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30 July 2020
Two Defendants Connected to Significant Meth Stash House Sentenced to PrisonRead the Press Release
MACON, Ga. – Two methamphetamine traffickers supplied with narcotics from a Macon-based stash house were sentenced to prison this week for their crimes, said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia.
Joseph Fairley, 47, formerly of Valdosta, Georgia and currently of Tampa, Florida, was sentenced to 180 months in prison on Wednesday by U.S. District Judge Marc Treadwell. Fairley pleaded guilty to one count possession with intent to distribute methamphetamine in April. Co-defendant Antonio Robinson, 40, of Macon, was sentenced to 72 months in prison by Judge Treadwell on Tuesday. Robinson previously pleaded guilty to one count possession with intent to distribute methamphetamine. There is no parole in the federal system.
The Drug Enforcement Administration (DEA) conducted surveillance on a major drug trafficking operation based out of Macon with ties to Atlanta in August 2018. Agents discovered that large quantities of methamphetamine was provided by co-defendant Jose E. Ordez Avalos, 39, of Ellenwood, Georgia. Co-defendant Alex Raymond, 43, of Warner Robins, Georgia transported the methamphetamine from Avalos to co-defendant Albruce Green, 40, of Macon. Green distributed methamphetamine to Fairly and Robinson out of a “stash house” located on Newberg Avenue. Green, Avalos and Raymond pleaded guilty to drug trafficking charges in June, and will be sentenced at a later date. Fairly was captured on August 20, 2018 after fleeing Georgia State Patrol troopers on I-75, with 56 grams of pure “ice” methamphetamine, 14 grams of cocaine and 33 grams of marijuana inside the vehicle. In addition to the drugs and firearm, the agents found a drug ledger in the trunk which contained various names and figures. Robinson was taken into custody on August 27, 2018, when a search warrant was executed at the Newberg Avenue residence. Robinson admitted to possessing 81.7 grams of “ice” methamphetamine. Green, Avalos and Raymond were tied to nearly two kilos of methamphetamine as a result of the investigation.
“By successfully shutting down a major stash house in Macon, agents destroyed a supply chain for methamphetamine into this region which was inflicting harm on our communities and destroying lives. We will vigorously prosecute all those caught trafficking methamphetamine and deadly narcotics,” said U.S. Attorney Charlie Peeler. “I want to thank the DEA, GBI, GSP, Bibb County Sheriff’s Office and Houston County Sheriff’s Office for their efforts investigating this case.”
This case was investigated by the DEA, GBI, Bibb County Sheriff’s Office, Houston County Sheriff’s Office and the Georgia State Patrol. Assistant U.S. Attorney Charles Calhoun and Steven Ouzts prosecuted 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.
Two California Residents Plead Guilty to Filing False Claims for FEMA Benefits in Connection with the Camp FireRead the Press Release
SACRAMENTO, Calif. — Two California residents separately charged with defrauding FEMA by filing false claims for benefits offered to certain victims of the November 2018 Camp Fire plead guilty to fraud in connection with a major disaster or emergency benefits, U.S. Attorney McGregor W. Scott announced.
Daniel Connelly, 55, of Forest Ranch, entered a guilty plea today. According to court documents, on Jan. 16, 2019, Connelly filed a false application for FEMA benefits. In his application, Connelly falsely claimed a Paradise residence, which had been damaged by the Camp Fire, as his primary residence. Connelly knew his claim was false at the time he applied for FEMA benefits because he had vacated the residence months prior to the fire after a bank initiated eviction proceedings. At the time of the Camp Fire, the residence was vacant and listed for sale. As a result of Connelly’s false statement in his application for FEMA benefits, he received $2,663 to assist with rent and the replacement of personal property.
Patrick Prigmore, 54, of Redding, pleaded guilty in a separate criminal case on July 23. According to court documents, on Dec. 3, 2018, Prigmore filed an application for FEMA benefits falsely claiming the same Paradise residence as his primary residence that Connelly had claimed when in fact Prigmore had never resided at the address. In support of his application, Prigmore submitted photographs of counterfeit utility bills, which falsely indicated that he had received utilities at the residence. As a result of the false statement made in his application for FEMA benefits, Prigmore received $12,837 for rental assistance and the replacement of personal property, as well as approximately nine months of free housing in a trailer provided by FEMA.
These cases are the product of an investigation by the Department of Homeland Security Office of the Inspector General with assistance from the Federal Bureau of Investigation. Assistant U.S. Attorney Shelley D. Weger is prosecuting both cases.
Connelly is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on Oct. 15. Prigmore is scheduled to be sentenced by U.S. District Judge John A. Mendez on Oct. 27. Both Connelly and Prigmore each face a maximum statutory penalty of 30 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Three Tribal Officials Charged in Bribery SchemeRead the Press Release
Two current tribal government officials and one former tribal government official of the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation (MHA Nation) were charged by criminal complaint unsealed today for their alleged acceptance of bribes and kickbacks from a contractor providing construction services on the Fort Berthold Indian Reservation (FBIR), which is the home of the MHA Nation.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Drew H. Wrigley for the District of North Dakota, and Acting Special Agent in Charge Aubree M. Schwartz of the FBI’s Minneapolis Field Office made the announcement.
Randall Jude Phelan, 55, of Mandaree, North Dakota, and Delvin Reeves, 52, of Watford City, North Dakota, were charged in complaints supported by one affidavit, while Frank Charles Grady, 52, of Hardin, Montana, was charged in a complaint supported by a second affidavit. All three defendants were charged in the District of North Dakota with one count of conspiracy and one count of federal programs bribery. Phelan and Reeves made their initial appearances in the District of North Dakota before U.S. Magistrate Judge Alice R. Senechal today. Grady made his initial appearance in the District of Montana before U.S. Magistrate Judge Timothy J. Cavan today.
According to the affidavits in support of the complaints against them, Phelan has been a representative on the Tribal Business Council, the elected governing body of the MHA Nation, since approximately November 2012, and Reeves is a paid employee of the tribal government. Grady was a Tribal Business Council representative from approximately November 2014 until November 2018.
According to the affidavit in support of the complaints against them, Phelan and Reeves solicited and accepted bribes and kickbacks from the contractor in connection with his business’s operation on the FBIR beginning in approximately 2013 and continuing through 2020. The complaint alleges that, in exchange for the payments, Phelan and Reeves used their official positions to help the contractor’s business, including by awarding contracts, fabricating bids during purportedly competitive bidding processes, advocating for the contractor with other tribal officials, and facilitating the submission and payment of fraudulent invoices.
The complaint against Grady alleges that he solicited and accepted bribes and kickbacks beginning in approximately January 2016 and continuing through September 2017. The affidavit in support of the complaint alleges that Grady used his official position to help the contractor’s business, including by awarding contracts, pressuring other construction companies to award subcontracting work, advocating for the contractor with other tribal officials, and facilitating the submission and payment of fraudulent invoices. The complaints allege that the defendants each accepted hundreds of thousands of dollars in bribes and kickbacks.
A criminal complaint is merely an accusation, and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI investigated the case. Trial Attorney Jessee Alexander-Hoeppner of the Criminal Division’s Fraud Section is prosecuting the case with the assistance of the U.S. Attorney’s Office for the District of North Dakota.
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 Man Sentenced to 12 Months and a Day in Prison for Wire FraudRead the Press Release
CONCORD - Shiva Chandan Reddy Thudi, 26, of Irving, Texas was sentenced on Wednesday to 12 months and a day in federal prison for wire fraud, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, Thudi attended college in New Hampshire from 2015 to 2017. During that time, he established relationships with and defrauded several individuals who were foreign citizens living in the United States. In essence, Thudi falsely told his victims he was seeking investors to share in the profits of business ventures that involved his producing and distributing films in the United States. In reality, Thudi was not a movie producer or distributor and, instead, he used his victim’s money for his own personal benefit. To keep the scheme going, Thudi engaged in a classic Ponzi scheme by using money paid by later victims to pay supposed “returns” on the “investment” made by earlier victims.
When interviewed by the Federal Bureau of Investigation, Thudi admitted he stole substantial amounts of money from the victims by selling illusory ownership interests in several films to them. Additionally, he admitted that he used the victims’ money for his personal benefit and to make lulling payments to keep the scheme going. In total, Thudi stole more than $160,000 from his victims.
Thudi previously pleaded guilty on April 12, 2020. He faces likely removal to India after serving his prison sentence.
“Fraudsters who cultivate and then exploit relationships in order to steal money are criminals who must be held responsible for their conduct,” said U.S. Attorney Murray. “In order to protect victims from financial crimes, we work closely with the FBI and other law enforcement agencies to identify, prosecute, and incarcerate the white collar criminals who use lies and fraud to steal hard-earned money.”
“By playing the role of film producer, Shiva Chandan Reddy Thudi stole tens of thousands of dollars from starstruck victims he convinced had the inside track for investing in his movies, but our investigation into his Ponzi scheme exposed him for what he really is, a con artist,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “With today’s sentence, he’s being held accountable for their losses, and we’d like to take this opportunity to remind everyone that if an investment opportunity sounds too good to be true, it probably is. Thanks to Rivier University’s valuable assistance, the FBI has brought one more fraudster to justice.”
This matter was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Matthew T. Hunter and former Assistant U.S. Attorney Robert Kinsella.
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Tehama County Woman Arrested in Bay Area for Indictment in Refund Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — A Corning woman was arrested in Dublin today for a refund‑fraud scheme, U.S. Attorney McGregor W. Scott announced.
The warrant was issued last week after a federal grand jury returned a 14-count superseding indictment against Sabrina Raylene Toilolo, 26, and her previously charged co-defendant Johnathon Ward, charging them with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.
According to court documents, Sabrina Toilolo and co-defendants Johnathon Ward, Monica Nunes, and Talalima Toilolo conspired to defraud financial institutions using a refund-fraud scheme. This scheme exploited the refund process used by businesses and retail establishments to pay back customers for returns, reimbursements, and erroneous charges. The defendants posed as merchants and executed fraudulent debit or credit card refunds, which caused the unauthorized transfer of money from a merchant bank account to an account under the defendants’ control.
The defendants committed this scheme by stealing or purchasing point-of-sale (POS) terminals used by businesses to process bankcard transactions. The defendants programmed each terminal to make it appear as if it was authorized by a particular merchant, connected the terminals to payment processing intermediaries, and executed refund transactions even though no purchases had been made. The payment processors, falsely believing the terminals were authorized, approved the refunds and caused the merchants’ banks to transfer funds to the defendants’ accounts. The defendants then drained the stolen funds from the accounts. The indictment alleges that this scheme caused at least $3.5 million in intended victim losses.
This case is the product of an investigation by the Regional Enforcement Allied Computer Team (REACT) Task Force, which includes investigators from the Santa Clara County District Attorney’s Office, and the Federal Bureau of Investigation. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.
Nunes and Talalima Toilolo have pleaded guilty in the case and have been detained pending sentencing. Charges against Ward are pending.
If convicted, Sabrina Toilolo faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud and conspiracy to commit wire fraud. Additionally, if convicted of aggravated identity theft, she faces a mandatory two-year prison sentence, to be served consecutive to any other sentence, and an additional $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; Ward and Sabrina Toilolo are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Tallahassee Man Sentenced to 25 Years in Prison for Sex Trafficking of A MinorRead the Press Release
TALLAHASSEE, FLORIDA –A Tallahassee man was sentenced to 25 years in federal prison on July 23, 2020, after his conviction on sex trafficking charges. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced that Dishay Henderson, 36, was sentenced last week following a January jury verdict finding him guilty of Enticement of a Minor to Engage in Prostitution and two counts of Sex Trafficking of a Minor.
“Sex trafficking of minors has absolutely no place in our society,” said U.S. Attorney Keefe. “It is a shameful, despicable practice, and the United States Attorney’s Office is committed to working closely with our federal, state, and local partners to pursue justice on behalf of the victims of this heinous crime.”
Henderson used his Tallahassee residence in early 2018 as a location for commercial sex trafficking and drug activity. He specifically harbored and solicited a 16-year-old girl, prostituting her to others for personal and financial gain. At times, his methods were violent and aggressive. In announcing the sentence, Chief United States District Judge Mark E. Walker noted that the sentence was, in part, aimed to deter others from “preying on the most vulnerable among us.”
