Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 6 March 2020
Fresno Man Sentenced to 6 ½ Years in Prison for Being a Felon in Possession of a FirearmRead the Press Release
FRESNO, Calif. — Raul Adrian Torres, 22, of Fresno, was sentenced today to 6 ½ years in prison for being a felon in possession a firearm, U.S. Attorney McGregor W. Scott announced.
According to court documents, on March 15, 2018, Torres was found to be in possession of a 9 mm hand gun with an obliterated serial number. Torres had two previous felony convictions for domestic violence in 2016 and 2017 and is prohibited from possessing a firearm. On Jan. 23, Torres pleaded guilty to the offense.
This case was the product of an investigation by Homeland Security Investigations, the Multi-Agency Gang Enforcement Consortium (MAGEC), and the Fresno Police Department. Assistant U.S. Attorneys Kirk E. Sherriff and Jessica A. Massey prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of 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 law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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 www.justice.gov/projectguardian.
Four Bureau of Prisons Correctional Officers Indicted by Federal Grand JuryRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announces that a federal grand jury sitting in Raleigh indicted four correctional officers employed by the Federal Bureau of Prisons (BOP) for making false statements surrounding three unrelated inmate deaths that occurred at the Federal Correctional Complex in Butner, North Carolina in 2019.
TYLER ROBISON, 41, ADAM COCKERHAM, 31, LONNIE FAIRLCOTH, 54, all of Creedmoor, and ERIC STEPHENSON, 37, of Angier, were each indicted on one count of making a false statement. The respective indictments allege that ROBISON, COCKERHAM, and STEPHENSON, in unrelated incidents involving the death of an inmate, made false entries on government forms documenting that they had completed rounds in an inmate housing unit when they had not. FAIRCLOTH is alleged to have made a false statement to an Office of Inspector General Special Agent during the course of the investigation. If convicted, they each face up to five years imprisonment and five years of supervised release.
The charges and allegations contained in the Indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The Department of Justice’s Office of Inspector General (OIG) conducted the investigation in this matter.
***
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 teacher gets 10 years for two child pornography-related convictionsRead the Press Release
HOUSTON – A 49-year-old former charter school teacher has been ordered to federal prison following his convictions for coercion and enticement of a child and possession of child pornography, announced U.S. Attorney Ryan K. Patrick.
Christopher Emerson, Katy, pleaded guilty Oct. 23, 2019.
Today, U.S. District Judge Sim Lake ordered Emerson to serve a 120 months for each of the convictions. The sentences will run concurrently. He will also serve 10 years on supervised released following completion of his prison term, during which he will have to comply with numerous requirements designed to restrict his access to children and the internet. He has also been ordered to register as a sex offender.
On or about June 7, 2018, authorities were conducting an undercover investigation of ongoing child exploitative crimes on the internet through the use of peer-to-peer software. The investigation led them to an IP address making child pornography available for sharing.
They downloaded 14 videos with file names that included toddlers, 4-year-old and 9-year olds from that IP address depicting child pornography. In several of the videos, minors under the age of 8 and 12 are caused to engage in sexually-explicit conduct including oral penetration of a minor male by an adult male’s penis.
The IP address returned back to Emerson at an address in Katy.
On June 22, 2018, law enforcement executed a search warrant at his home where they learned he was living with a minor female relative and his wife. They also seized a laptop and interviewed the child. At that time, she indicated Emerson had caused her to touch his penis was she was 6 or 7 years old.
Authorities further learned of a video of the young female, naked, in her bedroom after exiting the shower that available on Emerson’s computer media. Emerson collected and filed this video along with other child pornography videos on his computer.
He attempted to rationalize his creation of the video by claiming he set up his cell phone in the minor’s bedroom to catch her taking nude photos of herself. He claimed she was sending them to others, but the investigation revealed she had not done so.
At the time of the search, law enforcement also seized the laptop. Forensic analysis revealed he possessed one image and 34 videos of child pornography. One particular video included a minor female under the age of 5.
Emerson has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
Assistant U.S. Attorney Sherri L. Zack prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page
Former Social Security Employee Sentenced to Federal Prison for Stealing More than $70,000 from Social Security BeneficiariesRead the Press Release
Florence, South Carolina --- Acting United States Attorney A. Lance Crick announced today that Kianna Parrot, 31, of Florence, was sentenced to more than a year in federal prison after pleading guilty to accessing a protected computer for purposes of stealing benefits from disabled social security beneficiaries.
Evidence presented at the change of plea hearing showed that from September 27, 2017, to June 29, 2018, Parrot – who then worked as a claims specialist for the Social Security Administration in Florence – used her government computer to defraud beneficiaries out of their Supplemental Security Insurance payments. The SSI program protects the most vulnerable members of society by paying benefits to disabled adults and children who have limited income and resources.
Officials with the Social Security Administration first noticed suspicious deposits to Parrot’s personal accounts from SSI accounts. The ensuing investigation revealed that Parrot diverted SSI underpayments intended for legitimate beneficiaries to her own account. She accomplished this theft by using her Social Security Administration computer and personal identifying number to access the social security records of individuals owed SSI underpayments. Once she accessed these records, she would initiate a payment transaction which listed the names and social security numbers of the true beneficiaries, but which listed Parrot’s banking information. Parrot ultimately stole more than $70,000.
United States District Judge Mary G. Lewis sentenced Parrot to 18 months in federal prison, to be followed by a three-year term of supervised release. There is no parole in the federal system.
The case was investigated by the Social Security Administration’s Office of the Inspector General. Assistant United States Attorney Derek A. Shoemake of the Florence office prosecuted this case.
#####
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Former Senior Alstom Executive Sentenced to Prison for Role in Money Laundering Scheme to Promote Foreign BriberyRead the Press Release
A former senior executive with Alstom S.A. (Alstom), a French power and transportation company, was sentenced in federal court in New Haven, Connecticut, to 15 months in prison today for his role in a multi-year, multimillion-dollar money laundering scheme designed to promote violations of the Foreign Corrupt Practices Act (FCPA).
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John H. Durham of the District of Connecticut and Assistant Director in Charge Paul D. Delacout of the FBI’s Los Angeles Office made the announcement.
Lawrence Hoskins, 69, was sentenced on charges of conspiracy and money laundering, following his conviction in November 2019, after a one-week jury trial before U.S. District Judge Janet Bond Arterton, who imposed today’s sentence. In addition to his prison term, Hoskins was fined $30,000.
According to the evidence presented at trial, Hoskins was a senior vice president for Alstom’s International Network, who engaged in a conspiracy to promote the payment of bribes to officials in Indonesia in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for Alstom Power Inc. of Connecticut and its consortium partner, Marubeni Corporation, to provide power-related services for the citizens of Indonesia. The officials in Indonesia included a high-ranking member of the Indonesian Parliament and the President of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia. To conceal the bribes, Hoskins and his co-conspirators retained two consultants purportedly to provide legitimate consulting services on behalf of Alstom Power Inc., in connection with the Tarahan project. The primary purpose of hiring the consultants was to conceal the bribes to Indonesian officials, the evidence showed.
The first consultant retained by Hoskins and other members of the conspiracy received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament, the evidence showed. The consultant then transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to emails admitted at trial, Hoskins and other co-conspirators discussed in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project, including referring to him as a “cashier.”
The trial evidence further showed that, in the fall of 2003, Hoskins and his co-conspirators determined that the first consultant was not effectively bribing key officials at PLN, who expressed concerns that the first consultant was just going to give them “pocket money” and “disappear” after Alstom Power Inc. won the project. As a result, the co-conspirators retained a second consultant to more effectively bribe PLN officials. Evidence revealed that Hoskins and his co-conspirators pressed Alstom Power Inc. to front-load the second consultant’s terms of payment in order to “get the right influence” due to upcoming elections. Hoskins and his co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.
The FBI’s Los Angeles Field Office is investigating the case with assistance from the FBI’s Meriden, Connecticut, Resident Agency. The department appreciates the significant cooperation provided by its law enforcement colleagues in Indonesia, Switzerland's Office of the Attorney General and the United Kingdom, as well as authorities in France, Germany, Italy, Singapore and Taiwan.
Senior Deputy Chief Daniel S. Kahn and Assistant Chief Lorinda Laryea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut are prosecuting the case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
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 Philadelphia Attorney Pleads Guilty to Stealing Estate Funds from ClientsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Harris Roy Rosen, 65, of Sag Harbor, New York, pleaded guilty before United States District Court Judge Wendy Beetlestone to fraud charges stemming from a scheme to steal funds from his clients.
The defendant, an attorney who practiced law in Philadelphia through the business Rosen and Rosen PC, was charged by Information in February 2020 with wire fraud, aggravated identity theft, and tax evasion. From approximately 2013 through 2017, he perpetrated a complex fraud scheme through which he stole settlement and estate funds from his clients to support his lavish lifestyle, including the purchase of homes in both Philadelphia and the Hamptons, NY, and a Mercedes-Benz vehicle. As part of the scheme, Rosen routinely lied to clients about the status of their funds; forged clients’ names on settlement checks to deposit them into his personal bank accounts; forged checks to steal money from a client; and created fake bank statements to lull clients into believing that their settlement or estate funds were in appropriate bank accounts waiting to be disbursed. Ultimately, many clients did not get any of the settlement or estate funds to which they were entitled. Rosen also intentionally failed to file tax returns to avoid reporting his illicit income.Through his fraud scheme, the defendant defrauded clients of approximately $796,000. Based upon his evasion of federal taxes, he has a criminal tax due and owing to the Internal Revenue Service of approximately $261,000.
“Attorneys work in positions of trust and therefore must be held to the highest standards of ethical conduct,” said U.S. Attorney McSwain. “In this case, Rosen took advantage of his clients and swindled them in order to bankroll his lifestyle. That is reprehensible. My Office will continue to protect the public against fraudsters like Rosen who abuse their positions of trust.”
“Rosen funded his lavish lifestyle with money he stole from his clients,” said Michael Montanez, Acting Special Agent in Charge of IRS-Criminal Investigation. “Rosen utilized various means to conceal his theft from his clients and evade his tax liability. At this time of year, when hard-working Americans are sitting down to prepare their tax returns, it is especially disappointing to see the overt steps some individuals will take to hide their taxable income from the government.”
“Put simply, this is a case about greed and the abuse of trust,” said Tara A. McMahon, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “For years, Harris Rosen lived extravagantly on the money he stole from his clients. While they counted on him to act in their best interests, he considered only his own. The FBI will always work to shut down fraudsters like this, bring justice for their victims, and protect the public.”
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigative Division, and is being prosecuted by Assistant United States Attorney Lesley S. Bonney.
Former Marion County physician admits to drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Eugenio Menez, a former physician of Fairmont, West Virginia, has admitted to a drug charge, U.S. Attorney Bill Powell announced.
Menez, age 69, pled guilty to a one-count information this week charging him with “Distribution of Controlled Substances Outside the Bounds of Professional Medical Practice.” Menez admitted to illegally distributing oxycodone in September 2015 in Marion County.
Menez was a family physician who practiced in Marion County. He distributed controlled substances outside the course of professional medical practice by writing prescriptions for several female patients in exchange for sexual favors. Even though the female patients had medical appointments, those visits involved sexual acts, and Menez did not conduct medical exams of those patients. The appointments would be scheduled either early in the morning at his office before his staff reported or at his residence. The patients believed they would have been denied their prescriptions if they did not consent to the sexual acts. The patients’ accounts were corroborated by numerous video recordings produced by Menez.
“This doctor’s actions are beyond reprehensible. His medical degree put him in a position of power and he abused it in a disgusting manner. His degree will not protect him at sentencing,” said Powell.
Menez has surrendered his medical license, as well as his DEA registration, which permitted him to write prescriptions.
Menez faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda E. Wesley is prosecuting the case on behalf of the government. The Drug Enforcement Administration investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Former Acting Inspector General for the U.S. Department of Homeland Security Indicted on Theft of Government Property and Scheme to Defraud the United States GovernmentRead the Press Release
WASHINGTON, D.C. – A federal grand jury in the District of Columbia returned a sixteen-count indictment against a former Acting Inspector General for the U.S. Department of Homeland Security (“DHS”) and a former subordinate for their alleged theft of proprietary software and confidential databases from the United States government as part of a scheme to defraud the United States government.
U.S. Attorney Timothy J. Shea for the District of Columbia, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Inspector General Joseph V. Cuffari for the U.S. Department of Homeland Security, and Inspector General Tammy L. Whitcomb for the United States Postal Service made the announcement.
