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18 March 2020
Broken Bow Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Logan Lawson Cox, age 29, of Broken Bow, Oklahoma, entered a guilty plea to Felon In Possession Of Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years and not more than life imprisonment, a fine up to $250,000.00, or both.
The Indictment alleged that on or about November 17, 2019, in the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of said conviction, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The charges arose from an investigation by the McCurtain County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Jarrod Leaman represented the United States.
Agency Village Man Guilty of Involuntary ManslaughterRead the Press Release
United States Attorney Ron Parsons announced that an Agency Village, South Dakota, man has pled guilty to involuntary manslaughter.
Felix Duane Johnson, Jr., age 27, was indicted on January 7, 2020. He appeared before Judge William D. Gerdes in March 2020, and pled guilty to the Indictment.
The maximum penalty upon conviction is up to 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
According to court documents, on December 17, 2019, in Roberts County, Johnson unlawfully killed a human being without malice. Johnson was the only adult in the residence at the time the minor victim, who was approximately 11 months old, drowned in the bathtub. He was the person who was responsible for taking care of the children in the home because his girlfriend, who is the victim’s mother, was working at the time the child drowned. Johnson admitted that the death of the child was his responsibility and that the death was a result of his gross neglect and lack of due caution and circumspection. Johnson admitted that, while the child was in the bathtub unattended, he kept getting feelings like he should go and check on the child, but he ignored the promptings and became distracted with his mobile phone. The child ultimately drowned in the bathtub.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Johnson was remanded to the custody of the U.S. Marshals Service pending sentencing.
Agency Village Man Charged in Federal Court with Transferring Obscene Material to a MinorRead the Press Release
United States Attorney Ron Parsons announced that an Agency Village/Sioux Falls, South Dakota, man has been charged with two counts of transferring obscene material to a minor.
Aydan Sam Kirk, Jr., age 22, was indicted on March 3, 2020. He appeared before Judge Veronica L. Duffy on March 11, 2020, and pled not guilty to the Indictment.
According to the charging documents, on September 26 and October 2, 2019, Kirk knowingly used a facility and means of interstate commerce, that is, a computer connected to the internet and a mobile phone, to transfer and attempt to transfer obscene matter to an another individual who had not attained the age of 16 years, knowing that such other individual had not attained the age of 16 years.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Kirk was ordered to home detention pending trial.
14 Defendants Charged with Racketeering, Murder, Firearms, and Narcotics OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Darcel D. Clark, District Attorney for Bronx County, Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), Ray Donovan, Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in New York (“HSI”), and Cynthia Brann, Commissioner of the New York City Department of Correction (“NYCDOC”), announced today the unsealing of an Indictment charging ALEXANDER ARGUEDAS, a/k/a “Reckless,” MICHAEL DELAGUILA, a/k/a “Grizz,” STEVEN JUSTO, a/k/a “Riko,” DAVONTE BROWN, a/k/a “Tae,” JACOBB PADIN, a/k/a “Chino,” EDGARDO BARANCO, a/k/a “Slime,” ABBAS OZKURT, a/k/a “AB,” JAHVONNE CHAMBERS, a/k/a “JV,” DENISE BULLOCK, a/k/a “Mocha,” SIMONE CORDERO, a/k/a “Mixy,” MATTHEW NIEVES, a/k/a “WB,” TYERANCE MICKEY, a/k/a “Hoodlum,” and MARK BROCK, a/k/a “Rover,” with racketeering, firearms, and narcotics offenses, in connection with their membership and association with the Black Stone Gorilla Gang (“BSGG”). ARGUEDAS is also charged with the December 9, 2012, murder of Gary Rodriguez. ANDRE CURRY, a/k/a “Flex,” is charged with narcotics and firearms offenses.
Seven defendants were arrested today and will be presented this afternoon before United States Magistrate Judge Stewart D. Aaron. Three defendants were already in federal or state custody on other charges. The case has been assigned to United States District Judge Jesse M. Furman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Today’s indictment charges members and associates of a violent gang that allegedly wreaked havoc in the Bronx for years, committing numerous acts of violence against rival gang members and innocent victims. These charges are the product of a joint effort between our Office and the Bronx District Attorney’s Office, whom we thank for their outstanding partnership, not only in this case, but in our ongoing, shared commitment to keeping the people of the Bronx safe from violence. Because of that partnership, and thanks to the extraordinary efforts of the NYPD, DEA, Department of Correction, HSI, and Special Agents of the U.S. Attorney’s Office, the defendants now face federal charges for their alleged crimes.”
Bronx District Attorney Darcel D. Clark said: “This gang has allegedly brought violence, guns and illicit narcotics to Bronx streets, and my Office’s partnership with U.S. Attorney Geoffrey Berman, the NYPD, the DEA, the Department of Correction, and HSI has now brought them to justice. We remain unrelenting in putting such violent criminal enterprises out of business.”
NYPD Commissioner Dermot Shea said: “The NYPD’s work to identify and dismantle gangs and crews, and prevent the violence so often associated with their activities, continues to be of paramount importance to the NYPD and all our law enforcement partners. I thank the NYPD detectives involved in this case and our law enforcement partners for their hard work which resulted in these arrests.”
DEA Special Agent in Charge Ray Donovan said: “With deep rooted history of violence both in and outside of prison, the Black Stone Gorilla Gang is a fierce threat to New Yorkers. Today’s arrests have put an alleged murderer in jail along with 13 other gang associates allegedly embedded in racketeering, fraud, firearms, narcotics trafficking and/or assaults. I thank our law enforcement partners for their collaboration and partnership.”
NYCDOC Commissioner Cynthia Brann said: “Our Correction Intelligence Bureau works tirelessly to reduce violence and increase safety in our facilities, and we are proud of their hard work in this case, which involved many hours of collaboration with our fellow law enforcement partners. Gang activity drives a disproportionate amount of violence in our city, in both the streets and the jails, and because of these efforts both communities are safer.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “HSI is always willing to assist our law enforcement partners in any criminal investigation where our resources, capabilities and personnel can be of value. Bringing these dangerous individuals to face justice is why we invest in the specialized training and equipment we keep at the ready. HSI and our law enforcement partners will continue to thrive in arresting those most dangerous because of the dedication and teamwork we put forward.”
According to the allegations in the Indictment unsealed today in Manhattan federal court[1]:
ALEXANDER ARGUEDAS, a/k/a “Reckless,” MICHAEL DELAGUILA, a/k/a “Grizz,” STEVEN JUSTO, a/k/a “Riko,” DAVONTE BROWN, a/k/a “Tae,” JACOBB PADIN, a/k/a “Chino,” EDGARDO BARANCO, a/k/a “Slime,” ABBAS OZKURT, a/k/a “AB,” JAHVONNE CHAMBERS, a/k/a “JV,” DENISE BULLOCK, a/k/a “Mocha,” SIMONE CORDERO, a/k/a “Mixy,” MATTHEW NIEVES, a/k/a “WB,” TYERANCE MICKEY, a/k/a “Hoodlum,” and MARK BROCK, a/k/a “Rover,” are members and associates of the Black Stone Gorilla Gang, a racketeering enterprise that operates principally in the New York City metropolitan area and in the jails and prisons of New York City and the State of New York. In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, BSGG members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder and assaults; distributed and possessed with intent to distribute narcotics; committed robberies; engaged in bank fraud and wire fraud; and obtained, possessed, and used firearms. BSGG members also evaded prosecution by law enforcement authorities through acts of intimidation and violence against potential witnesses to crimes committed by the gang.
On or about December 9, 2012, ARGUEDAS shot and killed Gary Rodriguez in the vicinity of 3089 Decatur Avenue in the Bronx, New York.
In or around 2018, ARGUEDAS and others conspired to murder a fellow BSGG member who had fallen out of ARGUEDAS’s favor. At ARGUEDAS’s direction, another gang member shot at that individual.
On or about August 27, 2018, at ARGUEDAS’s direction, CHAMBERS attempted to slash a rival gang member with a scalpel in the Bronx, New York.
On or about November 12, 2019, ARGUEDAS and MICKEY assaulted a fellow BSGG member with a chair in the vicinity of 3063 Hull Avenue in the Bronx, New York.
On or about November 12, 2019, BROCK slashed an individual across the face in Manhattan, New York.
The defendants are also charged with participating in a conspiracy to distribute heroin, cocaine, cocaine base, oxycodone, and marijuana from in or about 2011 through in or about March 2020.
* * *
A chart containing the names, charges, and maximum and minimum penalties for the defendants is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD’s Gun Violence Suppression Division and Financial Crimes Task Force, the DEA, the NYCDOC Correction Intelligence Bureau, HSI, and the Special Agents of the U.S. Attorney’s Office.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Danielle R. Sassoon, Andrew K. Chan, and Brandon Harper, and Special Assistant United States Attorney Jaclyn M. Wood, are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTY
Count One
Racketeering Conspiracy
18 U.S.C. § 1962(d)
ALEXANDER ARGUEDAS
MICHAEL DELAGUILA
STEVEN JUSTO
DAVONTE BROWN
JACOBB PADIN
EDGARDO BARANCO
ABBAS OZKURT
DENISE BULLOCK
SIMONE CORDERO
MATTHEW NIEVES
Life imprisonment
JAHVONNE CHAMBERS
20 years’ imprisonment
Count Two
Murder in Aid of Racketeering
18 U.S.C. §§ 1959 and 2
ALEXANDER ARGUEDAS
Death or life Imprisonment;
Mandatory minimum of life imprisonment
Count Three
Murder through the Use of a Firearm
18 U.S.C. §§ 924(j) and 2
ALEXANDER ARGUEDAS
Death or life imprisonment;
Mandatory minimum of five years’ imprisonment
Count Four
Conspiracy to Commit Murder in Aid of Racketeering and Assault with a Dangerous Weapon in Aid of Racketeering
ALEXANDER ARGUEDAS
10 years’ imprisonment
Court Five
Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959 and 2
ALEXANDER ARGUEDAS
20 years’ imprisonment
Count Six
Firearms offense
18 U.S.C. §§ 924(c) and 2
ALEXANDER ARGUEDAS
Life imprisonment
Mandatory minimum of ten years’ imprisonment
Count Seven
Attempted Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959 and 2
ALEXANDER ARGUEDAS
JAHVONNE CHAMBERS
3 years’ imprisonment
Count Eight
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959 and 2
ALEXANDER ARGUEDAS
TYERANCE MICKEY
20 years’ imprisonment
Count Nine
Maiming, Assault with a Dangerous Weapon, and Assault Resulting in Serious Bodily Injury in Aid of Racketeering
18 U.S.C. §§ 1959 and 2
MARK BROCK
20 years’ imprisonment
Count Ten
Narcotics Conspiracy
21 U.S.C. § 846
ALEXANDER ARGUEDAS
MICHAEL DELAGUILA
STEVEN JUSTO
DAVONTE BROWN
JACOBB PADIN
EDGARDO BARANCO
ABBAS OZKURT
DENISE BULLOCK
SIMONE CORDERO
MATTHEW NIEVES
ANDRE CURRY
Life
Mandatory minimum of 10 years’ imprisonment
Count Eleven
Firearms Offense
18 U.S.C. §§ 924(c) and 2
ALEXANDER ARGUEDAS
MICHAEL DELAGUILA
STEVEN JUSTO
JACOBB PADIN
EDGARDO BARANCO
ABBAS OZKURT
MATTHEW NIEVES
ANDRE CURRY
Life
Mandatory minimum of 5 years’ imprisonment
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
17 March 2020
Wellington Couple Sentenced to Prison for Conspiracy to Commit Theft of Government Property and Aggravated Identity TheftRead the Press Release
Orlando, Florida – U.S. District Judge Gregory A. Presnell has sentenced Billy Altidor (29, Wellington) and Evanie Louis (28, Wellington) to federal prison terms for their roles in conspiracy to commit theft of government funds and aggravated identity theft. Altidor was sentenced to two years’ imprisonment, and Louis was sentenced to one year and a day in federal prison. Each was also ordered to serve two years of supervised release and pay $93,685.60 in restitution.
Altidor and Louis had pleaded guilty on July 29, 2019.
According to court documents, Louis, Altidor, and their co-conspirators used stolen personal identifiable information (PII) to access the “My Social Security” (MySSA) online portal and redirect Social Security benefit payments to accounts controlled by the conspirators. The conspirators accessed or attempted to access MySSA accounts belonging to more than 1,400 different individuals, without the victims’ knowledge or authorization.
Louis, Altidor, and their co-conspirators also used stolen PII to file false tax return and directed the fraudulently obtained tax refunds into accounts controlled by the conspirators. In addition, they used stolen identities to activate debit cards and bank accounts to receive the fraudulent tax refunds.
“Today’s sentencing is a warning to those who would steal and misuse personally identifiable information to defraud federal agencies and American taxpayers,” said Rodregas Owens, Special Agent in Charge of the Social Security Administration Office of the Inspector General, Atlanta Field Division. “We will continue to uphold the integrity and security of Social Security’s systems against this type of fraud. I want to thank the U.S. Attorney’s Office and Special U.S. Attorney Suzanne Huyler, as well as our law enforcement partners, for their efforts in holding these individuals accountable for their crimes.”
“We have made tremendous strides in the effort to combat tax-related identity theft. The vast majority of returns filed using stolen identities are stopped and never processed by the IRS,” stated Special Agent in Charge Mary Hammond of IRS Criminal Investigation. “Would-be identify thieves should know that simply submitting a false claim, even if the crook never receives the refund, is grounds for criminal prosecution. We will continue to tirelessly pursue those who are so audacious as to think that they can sneak through the cracks.”
This case was investigated by the Social Security Administration - Office of the Inspector General, the Internal Revenue Service – Criminal Investigation, and the Department of the Treasury - Office of the Inspector General. It was prosecuted by Special Assistant United States Attorney Suzanne Huyler.
Waterford, PA Man Indicted on Charges Related to the Sexual Exploitation of ChildrenRead the Press Release
ERIE, Pa. - A resident of Waterford, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
The three-count Indictment named John Douglas Root, Jr., 27, as the sole defendant.
According to the Indictment presented to the court, from April 2017 to March 2018, Root received, distributed and possessed computer and cell phone images depicting prepubescent minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 60 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Homeland Security Investigations conducted the investigation leading to the Indictment in this case. This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Washington Man Sentenced to 30 Years in Prison for Engaging in Child Exploitation EnterpriseRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Sharif El-Battouty, 45, of Puyallup, WA, was sentenced by United States District Court Judge Harvey Bartle III to 30 years’ imprisonment and a lifetime of supervised release for engaging in a child exploitation enterprise and conspiracy to advertise child pornography.