Assistant United States Attorney Michelle Spaven prosecuted the case, which was jointly investigated by the Tallahassee Police Department (TPD) and Homeland Security Investigations (HSI).
“I continue to be amazed by the outstanding work of TPD’s Special Victims Unit, specifically Investigator Beth Bascom. Once again, her tireless dedication to defend some of our most vulnerable citizens has resulted in a predator being taken off the streets. We appreciate the support and cooperation of HSI and our partner agencies,” TPD Chief Lawrence Revell said.
“This predator used sex trafficking to profit from the sexual abuse of young girls,” said Micah McCombs, acting Deputy Special Agent in Charge for HSI in Tampa. “The sentencing he received highlights the gravity of this crime, and we are proud the Tallahassee Police Department and our HSI special agents stopped him from doing more harm to young children.”
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 - U.S. v. HendersonSyracuse Man Charged with Filing False Tax Returns and Failing to File a ReturnRead the Press Release
SYRACUSE, NEW YORK – Glen Zinszer, 50, of Liverpool, New York, made his initial appearance yesterday and was arraigned in federal court in Syracuse, on charges that he filed false federal tax returns and failed to file a tax return when he was required to do so. Following the court appearance, Zinszer was released on conditions of supervision pending trial. The announcement was made by United States Attorney Grant C. Jaquith, Jonathan D. Larsen, Special Agent in Charge, New York Field Office, Internal Revenue Service–Criminal Investigation (“IRS-CI”), and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As alleged in the indictment, Zinszer failed to report as income on his tax returns hundreds of thousands of dollars that he withdrew from a company called Brazzlebox that he was operating in Syracuse, New York. It is further alleged that Zinszer used the money he withdrew from Brazzlebox’s accounts to finance personal expenses and obligations, including the payment of mortgages on personal properties, cash withdrawals for personal use, retail purchases, stays at hotels and spas, and personal telephone and internet service. The indictment also alleges that Zinszer failed to file a federal income tax return for tax year 2016 when he was required to do so.
The felony charges against Zinszer carry a maximum prison sentence of up to three years per count, a fine of up to $100,000 per count, and a term of supervised release of up to one year. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the Internal Revenue Service–Criminal Investigation (“IRS-CI”) and the Federal Bureau of Investigation (FBI), and is being prosecuted by Assistant U.S. Attorneys Michael D. Gadarian and Geoffrey J.L. Brown.
Statement from Attorney General William P. Barr on Introduction of Lawful Access Bill in the House of RepresentativesRead the Press Release
Today, Attorney General William P. Barr issued the following statement on the introduction of a bill in the U.S. House of Representatives that would give law enforcement access to encrypted data with court approval in order to protect user privacy. The legislation was introduced by Representative Ann Wagner.
“I applaud Representative Wagner for introducing this critical lawful access legislation. Although strong encryption is vital, we cannot allow the tech industry to use encryption that blinds law enforcement and prevents it from thwarting or investigating serious crimes and national security threats, including terrorist plots, cyberattacks, and sexual exploitation.
The danger is particularly great for children, especially during this time of coronavirus restrictions when children are spending more time online. Survivors of child sexual abuse and their families have pleaded with technology companies to do more to prevent predators from exploiting their platforms to harm children. Unfortunately, these companies have not done enough, which is why this legislation is needed.
Privacy and public safety are not mutually exclusive. I am confident that the tech industry can design strong encryption that allows for lawful access by law enforcement. Encryption should keep us safe, not provide a safe haven for predators and terrorists.”
Somerset Man Sentenced to Federal Prison for Running $2.4 Million Ponzi SchemeRead the Press Release
LONDON, Ky. – A Somerset, Ky., man, Rodney Scott Phelps, 58, was sentenced to 108 months in federal prison on Tuesday, by U.S. District Judge Claria Horn Boom, for conspiring to commit wire fraud and committing wire fraud by perpetrating a complex Ponzi scheme. Phelps was also ordered to pay restitution in the amount of $2,437,875.30
From January 2012 through October 2014, Phelps and co-defendant Jason Castenir defrauded 13 victims out of over $2.4 million, through three fake investment schemes. According to the evidence presented at Phelps’ trial and other court documents, Phelps and Castenir created Maverick Asset Management LLC (“MAM”) in 2012, as a private-equity firm located in Somerset, Kentucky. Beginning around this time, and continuing until late 2014, Castenir and Phelps convinced a number of investors from across the country, including in Washington State, Ohio, Arizona, and Nevada, to invest in an opportunity to obtain an oil concession from the government of Belize. They boasted of vast experience in successful oil exploration ventures and promised investors royalties on any oil extracted and a considerable interest rate on their investment, all of which was to be backed by Phelps’s multi-million dollar trust, in the name of Phelps Family Trust. Investors raised hundreds of thousands of dollars for this investment, wiring those funds to MAM in Kentucky. Evidence at trial revealed that Phelps and Castenir had little experience with successful oil ventures; there was no sizeable Phelps Family Trust; and they used the money they raised for MAM operating expenses, to pay themselves, and to make Ponzi payments back to other victim-investors.
In a related scheme, Phelps convinced three victims from Tennessee to invest roughly $1.2 million with MAM to trade on various commodities markets, again boasting of MAM’s vast experience successfully trading on these markets, including with funds from the Phelps Family Trust, and convincing victims that the Phelps Family Trust backed their investment. Phelps and Castenir invested roughly one-third of this money on commodities markets, losing almost all of it in short measure, but sent victims accounting statements detailing profits on their investments. Phelps and Castenir spent the rest of the money on MAM operating expenses, personal profit, and Ponzi payments to other victim-investors.
In a third scheme, Phelps convinced two victims from Tennessee to pay $1 million to an escrow account earmarked for initiating the purchase of a casino in Tunica, Mississippi. Phelps had committed to likewise pay $1 million from the Phelps Family Trust to match the victim investment, but never did. Instead, Phelps and Castenir took this money from the escrow account to pay MAM operating expenses, invest on commodities and stock markets, personally profit, and for Ponzi payments to other victim-investors.
In September 2019, after an eight day jury trial, Phelps was convicted of one count of conspiring to commit wire fraud and twelve counts of wire fraud.
Castenir pled guilty to conspiring to commit wire fraud, commodities fraud, and money laundering, in August 2017, and is scheduled for sentencing in September 2020. He faces a maximum sentence of imprisonment of 20 years for wire fraud, and 10 years each for the commodities fraud and money laundering.
Under federal law, Phelps must serve 85 percent of his prison sentence; and upon his release, they will be under the supervision of the United States Probation Office for three years.
“Scott Phelps engaged in a long-running and multifaceted Ponzi scheme to defraud investors, using the money received to continue his fraudulent plans and personally profit by stealing from investors,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The sentence imposed reflects the seriousness of Phelps’ criminal conduct.”
“The defendants perpetrated a massive investment fraud scheme that was laced with a web of financial lies which generated millions of dollars through false promises and deceit,” said Special Agent in Charge Bryant Jackson, IRS-Criminal Investigation, Cincinnati Field Office. “When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime. Investigations of this magnitude would not be successful without the collaborative efforts of the prosecutors and agents who investigated this case.”
“Abusing the trust placed in him by dozens of investors, Rodney Phelps engaged in multiple fraudulent investment schemes over the course of several years,” said Special Agent in Charge Robert Brown, FBI Louisville Field Office. “As his sentence reflects, the FBI and our partners remain firmly committed to holding accountable those who choose to victimize the public for their own financial gain.”
United States Attorney Duncan; James Robert Brown Special Agent in Charge of the Federal Bureau of Investigation-Louisville Division; and Bryant Jackson, Special Agent in Charge of the IRS-CI Cincinnati Field Office, jointly announced the sentencing.
The investigation was conducted by the Federal Bureau of Investigation, with assistance from the Commodities and Futures Trading Commission and the Internal Revenue Service-Criminal Investigation. The United States was represented by Assistant United States Attorneys Kathryn M. Anderson and Kenneth R. Taylor.
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Slidell Woman Convicted of Wire Fraud and Aggravated Identity TheftRead the Press Release
NEW ORLEANS - U.S. Attorney Peter G. Strasser announced today that defendant RACHEL E. LIPPS (“LIPPS”), age 39, of Slidell, LA pled guilty, on July 29, 2020, to thirty-three counts of wire fraud, in violation of Title 18, United States Code, Section 1343 and a single count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, between January 2013 and October 2017, LIPPS served as a part-time bookkeeper for Business A. Business A was a Louisiana corporation domiciled in Slidell, Louisiana. LIPPS was entrusted with the daily accounting and her job functions included accessing and utilizing QuickBooks software to issue payroll checks and pay vendors on behalf of Business A. Using QuickBooks, LIPPS fraudulently printed and cashed checks made payable to herself and several of her creditors. On or about July 22, 2014, LIPPS forged the signature of Business A’s co-owner on a check despite not having the authority to do so. In all, LIPPS stole $473,978.53 from Business A and its owners.
The court set sentencing in this matter for November 10, 2020 at 1:00 p.m. If convicted of wire fraud, LIPPS faces a maximum term of imprisonment of twenty (20) years, a fine of not more than $250,000, three years of supervised release following any term of imprisonment, and a $100 special assessment fee for each count. If convicted of aggravated identity theft, LIPPS faces a mandatory consecutive sentence of two (2) years, a fine of no more than $250,000, a supervised release term of up to one (1) year following any term of imprisonment, and a $100 special assessment fee.
This matter was handled by the Federal Bureau of Investigation and the Saint Tammany Parish Sheriff’s Office. Assistant United States Attorney Duane A. Evans is prosecuting the case.
Sisseton Woman Charged with Theft from an Indian Tribal OrganizationRead the Press Release
United States Attorney Ron Parsons announced that a Sisseton, South Dakota, woman has been indicted by a federal grand jury for Theft from an Indian Tribal Organization.
Jordyn Juanita Kirk, age 25, was indicted on July 20, 2020. She appeared before U.S. Magistrate Judge William D. Gerdes on July 30, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between August 17, 2018, and October 5, 2018, Kirk willfully and unlawfully embezzled, stole, knowingly converted to her own use, willfully misapplied, and willfully permitted to be misapplied, over $1,000 of the moneys, funds, credits, goods, assets, and other property belonging to the Sisseton-Wahpeton Oyate Tribal Court of the Sisseton-Wahpeton Oyate Tribe, an Indian tribal organization, and entrusted to the custody and care of an officer, employee, and agent of an Indian tribal organization
The charge is merely an accusation and Kirk is presumed innocent until and unless proven guilty.
The case was brought pursuant to The Guardians Project, a federal law enforcement initiative to coordinate efforts between participating agencies, to promote citizen disclosure of public corruption, fraud, and embezzlement involving federal program funds, contracts, and grants, and to hold accountable those who are responsible for adversely affecting those living in South Dakota’s Indian country communities. The Guardians Project is another step of federal law enforcement’s on-going efforts to increase engagement, coordination, and positive action on behalf of tribal communities. Led by the U.S. Attorney’s Office, the participating agencies include: Federal Bureau of Investigation; the Offices of Inspector General for the Departments of Interior, Health and Human Services, Social Security Administration, Agriculture, Transportation, Education, Justice, and Housing and Urban Development; Internal Revenue Service, Criminal Investigation Division; U.S. Postal Inspector Service; U.S. Postal Service, Office of Inspector General.
For additional information about The Guardians Project, please contact the U.S. Attorney’s Office at (605) 330-4400. To report a suspected crime, please contact law enforcement at the federal agency’s locally listed telephone number.
The investigation is being conducted by the U.S. Attorney’s Office and the Federal Bureau of Investigation. Assistant U.S. Attorney Ann M. Hoffman is prosecuting the case.
Kirk was released on bond pending trial. A trial date has not been set.
Sioux Falls Man Charged with Multiple Gun and Drug OffensesRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Possession with Intent to Distribute a Controlled Substance, Felon in Possession of a Firearm, and Possession of Stolen Firearms.
Timothy Tod Hartman, age 35, was indicted on July 20, 2020. He appeared before U.S. Magistrate Judge Veronica L. Duffy on July 29, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $8,000,000 fine, up to life of supervised release, and up to $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on February 25, 2020, Hartman knowingly and intentionally possessed with the intent to distribute 5 grams or more of methamphetamine, which is a Schedule II controlled substance.
