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22 July 2020
State Department Contractor Agrees to Pay Civil Penalties Under the Procurement Integrity ActRead the Press Release
ALEXANDRIA, Va. – Bernhardt Furniture Company, located in Lenoir, North Carolina, has agreed to pay $172,000 in civil penalties to settle allegations involving violations of the Procurement Integrity Act relating to the company’s receipt of competitor bid information and providing of gratuities to State Department employees in connection with a State Department contract.
The settlement resolves civil penalty claims against Bernhardt relating to criminal pleas entered by Bernhardt Vice President of Sales Steven Anstine, and State Department procurement officials Patricia DeLaughter and Davina Foster. From December 2016 to March 2017, in connection with a contract for the construction of the new Jakarta Embassy, Bernhardt received competitor bid information, including confidential bid prices and competitor’s design plans, on at least three separate occasions. In return, Bernhardt’s Anstine provided DeLaughter and Foster with meals and tickets to concerts and sporting events. Bernhardt, through its use of competitor’s confidential bid information, won the contract to provide furniture for the Jakarta Embassy; however, the conduct was discovered and the award was canceled before Bernhardt received any funds.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the Office of Inspector General for the Department of State.
The matter was investigated by Assistant U.S. Attorney Kristin S. Starr. The civil claims settled by this settlement are allegations only; there has been no determination of civil liability.
Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Criminal Case No. 1:19-cr-205 (United States v. Patricia DeLaughter) and 1:19-cr-256 (United States v. Davina Foster) and on the website of the District of South Carolina or on PACER by searching for Criminal Case No. Case No. 2:19:cr-404 (D.S.C.) (United States v. Steven Anstine).
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
Shawnee Man Charged with Robbing BancFirst Branch in Paden, OklahomaRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that the federal grand jury has issued an Indictment charging Bobby Ray Scott III, age 42, of Shawnee, Oklahoma, with Bank Robbery in violation of Title 18, United States Code, Sections 2113(a) and 2113(d). Bank Robbery is punishable by not more than life imprisonment, up to a $250,000.00 fine, or both.
The Indictment alleges that on or about June 12, 2020, in the Eastern District of Oklahoma, the defendant, by force, violence and intimidation did take from the person and presence of another, money belonging to and in the care, custody, control, management and possession of BancFirst located in Paden, Oklahoma, the deposits of which were then insured by the Federal Deposit Insurance Corporation, and in committing such offense, the defendant, Bobby Ray Scott III, did assault and put in jeopardy the life of another person by the use of a dangerous weapon, that is a firearm.
The charges arose from an investigation by the Okfuskee County Sheriff’s Office, the Homeland Security Investigations Task Force, and the Federal Bureau of Investigation Safe Trails Task Force. The Oklahoma Safe Trails Task Force is comprised of the FBI and nine partner agencies including: Muscogee Creek Nation Lighthorse Police, Okmulgee Police Department, Okmulgee Sheriff’s Office, Oklahoma Bureau of Narcotics, District 25 District Attorney’s Investigators, Cherokee Nation Police, Tahlequah Police Department, and Wagoner Police Department. Assistant United States Attorney Dean Burris represents the United States.
The above named individual has been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt.
San Diego Business Leader Pleads Guilty to Masterminding a $400 Million Ponzi SchemeRead the Press Release
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 and Andrew J. Galvin (619) 546-9721
SAN DIEGO – Gina Champion-Cain, a long-time San Diego business leader, restauranteur and real estate magnate, pleaded guilty in federal court today, admitting that she committed securities fraud by masterminding a massive, years-long Ponzi scheme with hundreds of victims throughout California and the United States.
Champion-Cain also admitted that she lied and forged documents to hide her scheme, obstructed justice by attempting to destroy evidence in the course of an investigation by the U.S. Securities and Exchange Commission, and conspired with employees of her own company and the local branch of a national title company to both commit the fraud and cover it up. The fraud was committed through her companies American National Investments, Inc., and ANI Development, LLC.
Crispin Torres, the former Chief Financial Officer of American National Investments, also pleaded guilty today to conspiring in the scheme by using funds received from investors to prop up Champion-Cain’s other businesses, some of which were failing.
“This is by far the largest Ponzi scheme discovered in this district,” said U.S. Attorney Robert Brewer. “Gina Champion-Cain constructed and maintained a house of cards that has come crashing down around her and all her victims. The scheme deprived many investors of their retirement savings, and cost at least one investor tens of millions of dollars and forced him into bankruptcy. And now it will cost the defendant her freedom. We will continue our aggressive efforts to root out corporate fraud and hold greedy criminals accountable.”
Brewer commended the great work of prosecutors Aaron Arnzen and Andrew Galvin as well as FBI agents and the Securities and Exchange Commission for unraveling this complicated, document-intensive fraud.
“This federal investigation revealed a $400 million-dollar fraudulent investment scheme by Gina Champion-Cain, a purported San Diego business magnate who was trusted by hundreds of investors,” said Acting FBI Special Agent in Charge Omer Meisel. “The FBI is committed to investigating those who engage in criminal conduct that corrupts the financial markets and defrauds the public. Furthermore, fraudsters will not escape justice by covering up or destroying evidence of their own wrongdoing. Obstructing a federal investigation is a serious criminal violation that the FBI will vigorously pursue and prosecute.”
As Champion-Cain admitted in her plea agreement, she raised money from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses. Since 2012, Champion-Cain drew in approximately $400 million from investors based on promises that she would use their money to fund those loans, the investors’ money would be safe in an escrow holding account, and the invested funds would and could only be returned to the specific investor who deposited the funds or his/her intermediary.
Champion-Cain admitted today that these promises were all false. She never used the funds to make liquor license loans. Instead, she and her co-conspirators simply used investor funds to pay back other (usually earlier) investors, and embezzled funds to support Champion-Cain’s unrelated businesses and her lifestyle. For example, Champion-Cain admitted that she used at least $60 million in investor funds to meet payroll and other expenses incurred by several businesses she owned, including the Patio restaurant chain, vacation rentals, a juice bar, and the now-defunct Mission Beach surf-themed clothing store Luv Surf Boutique. She also spent investor funds to pay herself over $2 million in cumulative salary since 2012, and spent over $640,000 for box seats at San Diego Padres games, over $200,000 for box seats at San Diego Charges games, at least $745,000 to pay off her credit card bills, and hundreds of thousands of dollars for automobiles, jewelry, and similar personal luxuries.
The plea agreement also details how Champion-Cain and her co-conspirators succeeded in defrauding investors by hiding the truth. They fabricated documents, forged signatures, and told investors lies through fake email accounts so that when investors attempted to double-check on their investments with people they thought were independent third parties, the investors were often really communicating with Champion-Cain or her employees. For example, Champion-Cain emailed an escrow company employee when investors tried to ask questions: “I told them NEVER to call and bother you ladies,” and “if they call asking about escrow agreements and alcohol licenses, blah, blah, blah … just say ‘SURE WHATEVER NOW SHOW ME THE MONEY … HAHAHAHA.’” The cover-up continued even after Champion-Cain and her co-conspirators learned of a government investigation into her scheme—in response to which they attempted to destroy evidence they knew was incriminating, including stacks of documents, emails, video surveillance footage, and accounting records.
Crispin Torres, who also pleaded guilty today, had been an accountant at American National Investments for years. As Chief Financial Officer, Torres knew that Champion-Cain’s other businesses were strapped for cash, and requested that Champion-Cain transfer at least $60 million of investor funds from escrow accounts so that Champion-Cain could keep these businesses afloat. Torres also established a bank account under a name that was similar to the national escrow company’s name, and knew that Champion-Cain tricked certain investors into depositing their funds into this account believing the money would be safe. When those deposits arrived, Torres, at Champion-Cain’s instruction, fabricated receipts from the escrow company to send to investors. The purpose was clear – to convince investors that a reliable national escrow company administered their funds. In fact, the escrow company had no connection with this particular bank account. Champion-Cain and Torres had unfettered access to these investor funds and simply stole the money to further the Ponzi scheme.
Champion-Cain and Torres are scheduled to appear for sentencing before U.S. District Judge Anthony Battaglia on October 13 at 9 a.m.
CLICK HERE - Slides presented at press conference
CLICK HERE - Champion-Cain Plea Agreement
CLICK HERE - Torres Plea AgreementDEFENDANTS
Gina Champion-Cain Case Number 20CR2115 Age: 55 San Diego, CA
Crispin Torres Case Number 20CR2114 Age: 53 National City, CA
SUMMARY OF CHARGES
Securities Fraud, Title 15, U.S.C. Sections 77q and 77x (Champion-Cain)
Maximum Penalty: Five years in prison
Obstruction of Justice, Title 18, U.S.C. Section 1505 (Champion-Cain)
Maximum Penalty: Five years in prison
Conspiracy, Title 18, U.S.C. Section 371 (Champion-Cain and Torres)
Maximum Penalty: Five years in prison
AGENCY
Federal Bureau of Investigation
Raleigh Man Indicted for Setting Multiple Fires to Raleigh Businesses During RiotsRead the Press Release
RALEIGH, N.C. – A Raleigh man was indicted for setting fires inside two Raleigh businesses after a demonstration over the death of George Floyd in Minneapolis, Minnesota, Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina announced.
Richard Rubalcava, of Raleigh, North Carolina, was arrested on June 18, 2020, by special agents of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and is charged by indictment with two counts of maliciously damaging or destroying, or attempting to damage or destroy, by means of fire or an explosive, any building or other real or personal property affecting interstate or foreign commerce.
According to the complaint, on May 30, 2020, at approximately 12:13 a.m., a fire was discovered at the Dollar General Express located at 149 East Davie Street, Raleigh, after it had been looted by rioters. Video surveillance was obtained from the Dollar General Express. The video shows Rubalcava enter the business and place numerous items in a Dollar General Bag. Rubalcava leaves and re-enters the business numerous times. Each time Rubalcava enters the business, he would steal items from the store. Further video surveillance captured Rubalcava inside the Dollar General Express setting fire to miscellaneous items located on an aisle endcap. Rubalcava appears to exit the store after setting the fire.
Additionally on May 30, 2020, video surveillance from Budacai Restaurant located at 120 East Martin Street, Raleigh, was given to the Raleigh Police Department (RPD) in regards to the restaurant being looted and a fire being set inside. After reviewing the video surveillance, RPD identified one of the subjects that entered the business as Rubalcava. The video surveillance showed Rubalcava entering the restaurant three times. The second time Rubalcava entered he stole the cash register. The third time Rubalcava entered he attempted to set a plant on fire inside the restaurant. After the plant would not ignite, Rubalcava ignited a towel and places the burning towel on a countertop. Surveillance video from both fires shows Rubalcava wearing the same clothing. Rubalcava admitted to RPD officers that he set the fire inside of Budacai Restaurant.
The counts charged in the indictment carry a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina credited the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Raleigh Police Department (RPD) with the investigation leading to Rubalcava’s arrest and indictment. The government is represented by Assistant U.S. Attorney Daniel W. Smith of the of the U.S. Attorney's Office’s Criminal Division.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-mj-01642-JG.
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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.
Penfield Man Charged with Bilking Investors Out of Hundreds of Thousands of DollarsRead 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 Brian L. Schumacher, 55, of Penfield, NY, was charged by complaint with wire fraud and wire fraud conspiracy. The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.
Assistant U.S. Attorney Charles M. Kruly, who is handling the case, stated that according to the complaint, between April 2016, and January 2017, the defendant conspired with others to defraud two investors out of hundreds of thousands of dollars. The actions of Schumacher and others led investors, located in Massachusetts and California, to wire significant amounts of funding to Schumacher’s company, Integra Diamonds, located in Rochester, NY, to enable Integra Diamonds to purchase diamonds in Africa.
The Massachusetts victim (Victim 1) was contacted by a co-conspirator of the defendant, who initially indicated that an investment of $100,000.00 would yield a minimum profit of $60,000.00 in one year. Skeptical because of the generous return that was promised, Victim 1 sought assurances that he was not the initial or sole investor in Integra Diamonds. Subsequently, Victim 1 received documents that falsely suggested that Integra Diamonds had other investors, and which also falsely claimed that Integra Diamonds had agreements with a logistics vendor and U.S.-based diamond purchasers. On June 16, 2016, Victim 1 wire transferred $100,000.00 from his bank account to an account in the name of Integra Diamonds. During the course of the conspiracy, $30,000 was returned to Victim 1, but not the remaining $70,000 of his $100,000.00 investment or any of the promised return. According to the complaint, $44,000 of Victim 1’s funds were attempted to be wired to Schumacher while he was in Sierra Leone to purchase diamonds. When that wire was unsuccessful, $44,500 was returned to a co-conspirator’s personal bank account.