El-Battouty – using the online alias “Fritos” – posted videos and images of child pornography in various text channels on the online-sharing platform Discord. Discord is a public communications service that permits users to create “servers,” or collections of chat rooms. These servers are capable of hosting numerous Discord users who communicate with each other through text chat messages visible to all other users present in that room, post video and image files for other users to download, and send links to material stored elsewhere on the Internet for retrieval by those users.
El-Battouty also actively produced child pornography by communicating directly with scores of minor children over the Internet using manipulation and deception to entice them into transmitting sexually explicit video and images of themselves, which the defendant and his co-conspirators would then record. Two of the Discord servers utilized in this conspiracy, titled “Camgirls” and “Thot Counselors,” facilitated the acquisition and dissemination of child pornography over various video-streaming platforms including Omegle, live.me, Periscope, and Skype.
“Child exploitation offenses are some of the most appalling crimes that we see in our society,” said U.S. Attorney McSwain. “Through his heinous scheme, El-Battouty perpetually victimized children by using Discord to download and share images of their abuse with others. Our community is much safer with the defendant behind bars for decades to come.”
“Sharif El-Battouty manipulated underage girls into sharing explicit images of themselves,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He then passed that child pornography to other online predators, furthering his victims’ sexual exploitation. The FBI is gratified to bring him to justice and to know he’ll be behind bars for some time, where he can’t continue to perpetrate such abhorrent acts against innocent children.”
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Kevin Jayne and Department of Justice Child Exploitation and Obscenity Section Attorneys Lauren Britsch and Kaylynn Shoop.
Van Zandt County Man Sentenced for Federal ViolationsRead the Press Release
TYLER, Texas – A 56-year-old Grand Saline, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.
Andrew Mark Harris pleaded guilty on Aug. 26, 2019, to conspiracy to distribute and possess with intent to distribute methamphetamine and was sentenced to 71 months in federal prison by U.S. District Judge Jeremy D. Kernodle on March 17, 2020. Judge Kernodle also ordered forfeiture of $1500, representing proceeds received by the defendant because of his drug distribution.
According to information presented in court, on July 14, 2018, Harris was stopped in Van Zandt County, Texas, for a traffic violation. At the time of the stop, he possessed approximately 1.4 grams of a mixture or substance containing methamphetamine, which he possessed with intentions to distribute to others.
Harris admitted to being involved in a conspiracy with others to obtain and distribute methamphetamine from July 2018 through at least May 2019. As part of that conspiracy, he obtained methamphetamine for resale and sold methamphetamine to others. He admitted that he was responsible, directly, for the possession with intent to distribute of at least 50 grams of a mixture or substance containing methamphetamine, and that the value of that methamphetamine was at least $1,500.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Van Zandt County Sheriff’s Office and the Texas Department of Public Safety and prosecuted by Assistant U.S. Attorney Alan Jackson.
Upshur County man is charged with making a bombRead the Press Release
ELKINS, WEST VIRGINIA – William John Clark, of Buckhannon, West Virginia, was indicted today on firearms charges, U.S. Attorney Bill Powell announced.
Clark, age 62, is charged with one count of “Making a Destructive Device,” one count of “Possession of Unregistered Firearm,” and one count of “Unlawful Possession of a Firearm.” Clark is accused of making an explosive bomb, which wasn’t registered as required by law. Clark, a convicted felon, is also accused of having a .22 caliber pistol and a .22 caliber revolver. The crimes allegedly occurred in March 2020 in Upshur County.
Clark faces at up to 10 years incarceration and a fine of up to $10,000 for the device count and the unregistered firearm count. He faces up to 10 years incarceration and a fine of up to $250,000 for the unlawful possession count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Upshur County Sheriff’s Office investigated.
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. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney’s Office Committed to Safety of Employees and Public Safety at the CourthouseRead the Press Release
WASHINGTON — Our mission to protect the citizens of the District of Columbia and the United States is not changed by the COVID-19 outbreak. While we have adapted operations to optimize the health and safety of our employees, we have ensured those employees have the resources and flexibility to continue to safeguard the District and the American people from violence, financial and sexual exploitation, threats against our national security, and other criminal activity.
In continuing our mission, we support the efforts by Chief Judge Howell of the United States District Court for the District of Columbia, Chief Judge Morin of the Superior Court of the District of Columbia, and our law enforcement partners to responsibly address the concerns of public health while maintaining the core functions of our criminal justice system.
U.S. Attorney Brady Appoints Experienced Prosecutor to Fight COVID-19 FraudRead the Press Release
PITTSBURGH - United States Attorney Scott W. Brady today announced the appointment of a COVID-19 Fraud Coordinator to lead investigations into potential fraud schemes perpetrated as a result of the coronavirus outbreak.
Attorney General William Barr has asked U.S. Attorneys nationwide to remain vigilant in detecting, investigating and prosecuting wrongdoing related to the crisis. "The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated," Attorney General Barr said.
"Scammers are using email phishing schemes claiming to be from legitimate health organizations, advertising counterfeit virus test kits, and fraudulently seeking donations for illegitimate or non-existent charitable organizations, all in an effort to exploit people’s anxiety and uncertainty," said U.S. Attorney Brady. "We will prioritize the investigation and prosecution of fraud related to the COVID-19 virus in order to protect the people of western Pennsylvania. All fraudsters should know that if you cross a state line, use your phone or the internet, DOJ can and will prosecute your crime."
As part of the strategy, Assistant U.S. Attorney Shaun Sweeney, a Senior Litigation Counsel, will serve as the COVID-19 Fraud Coordinator, and will oversee the prosecution of fraud resulting from virus scammers.
"AUSA Sweeney is an experienced and talented federal prosecutor who will lead our work to stop individuals who are taking advantage of the coronavirus outbreak," U.S. Attorney Brady added.
In addition the U.S. Attorney’s Office’s website now contains a front page button where visitors can quickly report fraud to the office and/or to the Federal Bureau of Investigation. Western Pennsylvanians who believe they may have been the target or victim of a virus-related fraud scheme should visit www.justice.gov/usao-wdpa and provide detailed information about their experience.
Two McAlester Individuals Sentenced for Heroin DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced the sentencing of McAlester, Oklahoma residents, Callie Marie Woolsey, age 31, and Darron Ray Aldridge, age 41, for Distribution of Heroin. Woolsey was sentenced to 188 months’ imprisonment, and 3 years of supervised release, and Aldridge to 151 months’ imprisonment, and 3 years of supervised release. They were also ordered to pay $2,539.63 in restitution. The charges arose from an investigation by the McAlester Police Department and the Drug Enforcement Administration.
The U.S. Attorney’s Office alleged that on December 16, 2018, in the Eastern District of Oklahoma, the defendants knowingly and intentionally distributed heroin, a Schedule I controlled substance. The Government’s case included evidence that A.B. died as a result of ingesting the heroin the defendants distributed to A.B.
United States Attorney, Brian J. Kuester said, “When death is avoidable, as it is when caused by drug overdose, it is especially tragic. The needless loss and pain is felt by family, friends, and community. The death that led to the prosecution of these defendants was caused by heroin, an illicit opioid that has inflicted countless deaths across the country. There is no “safe” heroin. Any given dose could end a life. If you are a user please get help. If you are providing others with heroin, whether it be for profit or you think you are doing a friend a favor, stop before it is too late. The consequences are irreversible.”
“Those who distribute drugs do so for one purpose, to make a profit,” said DEA Special Agent in Charge, Eduardo A. Chávez. “The DEA will never stop seeking justice for those who prey on others’ addictions.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearings. Assistant United States Attorney Sarah McAmis represented the United States.Two Canadian Nationals Sentenced to Federal Prison for Bitcoin FraudRead the Press Release
PORTLAND, Ore.— Karanjit Singh Khatkar, 23, and Jagroop Singh Khatkar, 24, residents of Surrey, British Columbia, Canada, were sentenced today to 24 months in federal prison and three years’ supervised release for conspiring to commit wire fraud and money laundering in a scheme to steal bitcoin from an Oregon resident.
According to the indictment, beginning in October 2017 and continuing until August 2018, the defendants used a Twitter account with the name @HitBTCAssist to trick victims into thinking they were communicating with a customer service representative from HitBTC, a Hong Kong-based online platform used to exchange virtual currency. HitBTC provides its customers with web-based “wallets” to store virtual currency and make transactions.
Using the fraudulent Twitter account, the defendants responded to the Oregon victim’s questions about withdrawing virtual currency from her HitBTC account. The defendants convinced the victim to send information they could use to log on and take over her email, HitBTC and Kraken accounts. Kraken is a U.S.-based online platform that offers services similar to HitBTC.
The defendants initiated transfers of 23.2 bitcoins from the victim’s HitBTC account to Karanjit Khatkar’s Kraken account. Karanjit Khatkar in turn transferred approximately 11.6 in stolen bitcoins to Jagroop Khatkar’s Kraken account.
Two days after illegally accessing the victim’s account, Karanjit Khatkar bought a Mercedes-Benz with $56,598 in Canadian dollars. The Khatkars also traveled to casinos. Karanjit Khatkar gambled with tens of thousands of dollars while staying at high-end casinos in Las Vegas, Nevada.
On July 18, 2019, Karanjit Khatkar was arrested upon arrival at the McCarran International Airport in Las Vegas and later ordered detained pending trial. Jagroop Khatkar appeared voluntarily for his arraignment and change of plea on December 16, 2019.
On December 16, 2019, the Khatkars pleaded guilty to conspiring to commit wire fraud and money laundering. As mandated by their plea agreements, the Khatkars delivered a check of $142,349 as a prepayment of restitution to their victim at their change of plea hearing.
At sentencing, the Khatkars were ordered to pay an additional $42,162 to their victim for a total restitution order of $184,511.
This case was investigated by FBI and prosecuted by Quinn P. Harrington and Julia E. Jarrett, Assistant U.S. Attorneys for the District of Oregon.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of the department at www.Justice.gov/Celebrating150Years.
Three Marshall Men Arrested for Trafficking MethamphetamineRead the Press Release
MARSHALL, Texas - U.S. Attorney Joseph D. Brown announced today that three individuals have been arrested pursuant to a federal indictment charging them with drug and firearms violations in the Eastern District of Texas.
A federal grand jury returned the 15-count indictment on Feb. 19, 2020, charging Danny Brian Hernandez, 27; Ronald Charles Parker, 31; and Armando Ivan De La Torre, 24, all of Marshall, with being involved in a conspiracy to traffic methamphetamine in the area.
According to court documents, the defendants have been charged with one count of conspiracy to distribute methamphetamine, 13 counts of possession with intent to distribute methamphetamine, and one count of carrying a firearm during a drug offense. Hernandez, Parker, and De La Torre were arrested today in Marshall. If convicted, the defendants face up to life in federal prison.
This case is the result of a joint investigation by the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Department of Public Safety; Marshall Police Department, and Harrison County Sheriff's Office. The case is being prosecuted by Assistant U.S. Attorney Lucas Machicek.
An indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Support of Law EnforcementRead the Press Release
RALEIGH - The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., stands in support of law enforcement during the COVID-19 pandemic and has stated:
“As the country grapples with the effects of the ongoing COVID-19 pandemic, and as daily activities are altered or discontinued, we know that your work remains unchanged. If anything, your efforts to deal with violent crime, drug trafficking and scams against our citizens will become more intense.”
“I want you to know that the men and women of the United States Attorney’s Office here in the Eastern District remain on duty and fully able to partner with you as you enforce federal criminal laws and work to keep all of Eastern North Carolina safe and secure. We will continue to work alongside you and to proudly stand with you in the federal courts all across this District. Our commitment to you, and to the mission we share, is unaffected by the health challenges the country faces. And, we renew our commitment to work with you to “Take Back North Carolina” from the criminals and wrong doers who would victimize our communities.”
Sunset Mesa Funeral Home Operators Arrested for Illegal Body Part SchemeRead the Press Release
DENVER – United States Attorney Jason R. Dunn today announced that the operators of Sunset Mesa Funeral Home in Montrose, Colorado, were arrested for illegally selling body parts or entire bodies without the consent of the family of the deceased. The two operators, Megan Hess, age 43, and her mother, Shirley Koch, age 66, appeared virtually before a U.S. Magistrate Judge in Grand Junction, where they were advised of their rights and the charges pending against them. The Denver Field Office of the FBI and the Department of Transportation Office of the Inspector General joined in today’s announcement.
According to a recently unsealed grand jury indictment, from 2010 through 2018, Hess and Koch operated Sunset Mesa Funeral Directors (SMFD), which purported to provide burial and cremation services. Hess, and at times Koch, would meet with families seeking cremation services, and would offer to cremate the decedents’ bodies and provide the remains back to the families. SMFD would charge $1,000 or more for cremations, but many never occurred.
In 2009, Hess also created a nonprofit called Sunset Mesa Funeral Foundation, d/b/a Donor Services, a body broker service operated out of the same location as SMFD.
In at least dozens of instances, Hess and Koch did not follow family wishes, and neither discussed nor obtained authorization for Donor Services to transfer decedents’ bodies or body parts to third parties. In the few instances where families agreed to donation, Hess and Koch sold the remains of those decedents beyond what was authorized by the family, which was often limited to small tissue samples, tumors, or portions of skin. Hess and Koch also delivered cremains to families with the representation that the cremains were that of the deceased when, frequently, that was not the case.
Hess and Koch would also ship bodies and body parts that tested positive for, or belonging to people who had died from, infectious diseases, including Hepatitis B and C, and HIV, after certifying to buyers that the remains were disease free. These shipments would be through the mail or on commercial air flights in violation of Department of Transportation regulations regarding the transportation of hazardous materials.
This investigation was complex and involved a detailed forensic review of evidence. At a later date, the U.S. Attorney’s Office will be conducting a victim-only meeting to provide additional information and answer victim questions.
Both defendants have been charged with six counts of mail fraud and three counts of illegal transportation of hazardous materials. If convicted of mail fraud, each defendant faces up to 20 years in federal prison, per count. If convicted of transportation of hazardous materials, each defendant faces up to 5 years in federal prison, per count. They each also face up to a $250,000 fine, per count.
“The defendants are charged with committing a blatant fraud on many, many victim. This betrays a fundamental trust during one of the worst times in a person’s life – having to make arrangements for a deceased loved one,” said U.S. Attorney Jason Dunn. “It is hard to imagine the pain and worry of those who used Sunset Mesa and not knowing what happened to their loved ones’ remains.”
