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Friday 17 July 2020
Managing Partner of Investment Advisory Firm Charged for over $100 Million Ponzi-Like Fraud SchemeRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of an Information charging DAVID HU, a managing partner and the chief investment officer of the New York-based investment advisory firm International Investment Group (“IIG”), with investment adviser fraud, securities fraud, and wire fraud offenses. As alleged, over a period of more than 10 years, HU perpetrated an over $100 million scheme to defraud investors in IIG’s funds, including by creating fictitious investments and overvaluing investments used to generate funds to pay off earlier investors in a Ponzi-like manner. HU was arrested today and was presented and arraigned before Magistrate Judge Robert W. Lehrburger. The case has been assigned to U.S. District Judge Alvin K. Hellerstein.
Acting Manhattan U.S. Attorney Audrey Strauss said: “As alleged, David Hu directed a multimillion-dollar, years-long scheme to defraud investors. Putting profit ahead of his fiduciary duties, Hu allegedly mismarked millions of dollars of loan assets to cover up millions in losses. Hu also created fake entities and loans, and falsified paperwork to deceive auditors and avoid detection. Now David Hu stands charged with federal crimes and faces time in federal prison.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, for nearly a decade, David Hu misled investors about the value of their investments, including the creation and sale of fictitious fund portfolios to raise capital to prop up his schemes. His alleged actions serve as an example of the lengths some will go to in these all-too-common fraud cases. The FBI is committed to investigating those who prey upon trusting individuals for their own personal gain.”
In a separate civil action, the U.S. Securities and Exchange Commission (“SEC”) today filed civil charges against HU.
As alleged in the Information and based on statements made in Manhattan federal court in this case:[1]
Background of IIG
HU and a co-conspirator (“CC-1”) founded IIG in 1994. HU was a managing partner and the chief investment officer of IIG. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (“TOF”), (2) the IIG Global Trade Finance Fund, Ltd. (“GTFF”), and (3) the IIG Structured Trade Finance Fund, Ltd. (“STFF”). IIG also advised the Venezuela Recovery Fund (“VRF”), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the “IIG Funds”). In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management.
IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses. IIG’s principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Trade finance loans are used by small and medium-sized companies, typically exporters and importers, to facilitate international trade. IIG’s purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on “soft commodities,” such as coffee, agriculture, fishing, and other food products. IIG’s trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.
Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry.
IIG purported to value the trade finance loans in the IIG Funds on a regular basis. IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds.
The Scheme
From approximately 2007 to 2019, HU conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner.
The scheme HU participated in involved, among other things:
- Mismarking Defaulted Loans. HU and CC-1 caused IIG to mismark the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”). Instead of acknowledging the defaulted status of these loans, HU and CC-1 instead caused IIG to mark the Defaulted Loans at par plus accrued interest, even though HU and CC-1 knew that the borrowers’ default significantly impaired the true value of these loans. HU and CC-1 certified these false valuations and caused them to be reported to investors.
- Mismarking Distressed Loans. HU and CC-1 caused IIG to mismark multiple loans that were distressed (the “Distressed Loans”). These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments. Even though HU and CC-1 knew that the non-performing status of the loans significantly impaired their true value, they nevertheless caused IIG to continue to mark the loans at par plus accrued interest.
- Creating Fictitious Loans. With respect to TOF, in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOF’s financials, HU and CC-1 removed the Defaulted Loans from the TOF portfolio, replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the “Fake Loans”). HU and CC-1 also created or directed the creation of documents to keep in IIG’s files as purported documentation of the Fake Loans. To pass auditor scrutiny, HU and CC-1 also directed purported borrowers – sham foreign entities that were controlled by IIG’s business associates and that did not engage in actual business – to provide confirmations of the Fake Loans to auditors, including by arranging for TOF to pay a monthly fee to one purported borrower in exchange for providing false confirmations. In reality, these purported borrowers did not receive a loan from TOF, and were not expected to make any payments to TOF.
- Using a CLO Trust to Create Liquidity through Investments in Fraudulent Loans. In or about 2014, HU and CC-1 obtained approximately $220 million in bank financing to create a collateralized loan obligation trust (the “CLO Trust”), for which IIG served as an investment adviser. HU and CC-1 then engaged in various deceptive acts, using the CLO Trust, to hide TOF’s losses and generate liquidity for TOF, which was facing investor redemption requests and demands for repayment of loans that IIG had taken from international development banks. For example, in its capacity as investment adviser for the CLO Trust, IIG, through the efforts of HU and CC-1, caused the newly-created CLO Trust to purchase loans from the TOF portfolio, including Defaulted Loans, Distressed Loans, and Fake Loans, which generated liquidity for TOF. After the CLO Trust purchased loans in the TOF portfolio, IIG, through the efforts of HU and CC-1, generated additional liquidity by causing the CLO Trust to issue securitized debt instruments based on these loans, payable in various tranches to investors in the CLO Trust.
- Using the CLO Trust and Panamanian Shell Entities to Cover Up Losses. IIG, through the efforts of HU and CC-1, also caused the CLO Trust to create new fraudulent trade finance loans, and used those new fraudulent loans to cover up TOF’s losses. Specifically, HU caused the creation of shell entities domiciled in Panama (“Panamanian Shell Entities”) that were controlled by an IIG nominee. Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities. Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU and CC-1 diverted to TOF in order to pay off TOF’s various debts and obligations.
- Generating Liquidity By Selling Fraudulent Loans to Newly Created Funds Backed by a New Investor. In or about 2017, HU and CC-1 targeted a foreign institutional investor (“Institutional Investor-1”) to raise money for two new private IIG managed funds: GTFF and STFF. Institutional Investor-1 provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF. HU and CC-1 caused GTFF and STFF to purchase at least approximately $100 million in fake, distressed, defaulted or otherwise fraudulent loans.
- Inducing a Retail Mutual Fund to Invest in a Fictitious $6 Million Loan. In or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the “Retail Fund”). As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG. In or about February 2017, a borrower (the “Argentine Borrower”) had failed to pay the principal on an approximately $6 million loan (“Loan-1”) in which the Retail Fund had invested and which was nearing its maturity date. In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (“Borrower-1”), and further directed the funds from Borrower-1’s account to pay off the debt owed by the Argentine Borrower to the Retail Fund. To replace the funds from Borrower-1’s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the “New Loan”). HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1’s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund. To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower.
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DAVID HU, 62, of West Orange, New Jersey, is charged with one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Ms. Strauss praised the investigative work of the FBI and also thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Drew Skinner and Negar Tekeei are in charge of the prosecution.
The charges contained in the Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Information, and the description of the Information set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
- Mismarking Defaulted Loans. HU and CC-1 caused IIG to mismark the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”). Instead of acknowledging the defaulted status of these loans, HU and CC-1 instead caused IIG to mark the Defaulted Loans at par plus accrued interest, even though HU and CC-1 knew that the borrowers’ default significantly impaired the true value of these loans. HU and CC-1 certified these false valuations and caused them to be reported to investors.
Man Pleads Guilty for Role in Illegally Straw Purchasing FirearmsRead the Press Release
ALEXANDRIA, Va. – A Maryland man pleaded guilty today to aiding and abetting the straw purchase of firearms.
According to court documents, D’Lanta Boone, 29, of Temple Hills, aided and abetted the straw purchase of seven firearms by providing his then-girlfriend with money and explicitly directing her as to which firearms to illegally purchase on his behalf. Police in Washington, D.C. recovered one of the illegally purchased firearms from a felon, and police in Prince George’s County recovered another of the illegally purchased firearms.
Boone faces a maximum penalty of five years in prison when sentenced on December 18. 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 Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division, made the announcement after Senior U.S. District Judge T.S. Ellis, III accepted the plea. Assistant U.S. Attorney Nicholas U. Murphy, II is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-153.
Lansing, Illinois Resident Ordered to Pay $323,986.54 in RestitutionRead the Press Release
HAMMOND- Ruby Toosevich a/k/a Ruby Marie Lewis, 55, of Lansing, Illinois, was sentenced before District Court Judge James T. Moody following her plea of guilty to bank fraud, announced U.S. Attorney Thomas L. Kirsch II.
Toosevich was ordered to pay $323,986.54 in restitution and sentenced to 27 months in prison.
According to documents filed in this case, between December 2012 and December 2013, Ruby Toosevich executed a scheme to defraud the medical practice where she worked by using her employer’s bank account to pay her own expenses. Toosevich created fraudulent invoices disguised as legitimate business expenses to obtain checks from her employer’s bank account totaling more than a half million dollars. She then used the checks to pay or attempt to pay for a mortgage, home remodeling and repairs, private school tuition, federal taxes, jewelry, a luxury car lease, and other expenses. After discovering Toosevich’s scheme, the medical practice stopped payment on some of the checks, resulting in a loss of approximately $335,676.
“Ms. Toosevich cheated her employer for the financial gain of herself, her friends and family,” said U.S. Attorney Kirsch. “These type of crimes will be investigated and prosecuted by my Office and our investigative partners.”
This case was investigated by the Internal Revenue Service, Criminal Investigation Division, and the Munster Police Department. The case was prosecuted by Assistant United States Attorney Jacqueline L. Jacobs.
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Kalamazoo Methamphetamine Dealers Plead Guilty to Drug Trafficking and Gun CrimesRead the Press Release
GRAND RAPIDS, MICHIGAN — Two Kalamazoo men face up to life in prison following their guilty pleas to multiple drug and firearms offenses, announced U.S. Attorney Andrew Birge. Trevon Gates (age 21) and Deonte Gates (age 19) were scheduled for trial on July 14, 2020 and instead pled guilty to their charges, which included conspiring to distribute methamphetamine and possessing firearms in furtherance of the methamphetamine conspiracy.
The Gates brothers partnered to sell methamphetamine in Kalamazoo, Holland, Plainwell, and Otsego during 2018 and 2019. The execution of a search warrant at the defendants’ home uncovered guns, money, methamphetamine, and drug packaging material. The investigation revealed that the brothers were constantly armed and even coerced at least one other person to deliver methamphetamine on their behalf or face harm.
“No one should view selling methamphetamine or other addictive drugs on the street as a way to raise one’s station in life,” commented U.S. Attorney Birge. “Taking advantage of addicts is shameful, destroys families and brings communities down. People who not only sell methamphetamine but also use guns to further their efforts pose an enhanced threat to safety in their communities. Our office is committed to investigating and prosecuting those individuals to the full extent of the law.”
Chief Karianne Thomas of the Kalamazoo Department of Public Safety agreed: “The illegal use and distribution of methamphetamine continues to be a scourge in our community and is responsible for driving a large amount of crime. This investigation showed that these two individuals had an extensive involvement in methamphetamine distribution in not just Kalamazoo, but throughout southwest Michigan. Their propensity to employ many different firearms to further their drug trafficking network made them particularly dangerous to the community. This is another excellent example of the outstanding partnership and cooperation between the Kalamazoo Department of Public Safety and our state and federal law enforcement partners to include the Michigan State Police, U.S. Attorney’s Office for the Western District of Michigan, U.S. Drug Enforcement Administration (DEA) and the Bureau of Alcohol Tobacco and Firearms (ATF).”
