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Thursday 9 January 2020
Man from Zuni Pueblo pleads guilty to assaulting two children in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Stanton Sanchez, 32, of Zuni, New Mexico, pleaded guilty in federal court in Albuquerque on Jan. 9 to two charges of assault of a minor resulting in serious bodily injury.
In Sanchez’s plea agreement, he admitted to committing the offenses on the Zuni Pueblo in McKinley County on July 22, 2018. Sanchez was intoxicated and driving too fast when he hit two children who were walking down a residential road. Sanchez’s blood alcohol content was more than twice the legal limit. Both children suffered serious injuries.
Sanchez is currently in custody pending sentencing. He will receive a sentence of 10 years in custody under the terms of his plea agreement.
The Pueblo of Zuni Tribal Police Department investigated this case. Assistant U.S. Attorney Allison Jaros is prosecuting the case.
Man Who Tried to Ditch Meth While Running from Police Sentenced to More than a Decade in PrisonRead the Press Release
A man who attempted to run from cops and ditch the meth he was carrying was sentenced January 6, 2020, to more than ten years in federal prison.
Robert Ryan Lee Baer, age 43, from Cedar Rapids, Iowa, received the prison term after a July 26, 2019 guilty plea to possessing meth with the intent to distribute it.
In a plea agreement, Baer admitted discarding a glove which had a bag containing 109.89 grams of pure methamphetamine while he was running from the cops. Baer has numerous previous state criminal convictions, including possessing methamphetamine with the intent to deliver, possessing contraband while confined, and another conviction for possessing a controlled substance. Baer also has six convictions for theft and a forgery conviction.
Baer was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Baer was sentenced to 130 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system. Baer is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Drug Enforcement Agency and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-00060.
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Man Who Made $4,000 a Month Selling Drugs Sentenced to Federal PrisonRead the Press Release
An Iowa man responsible for selling methamphetamine was sentenced January 8, 2020, to seven years in federal prison.
David Joe McVay, age 40, from Cedar Rapids, Iowa, received the prison sentence after a July 22, 2019 guilty plea to distribution of methamphetamine.
Information disclosed at sentencing and at his plea hearing showed that in March 2017, McVay sold methamphetamine to a confidential source. Evidence also showed that McVay not only sold methamphetamine, but also manufactured it. In total, he was involved with over a kilogram of methamphetamine. At times, McVay made up to $4,000 a month in drug sales. He also provided methamphetamine in exchange for Sudafed, a medication commonly used to manufacture methamphetamine. McVay has a long criminal history, totally 26 adult criminal convictions. He has nine prior controlled substance convictions.
McVay was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Robertson was sentenced to 84 months’ imprisonment. He must also serve a four-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Ashley Corkery and investigated by the Vinton Police Department, Benton County Sheriff’s Office, Iowa Division of Narcotics Enforcement, Benton County Attorney’s Office, the
Bureau of Alcohol, Tobacco, Firearms and Explosives, Hiawatha Police Department, Cedar Rapids Police Department, Independence Police Department, Iowa Department of Correctional Services, Tama County Sheriff’s Office, and Sumner Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00051.
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Man Who Fired Bullet That Killed 7-Year Old Child in Louisville Pleads Guilty to Federal Gun CrimeRead the Press Release
LOUISVILLE, Ky. – A Louisville, Kentucky, man, who fired the shot that killed a 7-year old child on May 21, 2017, has now pleaded guilty to three federal firearms charges, announced U.S. Attorney Russell Coleman.
“The face of gun crime in our city is an innocent child sitting at his kitchen table eating birthday cake on a Sunday night,” said U.S. Attorney Russell Coleman. “This case demonstrates how the feds can partner with LMPD and the Commonwealth’s Attorney’s Office to maximize our ability to incapacitate the trigger-pullers and protect kids like Dequante Hobbs.”
Wyatt Lamar Williams, 25, of Louisville, Kentucky, was charged in a superseding indictment on October 1, 2019, by a Federal Grand Jury sitting in Louisville with a three counts of being an unlawful user of a controlled substance in possession of a firearm.
Williams faces no more than 10 years in federal prison per count and a period of supervised release. There is no parole in the federal system.
The defendant was also successfully prosecuted by the Office of Jefferson Commonwealth’s Attorney Tom Wine and previously pled guilty in Jefferson County Circuit Court to second degree manslaughter, two counts of wanton endangerment and receiving a stolen firearm, and received a 20 year state sentence.
The case is being prosecuted by Assistant United States Attorney Larry Fentress and United States Attorney Russell Coleman. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Louisville Metro Police Department (LMPD).
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Man Sentenced to More than Two Years in Federal Prison for Possessing a SilencerRead the Press Release
A man who cut off his GPS ankle monitor while on release after pleading guilty to unlawfully possessing a silencer was sentenced January 6, 2020, to more than two years in federal prison.
Brett Scott Meana, age 44, from Newton, Iowa, received the prison term after a May 28, 2019 guilty plea to possessing an unregistered silencer.
Police were called to Meana’s residence following a domestic disturbance at his residence, during which he held a gun to his head and threatened to kill himself, later admitting he did not intend to kill himself, he just wanted a woman that was present to stop talking and judging him. Police found an unregistered silencer at Meana’s residence that he had made himself previously. Evidence at the sentencing hearing showed that after pleading guilty to possessing the unregistered silencer, Meana cutoff his GPS ankle monitor during June 2019. Meana left the ankle monitor, his wallet, and phone on the side of the road. He disappeared and was not heard from again for over a month. He finally made contact with his family and was picked up in a field near Des Moines.
Meana was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Carter was sentenced to 28 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, the Dubuque County Sheriff’s Office, and the US Marshal’s. For more information about Project Guardian, please see /media/1122011/dl?inline.
Meana is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, the Dubuque County Sheriff’s Office, and the United States Marshal’s Service.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-1009.
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Man Sentenced to 10 Years in Prison for Promising $5,000 to Have Ex-Wife MurderedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JAMES ERIK GODIKSEN, 57, formerly of Clinton, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 120 months of imprisonment, followed by three years of supervised release, for hiring an individual to murder Godiksen’s former spouse. Judge Bryant also ordered Godiksen to pay a $10,000 fine.
According to the evidence presented during a trial in this matter, while he was incarcerated at New Haven Correctional Center in 2016, Godiksen reached out to other inmates seeking a person who would be willing to kill Godiksen’s former wife. Between September 10 and September 14, 2016, Godiksen and an ATF special agent acting in an undercover capacity spoke multiple times by phone. During these conversations, Godiksen offered to pay the undercover agent $5,000 to murder his “ex-wife,” and provided the agent with a physical description of his former wife, her phone number, her home address, her place of work and the route she typically drove to work. He also told the undercover agent how he would like his former wife to be murdered. Godiksen stated to the undercover agent “I want her killed, if that’s possible . . . . Head cut off would be nice.”
Godiksen also offered the undercover agent additional money if he encountered his former wife’s current boyfriend and killed him, too.
Godiksen was arrested on September 14, 2016, after he met with the undercover agent and provided him with a “down payment” of $80, some of which was to be used to purchase a knife. Godiksen has been detained since his arrest.
On July 20, 2018, a jury found Godiksen guilty of one count of murder for hire.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Clinton Police Department and Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorneys Rahul Kale and Dave Vatti.
Man Sentenced for Armed Robbery and Armed Drug TraffickingRead the Press Release
RICHMOND, Va. – A Norfolk man was sentenced today to 28 years in prison for robbery affecting commerce, using, carrying, brandishing a firearm during the robbery, and three separate instances of armed drug trafficking.
According to court documents, Tajh Rodgers, 30, previously pleaded guilty for working with an accomplice to commit a violent armed robbery of a Sprint Store in Colonial Heights in January 2019. During the robbery, Rodgers and his co-conspirator held two employees hostage in the back of the store at gunpoint, and attempted to tie up the employees and threatened to kill them if they notified police. Due to a time-delay lock on the store’s safe, the robbers had to wait several minutes for the safe to open, and a customer entered the store. The robbers let one of the employees go to assist the customer, along with a warning that the employee would be killed if they tried to alert the customer about the crime. Soon after the customer left, the time-delay lock on the safe opened, allowing the robbers to steal a total of 72 items valued at approximately $25,000.
The investigation led to the identification of Rodgers as a suspect, as well as his connection to another drug trafficking investigation in Norfolk where the defendant engaged in several armed drug transactions during which he sold fentanyl, crack cocaine, and firearms to cooperating sources. In December 2018, Rodgers sold cocaine base, fentanyl, and a .38 caliber revolver to cooperating sources. A month later, he sold two bundles of fentanyl and a 9mm semi-automatic pistol. During both drug transactions, Rodgers was armed with the same .40 caliber Ruger semi-automatic pistol that he carried during the armed robbery of the Sprint Store.
After identifying Rodgers as the robbery suspect, investigators obtained a search warrant for his residence in Norfolk. During the search in January 2019, officers recovered the .40 caliber pistol, a loaded semi-automatic pistol, various items connected to the Sprint Store robbery, distribution quantities of fentanyl, marijuana, crack cocaine, and a plastic safe containing a digital scale with suspected narcotics residue and packaging material.
This case is part of Project Safe Neighborhoods (PSN) and Project Guardian, the Department of Justice’s signature initiatives to reduce gun violence and enforce federal firearms laws. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; Colonel Jeffrey W. Faries, Chief of Colonial Heights Police; Larry D. Boone, Chief of Norfolk Police, made the announcement after Senior U.S. District Judge Robert E. Payne accepted the plea. Assistant U.S. Attorneys Michael Gill, Kenneth Simon, and William B. Jackson are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:19-cr-111.
Maintenance Supervisor Charged with Violating the Clean Air Act and Making False StatementsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging James S. Marshall, 67, of Farmington, NY, with violation of the Clean Air Act, negligent endangerment under the Clean Air Act, and making a false statement. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the indictment, the defendant was a Maintenance Supervisor with the Finger Lakes Office for People with Developmental Disabilities (OPWDD), Developmental Disabilities Services Office. As part of his duties, Marshall controlled and supervised facilities being demolished or renovated.
On October 7, 2014, the defendant requested that asbestos testing be conducted at the Hillcrest Building, a building owned by the OPWDD, located on E. Maple Avenue in Newark, NY. On October 8, 2014, Marshall directed an inspector for the asbestos testing company to take four samples from two locations within the 300,000 square foot Hillcrest Building. The results of the four samples came back negative for asbestos.
On November 10, 2014, the OPWDD began soliciting public bids for the cleanout of the Hillcrest building. The specifications for the project stated that swipe testing for asbestos and lead was conducted and the findings for the substances were within normal limits.
On December 2, 2014, the defendant led a mandatory walkthrough of the Hillcrest Building for any individuals seeking to bid on the project. On December 24, 2014, a third-party contractor was awarded the contract for the cleanout of the Hillcrest Building.
The contractor conducted the cleanout between April 6 and April 10, 2015. On April 16, 2015, Marshall sent an e-mail to the OPWDD business office stating that the cleanout of the Hillcrest Building had been completed to his satisfaction.
On April 30 and May 28, 2015, regulated asbestos was found at the Hillcrest Building in a dry condition and was not in any container. According to the indictment, the defendant failed thoroughly to inspect the affected facility for the presence of asbestos prior to the commencement of a renovation activity; failed to ensure that regulated asbestos was adequately wetted during removal activity; failed to ensure that regulated asbestos remained wetted until placed in leak-tight containers; and failed to ensure that all regulated asbestos stripped and removed was disposed of timely. Marshall is also accused of negligently releasing into the ambient air a hazardous air pollutant, and placing another person in imminent danger of death and serious bodily injury during the cleanout of the Hillcrest Building. In addition, the defendant is accused of making a false statement by stating that the asbestos sampler walked through the entire building during testing, as it is alleged that the defendant knew that the asbestos sampler had not walked through the entire building.
The indictment is the result of an investigation by the U.S. Environmental Protection Agency, Criminal Investigation Division, under the direction of Special Agent-in-Charge Tyler Amon. Additional assistance was also provided by the New York State Department of Labor, Asbestos Control Bureau.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Lubbock Man Sentenced for Stealing FirearmsRead the Press Release
A firearms trafficker who stole guns from a Lubbock pawn shop was sentenced to 2.5 years in federal prison following an investigation by the ATF Lubbock Field Office, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Zachary Nicholas Gonzales, 21, pleaded guilty in September to theft of firearms from a federal firearms licensee.
In his plea papers, Mr. Gonzales admitted that in the early morning hours of July 4, 2019, he burglarized a Cash America Pawn shop on 50th Street, escaping with at least 14 stolen guns.
He breached the cage where guns were stored by propping a ladder next to the cage and removing several ceiling tiles in order to jump over the mesh, he said.
Surveillance video from an attempted burglary at anther Cash America location the evening of July 4 showed Mr. Gonzalez there as well.
Following his arrest on July 9, Mr. Gonzales was Mirandized and admitted to ATF agents that he intended to sell the stolen firearms to support his drug habit.
“Firearms traffickers are a menace to our communities, often allowing dangerous individuals to get their hands on deadly weapons,” said U.S. Attorney Nealy Cox. “We’re proud to work with ATF and our state and local partners to prosecute this case under Project Guardian, the Attorney General’s gun violence reduction initiative.”