On that same date, Hartman, who had been convicted of a crime punishable for a term exceeding one year, and being an unlawful user of a controlled substance, knowingly possessed firearms and ammunition. One of the firearms is believed to be stolen. Both firearms had been shipped and transported in interstate commerce.
The charges are merely accusations and Hartman is presumed innocent until and unless proven guilty.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice's signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department's past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sioux Falls Police Department. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Hartman was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Sioux Falls Man Charged with Being Felon in Possession of a FirearmRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Felon in Possession of a Firearm.
Curtis Ronald Rabenberg, age 39, was indicted on July 20, 2020. He appeared before U.S. Magistrate Judge Veronica L. Duffy on July 29, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and up to $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that both on November 19, 2019, and November 21, 2019, Rabenberg, who had been convicted of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed firearms. Said firearms had been shipped and transported in interstate commerce.
The charges are merely accusations and Rabenberg is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice's signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department's past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sioux Falls Police Department. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Rabenberg was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Sioux Falls Man Charged with Being Felon in Possession of a FirearmRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Felon in Possession of a Firearm and Ammunition.
Anthony James Howard, age 27, was indicted on July 20, 2020. He appeared before U.S. Magistrate Judge Veronica L. Duffy on July 29, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and up to $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about April 20, 2020, Howard, who had been convicted of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed a firearm and ammunition. Said firearm has been shipped and transported in interstate commerce.
The charge is merely an accusation and Howard is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice's signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department's past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sioux Falls Police Department. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Howard was remanded to the custody of the State. A trial date has not been set.
Schaller Man Charged with COVID-19 Related Mail FraudRead the Press Release
Alvin Lavon Rex, age 61, from Schaller, Iowa, has been charged with one count of mail fraud. The charge is contained in a criminal complaint unsealed today in United States District Court in Sioux City.
The complaint alleges that, in about May 2020, Rex received approximately $19,000 in deposits in his account at a bank in Storm Lake. The deposits were moneys received from unemployment claims made in Massachusetts and Arizona. The complaint further alleges that Rex then made a series of cash withdrawals from his account and mailed the cash to at least one other person in Maryland.
On March 27, 2020, the President signed into law the CARES Act, which provides emergency assistance to individuals, families, and businesses affected by the COVID-19 pandemic. The CARES Act includes a provision of temporary benefits for individuals who have exhausted their entitlement to regular unemployment compensation, as well as coverage for individuals who are not eligible for regular unemployment compensation, are self-employed, or have limited recent work history. The Complaint alleges that Rex received unemployment funds in the names of other individuals in Massachusetts and Arizona, which included Federal Pandemic Unemployment Compensation Benefits (FPUC) of an additional $600 per week claimed, pursuant to Section 2104 of the CARES Act.
If convicted, Rex faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.
Rex appeared today in federal court in Sioux City and was released on bond pending further proceedings. As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This prosecution is an example of the Department of Justice’s strong commitment to combating fraud and criminal activity related to COVID-19. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Federal Bureau of Investigation, the United States Department of Labor - Office of Inspector General, the United States Postal Inspection Service, and the Storm Lake Police Department. The Sac County Sheriff’s Office, the State of Arizona’s UI Benefit Fraud Investigation Unit - Office of Inspector General, the State of Massachusetts’ Program Integrity Unit - Department of Unemployment Assistance, and the State of Ohio’s Benefit Payment Fraud Control Unit - Department of Job and Family Services provided assistance to the investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-4062.
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San Joaquin County Man Pleads Guilty to Bankruptcy FraudRead the Press Release
SACRAMENTO, Calif. — Kulvir Singh Cheema, 59, of Ripon, pleaded guilty today to filing a false bankruptcy declaration, U.S. Attorney McGregor W. Scott announced.
According to court documents, when Cheema, the owner of a trucking company, filed for bankruptcy in April 2011, he provided false information about his employment, income, residence, and other facts. He also concealed certain assets such as trucks and bank accounts that he controlled and that were held in other names. In addition, in January 2010, in contemplation of filing for bankruptcy, Cheema fraudulently transferred ownership of his residence in Ripon from himself to another person. Cheema’s untruthful statements on his bankruptcy petition were designed to give the false impression that he was bankrupt with no assets. Through those falsehoods, Cheema was able to discharge over $2 million in debt, keep his trucks and business running, and repay a close friend. The value of the debts and assets concealed as a result of Cheema’s deception was between $150,000 and $250,000.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Brian A. Fogerty, André M. Espinosa, and Miriam Hinman are prosecuting the case.
Cheema is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on Oct. 22. Cheema faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Researcher Pleaded Guilty to Conspiring to Steal Scientific Trade Secrets from Ohio Children’s Hospital to Sell in ChinaRead the Press Release
Former Ohio woman Li Chen, 46, pleaded guilty today via video conference in U.S. District Court today to conspiring to steal scientific trade secrets and conspiring to commit wire fraud concerning the research, identification and treatment of a range of pediatric medical conditions.
“Once again we see the People’s Republic of China (PRC) facilitating the theft of our nation’s ingenuity and hard work as part of their quest to rob, replicate and replace any product they don’t have the ability to develop themselves,” said John C. Demers, Assistant Attorney General for National Security. “Far from being an isolated incident, we see the PRC implicated in around 60 percent of all trade secret theft cases. This continued economic belligerence runs contrary to the values and norms that facilitate the success of our industries and countering it remains among our highest priorities.”
“Nationwide Children’s Hospital’s Research Institute took reasonable measures to protect its cutting-edge intellectual property and trade secrets regarding exosomes, and I commend the cooperation of Nationwide Children’s throughout this investigation,” U.S. Attorney David M. DeVillers said. “Chen betrayed her employer of 10 years by stealing trade secrets from this American institution and transferring them to China after receiving payments from the Chinese government.”
“Li Chen was a trusted researcher at Nationwide Children’s Hospital, conducting cutting-edge U.S. government-funded research,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “With her guilty plea, she admits that she abused this trust to establish a company in China for her own financial gain. The FBI is committed to working closely with partners such as Nationwide Children’s Hospital to protect the innovations that make America a world leader in science and technology.”
Chen admitted to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for her own personal financial gain.
Chen and her husband, alleged co-conspirator Yu Zhou, 49, worked in separate medical research labs at the Research Institute for 10 years each (Zhou from 2007 until 2017 and Chen from 2008 until 2018). They are charged with conspiring to steal at least five trade secrets related to exosome research from Nationwide Children’s Hospital.
Exosomes play a key role in the research, identification and treatment of a range of medical conditions, including necrotizing enterocolitis (a condition found in premature babies), liver fibrosis and liver cancer.
According to her plea agreement, Chen conspired to steal and then monetize one of the trade secrets by creating and selling exosome “isolation kits.” Chen admitted to starting a company in China to sell the kits. Chen received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China. Chen also applied to multiple Chinese government talent plans, a method used by China to transfer foreign research and technology to the Chinese government.
As part of her plea, Chen has agreed to forfeit approximately $1.4 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc.
Chen and Zhou were arrested in California in July 2019 and their case was unsealed in August 2019 when they appeared in federal court in Columbus.
John C. Demers, Assistant Attorney General for National Security;David M. DeVillers, United States Attorney for the Southern District of Ohio; and Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the plea entered into today before U.S. District Judge Sarah D. Morrison. Assistant U.S. Attorneys S. Courter Shimeall, Peter K. Glenn-Applegate, Special Assistant U.S. Attorney J. Michael Marous and National Security Division Trial Attorney Matthew J. McKenzie, are representing the United States in this case.
Randolph County man sentenced for child porn chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jack Carl Rice, of Elkins, West Virginia, was sentenced today to 57 months incarceration for a child pornography charge, U.S. Attorney Bill Powell announced.
Rice, age 62, pled guilty to one count of “Possession of Child Pornography” in February 2020. Rice admitted to having images of child pornography depicting minors under the age of 12 in January 2018 in Harrison County.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Federal Bureau of Investigation, the West Virginia State Police, and the Bridgeport Police Department investigated.
U.S. District Judge Thomas S. Kleeh presided.
President of Navillus Contracting Charged with Defrauding Union Benefits FundsRead the Press Release
An 11-count indictment was unsealed earlier today in federal court in Brooklyn charging Donal O’Sullivan, his sister Helen O’Sullivan and Padraig Naughton with wire fraud, mail fraud, embezzlement from employee benefit funds, submission of false remittance reports to union benefit funds and conspiracy to commit those crimes. The indictment relates to the defendants’ conduct at Navillus Tile, Inc. d/b/a Navillus Contracting (“Navillus”), one of the largest construction firms in New York City. Donal O’Sullivan is the founder, owner and President of Navillus. Helen O’Sullivan is the Treasurer of Navillus and Padraig Naughton is the company’s Financial Controller. The defendants were arrested this morning and arraigned this afternoon before United States Magistrate Judge Robert M. Levy. Donal O’Sullivan was released on a $500,000 bond; Helen O’Sullivan and Naughton were each released on $250,000 bonds.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Thomas Licetti, Acting Regional Director, U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA); Michael C. Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Region (DOL-OIG); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Michael Farbiarz, Acting Inspector General, Port Authority of New York and New Jersey, Office of the Inspector General (PANYNJ-OIG), announced the arrests and indictment.
Navillus is a signatory to multiple collective bargaining agreements with labor organizations – including the Bricklayers and Allied Craft Workers Local No. 1, the New York City District Council of Carpenters, the Cement Masons Union, the Pointers, Cleaners and Caulkers, and the International Brotherhood of Teamsters Local 282 – that required the company to employ union workers on its projects and to make contributions to various union benefits including pension, annuity and welfare funds on their behalf. To ensure that the benefits funds received the contributions that it had agreed to pay, Navillus was required to periodically file remittance reports with the benefits funds that detailed the number of hours worked by each worker.
As alleged in the indictment, the defendants engaged in a payroll scheme from approximately 2011 to 2017 to avoid making those contributions by using a consulting firm to pay certain Navillus workers for work done on Navillus construction jobs. However, neither Navillus nor the consulting firm made contributions to the benefits funds on behalf of those workers. To disguise the scheme, the defendants directed the consulting firm to issue fraudulent invoices to conceal the fact that funds paid by Navillus to the consulting firm were, in fact, for wages paid to Navillus workers. As a result, the defendants caused Navillus to avoid making over $1 million in required contributions to union benefits funds.
“As alleged, these senior construction company executives were the architects of a payroll scheme designed to evade obligatory contributions to union benefits funds that their workers depend upon,” stated Acting United States Attorney DuCharme. “This Office, together with its federal and local law enforcement partners, will continue to investigate and hold accountable employers whose corrupt actions jeopardize their employees’ economic well-being.” Mr. DuCharme expressed his grateful appreciation to the New York City Police Department for its assistance with the case.
“As alleged, the defendants deprived union workers of benefits to which they were entitled, falsifying records and creatively circumventing their fiscal responsibilities,” stated FBI Assistant Director-in-Charge Sweeney. “This type of crime depletes the benefits union employees have a right to access. Today’s arrests highlight this illegal scheme and reassert our dedication to rooting out crimes of this nature.”
“Embezzling and underfunding employee benefits funds cheat workers, retirees, and their families of the benefits to which they are entitled and are against the law. The U.S. Department of Labor’s Employee Benefits Security Administration will continue to work with our law enforcement partners to investigate and take action to counter illegal activity that threatens employees’ hard-earned benefits,” stated DOL-EBSA Acting Regional Director Thomas Licetti.
“An important mission of the Office of Inspector General is to investigate allegations of fraud relating to labor unions and their affiliated employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated DOL-OIG Special Agent-in-Charge Mikulka.
“The alleged scheme perpetrated by the president of Navillus Contracting cheated union benefits funds of more than a million dollars,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI’s collaboration with federal, state and local partners allows for comprehensive investigations and arresting those fraudsters who look to fill their pockets at the expense of others.”
“The Port Authority Office of Inspector General initiated this investigation, and the message today’s indictment sends is crystal clear: the Port Authority has zero tolerance for fraud by its business partners, and we will work aggressively to ensure that individuals who engage in fraudulent conduct — including contractors’ senior executives, where appropriate — are held personally accountable under the criminal law,” stated PANYNJ Acting Inspector General Farbiarz.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Martin Coffey and Turner Buford are in charge of the prosecution.