Victim 2, a resident of California, also invested $100,000.00 in Integra Diamonds, after receiving a promise for a significant return. On December 2, 2016, Victim 2 wire transferred $100,000.00 from his bank account to an Integra Diamonds bank account. According to the complaint, Schumacher then withdrew $90,000 in cash from Victim 2’s investment, which he spent on expenses associated with another trip to Sierra Leone to purchase diamonds. Schumacher used Victim 2’s money to purchase, among other things, 1,211.85 carats of industrial diamonds for $30,296.25. Schumacher then allegedly resold those diamonds to a U.S. diamond broker for $11,514, none of which was returned to Victim 2. Over the course of the next year, Victim 2 requested status updates and return of his funds multiple times. Schumacher allegedly provided a number of excuses for the failure of Victim 2's investment, including that the diamond purchase was simply taking longer than expected and that the original diamond purchase fell through. Victim 2 was also informed that Schumacher was trying to secure another deal. Ultimately, Integra Diamonds did not repay Victim 2 any portion of the $100,000 loan principle, or any interest.
Schumacher will make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge Jeremiah J. McCarthy.
The complaint is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Payza and Patel Brothers Plead Guilty to Conspiring to Launder Money and Operating an Unlicensed Money Service BusinessRead the Press Release
WASHINGTON – Firoz Patel and his brother, Ferhan Patel, the founders and operators of Payza.com, AlertPay.com and Egopay.com, and the company MH Pillars doing business as Payza pled guilty to conspiring to launder money and operating an Internet-based unlicensed money service business that processed more than $250 million in illicit transactions. Firoz Patel also pled guilty to one count of conspiring to launder monetary instruments for charges related to a case out of the Middle District of Tennessee.
The plea, which took place July 17, 2020, in the United States District Court for the District of Columbia, was announced by Acting U.S. Attorney Michael R. Sherwin and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.
Firoz Patel, 46, and Ferhan Patel, 39, are Canadian citizens, who operated Payza from offices in Canada. Payza was a money transmitting business, which transferred funds for a fee on behalf of customers across the globe to people within the United States and locations abroad.
As part of the plea, the Patel brothers and MH Pillars, Ltd., agreed to forfeit more than $12.5 million. Firoz Patel admitted to operating a prior money service business, AlertPay, which ignored repeated warnings from state regulators about its unlicensed activities. Firoz Patel transitioned AlertPay into Payza after Firoz Patel was the subject of a Tennessee indictment for laundering narcotics proceeds through AlertPay. The defendants admitted that no substantive changes took place during this rebrand.
Payza had numerous merchants that were “Cyclers” and “MLMs” which the defendants knew to be Ponzi/pyramid schemes. The defendants admitted to sanitizing Payza’s customers list by removing known illegal merchants, before producing that information to third parties requesting customer information. For example, a co-conspirator informed Ferhan Patel in a series of emails that he was looking through the merchant list to remove “any merchants who have gross violations such as adult, gambling, drugs, violence ect. [sic]. And what I think is the tricky part: Identify MLM’s that are set up as obvious illegal Pyramid schemes.” Payza failed to follow its own “Merchant Risk Guideline,” as internal documents revealed specific failures in relation to preventing the taking on/servicing of pyramid and Ponzi schemes.
The defendants further admitted that Payza struggled to maintain relationship with financial institutions, because Payza so frequently was found to have customers engaged in illegal activity. Firoz Patel’s solution to this was to create a new company, Egopay, which took on all of Payza’s high risk customers. Firoz Patel and Ferhan Patel caused an email to be sent to high-risk Payza customers directing them to migrate their accounts to Egopay. Ferhan Patel told Firoz Patel that Egopay was a problem in the U.S. because Egopay collected no customer due diligence data which created “obvious money laundering concerns.” Ferhan Patel further admitted to Firoz Patel that Egopay was classified as a money service business and that it had no know your customer checks in place. In spite of these known money laundering problems, Firoz Patel continued to allow Egopay to operate freely via the Payza platform. Ultimately Egopay was shut down by regulators in Belize, after which Payza began again directly servicing many of Egopay’s customers.
The defendants each admitted that their scheme caused over $250,000,000 to be illegally transmitted and to failing to conduct proper due diligence of their customers. The defendant lastly acknowledged that their actions were done willfully, knowingly, and with the specific intent to violate the law.
The Honorable Ketanji B. Jackson scheduled the sentencing for November 10, 2020.
Further information for victims is available at https://www.justice.gov/usao-dc/victim-witness-assistance/obopay-payza.
This case was investigated by Department of Homeland Security, Immigration and Customs Enforcement, Washington Field Office, with assistance from the D.C. Financial Crimes Task Force. The case was prosecuted by Assistant U.S. Attorneys Zia Faruqui and Arvind Lal and former Assistant U.S. Attorneys Kate Connelly and John Marston, with assistance from Paralegal Specialist C. Rosalind Pressley and former Paralegal Specialist Toni Donato; Victim/Witness Advocates Yvonne Bryant and Tonya Jones; Document Management Analyst Basizette Stribling; Legal Assistant Jessica McCormick; and Thomas Royal and Joshua Ellen from the Litigation Support Section.
Passaic County Man Admits Participating in Heroin ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted conspiring to distribute 100 grams or more of heroin, and to distributing a quantity of heroin, U.S. Attorney Craig Carpenito announced.
Tyson Jacobs, 21, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin and one count of knowingly and intentionally distributing heroin. Jacobs was previously charged by complaint.
According to documents filed in this case and statements made in court:
The defendant and his conspirators are all members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through investigative techniques, including numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that from at least September 2018 through Oct. 1, 2019, the defendant and his conspirators conspired to distribute narcotics, including heroin and fentanyl.
The count of conspiracy to distribute at least 100 grams of heroin carries a mandatory minimum penalty of five years in prison and a maximum penalty of 40 years in prison and a fine of $5 million. The count of distribution of heroin carries a maximum of 20 years in prison and a fine of $1 million. Sentencing is scheduled for Nov. 23, 2020.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Carpenito credited special agents and task force officers with the ATF, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; and detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the OCDETF/Narcotics unit.
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Operation Mountaineer Highway Update: Fayette County Man 12th Defendant to be Sentenced for Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – A Fayette County man was sentenced to federal prison for his participation in a drug trafficking operation in Fayette County, announced United States Attorney Mike Stuart. Bobby Mack, Jr., 40, was sentenced to 72 months in prison and four years of supervised release. Mack had previously entered a guilty plea to conspiracy to distribute more than 100 grams of heroin. He is the 12th defendant to be convicted and sentenced as a result of the extensive investigation into drug trafficking in the Fayette County area.
“Operation Mountaineer Highway was a hugely successful effort in keeping a smorgasbord of illegal drugs out of our central and southern West Virginia communities,” said United States Attorney Mike Stuart. “The operation took down dozens of dealers. Many lives were saved as a result of this operation. Awesome work by the incredible team that worked this matter.”
Mack previously admitted that he participated in the drug trafficking organization by supplying heroin to a co-conspirator. More specifically, Mack admitted that on July 16, 2018, he distributed 182 grams of heroin to the co-conspirator. After Mack distributed the heroin, the co-conspirator was stopped by law enforcement officers and admitted that he had obtained the heroin from Mack at Mack’s residence in Scarbro. Based on this information, officers obtained a search warrant for Mack’s residence. While conducting the search, officers located items commonly used in drug distribution, three firearms, and approximately $343,097 dollars in cash. As part of the plea agreement, Mack agreed to forfeit to the United States the firearms which he was prohibited from possessing due to a prior felony conviction, as well as the $343,097.
The investigation was conducted by the Drug Enforcement Administration (DEA) and the Central West Virginia Drug Task Force, with the support of the West Virginia State Police, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Fayette County Sheriff’s Department, the Beckley/Raleigh County Drug Task Force, the Southern Regional Drug and Violent Crime Task Force, the Fayetteville Police Department and the Oak Hill Police Department. Assistant United States Attorneys Timothy D. Boggess and Andrew J. Tessman handled the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:18-cr-00200.
Follow us on Twitter: SDWVNews and USAttyStuart
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O.C. Man Admits Operating Unlicensed ATM Network that Laundered Millions of Dollars of Bitcoin and Cash for Criminals’ BenefitRead the Press Release
LOS ANGELES – A Yorba Linda man has agreed to plead guilty to federal criminal charges that he operated an illegal virtual-currency money services business that exchanged up to $25 million – including on behalf of criminals – through in-person transactions and a network of Bitcoin ATM-type kiosks.
Kais Mohammad, 36, a.k.a. “Superman29,” was charged in a three-count criminal information filed today in United States District Court. In a plea agreement also filed today, Mohammad agreed to plead guilty to one count of operating an unlicensed money transmitting business, one count of money laundering, and one count of failure to maintain an effective anti-money laundering program.
According to his plea agreement, from December 2014 to November 2019, Mohammad owned and operated Herocoin, an illegal virtual-currency money services business. As part of his business, Mohammad offered Bitcoin-cash exchange services, charging commissions of up to 25 percent – significantly above the prevailing market rate – for doing so.
Using the moniker “Superman29,” Mohammad advertised his business online to buy and sell Bitcoin throughout Southern California, in transactions up to $25,000. In a typical transaction, he met clients at a public location and exchanged currency for them. Mohammad generally did not inquire as to the source of the clients’ funds and on many occasions he knew the funds were the proceeds of criminal activity. Mohammad admitted that he knew at least one Herocoin client was engaged in illegal activity on the dark web.
Mohammad later purchased and advertised on the internet a network of Bitcoin ATM-type kiosks, which were located in malls, gas stations and convenience stores in Los Angeles, Orange, Riverside and San Bernardino counties. These kiosks allowed customers to use cash to buy Bitcoin, an Internet-based cryptocurrency, or sell Bitcoin in exchange for cash that is dispensed onsite.
Mohammad processed cryptocurrency deposited into the machines, supplied the machines with cash that customers would withdraw, and maintained the server software that operated the machines. Mohammad was able to monitor transactions on the machines and identify each transaction that occurred on them.
During the time of Herocoin’s operation, Mohammad, a former bank employee, intentionally failed to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Mohammad admitted he was aware that he was required to – but chose not to – develop and maintain an effective anti-money laundering program, file currency transaction reports for exchanges of currency in excess of $10,000, conduct due diligence on customers, and file suspicious activity reports for transactions over $2,000 involving customers he had reason to suspect were involved in criminal activity. With respect to his Bitcoin ATM network, Mohammad further admitted that he did not have a program in place that would have allowed him to obtain identifications for customers conducting multiple transactions of up to $3,000 or verify that any identification provided was the person conducting the transaction.
After FinCEN contacted Mohammad in July 2018 about his need to register his company, Mohammad did so, but he continued to fail to comply fully with federal law concerning money laundering, conducting due diligence and reporting suspicious customers.
During the course of its investigation, law enforcement conducted multiple transactions with Mohammad, including three successive purchases of Bitcoin totaling $14,500 by the same undercover agent from an ATM kiosk in Lakewood on September 12, 2018, for which Mohammad did not file a currency transaction report as required.
From February 2019 to August 2019, Mohammad also conducted multiple in-person transactions with undercover agents who represented they worked at a “karaoke bar” that employed women from Korea who entertained men in various ways, including engaging in sexual activity, according to the plea agreement. On August 28, 2019, Mohammad met with an agent and exchanged $16,000 in cash, which the agent represented were the proceeds from illegal activity, for 1.58592 Bitcoin. Mohammad never filed a currency transaction report or suspicious activity report for these transactions.
In total, Mohammad admitted that he exchanged between $15 million and $25 million from in-person exchanges and transactions occurring at his Bitcoin kiosks.
Mohammad is expected to plead guilty to the charges at a hearing in the coming weeks. Upon pleading guilty, Mohammad will face a statutory maximum sentence of 30 years in federal prison. As part of the plea agreement, Mohammad has agreed to forfeit cash, cryptocurrency, and 17 Bitcoin ATMs that he operated as part of his business.
This matter was investigated by IRS Criminal Investigation, Homeland Security Investigations, and the Los Angeles County Sheriff’s Department. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).
This case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the International Narcotics, Money Laundering, and Racketeering Section.
Nampa Man Sentenced to 10 Years for Methamphetamine TraffickingRead the Press Release
BOISE - Roberto Nieto Rangel, 41, of Nampa, was sentenced in U.S. District Court to 120 months in prison for possession with intent to distribute methamphetamine, U.S. Attorney Bart M. Davis announced today. Chief U.S. District Judge David C. Nye also ordered Rangel serve 5 years of supervised release following his prison sentence. A federal grand jury indicted Rangel on February 13, 2019. Rangel pleaded guilty to the charge on December 11, 2019.
According to court records, Rangel possessed nearly a pound of methamphetamine as well as a handgun with a scratched-off serial number. Rangel is prohibited from possessing firearms due to prior convictions for domestic assault and because he is in the United States unlawfully. Rangel has been convicted twice of illegally re-entering the United States.
This case was investigated by the Nampa Police Department and Treasure Valley Metro Violent Crimes Task Force. The Task Force is comprised of federal, state, and local agencies. These agencies include the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Department of Homeland Security; Ada County Sheriff’s Office; Boise Police Department; Caldwell Police Department; Canyon County Sheriff’s Office; Meridian Police Department; Nampa Police Department; and Idaho Department of Correction, Bureau of Probation and Parole.
This indictment was the result of a joint investigation by the Organized Crime and 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. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. Program participants include Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service.