Michigan State Police Lieutenant Andrew Foster of the West Michigan Enforcement Team commented, “We appreciate the work done by the U.S. Attorney’s Office with this investigation. This case brought to justice individuals responsible for trafficking large quantities of crystal methamphetamine into west Michigan. It is just another great example of the partnership WEMET has with our federal law enforcement and local agencies throughout west Michigan.”
Trevon Gates is subject to a mandatory minimum term of 15 years in prison, while Deontae Gates is subject to a mandatory minimum term of 10 years in prison. Both brothers will be sentenced later this year.
This case was investigated by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Kalamazoo Department of Public Safety, Kalamazoo Valley Enforcement Team, the Holland Police Department, and the West Michigan Enforcement Team.
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Jamaican Native Convicted of Fraud Pleads Guilty to Failure to Report for SentencingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Daciann Brown, 30, a Jamaican native residing in Rochester, NY, pleaded guilty to failure to appear for sentencing before Chief U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that in May 2018, the defendant pleaded guilty to wire fraud, false claims, and fraud related to identification documents. Brown purported to be a tax preparer and filed 66 false tax returns on behalf of 44 taxpayers with the IRS. Thirteen of those taxpayers did not know the defendant was filing returns using their personal information. Brown was scheduled to be sentenced on August 28, 2018. However, the defendant failed to appear on that date, and an arrest warrant was issued. On June 3, 2020, Brown was arrested by the U.S. Marshal Service.
The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, and the U.S. Marshal Service, under the direction of Marshal Charles Salina.
Sentencing on both the failure to appear and fraud charges will scheduled at a later date before Chief Judge Geraci.
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Internal Revenue Service Wrapped up the ‘Dirty Dozen’ List of Tax Scams for 2020; IRS Criminal Investigation and U.S. Attorney Office Urge Taxpayers to Watch Out for These Tax ScamsRead the Press Release
The Internal Revenue Service wrapped up its annual ‘Dirty Dozen’ list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments. The Internal Revenue Service Criminal Investigation division and the U.S. Attorney’s Office for the Southern District of Iowa urge taxpayers to be vigilant to these tax scams.
This year, the Dirty Dozen focuses on scams that target taxpayers. The criminals behind these bogus schemes view everyone as potentially easy prey.
“Fraud schemes harm everyone, especially those which defraud the IRS and members of our community,” said Adam Steiner, Acting Special Agent in Charge of the IRS Criminal Investigation division in the St. Louis Field Office. “As we stand ready to investigate anyone who would put a taxpayer at risk for a quick profit, we urge everyone to watch out for these tax scams all the time.”
Tax scams tend to rise during tax season or during times of crisis. “This years’ list of tax scams should serve as a stark reminder to everyone to be vigilant to these threats during the current pandemic and its aftermath,” said U.S. Attorney Marc Krickbaum for the Southern District of Iowa. “Please safeguard your personal and financial information, and don’t engage potential scammers online or on the phone.”
Taxpayers are encouraged to review the ‘Dirty Dozen’ list in a special section on IRS.gov and be on the lookout for these scams throughout the year.
For official information year round, taxpayers can visit IRS.gov
Internal Revenue Service Wrapped up the ‘Dirty Dozen’ List of Tax Scams for 2020; IRS Criminal Investigation and U.S. Attorney Office Urge Taxpayers to Watch Out for These Tax ScamsRead the Press Release
The Internal Revenue Service wrapped up its annual ‘Dirty Dozen’ list of tax scams with a special
emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic
Impact Payments. The Internal Revenue Service Criminal Investigation division and the U.S.
Attorney’s Office for the Southern District of Illinois urge taxpayers to be vigilant to these tax
scams.This year, the Dirty Dozen focuses on scams that target taxpayers. The criminals behind these bogus
schemes view everyone as potentially easy prey.“Fraud schemes harm everyone, especially those which defraud the IRS and members of our community,”
said Adam Steiner, Acting Special Agent in Charge of the IRS Criminal Investigation division in the
St. Louis Field Office. “As we stand ready to investigate anyone who would put a taxpayer at risk
for a quick profit, we urge everyone to watch out for these tax scams all the time.”Tax scams tend to rise during tax season or during times of crisis. “This years’ list of tax scams
should serve as a stark reminder to everyone to be vigilant to these threats during the current
pandemic and its aftermath,” said U.S. Attorney Steven D. Weinhoeft for the Southern District of
Illinois. “Please safeguard your personal and financial information, and refrain from engaging
potential scammers online or on the phone.”Taxpayers are encouraged to review the ‘Dirty Dozen’ list in a special section on
IRS.gov and be on the lookout for these scams throughout the year.For official information year round, taxpayers can visit IRS.gov
Howard University Graduate Pleads Guilty to Defrauding Financial Aid OfficeRead the Press Release
WASHINGTON – Brian Johnson, 35, of Washington, D.C., pled guilty today for his role in defrauding Howard University out of more than $100,000, announced Acting U.S. Attorney Michael R. Sherwin and James A. Dawson, Special Agent in Charge of the Federal Bureau of Investigation (FBI) Washington Field Office’s Criminal Division.
Johnson pled guilty to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371, in the U.S. District Court for the District of Columbia. The charge carries a statutory maximum sentence of five years in prison. Under federal sentencing guidelines, Johnson faces a likely recommended sentence of 10 to 16 months in prison. The plea agreement calls for Johnson to pay $107,697.75 in restitution and $53,849 in a forfeiture money judgment.
According to the statement of offense filed with the Court, Johnson earned a Bachelor of Science degree and a Master of Business Administration from Howard University. From 2011 through 2016, he worked in the school’s Financial Aid Office. He served as the Associate Director of Financial Aid from 2014 through August 2016. In the fall of 2016, a co-conspirator, who worked at Howard from 2011 through 2017 in the Financial Aid Office and then the Bursar’s Office, proposed a scheme to Johnson in which the co-conspirator would cause fraudulently-obtained money to be sent from Howard University to Johnson, with Johnson then kicking back half of the proceeds to the co-conspirator. As part of the scheme, the co-conspirator applied fraudulent financial aid awards onto Johnson’s student profile even though he was no longer a student or employed at the school. As a result, the co-conspirator caused the University to issue $107,697.75 to Johnson’s bank account between November 2016 and May 2017. Johnson admitted sharing half of the fraud proceeds with the co‑conspirator in the form of cash or electronic payments.
Chief Judge Beryl A. Howell accepted Johnson’s guilty plea and scheduled his sentencing for September 25, 2020.
In announcing the plea, Acting U.S. Attorney Sherwin and Special Agent in Charge Dawson commended the work of those from the FBI’s Washington Field Office who are involved in this ongoing investigation. They also expressed appreciation for the work of Paralegal Specialist Mariela Andrade and former Paralegal Specialist Brittany Phillips. Finally, they commended the work of Assistant U.S. Attorney Kondi J. Kleinman.
Hartford Felon Pleads Guilty to Possessing Sawed-Off ShotgunRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that KEVIN BARCO, 36, of Hartford, pleaded guilty today before U.S. District Judge Stefan R. Underhill to possession of a firearm by a convicted felon.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, on October 6, 2018, Hartford Police encountered Barco sitting in a car that was parked on Albany Avenue. A subsequent search of the car revealed a Harrington and Richardson, Model 176, 10 gauge shotgun with a sawed-off barrel. Eight shotgun shells were also found in the car.
Barco’s criminal history includes state convictions for felony weapon, robbery, larceny and escape offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Judge Underhill scheduled sentencing for October 9, 2020, at which time Barco faces a maximum term of imprisonment of 10 years. Barco is released on a $50,000 bond pending sentencing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorney Ray Miller
This prosecution 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 neighborhoods safer for everyone.
Harrison County Couple Sentenced for Illegal Possession of FirearmsRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced that on July 16, 2020, Walter Greenwood Stokes, 34 years of age, and his wife, Brittany Leah Lynne Stokes, 34 years of age, were sentenced to prison for possession of firearms while prohibited. Walter Stokes was sentenced to 70 months in prison followed by three years of supervised release, while Brittany Stokes was sentenced to a year and a day in prison followed by three years of supervised release. A third defendant, Laura Edith Chedester of Omaha, Nebraska, is awaiting sentencing on August 20, 2020.
The Stokes were convicted by jury on March 3, 2020. Walter Stokes was found guilty of being a felon in possession of a firearm and Brittany Stokes was found guilty of being a drug user in possession of a firearm and of falsifying a government document in the acquisition of a firearm.
The jury heard evidence that Woodbine Police Department along with the Logan Police Department served a search warrant on the Stokes’ residence located in Woodbine, Iowa. The search by law enforcement recovered 25 firearms, and over 14,000 rounds of ammunition. Five loaded semi-automatic assault type rifles were located in the master bedroom of the home. Evidence showed that Walter Stokes had built several of the assault weapons from parts obtained by Brittany Stokes. Evidence was also heard by the jury about an extensive history of drug use by the couple and that Walter Stokes had felony convictions dating back to 2003.
The investigation was conducted by the Woodbine Iowa Police Department, Logan Iowa Police Department, Council Bluffs Police Department, Harrison County Sheriff’s Office, Pottawattamie County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Fremont Man Sentenced to More Than 16 Years in Prison for Conspiring to Possess with Intent to Distribute MethamphetamineRead the Press Release
United States Attorney Joe Kelly announced that James Maynard, age 28, of Fremont, Nebraska, was sentenced on July 16, 2020, in federal court in Omaha, Nebraska, for conspiracy to possess with intent to distribute methamphetamine. Chief United States District Court Judge John M. Gerrard sentenced Maynard to 200 months’ imprisonment. After completing his term of imprisonment, Maynard will be required to serve a 5-year term of supervised release. There is no parole in the federal system.
On July 11, 2018, Dodge County Deputy Sheriffs stopped Maynard driving a vehicle on a Dodge County highway after observing him commit a number of traffic violations. During the stop, deputies noticed drug paraphernalia inside Maynard’s vehicle and asked him to step outside. In response, Maynard drove away leading deputies on a chase where speeds exceeded 100 mph. During the chase, Maynard threw out several evidentiary items including approximately 300 grams of actual methamphetamine. Maynard eventually crashed his vehicle and was arrested after a foot chase. During a post arrest interview, Maynard admitted selling methamphetamine for the past several months.
This case was investigated by the Dodge County Sheriff’s Office.
Franklin, N.C. Man Is Sentenced to More Than 12 Years for Armed Bank Robbery in AshevilleRead the Press Release
ASHEVILLE, N.C. – Chief U.S. District Judge Martin Reidinger sentenced William Keith Leonhart, 41, of Franklin, N.C., to 154 months in prison followed by five years of supervised release for robbing at gunpoint an Asheville bank, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
According to filed court documents and yesterday’s sentencing hearing, on August 5, 2019, the Asheville Police Department received a call regarding an armed robbery of the First Citizens Bank located at 1201 Tunnel Road in Asheville. Court records show that Leonhart had entered the bank, approached a teller and brandished a firearm. While pointing his firearm at the teller, Leonhart gave the teller a threatening demand note. The teller handed Leonhart approximately $500 out of her cash drawer and Leonhart fled the scene in a stolen vehicle. The next day, law enforcement identified Leonhart driving a second stolen vehicle in Black Mountain, N.C. Following a vehicle chase, Leonhart was arrested, and law enforcement recovered from inside the vehicle the firearm Leonhart had used during the robbery. According to court records, Leonhart had previously robbed the same bank in 2013, and had received a sentence of 66-89 months in prison.