“Mr. Gonzales garnered funds to support his drug habit by victimizing a Federal Firearms Licensee and fueling the illicit firearms trade,” stated ATF Special Agent in Charge Jeffrey C. Boshek II. “At least one of the stolen firearms was subsequently used in a violent crime.”
The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Lubbock Police Department, the Lubbock County Sheriff’s Office, and the Texas Department Public Safety conducted the investigation. Assistant U.S. Attorney Stephen Rancourt prosecuted the case. U.S. District Judge James Wesley Hendrix handed down the sentence.
This case was brought under Project Guardian, a Department of Justice initiative aimed at reducing gun violence by enforcing federal firearm laws through coordination between the federal government and state and local law enforcement.
Leader of Million-Dollar Moving Company Fraud Sentenced to Five Years in PrisonRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for leading a conspiracy involving numerous moving companies that systematically extorted hundreds of customers, U.S. Attorney Craig Carpenito announced.
Richard Bishara, 43, of Woodland Park, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Bishara and his conspirators jointly operated numerous moving companies that quoted customers “low-ball” price estimates for household goods moves and then raised prices on the date of the move after the goods were loaded and the customers were vulnerable. Through this scheme, Bishara and his conspirators, over a number of years and hundreds of moves, raised final prices for moves above the allowed increase from initial estimates as provided by federal regulations, including increases as high as 400 percent on the day of the move. The collective difference between the many estimates and the final balances for the customers’ moves was more than $1 million. Bishara personally owned a number of the moving companies involved, and, as a leader of the conspiracy, controlled certain bank accounts used by the companies.
Judge Wigenton also sentenced Bishara to three years of supervised release and ordered him to pay restitution of $72,709.
U.S. Attorney Carpenito credited special agents of the Department of Transportation-Office of the Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, Northeast Region; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, Newark Division; and special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), New York, under the direction of Special Agent in Charge Peter C. Fitzhugh, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Anthony Pope Esq., Newark
Lawrence Contractor Pleads Guilty to Conspiracy in Oread Hotel Tax CaseRead the Press Release
TOPEKA, KAN. – A Kansas building contractor pleaded guilty today to conspiring to deprive the city of Lawrence of sales tax revenues in connection with the development of a seven-story hotel adjacent to the University of Kansas campus.
Thomas S. Fritzel, 54, Lawrence, Kan., pleaded guilty to one count of criminal conspiracy. Fritzel, part owner and manager of Oread Inn LC, was a party to an agreement with the city to finance the more than $40 million hotel project, including $11 million worth of street repairs and a public parking garage.
Oread Inn LC was to pay all costs up front and to be repaid $11 million for public improvements. The money to repay Oread Inn LC was to come from an incremental increase in property tax, a sales tax and an additional 1 percent tax on sales within a portion of the redevelopment district.
In his plea, Fritzel admitted that he and others caused false monthly Kansas sales tax returns to be submitted to the state of Kansas. The reports classified certain sales as occurring within the redevelopment district when in fact they occurred outside the district. As a result, the city of Lawrence lost a portion of sales taxes it was due.
The city of Lawrence filed a civil lawsuit against Fritzel seeking the lost revenue and the parties settled that case in 2017.
Sentencing in the criminal case is set for May 4. Both parties have agreed to recommend a sentence of 12 months and a day in federal prison and a fine up to $250,000. The FBI and the Lawrence Police Department investigated. Assistant U.S. Attorney Rich Hathaway prosecuted.
Law Enforcement Appreciation Day and new PSA from U.S. Attorney's OfficeRead the Press Release
ATLANTA – Today, January 9, 2020 is Law Enforcement Appreciation Day. U.S. Attorney Byung J. “BJay” Pak is asking citizens to join him in saluting law enforcement officers in the Northern District of Georgia.
“Law enforcement officers are everyday heroes and part of our community. Fathers, mothers, brothers, sisters, sons, daughters, and our neighbors,” said U.S. Attorney Byung J. “BJay” Pak. “They go to work every day with a passion to serve others and to protect us. Few can truly appreciate the rigors of working in law enforcement. In addition, many of them serve the communities in which they grew up because they love where they are from, and see it as an honor and duty to give back. They are one of us. Please join us in thanking them for their dedication, and service.”
The U.S. Attorney’s Office for the Northern District of Georgia is also releasing our second “Everyday Heroes are One of Us” Public Service Announcement featuring Lt. Robert Howell of the Henry County, Georgia, Sheriff’s Office. The PSA is posted on our social media platforms and has been submitted to local media outlets.
The PSA is available on our Facebook page: https://www.facebook.com/NDGAnews/
Also on our YouTube Channel at: https://www.youtube.com/c/usaondga
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019Read the Press Release
The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division announced today. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 billion.
“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” said Assistant Attorney General Hunt. “The continued success of the department’s False Claims Act enforcement efforts are a testament to the tireless efforts of the civil servants who investigate, litigate, and try these important cases as well as to the fortitude of whistleblowers who report fraud.”
Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion. The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.
In addition to combating health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of other government operations and functions. The Act helps to protect our military and first responders by ensuring that government contractors provide equipment that is safe, effective, and cost efficient; to protect American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements, and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to farming subsidies.
In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15 and 30 percent. Whistleblowers filed 633 qui tam suits in fiscal year 2019, and this past year the department recovered over $2.1 billion in these and earlier filed suits.
Health Care Fraud
The department investigates and resolves matters involving a wide array of health care providers, goods, and services. The department’s health care fraud enforcement efforts not only recover money for federal health care programs, such as Medicare, Medicaid, and TRICARE, but also help deter fraud schemes that put patients at risk and increase health care costs.
Reflecting the department’s commitment to holding drug companies accountable for their role in the opioid crisis, two of the largest recoveries involving the health care industry this past year came from opioid manufacturers. In one matter, as part of a global resolution of criminal and civil claims, Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment. The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs. In another matter, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine. As part of the resolution, RB Group paid $500 million to the United States to resolve civil allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary; promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control pricing of Suboxone.
The department also pursued other cases involving drug manufacturers. For example, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug. The department also continued to investigate efforts by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients. Congress included co-pay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. This year, seven drug manufacturers – Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.
The department also reported substantial recoveries involving a variety of other healthcare providers. Pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records (EHR) systems and free or discounted technology consulting services. Greenway Health LLC, an EHR software vendor, paid over $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers. Encompass Health Corporation (formerly known as HealthSouth Corporation), the nation’s largest operator of inpatient rehabilitation facilities (IRFs), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.
Procurement Fraud
In the past year, the department also pursued a variety of fraud matters involving the government’s purchase of goods and services. For example, five South Korea-based companies – SK Energy Co. Ltd., GS Caltex Corporation, Hanjin Transportation Co. Ltd., Hyundai Oilbank Co. Ltd. and S-Oil Corporation – agreed to resolve allegations that they engaged in anticompetitive conduct targeting contracts to supply fuel to the U.S. military in South Korea and made false statements to the government in connection with their agreement not to compete. The United States Department of Defense paid substantially more for fuel supply services in South Korea than it would have absent collusion on the fuel supply contracts. In total, the five companies paid over $162 million as part of the False Claims Act settlements.
The Civil Division entered into a $34.6 million settlement with aluminum extrusion manufacturer Hydro Extrusion Portland Inc., formerly known as Sapa Profiles Inc. (SPI), to resolve SPI’s civil liability for causing a government contractor to invoice NASA and the Department of Defense’s Missile Defense Agency (MDA) for aluminum extrusions that did not comply with contract specifications. Government contractors purchased aluminum extrusions from SPI for use on rockets for NASA and missiles provided to the MDA. SPI provided those contractors with falsified certifications after altering the results of tensile tests designed to ensure the consistency and reliability of aluminum extrusions. Several of the rockets used by NASA crashed, resulting in the loss of the NASA payloads that they carried. SPI also resolved related criminal claims arising from the same conduct.
The department recovered over $27 million from Northrop Grumman Systems Corporation (NGSC) in a settlement resolving False Claims Act allegations related to two battlefield communications contracts with the United States Air Force. The settlement resolved allegations that NGSC billed the Air Force for labor hours purportedly incurred by individuals stationed in the Middle East who had not actually worked the hours claimed.
In separate settlement agreements with the Civil Division, American Airlines paid $22 million and British Airways Plc/Iberia Airlines paid $5.8 million to resolve allegations that they falsely reported the times they transferred possession of United States mail to foreign postal administrations or other intended recipients under contracts with the United States Postal Service (USPS). USPS contracted with the airlines to take possession of receptacles of United States mail at six locations in the United States or at various Department of Defense and Department of State locations abroad, and then timely deliver that mail to numerous international and domestic destinations.
The software development company Informatica LLC paid $21.57 million to resolve allegations that it caused the government to be overcharged by providing misleading information about its commercial sales practices that was used in General Services Administration (GSA) contract negotiations. Informatica allegedly provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts. The false disclosures caused GSA to agree to less favorable pricing, and, ultimately, government purchasers to be overcharged.
Other Fraud Recoveries
The number and variety of judgments and settlements announced during fiscal year 2019 reflect the diversity of fraud recoveries arising under the False Claims Act. For example, Duke University paid $112.5 million to resolve allegations that it violated the False Claims Act by submitting applications and progress reports that contained falsified research on federal grants to the National Institutes of Health (NIH) and to the Environmental Protection Agency (EPA). Luke Hillier, the majority owner and former Chief Executive Officer of Virginia-based defense contractor ADS, Inc., paid $20 million to settle allegations that he fraudulently obtained federal set-aside contracts reserved for small businesses that his company was ineligible to receive. In order to qualify as a small business, companies must satisfy defined eligibility criteria, including requirements concerning size, ownership, and operational control. The government alleged that Hillier caused ADS to falsely represent that it qualified as a small business concern and that, as a result of Hillier’s representations, his company was awarded numerous small business set-aside contracts for which it was ineligible. The government previously resolved related claims against ADS for $16 million and Charles Salle, the former general counsel of ADS, for $225,000.
The department also continued its efforts to hold accountable those who seek to abuse their license to remove minerals from federal lands in exchange for the payment of an appropriate royalty. This past year, gas marketer B. Charles Rogers Gas Ltd. (BCR) and its owners paid over $3.5 million to resolve allegations that they engaged in a scheme to reduce mineral royalty payments for natural gas removed from federal lands. Another individual who worked with BCR while employed as a gas supply manager at a natural gas distributor paid an additional $800,000 to resolve his alleged role in the scheme.
In another matter, Omega Protein Corp. and Omega Protein, Inc. paid $1 million to resolve allegations that it obtained a loan from the United States by falsely certifying compliance with federal environmental laws. A leading domestic producer of Omega-3 rich fish oil, protein-rich specialty fishmeal, and organic fish solubles, Omega allegedly certified to the Oceanic and Atmospheric Administration, an agency within the Department of Commerce, that it was complying with federal environmental laws while knowingly and unlawfully discharging pollutants and oil into U.S. waters.
North Greenville University (NGU) paid $2.5 million to resolve allegations that it submitted false claims to the U.S. Department of Education. Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from making incentive payments to student recruiters based on their success in securing student enrollment. The settlement resolves allegations that NGU compensated a student recruiting company based on the number of students who enrolled in NGU’s programs, in violation of the prohibition on incentive compensation.
Holding Individuals Accountable
The department continued its commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations. In addition to the settlements with Luke Hillier and Charles Salle discussed above, the following are additional examples of recoveries involving individuals.
The department negotiated separate settlements with the individual owners of seven Osteo Relief Institutes for a total recovery from the owners and their clinics of more than $7.1 million. The settlements resolved allegations that the defendants knowingly billed Medicare for medically unnecessary viscosupplementation injections and medically unnecessary knee braces. Viscosupplementation is a treatment for osteoarthritis, in which a doctor injects a gel-like fluid into a patient’s knee joint to act as a lubricant and to supplement the natural properties of joint fluid. The government alleged that these clinics administered viscosupplementation injections to patients who did not need them, used multiple brands of viscosupplements successively on patients without clinical support, and used discounted viscosupplements reimported from foreign countries. The government also alleged that they provided unnecessary custom knee braces to patients.
In addition to negotiating a settlement with Vanguard Healthcare LLC for approximately $18 million in allowed claims to resolve allegations of grossly substandard nursing home services, the department also pursued Vanguard’s majority owner and CEO and Vanguard’s former director of operations. These two individuals collectively paid $250,000 to resolve allegations that five Vanguard-owned skilled nursing facilities submitted false claims to Medicare and Medicaid for nursing home services that were grossly substandard or worthless, including allegations that the facilities failed to administer medications as prescribed, failed to provide standard infection control or wound care, failed to take prophylactic measures to prevent pressure ulcers, and failed to meet basic nutrition and hygiene needs of their residents.
This year, the department also obtained a $21 million settlement with a compounding pharmacy, Diabetic Care Rx LLC (which does business as Patient Care America), and a private equity firm, Riordan, Lewis & Haden Inc., (RLH) to resolve a lawsuit alleging that they submitted false claims to Tricare, the federal health care program for military members and their families, through their involvement in a kickback scheme to generate referrals of prescriptions for expensive pain creams, scar creams, and vitamins, regardless of patient need. At the same time as this settlement with Diabetic Care and RLH, the department secured settlements totaling over $300,000 with Diabetic Care Rx’s Chief Executive Officer and former Vice President of Operations. All of the settlements were based on the defendants’ ability to pay.