The Defendants:
DONAL O’SULLIVAN
Age: 59
Queens, New YorkHELEN O’SULLIVAN
Age: 60
Queens, New YorkPADRAIG NAUGHTON
Age: 48
New York, New YorkE.D.N.Y. Docket No. 20-CR-272 (WFK)
Plainville Man Charged with Enticement of MinorRead the Press Release
BOSTON – A Plainville man was arrested yesterday and charged with attempted enticement of a minor.
David Cerasuolo, 47, of Plainville, Mass., was charged by criminal complaint with one count of coercion and enticement of a minor, or attempt thereof. Following an initial appearance via videoconference in federal court in Boston, Cerasuolo was detained pending a probable cause and detention hearing scheduled for July 31, 2020.
According to the criminal complaint, Cerasuolo used chat applications to engage in conversations with an individual he believed to be a 13-year-old girl, but was actually an undercover federal agent. During these conversations, Cerasuolo attempted to entice the 13-year-old to engage in sexual activity and sent her several photographs of himself, including one displaying his penis.
The charging statute provides for a mandatory minimum sentence of 10 years and up to life in prison, at least five years and up to a lifetime 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 and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Plainville, Arlington, Boston and Newton Police Departments and Massachusetts Department of Correction provided assistance with the investigation. Assistant U.S. Attorney Adam Deitch of Lelling’s Major Crimes Unit is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner of New York Tax Preparation Business Pleads Guilty to Conspiring to File False ReturnsRead the Press Release
WASHINGTON – A Queens, New York return preparer pleaded guilty today to conspiracy to defraud the United States by filing false returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents and statements made in court, Richard Barker owned and operated a tax return preparation business under the names Tax Depot Inc. and KPS Kampant, Parkinson, Sinclair & Co. Inc. From 2011 through 2017, Barker conspired with other individuals to file returns for clients falsely reporting significant tax withholdings, in an effort to fraudulently inflate refunds from the IRS. Barker also admitted that he filed returns for himself, a coconspirator, and others, claiming more than $530,000 in fraudulent refunds from the IRS. In all, Barker caused a loss of at least $460,000 to the United States.
U.S. District Judge Eric R. Komitee will schedule sentencing a later date. At sentencing, Barker faces a maximum sentence of five years in prison. Barker also faces a period of supervised release, restitution, and monetary penalties.
Barker was previously charged in a January 2020 indictment alleging that Barker and two associates, Ricardo Andujar and Jose Andreu, conspired to defraud the United States. Andreu was also charged with filing false returns for himself, claiming approximately $182,000 in fraudulent refunds. Andreu’s case is pending. Andujar remains at large.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation and Treasury Inspector General for Tax Administration, who conducted the investigation, and Trial Attorneys Ann Marie Cherry and Mark Kotila of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Orange County Men Indicted on Drug ChargeRead the Press Release
ALBANY, NEW YORK – Peter Mami, age 41, and James Taylor, age 32, both of Orange County, New York, were indicted yesterday with possessing and intending to distribute more than 500 grams of cocaine. The announcement was made by United States Attorney Grant C. Jaquith and Ray Donovan, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division.
According to the indictment and a previously filed criminal complaint, on March 2, 2020, Taylor and Mami possessed with the intent to distribute approximately two kilograms of cocaine. The charges in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
If convicted, Taylor and Mami each face at least 5 years and up to 40 years in prison, a fine of up to $5 million, and a term of supervised release of at least 4 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the DEA and is being prosecuted by Assistant U.S. Attorney Ashlyn Miranda.
Omaha Man Sentenced to 10 Years in Prison for Bank RobberyRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on Wednesday, July 29, 2020, Brandon Bird, age 41, of Omaha, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 120 months in prison for bank robbery. Bird was ordered to serve three years of supervised release to follow his term of imprisonment and pay a $100 Special Assessment to the Crime Victims’ Fund.
On October 30, 2019, Bird walked into a U.S. Bank in Council Bluffs and gave a demand note to the teller requesting money. After obtaining cash from the bank, Bird fled the scene and was then stopped by law enforcement. All of the stolen cash was recovered.
This matter was investigated by the Council Bluffs Police Department, Iowa State Patrol, Federal Bureau of Investigation, and the Great Plains Violent Crimes Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Ohio Man Pleads Guilty to Sex Offense Involving MinorsRead the Press Release
HUNTINGTON, W.Va. – A Chesapeake, Ohio man pled guilty to a sex offense involving a minor, announced United States Attorney Mike Stuart. Mikel Bradley Smith, 19, pled guilty to traveling in interstate commerce to engage in sexual activity with a minor.
“Protecting children is a top priority in my office,” said United States Attorney Mike Stuart. “Crimes against children are inexcusable and child predators will be prosecuted to the fullest extent of the law.”
Smith admitted that on February 27, 2020, he responded to a Craigslist ad and engaged in a conversation with a person he believed to be a mother of two minors, ages 11 and 13. During the course of the conversation, Smith arranged to travel from Chesapeake, Ohio to Huntington to meet the woman in order to engage in sexual activity, including oral sex and sexual intercourse, with the two minor females. On February 28, 2020, Smith traveled to Huntington with condoms and small gifts for the two minors and met with the woman, at which time he was placed under arrest.
Smith faces up to 30 years in prison when sentenced on November 2, 2020. He also will be required to register as a sex offender following his release from prison.
The Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force conducted the investigation. United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Jennifer Rada Herrald is handling the prosecution.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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. 3:20-cr-00071.
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###Niagara Falls Man with Two Prior Felony Convictions Pleads Guilty to Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jacob Taggart, 31, of Niagara Falls, NY, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to being a felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison, and a $250,000 fine.
Assistant U.S. Attorney Charles E. Watkins, who is handling the case, stated that just after midnight on May 9, 2019, the Niagara Falls Police Department received a 911 call reporting that the defendant displaying a handgun inside the Players Bar on Niagara Street. Before officers arrived at the scene, Taggart left the club in a vehicle traveling on Ferry Avenue. Officers located the car and executed a stop. A 9mm handgun was found underneath the rear of the front passenger seat where defendant was seated. A review of the Players Bar surveillance video captured Taggart twice taking the firearm from his pocket and displaying it inside the bar. The firearm was previously reported stolen out of Stamford, Connecticut.
The defendant was convicted: in January 2013, of attempted gang assault in the 2nd degree, and in February 2011, of criminal possession of a controlled substance. As a result, Taggart is legally prohibited from possessing a firearm.
The plea is the result of an investigation by the Niagara Falls Police Department, under the direction of Superintendent Thomas Licata, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito.
Sentencing is scheduled for December 3, 2020, before Judge Sinatra.
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New Orleans Tax Preparer Sentenced for Fraudulent Tax ReturnsRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced today, TRISH CHRISTOPHER, age 36, of Metairie was sentenced to three years of probation before U.S. District Judge Susie Morgan, for aiding and assisting in the preparation of false federal tax returns, in violation of Title 26, United States Code, Section 7206(2), a crime punishable by up to
(3) three years of imprisonment.CHRISTOPHER admitted that as owner and operator of C.C. Tax Service, located in New Orleans, Louisiana, she prepared and caused to be prepared at least 36 individual income tax returns that included false or fictitious Schedule A itemized deductions in order to falsely inflate her clients’ tax refunds.
“When Trish Christopher utilized her tax return preparation business, C.C. Tax Service, for ill-gotten gains, she underestimated the special agents of IRS Criminal Investigation,” said James E. Dorsey, Special Agent in Charge, IRS-Criminal Investigation, Atlanta Field Office. “By identifying, investigating and recommending prosecution of abusive return preparers, IRS-CI works diligently to protect the American tax system.”
Pursuant to the plea agreement, CHRISTOPHER has agreed to pay restitution of $195,205.00 to the Internal Revenue Service (IRS). In addition to probation and restitution, CHRISTOPHER has been ordered to pay a $100.00 special assessment fee.
U.S. Attorney Peter G. Strasser praised the work of the Internal Revenue Service, Criminal Investigations Division, for its work in investigating this case. The case was prosecuted by Assistant United States Attorney Shirin Hakimzadeh.
New Bedford Massachusetts Man Sentenced to 25 Years’ Imprisonment on Child Pornography ChargesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Jason Monast, age 37, of New Bedford, Massachusetts, was sentenced on July 28, 2020, to 25 years’ imprisonment followed by 10 years on supervised release by United States District Court Judge Malachy E. Mannion, for online enticement of a minor and penalties for registered sex offenders.
According to United States Attorney David J. Freed, between March 1, 2019 and April 11, 2019, as a registered sex offender, Monast used the internet to entice a minor to engage in sexual activity.
The case was investigated by the Federal Bureau of Investigation and the Covington Township Police Department. Assistant U.S. Attorney Jenny P. Roberts prosecuted the case.
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 the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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Nashua Man Sentenced to 63 Months for Participating in Drug Trafficking Conspiracy in Nashua AreaRead the Press Release
CONCORD – George Cruz, 30, of Nashua, was sentenced on Wednesday to 63 months in federal prison for participating in a conspiracy to distribute crack cocaine, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, Cruz was a member of a drug trafficking organization that distributed crack cocaine and other drugs to various customers in the Nashua area. Cruz actively sold drugs to customers for the organization.
Cruz previously pleaded guilty on December 17, 2019.
In addition to Cruz, six defendants in this case have pleaded guilty. Four of the defendants have been sentenced: Donald Johnson was sentenced to 42 months in prison; Melvin Nooks, Jr. was sentenced to 120 months in prison; Marvin Morrison was sentenced to 15 months in prison; and Mallory Nooks received 60 months in prison. William Greenleaf is scheduled to be sentenced on November 3, 2020 and Isaiah Kinard is scheduled to be sentenced on November 4, 2020. Three other defendants are awaiting trial.
“This 63-month sentence should serve as a warning to drug dealers operating in the Nashua area,” said U.S. Attorney Murray. “Mr. Cruz now follows four of his fellow conspirators to federal prison. A similar fate awaits those who peddle crack cocaine anywhere in the Granite State. We will continue to work with the FBI and all of our law enforcement partners to identify, prosecute, and incarcerate the purveyors of dangerous illegal drugs.”
“With today’s sentence, George Cruz became the fifth member of this drug trafficking organization to be held accountable for pumping illegal narcotics like crack cocaine into the neighborhoods of Nashua,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Given that the safety and quality of life of our communities are on the line, our Safe Streets Gang Task Force will vigorously work to put drug trafficking rings like this one permanently out of business.”
This matter was investigated by the Federal Bureau of Investigation with assistance from the New Hampshire State Police, Nashua Police Department, Manchester Police Department, Dover Police Department, and Portsmouth Police Department. The case was prosecuted by Assistant U.S. Attorneys Georgiana Konesky and Anna Krasinski.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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Man sentenced to 32 years for kidnapping and carjacking an Indianapolis womanRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced today, Christian Lovies, 21, Milwaukee, Wisconsin, was sentenced to more than 32 years in federal prison by U.S. District Judge James R. Sweeney. In February, a jury found Lovies guilty of kidnapping, carjacking, and brandishing a firearm during and in relation to a violent crime.
“I hope the sentence Lovies received will bring some peace and comfort to the brave victim in this case.” said Minkler. “The fear that Lovies and his violent crime partners imposed on this innocent victim and others is unimaginable. No doubt, Milwaukee, Indianapolis, and Cincinnati are much safer with Lovies and his co-defendants off the street.”
Lovies and three associates were involved in a violent crime spree including the theft of a vehicle containing a toddler in Milwaukee, Wisconsin. Fortunately, the child was found, uninjured, approximately a half mile away from where the vehicle was stolen. Lovies and his associates then stole another vehicle and fled Milwaukee to avoid arrest for their offenses. The stolen vehicle that the group was traveling in broke down in Indianapolis, leaving the group stranded and on foot.
Lovies and another co-defendant approached an Indianapolis teacher who was getting gas on the northwest side of Indianapolis. Lovies pointed a gun at the victim, demanded her keys, and forced the victim into the backseat of her vehicle. The victim was held captive for approximately three hours while the group travelled to Cincinnati, Ohio. During the trip, Lovies and another co-defendant discussed killing the victim, but decided against it. The victim was ultimately released in Cincinnati, Ohio and was permitted to leave with her vehicle. She quickly drove away and ended up stopping at a YMCA where she was assisted by the staff in calling the Cincinnati Police Department.