In October 2019, Leonhart pleaded guilty to one count of bank robbery and one count of possession of a firearm in furtherance of a crime of violence. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement U.S. Attorney Murray thanked the Asheville Police Department, the Black Mountain Police Department, and the Federal Bureau of Investigation for their investigation of this case. He also thanked District Attorney Todd Williams for his office’s coordination over the course of the prosecution of this case.
Special Assistant United States Attorney (SAUSA) Alexis Solheim prosecuted the case. Ms. Solheim is a state prosecutor with the office of the 30th Prosecutorial District, and was assigned by District Attorney Ashley Welch to serve as SAUSA with the U.S. Attorney’s Office in Asheville. Ms. Solheim is duly sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 30th Prosecutorial District and the United States Attorney’s Office. The SAUSA position helps ensure the effective and vigorous prosecution of federal court cases that impact the counties within the 30th Prosecutorial District.
Former Waterloo Teacher Sentenced to Eight Months’ Imprisonment for FraudRead the Press Release
A former Waterloo teacher was sentenced today to 8 months in federal prison. Defendant is to serve 4 months in BOP facility and 4 months in home confinement.
Anthony Dehl, age 59, from Waterloo, Iowa, received the prison term after a guilty plea to wire fraud.
In a plea agreement, Dehl admitted that from 2014 to 2019, he defrauded the Waterloo Education Association (WEA) out of $54,254.07. He withdrew most of the money at a local casino. At the time of the fraud, Dehl was the treasurer of the WEA and concealed his scheme by submitting false treasurer reports and other yearly reports to the organization.
Dehl was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Dehl was sentenced to 8 months’ imprisonment and fined $4,000. Dehl was ordered to make $54,254.07 in restitution to the WEA and defendant paid his restitution in full. Defendant must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Dehl was released on the bond previously set and is to surrender to the United States Marshal on August 3, 2020.
The case was prosecuted by Assistant United States Attorney Matthew J. Cole and investigated by FBI and the Iowa State Auditor’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-02004.
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Former USPS Employee Charged with Stealing Cash and Gift Cards from MailRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, today announced that ELIZABETH URBANI, 42, of West Haven, has been charged by federal criminal complaint with theft of mail by a U.S. Postal Service (USPS) employee.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Urbani appeared today before U.S. Magistrate Judge Robert M. Spector via videoconference.
As alleged in the criminal complaint, Urbani has been employed by the U.S. Postal Service since approximately 2015, and most recently was a mail carrier assigned to the New Haven Post Office. Beginning in December 2019, some USPS customers along Urbani’s mail route submitted complaints that their mail was missing or had been stolen. Subsequent investigation revealed that, in January and February 2020, Urbani opened approximately 125 pieces of mail and stole cash and gift cards contained within several of those mail pieces.
The charge of theft of mail by an employee carries a maximum term of imprisonment of five years.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Urbani, who resigned from the USPS, is released on a $50,000 bond.
This investigation is being conducted by the U.S. Postal Service Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Brendan Keefe.
Individuals who believe they are a victim of mail theft may file a complaint by calling 888-USPS-OIG or by visiting this link.
Former Head of Community Preparatory Academy Admits Stealing over $3 Million and Spending $220,000 on Disney ExpensesRead the Press Release
LOS ANGELES – Federal prosecutors today filed criminal theft and tax fraud charges against the former executive director of a charter school outfit who stole more than $3.1 million that should have been spent on school operations, but instead financed a lifestyle that included extravagant spending on Disney cruises and theme park admissions.
Janis Bucknor, 52, a resident of Baldwin Hills, who ran the for-profit Community Preparatory Academy (CPA) charter school and controlled several related entities, agreed to plead guilty to two felony offenses in a plea agreement also filed today in United States District Court. CPA operated two schools, one in Carson and one in South Los Angeles.
The case charges Bucknor with one count of theft, embezzlement and intentional misapplication of funds from an organization receiving federal funds, and one count of tax evasion for the tax year 2016. The court has yet to schedule any hearings in this matter.
Over the course of approximately 5½ years – from early 2014 through November 2019 – Bucknor stole a total of $3,168,346 from CPA, according to the most recent estimate of losses in the case. The amount of stolen funds is nearly one-third of all federal and state funding that went to CPA during the time.
In her plea agreement, Bucknor admitted using the stolen funds to pay for, among other things, personal travel, restaurants, Amazon and Etsy purchases, and private school tuition for her children. She also admitted spending about $220,614 on Disney cruise line vacations, theme park admissions and other Disney-related expenses.
The scheme began to unravel in February 2018, when “LAUSD-Charter School Division’s routine audit of CPA revealed that defendant used the CPA accounts for personal expenses, including unauthorized payments directly from some of the CPA accounts to Disney, Louis Vuitton, Girl Scouts, Ticketmaster, Uber, Baby Teeth Children’s Dentistry, Williams Sonoma, National American Miss pageants, and Forest Lawn Mortuaries, all of which were for defendant’s own personal and unauthorized use and benefit,” according to the plea agreement.
In relation to the tax evasion offense, Bucknor agreed to plead guilty to her 2016 taxes, but she admitted failing to pay the Internal Revenue Service $299,639 in taxes when she failed to report $1,322,254 in income for the tax years 2015 through 2018.
When she pleads guilty, Bucknor will face a statutory maximum sentence of 15 years in federal prison.
As part of the plea agreement, Bucknor has agreed to forfeit to the government her interest in three residential properties in South Los Angeles that were paid for with funds stolen from the charter school.
This case was investigated by the Los Angeles Unified School District’s Office of the Inspector General, the U.S. Department of Education Office of Inspector General, IRS Criminal Investigation, the United States Secret Service, and the United States Postal Inspection Service.
The criminal case is being prosecuted by Assistant United States Attorneys Katherine A. Rykken and Alexander C.K. Wyman of the Major Frauds Section. Assistant United States Attorneys Jonathan Galatzan and Katharine Schonbachler are handling the asset forfeiture part of the matter.
Five-Time Convicted Felon Sentenced for Assaulting, Resisting, and Impeding a Federal Wildlife OfficerRead the Press Release
United States Attorney Joe Kelly announced that Michael Ellis, 51, of Omaha, was sentenced today in federal court in Omaha to 12 months’ imprisonment, the maximum possible sentence, for Assaulting, Resisting, Opposing, Impeding, Intimidating, and Interfering with a federal officer by United States Magistrate Judge Susan M. Bazis. There is no parole in the federal system. After his release from imprisonment, Ellis will serve a 1-year term of supervised release.
On August 10, 2019, a Federal Wildlife Officer was in uniform and driving a marked United States Fish and Wildlife Services vehicle while patrolling the Boyer Chute National Wildlife Refuge. The officer observed Ellis’s vehicle driving on a portion of County Road P51 on the Wildlife Refuge that had been closed due to flooding. The officer stopped Ellis’s vehicle. The officer walked up to the driver’s side and spoke with Ellis, who was the driver. The officer observed open containers of beer in the cup holders of the center console. The officer asked Ellis to turn off his vehicle and requested his identification. Ellis did neither and instead took off his seat belt. Ellis eventually provided the officer with his Nebraska Identification card. The officer told Ellis he was trespassing and Ellis stated that the road closed sign did not say “no trespassing.” A records check indicated that Ellis did not have a valid driver’s license. The officer asked Ellis if he had any weapons in the vehicle and Ellis stated he had knives. The officer requested a Washington County Sheriff’s Deputy to come to the scene and Ellis stated “man, I’m taking off…” and “I ain’t going to [expletive] jail again, dude.” The officer ordered Ellis out of the vehicle and Ellis refused to comply. The officer then attempted to remove Ellis from the vehicle and Ellis pulled away from the officer and pulled his arms away from the officer while the officer tried to handcuff Ellis. Ellis kept reaching toward his waist as he was struggling with the officer. During this, Ellis stated, “you ain’t putting them damn [handcuffs] on me.” The officer was able to handcuff one of Ellis’s wrists, but due to Ellis pulling away was unable to handcuff Ellis’s second wrist. The officer then pinned Ellis against Ellis’s vehicle while waiting for a Washington County Sheriff’s Deputy to arrive. During this time, Ellis stated to the officer, “You don’t understand man, you’re [expletive] with one of the North Omaha boys,” that he has “done all kinds of dirty work,” and “you’re done.” Upon the second officer arriving, Ellis’ second wrist was able to be handcuffed. During a search of Ellis, multiple knives were found in a case on Ellis’s belt, from Ellis’s waistband, and in Ellis’s pockets.
Ellis is a five-time convicted felon with an extensive criminal history dating back 30 years that includes assaultive behavior and carrying knives. Magistrate Judge Bazis when imposing this maximum possible sentence noted that Ellis’s behavior on August 10 put both himself and the officer in danger. Magistrate Judge Bazis also noted the dangers faced by Federal Wildlife Service Officers who work in remote areas with little to no backup readily available to them if they need help in situations like these. In this case Washington County Sheriff deputies had to leave their normal patrol areas to assist and one off-duty officer was eating dinner and left his personal residence to come to the scene to assist.
This case was investigated by United States Fish and Wildlife Service and Washington County Sheriff’s Office.
Five People from Kyle Arrested for Conspiracy to Distribute Methamphetamine in South DakotaRead the Press Release
United States Attorney Ron Parsons announced that five Kyle, South Dakota, men and women have been arrested by a complaint for Conspiracy to Distribute a Controlled Substance.
Robert O’Rourke, age 39; Lynette O’Rourke, age 37; Sunny O’Rourke, age 43; Guadalupe “Lupe” Garcia, age 38; and Shaina Phelps, age 42, were charged by complaint on June 16, 2020. They all appeared before U.S. Magistrate Judge Daneta Wollmann on June 24, 2020, and pleaded not guilty to the charge. The maximum penalty upon conviction is up to life imprisonment and/or a $10,000,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to the O’Rourkes, Garcia, and Phelps conspiring together to distribute 500 grams or more of methamphetamine in South Dakota. The charge is merely an accusation and the five defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Badlands Safe Trails Drug Enforcement Task Force, which is comprised of agents from the Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, Bureau of Indian Affairs Division of Drug Enforcement, Martin Police Department, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Heather Sazama is prosecuting the case.
Garcia was released on bond, while the O’Rourkes and Phelps were detained pending trial. A trial date has been set for September 1, 2020.
Felon Sentenced to Federal Prison for Possessing AmmunitionRead the Press Release
A convicted felon who unlawfully possessed ammunition was sentenced today to more than two years’ in federal prison.
Mopreme Vychon Todd-Harris, age 21, from Hiawatha, Iowa, received the prison sentence after a February 7, 2020 guilty plea to being a felon in possession of ammunition. In 2017, Todd-Harris was convicted of burglary 3rd degree, a felony conviction. The conviction prohibited him from legally possessing a firearm or ammunition.