Recoveries in Whistleblower Suits
Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.
The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year – an average of more than 12 new cases every week.
“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt. “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions. Congress also included in the False Claims Act authority for the government to dismiss cases that do not advance the goal of fraud prevention, and during the past year the government made increasing use of this tool to help prioritize and protect the expenditure of government resources.
Finally, Assistant Attorney General Hunt expressed appreciation for the many dedicated public servants throughout the department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many other federal and state agencies that contributed to the department’s False Claims Act recoveries this past fiscal year.
“The accomplishments announced today reflect the extraordinary efforts of the men and women throughout the government committed to protecting the federal fisc and the integrity of the government’s programs,” said Assistant Attorney General Hunt. “Having served many years in the Civil Division, I have witnessed the passion and dedication of the talented employees who have committed their careers to serving the American people and defending the interests of our great nation.”
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Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Jury Finds Florida Felon Guilty of Armed Drug Trafficking and Other OffensesRead the Press Release
Tampa, Florida – A federal jury today found Robert Christopher Sunmonu (22, St. Petersburg) guilty of possessing a firearm in furtherance of a drug trafficking crime, possessing crack cocaine with the intent to distribute it, and possessing a firearm as a convicted felon. Sunmonu faces a mandatory minimum penalty of five years, and up to life, in federal prison. His sentencing hearing has not yet been scheduled.
Sunmonu was indicted on September 24, 2019.
According to testimony presented at trial, on August 2, 2019, officers from the St. Petersburg Police Department attempted to stop Sunmonu, who was driving a stolen car. Instead of stopping, Sunmonu fled and led officers on a chase through St. Petersburg, ending in an apartment complex, where Sunmonu then fled on foot. Sunmonu jumped a concrete wall and was attempting to hop a fence when an officer grabbed him. Sunmonu continued to try and break free as a second officer pried Sunmonu from the fence and got him to the ground. As officers tried to gain control of Sunmonu’s hands, he resisted and reached for his waist. The officers eventually handcuffed Sunmonu and found a loaded firearm in his pants pocket. In retracing Sunmonu’s steps, the officers recovered trafficking amounts of crack cocaine, marijuana, and Xanax.
At the time of the incident, Sunmonu had multiple prior felony convictions. Therefore, he is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Petersburg Police Department. It is being prosecuted by Assistant United States Attorney Gregory T. Nolan.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Jury Convicts Lawrence Man of Participating in Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD – Malaquia Guillermo, 52, of Lawrence, Massachusetts was found guilty of participating in a conspiracy to distribute fentanyl, United States Attorney Scott W. Murray announced today.
According to evidence presented during a three-day jury trial, Guillermo, Marangely Melendez, and others participated in a conspiracy to distribute fentanyl to customers in the Lawrence area, including customers from New Hampshire. Evidence at trial showed that on December 6, 2018, an individual who was cooperating with law enforcement officers contacted Melendez and ordered approximately 50 grams of fentanyl. Shortly thereafter, Guillermo met with the cooperating individual at a location in Lawrence and provided approximately 50.9 grams of fentanyl in exchange for $1,000.
Guillermo will be sentenced on April 23, 2020. Melendez pleaded guilty on November 26, 2019, and is scheduled to be sentenced on March 11, 2020.
“Interstate fentanyl trafficking continues to cause substantial damage to the health and safety of the people New Hampshire,” said U.S. Attorney Murray. “I am grateful for this jury verdict holding the defendant responsible for conspiring to distribute this lethal drug. Working with DEA and all of our law enforcement partners, we will continue with our efforts to stop the flow of fentanyl into the Granite State.”
This matter was investigated by the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Anna Dronzek and Joachim Barth.
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Janesville Felon Sentenced to 46 Months for Possessing FirearmRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Antonio Sims, 39, Janesville, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 46 months in federal prison, to be followed by three years of supervised release, for being a felon in possession of a firearm. Sims pled guilty to this offense on October 8, 2019.
On July 4, 2019, Janesville law enforcement officers responded to a complaint of a man making threats with a gun. The officers made contact with Sims who fit the description provided to them. When officers attempted to take Sims into custody, Sims fled on foot. With officers in close pursuit, Sims retrieved a handgun from his waistband and discharged it in the air three times.
Sims previously had been convicted of five felony offenses, including possession of a controlled substance with intent to deliver and aggravated battery.
The charge against Sims was the result of an investigation conducted by the Janesville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of this case has been handled by United States Attorney Blader.
The charge against Sims was brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition, and violent crimes and drug crimes that involve the use of firearms.
Indian national convicted of role in call center scam that victimized thousands in the U.S.Read the Press Release
HOUSTON - An Indian national has entered a guilty plea for his role in operating and funding India-based call centers which defrauded thousands of victims out of millions of dollars between 2013 and 2016.
Hitesh Madhubhai Patel aka Hitesh Hinglaj, 43, of Ahmedabad, India, pleaded guilty to conspiracy to commit wire fraud as well as a general conspiracy to commit identification fraud, access device fraud, money laundering and to impersonate a federal officer or employee.
“Hitesh Patel played a prominent role in this massive, India-based fraud scheme that bilked vulnerable Americans out of millions of dollars,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. “This important resolution would not have occurred without the assistance of our Singaporean colleagues, to whom we extend our deep appreciation.”
Patel and his conspirators perpetrated a complex scheme in which employees from call centers in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS). They also engaged in other telephone call scams designed to defraud victims throughout the United States. U.S. victims were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Those who fell victim to the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently-obtained funds.
In his plea, Patel admitted to operating and funding several India-based call centers from which the fraud schemes were perpetrated, including organizational co-defendant call center HGLOBAL. Patel frequently corresponded by email and WhatsApp messaging with co-defendants to exchange credit card numbers, telephone scam scripts, deposit slips, payment information, call center operations information, instructions and bank account information. The scripts included impersonation of IRS, USCIS, Canada Revenue Agency and Australian Tax Office personnel as well as payday loan, U.S. government grant and debt collection fraud schemes.
Patel also received monthly income and expense reports to his personal email from the call centers and used his Indian cell phone number to access GPR cards through automated telephone systems on many occasions.
A co-defendant described Patel as “the top person in India and the boss for whom most of the other defendants worked.” Another co-defendant claimed Patel was arrested in India in 2016, but paid a bribe and was released. Additionally, Patel admitted he was accountable for approximately $25-65 million.
Patel was extradited from Singapore in April 2019 to face charges in this large-scale telefraud and money laundering scheme. Singapore authorities apprehended Patel at the request of the United States pursuant to a provisional arrest warrant in September 2018 after Patel flew there from India.
U.S. District Judge David Hittner accepted the plea today and set sentencing for April 3. At that time, Patel faces up to 20 years in prison for the wire fraud conspiracy and five years for the general conspiracy. Both counts also carry the possibility of a fine of up $250,000 or twice the gross gain or loss from the offense.
A total of 24 domestic defendants associated with this transnational criminal scheme have already been convicted and sentenced to up to 20 years in prison in the Southern District of Texas, District of Arizona and Northern District of Georgia. They were also ordered to pay millions of dollars in victim restitution and money judgments and to forfeit seized assets. Some defendants were removed from the country based on their illegal immigration status, while another defendant had his U.S. citizenship revoked due to a separate conviction for immigration fraud. Charges remain pending for other India-based defendants. They are presumed innocent unless and until convicted through due process of law.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Department of Homeland Security – Office of Inspector General and Treasury Inspector General for Tax Administration conducted the investigation. The Department of Justice’s Office of International Affairs and HSI Singapore provided significant support in securing and coordinating Patel’s arrest and extradition, working in concert with their counterparts at the Singapore Attorney General’s-Chambers and the Singapore Police Force.
Assistant U.S. Attorneys Mark McIntyre and Craig Feazel of are prosecuting the case along with Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section and Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section.
Indian National Pleads Guilty to Owning, Funding, and Operating India-Based Call Centers That Scammed U.S. Victims Out of Millions of DollarsRead the Press Release
An Indian national pleaded guilty today in the Southern District of Texas for his role in operating and funding India-based call centers whose callers, and U.S.-based conspirators, defrauded U.S. victims out of millions of dollars between 2013 and 2016.
Hitesh Madhubhai Patel, also known as Hitesh Hinglaj, 43, of Ahmedabad, India, pleaded guilty to wire fraud conspiracy and general conspiracy to commit identification fraud, access device fraud, money laundering, and impersonation of a federal officer or employee.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Acting Executive Associate Director Alysa D. Erichs of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General Joseph V. Cuffari of the U.S. Department of Homeland Security (DHS) Office of Inspector General (OIG) made the announcement today.
"Hitesh Patel played a prominent role in this massive, India-based fraud scheme that bilked vulnerable Americans out of millions of dollars," said Assistant Attorney General Benczkowski. "This important resolution would not have occurred without the assistance of our Singaporean colleagues, to whom we extend our deep appreciation."
According to admissions that he made as part of his plea, Patel and his co-conspirators perpetrated a complex scheme in which employees from call centers in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams designed to defraud victims throughout the United States. U.S. victims were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Those who fell victim to the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently obtained funds.
In his plea, Patel admitted to operating and funding several India-based call centers from which the fraud schemes were perpetrated, including the call center HGLOBAL. Patel corresponded by email and WhatsApp messaging frequently with his co-defendants to exchange credit card numbers, telephone scam scripts, deposit slips, payment information, call center operations information and instructions, and bank account information. The scripts included IRS impersonation, USCIS impersonation, Canada Revenue Agency (CRA) impersonation, Australian Tax Office (ATO) impersonation, payday loan fraud, U.S. Government grant fraud, and debt collection fraud.
Patel also received monthly income and expense reports to his personal email from the call centers, and used his Indian cell phone number to access GPR cards through automated telephone systems on many occasions.
A co-defendant described Patel as “the top person in India and the boss for whom most of the other defendants worked,” and the owner of multiple call centers. Another co-defendant stated that Patel was arrested in India in 2016, but then paid a bribe and was released. Additionally, Patel admitted that a reasonably foreseeable loss of more than $25 million but less than $65 million was attributable to him, based on the government’s evidence against him.
Patel was prosecuted in the United States after being extradited from Singapore in April 2019 to face charges in this large-scale telefraud and money laundering scheme. Singapore authorities apprehended Patel at the request of the United States pursuant to a provisional arrest warrant in September 2018, after Patel flew there from India.
U.S. District Judge David Hittner of the Southern District of Texas accepted the plea today and set sentencing for April 3, 2020. At that time, Patel faces up to 20 years in prison for the wire fraud conspiracy and five years for the general conspiracy. Both counts also carry the possibility of a fine of up to $250,000 or twice the gross gain or loss from the offense.
A total of 24 domestic defendants associated with this transnational criminal scheme have previously been convicted and sentenced to terms of imprisonment of up to 20 years in the Southern District of Texas, District of Arizona and Northern District of Georgia. The defendants were also ordered to pay millions of dollars in victim restitution and money judgments and to forfeit seized assets. Some defendants were ordered to be deported based on their illegal immigration status, with another defendant having his U.S. citizenship revoked due to a separate conviction for immigration fraud. Charges remain pending for other India-based defendants. They are presumed innocent unless and until convicted through due process of law.
HSI, DHS-OIG and TIGTA conducted the investigation. The Department of Justice’s Office of International Affairs and HSI Singapore provided significant support in securing and coordinating Patel’s arrest and extradition, working in concert with their counterparts at the Singapore Attorney General’s-Chambers and the Singapore Police Force.
Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section, Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Mark McIntyre and Craig Feazel of the Southern District of Texas are prosecuting the case.
A Department of Justice website has been established to provide information about the case to victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone seeking additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may find helpful information on the IRS tax scams website, the FTC phone scam website, and the FTC identity theft website.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Illegal Alien Sentenced for Possession of a FirearmRead the Press Release
Hattiesburg, Miss. – Gregorio Xolotl-Hipolito, 42, an illegal alien from Mexico, was sentenced today by U.S. District Judge Keith Starrett to 15 months in prison, followed by three years of supervised release, for possession of a firearm by an illegal alien, announced U.S. Attorney Mike Hurst, Mr. William Joyce, Acting Field Office Director of Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations, in New Orleans, and Special Agent-in-Charge Kurt Thielhorn with the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Upon completion of his federal prison sentence, Xolotl-Hipolito will be surrendered to the administrative custody of ICE officials in the Department of Homeland Security, where he will face removal proceedings to remove him from the United States to his home nation of Mexico. Were he to return to the U.S. during the three-year period after his imprisonment, he would be subject to additional prison time consecutive to imprisonment that could result from further prosecution for the crime of return-after-removal. Xolotl-Hipolito pled guilty before Judge Starrett, on October 1, 2019.
