and compensation decisions, and implementing independent quality assurance testing of non-escalated and escalated surveillance alerts. Based on JPMorgan’s, JPMC’s and JPMS’ remediation and the state of their compliance program, the department determined that an independent compliance monitor was unnecessary.
Today, the CFTC announced a separate settlement with JPMorgan, JPMC, and JPMS in connection with a related, parallel proceeding. Under the terms of that resolution, JPMorgan agreed to pay approximately $920 million, which includes a civil monetary penalty of approximately $436 million, as well as restitution and disgorgement that will be credited to any such payments made to the department under the DPA. Also, the SEC announced today a separate settlement with JPMS in connection with a related, parallel proceeding regarding trading activity in the secondary cash market for U.S. Treasury notes and bonds. Under the terms of that resolution, JPMS agreed to pay $10 million in disgorgement and a civil monetary penalty of $25 million.
The FBI’s New York Field Office investigated this case. Assistant Chief Avi Perry and Trial Attorney Matthew F. Sullivan of the Fraud Section and Assistant U.S. Attorney Jonathan Francis of the District of Connecticut prosecuted the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/jpmorgan-dpa or call (888) 549-3945.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Husband and Wife Indicted and Arrested for Health Care FraudRead the Press Release
SAN JUAN, Puerto Rico – On September 24, 2020, a Federal Grand Jury in the District of Puerto Rico returned two separate indictments charging Robert Crespo Zamora and Carmen J. Pagán Domínguez with health care fraud, aggravated identity theft, conspiracy to commit health care fraud, obstruction of a criminal investigation related to health care offenses, and mail fraud conspiracy, announced W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico. The Office of Inspector General for the United States Department of Health and Human Services (HHS-OIG) led the investigation with the collaboration of the United States Postal Inspection Service (USPIS). The indictments were unsealed today upon the arrest of the two defendants by federal law enforcement officers from the HHS-OIG and USPIS.
A first indictment alleges that, from in or about November 2015, through in or about May 2020, defendants Carmen J. Pagán Domínguez and Robert Crespo Zamora, enriched themselves by causing the submission of at least one thousand two (1,002) false and fraudulent claims for non-invasive cardiovascular studies to Medicare, in the amount of $259,147.71. Cardiology Medical Group (CMG) and Cardiology Medical Services (CMS) received approximately $132,312.15 for the fraudulently submitted claims. During the scheme, Carmen J. Pagán Domínguez, the owner and biller for CMG and CMS, and Robert Crespo Zamora, a cardiovascular technician, caused the submission of claims to Medicare for non-invasive cardiovascular studies allegedly performed by two cardiologists, even though those services were not provided by said physicians.
According to a second indictment, from in or about January 2020, through in or about May 2020, defendants Robert Crespo Zamora and Carmen J. Pagán Domínguez enriched themselves by causing the submission of at least three hundred (300) false and fraudulent non-invasive cardiovascular studies claims to Medicare in the amount of $439,890.00. Cardiovascular Prophylaxis & Evolution (CPE) received approximately $249,272.00 for the fraudulently submitted claims. During the scheme, Robert Crespo Zamora, the owner and cardiovascular technician for CPE, and Carmen J. Pagán Domínguez, biller for CPE, caused the submission of claims for non-invasive cardiovascular testing, purportedly performed to Medicare beneficiaries, although defendants knew said testing services were not medically necessary, and the test results were never interpreted by a cardiologist, licensed physician, or any other qualified health care provider.
“The submission of false claims to federal health care benefit programs is unacceptable and a waste of taxpayer funds,” said U.S. Attorney W. Stephen Muldrow. “Today’s arrests show the Department of Justice’s and its law enforcement partners’ firm commitment to protect public funds and to safeguard the well-being of Medicare and Medicaid beneficiaries.”
“Health care professionals must be held to a high standard of ethical behavior,” said Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”). “Along with our law enforcement partners, HHS-OIG will continue to ensure that those individuals and entities that bill federal health care programs do so in an honest manner.”
“United States Postal Inspectors will continue to aggressively investigate criminals who use the USPS and its products for illegal gain. We are committed to working with our law enforcement partners to investigate and bring to justice those who commit these types of offenses, and especially the impact that these financial crimes have on individuals, businesses, and government agencies alike,” said James V. Buthorn Inspector in Charge, USPIS Newark Division, San Juan Field Office.
