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19 August 2020
The Bank of Nova Scotia Agrees to Pay $60.4 Million in Connection with Commodities Price Manipulation SchemeRead the Press Release
NEWARK, N.J. – The Bank of Nova Scotia (Scotiabank), a Toronto, Canada-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to a price manipulation scheme involving thousands of episodes of unlawful trading activity by four traders in the precious metals futures contracts markets.
Scotiabank entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of New Jersey charging the company with one count of wire fraud and one count of attempted price manipulation. Under the terms of the DPA, Scotiabank has agreed to the imposition of an independent compliance monitor, and will pay over $60.4 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with part of the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today.
“For over eight years, Scotiabank traders placed thousands of orders for precious metals futures contracts in an attempt to manipulate prices for their own and the bank’s benefit and to deceive other market participants,” said Chief Robert A. Zink of the Justice Department’s Criminal Division, Fraud Section. “This deferred prosecution agreement—which includes a criminal monetary penalty at the top of the United States Sentencing Guidelines range, money to compensate victims, and an independent compliance monitor—reflects the seriousness of the offense and the state of Scotiabank’s compliance program, and further helps to promote the integrity of our public markets.”
“For the markets to work fairly, everyone needs to be able to make trading decisions with consistent, accurate information,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “In the conduct described here, four Scotiabank traders attempted to rig precious metals futures prices in their favor by placing thousands of orders they knew they would cancel before the trades were executed. In this way, they sought to illegally manipulate the market to their own advantage, and to the disadvantage of other traders. The resolution announced requires Scotiabank to pay a substantial penalty and places them under watch by an independent compliance monitor.”
“Today, Scotiabank has admitted to their role in a massive price manipulation scheme aimed at falsely manufacturing the prices of precious metals futures contracts to serve the bank’s best interests,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “The bank’s actions were designed to lead others to trade in ways they never would have without what was believed to be legitimate market activity. Scotiabank’s agreement to surrender more than $60 million in criminal fines, disgorgement and victim compensation underscores the severe penalties that can be levied against those who wish to engage in similar, illegal business tactics.”
“The consequences of the actions of these traders are far reaching, affecting not only the economy of the United States, but also the world’s financial markets,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group. “Anyone who thinks that manipulating trading markets to benefit their own bank accounts should see today’s announcement as a significant warning. The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace.”
According to admissions and court documents, between approximately January 2008 and July 2016, four precious metals traders located in New York, London and Hong Kong engaged in fraudulent and manipulative trading practices in the markets for gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by the CME Group, Inc. One of the traders, Corey Flaum, 42, of Delray Beach, Florida, pleaded guilty on July 25, 2019, to one count of attempted price manipulation in connection with his precious metals futures contracts trading at Scotiabank and another financial services firm, and his sentencing is scheduled for Jan. 27, 2021, before U.S. District Judge Brian M. Cogan of the Eastern District of New York.
As part of the DPA, Scotiabank has agreed to, among other things, continue to cooperate with the department in any ongoing investigations and prosecutions relating to the underlying misconduct, to modify its compliance program where necessary and appropriate, and to retain an independent compliance monitor for a period of three years.
A number of relevant considerations contributed to the department’s criminal resolution with Scotiabank, including the nature and seriousness of the offense, the state of Scotiabank’s compliance program, and Scotiabank’s failure to fully and voluntarily self-disclose the offense conduct to the department.
As Scotiabank admitted in the DPA, Flaum and the three other traders, collectively, placed thousands of orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution. By placing these orders, the traders intended to artificially move the prices of precious metals futures contracts in a direction that was favorable to them, and to inject false and misleading information into the precious metals futures markets in order to deceive other market participants into believing something untrue, namely that the market reflected legitimate supply and demand. This false and misleading information was intended to, and at times did, trick other market participants into reacting to the apparent change and imbalance in supply and demand by buying and selling futures contracts at quantities, prices, and times that they otherwise likely would not have traded.
As set forth in the DPA, Scotiabank’s compliance function failed to detect or prevent the four traders’ unlawful trading practices. Moreover, between August 2013 and February 2016, three Scotiabank compliance officers possessed information regarding unlawful trading by one of the traders other than Flaum but failed to prevent further unlawful conduct by this same trader. These facts were significant considerations that counseled for the imposition of a criminal monetary penalty at the high end of the applicable United States Sentencing Guidelines range under the DPA.
Since the time of the underlying offense conduct, Scotiabank has made significant investments to improve its compliance technology and trade surveillance tools, has nearly doubled its annual compliance operating budget, has added more than 200 full-time equivalent compliance positions, and is in the process of winding down its precious metals business. The department ultimately determined, however, that an independent compliance monitor was necessary because Scotiabank’s remedial improvements to its compliance and ethics program have yet not been fully implemented and tested to demonstrate that they would be effective in detecting and preventing similar misconduct in the future.
Scotiabank did not receive voluntary disclosure credit because it did not voluntarily and timely disclose the offense conduct to the department. In 2016, after one of its futures commission merchants flagged trading by Flaum for possible spoofing, Scotiabank made a voluntary disclosure regarding Flaum to the CFTC. As a result of recordkeeping failures, however, Scotiabank’s disclosure to the CFTC was materially incomplete. As a result, the CFTC was impaired in its ability to fully investigate Flaum’s unlawful trading and discover the true extent of the misconduct. The CFTC, relying on Scotiabank’s incomplete and, ultimately, inaccurate disclosure, entered into a resolution with Scotiabank in 2018 that did not reflect the full extent of Flaum’s conduct (2018 CFTC Resolution). In the 2018 CFTC resolution, Scotiabank received a substantially reduced penalty in recognition of, among other things, its purported self-reporting.
Today, the CFTC announced two separate settlements with Scotiabank in connection with related, parallel proceedings. One of Scotiabank’s resolutions with the CFTC relates to unlawful trading by Flaum and the three other traders that Scotiabank did not fully disclose to the CFTC in connection with the CFTC’s prior investigation that resulted in the 2018 CFTC Resolution, discussed above. Under the terms of the new agreement between Scotiabank and the CFTC, Scotiabank agreed to pay approximately $60.4 million, which includes a civil monetary penalty of $42 million, as well as restitution and disgorgement that will be credited to any such payments made to the department. The second resolution between Scotiabank and the CFTC relates to certain false statements that Scotiabank made to the CFTC (including in connection with the investigation that resulted in the 2018 CFTC Resolution), the COMEX, and the National Futures Association. Under the terms of this agreement, Scotiabank has agreed to pay a civil monetary penalty of approximately $17 million.
The FBI’s New York Field Office and the USPIS investigated this case. Assistant Chief Avi Perry and Trial Attorneys Matthew F. Sullivan and Alexander Kramer of the Fraud Section and Assistant U.S. Attorney Catherine R. Murphy of the District of New Jersey prosecuted the case. The CFTC’s Division of Enforcement provided assistance in this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/the-bank-of-nova-scotia-dpa or call (888) 549-3945.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
The Bank of Nova Scotia Agrees to Pay $60.4 Million in Connection with Commodities Price Manipulation SchemeRead the Press Release
The Bank of Nova Scotia (Scotiabank), a Toronto, Canada-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to a price manipulation scheme involving thousands of episodes of unlawful trading activity by four traders in the precious metals futures contracts markets.
Scotiabank entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of New Jersey charging the company with one count of wire fraud and one count of attempted price manipulation. Under the terms of the DPA, Scotiabank has agreed to the imposition of an independent compliance monitor, and will pay over $60.4 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with part of the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today.
“For over eight years, Scotiabank traders placed thousands of orders for precious metals futures contracts in an attempt to manipulate prices for their own and the bank’s benefit and to deceive other market participants,” said Chief Robert A. Zink of the Justice Department’s Criminal Division, Fraud Section. “This deferred prosecution agreement—which includes a criminal monetary penalty at the top of the United States Sentencing Guidelines range, money to compensate victims, and an independent compliance monitor—reflects the seriousness of the offense and the state of Scotiabank’s compliance program, and further helps to promote the integrity of our public markets.”
“For the markets to work fairly, everyone needs to be able to make trading decisions with consistent, accurate information,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “In the conduct described here, four Scotiabank traders attempted to rig precious metals futures prices in their favor by placing thousands of orders they knew they would cancel before the trades were executed. In this way, they sought to illegally manipulate the market to their own advantage, and to the disadvantage of other traders. The resolution announced requires Scotiabank to pay a substantial penalty and places them under watch by an independent compliance monitor.”
“Today, Scotiabank has admitted to their role in a massive price manipulation scheme aimed at falsely manufacturing the prices of precious metals futures contracts to serve the bank’s best interests,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “The bank’s actions were designed to lead others to trade in ways they never would have without what was believed to be legitimate market activity. Scotiabank’s agreement to surrender more than $60 million in criminal fines, disgorgement and victim compensation underscores the severe penalties that can be levied against those who wish to engage in similar, illegal business tactics.”
“The consequences of the actions of these traders are far reaching, affecting not only the economy of the United States, but also the world’s financial markets,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group. “Anyone who thinks that manipulating trading markets to benefit their own bank accounts should see today’s announcement as a significant warning. The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace.”
According to admissions and court documents, between approximately January 2008 and July 2016, four precious metals traders located in New York, London and Hong Kong engaged in fraudulent and manipulative trading practices in the markets for gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by the CME Group, Inc. One of the traders, Corey Flaum, 42, of Delray Beach, Florida, pleaded guilty on July 25, 2019, to one count of attempted price manipulation in connection with his precious metals futures contracts trading at Scotiabank and another financial services firm, and his sentencing is scheduled for Jan. 27, 2021, before U.S. District Judge Brian M. Cogan of the Eastern District of New York.
As part of the DPA, Scotiabank has agreed to, among other things, continue to cooperate with the department in any ongoing investigations and prosecutions relating to the underlying misconduct, to modify its compliance program where necessary and appropriate, and to retain an independent compliance monitor for a period of three years.
A number of relevant considerations contributed to the department’s criminal resolution with Scotiabank, including the nature and seriousness of the offense, the state of Scotiabank’s compliance program, and Scotiabank’s failure to fully and voluntarily self-disclose the offense conduct to the department.
As Scotiabank admitted in the DPA, Flaum and the three other traders, collectively, placed thousands of orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution. By placing these orders, the traders intended to artificially move the prices of precious metals futures contracts in a direction that was favorable to them, and to inject false and misleading information into the precious metals futures markets in order to deceive other market participants into believing something untrue, namely that the market reflected legitimate supply and demand. This false and misleading information was intended to, and at times did, trick other market participants into reacting to the apparent change and imbalance in supply and demand by buying and selling futures contracts at quantities, prices, and times that they otherwise likely would not have traded.
As set forth in the DPA, Scotiabank’s compliance function failed to detect or prevent the four traders’ unlawful trading practices. Moreover, between August 2013 and February 2016, three Scotiabank compliance officers possessed information regarding unlawful trading by one of the traders other than Flaum but failed to prevent further unlawful conduct by this same trader. These facts were significant considerations that counseled for the imposition of a criminal monetary penalty at the high end of the applicable United States Sentencing Guidelines range under the DPA.
Since the time of the underlying offense conduct, Scotiabank has made significant investments to improve its compliance technology and trade surveillance tools, has nearly doubled its annual compliance operating budget, has added more than 200 full-time equivalent compliance positions, and is in the process of winding down its precious metals business. The department ultimately determined, however, that an independent compliance monitor was necessary because Scotiabank’s remedial improvements to its compliance and ethics program have yet not been fully implemented and tested to demonstrate that they would be effective in detecting and preventing similar misconduct in the future.
Scotiabank did not receive voluntary disclosure credit because it did not voluntarily and timely disclose the offense conduct to the department. In 2016, after one of its futures commission merchants flagged trading by Flaum for possible spoofing, Scotiabank made a voluntary disclosure regarding Flaum to the CFTC. As a result of recordkeeping failures, however, Scotiabank’s disclosure to the CFTC was materially incomplete. As a result, the CFTC was impaired in its ability to fully investigate Flaum’s unlawful trading and discover the true extent of the misconduct. The CFTC, relying on Scotiabank’s incomplete and, ultimately, inaccurate disclosure, entered into a resolution with Scotiabank in 2018 that did not reflect the full extent of Flaum’s conduct (2018 CFTC Resolution). In the 2018 CFTC resolution, Scotiabank received a substantially reduced penalty in recognition of, among other things, its purported self-reporting.
Today, the CFTC announced two separate settlements with Scotiabank in connection with related, parallel proceedings. One of Scotiabank’s resolutions with the CFTC relates to unlawful trading by Flaum and the three other traders that Scotiabank did not fully disclose to the CFTC in connection with the CFTC’s prior investigation that resulted in the 2018 CFTC Resolution, discussed above. Under the terms of the new agreement between Scotiabank and the CFTC, Scotiabank agreed to pay approximately $60.4 million, which includes a civil monetary penalty of $42 million, as well as restitution and disgorgement that will be credited to any such payments made to the department. The second resolution between Scotiabank and the CFTC relates to certain false statements that Scotiabank made to the CFTC (including in connection with the investigation that resulted in the 2018 CFTC Resolution), the COMEX, and the National Futures Association. Under the terms of this agreement, Scotiabank has agreed to pay a civil monetary penalty of approximately $17 million.
The FBI’s New York Field Office and the USPIS investigated this case. Assistant Chief Avi Perry and Trial Attorneys Matthew F. Sullivan and Alexander Kramer of the Fraud Section and Assistant U.S. Attorney Catherine R. Murphy of the District of New Jersey prosecuted the case. The CFTC’s Division of Enforcement provided assistance in this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/the-bank-of-nova-scotia-dpa or call (888) 549-3945.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Texas Duo to Serve Federal Prison Sentences for Multi-State Pharmacy Burglaries in Oklahoma and KansasRead the Press Release
OKLAHOMA CITY – JEREMY BALLEW, 43, of Tyler, Texas, and DANIELLE MONSERRATE, 40, of Rowlett, Texas, have been sentenced to serve federal prison terms of 57 months and 12 months respectively for the burglaries of three pharmacies in Kansas and Oklahoma, announced U.S. Attorney Timothy J. Downing.
According to an Indictment filed on February 19, 2019, Ballew and Monserrate were charged with drug conspiracy and possession with intent to distribute hydrocodone. Ballew and Monserrate were then charged by Superseding Indictment filed on March 19, 2019, with burglary involving controlled substances and aiding and abetting, along with additional charges of drug conspiracy and possession with intent to distribute hydrocodone. On December 2, 2019, Ballew pleaded guilty to count 3 of the of the Superseding Indictment in CR-19-0046 for the Nichols Hills burglary and counts 1 and 2 of the Indictment filed in CR-19-00362 for the two Kansas pharmacy burglaries. The counts of drug conspiracy and possession with intent to distribute found in the Superseding Indictment, as well as the counts of drug conspiracy found in the earlier Indictment in CR-19-0046 were ultimately dismissed as part of a plea agreement.