“I also want to recognize the hard work of the men and women of the FBI who conducted this investigation,” added U.S. Attorney Dunn. “This was an extremely complex case and would not have resulted in charges absent their dogged work.”
“Let today’s actions serve notice to those who would commit such self-serving acts of callous greed, we will diligently and tirelessly work to bring you to justice,” said FBI Denver Assistant Special Agent in Charge Dameon Hutto.
“Today’s indictment stemming from the illegal transportation of hazardous materials is a clear signal that such illegal acts will not be tolerated,” stated Lisa Glazzy, Acting Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General (DOT-OIG). “Working with our law enforcement and prosecutorial colleagues, we will continue to protect the public’s safety from those who would seek to circumvent DOT-related laws and regulations.”
This case is being prosecuted by Assistant U.S. Attorney Jeremy Chaffin from the U.S. Attorneys Grand Junction Office and Assistant U.S. Attorney Tim Neff in the Denver office.
The information provided today, as well as the information contained in the indictment, are allegations, and the defendants are presumed innocent unless and until proven guilty.
Statement of United States Attorney James P. Kennedy, Jr. on COVID-19Read the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051As a community and a nation, we come together in times of crisis. Ironically, when it comes to COVID-19, our unification is best done in a metaphorical rather than literal sense.
In that spirit of unity, I ask that everyone in the community reflect on the brave men and women of law enforcement and those who work throughout the criminal justice system, who despite these difficult times, come together each day on a shared mission to serve, protect, and uphold the rule of law. Every individual working in law enforcement, whether as a law enforcement officer or prosecutor, began their career with an oath. Because that oath engendered a promise, it also carried with it a moral obligation. In the case of those working in the criminal justice system, that obligation includes a promise to support and defend the Constitution of the United States and to uphold our Nation’s laws. But their obligation—our obligation—does not end there. As Americans—no matter our occupation, no matter who we are, and not matter what we do—each of us are part of what our Founding Father’s characterized as the “great experiment” in self-governance. Yet, I fear that too many of us have come to view self-governance as a descriptor of how we go about choosing our leaders more than it is a characterization for how we ought to go about living our lives. Indeed, our very identity, as a Nation and as citizens, is predicated upon our ability to engage in self-governance. That is, the responsibility and obligation that each of us have to control and govern our own behavior—to live morally.
In times such as this—when we are tested—we must reaffirm our commitment to engage in self-governance and to unify in order to uphold those aspirational values which lie at the heart of our identity as Americans. As Americans, our identity depends not on where we came from, who we are, or what we have, but instead it is all about what we honor and uphold. Notions such as equality, justice, fairness—and perhaps the greatest legal precept ever—the Golden Rule—serve as the signposts on our collective journey toward unification and continued survival. We call it the American way, and it is our commitment to that American way that has guided us through troubled and uncharted waters in the past and it will carry us through these difficult times as well.
Those of us working in the criminal justice system at all levels remain committed to ensuring that the justice system will continue to function during this national crisis. The tremendous men and women who serve in my office will follow the guidance of the Attorney General, which makes it clear that the critical mission of the Department of Justice will continue. We will work closely with our partners in law enforcement and with the judiciary in order to ensure that health of those public servants who selflessly do their best each day to live up to their oaths of office. Together, we will continue to hold accountable those who fail to live up to their moral obligation as Americans.
Finally, my Office and the entire Department of Justice will remain particularly vigilant in detecting, investigating, and prosecuting wrongdoing related to the crisis. There have been reports of individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud, reports of phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention, and reports of malware being inserted onto mobile apps designed to track the spread of the virus. The pandemic is dangerous enough without wrongdoers seeking to profit from public panic. Such conduct will not be tolerated.
Together, we will pull through this crisis and reaffirm to the world that, nearly 250 years after the “great experiment” in self-governance, our people, our communities, and our Nation remain resilient, vital, and healthy.
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Statement from United States Attorney Mike Stuart Regarding COVID-19Read the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart issued the following statement regarding the continuity of office operations and defending against scams relating to the COVID-19 pandemic:
“My office is following the guidance of Attorney General Barr, which makes it clear that the critical mission of the Department of Justice continues. All office locations (Charleston, Huntington and Beckley) remain open and members of my team are continuing the administration of justice, enforcement of the Rule of Law, and the protection and safety of the people of West Virginia. I am grateful for the commitment and dedication of my team and our law enforcement partners during this unprecedented time. I am doing all I can to protect the health and safety of my team even as we continue with the critical mission of ensuring the health and safety of the people of West Virginia.
It is an absolute priority for me and my team to detect, investigate and prosecute all criminal conduct related to the pandemic. Citizens should remain vigilant -- scammers & fraudsters never let an opportunity to scam and defraud go to waste. Fraud against our seniors or against consumers is despicable -- especially when it is intended to take advantage of the natural fear and anxiety of a National Emergency and the COVID-19 situation. When it comes to the COVID-19 situation, whether it’s a fake “charitable” cause or a fake “cure,” don’t be duped. Use common sense, never give out your personal info, banking info or Social Security number, and never buy a gift card because someone wants paid “right now.” If you’re confused or unsure, you should consult a friend or family member, and if you suspect fraud, report it to law enforcement and the FTC at consumer.ftc.gov. If you are aware of such misconduct, please notify law enforcement as quickly as possible. My office will be working with our federal, state and local law enforcement partners to ensure that all appropriate enforcement tools are made available to punish wrongdoers.”
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Statement from U.S. Attorney Thomas T. Cullen Regarding Operations as a Result of COVID-19Read the Press Release
Roanoke, VIRGINIA – United States Attorney Thomas T. Cullen issued the following statement regarding the continuity of federal law enforcement operations in the Western District of Virginia:
“Our offices in Roanoke, Charlottesville, and Abingdon remain open, and we are working closely with our federal, state, and local partners to protect the public and ensure that critical law-enforcement operations continue uninterrupted,” U.S. Attorney Cullen stated today. “Based on guidance issued by the Office of Management and Budget and the Department of Justice in Washington, D.C., we have implemented a voluntary telework program for our employees. Non-high risk employees will continue to cover office and court responsibilities as needed and on a rotating basis. I am grateful for the dedication and commitment of these public servants during this challenging time.”
Southwest Washington man charged with making anti-Semitic threats against neighborRead the Press Release
Tacoma, Washington – A 48-year old La Center, Washington man was arrested today on a criminal complaint charging him with cyberstalking and two counts of interstate threats, announced U.S. Attorney Brian T. Moran. MATHIAS DOUGLAS KANE was arrested late yesterday without incident outside his home. KANE will make his initial appearance in U.S. District Court in Tacoma at 2:30 today.
According to the criminal complaint, KANE made online threats against a neighbor who took in KANE’s 13-year-old child when the child needed a place to live. On multiple occasions in January 2020, KANE posted personally identifying information about his neighbor online and threatened to harm her. KANE posted anti-Semitic comments and threatened to harm state Child Protective Services (CPS) workers, members of law enforcement and Jews. KANE identified himself as a White Nationalist and used a screenname and images involving NAZI symbols.
On two occasions KANE was contacted by law enforcement regarding his access to weapons. KANE denied possessing firearms, but refused to allow law enforcement to search his home. KANE posted multiple times about manufacturing guns and ammunition and his access to firearms parts. A search of his home and vehicle last night did not recover any firearms.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Cyberstalking and making interstate threats are both punishable by up to 5 years in prison.
The case is being investigated by the FBI with assistance from the Clark County Sheriff’s Office and the La Center Police Department.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg.
kane_complaint.pdfSmith County Man Sentenced to over 19 years for Federal Drug TraffickingRead the Press Release
TYLER, Texas – A 27-year-old Tyler, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.
Dakota Allen pleaded guilty on Sep. 12, 2019, to possession with intent to distribute methamphetamine and was sentenced to 235 months in federal prison by U.S. District Judge Jeremy D. Kernodle on March 17, 2020. Judge Kernodle also ordered forfeiture of $5,000 seized from the defendant.
According to information presented in court, on March 7, 2019, Allen and co-defendant, Haleigh Morris, were stopped in Smith County, Texas, for a traffic violation. At the time of the stop, they were in possession of approximately one kilogram of methamphetamine located in a camo zipper bag, along with $6,250 in cash, ziplock bags, a digital scale, and drug paraphernalia. Another $956 cash was in the center console. During the traffic stop, Allen attempted to drive off and evade arrest. During this time, the defendants threw the camo zipper bag out the window before Allen wrecked the vehicle. They were both indicted on April 17, 2019.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Allen Hurst.
Second Hudson County Man Charged with Using Drones to Smuggle Contraband into Fort Dix Federal Prison Appears in CourtRead the Press Release
TRENTON, N.J. – The second of two Hudson County, New Jersey, men charged with conspiring to use drones to smuggle contraband, including marijuana, steroids, syringes, cell phones and cell phone equipment, into the federal correctional facility at Fort Dix, surrendered to authorities and appeared in court today, U.S. Attorney Craig Carpenito announced.
Adrian Goolcharran, a/k/a “Adrian Ajoda,” a/k/a “Adrian Ahoda,” 35, of Union City, New Jersey, appeared before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court and was released on a $100,000 secured bond. He and Nicolo Denichilo, 38, of Jersey City, New Jersey, are each charged by complaint with one count of conspiring to smuggle contraband and to defraud the United States and one count of smuggling contraband into the federal prison at Fort Dix. Denichilo appeared in court March 13, 2020, following his arrest and was released on a $100,000 unsecured bond.
According to the documents filed in this case and statements made in court:
Special agents of the U.S. Department of Justice, Office of Inspector General (DOJ-OIG) obtained evidence of at least seven drone deliveries since July 2018 containing contraband meant for inmates at Fort Dix. Goolcharran used cell phones to coordinate the drops with others, including text messaging aerial shots of locations at Fort Dix to better position the drops and to discuss weather conditions. On the same day as a drone drop in April 2019, local police in the area conducted a vehicle stop on Denichilo and Goolcharran less than five miles from Fort Dix. On March 7, 2020, an individual fitting Goolcharran’s description and another individual were captured by a surveillance camera carrying and flying a drone from a launch spot located in the woods outside of Fort Dix. Law enforcement also obtained evidence of Goolcharran bringing multiple drones to a store for repairs, including a broken drone shortly after the March 7, 2020, drone flight.
On March 12, 2020, law enforcement agents, acting on information obtained by Fort Dix officials, approached Denichilo and another individual at a launch site near Fort Dix, minutes after Fort Dix officials had observed a drone flying over a housing unit at the prison. Both men fled, and Denichilo was apprehended hiding in a ditch near the launch site. Fort Dix officials also found an inmate in the area of the drone drop inside the prison in possession of 34 cell phones, nine chargers, 51 SIM cards and other telephone equipment. Agents also seized an SUV near the launch site outside of the prison that contained the drone in the backseat.
Contraband that has been seized by authorities pursuant to the intercepted drone drops into Fort Dix includes marijuana, steroids, more than 160 cell phones, 150 SIM cards, 74 cell phone batteries and chargers, 35 syringes and two metal saw blades. Denichilo’s fingerprint was obtained from a plastic bag recovered from one of the drone drops at Fort Dix. Goolcharran’s DNA was recovered from electrical tape found on the drone used in a July 2018 drop.
The conspiracy count carries a maximum penalty of five years in prison and maximum fine of $250,000 and the contraband smuggling count carries a maximum penalty of one year in prison and $100,000 fine.
U.S. Attorney Carpenito credited agents of the DOJ-OIG, New Jersey area office, under the direction of Special Agent in Charge Guido Modano, and its Cyber Investigations Office, under the direction of Special Agent in Charge Keith A. Bonanno; the U.S. Air Force Office of Special Investigations, Detachment 307, under the direction of Superintendent Jonathan Jackson; and the U.S. Department of Transportation – Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Douglas Shoemaker, with the investigation leading to the charges.
He also thanked Federal Bureau of Prisons personnel at Fort Dix, under the direction of Warden David Ortiz; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney; and officers with the Pemberton Borough Police Department, under the direction of Chief Edward Hunter; the Pemberton Township Police Department, under the direction of Chief David Jantas; and Chesterfield Township Police Department, under the direction of Chief Kyle Wilson, for their assistance.
The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey Manis of the Office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Raleigh Man Sentenced to 10 Years Imprisonment on Child Pornography ChargesRead the Press Release
RALEIGH — The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, United States District Judge James C. Dever, III, sentenced DUSTIN LEE BISHOP, 32, of Raleigh, NC to 120 months’ imprisonment, followed by an eight-year term of supervised release. BISHOP was also ordered to pay more than $19,000 in restitution to known child pornography victims identified through the investigation. BISHOP pled guilty pursuant to a plea agreement on November 12, 2019 to one count of receipt of child pornography.
In September 2017, investigators with the National Center for Missing and Exploited Children (NCMEC) received information from Google regarding a user account that had uploaded multiple files of child pornography. The cyber tip was forwarded to the North Carolina Internet Crimes Against Children (NCICAC) task force and investigated by the Federal Bureau of Investigation (FBI) in Raleigh, North Carolina, and the Raleigh Police Department.
Investigators confirmed that that the account identified in the cyber tip belonged to BISHOP and later obtained a search warrant for BISHOP’s residence that was executed on February 20, 2018. Investigators with the FBI executed the warrant and seized 19 electronic devices and 6 DVDs from BISHOP. A forensic review was conducted and revealed over 9,300 images and more than 840 videos containing child pornography. BISHOP agreed to speak with investigators at the time of the search and admitted to receiving, trading, and possessing child pornography.
This case is part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national initiative, go to www.projectsafechildhood.gov.
The Federal Bureau of Investigation (FBI) in Raleigh, North Carolina and the Raleigh Police Department conducted the investigation of this case. Assistant United States Attorney Bryan M. Stephany represented the government.
Prison, Restitution for Tax Preparers Guilty of Filing 126 False Tax ReturnsRead the Press Release
COLUMBUS, Ga. – Two Columbus tax preparers guilty of federal wire fraud and identity theft charges were sentenced to prison for their crimes, said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia. Keven Walker, 33, of Columbus, was sentenced by U.S. District Judge Clay Land on Monday, March 16 to 54 months in prison and three years of supervised release after pleading guilty in August 2019 to one count of wire fraud and one count of identity theft. His co-defendant, Tiffany Gist a/k/a Tiffany Walker, 46, of Columbus, was sentenced on Monday by Judge Land to 45 months in prison and three years supervised release after pleading guilty in July 2019 to one count wire fraud and one count identity theft. In addition, Mr. Walker and Mr. Gist have been jointly ordered to repay $33,446 in restitution to the IRS. There is no parole in the federal system.