Information disclosed at sentencing and in his plea agreement showed that on July 21, 2019, Waterloo police officers observed Todd-Harris, who officers knew to have an outstanding warrant for his arrest, in public with a group of other people. Officers approached Todd-Harris and saw a gun in his right hand. The gun was loaded with live rounds of ammunition, though the gun was later determined to be an antique. The warrant for Todd-Harris’s arrest was because he had previously escaped from the Waterloo Residential Correctional Facility.
Todd-Harris was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Todd-Harris was sentenced to 27 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Ashley Corkery and Special Assistant United States Attorney Alexander Geocaris and investigated by the Waterloo Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from its Project Guardian partners. For more information about Project Guardian, please see /media/1122011/dl?inline.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-2061.
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Federal Jury Finds Former Detroit Man Guilty of Drug OffensesRead the Press Release
CHARLESTON, W.Va. – A Charleston man, formerly of Detroit, Michigan, was found guilty on all counts - three felony drug offenses - by a jury of his peers today, announced United States Attorney Mike Stuart. Ralph Weathington, Jr., 28, was found guilty of distribution of methamphetamine, distribution of fentanyl, and possession with the intent to distribute cocaine, fentanyl, and more than 50 grams of methamphetamine.
“Guilty on each and every count. Another former Detroit drug dealer is headed to prison. Weathington was dealing a smorgasbord of dangerous and deadly drugs - drugs that have wreaked havoc, chaos and death on our communities,” said United States Attorney Mike Stuart. “We are pleased that as a result of today’s verdict, the people of the city of Charleston and the people of West Virginia are significantly safer. I applaud the work of the investigators and my entire team for a job well done.”
Evidence presented to the jury established that on January 22, 2018, the defendant met with a confidential informant working with the Kanawha County Sheriff’s Office and the Drug Enforcement Administration (DEA) in Charleston and sold the informant approximately two ounces of methamphetamine. Later, on January 30, 2018, the defendant again met with a confidential informant on the West Side of Charleston and sold the informant approximately 3.5 grams of fentanyl. Finally, on May 22, 2019, the defendant was present at an apartment in Charleston when officers with the United States Marshals Service and the Kanawha County Sheriff’s Office discovered him holding a gray article of clothing that appeared to be wrapped around another object. The defendant was standing next to an open window as he held this object, and he threw it out the window when ordered by an officer to show his hands. An officer with the Charleston Police Department observed several objects falling from the window to the ground, and moved to secure the evidence which was found to be approximately 111 grams of methamphetamine, 18 grams of fentanyl, 27 grams of cocaine, United States currency, a silver weight used to calibrate a digital scale, a small shoebox and a gray sweatshirt. An officer with the Metropolitan Drug Enforcement Network Team (MDENT) arrived on scene and collected the drug-related evidence. Then, with the assistance of other officers, the apartment was searched and 18 additional grams of fentanyl were located along with a semi-automatic pistol, two digital scales and additional United States currency.
Weathington faces up to life in prison when sentenced on October 15, 2020.
The Drug Enforcement Agency (DEA), the Kanawha County Sheriff’s Office, the Charleston Police Department, the United States Marshals Service, and the Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Senior United States District Judge John T. Copenhaver, Jr., presided over the trial. Assistant United States Attorneys Jeremy B. Wolfe and Monica D. Coleman handled the prosecution.
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District Man Sentenced to Five Years in Prison for Involuntary ManslaughterRead the Press Release
WASHINGTON – Edward Banks, 47 of Washington, D.C. was sentenced today to five years of incarceration for involuntary manslaughter. The announcement was made by the Acting United States Attorney, Michael R. Sherwin and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
On February 24, 2020, Banks pled guilty in the Superior Court of the District of Columbia on one count of Involuntary Manslaughter. He was sentenced by the Honorable Juliet McKenna on July 17, 2020. Following his prison term, he will serve five years of supervised release.
On August 18, 2019, the defendant entered a homeless shelter located at 2700 Martin Luther King Avenue, SE. At a certain point, the defendant was walking down a hallway in the shelter when he came upon the decedent, Mr. Abraham Weldemichael, who was standing outside the bathroom door. The defendant became angry at the decedent and took an aggressive posture. The defendant then punched Mr. Weldemichael in the face once and fled the scene. Mr. Weldemichael collapsed to the ground and did not move. Mr. Weldemichael’s unconscious body was on the ground for approximately six minutes until he was eventually discovered by security staff. Medical personnel arrived at the scene and Mr. Weldemichael was transported to George Washington Hospital. Upon arrival, he was admitted in critical condition and it was determined that he was suffering from swelling and bleeding in the brain. He eventually succumbed to his injuries and was pronounced dead on August 21, 2019 at 2:32 am.
In announcing the sentence, Acting U.S. Attorney Sherwin commended the work of those who investigated the case from the Criminal Investigations Division Homicide Branch of the Metropolitan Police Department. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant United States Attorney Shehzad Akhtar, Paralegal Specialists Lashone Samuels; Victim Witness Specialist Jennifer Allen and Investigative Analyst Zachary McMenamin.
Department of Justice and Department of Homeland Security Announce Plan to Restart MPP HearingsRead the Press Release
The U.S. Department of Homeland Security (DHS) and the U.S. Department of Justice (DOJ) remain committed to resuming removal hearings for aliens subject to the Migrant Protection Protocols (MPP) as expeditiously as possible. To lend greater certainty in a fluid COVID-19 environment, DHS has maintained close contact with the Department of State (DOS) and the Government of Mexico (GOM) and worked with DOJ to identify public health criteria to determine when hearings may resume swiftly and safely.
The criteria below outline the factors that DHS and DOJ will use to determine when to resume MPP hearings. Once the criteria are met, the Departments will provide public notification at least fifteen calendar days prior to resumption of the hearings with location-specific details. In order to resume MPP hearings in a responsible manner that will minimize risk to public health and the spread of disease, DHS plans to adhere to recommended federal guidance and protocols, including in particular the Centers for Disease Control and Prevention’s (CDC) social-distancing and sanitization standards. DHS is working to secure the equipment and resources necessary to support this safe resumption of MPP hearings. The use and application of these criteria are subject to continuing evaluation:
Criteria to Restart MPP Hearings
- When California, Arizona, and Texas progress to Stage 3 of their reopening plans.[1]
- When DOS[2] and CDC[3] lower their global health advisories to Level 2, and/or a comparable change in health advisories, regarding Mexico in particular.
- When GOM’s “stoplight” system categorizes all Mexican border states (i.e., Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora, and Baja California) as “yellow.”[4]
Once the threshold criteria above are satisfied, DHS and DOJ will take the following steps to ensure that MPP hearings can safely resume:
Safeguards to Protect DHS Employees and Aliens in MPP
- DHS will develop detailed, location-specific plans to safely resume MPP hearings consistent with CDC guidelines. These plans at a minimum will address, but are not limited to, intake processes for aliens and visitors, transportation requirements, facility size, overnight hold capacity, and cleaning schedules.
- All agencies will apply CDC social-distancing guidelines, as appropriate, at each stage of the court hearing process and consistent with local operational realities.[5] Once a facility’s capacity is reached, the remaining aliens will have their hearings rescheduled for a future date.
- For the entirety of the hearing process, all DHS and DOJ personnel and aliens will be required to wear face masks that are consistent with CDC guidance and subject to any applicable policies of either Department. This requirement will apply to the immigration hearing facilities (IHFs) in Laredo and Brownsville. All visitors will also be required to wear face masks while they are in the facilities.[6]
- All DHS personnel participating in the processing of MPP aliens, aliens arriving to attend MPP hearings, and visitors entering the IHFs, will have their temperatures checked prior to entering any DHS facility. Aliens displaying a fever of over 100.4 degrees Fahrenheit will have their court hearing rescheduled. At the IHFs in Laredo and Brownsville, any visitor displaying a fever of over 100.4 degrees Fahrenheit will not be able to enter the facility.[7] DHS personnel displaying a fever of over 100.4 degrees Fahrenheit will be managed according to agency-specific protocols.
- All congregate settings will be cleaned and disinfected regularly according to CDC guidelines for similar facilities.[8]
- Every reasonable effort will be made to avoid holding migrants overnight in DHS custody.
DHS continues to work closely with DOJ, DOS, and GOM to explore every available option to resume removal hearings for aliens subject to MPP as soon as possible, with as much flexibility as existing statutes, regulations, and guidelines allow.
Individuals should continue to check on case status in English and Spanish by calling the Automated Case Information Hotline at 1-800-898-7180 or visiting the EOIR Automated Case Information portal.
[1] California: https://covid19.ca.gov/roadmap/#top; Arizona: https://azgovernor.gov/governor/reopening-guidance;
Texas: https://gov.texas.gov/uploads/files/press/EO-GA-26_expanded_opening_COVID-19.pdf
[2] https://travel.state.gov/content/travel/en/traveladvisories/ea/travel-advisory-alert-global-level-4-health-advisory-issue.html
[3] https://wwwnc.cdc.gov/travel/notices/warning/coronavirus-global
[4] https://coronavirus.gob.mx/semaforo/
[5] https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/social-distancing.html
[6] For DOJ/ Executive Office for Immigration Review (EOIR) requirements, see /media/1071956/dl?inline
[7] DOJ will have its own requirements for EOIR courthouses.
[8] https://www.cdc.gov/coronavirus/2019-ncov/community/cleaning-disinfecting-decision-tool.html
Davenport Man Sentenced to Federal Prison for ArsonRead the Press Release
DAVENPORT, IA – On Friday, July 10, 2020, Vincent Taggart Reid III, age 29, of Davenport, was sentenced by United States District Court Chief Judge John A. Jarvey to 110 months in prison after he pleaded guilty to Arson/Attempted Arson, announced United States Attorney Marc Krickbaum. Reid was ordered to serve a period of supervised release of three years to follow his prison term, pay a $100 special assessment to the Crime Victims’ Fund, and pay restitution to the victim for damage caused to her property.
Reid pleaded guilty on February 10, 2020. On March 30, 2019, Davenport Police Officers were called to a Davenport duplex because an individual was trying to set the upstairs unit on fire. Prior to officers being called, Reid had been kicked out of the duplex by the victim. Despite being ordered to leave, Reid kicked down the door and followed the victim upstairs into her unit, and threatened to burn down the building and destroy her property. Reid began to damage property belonging to the victim. While the victim recorded him, Reid attempted to light multiple couch pillows on fire before grabbing a lit candle and intentionally kicking it under the couch. Shortly before officers arrived in the area, Reid shot a gun into the air and then took off from officers in a car at high speeds. Reid was eventually located by officers at a home associated with him. After further investigation, Reid was arrested and taken into custody.
This matter was investigated by the Davenport Police Department. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
DHS employee charged with fraudRead the Press Release
HOUSTON – A 46-year-old Laredo man has been charged with using the personal information of deceased individuals in online loan scam, announced U.S. Attorney Ryan K. Patrick.
David Allen Parker made his initial appearance today, at which time the indictment was unsealed. He will remain in custody pending a hearing set for July 24.