On August 17, 2020, U.S. District Judge Scott L. Palk sentenced Ballew to 57 months in prison for the Nichols Hills Drug pharmacy burglary, on December 3, 2017 in count 3 of the Superseding Indictment in CR-19-0046, 57 months for the Dandurand Pharmacy burglary in Wichita, Kansas, and 57 months for the Sigler Pharmacy burglary in Lawrence, Kansas, both occurring October 29, 2017 in counts 1 and 2 of the Indictment in CR-19-00362. Each term of imprisonment was ordered to run concurrent to one another. Judge Palk also imposed three years of supervised release as to each count to follow the terms of imprisonment, and ordered restitution in the amount of $29,253.11. In announcing Ballew’s sentence, Judge Palk noted Ballew’s long criminal history, his serious addiction to pain killers, and the lack of any meaningful drug treatment while incarcerated earlier in the Bureau of Prisons. Ballew’s sentence included strong recommendations to the Bureau of Prisons by Judge Palk for intensive drug treatment.
Monserrate was arrested in connection with the after-hours burglary of the Dandurand Pharmacy, Wichita, Kansas on October 29, 2017, and the after-hours burglary of the Nichols Hills Drug pharmacy on December 3, 2017. Monserrate pled guilty to both of these pharmacy burglaries, which relate to count 3 of the Superseding Indictment in CR-19-0046 and count 2 of the Indictment in CR-19-00362. For her role as a lookout in those two burglaries for Ballew, Judge Palk sentenced her to 12 months and a day in prison as to each count concurrently, followed by three years of supervised release, and $7,325.00 in restitution. In announcing Monserrate’s sentence, Judge Palk noted Monserrate’s long history of substance abuse, her poor performance while on pretrial release, and the amount of dangerous prescription drugs she allowed illegally into the community.
This case is the result of an investigation by the Drug Enforcement Administration’s, Tactical Diversion Squad, Oklahoma City District Office, with assistance from the DEA Tactical Diversion Squad, Fort Worth District Office, the Oklahoma City Police Department, the Lawrence, Kansas Police Department, the Wichita, Kansas Police Department, the Irving, Texas Police Department, the Phelps County, Missouri Sheriff’s Department, and the U.S. Marshals Service. Assistant U.S. Attorneys David Petermann and Matt Anderson prosecuted the case, with assistance from the United States Attorney’s Office for the District of Kansas.
This case is part of the Department of Justice priority to address and reduce opioid-related criminal activity.
Reference is made to court filings for further information. To download a photo of U.S. Attorney Downing, click here.
Southfield Man Charged in Multi-State Identify Theft and Unemployment Fraud SchemeRead the Press Release
A Southfield man was charged in a criminal complaint for his alleged role in a multi-state unemployment insurance fraud scheme aimed at defrauding the State of Michigan, the State of Pennsylvania, and the U.S. Government of funds earmarked for unemployment assistance during the COVID-19 pandemic, announced United States Attorney Matthew Schneider.
Joining in the announcement were Special Agent-in-Charge Steven M. D’Antuono, Federal Bureau of Investigation; Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General; and Chief Phil Langmeyer, Bloomfield Township Police Department.
Charged is Samuel George Baker, 37.
According to the complaint, Baker has filed numerous fraudulent applications for unemployment insurance benefits in the names of various individuals in state of Pennsylvania, causing over $150,000 in fraudulent UI benefits to be paid out unlawfully. It is alleged that during the application process, Baker requested the benefits to be paid out via debit card, and then caused the cards to be mailed to various addresses here in Michigan. The cards were then loaded with additional UI payments every two weeks, throughout the duration of the scheme. According the complaint, Baker began making near-daily withdrawals in July 2020, using multiple cards each day. Baker is also alleged to have used proceeds from his crimes to purchase at least one piece of high-end jewelry—a rare, $45,000 Rolex watch.
It is also alleged that in May 2020, Baker filed multiple fraudulent Michigan unemployment insurance claims, using false social security numbers and fake driver’s licenses. Investigation into this aspect of Baker’s scheme remains ongoing; however, it is alleged that Baker has already received more than $37,000 in benefits from his Michigan unemployment claims.
“At a time when thousands of people are out of work because of the pandemic, Samuel Baker is charged with stealing unemployment benefits that should have gone to Michiganders trying to feed their families. Anyone who steals unemployment funds steals from the people of Michigan,” stated United States Attorney Schneider.
“Mr. Baker's scheme exploited a fund designed specifically to support Americans during this incredibly challenging time,” said Steven M. D’Antuono, Special Agent in Charge of the FBI in Michigan. “Thanks to the hard work of all of the agencies involved in this investigation, those individuals who need the support at this critical time will be able to receive it.”
“An important mission of the Office of Inspector General is to investigate allegations relating to unemployment insurance fraud. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Special Agent-in-Charge Irene Lindow, Chicago Region, U.S. Department of Labor Office of Inspector General.
A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigation is completed, a determination will be made whether to seek a felony indictment.
This case is being prosecuted by Assistant United States Attorney Ryan A. Particka. The investigation is being conducted jointly by the Federal Bureau of Investigation, the Department of Labor, Office of the Inspector General, and the Bloomfield Township Police Department.
Somerset County Man Sentenced to 11+ Years in Prison for Violating Federal Child Exploitation and Firearms LawsRead the Press Release
JOHNSTOWN, Pa. – A Somerset County resident has been sentenced in federal court to 135 months in prison and ten years’ supervised release on his conviction of violating federal child pornography and firearms laws, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence on William M. Jones, 51, of Stoystown, Pa.
According to information presented to the court, on September 18, 2019, Jones knowingly possessed pictures and videos in individual computer graphic files which were produced using prepubescent minors engaging in sexually explicit conduct. Further, Jones was found in possession of a firearm and ammunition. In 2003, Jones was convicted in Howard County, Indiana, of child molestation, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms.
Assistant United States Attorney Arnold P. Bernard, Jr. prosecuted this case on behalf of the government.
Mr. Brady commended the US Immigration and Customs Enforcement/Homeland Security Investigations for the investigation that led to the successful prosecution of Jones.
Sioux County Man Pleads Guilty to Possession with Intent to Distribute MethRead the Press Release
A man who possessed with intent to distribute methamphetamine pled guilty August 13, 2020, in federal court in Sioux City.
Ernesto Soto, 30, from Hawarden, Iowa, was convicted of one count of possession with intent to distribute methamphetamine.
At the plea hearing Soto admitted that on February 5, 2020, Woodbury County, Sheriff’s Deputy conducted a traffic stop of the vehicle Soto was traveling in. Upon conducting a probable cause search within the vehicle, law enforcement discovered approximately 34 grams methamphetamine, 1.6 grams cocaine, baggies, and a glass smoking device with residue located in a black bag that belonged to Soto. The methamphetamine, cocaine, and baggies were concealed in a pop can with a false bottom. At least 5 grams of the approximately 34 grams was actual (pure) methamphetamine. In May 19, 2014, Soto was convicted in the Iowa District Court for Sioux County, of intent to manufacture/deliver methamphetamine under 5 grams.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Soto remains in custody of the United States Marshal and will remain in custody pending sentencing. Soto faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, and at least 4 years up to life of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Patrick T. Greenwood and was investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4033.
Follow us on Twitter @USAO_NDIA.
Second Person Charged with Arson of Providence Police Cruiser During June RiotRead the Press Release
PROVIDENCE – A second Rhode Island man has been charged and arrested for his alleged involvement in the burning and destruction of a Providence Police cruiser during a riot in downtown Providence in the early morning hours of June 2, 2020.
Nicholas L. Scaglione, 30, of Cranston, was arrested on Tuesday, charged by way of a federal criminal complaint with attempted malicious destruction of a vehicle by fire, and released by the court on unsecured bond, announced United States Attorney Aaron L. Weisman, Special Agent in Charge of the FBI Boston Division Joseph R. Bonavolonta, and Providence Police Chief Colonel Hugh T. Clements, Jr.
On Friday, Luis Joel Sierra, 34, of Providence, was arrested on a federal criminal complaint charging him with attempted malicious destruction of a vehicle by fire. He was ordered detained in federal custody.
According to court documents, an FBI Joint Terrorism Task Force, Providence Police, and United States Attorney’s Office investigation determined that Sierra allegedly set a Providence Police car on fire by leaning inside the cruiser and igniting a fire with lighter fluid.
According to information presented to the court, it is alleged that Scaglione squirted a flammable liquid into the vehicle, causing the fire to intensify. The cruiser became fully engulfed and was destroyed.
According to court documents, both Sierra and Scaglione allegedly shared information with others about their alleged individual roles in the burning of the cruiser. According to court documents, among text messages allegedly written by Scaglione is a text message where he wrote, “But that police cruiser that went up in flames last night can be replaced... I was pissed. I've been pissed. That was pent up years of rage and frustration with the way I've seen and been treated by police. That cop car can be replaced. People’s lives cannot... Then I go out fighting and standing up for s**t I believe in. Cuz I know for a fact if it was you or anyone else I was close to I'd burn the whole police force down and not even blink."
As alleged in court documents, Sierra told another individual that he was one of the individuals responsible for the arson of the Providence Police Department vehicle by applying a flammable liquid to the interior of the vehicle and then using a lighter to ignite the fire. Law enforcement was also provided with several videos allegedly taken on Snapchat off Sierra’s phone and a recorded conversation with Sierra during which Sierra allegedly detailed his actions igniting the fire.
A significant amount of information into each man’s alleged role into the burning of Providence Police cruiser in the form of emails, telephone calls, text messages and video clips was brought to the attention of law enforcement following the publication of an FBI poster seeking information of two persons of interest in the June 2, 2020 arson of the Providence Police Department vehicle.
The two men depicted in the poster have been identified as Luis Joel Sierra (#1) and Nicholas L. Scaglione (#2).
Attempted malicious destruction of a vehicle by fire is punishable by statutory penalties of 5-20 years imprisonment, up to three years of supervised release, and a fine of up to $250,000.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The cases are being prosecuted by Assistant U.S. Attorney Paul F. Daly, Jr.
United States Attorney Aaron Weisman thanks the Rhode Island Fusion Center for their assistance in this investigation.
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Sarasota Man Pleads Guilty to Possessing A Machine GunRead the Press Release
Orlando, Florida – Max Chambers (21, Sarasota), a former University of Central Florida student, today pleaded guilty to possession of a machine gun. He faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, on January 28, 2019, the University of Central Florida (UCF) Police Department received an anonymous crime line tip claiming that Chambers was in possession of three drop-in auto-sears (DIAS) – a device used to cause a semi-automatic firearm to fire fully automatic – on university grounds. After making contact with Chambers, law enforcement located a completed DIAS in his dorm room. A second DIAS and an AR-15 style rifle that Chambers had converted to fire fully automatic were found in Chambers’s vehicle, which was parked on UCF property. During interviews with law enforcement, Chambers admitted to making the DIAS, and altering the AR-15 with the goal of making it fire fully automatic.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the University of Central Florida Police Department. It is being prosecuted by Assistant United States Attorney Amanda Daniels.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Randolph Man Sentenced for Dealing FentanylRead the Press Release
BOSTON – A Randolph man was sentenced today in federal court in Boston for distributing fentanyl.
Richard Petit-Frere, 25, was sentenced by U.S. District Court Chief Judge F. Dennis Saylor IV to 60 months in prison and 48 months of supervised release. In August 2019, Petit-Frere pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 40 grams or more of fentanyl, one count of distribution of and possession with intent to distribute 40 grams or more of fentanyl and five counts of distribution of and possession with intent to distribute fentanyl.
On multiple occasions from May 2, 2018, through Nov. 11, 2018, an undercover federal agent purchased fentanyl from Petit-Frere and others in Randolph, Canton and Foxboro. The investigation revealed that Petit-Frere was a member of the No Fear Ones street gang in Randolph.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Randolph Police Chief William Pace; Stoughton Police Chief Donna M. McNamara; and Foxboro Police Chief Michael Grace made the announcement today. Assistant U.S. Attorney Nicholas Soivilien of Lelling’s Organized Crime and Gang Unit prosecuted the case.
Randolph County man indicted on methamphetamine and firearms chargesRead the Press Release
ELKINS, WEST VIRGINIA – Richard Scott Connally, of Montrose, West Virginia, was indicted on methamphetamine and firearms charges, U.S. Attorney Bill Powell announced.
Connally, 25, was indicted on one count of “Possession with Intent to Distribute at Least 50 Grams of Methamphetamine” and one count of “Possession of a Firearm in Furtherance of a Drug Crime.” Connally is accused of having more than 50 grams of methamphetamine in October 2019 in Randolph County. Connally is also accused of having a 9mm pistol at the time of the methamphetamine possession.
Connally faces at least 10 years and up to life incarceration and a fine of up to $10 million the methamphetamine charge. He faces at least five years of incarceration and a fine of up to $250,000 for the firearms charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Mountain Region Drug & Violent Crimes Task Force and the Randolph County Sheriff’s Office investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Randolph County man charged with transporting stolen propertyRead the Press Release
ELKINS, WEST VIRGINIA – Travis Charles White, of Kerens, West Virginia, was indicted on charges related to taking stolen items across state lines, U.S. Attorney Bill Powell announced.
White, 43, was indicted by a grand jury on two counts of “Interstate Transportation of Stolen Property.” White is accused of taking more than $16,000 of stolen U.S. Savings Bonds from West Virginia to Colorado, as well as taking a stolen 2007 Toyota RAV4 from West Virginia to Pennsylvania. The crimes are alleged to have occurred in February 2017 in Randolph County.
White faces up to 10 years of incarceration and a fine of up to $250,000. 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 Danae DeMasi-Lemon is prosecuting the case on behalf of the government. The West Virginia State Police investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Project Parkersburg Update: Two Defendants Sentenced to Federal Prison for Drug TraffickingRead the Press Release
CHARLESTON, W.Va. – Two Project Parkersburg defendants were sentenced to federal prison today for their roles in a large-scale, multi-state drug trafficking conspiracy, announced United States Attorney Mike Stuart.