The indictment charges Charles K. Edwards, 59, of Sandy Spring, Maryland, and Murali Yamazula Venkata, 54, of Aldie, Virginia, with conspiracy to commit theft of government property and to defraud the United States, theft of government property, wire fraud, and aggravated identity theft. The indictment also charges Venkata with destruction of records. The indictment, which was returned on Thursday, March 5, 2020, was unsealed this morning after Edwards and Venkata were taken into custody under the charges. Both defendants will be presented for an initial appearance at 1:45 p.m. today before United States Magistrate Judge Robin M. Meriweather.
According to the allegations in the indictment, from October 2014 to April 2017, Edwards, Venkata, and others executed a scheme to defraud the United States government by stealing confidential and proprietary software from the Office of the Inspector General of DHS (DHS-OIG), along with sensitive government databases containing personal identifying information (“PII”), so that Edwards’s company, Delta Business Solutions, could later sell an enhanced version of DHS-OIG’s software to the Office of Inspector General for the U.S. Department of Agriculture (“USDA-OIG”) at a profit. Although Edwards had left DHS-OIG in December 2013, he continued to leverage his relationship with Venkata and other DHS-OIG employees to steal the software and the sensitive government databases.
The indictment further alleges that, in addition to stealing DHS-OIG’s software and the sensitive government databases, Venkata and others also assisted Edwards by reconfiguring his laptop so that he could properly upload the stolen software and databases, provided troubleshooting support whenever Edwards required it, and helped him build a testing server at his residence with the stolen software and databases, which contained PII. As further part of the alleged scheme, Edwards retained software developers in India for the purpose of developing his commercial alternative of DHS-OIG’s software. In so doing, Edwards not only shared DHS-OIG’s proprietary software with foreign nationals but also the PII of U.S. federal employees and individuals implicated (either as victims, subjects, or witnesses) in official investigations conducted by DHS-OIG as well as the Office of Inspector General for the U.S. Postal Service (“USPS-OIG”).
The indictment is the result of an ongoing investigation by DHS-OIG and USPS-OIG and is being prosecuted by Assistant United States Attorney David B. Kent of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Victor R. Salgado of the Criminal Division’s Public Integrity Section.
The defendants face maximum terms of imprisonment of 5 years on the conspiracy to commit theft of government property charge; 10 years on the theft of government property charge; and 20 years on the wire fraud charges. The defendants face a mandatory minimum sentence of 2 years of imprisonment on the aggravated identity theft charges. Venkata faces a maximum term of imprisonment of 20 years on the destruction of records charge. Both defendants face fines on each count of conviction of up to $250,000 or twice the pecuniary gain or loss arising from the scheme alleged in the indictment.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless proven guilty.
Former Acting Inspector General for the U.S. Department of Homeland Security Indicted on Theft of Government Property and Scheme to Defraud the United States GovernmentRead the Press Release
A federal grand jury in the District of Columbia returned a 16-count indictment against a former Acting Inspector General for the U.S. Department of Homeland Security (DHS) and a former subordinate for their alleged theft of proprietary software and confidential databases from the U.S. government as part of a scheme to defraud the U.S. government.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Timothy J. Shea for the District of Columbia, DHS Inspector General Joseph V. Cuffari and Inspector General Tammy L. Whitcomb for the U.S. Postal Service (USPS) made the announcement.
The indictment charges Charles K. Edwards, 59, of Sandy Spring, Maryland, and Murali Yamazula Venkata, 54, of Aldie, Virginia, with conspiracy to commit theft of government property and to defraud the United States, theft of government property, wire fraud, and aggravated identity theft. The indictment also charges Venkata with destruction of records.
According to the allegations in the indictment, from October 2014 to April 2017, Edwards, Venkata, and others executed a scheme to defraud the U.S. government by stealing confidential and proprietary software from DHS Office of Inspector General (OIG), along with sensitive government databases containing personal identifying information (PII) of DHS and USPS employees, so that Edwards’s company, Delta Business Solutions, could later sell an enhanced version of DHS-OIG’s software to the Office of Inspector General for the U.S. Department of Agriculture at a profit. Although Edwards had left DHS-OIG in December 2013, he continued to leverage his relationship with Venkata and other DHS-OIG employees to steal the software and the sensitive government databases.
The indictment further alleges that, in addition to stealing DHS-OIG’s software and the sensitive government databases, Venkata and others also assisted Edwards by reconfiguring his laptop so that he could properly upload the stolen software and databases, provided troubleshooting support whenever Edwards required it, and helped him build a testing server at his residence with the stolen software and databases, which contained PII. As further part of the alleged scheme, Edwards retained software developers in India for the purpose of developing his commercial alternative of DHS-OIG’s software.
The indictment is the result of an ongoing investigation by DHS-OIG and USPS-OIG and is being prosecuted by Trial Attorney Victor R. Salgado of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney David B. Kent of the U.S. Attorney’s Office for the District of Columbia.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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.
Foreign currency trader pleads guilty to fraudRead the Press Release
ATLANTA – Kevin Perry has pleaded guilty to defrauding investors in a foreign currency trading scam that began when he was a teenager.
“Clients that invested with Perry’s company were assured they were secure from loss,” said U.S. Attorney Byung J. Pak. “Actually, Perry was enriching himself and paying off other investors. We encourage citizens to be cautious with investments, and to remember that if it sounds too good to be true, it probably is.”
“This guilty plea will be little solace to the victims who lost their savings because of Perry’s personal greed,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is determined to root out and prosecute anyone who undermines investor confidence at the expense of innocent victims.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Perry led investors to believe that his investment company, Lucrative Pips, was successfully earning substantial profits by investing in the foreign currency (or “forex”) market. Perry induced investors into sending money by signing agreements that claimed the investors’ initial investments were secure from loss. In actuality, Lucrative Pips was never registered as a commodity pool operator with the Commodity Futures Trading Commission.
Also, Perry had never generated the historical returns represented to investors, and he was using investor money to enrich himself or to pay off other investors, with the goal of enticing others to invest with him. Even after the Commodity Futures Trading Commission filed a civil complaint against Perry, he continued to make fraudulent investment pitches to potential investors, which included falsely promising an undercover agent that an investment of $10,000 would return a profit of $19,000 to $25,000 per month.
Kevin Perry, 22, of Cartersville, Georgia pleaded guilty before U.S. District Judge William M. Ray, II.
The Federal Bureau of Investigation is investigating this case.
Assistant U.S. Attorney Thomas J. Krepp and Assistant U.S. Attorney Nathan P. Kitchens, Deputy Chief of the Cyber and Intellectual Property Crime Section, are prosecuting the case. The Commodities and Futures Trading Commission provided invaluable assistance throughout the course of the investigation.
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.
Federal Grand Jury Indicts Birmingham Man for CarjackingRead the Press Release
BIRMINGHAM, Ala. – A federal grand jury recently indicted a Birmingham man for an armed carjacking, announced U.S. Attorney Jay E. Town and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
A two-count indictment filed in U.S. District Court charges Tadarrius Lawaun Smith, 21, with the carjacking and carrying and brandishing a firearm during and relation to a violent crime on December 4, 2019.
“Carjacking is one of the most terrifying crimes that we prosecute,” Town said. “We will not sit idly by and allow criminals to intimidate our citizens with such violence. We will find you and we will prosecute you. We are thankful that this victim survived and for the assistance of the citizens who provided information to the Birmingham Police Department.”
“Removing the criminal element that uses a firearm to facilitate violent crimes such as a carjacking is a priority of ATF,” Watson said.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: Bureau of Alcohol, Tobacco, Explosives and Firearms. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The maximum penalty for carjacking is 10 years in prison. The maximum penalty for brandishing a firearm during and in relation to a violent crime carries a mandatory seven years in prison per count, to be served consecutively to any other sentence imposed for the crime.
The ATF investigated the case, along with the Birmingham Police Department. Assistant U.S. Attorney Alan Baty is prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Federal Grand Jury Indictments AnnouncedRead the Press Release
TULSA, Okla. –United States Attorney Trent Shores announced today the results of the March Federal Grand Jury A.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged violations of federal law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Johnny Fay Armer and William Norman Moore. Possession of Methamphetamine With the Intent to Distribute; Possession of a Firearm in Furtherance of a Drug Trafficking Crime. Armer, 36, and Moore, 42, both of Green Forest, Arkansas, are charged with knowingly possessing with intent to distribute and to distribute 500 grams or more of methamphetamine. They are further charged with possessing a firearm in furtherance of their drug trafficking crime. The Bixby Police Department, Drug Enforcement Administration, and Bureau of Indian Affairs are the investigative agencies.
Demonte Bell. Threatening to Murder a Member of the Immediate Family of a Federal Law Enforcement Officer; Threatening to Murder a Federal Law Enforcement Officer. Bell, 35, of Tulsa, is charged with threatening to murder the children of two Deputy U.S. Marshals when the deputies were engaged in official duties. Bell is further charged with threatening to murder the two Deputy U.S. Marshals while they were engaged in official duties. The threats were allegedly made on Dec. 27, 2019. The U.S. Marshals Service is the investigative agency.
William Joseph Booth III. Failure to Register as a Sex Offender. Booth III, 35, of Tulsa, is charged with knowingly failing to register as a sex offender. The Tulsa Police Department and U.S. Marshals Service are the investigative agencies.
Jamie Campa-Quinones. Unlawful Reentry of a Removed Alien. Campa-Quinones, 44, of Tulsa, is charged with reentry of a removed alien, having returned to the United States unlawfully after being deported Feb. 25, 2016, at or near Del Rio, Texas. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) and Enforcement and Removal Operations (ICE-ERO) are the investigative agencies.
David Ellis Fisher. Willfully Making and Subscribing a False Income Tax Return. Fisher, 63, of Bristow, is charged with filing false tax returns. According to the indictment, Fisher owned and operated A-1 Power Tongs and Casing Crews, LLC, a business that provided equipment and services to oil and gas extraction companies. From 2013 through 2015, Fisher allegedly willfully underreported his income on his tax returns by depositing a portion of the payments to his business into a bank account that Fisher did not disclose to his bookkeeper or tax return preparer. The IRS-Criminal Investigation Division is the investigative agency.
Antonio Gonzalez and Paul James Lankford. Felon in Possession of Firearms and Ammunition. Gonzalez, 34, of Tulsa, is charged with being a felon in possession of a Smith & Wesson 9 mm semi-automatic pistol and 31 rounds of associated ammunition. Lankford, 32, of Broken Arrow, is charged with being a felon in possession of a Smith & Wesson 9mm semi-automatic pistol, a Smith and Wesson Airweight .38 caliber revolver and 56 rounds of associated ammunition. The Tulsa Police Department, FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigative agencies.
Jacob Wayne Little. Felon in Possession of Firearm and Ammunition. (superseding indictment) Little, 26, of Kellyville, is charged with being a felon in possession of a Smith & Wesson .380 caliber semi-automatic pistol and associated ammunition when he was arrested on Nov. 4, 2019. Little is further charged with being a felon in possession of a Taurus .380 ACP caliber pistol and associated ammunition during a separate incident on Feb. 10, 2020. The Tulsa Police Department, U.S. Marshals Service and Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigative agencies.
Ryan David Miller. Sexual Exploitation of a Child by a Parent or Guardian; Advertising Child Pornography; Distribution of Child Pornography; Receipt of Child Pornography; Possession of Child Pornography; Tampering with a Victim. Miller, 33, of Sapulpa, is charged in Count 1 with producing child pornography of his minor children. In Count 2, he is charged with knowingly using electronic means to advertise the child pornography. In Count 3, he is charged with knowingly distributing the child pornography through electronic means. In Count 4, Miller is charged with knowingly receiving child pornography. In count 5, Miller is charged with knowingly possessing and accessing child pornography that involved the use of two minors below the age of 12. In Count 6, Miller is charged with tampering with, or intimidating, a victim. The FBI, Broken Arrow Police Department, and Tulsa Police Department are the investigative agencies.
Dallas Gray Morton. Felon in Possession of Firearm and Ammunition (superseding indictment) Morton, 26, of Tulsa, is charged with being a felon in possession of a Smith & Wesson .40 S&W caliber semi-automatic pistol and associated ammunition on Oct. 1, 2019. He is further charged with being a felon in possession of a Glock GMBH 9x19 caliber semi-automatic pistol and ammunition on Feb. 24, 2020. The Tulsa Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigative agencies.
Brian James Susi. Felon in Possession of Firearm and Ammunition). Susi, 32, of Broken Arrow, is charged with being a felon in possession of a Smith & Wesson .380 ACP caliber semi-automatic pistol and associated ammunition on Dec. 30, 2019. He is further charged with being a felon in possession of a Glock GMBH 9x19 caliber semi-automatic pistol and associated ammunition on Jan. 15, 2020. The Owasso Police Department, Tulsa Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigative agencies.