This case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit www.treasurevalleypartners.org.
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Medina Husband and Wife Plead Guilty to Drug Related ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Anthony Allee, 29, of Medina, NY, pleaded guilty before U.S. District Judge John J. Sinatra, Jr. to possessing with intent to distribute, and distributing, cocaine, and unlawful possession of a short-barreled shotgun in furtherance of drug trafficking. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a $1,000,000 fine. In addition, Allee’s wife Tashira, 37, pleaded guilty to maintaining a drug-involved premises, and also faces a maximum penalty of 20 years in prison and a $500,000 fine.
Assistant U.S. Attorney Justin G. Bish, who is handling the case, stated that between April 2019 and July 22, 2019, the defendants used their Ridge Road residence in Medina, to store, sell, and use marijuana, hydrocodone, and cocaine. Anthony Allee also possessed various firearms in furtherance of his drug trafficking in order to protect himself, his drugs, and his drug proceeds.
On July 22, 2019, a state search warrant was executed at the residence. Investigators seized multiple firearms, ammunition, numerous articles of stolen property, approximately 73 grams of marijuana, 247 hydrocodone pills, cocaine residue located on a working digital scale with a razor blade, two additional digital scales, a vacuum sealer with bags, and knotted baggies.
The pleas are the result of an investigation by the Orleans County Sheriff’s Office, under the direction of Sheriff Randy Bower; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Niagara County Drug Task Force, under the direction of Acting Sheriff Michael Filicetti; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge James B. Devito; the New York State Police, under the direction of Major James Hall; and the Orleans County District Attorney’s Office, under the direction of District Attorney Joseph Cardone.
Tashira Allee is scheduled to be sentenced on November 12, 2020, and Anthony Allee is scheduled to be sentenced on November 18, 2020. Both sentencings will be before Judge Sinatra.
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Massachusetts Man Sentenced for Illegally Retaining Classified National Defense Information Regarding U.S. Military ProgramsRead the Press Release
BOSTON – A former Raytheon systems engineer was sentenced today for illegally retaining national defense information. The defendant retained 31,000 pages of information that was marked as classified, some of which pertained to U.S. missile defense and was classified at the SECRET level, and altered or obliterated the classification markings on documents.
Ahmedelhadi Yassin Serageldin, 67, of Sharon, was sentenced by U.S. District Court Judge Patti B. Saris to 18 months in prison, one year of supervised release and ordered to pay a fine of $10,000. In December 2019, Serageldin pleaded guilty to one count of willfully retaining national defense information.
Serageldin was a systems engineer at Raytheon Technologies in Massachusetts from August 1997 until he was terminated in May 2017. Serageldin had a SECRET level security clearance in order to complete his assignments on several defense contracts for the U.S. government involving military radar technology.
After Raytheon raised suspicions to federal authorities about whether Serageldin was being candid during an internal investigation of his computer usage, agents followed Serageldin to a local library where they discovered that he was researching how to delete files from his computer. During the execution of search warrants, over 3,100 electronic files and over 110 paper documents belonging to Raytheon or the Department of Defense, over 570 of which were marked as containing classified information, were recovered. The documents marked as containing classified information totaled approximately 31,000 pages in length. Court documents list five specific documents, all of which pertain to U.S. military programs involving missile defense and are classified at the SECRET level. It was also determined that Serageldin had altered or obliterated the classification markings on approximately 50 documents.
United States Attorney Andrew E. Lelling; Assistant Attorney General John C. Demers of the Justice Department’s National Security Division; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Michael Wiest, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office made the announcement today. Assistance with the investigation was provided by the Air Force Office of Special Investigations and the Internal Revenue Service’s Criminal Investigations in Boston. Raytheon Technologies has cooperated with the investigation, which was launched after they notified federal authorities about the suspicious conduct. Assistant U.S. Attorney Scott L. Garland, Deputy Chief of Lelling’s National Security Unit, prosecuted the case with assistance from Trial Attorney Scott Claffee of the Justice Department’s National Security Division.
Manitowoc Man Indicted on Methamphetamine ChargeRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on July 21, 2020, a federal grand jury indictment was issued against Keynan J. Juul (age: 23) of Manitowoc, Wisconsin.
The indictment alleges that Juul possessed in excess of 50 grams of actual methamphetamine with the intent to distribute it to others in violation of Title 21, United States Code, Sections 841(a) and 841(b)(1)(A). “Actual” methamphetamine possesses a high level of purity and is also known as “crystal” methamphetamine or “ice.” If convicted of that charge, Juul faces a mandatory minimum of 10 years’ imprisonment and up to a life sentence. He faces a fine of up to $10,000,000 and from five years to a lifetime on supervised release.
This case was investigated by the City of Two Rivers Police Department and the Manitowoc County Metropolitan Drug Enforcement Group. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Public Information Officer Kenneth Gales, (414) 297-1700
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Man Pleads Guilty to Armed Robbery and CarjackingRead the Press Release
ALEXANDRIA, Va. – A Washington, D.C. man pleaded guilty today to his role in an armed robbery and carjacking that led to a high-speed police chase and resulted in injuries to two police officers.
According to court documents, Jovan Doir Johnson, 30, together with another individual, obtained a stolen vehicle at gunpoint in Arlington and then used it to rob a 7-Eleven in Lorton. On Aug. 28, 2019, both men fled the 7-Eleven traveling north on Interstate 95 before taking Interstate 495 toward the Wilson Bridge, where several Virginia State Police cruisers attempted to stop the stolen Prius as it approached the bridge. When one cruiser attempted to stop the stolen vehicle, the vehicle drove into the rear corner of the cruiser forcing it into the concrete medium barrier at a high rate of speed. The first cruiser’s air bag deployed and the trooper was taken to the hospital with injuries as a result of the impact. A second cruiser subsequently advanced and pushed the stolen vehicle into the concrete medium just before reaching the bridge. The resulting impact also caused the second cruiser’s driver airbag to deploy. The trooper driving that second cruiser was also taken to the hospital. The Fairfax County Police Helicopter assisted in the stop.
Johnson pleaded guilty to armed robbery and brandishing a firearm during two crimes of violence, and carjacking. He faces a mandatory minimum sentence of 14 years, and a maximum possible sentence of life in prison when sentenced on November 4. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
This case is part of Project Safe Neighborhoods (PSN), which 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge, Criminal Division, FBI Washington Field Office; Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police; M. Jay Farr, Arlington County Chief of Police; and Colonel Gary T. Settle, Virginia State Police Superintendent, made the announcement after U.S. District Judge Rossie D. Alston, Jr. accepted the plea. Assistant U.S. Attorney Ronald L. Walutes, Jr. is prosecuting the case.
This matter was investigated by the FBI Washington Field Office’s Safe Streets Violent Crime Task Force which is composed of Special Agents and detectives from law enforcement agencies within Northern Virginia and the District of Columbia. The task force concentrates on investigating violent crimes and criminal threats within the Capital Region.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-351.
Man Indicted on Charges Related to Shooting of the Embassy of CubaRead the Press Release
WASHINGTON – Alexander Alazo, 42, of Middletown, Pennsylvania, and Aubrey, Texas, was indicted today by a federal grand jury, which charged him with multiple offenses related to his shooting of the Embassy of Cuba in Washington, D.C., announced Acting U.S. Attorney Michael R. Sherwin; Special Agent in Charge of the Washington Field Division of the U.S. Secret Service Matthew Miller; Todd J. Brown Director of the U.S. Diplomatic Security Service; and Peter Newsham, Chief of the Metropolitan Police Department.
Alazo was arrested on April 30, 2020, and was charged by criminal complaint with a violent attack on a foreign official or official premises using a deadly weapon (18 U.S.C. § 112(a)), willfully injuring or damaging property belonging to or occupied by a foreign government in the United States (18 U.S.C. § 970(a)), and interstate transportation of a firearm and ammunition with intent to commit a felony (18 U.S.C. § 924(b)). On May 1, 2020, U.S. Magistrate Judge G. Michael Harvey detained Alazo without bond pending trial. Today, a federal grand jury returned an Indictment against Alazo charging him with four federal offenses, the three for which he was charged by criminal complaint, and an additional charge for using, carrying, brandishing and discharging a firearm during a crime of violence (18 U.S.C. § 924(c)).
The criminal complaint and Indictment stem from an incident in the early hours of April 30, 2020, when Alazo fired approximately 32 rounds of an assault-style weapon at the Embassy of Cuba in Washington, D.C., which was occupied at the time of the offense. Although the Embassy of Cuba suffered both exterior and interior damage, no one was injured in the attack. Alazo was immediately apprehended by the Metropolitan Police Department (MPD) without incident, and the weapon used in the shooting was recovered, as was an accelerant-soaked Cuban flag.
Both the criminal complaint and the Indictment are formal accusations of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless proven guilty. If convicted, Alazo faces a mandatory sentence of at least ten years in prison for the charge of discharging a firearm during a crime of violence. The crime of a violent attack on a foreign official or official premises using a deadly weapon and the crime of willfully injuring or damaging property belonging to or occupied by a foreign government in the United States both carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and not more than three years of supervised release. The crime of interstate transportation of a firearm and ammunition with intent to commit a felony carries a maximum sentence of five years in prison a fine of up to $250,000, and not more than one year of supervised release.
“We commend the efforts of local and federal law enforcement who intervened quickly to protect lives and reduce damage to the property of a foreign government present in the United States,” said Acting U.S. Attorney Sherwin. “This investigation and prosecution is a testament to the commitment of American law enforcement to thwart the efforts of any individual who would target with violence any foreign embassy in the United States.”
“The Diplomatic Security Service is firmly committed to ensuring the safety and security of foreign missions in the United States,” said Director Brown. “We take our responsibilities outlined in the Vienna Convention seriously.”
“Our city has experienced far too many tragic outcomes when someone fires a weapon indiscriminately in our community,” said Metropolitan Police Department Chief Peter Newsham. “With this indictment, it is our hope that the criminal justice system holds this individual accountable.”
In announcing the Indictment, Acting U.S. Attorney Sherwin, Special Agent in Charge Miller, and DSS Director Brown commended the work of those who investigated the case from the Secret Service, the Diplomatic Security Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the MPD. Finally, they cited the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorneys Jason McCullough and Stuart Allen, Special Assistant U.S. Attorney Nicole Hutchinson, and Paralegal Specialist Bria Cunningham.
Luzerne County Man Charged with Drug Trafficking and Firearms OffensesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Michael Marchese, age 28, of Swoyersville, Pennsylvania, was indicted on July 21, 2020, by a federal grand jury for drug trafficking and firearms offenses.
According to United States Attorney David J. Freed, the indictment alleges that between April and May 2020 within the Middle District of Pennsylvania, Marchese conspired to distribute in excess of 50 grams of methamphetamine, distributed methamphetamine, and was in possession of a Ruger LCP .380 handgun and ammunition as a convicted felon.
The investigation was conducted by the Luzerne County Drug Task Force, the Kingston Police Department and the Bureau of Alcohol, Tobacco and Firearms (ATF). Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal enforcement and the local community to develop effective, locally-based strategies to reduce crime.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under federal law, the drug trafficking offense carries a mandatory minimum sentence of five years in prison, up to a maximum sentence of forty years in prison, a term of supervised release following imprisonment, and a fine. The charge of felon in possession of a firearm carries a maximum sentence of ten years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Longtime Leader of South Los Angeles Street Gang Arrested in RICO Conspiracy Case Alleging Two Previously Unsolved MurdersRead the Press Release
LOS ANGELES – A long-time senior leader of the South Los Angeles-based East Coast Crips (ECC) was arrested today on a federal grand jury indictment alleging he engaged in a decades-long conspiracy to murder rivals, extort local business and distribute narcotics.
Paul Gary Wallace, 54, also known as “Doc” and “Uncle Bill,” of South Los Angeles, was taken into federal custody today by the FBI and Los Angeles Police Department. He is scheduled to be arraigned on the indictment this afternoon in United States District Court.
Wallace is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm in furtherance of a violent crime resulting in death.
According to the indictment, Wallace was a member of the ECC for more than 30 years and rose to become the leader and most influential member of the gang’s “6-Pacc” set, a series of cliques of the gang responsible for control over territory in South Los Angeles. The indictment describes how Wallace maintained his control over the gang through violence and intimidation. Wallace allegedly murdered and conspired to commit murder to enhance the gang’s violent reputation, to enhance his status within the gang, to retaliate against rivals, and to enforce discipline within the gang.
The indictment specifically alleges Wallace’s involvement in two murders. On February 9, 2003, Wallace allegedly repeatedly shot and killed a fellow ECC gang member who had publicly disrespected Wallace. On November 13, 2014, Wallace ordered the murder of a rival gang member, drove co-conspirators to the victim’s house, and personally handed a co-conspirator a firearm, which the co-conspirator used to murder the victim, the indictment alleges. The murder weapon, an AK-47-style assault rifle, was later found in Wallace’s van.