If found guilty, the defendants face maximum sentences of: (a) up to ten years in prison for charges relating to health care fraud, conspiracy to commit health care fraud, and mail fraud conspiracy; (b) up to five years imprisonment for the obstruction of a criminal investigation related to health care offenses; and (c) a mandatory two-year consecutive term in prison for aggravated identity theft.
The case was investigated by the HHS-OIG and USPIS, and will be prosecuted by Assistant U.S. Attorney José Ruiz Santiago, Criminal Health Care Fraud Coordinator at the United States Attorney’s Office.
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent, unless and until proven guilty.
The public is encouraged to report suspected instances of health care fraud to the HHS OIG Hotline at 1-800-HHS-TIPS (1-800-447-8477) or https://oig.hhs.gov/fraud/report-fraud/index.asp
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Holyoke Man Sentenced for Heroin DistributionRead the Press Release
BOSTON – A Holyoke man was sentenced yesterday in federal court in Springfield for distributing heroin.
Jayson Quinones, 35, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 14 months in prison and three years of supervised release. In May 2020, Quinones pleaded guilty to distributing and possessing with intent to distribute heroin.
Quinones sold heroin on Oct. 7, 2019 in Holyoke. The arrest was the result of a multi-agency investigation into heroin trafficking in Holyoke dubbed “Operation Open Air.”
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Holyoke Police Chief Manny Febo made the announcement. Assistant United States Attorney Todd E. Newhouse of Lelling’s Springfield Branch Office prosecuted the case.
Heroin Sale Near Truck Stop Results in Prison SentenceRead the Press Release
A man who distributed heroin near a truck stop was sentenced today to more than three years in federal prison.
Orlando Wash, age 30, from Cedar Rapids, Iowa, received the prison term after a May 21, 2020 guilty plea to one count of distribution of heroin near a truck stop after having been previously convicted of a felony drug offense.
At the guilty plea and sentencing hearings, information showed that Wash sold heroin in the Cedar Rapids area from 2016 through 2019. Specifically on November 8, 2018, Wash sold heroin to an individual working for the Cedar Rapids Police Department near a truck stop located near I-380 in Cedar Rapids. Wash admitted he was responsible for possessing of a firearm during the period he was selling heroin.
Wash was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Wash was sentenced to 41 months’ imprisonment. He must also serve a six-year term of supervised release after the prison term. There is no parole in the federal system.
Wash is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Patrick Reinert and investigated as part of the Northern Iowa Heroin Initiative and the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice by Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation and the Cedar Rapids Police Department. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 19-CR-00127. Follow us on Twitter @USAO_NDIA.
Hatch man pleads guilty to hostage takingRead the Press Release
ALBUQUERQUE – Mario Balcazar, 23, of Hatch, New Mexico, pleaded guilty in federal court on Sept. 24 to a charge of hostage taking. Balcazar remains in custody pending a sentencing hearing.
According to the plea agreement, on or about May 9, Balcazar picked up an illegal alien on the United States side of the United-States-Mexico border and drove her to his residence in Doña Ana County, New Mexico. Balcazar then detained the victim until her family paid him $1,500.
Balcazar faces up to life in prison and a five-year mandatory term of supervised release of supervised release.
Homeland Security Investigations and the U.S. Border Patrol investigated this case. Assistant U.S. Attorneys Rachel Feuerhammer, Luis A. Martinez, and Nicole Hammond are prosecuting the case.
Guilty plea for man accused of importing cocaine hidden in Savannah shipmentRead the Press Release
SAVANNAH, GA: The second of two men charged in June 2019 after more than 45 pounds of cocaine were seized from a Savannah shipment has admitted guilt to a federal drug trafficking charge.
Jimmy Alexander Pujols, a/k/a “El Gallo,” 35, pled guilty to Possession with Intent to Distribute 5 Kilograms or More of Cocaine in U.S. District Court, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The co-defendant in the case, Fausto Mendez Ramos, a/k/a “Rudy Reyes Polanco,” 40, earlier pled guilty to Conspiracy to Import a Controlled Substance. Each of the charges carries a penalty of up to life in prison, and there is no parole in the federal system.
“Safeguarding the integrity of the vital shipments coming through Savannah includes identifying and intercepting illicit and illegal items hidden among the thousands of containers entering the city each day,” said U.S. Attorney Christine. “We commend the outstanding work of the local and federal law enforcement agencies who caught these traffickers attempting to smuggle poison for distribution into our communities.”