“Two dishonest tax return preparers will now spend significant time behind bars for choosing to cheat trusting clients and the United States,” said U.S. Attorney Charlie Peeler. “Our office is committed to protecting the integrity of the tax system and our citizens from fraud. We will continue to work alongside our IRS partners to root out and prosecute tax fraud.”
“While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients, said Andrew M. Thornton, Jr., Acting Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office. “The defendant in this investigation wreaked havoc on the integrity of our tax system in a very short time period. It is our hope that today's sentencing of Walker and Gist sends the strong message that tampering with the integrity of our nation's tax system will result in jail time."
Mr. Walker was the owner of Walker Tax Financial Group, an income tax preparation business operating in Columbus. During the 2013 tax year, IRS agents discovered that the co-defendants filed 126 fraudulent returns, attempting to steal approximately $216,684 in refunds. According to Mr. Walker’s signed plea agreement, the co-defendants used one victim’s correct social security number to file a phony tax return, but the address and W-2 form were false. Victims signed affidavits stating they never did business with the defendants and did not authorize them to file tax returns.
The case was investigated by the IRS. Assistant U.S. Attorney Mel Hyde prosecuted the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Okmulgee Man Sentenced to 45 Months for Abusive Sexual Contact with Child Under 12Read the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Carl Ray Smith, age 52, of Okmulgee, Oklahoma, was sentenced to 45 months’ imprisonment, and 5 years of supervised release for Abusive Sexual Contact With A Child Under 12 Years. After Smith is released from incarceration, he must register as a convicted sex offender and participate in an approved sex offender treatment program. The charges arose from an investigation by the Henryetta Police Department, the Muscogee Creek Nation Lighthorse Police, and the Federal Bureau of Investigation.
The Indictment alleged that beginning on about May 1, 2019 and continuing until about May 25, 2019, in the Eastern District of Oklahoma, in Indian Country, the defendant, a non-Indian, knowingly engaged in and caused sexual contact as defined in Title 18, United States Code, Section 2246(3), with an Indian under the age of 12 years old.
United States Attorney Brian J. Kuester said, “A courageous child spoke out to describe acts the defendant committed that no child should have to experience and as a result this investigation began. Less than a year later the defendant has been sentenced to the Bureau of Prisons and will forever be required to account for his whereabouts by registering as a sex offender. This child’s courage began the process that made a community safer.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Sarah McAmis represented the United States.Oil City, PA Man Facing Child Pornography and Illegal Gun Possession ChargesRead the Press Release
ERIE, Pa. - A resident of Oil City, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children and violating federal firearms laws, United States Attorney Scott W. Brady announced today.
The three-count Indictment named Edward Baker III, 50, as the sole defendant.
According to the Indictment presented to the court, from April 2019 to December 2019, Baker received and possessed computer images depicting prepubescent minors engaging in sexually explicit conduct. In addition, he unlawfully possessed firearms as an unlawful user of a controlled substance.
The law provides for a maximum total sentence of 50 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Homeland Security Investigations conducted the investigation leading to the Indictment in this case. This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Richmond Man Sentenced to 12 Years for Mortgage Rescue Fraud SchemeRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Aston Wood, 56, New Richmond, Wisconsin and Miami, Florida, was sentenced today by U.S. District Judge James D. Peterson to 12 years in federal prison for a mortgage rescue scheme that defrauded more than 70 Wisconsin homeowners. Wood pleaded guilty to wire fraud and bankruptcy fraud on January 6, 2020.
U.S. Attorney Blader was joined in making the announcement by Robert E. Hughes, Special Agent in Charge of the FBI’s Milwaukee Field Office; Kathy A. Enstrom, Special Agent in Charge of the Chicago Field Office of IRS Criminal Investigation; Catherine Huber, Special Agent in Charge, Central Region, Federal Housing Finance Agency – Office of Inspector General; and Patrick S. Layng, United States Trustee for Region 11.
At the sentencing, Judge Peterson called the defendant a professional conman, said that this was “a particularly heartless crime,” and told the defendant that his crime “stands apart from anything I’ve come across in my six years on the bench.”
Between 2014 and 2019, Wood defrauded more than 70 Wisconsin homeowners out of approximately $390,000. Many homeowners unfortunately lost their homes in connection with the scheme. Using the names ASC Financial, LLC and Maywood Capital II, LLC, Wood solicited people facing the possibility of foreclosure and represented to them that he could help them stay in their home by obtaining loan refinancing or modification. He told customers that to stop foreclosures, they needed to immediately begin making mortgage payments towards a new loan as part of a trial period while he worked out the details of the loan with the mortgage lenders. Wood instructed customers to make these mortgage payments to businesses he controlled under the premise that he would forward the payments to the customers’ mortgage lenders.
Wood was able to collect mortgage payments from homeowners for months, even years, by falsely reassuring them that their payments were going to their mortgage lenders and that new loans were being finalized. In fact, Wood’s bank records confirmed he deposited the customers’ mortgage payments and spent their money on his own travel and living expenses. When customers eventually lost their homes in foreclosure, Wood told them that it was due to the mortgage lenders’ greed or negligence.
Wood defrauded some homeowners out of additional money even after they lost their homes by falsely telling them that he would use the money to help them buy back their foreclosed property or use the money to sue the mortgage companies.
As part of his fraud scheme, Wood advised many customers to file bankruptcy in the Western District of Wisconsin. The automatic stay triggered by the bankruptcy filings temporarily stalled the foreclosures, which extended the time in which Wood could collect the monthly mortgage payments. In November 2016, the U.S. Trustee’s Office began investigating Wood and in October 2017, U.S. Bankruptcy Judge Catherine J. Furay issued an injunction permanently barring Wood from soliciting, offering to perform, or performing services relating to mortgage foreclosure and debt relief. Despite the court order, however, Wood continued to engage in mortgage rescue fraud under a new business name.
U.S. Attorney Blader praised the work of the U.S. Trustee’s Office and the law enforcement agents who investigated the criminal case. U.S. Attorney Blader also urged Wisconsin residents to be alert to this type of fraud.
The following are tips to avoid being a victim of mortgage fraud schemes from the U.S. Department of Treasury and the U.S. Department of Housing and Urban Development:
- Beware of anyone seeking to charge you in advance for mortgage modification services. In most cases, charging fees in advance of a mortgage modification is illegal.
- Only your mortgage company has the discretion to grant a loan modification. Therefore, no third party can guarantee or pre-approve your mortgage modification application.
- Beware of individuals and companies claiming that your payments should be sent to an alternate contact or address that is different from the information in your mortgage statement.
- Beware of individuals or companies that offer money-back guarantees or insist on upfront fees and can only accept payment by cash, cashier's check, or wire transfer.
- Beware of private individuals claiming to be affiliated with government-backed refinancing programs.
The charges against Wood were the result of an investigation conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, and the Federal Housing Finance Agency – Office of Inspector General, with assistance from the Office of the United States Trustee. The prosecution of the case has been handled by Assistant U.S. Attorney Meredith P. Duchemin.
New Orleans Man Indicted for Bank RobberyRead the Press Release
NEW ORLEANS, LOUISIANA – ISIAH HOLMES, age 48, a resident of New Orleans, was indicted for bank robbery on March 13, 2020, announced U.S. Attorney Peter G. Strasser.
According to court documents, on or about December 23, 2019, HOLMES entered the Capital One Bank located at 4121 Canal St. in New Orleans. HOLMES then handed the teller a note that claimed he was armed, and demanded money. HOLMES obtained approximately $774 and left the bank. If convicted, HOLMES faces a maximum of 20 years imprisonment, a $250,000 fine, 3 years of supervised release and a $100 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.
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Maryland Man Convicted of Sex Trafficking by Force, Fraud, and CoercionRead the Press Release
WASHINGTON — Terrell Armstead, 29, of Baltimore, Maryland, was convicted on Monday of sex trafficking by force, fraud, and coercion, announced U.S. Attorney Timothy J. Shea, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division Timothy M. Dunham, and Chief of the Metropolitan Police Department Peter Newsham.
U.S. Attorney Shea stated: “The defendant exploited his young victims as if they were commodities to be controlled and sold. The prosecution of human trafficking is a priority for the U.S. Attorney’s Office. We will fight to protect these vulnerable victims.”
“The FBI has no greater mission than to protect our nation’s children from harm and take traffickers off the streets in our community,” said FBI Special Agent in Charge Dunham. “I would like to thank the men and women of the FBI and our partners, who work tirelessly every day to bring justice for the victims of these heinous crimes. We will continue to work to protect our community from those who exploit women and children for their own personal gain and greed.”
Armstead was found guilty on March 16 following a jury trial in the U.S. District Court for the District of Columbia before the Honorable Amit P. Mehta. Armstead was convicted of sex trafficking a woman, Victim E, by force, fraud, and coercion between June and September 2018. Armstead faces a mandatory minimum sentence of 15 years in prison and up to life in prison. Armstead is currently serving time on a separate conviction in Maryland.
On Sept. 13, 2019, in a related case also before Judge Mehta, Armstead pled guilty to conspiracy to obtain firearms in Virginia and to transport them into the District of Columbia to resell them illegally, and to unlawful possession of a firearm by a convicted felon. Those convictions carry, respectively, potential sentences of up to five and 10 years in prison. Sentencing for that case is pending.
According to evidence presented at trial, from March 2015 until September 2019, Armstead trafficked, in the District of Columbia, Maryland, Virginia, and elsewhere, several young women for commercial sex, including Victim A (whom Armstead began trafficking when she was only 16 years old) and Victim E. In total, five women testified about Armstead’s role in sexually exploiting them for money. Armstead operated his “pimping” enterprise by recruiting these young women as commercial sex workers, then advertising them in online forums (like Backpage.com), having them work in strip clubs to meet “customers,” and prostituting them on “the blade,” the commercial sex track in downtown Washington, D.C. Armstead promoted himself on social media, purporting to live a life of luxury with the money he took from the women he prostituted. He controlled and manipulated the victims, including by threats of force and by brandishing various weapons (including large automatic weapons), by taking and controlling all the proceeds from their commercial sex work, by limiting their contact with friends and family (such as smashing a cellphone), and by controlling their access to transportation and even their own identification documents.
The evidence showed that, among other things, Armstead prostituted Victim A out of hotels beginning when she was only 16 years old. The government’s evidence also included Backpage.com ads, linked to Armstead’s online accounts, posted at the time showing 16‑year‑old Victim A and other girls being sold for sex as far back as March and April 2015.
The evidence also showed that Armstead lured Victim E across the country based on false promises of fantastic success and financial comfort and security. Instead, after three months of Armstead’s trafficking, Victim E left the D.C. area with nothing. Witnesses also testified about violent episodes in which Armstead assaulted his victims, including a horrifying incident in which Armstead forced a loaded gun into Victim A’s mouth while having sex with her.
Finally, the evidence showed that Armstead engaged in extensive efforts to obstruct the investigation and trial. His own recorded jail calls showed him directing Victim A to lie to investigators — and the evidence showed him continuing to contact Victim A to affect her testimony, up to and including at trial.
In announcing the conviction, U.S. Attorney Shea, Special Agent in Charge Dunham, and Chief Newsham commended the assistance provided by officers and agents of the Federal Bureau of Investigation and Metropolitan Police Department Child Exploitation and Human Trafficking Task Force; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the D.C. Department of Corrections. They also acknowledged the efforts of those who handled the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Kenya Davis and Amy Larson, Paralegal Supervisor Mary Downing and Paralegal Specialist/Contractor Kenny Nguyen.
Man from Las Cruces, New Mexico pleads guilty to federal child pornography chargeRead the Press Release
ALBUQUERQUE, N.M. – Armando Gonzalez, 38, of Las Cruces, New Mexico pleaded guilty in federal court in Las Cruces on Mar. 17 to production of a visual depiction of a minor engaging in sexually explicit conduct.
According to Gonzalez’s plea agreement, he admitted producing a video on his mobile phone on Jun. 3, 2019, showing sexually explicit conduct involving a child. Gonzalez also admitted sending the video to another person by social media.
Gonzalez is currently in custody awaiting sentencing. He faces from 15 to 30 years in prison for this offense.
Homeland Security Investigations, the Las Cruces Police Department, and New Mexico State Police investigated this case. Assistant U.S Attorney Marisa A. Ong is prosecuting the case.
Man from Albuquerque pleads guilty to federal sex trafficking chargeRead the Press Release
Albuquerque, N.M. – Cornelius Galloway, 37, of Albuquerque, New Mexico pleaded guilty in federal court in Albuquerque today to conspiracy to commit sex trafficking.
In Galloway’s plea agreement, he admitted participating in a sex trafficking ring in Bernalillo County from Oct. 2016 to Feb. 2017. Galloway and other members of the ring operated a prostitution service in which they used force, threats, fraud and coercion to compel women to engage in sex for money. Galloway admitted the members of the ring advertised prostitutes online, rented hotel rooms for prostitution, and arranged appointments with clients by phone. They did not allow the victims any say about hours, fees, or locations, and forced them to turn over all the money they received from customers.
Galloway is in custody awaiting sentencing. He agreed to serve 17 years in prison under the terms of his plea agreement. Co-defendant Danielle Galloway pleaded guilty Apr. 8, 2019 to conspiracy to commit sex trafficking. She is currently awaiting sentencing.
Two other co-defendants in the case, Marcus Taylor, 35, and Matthew Woods, 31, of Albuquerque, are in custody and scheduled for trial on August 10. An indictment is only an accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Homeland Security Investigations investigated this case with the Albuquerque Police Department. Assistant U.S. Attorneys Letitia Carroll Simms and Jack E. Burkhead are prosecuting the case.
MS-13 Gang Member Pleads Guilty to Murder and Extortion ChargesRead the Press Release
SAN FRANCISCO – Alexander Martinez-Flores, a/k/a Pocar, pleaded guilty to using a firearm to cause murder, conspiracy to commit murder and extortion, and racketeering conspiracy in connection with his role as a member and former leader of a local MS-13 gang clique, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The guilty plea was received by the Honorable Edward J. Davila, United States District Judge.