The charges allege that from approximately 2018 through July 2019, Parker devised a scheme to defraud online lending institutions. Parker allegedly applied for lines of credit in excess of $33,000 using stolen personal identifying information belonging to deceased individuals. Parker submitted the loan applications containing misappropriated personal identifying information through the internet to lending institutions in New York, according to the charges.
If convicted of wire fraud, Parker faces up to 20 years in federal prison and a possible $250,000 maximum fine.
The FBI - Dallas, Abilene and San Antonio Divisions, DHS - Office of Inspector General and the Abilene Police Department conducted the investigation.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Council Bluffs Residents Sentenced to Prison for Conspiracy to Distribute MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA -- United States Attorney Marc Krickbaum announced on Wednesday, July 15, 2020, Harley Bressman, age 46, of Council Bluffs, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 210 months in prison for conspiracy to distribute methamphetamine. Bressman was ordered to serve 10 years of supervised release to follow his prison term and pay a $100 special assessment to the Crime Victims’ Fund.
Sabrina Spahn, age 48, of Council Bluffs, was sentenced to 77 months in prison for her role in the methamphetamine conspiracy. She was ordered to serve five years of supervised release to follow her prison term and pay a $100 special assessment to the Crime Victims’ Fund.
The charges were the result of an ongoing investigation involving Bressman distributing a large quantity of methamphetamine in the Council Bluffs area. An undercover investigation led law enforcement to execute a search warrant at Bressman and Spahn’s residence in Council Bluffs, where over four pounds of methamphetamine was located as well as seven pounds of methamphetamine discovered at a related location.
The investigation was conducted by the Council Bluffs Police Department, Southwest Iowa Narcotics Task Force, Middle Iowa Narcotics Enforcement, Iowa Division of Narcotics Enforcement, and prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Council Bluffs Men Sentenced to Prison for Conspiracy to Distribute CocaineRead the Press Release
COUNCIL BLUFFS, IA - United States Attorney Marc Krickbaum announced on Monday, July 13, 2020, Douglas Schlott, age 35, of Council Bluffs, was sentenced by United States District Court Judge Stephanie M. Rose to a total of 71 months in prison to be followed by a five year term of supervised release for Conspiracy to Distribute Cocaine and Possessing a Firearm in Furtherance of Drug Trafficking.
Also sentenced by Judge Rose as part of the cocaine conspiracy was Tyler Alwan, age 21, of Council Bluffs. Alwan pleaded guilty to Conspiracy to Distribute Cocaine and was sentenced to 16 months in prison to be followed by four years of supervised release.
The charges were the result of an investigation initiated by a concerned citizen who provided information to the Council Bluffs Police Department that drugs were being distributed in a parking lot. An undercover investigation of this information led local law enforcement to execute a search warrant at Douglas Schlott’s residence in Council Bluffs where police located cocaine, drug paraphernalia, and a firearm.
This investigation was conducted by the Council Bluffs Police Department and prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Council Bluffs Man Sentenced to over 15 Years in Prison for Receipt of Child PornographyRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on Monday, July 13, 2020, Brent Rawson, age 55, of Council Bluffs, was sentenced by United States District Court Judge Stephanie M. Rose to 188 months in prison for receipt of child pornography. Rawson was ordered to serve eight years of supervised release to follow his prison term and pay $100 special assessment to the Crime Victims’ Fund.
The charges were the result of an investigation initiated from two internet service providers who submitted tips to the National Center for Missing and Exploited Children that a user of their service uploaded suspected images of child pornography. An investigation of this information led law enforcement to execute a search warrant at Rawson’s Council Bluffs residence. Law enforcement located a laptop, cell phone, and two hard drives, which were taken as evidence and analyzed. The forensic analysis revealed Rawson possessed and received numerous images and videos of child pornography.
This investigation was conducted by the Douglas County Sheriff Office and the Omaha Federal Bureau of Investigations Child Exploitation and Human Trafficking Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Council Bluffs Man Sentenced for Drug and Firearm OffensesRead the Press Release
COUNCIL BLUFFS, IA - United States Attorney Marc Krickbaum announced on Thursday, July 16, 2020, Matthew Carson, age 37, of Council Bluffs, was sentenced by United States District Court Chief Judge John A. Jarvey to a total of 10 years in prison for Possession with Intent to Distribute Methamphetamine and Carrying a Firearm During a Drug Trafficking Crime. He was ordered to serve five years of supervised release to follow his prison term and pay $200 to the Crime Victims’ Fund.
The charges stemmed from two traffic stops of Carson by Council Bluffs Police Officers. On August 8, 2019, Carson drove without a valid driver’s license and was found in possession of 24 grams of methamphetamine. On September 25, 2019, Carson was found in possession of 20 grams of methamphetamine and a loaded firearm.
This investigation was conducted by the Council Bluffs Police Department and prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Council Bluffs Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA -- United States Attorney Marc Krickbaum announced on Wednesday, July 15, 2020, Michael Sutton, age 47, of Council Bluffs, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 147 months in prison for conspiracy to distribute methamphetamine. Sutton was ordered to serve 10 years of supervised release to follow his prison term and pay $100 to the Crime Victims’ Fund.
The charge was the result of an investigation involving Sutton distributing a large quantity of methamphetamine in the Council Bluffs area. Local law enforcement executed a search warrant at Sutton’s residence in Council Bluffs where 724 grams of methamphetamine was found.
The investigation was conducted by the Council Bluffs Police Department, Southwest Iowa Narcotics Task Force, Iowa Division of Narcotics Enforcement, and the Omaha Police Department. This case was prosecuted by the United States Attorney’s Office for the Southern
District of Iowa.Council Bluffs Man Sentenced for Conspiracy to Distribute FentanylRead the Press Release
COUNCIL BLUFFS, IA -- United States Attorney Marc Krickbaum announced on Wednesday, July 15, 2020, Larry Schneckloth, age 47, of Council Bluffs, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 110 months in prison for Conspiracy to Distribute Fentanyl. Schneckloth was ordered to serve five years of supervised release to follow his prison term and pay a $100 special assessment to the Crime Victims’ Fund.
The charge was the result of an investigation regarding Scheckloth distributing controlled substances in the Council Bluffs area. Schneckloth sold fentanyl pills on two occasions in Sarpy County, Nebraska, and he was also linked to fentanyl pills located during an investigation at a hotel in Omaha, Nebraska. Law enforcement, through their investigation, attributed over 3000 fentanyl pills to Schneckloth. On December 7, 2019, Council Bluffs Police officers were dispatched to a motel in Council Bluffs where Schneckloth was arrested for a warrant and was found in possession of 95 grams of methamphetamine.
This investigation was conducted by the Council Bluffs Police Department, Southwest Iowa Narcotics Task Force, Iowa Division of Narcotics Enforcement, Omaha Police Department, and Sarpy County Sheriff’s Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Felon Sentenced to 48 Months in Prison for Possessing Firearms and Possessing with the Intent to Distribute CocaineRead the Press Release
St. Louis, Missouri – Matthew Orasco, 40, of St. Louis, Missouri, was sentenced to 48 months in prison for the offenses of possessing with intent to distribute cocaine and felon in possession of a firearm. Orasco appeared in federal court today before U.S. District Judge John A. Ross.
According to court documents, on August 23, 2019, FBI agents executed a search warrant at Orasco’s St. Louis County residence in connection with an investigation of distribution of controlled substances and unlawful possession of firearms at the residence.
Pursuant to the search warrant, the FBI seized evidence of crimes from the residence, including distribution amounts of cocaine and other controlled substances, nine firearms, high capacity ammunition magazines, and more than 500 rounds of ammunition compatible with the seized firearms. The FBI also seized approximately $45,000 in U.S. currency, three cars, and two motorcycles from the residence. As part of the plea agreement, Orasco agreed to forfeit the money, cars, and motorcycles seized by the FBI, as those items either facilitated Orasco’s illegal activity, constituted proceeds of his illegal activity, or were acquired with such proceeds.
Prior to August 23, 2019, Orasco had been convicted of at least one felony crime and knew he had been so convicted at the time he possessed the firearms.
The Federal Bureau of Investigation investigated this case with the assistance of the St. Louis County Police Department. Assistant U.S. Attorney Jay Redd handled this case for the U.S. Attorney’s Office.
Commonwealth Edison Agrees to Pay $200 Million to Resolve Federal Criminal Investigation into Bribery SchemeRead the Press Release
CHICAGO — Commonwealth Edison Company (“ComEd”), the largest electric utility in Illinois, has agreed to pay $200 million to resolve a federal criminal investigation into a years-long bribery scheme, the U.S. Attorney’s Office in Chicago announced today.
The criminal investigation of ComEd is being resolved with a deferred prosecution agreement under which ComEd admitted it arranged jobs, vendor subcontracts, and monetary payments associated with those jobs and subcontracts, for various associates of a high-level elected official for the state of Illinois, to influence and reward the official’s efforts to assist ComEd with respect to legislation concerning ComEd and its business. The U.S. Attorney’s Office today filed a one-count criminal information in U.S. District Court in Chicago charging ComEd with bribery. Under the agreement, the government will defer prosecution on the charge for three years and then seek to dismiss it if ComEd abides by certain conditions, including continuing to cooperate with ongoing investigations of individuals or other entities related to the conduct described in the bribery charge.
The deferred prosecution agreement, which is subject to approval by the U.S. District Court, requires ComEd to pay a $200 million fine. A court date for the approval hearing has not yet been scheduled.
The bribery charge and deferred prosecution agreement were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorneys Amarjeet S. Bhachu, Diane MacArthur, Timothy J. Chapman, Sarah E. Streicker, Matthew L. Kutcher, and Michelle Kramer.
In addition to the monetary penalty and obligation to continue cooperating with government investigations, ComEd’s obligations under the deferred prosecution agreement include enhancing its compliance program and providing annual reports to the government regarding remediation and implementation of its compliance measures. If ComEd fails to completely perform or fulfill each of its obligations under the agreement during the three-year term, the U.S. Attorney’s Office can initiate prosecution of the charged offense.
ComEd’s admissions regarding the charged conduct are contained in a Statement of Facts attached to the deferred prosecution agreement. ComEd admitted that its efforts to influence and reward the high-level elected official – identified in the Statement of Facts as “Public Official A” – began in or around 2011 and continued through in or around 2019. During that time, the Illinois General Assembly considered bills and passed legislation that had a substantial impact on ComEd’s operations and profitability, including legislation that affected the regulatory process used to determine the electricity rates ComEd charged its customers. Public Official A controlled what measures were called for a vote in the Illinois House of Representatives and exerted substantial influence over fellow lawmakers concerning legislation affecting ComEd. The company admitted that it arranged for jobs and vendor subcontracts for Public Official A’s political allies and workers even in instances where those people performed little or no work that they were purportedly hired by ComEd to perform.
In addition to the jobs and contracts, ComEd further admitted that it undertook other efforts to influence and reward Public Official A, including by appointing an individual to ComEd’s Board of Directors at the request of Public Official A; retaining a particular law firm at the request of Public Official A; and accepting into the company’s internship program a certain amount of students who resided in the Chicago ward where Public Official A was associated.
To date, ComEd has provided substantial cooperation with the federal investigations. Per the terms of the agreement, the company will continue to provide such cooperation until all investigations and prosecutions arising out of the charged conduct are concluded.