Vernard Earl Tucker. Failure to Register as a Sex Offender. Tucker, 50, of Wyandotte, is charged with knowingly failing to register as a sex offender. The U.S. Marshals Service is the investigative agency.
Evans man indicted for production, possession of child pornographyRead the Press Release
AUGUSTA, GA: An Evans man has been indicted by a federal grand jury for production and possession of child pornography.
Michael Peyton Gunn, 35, was indicted by a grand jury in U.S. District Court on four counts of Production of Child Pornography and one count of Possession of Child Pornography, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charges carry a penalty of up to 30 years in prison per count for production of child pornography, along with substantial fines, asset forfeiture and restitution, with a period of supervised release after completion of the prison term.
There is no parole in the federal system.
“When a lead from an investigation in another state was received, our local FBI partners jumped into action to track down and apprehend those who exploit the most vulnerable among us,” said U.S. Attorney Christine. “There will be no place for predators to hide: We will find them and bring them to justice – and halt the victimization of children.”
According to court documents and testimony, an FBI investigation in another state led agents to Gunn as a source of child pornography, resulting in the discovery of child pornography on electronic devices in his home.
“The FBI is committed to protecting every citizen, and no one more than innocent children who are preyed on by adults,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “These charges are particularly troubling and a reason the FBI is committed to identifying and apprehending predators accused of these atrocious acts.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated under the Department of Justice Project Safe Childhood by the FBI and prosecuted for the United States by Assistant U.S. Attorney Tara M. Lyons.
Estherville, Iowa Man Off to Federal Prison for Meth and Gun ConvictionsRead the Press Release
A man who conspired to distribute methamphetamine while illegally possessing guns was sentenced March 4, 2020, to 11 years in federal prison.
Dustin Julich, 35, from Estherville, Iowa, pled guilty on September 20, 2019, to conspiracy to distribute methamphetamine and illegal possession of a firearm. Julich was previously convicted of theft second degree and burglary third degree which prohibits him from possessing firearms in Iowa.
At the plea hearing, Julich admitted that for about three years he and others distributed over 1 kilogram of methamphetamine in the Estherville, Iowa area. During a search warrant of Julich’s truck and trailer, law enforcement seized approximately ½ pound of methamphetamine along with two guns.
Julich was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Julich was sentenced to 132 months’ imprisonment. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Mikala Steenholdt and was investigated by Estherville Police Department, Emmet County Sheriff’s Office, Iowa Division of Narcotics Enforcement, Iowa Great Lakes Drug Task Force, and Iowa Division of Criminalistics Laboratory.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-3010. Follow us on Twitter @USAO_NDIA.
Eight Maryland Men Indicted on Federal Charges Related to a Heroin and Fentanyl Distribution Conspiracy Operating in Washington CountyRead the Press Release
Baltimore – A federal grand jury has returned a second superseding indictment charging eight defendants with federal charges related to a conspiracy to distribute controlled substances, specifically fentanyl and/or heroin in Washington County, Maryland. The second superseding indictment, which was returned on March 4, 2020, adds two additional defendants and six counts. The following defendants are charged in the second superseding indictment:
Christopher Scott Benton, a/k/a Brisco, age 30, of Hagerstown, Maryland;
Jarvis Antonio Coleman-Fuller, age 32, of Hagerstown;
Eric Tyrell Johnson, a/k/a E, age 36, of Owings Mills, Maryland;
Jeroam Edwin Nelson, Jr., a/k/a Boob, age 30, of Hagerstown;
Thamar J. Smith, a/k/a SK and Skoal, age 46, of Hagerstown;
Philander Alexander Spruill, a/k/a Buddha, age 28, of Hagerstown;
Edward Melvin Ware, a/k/a Eddie, age 32, of Edgewater, Maryland; and
Tyler Lee Ware, a/k/a Bugsy, age 32, of Hagerstown.The second superseding indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore; Washington County Sheriff Douglas Mullendore; Chief Paul “Joey” Kifer of the Hagerstown Police Department; and Washington County Sheriff Charles P. Strong.
According to the 15-count indictment, beginning in about April 2019 and continuing to about November 2019, the defendants conspired to distribute heroin and/or fentanyl in the Washington County area. During the course of the investigation, law enforcement seized narcotics, including at least 1.2 kilograms of fentanyl, four firearms and ammunition, and at least $16,223 in cash. All of the defendants are charged with being members of the conspiracy. Tyler Ware is also charged with distribution of heroin on July 4, 2019. Smith, Johnson, Spruill, Nelson, and Coleman-Fuller are charged with possession with intent to distribute fentanyl and/or heroin; Johnson, Spruill, Nelson, and Coleman-Fuller are charged with being felons in possession of a firearm and/or ammunition; Spruill and Coleman-Fuller are charged with possession of a firearm in furtherance of a drug trafficking crime; and Coleman-Fuller is charged with possession of body armor by a violent felon.
If convicted, Benton, Nelson, and Spruill face a mandatory minimum sentence of at least 10 years in federal prison and up to life in prison for the drug charges; Coleman-Fuller, Johnson, Smith, Edward Ware, and Tyler Ware all face a mandatory minimum sentence of at least five years in federal prison and up to 40 years in prison for the drug charges; Coleman-Fuller, Nelson, and Spruill each face a maximum sentence of 10 years in federal prison for being felons in possession of firearms and/or ammunition; Johnson faces a mandatory minimum sentence of at least 15 years in federal prison and up to life in prison for being a felon in possession of a firearm; and Coleman-Fuller and Spruill face a mandatory minimum of five years in federal prison, consecutive to any other sentence, and up to life in federal prison for possession of a firearm in furtherance of a drug trafficking crime. Coleman-Fuller also faces a maximum of three years in federal prison for possession of body armor by a violent felon. 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.
Nelson, Spruill, and Edward Ware have had an initial appearance in U.S. District Court in Baltimore and remain detained. Benton, Coleman-Fuller, and Smith are expected to have initial appearances today. Johnson and Tyler Ware are in state custody on related charges.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
United States Attorney Robert K. Hur commended the DEA, HSI, the Washington County Narcotics Task Force, and the Washington County State’s Attorney’s Office for their work in the investigation, and thanked the Baltimore County State’s Attorney’s Office for its assistance. Mr. Hur thanked Assistant U.S. Attorneys Jeffrey J. Izant and Christina A. Hoffman, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
# # #
East Haven Man Sentenced to 2 Years in Federal Prison for Role in Drug Trafficking RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that PEDRO ORTA-RIVAS, also known as “Cuba” and “El Brujo,” 51, of East Haven, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 24 months of imprisonment, followed by three years of supervised release, for his role in a New Haven-based drug trafficking organization.
According to court documents and statements made in court, an investigation headed by the Drug Enforcement Administration New Haven Task Force and New Haven Police Department revealed that Malbin Rubiera-Herrera, also known as “Chaca,” acquired fentanyl, heroin and cocaine from sources in Connecticut and New Jersey and distributed the drugs through a network of associates in the greater New Haven area. Between October and December 2018, investigators made controlled purchases of narcotics from Rubiera-Herrera. Subsequent court-authorized wiretaps revealed a widespread narcotics trafficking conspiracy that involved the trafficking of kilogram-quantities of fentanyl, heroin and cocaine into Connecticut. Orta-Rivas helped to broker narcotics transactions, distributed drugs for the organization, and collected monies owed.
On June 5, 2019, a grand jury returned a superseding indictment charging Orta-Rivas, Rubiera-Herrera and 12 other individuals with fentanyl, heroin and cocaine trafficking offenses. On November 5, 2019, Orta-Rivas pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, heroin and cocaine.
Orta-Rivas, who is released on a $100,000 bond, is required to report to prison on April 7, 2020.
Rubiera-Herrera pleaded guilty on June 20, 2019, and awaits sentencing.
This matter is being investigated by the DEA New Haven Task Force and the New Haven Police Department, with the assistance of the Federal Bureau of Investigation, Department of Homeland Security, U.S. Marshals Service, Connecticut State Police, Connecticut Department of Correction, East Haven Police Department, Easton Police Department, Orange Police Department, and the Cape May County (N.J.) Prosecutor's Office, Gangs, Guns and Narcotics Task Force.
The DEA New Haven Task Force includes participants from the U.S. Marshals Service, Internal Revenue Service - Criminal Investigation Division, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia, Meriden, Derby, Middletown, Naugatuck and Waterbury Police Departments.
This case is being prosecuted by Assistant U.S. Attorneys Jocelyn Courtney Kaoutzanis and S. Dave Vatti.
Durham Tax Preparer Pleads Guilty to Tax FraudRead the Press Release
WINSTON-SALEM, N.C. - Matthew G.T. Martin, United States Attorney for the Middle District of North Carolina, announced today that SASHA SHABLEY JACKSON pleaded guilty to a felony charge of aiding and abetting the preparation of false tax returns.
JACKSON, age 32, of Durham, N.C., pleaded guilty before Chief United States District Judge Thomas D. Schroeder in federal court in Winston-Salem, to one count of tax fraud, in violation of 26 U.S.C. § 7206(2).
According to documents filed with the court, JACKSON owned and operated Top Notch Professional Tax Services, in Durham, North Carolina, preparing tax returns for clients from 2015 to 2019. During that time, she knowingly and willfully prepared and caused to be filed with the IRS income tax returns that were materially false. The false items including false dependents, false income, false education credits, and false fuel tax credits, all of which produced fraudulently inflated refunds. The IRS determined that the tax loss attributable to JACKSON’s misconduct is $1,196,263.
The defendant faces a maximum penalty of three years imprisonment, a fine of up to $250,000, or both, and a term of supervised release of not more than one year. She also agreed to pay restitution in the amount of $1,196,263. Sentencing will occur in Winston-Salem on June 9, 2020 at 2:00 p.m.
The case was investigated by Internal Revenue Service – Criminal Investigations. The case was prosecuted by Assistant United States Attorney Tanner Kroeger.
###
Dominican National Sentenced to Five Years in Federal Prison for Fentanyl and Heroin Conspiracy and DistributionRead the Press Release
BOSTON – A Dominican national was sentenced yesterday in federal court in Worcester for distributing fentanyl and heroin.
Erotides Mendez, 50, a Dominican national previously residing in New York City, was sentenced by U.S. District Court Judge Timothy J. Hillman to five years in prison to be followed by four years of supervised release. Mendez will be deported upon completion of his sentence. In November 2019, Mendez pleaded guilty to one count of conspiring to distribute heroin and more than 40 grams of fentanyl, one count of distributing heroin and more than 40 grams of fentanyl and one count of possessing heroin and more than 40 grams of fentanyl with intent to distribute. Mendez and co-defendant Albeiro Gomez, who previously pleaded guilty and is set to be sentenced on March 20, 2020, were arrested in December 2018.
Investigators intercepted communications to and from the defendants’ phones which evidenced their drug trafficking activities. Mendez was involved in the acquisition of heroin and fentanyl in New York and the transportation of these drugs for sale in and around Worcester. Gomez was a livery driver in Worcester who used his livery vehicle to procure and distribute drugs, meet with customers and to collect cash derived from drug sales.
In November 2018, law enforcement stopped a passenger van headed from New York City to Worcester, and observed Mendez – a passenger in the van – throw a bag containing approximately 150 grams of heroin from the van. In December 2018, agents stopped a car in which Mendez was a passenger and located approximately 150 grams of heroin and 138 grams of a mixture of fentanyl and heroin.
In connection with this investigation, Freiber Betancourth, of Worcester, pleaded guilty to drug trafficking charges and was sentenced to 12 months and one day in prison. Betancourth distributed heroin and fentanyl from the parking lot of his employer. In addition, Jonathan Bobadilla Rosa pleaded guilty to drug trafficking and identity theft charges and is scheduled to be sentenced on April 23, 2020.
United States Attorney Andrew E. Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement today. Assistance with the investigation was provided by the Massachusetts State Police and the U.S. Department of State, Diplomatic Security Service, Boston Field Office. Assistant U.S. Attorneys Bill Abely and John Mulcahy of Lelling’s Criminal Division are prosecuting the case.
###
Department of Justice to Publish Final Rule to Comply Fully with DNA Fingerprint Act of 2005Read the Press Release
The Department of Justice today issued a final rule to implement the Attorney General’s authority provided by the bipartisan DNA Fingerprint Act of 2005 to authorize the Department of Homeland Security (DHS) to collect DNA samples from certain non-United States persons it detains. Once implemented, this rule will facilitate federal, state, and local investigative and crime reduction efforts.
“Today’s rule assists federal agencies in implementing longstanding aspects of our immigration laws as passed by bipartisan majorities of Congress,” said Deputy Attorney General Jeffrey A. Rosen. “Its implementation will help to enforce federal law with the use of science.”