As a leader of the ECC, Wallace’s other criminal conduct included selling drugs in ECC territory, extorting local businesses, presiding over robberies, and engaging in other acts of violence, including intimidation, assaults and shootings against the gang’s rivals, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Wallace would face a statutory maximum sentence of life in federal prison and is death-penalty eligible.
This matter was investigated by the FBI and the Los Angeles Police Department.
This case is being prosecuted by Assistant United States Attorneys Joseph D. Axelrad and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
Local Businessman Pleads Guilty to Bank Fraud and Tax Evasion ChargesRead the Press Release
Assistant U. S. Attorney Oleksandra Johnson (619) 546-9769
NEWS RELEASE SUMMARY – July 22, 2020
SAN DIEGO – A local business owner pleaded guilty in federal court today to bank fraud and tax evasion charges, admitting that over the course of several years he evaded taxes by failing to report $498,612 of income to the IRS, and also orchestrated an illegal scheme to fraudulently obtain a mortgage for his $1.8 million residence using a third party.
As part of his plea agreement, David Daughtrey also agreed to pay over $1 million in restitution to the Internal Revenue Service. He is scheduled to be sentenced on November 16, 2020, before U.S. District Judge Larry A. Burns.
“People who cheat on their taxes are cheating all other law-abiding tax payers,” said U.S. Attorney Robert Brewer. “Mr. Daughtrey blatantly disregarded his tax obligations for years. The defendant not only abused the tax system for his own financial benefit, but conspired to commit bank fraud in order to maintain this lifestyle.” Brewer commended the excellent work of prosecutor Oleksandra Johnson and FBI and IRS agents.
“The FBI is dedicated to ensuring that white collar crimes are uncovered and prosecuted,” stated FBI Acting Special Agent in Charge Omer Meisel. “Today, David Daughtrey has admitted to mortgage fraud and tax evasion. This case illustrates that the FBI will continue to investigate those individuals that engage in fraudulent financial schemes that cause harm to our banking industry and defraud the government of tax revenue.”
“Our Nation’s tax system funds critical infrastructures and vital programs, including supporting our citizens and small businesses during the ongoing pandemic,” Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation. “Honest Americans’ compliance with the tax laws is imperative. Rather than pay his fair share, David Daughtrey chose to live lavishly, while intentionally failing to report his true income and evading the payment of over $400,000 in taxes. Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19. We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”
Daughtrey admitted that from July 2006 until April 2016, he conspired with others to commit bank fraud and tax evasion. As part of the bank fraud scheme, Daughtrey directed another individual to submit a mortgage application to Wells Fargo to purchase a $1.8 million five-bedroom residence, and to falsely claim that the funds used as down payment belonged to the third party and the residence would be used by the third party. In reality, Daughtrey provided the funds, and the home was intended to be Daughtrey’s primary residence. Daughtrey made monthly mortgage payments of approximately $8,000 for his residence, but continued to represent to the bank that the third party owned the house. Daughtrey later submitted a false hardship letter on behalf of the third party in an effort to get the bank to modify the terms of the loan on the home. As part of the plea agreement, Daughtrey admitted he was the true owner of the residence at all relevant times, and promised to make a good faith effort to transfer the legal ownership of the home into his own name.
Daughtrey also admitted as part his plea that over several years, he and his spouse (who is not charged in the case) conspired to commit tax evasion by filing tax returns listing substantially less income than Daughtrey actually earned. Daughtrey’s tax return for the year 2012 omitted at least $498,612 in income. Daughtrey failed to report his total income in tax years 2013, 2014, and 2015, and did not file timely tax returns for subsequent years. According to the plea agreement, the resulting tax loss to the IRS for the years 2012-2014 was $456,536. Daughtrey agreed to pay $1,016,457.91 in restitution to the IRS, which includes the total tax loss plus penalties and interest.
DEFENDANTS Case Number 20cr2113-LAB
David Daughtrey Age: 60 El Cajon, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bank Fraud and Tax Evasion, 18 U.S.C. § 371 (count 1); and
Making a False Tax Return, 26 U.S.C. § 7206(1) (count 2).
Maximum penalty:
Five years’ imprisonment and $250,000 fine (count 1)
Three years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest (count 2)
AGENCY
Federal Bureau of Investigation
Internal Revenue Service
Las Vegas Felon Sentenced to 10 Years in Prison for Drug Possession and Unlawful Possession of A FirearmRead the Press Release
RENO, Nev. — Martane H. Wade, 39, of Las Vegas, was sentenced today by Chief U.S. District Judge Miranda M. Du to ten years in prison, to be followed by five years of supervised release, for possession with intent to distribute 500 or more grams of methamphetamine and for being a felon in possession of a firearm, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada and Assistant Special Agent in Charge Daniel Neill of the Drug Enforcement Administration (DEA).
Wade, a five-time convicted felon, pleaded guilty in August 2019 to one count of possession with intent to distribute 500 or more grams of methamphetamine and one count of being a felon in possession of a firearm. He was remanded to the custody of the U.S. Marshals Service following today’s sentencing hearing.
According to court documents, on May 3, 2018, law enforcement attempted to conduct a traffic stop of the vehicle Wade was driving. Wade attempted to escape by driving off, but was unsuccessful. He and a passenger were taken into custody.
During the execution of a search warrant, law enforcement found approximately two pounds of crystal methamphetamine in a purse inside the vehicle. Further, in a search of an apartment for Wade and the passenger, law enforcement found heroin, cocaine, crack cocaine, packing materials, scales, a money counter, and two firearms: a Walther PPK 9mm semi-automatic pistol and a Colt .25 caliber semi-automatic pistol. Wade has prior felony convictions in Nevada and California, including possession with intent to sell cocaine, possession with intent to sell methamphetamine, trafficking in cocaine, and prohibited person in possession of a firearm.
The charges resulted from an investigation by the DEA.
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Ithaca Man Sentenced to 60 Months on Drug Trafficking ConvictionRead the Press Release
SYRACUSE, NEW YORK – Robert Payne, age 39, of Ithaca, New York, was sentenced today to serve five years (60 months) in prison for his conviction for participating in a cocaine trafficking conspiracy, announced United States Attorney Grant C. Jaquith, Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Field Division, Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), New York State Police Superintendent Keith Corlett, Sheriff Eugene Conway, Onondaga County Sheriff’s Office, and William J. Fitzpatrick, Onondaga County District Attorney. The defendant was also ordered to serve a period of four years supervised release following his term of incarceration, and to forfeit to the government $112,500 in proceeds from his drug trafficking activity.
Pursuant to his plea agreement in this case, Payne admitted that during the summer of 2018, he distributed roughly 2.5 kilograms of cocaine to his co-defendant Daitwaun Fair. This case was investigated by the U.S. Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the New York State Police, the Onondaga County Sheriff’s Office, and the Onondaga County District Attorney’s Office, and was prosecuted by Assistant U.S. Attorney Nicolas Commandeur.
Irish National Sentenced to Prison for Trafficking in Rhinoceros HornsRead the Press Release
An Irish national was sentenced in federal court in Waco, Texas, today to 12 months in prison for conspiracy to violate the Lacey Act in relation to illegal rhinoceros horn trafficking, announced Assistant Attorney General Jeffrey Bossert Clark of the Environment and Natural Resources Division of the Department of Justice.
John Slattery, who was arrested on Aug. 1, 2019, in Ireland, was extradited to the United States for his role in trafficking horns from black rhinoceros. Slattery pleaded guilty to conspiring to traffic in horns from black rhinoceros on July 7, 2020.
On May 13, 2014, a federal grand jury sitting in Waco, Texas, returned an indictment that has since been unsealed, charging Slattery and a co-defendant, Patrick Sheridan, with conspiring to traffic in horns from black rhinoceros. In addition to conspiracy, the indictment charges substantive violations of the Lacey Act for wildlife trafficking and making a false wildlife document.
According to documents filed with the court, in September 2010, Slattery traveled with his brother, Michael Slattery Jr. and Patrick Sheridan to a taxidermy shop in Austin, Texas, to purchase rhinoceros horns. Upon their first visit to the shop, John Slattery and his co-conspirators were informed that the horns could only be sold to a resident of Texas. The following day, Slattery enlisted the help of an individual (now deceased), a Texas resident who acted as a straw buyer, to enable the three co-conspirators to purchase the rhinoceros horns.
As part of the plea, Slattery admitted that through the straw buyer, he and his co-conspirators paid the taxidermist $18,000 for the horns. They were given an “Endangered Species Bill of Sale,” which the group later modified and falsified. Slattery further admitted that after they purchased the horns in Texas, Slattery traveled to New York, where he sold the horns to an individual for $50,000. Slattery gave the purchaser the falsified “Endangered Species Bill of Sale,” which Slattery and his co-conspirators had modified to make it look as if the sale in Texas was legal, when in fact, it was not. Slattery further admitted that he later offered the same individual 10 rhinoceros horns for sale. That sale was not completed.
In September 2013, Slattery Jr. was arrested in New York and charged in the Eastern District of New York with conspiring with Slattery and Sheridan to traffic rhinoceros horns. In January 2014, Slattery Jr. pleaded guilty and was sentenced to 14 months in prison for his role in the conspiracy. In September 2015, Sheridan was extradited to the United States from the United Kingdom. Sheridan was returned to the Western District of Texas where he pleaded guilty and was sentenced to 12 months in prison. In addition to the conspiracy to traffic in rhinoceros horns, Slattery and Sheridan were charged with violating the Lacey Act’s trafficking provision and making a fictitious and fraudulent bill of sale in connection with the rhinoceros horns in an attempt to make their illegal purchase of the horns appear legal.
The transport of Slattery to the Western District of Texas to face these charges concluded the extradition process from Ireland, a process governed by an extradition treaty between the United States and Ireland. Slattery was sentenced in federal court in Waco, by U.S. District Judge Alan Albright.
The case was investigated by agents from U.S. Fish and Wildlife Service Office of Law Enforcement. The case is being prosecuted by Trial Attorney Gary N. Donner of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Greg Gloff for the Western District of Texas. The Criminal Division’s Office of International Affairs provided significant support in securing and coordinating Slattery’s arrest and extradition. Assistance for Slattery’s extradition was provided by the Government of Ireland.
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: Kansas Man Threatened Victims After Stealing their ATM CardsRead the Press Release
TOPEKA, KAN. – A Topeka man was indicted today on a federal robbery charge, U.S. Attorney Stephen McAllister said.
Raymond Paul Stilley, 31, who is in custody,was charged with one count of robbery. The indictment alleges that on July 12, 2020, Stilley threatened two victims in Lawrence, Kan., with violence to force them to provide PIN numbers to debit and credit cards he had taken from them. He was going to use the cards to withdraw cash at ATM machines in Topeka and Lawrence.
Topeka police reported arresting Stilley after a standoff in which he refused to get out of his car.
If convicted, he could face up to 20 years in federal prison and a fine up to $250,000. The FBI and the Topeka Police Department investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
OTHER INDICTMENTS
Antonio Lawrence, 31, Topeka, Kan., is charged with one count of producing child pornography, two counts of distributing child pornography and one count of possessing child pornography. The crimes are alleged to have occurred during 2019 in Topeka, Kan.
Upon conviction, the crimes carry the following penalties:
Production: Not less than 15 years and not more than 30 years in federal prison and a fine up to $250,000.
Distribution: Not less than five years and not more than 20 years and a fine up to $250,000 on each count.
Possession: Up to 10 years and a fine up to $250,000.
The FBI and the Topeka Police Department investigated. Assistant U.S. Attorney Stephen Hunting is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Hammond Man Sentenced to 180 Months in PrisonRead the Press Release
HAMMOND-Rickey Kendrick, 24, of Indianapolis, Indiana, was sentenced by Judge Philip P. Simon to 180 months in prison following his guilty plea to possessing a firearm as a previously convicted felon, announced U.S. Attorney Kirsch.
Because of Kendrick’s multiple other felony convictions, his illegal possession of a firearm will put him in prison for 15 years” said U.S. Attorney Kirsch. “Our law enforcement partners have always focused on felon in possession cases and will continue these investigations.”
According to documents in the case, on September 25, 2018, Rickey Kendrick possessed a nine millimeter firearm while driving in Gary, Indiana. Kendrick has six prior felony convictions for burglary.
This case is the result of the investigative efforts of the FBI GRIT Task Force and the Gary Police Department. The case was prosecuted by Northern District of Indiana Assistant U.S. Attorneys Thomas R. Mahoney and Caitlin M. Padula.
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Former Vice President of Teamsters Labor Union Sentenced to 18 Months in Prison for BriberyRead the Press Release
Audrey Strauss, Acting United States Attorney for the Southern District of New York, announced that JOHN ULRICH, the former vice president of International Brotherhood of Teamsters Local 812 (the “Union”) and former trustee of the Union’s employee health benefit plan (the “Plan”), was sentenced today in Manhattan federal court to 18 months in prison for soliciting tens of thousands of dollars in bribe payments from an executive with the Plan’s Third Party Administrator (the “TPA-1”) in exchange for using his influence to ensure the Union’s continued retention of TPA-1 as its Plan administrator. United States District Judge Analisa Torres imposed today’s sentence.