The shipment was intercepted in June 2019 by Agents from the U.S. Drug Enforcement Administration (DEA), in conjunction with Homeland Security Investigations (HSI), Customs and Border Protection (CBP) and the Richmond County Sheriff’s Office, and with assistance from the Augusta Fire Department. Investigators seized packages containing 21.3 kilos of cocaine while serving a federal search warrant at an Augusta warehouse holding a shipping container that had been transported from Savannah. Pujols and Ramos, who arrived to oversee the operation of transferring the hidden packages of drugs from the container to a truck for shipment to Florida, were taken into custody.
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Division commented on the plea, “This guilty plea is a direct result achieved because of the dedicated efforts between local, state and federal law enforcement. The distribution of cocaine and the negative impact continues to plague many communities. These communities are much safer today because another drug trafficker has been removed from the streets.”
“Drug abuse is a significant public health concern throughout the country,” said James Long, Savannah CBP Acting Area Port Director. “Through vigorous enforcement efforts, CBP will continue to intercept narcotics and prevent it from reaching our communities.”
This case is being prosecuted by Assistant U.S. Attorney and Organized Crime Drug Enforcement Task Force Coordinator Marcela C. Mateo, and Assistant U.S. Attorney E. Greg Gilluly Jr.
Ghost Gun and Machine Gun Conversion Device Dealer Pleads GuiltyRead the Press Release
ALEXANDRIA, Va. – A Fairfax man pleaded guilty today to dealing in firearms without a license.
According to court documents, Davud Sungur, 20, has never had a federal firearms license. Beginning around March 2019 through March 2020, Sungur engaged in the business of dealing in firearms through the repetitive purchase and resale of firearms. Among the firearms that he sold and advertised for sale were homemade pistols devoid of serial numbers or other unique identifiers, commonly known as "ghost guns." Sungur explained to prospective customers that he charged a premium for such pistols because he made them, because they lacked serial numbers, and because they could not be linked to any previous criminal activities.
“Ghost guns appeal to criminals because they are untraceable,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “I want to be clear: If you engage in the business of selling firearms without a license or produce illegal firearms, you have a federal problem and will be held accountable.”
According to court documents, Sungur also sold weapons on multiple occasions to undercover detectives with the Fairfax County Police Department’s Organized Crime & Intelligence Bureau, who had learned he was selling firearms. Over the course of four separate transactions, he sold detectives more than 1,000 rounds of ammunition, magazines, and numerous firearms – some of which were "ghost guns" – in exchange for cash. On two of these occasions, Sungur also sold detectives 3D-printed machine gun conversion devices that, after installation, enabled semi-automatic firearms to fire fully-automatically. Following his arrest, Homeland Security Investigations executed a search warrant at his residence and discovered that he was in possession of additional materials and kits used to manufacture ghost guns, additional ammunition, additional magazines, a 3D printer, and an additional firearm.
“Not only was this defendant not licensed to sell firearms, but the weapons he sold were often illegally produced or obtained, and at times stripped of their serial numbers. This activity clearly indicates that the defendant was knowingly selling to individuals who could not legally possess a firearm, or may have been engaged in criminal activity,” said Ashan M. Benedict, Special Agent in Charge of ATF’s Washington Field Division. “Today’s plea puts a needed end to the defendant’s reckless disregard for both the law and the consequences of selling illegal weapons.”
Sungur pleaded guilty to dealing in firearms without a license. He faces a maximum penalty of five years in prison when sentenced on December 16. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
“Sungur manufactured and altered firearms to make them either untraceable or more dangerous, deliberately attempting to evade regulations intended to keep the public safe,” said Raymond Villanueva, Special Agent in Charge for Homeland Security Investigation’s Washington, D.C. Field Office. “Thanks to the work of our law enforcement partners, he can no longer distribute and profit from his illicit firearms in our communities.”
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., made the announcement after U.S. District Judge Anthony J. Trenga accepted the plea.
Assistant U.S. Attorney John C. Blanchard and Special Assistant U.S. Attorney Sara A. Hallmark are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-162.
Garner Man Charged with Fraudulently Seeking over $6 Million in Covid Relief FundsRead the Press Release
RALEIGH, N.C. – A Garner man was charged with fraudulently seeking over $6 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Robert J. Higdon Jr. of the Eastern District of North Carolina.