The transnational street gang La Mara Salvatrucha, also known as MS-13, has local chapters, or “cliques,” throughout the world, including El Salvador, Honduras, Mexico, and the United States. MS-13 members and associates engage in crimes such as murder, narcotics trafficking, extortion, and obstruction of justice. MS-13 members enforce gang rules and protect gang territory with violence, including murder. The Santa Cruz Salvatrucha Locos (SCSL) is an MS-13 clique that operates in and around Santa Cruz, California.
According to his plea agreement, Martinez-Flores, 29, of Santa Cruz, Calif., was a member of the SCSL clique of the MS-13 gang from at least January 2013 to February 2017, and the first-in-command from about February to August 2014. Martinez-Flores and SCSL members engaged in violence, drug trafficking and extortion. Martinez-Flores coordinated with MS-13 members in El Salvador and other places to carry out the directives of the gang’s leadership in and around Santa Cruz. Martinez-Flores directed how SCSL money was maintained and spent.
The plea agreement describes Martinez-Flores’ role in patrolling SCSL’s claimed gang territory in Santa Cruz. Martinez-Flores admitted in the plea agreement that he and other gang members patrolled their territory with firearms and knives and beat up, stabbed, threatened or shot rival gang members in order to maintain control over this turf. Martinez-Flores admitted that he hunted for rivals to kill on many occasions.
In the plea agreement, Martinez-Flores admitted that he was one of the shooters in a murder committed by SCSL gang members. Martinez-Flores admitted that in April 2016 the gang discussed seeking approval from El Salvador to kill a suspected rival gang member. The murder was approved and Martinez-Flores was one of the gang members tasked with killing the victim. On September 22, 2016, the victim was shot and killed, and Martinez-Flores was one of the shooters. Martinez-Flores celebrated the murder with other MS-13 members.
The plea agreement also describes Martinez-Flores’ role in supporting SCSL’s extortion and drug trafficking activities. The plea agreement describes how on one occasion in July 2016, Martinez-Flores collected an extortion payment—the “monthly fee due to SCSL”—from a local drug dealer.
A federal grand jury returned a second superseding indictment against Martinez-Flores and others on August 16, 2018. The indictment charged Martinez-Flores with one count of racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); one count of conspiracy to commit extortion by force, in violation of 18 U.S.C. § 1951(a); one count of conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5); one count of murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(1); one count of use of a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A); and one count of use of a firearm causing murder, in violation of 18 U.S.C. § 924(j)(1)(A). Martinez-Flores pleaded guilty to the racketeering conspiracy, conspiracies to commit extortion and murder, and use of a firearm causing murder counts. If Martinez-Flores complies with and the court accepts the plea agreement, the remaining counts will be dismissed at sentencing.
Judge Davila scheduled Martinez-Flores’ sentencing hearing for June 8, 2020, at 1:30 p.m. Pursuant to the terms of his plea agreement, Martinez-Flores has agreed that a reasonable and appropriate disposition of his case would include a term of 30 years in prison and a five-year term of supervised release. The court also may order payment of a fine and restitution, and forfeiture. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Nine of the other charged defendants have already pleaded guilty for their roles in the SCSL and MS-13 criminal enterprise and seven have been sentenced as reflected in the following chart:
Name
Charges
Sentence
Ismael Alvarenga-Rivera, a/k/a Casper
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 23, 2019, to 90 months in prison
Willfredo Ayala-Garcia, a/k/a Chino
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 17, 2019, to 80 months in prison
Jose David Abrego-Galdamez, a/k/a Largo
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 16, 2019, to 36 months in prison, consecutive to his sentence in CR 17-567 BLF
Gerber Morales, a/k/a Choco
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on September 17, 2019, to 72 months in prison
Emilio Escobar-Albarnga, a/k/a Diablo
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on January 20, 2020, to 60 months in prison
Josue Alcedis Escobar Cerritos, a/k/a Penguino
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on July 30, 2019, to 72 months in prison
Melvin Lopez, a/k/a Sharky
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a); Conspiracy to Commit Murder, 18 U.S.C. § 1959(a)(5)
Sentenced on January 27, 2020, to 120 months in prison
Tomas Rivera, a/k/a Profugo, a/k/a Caballo, a/k/a Jonas Portillo Escobar
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a); Conspiracy to Commit Murder, 18 U.S.C. § 1959(a)(5).
Scheduled to be sentenced on April 13, 2020
Velarmino Escobar-Ayala, a/k/a Meduza
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a); Conspiracy to Commit Murder, 18 U.S.C. § 1959(a)(5)
Scheduled to be sentenced on May 4, 2020
The United States Attorney’s Office’s Organized Crime Strike Force is prosecuting the case. This prosecution is the result of an investigation conducted by HSI with the assistance of the Santa Cruz Police Department.
Long-Time Fugitive Arrested for Participation in Large-Scale Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A Brazilian national was arrested this morning for his role in a long-running mortgage fraud scheme based in New Jersey, U.S. Attorney Craig Carpenito announced.
Isaac DePaula, 40, of Brazil, was charged by complaint in 2012, indicted in 2016, and has been a fugitive. He returned via Newark Liberty International Airport this morning to face a four-count indictment charging him with conspiracy to commit bank fraud and three counts of bank fraud. DePaula made his initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court and was released on his own recognizance.
According to documents filed in this and other cases and statements made in court:
From September 2006 to May 2008, DePaula and his conspirators engaged in a long-running, large-scale mortgage fraud conspiracy through a company called Premier Mortgage Services (PMS). The conspirators targeted properties in low-income areas of New Jersey. After recruiting straw buyers, the conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the targeted properties. The conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1), which hid the true sources and destinations of the mortgage funds provided by financial institutions. In reality, the straw buyers had no means of paying the mortgages on the properties, many of which entered into foreclosure proceedings.
DePaula was a loan officer at PMS and recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from PMS for each mortgage loan that they closed, and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.
DePaula faces a maximum potential penalty of 30 years in prison and a fine of $1 million per count. His co-defendant, Rodrigo Costa, remains at large. All of the remaining conspirators have previously pleaded guilty and been sentenced for their roles in the scheme.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the IRS, under the direction of Special Agent in Charge John R. Tafur; and special agents of the Federal Housing Finance Agency’s Office of the Inspector General, under the direction of Special Agent in Charge Robert Manchak, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel: Joshua Cohn Esq., Saddle Brook, New Jersey
Leaders of Colombia’s “Clan Rincon” Sentenced to Prison Terms for Roles in International Drug Trafficking ConspiracyRead the Press Release
Today, a federal judge in Ft. Lauderdale sentenced two brothers whose family owns one of the largest emerald mines in Boyacá, Colombia to prison terms for conspiring with Boyacá’s cocaine producers, leading to thousands of kilograms of Colombian cocaine entering the United States.
United States District Judge Rodney Smith sentenced the leader of the “Clan Rincon,”53- year-old Colombian national Pedro Nel Rincon-Castillo, to 235 month in prison, followed by five years of supervised release. The judge sentenced the leader’s brother, Omar Rincon-Castillo, 50, of Colombia, to 210 months in prison, followed by five years of supervised release. On January 6, 2020, both defendants pled guilty to conspiring to distribute more than five kilograms of cocaine, knowing that the cocaine was heading for the United States.
According to court documents, two major exports of Boyacá, Colombia are emeralds and cocaine. Most of the world’s emeralds come from Boyacá and the region is rife with coca farms that yield cocaine base and laboratories that manufacture cocaine for export.
Pedro and Omar are part of the Rincon-Castillo family, known as Clan Rincon. The family owns emerald mines in Boyacá, Colombia. Clan Rincon is powerful and has significant influence in the region.
In the early 2000s, communist guerilla members of FARC were making their way into Boyacá. They demanded that cocoa farmers, owners of drug laboratories, and owners of emerald mines pay “taxes” to FARC. To stop FARC from taxing the family’s emerald mines, Pedro -- the leader of Clan Rincon -- arranged intervention from the Defense Forces of Colombia (known by its Spanish acronym, AUC). AUC, which is a right-wing paramilitary and drug trafficking group that is enemy to FARC, arrived in Boyacá and kept FARC out of the region.
AUC wanted compensation for its services. In exchange for continuing to keep Boyacá free of FARC, AUC sought to tax the emerald mine owners. Clan Rincon offered another idea. Clan Rincon, through Pedro, Omar, and others, proposed that AUC tax the area’s cocoa farmers and owners of the cocaine drug laboratories, instead of the mine owners. They reached a deal.
With Clan Rincon’s assistance and approval, cocoa farmers and owners of drug laboratories paid a fee for AUC’s protection. This protection deal, which Clan Rincon orchestrated and approved, allowed the cocoa farmers and drug laboratory owners to continue their criminal activities, leading to the export of thousands of kilograms of cocaine from Colombia for eventual entry into the United States.
On November 15, 2019, the judge sentenced co-defendant Jose Rogelio Nieto Molina, 46, of Colombia, to 168 months in prison, for his role in the conspiracy. The sentencing of co-defendant Horacio Triana is set for April 28th. The sentencing of co-defendant Gilberto Rincon is set for May 4th.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida and Kevin W. Carter, Special Agent in Charge, DEA, Miami Field Division, made the announcement. U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA Miami Field Division, DEA Bogota Country Office, the Government of Colombia, the Criminal Division’s Office of International Affairs, the Office of the Judicial Attaché in Colombia, and the U.S. State Department for their assistance in this matter.
Assistant U.S. Attorneys Robert Emery, Andrea Goldbarg, and Michael B. Nadler are prosecuting this case.
The prosecution was part of Operation Money Badger, which is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (“OCDETF”), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Lawton Man Sentenced to 33 Months, $26,000 Restitution for Use of Telephone to Make Bomb ThreatRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Roger Christopher Simpson, age 45, of Lawton, Oklahoma, was sentenced to 33 months’ imprisonment, and 3 years of supervised release for Use Of Telephone To Make Bomb Threat, in violation of Title 18, United States Code, Section 844(e). The defendant was also ordered to pay restitution in the amount of $26,529.14. The charges arose from an investigation by the Seminole Police Department, the Seminole County Sherriff’s Office, the Oklahoma Highway Patrol, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On January 22, 2019 the defendant called a business in Seminole, Oklahoma and left a voicemail that said there was a bomb in a car parked in the parking lot of the business. As a result, the facility was locked down and law enforcement agencies responded. They searched and cleared the parking lot and no bomb was located. As a result of the bomb threat, the business was closed for four hours and production halted.
United States Attorney Brian J. Kuester said, “Bomb threats are not taken lightly. Law enforcement agencies respond in force to ensure the safety of the public. Businesses shut down to prevent injury to employees and customers. The defendant’s call caused law enforcement resources to be expended and lost time, production, and money for the business, not to mention the emotional toll on all involved. I hope his sentence will serve as a deterrent to him and a reminder to others who might be inclined to make such a call – bomb threats are no laughing matter.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Clay Compton represented the United States.Lame Deer man admits assault charge after shooting woman in the headRead the Press Release
BILLINGS – A Lame Deer man accused of shooting a woman in the head during an evening of drinking today admitted assault charges, U.S. Attorney Kurt Alme said.
Jolson Hubert Bearcomesout, 39, pleaded guilty to assault resulting in serious bodily injury. Bearcomesout faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release.
U.S. Magistrate Judge Timothy J. Cavan presided and will recommend that U.S. District Judge Susan P. Watters accept Bearcomesout’s plea. Watters is presiding in the case. A sentencing date will be set. Bearcomesout was detained.
In court records filed in the case, the prosecution said the evidence would show that on June 1, 2019, Bearcomesout, the victim, identified as Jane Doe, and others were at Bearcomesout’s house and drinking.
By evening, the group was in Bearcomesout’s bedroom, where they drank and danced. At one point, Bearcomesout sat in a chair and Jane Doe sat between his legs with her head in his lap. Bearcomesout took a firearm, a 9mm pistol that was on the bed, pointed it at Jane Doe’s head and pulled the trigger. A bullet entered Jane Doe’s neck and exited through the backside of her left shoulder.
Bearcomesout took the pistol and an AR-15 and fled. He was arrested in Forsyth. In an interview with law enforcement, Bearcomesout said he did not know there was a bullet in the chamber and that he was “just fooling around.”
Jane Doe was taken to the Indian Health Service in Lame Deer and ultimately transported to the University of Utah Hospital in Salt Lake City, where she was treated for multiple injuries and complications.
Assistant U.S. Attorney Bryan Dake is prosecuting the case, which was investigated by the Bureau of Indian Affairs.
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Kingston Man Sentenced to 33 Months, over $410,000 Restitution for Wire FraudRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Rusty Shawn Summit, age 38, of Kingston, Oklahoma, was sentenced to 33 months’ imprisonment, and 3 years of supervised release for Wire Fraud, in violation of Title 18, United States Code, Sections 1343 and 2. Summit was also ordered to pay total restitution of $410,981.08. The charges arose from an investigation led by the United States Secret Service and the District 19 District Attorney’s Office. Assistance was also provided by the Marshall County Sheriff’s Office, and District Attorney Districts 20 and 6.
The Indictment alleges that from on or about May 27, 2016, to on or about March 7, 2017, in the Eastern District of Oklahoma and elsewhere, the defendant, devised a scheme to obtain money and property from others by means of materially false and fraudulent pretenses, representations and promises. The defendant entered into construction contracts with customers promising to construct metal buildings. He required customers to pay sums of money prior to beginning construction and require additional sums of money prior to completion of construction. Defendant would not complete the project or partially complete it using substandard materials and workmanship. He spent money received from customers on items unrelated to the construction contracts.
United States Attorney Brian J. Kuester said, “The defendant’s greedy scheme targeted and took advantage of unsuspecting victims, depriving them of tens of thousands of their hard earned dollars. His fraudulent business dealings spanned many counties in Oklahoma and Texas. I applaud the work of the law enforcement agencies that worked together to bring the defendant to justice. Because of the multi-agency effort, the defendant’s predatory conduct has been stopped.”
Glenn Dennis, United States Secret Service Special Agent in Charge Oklahoma City Field Office said, “This defendant was successfully brought to justice through a strong partnership between the US Secret Service and Investigators from the District Attorney’s Office in the 19th District of OK as well as support from the Marshall County Sheriff’s Office and the District Attorney in Districts 6 and 20. This case illustrates how complex criminal frauds can quickly victimize multiple individuals and businesses with hundreds of thousands of dollars in losses. Strong Task Force partnerships effectively bring resources from agencies with specialized skillsets to bear in combating criminals who seek to damage citizens and businesses of Oklahoma.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. First Assistant United States Attorney Christopher Wilson represented the United States.Justice Department Files Lawsuit Alleging Disability-Based Discrimination in North Dakota HousingRead the Press Release
The Department of Justice announced today that it filed a lawsuit alleging that Hampton Corporation Inc. and several other individuals and entities violated the Fair Housing Act and Americans with Disabilities Act by failing to design and construct multifamily residential properties and an associated rental office in North Dakota so that they are accessible to people with disabilities.