Lovies and his associates allegedly carjacked two other women in the Cincinnati area. Lovies has federal charges pending in those cases, and has already been sentenced for offenses he committed in the Milwaukee area.
Two of Lovies co-defendants have been sentenced to federal prison and/or have pending charges in Milwaukee for their crime spree. Jaleel Schultz received 18 years for his participation in this case and pled guilty to state charges in Milwaukee related to the car theft with the child inside. He also has pending charges for a drive by shooting that occurred in Milwaukee. Armone Hudson received 10 years for his role in this offense. The fourth individual involved in this offense was a juvenile and that case remains under seal.
This case was investigated by the Federal Bureau of Investigation, the Indianapolis Metropolitan Police Department, the Milwaukee Police Department, and the Cincinnati Police Department.
“Today’s sentencing of Christian Lovies demonstrates the FBI’s commitment to investigating cases of violent crime to protect innocent victims from those who engage in this type of activity. The teamwork between the our agents and task force officers on the FBI Violent Crimes Task Force and police departments across three states, ensured there is one less predator victimizing members of our community.”
According to Assistant United States Attorneys Amanda Kester and Kathryn Olivier, who prosecuted this case for the government, Lovies will also serve five years of supervised release following his release from federal prison.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution sentencing demonstrates the office’s firm commitment to prosecute defendants committing violent crimes involving firearms, and carjacking. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Sections 2.3
Man charged with sending threatening emailRead the Press Release
HONOLULU, Hawaii – Sean Michael Fujiwara, 43, of Kailua, Hawaii, was charged on July 28, 2020 by federal complaint with sending threatening interstate communications. Fujiwara has been remanded to federal custody pending further proceedings.
U.S. Attorney Kenji M. Price for the District of Hawaii announced that the complaint alleges that Fujiwara sent emails at least 21 times between December 8, 2017 and July 27, 2020 that were threatening in nature or contained references to foreign terrorist organizations, or both. Among the alleged messages were a February 25, 2018 email to a personal Hawaii Department of Education email address threatening to shoot and kill teachers and students, a June 8, 2020 email to a law enforcement agency threatening to plant a bomb at a specified police station, and multiple emails proclaiming Fujiwara’s allegiance to ISIS.
“Words have meaning, and the law enforcement community in Hawaii will not tolerate the use of electronic communications to send threatening words to victims in our communities. We will thoroughly investigate and prosecute those whose conduct jeopardizes public safety, particularly during times when many in our communities have enough to worry about,” said U.S. Attorney Price.
“The FBI takes these types of threats very serious especially when they reference schools and the killing of students and teachers. Many times these threats are more than words and are actually a precursor to violence. The men and women of the FBI work tirelessly to identify the author of such threats to ensure they are stopped before they act out. This arrest is an example of the FBI’s dedication to justice and our goal of making Hawaii a safer place for all,” said Federal Bureau of Investigation Special Agent in Charge Eli S. Miranda.
The charges in the complaint are merely allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Sean Van Demark.
Man Charged with Possessing with Intent to Distribute MethamphetamineRead the Press Release
St. Louis – Richard L. Treis, 46, was charged by a federal complaint today with possession with intent to distribute 500 grams or more of methamphetamine.
According to the complaint, on July 15, 2020, an Undercover Agent (UCA) with Department of Homeland Security received a phone call from Richard Treis. Treis was looking to purchase 40 pounds of methamphetamine from the UCA for $120,000.
On July 29, 2020, investigators conducted surveillance on a vehicle in which Treis was the passenger and another individual who was the driver. The UCA met with Treis at the proposed meeting location, in Pacific, Missouri. Treis opened up a black bag and showed the UCA a large amount of United States Currency. The UCA directed Treis to drive to the back of the location where they could exchange the methamphetamine for the money.
The other individual and Treis drove to the agreed location, where the UCA provided Treis with a bag containing 7.1 kilograms of methamphetamine. Treis handed the bag of methamphetamine to the other individual and began walking toward the vehicle that they had arrived in. Investigators converged on the scene and arrested Treis and the other individual.
The Department of Homeland Security and the Drug Enforcement Administration are investigating these current charges. Assistant United States Attorney Derek Wiseman is handling the case for the Office.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
Macomb County Couple Charged with Tax Evasion and Health Care Fraud Offenses and Physician Charged in Health Care Fraud ConspiracyRead the Press Release
A superseding indictment was unsealed today charging Isabel Tcruz and Noli Tcruz with tax evasion and multiple health care fraud offenses, and charging Dr. Terry S. Baul with participating in a health care fraud conspiracy, U.S. Attorney Matthew Schneider announced today. Previously, only Isabel Tcruz had been indicted with health care fraud offenses in this case.
Schneider was joined in the announcement by Special Agent in Charge Sarah Kull, Internal Revenue Service, Criminal Investigation, Detroit Division and Special Agent in Charge Lamont Pugh, U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
Charged in the superseding indictment are:
Isabel Tcruz, 61, of Washington Township
Noli Tcruz, 65, of Washington Township
Dr. Terry S. Baul, 69, of Detroit.
According to the Superseding Indictment, during May 2011 to January 2018, Isabel Tcruz and Noli Tcruz owned and operated multiple home health care companies in Roseville, Michigan, including Maxicare Home Health Agency, Inc., Faith Home Care Services, LLC, and Affinity Home Care, LLC, though they sold Affinity Home Care in December 2014. They also owned and operated home health agencies in Arizona and Nevada. The companies were enrolled as participating providers with Medicare and submitted claims to Medicare. As part of that enrollment, Isabel and Noli Tcruz agreed to comply with all Medicare rules, which included that they would not violate the Anti-Kickback statute. Dr. Terry S. Baul operates a family practice in Detroit.
The superseding indictment alleges that, from approximately September 2007 through the present, Isabel and Noli Tcruz engaged in tax evasion. During that time they willfully avoided paying approximately $602,154.91 in taxes, not including interest and penalties, which had been assessed against them for the years 2006-2009. Isabel and Noli Tcruz avoided paying their taxes in numerous ways, including using their home health care business bank accounts to pay more than $440,000 in personal expenses. They also placed funds beyond the reach of the IRS by diverting money from their businesses to other people, and those people used the money to pay Isabel and Noli Tcruz’s personal expenses. Among other things, Isabel and Noli Tcruz used money from their businesses to purchase a home in Michigan for $675,000 and a home in Henderson, NV for $925,000. From 2011 to 2017, Isabel and Noli Tcruz used their businesses to pay, directly or indirectly, approximately $909,020.55 in personal expenses, and they issued checks from their business accounts made payable to themselves, but diverted the money to others to pay their expenses, totaling approximately $1,616,239.26.
The superseding indictment further alleges that, from May 2011 through January 2018, Isabel Tcruz, Noli Tcruz, Dr. Terry Baul, and other doctors conspired to defraud the United States by paying and receiving health care kickbacks. In short, Isabel and Noli Tcruz, through their home health care companies, arranged with multiple physicians, including Dr. Baul, to pay the physicians, and for the physicians to receive, kickbacks and bribes in exchange for referring Medicare beneficiaries and providing Medicare beneficiary information that was used to support false and fraudulent claims by the business entities. Isabel and Noli Tcruz then submitted or caused the submission of claims to Medicare for home health care services that were provided or purportedly provided to the beneficiaries.
Isabel Tcruz, Noli Tcruz, Dr. Baul, and the other physicians attempted to disguise the illegal kickbacks. For example, Isabel Tcruz paid Dr. Baul in cash and gifts, rather than payments that could be tracked.
Isabel and Noli Tcruz are also charged with separate counts based on specific instances where they paid kickbacks or bribes.
Fraudulent claims to Medicare totaling at least $12,000,000 were submitted that were obtained through illegal kickbacks and bribes, and not otherwise eligible for Medicare reimbursement.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
The case was investigated by Special Agents of IRS Criminal Investigations and HHS-OIG.
The case is being prosecuted by Assistant U.S. Attorneys Brant Cook and Andrew Lievense.
Los Angeles City Councilman Jose Huizar Charged in 34-Count Indictment Alleging Wide-Ranging Political CorruptionRead the Press Release
INDICTMENTLOS ANGELES – A federal grand jury today returned a 34-count indictment against Jose Huizar, an elected member of the Los Angeles City Council, on charges that he led a criminal enterprise where he used his powerful position at City Hall to enrich himself and his close associates, and unlawfully gave favorable treatment to developers who financed and facilitated bribes and other illicit financial benefits.
The indictment incorporates the allegations made in last month’s criminal complaint that charged Huizar, 51, of Boyle Heights, with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act. The indictment specifically alleges 402 overt acts that Huizar and his co-conspirators committed to further their criminal enterprise, including bribery, honest services fraud, and money laundering.
In addition to the RICO conspiracy charge, the indictment charges Huizar with the following criminal charges: 12 counts of honest services wire fraud; two counts of honest services mail fraud; four counts of traveling interstate in aid of racketeering; six counts of bribery; five counts of money laundering; one count of structuring cash deposits to conceal bribes; one count of making a false statement to a financial institution; one count of making false statements to federal law enforcement; and one count of tax evasion.
Huizar is expected to appear via videoconference for his arraignment, which is scheduled for August 3 in United States District Court.
Huizar has represented Council District 14 (CD-14), which includes downtown Los Angeles and its surrounding communities, since 2005. Huizar for several years was chair of the city’s influential Planning and Land Use Management Committee, a position he lost after the FBI executed search warrants at his city offices and personal residence in November 2018. During the search of his home, agents seized approximately $129,000 cash that was stashed in Huizar’s closet and which, according to the indictment, he received from a Chinese billionaire and another businessperson seeking favors from him.
The indictment alleges that Huizar operated the “CD-14 Enterprise,” along with co-conspirator members, including “Individual 1,” a former general manager of the Los Angeles Department of Building and Safety and former deputy mayor; George Esparza, Huizar’s former special assistant; and real estate development consultant George Chiang. Members and associates of the criminal enterprise referred to Huizar as their “boss,” operated as a criminal organization, and worked together for common purposes, the indictment alleges.
The CD-14 Enterprise allegedly had several objectives, including enriching its members and associates through means that included bribery, extortion, and honest services fraud; advancing its political goals and maintaining its control and authority; concealing the enterprise’s financial activities; and protecting the enterprise by concealing its activities and shielding the enterprise from detection by law enforcement, the city, and the public.
Among the multitude of corruption allegations, the indictment alleges that Huizar illegally accepted more than $800,000 in benefits from Chairman E, a Chinese billionaire who runs a multinational development firm and who owns a hotel in Huizar’s district. Chairman E provided $600,000 in collateral to fund a settlement of a sexual harassment lawsuit filed against Huizar by a former CD-14 staffer, allegations that threatened his 2015 re-election campaign, according to the indictment.
The indictment outlines Huizar’s concealment of illicit benefits, including by instructing his special assistant on how to avoid bank reporting requirements, using his family members to launder hundreds of thousands of dollars in bribes, making false statements on a bank loan application and failing to report his illicit benefits on tax returns and ethics disclosure forms. Huizar allegedly engaged in obstructionist conduct, including attempting to influence other witnesses and lying to federal prosecutors and the FBI.
In total, Huizar allegedly agreed to accept at least $1.5 million in illicit financial benefits.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The charges of RICO conspiracy, honest services fraud, and money laundering each carry a statutory maximum sentence of 20 years in federal prison. The charge of making false statements to a financial institution has a statutory maximum sentence of 30 years’ imprisonment. The bribery charges each carry a statutory maximum sentence of 10 years in federal prison. The charges of tax evasion, structuring, making false statements to law enforcement, and interstate travel in aid of racketeering have a five-year maximum prison sentence.
Huizar is the fifth person to be charged in the ongoing corruption investigation being conducted by the FBI and the U.S. Attorney’s Office. The other four defendants have pleaded guilty. Esparza, Chiang, and Justin Jangwoo Kim, a Huizar fundraiser who admitted to facilitating bribes, are scheduled to be sentenced by United States District Judge John F. Walter in February 2021. Esparza, Chiang, and Kim are cooperating with the ongoing investigation.