On June 24, 2019, while conducting Criminal Alien Program duties at the Forrest County Adult Detention Center, in Hattiesburg, an agent of Immigration & Customs Enforcement (ICE) encountered Xolotl-Hipolito, who had been arrested by Hattiesburg Police for possession of a stolen firearm and driving while consuming alcohol. When stopped by police, Xolotl-Hipolito had no driver’s license and only a Tennessee ID card. A .22 caliber pistol was found in plain view next to Xolotl-Hipolito in the vehicle of which he was the sole occupant. Police also found .22 ammunition in Xolotl-Hipolito’s pocket as well as elsewhere in the vehicle. Local officials notified ICE, and Xolotl-Hipolito was identified as an illegal alien from Mexico who had been removed from the United States. Records revealed that, in 2011, an Immigration Judge ordered Xolotl-Hipolito removed from the U.S. Records also documented that Xolotl-Hipolito illegally reentered the U.S. and was removed four previous times.
Additionally, police and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), determined that the pistol had been reported as stolen. ATF also determined that the firearm had traveled in and affected interstate commerce.
U.S. Attorney Hurst praised the cooperation of the U.S. Department of Homeland Security, Immigration & Customs Enforcement, Enforcement Removal Operations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Hattiesburg Police Department and the Forrest County Sheriff’s Department. Assistant United States Attorney Stan Harris was the prosecutor for the case.
Illegal Alien Known as the “Rittenhouse Rapist” Sentenced to Federal Prison for Illegally Reentering the United StatesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Milton Mateo Garcia-Vasquez, 32, of Philadelphia, PA and a citizen of Honduras, was sentenced to the statutory maximum of 24 months’ imprisonment by United States District Court Judge Paul S. Diamond for unlawfully re-entering the United States after being deported.
Garcia-Vasquez pleaded guilty to illegal re-entry after deportation in August 2019. The defendant was previously deported and removed from the United States on June 18, 2013, and never requested or received authorization to re-enter the country. Nonetheless, he broke the law by re-entering the country and then proceeded to brutally rape a young woman near Rittenhouse Square in Philadelphia. The defendant grabbed the young woman from behind while she was walking back to her apartment, pushed her into the apartment and sexually assaulted her. He then left, but soon returned to the apartment and sexually assaulted the victim a second time. Garcia-Vasquez was arrested on June 23, 2014 by Philadelphia Police and charged with burglary, kidnapping and rape. He pleaded guilty to those charges in 2015 and was sentenced to a total of 22-44 years in state prison.
“Responsible public policy involves protecting public safety by setting up incentives for people to follow the law. Sanctuary city polices do just the opposite by incentivizing illegal aliens to come to sanctuary jurisdictions, like Philadelphia, where they are led to believe that our nation’s immigration laws will not apply to them,” said U.S. Attorney McSwain. “A natural consequence of this policymaking is that illegal aliens are drawn to Philadelphia, where some of them commit heinous crimes that never would have occurred if they weren’t here in the first place. This is a terrible tragedy for the innocent victims of such crimes. But it is also a tragedy for our justice system because it normalizes the unfair and un-American idea that the rule of law should not apply to a certain segment of society -- namely, illegal aliens. Anyone who cares about the rule of law or equal treatment under the law should find sanctuary city policies utterly repugnant. We at the U.S. Attorney’s Office will continue to enforce the rule of law in a neutral, non-partisan manner, rather than playing favorites.”
The case was investigated by the Department of Homeland Security – Immigration and Customs Enforcement, and is being prosecuted by Assistant United States Attorney Mary E. Crawley.
Houston Man gets significant time for sexually exploiting young childrenRead the Press Release
HOUSTON – A 26-year-old man from Houston has received a 30-year prison term following his convictions of producing and possessing child pornography, announced U.S. Attorney Ryan K. Patrick.
Stephen Edward Torres pleaded guilty June 7, 2019.
Today, U.S. District Judge Sim Lake ordered Torres to serve 360 months for each count of the sexual exploitation of a child, otherwise known as production of child pornography. He also received another 120 months for the possession charge which were all ordered to be served concurrently for a total of 360 months in federal prison.
At the hearing, the court heard evidence regarding a pattern of abuse which rendered Torres a repeat and dangerous sex offender. The abuse included oral and vaginal penetration of the minors who were under the age of 5.
The defense asked Judge Lake to consider the fact that he is “slow,” suffers from substance abuse and has suffered head trauma. However, the government implored asked that Torres be held accountable for the pain and trauma he caused to the young victims - still too young to understand the magnitude of how he has impacted them. The court also heard that what he stole from the children cannot be replaced. Torres not only produced photos documenting the rapes of these minors, but he shared these images via the internet with others who share this sexually-deviant interest in children.
The victims’ mother also provided testimony who detailed the children’s suffering. She told the court how she and the children experience anxiety because of the trauma they endured and how scared the children are to be away from her. “We are thankful for being away from that HEARTLESS DECIEVING SOUL,” she said.
Following the 30-year prison term, Torres will be on supervised release for the rest of his life, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender and must pay restitution.
Torres came to the attention of law enforcement after a he communicated online with an undercover law enforcement officer and sent child pornography images he created of one of his molestation victims.
Authorities executed a search warrant, at which time they seized a cellular phone and children’s clothes from his residence. Forensic analysis yielded 17 image files and 56 videos that constituted child pornography. Torres produced 16 of the videos himself, some of them which depict Torres violating the minors via oral penetration.
Torres has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
Assistant U.S. Attorney Sherri L. Zack is prosecuting the case, which was brought as part of Project Safe Childhood(PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Grovetown man charged with illegally possessing weapons, including pipe bombRead the Press Release
AUGUSTA, GA: A Grovetown man has been indicted by a federal grand jury on charges that include possession of a pipe bomb.
James Richard Grates II, 36, is charged with Possession of a Firearm by a Convicted Felon, and Possession of an Unregistered Firearm, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charges carry a possible penalty of up to 10 years in prison, followed by a period of supervised release. There is no parole in the federal system.
Personnel from the Columbia County Sheriff’s Office, the Richmond County Sheriff’s Office Bomb Squad and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were called to Grates’ mobile home in April 2019 after being alerted about possible unsafe conditions in the residence. Investigators searched the property and seized homemade explosives made from pipe and black powder, along with a 12-gauge shotgun.
“This cases involves illegally possessed firearms and explosives in the hands of convicted felon,” said Beau Kolodka, Assistant Special Agent in Charge of the Atlanta Field Division of the ATF. “It demonstrates the cooperation that exists between ATF, Columbia County Sheriff’s Office and Richmond County Sheriff’s Office to keep the residents of these counties safe.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the ATF, the Columbia County Sheriff’s Office and the Richmond County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorney Alejandro V. Pascual IV.
Gates Man Arrested for Attempting to Have Sex with A 13 Year Old ChildRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Michael Greco, 24, of Gates, NY, was arrested and charged by criminal complaint with online enticement of a minor. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney Kyle Rossi, who is handling the case, stated that earlier this month, the defendant engaged in online conversations with an individual who he believed was a “mother” engaged in the prostitution of her 13 year old daughter. In fact, the “mother” was an undercover New York State Police investigator. Between January 2 and January 7, 2020, Greco engaged in text messaging and phone calls with the undercover investigator, during which the defendant agreed to pay $100 in order to have sex with the child.
On January 7, 2020, Greco arrived at pre-arranged meeting place, where he expected to meet the child for sex. Instead, the defendant was met by members of the State police and Homeland Security Investigations, who took
Greco into custody. The defendant was found in possession of $100, condoms, and candy, which he intended to give the child as a gift.
Greco made an initial appearance today before U.S. Magistrate Judge Marian W. Payson and is being held pending a detention hearing scheduled for January 9, 2020.
The criminal complaint is the result of an investigation by the New York State Police Troop E Major Crimes Unit, Canandaigua, under the direction of Major Eric Laughton, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Fourth Charlotte Man Pleads Guilty in Check-Cashing SchemeRead the Press Release
CHARLOTTE, N.C. – Omontie Rowe, 22, of Charlotte, pleaded guilty in federal court to aggravated identity theft, for his role in an extensive check-cashing scheme that caused hundreds of thousands of dollars in losses to at least five financial institutions, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge David S. Cayer presided over today’s plea hearing.
David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, joins U.S. Attorney Murray in making today’s announcement.
From January 2018 through June 2019, Rowe and his three co-defendants, Jacoby Berry, Fredrick Clark, and Fabio Wolfe, executed the check cashing scheme by obtaining business and personal checks that were stolen, counterfeit or altered by members of the conspiracy. After depositing the worthless checks into various bank accounts, the co-conspirators made multiple cash withdrawals and purchases before the victim banks detected the fraud.
Court records show that the four defendants called themselves the “All Profit Group,” or “AP Group,” and bragged about their successful check fraud scheme on social media, by posting images of themselves with handfuls of cash. They also used social media to recruit “straw account holders,” by posting to social media websites and approaching individuals with the promise of an easy pay day. According to court records, the recruited straw account holders were promised a payment of $100 to $1,500, in exchange for allowing the co-defendants to use the account holders’ new or existing bank accounts to perpetuate the fraud.
All four co-defendants have pleaded guilty to aggravated identity theft and are awaiting sentencing. The aggravated identity theft charge carries a mandatory minimum prison term of two years. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray thanked USPIS for their investigation of the case.
Assistant U.S. Attorneys Maria Vento and William Miller, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Four indicted in drug conspiracy distributing meth in Richmond CountyRead the Press Release
AUGUSTA, GA: Four people have been indicted in Richmond County on federal charges for distributing methamphetamine and illegally possessing firearms.
The eight-count indictment, returned by a U.S. District Court grand jury, alleges that the four defendants were involved in a conspiracy dating back at least to February 2018 to distribute large amounts of methamphetamine throughout the Augusta area, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
“Cooperative efforts by federal and local law enforcement partners, including the Drug Enforcement Administration (DEA) and the Richmond County Sheriff’s Office, provide our office with powerful tools to dismantle illegal drug distribution networks,” said U.S. Attorney Christine. “Working together, we will use every weapon at our disposal to eliminate these merchants of misery.”
The investigation, which included controlled purchases and federal search warrants, seized quantities of methamphetamine, 15 firearms and more than $44,000 in cash.
Charged in the indictment are:
- Bridget Lydell Biggam, 35, of Appling, Ga., is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; Possession of 50 Grams or More of Methamphetamine with Intent to Distribute; and Possession of Methamphetamine with Intent to Distribute. She faces a possible sentence of up to life in prison.
- Christopher Allen Marshall, 33, of Augusta, Ga., is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; Possession of 50 Grams or More of Methamphetamine with Intent to Distribute; Possession of Firearms in Furtherance of a Drug Trafficking Crime; and Possession of Firearms by a Convicted Felon. He faces a possible sentence of up to life in prison.
- Bjorn Michael Wiley, 42, of Martinez, Ga.; is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; and Possession of 50 Grams or More of Methamphetamine with Intent to Distribute. He faces a possible sentence of up to life in prison. And,
- John Tillman Durst, 29, of Waynesboro, Ga., is charged with Conspiracy to Possess with Intent to Distribute 5 Grams or More of Methamphetamine; and Possession of Methamphetamine. He faces a possible sentence of up to 40 years in prison.
Each of the defendants, if convicted, also would be subject to substantial fines and would serve a period of supervised release after completion of any prison sentence. There is no parole in the federal system.
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division said of the indictments, “This criminal network posed a clear and present danger to the safety and security of the Augusta area. Their removal automatically makes this community safer. These indictments illustrate how success can be achieved through the combined efforts between federal, state and local law enforcement and the U.S. Attorney’s Office.”
“When you arrest four drug traffickers with 15 firearms, this is a victory for the citizens of Richmond County,” said Richmond County Sheriff Richard Roundtree. “This will contribute to reducing the senseless gun violence accompanied by drug distribution and firearms. We continue to value our partnership with the U.S. Attorney’s Office and the U.S. Drug Enforcement Administration.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The investigation is being conducted by the DEA and the Richmond County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorney Henry W. Syms Jr.
Former State Senator’s Accountant Sentenced for Tax FraudRead the Press Release
BOSTON—John H. Nardozzi, a certified public accountant for former State Senator Brian Joyce, was sentenced today for conspiring with the late senator to defraud the IRS from 2011 through 2014.
Nardozzi, 68, of Waltham, was sentenced by U.S. District Court Judge William G. Young to 18 months in prison and three years of supervised release.
In October 2019, Nardozzi was convicted after a seven-day trial of conspiring with Joyce to defraud the IRS of approximately $600,000 by manipulating income that should have been reported on Joyce’s corporate tax return and by applying it to Joyce’s personal tax return. Nardozzi was also convicted of fraudulently creating a simplified-employee pension plan (SEP) for Joyce and his wife, to which they were not otherwise entitled. In doing so, Nardozzi enabled Joyce and his wife to defer taxes on over $400,000 of income, including income that Joyce falsely attributed to his wife. Nardozzi also assisted Joyce in an illegal rollover of Joyce’s SEP account to purchase stock in a private company without following the IRA rollover rules.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorneys Dustin Chao and Evan Gotlob of Lelling’s Public Corruption and Special Prosecutions Unit prosecuted the case.
Former Professor Sentenced to over Seven Years in Federal Prison for Possessing Methamphetamine in a School ZoneRead the Press Release
A man who previously worked as a professor was sentenced January 8, 2020, to more than seven years in federal prison.