As a result of this rule change, the Department of Justice will ensure that all federal agencies are in full compliance with the bipartisan DNA Fingerprint Act, which was a component of a larger legislative package that passed the House of Representatives by an overwhelming vote of 415 to four, and the Senate by unanimous consent. The DNA Fingerprint Act provided the Attorney General with the exclusive authority to draft regulations to authorize and direct any federal agency to “collect DNA samples from individuals who are arrested, facing charges, or convicted or from non-United States persons who are detained under the authority of the United States.” 24 U.S.C. § 40702(a)(1)(A).
Since Congress’ passage of the bipartisan DNA Fingerprint Act, the Federal Bureau of Investigation (FBI) built a high-throughput DNA sample processing infrastructure through its Combined DNA Index System (CODIS). The CODIS database is a vital tool for federal, state, and local law enforcement investigations. All fifty states, the District of Columbia, Puerto Rico, and federal law enforcement agencies participate in the national sharing of DNA profiles through CODIS. The FBI also has consistently reduced the operational burden for individual federal agencies to collect DNA through technological enhancements.
In advance of this rule change, the Department of Justice and DHS have been working collaboratively to conduct a pilot program for the collection of DNA from non-U.S. persons detained by DHS. As with all other DNA samples that federal agencies collect under the authority of the bipartisan DNA Fingerprint Act, the DNA samples that DHS collects from its non-United States person detainees will be entered into the Federal Bureau of Investigation’s Combined DNA Index System (CODIS). The FBI’s laboratory has the capacity to handle the increased input from DHS, and its capabilities can be scaled up to meet additional capacity. The FBI will provide DHS with the DNA collection kits, analyze the samples, and ensure that law enforcement agencies use the results in accordance with the FBI’s stringent CODIS privacy requirements.
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.
Department of Justice charges unprecedented number of elder fraud defendants nationwide and launches hotlineRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler joined Attorney General William P. Barr, FBI Director Christopher A. Wray, and Chief Postal Inspector Gary R. Barksdale today in announcing the largest coordinated sweep of elder fraud cases in history. This year, prosecutors charged more than 400 defendants, far surpassing the 260 defendants charged in cases as part of last year’s sweep. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of over a billion dollars.
“Americans are fed up with the constant barrage of scams that maliciously target the elderly and other vulnerable citizens,” said Attorney General William P. Barr. “This year, the Department of Justice prosecuted more than 400 defendants, whose schemes totaled more than a billion dollars. I want to thank the men and women of the Department’s Consumer Protection Branch, which coordinated this effort, and all those in the U.S. Attorneys’ Offices and Criminal Division who worked tirelessly to bring these cases. The Department is committed to stopping the full range of criminal activities that exploit America’s seniors.”
“When the elderly are defrauded, not only has their trust been violated, but it causes a significant financial hardship, and these losses can be devastating to them,” said Minkler. “We are committed to holding the perpetrators of elder fraud schemes accountable and ensuring our elderly citizens receive the protection they deserve.”
For further information on elder fraud cases highlighted in this sweep within the Southern District of Indiana, as well as across the country, please see the interactive map located at the following link: https://www.justice.gov/civil/elder-fraud-sweeps-2020.
Attorney General Barr also announced the launch of a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers. Case managers will assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint
to the Federal Trade Commission on behalf of the caller. The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).
These outreach efforts have helped to prevent seniors from falling prey to scams and have frustrated offenders’ efforts to obtain even more money from vulnerable elders.
Denver Woman Pleads Guilty to Mail Fraud and Tax Evasion After Using Company Money to Purchase $846,441 in Goods That Were Then Sold on EbayRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Kristen Martin, age 38, of Denver, pleaded guilty to mail fraud and federal tax evasion. The defendant appeared at the change of plea free on bond. Her bond was continued after the hearing. The IRS-Criminal Investigation, the Federal Bureau of Investigation (FBI) and the U.S. Postal Inspection Service joined in today’s announcement.
According to the filed Information and the stipulated facts in the plea agreement, Martin was an executive assistant with her employer from January 2013 through December 2016. As part of her duties as an executive assistant, Martin was authorized to use a company account at Staples to purchase supplies that were needed by her employer. Due to various changes in assignments within the company, over the years Martin gained access to and utilized 23 different company accounts for purposes of ordering supplies from Staples.
From 2013 through 2016, Martin used the company’s accounts at Staples to order unauthorized items which she kept for herself and resold online through Ebay and other means. According to the Information, Martin fraudulently ordered, and billed to her company, 4,790 scientific calculators, 250 Ipads/tablet computers, 440 Apple TVs, 178 Kindles, 159 headsets, and 5 cameras, causing the company a loss of $846,441.11. Martin disputes this amount but agrees that she caused a loss of more than $550,000 to her employer through her scheme. Martin resold these fraudulently obtained goods and enriched herself from the sales to the tune of $571,725.61. Further, Martin used the company’s Federal Express account to ship the fraudulently purchased items to her buyers, costing her employer an additional loss of $7,896.57.
When senior employees of the company questioned Martin about some of these irregular purchases, she lied and stated that the purchases were made for a company project in a different division of the company.
In addition to both lying to and stealing from the company, Martin also willfully hid this fraudulently earned income from the IRS by filing false federal income tax returns for the years 2013 through 2016, in which she made false statements and failed to report the hundreds of thousands of dollars that she made from her scheme.
As a result of her actions, Martin has agreed to pay restitution in an amount up to $872,337.68 to her employer and in the amount of $161,864 to the IRS. The guilty plea hearing was held before U.S. District Court Judge Christine M. Arguello.
Martin will be sentenced by Judge Arguello on June 15, 2020. She was first charged by Information on January 14, 2020.
This case was investigated by the Internal Revenue Service—Criminal Investigation, the FBI and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Pegeen D. Rhyne
Defendant Sentenced to 5 1/2 Years for Witness Tampering and Lying to the FBI in Garland Shooting InvestigationRead the Press Release
PHOENIX, Ariz. – On March 3, 2020, United States District Judge John J. Tuchi sentenced Abdul Khabir Wahid, 54, of Phoenix, to 67 months in prison for making a false statement to the FBI during an investigation involving international terrorism and tampering with a witness, in violation of 18 U.S.C. § 1001(a)(2) and 18 U.S.C. § 1512(b)(3), respectively. Wahid was sentenced to three years of supervised release to follow his prison term. Wahid’s trial was held before Judge Tuchi from February 26, 2019, to March 1, 2019, after Wahid waived a jury trial.
Evidence at trial showed that Wahid committed the offenses during the FBI investigation of the May 3, 2015, ISIS-related attack on the Muhammad Art Exhibit and Contest in Garland, Texas. Elton Simpson and Nadir Soofi drove from Arizona to Texas to conduct the attack, stopped their car near the contest location, and began firing semiautomatic rifles at security personnel and law enforcement officers. One of their bullets struck and injured a security guard. Police officers shot and killed Simpson and Soofi during the firefight. Wahid did not travel to Texas and was not involved in the attack.
On May 1, 2015, just days before the attack, Simpson instructed Wahid to deliver a key and an envelope to a third person. During a May 6, 2015, interview with FBI agents, Wahid made false statements and concealed those facts, despite having delivered the key and envelope as instructed by Simpson. Trial testimony revealed the FBI would have pursued additional avenues of investigation had Wahid truthfully disclosed the information, but was unable to do so in a timely manner. Also, between May 4 and July 8, 2015, Wahid tried to persuade Soofi’s brother not to speak with the FBI, to lie about seeing Simpson and Soofi with guns, and to lie about observing ISIS propaganda videos in Simpson and Soofi’s apartment.
“Wahid obstructed a terrorism investigation and is no friend of the United States,” said U.S. Attorney Michael Bailey. “I want to thank the FBI for the tremendous effort that went into the underlying investigation, as well as the brave law enforcement officials in Garland whose quick action during the attack prevented a much larger tragedy.”
“The FBI takes its mission of protecting the American public seriously, and we are dedicated to conducting fair and thorough investigations,” said Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office. “Wahid not only lied to the FBI but he directly interfered with an investigation. This sentencing shows that, those who participate in that type of activity will be held accountable for their actions. The FBI would like to thank the U.S. Attorney’s Office for their diligent work on this case.”
The case was investigated by the FBI, and the prosecution was handled by Assistant U.S. Attorneys Kristen Brook and Joseph Koehler of the District of Arizona.
Consultant Indicted for Allegedly Corruptly Offering Money to Illinois State SenatorRead the Press Release
CHICAGO — A Chicago consultant has been indicted in federal court for allegedly corruptly offering money to an Illinois State Senator in connection with obtaining state approval for a suburban development project.
WILLIAM A. HELM, 56, of Chicago, is charged with one count of federal program bribery. The indictment was returned Thursday in U.S. District Court in Chicago. Arraignment is set for March 10, 2020, at 2:00 p.m., before U.S. Magistrate Judge Sheila M. Finnegan.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorneys Christopher J. Stetler and James P. Durkin.
According to the indictment, Helm and his consulting firm were retained by a construction company to assist in obtaining approval from the Illinois Department of Transportation for signalization and roadwork in connection with the company’s development project in East Dundee. The company sought approval from IDOT in 2017, the indictment states. From July 2018 to at least November 2018, Helm corruptly offered and agreed to pay money to influence and reward the senator in connection with IDOT approval of the project, the indictment states. At the time, the senator was Chairman of the Senate Transportation Committee and was in a position to assist with obtaining such approvals, the indictment states.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charge in the indictment is punishable by up to ten years in federal prison. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
Construction company owner pleads guilty in $2.5M fraud schemeRead the Press Release
McALLEN, Texas – A construction company owner has admitted guilt in connection to his participation in a financial fraud scheme, announced U.S. Attorney Ryan K. Patrick.
Today, Delfino Gaona, 47, McAllen, pleaded guilty to one count of conspiring to defraud the United States and one count of failing to file a currency transaction report by a non-financial trade or business. As part of the plea, he also agreed to a criminal forfeiture of $2,587,821.66.
Gaona was the owner of Keystone Construction, based in Mission. From Dec. 1, 2014, through Nov. 14, 2018, he accepted over $10,000 in approximately 13 separate real estate transactions. However, he failed to file an IRS Form 8300 with the Secretary of the Treasury for each of the transactions. As part of his plea, he admitted to receiving more than $2.5 million and structuring the transactions and falsifying receipts in an effort to evade the reporting requirement.
Under federal law, any non-financial trade or business that received more than $10,000 in cash in one transaction or two or more related transactions must file an IRS Form 8300.
U.S. District Judge Micaela Alvarez will impose sentencing June 24. At that time, Gaona faces up to 10 years in federal prison and a possible $500,000 maximum fine for failing to file a currency transaction report. He also faces up to five years conspiracy to defraud the United States and a possible $250,000 maximum fine.
The FBI – Complex Financial Crimes Task Force conducted the investigation with the assistance of the Drug Enforcement Administration, Texas Department of Public Safety, Texas Department of Insurance Fraud Unit, Hidalgo County Sheriff’s Office and police departments in McAllen and Pharr. Assistant U.S. Attorney Roberto Lopez Jr. is prosecuting the case.
Colorado Man Sentenced for Assaulting a CongressmanRead the Press Release
A man who assaulted U.S. Congressman Steve King was sentenced March 5, 2020, to two years’ probation.
Blake Gibbins, age 27, from Lafayette, Colorado, received the sentence after a September 23, 2019, guilty plea to one count of assaulting a member of congress.
In his plea agreement, Gibbins admitted that on March 22, 2019, at the Mineral City Mill & Grill in Fort Dodge, Iowa, he approached a table where U.S. Congressman Steve King and others were seated. He admitted he then assaulted Congressman King by intentionally throwing a full glass of water on him. He also admitted he was wrong to throw water on Congressman King.
Gibbins was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Gibbins was sentenced to 2 years’ probation, as recommended by both parties. He was also ordered to do 200 hours of community service in the first year of his probation.
The case was prosecuted by Assistant United States Attorney Timothy T. Duax and was investigated by the Federal Bureau of Investigation, the Fort Dodge Police Department, and the United States Capitol Police.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is CR19-3033-LTS.
Follow us on Twitter @USAO_NDIA.
Colombian Submarine Manufacturer Pleads Guilty to Cocaine Smuggling ChargesRead the Press Release
Tampa, Florida – Alexander Giraldo Santa (48, Colombia) has pleaded guilty to conspiracy to possess with the intent to distribute five or more kilograms of cocaine while aboard a vessel subject to the jurisdiction of the United States. He faces a maximum penalty of life in federal prison, although the terms of his extradition prohibit the imposition of a life sentence.