Tristan Bishop Pan, 38, of Garner, is charged with wire fraud, bank fraud, and engaging in unlawful monetary transactions.
The indictment, unsealed today, alleges that Pan perpetrated a scheme to submit fraudulent PPP loan applications to federally insured banks. The Small Business Administration (SBA) guarantees PPP loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to the allegations, Pan submitted numerous fraudulent PPP loan applications, including on behalf of entities named Pan Insurance Agency, White Walker, Khaleesi, and The Night’s Watch. The indictment alleges that, in support of the fraudulent PPP loan applications, Pan made false statements about the companies’ employees and payroll expenses. The PPP loan applications were supported by fake documents, including falsified tax filings, according to the indictment. Pan allegedly submitted fourteen PPP loan applications seeking over $6.1 million and received more than $1.7 million in benefits following approval of the Pan Insurance Agency and White Walker PPP loan applications. The government was able to seize some of the allegedly fraudulent loan benefits.
The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal indictment is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Treasury Inspector General for Tax Administration, the Federal Deposit Insurance Corporation Office of Inspector General, and the FBI, with the assistance of the Small Business Administration Office of Inspector General. Assistant U.S. Attorneys Ethan A. Ontjes and John Harris and Trial Attorney Justin M. Woodard of the U.S. Department of Justice Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Gang Member Sentenced for Distributing Crack Cocaine in Public Housing DevelopmentRead the Press Release
BOSTON – A man identified as a member of the Heath Street Gang was sentenced yesterday for distributing crack cocaine in a public housing development.
Michael Pridgen, 36, was sentenced by U.S. District Court Judge Richard G. Stearns to 54 months in prison and six years of supervised release, during which time Pridgen will be prohibited from the geographic area of Boston in which he was convicted of selling drugs. In May 2020, Pridgen pleaded guilty to two counts of distribution and possession with intent to distribute crack cocaine, one count of possession with intent to distribute crack cocaine and fentanyl and one count of distribution and possession with intent to distribute crack cocaine in a public housing development.
Pridgen distributed crack cocaine in and around the Mildred C. Hailey Apartments, formerly known as the Bromley Heath Housing Development, in Boston on multiple occasions in the spring and summer of 2019. In a June 5, 2019, incident Pridgen stored crack cocaine and a digital scale in an electrical box affixed to the wall in the stairwell of the public housing complex. At the time of his arrest on Sept. 10, 2019, Pridgen was found on a bench in a courtyard at the Mildred C. Hailey Apartments, in possession of distribution-quantity of crack cocaine and fentanyl. Although Pridgen has been identified by law enforcement as a member of the Heath Street Gang, he was living in Westborough at the time of these incidents.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Gross made the announcement today.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Former Wall Street Trader Sentenced to More Than 5 Years in Prison for Running A Ponzi SchemeRead the Press Release
Audrey Strauss, Acting United States Attorney for the Southern District of New York, announced that PAUL A. RINFRET was sentenced in Manhattan federal court today to 63 months in prison for participating in a Ponzi scheme in which he obtained approximately $19 million in total from victims through a variety of lies and misrepresentations. RINFRET pled guilty to one count of wire fraud and one count of securities fraud on October 8, 2019, before U.S. District Judge Gregory H. Woods, who also imposed today’s sentence.
Acting Manhattan U.S. Attorney Audrey Strauss said: “Today, Paul Rinfret was brought to justice for callously lying to investors. Rinfret told investors his investment returns were excellent, when in fact he failed to invest investor funds as promised, generated losses when he did invest, and diverted the majority of investor funds to his personal use and to repay investors in a Ponzi-like fashion. We will continue to aggressively pursue frauds like this one, which caused millions of dollars in losses, in order to preserve investor confidence in our capital markets.”
According to the allegations contained in the Complaint and the Indictment:
From at least 2016 through 2019, RINFRET engaged in a scheme to defraud potential and actual investors in an entity called Plandome Partner s L.P. for his own personal gain and for the gain of his family members. RINFRET offered potential investors the ability to invest in Plandome Partners through the purchase of limited partnership interests. In soliciting investments, RINFRET falsely represented to potential and actual investors (the “Victims”) that he would use all of their investment funds to trade futures contracts tied to the Standard & Poor’s 500 index using a propriety trading algorithm he had developed, taking for himself a fee equivalent to 25% of the net profits on the trades.