Randall Mark Gilbert, age 61, from Marion, Iowa, received the prison term after a July 31, 2019 guilty plea to possession with intent to distribute methamphetamine near a protected location.
In a plea agreement, Gilbert admitted he possessed more than ten grams of meth within 1,000 feet of Lisbon High School. Police found the meth in his home during a search. After being arrested and getting out of jail, Gilbert went to the home of a man and woman. After Gilbert entered, the man ran out of the house. Gilbert cut a phone line and threatened the woman, who he believed had set him up, with a knife. Gilbert forced the woman to go with him to his house. Gilbert had previously worked as professor.
Gilbert was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Gilbert was sentenced to 85 months’ imprisonment. He must also serve an eight-year term of supervised release after the prison term. There is no parole in the federal system.
Gilbert being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Lisbon Police Department, the Mt. Vernon Police Department, the Cedar County Sheriff’s Department, the Mechanicsville Police Department, and the Jones County Emergency Response Team.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00064.
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Former Newark Police Officer Admits Bribery and Assisting in Preparing False Federal Tax ReturnRead the Press Release
NEWARK, N.J. – A former Newark police officer today admitted soliciting and accepting cash payments from a brothel owner in Newark in exchange for protecting brothels from police action, and to failing to report those cash payments on his personal federal income tax returns, U.S. Attorney Craig Carpenito announced.
Julio I. Rivera, 50, of Old Bridge, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to two counts of an indictment charging him with bribery (Count Six) and aiding and assisting in the preparation of a false 2015 personal federal tax return (Count 13).
According to documents filed in this case and statements made in court:
From September 2014 to August 2015, Rivera solicited and accepted cash payments from a Newark brothel owner (“Individual 1”) who ran brothels located on Lafayette Street and Emmet Street. In exchange for these cash bribes, Rivera performed official acts and violated his lawful duties for the benefit of Individual 1, including declining to arrest individuals who were committing and promoting prostitution, agreeing to protect these individuals from arrest by other Newark police officers, and agreeing to take adverse action against a competing brothel. Rivera collected between $40,000 and $95,000 in bribes in exchange for protecting those and other brothels in Newark.
Rivera also intentionally withheld information from his tax preparer regarding the cash bribes that he received, which caused Rivera’s filed federal tax returns for certain tax years, including 2015, to understate the total amount of income that Rivera received. Rivera stipulated that this misconduct resulted in a loss to the IRS of $15,000 to $40,000.
The maximum potential penalty for the count of bribery is 10 years in prison and the maximum potential penalty for the tax fraud is three years in prison; both counts carry a maximum potential fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for April 30, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecutions Division in Newark.
Defense counsel: Kristen Santillo Esq., New York
Former Long Island Investment Advisor Sentenced to 170 Months in Prison for Multi-Million Dollar Securities Fraud and Ponzi SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Steven Pagartanis was sentenced by United States District Judge Joan M. Azrack to 170 months’ imprisonment and ordered to pay more than $6.5 million in restitution. Pagartanis, a former registered investment advisor based on Long Island, pleaded guilty in December 2018 to conspiracy to commit mail and wire fraud for orchestrating a securities fraud scheme over the course of 18 years.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence.
“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” stated United States Attorney Donoghue. “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this Office and the Department of Justice.” Mr. Donoghue thanked the Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their cooperation and assistance during the investigation.
“Steven Pagartanis deceived investors from New York to California with the selfish goal of enriching himself at the expense of innocent elderly victims,” stated IRS-CI Special Agent-in-Charge Larsen. “We at IRS-CI welcome the opportunity to lend our financial expertise to uncover such callous criminality and protect the innocent from being swindled out of their life savings.”
From January 2000 to March 2018, Pagartanis, then an affiliate of a registered broker-dealer, solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an eight percent return. At Pagartanis’s direction, the victims wrote checks payable to an entity he secretly controlled. Pagartanis then laundered the victims’ investments through a series of bank accounts, and used the money to pay personal expenses, purchase luxury items, fund failed business ventures including his wife’s pet store and make the guaranteed “interest” or “dividend” payments to other victims. The defendant’s victims invested over $13 million and sustained losses of over $9 million. Many lost substantial amounts of their life savings, including funds set aside to help ill family members, pay college expenses and maintain their homes.
Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 60
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (JMA)
Former Gulf Cartel leader convicted of international drug traffickingRead the Press Release
BROWNSVILLE, Texas - Jorge Costilla-Sanchez has pleaded guilty to an international drug trafficking conspiracy to distribute cocaine and marijuana into the United States.
Costilla-Sanchez, 48, was an active member of the “Cartel Del Golfo” (CDG or Gulf Cartel). CDG is a violent Mexican criminal organization engaged in the manufacture, distribution and importation of ton quantities of cocaine and marijuana into the United States. In the late 1990s, the Gulf Cartel recruited an elite group of former Mexican military personnel to join their ranks as security and enforcers who became known as Los Zetas. The Gulf Cartel and Los Zetas operated under the name of “The Company.” Costilla-Sanchez became the leader of The Company for several years following the arrest of Osiel Cardenas in 2003 and before Costilla-Sanchez’s arrest in September 2012.
During his association with The Company, Costilla-Sanchez was responsible for overseeing all operations and providing leadership that resulted in the importation of thousands of kilograms of cocaine and marijuana into the United States. Under Costilla-Sanchez’s leadership, The Company controlled numerous plazas along the United States and Mexico border including Matamoros, Rio Bravo, Reynosa, Miguel Aleman and Nuevo Laredo. Costilla-Sanchez used these strategically important locations to distribute cocaine and marijuana into the United States and to return bulk U.S. currency to himself and other members of CDG in Mexico.
During the course of his involvement in the conspiracy, law enforcement in Mexico and Panama seized ton quantities of cocaine that were intended for Costilla-Sanchez and other members of CDG to distribute in Mexico and the United States. Specifically, on Oct. 5, 2007, Mexican law enforcement seized 11,700 kilograms of cocaine from a warehouse in Tampico, Mexico, and on Nov. 30, 2007, the Panamanian National Police seized approximately 2,400 kilograms of cocaine in Colon, Panama.
During his guilty plea today, Costilla-Sanchez acknowledged his participation in a conspiracy to possess with the intent to distribute over 450 kilograms of cocaine and over 90,000 kilograms of marijuana.
Costilla-Sanchez previously pleaded guilty in 2017 to a separate conspiracy to possess with intent to distribute cocaine and marijuana as well as two counts of assault on a federal officer. He has not yet been sentenced for those offenses.
U.S. District Judge Fernando Rodriguez Jr. will impose sentencing April 14. At that time, Costilla-Sanchez faces a minimum of 10 years and up to life in federal prison.
The Drug Enforcement Administration - Houston Field Division conducted the investigation.
Trial Attorneys Cole Radovich and Kirk Handrich of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted this case with significant assistance of Assistant U.S. Attorney Jody Young of the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Office of International Affairs and Office of Enforcement Operations.
Former Gulf Cartel Leader Convicted of International Drug Trafficking ConspiracyRead the Press Release
Jorge Costilla-Sanchez pleaded guilty to an international drug trafficking conspiracy to distribute cocaine and marijuana into the United States.
Costilla-Sanchez, 48, was an active member of the “Cartel Del Golfo” (CDG or Gulf Cartel). CDG is a violent Mexican criminal organization engaged in the manufacture, distribution, and importation of ton quantities of cocaine and marijuana into the United States. In the late 1990s, the Gulf Cartel recruited an elite group of former Mexican military personnel to join their ranks as security and enforcers who became known as Los Zetas. The Gulf Cartel and Los Zetas operated under the name of “The Company.” Costilla-Sanchez became the leader of The Company for several years following the arrest of Osiel Cardenas in 2003 and before Costilla-Sanchez’s arrest in September 2012.
During his association with The Company, Costilla-Sanchez was responsible for overseeing all operations and providing leadership that resulted in the importation of thousands of kilograms of cocaine and marijuana into the United States. Under Costilla-Sanchez’s leadership, The Company controlled numerous plazas along the United States and Mexico border including Matamoros, Rio Bravo, Reynosa, Miguel Aleman and Nuevo Laredo. Costilla-Sanchez used these strategically important locations to distribute cocaine and marijuana into the United States and to return bulk U.S. currency to himself and other members of CDG in Mexico.
During the course of his involvement in the conspiracy, law enforcement in Mexico and Panama seized ton quantities of cocaine that were intended for Costilla-Sanchez and other members of CDG to distribute in Mexico and the United States. Specifically, on Oct. 5, 2007, Mexican law enforcement seized 11,700 kilograms of cocaine from a warehouse in Tampico, Mexico, and on Nov. 30, 2007, the Panamanian National Police seized approximately 2,400 kilograms of cocaine in Colon, Panama.
The Defendant oversaw a vast network of other individuals including local plaza bosses, drug couriers, security personnel, scouts, hitmen and others to facilitate The Company’s drug trafficking operations. In the performance of his duties for The Company, the Defendant and others under his charge possessed and used dangerous weapons, including firearms. Further, the Defendant organized, directed, and carried out numerous acts of violence against rival drug trafficking groups, Mexican law enforcement and others who The Company perceived as threats to their drug trafficking activities.
During his guilty plea today, Costilla-Sanchez acknowledged his participation in a conspiracy to possess with the intent to distribute over 450 kilograms of cocaine and over 90,000 kilograms of marijuana.
Costilla-Sanchez’s sentencing has been set for April 14, 2020, before U.S. District Judge Fernando Rodriguez Jr. At that time Costilla-Sanchez faces a minimum of 10 years and up to life in federal prison.
The Drug Enforcement Administration - Houston Field Division conducted the investigation.
Trial Attorneys Cole Radovich and Kirk Handrich of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted this case, with significant assistance provided by Assistant U.S. Attorney Jody Young of the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Office of International Affairs and Office of Enforcement Operations.
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Former Consultant/Chief Operating Officer of 1 Global Capital LLC Pleads Guilty for Role in Wire and Securities Fraud Conspiracy Related to $287 Million SchemeRead the Press Release
Today, a former consultant who also served as the Chief Operating Officer of 1 Global Capital, LLC pled guilty for his role in connection with a $287 million securities fraud scheme involving a commercial payday loan business that operated from early 2014 through July 2018 and impacted more than 3,400 investors in 42 different states.
Ariana Fajardo Orshan, United States Attorney, Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami Field Office, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office made the announcement.
Steven Allen Schwartz, 75, of Delray Beach, Florida, pled guilty before U.S. Magistrate Judge Patrick M. Hunt to the single count information, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371 (Case No. 20-CR-60003). Schwartz is scheduled to be sentenced on March 13, 2020 at 3:00 p.m. before U.S. District Judge Roy K. Altman. He faces a maximum statutory sentence of up to five years in prison and a fine up to $250,000 or double the gross proceeds of the offense.
According to the court record, 1 Global Capital LLC (1 Global) was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). To fund these loans, 1 Global obtained funds from investors nationwide, offering short-term investment contracts that promised to “place” the investors’ money in MCAs. The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid. 1 Global raised money using investment advisors and other intermediaries, with promises to these advisors of significant commissions. In many cases, the commissions were not fully disclosed to investors.
Schwartz was a director and consultant at 1 Global, and also held out as a Chief Operating Officer in the company’s marketing materials. Schwartz also served as the designated trustee for a purported family trust and an art trust for which Individual #1, the de facto owner of 1 Global, served as the grantor. On or about June 5, 2014, 100% of the issued and outstanding shares of 1 Global were transferred under the umbrella of Individual #1’s purported family trust, and designated as the trust property.
In order to attract investments, Individual #1, Schwartz, Attorney #1, co-conspirator Alan G. Heide, and others made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. 1 Global promised investors that all or nearly all of that money would be applied to various MCA agreements with the investor supposedly receiving a portion of the proceeds paid back by the merchants. In reality, 1 Global business lost money and ultimately used new investor funds to pay back earlier investors who sought to cash out in a manner consistent with a Ponzi scheme. Furthermore, the conspirators misappropriated large amounts of cash for themselves, including, primarily, to support the lavish lifestyle of Individual #1. 1 Global also paid substantial commissions and other expenses with investor funds without disclosing the extent of these payments.
According to the court record, co-conspirators at 1 Global made false statements to investors that gave the impression that 1 Global had an independent auditor. These misrepresentations were made in monthly statements mailed to investors that falsely showed profitable investments. The statements gave the false impression that the finances had been independently verified by an outside audit firm. As 1 Global continued to lose money over time, the cash shortfall continued to increase and 1 Global was only able to continue operations by raising new investor funds before its eventual collapse in July 2018.
According to the court record, Schwartz was also aware that 1 Global had received written legal advice authored by an outside law firm retained by 1 Global, and that in memoranda received from this outside law firm, the firm opined that 1 Global was improperly offering unregistered securities, in violation of federal law. Despite having received this advice in or around June and July 2016, Schwartz, Individual #1, and their co-conspirators continued to operate the business and hid the advice contained in the legal memoranda from investors, failing to disclose the risks it described. Moreover, instead of following this advice, Individual #1 and co-conspirators not only concealed it from the investors, but also sought false legal cover from co-conspirator Jan Douglas Atlas, who authored opinion letters based on false and fraudulent information, stating that 1 Global’s offerings were not securities.