Commerce City Resident Sentenced for Marijuana CultivationRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Zhiming Wang, age 26, a Chinese national and a lawful permanent residence of the U.S., was sentenced today to serve 14 months in federal prison, followed by 3 years on supervised release for maintaining a drug involved premises related to the cultivation of marijuana. The defendant lived in Commerce City, Colorado. The Denver Division of the DEA joined in today’s announcement.
According to the stipulated facts contained in Wang’s plea agreement, on January 31, 2019, agents with the DEA and partner law enforcement agencies, uncovered a marijuana grow with 809 marijuana plants in various stages of maturity after executing a search warrant at his Commerce City residence. Additionally, agents found approximately one-half pound of finished marijuana product in the residence.
It was determined that the defendant established the marijuana grow for the purpose of selling it for profit. Further investigation revealed that Mr. Wang resided at the Commerce City residence since November 2016. Electric power for the residence was subscribed to the defendant since November 1, 2016. Power usage records indicate that, during the time period from September 2017 to November 2018, the residence used between 2,505 kWh and 16,059 kWh per month, which was far in excess of the normal usage of between 500 kWh to 1,500 kWh for a residence. The power use revealed that the defendant was cultivating marijuana during a substantial number of months between September 2017 and November 2018.
“The cultivation of marijuana is a violation of federal law,” said U.S. Attorney Jason Dunn. “Mr. Wang grew marijuana in a residential neighborhood without concern for the consequences. He was caught and is now paying the price.”
“The case against Mr. Wang is yet another in a long list of examples of criminals using the Colorado state marijuana laws to hide their activities for profit,” said Special Agent in Charge Deanne L. Reuter. “DEA will continue to investigate and prosecute criminals and organizations who exploit conflicts between the law and take advantage of our communities.”
The prosecution of Mr. Wang is part of a significant operation into the production and distribution of black market marijuana, first announced on May 24, 2019. (https://www.justice.gov/usao-co/pr/forty-two-individuals-arrested-one-largest-black-market-marijuana-takedowns-colorado)
He appeared at the sentencing hearing free on bond, and was ordered to report to a facility designated by the Bureau of Prisons by August 21, 2020.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Number 19-cr-195. Mr. Wang was prosecuted by Assistant U.S. Attorney Aaron M. Teitelbaum.
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.
Citizen of the UK sentenced to 42 months in prison for illicit sexual contact with a teen-agerRead the Press Release
Seattle — A citizen of the United Kingdom, who most recently resided in Nevada, was sentencing today in U.S. District Court in Seattle to 42 months in prison for Engaging in Illicit Sexual Conduct in a Foreign Place. JOSEPH LAWSON SCOTT, 35, cultivated a friendship with a woman he met in an online gaming community, and groomed her teen-age daughter for sexual abuse. In April 2018, SCOTT visited the family in Canada and sexually assaulted the girl. At the sentencing hearing, U.S. District Judge James L. Robart called the crime “abhorrent” and “deeply troubling.”
According to records filed in the case, SCOTT was arrested in Nevada where he worked as a bail bondsman in November 2019. He was indicted for four counts of Engaging in Illicit Sexual Conduct in a Foreign Place. SCOTT pleaded guilty to one count of the indictment in January 2020.
SCOTT will likely be deported following his prison term. However, should he be allowed to remain in the United States, the Court ordered 10 years of supervised release to follow his incarceration.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
The case was investigated by Homeland Security Investigations (HSI) and the Royal Canadian Mounted Police (RCMP).
The case was prosecuted by Assistant United States Attorney Matthew Hampton.
Central Falls Man Indicted in Pawtucket ShootingRead the Press Release
PROVIDENCE – A Central Falls man arrested in connection with a shooting in Pawtucket in April 2020, which was caught on video and left a parked car riddled with bullets, was indicted by a federal grand jury today for allegedly being a felon in possession of ammunition.
It is alleged that Jayquan Parker, 25, fired at least 22 rounds into a parked vehicle and nearby garage and drove off. Based on information developed by Pawtucket Police and gleaned from surveillance videos recorded in the surrounding area of the shooting, Pawtucket Police identified Parker as the alleged shooter. He was located and arrested by the Fugitive Task Force and Pawtucket Police on April 19, and arraigned on multiple state charges.
According to court documents, prior to the shooting, Parker had been convicted and sentenced in Rhode Island state court on felony charges on multiple occasions. As a result, in addition to state charges filed against Parker in connection with the April 7 shooting, the Government filed a federal criminal complaint charging Parker with being a felon in possession of ammunition.
Today, a federal grand jury returned a one-count indictment charging Parker with being a felon in possession of ammunition, announced United States Attorney Aaron L. Weisman, Pawtucket Police Chief Tina Goncalves, United States Marshal Wing Chau, and Superintendent of the Rhode Island State Police Colonel James M. Manni.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The case in U.S. District Court is being prosecuted by Assistant U.S. Attorney William J. Ferland.
The Rhode Island Violent Fugitive Task Force is run by the U.S Marshals Service along with the Rhode Island State Police. The Task Force is comprised of members from the U.S. Marshals Service, the Rhode Island State Police, and the Warwick, Cranston, Coventry, East Providence, Middletown, Pawtucket, Portsmouth and Providence Police Departments who work full time to track down and apprehend the most violent and dangerous fugitives both within the United States and Internationally.
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Cedar Rapids Meth User and Domestic Abuser Sentenced to Prison for Unlawfully Possessing a GunRead the Press Release
A Cedar Rapids man who unlawfully possessed a gun was sentenced today to federal prison.
Bradley James Cable, age 34, from Cedar Rapids, Iowa, received the prison sentence after a November 15, 2019 guilty plea to possession of a firearm by a drug user and a person previously convicted of a misdemeanor crime of domestic violence.
Information disclosed at sentencing and in his plea agreement showed that
on April 11, 2019, Cedar Rapids police officers searched a home where Cable was residing. Officers located two shotguns, shotgun ammunition, methamphetamine residue, drug paraphernalia, and digital scales. Cable’s fingerprints were found on a glass bong, two shotgun cartridges, and one of the shotguns, which was also reported stolen. Cable admitted to handling the firearm at the residence and admitted he used methamphetamine recreationally. In 2004, Cable was convicted of domestic abuse assault, which prohibited him from possessing a firearm.
Cable was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Cable was sentenced to ten months’ imprisonment, five months of which can be served as home confinement, and fined $3,000. Cable must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Ashley Corkery and Special Assistant United States Attorney Alexander Geocaris and investigated by the Cedar Rapids Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from its Project Guardian partners. For more information about Project Guardian, please see /media/1122011/dl?inline.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-88.
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California Man Sentenced to Prison for Distributing MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA - United States Attorney Marc Krickbaum announced on July 16, 2020, James William Chvala, age 56, of California, was sentenced by United States District Court Chief Judge John A. Jarvey to 60 months in prison to be followed by four years of supervised release for possession with intent to distribute methamphetamine.
The sentencing was the result of a traffic stop on June 26, 2019, in Council Bluffs by the Council Bluffs Police Department. An investigation revealed Chvala had approximately one pound of methamphetamine hidden in his vehicle and had obtained the methamphetamine from a source in California and was transporting it for distribution in Illinois. It was learned that Chvala had made multiple trips from California to deliver methamphetamine in Illinois. Chvala pleaded guilty to possession with intent to distribute methamphetamine on January 24, 2020.
The investigation was conducted by the Council Bluffs Police Department and Southwest Iowa Narcotics Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Buffalo Woman Sentenced for Allowing Her Former Boyfriend to Write Fraudulent Prescriptions for AdderallRead 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 Phousavath Luangrath, 30, of Buffalo, NY, who was convicted of misprision of a felony, was sentenced to serve one year probation by U.S. District Judge Lawrence J. Vilardo. The defendant was also ordered to pay restitution in the amount of $572.20.
Assistant U.S. Attorneys Joshua A. Violanti and Timothy C. Lynch, who handled the case, stated that between February 2 and December 21, 2017, the defendant allowed co-defendant James T. Keefe, with whom she was involved in an intimate relationship, to write fraudulent prescriptions for controlled substances using her information. Keefe was a New York State licensed physician and a DEA Registrant. Keefe wrote the fraudulent prescriptions so that he could receive Adderall for personal use. The prescriptions were issued not for a legitimate purpose and were outside the usual course of professional practice. Luangrath was issued 10 prescriptions in her own name by Keefe for Schedule II controlled substances.
Keefe was previously convicted of conspiring to possess with intent to distribute, and to distribute, oxycodone, hydrocodone, and amphetamine, and is awaiting sentencing.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan.
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Brevard, N.C. Woman Is Sentenced to Prison for Selling Fake Title Insurance PoliciesRead the Press Release
ASHEVILLE, N.C. – U. S. District Judge Martin Reidinger sentenced Ginger Lynn Cunningham, 39, formerly of Hendersonville and currently residing in Brevard, to 14 months in prison yesterday, for selling fake title insurance policies, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Cunningham was ordered to serve three years under court supervision and to pay $412,344 as restitution.
According to information contained in filed court documents and presented in court during Cunningham’s sentencing hearing, Cunningham owned and operated Blue Ridge Title Company, an independent title insurance agency located in Buncombe County. Beginning in February 2015, Cunningham became an authorized independent agent for Commonwealth Land Title Insurance Company (Commonwealth). As an authorized agent, Cunningham’s title agency sold title insurance policies underwritten by Commonwealth and collected premium payments during real estate closings. Under the agreement with Commonwealth, Cunningham’s Blue Ridge Title Company would keep 80% of the premium payments, and the remaining 20% would be sent to Commonwealth. On or about March 21, 2016, Commonwealth terminated their agreement with Blue Ridge Title Company, because Cunningham failed to submit premium payments as required to Commonwealth. At the time of termination, Blue Ridge Title Company owed Commonwealth in excess of $25,000 in premium payments.
According to court documents, from March 2016 until October 2017, Cunningham continued to represent herself and Blue Ridge Title Company to be an independent agent of Commonwealth, despite knowing that she no longer had any relationship with Commonwealth, and continued to sell fictitious title insurance policies and collect premium payments. The buyers of these bogus title insurance policies did not know that they were not underwritten by any insurance provider, and thus had no value. Court records show that Cunningham further deceived her customers by drafting official looking, but fictitious, policy documents that bore the name of Commonwealth Land Title Insurance Company and fabricated policy numbers. Cunningham kept 100% of the premium payments associated with these worthless policy sales. As court records show, during the relevant time period, Cunningham sold at least 973 counterfeit title insurance policies and received at least $412,344 in premiums for the bogus policies. On October 28, 2019, Cunningham pleaded guilty wire fraud.
In making today’s announcement U.S. Attorney Murray commended the U.S. Department of Housing and Urban Development, Office of Inspector General, the Federal Housing Finance Agency, Office of Inspector General, and the North Carolina Department of Insurance for their investigation of this case.
Assistant United States Attorney Don Gast, of the U.S. Attorney’s Office in Asheville, prosecuted the case for the United States.
Blair County Man Charged with Unlawful Possession of Multiple DrugsRead the Press Release
PITTSBURGH – A resident of Blair County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
The one-count Indictment, returned on July 8, named Jesse Daniel Ginter, 39, of Williamsburg, PA 16693, as the sole defendant.