Through his fraudulent scheme, RINFRET obtained approximately $19 million in total from approximately six Victims on the false claim that he would utilize their investment funds for trading. RINFRET’s lies and misrepresentations were varied and many. For example, RINFRET claimed that Plandome Partners traded through certain brokerage accounts, one of which simply did not exist, and two of which were not open at a time when RINFRET claimed to be trading in those accounts.
Further, RINFRET used only a small portion of the Victims’ invested funds to engage in actual trading. Instead, RINFRET used most of the Victims’ money to purchase luxury goods and high-end vacation rentals for himself and family members. For example, RINFRET used the Plandome Partners account to spend almost $50,000 on a luxury Hamptons vacation rental, more than $40,000 on jewelry, and tens of thousands of dollars on the event venue where his son held his engagement party.
When RINFRET did actually engage in trading with Victims’ funds, he generated losses. But, to prevent his Victims from seeking a return of their money, and to induce additional investments, RINFRET falsely reported excellent investment performance results to the Victims through false and fraudulent monthly account statements that RINFRET typically emailed to the Victims. RINFRET also sent fabricated brokerage account statements to the Victims.
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In addition to the prison term, RINFRET, 71, of Manhasset, New York, was sentenced to two years of supervised release, ordered to pay forfeiture in the amount of $20,268,268, and to pay $12,290,803 in restitution to his victims.
Ms. Strauss praised the investigative work of Homeland Security Investigations and also thanked the Securities and Exchange Commission for its assistance in the investigation.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Robert L. Boone is in charge of the case.
Former Registered Broker Pleads Guilty to Participating in a Multi-Million Dollar Securities Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Joshua Turney, formerly a registered broker at Global Arena Capital Corp. (“Global”), a now defunct brokerage firm located in New York City, pleaded guilty before United States District Judge Eric N. Vitaliano to conspiracy to commit securities fraud for engaging in unauthorized trading in his customers’ accounts. When sentenced, Turney faces up to five years in prison, as well as restitution, criminal forfeiture and a fine.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty plea.
“With today’s guilty plea, Turney has been held accountable for abusing the trust of his customers and for engaging in unauthorized trades to unjustly enrich himself,” stated Acting United States Attorney DuCharme. “This Office will continue to work vigilantly alongside our law enforcement partners to protect the integrity of financial markets.” Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office (SEC), for its significant cooperation and assistance during the investigation.
“The scheme Turney and his co-conspirators are accused of today is fairly straightforward. As alleged, they pushed through more than $100 million in customer trades, most of which were unauthorized, for the sole purpose of generating commission for themselves. In Turney’s case, reaping the benefits of his proceeds, however, won’t be quite as simple now that he’s been charged with a federal crime,” stated FBI Assistant Director-in-Charge Sweeney.
According to court filings and facts presented at the plea hearing, between April 2015 and June 2015, shortly before Global ceased operations, Turney and his co-conspirators engaged in a scheme to defraud Global customers by purchasing and selling securities without the customers’ prior authorization or knowledge. Approximately 4,500 trades were executed in approximately 360 customer accounts during this time period, most of which were unauthorized. The principal value of these transactions was approximately $106 million, and the trades generated over $2.44 million in commissions and fees for Global.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Shannon C. Jones is in charge of the prosecution.
The Defendant:
JOSHUA TURNEY
Age: 41
San Diego, CaliforniaE.D.N.Y. Docket No.-20 CR-359 (ENV)
Former Professional Trustee of Sacramento-Based Trust Sentenced to 30 Months in Prison for Fraud and Money LaunderingRead the Press Release
SACRAMENTO, Calif. — Loretta Darlene Stewart-Cabrera, also known as Loretta Dexter, 55, of Sacramento, was sentenced today by U.S. District Judge Kimberly J. Mueller to 30 months in prison for wire fraud and money laundering, U.S. Attorney McGregor W. Scott announced.
According to court documents, Stewart-Cabrera was a professional fiduciary who served as the trustee of a trust that owned a Sacramento property. After the trust grantor died in December 2012, Stewart-Cabrera executed a scheme to obtain and spend the trust assets. Stewart-Cabrera did this by selling the trust’s property, only distributing to the trust beneficiaries approximately $30,000 of the more than $300,000 she received from the sale of the property, and spending the remaining money without the permission or knowledge of the trust beneficiaries. She used a portion of the trust funds to gamble and dine in Las Vegas casinos, pay family members, and purchase merchandise.
This case was the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.