Amanda Atkinson, 44, of Vienna, was sentenced to 30 months in prison and one year of supervised release. She previously admitted using a cellular telephone to facilitate drug trafficking. Michael Holley, Jr., 37, of Parkersburg, was sentenced to 77 months in prison and four years of supervised release. He previously admitted distributing between 50 grams and 200 grams of methamphetamine between February 2018 and July 2018.
“Project Parkersburg was an extraordinary law enforcement operation that successfully dismantled a major network of drug traffickers,” said United States Attorney Mike Stuart. “Today’s sentencings bring the total number of federal defendants sentenced to 10, with additional defendants still awaiting sentencing. My team is laser-focused on shuttering drug trafficking organizations before any more of our kids and communities fall victim.”
Atkinson and Holley, Jr. were prosecuted as part of Project Parkersburg – a major takedown and dismantling of a multi-state drug trafficking organization (DTO) responsible for distributing methamphetamine and heroin. The long-term, joint investigation resulted in at least 29 individuals being charged in federal and state court and the seizure of 121 pounds of ICE methamphetamine, six kilograms of cocaine, 217 grams of heroin and 478 grams of fentanyl.
Of the defendants charged in federal court, Todd Land, Jeffrey Hoyler, Nicholas Easton, T.J. Gibson, Edward Marks, Amy Rake, Marshall Polan, and Troy Pastorino have been sentenced. Aurelius Edmonds, Terrence McGuirk, Michael Rhodes and Antoine Terry await sentencing later this year.
The investigation was conducted by the Federal Bureau of Investigation (FBI), the Parkersburg Police Department, the Dayton (Ohio) Police Department and the Parkersburg Narcotics and Violent Crime Task Force. United States District Judge Irene C. Berger imposed the sentences. Assistant United States Attorneys Joshua Hanks and Jeremy Wolfe handled the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 18-CR-00225.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Postal Employee Pleads Guilty to Theft of MailRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that AMY MAKAROS, 41, of New Britain, waived her right to be indicted and pleaded guilty today before U.S. District Judge Stefan R. Underhill to theft of mail by a postal employee.
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, between November 2018 and February 2019, while she was employed as a mail carrier at the U.S. Post Office in Farmington, Makaros stole numerous pieces of mail, including greeting cards that contained gift cards or other items of value. When confronted by investigators, Makaros admitted her theft and subsequently surrendered approximately 19 pieces of mail and four gift cards that she had stolen.
Theft of mail by a postal employee carries a maximum term of imprisonment of five years.
This investigation has been conducted by the U.S. Postal Service Office of the Inspector General and is being prosecuted by Assistant U.S. Attorney Elena L. Coronado.
U.S. Attorney Durham encouraged individuals who believe they are a victim of theft related to this case to file a complaint by calling 888-USPS-OIG, or by visiting https://www.uspsoig.gov/form/file-online-complaint.
Portland Man Charged with Assaulting Deputy U.S. Marshal with Baseball Bat During July Riot at Federal CourthouseRead the Press Release
PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that a Portland man has been charged with assaulting a U.S. Marshals Service deputy with a baseball bat during a riot at the Mark O. Hatfield U.S. Courthouse in downtown Portland on July 27, 2020.
Dakotah Ray Horton, 24, has been charged by criminal complaint with one count of assaulting a federal officer.
“Assaulting a federal officer with a dangerous weapon is a serious violent crime,” said U.S. Attorney Williams. “I applaud the tenacity of the deputy U.S. Marshals who, for multiple weeks, worked tirelessly to identify this defendant.”
“This case is a shining example how law enforcement successfully works together to pursue violent opportunists that assault federal law enforcement personnel as they are serving their community—in this case, literally protecting the institution of American justice, said Acting Special Agent in Charge Eben Roberts. “HSI stands ready to assist in these types of investigations to ensure law enforcement can safely and effectively perform its congressional mandate.”
For several weeks in June and July 2020, the Hatfield Federal Courthouse was the site of large demonstrations and protests. On many nights, after peaceful demonstrations ended, the courthouse was the repeated target of vandalism. U.S. Marshals Service deputies and officers from the Federal Protective Service, Homeland Security Investigations, and U.S. Customs and Border Protection working to protect the building were subjected to threats and assaults from rioters while performing their duties.
According to court documents, in the early morning hours of July 27, 2020, rioters attempted to destroy a security fence in front of the Hatfield Federal Courthouse with power tools. Rioters proceeded to attack law enforcement officers by throwing hard objects, glass bottles, and explosive devices at them.
After rioters ignored repeated orders to leave the area, the U.S. Marshals Service formed a line in front of them and began to move forward to disperse the crowd. As deputies approached, they attempted to arrest an individual for assaulting an officer. As one of the deputies knelt on the ground to assist with the arrest, Horton approached from behind and struck the deputy in the upper back, neck, and shoulder with a wooden baseball bat causing non-life-threatening injuries. When the deputy turned around, he observed Horton pointing the bat at him. The assault was witnessed by multiple individuals and captured on several internet video feeds.
On August 2, 2020, the U.S. Marshals Service distributed a bulletin to law enforcement agencies in the Portland metropolitan area seeking assistance in identifying Horton. The bulletin included a full body photo of Horton as well as many close-ups of his face collected from videos posted online. Two weeks later, on August 17, 2020, a deputy U.S. Marshal observed an individual in the Rock Creek area of Washington County matching Horton’s physical appearance as depicted in the bulletin. The individual, later confirmed to be Horton, was arrested without incident. During his arrest, deputies found a loaded firearm concealed in Horton’s waistband.
Horton made his initial appearance in federal court on August 18, 2020 before a U.S. Magistrate Judge. Today, he was ordered detained pending further court proceedings.
Assaulting a federal officer with a deadly or dangerous weapon is punishable by up to 20 years in federal prison.
This case was investigated by the U.S. Marshals Service with assistance from Homeland Security Investigations and the Washington County Sheriff’s Office. It is being prosecuted by Leah K. Bolstad, Assistant U.S. Attorney for the District of Oregon.
A criminal complaint is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
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.
Horton strikes a deputy U.S. Marshal with a wooden baseball bat. Second angle of Horton striking a deputy U.S. Marshal with a wooden baseball bat. Horton shortly after assaulting a deputy U.S. Marshal. Detail of clothing worn by Horton during assault on a deputy U.S. Marshal. Horton after his August 17 arrest.Passaic County Man Admits Participating in Heroin ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted conspiring to distribute heroin and to distributing a quantity of heroin, U.S. Attorney Craig Carpenito announced.
Dwayne Northern, a/k/a “Black,” a/k/a “D Black,” 35, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with conspiracy to distribute and possess with the intent to distribute heroin and knowingly and intentionally distributing heroin.
According to documents filed in this case and statements made in court:
The defendant and his conspirators are members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through investigative techniques, including numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that from at least September 2018 through Oct. 1, 2019, the defendant and his conspirators conspired to distribute narcotics, including heroin and fentanyl.
Each count to which Northern pleaded guilty carries a maximum penalty of 20 years in prison and a fine of at least $1 million. Sentencing is scheduled for Dec. 21, 2020.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Carpenito credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.
Owner of Michigan Payroll Tax Services Firm Charged with Employment Tax FraudRead the Press Release
A federal grand jury in Detroit, Michigan, returned an indictment today charging a Farwell, Michigan, businessman with failing to pay payroll taxes to the Internal Revenue Service (IRS) and failing to file his own returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew Schneider for the Eastern District of Michigan.
According to the indictment, Dale Thrush was the owner and operator of 402 N. Mission St. LLC (Mission Street), a Mount Pleasant, Michigan, company that provided payroll tax services to employers, including withholding taxes and forwarding the funds due to the IRS. The indictment alleges that from 2014 through 2016, Thrush withheld payroll taxes from Mission Street employees’ paychecks, but only paid a portion of the funds due to the IRS. Instead, Thrush allegedly used nearly $400,000 from Mission Street’s payroll account, including the withheld taxes, to cover expenses for his other businesses and to fund remodeling and construction costs for his wife’s business. It is also alleged that from 2013 through 2016, Thrush did not file personal tax returns reporting the income he earned from his businesses.
If convicted, Thrush faces a maximum sentence of five years in prison for each of the ten counts of failing to pay over payroll taxes, and a maximum sentence of one year in prison for each of the four counts of failing to file his own return. Thrush also faces a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Mark McDonald of the Tax Division and Assistant U.S. Attorney Jules DePorre, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Car Dealership Admits Engaging in Large-Scale FraudRead the Press Release
NEWARK, N.J. – An Atlantic County, New Jersey, man today admitted his role in engaging in a pattern of fraudulent activity through his auto dealership, U.S. Attorney Craig Carpenito announced.
Afzal Khan, a/k/a “Bobby Khan,” 38, of Egg Harbor Township, New Jersey, pleaded guilty by videoconference before U.S. District Judge William J. Martini to Count One of an indictment charging him with wire fraud.
According to documents filed in the case and statements made in court:
From at least December 2013 through September 2014, Khan, through his car dealership, Emporio Motor Group (Emporio) of Ramsey, New Jersey, engaged in acts to defraud lenders and customers. Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. Khan also obtained loans from the victim bank for cars that were delivered, but for which neither he nor Emporio had title. As a result, the purchasers of these cars were liable for the loans, but could not register the cars. In addition, Khan offered to sell cars for individuals on consignment, but did not return the cars or provide any money to the individuals from the sale of the cars. Khan admitted that as a result of his actions, he exposed the victim bank to a potential loss of at least $550,000.
Khan faces a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Dec. 17, 2020.
U.S. Attorney Carpenito credited special agents of the FBI’s Newark Division, under the direction of Acting Special Agent in Charge Joe Denahan, with the investigation leading to today’s guilty plea. He also thanked the Bergen County Prosecutor’s Office and the Ramsey Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Operation Legend Results in 22 Defendants Charged with Various Federal ChargesRead the Press Release
DETROIT – Federal and local law enforcement today announced the initial early results of Operation Legend, a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in cooperation with state and local law enforcement officials to fight violent crime.
On July 29, United States Attorney Matthew Schneider was joined at a press conference at the Detroit offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives with the heads of Michigan’s federal law enforcement, including ATF Special Agent in Charge James Deir, FBI Special Agent in Charge Steve D’Antuono, and United States Marshal Owen Cypher to announce that Operation Legend was expanding to Detroit.
To date, Operation Legend has yielded the arrest of 22 defendants being charged with federal offenses outlined below. Please note that some are charged with multiple offenses.
- 14 defendants have been charged with being a felon in possession of a firearm;
- Two defendants have been charged with possession with the intent to distribute controlled substances;
- Two defendants have been charged with possession of a firearm in furtherance of drug trafficking;
- Three defendants have been charged with receipt of a firearm while under indictment;
- Four defendants have been charged with making false statement to a licensed firearm dealer; and
- Two defendants have been charged with carjacking.
United States Attorney Matthew Schneider stated, “Operation Legend is working. The additional federal agents in Detroit have already taken high-powered assault rifles off our streets and have put armed drug dealers behind bars. If these federal agents had not come to Detroit, these violent criminals would still be terrorizing our neighborhoods. We cannot – and we will not – let up in our fight against violent crime.”
Operation Legend is an extension of Operation Relentless Pursuit, an initiative announced in Detroit in December, 2019 by Attorney General William Barr, that surged federal resources to fight back against violent crime, gangs, and gun violence in seven of America’s most affected cities, including Detroit.
The Operation was first launched on July 8 in Kansas City, Missouri, as a result of President Trump’s promise to assist America’s cities that are plagued by recent violence and has since expanded to include Albuquerque, Chicago, Cleveland, Milwaukee, Detroit, Memphis and St. Louis.
Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. Similar crimes are happening in Detroit. Detroit is currently experiencing a significant increase in violent crime, with homicides currently up 31% and shootings up 53%.
Operation Legend, combined with Operation Relentless Pursuit, brought a total of approximately 42 federal agents to Detroit, in addition to the many federal agents who have worked for decades with state and local partners on violent crime and other offenses. An additional 10 Detroit ATF agents have been reassigned to work on violent gun crimes.
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Nine Individuals Charged with Bank Fraud, Aggravated Identity TheftRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Philip Bartlett, Inspector-in-Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced charges against SAIBO SIDIBEH, MOUKHAMED FALL, MAMADY DANFAKHA, ALHANSA HYDARA, MAMADOU DIALLO, DEMBA DIAKITE, MOHAMMED SABALY, BANGALY DOUMBIA, and ABUBACKR DANSO for their involvement in a bank fraud scheme involving the deposit of more than $700,000 of fraudulent checks and the subsequent withdrawal of funds. SIDIBEH, FALL, HYDARA, and DANSO were arrested on August 12, 2020, and presented before U.S. Magistrate Judge Ona T. Wang. DANFAKHA, DIALLO, DIAKITE, and DOUMBIA were arrested this morning and are expected to be presented later today before U.S. Magistrate Judge Stewart D. Aaron in Manhattan federal court. SABALY remains at large.
As alleged in the criminal Complaint[1] unsealed today in Manhattan federal court:
Between at least July 2018 and at least August 2019, SAIBO SIDIBEH, MOUKHAMED FALL, MAMADY DANFAKHA, ALHANSA HYDARA, MAMADOU DIALLO, DEMBA DIAKITE, MOHAMMED SABALY, BANGALY DOUMBIA, and ABUBACKR DANSO engaged in a scheme to defraud banks by depositing fraudulent, forged, or altered checks into the bank accounts of third parties at ATMs in the Bronx, Manhattan, and elsewhere. Before the bank realized that a check was invalid, the defendants withdrew the funds, typically by purchasing postal money orders. In total, the defendants deposited more than $700,000 in fraudulent checks.