Along with its lawsuit, the department submitted to the court a partial consent decree resolving claims against the architect and engineer involved in the design of one of the four apartment complexes at issue in the lawsuit: Hepper Olson Architects LTD, and Pribula Engineering PLLC.
“When dwellings are designed and constructed without complying with the Fair Housing Act’s accessibility protections, people suffer,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department of Justice will work to ensure that individuals with disabilities have an equal opportunity to live in and enjoy their homes safely.”
“Serious accessibility violations that make life more difficult for many North Dakotans with disabilities must be remedied—that is our firm commitment, as we do the important work of enforcing the promises made in the Fair Housing Act and the Americans with Disabilities Act,” said Drew Wrigley, U.S. Attorney for the District of North Dakota.”
The lawsuit, filed in the U.S. District Court for the District of North Dakota, alleges that significant physical accessibility barriers exist at four developments and a rental office designed and constructed by Hampton Corporation Inc.; Daniel Stauss; Scott Stauss; Steeple Apts LLC; HDD Inc.; and Times Square Townhomes II Inc. These barriers include, among other violations, steps or excessive slopes leading to unit entrances from sidewalks and other public use areas; insufficiently wide openings at interior doors that make them inaccessible for many persons with mobility impairments; inadequate interior space to maneuver a wheelchair; and inaccessible parking. The accessibility violations exist at 116 units constructed over an approximately 15 year period.
The properties with alleged violations are the following:
- Townhomes at Charleswood, located at 1908 Burlington Drive in West Fargo, North Dakota;
- Carrington Court Townhouse Apartments, located at 3383 Primrose Court in Grand Forks, North Dakota;
- South Hampton Townhomes, located at 3174, 3274, and 3374 36th Avenue South in Grand Forks, North Dakota;
- Steeples Apartments, located at 2850 and 2950 36th Avenue South in Grand Forks, North Dakota; and
- The rental office serving Carrington Court Townhouse Apartments, South Hampton Townhomes, and Steeples Apartments, located at 3001 36th Avenue South in Grand Forks, North Dakota.
The lawsuit seeks a court order prohibiting Hampton Corporation and the other defendants from designing or constructing future residential properties in a manner that discriminates against persons with disabilities. The lawsuit also seeks an order requiring the defendants to make physical modifications to the properties to bring them into compliance with the Fair Housing Act and the Americans with Disabilities Act; to provide monetary damages to people harmed by the lack of accessibility at the properties; and to pay civil penalties. The partial consent decree requires, among other provisions, that Hepper Olson Architects and Pribula Engineering contribute to a fund to pay monetary compensation to individuals harmed because of the accessibility violations and that Hepper Olson Architects contribute to a fund to pay for modifications to inaccessible features at the buildings.
The Justice Department, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the FHA, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Among other protections, the FHA requires that all multifamily housing constructed after March 13, 1991, have basic physical accessibility features, including, among other things, accessible routes without steps to all single-story, ground-floor units and to all units in a building served by an elevator. The ADA protects individuals with disabilities from discrimination in public accommodations, including the rental office at issue in this case. The full and fair enforcement of the Fair Housing Act and the Americans with Disabilities Act and their mandates to integrate individuals with disabilities is a major priority of the Civil Rights Division.
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777, or through its website at https://www.hud.gov/program_offices/fair_housing_equal_opp.
The complaint contains allegations of unlawful conduct. The allegations in the complaint must be proven in court. Persons who believe they may have been harmed by inaccessible features at any of the above properties should contact the Department of Justice at 1-800-896-7743 Ex. 9994.
Justice Department Announces Antitrust Civil Process Changes for Pendency of COVID-19 EventRead the Press Release
The Department of Justice Antitrust Division announced today that it has adopted a series of temporary changes to its civil merger investigation processes, which will remain in place during the pendency of the coronavirus (COVID-19) event. These changes will ensure that the Antitrust Division will be able to continue operations as its employees carry out their duties to protect American consumers under a mass telework directive, in accordance with health guidance from the CDC, WHO, and other health authorities.
“As the Antitrust Division takes steps to protect the health and safety of its work force and the parties that appear before it, these process changes will ensure that the Division can continue to review transactions efficiently and effectively,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Division remains open for business, and we will continue to carry out our mission to protect competition and the American consumer. We are in this together and intend to work cooperatively with the business community on pending mergers, consistent with our responsibilities under the antitrust laws and to protect the health and safety our employees and the public.”
The civil process changes include the following:
- For mergers currently pending or that may be proposed, the Antitrust Division is requesting from merging parties an additional 30 days to timing agreements to complete its review of transactions after the parties have complied with document requests. If circumstances require, the Division may revisit its timing agreements with merging parties in light of further developments.
- The Antitrust Division will allow electronic filing of Hart-Scott-Rodino submissions.
- The Antitrust Division will conduct all meetings by phone or video conference (where possible), absent extenuating circumstances.
- All scheduled depositions temporarily will be postponed and will be rescheduled using secure videoconferencing capabilities.
For questions regarding these process changes, please contact Amy Fitzpatrick at 202-476-0529, or [email protected].
Jefferson County man faces drug chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – Michael Anthony Parkinson, of Ranson, West Virginia, was indicted today on a drug charge, U.S. Attorney Bill Powell announced.
Parkinson, age 35, was indicted on one count of “ Conspiracy to Possess with the Intent to Distribute Fifty Grams or More of Methamphetamine” and one count of “Possession with Intent to Distribute Fifty Grams or More of Methamphetamine.” Parkinson is accused of having more than 50 grams of methamphetamine that he planned on distributing in December 2019 and January 2020 in Jefferson County and elsewhere.
Parkinson faces at least five years and up to 40 years incarceration and a fine of up to $5,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the Ranson Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Iranian National Extradited to the Western District of Texas for Illegally Exporting Military Sensitive Items from the U.S. to IranRead the Press Release
On Saturday, 38-year-old Merdad Ansari who is an Iranian citizen and a resident of the United Arab Emirates was extradited from Georgia and arrived Saturday evening in San Antonio to face federal charges in connection with a scheme to obtain military sensitive parts for Iran in violation of the Iranian Trade Embargo, announced Assistant Attorney General for National Security John C. Demers, U.S. Attorney John F. Bash for the Western District of Texas; FBI San Antonio Division Special Agent in Charge Christopher Combs; Homeland Security Investigations (HSI) San Antonio Office Special Agent in Charge Shane Folden; Defense Criminal Investigative Service (DCIS) Southwest Field Office Special Agent in Charge Michael Mentalvos; and, Special Agent in Charge Tracy Martin, U.S. Commerce Department's Bureau of Industry and Security's Office of Export Enforcement, Dallas Field Office.
These parts had dual-use military and civilian capability and could be used in such systems as: nuclear weapons, missile guidance and development, secure tactical radio communications, offensive electronic warfare, military electronic countermeasures (radio jamming), and radar warning and surveillance systems.
“As alleged, the defendant helped Iran to develop its weapons programs by obtaining military parts in violation of the Iranian Trade Embargo,” said Assistant Attorney General for National Security John C. Demers. “We are grateful for the work our partners have done to ensure Ansari can be brought to justice.”
“I am pleased that Mr. Ansari will face justice in an American courtroom. I am grateful to the many law-enforcement partners who worked so diligently to make that happen,” stated U. S. Attorney John F. Bash for the Western District of Texas.
“The FBI greatly appreciates the collaborative efforts and unwavering support from the Georgian Government and our federal partners. Together, over several years, we relentlessly pursued every lead to ensure that Ansari would eventually face the charges detailed in the indictment,” stated FBI San Antonio Division Special Agent in Charge Christopher Combs. “Investigating criminal violations of U.S. trade embargoes is one of the FBI's highest priorities since this criminal activity affects the national security of the United States and our allies, especially the security of our troops abroad.”
“HSI will use all resources at its disposal to prevent sensitive technology from being illegally exported from the United States,” said Shane Folden, Special Agent in Charge, HSI San Antonio. “HSI commends all the agencies involved in this effort, their dedication and perseverance has brought this individual before the court to face justice.”
Ansari, and his co-defendant Mehrdad Foomanie (aka Frank Foomanie) of Iran, are charged in a federal grand jury indictment returned in June 2012 with conspiracy to violate the Iranian Transactions Regulations (ITR), conspiracy to launder money and conspiracy to commit wire fraud. Foomanie remains a fugitive in this case. In October 2012, a third co-defendant, Susan Yip (aka Susan Yeh), a citizen of Taiwan, was sentenced to two years in federal prison after pleading guilty to conspiring to violate the ITR by acting as a broker and conduit for Foomanie to buy items in the U.S. and have them unlawfully shipped to Iran.
According to the indictment, Foomanie also bought or attempted to buy items in the U.S. and arranged to have them unlawfully shipped to Iran through his companies in Iran (Morvarid Shargh Co. Ltd.); in Hong Kong (Panda Semiconductor and Foang Tech Inc., aka Ofogh Electronics Co.); and, in China (Ninehead Bird Semiconductor). The indictment also alleges that Ansari attempted to transship and transshipped cargo obtained from the U.S. by Yip and Foomanie using Ansari’s company, Gulf Gate Sea Cargo L.L.C., located in Dubai, United Arab Emirates. In her guilty plea, Yip admitted to primarily using her companies in Taiwan (Hivocal Technology Company, Ltd.; Enrich Ever Technologies Co., Ltd.; and, Kuang-Su Corporation) and in Hong Kong (Infinity Wise Technology; Well Smart (HK) Technology; Pinky Trading Co., Ltd.; and, Wise Smart (HK) Electronics Limited) to carry out the fraudulent scheme.
From Oct. 9, 2007, to June 15, 2011, the defendants obtained or attempted to obtain from companies worldwide over 105,000 parts valued at approximately $2,630,800 involving more than 1,250 transactions. The defendants conducted 599 transactions with 63 different U.S. companies where they obtained or attempted to obtain parts from U.S. companies without notifying the U.S. companies these parts were being shipped to Iran or getting the required U.S. Government license to ship these parts to Iran.
At no time did Yip, Foomanie, or Ansari, individually or through any of their companies, ever apply for or receive either a required U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) license or Department of Commerce export license to ship any item listed in this Indictment to the Republic of Iran.
The Iranian Transactions Regulations, renamed the Iranian Transactions and Sanctions Regulations in October 2012, prohibit, among other things, the exportation, re-exportation, sale or supply, directly or indirectly, to Iran or the Government of Iran, of any goods, technology or services from the U.S. or by a U.S. person. The embargo also prohibits any transaction by any U.S. person or within the U.S. that evades or avoids, or has the purpose of evading or avoiding, any prohibition set forth in the Executive Orders.
Upon conviction, Foomanie and Ansari faces up to 20 years in federal prison for conspiracy to violate the ITR, up to 20 years in federal prison for conspiracy to launder money and up to five years in federal prison for conspiracy to commit mail fraud.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
The extradition occurred with substantial assistance from the Criminal Division’s Office of International Affairs and the Government of Georgia.
Iranian National Extradited to the Western District of Texas for Illegally Exporting Military Sensitive Items from the U.S. to IranRead the Press Release
On Saturday, 38-year-old Merdad Ansari who is an Iranian citizen and a resident of the United Arab Emirates was extradited from Georgia and arrived Saturday evening in San Antonio to face federal charges in connection with a scheme to obtain military sensitive parts for Iran in violation of the Iranian Trade Embargo, announced Assistant Attorney General for National Security John C. Demers, U.S. Attorney John F. Bash for the Western District of Texas; FBI San Antonio Division Special Agent in Charge Christopher Combs; Homeland Security Investigations (HSI) San Antonio Office Special Agent in Charge Shane Folden; Defense Criminal Investigative Service (DCIS) Southwest Field Office Special Agent in Charge Michael Mentalvos; and, Special Agent in Charge Tracy Martin, U.S. Commerce Department's Bureau of Industry and Security's Office of Export Enforcement, Dallas Field Office.
These parts had dual-use military and civilian capability and could be used in such systems as: nuclear weapons, missile guidance and development, secure tactical radio communications, offensive electronic warfare, military electronic countermeasures (radio jamming), and radar warning and surveillance systems.
“As alleged, the defendant helped Iran to develop its weapons programs by obtaining military parts in violation of the Iranian Trade Embargo,” said Assistant Attorney General for National Security John C. Demers. “We are grateful for the work our partners have done to ensure Ansari can be brought to justice.”
“I am pleased that Mr. Ansari will face justice in an American courtroom. I am grateful to the many law-enforcement partners who worked so diligently to make that happen,” stated U. S. Attorney John F. Bash for the Western District of Texas.
“The FBI greatly appreciates the collaborative efforts and unwavering support from the Georgian Government and our federal partners. Together, over several years, we relentlessly pursued every lead to ensure that Ansari would eventually face the charges detailed in the indictment,” stated FBI San Antonio Division Special Agent in Charge Christopher Combs. “Investigating criminal violations of U.S. trade embargoes is one of the FBI's highest priorities since this criminal activity affects the national security of the United States and our allies, especially the security of our troops abroad.”
“HSI will use all resources at its disposal to prevent sensitive technology from being illegally exported from the United States,” said Shane Folden, Special Agent in Charge, HSI San Antonio. “HSI commends all the agencies involved in this effort, their dedication and perseverance has brought this individual before the court to face justice.”
Ansari, and his co-defendant Mehrdad Foomanie (aka Frank Foomanie) of Iran, are charged in a federal grand jury indictment returned in June 2012 with conspiracy to violate the Iranian Transactions Regulations (ITR), conspiracy to launder money and conspiracy to commit wire fraud. Foomanie remains a fugitive in this case. In October 2012, a third co-defendant, Susan Yip (aka Susan Yeh), a citizen of Taiwan, was sentenced to two years in federal prison after pleading guilty to conspiring to violate the ITR by acting as a broker and conduit for Foomanie to buy items in the U.S. and have them unlawfully shipped to Iran.