According to the plea agreement, Giraldo Santa participated in the manufacture of numerous self-propelled semi-submersible vessels used to smuggle hundreds of kilograms of cocaine on the high seas. Two of the vessels were intercepted by the United States Coast Guard.
This case was investigated by the Panama Express Strike Force, an Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the United States Coast Guard Investigative Service, Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs
Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted by Assistant United States Attorney James C. Preston, Jr.
Chicopee Man Sentenced to Seven Years in Federal Prison for Child Pornography OffensesRead the Press Release
BOSTON – A Chicopee man was sentenced today in federal court in Springfield for receiving child pornography.
Victor Stepus, 51, was sentenced by U.S. District Court Judge Mark G. Mastroianni to seven years in prison and 10 years of supervised release. In November 2019, Stepus pleaded guilty to three counts of receipt of child pornography and one count of possession of child pornography. Stepus has been in custody since his arrest in August 2015.
The investigation that led to the charges against Stepus began with the discovery of Playpen, a secret child pornography bulletin board and website dedicated to the advertisement and distribution of child pornography and the discussion of matters involving the sexual abuse of children. Playpen existed on the “dark web,” and enabled allowed users, on an anonymous basis, to access the site. When investigators obtained logs from the Playpen site, they found that Stepus had been an active user during a six-month period during 2014 and 2015.
A search of Stepus’s residence resulted in the seizure of a personal computer that contained over 8,000 images and 33 videos of child pornography. These included images depicting the sexual abuse, including bondage, of girls as young as eight years old. Stepus admitted that for the past several years he used his home computer to access and download child pornography two to three times per week.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Chicopee Police Chief William R. Jebb made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
###
Chicago Man Pleads Guilty to Engaging in Internet-Based Child Exploitation Enterprise and Child Pornography ConspiracyRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Marqueal Bonds, 22, of Chicago, IL, pleaded guilty to engaging in a nationwide child exploitation enterprise and conspiracy to advertise child pornography. Bonds entered a guilty plea mid-trial before Senior United States District Judge Harvey Bartle, III.
Using Discord, an electronic communications service that allows users to share files and communicate via text chat messages, Bonds and his co-conspirators participated in two separate collections of chat rooms to discuss and share files containing child pornography. Shortly after federal agents executed a search warrant of Discord’s servers in October 2018, revealing messages about child pornography, the defendant confessed to his participation in this child exploitation enterprise. Subsequent forensic analysis of his digital devices confirmed his confession.
“Bonds was part of a deplorable group of sexual predators who exploited thousands of young girls on Discord, a web-based chatroom application,” said U.S. Attorney McSwain. “Bonds and his co-conspirators employed a familiar ruse to lure their victims: they trolled the Internet on legitimate sites like Snapchat, Periscope, and Live.me for vulnerable victims, tricked them into believing they were chatting with boys or girls their own ages, and then obtained video and naked photos of them to share on Discord. Bonds’ guilty plea ensures that he will be held accountable for this exploitation, and my Office will continue to aggressively prosecute child predators in all their noxious forms.”
“Marqueal Bonds not only manipulated underage girls into providing him explicit images of themselves, he shared them online, perpetuating the sexual exploitation of these children,” said Tara A. McMahon, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “We’re pleased that Bonds finally recognized how much damning digital evidence the FBI’s investigation turned up and decided, mid-trial, it was in his best interests to change his plea to guilty. The FBI is working aggressively every day to put predators like this behind bars and prevent them from targeting additional victims.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Kevin Jayne and Department of Justice Trial Attorney Kaylynn Foulon, of the Child Exploitation and Obscenity Section.
Chelsea Landlord Agrees to Settle False Claims Act AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today a $7,000 settlement with 44 Hawthorne, LLC and its owner, Alek Vienneau, to resolve allegations that they submitted false claims to the federal government after receiving impermissible excess rent payments from a low income tenant while participating in a federal housing subsidy program.
The Department of Housing and Urban Development provides federal funding through the Federal Housing Choice Voucher program, commonly referred to as “Section 8,” to assist low income individuals in securing safe housing. The funding is provided through vouchers that are administered by local public housing agencies. The housing subsidy, which may cover all or a portion of a tenant’s monthly rent, is paid directly to the landlord. As a condition for receiving the housing subsidy, the landlord contractually agrees not to charge the Section 8 tenant rent in excess of the amount set by the public housing agency.
Despite this restriction, 44 Hawthorne, LLC and its owner, Alek Vienneau, allegedly collected excess rent from a Section 8 tenant for five months between June and November 2017. Denise Komnenus, the Section 8 tenant, first raised this allegation in a lawsuit filed against the defendants under the qui tam, or whistleblower, provisions of the False Claims Act.
“The Section 8 program provides crucial funding for low income individuals to afford safe housing,” said United States Attorney Andrew E. Lelling. “We will hold accountable landlords who benefit from the program and then take advantage of their tenants.”
“This settlement is the latest example of our continued commitment to hold landlords accountable for actions that seek to enrich themselves at the expense of our poorest neighbors,” said Special Agent in Charge Christina Scaringi, U.S. Department of Housing and Urban Development, Office of Inspector General.
The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The settlement agreement requires the defendants to pay $7,000 to the United States. Ms. Komnenus will receive approximately $1,540 of the recovery in this case.
U.S. Attorney Lelling and HUD OIG SAC Scaringi made the announcement today. This case was handled by Assistant U.S. Attorneys Steven Sharobem and Elianna Nuzum of Lelling’s Office with the assistance of the United States Department of Housing and Urban Development’s Office of Inspector General.
###
Catskill Physician Receives 54 Months in Prison for Distribution of Opioids, Health Care Fraud, Aggravated Identity Theft, and Obstruction of JusticeRead the Press Release
ALBANY, NEW YORK – Myra Mabry, age 50, of Catskill, New York, was sentenced today to 54 months in prison for unlawfully distributing opioids, for impersonating her patients and defrauding insurance companies as part of the opioids distribution scheme, and for attempting to obstruct the investigation into her criminal activities.
The announcement was made by United States Attorney Grant C. Jaquith and Special Agent in Charge Ray Donovan, U.S. Drug Enforcement Administration (DEA), New York Division.
As part of her August 5, 2019 guilty plea, Mabry, an obstetrician-gynecologist, admitted that between 2015 and 2017, she wrote prescriptions for oxycodone, morphine and hydromorphone to third parties, for no legitimate medical purpose, and then instructed a co-conspirator, Sarah Brown, to fill those prescriptions by impersonating the named recipients at pharmacies, knowing that the patients’ health care benefit programs would pay the costs.
United States Attorney Grant C. Jaquith stated: “Myra Mabry’s disgraceful conduct demonstrates that she has no business practicing medicine. She betrayed her patients, violated her Hippocratic Oath, and orchestrated an elaborate scheme to avoid accountability for her crimes by bribing someone else to take the fall for her. I commend the DEA for its excellent work in this case. The message here is clear: those who criminally violate their professional oaths will be arrested, prosecuted, and imprisoned.”
DEA Special Agent in Charge Ray Donovan stated: “This investigation ends with Myra Mabry’s sentence of over four years in prison, but clearly reinforces law enforcement’s commitment to weeding out opioid traffickers no matter what their profession. I applaud our partners at the U.S. Attorney’s Office for the Northern District of New York, the DEA’s Albany District Office’s Tactical Diversion Squad, and the New York Bureau of Narcotic Enforcement for their diligent work.”
In pleading guilty, Mabry also admitted that she attempted to obstruct a federal investigation into her activities by instructing Brown to testify before a federal grand jury, falsely, that Mabry was the subject of an extortionate scheme. In fact, Mabry was not the subject of an extortionate scheme, was complicit in the scheme to distribute opioids for no medical purpose, and agreed to pay Brown for false testimony in the hope of minimizing her criminal exposure and preserving her medical license.
Mabry surrendered her New York medical license after pleading guilty in August 2019, and has been unable to prescribe controlled substances since October 2017.
United States District Judge Mae A. D’Agostino also sentenced Mabry to 3 years of supervised release, to be served following her release from prison. In sentencing Mabry, Judge D’Agostino described Mabry’s conduct as “horrendous” and a “massive conspiracy in terms of the drugs” involved.
Brown, age 42, of Akra, New York, pled guilty on September 4, 2019 to conspiring to distribute controlled substances, health care fraud, aggravated identity theft, and obstruction of justice. Her sentencing is scheduled for March 11.
This case was investigated by the DEA, with assistance from the New York Bureau of Narcotic Enforcement, and was prosecuted by Assistant U.S. Attorney Wayne A. Myers.
Brooklyn Tax Preparer Sentenced to Prison for Preparing Fraudulent ReturnsRead the Press Release
A Brooklyn, New York, tax return preparer was sentenced to 15 months in prison today for preparing false returns for his clients and himself, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Richard P. Donoghue for the Eastern District of New York.
According to court documents and statements made in court, Emerson Gamory owned and operated Emerson Gamory Income Tax Services Inc. (Gamory Tax), a tax preparation business in Brooklyn. From 2013 through 2017, Gamory falsified client returns by fraudulent claiming deductions for gifts to charity, unreimbursed employee expenses, and education expenses in order to inflate his clients’ refunds. Gamory also prepared false returns for Gamory Tax that underreported its gross receipts and returns for himself that underreported net profits. In total, Gamory caused a tax loss of more than $550,000 to the United States.
On June 25, 2019, Gamory pleaded guilty to aiding and assisting in the preparation of false tax returns and filing a false return for himself.
In addition to the term of imprisonment, U.S. District Judge Carol Bagley Amon ordered Gamory to serve one year of supervised release and to pay $574,565 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Donoghue commended special agents of IRS-CI, who investigated the case, and Assistant Chief Jorge Almonte and Trial Attorney Christopher P. O’Donnell of the Tax Division, and Assistant U.S. Attorney John Vagelatos, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Brooklyn Man Pleads Guilty to Money Laundering ConspiracyRead the Press Release
Earlier today, before United States District Court Judge Dora L. Irizarry in Brooklyn, Andrew Tepfer pleaded guilty to participating in a money laundering conspiracy designed to avoid paying a multi-million dollar court-ordered restitution judgment compensating victims of a securities fraud scheme. When sentenced, Tepfer faces up to 20 years in prison and a fine in an amount to be determined by the court.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Tepfer has been held responsible for his participation in a money laundering scheme to hide funds derived from a brazen shakedown,” stated United States Attorney Donoghue. “This Office will vigorously prosecute those who flout court orders and exploit victims.” Mr. Donoghue thanked the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation for their assistance with the investigation.
According to court filings, in 2011 and 2012, Tepfer and another individual (“John Doe”) pleaded guilty in federal court in Brooklyn to securities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. At their sentencing proceedings in 2014, they were ordered to pay approximately $12.7 million in restitution to the victims of the scheme. Thereafter, in February 2017, Tepfer’s co-conspirator Mark Weissman told John Doe that incriminating information about him would be provided to law enforcement unless he paid $6 million to Tepfer. Weissman and his co-conspirators then planned how to have John Doe make the payment in a manner that would prevent it from being seized by law enforcement authorities seeking to enforce the court’s restitution order. In June 2019, Weissman pleaded guilty to conspiring to obstruct an official proceeding and was sentenced in January 2020 to four years’ probation, 300 hours of community service and a $45,000 fine.
At his guilty plea proceeding today, Tepfer admitted that he conspired with others to conduct international financial transactions designed both to funnel funds that he believed were the proceeds of the earlier securities fraud back to himself, and to conceal the source of those funds.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Nathan Reilly is in charge of the prosecution.
The Defendant:
ANDREW TEPFER (also known as "Avi Tepfer")
Age: 56
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-524 (DLI)
Bristow Businessman Indicted for Tax FraudRead the Press Release
A federal grand jury returned an indictment Wednesday charging a Bristow, Oklahoma, business owner with filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Trent Shores for the Northern District of Oklahoma.
According to the indictment, David Ellis Fisher owned and operated A-1 Power Tongs and Casing Crews LLC, a business that provided equipment and services to oil and gas extraction companies. From 2013 through 2015, Fisher allegedly willfully underreported his income on his tax returns for 2013 through 2015 by depositing a portion of the payments to his business into a bank account that Fisher did not disclose to his bookkeeper or tax return preparer.
If convicted, Fisher faces a maximum sentence of three years in prison on each count. He also faces a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Shores commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Andrew Kameros of the Tax Division, who is prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
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.
Brewer Man Pleads Guilty to Illegally Possessing FirearmsRead the Press Release
Bangor, Maine: A Brewer man pleaded guilty yesterday in federal court in Bangor to being a felon in possession of two firearms, U.S. Attorney Halsey B. Frank announced.