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A chart containing the names, charges, and penalties for the defendants is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Ms. Strauss praised the outstanding investigative work of the USPIS and the NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Andrew A. Rohrbach is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Count
Charge
Defendant(s)
Maximum/minimum penalties
1
Conspiracy to commit bank fraud
18 U.S.C. § 1349
MOUKHAMED FALL,
MAMADY DANFAKHA,
MAMADOU DIALLO,
ALHASANA HYDARA,
DEMBA DIAKITE
30 years
2
Bank fraud
18 U.S.C. §§ 1344 and 2
MOUKHAMED FALL,
MAMADY DANFAKHA,
MAMADOU DIALLO,
ALHASANA HYDARA,
DEMBA DIAKITE
30 years
3
Aggravated identity theft
18 U.S.C. §§ 1028A(a)(1), 1028A(b), and 2
MOUKHAMED FALL,
MAMADY DANFAKHA,
MAMADOU DIALLO,
ALHASANA HYDARA,
DEMBA DIAKITE
Mandatory two-year consecutive sentence
4
Bank fraud
18 U.S.C. §§ 1344 and 2
MOHAMMED SABALY
30 years
5
Aggravated identity theft
18 U.S.C. §§ 1028A(a)(1), 1028A(b), and 2
MOHAMMED SABALY
Mandatory two-year consecutive sentence
6
Bank fraud
18 U.S.C. §§ 1344 and 2
SAIBO SIDIBEH
30 years
7
Aggravated identity theft
18 U.S.C. §§ 1028A(a)(1), 1028A(b), and 2
SAIBO SIDIBEH
Mandatory two-year consecutive sentence
8
Bank fraud
18 U.S.C. §§ 1344 and 2
BANGALY DOUMBIA
30 years
9
Aggravated identity theft
18 U.S.C. §§ 1028A(a)(1), 1028A(b), and 2
BANGALY DOUMBIA
Mandatory two-year consecutive sentence
10
Bank fraud
18 U.S.C. §§ 1344 and 2
ABUBACKR DANSO
30 years
11
Aggravated identity theft
18 U.S.C. §§ 1028A(a)(1), 1028A(b), and 2
ABUBACKR DANSO
Mandatory two-year consecutive sentence
[1] As the introductory phrase signifies, the text of the Complaint and the description of the Complaint set forth herein are only allegations, and every fact described should be treated as an allegation.
New York Hospice Provider Settles Civil Healthcare Fraud AllegationsRead the Press Release
Metropolitan Jewish Health System Hospice and Palliative Care (“MJHS Hospice”), a New York nonprofit hospice provider, has agreed to pay the United States $4,850,000 to resolve civil allegations that it billed Medicare and Medicaid for services rendered to hospice patients at heightened levels of care for which the patients did not qualify, in violation of the False Claims Act, and has agreed to pay the State of New York $375,000.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the settlement. Mr. DuCharme thanked the Office of the Inspector General of the U.S. Department of Health and Human Services and the New York State Attorney General for their assistance in the investigation.
The settlement resolves allegations that MJHS Hospice knowingly billed Medicare and Medicaid for unnecessary levels of hospice care to patients. Medicare’s and Medicaid’s hospice benefits are available for patients who elect palliative treatment (medical care focused on the patient’s relief from pain and stress) for a terminal illness.
Under the Medicare and Medicaid programs, a hospice provider may seek payment for several levels of care, including heightened levels known as “CHC” (continuous home care services) and “GIP” (general inpatient services). To receive reimbursement for CHC, a hospice provider must show that a patient is experiencing acute medical symptoms. For a hospice provider to obtain reimbursement for GIP, a patient must need pain control, or acute or chronic symptom management, which must be managed in a hospital. After an extensive investigation, the United States determined that from 2011-2015, MJHS falsely claimed that some of its patients required CHC and, in 2012, falsely claimed that some patients required GIP.
“It is vital that the terminally ill have appropriate access to hospice care, including levels of care that are available under Medicare and Medicaid. This Office recognizes the importance of preserving limited federal health care funds for this purpose, and to holding health care providers accountable when they seek reimbursement for care that is not reasonable and necessary,” stated Acting United States Attorney DuCharme.
The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery. The claims resolved by the settlement are allegations only and there has been no finding of liability by a court.
The United States’ case was handled by Assistant U.S. Attorney Lisa D. Kutlin of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.
E.D.N.Y. Docket No. 14-CV-4201 (FB)
New Orleans Man Pleads Guilty to Gun and Drug OffensesRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that SHEON COPPRUE, age 49, of New Orleans, pled guilty today to charges relating to drug trafficking, firearm possession, and bribery.
COPPRUE pled guilty to conspiring to distribute and to possess with the intent to distribute 50 grams or more of methamphetamine and 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(A), and 846. COPPRUE also pled guilty to possession of a firearm by a felon, in violation of 18 U.S.C. § 922(g)(1), and bribery of a public official, in violation of 18 U.S.C. § 201(b)(1).
According to Court documents, COPPRUE conspired with ALLEN EDGERSON a/k/a “King,” DARNELL JOHNSON a/k/a “Yaggi,” and RACHEL CESARIO to ship large quantities of methamphetamine from California to New Orleans. COPPRUE also bribed codefendant TONYA CALVIN, a postal worker, to deliver the drug-filled packages to him in New Orleans. COPPRUE, who was a felon and prohibited from possessing firearms, was caught with four firearms that he kept at his home and another address where he stored narcotics.
For the drug conspiracy, COPPRUE faces a term of imprisonment of at least ten years and up to life in prison, a fine of $10,000,000, and at least five years of supervised release, following any term of imprisonment. For the crime of possessing a firearm as a convicted felon, COPPRUE faces up to ten years in prison, a fine of $250,000, and three years of supervised release following any term of imprisonment. For the bribery count, COPPRUE faces up to fifteen years in prison, a fine of $250,000, and three years of supervised release following any term of imprisonment.
Judge Sarah S. Vance set COPPRUE’s sentencing for December 9, 2020. Trial of the remaining defendants is currently set for October 5, 2020.
U.S. Attorney Strasser praised the work of the United States Postal Inspection Service, the Drug Enforcement Administration, and the Louisiana State Police. Assistant U.S. Attorney Nicholas D. Moses is in charge of the prosecution.
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Mineral County woman admits to methamphetamine distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – Amber Heward, of Burlington, West Virginia, has admitted to methamphetamine distribution, U.S. Attorney Bill Powell announced.
Heward, also known as “Amber Brown,” age 30, pled guilty to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Fifty Grams or More of Methamphetamine.” Heward admitted to working with others to distribute more than 50 grams of methamphetamine, also known as “ice,” from October 2018 to February 2019 in Mineral County.
Heward faces at least 10 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 Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Potomac Highlands Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Mexican Citizen with Fraudulent U.S. Passport Sentenced to Two Years in Federal PrisonRead the Press Release
Ocala, Florida – United States District Judge Roy B. Dalton, Jr. has sentenced a Mexican citizen, J. Refugio Medina-Zamarripa (40, Mascotte), to two years in federal prison for passport fraud and aggravated identity theft. Medina-Zamarripa had pleaded guilty on January 13, 2020.
According to court records, Medina-Zamarripa had been living in the United States under a false identity for 15 years. During that time, he fraudulently acquired several state-issued identification cards and a United States passport. When Medina-Zamarripa attempted to renew the passport in 2017, U.S. Department of State investigators discovered that he was using the identity of an American citizen living in Texas, who had been the victim of identity theft.
Following his federal prison sentence, Medina-Zamarripa will be deported back to Mexico.
This case was investigated by U.S. Department of State’s Diplomatic Security Service, with support from the Department of Homeland Security’s U.S. Customs and Border Protection. It was prosecuted by Assistant United States Attorney Michael P. Felicetta.
Meriden Man Sentenced to Prison for Obstructing the IRSRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that DONALD CARIATI, JR., 45, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 12 months and one day of imprisonment, followed by one years of supervised release, for obstructing the IRS. Judge Shea also ordered Cariati to pay a $95,000 fine, and restitution of more than $1 million.
According to court documents and statements made in court today, Cariati owns and operates Cariati Developers Inc. (“CDI”), a snowplow and hauling business based in Wallingford. Between 2013 and 2017, Cariati paid several CDI employees with company checks asserting that they were independent contractors or subcontractors in order to evade the responsibility to withhold and pay over taxes to the IRS. However, Cariati and CDI failed to issue Forms 1099 to these “subcontractors” for particular years. Cariati also informed certain individuals that they were being paid off the books, meaning that their pay was not reported to the IRS.
In late 2015, the IRS began an audit of CDI. During the course of this audit, Cariati caused fraudulent invoices to be made available to an IRS revenue agent. The invoices were purported to have been created in 2013 and purported to substantiate that individuals were appropriately considered subcontractors.
The investigation also revealed that, in 2014, CDI paid an invoice related to products for Cariati’s cigarette boat. During the IRS audit, Cariati caused his accountant to provide to the IRS a false invoice to make it appear that the purchase was a business expense and not a personal expense.
Judge Shea ordered Cariati to pay restitution of $1,077,048.99. Cariati paid $1 million toward his tax obligation today.
On February 28, 2020, Cariati pleaded guilty to one count of obstructing or impeding the due administration of the Internal Revenue laws.
Cariati, who is released on bond, is required to report to prison in 90 days.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Jennifer Laraia.
Member of Sanford Cocaine Trafficking Conspiracy Sentenced to Federal PrisonRead the Press Release
Orlando, Florida – U.S. District Judge G. Kendall Sharp today sentenced Antonio Chandler (40, Sanford) to five years in federal prison for conspiracy to possess with the intent to distribute more than 500 grams of cocaine. Chandler had pleaded guilty to his role in the conspiracy on June 4, 2020. His co-conspirators, Dondi Kentrail Freeney and Telvin Williams, pleaded guilty in June 2019. They were sentenced to seven years and six months and five years in federal prison, respectively. A fourth conspirator, Benjamin Robinson, was found guilty after a jury trial on August 9, 2019. He was sentenced to more than nine years in federal prison.
According to testimony and evidence presented at trial and during court hearings, in January 2016, Chandler and his co-conspirators arranged for multiple shipments of cocaine to be sent through the United States Postal Service (USPS) from California. During the investigation, the FBI and USPS seized three of the packages, each containing two kilograms of cocaine hidden inside tubs of protein powder. Law enforcement was also identified four additional shipments that the conspirators had successfully shipped through the mail. In 2016, during the month of January Robinson and his co-conspirators were responsible for shipping 14 kilograms of cocaine through the mail, estimated to be worth a total $490,000.
This case was investigated by the Federal Bureau of Investigation, with assistance from the U.S. Postal Inspection Service, the Lake County Sherriff’s Office, and the Volusia Bureau of Investigation. It was prosecuted by Assistant United States Attorney Dana E. Hill.
Max Prison Sentence + Restitution for Discharged Veteran Who Faked Military Honors and Combat-Related Mental Health Illness to Claim VA BenefitsRead the Press Release
COLUMBUS, Ga. – A veteran who reaped federal monetary benefits for faking a mental health condition and who falsely claimed to have earned two of the highest honors bestowed for military service was sentenced to the top of his sentencing guideline range and will pay restitution for his crimes, said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia.
Gregg Ramsdell, 61, of Columbus, was sentenced to 12 months in prison, the top of his federal sentencing guideline range, three years supervised release and was ordered to pay $76,000 in restitution to the U.S. Department of Veterans Affairs (VA) by U.S. District Judge Clay Land on Tuesday, August 18 after pleading guilty to one count of false statements and one count of violation of the Stolen Valor Act. There is no parole in the federal system.
“Ramsdell’s conduct does a disservice to all of those who exhibit true valor, serving honorably and courageously in our nation’s armed forces. He will pay the penalty for claiming to be the hero he was not, and reaping monetary benefits reserved for our nation’s true heroes,” said U.S. Attorney Charlie Peeler. “I want to thank the FBI for unraveling his lies, and working alongside us and the VA to protect the integrity of a system built only for those who have sacrificed for and served our country.”
“The sentenced imposed on Ramsdell sends a clear message that anyone who falsely claims to have received our Nation’s most valorous medals earned through combat and service will be held accountable. VA OIG is resolute in investigating allegations of ‘Stolen Valor’ and holding those who attempt to besmirch the heroic service of our military for personal gain responsible for their deceitful acts,” said David Spilker, Special Agent in Charge, VA Office of Inspector General.
"Anyone who lies about serving our country to illegally take tax payer money from federal programs that help deserving veterans must be held accountable to the full extent of our laws," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "Hopefully Ramsdell's sentence will bring solace to every veteran insulted by his actions, particularly those who suffered physical and mental trauma for their commitment and valor."
Ramsdell admitted that he falsely claimed to have suffered post-traumatic stress disorder (PTSD) when he applied for disability payments from the VA on September 7, 2014. Ramsdell wrote that he witnessed horrible atrocities during deployment in Afghanistan from October 2008 to March 2009. Among other stressors, he stated he had seen "men, women and children being executed. Women holding babies while detonating themselves. IED explosions causing severe bodily injuries and death. Retrieving body parts and bagging them. Having blood and body excrements being blown onto my uniform." He also falsely claimed that these experiences made him “unable to live a normal life.” As a result of Ramsdell’s false claims, the VA gave him added PTSD benefits retroactive to his military discharge date of June 1, 2014 totaling $76,000. In truth, Ramsdell was not in Afghanistan during that period of time that he claimed to witness the atrocities that supported his false PTSD claim, and he admitted to investigators that he lied about having PTSD. In addition, Ramsdell applied for and attained a coveted civilian position at U.S. Army Fort Benning in 2017, in part because his resume listed that he was both a Silver Star and Purple Heart with Cluster recipient. He never received these honors.
The Stolen Valor Act of 2013 makes it a crime for people to pass themselves off as war heroes in order to claim money, employment, property or other tangible benefits. The Silver Star medal is the third highest honor bestowed by the U.S. Army. The Purple Heart medal is awarded to members of the U.S. Armed Forces who are wounded or killed in battle. An additional Oak Leaf Cluster is given to Army and Air Force service members to indicate being wounded in combat on more than one occasion.
The case was investigated by the FBI and the Department of Veterans Affairs, Office of the Inspector General. Assistant U.S. Attorney Melvin Hyde is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Massachusetts Man Indicted for Mailing Threatening Communications to Circuit JudgeRead the Press Release
CHARLESTON, W.Va. - A federal grand jury has indicted Keith Lessard, 40, of Uxbridge, Massachusetts, for mailing threatening communications to a Kanawha County Circuit Judge, according to United States Attorney Mike Stuart.
According to the indictment, Lessard engaged in a series of communications with the Judge and others using email and the United States Postal Service. The indictment alleges that the communications were part of a scheme to extort money from the Judge by threatening injury to her reputation by claiming that she engaged in illegal prosecutorial misconduct in a 2010 case against Lessard when she was serving as an Assistant Prosecuting Attorney in Kanawha County.
“Threats of any kind are taken seriously and investigated, especially when those threats target a member of the judiciary,” said United States Attorney Mike Stuart. “Lessard now faces two years if convicted of this scheme that targeted a judge.”
“These threats are taken very seriously and an example of the FBI’s dedication to keeping our community safe,” said FBI Pittsburgh Special Agent in Charge Michael Christman. “These charges should send the message that we will not tolerate sending threatening words to victims in our communities.”
Lessard faces up to two years in prison, if convicted.
The Federal Bureau of Investigation (FBI) and the United States Postal Inspection Service (USPIS) are conducting the investigation. Assistant United States Attorney Joshua C. Hanks is handling the prosecution.