According to the Indictment, on or about March 12, 2018, Ginter unlawfully possessed with intent to distribute furanyl fentanyl, methoxyacetyl fentanyl, cyclopropyl fentanyl, U-47700, AMB-Fubinaca, carfentanil, fentanyl, marijuana, cocaine, and methamphetamine. The indictment also seeks the forfeiture of multiple firearms,
For Ginter’s offense, the law provides for a maximum total sentence of 20 years imprisonment, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney David Lew is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service; U.S. Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations; Federal Bureau of Investigation; and Pennsylvania State Police conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indictment- Indictment
Armed Career Criminal Charged with Illegal Possession of A Firearm, CocaineRead the Press Release
United States Attorney Erica H. MacDonald today announced a three count federal indictment charging KEEGAN JAMAAL ROLENC, 28, with being a felon in possession of a firearm, possession with intent to distribute cocaine, and carrying a firearm during and in relation to a drug trafficking crime. ROLENC made his initial appearance before Magistrate Judge Katherine M. Menendez in U.S. District Court. ROLENC was ordered to remain in custody pending a formal detention hearing, which is scheduled for Wednesday, July 22, at 2:00 p.m.
According to the allegations in the indictment, on or about February 2, 2020, ROLENC was found to be in possession of a Beretta model BU9 Nano 9mm semi-automatic pistol and a distributable amount of cocaine. Because ROLENC has prior felony convictions for third-degree controlled substance possession, drive-by shooting, second-degree assault, fifth-degree drug possession and third-degree assault, he is prohibited under federal law from possessing firearms or ammunition at any time.
This case is the result of an investigation conducted by the Minneapolis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was brought as part of the Twin Cities Violent Crime Task Force, a multi-agency effort that brings together additional federal and state resources to assist local law enforcement to investigate, arrest, and prosecute individuals responsible for gun violence in the Twin Cities. For more information about the Twin Cities Violent Crime Task Force, please visit https://www.justice.gov/usao-mn/pr/united-states-attorney-announces-new-twin-cities-violent-crime-task-force.
Assistant U.S. Attorney Thomas Calhoun-Lopez is prosecuting the case.
Defendant Information:
KEEGAN JAMAAL ROLENC, 28
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm (Armed Career Criminal), 1 count
- Possession with intent to distribute cocaine, 1 count
- Carrying a firearm during and in relation to a drug trafficking crime, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Thursday 16 July 2020
West L.A. Man Charged with Fraudulently Obtaining about $9 Million in COVID-Relief Loans, Some of Which He Gambled Away in Las VegasRead the Press Release
LOS ANGELES – A resident of the Beverly Grove neighborhood of Los Angeles was ordered held without bond this afternoon after being arrested on federal charges alleging he fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.
Andrew Marnell, 40, was arrested this morning by federal authorities. Marnell made his initial court appearance this afternoon in United States District Court in Los Angeles, where he was ordered detained pending a hearing on Tuesday.
A criminal complaint unsealed in court this afternoon charges Marnell with one count of bank fraud and alleges he obtained more than $8 million in PPP loans through applications to insured financial institutions, and others, on behalf of different companies. During today’s court hearing, prosecutors said they now believe Marnell received approximately $9 million in fraudulent loans – a number that could rise as the investigation continues.
The affidavit in support of the complaint alleges that Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. The affidavit also alleges that Marnell, often using aliases, submitted fake and altered documents, including bogus federal tax filings and employee payroll records.
The complaint further alleges that Marnell then transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets. The affidavit also outlines how Marnell spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at the Bellagio Hotel & Casino and other gambling establishments as recently as last weekend.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $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 1 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 complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The bank fraud count alleged in the complaint against Marnell carries a statutory maximum sentence of 30 years in federal prison.
This case is being investigated by the Federal Housing Finance Agency – Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation – Office of Inspector General, IRS Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration Office of Inspector General. The California Department of Justice – Bureau of Gambling Control provided assistance in the investigation.
This case is being prosecuted by Assistant United States Attorney Kerry Quinn of the Major Frauds Section and DOJ Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section.
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.
Weakley County Man Sentenced to 23 Years in Federal Prison for Conspiracy to Distribute MethamphetamineRead the Press Release
Jackson, TN – Keith Norris, 32, has been sentenced to 280 months in federal prison for conspiracy to distribute methamphetamine. U.S. Attorney D. Michael Dunavant announced the sentence today.
According to information presented in court, in 2018, the Weakly County Sheriff’s Department (WCSD) in Dresden, Tennessee, began an investigation into an ongoing drug trafficking organization led by Keith Norris. The investigation included search warrants, traffic stops, statements of cooperators, and phone records. Weakley County investigators received information about Norris distributing methamphetamine to five other co-defendants. During a search of Norris’s residence on April 26, 2018, investigators recovered methamphetamine and over $1,300 in currency.
On June 14, 2018, investigators again executed a search warrant on Norris’s residence. Norris was seen attempting to destroy the drug evidence; however, 4.5 ounces of methamphetamine was recovered during the search. Norris was arrested, claimed ownership of all the narcotics recovered, and allowed agents to search his cell phone. Based on his statement, Norris was held accountable for distributing 296 ounces of actual methamphetamine, which equates to over 4.5 kilograms of actual methamphetamine.
On July 13, 2020, U.S. District Court Chief Judge Thomas Anderson sentenced Norris to 280 months in federal prison followed by 5 years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Drug distribution conspiracies are NOT victimless crimes. Methamphetamine causes significant human pain, loss, and destruction in countless ways, including addiction, injuries, and deaths. Individuals who distribute harmful drugs into our rural communities can no longer hide, and those who choose to engage in such lawlessness will pay the price with a long prison sentence."
This is the second sentencing in a case involving multiple defendants, including Keith Norris, Robert Thomas, Charles Settles, Justin Tyler Bynum and Solomon Clay on charges of conspiracy to distribute actual methamphetamine. On August 6, 2019, Robert Thomas was sentenced to 108 months in federal prison followed by 5 years supervised release for his role in the conspiracy. https://www.justice.gov/usao-wdtn/pr/martin-tennessee-man-sentenced-108months-imprisonment-conspiracy-distribute
This case was investigated by the Weakly County Sheriff’s Department and Martin Police Department.
Assistant U.S. Attorney Jerry Kitchen prosecuted this case on behalf of the government.
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Waukesha bar owner sentenced to 15 years for Arson and related chargesRead the Press Release
Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, announced that on July 16, 2020, Brian Whitton (age: 42) of Waukesha, Wisconsin, was sentenced to 15 years in federal prison. Whitton was found guilty following a jury trial last February of arson of a commercial building, two counts of mail fraud, arson to commit another felony offense, and making a false statement to law enforcement agents in violation of Title 18, United States Code, Sections 844(i), 844(h), 1001, and 1341.
The jury found that Whitton intentionally set fire to his business, a bar called “The Stage Off Main” located at 854 Martin Street in Waukesha, Wisconsin, on March 25, 2017. The evidence at trial revealed that the fire originated in the basement of the building and included surveillance video that captured Whitton quickly exiting the basement, emptying the cash registers, and leaving the bar approximately 18 seconds before smoke started to fill the first floor of the building.
The fire was set around 3:00 a.m. when the upper apartment unit in the building was occupied by Whitton’s two tenants and their guest. Fortunately, no citizens or first responders were injured as a result of the fire but the building sustained damage. Whitton, who was experiencing financial difficulty at the time, submitted a fraudulent proof of loss claim to his insurance carrier, United States Liability Insurance Company, LLC (“USLI”), in which he falsely claimed that the fire was the result of an accident. Whitton also repeatedly lied about his activities immediately preceding the fire to investigators.
Senior District Judge William C. Griesbach characterized arson as a “horrendous crime” and noted, “This is behavior that no people of civilized society can tolerate.” Whitton will also be required to spend 3 years on supervised release following his prison sentence and was ordered to pay $161,833.07 in restitution to USLI.
United States Attorney Krueger stated, “This substantial prison sentence should serve as a warning to anyone who thinks arson is acceptable in any circumstance. The United States Attorney’s Office commends the dedicated work of our law enforcement partners in holding Whitton accountable.”
The case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), the Waukesha Police Department and the Waukesha Fire Department. The case was prosecuted by Assistant United States Attorneys Kelly B. Watzka and Timothy W. Funnell.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Public Information Officer Kenneth Gales, (414) 297-1700
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Waterloo Gang Affiliate Sentenced for Weapon OffenseRead the Press Release
A man who hid a loaded firearm in the HVAC ductwork of a relative’s home in Waterloo, Iowa, was sentenced today to federal prison.
Keyion Smith-Allen, age 20, from Cedar Rapids, Iowa, received the prison term after a February 21, 2020 guilty plea to possession of a firearm by a drug user.
In a plea agreement, Smith-Allen admitted he was in possession of a semi-automatic .45 caliber handgun which was found in the basement of a relative’s residence in Waterloo. He further admitted he had purchased the handgun in Cedar Rapids, Iowa, and transported it to Waterloo. He admitted to using both ecstasy and marijuana at the time he possessed the handgun. Testimony at sentencing showed that Smith-Allen is an associate of multiple hybrid Waterloo gangs falling under a larger group referred to as “400.”
Smith-Allen was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Smith-Allen was sentenced to 10 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Smith-Allen was released on the bond previously set and was immediately remanded to the custody of the United States Marshals following the sentencing hearing.
The case was prosecuted by Assistant United States Attorney Liz Dupuich and investigated by the Waterloo Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see /media/1122011/dl?inline.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-2002-CJW.
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Violent felon facing federal firearm chargesRead the Press Release
INDIANAPOLIS – United States Attorney Josh J. Minkler announced today that Jeremy Bullock, 43, Indianapolis, Ind. was charged with a previously convicted felon in possession of a firearm and possession of an unregistered firearm.
"This is exactly the type of crime and arrest that Project Safe Neighborhoods (PSN) is designed for." said Minkler. "Making neighborhoods safer by focusing law enforcement resources on the most violent in society. Mr. Bullock has a history of violent behavior which has continued by his actions of terrorizing his neighbors by firing gunshots in the neighborhood in which he lives. This is another great example of the exceptional work by the special agents and officers assigned to the CGIC (Crime Gun Intelligence Center)."
Since January 2020, the Indianapolis Metropolitan Police Department had received several calls about gunshots being fired in and around the area of 3134 East Sumner Avenue, Indianapolis. Officers and special agents from the Crime Gun Intelligence Center began an investigation.
On July 1, 2020, with the assistance of the IMPD SWAT Team, officers and special agents from CGIC executed a search warrant at 3134 East Sumner Avenue, Indianapolis. Two
individuals were located after they exited the residence. One of the persons was Jeremy Bullock. Mr. Bullock has numerous prior felony convictions, to include murder, carjacking, burglary, resisting law enforcement, and possession of a firearm by a serious violent felon.
While searching the residence, investigators located a handgun, sawed off shotgun, a semi-automatic rifle, ammunition, suspected marijuana, and narcotic paraphernalia.