Former Los Angeles City Councilman Mitchell Englander pleaded guilty on July 7 to charges of scheming to falsify material facts related to trips he took to Las Vegas and Palm Springs that were funded by a businessperson. Englander’s sentencing hearing is scheduled for December 7, also before Judge Walter.
The cases against Huizar and his associates in the CD-14 Enterprise are being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Veronica Dragalin and Melissa Mills, also of the Public Corruption and Civil Rights Section.
Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s tip line at tips.fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
Liverpool Man Pleads Guilty to Robbing Banks in Brighton and Buffalo, and Attempting to Rob A Third Bank in Niagara FallsRead 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 Michael Tyo, 32, of Liverpool, NY, pleaded guilty to two counts of bank robbery and one count of attempted bank robbery, before U.S. District Judge David G. Larimer. The charges carry a maximum penalty of 20 years in prison, and a $250,000 fine.
Assistant U.S. Attorney Katelyn M. Hartford, who is handling the case, stated that over the course of four days in August 2019, Tyo robbed a bank in Brighton, New York; a bank in Buffalo, New York; and attempted to rob a third bank in Niagara Falls, New York.
On August 24, 2019, Tyo robbed the Citizens Bank inside the Tops Market on South Clinton Avenue in Brighton. The defendant gave the bank teller a detailed note that said, “if I even glimpse a dye-pack I will not hesitate to elevate the situation and you will be the first casualty.” Another part of the note stated, “If I happen to get caught because of you, when I get out of prison, I will systematically destroy you and the people you love the most.” The bank teller complied with the defendant’s demands and gave him U.S. currency, which Tyo took and fled the bank.
On August 27, 2019, Tyo robbed a second Citizens Bank inside the Tops Market on South Park Avenue in Buffalo. He gave the bank teller a note demanding $50 and $100 bills.
The defendant threatened the use of violence, stating in the note that he would use his gun if the teller did not cooperate. The teller complied and gave the defendant U.S. currency, which he took and fled the bank.
Also on August 27, 2019, Tyo attempted to rob a third bank, the Key Bank on Niagara Falls Boulevard in Niagara Falls. However, when he gave the teller a demand note, the teller said that they were dealing with a computer issue, and Tyo did not succeed in obtaining any money.
The plea is the result of an investigation by the Brighton Police Department, under the direction of Chief Dave Catholdi, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.
Sentencing is scheduled for October 15, 2020, at 10:00 a.m. before Judge Larimer.
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KCK Woman Charged with CarjackingRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Kansas, woman was charged in federal court today with stealing a vehicle at gunpoint from the parking garage at the Country Club Plaza.
This Century Arms Draco AK 47-style 9mm pistol was seized from Maricela Delores Lozano at the time of her arrest.Maricela Delores Lozano, 20, was charged with one count of carjacking and one count of using a firearm during a crime of violence in a complaint filed under seal in the U.S. District Court in Kansas City, Mo., on Tuesday, July 28. The complaint was unsealed today following Lozano’s arrest and initial court appearance.
The federal criminal complaint alleges that Lozano used a Century Arms Draco AK 47-style 9mm pistol during the theft of a 2010 Nissan Altima on July 19, 2020.
According to an affidavit filed in support of the criminal complaint, Lozano approached the owner of the Altima, who was attempting to start her vehicle to leave the parking garage of the Country Club Plaza, at about 5:48 p.m. on July 19, 2020. Lozano brandished the AK 47-style pistol, the affidavit says, pointed it at the victim, and demanded her keys and cell phone. The victim complied and walked away from the vehicle, after which Lozano drove her car out of the parking garage. The victim went to a nearby business and used their phone to call the police.
Lozano, who was standing beside the stolen vehicle, was spotted by a Missouri State Highway Patrol corporal in a driveway in Fulton, Missouri, on July 21, 2020. When the officer drove toward her, the affidavit says, she got into the vehicle and attempted to flee. The officer stopped the vehicle and arrested Lozano and a male passenger. The officer seized the loaded firearm from the floorboard behind the driver’s seat.
The charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the Kansas City, Mo., Police Department, the Missouri State Highway Patrol, and the FBI.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.KC Man Threatened Witness, Charged with Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man who threatened a witness has been charged in federal court for illegally possessing a firearm and ammunition.
Shannon L. Walz, 45, was charged with one count of being a felon in possession of a firearm and one count of being a felon in possession of ammunition in a criminal complaint filed under seal in the U.S. District Court in Kansas City, Mo., on Tuesday, July 28. The complaint was unsealed and made public following Walz’s arrest and initial court appearance on Wednesday, July 29. Walz remains in federal custody pending a detention hearing, which has not yet been scheduled.
According to an affidavit filed in support of the federal criminal complaint, Walz was arrested following a foot chase by Kansas City, Mo., police officers on May 30, 2020. Officers were called by a resident in the Fairwood and Robandee neighborhood who had been confronted by Walz. Walz knocked on the front door of the person’s residence, the affidavit says, and when the resident opened the door, Walz told the resident to keep their mouth shut regarding a shooting assault that occurred on May 24, 2020. (The victim of the assault died from his injuries on June 10, 2020.) Walz shouted and waved a handgun in a threatening manner, according to the affidavit. The resident closed the door and dialed 911 while Walz walked away from the house.
Police officers responded to the call and saw Walz walking on James A. Reed Road. When Walz saw the officers, the affidavit says, he fled on foot. Walz ran through the property of a church at 9420 James A. Reed Road. He was captured shortly thereafter near the intersection of Bannister and James A. Reed Roads and placed under arrest. Walz had two knives and a .40-caliber handgun magazine (containing 10 rounds) in his pocket.
Officers subsequently obtained surveillance video from the church, which depicts Walz fleeing from officers and throwing a Hi-Point .40-caliber handgun into some bushes near the front entrance of the church. Officers returned to the church on June 10, 2020, and found the loaded handgun.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Walz has prior felony convictions for statutory rape and burglary.
The charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department, the FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.Justice Department Settles with School District to Resolve Disability Discrimination ComplaintRead the Press Release
The Justice Department today announced that it reached an agreement with Spencer East Brookfield Regional School District in Spencer, Massachusetts to resolve the department’s lawsuit alleging disability discrimination in violation of the Americans with Disabilities Act (ADA).
The department’s complaint alleges that the school district terminated an elementary-school paraprofessional with knee and shoulder impairments on the basis of her disability. Further, the complaint alleges that the school district unlawfully denied the employee’s reasonable accommodation request that, due to her physical limitations, she be excused from a new policy requiring paraprofessionals to be trained to physically restrain school children and be available to perform restraints. The employee was otherwise qualified to perform her job.
Under the agreement, the school district will revise its policies to ensure compliance with the ADA, train staff on the ADA, and file periodic reports with the department on implementation of the agreement. The school district will also pay over $85,000 in back pay and compensatory damages to its former employee. This matter was based on a referral from the Equal Employment Opportunity Commission’s Massachusetts District Office.
“Work provides more than just a paycheck: it provides a sense of purpose, dignity, independence, self-worth, and belonging,” said Assistant Attorney General Eric Dreiband of the Department of Justice's Civil Rights Division. “Without reasonable accommodations for their jobs, many people with disabilities cannot work and, as a result, are unable to achieve economic self-sufficiency and full participation in the workforce. As we celebrate the 30th Anniversary of the ADA, the Civil Rights Division renews its commitment to ensuring that all individuals have an equal opportunity to work free from discrimination based on disability.”
“Even as we celebrate the 30th anniversary of the Americans with Disabilities Act, this case shows that barriers to equal employment opportunity still exist for employees with disabilities,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “Public employers must be leaders in prohibiting discrimination in public sector jobs and ensuring a fair workplace.”
July 26, 2020 marked the 30th Anniversary of the ADA. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. Please visit the department’s ADA Anniversary webpage to learn more about the ADA’s history and impact.
To read the settlement agreement, please click here, and to read the complaint, please click here. For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Justice Department Settles with Private School to Ensure Compliance with the ADARead the Press Release
WASHINGTON – The Justice Department today reached a settlement agreement with Ridgewood Preparatory School (Ridgewood) to ensure that students with disabilities are not discriminated against in the full and equal enjoyment of Ridgewood’s services and facilities. Ridgewood is a private, nonsectarian school in Metairie, Louisiana that provides education to children in pre-kindergarten to twelfth grade.
The settlement agreement resolves allegations that Ridgewood violated the Americans with Disabilities Act (ADA) by denying a child with spina bifida admission to its pre-kindergarten and kindergarten programs on the basis of his disability, failing to reasonably modify its policies, practices, and procedures to enable the child to access the school’s programs, and failing to ensure that its buildings and facilities are accessible to people with disabilities. The department’s investigation found that the school, among other things, had inaccessible doors, walkways, and bathrooms.
Under the agreement, Ridgewood will offer the child two years of tuition-free enrollment and, upon enrollment, provide him with reasonable modifications. Ridgewood will also modify its facilities to make them accessible to individuals with disabilities, revise its policies to ensure compliance with the ADA, train relevant staff on the ADA, and pay a $1,000 civil penalty to the United States.
“No child with a disability should be unlawfully denied admission to a school because of a disability, and no parent of a child with a disability should have to worry that his or her child will be discriminated against in this way,” said Assistant Attorney General Eric S. Dreiband of the Justice Department’s Civil Rights Division. “As we celebrate the 30th Anniversary of the ADA, the Civil Rights Division is committed to ensuring that no child with a disability is prevented from enrolling in the school of his or her choice because of discriminatory attitudes about children with disabilities and what they can achieve.”
“Thirty years after the passage of the Americans with Disabilities Act, cases like this demonstrate that there is still work to be done to ensure that children with disabilities do not face disability discrimination in education or otherwise,” said U.S. Attorney Peter G. Strasser for the Eastern District of Louisiana. “Through this agreement, Ridgewood is taking important steps to make sure that all children in its programs, including children with disabilities, will be given the opportunity to have a positive and successful educational experience free from barriers.”
2020 marks the 30th Anniversary of the Americans with Disabilities Act. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. Please visit the department’s ADA Anniversary webpage to learn more about the ADA’s history and impact.
People interested in finding out more about the ADA or these settlement agreements can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.
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Justice Department Settles with Private School to Ensure Compliance with the ADARead the Press Release
The Justice Department today reached a settlement agreement with Ridgewood Preparatory School (Ridgewood) to ensure that students with disabilities are not discriminated against in the full and equal enjoyment of Ridgewood’s services and facilities. Ridgewood is a private, nonsectarian school in Metairie, Louisiana, that provides education to children in pre-kindergarten to twelfth grade.
The settlement agreement resolves allegations that Ridgewood violated the Americans with Disabilities Act (ADA) by denying a child with spina bifida admission to its pre-kindergarten and kindergarten programs on the basis of his disability, failing to reasonably modify its policies, practices, and procedures to enable the child to access the school’s programs, and failing to ensure that its buildings and facilities are accessible to people with disabilities. The department’s investigation found that the school, among other things, had inaccessible doors, walkways, and bathrooms.
Under the agreement, Ridgewood will offer the child two years of tuition-free enrollment and, upon enrollment, provide him with reasonable modifications. Ridgewood will also modify its facilities to make them accessible to individuals with disabilities, revise its policies to ensure compliance with the ADA, train relevant staff on the ADA, and pay a $1,000 civil penalty to the United States.
“No child with a disability should be unlawfully denied admission to a school because of a disability, and no parent of a child with a disability should have to worry that his or her child will be discriminated against in this way,” said Assistant Attorney General Eric S. Dreiband of the Justice Department’s Civil Rights Division. “As we celebrate the 30th Anniversary of the ADA, the Civil Rights Division is committed to ensuring that no child with a disability is prevented from enrolling in the school of his or her choice because of discriminatory attitudes about children with disabilities and what they can achieve.”
“Thirty years after the passage of the Americans with Disabilities Act, cases like this demonstrate that there is still work to be done to ensure that children with disabilities do not face disability discrimination in education or otherwise,” said U.S. Attorney Peter G. Strasser for the Eastern District of Louisiana. “Through this agreement, Ridgewood is taking important steps to make sure that all children in its programs, including children with disabilities, will be given the opportunity to have a positive and successful educational experience free from barriers.”
2020 marks the 30th Anniversary of the ADA. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. Please visit the department’s ADA Anniversary webpage to learn more about the ADA’s history and impact.