Please note: An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00144.
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Maryland Woman Sentenced to Three Years of Probation for Making False Statements When Purchasing FirearmsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Shanique Hall, age 29, of Mount Rainier, Maryland, was sentenced on August 18, 2020, by the U.S. District Court Judge Christopher C. Conner to three years of probation for making false statements when purchasing firearms.
According to United States Attorney David J. Freed, Hall previously pleaded guilty to falsely stating that she was a resident of Pennsylvania when she purchased multiple firearms in central Pennsylvania in 2018. Hall admitted that she provided this false information when, on four occasions, she purchased or attempted to purchase a total of eight firearms.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
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Man Accused of Threatening the San Diego Pride Parade Sentenced to 70 Months for Armed Bank RobberiesRead the Press Release
Assistant U. S. Attorney Mario J. Peia (619) 546-9706
NEWS RELEASE SUMMARY – August 17, 2020
SAN DIEGO – A man who allegedly threatened to “kill all the gays and children” at the San Diego Pride parade was sentenced to 70 months in prison today after pleading guilty to one count of bank robbery and two counts of armed bank robbery.
According to a federal complaint, Andre Lafayette Holmes robbed US Bank on Campo Road in Spring Valley on November 4, 2016; Mission Federal Credit Union in San Diego on June 14, 2018, and California Bank and Trust on Fifth Avenue, also in San Diego, on June 28, 2019. In the first crime he claimed to have a gun; in the second and third robberies he pointed a pistol at tellers, the complaint said.
FBI agents identified Holmes as the armed bank robber in three unsolved cases following threats he made to the San Diego Pride Parade organizers on July 10, 2019. In the first of two late-morning phone calls to pride organizers’ main line, a caller stated: “I think I’m going to have to kill all the gays and the children.” He then repeated, “I’m going to have to kill the f------ and children.” The employee asked, “Sir, what’s your name?” The caller replied: “I don’t like them” and “I hate the f------.” He then hung up. About four minutes later, he called back. “F--- Donald Trump. I hate Hillary. I hate f---. I’m going to shoot up the Pride event.” The male caller repeated the same statement approximately four times.
On July 11, San Diego Police Department investigators identified the phone number as belonging to Holmes. They determined that Holmes drives a 2009 Toyota minivan registered in his name. They located Holmes near Miramar College and conducted a traffic stop. He was in possession of the phone from which the threats were made, the complaint said.
During subsequent searches of Holmes residence and vehicle, investigators discovered evidence of the armed bank robberies, including a gray semi-automatic pistol, a rubber “old man” style mask, a large bag of cash and clothing believed worn by the bank robber, among other things. They also found a Big Gulp 7-Eleven mug consistent with the one used during two of the robberies.
In the first robbery, the complaint alleges that Holmes used a demand note which said: “We have guns! I will personally shoot anyone you alert! Don’t make me jump over the counter and kill innocent people. Big bills only and I’ll calmly leave. Money now!!!!” On the back of the note, it said: “I’m sorry, good man on hard times. Sincerely, Bank Robber.”
In the second robbery at Mission Federal Credit Union, Holmes pulled a semi-automatic pistol from his pocket and pointed it at a teller and demanded money, the complaint said. He then proceeded to demand money from a second teller.
In the third robbery, Holmes again had a light-colored semiautomatic pistol and verbally demanded money.
Holmes is presently charged in the San Diego County Superior Court for the threats made to the San Diego Pride Parade.
“This dangerous defendant was apprehended because of excellent investigation by the FBI and terrific work by prosecutor Mario Peia,” said U.S. Attorney Robert Brewer. “Mr. Holmes terrorized bank employees and put their lives at risk, and for that he goes where he deserves to go- prison.”
“The FBI is committed to investigating, prosecuting, and incarcerating dangerous violent criminals who threaten the safety and security of our community,” said Omer Meisel, Acting Special Agent in Charge of FBI's San Diego Field Office. “Mr. Jones is a dangerous criminal who utilized a firearm in the commission of his crimes and today a violent criminal was brought to justice.”
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section. Formed in 2019, by U.S. Attorney Robert S. Brewer Jr., the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.
DEFENDANT Case Number 19cr3018-LAB
Andre Lafayette Holmes Age: 31 San Diego, California
SUMMARY OF CHARGES
Bank Robbery – Title 18, U.S.C., Section 2113(a)
Maximum penalty: Twenty years
Armed Bank Robbery – Title 18, U.S.C., Section 2113(a) & (d)
Maximum penalty: Twenty five years
Brandishing a Firearm in Commission of Crime of Violence – Title 18, U.S.C., Section 924(c)
Maximum penalty: Life in prison; Consecutive mandatory minimum: Seven years
AGENCY
Federal Bureau of Investigation
San Diego Police Department
Malden Woman Indicted for Stealing Social Security Benefits and Bank EmbezzlementRead the Press Release
BOSTON – A Malden woman was arrested today and charged with stealing Social Security benefits and bank embezzlement.
Materesa Jose, 52, was charged with one count of theft of public funds and one count of bank embezzlement. Jose was arrested today and will make an initial appearance before U.S. District Court Magistrate Judge Jennifer Boal at 3:30 p.m.
According to the indictment, Jose, while an employee at Eastern Bank, stole approximately $27,605 from the bank, some of which consisted of Social Security benefits, from September 2017 through July 2018.
The charge of theft of public funds provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of bank embezzlement provides for a sentence of up to 30 years in prison, five years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Tonya Perkins, Acting Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Matthew Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Lynn Haven Mayor and City Attorney Indicted for Corruption and Fraud Charges Stemming from Hurricane Michael Clean-up ActivitiesRead the Press Release
PANAMA CITY, FLORIDA – Lynn Haven City’s Mayor and Attorney are the subjects of a 64-count indictment returned yesterday by a federal grand jury in Panama City, Florida. Lynn Haven Mayor Margo Anderson, 65, of Jacksonville, Florida, and Lynn Haven City Attorney Joseph Adam Albritton, 33, of Lynn Haven, Florida, have been indicted for conspiring to commit wire fraud and honest services fraud, substantive counts of wire fraud, honest services fraud, and theft concerning federal programs. Anderson is also charged with making false statements to FBI agents. Albritton is charged with submitting a false invoice to an insurance company for hurricane debris removal from his residence.
United States Attorney Lawrence Keefe of the Northern District of Florida, Special Agent in Charge Rachel Rojas of the Federal Bureau of Investigation’s Jacksonville Division, and Bay County Sheriff Tommy Ford made the announcement at a press conference held today.
“This indictment serves as a powerful message to all public officials and any other citizen who serves in a position of trust,” said U.S. Attorney Keefe. “Our Public Trust Unit, working alongside our federal, state and local law enforcement partners, are committed to investigating and prosecuting anyone who illegally abuses a position of trust for personal gain. The integrity of those who run our government is essential to our democracy.”
Anderson was arrested by FBI agents this morning at her Jacksonville, Florida, residence. Her initial appearance is scheduled for 2:30 p.m. EST today at the United States Courthouse in Jacksonville. Albritton was arrested by deputies of the Bay County Sherriff’s Office this morning in Lynn Haven, Florida. His initial appearance is scheduled for 4:00 p.m. EST today at the United States Courthouse in Tallahassee.
"This case is an example of what happens when public servants becomes complicit in corrupt behavior rather than standing up to it," said Rachel L. Rojas, Special Agent in Charge of the FBI Jacksonville Division. "Anyone who puts personal greed above their responsibility to protect the public should be held accountable, and that is why rooting out corrupt public officials remains the FBI’s number one criminal investigative priority."
Following Hurricane Michael, on October 16, 2018, the City of Lynn Haven adopted a local state of emergency for post-disaster relief and planning. The City also approved a resolution waiving the procedures that are normally required under Florida law so that timely action could be taken to ensure the safety, welfare, and health of the citizens of Lynn Haven. The resolution delegated emergency powers to Mayor Anderson or her designee, meaning they could independently enter into contracts and spend public funds. Although the emergency declaration was ended by Lynn Haven two weeks later, the city entered into an emergency agreement with David White, owner of Erosion Control Specialists (ECS) to perform hurricane clean-up services.
The indictment returned yesterday alleges ECS was paid for services that were not authorized under the emergency contract. According to the indictment, unauthorized work valued at over $48,000 was performed at the private residences of Anderson, her mother, and a neighbor, and an additional $25,000 worth of unauthorized work was performed at the private residences of Albritton and his girlfriend. The indictment alleges that ECS invoices falsely claimed this work was provided to Lynn Haven public areas. After the unauthorized work was performed, Albritton went on to file a fraudulent claim with St. John’s Insurance Company that his residence had been damaged by Hurricane Michael, according to the indictment. Albritton is charged with providing the insurance company with a false invoice from ECS indicating he had paid for tree removal, debris removal, and installation of a tarp to his residence totaling $9,600.
Anderson and Albritton are also charged with devising a scheme to defraud Lynn Haven and its citizens of their right to honest services of Anderson, as Mayor, and Albritton, as City Attorney. The indictment alleges that both Anderson and Albritton solicited and received bribes or kickbacks from City projects that they approved.
After the initial emergency declaration by Lynn Haven expired, the indictment alleges Albritton conspired with then-City Manager Michael White to award a trash pick-up project to ECS. Although Lynn Haven waste trucks had the ability to perform the same work at no additional cost to the city, ECS was paid $300 per hour, per crew for this task. The indictment charges Albritton with demanding, and receiving, $10,000 in cash for each weeks of trash services billed to Lynn Haven by ECS from mid-October 2018 through January 2019. The city of Lynn Haven was ultimately billed $1.8 million for unnecessary trash pick-up according to the indictment.
The indictment alleges that Anderson halted progress on plans to permit a city-owned site for disposal of vegetative debris, even though using the city-owned site would have saved Lynn Haven millions of dollars in disposal fees. Instead, the indictment alleges Anderson told the City Manager to use a privately owned company (Company B) for vegetative debris disposal. According to the indictment, the city of Lynn Haven paid disposal fees in excess of $2 million to Company B. Additionally, the indictment charges that between 2015 and the present date, Anderson helped Company B win multiple other multi-million dollar contracts with the city of Lynn Haven. In return, the indictment charges Anderson with accepting things of value from the owner of Company B, including travel in a private airplane, lodging aboard a private yacht, meals and entertainment. According to the indictment, Anderson and her husband also received a $106,000 motorhome from Company B in February 2018.
During the time periods when the alleged crimes were being committed, neither Anderson nor Albritton filed required quarterly gift reports documenting that they received gifts in excess of $100 according to the indictment.
This investigation was conducted by the Federal Bureau of Investigation and the Bay County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Stephen M. Kunz.
“I am proud of the efforts of the senior criminal investigators and analysts from the Bay County Sheriff’s Office, and at the expertise of the team assembled by U.S. Attorney Larry Keefe and Special Agent in Charge Rachel Rojas,” said Tommy Ford, Bay County Sheriff. “Through this partnership we will work to root out corruption and hold those responsible for taking advantage of us during our most vulnerable time. This investigation remains very active and ongoing.”
If convicted, both Anderson and Albritton face prison terms of up to 20 years for conspiracy to commit wire fraud and honest services fraud, substantive wire fraud and honest services fraud, and mail fraud, and 10 years for theft concerning programs receiving federal funds. Anderson could be sentenced to an additional 5 year term if convicted for making false statements to federal agents and Albritton faces a maximum of 20 years for submitting a false invoice to an insurance company.
This indictment is a follow-up to the indictment returned in November 2019 of five defendants, including former Lynn Haven City Manager Michael White, former Lynn Haven Community Services Director David Horton, and Erosion Control Specialists owner David White, for conspiring to commit wire fraud, substantive counts of wire fraud and honest services fraud, relating to post-Hurricane Michael clean-up activities in Lynn Haven. All five of the defendants indicted in November have pled guilty to charges from the first indictment, and are awaiting sentencing.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - Anderson and Albritton Anderson Albritton IndictmentJuvenile Carjacker Sentenced to 186 Months in Prison for Six Armed CarjackingsRead the Press Release
St. Louis, Missouri – Deron Mitchell, Jr., 19, of St. Louis, was sentenced to 186 months in prison for his involvement in six armed carjackings committed in 2018. In February 2020, Mitchell pled guilty to six counts of carjacking and two counts of brandishing a firearm in furtherance of a crime of violence. Mitchell appeared today before U.S. District Judge Rodney W. Sippel.
According to court documents, Mitchell and co-defendant Deandre Moore committed six carjackings – one on September 6, 2018; two on November 4, 2018; and three on November 5, 2018. Both defendants were caught with firearms while occupying a stolen car that contained personal property taken in other carjackings. Mitchell and Moore were arrested on November 6, 2018, and Mitchell confessed to the carjackings.
Moore previously pleaded guilty and was sentenced in May to 186 months in prison for his role in these offenses.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, St. Louis Metropolitan Police Department and the Maplewood Police Department investigated this case. Assistant United States Attorney Paul D’Agrosa handled this case for the United States Attorney’s Office.
Iranian National and U.A.E. Business Organization Charged with Criminal Conspiracy to Violate Iranian SanctionsRead the Press Release
Amin Mahdavi, 53, an Iranian national living in the United Arab Emirates (UAE), and Parthia Cargo LLC, a freight forwarding company located in the UAE, were charged in the U.S. District Court for the District of Columbia with participating in a criminal conspiracy to violate U.S. export laws and sanctions against Iran.
“Iran evades the U.S. embargo resulting from their malicious activities with the collaboration of those who pose as innocent buyers, but who are ready to send the products on to their forbidden destination,” said Assistant Attorney General for National Security John C. Demers. “These charges against Parthia Cargo LLC and its managing director should put on notice all freight forwarders and others who facilitate illicit transshipments to Iran that their conduct will not be tolerated.”
“We will not abide individuals or business organizations that seek to harm our national security by providing coveted U.S. goods to Iran, and we will pursue these wrongdoers no matter where they are located in the world,” said Acting U.S. Attorney Michael R. Sherwin for the District of Columbia.
“Amin Mahdavi defiantly conspired and violated U.S. sanctions to benefit his company and Iran,” said James A. Dawson, Acting Assistant Director in Charge of the FBI Washington Field Office. “Today’s charges are another example of the dedicated and unrelenting efforts of the FBI and the U.S. Attorney's Office to pursue those who violate our nation's sanctions and put our national security at risk. The FBI is charged with protecting our nation's security and intellectual property from being used to benefit our foreign adversaries.”