According to court records, on May 17, 2019, Brewer police officers found Jamey Brigley, 32, in possession of brass knuckles. He later physically resisted and struggled with an officer, and two additional officers had to assist in securing him. When officers searched his backpack following his arrest, they found two pistols, one of which had an obliterated, unreadable serial number. Brigley admitted that he knew he could not legally buy or own a firearm. He was prohibited from possessing firearms due to prior felony convictions, including convictions for Unlawful Possession of Oxycodone and Unlawful Trafficking in Scheduled Drugs in 2015.
Brigley faces up to 10 years in prison, a $250,000 fine and three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The Brewer Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime. For more information about PSN, please visit http://www.justice.gov/psn.
Bangladeshi National Pleads Guilty to Conspiracy to Bring Aliens to the United StatesRead the Press Release
A Bangladeshi national formally residing in Tapachula, Mexico, pleaded guilty for his role in a scheme to smuggle aliens from Mexico into the United States.
Mohamad Milon Hossain, 39, admitted that from March 2017 to June 2019, he conspired to bring, and brought, Bangladeshi nationals to the United States at the Texas border in exchange for payment. Hossain operated out of Tapachula, Mexico, where he maintained a hotel that housed aliens on their way to the United States. Hossain provided plane tickets and other assistance for the aliens to travel from Tapachula to Monterrey, Mexico where co-conspirator Moktar Hossain assisted their illegal crossing into the United States.
U.S. District Judge Diana Saldana accepted the guilty plea. Sentencing has not been scheduled.
“Hossain’s brazen scheme to smuggle Bangladeshi aliens into the United States put our national security at risk,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This guilty plea underscores the Department’s commitment to working with our law enforcement partners here and abroad to disrupt the flow of illegal aliens into the United States and bring human smugglers to justice.”
“Border Security is national security,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “Our DHS law enforcement partners work on both sides of the border to make sure it is secure. The Southern District of Texas is on the front line of the fight against illegal immigration and we will continue to lead the nation in doing so.”
“This plea is a clear statement that defendants who smuggle illegal aliens across the United States border for profit will face consequences in a U.S. courtroom,” said Special Agent in Charge Shane Folden of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio. “HSI remains committed in aggressively investigating and prosecuting members of transnational criminal organizations that exploit and endanger the people they smuggle into the United States. We will continue to work with our law enforcement partners both domestic and international to maintain the integrity of our border and the safety of our communities.”
HSI Laredo is investigating this case with assistance from the HSI Human Smuggling Unit, HSI Mexico City, HSI Houston, HSI Calexico, HSI Monterrey, U.S. Customs and Border Protection (CBP) Office of Field Operations, CBP Border Patrol and the U.S. Marshals Service. The investigation is being conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Trial Attorneys James Hepburn and Erin Cox of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Texas.
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.
Baltimore Felon Sentenced to Nine Years in Federal Prison for Illegal Possession of a Stolen FirearmRead the Press Release
Baltimore, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Kyle Greene, age 32, of Baltimore, Maryland, today to nine years in federal prison, followed by three years of supervised release, for possession of a stolen firearm.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Commissioner Michael Harrison of the Baltimore Police Department.
“Kyle Greene had multiple felony convictions and was prohibited from possessing firearms and ammunition. Despite that prohibition, law enforcement recovered a loaded gun that had been stolen, from under Greene’s mattress. Now Greene will serve nine years in federal prison, where there is no parole—ever,” said U.S. Attorney Robert K. Hur. “We are determined to work with our law enforcement partners to reduce violent crime by removing gun-toting criminals from our communities. I urge anyone who is tempted to follow Kyle Greene’s example to put down the gun. You’ll save a life, maybe even your own.”
According to Greene’s guilty plea, on February 27, 2019, members of the Baltimore Police Department (BPD) and FBI executed a search warrant at Greene’s residence. During the search, Greene was located in his bedroom. A loaded firearm was recovered from under the mattress in that room. The gun was found to have been stolen. Greene admitted that he knew the firearm was there and that it was stolen. As a result of previous felony convictions, Greene was prohibited from possessing firearms and ammunition.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the FBI and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Matthew DellaBetta and Christine Goo, who prosecuted the case.
# # #
Aviation maintenance student charged with bribing examiner to pass FAA’s mechanic’s examinationRead the Press Release
ATLANTA - Aviation maintenance student Frank A. Jalion Amaro has been charged with bribing a Federal Aviation Administration (“FAA”) Designated Mechanic Examiner in exchange for receiving a passing score on the FAA’s Airframe and Powerplant examination.
“The integrity of America’s civil aviation system is of paramount importance,” said U.S. Attorney Byung J. “BJay” Pak. “By allegedly trying to bribe his way into obtaining an FAA certification to repair aircrafts, Amaro put his personal ambitions ahead of the safety of others.”
“Blatant actions that seek to circumvent FAA certification requirements will not be tolerated,” said Todd A. Damiani, Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General. “Together with our prosecutorial partners, we are committed to identifying and preventing those individuals willing to compromise the safety of the National Airspace System and the traveling public.”
According to U.S. Attorney Pak, the charges, and other information presented in court: The FAA is an agency of the U.S. Department of Transportation that is responsible for the regulation and oversight of civil aviation in the United States, including the operation and development of the National Airspace System and the management of commercial space transportation. The FAA’s primary mission is to ensure the safety of civil aviation.
As part of its responsibility to protect the integrity and safety of the American civil aviation system, the FAA requires mechanics and repairmen to obtain an Airframe and Powerplant Certificate to perform maintenance on aircraft and approve equipment for returns to service. To receive an Airframe and Powerplant Certificate, the FAA requires mechanics to complete 1,900 hours of classroom and practical training and to pass several tests covering 43 technical subjects.
Amaro was a student at an aviation maintenance school in Las Vegas, Nevada. In late 2019, Amaro was preparing to take the examination to obtain an FAA Airframe and Powerplant Certificate. On November 19, 2019, Amaro contacted an FAA Designated Mechanic Examiner (“FAA Examiner”) in the Atlanta-metropolitan area. As a Designated Mechanic Examiner, the FAA authorized the FAA Examiner to perform activities on its behalf, including administering the Airframe and Powerplant examination.
Beginning on November 19, 2019, Amaro (using an alias and spoofed phone number) contacted the FAA Examiner and offered to pay the FAA Examiner a bribe payment in exchange for receiving a passing score on the Airframe and Powerplant examination. The FAA Examiner immediately reported Amaro’s bribe solicitation and, thereafter, agreed to work with federal law enforcement authorities.
Over the next several weeks, Amaro and the FAA Examiner agreed that Amaro would take the Airframe and Powerplant examination in Duluth, Georgia, on December 16, 2019. As part of the agreement, Amaro offered to pay the FAA Examiner $500 upfront and $2,000 on the day of the test, in exchange for receiving a passing score on the Airframe and Powerplant examination.
On December 9, 2019, Amaro sent the FAA Examiner $500 via a mobile payment service. On December 16, 2019, Amaro met the FAA Examiner in Duluth and paid the FAA Examiner $2,000 in cash for a passing score on the Airframe and Powerplant examination.
Based on the conduct set forth above, the U.S. Attorney charged Frank A. Jalion Amaro, 21, of Las Vegas, Nevada, in a criminal information with bribery. Notably, defendants who are charged via a criminal information, typically plead guilty shortly after being arraigned.
The Department of Transportation – Office of Inspector General is investigating this case.
Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, 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.
Anaconda man sentenced for illegal firearm possession after admitting to making a bombRead the Press Release
MISSOULA—An Anaconda man who admitted making a bomb was sentenced today to four years in prison and three years of supervised release, U.S. Attorney Kurt Alme said.
Maxie Richard Arthur, 43, pleaded guilty in November to possession of an unregistered firearm.
Chief U.S. District Judge Dana L. Christensen presided.
In court documents filed in the case, the prosecution said Arthur possessed a destructive device, a bomb, which was not registered to him in the National Firearms Registration and Transfer Record. In August 2019, law enforcement arrested Arthur on another offense and in a search of his residence, found firearms and a bomb made by Arthur.
Arthur acknowledged to law enforcement he made the bomb and that he and a friend were going to buy zombie mannequins that bleed to see what the bomb did when it blew up. He also acknowledged, buying, possessing and shooting the firearms and that because he was a convicted felon, he was prohibited from possessing them.
Assistant U.S. Attorney Paulette Stewart prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Anaconda-Deer Lodge County Law Enforcement.
This case is part of Project Guardian, the U.S. Department of Justice’s recent initiative to reduce gun violence and enforce federal firearms laws, and Project Safe Neighborhoods, the USDOJ’s initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 36% from 2013 through 2018. Through these initiatives, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
XXX
Ali Sultan Sentenced to 104 Months in PrisonRead the Press Release
FORT WAYNE – Ali Sultan, age 21, was sentenced by U.S. District Court Judge Damon R. Leichty, after pleading guilty to distributing cocaine and heroin and possessing a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Kirsch.
Sultan was sentenced to 104 months in prison followed by 3 years of supervised release
According to documents in this case, in early 2017, Sultan took over the drug operation of his brother who was incarcerated for murder and drug dealing. Between June and October 2017, Sultan distributed cocaine and heroin on numerous occasions. Specifically, Sultan distributed crack cocaine and heroin on August 9, 2017, and possessed a firearm in furtherance of that drug transaction
The case was investigated by Federal Bureau of Investigations with the assistance of the Fort Wayne Police Department, Indiana State Police and the Allen County Police Department. The case was handled by Assistant United States Attorneys Anthony W. Geller and Stacey R. Speith.
###
33 Charged with Meth ConspiracyRead the Press Release
Thirty-three individuals in the Dimmit, Texas area have been charged with conspiracy to distribute methamphetamine and other drug crimes, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Nineteen of the defendants were arrested on Thursday, March 5 during a large-scale takedown coordinated by the FBI’s Dallas Field Office. Four defendants remain fugitives. Ten defendants were already in law enforcement custody on state charges.
A 38-count federal indictment, filed February 27, was unsealed today.
In addition to the drug charges, six defendants were charged with gun crimes, including possession of a firearm in furtherance of a drug trafficking crime, unlawful user of a controlled substance in possession of a firearm, and felon in possession of a firearm.
“Methamphetamine is a highly addictive drug that ravages communities. We will do everything we can to keep those peddling meth off our streets,” said U.S. Attorney Nealy Cox.
“The FBI remains committed to working with our partners to protect our communities from the scourge of methamphetamine and other dangerous drugs,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “In this case, we worked closely with the Castro County Sheriff’s Office, Hereford Police Department, Texas Department of Public Safety, and other law enforcement agencies over the course of several months in order to gather the evidence presented in this indictment.”
Those charged include:
• Jesus Manuel Garcia, aka “Don Chuy,” 58
Charged with one count of conspiracy to distribute methamphetamine and two counts of distribution of methamphetamine
• Noel Mandujano, aka “Noe” and “Oregon,” 48
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Robert Vera, 48
Charged with one count of conspiracy to distribute methamphetamine and two counts of distribution of methamphetamine
• Gustavo Rincon, aka “Tavo,” 43
Charged with one count of conspiracy to distribute methamphetamine and two counts of distribution of methamphetamine
• Ricky Dale Leavitt, aka “Big Rick,” 45
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Michael Diaz, aka “Mike,” 45
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Michael Reyes, aka “Rat,” 42
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Arturo Martinez, aka “Juan,” 41
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Steven Mendez, 36
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Johnny Gilbert Lopez, aka “Cannon,” 52
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Katrina Casas, 34
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Ricardo Reyes, Jr., aka “Little Ricky,” 32
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Roxanne Casas, 37
Charged with one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine
• Cruz Nunez, aka “Cruz Mendez,” 56
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Priscilla Kay Caballero, 35
Charged with one count of conspiracy to distribute methamphetamine
• Susan Odette Stinnett, 32
Charged with one count of conspiracy to distribute methamphetamine, one count of possession with intent to distribute methamphetamine, and one count of unlawful user of a controlled substance in possession of a firearm (Ruger 9mm pistol)
• Denita Mirelez, aka “Denita Mireles,” 45
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• John David Ramirez, 40
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Ricardo Chavez, aka “KK,” 39
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
• Serviano Riojas, aka “Smokey,” 39
Charged with one count of conspiracy to distribute methamphetamine and one count of distribution of methamphetamine
An indictment is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law.
If convicted, the defendants face maximum sentences of up to 40 years, or life in some instances, in federal prison for the drug-related offenses, and up to 10 years for the firearm possession charges.