People interested in finding out more about the ADA or these settlement agreements can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.
Justice Department Settles with Spencer East Brookfield Regional School District to Resolve Disability Discrimination ComplaintRead the Press Release
BOSTON – The Justice Department reached an agreement with Spencer East Brookfield Regional School District in Spencer, Mass. to resolve the Department’s lawsuit alleging disability discrimination in violation of the Americans with Disabilities Act (ADA).
The Justice Department’s complaint alleged that the school district terminated a paraprofessional with knee and shoulder impairments on the basis of her disability after 16 years of employment. The school district denied the employee’s reasonable accommodation request that, due to her physical limitations, would have excused her from a new policy requiring paraprofessionals to be trained to physically restrain school children and be available to perform restraints.
Under the agreement, the school district will revise its policies to ensure compliance with the ADA, train staff on the ADA, and file periodic reports with the Justice Department on implementation of the agreement. The school district will also pay $85,699 in back pay and compensatory damages to its former employee. This matter was based on a referral from the Equal Employment Opportunity Commission’s Massachusetts District Office.
“Even as we celebrate the 30th anniversary of the Americans with Disabilities Act, this case shows that barriers to equal employment opportunity still exist for employees with disabilities,” said United States Attorney Andrew E. Lelling. “Public employers must be leaders in prohibiting discrimination in public sector jobs and ensuring a fair workplace.”
“Work provides more than just a paycheck: it provides a sense of purpose, dignity, independence, self-worth, and belonging,” said Assistant Attorney General Eric Dreiband. “Without reasonable accommodations for their jobs, many people with disabilities cannot work and, as a result, are unable to achieve economic self-sufficiency and full participation in the workforce. As we celebrate the 30th Anniversary of the ADA, the Civil Rights Division renews its commitment to ensuring that all individuals have an equal opportunity to work free from discrimination based on disability.”
This year marks the 30th Anniversary of the Americans with Disabilities Act. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. The Justice Department will continue to use its enforcement and technical assistance tools to eliminate unlawful discrimination against individuals with disabilities.
U.S. Attorney Lelling and AAG Dreiband made the announcement today. The case was handled by Assistant U.S. Attorney Torey Cummings of Lelling’s Civil Rights Unit and the Justice Department’s Civil Rights Division.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights
Jones County Man Convicted for Unlawful Possession of an Unregistered Destructive DeviceRead the Press Release
Hattiesburg, Miss. – Brian Richard Sanders, 66, of Laurel, pled guilty today before U.S. District Judge Keith Starrett, to the unlawful possession of an explosive destructive device not registered in the national firearms registration and transfer record, announced U.S. Attorney Mike Hurst and Special Agent-in-Charge Kurt Thielhorn with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Sanders is scheduled to be sentenced by Judge Starrett on November 18, 2020, at 11:00 a.m. He faces a maximum penalty of 10 years in prison and a $250,000 fine.
On January 17, 2020, the ATF and the Jones County Sheriff’s Office received information that Sanders had manufactured and possessed an Improvised Explosive Device (IED) in his home in Laurel. The Sheriff’s Office obtained a search warrant for his home. ATF agents and members of the City of Biloxi Police Department Bomb Squad assisted in the search. Agents seized a pipe bomb, two bottles of black powder, a roll of red hobby fuse, several firearms, and ammunition. Additionally, they found a rifle that had what appeared to be a silencer attached.
An ATF Explosive Specialist/Bomb Technician, and Biloxi Bomb Squad members successfully disassembled the device in a safe area near the home, and were able to recover all pieces including the pipe with end-caps, red fuse, suspected black powder, and nails. As a destructive device, the pipe bomb was considered a firearm as defined within the National Firearms Act (NFA).
A query was conducted with the ATF National Firearms Act Division, which confirmed that both the pipe bomb explosive destructive device and silencer were not registered. A laboratory verified that the pipe bomb was in fact an explosive destructive device that was or readily could be made operable. The ATF also confirmed that the homemade silencer was a functioning silencer.
U.S. Attorney Hurst commended the coordinated investigation by the ATF, the Jones County Sheriff’s Office and the City of Biloxi Police Department Bomb Squad. The case is being prosecuted by Assistant U.S. Attorney Stan Harris.
Japanese Shipping Company Fined $1.5 Million for Concealing Illegal Discharges of Oily WaterRead the Press Release
Misuga Kaiun Co. Ltd. (MISUGA), a Japanese-based company engaged in international shipping, was sentenced yesterday in federal court before U.S. District Court Judge Paul G. Byron in Orlando, Florida.
The company pleaded guilty to violating the Act to Prevent Pollution from Ships for failing to accurately maintain an oil record book that covered up discharges of oily water from the Motor Vessel (M/V) Diamond Queen. MISUGA was sentenced to pay a fine of $1.5 million, placed on probation for a period of four years, and ordered to implement a comprehensive Environmental Compliance Plan as a special condition of probation.
“The world’s oceans are an important natural resource,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “This prosecution demonstrates the department’s continuing commitment to protecting our ocean resources and upholding the rule of law.”
“Our oceans and waterways are essential to the health and balance of the world’s ecosystem,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “Those who act with reckless disregard for the safety of our environment by willfully polluting or contaminating it put everyone at risk, and will be held accountable for their actions.”
“The results announced today send a strong message to anyone who seeks to take shortcuts and intentionally pollute our environment,” said Rear Adm. Eric C. Jones, Commander Coast Guard District Seven. “I am proud of the hard work and dedication of our marine inspectors from Marine Safety Detachment Cape Canaveral, as well as our special agents from Coast Guard Investigative Service Southeast Region, during a time when many may think we are distracted by the pandemic. We will continue to work with our Department of Justice and environmental protection partners to hold accountable any who put profit above regulations, threaten our coastal ecosystems and jeopardize our waters and harbors for future generations.”
“The Coast Guard Investigative Service will continue to proactively investigate environmental crime, which costs our communities not only monetarily but also impacts the health and safety of our waterways, and all those who rely on them,” said Special Agent in Charge Zinnia James of the Southeast Region of the Coast Guard Investigative Service.
In pleading guilty, MISUGA admitted that the chief engineer onboard the M/V Diamond Queen, a 34,800 gross-ton, 656-foot ocean-going commercial bulk carrier, knowingly failed to record the overboard discharge of oily bilge water without the use of required pollution-prevention equipment. The discharges occurred on multiple occasions, from approximately April 2019 until the vessel arrived in Port Canaveral, Florida, on May 22, 2020. The chief engineer, Cloyd Dimapilis, also pleaded guilty to falsifying the oil record book, and was sentenced to one year of probation.
According to the plea agreement, MISUGA operated the M/V Diamond Queen. Prior to the ship’s arrival in Port Canaveral on May 22, a junior crewmember informed the U.S. Coast Guard that he had information about illegal discharges that had taken place on the vessel. The U.S. Coast Guard dispatched Port State Control Examiners to conduct an inspection of the vessel. Examiners discovered evidence of the system that was used to discharge oily water from the vessel in order to bypass the vessel’s oily water separator.
Senior Trial Attorney Kenneth Nelson of the Environmental Crimes Section and Assistant U.S. Attorney John Gardella of the Middle District of Florida are prosecuting the case. The prosecution is the result of an investigation by the Coast Guard Investigative Service, Marine Safety Detachment Port Canaveral, and Coast Guard Sector Jacksonville.
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.
Indictment: 2019 Kidnapping Took Place in Wyandotte CountyRead the Press Release
KANSAS CITY, KAN. – A grand jury in Kansas City, Kan., returned kidnapping charges Wednesday against six defendants, U.S. Attorney Stephen McAllister said.
The superseding indictment builds on an indictment initially filed under seal late last year alleging the kidnapping took place in April 2019 in Wyandotte County. The indictment alleges a ransom was paid and that some of the defendants carried firearms during the crime. The indictment identifies the victim only as D.B. and provides no further details of the crime. The federal penalty for kidnapping is up to life in prison.
Charged in the case are the following:
David Carr, 34, Kansas City, Kan., one count of kidnapping (count one), one count of brandishing a firearm during the crime (count four).
Brandon West, 34, Kansas City, Kan., one count of kidnapping (count one), one count of receiving and possessing ransom money (count two), one count of brandishing a firearm during the crime (count four).
Randi Serna, 30, Wichita, Kan., one count of kidnapping (count one).
Brian Spaulding, 30, Mission, Kan., one count of kidnapping (count one), one count of discharging a shotgun during the crime (count three).
Michael Huggins, 39, one count of kidnapping (count one), one count of receiving and possessing ransom money (count two),
James Michael Poterbin, 44, one count of kidnapping (count one), one count of brandishing a firearm during the crime (count four).
Upon conviction, the crimes carry the following penalties:
Kidnapping: Up to life in federal prison and a fine up to $250,000.
Receiving ransom money: Up to 10 years and a fine up to $250,000.
Brandishing a firearm in a crime of violence (counts three and four): Not less than five years and a fine up to $250,000.
The FBI investigated. Assistant U.S. Attorney Sheri Catania is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Health Care Executive Sentenced to 20 Years in TRICARE Fraud CaseRead the Press Release
The health care executive at the center of a $70 million compounded pain and scar cream fraud has been sentenced to 20 years in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
In December 2019, after six days of deliberation, a federal jury convicted John Paul Cooper, 56, of one count of conspiracy to commit health care fraud, one count of receipt of illegal kickbacks, and six counts of payment of illegal kickbacks. Mr. Cooper was sentenced Tuesday by Chief U.S. District Judge Barbara M.G. Lynn.
“This defendant siphoned millions of dollars from Defense Department’s health insurance program, with little regard for whether its patients would actually benefit from the prescriptions he pushed,” said U.S. Attorney Erin Nealy Cox. “His greed tainted their care.”
"The Defense Criminal Investigative Service is committed to ensuring that TRICARE, the U.S. military healthcare program, continues to provide safe and superior medical care to America's Warfighters," said Michael C. Mentavlos, Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office. "Fraudulent healthcare schemes not only expose beneficiaries to potential harm, but also waste valuable taxpayer dollars. Today's sentencing is a culmination of DCIS' efforts, along with our partners, to combat such fraud."
According to evidence presented at trial, Mr. Cooper, president and co-owner of pharmaceutical marketing group CMGRX, conspired with Richard Robert Cesario, CMGRX CEO and co-owner, to defraud TRICARE, the Defense Department’s health insurance program for military servicemembers and their families.
The evidence showed that CMGRX hired marketers to recruit more than 2,300 patients, many of whom were on active duty at Fort Hood, and incentivized them to obtain costly pain and scar cream prescriptions with their TRICARE benefits in exchange for kickbacks of $250 per prescription.
Mr. Cooper and Mr. Cesario disguised these illegal kickbacks by claiming they were payments for participation in a bogus medical study and by funneling the money through the “Freedom from Pain Foundation,” a sham charity they funded, directed, and controlled.
Evidence showed that CMGRX also paid multiple doctors, who had no prior relationship with the patients, to write their prescriptions after brief telephone calls. However, instead of giving the prescriptions to the patients, Mr. Cooper and Mr. Cesario instructed the doctors to send the signed prescriptions back to CMGRX, so that the company could send the prescriptions to partner pharmacies. In exchange for those prescription referrals, the pharmacies billed TRICARE for the drugs and kicked back a percentage of the reimbursement to CMGRX.
From September 2014 through May 2015, CMGRX caused over $124 million in claims to be billed to TRICARE, $70 million of which were paid.
Mr. Cesario – who pleaded guilty before trial to conspiracy to commit health care fraud and receipt of illegal remuneration – is awaiting sentencing. CMGRX marketers Joe Straw and Luis Rios also pleaded guilty before trial and are likewise awaiting sentencing.
The owners of CMGRX partner pharmacy Trilogy, Jeff Fuller and Andrew Baumiller, and one of their employees, Liz Valdez, pleaded guilty before trial as well. Mr. Fuller was sentenced by Judge Lynn to five years in prison. Mr. Baumiller and Ms. Valdez are awaiting sentencing. Ravi Morisetty, the owner of CMGRX partner Alpha Pharmacy, pled guilty and was sentenced to two years in prison. Mr. Morisetty did not report to the Bureau of Prisons to serve his sentence and remains a fugitive.