Acting U.S. Attorney Audrey Strauss said: “For years, John Ulrich betrayed the trust of the Union members who elected him in order to line his pockets with bribe money. For abusing his position of trust for his own financial benefit, Ulrich has been sentenced to federal prison.”
According to the allegations in the Indictment, other filings in Manhattan federal court, statements made in court and publicly-available documents:
The Union has more than approximately 3,000 members, and represents workers in the beverage industry throughout the New York metropolitan area. The Union’s members are covered by the Plan, which provides, among other things, life insurance, health insurance, dental, vision, and disability benefits to Union members and their families. As the Plan’s third-party administrator, TPA-1 processed health insurance claims for participants in the Plan. At all times relevant to the Indictment, ULRICH was a member and officer of the Union and a trustee of the Plan.
In or about 2013, ULRICH was experiencing financial difficulties, and solicited bribe payments from an executive with TPA-1 (“Executive-1”) of $5,000 per quarter in exchange for using his influence to maintain TPA-1 as the Plan’s third-party administrator. Before ULRICH solicited these bribes, the Plan had issued a request for proposals for a new third-party administrator, and TPA-1 was at risk of losing the Plan’s business. ULRICH told Executive-1 that ULRICH would use his influence with the Union to ensure that the Plan continued to use TPA-1 to administer the Union’s health care plan. Executive-1 agreed to make $5,000 quarterly payments to ULRICH, and began doing so. Subsequently, despite receiving multiple bids from other third-party administrators, the Plan continued to work with TPA-1.
In or about 2014, ULRICH demanded increased bribe payments from Executive-1. In part, ULRICH told Executive-1 that these increased bribe payments were needed for another trustee of the Plan, and Executive-1 began making such increased payments. On or about September 19, 2015, ULRICH again solicited additional bribe payments for this trustee. In an email of the same date, ULRICH referred to the bribe payments as “pizza,” and explained that the additional payments for the other trustee would be “good insurance” for them.
After a special board meeting convened by the Plan in February 2016, ULRICH was terminated as vice president and trustee of the Union and Plan, respectively. In total, ULRICH demanded, and Executive-1 paid, tens of thousands in bribes before ULRICH was removed from office.
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In addition to his prison term, ULRICH, 50, of Newburgh, New York, was sentenced to two years of supervised release, and was ordered to forfeit $55,000, and to pay restitution in an amount to be determined later. As a result of ULRICH’s conviction, for a period of 13 years he is prohibited from, among other things, being employed by a labor union or employee benefit plan, pursuant to 29 U.S.C. §§ 504 and 1111.
Ms. Strauss praised the Federal Bureau of Investigation, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, and the U.S. Department of Labor Office of Labor-Management Standards for their outstanding investigative work in this case.
This matter is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Eli J. Mark and Louis A. Pellegrino are in charge of the prosecution.
Former SCANA Executive to Plead Guilty to Conspiracy to Commit Mail and Wire Fraud TomorrowRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr., announced today that Stephen A. Byrne, former Executive Vice President of SCANA, is scheduled to plead guilty in federal court tomorrow, July 23, to conspiracy to commit mail and wire fraud.
The hearing is scheduled for 10 a.m. at the Matthew J. Perry Federal Courthouse, 901 Richland Street, Columbia, in Courtroom 1, before Judge Mary G. Lewis.
NOTE: Press inquiries regarding logistics should be directed to Derek A. Shoemake, 843-813-0982.
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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.
Former Kansas Man Sentenced for Child PornographyRead the Press Release
WICHITA, KAN. – A former Kansas man was sentenced today to 10 years in federal prison for uploading child pornography to his Yahoo Messenger account, U.S. Attorney Stephen McAllister said.
Kenneth Herd, 55, formerly of Lyons, Kan., pleaded guilty to one count of transporting child pornography. In his plea, he admitted that Yahoo reported him to Cyber Tip Report (https://report.cybertip.org/ ). Investigators used Herd’s IP address to track the account to him at an address in Lyons, Kan. Herd now lives in Chandler, Okla.
McAllister commended the KBI and Assistant U.S. Attorney Jason Hart for their work on the case.
Former City of Shreveport Employee and Co-Conspirator Charged with Credit Card Fraud and Aggravated Identity TheftRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that two Shreveport men were indicted today for credit card fraud and aggravated identity theft. The 11-count indictment charges former City of Shreveport Public Works employee, Tory Deshawn Jackson, 41, and Jawaski L. Johnson, 30, with one count of conspiracy to use an unauthorized access device and nine counts of use of an unauthorized access device. In addition, Jackson was charged with one count of aggravated identity theft.
According to the indictment, from September 2017 through October 2019, Jackson and Johnson allegedly engaged in a scheme to fraudulently purchase fuel using three Fuelman credit cards stolen from the City of Shreveport. Jackson purchased the fuel using a PIN that he did not have authorization to use; Johnson would then sell the fuel to third parties at a discounted rate. The defendants conducted over 3,800 transactions totaling approximately $400,000.
If convicted the defendants face five years in prison for the conspiracy, 10 years in prison for the access device fraud, a $250,000 fine and up to three years of supervised release. Jackson faces an additional two years in prison for the aggravated identity theft.
This case is being investigated by the Federal Bureau of Investigation and the Shreveport Police Department. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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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.
Former Bay Area Engineer Charged with Mail Fraud and Aggravated Identity Theft in Connection with Fraudulent Building Inspection ReportsRead the Press Release
SAN FRANCISCO – A complaint was unsealed today charging Peter Schurman with mail fraud and aggravated identity theft in connection with a scheme to defraud individuals and municipalities in Sausalito and San Francisco by issuing and charging clients for fraudulent Special Inspection reports, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
According to the complaint filed July 14, 2020, and unsealed today, Schurman, 70, of Tiburon, was an engineering technician and field inspector at several engineering firms throughout the Bay Area. Schurman focused on Special Inspection reports, which are a proactive method of enhancing public safety by ensuring buildings are constructed according to design documents, specifications and approved drawings.
As evidence of mail fraud and aggravated identity theft, the complaint alleges that between July 2015 and October 2019, Schurman knowingly used the name and engineer stamp of other persons who were licensed engineers, without their knowledge or permission, in order to make fraudulent Special Inspection reports appear legitimate. On one project described in the complaint, Schurman sent six invoices containing nine Special Inspection reports for a homeowner in Sausalito, California. Those reports certified that specified work on the project had been performed pursuant to the city-approved plans. According to the complaint, however, the engineer whose signature and stamp appeared on the reports never worked on the project, never signed the documents, never provided her/his stamps, and had no idea that her/his credentials had been used or that her/his signature had been forged.
The complaint further alleges that Schurman’s scheme involved fraudulent Special Inspection reports relating to at least seven other properties in San Francisco, California. Similar to the above-described instance in Sausalito, the fraudulent Special Inspection reports involved in the San Francisco projects were submitted with forged signatures and stamps from five different engineers.
Schurman is charged with mail fraud, in violation of 18 U.S.C. § 1341 and aggravated identity theft, in violation of 18 U.S.C. § 1028A. The maximum penalty for mail fraud is 20 years in prison and a $250,000 fine. The maximum sentence for aggravated identity theft is two years in prison—to be served consecutively to the underlying felony—and a $250,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Schurman had his initial appearance today before U.S. Magistrate Judge Sallie Kim and is set for a status conference on August 21, 2020. Schurman was released on a $50,000 bond.
The case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office. The case is being investigated by the FBI. San Francisco City Attorney Dennis Herrera also alleged in a lawsuit unsealed in March of 2020 that Schurman engaged in fraud.
Florida Man Sentenced for Shipping Synthetic Drugs to Southwest VirginiaRead the Press Release
ABINGDON, VIRGINIA. – Michael John Harrigan, a Florida man who was convicted of conspiring to distribute Schedule I controlled substances in the form of synthetic cannabinoids, was sentenced today in U.S. District Court here to 36 months in federal prison, United States Attorney Thomas T. Cullen announced.
Harrigan, 60, and a co-defendant, Jared Andrea Roa, 30, of Tampa, Fla., pleaded guilty in November 2019 to conspiring to distribute Schedule I controlled substances in the form of synthetic cannabinoids. Additionally, Harrigan agreed to forfeit $500,000 in criminal proceeds to the United States.
According to court documents, Harrigan and Roa admitted to packaging and shipping large quantities of AB-FUBINACA, a Schedule I synthetic cannabinoid, throughout the United States via the United States Postal Service, and other shipping services. Quantities of these drugs were sent to the Western District of Virginia from Florida, including packages that were intercepted before delivery in Coeburn, Va. in October 2014. Additionally, in September 2017, a search of a storage unit belonging to Roa in Tampa, Fla. yielded quantities of AB-FUBINACA, packaging materials, and address labels listing Harrigan’s name and address. Harrigan’s illegal profits from this drug activity were found to have been at least $500,000.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms, and Explosives, United States Postal Inspection Service, Drug Enforcement Administration, the Wise County Sheriff’s Office, and the Southwest Virginia Drug Task Force. Assistant United States Attorneys Lena Busscher and Zachary T. Lee prosecuted the case for the United States.
Federal Agent and Alleged Accomplice Charged in Miami Federal Court with Conspiring to Distribute Drugs, Obstruct Justice, and Lie to the FBIRead the Press Release
Miami, Fl. – South Florida federal prosecutors have charged Hialeah residents Alberico Ahias Crespo, 45, and Jorge Diaz Gutierrez, 65, with conspiring to distribute Oxycodone, obstruct justice, and make false statements to the FBI. Crespo is a Special Agent with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), who, during the time of the alleged crimes, worked as part of the South Florida Health Care Fraud Strike Force. Crespo allegedly used his position as an agent to both advance the drug distribution crimes and impede related federal health care fraud investigations, including investigations on which Crespo himself worked.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Derrick L. Franklin, Special Agent in Charge, HHS-OIG, Special Investigations Branch, made the announcement.
According to the complaint affidavit charging criminal conduct from September 2019 to June 2020, Diaz was part of an illegal Oxycodone distribution system involving patients, pharmacies, and medical clinics. Diaz allegedly recruited patients and sent them to particular medical clinics to obtain Oxycodone prescriptions that the patients did not need. Once the patients obtained the prescriptions, they would give them to Diaz in exchange for money. Diaz allegedly would fill the prescriptions at certain pharmacies and sell the Oxycodone pills (at a mark-up) to third party street dealers.
According to the affidavit, Diaz and Crespo were associates. Crespo allegedly used his position as an HHS-OIG Special Agent working on health care fraud cases to protect Diaz’s Oxycodone operation. According to the affidavit, Crespo did this by monitoring Strike Force investigations involving Diaz, accessing and disclosing sensitive law enforcement information to Diaz, updating Diaz on the progress of health care fraud investigations, and coaching Diaz on how to lie to investigators and tamper with evidence.
The narcotics and obstruction charges each carry a maximum sentence of 20 years’ imprisonment. The materially false statements charge carries a maximum sentence of five years’ imprisonment.
U.S. Attorney Fajardo Orshan commended the investigative efforts of FBI and HHS-OIG, Special Investigations Branch. Assistant United States Attorneys Sean T. McLaughlin and Christopher Clark are prosecuting this case.
A criminal complaint is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 20-mj-03211-JB.
Eustis Man Sentenced to 18 Years for Methamphetamine and Gun OffensesRead the Press Release
Ocala, Florida – United States District Judge Roy B. Dalton, Jr. has sentenced Anthony Michele DeCotis, Jr. (32, Eustis) to 18 years in federal prison for possessing with intent the to distribute methamphetamine and possessing of a firearm in furtherance of a drug trafficking crime. DeCotis had pleaded guilty on January 29, 2020.
According to court records, on August 3, 2017, DeCotis was in a vehicle that had been stopped by an officer with Eustis Police Department. After a drug detection dog indicated to the presence of drugs, the officer found that DeCotis possessed three ounces of methamphetamine, three firearms, more than $2,000 cash, a scale, and multiple baggies.
At the time of his arrest, DeCotis was on release from a state bond for charges related to similar conduct 10 weeks prior. He was later found guilty in state court for possession of methamphetamine and possession of a firearm, and was sentenced to serve 36 months in state prison. Judge Dalton ordered the 18-year federal sentence to run consecutive to the state sentence.
DeCotis was determined to be a Career Offender based on his multiple prior convictions for drug felonies and violent crimes. He had been recently released from prison in February 2017, six months before committing these offenses.
This case was investigated by the Drug Enforcement Administration with support from the Eustis Police Department. It was prosecuted by Assistant United States Attorney Michael P. Felicetta.
Erie Residents Charged in Methamphetamine Trafficking ConspiracyRead the Press Release
ERIE, Pa. – Two residents of Erie, Pennsylvania have been indicted by a federal grand jury in Erie on charges of violating federal drug laws, United States Attorney Scott W. Brady announced today.
The two-count Indictment named Rodney Domanick Evans, 30, and Lindsey Michelle Thompson, 36, as defendants.
According to the Indictment presented to the court, on or about December 19, 2019, Evans and Thompson conspired to distribute and distributed 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine.