“The actions today are a result of the ongoing coordination and collaborative counter proliferation efforts by the Office of Export Enforcement and the FBI,” said P. Lee Smith, of BIS. “The Boston Field Office of the Office of Export Enforcement will continue to vigorously pursue violators with all law enforcement partners to interdict illicit trade that threatens U.S. national security and undermines U.S. foreign policy.”
Mahdavi and Parthia Cargo LLC were charged in a criminal complaint with conspiring to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).
The affidavit in support of the criminal complaint alleges that Mahdavi was the Managing Director of Parthia Cargo LLC, a business organization that facilitated the illegal shipment to Iran of goods manufactured in the United States. Mahdavi acknowledged to U.S. government officials in 2017 that he understood a U.S. government license was necessary to lawfully ship U.S. commercial aircraft parts to Iran. But Mahdavi nonetheless agreed to help ship a U.S.-origin commercial aircraft part to an Iranian air transport company, utilizing the freight forwarding services of Parthia Cargo LLC and without obtaining a license. Mahdavi and Parthia Cargo LLC conspired with individuals and business organizations located outside the United States as part of the criminal scheme, which included falsely stating to a U.S.-based aircraft parts supplier that the goods would not be shipped to Iran unless authorized by the U.S. government.
A concurrent action was filed by the Department of the Treasury, sanctioning Mahdavi and Parthia Cargo LLC, as well as a related UAE business organization, Delta Parts Supply FZC.
If convicted, Mahdavi would face up to five years of imprisonment and a fine of up to $250,000, and Parthia Cargo LLC would face a fine of up to $500,000. The criminal charge in the complaint is an allegation, and Mahdavi and Parthia Cargo LLC are presumed innocent until proven guilty beyond a reasonable doubt.
The investigation was conducted by the FBI’s Washington Field Office and the BIS’s Boston Field Office. Assistant U.S. Attorney Michael J. Friedman and National Security Division Trial Attorney Jennifer Kennedy Gellie are representing the United States.
Iranian National and U.A.E. Business Organization Charged with Criminal Conspiracy to Violate Iranian SanctionsRead the Press Release
WASHINGTON – Amin Mahdavi, 53, an Iranian national living in the United Arab Emirates (UAE), and Parthia Cargo LLC, a freight forwarding company located in the UAE, were charged in the United States District Court for the District of Columbia with participating in a criminal conspiracy to violate U.S. export laws and sanctions against Iran.
“We will not abide individuals or business organizations that seek to harm our national security by providing coveted U.S. goods to Iran, and we will pursue these wrongdoers no matter where they are located in the world,” said Acting U.S. Attorney Michael R. Sherwin.
“Iran evades the U.S. embargo resulting from their malicious activities with the collaboration of those who pose as innocent buyers, but who are ready to send the products on to their forbidden destination,” said Assistant Attorney General for National Security John C. Demers. “These charges against Parthia Cargo LLC and its managing director should put on notice all freight forwarders and others who facilitate illicit transshipments to Iran that their conduct will not be tolerated.”
"Amin Mahdavi defiantly conspired and violated U.S. sanctions to benefit his company and Iran," said James A. Dawson, Acting Assistant Director in Charge of the FBI Washington Field Office. "Today’s charges are another example of the dedicated and unrelenting efforts of the FBI and the US Attorney's Office to pursue those who violate our nation's sanctions and put our national security at risk. The FBI is charged with protecting our nation's security and intellectual property from being used to benefit our foreign adversaries."
“The actions today are a result of the ongoing coordination and collaborative counter-proliferation efforts by the Office of Export Enforcement and the FBI,” said P. Lee Smith, of BIS. “We will continue to vigorously pursue violators with all law enforcement partners to interdict illicit trade that threatens U.S. national security and undermines U.S. foreign policy.”
Mahdavi and Parthia Cargo LLC were charged in a criminal complaint with conspiring to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).
The affidavit in support of the criminal complaint alleges that Mahdavi was the Managing Director of Parthia Cargo LLC, a business organization that facilitated the illegal shipment to Iran of goods manufactured in the United States. Mahdavi acknowledged to U.S. government officials in 2017 that he understood a U.S. government license was necessary to lawfully ship U.S. commercial aircraft parts to Iran. But Mahdavi nonetheless agreed to help ship a U.S.-origin commercial aircraft part to an Iranian air transport company, utilizing the freight forwarding services of Parthia Cargo LLC and without obtaining a license. Mahdavi and Parthia Cargo LLC conspired with individuals and business organizations located outside the United States as part of the criminal scheme, which included falsely stating to a U.S.-based aircraft parts supplier that the goods would not be shipped to Iran unless authorized by the U.S. government.
A concurrent action was taken by the Department of the Treasury, sanctioning Mahdavi and Parthia Cargo LLC, as well as a related UAE business organization, Delta Parts Supply FZC.
If convicted, Mahdavi would face up to five years of imprisonment and a fine of up to $250,000, and Parthia Cargo LLC would face a fine of up to $500,000. The criminal charge in the complaint is an allegation, and Mahdavi and Parthia Cargo LLC are presumed innocent until proven guilty beyond a reasonable doubt.
The investigation was conducted by the FBI’s Washington Field Office and the BIS’s Boston Field Office. Assistant U.S. Attorney Michael J. Friedman and National Security Division Trial Attorney Jennifer Kennedy Gellie are representing the United States.
Investment Advisor Indicted for Fraud While Out on Bail for Similar OffensesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jason C. Weigand, 50, of Denver, PA has been charged by Indictment with mail fraud, wire fraud, and interstate transportation of stolen securities, while on bail for separate, similar offenses.
The Indictment announced today alleges that Weigand helped a former client of his, identified in court documents as “AH,” recover on life insurance policies when her husband died. Weigand later convinced AH to provide him with at least $239,000, which he told her that he would invest on her behalf. However, according to the Indictment, Weigand did not invest the client’s money in appropriate investments as he promised, but instead used the money for his own personal and business purposes, including payments to his personal line of credit, his Visa credit card, and his Lincoln MKZ and Chevy Suburban car loans.
In October 2017, Weigand was charged in a separate federal Indictment with allegedly misusing funds belonging to his clients. He was arrested on those charges and released subject to conditions including that he not commit any “Federal, State, or local crime during the period of release.” He allegedly violated those conditions by committing some of the offenses alleged in the current Indictment. Further, during the relevant time period, Weigand did not even possess a license to act as an investment advisor.
According to the Indictment, Weigand was a registered investment advisor in Pennsylvania between 2009 and 2014, and in New Jersey between 2011 and 2014. He voluntarily surrendered his licenses as an investment advisor in both states in 2014. In the case of his Pennsylvania license, Weigand terminated it on April 10, 2014—the same day that he was questioned by investigators from the Pennsylvania Department of Banking and Securities about his investment advisor activities.
“Weigand is alleged to be a serial fraudster with no respect for the law,” said U.S. Attorney McSwain. “Rather than serving his clients, he served himself. Prosecuting financial and securities fraud -- and thereby safeguarding innocent investors -- has been and will continue to be a top priority of my Office.”
“Jason Weigand was first arrested in 2017 by Postal Inspectors from the Philadelphia Division for stealing money from his investment advisory clients,” said Postal Inspector in Charge, Damon Wood. “Since 2017, while preparing to defend himself on those charges, Mr. Weigand went back to his old ways, stealing money from his investment clients. I applaud the diligence of the investigators and prosecutors in this case to not only prepare for trial but to follow up on allegations of new crimes. The Postal Inspection Service has long prided itself as being a leader in investigating investments frauds. From snake oil salesmen in the 19th century to modern day Wall Street frauds, if the United States Mail is used, Postal Inspectors will work tirelessly to bring the perpetrators to justice.”
If convicted, the defendant faces a maximum possible sentence of 120 years imprisonment, $1,500,000 fine, 3 years supervised release, $600 special assessment.
The case was investigated by the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorneys Katherine Driscoll and Paul Shapiro.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indictments: Aliens Were Deported, but Returned to the U.S.Read the Press Release
TOPEKA, KAN. – In three unrelated cases, a federal grand jury today indicted aliens who are accused of returning to the United States after being deported, U.S. Attorney Stephen McAllister said.
Enrique Jaime Ortega-Rodriguez, 40, a Mexican citizen, is charged with one count of unlawful re-entry. The indictment alleges that on July 26, 2020, he was found in Dodge City, Kan. In November 2015, he was deported from San Ysidro, Calif.
If convicted, he could face up to two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
Edgar Castro-Motta, 39, is charged with one count of unlawful re-entry after being convicted of a felony and deported. The indictment alleges that on Jan. 29, 2020, he was found in Johnson County, Kan. In April 2015, he was deported after being convicted of a felony.
If convicted, he could face up to 10 years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
Hector Medina-Espericueta, 55, is charged with one count of unlawful re-entry. The indictment alleges that on June 23, 2020, he was found in Johnson County, Kan. In March 2014, he was deported.
If convicted, he could face up to two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
OTHER INDICTMENTS
Casey L. Casto, 38, Milford, Kan., who was an employee of the U.S. Postal Service in Milford, is charged with two counts of delaying or destroying mail. The crimes are alleged to have occurred during June and July 2019 in Milford.
If convicted, the defendant could face up to five years in federal prison and a fine up to $250,000 on each count. The U.S. Postal Service investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
Chloe Jean Heather, 28, Holts Summit, Mo., and Paul Edward Raef, 38, Holts Summit, Mo., are charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred June 18, 2020, in Geary County, Kan.
If convicted, they could face a penalty of not less than 10 years in federal prison and a fine up to $10 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Lindsey Debenham is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Hood River Man Sentenced for Role in Interstate Marijuana Trafficking and Money Laundering ConspiracyRead the Press Release
PORTLAND, Ore.—A Hood River, Oregon man was sentenced to federal prison last week for his role in a conspiracy to traffic marijuana grown in Hood River and Portland to Florida, and launder the proceeds back to Oregon, announced U.S. Attorney Billy J. Williams. On August 14, 2020, Cole William Griffiths, 32, was sentenced to two years in federal prison and five years’ supervised release.
According to court documents, in April 2018, following several months of investigation, authorities executed a search warrant at Griffiths’ Hood River residence, seizing 4,376 marijuana plants, $7,700 in cash, firearms, ammunition and several vehicles. Griffiths was not present during the search, having just left for Florida. Investigators later seized a yacht Griffiths owned in Florida valued at approximately $225,000.
On August 21, 2018, a federal grand jury in Portland returned a three-count indictment charging Griffiths with conspiring to manufacture, possess with the intent to distribute, and distribute marijuana and maintaining drug-involved premises; conspiring to commit money laundering; and illegally possessing a firearm as a convicted felon. On April 22, 2019, Griffiths pleaded guilty to the first two counts.
During sentencing, U.S. District Court Judge Robert E. Jones ordered Griffiths to forfeit any criminally-derived proceeds and property used to facilitate his crimes, including more than $256,956 in U.S. currency; a 2000 Sealine F44 Yacht; eight vehicles; two all-terrain vehicles; four trailers; heavy construction equipment; and 14 firearms.
This case was investigated by the U.S. Drug Enforcement Administration, IRS Criminal Investigation, Homeland Security Investigations, and the FBI. It was prosecuted by the U.S. Attorney’s Office for the District of Oregon.
This case was brought as part of the Justice Department’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the department’s strategy for reducing the availability of drugs in the U.S. OCDETF was established in 1982 to mount a comprehensive attack on drug trafficking by disrupting and dismantling major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in coordination with state and local law enforcement.
Hillsborough County Man Sentenced to 19 Years for Enticement of A Minor and Production of Child PornographyRead the Press Release
Tampa, Florida – U.S. District Judge Virginia Hernandez Covington has sentenced Thomas Hill (41, Hillsborough County) to 19 years in federal prison for enticement of minor and production of child pornography. Hill had pleaded guilty on January 7, 2020.
According to court documents, starting in November 2018, Hill began communicating online with a 17-year-old girl in Georgia. At Hill’s direction, the girl produced pornographic images of herself and transmitted them to Hill in Tampa via Skype messenger. In online chats, Hill also instructed the victim to use various objects to penetrate herself, to refer to herself as his slave, and to address him as “master.” Hill and the victim made plans for Hill to take the victim from her home in Georgia so she could live with him and told the victim that he would physically and sexually abuse her and their future offspring.
In early December 2018, Hill drove to Georgia, picked up the victim without her parents’ knowledge or consent, and brought her back to Tampa to live with him. Once in Tampa, Hill forced the victim to engage in non-consensual sex acts. Hill also made the victim perform unpaid menial labor at his house and restricted her ability to leave the residence or communicate with outsiders. After living with Hill for several weeks, the victim fled Hill’s home and was discovered by local law enforcement running down the street, crying for help.
“The facts of this case are beyond disturbing. Mr. Hill forced his young victim to commit horrific and unspeakable acts,” said Michael F. McPherson, Special Agent in Charge of FBI Tampa Division. “These investigations are tough to work and I am proud of the dedicated special agents who do the job to protect our children from sexual predators.”
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Candace Garcia Rich.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. 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 locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Hartford Heroin Trafficker Sentenced to 6 Years in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that FRANCISCO LEON, also known as “Gordo,” 41, of Hartford, was sentenced today by U.S. District Judge Kari A. Dooley in Bridgeport to 72 months of imprisonment, followed by three years of supervised release, for trafficking heroin and illegally possessing firearms.
According to court documents and statements made in court, in June 2019, Hartford Police received information that Leon was selling large quantities of narcotics from an apartment located at 777 Maple Avenue in Hartford. In July 2019, investigators made a controlled purchase of heroin from Leon.
On July 9, 2018, investigators conducted a court-authorized search of the apartment and seized approximately 9,700 bags of heroin, various drug paraphernalia, and a loaded handgun. Leon was arrested on state charges on that date. At the time of his arrest, Leon possessed a U-Haul access cared and three keys from a U-Haul storage facility located on Capitol Avenue in Hartford. A subsequent search of a storage unit controlled by Leon revealed approximately nine kilograms of heroin, two loaded handguns, and assorted ammunition.
Leon’s criminal history includes multiple state convictions related to the possession and sale of narcotics.
On March 28, 2019, Leon pleaded guilty to one count of possession with intent to distribute heroin and one count of possession of a firearm by a convicted felon.
Judge Dooley ordered Leon to forfeit $13,980 that was seized from him during the investigation.
Leon, who is released on $250,000 bond, is required to report to prison on October 29, 2020.
This matter was investigated by the Hartford Police Department and the FBI’s Northern Connecticut Gang Task Force. The Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. This case was being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Hancock County man facing child pornography chargesRead the Press Release
ELKINS, WEST VIRGINIA – Gavin Collins, of Newell, West Virginia, was indicted today on charges involving child pornography, U.S. Attorney Bill Powell announced.