This case was the result of an investigation by the Alcohol, Tobacco, Firearms, and Explosives, and the Indianapolis Metropolitan Police Department.
According to Assistant United States Attorney Michelle Brady who is prosecuting this case for the government, Bullock faces up to life imprisonment, 5 years of supervised release, and a maximum fine of $250,000.
A charge is not evidence of guilt. All parties are presumed innocent until proven otherwise in federal court.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its public safety challenges. This demonstrates the office’s firm commitment to target, investigate, and prosecute defendants committing violent crimes. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Section 2.2, 2.3.
Upshur County man admits to methamphetamine distributionRead the Press Release
ELKINS, WEST VIRGINIA – Thomas Arthur Cicalese, of Buckhannon, West Virginia, has admitted to methamphetamine distribution, U.S. Attorney Bill Powell announced.
Cicalese, age 69, pled guilty to one count of “Possession with Intent to Distribute 50 grams or more of Methamphetamine.” Cicalese admitted to distributing 50 grams or more of methamphetamine in March 2019 in Upshur County.Cicalese faces not less than ten years and up to life incarceration and a fine of up to $10,000,000. 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 Brandon Flower is prosecuting the case on behalf of the government. The Mountain Lakes Drug & Violent Crimes Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Uniontown Medical Group Office Manager Pleads Guilty in a Nearly $1M Embezzlement SchemeRead the Press Release
PITTSBURGH, PA - A resident of Fayette County, PA, pleaded guilty in federal court to charges of Wire Fraud and False Income Tax Returns, United States Attorney Scott W. Brady announced today.
Cynthia L. Demniak, 60, of Leckrone, PA, pleaded guilty to 11 counts before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that Demniak, in her position as office manager for Grandview Medical Management located in Uniontown, PA, between 2013 and 2018 embezzled approximately $926,940 from her employer, which she used for personal expenses and to satisfy a gambling addiction. The court was also advised that for tax years 2013 through 2018, Demniak materially underreported the embezzled income from Grandview Medical Center on her federal income tax returns, totaling nearly $270,426 in restitution owed to the IRS.
Judge Fischer scheduled sentencing for November 19, 2020. The law provides for a total sentence of 118 years in prison, a fine of $2,750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigation and United States Postal Inspection Service are conducted the investigation that led to the prosecution of Cynthia L. Demniak.
UAE Company Admits to North Korean Sanctions Violations and Defrauding the U.S. Goverment, Agrees to Pay $665,000Read the Press Release
WASHINGTON – Essentra FZE Company Limited (“Essentra FZE”), a global supplier of cigarette products that is incorporated in the United Arab Emirates (“UAE”), has agreed to pay a $665,112 fine and enter into a deferred prosecution agreement with the Justice Department for conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) and defrauding the United States in connection with evading sanctions on North Korea. Today’s public filing against Essentra FZE is the first ever DOJ corporate enforcement action for violations of these regulations. Essentra FZE has also entered into a settlement agreement with the Treasury Department’s Office of Foreign Assets Control (“OFAC”).
Assistant Attorney General John C. Demers for the Justice Department’s National Security Division, Acting U.S. Attorney Michael R. Sherwin of the District of Columbia, and Special Agent in Charge Jennifer C. Boone of the FBI’s Baltimore Field Office made the announcement.
In entering the deferred prosecution agreement, Essentra FZE admitted and accepted responsibility for its criminal conduct and to pay a fine. Essentra FZE also agreed to implement rigorous internal controls and to cooperate fully with the Justice Department, including by reporting any criminal conduct by an employee.
“The sanctions the United States has imposed on the North Korean regime are of the utmost importance to the national security of our nation, and the enforcement of U.S. sanctions and related financial criminal laws is a major priority of the National Security Division” said Assistant Attorney General for National Security John C. Demers. “Essentra FZE devised a criminal scheme to use a deceitful web of front companies and financial entities to manipulate U.S. banks into processing prohibited U.S. dollar transactions for the benefit of North Korea. The company has now committed to working with our prosecutors to bring those individuals responsible for these acts to justice.”
“Essentra FZE undermined the integrity of our financial system and harmed our national security by deliberately providing North Korea with coveted access to the U.S. economy,” said Acting U.S. Attorney Sherwin. “Foreign companies transacting through the U.S. financial system or overseas branches of U.S. banks must comply with U.S. sanctions or else face punishment.”
"This is an important case as it demonstrates the FBI will not hesitate to hold businesses accountable for violating sanctions involving North Korea," said Alan E. Kohler, Jr, Assistant Director of the FBI's Counterintelligence Division. "We will aggressively go after enterprises using front companies, false documents, or other illegal methods to evade sanctions. We want North Korea and private industry to know that efforts to dodge our laws will never be tolerated as business as usual."
“Today’s agreement shows that attempts to skirt U.S. sanctions, no matter how complicated the trail or how complex the scheme, will be discovered and met with serious consequences,” said Jennifer Boone, Special Agent in Charge of the FBI’s Baltimore Division. “I want to thank the FBI team. This result is a testament to their hard work.”
U.S. sanctions prevented correspondent banks in the United States and overseas branches of U.S. banks from processing wire transfers on behalf of customers located in North Korea. According to admissions and court documents, beginning in at least October 2017 and continuing until at least December 2018, Essentra FZE deceived banks in the U.S. and in the U.A.E. into processing transactions for a North Korean tobacco company. Essentra FZE and its co-conspirators utilized financial cutouts and front companies to conceal the North Korean nexus, as well as falsified shipping records.
Assuming Essentra FZE’s continued compliance with the deferred prosecution agreement, the government has agreed to defer prosecution for a period of three years, after which time, the government would seek to dismiss the charges.
U.S. Attorney Wrigley Announces a Minneapolis, MN, Man was sentenced to 15 Years in Prison for Narcotics Trafficking and Possession of Multiple Firearms by a Prohibited PersonRead the Press Release
Bismarck – United States Attorney Drew Wrigley announced that Richard Thomas Sims, Age 31 of Minneapolis, MN, has been sentenced to serve 15 years in federal prison for Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances and Possession of Firearms by a Prohibited Person. Sims pled guilty to the offenses on December 3, 2019, and was sentenced by United States District Court Judge Daniel Hovland on July 15, 2020. Judge Hovland further sentenced Sims to 3 years of supervised release and ordered him to pay $200.00 Special Assessment. Sims was ordered to forfeit 13 firearms seized during the investigation.
"This defendant was running a drug dealer’s equivalent of a department store, such was the variety of his product offerings," said US Attorney Drew Wrigley, "combined with his illegal arsenal of firearms, the defendant posed a significant risk to public safety and is headed to a cell he very much earned."
From January 2017 through April of 2019, Sims conspired with others to distribute methamphetamine, heroin, and cocaine in the Bismarck, ND area. In addition, during the drug conspiracy, Sims was illegally in possession of several firearms, though his prior felony conviction made it unlawful for him to do so. During a search of Sims residence, drugs, drug paraphernalia, and evidence of a drug distribution operation were found in different areas the residence. A total of 375.5 grams of methamphetamine, 36 grams of pink methamphetamine, 120 grams of marijuana, 108 MDMA pills, 20 grams of cocaine, two LSD blotter papers, and 7.5 OxyContin pills with no prescription and two pistols were found during the search. A search of a rented storage unit also revealed 2,275 grams of methamphetamine with packaging, approximately 27 grams of heroin, two AR-15 rifles, one .223 caliber that was reported stolen to the Stillwater County Sheriff’s Department in Montana, and 13 other firearms.
This case was investigated by the Bismarck Police Department, North Dakota Bureau of Investigation, and Department of Homeland Security Investigations and was prosecuted by Assistant United States Gary Delorme.
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Two Sentenced for Concealing Hundreds of Thousands of Dollars in Corporate Contributions to U.S. Senate CampaignRead the Press Release
FRANKFORT, Ky. – Two men were sentenced today to 21 months in federal prison and 3 years probation with 9 months served in a halfway house, respectively, for orchestrating a multi-year scheme to funnel more than $200,000 in secret, unlawful corporate contributions into a campaign for United States Senate and for causing the concealment of those contributions from the Federal Election Commission (FEC).
Gerald G. Lundergan, 73, of Lexington, Kentucky, was sentenced to 21 months in prison, to be followed by two years of supervised release, and ordered to pay a fine of $150,000. Co-defendant Dale C. Emmons, 67, of Richmond, Kentucky, was sentenced to three years probation, with nine months served in a halfway house, and ordered to pay a fine of $50,000. The defendants were sentenced before the Honorable Gregory F. Van Tatenhove of the U.S. District Court for the Eastern District of Kentucky.
On Sept. 12, 2019, following a five-week trial, a jury convicted Lundergan of one count of conspiracy, one count of making corporate campaign contributions, four counts of causing the submission of false statements to the FEC and four counts of causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction. The jury convicted Emmons of one count of conspiracy, one count of making corporate campaign contributions, two counts of causing the submission of false statements and two counts of causing the falsification of documents with the intent to obstruct and impede.
According to the evidence presented at trial, Lundergan used the funds of S.R. Holding Company Inc. (S.R. Holding), a company he owned, to pay for services provided by consultants and vendors to a campaign for a U.S. Senate seat in the 2014 election cycle. The candidate for this seat was Lundergan’s daughter, Alison Lundergan Grimes. The evidence established that Lundergan caused the issuance of a number of payments from S.R. Holding funds for services that included audio-video production, lighting, recorded telephone calls and campaign consulting, between July 2013 and December 2015.
The corporate contributions also included monthly payments from S.R. Holding to Emmons and his company during this period. Emmons provided services to the campaign and sought and received compensation from Lundergan and S.R. Holding. Emmons also used the funds of his corporation, Emmons & Company Inc., to pay other vendors and a campaign worker for services rendered to the campaign. Those services included recorded telephone calls, technological support services, and other campaign-related expenses.
The evidence established that Lundergan and Emmons concealed these activities from other officials associated with the campaign. Their concealments caused the campaign unwittingly to file false reports with the FEC because the reports failed to disclose the source and amount of the corporate contributions.
"This case should underscore the fundamental principle that breaking the law has consequences. The defendants circumvented the campaign finance laws, by knowingly making over $200,000 in unlawful corporate campaign contributions and causing false filings to be submitted to the Federal Election Commission. These are important laws that regulate the integrity of our elections. A jury convicted them, and the Court has now sentenced them for their crimes,” said Robert M. Duncan Jr., U.S. Attorney for the Eastern District of Kentucky. "I commend the FBI for their thorough investigation, and the members of the prosecution team for their dedication to enforcing the law and in presenting this important case."
"Kentuckians place a great deal of trust in the political process. Regardless of the perpetrator’s position or status, when that trust is broken by corrupt individuals, law enforcement has a duty to protect the people's interests. Today's sentence demonstrates that no one is above the law and we will rigorously pursue anyone who tries to undermine the strength of our democracy." said Special Agent in Charge Robert Brown, FBI Louisville Field Office.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan Jr. of the Eastern District of Kentucky, and Special Agent in Charge James Robert Brown Jr. of the FBI’s Louisville Field Office made the announcement.
The FBI investigated the case. Deputy Chief Robert J. Heberle of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith of the Eastern District of Kentucky are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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