The law provides for a maximum total sentence of 80 years in prison, a fine of $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Paul S. Sellers is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Erie County Detective Bureau, Erie Police Department and the Millcreek Police Department conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
East Hartford Woman Sentenced to Three Years in Prison for Role in Fentanyl Trafficking RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MARISOL FERRY, formerly known as “Marisol Hernandez,” 27, of East Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 36 months of imprisonment, followed by three years of supervised release, for distributing fentanyl.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI’s Northern Connecticut Violent Crimes Gang Task Force and Hartford Police Department’s Vice and Narcotics Division into the trafficking of narcotics and associated violence in Hartford’s South End by members and associates of the Almighty Latin Kings Nation (“Latin Kings”). The investigation, which included court-authorized wiretaps, physical surveillance and controlled purchases of narcotics, revealed that two members of the Latin Kings operated separate drug trafficking organizations that distributed fentanyl, heroin, cocaine and crack cocaine. The organizations used multiple locations to process, package, store and distribute narcotics, and possessed firearms in furtherance of their drug trafficking activities.
Marisol Ferry’s husband, Nelson Ferry, led one of the drug trafficking organizations, and Marisol was an active participant in the processing, packaging and distribution of heroin/fentanyl from their East Hartford residence. Nelson Ferry also operated a “trap house” at 149 Wethersfield Avenue in Hartford as a distribution point for drug customers. Between February and April 2018, investigators made several controlled purchases of fentanyl and crack cocaine from Nelson Ferry’s associate at or near the trap house. On May 22, 2018, Ferry’s associate was shot and seriously wounded in an apparent robbery of the trap house. After the shooting, intercepted communications revealed that Nelson Ferry solicited his brother-in-law, Dannie Darling, to locate and likely harm the shooter. Marisol Ferry also threatened the shooter on Facebook. In order to prevent violence, investigators followed Nelson Ferry, sent uniformed police officers into targeted areas, and stopped Darling in his vehicle to identify him.
Nelson and Marisol Ferry were arrested on June 19, 2018. A search of their residence on that date revealed approximately 50 grams of fentanyl, assorted drug paraphernalia and more than $2700 in cash.
Marisol Ferry has been detained since her arrest. On August 19, 2019, she pleaded guilty to one count of conspiracy to possess with intent to distribute, fentanyl.
Nelson Ferry pleaded guilty to related charges and, on February 26, 2020, was sentenced to 87 months of imprisonment. Darling also pleaded guilty and, January 22, 2020, was sentenced to 51 months of imprisonment.
On January 27, 2020, Randy Parkman, of Hartford, pleaded guilty to federal robbery and firearm offenses related to the May 22, 2018, shooting at the Wethersfield Avenue trap house. On June 24, he was sentenced to 204 months (17 years) of imprisonment.
This matter is being investigated by the FBI’s Northern Connecticut Gang Task Force and the Hartford Police Department. The Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division and Shooting Task Force have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Department of Justice Announces Expansion of Operation Legend to ChicagoRead the Press Release
CHICAGO – John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, today joined Attorney General William P. Barr and President Donald J. Trump to announce the expansion of Operation Legend to Chicago.
Operation Legend is a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The Operation was first launched on July 8, 2020, in Kansas City, Mo., as a result of President Trump’s promise to assist America’s cities that are plagued by recent violence. Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29, 2020, in Kansas City. The first federal arrest under Operation Legend was announced on July 20, 2020.
As part of Operation Legend, Attorney General Barr directed the FBI, U.S. Marshals Service, DEA, and ATF to significantly increase resources into Chicago, as well as Albuquerque, N.M., in the coming weeks to help state and local officials fight high levels of violent crime, particularly gun violence.
“A top priority as federal prosecutors is to reduce violent crime, particularly in a large urban area like Chicago,” said U.S. Attorney Lausch. “As part of Operation Legend, additional federal resources will assist our office and our federal, state, and local law enforcement partners to increase prosecutions of trigger-pullers, drug traffickers, carjackers, and those who illegally traffic, use, and possess firearms. We will use these new resources and every other available federal law enforcement tool to reduce the unacceptable level of violent crime in Chicago.”
“The most basic responsibility of government is to protect the safety of our citizens,” said Attorney General Barr. “Today, we have extended Operation Legend to Chicago and Albuquerque to protect the residents of those cities from senseless acts of deadly violence by targeting those involved in gang activity and those who use guns to commit violent crime. For decades, the Department of Justice has achieved significant success when utilizing our anti-violent crime task forces and federal law enforcement agents to enforce federal law and assist American cities which are experiencing upticks in violent crime. The Department of Justice’s assets will supplement local law enforcement efforts, as we work together to take the shooters and chronic violent criminals off of our streets.”
Chicago is currently experiencing a significant increase in violent crime, with homicides up 51% over 2019. Over the weekend of July 17, more than 60 people were shot in the city of Chicago, with 14 fatalities. Similarly, Albuquerque is currently on pace to break 2019’s record for homicides in the city. On the weekend of July 10, there were four murders in Albuquerque within a 24-hour period.
In Chicago, the Department of Justice will supplement state and local law enforcement agencies by sending more than 100 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of U.S. Attorney Lausch, these investigators will complement the work already underway by existing joint federal, state and local task forces focused on combatting Chicago’s violent criminals, gangs, and drug trafficking organizations. The investigatory efforts will be advanced by more than 100 members of the U.S. Marshals Service Great Lakes Task Force, which will direct violent fugitive apprehension operations within Chicago to identify wanted gang members, violent criminals, and firearms violators. The Department of Homeland Security’s Homeland Security Investigations (HSI) is also committing 100 agents, already stationed in Chicago, to Operation Legend. HSI agents will conduct investigations into gangs, narcotics traffickers, violent offenders, and firearms traffickers.
To further support the Chicago Police Department in reducing violent crime, ATF has deployed its national Crime Gun Intelligence Mobile Command Vehicle to assist local law enforcement with analysis of crime scenes and spent shell casings through the National Integrated Ballistic Information Network (NIBIN). ATF will also make available additional resources to assist the city of Chicago in providing timely, efficient analysis of ballistic evidence from shootings in order to quickly disrupt violent criminals and prosecute those prohibited from possessing firearms under federal law. The Bureau of Justice Assistance will make available $3.5 million in funding to reimburse the Chicago Police Department and City of Chicago for the work of local law enforcement on the federal task forces supporting Operation Legend’s violent crime reduction efforts. The COPS Office has also made $9.375 million available to the Chicago Police Department to fund the hiring of 75 officers.
In Albuquerque, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of John C. Anderson, United States Attorney for the District of New Mexico, these federal investigators will work closely with the Albuquerque Police Department and the Bernalillo County Sheriff’s Department, along with other local partners, through preexisting task forces directed at combatting violent crimes. Up to ten HSI agents will assist with the efforts in Albuquerque, as well. The Department of Justice has also made available more than $1.5 million in COPS Hiring Grants to the Bernalillo County Sheriff’s Department to onboard five deputies and to support additional federal task force officers committed to violent crime reduction efforts. Separately, the Bureau of Justice Assistance has made available $1.4 million to reimburse the Bernalillo County Sheriff’s Office for the work of local law enforcement on the federal task forces supporting Operation Legend’s violent crime reduction efforts. The Department has also assisted Albuquerque through the Joint Law Enforcement Operations (JLEO) fund to assist reimbursement of local law enforcement serving as federal task force officers with FBI, ATF, DEA, and the U.S. Marshals Service. These JLEO funds also will be used to assist the city of Albuquerque in acquiring technology used for detection of gunshots and development of an integrated response plan to gunshots by local law enforcement.
Convicted Felon Sentenced to Prison for Possessing A Stolen GunRead the Press Release
VALDOSTA, Ga. – A convicted felon with a lengthy criminal record was sentenced to prison for illegally possessing a stolen firearm, said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia.
Charles Bernard Little, aka Jaquazen McQueen, 23, of Valdosta, was sentenced to 60 months in prison by U.S. District Judge Louis Sands on Tuesday, July 21 after pleading guilty to one count possession of a firearm by a convicted felon. There is no parole in the federal system.
Valdosta Police officers responded to a domestic assault complaint at a Valdosta residence on February 10, 2019. Officers found Little inside the residence and discovered a 9mm semiautomatic pistol that Little admitted he had purchased “on the street.” Officers later discovered the pistol was stolen in Lowndes County only nine days earlier. Little has several prior felony convictions for multiple crimes including violation of the street gang terrorism and prevention act based on commission of a gang related simple battery in Lowndes Superior Court and burglary in the first degree in Thomas Superior Court.
“It is illegal for convicted felons to possess weapons. We are working closely with our local law enforcement partners to identify criminal gun cases that warrant federal prosecution, where the punishment is without parole,” said U.S. Attorney Charlie Peeler. “Project Safe Neighborhoods is the Justice Department’s initiative to curb violence. Removing firearms from the hands of convicted felons is one piece of the strategy to reduce violent crime in Valdosta and across the Middle District of Georgia. I want to thank the Valdosta Police Department and ATF for their work in this case.”
The investigation was conducted as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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/archives/projectguardian.
The case was investigated by the Valdosta Police Department and the Bureau of Alcohol, Tobacco and Firearms (ATF). Assistant U.S. Attorney Robert McCullers 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
Convicted Child Rapist Indicted on Naturalization and Passport Fraud ChargesRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment today charging a naturalized citizen of the U.S., born in Mexico, with naturalization and passport fraud.
According to the indictment, J. Refugio Gomez-Juarez, age 51, knowingly failed to disclose during his naturalization proceedings that he had committed the crime of second degree forcible rape of a mentally disabled child.
According to the indictment, Gomez-Juarez was thereafter naturalized as a United States citizen and fraudulently obtained multiple United States passports.
Gomez-Juarez is charged in an 11-count indictment with naturalization and passport fraud. If convicted, he faces up to a maximum term of imprisonment of 25 years per count, a maximum fine of $250,000 per count, a term of supervised release following any term of imprisonment, and the revocation of his citizenship.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. Agents with ICE’s Enforcement and Removal Operations and Homeland Security Investigations, assigned to the Document Benefit Fraud Task Force, are investigating the case as part of Operation False Haven. Operation False Haven is an ongoing initiative to identify and prosecute felons who fraudulently obtained U.S. citizenship.
A copy of this press release is located on our website.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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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.
Centric Parts to Pay $8 Million to Resolve Allegations of Failing to Pay the United States Millions of Dollars in Import Duties on Brake PadsRead the Press Release
LOS ANGELES – CWD, LLC, which operates under the name Centric Parts, a Delaware corporation headquartered in Carson, and its affiliates have agreed to pay $8 million to the United States to resolve allegations that they violated the False Claims Act and the Tariff Act of 1930 by knowingly underpaying customs duties owed to the United States on imported brake pads.
Centric Parts and its affiliates sell aftermarket brake and chassis components for passenger vehicles and trucks. Centric Parts imported brake parts into the United States and was responsible for the submission of entry documents to U.S. Customs and Border Protection and the payment of any customs duties owed on those products.
The United States alleged that, from 2007 to 2017, Centric Parts falsely claimed on entry documents that mounted brake pads, which carry a 2.5 percent tariff, were unmounted brake pads, which require no tariff. The United States further alleged that when confronted with the misclassifications in 2017, company officials decided to conceal and not disclose the past false entry documents to Customs. As a result of Centric Parts’ alleged omissions and false statements regarding its imported products, the company knowingly evaded millions of dollars of customs duties it owed to the United States.
The settlement resolves two lawsuits filed by former employees pursuant to the qui tam provisions of the False Claims Act. These provisions permit private parties to sue on behalf of the government when a defendant knowingly avoids an obligation to pay money to the government, and to share in any recovery. The two “whistleblowers,” Steven Hughes and Jeffrey Hawk, will receive a total of $1.48 million as their share of the settlement.
Although Centric Parts has filed for bankruptcy protection, the bankruptcy court entered an order confirming the company’s plan of reorganization that explicitly provides the settlement debt is non-dischargeable and will be paid by the reorganized company.
The $8 million settlement resolves federal cases filed in Los Angeles and Detroit: United States ex rel. Steven Hughes v. CWD Holdings, LLC, Case No. 19-CV-7089-DMG (C.D. Cal.), and United States ex rel. Jeffrey Hawk v. CWD Holdings, LLC., et al., Case No. 17-12225-BAF (E.D. Mich.).
The case filed in Detroit was unsealed today, while the Los Angeles case was unsealed on July 16.
Assistant United States Attorney Karen Paik of the Civil Fraud Section handled the Los Angeles case. The matter was investigated by agents from U.S. Customs and Border Protection, and Homeland Security Investigations.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Cedar Lake Woman Indicted for Wire FraudRead the Press Release
HAMMOND – Jessica Guska (a/k/a Jessica Irvine, Jessica Brewer, Jessica Carrington and Jessica Hoggard), 42, Cedar Lake, Indiana was charged by way of a 4 count indictment for wire fraud, announced U.S. Attorney Thomas L. Kirsch II.