Collins, 29, was indicted by a grand jury on one count of “Production of Child Pornography by Person Having Custody or Control” and one county of “Distribution of Child Pornography.” Collins is accused of producing child pornography with a minor in his custody from September 2018 to July 2020 in Hancock County and distributed child pornography in July 2020.
Collins faces at least 15 years and up to 30 years of incarceration and a fine of up to $250,000 for the production charge and faces no less than five years and up to 20 years of incarceration for the distribution charge. 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 Danae DeMasi-Lemon is prosecuting the case on behalf of the government. The Federal Bureau of Investigation investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Great Falls drug trafficker sentenced to prison after more than five pounds of meth seizedRead the Press Release
GREAT FALLS — A Great Falls man who admitted trafficking methamphetamine after agents found more than five pounds of the drug at his residence was sentenced today to six years and eight months in prison and five years of supervised release, U.S. Attorney Kurt Alme said.
Tony Ray Sangrey, 35, pleaded guilty in April to possession with intent to distribute meth.
Chief U.S. District Judge Brian M. Morris presided.
The prosecution said in court documents that in May 2019, Drug Enforcement Administration agents in Bakersfield, CA, contacted DEA agents in Montana with information that a California man was bringing pounds of meth to Great Falls. The Montana agents also learned that the meth was likely destined for Sangrey's residence.
The investigation determined that a meth shipment should have arrived at Sangrey's home in a black BMW. Great Falls police immediately went to Sangrey's home and saw a black BMW parked near the garage. Officers informed Sangrey they were securing the residence and getting a search warrant.
During a search of the garage, officers found a small room labeled "man cave." Inside this room, detectives found a safe and a computer used to monitor the exterior surveillance system on the house and garage. The safe contained a dozen pre-packaged bags of meth that totaled nearly one pound. In the BMW, officers found five heat-sealed bags of meth weighing almost five pounds. The total amount of meth seized was the equivalent of about 20,294 doses. Sangrey acknowledged to officers that he began dealing meth in the summer of 2018.
Assistant U.S. Attorney Jessica Betley prosecuted the case, which was investigated by the DEA, Russell Country Drug Task Force and the Great Falls Police Department.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 36% from 2013 to 2018. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Grand Jury Returns IndictmentsRead the Press Release
MADISON, WIS. -- A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
Eau Claire Woman Charged With Gun & Drug Crimes
Diana Xiong, 31, Eau Claire, Wisconsin, is charged with being a felon in possession of a firearm and two counts of distributing methamphetamine. The indictment alleges that she possessed a .25 caliber pistol on May 20, 2020, and that she distributed methamphetamine on May 28 and June 1, 2020.
If convicted, Xiong faces a maximum penalty of 10 years in federal prison on the gun charge, and 20 years on each of the drug charges.
The charges against her are the result of an investigation by the Dunn County Sheriff’s Office; Menomonie Police Department; West Central Drug Task Force; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; Wisconsin Department of Justice Division of Criminal Investigation; Central Wisconsin Drug Task Force; Brown County Drug Task Force; and St. Paul (Minnesota) Task Force. Assistant U.S. Attorney Taylor L. Kraus is handling the prosecution.
Waunakee Man Charged with Illegally Possessing Firearm
Samuel A. Schiltz, 19, Waunakee, Wisconsin, is charged with being a felon in possession of a firearm. The indictment alleges that on May 11, 2020, he possessed a .40 caliber handgun.
If convicted, Schiltz faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wisconsin Department of Justice Division of Criminal Investigation. Assistant U.S. Attorney Corey C. Stephan is handling the prosecution.
Evansville Woman Charged with Fraud Scheme
Nichole Genz, 40, Evansville, Wisconsin, is charged with conspiring to commit wire fraud and nine counts of wire fraud in relation to a scheme to defraud her employer, Learning Gardens Child Development Center, a business that provided child care services for infants and toddlers. Learning Gardens is a subsidiary entity of Park Towne Development Corporation, a Madison, Wisconsin-based company. The indictment alleges that Genz, working with an individual not named in the indictment who was employed as the accounting manager at Park Towne, caused losses in excess of $311,000 to Park Towne and its subsidiaries, including Learning Gardens.
The indictment alleges that from January 2014 to September 2018, while employed as the Executive Director at Learning Gardens, Genz and her co-conspirator embezzled funds from Park Towne by the following methods:
- Depositing some tuition checks into the Learning Gardens petty cash account and withdrawing the funds in cash, instead of depositing them into the Park Towne main operating account;
- Issuing checks from other Park Town subsidiaries that were altered to make them payable to cash, or to Learning Gardens, which were deposited into the Learning Gardens petty cash account and withdrawn in cash;
- Creating altered bank statements for the Learning Gardens petty cash account;
- Creating a false bank statement reconciliation spreadsheet for the Learning Gardens petty cash account;
- Misusing Learning Gardens debit cards to purchase items for Genz’s personal use; and
- Misusing Learning Gardens credit cards to purchase items for Genz’s personal use.
If convicted, Genz faces a maximum penalty of 20 years in federal prison on each of the 10 counts of the indictment. The charges against her are the result of an investigation by the Madison Police Department. Assistant U.S. Attorney Daniel J. Graber is handling the prosecution.
Oneida County Woman Charged With False Statements
Peggy A. Faulkner, 58, Three Lakes, Wisconsin, is charged with making false and fraudulent statements in connection with health care benefits involving the U.S. Department of Labor’s Office of Workers’ Compensation Programs. The indictment alleges that from January 2014 through December 2015, she submitted multiple forms requesting reimbursement for mileage to appointments associated with her workers’ compensation injury, knowing that she did not actually incur such expense.
If convicted, Faulkner faces a maximum penalty of five years in federal prison. The charge against her is the result of an investigation by the U.S. Postal Service, Office of Inspector General. Assistant U.S. Attorney Robert A. Anderson is handling the prosecution.
Dane County Man Faces Additional Charges Related to Attempts to Produce Child Pornography Using Hidden Recording Devices
David M. Kruchten, 38, Cottage Grove, Wisconsin, is charged in a superseding indictment with 14 counts of attempting to produce child pornography through use of hidden recording devices, and one count of transporting minors from Wisconsin to Minnesota with the intent to produce child pornography through use of hidden recording devices. Kruchten previously was charged in an indictment returned by the grand jury on January 29, 2020 with seven counts of attempting to produce child pornography using hidden recording devices on October 27, 2019 and January 20, 2019. Seven of the additional counts in the superseding indictment allege that he attempted to produce child pornography on October 29, 2018 using hidden recording devices, and the other additional count alleges that he transported seven minors from Wisconsin to Minnesota on December 6, 2019, with the intent to produce child pornography using hidden recording devices.
Kruchten, a teacher at Madison East High School, was arrested on January 30 and has been detained in custody since. A date has not been scheduled for his trial, which will take place before Chief U.S. District Judge James D. Peterson.
If convicted, Kruchten faces a mandatory minimum penalty of 15 years and a maximum of 30 years in federal prison on each count in the indictment. The charges against him are the result of an investigation by the Wisconsin Department of Justice Division of Criminal Investigation, Cottage Grove Police Department, and Minneapolis Police Department. Assistant U.S. Attorneys Elizabeth Altman and Laura Przybylinski Finn are handling the prosecution.
Georgia State Prisoner Sentenced for Mailing Threatening Letters to United States District Court JudgesRead the Press Release
Montgomery, Alabama – On Friday, August 14, 2020, Daniel Eric Cobble, age 45, was sentenced to a term of 20 years of federal imprisonment for mailing threatening letters to United States District Court Judges of the Middle District of Georgia announced Louis V. Franklin, Sr., United States Attorney for the Middle District of Alabama.
A trial of the matter underlying the federal sentence was held February 19 and 20, 2020, in Columbus, Georgia, before United States District Judge Clay D. Land of the United States District Court for the Middle District of Georgia. The trial evidence showed that, in March and July 2013 and again in March 2014, Cobble mailed threatening letters to two United States District Court Judges of the Middle District of Georgia who were presiding over two different matters in which Cobble was a party.
“We all know too well the stories of judges, law enforcement officers, and other public servants who are violently targeted simply for doing their jobs,” said U.S. Attorney Franklin. “This sentence sends a message to anyone who would threaten to harm public servants and their families-we will find you, we will prosecute you, and you will go to prison.”
Cobble will not begin serving his federal sentence until he has completed service of the State of Georgia sentence he is currently serving. Additionally, there is no parole in the federal system.
The Macon, Georgia office of the Federal Bureau of Investigation was responsible for the investigation of the case.
Four Individuals Charged with $19 Million Fraudulent Invoicing Scheme Targeting Amazon’s Vendor SystemRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the indictment and arrest today of YOEL ABRAHAM, HESHL ABRAHAM, ZISHE ABRAHAM, and SHMUEL ABRAHAM, who are brothers, on charges of engaging in a scheme to systematically defraud Amazon.com, LLC, (“Amazon”), an online retailer and e-commerce platform. Through the course of the scheme, the defendants manipulated Amazon’s vendor system in attempts to fraudulently induce Amazon to pay for goods that Amazon had not ordered. In executing the scheme, the defendants fraudulently attempted to obtain at least approximately $32 million and successfully obtained at least approximately $19 million. YOEL ABRAHAM, HESHL ABRAHAM, ZISHE ABRAHAM, and SHMUEL ABRAHAM were arrested this morning and will be presented and arraigned later today before U.S. Magistrate Judge Stewart D. Aaron. The case is assigned to U.S. District Judge Ronnie Abrams.
Acting Manhattan U.S. Attorney Audrey Strauss said: “The indictment alleges that Yoel, Heshl, Zishe, and Shmuel Abraham came up with a new twist on an old trick, but the use of complex technology did not hide the simple fact that the defendants were bilking Amazon for goods they never provided. The more our economic life moves online, the more we must ensure the integrity of our digital markets, which my Office is committed to doing.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said: “The four charged today allegedly attempted to defraud Amazon out of tens of millions of dollars though a sophisticated and layered fraudulent invoicing scheme. Invoice fraud is not a victimless crime. Millions of dollars in lost revenue negatively impacts a company’s ability to provide cost effective services to legitimate customers who use the vendor’s platform. HSI works closely with our private partners to ensure that this type of fraud is mitigated, and those criminals are prosecuted for their actions.”
According to the Indictment unsealed today in Manhattan federal court:[1]
The defendants, who purportedly operated wholesale businesses, opened vendor accounts with Amazon to sell the company small quantities of goods. By accepting a purchase order, the defendants agreed to supply specific goods, at specific prices, in specific quantities. Instead, they manipulated Amazon’s vendor system, and then, in the most egregious iteration of the scheme, invoiced the company for substitute goods at grossly inflated prices and excessive quantities. The defendants frequently shipped and invoiced for more than 10,000 units of an item when Amazon had requested, and the defendants had agreed to ship, fewer than 100.
The defendants communicated about the scheme, extended help and advice to one another, and helped one another evade detection using an encrypted group texting chain on WhatsApp, a messaging application. For example, on or about May 1, 2018, YOEL ABRAHAM, the defendant, stated to the group “I’m so in the mood to fuck Amazon,” and asked “Did anyone try to overship and make a million profit in a week?” ZISHE ABRAHAM, the defendant, asked how YOEL ABRAHAM would do it (“Come in [sic] how to do it?”). SHMUEL ABRAHAM, the defendant, offered his advice on how to carry out such a large fraudulent transaction, noting he “didn’t tried this yet but tried already different things and it worked.” SHMUEL ABRAHAM cautioned, however, “[j]ust make sure you have another account. But you can fuck them a lot. When it’s to [sic] big numbers fast they will lock you out.” ZISHE ABRAHAM, the defendant, also offered his thoughts on how best to perpetrate such a large overshipment.
Once Amazon detected the pattern of fraudulent overshipping, it suspended the vendor accounts engaged in the fraud; in response, the defendants tried to open other vendor accounts and disguise their identities by registering them in fake names, using different email addresses, and using virtual private servers (“VPSs”) to obfuscate their connection to previously suspended accounts and frustrate Amazon’s ability to detect and mitigate their fraudulent activity. For instance, on or about November 1, 2018, the defendants discussed that Amazon’s increasing enforcement was going to force them to give up the fraudulent invoicing scheme altogether and go into a legitimate line of business (YOEL ABRAHAM: “This shit is massed up, looks like will have to build a legit business”). They also discussed new ways to evade detection and how to continue to perpetrate the fraud (YOEL ABRAHAM: “Open account under dummy names and they can go look for no one.” ZISHE ABRAHAM: “Yup need to do that. . . . The problem the first accounts was under real names.”). A few days later, HESHL ABRAHAM circulated a link to a “VPS company I use now. . . . This is how I know because they linked both of my vendor accounts.”).
* * *
YOEL ABRAHAM, 28, of Suffern, New York, HESHL ABRAHAM, 32, of Spring Valley, New York, ZISHE ABRAHAM, 30, of Spring Valley, New York, and SHMUEL ABRAHAM, 24, of Airmont, New York, are each charged with conspiracy to commit wire fraud, wire fraud, and money laundering. Wire fraud and wire fraud conspiracy carry a maximum sentence of 20 years in prison, and money laundering carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Ms. Strauss praised the work of the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department, U.S. Customs and Border Protection, the Rockland County Sheriff’s Department, and the Waterfront Commission of New York Harbor, and thanked Amazon for its cooperation with the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jilan J. Kamal is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.
Founder and Chairman of a Multinational Investment Company and a Company Consultant Convicted of Bribery and Public Corruption are Sentenced to PrisonRead the Press Release
The founder and chairman of a multinational investment company and a company consultant were sentenced to prison today for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions.
Greg E. Lindberg, 50, of Durham, North Carolina, the founder and chairman of Eli Global LLC (Eli Global) and the owner of Global Bankers Insurance Group (GBIG), was sentenced to 87 months in prison and three years of supervised release. Lindberg’s consultant, John D. Gray, 70, of Chapel Hill, North Carolina, was ordered to serve 30 months in prison, followed by two years of supervised release. Lindberg and Gray were also ordered to pay forfeiture in the amount approximately $1.45 million held in accounts established by the defendants for the purpose of funneling the bribe payments.
On March 5, 2020, a federal jury convicted Lindberg and Gray of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds following an approximately three-week trial. U.S. District Judge Max O. Cogburn Jr. presided over the trial and today’s sentencing hearings.