According to the indictment, Foomanie also bought or attempted to buy items in the U.S. and arranged to have them unlawfully shipped to Iran through his companies in Iran (Morvarid Shargh Co. Ltd.); in Hong Kong (Panda Semiconductor and Foang Tech Inc., aka Ofogh Electronics Co.); and, in China (Ninehead Bird Semiconductor). The indictment also alleges that Ansari attempted to transship and transshipped cargo obtained from the U.S. by Yip and Foomanie using Ansari’s company, Gulf Gate Sea Cargo L.L.C., located in Dubai, United Arab Emirates. In her guilty plea, Yip admitted to primarily using her companies in Taiwan (Hivocal Technology Company, Ltd.; Enrich Ever Technologies Co., Ltd.; and, Kuang-Su Corporation) and in Hong Kong (Infinity Wise Technology; Well Smart (HK) Technology; Pinky Trading Co., Ltd.; and, Wise Smart (HK) Electronics Limited) to carry out the fraudulent scheme.
From Oct. 9, 2007, to June 15, 2011, the defendants obtained or attempted to obtain from companies worldwide over 105,000 parts valued at approximately $2,630,800 involving more than 1,250 transactions. The defendants conducted 599 transactions with 63 different U.S. companies where they obtained or attempted to obtain parts from U.S. companies without notifying the U.S. companies these parts were being shipped to Iran or getting the required U.S. Government license to ship these parts to Iran.
At no time did Yip, Foomanie, or Ansari, individually or through any of their companies, ever apply for or receive either a required U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) license or Department of Commerce export license to ship any item listed in this Indictment to the Republic of Iran.
The Iranian Transactions Regulations, renamed the Iranian Transactions and Sanctions Regulations in October 2012, prohibit, among other things, the exportation, re-exportation, sale or supply, directly or indirectly, to Iran or the Government of Iran, of any goods, technology or services from the U.S. or by a U.S. person. The embargo also prohibits any transaction by any U.S. person or within the U.S. that evades or avoids, or has the purpose of evading or avoiding, any prohibition set forth in the Executive Orders.
Upon conviction, Foomanie and Ansari faces up to 20 years in federal prison for conspiracy to violate the ITR, up to 20 years in federal prison for conspiracy to launder money and up to five years in federal prison for conspiracy to commit mail fraud.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
The extradition occurred with substantial assistance from the Criminal Division’s Office of International Affairs and the Government of Georgia.
Hayward Resident Sentenced to Four Years for Acting as an Agent of the People’s Republic of ChinaRead the Press Release
Xuehua (Edward) Peng aka Edward Peng was sentenced yesterday to 48 months in prison, and ordered to pay a $30,000 fine for acting as an agent of the People’s Republic of China’s Ministry of State Security (MSS) in connection with a scheme to conduct pickups known as “dead drops” and transport Secure Digital (SD) cards from a source in the United States to the MSS operatives in China, announced the Department of Justice.
“This case exposed one of the ways that Chinese intelligence officers work to collect classified information from the United States without having to step foot in this country. Peng acted as an agent of the Chinese Ministry of State Security in the United States, conducting numerous dead drops here on their behalf and delivering classified information to them in China. He pled guilty and is now being held accountable for his criminal actions and his betrayal of his oath of citizenship,” said Assistant Attorney General for National Security John C. Demers. “This case is but one example of the Chinese government’s multi-faceted espionage efforts and it both illustrates our determination to thwart those efforts and serves as a warning to other potential co-optees that we will find you and ensure you are punished.”
“Today Xuehua Peng suffers the consequences of acting in the United States at the direction of a foreign government,” said U.S. Attorney David L. Anderson for the Northern District of California. “This day of reckoning comes from Peng’s decision to execute dead drops, deliver payments, and personally carry to Beijing, China, secure digital cards containing classified information related to the national security of the United States. Peng will now spend years in prison for compromising the security of the United States.”
"This sentence serves as a powerful deterrent to both Communist China, who will continue to attempt to recruit others to act on its behalf, and those who attempt to carry out such tasks at the direction of its intelligence services” said FBI San Francisco Special Agent in Charge John F. Bennett. “These actions are illegal and inexcusable. By working jointly with our partners, we will never stop our fight against hostile intelligence services and our determination to protect the national security of the United States should never be in doubt.”
According to his Nov. 25, 2019, guilty plea, Peng, a 56 year-old U.S. citizen living in Hayward, Calif., acted at the direction and under the control of MSS officials in China in retrieving classified information passed to him and leaving money behind for the source. Peng admitted that in March 2015, an official from the People’s Republic of China (PRC) introduced himself to Peng while Peng was on a business trip to China. The official asked Peng to use his citizenship in the United States to assist the official with matters of interest to the PRC. Peng eventually came to understand that the official was employed as an intelligence or security services officer of the PRC, specifically of the Ministry of State Security (MSS), and nevertheless agreed to perform activities in the United States on behalf of the PRC. Peng’s plea acknowledged that he knew he was acting on behalf of the government of the PRC.
Specifically, Peng admitted that in March of 2015, he received instructions regarding how to use dead drops to exchange money for items to deliver to the PRC. Peng admitted that the official directed him to locate and reserve hotel rooms where he was to leave money and then depart for several hours. The official instructed Peng to return later and retrieve small electronic storage devices that the source would leave for him. Thereafter, Peng was to fly to the PRC and deliver the retrieved devices to the PRC official. Peng never met nor interacted with the individual who left the devices for him and was instructed not to access the information stored on the SD cards.
According to the Plea, Peng participated in five dead drops involving drop-offs of cash and/or pick-ups of SD cards, after a practice run in June 2015. After he participated in two dead drops in the San Francisco Bay Area between October 2015 and April 2016, Peng began making dead drops in Columbus, Georgia. After three dead drops in Georgia, Peng informed the PRC official that he wanted to resume dead drops in the San Francisco Bay Area. Peng did not complete a seventh dead drop before his arrest by federal authorities in September 2019.
Federal law requires people acting within the United States on behalf of a foreign government to file with the Attorney General a notice and documentation of their activities. Peng acknowledged that he never filed with the Attorney General of the United States any notice or documentation of his actions as an agent of the People’s Republic of China or the Ministry of State Security. Peng also admitted that the PRC official paid him at least $30,000 for the acts he performed as a courier for the MSS.
The 48 month sentence was handed down by The Honorable Haywood S. Gilliam, U.S. District Court Judge, following Peng’s November 25, 2019 plea of guilty to an Information charging one count of acting as an agent of a foreign government without notice to the Attorney General, in violation of 18 U.S.C. § 951. Peng has been in custody since his arrest on Sept. 27, 2019.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division. The prosecution is the result of an investigation by the FBI and Internal Revenue Service-Criminal Investigation.
Hayward Resident Sentenced to Four Years for Acting as an Agent of the People’s Republic of ChinaRead the Press Release
SAN FRANCISCO – Xuehua (Edward) Peng a/k/a Edward Peng was sentenced today to 48 months in prison and ordered to pay a $30,000 fine for acting as an agent of the People’s Republic of China’s Ministry of State Security (MSS) in connection with a scheme to conduct pickups known as “dead drops” and transport Secure Digital (SD) cards from a source in the United States to the MSS operatives in China, announced United States Attorney David L. Anderson, Assistant Attorney General for National Security John C. Demers, and Federal Bureau of Investigation San Francisco Division Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
Peng pleaded guilty to the charge on November 25, 2019. According to his plea agreement, Peng, a 56 year-old U.S. citizen living in Hayward, Calif., acted at the direction and under the control of MSS officials in China in retrieving information passed to him and leaving money behind for the source. Peng admitted that in March of 2015, an official from the People’s Republic of China (PRC) introduced himself to Peng while Peng was on a business trip to China. The official asked Peng to use his citizenship in the United States to assist the official with matters of interest to the PRC. Peng eventually came to understand that the official was employed as an intelligence or security services officer of the PRC, specifically of the Ministry of State Security (“MSS”), and nevertheless agreed to perform activities in the United States on behalf of the PRC. Peng’s plea acknowledged that he knew he was acting on behalf of the government of the PRC.
“Today Xuehua Peng suffers the consequences of acting in the United States at the direction of a foreign government,” said U.S. Attorney Anderson. “This day of reckoning comes from Peng’s decision to execute dead drops, deliver payments, and personally carry to Beijing, China, secure digital cards containing classified information related to the national security of the United States. Peng will now spend years in prison for compromising the security of the United States.”
“This case exposed one of the ways that Chinese intelligence officers work to collect classified information from the United States without having to step foot in this country. Peng acted as an agent of the Chinese Ministry of State Security in the United States, conducting numerous dead drops here on their behalf and delivering classified information to them in China. He pled guilty and is now being held accountable for his criminal actions and his betrayal of his oath of citizenship,” said Assistant Attorney General Demers. “This case is but one example of the Chinese government’s multi-faceted espionage efforts and it both illustrates our determination to thwart those efforts and serves as a warning to other potential co-optees that we will find you and ensure you are punished.”
"This sentence serves as a powerful deterrent to both Communist China, who will continue to attempt to recruit others to act on its behalf, and those who attempt to carry out such tasks at the direction of its intelligence services” said Special Agent in Charge Bennett. “These actions are illegal and inexcusable. By working jointly with our partners, we will never stop our fight against hostile intelligence services and our determination to protect the national security of the United States should never be in doubt.”
Peng admitted that in March of 2015, he received instructions regarding how to use dead drops to exchange money for items to deliver to the PRC. Peng admitted that the official directed him to locate and reserve hotel rooms where he was to leave money and then depart for several hours. Peng was instructed to return later and retrieve small electronic storage devices that would be left for him. Thereafter, he was to fly to the PRC and deliver the retrieved devices to the PRC official. Peng never met nor interacted with the individual who left the devices for him and was instructed not to access the information was stored on the SD cards.
According to his plea agreement, Peng participated in five dead drops involving drop-offs of cash and/or pick-ups of SD cards, after a practice run in June 2015. After he participated in two dead drops in the San Francisco Bay Area between October 2015 and April 2016, Peng began making dead drops in Columbus, Georgia. After three dead drops in Georgia, Peng informed the PRC official that he wanted to resume dead drops in the San Francisco Bay Area. Peng did not complete a seventh dead drop before his arrest by federal authorities in September 2019. The dead drops described in Peng’s plea agreement are as follows:
Dates
Action
June 2015
A PRC official directs Peng to perform a dead drop at a hotel in Newark, Calif. Peng describes this first dead drop as “practice.” The PRC official instructs Peng to retrieve a package left for him at the front desk of the hotel by an individual that Peng had not met.
October 2015
A PRC official calls Peng and directs him to participate in another dead drop at the same hotel in Newark. On October 24, 2015, Peng goes to the hotel receptionist and retrieves a package that was left for him there. The package contains a secure digital (SD) memory card. The next day, October 25, 2015, Peng drives to the San Francisco International Airport and flies directly to Beijing, PRC. In Beijing, Peng meets with agents of the MSS, including the PRC official with whom Peng had been communicating, and delivers the SD card to MSS.
April 2016
A PRC official uses coded language to tell Peng that another dead drop will occur on April 23, 2016. The official directes Peng to book a hotel room where he will conduct the exchange. The PRC official directed Peng to leave $20,000 cash in the hotel room and that Peng be will be reimbursed for the payment. The PRC official instructs Peng to return to the PRC on April 24, and to fly directly to Beijing, Shanghai, or Guangdong. Peng is informed that the PRC official with whom he is communicating would meet Peng when he landed. Peng complied with the instructions. On April 23, 2016, Peng drives to an Oakland hotel, reserves a room, and leaves a key to the room at the front desk. Peng leaves $20,000 concealed on the underside of a dresser in the room. Hours later, Peng returns, observes that the money had been retrieved and determines that a cigarette pack with an SD card inside of it has been left for him in place of the money. Peng travels on a direct flight from San Francisco to Beijing the next day where he meets with agents of the MSS, including the PRC official.
Late 2016 to January 2017
Peng travels to Columbus, Georgia and selects a hotel for future dead drops. Peng flies to PRC to report to MSS officers the new location.
June 30, 2017 to July 1, 2017
Peng leaves $20,000 taped to the underside of a dresser in the hotel room and leaves a key to his room at the front desk. Returning to the hotel approximately 90 minutes later, Peng checks to ensure the money was taken, checks out of the hotel, and returns to his home in Hayward.
August 23, 2017 to September 10, 2017
The PRC official calls Peng on August 23, 2017. The official instructs Peng in coded language to conduct a dead drop on September 9, 2017, at the Columbus hotel. This dead drop entailed Peng leaving $10,000 in exchange for an SD card. Peng transfers money from an account he controls in PRC to an individual who provides Peng with $10,000 in cash. Peng travels to Columbus on September 8, 2017, and on the next day puts $10,000 cash in an envelope and tapes it to the underside of a dresser in the hotel room. Peng leaves the room and leaves a key at the front desk. When he returns approximately three hours later, Peng confirms that the cash had been retrieved and an SD card has been left in its place. Peng returns home and on September 10, 2017, flies from San Jose International Airport on a nonstop flight to Beijing. Peng meets with agents of the MSS, including the PRC official, and provides them with the SD card.
June 20, 2018 to July 2, 2018
June 20, 2018, a PRC official calls Peng with instructions regarding a third dead drop in Georgia. The official uses coded language to instruct Peng to leave $20,000 on June 30, 2018, and retrieve an SD card. Peng travels to the same Columbus hotel on June 29, 2018, and the next day tapes $20,000 to a dresser drawer in the hotel room. Peng leaves a key at the front desk, returns three hours later, and finds an SD card where he had left the money. Peng returns home and, on July 2, 2018, flies from San Francisco International Airport to Beijing to meet with agents of the MSS, including the PRC official, to whom he delivers the SD card.
August 2019 to September 27, 2019
Peng reserves a room at the same hotel in Newark, Calif., that he had used for the two dead drops in 2015. Peng prepares to leave funds and collect an SD card, however, he is later informed by the PRC official that the dead drop would be delayed. Peng is arrested at his residence in Hayward on September 27, 2019, before the seventh dead drop is completed.
Peng also admitted that the PRC official paid him at least $30,000 for the acts he performed as a courier for the MSS.
Federal law requires people acting within the United States on behalf of a foreign government to file with the Attorney General a notice and documentation of their activities. Peng acknowledged that he never filed with the Attorney General of the United States any notice or documentation of his actions as an agent of the People’s Republic of China or the Ministry of State Security.
Peng was charged by Information with one count of acting as an agent of a foreign government without notice to the Attorney General, in violation of 18 U.S.C. § 951. He pleaded guilty to the charge. Peng has been in custody since his arrest on September 27, 2019, and will begin serving his prison term immediately.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division. The prosecution is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation.