1 Global operated from early 2014 through approximately July 27, 2018, when it filed for bankruptcy. As of that time, according to documents from related cases, 1 Global had more than 3,600 investors and had raised more than $330 million, and its own internal documents showed a $50 million cash deficit. The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (S.D. Fla.), remains pending.
In connection with a parallel civil enforcement action, the SEC announced the filing of civil fraud charges against Schwartz on January 6, 2020. In related cases, the SEC previously filed civil fraud actions, captioned, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (S.D. Fla.); SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (S.D. Fla.); and SEC v. Jan Douglas Atlas, 19-62303-CV-WPD (S.D. Fla.).
Two co-conspirators have pled guilty to charges arising from their roles in the 1 Global fraud, in related criminal cases pending in the Southern District of Florida: United States v. Alan G. Heide, 19-60231-CR-RKA, and United States v. Jan Douglas Atlas, 19-60258-CR-RKA.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI’s Miami Field Office and the IRS-CI’s Miami Field Office. She also thanked the SEC’s Miami Regional Office and Florida’s Office of Financial Regulation for their assistance. This case is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Lisa H. Miller, as well as Assistant Chief Rush Atkinson from the Criminal Division’s Fraud Section. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture related to the matter.
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 at http://pacer.flsd.uscourts.gov.
Former Case Manager at Northwestern Community Services Board Pleads Guilty to Federal ChargeRead the Press Release
Harrisonburg, VIRGINIA – A former case manager at the Northwestern Community Services Board [NWCSB] pleaded guilty yesterday in U.S. District Court in Harrisonburg to illegally accessing the health care information of another individual, United States Attorney Thomas T. Cullen announced today.
Melissa Thomas, 45, of Winchester, Va., pled guilty yesterday to one count of accessing the individually identifiable health care information of a minor child for whom she was not the case manager.
According to court documents, Thomas worked as a case manager at NWCSB from September 2009 through January 2014. In December 2013, an individual lodged a complaint that Thomas had accessed her minor child’s health record, breaching confidentially. Thomas was subsequently investigated by the NWSCB and the Office of Inspector General for the Department of Health and Human Services and it was determined she willfully and knowingly violated the law by illegally accessing the record of the minor child. Thomas was terminated from her employment for the illegal access on January 7, 2014.
The investigation of the case was conducted by the United States Office of Inspector General for the Department of Health and Human Services Roanoke Field Office. Assistant United States Attorney Ronald M. Huber is prosecuted the case for the United States.
Florida woman admits trying to transport illegal aliensRead the Press Release
GREAT FALLS – A Florida woman today admitted she drove to Sweetgrass in September last year to try to pick up three illegal aliens from Mexico to take them back to Florida, U.S. Attorney Kurt Alme said.
Lucia Marlene Mendez, 34, of Tampa, Fla., pleaded guilty to attempted transportation of an illegal alien. Mendez faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release.
U.S. District Judge Brian M. Morris presided and set sentencing for May 6. Mendez was released pending further proceedings.
The prosecution said in court records that at about 4:15 a.m. on Sept. 8, 2019, a Border Patrol agent saw a suspicious black 2018 Dodge Caravan, with a Florida license plate registered to a vehicle rental company, driving in Sweetgrass, about a block from where three illegal aliens from Mexico had been apprehended.
Border Patrol agents pulled over the Caravan, and Mendez, the driver, and a passenger, her boyfriend, were identified. Mendez is a U.S. citizen, but boyfriend was an undocumented alien from Mexico and in the country illegally. Mendez initially told agents that she was on vacation and was looking for a hotel. After being told that one of the undocumented aliens had already told an agent that she was coming to pick them up, Mendez acknowledged she was there to get them.
Mendez told agents that she was to be paid $600 for driving from Florida to Sweetgrass to get the illegal aliens. She was given $1,000 for gas and hotels for roundtrip travel to Montana and back to Florida. Mendez told agents that had she realized how far Sweetgrass was from Florida, she would have asked for more money.
Assistant U.S. Attorney Paulette Stewart is prosecuting the case, which was investigated by the U.S. Border Patrol.
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Federal Jury Finds Virginia Man Guilty of Sex Offense Involving a MinorRead the Press Release
BLUEFIELD, W.Va. – A federal jury convicted a Virginia man yesterday after a two-day trial, announced United States Attorney Mike Stuart. The jury found Jeffrey William Sexton, Jr., 27, of Virginia Beach, guilty of traveling across state lines to engage in illicit sexual activity with a minor on June 1, 2019.
“As a dad, I cannot adequately describe how much matters like this trouble me. Cases like this are disturbing and difficult to work. Sexton thought he was traveling to engage in sex with a 13 year old and, to the nightmare of every parent, even encouraged her to sneak out of her house,” said United States Attorney Mike Stuart. “We are blessed that Sexton was communicating with an undercover officer and not a real 13-year-old. We are doing everything within our power to keep West Virginia’s children safe from predators like Sexton. I want to thank the FBI Task Force and my prosecution team for bringing this case to a successful conclusion.”
Sexton had previously been charged in a single-count indictment with travel to engage in illicit sexual activity with a minor. At trial, evidence revealed that Sexton began communicating with an undercover law enforcement officer posing as a 13-year-old girl on a social messaging and dating application on approximately May 28, 2019. During the conversations, Sexton brought up the topic of oral sex with the purported minor. At approximately 1 a.m. on June 1, 2019, Sexton traveled from Bluefield, Virginia, to Bluefield, West Virginia, to meet the alleged 13-year-old after telling her to sneak out of her house. On May 31, 2019, Sexton had also reached out to chat with two other law enforcement officers posing as minors on the same messaging application, discussing oral sex with one officer who stated she was only 14 years old.
Sexton faces up to thirty years in prison when sentenced on May 19, 2020.
The investigation was the result of an undercover operation conducted by the Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force, which included task force officers from the Raleigh and Mercer County Sheriffs’ Departments.
Senior United States Senior Judge David A. Faber presided over the trial. Assistant United States Attorneys Jennifer Rada Herrald and Kathleen Robeson handled the prosecution.
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Federal Inmates Guilty of Escape from Beaumont FacilityRead the Press Release
BEAUMONT, Texas – Two federal inmates have pleaded guilty to escape from a Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Julian Villa-Gomez Lemus, 34, a Mexican national, and Robert Lloyd Young, 45, of Bruceville, Texas, each pleaded guilty to escaping from federal custody before U.S. Magistrate Judge Zack Hawthorn on Jan. 9, 2020.
According to information presented in court, on Oct. 11, 2019, the Jefferson County Sheriff’s Office received an anonymous tip alerting them that inmates at the Bureau of Prison Camp Facility in west Jefferson County were planning to escape from the facility in order to retrieve contraband that had been left for them in a field off Hillebrandt Road. Law enforcement officers surrounded the area in concealed locations and within several hours observed four inmates approaching on foot. All four inmates were apprehended after attempting to flee and detained. A search of the inmates revealed several cellular telephones and a bottle of whisky. All four were indicted by a federal grand jury on Nov. 6, 2019.
Lemus and Young were both serving federal prison sentences for drug trafficking convictions. Lemus was convicted in the Middle District of Florida while Young was convicted in the Western District of Texas.
“There have been ongoing issues with inmates walking away from this facility, which is a low security prison camp,” said U.S. Attorney Joseph D. Brown. “Bureau of Prison officials have continued to improve the security features at the camp, and we will continue to prosecute inmates that escape, and any friends or family members that help them in any way.”
Under federal statutes, Lemus and Young face up to an additional 5 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Marshals Service and prosecuted by Executive Assistant U.S. Attorney Brit Featherston.
Federal Firearms Charges Filed Against Two San Francisco Residents for Respective Roles in Shootout Resulting in MurderRead the Press Release
SAN FRANCISCO – A federal grand jury issued a superseding indictment charging Robert Manning and Jamare Coats for their respective roles in the March 23, 2019, shootout at the Fillmore Heritage Center, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. U.S. Attorney Anderson announced the charges as part of a press conference scheduled to coincide with Law Enforcement Appreciation Day (LEAD).
“We are all safer when federal and local law enforcement are allowed to work together,” said U.S. Attorney Anderson. “Cases clear faster when we remove obstacles to cooperation. There is no greater contributor to public safety than professional investigations and prompt charging decisions.”
"The streets of San Francisco cannot be used as a playground for gang warfare," said FBI Special Agent in Charge Bennett. "We work side-by-side with our state and local partners with a collaborative focus on keeping our neighborhoods safe."
"I am grateful for the assistance of the U.S. Attorney’s Office and the San Francisco office of the Federal Bureau of Investigations," said San Francisco Police Chief Scott. "Through the efforts of San Francisco's finest working in collaboration with our federal partners, we were able to obtain indictments in a violent crime that impacted the residents of our City, especially those who reside in the Fillmore District."
According to the superseding indictment, San Francisco residents Manning, 28, and Coats, 26, were members of a street gang called Mac Block that operated in San Francisco’s Western Addition. The indictment alleges Mac Block was an enterprise whose members engaged in racketeering activity, including murder, attempted murder, and robbery. According to the indictment, on March 23, 2019, Manning and Coats used and carried a firearm in connection with the murder of a victim. The indictment alleges that Manning and Coats used and carried a firearm for the purpose of maintaining and increasing their position in the Mac Block street gang.
Additional facts about the alleged crime appear in an order filed September 3, 2019, directing that Coats will remain detained pending further proceedings. For example, in the order, U.S. Magistrate Judge Elizabeth D. Laporte recites that the government proffered several facts at a hearing during which issues about detention were discussed. Among the facts proffered by the government were the following: Coats fired a weapon in front of the Fillmore Heritage Center, the victim died, and multiple bystanders were struck by gunfire. In addition, other court documents make clear that one bystander was paralyzed as a result of being struck by a bullet during the shootout.
Manning and Coats are charged with use of a firearm in furtherance of a crime of violence causing death, in violation of 18 U.S.C. § 924(j). In addition, each defendant is charged with one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g).
Both defendants are in custody. Coats is scheduled to be arraigned on January 10, 2020, before U.S. Magistrate Judge Sallie Kim, while Manning made his initial federal court appearance on January 2, 2020, in Fresno, California.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the 924(j) charge, the defendants face the maximum statutory sentence of the death penalty. If convicted of a 922(g) charge, the defendants face a maximum statutory sentence of 10 years in prison, 3 years of supervised release, and a $250,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The United States Attorney’s Office’s Organized Crime Strike Force is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the San Francisco Police Department.
LEAD was organized by Concerns of Police Survivors and was created to support the needs of local law enforcement officers. The event first was observed in 2015 and has been celebrated each year to address officer wellness, resilience, and suicide prevention efforts.
Federal Complaint Charges Honduran National with KidnappingRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Luis Analberto Pineda-Anchecta, 37, a Honduran national, has been charged with kidnapping via a federal criminal complaint filed in federal court in Charlotte.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD), join U.S. Attorney Murray in making today’s announcement.
According to allegations contained in the criminal complaint, on or about May 15, 2019, CMPD officers arrested Pineda-Anchecta on several state charges, including Assault on a Female and Communicating Threats against his ex-girlfriend, identified in court documents as F.M. Two days following his arrest, the complaint alleges that Pineda-Anchecta was released from state custody on bond.
As alleged in the criminal complaint, in the evening of May 21, 2019, F.M. was approached by two masked men as she was walking to her vehicle parked at her apartment complex in Charlotte. The victim recognized one of the masked men as the defendant, who allegedly proceeded to grab the victim by the arm, stuff a cloth in her mouth, and then wrap a cord or rope around her head so the cloth would stay in place. The complaint alleges that Pineda-Anchecta and the other masked man then forced F.M. against her will into the passenger seat of a vehicle. As alleged in the complaint, Pineda-Anchecta then told F.M. “I love you and I’m going to kill you.” The complaint alleges that the other masked individual did not accompany Pineda-Anchecta and F.M. in the vehicle.
According to allegations in the criminal complaint, Pineda-Anchecta drove his vehicle on Lancaster Highway. While Pineda-Anchecta was driving, the complaint alleges that he maintained a tight grip on the plastic rope tied around the victim’s face. According to the complaint, after traveling a short while on Lancaster Highway, Pineda-Anchecta parked his vehicle on the side of the road near a wooden area and turned off the vehicle’s engine. Pineda-Anchecta maintained his grip on the plastic rope around F.M.’s face, and allegedly pulled the victim out of the car and dragged her toward the wooded area near the road.
The complaint alleges that, following a struggle between Pineda-Anchecta and F.M., the victim was able to escape and run into the middle of the highway, and was assisted by motorists who stopped to offer help. According to allegations in the complaint, the victim identified Pineda-Anchecta as the person who had assaulted her.
The complaint further alleges that Pineda-Anchecta left the scene on foot. After obtaining a search warrant, CMPD officers searched Pineda-Anchecta’s vehicle, from which they recovered a spool of plastic rope similar to the rope wrapped around the victim’s face during the course of the kidnapping. Law enforcement also located the victim’s phone in Pineda-Anchecta’s vehicle.