Co-defendant, Robert Cannon Hayes, 74, of Concord, North Carolina, was also sentenced today to a one-year probationary term. Hayes previously pleaded guilty to making false statements to the FBI and agreed to cooperate with the government’s investigation.
“When Greg Lindberg and John Gray offered millions of dollars in bribes to the North Carolina Insurance Commissioner, they referred to their elaborately corrupt scheme as a ‘win-win’ – unaware that the FBI was watching and listening,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today, both men have been held accountable for their crimes, and their sentences underscore the Department of Justice's unyielding commitment to rooting out corruption wherever we find it.”
“Lindberg and his accomplices, driven by greed, devised an extensive political bribery scheme to illegally funnel millions of dollars to an elected official for the benefit of Lindberg’s business interests. To this day, Lindberg and Gray remain unremorseful and refuse to accept responsibility for their criminal actions. The severity of their brazen conduct is reflected in the Court’s sentence,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “Bribery of a public official is far from a victimless crime. It is our duty to the American people to stop bad actors with deep pockets and unscrupulous intentions from wrecking the foundation on which this country proudly stands. To those that greedily seek to line their own pockets through deceit and fraud, I offer the following advice: Keep a travel toothbrush handy.”
“When the prison bars close behind Mr. Lindberg and Mr. Gray, they will hear the sound of justice, loud and clear,” said Special Agent in Charge John Strong of the FBI’s Charlotte Field Office. “The FBI will root out any and all forms of public corruption. We remain committed to ensuring those who attempt to interfere with the integrity of our democratic process pay the price.”
According to filed court documents, evidence presented at trial, and today’s sentencing hearings, in January 2018, the elected Commissioner (Commissioner) of the North Carolina Department of Insurance (NCDOI) reported concerns to the FBI about political contributions and other requests made by Lindberg and Gray, and agreed to cooperate with the federal investigation that was initiated.
According to evidence presented at trial, from April 2017 to August 2018, Lindberg and Gray engaged in a bribery scheme involving independent expenditure accounts and improper campaign contributions for the purpose of causing the Commissioner to take official action favorable to Lindberg’s company, GBIG. Trial evidence established that Lindberg and Gray gave, offered, and promised the Commissioner millions of dollars in campaign contributions and other things of value, in exchange for the removal of NCDOI’s Senior Deputy Commissioner, who was responsible for overseeing regulation and the periodic examination of GBIG.
According to trial evidence, Lindberg, Gray and the Commissioner held numerous in-person meetings at different locations, including in Statesville, North Carolina, and had telephonic and other communications with each other, and others, to discuss Lindberg’s request for the personnel change in exchange for millions of dollars, and to devise a plan on how to funnel campaign contributions to the Commissioner anonymously. In order to conceal the bribery scheme, at the direction of Lindberg, two corporate entities were set-up to form an independent expenditure committee with the purpose of supporting the Commissioner’s re-election campaign, and Lindberg funded the entities with $1.5 million as promised to the Commissioner. In addition, at Lindberg and Gray’s direction, Hayes caused the transfer of $250,000 from monies Lindberg had previously contributed to a North Carolina state party of which Hayes was chairman, to the Commissioner’s re-election campaign.
According to admissions Hayes made in connection with his guilty plea, on or about Aug. 28, 2018, Hayes falsely stated to FBI agents that he had never spoken with the NCDOI Commissioner about personnel or personnel problems at NCDOI, or about Lindberg or Gray. Hayes further admitted that, at the time he made the materially false statements, Hayes knew that it was unlawful to lie to the FBI, and knew that his statements were false because Hayes had in fact spoken with the NCDOI Commissioner about Lindberg and Gray, and about Lindberg’s request that the Commissioner move certain personnel within NCDOI.
The FBI’s Charlotte field office investigated the case.
Trial Attorney James C. Mann of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys William T. Stetzer and Dana O. Washington of the U.S. Attorney’s Office for the Western District of North Carolina prosecuted the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Founder and Chairman of A Multinational Investment Company and A Company Consultant Convicted of Bribery and Public Corruption Are Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – The founder and chairman of a multinational investment company and a company consultant were sentenced to prison today for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions.
Greg E. Lindberg, 50, of Durham, North Carolina, the founder and chairman of Eli Global LLC (Eli Global) and the owner of Global Bankers Insurance Group (GBIG), was sentenced to 87 months in prison and three years of supervised release. Lindberg’s consultant, John D. Gray, 70, of Chapel Hill, North Carolina, was ordered to serve 30 months in prison, followed by two years of supervised release. Lindberg and Gray were also ordered to pay forfeiture in the amount approximately $1.45 million held in accounts established by the defendants for the purpose of funneling the bribe payments.
On March 5, 2020, a federal jury convicted Lindberg and Gray of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds following an approximately three-week trial. U.S. District Judge Max O. Cogburn Jr. presided over the trial and today’s sentencing hearings.
Co-defendant, Robert Cannon Hayes, 74, of Concord, North Carolina, was also sentenced today to a one-year probationary term. Hayes previously pleaded guilty to making false statements to the FBI and agreed to cooperate with the government’s investigation.
“When Greg Lindberg and John Gray offered millions of dollars in bribes to the North Carolina Insurance Commissioner, they referred to their elaborately corrupt scheme as a ‘win-win’ – unaware that the FBI was watching and listening,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today, both men have been held accountable for their crimes, and their sentences underscore the Department of Justice's unyielding commitment to rooting out corruption wherever we find it.”
“Lindberg and his accomplices, driven by greed, devised an extensive political bribery scheme to illegally funnel millions of dollars to an elected official for the benefit of Lindberg’s business interests. To this day, Lindberg and Gray remain unremorseful and refuse to accept responsibility for their criminal actions. The severity of their brazen conduct is reflected in the Court’s sentence,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “Bribery of a public official is far from a victimless crime. It is our duty to the American people to stop bad actors with deep pockets and unscrupulous intentions from wrecking the foundation on which this Country proudly stands. To those that greedily seek to line their own pockets through deceit and fraud, I offer the following advice: Keep a travel toothbrush handy.”
“When the prison bars close behind Mr. Lindberg and Mr. Gray, they will hear the sound of justice, loud and clear,” said Special Agent in Charge John Strong of the FBI’s Charlotte Field Office. “The FBI will root out any and all forms of public corruption. We remain committed to ensuring those who attempt to interfere with the integrity of our democratic process pay the price.”
According to filed court documents, evidence presented at trial, and today’s sentencing hearings, in January 2018, the elected Commissioner (Commissioner) of the North Carolina Department of Insurance (NCDOI) reported concerns to the FBI about political contributions and other requests made by Lindberg and Gray, and agreed to cooperate with the federal investigation that was initiated.
According to evidence presented at trial, from April 2017 to August 2018, Lindberg and Gray engaged in a bribery scheme involving independent expenditure accounts and improper campaign contributions for the purpose of causing the Commissioner to take official action favorable to Lindberg’s company, GBIG. Trial evidence established that Lindberg and Gray gave, offered, and promised the Commissioner millions of dollars in campaign contributions and other things of value, in exchange for the removal of NCDOI’s Senior Deputy Commissioner, who was responsible for overseeing regulation and the periodic examination of GBIG.
According to trial evidence, Lindberg, Gray and the Commissioner held numerous in-person meetings at different locations, including in Statesville, North Carolina, and had telephonic and other communications with each other, and others, to discuss Lindberg’s request for the personnel change in exchange for millions of dollars, and to devise a plan on how to funnel campaign contributions to the Commissioner anonymously. In order to conceal the bribery scheme, at the direction of Lindberg, two corporate entities were set-up to form an independent expenditure committee with the purpose of supporting the Commissioner’s re-election campaign, and Lindberg funded the entities with $1.5 million as promised to the Commissioner. In addition, at Lindberg and Gray’s direction, Hayes caused the transfer of $250,000 from monies Lindberg had previously contributed to a North Carolina state party of which Hayes was chairman, to the Commissioner’s re-election campaign.
According to admissions Hayes made in connection with his guilty plea, on or about Aug. 28, 2018, Hayes falsely stated to FBI agents that he had never spoken with the NCDOI Commissioner about personnel or personnel problems at NCDOI, or about Lindberg or Gray. Hayes further admitted that, at the time he made the materially false statements, Hayes knew that it was unlawful to lie to the FBI, and knew that his statements were false because Hayes had in fact spoken with the NCDOI Commissioner about Lindberg and Gray, and about Lindberg’s request that the Commissioner move certain personnel within NCDOI.
The FBI’s Charlotte field office investigated the case.
Trial Attorney James C. Mann of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys William T. Stetzer and Dana O. Washington of the U.S. Attorney’s Office for the Western District of North Carolina prosecuted the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Former Rochester Resident Going to Prison for 20 Years for Producing Child PornographyRead 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 David Roy Jones, 55, formerly of Rochester, NY, was sentenced to serve 20 years in prison by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney John J. Field, who handled the case, stated that in the summer of 2006, the defendant produced child pornography involving two minors, one of whom was under Jones’ custody, care, and control. Jones, who produced the images and videos in the Rochester area over a period of years, did so after giving his minor victims alcohol and drugs. The defendant, after saving pornographic images of the minors to multiple storage media devices, transported them from New York to Tennessee. Jones was subsequently arrested and convicted in Tennessee on similar charges involving other minors.
Upon hearing of Jones’ arrest in Tennessee, one of his Rochester victims, who is now an adult, contacted the FBI to report what had occurred to her during her childhood. The victim reported that the defendant, while in Rochester, groomed and sexually abused her for many years.
The sentencing is the result of an investigation by the Hamblen County, Tennessee, Sheriff’s Office, under the direction of Sheriff Esco R. Jarnagin, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.
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Former Mount Vernon couple plead guilty to defrauding mortgage assistance programRead the Press Release
COLUMBUS, Ohio – A former Mount Vernon couple pleaded guilty in U.S. District Court today to accepting federal mortgage assistance in Ohio while living in another state and renting the Ohio property to a tenant.
Christopher Lee Horn, 58, and Sondra Horn, 57, both of Richville, Minn., pleaded guilty to conspiring to defraud the United States Treasury Department’s Troubled Asset Relief Program.
Part of the relief programs funds targeted aid to families in states hit hard by the 2008 economic and housing market downturn. The program provided state housing finance agencies funding to develop locally tailored foreclosure prevention solutions. In Ohio, the housing finance agency created “Save the Dream Ohio,” a statewide program focused on unemployed and underemployed homeowners at risk of mortgage loan default or foreclosure.
According to court documents, the Horns admitted to receiving more than $14,000 in Save the Dream Ohio mortgage assistance funds to which they were not entitled.
In September 2014, the couple received more than $2,800 in rescue payment assistance and was approved to receive 18 monthly mortgage assistance payments of $692 each for their property at 18 Marion Street in Mount Vernon.
Also in September 2014, Christopher and Sondra Horn negotiated to rent their Marion Street residence to a tenant for $655 per month. In later months, the amount increased. The couple requested the tenant pay his monthly rent in cash or personal check to a third party, who then deposited the money into a joint credit union account controlled by the Horns.
Each pleaded guilty to conspiring to commit theft of government property, a crime punishable by up to 10 years in prison.
“Today the defendants join 388 defendants convicted of crimes the Special Inspector General for the Troubled Asset Relief (SIGTARP) investigated,” said Special Inspector General Christy Goldsmith Romero. “Christopher and Sondra Horn knowingly defrauded a TARP program that helps unemployed homeowners stay in their primary home. The Special Inspector General commends the Office of the U.S. Attorney for the Southern District of Ohio for standing with SIGTARP to combat rescue fraud.”
Congress sets the maximum statutory sentence. Sentencing of the defendants will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
David M. DeVillers, United States Attorney for the Southern District of Ohio; and Special Inspector General Christy Goldsmith Romero, Troubled Asset Relief Program; announced the plea offered today before U.S. Magistrate Judge Norah McCann King. Assistant United States Attorney Sheila G. Lafferty is representing the United States in this case.
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Former Leader of Boston Latin Kings Chapter Pleads Guilty to Racketeering Conspiracy and Drug Conspiracy ChargesRead the Press Release
BOSTON – The former second-in-command of the Boston-based Devon Street Kings Chapter of the Massachusetts Almighty Latin King and Queen Nation (“Latin Kings”) pleaded guilty today to racketeering charges.
Alexis Peguero, a/k/a “King Lexi,” a/k/a “King Looney,” 29, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Dec. 15, 2020. Alexis Peguero was arrested and charged in December 2019, at which time he was the Cacique or second-in-command of the Devon Street Kings, a Boston-based Chapter of the Latin Kings.
The Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
Named for its origin on Devon Street in Boston, the Devon Street Kings or D5K Chapter of the Latin Kings, included at various times, approximately a dozen members who reported to Alexis Peguero, who served as “Cacique” or the second-in-command of the Chapter. The Devon Street Kings, in turn, reported to the Massachusetts State Leadership of the Latin Kings, providing information, structure, funds and other resources to further the Latin Kings goals and directives in the state.
As described in court documents, Alexis Peguero produced various music videos touting his allegiance to the Latin Kings, distributed controlled substances and threatened rival gang members. During the investigation, various meetings were covertly recorded where Alexis Peguero and members of the Devon Street Kings discussed the business of the racketeering enterprise. In addition, Alexis Peguero was present during meetings where members were beaten and violence against rival gangs was discussed and decided upon.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Alexis Peguero is the eighth defendant to plead guilty in the case.
The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and Boston Police Commissioner William Gross made the announcement today. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorney Philip A. Mallard and Mark Grady of Lelling’s Criminal Division are prosecuting the case.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Fort Riley Soldier Sentenced for Distributing Info on Napalm, IEDsRead the Press Release
TOPEKA, KAN. – A former Army soldier stationed at Fort Riley was sentenced today to 30 months in federal prison for distributing instructions for making explosives, U.S. Attorney Stephen McAllister said. After his prison time, the defendant will serve three years on supervised release.
Jarrett William Smith, 24, formerly of Ft. Riley, Kan., pleaded guilty to two counts of distributing information related to explosives, destructive devices and weapons of mass destruction.
Smith joined the Army June 12, 2017. He served as an infantry soldier and was trained in combat and tactical operations. He was transferred to Fort Riley in Kansas July 8, 2019.
The FBI received information that Smith used social media to give out guidance to others on how to construct improvised explosive devices. He spoke to others on social media about wanting to travel to Ukraine to fight with a violent, far-right military group.
On September 20, 2019, from Fort Riley Smith sent a person working undercover for the FBI specific instructions for making an explosive device. Smith also provided a recipe for creating improvised napalm.
McAllister commended the FBI and Assistant U.S. Attorney Tony Mattivi for their work on the case.