Two doctors associated with CMGRX, Walter Simmons and William Elder-Quintana, are scheduled to be retried later this year, after the jury failed to reach unanimous verdicts on counts against them.
The Defense Criminal Investigative Service and the Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Douglas Brasher and Renee Hunter are prosecuting the case.
Greece Man Sentenced on Gun and Drug ChargesRead 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 Kwashie Ajavon, 33, of Greece, NY, who was convicted of possessing with intent to distribute crack cocaine, and being a felon in possession of a firearm and/or ammunition, was sentenced to serve 87 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Cassie Kocher, who handled the case, stated that on August 13, 2019, law enforcement officers executed a search warrant at the defendant’s residence on Estall Road in Greece. During the search, officers recovered three loaded firearms, approximately $1,200 in cash, methamphetamine, marijuana, and drug packaging materials and cutting agents. Officers also searched a vehicle pursuant to a search warrant and recovered a quantity of crack cocaine and a scale.
In 2008, Ajavon was convicted of Criminal Possession of a Weapon in the Second Degree in Monroe County Court and sentenced to 42 months in prison. As a result, he is legally prohibited from possessing a firearm.
The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.
The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Grand Jury Returns Indictment in Pipeline Drug Case Charging Pair with Possession of Marijuana with Intent to DistributeRead the Press Release
SALT LAKE CITY – A federal grand jury returned a two-count indictment Wednesday afternoon charging two individuals with possession of marijuana with intent to distribute in a pipeline drug case originating from the Utah Port of Entry off Interstate 80 near Wendover. Law enforcement officers found approximately 341 pounds of marijuana in a commercial truck they were traveling in.
“This case is unique only because of the amount of marijuana seized in a semi-truck. Every week, Utah law enforcement officers intercept loads of marijuana transiting Utah’s highways from the west coast to points east. In return, Utah officers will also intercept large bundles of drug-related cash traveling back from the east to the west coast,” U.S. Attorney John W. Huber said. “Policy makers and voters in west coast jurisdictions have created dynamics that negatively impact public safety in Utah. Simply put, these west coast marijuana havens cannot control the black market and overproduction dynamics they have created, and Utah is left to fend for ourselves in maintaining the quality of life we enjoy.
“I remind marijuana traffickers who hope to hide amidst the camouflage of state laws that allow marijuana production: federal law prohibits your conduct and I will enforce those provisions of the law in Utah. Marijuana traffickers may want to rethink their travel plans,” Huber said.
According to charging documents, an agent with the Utah Port of Entry made contact with the driver of the commercial semi-truck and trailer following an overweight reading at the Port of Entry. The driver of the truck was identified with a North Carolina driver’s license as Florin Daniel Goran, 36. Goran is a Romanian citizen. A passenger in the truck was identified as Claudia Marie De Marco, 35, of Hermosa Beach, California.
The agent at the Port of Entry conducted a commercial vehicle safety inspection. When the agent opened the door to the vehicle during the inspection, the agent detected the odor of raw marijuana coming from inside the cab. The agent requested a Utah Highway Patrol trooper be dispatched to the Port of Entry for further investigation. The trooper also detected the odor of marijuana in the cab, the complaint alleges.
A search of the cab was conducted and a black garbage bag was located behind the driver’s seat in a passenger compartment. The bag contained 11 clear bags with approximately 1-pound of suspected raw marijuana in each one of them.
As a part of the inspection, the Utah Port of Entry agent reviewed material noting the semi-trailer contained a shipment of Pedialyte headed to Columbus, Ohio. Opening the vent door to the trailer, the agent could smell marijuana. Another officer, who had arrived at the scene, looked through the vent door with a flashlight and could see large black garbage bags and unsecured boxes inside, the complaint alleges.
The truck was sealed and taken, along with the two suspects, to the Tooele County UHP office. A DEA Metro Narcotics Task Force officer responded to the office for further investigation and a search of the semi’s cab and trailer was conducted.
According the complaint, the trailer contained 330 packages of raw marijuana in clear and black vacuum-sealed bags, each appearing to be approximately 1-pound packages. Law enforcement officers also found 1,240 THC vape cartridges, 150 THC chocolate bars, and 126 packages of THC edibles in the trailer. The raw marijuana tested positive for marijuana.
Goron is charged with possession of marijuana with intent to distribute in the first count of the indictment. He faces up to 40 years in prison if convicted of the charge with a mandatory minimum of 5 years in prison. DeMarco is charged with possession of marijuana with intent to distribute in the second count of the indictment. She faces up to five years in prison if convicted of the charge.
Complaints and indictments are not findings of guilt. Defendants charged in these documents are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Utah and an Assistant Utah Attorney General, designated as a Special Assistant U.S. Attorney. Special agents, troopers, and officers with the DEA Metro Narcotics Task Force, the Utah Highway Patrol, the Utah State Bureau of Investigation, and the Wendover Police Department are investigating the case. An agent with the Utah Department of Transportation’s Motor Carrier Division, Wendover Port of Entry is also assisting with the case.
Gautier Man Charged with Assault on U.S. Marshals Service Task Force OfficersRead the Press Release
Gulfport, Miss – Joseph D. Sonnier, 31, of Gautier, Mississippi, has been charged in an indictment, returned by a Federal Grand Jury on July 28, 2020, with four counts of assault on an officer or employee of the government, one count of felon in possession of a firearm and four counts of discharging a firearm in connection with a violent crime, announced U.S. Attorney Mike Hurst and Special Agent in Charge Michelle Sutphin with the Federal Bureau of Investigation in Mississippi.
Sonnier will have his initial appearance before United States Magistrate Judge John Gargiulo in Gulfport on Thursday, August 6, 2020, at 10:00 a.m.
According to Count 1 of the indictment, Sonnier is alleged to have fired a firearm at J.M., a U.S. Marshals Service Task Force officer, in the course of his duties as he attempted to execute a search warrant, striking J.M. in the neck. According to Counts 2-4 of the indictment, Sonnier is alleged to have used a deadly weapon to assault, impede or otherwise restrict three other officers as they attempted to execute the same search warrant. According to Count 5 of the indictment, Sonnier is alleged to have been in possession of a firearm even though he is prohibited as a convicted felon. According to Counts 6-9 of the indictment, Sonnier is alleged to have discharged a firearm in the commission of a crime of violence.
If convicted, Sonnier faces a maximum penalty of 20 years in prison on each count of assaulting a federal officer, a maximum penalty of 10 years in prison for being a felon in possession of a firearm, and 10 years on each count of discharging a firearm in connection with a violent crime.
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Erica Rose.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. Every defendant is presumed innocent until proven guilty in a court of law.
Garland Chiropractic Owners Sentenced to More Than Three Years for Tax FraudRead the Press Release
Two owners of a Garland chiropractic clinic were sentenced yesterday to 37 months in federal prison and ordered to repay approximately $350,000 for tax fraud, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Tammy Boulyaphonh, 51, was convicted by a federal jury on all five counts against her, including one count of conspiring to defraud the United States by underreporting income and four counts of filings false tax returns in February. Her husband, 59-year-old Khamlor Boulyaphonh had pleaded guilty to similar counts days before trial. The defendants were sentenced yesterday before U.S. District Judge Jane J. Boyle.
“This sentencing is a reminder that there are consequences to criminal tax evasion that include going to prison, being branded a convicted felon for the rest of their lives, and paying back all of the taxes owed,” said Special Agent in Charge Tamera Cantu of the IRS Criminal Investigation Dallas Field Office. “This should resonate with those contemplating similar fraudulent actions.”
According to court documents, Mr. and Ms. Boulyaphonh owned and operated chiropractic clinics in Dallas-Fort Worth that provided medical care principally to patients injured in motor vehicle accidents. The majority of the couples’ business income was derived from payments received from insurance companies and payments received from attorneys who had received insurance settlement payments on behalf of their patients.
Ms. Boulyaphonh directed multiple personal injury attorneys to make checks out to her and her husband personally, then diverted the attorney payments to the couple’s personal bank accounts. Mr. and Ms. Boulyaphonh concealed the diverted income from their tax preparer and provided him with false documents to advance the scheme.
At trial, prosecutors established that the couple had paid less than $4,000 total tax on gross receipts of more than $2 million, all while owning two homes, two luxury vehicles, $1 million life insurance policies, and luxury goods.
Between 2010 and 2013, the couple concealed more than $1.2 million in business income from the IRS.
IRS-Criminal Investigation and the Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Douglas Brasher is prosecuting the case.
Former West Virginia University professor sentenced for fraud that enabled him to participate in the People’s Republic of China’s “Thousand Talents Plan”Read the Press Release
CLARKSBURG – Dr. James Patrick Lewis, of Fairview, West Virginia, was sentenced today to three months incarceration for a fraud charge involving West Virginia University, the Department of Justice announced.
Lewis was also fined $9,363 for the cost of the incarceration and ordered to pay $20,189 in restitution to WVU, which is paid in full.
Lewis, age 54, pleaded guilty to a one-count information charging him with "Federal Program Fraud." From 2006 to August 2019, Lewis was a tenured professor at West Virginia University in the physics department, specializing in molecular reactions used in coal conversion technologies. In July 2017, Lewis entered into a contract of employment with the People’s Republic of China through its "Global Experts 1000 Talents Plan." China’s Thousand Talents Plan is one of the most prominent Chinese Talent recruit plans that are designed to attract, recruit, and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security. These talent programs seek to lure overseas talent and foreign experts to bring their knowledge and experience to China and reward individuals for stealing proprietary information.
According to Lewis’s contract, the Chinese Academy of Sciences agreed to employ Lewis as a professor for at least three years. In return, Lewis agreed to maintain an active research program that yielded publications in high quality, peer-reviewed journals, and to provide research training and experience for Chinese Academy of Sciences students.
As a part of the program, Lewis was promised benefits, including a living subsidy of 1 million Yuan (approximately $143,000), a research subsidy of 4 million Yuan (approximately $573,000), and a salary of 600,000 Yuan (approximately $86,000). To receive the benefits, Lewis would have to work full time in China for three consecutive years, for no less than nine months per year, and would have to begin work no later than Aug. 8, 2018.
In March 2018, Lewis submitted a request to WVU for an alternate/parental work assignment, requesting to be released from his teaching duties for the fall 2018 semester in order to serve as the primary caregiver for a child he and his wife were expecting in June 2018. In fact, however, Lewis knew this request was fraudulent. Rather than caring for his newborn child, Lewis planned to work in China during the fall 2018 semester as a part of his agreement with the "1000 Talents Plan." Based on the false justification Lewis offered, WVU granted his request.
In the fall of 2018, Lewis spent all but three weeks of the semester in China while his newborn child remained in the United States. During this period, Lewis received his full salary from WVU pursuant to his alternate/parental work assignment. Lewis’s scheme allowed him to fraudulently obtain $20,189 from WVU.
Lewis is no longer employed by WVU, having resigned in August 2019. He was ordered to self-report to prison in 30 days.
Assistant U.S. Attorney Jarod J. Douglas and Trial Attorney Evan N. Turgeon with the Department of Justice’s Counterintelligence and Export Control Section, National Security Division, prosecuted the case on behalf of the government. The FBI and the Internal Revenue Service investigated. WVU cooperated in the investigation of this case.
U.S. District Judge Thomas S. Kleeh presided.
Former Schertz Business Manager Pleads Guilty to Stealing over $470,000 from CompanyRead the Press Release
Today, 47-year-old Deanna Bates Wehde of San Antonio admitted to stealing over $470,000 from the company she managed, announced U.S. Attorney John F. Bash and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Appearing before U.S. Magistrate Judge Henry Bemporad, Wehde pleaded guilty to one count of wire fraud and one count of aggravated identity theft. By pleading guilty, Wehde admitted that while employed by Stone Care of Texas between May 2016 and September 2018, she defrauded the company by using company credit cards issued in the names of former employees for business-related travel to make unauthorized purchases and cash withdrawals for her own personal use and benefit.
Wehde faces up to 20 years in federal prison for wire fraud and a mandatory consecutive sentence of two years in federal prison for aggravated identity theft as well as restitution to the company. Wehde remains on bond pending sentencing scheduled for November 5, 2020, before Chief U.S. District Court Judge Orlando Garcia in San Antonio.
The FBI investigated this case. Assistant U.S. Attorney William R. Harris is prosecuting this case on behalf of the government.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.