The investigation was conducted by the Federal Bureau of Investigation’s Dallas Field Office; the Drug Enforcement Administration’s Dallas Field Division; the U.S. Marshals Service; Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division; ICE – Enforcement & Removal Operations; Castro County Sheriff's Office; Hereford Police Department; Texas Department of Safety; Amarillo Police Department; Dimmitt Police Department; Randall County Sheriff's Office; Lubbock Police Department; Potter County Sheriff's Office; Lubbock County Sheriff's Office; and the Plainview Police Department. Assistant U.S. Attorney Sean Long is prosecuting the case.
This case was brought by the Organized Crime Drug Enforcement Task Force, an interagency partnership dedicated to reducing the supply of illegal narcotics in the United States and combating violence associated with the drug trade.
Thursday 5 March 2020
Youngstown physician indicted for operating a “pill mill” that distributed controlled substances, including opioids, and causing the deaths of two patientsRead the Press Release
Martin Escobar, age 57, of Youngstown, Ohio, was indicted by a federal grand jury in a 145-count indictment charging the unlawful distribution and dispensation of controlled substances, causing the deaths of two patients, maintaining a drug-involved premises, health care fraud, and unlawfully distributing and dispensing a controlled substance to a person under the age of 21.
The indictment alleges that between March 2015 and May 2019, Escobar prescribed opioids and other controlled substances out of his Lake Milton medical office, including opioids such as oxycodone and hydrocodone, often in combination with benzodiazepines and stimulants, all outside the usual course of professional practice and not for a legitimate medical purpose.
The indictment further alleges that to support his illegal prescribing, Escobar engaged in the following conduct, among other things: used false diagnoses; falsified patient pain intensity scales in medical charts; increased dosages of controlled substances and prescribed them for prolonged periods without evidence of efficacy; failed to adequately investigate patients’ pain complaints; failed to consider treatment options other than controlled substances; and falsely claimed in patient charts to have performed extensive physical examinations of patients. The indictment also alleges that Escobar ignored the results of patients’ urine drug screen tests, many of which were performed in Escobar’s medical office and that Escobar billed the government for. The indictment further alleges that these screens demonstrated the absence of prescribed controlled substances and the presence of non-prescribed controlled substances, suggesting the patients were abusing prescribed and non-prescribed controlled substances, and selling prescribed controlled substances that Escobar prescribed to them on the illegal secondary street market.
In addition, the indictment alleges that Escobar committed health care fraud by billing and causing the government to be billed for medically unnecessary controlled substances and urine drug screen tests.
The indictment further alleges that Escobar caused the deaths of two of his patients in 2015 and 2016 by unlawfully distributing and dispensing controlled substances to them that led to their deaths.
“We are relying on our community’s healthcare professionals to help devise strategies to address the opioid crisis,” said U.S. Attorney Justin Herdman. “The vast majority of doctors take their oath to do no harm seriously and have embraced practices that lead to responsible prescribing and reduce diversion, abuse, and addiction. Where there may be departures from those professional obligations, as alleged with respect to this defendant, we stand ready to use every law enforcement tool, including criminal charges, to address that harm.”
“Today's indictment is another example of DEA's determination to combat the troubling prescription drug abuse problem in this country,” said Drug Enforcement Administration Detroit Field Division Special Agent in Charge Keith Martin. “Dr. Escobar allegedly abused his position of trust and jeopardized the lives of many individuals by illegally prescribing controlled substances. No matter if it’s in a doctor’s office, board room or street corner, DEA and our law enforcement partners will continue to investigate and bring to justice those who are responsible for the illegal distribution of prescription medicines.”
“All physicians are expected to uphold specific ethical standards to do no harm, but Dr. Escobar, who took the Hippocratic oath to become a physician, is accused of falsifying medical records, prescribing unnecessary controlled substances subsequently causing two deaths, among other charges,” stated FBI Special Agent in Charge Eric Smith. “Patients should be able to trust and rely on their chosen physician, not become addicts or die as a result of their physician's care. The FBI will continue to work with our partners to root out and hold accountable physicians that are violating the law and endangering their patients.”
“Prescribing controlled substances outside the usual course of professional practice and with no legitimate medical purpose puts a patient’s health and safety at risk,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “Prescribing patterns such as those alleged in this indictment are serious in nature and only exacerbate the opioid crisis. The OIG will continue to work with our law enforcement partners to vigorously investigate allegations of this nature.”
“Every time a pill mill grinds to a halt, Ohio moves closer to ending this crisis,” Ohio Attorney General Dave Yost said. “Ohio needs Medicaid fraud teams like these to hold these operations accountable.”
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Medicaid Fraud Control Unit of the Ohio Attorney General’s Office, and the Ohio Board of Pharmacy. It is being prosecuted by Assistant U.S. Attorneys Brendan D. O’Shea, Michael L. Collyer, and Special Assistant U.S. Attorney Jonathan L. Metzler of the Ohio Attorney General’s Office.
If you believe that you may have relevant information about Martin Escobar, you are asked to contact law enforcement at (216) 583-5314.
Woman Sentenced to Prison for Armed Drug DealingRead the Press Release
NEWPORT NEWS, Va. – A Hampton woman was sentenced today to over seven years in prison for possessing cocaine for distribution while possessing a firearm.
According to court documents, Marquita Meredith, 37, was convicted for distributing cocaine from her residence in Hampton. Meredith, who is the mother of seven children, was pregnant during the drug conspiracy and had children in her residence during drug sales in 2018 and 2019. In January 2019, officers recovered over an ounce of cocaine from Meredith’s residence. Children were at the home at the time of the search warrant. Prior to the drug sales and search warrant, Meredith possessed over half an ounce of cocaine and a firearm during a November 2017 traffic stop in Newport News.
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, and Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by Senior U.S. District Judge Rebecca Beach Smith. Special Assistant U.S. Attorney Amy E. Cross prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:19-cr-061.
Woman Indicted for Bank RobberyRead the Press Release
NEW ORLEANS, LOUISIANA – CATHOLINE HAMMETT, age 29, a resident of New Orleans, was indicted for bank robbery, announced U.S. Attorney Peter G. Strasser.
According to the indictment, on or about January 8, 2020, HAMMETT entered the Iberia Bank located at 3412 St. Charles, Ave in New Orleans. She handed the teller a note that claimed HAMMETT had a bomb, and demanded money. HAMMETT obtained approximately $633 and left the bank. If convicted, HAMMETT faces a maximum sentence of (20) years imprisonment, (3) years of supervised release, a $250,000.00 fine and a $100.00 special assessment fee.
United States Attorney Strasser reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Assistant U. S. Attorney G. Dall Kammer, Supervisor of the General Crimes Unit.
Wilmington Man Receives 96 Months in Federal Prison for Drug OffensesRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that yesterday in federal court, Chief United States District Judge Terrence W. Boyle sentenced JAMES EARL RUTLAND III, 34, of Wilmington, North Carolina, to 96 months imprisonment, followed by 3 years of supervised release and a $100 special assessment.
RUTLAND was named in an Indictment filed in the Eastern District of North Carolina on May 31, 2019, charging him with possession with intent to distribute a quantity of heroin on July 20, 2018, possession with intent to distribute a quantity of heroin, a quantity of fentanyl and a quantity of tramadol, on October 29, 2018, and possession with the intent to distribute a quantity of cocaine and a quantity of heroin on January 23, 2019. On December 11, 2019, RUTLAND pled guilty to count three of the Indictment charging possession with intent to distribute a quantity of cocaine and a quantity of heroin on January 23, 2019.
According to the investigation, on July 20, 2018, following a controlled purchase of heroin from RUTLAND, the New Hanover County Sheriff’s Office executed a search warrant on RUTLAND’s hotel room. Officers found multiple bags of a mixture of heroin and fentanyl in the hotel room and 9mm ammunition in RUTLAND’s car. On October 29, 2018, law enforcement officers were notified by a confidential source that RUTLAND was “selling dope”. Law enforcement officers approached and searched RUTLAND and recovered 79 bindles of a heroin, fentanyl and tramadol mixture. Finally, on January 23, 2019, officers with the New Hanover County Sheriff’s Office conducted a controlled purchase of heroin from RUTLAND using a confidential informant and subsequently recovered additional bags of heroin and cocaine hidden by RUTLAND in a Wilmington mini-mart in the area of the controlled purchase. RUTLAND has an extensive history of narcotics related convictions and offenses in New Hanover County.
This case is part of the FBI Investigation Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Dodgeball” with cooperation from the ATF, Wilmington Police Department and New Hanover County Sheriff’s Office. This operation is focused on a drug trafficking organization operating in the New Hanover County area of North Carolina.
This case is also part of the Take Back North Carolina Initiative of the United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
The FBI, ATF, Wilmington Police Department and New Hanover County Sheriff’s Office conducted the investigation of this case. Special Assistant United States Attorney Murphy Averitt prosecuted the case on behalf of the government. Mr. Averitt is a prosecutor with the Prosecutorial District 6 District Attorney’s Office encompassing New Hanover County. District Attorney Ben David has assigned him to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
***
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.
Waterloo Bank Robber Sentenced to PrisonRead the Press Release
A Waterloo bank robber with a long and violent criminal history was sentenced March 4, 2020, to more than 17 years in federal prison.
Steven Lee Sisk, age 55, from Waterloo, Iowa, received the prison term after a June 25, 2019 guilty plea to bank robbery.
Evidence at sentencing showed that in 2017, Sisk robbed a bank in Waterloo, Iowa. He took $2,389 from a teller after pointing what appeared to be a gun at her face. At the time of sentencing, Sisk had accumulated 47 prior convictions for various crimes. These convictions include willful injury causing bodily injury, domestic assault with intent to cause serious injury, burglary, fraud practices, assault, theft, delivery of cocaine, interference with official acts, possession of controlled substances, and multiple other crimes.
Sisk was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Sisk was sentenced to 210 months’ imprisonment. He was ordered to make $2,389 in restitution to the bank. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Sisk is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by Waterloo Police Department and the Federal Bureau of Investigation (FBI), the Tri-County Drug Task Force, and the Linn County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-2007.
Follow us on Twitter @USAO_NDIA.
Washington State Man Sentenced for Child Exploitation in TennesseeRead the Press Release
Chattanooga, Tenn. – On March 4, 2020, Mark Douglas Gould, 50, currently of Port Orchard, Washington, was sentenced by the Honorable Curtis L. Collier, in the U.S. District Court for the Eastern District of Tennessee at Chattanooga.
As part of the plea agreement, Gould pled guilty to an indictment charging him with one count of knowingly using a facility or means of interstate commerce in an attempt to persuade, induce, entice, or coerce a minor to engage in sexual activity. Gould was sentenced to 210 months in prison, followed by 10 years’ supervised release. Gould is required to register with the state sex offender registry in any state in which he lives, works, or attends school and to comply with special sex offender conditions during his supervised release.
In January 2019, Gould responded to an online advertisement offering to permit someone to engage in online sexually oriented live transmissions with an 8-year-old in exchange for child pornography. During the on-line conversation, Gould proffered an additional child in exchange for sexually explicit content. Law enforcement officials apprehended the individual who was offering the advertised content and took over the account, assuming the role of the initial contact. Gould continued his efforts and, in doing so, distributed child pornography and offered payment to take part in a live transmission. Ultimately, Gould traveled from Washington state to Chattanooga, Tennessee, intending to engage in sexual contact with the child, and was then arrested.
“Predators who actually travel in an attempt to victimize and have sexual contact with children are the worst of their kind. Collaborative efforts of federal, state and local law enforcement agencies resulted in this defendant no longer being able to circulate images and videos of sexually abuse of children,” said U.S. Attorney J. Douglas Overbey. “To those who choose to do the same, know that we’re coming for you, and we’ll put you away for as long as the law allows.”
“Sexual predators use the Internet and social media to find children, victimize them and entice illicit sexual activity. This crime is deplorable and will be prosecuted to the fullest extent possible by law,” said HSI Nashville Special Agent in Charge Jerry C. Templet Jr. “This sentencing should send a message that the United States will aggressively investigate and prosecute those who choose to participate in the continued victimization of children.”
The criminal indictment resulted from an ongoing investigation by the Chattanooga Crimes Against Children Task Force, comprised of agents from the Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), the Hamilton County Sheriff’s Department, and the Chattanooga Police Department. This investigation was led by HSI Special Agent Dave Nalley.
Assistant United States Attorney James T. Brooks represented the United States.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit www.justice.gov/psc.
For more information about internet safety education, go to www.justice.gov/psc/resources.html click on the tab "resources.”
###
U.S. Marshals Arrest “Operation Cold Snap” FugitiveRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that Clay Millhouse, a/k/a “Bear,” 34, was arrested yesterday by the U.S. Marshals Service (USMS) on state and federal charges. Millhouse was one of three fugitives from last week’s “Operation Cold Snap,” an ATF-led operation that recovered a total of 82 illegally possessed firearms, and resulted in the filing of federal firearm and drug trafficking charges against 16 defendants in 10 separate indictments.