Guska was the president of Cedar Lake-based Riptide Travel Softball, a competitive softball club for girls. Ms. Guska was responsible for managing Riptide Travel Softball’s finances. It is alleged that from August 2018 until approximately October 2019 Ms. Guska embezzled money meant for Riptide Travel Softball and used it to pay her personal expenses, including health care costs, air travel, vacations and her home property taxes.
The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.
If convicted, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is being investigated by the Federal Bureau of Investigation with the assistance of the Cedar Lake Police Department and is being prosecuted by Assistant U.S. Attorney Molly Kelley.
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Carlisle Man Sentenced to 15 Years in Prison for Distribution of Child PornographyRead the Press Release
LITTLE ROCK—A Carlisle man was sentenced today on one count of distribution of child pornography. United States District Court Judge James M. Moody Jr. sentenced Stuart Adams, 34, to 15 years in federal prison. Cody Hiland, the United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI Little Rock Field Office, announced today’s sentencing.
In February 2019, an undercover FBI agent posted an advertisement online, indicating that he was seeking children for sexual purposes. Adams responded to the ad and began texting the undercover agent. In the texts, Adams expressed interest in meeting the agent’s fictitious eight-year-old daughter and having sex with her. Adams sent the agent two videos and one photograph that depicted child pornography.
Based on those interactions, the FBI obtained a search warrant for Adams’ residence in Carlisle. They seized a cell phone that contained three photos of sexually explicit material involving children. Law enforcement also seized a hard drive that contained 71 photos and six videos of child pornography, as well as various external drives and storage cards that contained additional photos and videos of child pornography.
“This defendant responded to an online advertisement because he was looking for an opportunity to sexually abuse a child,” U.S. Attorney Hiland said. “In his attempts to build trust with whom he believed to be his victim’s father, he distributed child pornography. Today’s sentence demonstrates that those who target our children will not go unpunished, and we will aggressively investigate and prosecute anyone who attempts to victimize children in our communities.”
“Stuart Adams’ sentence today sets the tone for how we will handle child predators in our state,” Special Agent in Charge Upchurch said. “If you harm a child, we will investigate you, we will arrest you, and with help from our United States Attorney’s Office partners, we will prosecute you to the fullest extent of the law. We urge our Arkansas neighbors to remain vigilant against child predators and to immediately report suspected cases of violence against children to the FBI.”
On June 5, 2019, Adams was charged in a three-count indictment with two counts of distribution of child pornography and one count of possession of child pornography. The defendant pleaded guilty to one count of distribution of child pornography on February 3, 2020.
In addition to the prison term, Adams was sentenced to five years of supervised release following his imprisonment. The investigation was conducted by the FBI, and the case was prosecuted by Assistant United States Attorney Kristin Bryant.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
CWD Holdings to Pay $8 Million to Resolve False Claims Act Allegations Relating to Unpaid Import DutiesRead the Press Release
CWD Holdings LLC has agreed to pay the United States $8 million to resolve allegations that it violated the False Claims Act by knowingly avoiding paying tariffs on certain imported brake parts. The settlement arises out of allegations that CWD falsely claimed that the mounted brake pads it in fact imported, which carried a 2.5% tariff, were unmounted brake pads, which required no tariff. CWD is a Delaware-incorporated company based in California, with additional operating facilities and subsidiaries in California, Kentucky, and Michigan. CWD and its subsidiaries provide aftermarket brake and chassis components for passenger vehicles and trucks.
This settlement resolves allegations that from 2007 to 2017, CWD knowingly imported into the United States mounted brake pad sets subject to a 2.5% tariff under the Harmonized Tariff Schedule and misrepresented the nature of the imported goods to United States Customs and Border Protection (“U.S. Customs”). The allegations claim that CWD falsely represented to U.S. Customs that the mounted disk brake pad sets were unmounted brake pads, requiring the payment of no duty, in order to avoid payment of the 2.5% tariff.
“CWD Holdings avoided millions of dollars in customs duties by misrepresenting the nature of the imported goods to U.S. Customs,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “With this lawsuit and the accompanying resolution, CWD Holdings is being held to account for its unlawful evasion of customs duties.”
“U.S. Customs and Border Protection maintains a zero-tolerance policy for trade fraud and other unfair trade practices that undermine the competitiveness of U.S. businesses,” said Director Field Operations Christopher Perry. “We are proud to partner with the U.S. Attorney’s Office to level the playing field for legitimate traders by steadfastly enforcing U.S. trade laws.”
The settlement resolves allegations contained in two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. Two separate whistleblowers filed the lawsuits: Jeffrey Hawk and Steven Hughes, both former employees of CWD Holdings and/or its subsidiaries. The False Claims Act permits private parties to file suit on behalf of the United States and to share in any recovery. The whistleblowers in this case will receive $1.48 million of the settlement amount.
The matter was handled by Assistant United States Attorneys John Spaccarotella and Caroline Burgunder from the U.S. Attorney’s Office for the Eastern District of Michigan; and Karen Paik and Abraham Meltzer from the U.S. Attorney’s Office for the Central District of California.
The two qui tam cases are docketed as United States ex rel. Jeffrey Hawk v. CWD Holdings, LLC, et al., Case No. 17-12225 (E.D. MI), and United States ex rel. Steven Hughes v. CWD Holdings, LLC, Case No. 19-CV-7089 (C.D. CA). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Busby woman sentenced to prison for endangering childrenRead the Press Release
BILLINGS—A Busby woman convicted of severely neglecting two young children who were in her custody, causing them serious injury, was sentenced today to one year in prison and three years of supervised release, U.S. Attorney Kurt Alme said.
Edith Wolfblack, 60, pleaded guilty in December to two counts of criminal child endangerment.
U.S. District Judge Susan P. Watters presided.
The prosecution said in court records that in October 2018, the Bureau of Indian Affairs Social Services removed two children, who were under the age of 14, from Wolfblack’s home on the Northern Cheyenne Indian Reservation. The children had been placed in Wolfblack’s care in 2013. During the years in Wolfblack’s custody, Wolfblack failed to take the children to doctor’s appointments, many that were meant to address ongoing health issues, thereby inhibiting proper development of the children. Medical records also indicated severe malnutrition and a significant failure to grow. The children were hospitalized after being removed from the home. Since removal, the children have continued to grow and thrive medically.
Assistant U.S. Attorney Bryan Dake prosecuted the case, which was investigated by the BIA and FBI.
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Bucks County Man Pleads Guilty to Faking a Military Career as a Navy SEAL, Stealing from the Government, and Straw Purchasing FirearmsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Meleski, 58, of Chalfont, PA, pleaded guilty to multiple charges, including healthcare fraud, mail fraud, stolen valor, and aiding and abetting straw purchases of firearms.
In November 2019, Meleski was charged by Indictment for his scheme to defraud the government of hundreds of thousands of dollars in benefits. To perpetrate the scheme, Meleski faked serving in the U.S. military, specifically the Navy SEALs, and falsely represented that he had been a Prisoner of War, in order to secure healthcare benefits from the Veterans Administration (VA) worth over $300,000. Due to his false representation as a POW, the defendant received healthcare from the VA in Priority Group 3, effectively receiving healthcare before other deserving military service members. In reality, Meleski never served a single day in the United States military.
Meleski also filed for monetary compensation from the VA for PTSD he supposedly suffered during an armed conflict in Beirut in which he rescued injured service members. In his application for disability benefits for PTSD, Meleski falsely represented that he had been awarded the Silver Star for heroic actions during his time as a Navy SEAL. Again, Meleski never served a single day in the United States military and of course was never awarded any service medals. Meleski also submitted another application to the VA for monetary compensation in which he included obituaries of actual Navy SEALs alongside whom he had supposedly served. In short, he traded on the actions of true heroes in an attempt to bolster his false application for monetary benefits.
The defendant also filed for disability benefits from The United States Social Security Administration (SSA) for injuries he claimed to have received during his time in the service. Meleski falsely testified under oath in connection with an SSA Disability proceeding.
After being arrested for fraud, it was discovered that the defendant had also engaged in aiding and abetting the straw purchase of two separate firearms; he also pleaded guilty to this conduct.
“Meleski faked a record as a decorated U.S. Navy SEAL in order to steal numerous forms of compensation,” said U.S. Attorney McSwain. “Everything about this case is profoundly offensive. Our veterans fought for the freedoms we hold dear, and we owe them a debt that we can never fully repay. But holding individuals like Meleski accountable for their crimes is one small way that we can honor our veterans’ service.”
“This guilty plea is a warning to those who make false statements in applying for Social Security disability benefits,” said Gail S. Ennis, Inspector General of Social Security. "I want to recognize the efforts of the VA OIG and ATF in investigating this case, and the United States Attorney’s Office for bringing these charges.”
The case was investigated by Department of Veterans Affairs Office of the Inspector General, Social Security Administration Office of the Inspector General, and the Bureau of Alcohol, Tobacco and Firearms. It is being prosecuted by Special Assistant United States Attorney Megan Curran.
Baton Rouge Man Sentenced to 110 Months in Federal Prison for Gun and Drug ChargesRead the Press Release
United States Attorney Brandon J. Fremin announced that U.S. District Judge John W. deGravelles sentenced Justin Williams, age 31, of Baton Rouge, Louisiana, to 110 months in federal prison following his convictions for distribution of heroin, possession with the intent to distribute heroin, possession of a firearm in furtherance of a drug trafficking crime, and felon in possession of a firearm. The Court further sentenced Williams to serve five years of supervised release following his term of imprisonment and ordered that the firearm involved be forfeited.
According to admissions made as part of his guilty plea, on March 22, 2019, Williams sold heroin to a confidential informant from his vehicle in Baton Rouge, Louisiana. East Baton Rouge Sheriff’s Office detectives subsequently stopped Williams’ vehicle, at which time heroin, a stolen Glock 9mm pistol with a fully loaded 30-round extended magazine, and $2,077.00 in cash were recovered. Williams was previously convicted of illegal possession of stolen things and cruelty to the infirmed in 2009, and possession of Schedule II drugs in 2013.
U.S. Attorney Brandon Fremin stated, “Convicted felons like this defendant who illegally arm themselves and sell drugs, particularly opioids, create a dangerous situation for our citizens and for law enforcement and it must stop. My office and our partners remain committed to punishing convicted criminals who do so. Great credit goes to our partnership with local authorities for this result, and I want to thank our prosecutor, the ATF, and the East Baton Rouge Sheriff’s Office for their work on this case.
“In our effort to disrupt violent gun crime in our community, ATF will continue to focus efforts on prohibited individuals who unlawfully possess firearms,” said ATF New Orleans Field Division Special Agent in Charge Kurt Thielhorn. “ATF will continue to work tirelessly to protect our communities and hold accountable those who threaten our safety.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with critical assistance from the East Baton Rouge Sheriff’s Office, and was prosecuted by Assistant United States Attorney William K. Morris.
Auburn Man Charged with Possession of Child PornographyRead the Press Release
BOSTON – An Auburn man was arrested and charged with possession of child pornography.
Jesse Laino, 26, was charged in a criminal complaint with one count of possession of child pornography. Laino was released on conditions following an initial appearance in federal court in Worcester today.
As alleged in charging documents, federal agents executed a search of Laino and his residence and seized two cellphones that contained child pornography, including hundreds of images and dozens of videos.
The charging statute provides for a sentence of up to 10 years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Auburn Police Chief Andrew J. Sluckis Jr.; and Worcester Police Chief Steven M. Sargent made the announcement today. Assistant U.S. Attorney John T. Mulcahy of Lelling’s Worcester Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Attorney General William P. Barr Joins President Donald J. Trump to Announce Expansion of Operation LegendRead the Press Release
Today, Attorney General William P. Barr joined President Donald J. Trump to announce the expansion of Operation Legend to Chicago and Albuquerque. Operation Legend is a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The Operation was first launched on July 8 in Kansas City, Missouri, as a result of President Trump’s promise to assist America’s cities that are plagued by recent violence.
Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. The first federal arrest under Operation Legend was announced on July 20.
“The most basic responsibility of government is to protect the safety of our citizens,” said Attorney General Barr. “Today, we have extended Operation Legend to Chicago and Albuquerque to protect the residents of those cities from senseless acts of deadly violence by targeting those involved in gang activity and those who use guns to commit violent crime. For decades, the Department of Justice has achieved significant success when utilizing our anti-violent crime task forces and federal law enforcement agents to enforce federal law and assist American cities which are experiencing upticks in violent crime. The Department of Justice’s assets will supplement local law enforcement efforts, as we work together to take the shooters and chronic violent criminals off of our streets.”
As part of Operation Legend, Attorney General Barr directed the FBI, U.S. Marshals Service, DEA, and ATF to significantly increase resources into Chicago and Albuquerque in the coming weeks to help state and local officials fight high levels of violent crime, particularly gun violence. Chicago is currently experiencing a significant increase in violent crime, with homicides currently up 51 percent over 2019. Over the weekend of July 17, more than 60 people were shot in the city of Chicago, with 14 fatalities. Similarly, Albuquerque is currently on pace to break 2019’s record for homicides in the city. On the weekend of July 10, there were four murders in Albuquerque within a 24-hour period.