Pineda-Anchecta is currently in federal custody. He was previously convicted of illegal reentry by a deported alien, and, on January 7, 2020, he was sentenced to seven months in prison. Pineda-Anchecta will appear in federal court on the new federal charges on Friday, January 10, 2020. The kidnapping charge carries a maximum term of life in prison.
The charges contained in the complaint are allegations. The defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray commended ICE’s Homeland Security Investigations and CMPD for their investigation of this case. He also thanked ICE’s Enforcement and Removal Operations for their assistance.
Assistant U.S. Attorney Kenneth Smith is in charge of the prosecution.
Fayetteville Man Sentenced to over 15 Years in Federal Prison for Drug TraffickingRead the Press Release
Fayetteville, Arkansas – Duane (DAK) Kees, United States Attorney for the Western District of Arkansas; announced today that Danny Witt, age 50, was sentenced today to 188 months in federal prison followed by five years of supervised release on one count of Possession with Intent to Distribute More Than 50 grams of a Mixture or Substance Containing Methamphetamine. The Honorable Judge Timothy L. Brooks presided over the sentencing hearings today in the United States District Court in Fayetteville.
In January of 2019, detectives with the 4th Judicial Drug Task Force learned that Witt was trafficking methamphetamine in the Northwest Arkansas area. On January 7, 2019, knowing that Witt had a search waiver on file, detectives located and approached Witt in the parking lot of a motel in Fayetteville, Arkansas. While speaking with Witt, he spontaneously admitted to being in possession of a firearm. During the search of Witt’s person, Detectives located approximately 4 ounces of methamphetamine on his person.
The methamphetamine was subsequently sent to the DEA Crime Lab in Miami, Florida and tested positive for 111.5 grams of methamphetamine.
Witt was indicted by a federal grand jury in June of 2019 and entered a guilty plea in August of 2019.
This case was investigated by the State of Arkansas Fourth (4th) Judicial District Drug Task Force. Assistant United States Attorney David Harris prosecuted the case for the Western District of Arkansas.
Drug User Sentenced to Nearly Five Years in Federal Prison for Illegally Possessing Two GunsRead the Press Release
An illegal user of methamphetamine and marijuana who left a sawed-off shotgun in the car, but carried a handgun into a hotel was sentenced January 8, 2020, to almost five years in federal prison.
Adrian Zarate, age 26, from Waterloo, Iowa, received the prison term after an August 21, 2019, guilty plea to unlawfully possessing a sawed-off shotgun.
At the guilty plea, Zarate admitted he illegally possessed a sawed-off shotgun that he knew had been cut short on October 11, 2018. On that day, Zarate and his girlfriend drove her car to a hotel in Waterloo. They went and checked into the hotel. Zarate left the sawed-off shotgun in his girlfriend’s car. The shotgun could be seen in the car from the outside. Zarate and his girlfriend took a backpack with a handgun in it into the hotel.
Waterloo police received a tip that Zarate had the shotgun. Officers located the car in the hotel parking lot, saw the sawed-off shotgun, and went to Zarate’s room. Officers eventually searched the room and found the handgun, which had an obliterated serial number and was loaded with six bullets, two glass pipes with meth residue, shotgun shells, and a large knife. Officers seized the sawed-off shotgun from the car. They also found an axe, a machete, handgun magazines, and a digital scale with meth residue in the car. Zarate later tested positive for meth and marijuana.
Zarate was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Zarate was sentenced to 57 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: [list partners here]. For more information about Project Guardian, please see /media/1122011/dl?inline.
Zarate is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by a Federal Task Force composed of the Waterloo Police Department, Federal Bureau of Investigation, and Bureau of Alcohol Tobacco and Firearms assisted by the Black Hawk County Sheriff’s Office and Cedar Falls Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-cr-2073.
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Drug Trafficker Admits Mailing Thousands of Packages containing Fentanyl, Methamphetamine and Heroin to Customers around the U.S.Read the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – January 9, 2020
SAN DIEGO – Erik Alexi Martineau, a U.S. citizen who was living in Mexico, pleaded guilty in federal court today, admitting that he mailed an estimated 7,800 parcels containing fentanyl, methamphetamine and heroin from San Diego to locations throughout the U.S.
Martineau pleaded guilty before U.S. Magistrate Judge Barbara Major to Conspiracy to Distribute Controlled Substances. He is scheduled to be sentenced on March 30 at 9 a.m. by U.S. District William Q. Hays. Martineau faces a mandatory minimum sentence of 10 years in custody.
“The use of the Postal Service to distribute dangerous drugs – particularly deadly fentanyl – puts the Postal Service and the public at risk,” said U.S. Attorney Robert Brewer. “We are not going to allow drug traffickers to hijack the U.S. Mail.”
According to his plea agreement, in January 2018, Martineau rented a storage unit in San Diego County to package controlled substances like methamphetamine, heroin, and fentanyl for shipment to various locations. The defendant also opened a business account at an office supply store so that he could print shipping labels for parcels containing controlled substances.
From January 2018 to June 29, 2019, Martineau received multiple shipping labels from others and arranged to print them at an office supply store. He picked up the controlled substances from various locations in San Diego and packaged the controlled substances inside his rented storage locker. During the 18-month conspiracy, Martineau packaged approximately 100 parcels each week, or about 7,800 parcels.
During the investigation conducted by the U.S. Postal Inspectors and Homeland Security Investigations, law enforcement seized hundreds of parcels containing controlled substances.
Brewer praised Assistant U.S. Attorney Sherri Walker Hobson and federal agents from Homeland Security Investigations and the U.S. Postal Inspectors for uncovering the scheme and working hard to achieve justice.
DEFENDANT
Erik Alexis Martineau Age: 50 Mexico
SUMMARY OF CHARGES Case Number 19cr2836WQH
Conspiracy to Distribute Controlled Substances, in violation of 21 U.S.C. 841 and 846
Maximum Penalty: Life in prison (10-year minimum mandatory); $10 million fine
INVESTIGATING AGENCIES
U.S. Postal Inspectors
Homeland Security Investigations
Defendant Receives 12 Months in Human Trafficking CaseRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces today that United States District Judge Terry F. Moorer sentenced defendant Alexis Hernandez, 23, of Houston, Texas, to imprisonment for 12 months for unlawfully transporting illegal aliens in the United States. As part of the sentence, the judge ordered that Hernandez be subject to three years of supervised release after finishing his term of imprisonment, pay a $100 mandatory special assessment, and receive substance abuse testing and treatment as directed by the U.S. Probation Office.
On October 10, 2019, United States Attorney Moore charged Hernandez with one count of unlawfully transporting aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(ii) and (B)(i). Hernandez appeared in court the following day and pleaded guilty to the charge.
Hernandez admitted to the following facts at his plea hearing. On October 1, 2019, Mobile County Sheriff’s Office Deputy Aubrey Bishop was conducting interdiction operations on Interstate 10 near Grand Bay, Alabama. At 11:45 a.m., Bishop saw a Toyota Sequoia vehicle bearing a Texas license plate traveling eastbound on I-10. He saw the vehicle exit off the interstate without using a turn signal. Bishop activated his emergency lights and conducted a traffic stop on the vehicle for the traffic violation. Bishop approached the vehicle and made contact with the driver, who was Hernandez. Bishop explained to him why he was stopped and asked for his driver’s license. Hernandez was unable to produce a driver’s license and instead produced another identification card. Bishop asked a passenger if he had a license. The passenger did not speak English; the passenger did not have a driver’s license and produced a foreign identification card instead. A United States Border Patrol Agent arrived on the scene to assist with the traffic stop. The vehicle had eight occupants: Hernandez and seven passengers who were illegal aliens. The eight occupants were transported to the Mobile, Alabama Border Patrol Station.
At the station, U.S. Border Patrol Agent Daniel W. Roland interviewed several passengers in Spanish. One of the passengers (“Alien 1”), a Honduran national, said that she had illegally crossed the United States border near Camargo, Mexico (Rio Grande City, Texas). Alien 1 said that she had gotten in a truck with a trailer driven by an unknown male. Alien 1 said that she had ridden in the truck until arriving in Houston, Texas. Alien 1 said that she had stayed at an apartment in Houston, Texas for approximately four days. Alien 1 said that there were other illegal aliens at the apartment with her. Alien 1 said that the woman, who appeared to be in charge of the apartment, took her to a gas station and waited with her until another vehicle arrived. According to Alien 1, when the other vehicle arrived the woman told her to get in the vehicle. Alien 1 said that Hernandez was the driver of the vehicle. Alien 1 said that her brother had made the arrangements to be smuggled to Silver Spring, Maryland.
Agent Roland interviewed another passenger (“Alien 2”). Alien 2, an Ecuadorian national, said that he had illegally crossed the United States border near Miguel Aleman, Mexico (Roma, Texas). Alien 2 said that after crossing the border, he was taken to Houston, Texas by vehicle where he was taken to a house. Alien 2 said that he had stayed at the house in Houston for approximately four days. Alien 2 said that an unknown individual took him to a parking lot where they waited for another vehicle to arrive. Alien 2 said that another vehicle showed up driven by Hernandez. Alien 2 said that he had gotten in the vehicle. Alien 2 said that his brother had made the arrangements for him to be smuggled to New York.
Agent Roland interviewed another passenger (“Alien 3”). Alien 3, a Mexican national, said that he had illegally crossed the United States border near Camargo, Mexico (Rio Grande City, Texas). Alien 3 said that after he had crossed the border, he was taken to Houston, Texas, where he was taken to a house and told to wait for a vehicle to arrive. Alien 3 said that a vehicle arrived at the house and that he had entered the vehicle. Alien 3 said that Hernandez was the driver of the vehicle. Alien 3 said that his uncle had made the arrangements for him to be smuggled to South Carolina.
Agent Roland interviewed another passenger (“Alien 4”). Alien 4, an Ecuadorian national, said that he had illegally crossed the United States border near McAllen, Texas. Alien 4 said that he was driven from McAllen, Texas to Houston, Texas by an unknown individual. Alien 4 said that he was taken to a house in Houston, Texas where he was told to wait for a vehicle to arrive. Alien 4 said that an unknown person at the house and took him to a store, where they waited for another vehicle to arrive. Another vehicle did arrive, driven by Hernandez. Alien 4 said that he was told to get in the car driven by Hernandez. Alien 4 said that his father had made the arrangements for him to be smuggled to New York.
Agent Roland also interviewed Hernandez. He said that a relative had told him that she knew of a woman that had some people who needed to go up north. Hernandez said that the woman’s son dropped off the individuals – who were discovered in Hernandez’s vehicle during Bishop’s traffic stop – at his house. Hernandez said that the individual gave him some gas money and an address. Hernandez said that he believed that he was going to be paid $100 per alien located in the vehicle.
The United States Border Patrol and the Mobile County Sheriff’s Office investigated the case. Assistant United States Attorney Sinan Kalayoglu prosecuted the case.D.C. Man Pleads Guilty to Firearms Charge in ATF Firearms and Narcotics InvestigationRead the Press Release
WASHINGTON – Kevin Stackhouse, 31, of Southeast, D.C. pled guilty yesterday to a federal firearms charge stemming from his narcotics trafficking in the summer and fall of 2019, announced U.S. Attorney Jessie K. Liu, Ashan M. Benedict, Special Agent in Charge of the Washington Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Stackhouse pled guilty in the U.S. District Court for the District of Columbia to one count of Using, Carrying, and Possessing a Firearm in Furtherance of a Drug Trafficking Offense. He will be sentenced on March 30, 2020 by the Honorable Judge Amit P. Mehta. He faces a minimum term of incarceration of five years and up to life in prison.
Stackhouse was arrested after the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) engaged in a large-scale drug investigation in the 2900 block of Martin Luther King Jr. Avenue, Southeast, Washington, D.C. and arrested multiple individuals involved with narcotics trafficking. During the investigation, the ATF conducted several controlled purchases of narcotics from Stackhouse, including the purchase of cocaine base (also known as crack cocaine). On October 9, 2019, ATF obtained a search warrant and conducted a search of Stackhouse’s residence, finding a digital scale, drug paraphernalia, cocaine residue, two loaded firearms – a .22 caliber firearm and a revolver – and four imitation firearms. Law enforcement also recovered nearly 400 rounds of ammunition, and two additional firearms magazines.
“This investigation is another example of our desire and ability to disrupt drug trafficking organizations in the District of Columbia,” said U.S. Attorney Liu. “As a result of this effort, we were able to remove six firearms or imitation firearms, all of which are dangerous tools used in the drug trade and can harm our community.”
This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation. OCDETF specializes in the investigation and prosecution of drug trafficking and money laundering organizations and related criminal enterprises.
This case was also prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide crime-reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety - one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the District of Columbia, U.S. Attorney Jessie K. Liu coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
In announcing the plea, U.S. Attorney Liu, Special Agent in Charge Benedict, and Chief Newsham commended the work of those who investigated the case, including ATF and MPD. They also expressed appreciation for the assistance provided by the United States Secret Service, U.S. Marshals Service, Prince George’s County, Md. Police Department, and the U.S. Attorney’s Office for the District of Maryland.