Millhouse is named in one of those federal indictments along with his co-defendant, Shad Rider-Sorden, a/k/a “Shadow,” 28, charging them with conspiracy to possess and sell stolen firearms and possession or sale of a stolen firearm. Millhouse is also charged with being a felon in possession of a firearm.
According to the indictment, on Sept. 20, 2019, Millhouse, Rider-Sorden, and another individual, pulled into the driveway of an Anchorage residence in a pickup truck. The indictment alleges that Millhouse and Rider-Sorden unlawfully entered the residence and exited carrying a large gun safe, which included approximately 12 firearms. It is further alleged that on Nov. 25, 2019, Millhouse and Rider-Sorden sold firearms to another person, and cautioned the buyer about re-selling the firearms in the state. Millhouse has multiple felony convictions with the State of Alaska for crimes including Sexual Abuse of a Minor, Theft, and Robbery, which prohibited him from possessing firearms.
If convicted, Millhouse and Rider-Sorden face a maximum penalty of up to 10 years in federal prison. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Anchorage Police Department (APD) conducted the investigation leading to the charges in this case. Millhouse was arrested by the USMS Pacific Northwest Violent Offenders Task Force (PNVOTF), which is comprised of the USMS, the Alaska State Troopers (AST), the Anchorage Police Department (APD), and Homeland Security Investigations (HSI). This case is being prosecuted by Assistant U.S. Attorney Carole Holley.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Sues Spinal Device Company and Its Executives for Allegations that they Paid Kickbacks to SurgeonsRead the Press Release
BOSTON – The U.S. Attorney’s Office has filed a civil health care fraud complaint against SpineFrontier, Inc. (SpineFrontier); Impartial Medical Experts, LLC (IME); Kingsley Chin, the founder and CEO of SpineFrontier; Aditya Humad, the CFO of SpineFrontier; Vanessa Dudley, Chin’s wife and the Business Administrator of IME; and other entities Chin owns and controls.
The government alleges that SpineFrontier, based in Malden, Mass., and the other defendants paid, and conspired to pay, kickbacks in the form of sham consulting fees via a sham third-party, IME. The lawsuit alleges that the defendants made these payments to surgeons to induce them to use SpineFrontier’s devices in spinal surgeries. The government contends that the defendants violated the Anti-Kickback Statute, and as a result caused federal health care programs to pay millions of dollars in false claims.
In addition, the U.S. Attorney’s Office has settled civil health care fraud claims against five physicians, each of whom admits to seeking and obtaining kickbacks from SpineFrontier, via the sham third-party IME, for consulting work he did not perform. Further, each physician admits that one or more of SpineFrontier, Chin, or Humad specifically instructed him to bill “consulting” hours to SpineFrontier for each and every surgery in which he used a SpineFrontier device, regardless of whether he spent any time actually consulting.
- Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $486,985;
- Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $330,668;
- Dr. Joseph Shehadi, a neurosurgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $323,419;
- Dr. Agha Khan, a neurosurgeon in Maryland, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $310,843; and
- Dr. John Atwater, an orthopedic surgeon who has worked in in Florida and Illinois, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $105,149.
Each of the five settling surgeons cooperated with the government’s investigation into the defendants, and the U.S. Attorney’s Office took that cooperation into account in these settlements.
“Medical device companies that pay surgeons kickbacks, directly or indirectly, corrupt the market, damage the health care system and jeopardize patient health and safety,” said United States Attorney Andrew E. Lelling. “We will pursue aggressively any organization or individual who fails to play by the rules.”
“Kickbacks undermine the integrity of federal health care programs and can result in unnecessary or harmful medical care,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice will pursue unlawful kickback arrangements in whatever form they occur to ensure the integrity of the medical care received by federal program beneficiaries.”
“Kickbacks paid to surgeons as sham medical consultants, as alleged in this case, cheat patients and taxpayers alike,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working with our law enforcement partners, we will continue to investigate kickback schemes that threaten the integrity of our federal health care system, no matter how those schemes are disguised.”
“Surgeons have a moral imperative to operate in a trustworthy, transparent manner. No less than people’s lives and safety depend on them. Today, five spine doctors from across the country admitted they prioritized payoffs over patients to enrich themselves and a Malden medical supply company, SpineFrontier, by shelving their ethics once hundreds of thousands of dollars in kickbacks were put on the negotiating table,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI aggressively pursues health care fraud because cases like this don’t just impact a few people. The cost of these egregious crimes is ultimately borne by all taxpayers.”
“Veterans and non-Veterans alike put trust in their physicians and that confidence is the cornerstone of our health care system. When physicians choose personal gain over patient care, that trust is broken. The settlement with Dr. Murray demonstrates VA OIG’s strong commitment to combating fraud and corruption in our government health care programs, including the Veterans Health Administration,” said VA OIG Acting Special Agent in Charge Jeffrey Stachowiak.
According to the government’s complaint, SpineFrontier paid physicians kickbacks through IME, which operates only with a Florida post office box, and whose sole employee is Chin’s wife, Dudley. The government contends that the defendants told surgeons that they could bill SpineFrontier and IME for “consulting” on a per-surgical case basis, regardless of the time, if any, the surgeons spent consulting. SpineFrontier and IME allegedly set no limit on the number of times a surgeon could purportedly evaluate a SpineFrontier device, leading to numerous instances in which SpineFrontier paid the same physician for submitting consulting hours on the same SpineFrontier device over and over again.
According to the complaint, SpineFrontier made no effort to catalogue, review, or assess feedback that surgeon-consultants provided. Often, the defendants paid surgeons ostensibly for consulting time even when surgeons had provided no product feedback whatsoever.
The government alleges that SpineFrontier and IME paid more than $8 million in kickbacks to surgeons, which generated more than $100 million in revenue, with the vast majority of SpineFrontier's total domestic sales revenues coming from kickback-tainted surgeries.
In connection with the filing of its complaint, the government intervened in two private whistleblower lawsuits that had been filed under seal pursuant to the False Claims Act. The cases are United States ex rel. Birchall v. SpineFrontier, Inc. et al., No. 15-cv-12877 and United States ex rel. Miller & Bennett v. SpineFrontier, Inc. et al., No. 15-cv-12908.
U.S. Attorney Lelling, Assistant Attorney General Hunt, HHS-OIG SAC Coyne, FBI SAC Bonavolonta, and VA OIG Acting SAC Stachowiak made the announcement today. The government’s investigation is being handled by Assistant U.S. Attorneys Abraham R. George, David J. Derusha, Patrick M. Callahan and Steven T. Sharobem of Lelling’s Office and Trial Attorneys Douglas Rosenthal and Chris Terranova of the Department of Justice’s Civil Division.
Two Peoria Men Arrested, Charged in Five-County Burglary Spree of Licensed Firearms DealersRead the Press Release
PEORIA, Ill. – Two Peoria, Ill., men appeared in federal court in Peoria today following their arrests on charges that allege they have stolen 53 guns from Central Illinois licensed firearms dealers since Christmas Day 2019. Terrence M. Daniels, 19, and James D. Woolfolk, 20, both of Peoria, are charged in the burglary of six licensed firearms dealers in five counties.
As alleged in the affidavit filed in support of the criminal complaint, Daniels and Woolfolk burglarized and stole guns from licensed firearms dealers in the Illinois counties of Tazewell, Woodford, Logan, McLean, and Bureau, as follows:
- Dec. 25, 2019: Midwestern Firearms Company, 829 E. Camp St., East Peoria. Police were alerted at approximately 3:20 a.m. Ten firearms were stolen;
- Feb. 23, 2020: Midwestern Firearms Company, 829 E. Camp St., East Peoria. Police were alerted at approximately 2:08 a.m. Six firearms were stolen;
- Feb. 27: Freedom Sports Shop, 146 W. Front St., El Paso. Police were dispatched at approximately 12:25 a.m.; however, no firearms were stolen;
- Feb. 27: Pekin Gun and Sporting Goods, 281 Derby St., Pekin. Police were dispatched at approximately 1:40 a.m. 13 firearms were stolen;
- Feb. 27: Tactical Bunker, 127 S. Sangamon St., Lincoln. Police were dispatched when the business owner arrived to find that the business had been burglarized. Six firearms were stolen;
- Feb. 29: Guns and Glory, 117 E. Center St., LeRoy. Police were dispatched at approximately 1:39 a.m. Nine firearms were stolen; and,
- March 4: LZ Resale, 120 E. St. Paul St., Spring Valley. Police were dispatched at approximately 1:31 a.m. Nine firearms were stolen.
The affidavit alleges that in each instance, officers arrived to find the front door glass broken and firearms removed from broken glass display cases. In several of the instances, agents reviewed surveillance footage of the burglaries.
“A top priority of the Department of Justice is keeping our communities safe from gun violence,” stated U.S. Attorney John Milhiser. “Stolen guns frequently get into the hands of dangerous criminals, resulting in deadly consequences. We will continue to work with our federal, state, and local partners to aggressively prosecute those who help put guns in the wrong hands.”
Both men were arrested on March 4, and appeared this afternoon before U.S. Magistrate Judge Jonathan E. Hawley in Peoria. Woolfolk waived a detention hearing and was ordered to remain in the custody of the U.S. Marshals Service. Daniels was also detained pending a detention hearing scheduled on Monday, March 9.
The charges are the result of investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Peoria Police Department with assistance from the East Peoria; Pekin; El Paso; LeRoy; Lincoln; and, Spring Valley Police Departments.
If convicted, for the offenses of stealing firearms from a federal firearms licensee and possession of stolen firearms, the maximum statutory penalty for each count is up to 10 years in prison and a fine of up to $250,000. The maximum penalty for conspiracy to steal and possess firearms from a federal firearms licensee is five years in prison and a fine of $250,000.
Members of the public are reminded that a complaint is merely an accusation; each defendant is presumed innocent unless proven guilty.
This case is brought as 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, and local authorities in investigating and prosecuting gun crimes; improves information-sharing by ATF when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System, to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
Two Former Texas Executives Charged with Fraud and Obstruction of JusticeRead the Press Release
Two former executives of EarthWater Limited (EarthWater), a Dallas-based company, were charged in a superseding indictment with conspiracy to commit wire fraud and bank fraud and obstruction of justice.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group in Washington, D.C., made the announcement.
Beth Ellen DeGroot, 60, and Harley E. “Buddy” Barnes III, 61, both of Plano, Texas, were charged with one count of conspiracy to commit wire fraud and bank fraud and one count of obstruction.
Barnes and nine other individuals had been previously indicted by a Dallas grand jury for their alleged roles in a high-yield investment fraud scheme involving EarthWater. To induce victims to purchase EarthWater stock, the defendants allegedly falsely promised victims the opportunity to earn a high-rate of return in a short period of time by offering them stock at a low price on what they falsely claimed was the eve of EarthWater’s initial public offering (IPO). In truth, EarthWater had no ability or actual plans to go public.
The defendants also allegedly lied to victims about how their money would be used, telling victims that nearly all of their money would be reinvested in EarthWater’s business (including to launch the IPO). In truth, the defendants allegedly stole most of the victims’ money and treated EarthWater’s accounts like their own personal piggybank. Barnes and his co-conspirators allegedly targeted elderly victims, defrauding them of millions of dollars. A trial date is currently scheduled for March 30, 2020.
The superseding indictment alleges that, following Barnes’ arrest for the alleged EarthWater fraud, DeGroot, who was EarthWater’s vice president, partnered with Barnes, who was EarthWater’s chief financial officer, to continue to use EarthWater to raise money, including by selling stock. In addition, Barnes and DeGroot conspired to use EarthWater to fraudulently obtain large paychecks from EarthWater’s payroll processor and to fraudulently obtain a substantial mortgage from an FDIC-insured financial institution. Specifically, Barnes and DeGroot allegedly misrepresented that EarthWater continued to operate and employ them as its top executives when, in reality, EarthWater had shut down and they were unemployed.
The superseding indictment further alleges that, after Barnes was arrested in connection with the EarthWater fraud, Barnes and DeGroot attempted to hide Barnes’s assets to prevent his money from being subject to forfeiture and fine in the event he were to be convicted.
The superseding indictment includes two counts of obstruction for which DeGroot was originally charged in October 2019. Among other things, DeGroot was charged with providing falsified records to a Dallas-based grand jury in order to conceal evidence relating to the conspiracy described above.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
USPIS investigated the case. Trial Attorneys Christopher Fenton and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary F. Walters of the Northern District of Texas are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.