In Chicago, the Department of Justice will supplement state and local law enforcement agencies by sending over 100 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of John R. Lausch Jr., U.S. Attorney for the Northern District of Illinois, these investigators will complement the work already underway by existing joint federal, state and local task forces focused on combating Chicago’s violent gangs, gun crime, and drug trafficking organizations. The investigatory efforts will be advanced by more than 100 members of the U.S. Marshals Service Great Lakes Task Force, which will direct violent fugitive apprehension operations within Chicago to identify wanted gang members, violent criminals, and firearms violators. The Department of Homeland Security’s Homeland Security Investigations (HSI) are also committing at least 100 agents, already stationed in Chicago, to Operation Legend. HSI agents will conduct investigations into gangs, narcotics traffickers, violent offenders, and firearms traffickers.
To further support the Chicago Police Department in reducing violent crime, ATF has deployed its national Crime Gun Intelligence Mobile Command Vehicle to assist local law enforcement with analysis of crime scenes and spent shell casings through the National Integrated Ballistic Information Network (NIBIN). ATF will also make available additional resources to assist the City of Chicago in providing timely, efficient analysis of ballistic evidence from shootings in order to quickly disrupt violent criminals and prosecute those prohibited from possessing firearms under federal law.
The Bureau of Justice Assistance will make available $3.5 million in funding to reimburse the Chicago Police Department and City of Chicago for the work of local law enforcement on the federal task forces supporting Operation Legend’s violent crime reduction efforts. The COPS Office has also made $9.375 million available to the Chicago Police Department to fund the hiring of 75 officers.
In Albuquerque, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of John C. Anderson, U.S. Attorney for the District of New Mexico, these federal investigators will work closely with the Albuquerque Police Department and the Bernalillo County Sheriff’s Department, along with other local partners, through pre-existing task forces directed at combatting violent crimes. Up to ten HSI agents will assist with the efforts in Albuquerque, as well.
The Department of Justice has also made available over $1.5 million in COPS Hiring Grants to the Bernalillo County Sheriff’s Department to onboard five deputies and to support additional federal task force officers committed to violent crime reduction efforts. Additionally, the COPS Office has made $9.74 million available to the Albuquerque Police Department to fund the hiring of 40 officers. Separately, the Bureau of Justice Assistance has made available $1.4 million to reimburse the Bernalillo County Sheriff’s Office and Albuquerque Police Department for the work of local law enforcement on the federal task forces supporting Operation Legend’s violent crime reduction efforts. The Department has also provided assistance through the Joint Law Enforcement Operations (JLEO) fund to assist reimbursement of local law enforcement serving as federal task force officers with FBI, ATF, DEA, and the U.S. Marshals Service. These JLEO funds also will be used to assist the City of Albuquerque in acquiring technology used for detection of gunshots and development of an integrated response plan to gunshots by local law enforcement.
Atlanta man arraigned for embezzling over $200,000 from his disabled father’s VA accountRead the Press Release
ATLANTA – William Dorsey, Jr., has been arraigned for embezzling over $200,000 from his father’s beneficiary account funded by the U.S. Department of Veterans Affairs (VA.)
“We must be diligent in protecting our elderly citizens, especially our veterans,” said U.S. Attorney Byung J. “BJay” Pak. “We are focused on preventing and punishing the exploitation and abuse of our most vulnerable citizens.”
“Fiduciaries assume a solemn duty to care for veterans who served their country through their military service and now are unable to care for themselves. The VA Office of Inspector General is dedicated to working with our law enforcement partners to ensure that any fiduciary who embezzles VA funds intended to provide necessary support to our nation’s disabled veterans is held responsible,” said David Spilker, Special Agent in Charge, VA Office of Inspector General.
According to U.S. Attorney Pak, the charges, and other information presented in court: On May 10, 2010, William Dorsey, Jr., signed a fiduciary agreement agreeing to manage the benefit payments provided by the VA to his father, William Dorsey Sr., a 67-year-old disabled Vietnam veteran diagnosed with Alzheimer’s Disease and dementia. According to medical records from the secure medical center where he resides, William Dorsey, Sr., is wheel-chair bound, cannot communicate, and requires total assistance with his daily activities.
As part of the fiduciary agreement, Dorsey, Jr., agreed to spend the VA benefit funds only for his father’s daily needs, to never comingle funds, to never withdraw cash from the account, and to keep accurate records and receipts. However, by the time he was removed as fiduciary seven years later in May 2017, banking records indicate all of these conditions had been violated, including the direct transfer of money from his father’s account to his own personal account. According to a financial analysis conducted by the VA, over $200,000 remains unaccounted for.
During this same time period, nursing staff reported that Dorsey, Sr., only needed approximately $50-$100 to cover expenses each month, and that William Dorsey, Jr., commonly provided items of inferior quality, such as used oversized clothing and half empty bottles of shampoo. According to one social worker supervisor, the attending nurses felt compelled on occasion to buy “basic necessities” for Dorsey, Sr., out of their own pocket.
William Dorsey, Jr., 42, of Atlanta, Georgia, was arraigned before U.S. Magistrate Judge Alan J. Baverman. Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated the U.S. Department of Veterans Affairs, Office of the Inspector General, Criminal Investigations Division.
Assistant U.S. Attorney Scott McAfee is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Alien Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment today charging Francisco Javier Cortes-Gutierrez, age 35, of Mexico, with illegal reentry of a removed alien.
If convicted of illegal reentry, Cortes-Gutierrez, previously deported four times and found in New Hanover County, would face a maximum imprisonment term of two years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. ICE’s Enforcement and Removal Operations and Homeland Security Investigations are investigating the case.
A copy of this press release is located on our website.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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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.
Attorney General William P. Barr Joins President Donald J. Trump to Announce Expansion of Operation LegendRead the Press Release
WASHINGTON – Today, Attorney General William P. Barr joined President Donald J. Trump to announce the expansion of Operation Legend to Chicago and Albuquerque. Operation Legend is a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The Operation was first launched on July 8 in Kansas City, Missouri, as a result of President Trump’s promise to assist America’s cities that are plagued by recent violence.
Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. The first federal arrest under Operation Legend was announced on July 20.
“The most basic responsibility of government is to protect the safety of our citizens,” said Attorney General Barr. “Today, we have extended Operation Legend to Chicago and Albuquerque to protect the residents of those cities from senseless acts of deadly violence by targeting those involved in gang activity and those who use guns to commit violent crime. For decades, the Department of Justice has achieved significant success when utilizing our anti-violent crime task forces and federal law enforcement agents to enforce federal law and assist American cities which are experiencing upticks in violent crime. The Department of Justice’s assets will supplement local law enforcement efforts, as we work together to take the shooters and chronic violent criminals off of our streets.”
U.S. Attorney John C. Anderson added the following:
"We are grateful for today’s additional commitment of the President and the Attorney General to fighting violent crime in Albuquerque at a time when violent crime remains a plague on our streets. Too often in Albuquerque, violent crimes have left a tragic and lasting impact upon innocent families. Operation Legend reminds us of the human cost that comes from unchecked violence on our streets.
As an example of that human cost, the FBI has today announced a reward seeking information leading to the identification and arrest of the individual(s) responsible for the homicide of Albuquerque resident Jacqueline Vigil. As most in our community are aware, Vigil was fatally shot in her driveway in Albuquerque on the morning of November 19, 2019, when she was headed to the gym. Vigil was 55 years old.
Our experience has proven that federal efforts can make a difference in Albuquerque. For example, as reported in the local press in July 2019, a significant decline of the overall number of robberies the city of Albuquerque coincided with the increase in the United States Attorney’s Office’s prosecution of robberies under the federal Hobbs Act.
I must also briefly address several mistaken reports concerning Operation Legend. The public should please not confuse or equate Operation Legend with the events unfolding in Portland, Oregan. Portland is not an Operation Legend City and Operation Legend was not conceived or announced in response to the events in Portland. Nor is Operation Legend directed at controlling protestors or about immigration enforcement.
Operation Legend is instead about fighting violent crime. As such, it is a direct augmentation of federal resources for the vital work that federal agents are already doing in Albuquerque in concentrating upon the most dangerous actors and groups in an effort to make the city where we all work and live a safer place."
As part of Operation Legend, Attorney General Barr directed the FBI, U.S. Marshals Service, DEA and ATF to significantly increase resources into Chicago and Albuquerque in the coming weeks to help state and local officials fight high levels of violent crime, particularly gun violence. Chicago is currently experiencing a significant increase in violent crime, with homicides currently up 51% over 2019. Over the weekend of July 17, more than 60 people were shot in the city of Chicago, with 14 fatalities. Similarly, Albuquerque is currently on pace to break 2019’s record for homicides in the city. On the weekend of July 10, there were four murders in Albuquerque within a 24-hour period.
In Albuquerque, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, and ATF to the city. In coordination with the United States Attorney’s Office, these federal investigators will work closely with the Albuquerque Police Department and the Bernalillo County Sheriff’s Department, along with other local partners, through pre-existing task forces directed at combatting violent crimes. Up to ten HSI agents will assist with the efforts in Albuquerque, as well.
The Department of Justice has also made available over $1.5 million in COPS Hiring Grants to the Bernalillo County Sheriff’s Department to onboard five deputies and to support additional federal task force officers committed to violent crime reduction efforts. Additionally, the COPS Office has made $9.74 million available to the Albuquerque Police Department to fund the hiring of 40 officers. Separately, the Bureau of Justice Assistance has made available $1.4 million to reimburse the Bernalillo County Sheriff’s Office for the work of local law enforcement on the federal task forces supporting Operation Legend’s violent crime reduction efforts. The Department has also provided assistance through the Joint Law Enforcement Operations (JLEO) fund to assist reimbursement of local law enforcement serving as federal task force officers with FBI, ATF, DEA, and the U.S. Marshals Service. These JLEO funds also will be used to assist the City of Albuquerque in acquiring technology used for detection of gunshots and development of an integrated response plan to gunshots by local law enforcement.
21 July 2020
U.S. Court of Appeals Affirms Sentence of Macon Businessman Guilty of Defrauding Bibb County SchoolsRead the Press Release
MACON – The United States Court of Appeals for the Eleventh Circuit confirmed Monday that a Macon businessman convicted and sent to prison for his role in a complex scheme to defraud the Bibb County School District (BCSD) of millions of dollars will pay back taxpayers and serve his full prison sentence, announced Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia.
Dave Carty, 49, of Macon, was found guilty on February 1, 2019 of one count of wire fraud following a week-long trial before U.S. District Judge Marc Treadwell. Carty was sentenced to 50 months in prison and ordered to pay $1,920,853.36 in restitution. Carty appealed, and on July 21, the Eleventh Circuit affirmed Carty’s conviction and the sentence imposed by Judge Treadwell. A co-defendant, Isaac Culver, was found guilty in July 2018 by a jury of his peers for conspiracy to commit wire and mail fraud, mail fraud, conspiracy to launder the proceeds of unlawful activity and ten counts of wire fraud. Mr. Culver was sentenced to 87 months in prison and three years of supervised release. Mr. Culver was also ordered to pay $1,920,853.36 in restitution. Mr. Culver appealed his conviction and sentence, and that appeal is pending in the Eleventh Circuit.
“Carty and his co-defendant ran a scam to defraud the Bibb County School District of $2 million by hiding their participation in the sale of computers to the district, to the detriment of every child in a BCSD classroom. Prior to trial, this pair did not accept responsibility for their actions, but a jury held them accountable. Post-trial, they still would not accept responsibility for their criminal conduct. Thankfully, the Eleventh Circuit has held Mr. Carty accountable by affirming his conviction and the judge’s sentence. Carty cannot run from justice. He will pay the price for the scheme,” said U.S. Attorney Peeler.
This case was investigated by the FBI and Internal Revenue Service (IRS). Assistant U.S. Attorneys Danial Bennett and Beth Howard prosecuted the case for the Government with participation and cooperation of Special Assistant U.S. Attorney David McLaughlin from the Georgia Office of the Attorney General. Assistant U.S. Attorney Michelle Schieber handled the appeal. Questions concerning this case 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.
U.S. Attorney, FBI to announce charges related to $60 million bribe to state official & associatesRead the Press Release
COLUMBUS, Ohio – Federal officials will brief the media on a public corruption racketeering conspiracy involving $60 million.
The briefing will be held:
TODAY: TUESDAY, JULY 21, 2020
WHEN: 2:30PM
WHERE: U.S. Attorney’s Office
Main Conference Room
303 Marconi Blvd. Suite 200
Columbus, Ohio 43215
WHO: U.S. Attorney David M. DeVillers
Chris Hoffman, FBI, Special Agent in Charge
*Pool coverage is strongly encouraged for video footage. Reporters not present in person will be given opportunity to ask questions via conference telephone line.*
Room available at 2:15PM. ID and valid media credential will be required for entrance on Marconi Blvd., where someone will bring you into the building. No TV lighting provided. Please practice social distancing inside the main conference room/common areas and wear a mask.
Contact Jennifer Thornton at [email protected] by 1PM to join via conference telephone line.
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If you have media questions, contact Jennifer Thornton at [email protected].