Finally, they cited the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, Assistant U.S. Attorney Gregory Rosen of the Violent Crime and Narcotics Section, Paralegal Specialist Teesha Tobias, Kim Hall, and Candace Battle, and Legal Assistant Peter Gaboton.
Convicted Felon Who Possessed Firearm Sentenced to 180 Months in Federal PrisonRead the Press Release
LITTLE ROCK— Raymond Trice, a multi-convicted felon, will spend the next 180 months in federal prison for illegally possessing a firearm. Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced the sentence, which was handed down today by Chief United States District Judge D.P. Marshall, Jr.
Trice, 43, of Jonesboro, pleaded guilty to one count of being a felon in possession of a firearm on August 6, 2019. At that hearing, Trice admitted that on December 18, 2017, a Jonesboro police officer saw Trice peering into the windows of parked cars in the early morning hours. Trice fled when police tried to question him. Later, police found a loaded .38 caliber revolver along the route where Trice fled.
Trice admitted that he had previous convictions for multiple offenses, including battery, aggravated assault, robbery, burglary, and possession of cocaine. Judge Marshall also sentenced Trice to four years of supervised release to follow his 15-year prison sentence.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support of the Jonesboro Police Department. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
# # #
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Convicted Felon Sentenced to 98 Months in Prison for Illegal Possession of FirearmsRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of RICHARD ALONZO WOODS, 36, to 98 months in prison for illegally possessing two firearms and for violating the terms of his supervised release. WOODS, who pleaded guilty on May 9, 2019, was sentenced today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota. On August 1, 2019, WOODS’s co-defendant, DAMON TYRELL LEE ACON, 23, was sentenced to 60 months in prison for illegal possession of firearms.
According to his guilty plea and documents filed in court, on May 18, 2018, WOODS and ACON knowingly possessed two firearms, namely, a Magnum Research, Desert Eagle 9mm pistol, and a Cobra CA380, .380 caliber pistol. Because WOODS and ACON have prior felony convictions, they are prohibited under federal law from possessing firearms at any time.
This case was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Minneapolis Police Department. This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Paul Police Department. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state, and local law enforcement to combat violent crime. This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.
This case was prosecuted by Assistant U.S. Attorneys Samantha H. Bates, W. Anders Folk, and former Assistant U.S. Attorney Surya Saxena.
Defendant Information:
RICHARD ALONZO WOODS, 36
Minneapolis, Minn.
Convicted:
- Felon in possession of a firearm, 1 count
Sentenced:
- 98 months in prison
- Three years of supervised release
DAMON TYRELL LEE ACON, 23,
St. Paul, Minn.
Convicted:
- Felon in possession of a firearm, 1 count
Sentenced:
- 60 months in prison
- Three years of supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Co-Founder of Investment Fund Pleads Guilty to Conspiracy, Securities Fraud, Wire Fraud, and Investment Adviser Fraud ChargesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JASON RHODES pled guilty today before U.S. District Judge Sidney H. Stein to securities fraud, wire fraud, investment adviser fraud, and conspiracy charges in connection with his participation in a scheme to defraud approximately 25 investors in Sentinel Growth Fund Management, LLC (“Sentinel”), a hedge fund RHODES co-founded, out of approximately $19.6 million by lying to the investors and using investor funds for his own personal use and to make repayments to earlier investors in a Ponzi-like manner.
U.S. Attorney Geoffrey S. Berman said: “As he admitted in court today, Jason Rhodes solicited investors’ money with a promise to invest it in securities. Instead, he used it to line his own pockets and to pay off other investors who were demanding their money. Rhodes now faces significant time in federal prison for his admitted crimes.”
According to the Indictment and other Court filings:
Beginning in at least 2013 and through in or about December 2016, RHODES, together with his co-conspirators, solicited investments in Sentinel by falsely representing to investors that their funds would be used for legitimate, specified investment purposes, namely purchasing securities. In fact, RHODES failed to invest the investor monies as promised, but rather diverted investor funds to his own personal use and the personal use of his co-conspirators and, in a Ponzi-like manner, to make repayments to other investors who were demanding their money. Among other things, RHODES diverted investor funds to a trucking business operated by RHODES and his wife; to pay more than $1 million to settle an unrelated civil lawsuit filed against RHODES and one of his co-conspirators; and on other personal expenses including a resort stay in Dubai and a luxury time-share vacation club. Through this scheme, RHODES and his co-conspirators defrauded approximately 25 investors out of a total of approximately $19.6 million.
Among other fraudulent acts, RHODES and a co-conspirator falsified an account statement for an investor (“Investor-1”) to conceal the fact that RHODES and his co-conspirators had misappropriated most of the $4.2 million Investor-1 had invested in Sentinel. After Investor-1 discovered the fraudulent nature of the account statement, RHODES, working with others, obtained funds from yet another investor (“Investor-2”) in order to make payments to Investor-1. RHODES and his co-conspirators then, on multiple occasions, created fraudulent reports for Investor-2, falsely reflecting that Investor-2’s funds were invested with portfolio managers in Sentinel’s brokerage accounts and were earning returns. In truth and in fact, and as RHODES well knew, Investor-2’s funds had been almost entirely misappropriated upon their receipt to repay Investor-1, and were not being managed by portfolio managers on Sentinel’s platform.
* * *
RHODES, 47, of Rowayton, Connecticut, pled guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, one count of wire fraud, and one count of investment adviser fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The investment adviser fraud count carries a maximum sentence of five years in prison and a maximum fine of $10,000.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
RHODES is scheduled to be sentenced by Judge Stein on April 6, 2020, at 2:30 p.m.
Mr. Berman praised the work of the Federal Bureau of Investigation. He also thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Elisha J. Kobre and Jared Lenow are in charge of the prosecution.
Canton, Texas Man Sentenced for East Texas Drug Trafficking CrimesRead the Press Release
TYLER, Texas – A 44-year-old Canton, 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.
Robby Dale Baker pleaded guilty on June 21, 2019, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 130 months in federal prison by U.S. District Judge Jeremy D. Kernodle on Jan. 7, 2020. Baker was also ordered to pay a money judgment in the amount of $8,000.
According to information presented in court, in March, April, and May of 2018, Baker sold methamphetamine on three separate occasions. On May 22, 2018, law enforcement executed a search warrant at Baker’s Canton, Texas residence and recovered more methamphetamine, as well as several firearms and ammunition. Baker admitted to being involved in a drug trafficking conspiracy to distribute methamphetamine to others. Baker was indicted by a federal grand jury on July 27, 2018.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Van Zandt County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Alan Jackson.
Bottler of Crystal Geyser Water Pleads Guilty to Illegally Storing and Transporting Hazardous Wastewater Contaminated with ArsenicRead the Press Release
LOS ANGELES – The company that produces “Crystal Geyser Natural Alpine Spring Water” pleaded guilty this morning to federal charges of illegally storing and transporting hazardous waste created from filtering arsenic out of spring water at its facility in Olancha, California.
CG Roxane, LLC pleaded guilty to one count of unlawful storage of hazardous waste and one count of unlawful transportation of hazardous material. In a plea agreement recently filed in United States District Court, CG Roxane agreed to pay a criminal fine of $5 million.
According to court documents, CG Roxane obtained water by drawing groundwater from the eastern slope of the Sierra Nevada mountains that contained naturally occurring arsenic. The company used sand filters to reduce the concentration of arsenic so the water would meet federal drinking water standards. To maintain the effectiveness of the sand filters, CG Roxane back-flushed the filters with a sodium hydroxide solution, which generated thousands of gallons of arsenic-contaminated wastewater.
For approximately 15 years, CG Roxane discharged the arsenic-contaminated wastewater into a manmade pond – known as “the Arsenic Pond” – at its Olancha facility along Highway 395.
In March 2013, the Lahontan Regional Water Quality Control Board took a sample from the Arsenic Pond and in 2014 informed CG Roxane that the sample had an arsenic concentration that was more than eight times the hazardous waste limit, creating a risk to the area’s groundwater and wildlife. The water board referred the matter to the California Department of Toxic Substances Control (DTSC), which took its own samples that showed the Arsenic Pond had an arsenic concentration almost five times the federal hazardous waste limit. Subsequent sampling and testing by CG Roxane and its retained laboratory confirmed a similar arsenic concentration in the Arsenic Pond.
DTSC officials met with CG Roxane representatives in April 2015, presented a list of preliminary violations, and instructed the company to arrange for the removal of the Arsenic Pond.
In May 2015, CG Roxane hired two Los Angeles-area entities to remove the hazardous waste and transport it – which was done without the proper manifest and without identifying the wastewater as a hazardous material, according to court documents. The arsenic-contaminated wastewater was ultimately transported to a Southern California facility that was not authorized to receive or treat hazardous waste. As a result, more than 23,000 gallons of the wastewater from the Arsenic Pond allegedly was discharged into a sewer without appropriate treatment.
CG Roxane pleaded guilty to the two felony offenses before United States District Judge S. James Otero, who scheduled a sentencing hearing for February 24.
The two companies hired to transport and treat the wastewater – United Pumping Services, Inc. and United Storm Water, Inc., both located in the City of Industry – were charged along with CG Roxane in this case in 2018. Both of those companies are scheduled to go on trial on April 21. If convicted, each company would face a statutory maximum fine of $8 million.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The investigation in this case focused on alleged violations involving the handling, storage and transportation of CG Roxane’s wastewater, not the safety or quality of CG Roxane’s bottled water.
The investigation in this matter is being conducted by the United States Environmental Protection Agency, Criminal Investigations Division and the United States Department of Transportation’s Office of Inspector General. These federal agencies received assistance from the California Department of Toxic Substances Control.
This case is being prosecuted by Assistant United States Attorneys Dennis Mitchell, Heather C. Gorman and Michael G. Freedman of the Environmental and Community Safety Crimes Section.
The United States Attorney’s Office for the Eastern District of California also assisted in the investigation.
Boston Career Criminal Pleads Guilty to Drug and Firearm ChargesRead the Press Release
BOSTON – A career criminal, still on supervised release from a previous federal drug trafficking conviction, pleaded guilty today in federal court in Boston to drug trafficking and firearm charges.
Damien Bynoe, 44, of Roxbury, pleaded guilty to one count each of being a felon in possession of a firearm and ammunition and possession with intent to distribute heroin and cocaine. U.S. District Court Judge William G. Young scheduled sentencing for April 29, 2020.
On Jan. 19, 2019, police officers executed a search warrant and seized a loaded gun, heroin and cocaine from an apartment in Roxbury tied to Bynoe, as well as additional amounts of heroin and cocaine from Bynoe himself.
In 2009, Bynoe was convicted in federal court in Boston of distribution of cocaine base within 1000 feet of a school. For that offense, Bynoe was sentenced to six years in prison and six years of supervised release. While on supervised release, Bynoe was arrested and charged with the offenses he was sentenced for today.
According to court documents, Bynoe’s criminal record also includes a 2007 conviction for assault with a firearm; a 2001 conviction for distribution of cocaine in a school zone, for which he served five years in prison; and a 1991 juvenile delinquency adjudication for murder and unlawful possession of a firearm, in which Bynoe shot and killed two teenagers on a Roxbury street.
On the felon in possession of a firearm charge, based on his prior criminal record, Bynoe faces a mandatory minimum sentence of 15 years and up to life in prison, up to five years of supervised release and a fine of up to $250,000. The charge of possession with intent to distribute heroin and cocaine provides for a sentence of up to 30 years in prison, at least six years of supervised release and a fine of up to $2 million. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William Gross made the announcement today. Assistant U.S. Attorney Christopher Pohl of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
Amherst Man Charged with Trafficking Exotic CatsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr., and Assistant Attorney General Jeffrey Bossert Clark announced today that a federal grand jury has returned an indictment charging Christopher Casacci, 38, of Amherst, NY, with violating the Lacey Act and the U.S. Animal Welfare Act based on his alleged trafficking of African wild cats in interstate commerce. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
The indictment alleges that the defendant, doing business as “ExoticCubs.com,” imported and sold dozens of caracals (Caracal caracal) and servals (Leptailurus serval) in interstate commerce between February and June of 2018. Caracals, also known as the “desert lynx,” are wild cats native to Africa, and grow to approximately 45 pounds. Servals, also wild cats native to Africa, grow to approximately 40 pounds. Both species are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and their commercial possession and sale is restricted under New York state law.
Casacci is also charged with disguising his commercial activity by falsely declaring the animals as domesticated breeds, such as savannah cats and bengal cats, on shipping records.
People and businesses dealing in animals are required to comply with humane care standards under the Animal Welfare Act. The defendant is alleged to have failed to do so, and to have failed to secure the necessary license from the U.S. Department of Agriculture. Casacci is charged with violating the Animal Welfare Act for selling animals without a license showing minimum compliance with humane treatment standards.
The defendant was arraigned this morning before U.S. Magistrate Judge Michael J. Roemer and was released on conditions. He is due back in court for a status hearing on January 23, 2020, at 1:00 p.m.
The indictment is the result of an investigation by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, under the direction of Special Agent-in-Charge Ryan Noel, and the New York State Department of Environmental Conservation, Bureau of Environmental Crimes Investigation. The case is being prosecuted by Trial Attorney Patrick Duggan and Assistant United States Attorney Aaron J. Mango.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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