Harrison County man charged with methamphetamine distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Joseph Herbert Hobbs, of Reynoldsville, West Virginia, was indicted today on drug charges, U.S. Attorney Bill Powell announced.
Hobbs, also known as “Joe,” age 38, was indicted on three counts of “Distribution of Fifty Grams or More of Methamphetamine” and one count of “Possession with Intent to Distribute 500 grams or more of Methamphetamine.” Hobbs is accused of selling more than two and a half pounds of methamphetamine for a total of $12,250 in January and February 2020 in Harrison County. He is also accused of having more than 500 grams of methamphetamine in Harrison County in February 2020.
Agents seized more than 21 pounds of methamphetamine, more than 4,000 stamps of fentanyl, along with approximately $60,000 in cash and dozens of firearms as a part of the investigation.
Hobbs faces at least five years and up to 40 years incarceration and a fine of up to $10,000,000 for each of the distribution counts. He faces at least 10 years and up to life incarceration and a fine of up to $10,000,000 for the possession count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Harrison County man charged with meth and heroin distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – William Maylen Crayton, II, of Bridgeport, West Virginia, was indicted today on drug charges, U.S. Attorney Bill Powell announced.
Crayton, age 29, is charged with one count of “Possession with Intent to Distribute 50 Grams or More of Methamphetamine,” two counts of “Possession with Intent to Distribute Methamphetamine,” and one count of “Possession with Intent to Distribute Heroin.” Crayton is accused of having more than 50 grams of methamphetamine in April 2019 in Harrison County. He is also accused of having methamphetamine and heroin in June and July 2019 in Harrison County.
Crayton faces at least five years and up to 40 years incarceration and a fine of up to $10,000,000 for the 50 grams or more count, and faces up to 20 years incarceration and a fine of up to $1,000,000 for each of the other counts. faces up to 20 years incarceration and a fine of up to $1,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the Bridgeport Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Gang Member Charged with Selling Fentanyl and Crack in East HartfordRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JOSE RESTREPO, also known as “Crack Baby,” 38, of East Hartford, was arrested today on a criminal complaint charging him with distributing fentanyl and crack cocaine.
As alleged in court documents, the FBI’s Northern Connecticut Violent Crimes and Gang Task Force has been investigating drug trafficking and related criminal acts being committed by members and associates of the Los Solidos and Latin Kings street gangs. Restrepo is a member of Los Solidos. The investigation has revealed that Restrepo and other gang members are distributing fentanyl and crack cocaine in Hartford and surrounding communities. Earlier this month, law enforcement learned that Restrepo was feuding with other members of Los Solidos and was selling narcotics in East Hartford. In the past week, investigators made three controlled purchases of crack and one controlled purchase of fentanyl from Restrepo in East Hartford.
At the time of his arrest, it is alleged that Restrepo possessed approximately 200 bags of suspected fentanyl.
Restrepo is charged with possession with intent to distribute, and distribution of, fentanyl and cocaine base (“crack cocaine”), an offense that carries a maximum term of imprisonment of 20 years.
Restrepo appeared today before U.S. Magistrate Judge Thomas O. Farrish in Hartford and was ordered detained.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The FBI’s Northern Connecticut Violent Crimes and Gang Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
This case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Former Jefferson County postal employee charged with stealing mailRead the Press Release
MARTINSBURG, WEST VIRGINIA – Nelson Clark, Jr., of Martinsburg, West Virginia, was indicted today on an embezzlement charge, U.S. Attorney Bill Powell announced.
Clark, age 33, is charged with one count of “Embezzlement of Mail by Postal Employee.” Clark, was a postal employee in Jefferson County. He is accused of taking multiple items from parcels in the mail being processed by his postal station in March 2019 in Jefferson County.
Clark faces up to five years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jeffrey A. Finucane is prosecuting the case on behalf of the government. The U.S. Postal Service Office of Inspector General investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Congressman Duncan D. Hunter Sentenced to 11 Months in Prison for Stealing Campaign FundsRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738; Mark Conover (619) 546-6763 and Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – March 17, 2020
SAN DIEGO – Former U.S. Representative Duncan D. Hunter was sentenced today to 11 months in prison for his admitted role in a years-long conspiracy to knowingly and willfully steal $250,000 in campaign funds that he and his wife used to maintain their lifestyle when their family was otherwise drowning in debt.
U.S. District Judge Thomas J. Whelan handed down the sentence and ordered Hunter to surrender to the Bureau of Prisons by May 29 at noon. The judge refused the defendant’s request to impose a sentence where Hunter would have served part or all of his sentence in home confinement, explaining that “the number of years and the amount of transactions” made such sentence inappropriate because this wasn’t a single act of theft but a crime committed repeatedly over almost a decade.
“Congressman Hunter violated the trust of his supporters by using hundreds of thousands of dollars they donated in good faith to his reelection campaign for personal expenditures,” said David Leshner, Attorney for the United States. Leshner praised prosecutors Phil Halpern, Emily Allen and Mark Conover as well as the Federal Bureau of Investigation for their tireless pursuit of justice in this case: “These prosecutors conducted the investigation with the utmost professionalism, and they exemplify the Department of Justice’s commitment to upholding the rule of law. This case would not have been possible without their hard work, talent, and dedication to the pursuit of justice.”
Assistant U.S. Attorney Phil Halpern, in arguing for a strong sentence, told the court: “Rather than admit his guilt and resign his seat when the charges came to light, or even when he was originally charged, Hunter chose to mislead the more than 700,000 people who live in the 50th congressional district.” “As we now know, Hunter lied to the people about his guilt. Not once, but countless times. As a result of his duplicity, the voters were robbed of their right to representation in Congress – representation they are denied to this day. A price must be exacted when an elected representative seeks to cover up corruption by hiding behind lies.”
The government had sought a sentence of 14 months, but prosecutors said they were pleased with the outcome of the case. “We have the utmost respect for Judge Whelan, who is probably the most experienced judge on the federal bench,” Halpern said. “If Judge Whelan believed this to be the appropriate sentence, then it certainly was.”
As court filings show, both Hunter and his wife, Margaret, who also pleaded guilty and is scheduled to be sentenced on April 7, used hundreds of thousands of dollars in campaign funds as their personal piggy bank from 2010 through 2016. During that time, the Hunters stole money from the campaign for items as inconsequential as fast food, movie tickets and sneakers; as trivial as video games, Lego sets and Playdoh; as mundane as groceries, dog food, and utilities; and as self-indulgent as luxury hotels, overseas vacations and plane tickets for their family pet rabbits, Eggburt and Cadbury. Hunter gave his wife access to campaign funds so that she could subsidize their personal lifestyle, and repeatedly ignored his senior staff when they tried to rein in the rampant personal spending. When questions arose and the case went public, he falsely blamed his wife and family rather than taking responsibility for the crime.
“Public corruption erodes public confidence and undermines the strength of our democracy,” said Omer Meisel, Acting Special Agent in Charge of the San Diego Division of the FBI. “The FBI is committed to investigate public officials who abuse the public trust and use their office to commit illegal acts.”
As detailed in the sentencing papers filed in court, beginning in 2010 and continuing up to late 2016, Duncan and Margaret Hunter agreed to use campaign funds for their own personal benefit and enjoyment—and to spend freely from Hunter’s campaign donors’ funds. Many of the Hunters’ personal outings with family or friends (which included trips to the Del Mar racetrack, dinners or drinks with friends, family and “couples” vacations, golf outings, and a weekend-long bachelor party) should not have been paid for with campaign funds. Among their improper spending, the Hunters paid $2,448.27 in campaign funds in August 2011 for a “couples” vacation in Las Vegas, Nevada, which Hunter concealed by falsely reporting to the campaign treasurer that the expenses were all “campaign related.” His friend, however, described the weekend as a “pure vacation” where the foursome enjoyed Las Vegas restaurants, lounging by the pool, sightseeing, and taking in a show. In order to conceal his illegal spending that weekend, Hunter went so far as to schedule a 20 minute tour of a charter school. Similarly, later that same month, knowing that their family bank account had a negative balance, the Hunters improperly used $113.73 in campaign funds to pay their half of the bill during another couples’ “date night” out with good friends at Jake’s Del Mar; improperly used $156.22 in campaign funds during a “couples” day at the Del Mar Racetrack; and improperly used $511.03 in campaign funds at the Hotel del Coronado to celebrate their child’s birthday. Hunter once again falsely told the campaign treasurer that all these charges were “campaign related.”
Previously, Hunter’s wife, Margaret, publicly acknowledged that these types of improper expenses went on for years and included spending as flagrant as: (1) $100.69 on November 16, 2013 at Casa De Pico in La Mesa to take their family and close friends out to dinner in relation to their son’s little league football game; (2) $1,489 on June 28, 2014 to treat their good friends to dinner at the Studio restaurant in the Montage Laguna Beach resort, and for room service, drinks, and meals the next day for the Hunters by themselves; (3) a family trip to Disneyland on September 26, 2015, which included $229.44 at Disneyland’s Star Trader shop for Minnie Mouse ear headbands and Star Wars-themed clothes for the Hunters’ children; and (4) $669.07 on March 27, 2016 at the Hotel del Coronado for a family Easter Sunday brunch in the Crown Room that the Hunters recognized was well outside their budget.
In her plea agreement, Margaret Hunter specifically acknowledged that she and Duncan Hunter used campaign funds to secretly make thousands of dollars in improper personal purchases (including family vacations, household goods and groceries, restaurants and bar tabs, a bachelor party, gas, fast food, retail shopping, cash withdrawals, a garage door, and personal Uber rides, among others) which they continued to disguise as campaign-related expenses.
Hunter enabled the theft by repeatedly providing his wife with a campaign credit card despite the advice from his treasurer that he not do so. Similarly, Hunter – against the advice of his campaign staff and congressional office staff – installed Margaret as his paid campaign manager on two separate occasions with full knowledge that she was misappropriating campaign funds in order to finance their personal lifestyle. When discussing her appointment as the salaried campaign manager for the second time in 2014, Margaret observed that Hunter “need[ed] the extra money as much as I do[.]”
According to court documents, the Hunters used campaign funds improperly on various family vacations, including:
- A July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for zip lining for Hunter and two of his children, and $250 in airline travel charges for Eggburt);
- A February 2015 family trip to Minnesota, during which they improperly paid for personal family expenses including $250 in airline travel charges for Eggburt, and $132 in Uber rides to take the Hunter family to the Mall of America;
- A June/July 2015 family vacation to Hunter’s cousin’s wedding in Boise, Idaho, and a stopover in Las Vegas, in which the Hunters, among other things, spent $205.62 in campaign funds for personal items (including a pair of designer sunglasses for Hunter) at the North Face store;
- A November 2015 family vacation to Italy, in which the Hunters improperly used more than $14,000 in campaign funds, which Hunter justified by attempting to set up a one-day tour of a U.S. Navy facility in Italy (which never occurred);
- Similarly, Hunter used more than $1,000 in campaign funds to take one of his girlfriends on a 2010 winter ski trip to the Hyatt Regency Lake Tahoe Resort, Spa and Casino.
Hunter turned to campaign funds because his family’s finances were in constant disarray. During the course of the conspiracy, the Hunters overdrew their bank account more than 1,100 times in a seven-year period resulting in $37,761 in “overdraft” and “insufficient funds” bank fees. Their credit cards were frequently charged to the credit limit, often with five-figure balances, resulting in an additional $24,600 in finance charges, interest, and other fees related to late, over the limit, and returned payment fees.
Sentencing documents show that Hunter and his wife both recognized that campaign funds were being spent on personal activities. For example, after returning home from their Boise and Las Vegas vacation, Duncan and Margaret Hunter discussed how the campaign card had been declined as the family had “racked up a $600 minibar…and more charges at Caesars…” as well as a $200 family breakfast, the “kids room service” and pool drinks, and gift shop purchases. And, despite falsely telling the campaign treasurer that the various charges related to their 2015 Italy vacation “were mostly military/defense meet related,” Margaret Hunter emailed a friend that “Italy was amazing. Truly our best family trip so far. Like that saying ‘if traveling was free you’d never see me again’!” For his part, Hunter “doubled down” on this lie by having his Chief of Staff deny to the press that that the trip was a family vacation.
DEFENDANTS Case Number 18cr3677-W
Duncan D. Hunter Age: 43 Alpine, CA
Margaret E. Hunter Age: 44 La Mesa, CA
SUMMARY OF CHARGE
Conspiracy to Steal Campaign Funds – Title 18, U.S.C., Sec. 371
AGENCY
Federal Bureau of Investigation
- A July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for zip lining for Hunter and two of his children, and $250 in airline travel charges for Eggburt);
Five Men Charged in Violent KidnappingRead the Press Release
BOSTON – Five men from Cape Cod and Rhode Island were charged in a superseding indictment unsealed yesterday in federal court in Boston, on charges related to a violent kidnapping and witness retaliation and intimidation scheme.
Three individuals, Edwin Otero, 30, of Hyannis; Justin Joseph, 33, of Pawtucket, Rhode Island; and Anthony Basilici, 36, of Pawtucket, Rhode Island were previously arrested on the original indictment, and are all being detained pending trial. The superseding indictment also charges two additional individuals, Cameron Cartier, 26, who was arrested and detained on March 16, 2020, and Albert Lee a/k/a “Mook,” 29, who remains at large.
The unsealed indictment supersedes a July 2019 indictment, which originally charged 11 individuals from Cape Cod and Rhode Island with a heroin conspiracy and various firearm charges.
According to court documents, in April 2019, Otero, Joseph, Basilici, Cartier and Lee lured an unnamed victim from Massachusetts to Rhode Island, where they kidnapped and held him, stripped him naked, assaulted and threatened to rape him, and then took his clothing and cellular telephone. These same individuals also allegedly conspired to cause physical injury to the victim to retaliate against him because they believed he was cooperating with law enforcement. Otero and Basilici also allegedly further intimidated or attempted to intimidate other witnesses after the kidnapping.
The charge of kidnapping conspiracy provides for a sentence of up to life in prison, up to five years of supervised release and a fine of up to $250,000. The charges of witness intimidation and witness retaliation conspiracy provide for a sentence of no greater than 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Barnstable Police Chief Matthew K. Sonnabend; and Barnstable County Sheriff James M. Cummings, made the announcement today. Assistant U.S. Attorneys Christopher Pohl and Lauren Graber of Lelling’s Narcotics and Money Laundering Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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