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5 December 2019
Former Texas Correctional Officer Pleads Guilty to Civil Rights Offense for Assaulting InmateRead the Press Release
Tavoris Bottley, 34, a former Senior Correctional Officer at the Federal Correctional Complex (FCC) in Beaumont, Texas, pleaded guilty in court today to assaulting a federal inmate housed at the facility.
According to documents filed in connection with the guilty plea, on June 8, 2017, Bottley, while on duty as a federal correctional officer at FCC Beaumont, punched A.A, an inmate, in the face and head multiple times without justification. Bottley admitted that he and his supervisor, Lieutenant Khristal Ford, intentionally unlocked and entered the secured cell where A.A. was being held with the intention of assaulting the inmate for being disrespectful and throwing a food tray. Bottley admitted that he then punched A.A., even though the inmate did not pose any threat at the time.
Khristal Ford previously pleaded guilty on May 29, 2019, to aiding and abetting in the assault of A.A., and admitted to submitting written reports that omitted any reference to the assault in an effort to cover up the incident and make it appear justified.
“This conduct by a federal correctional officer erodes public trust,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department of Justice will continue to vigorously prosecute those who violate the civil rights of inmates.”
“Correctional officers have an obligation to be professional” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas. “Unprovoked violence not only violates the rights of the inmate, but hurts the reputations of law enforcement professionals who do things the right way.”
“When Bottley assaulted this inmate, he violated the inmate’s civil rights and he betrayed the oath of office he swore to uphold when he became a federal Corrections Officer,” said Robert A. Bourbon, Special Agent in Charge of the Department of Justice Office of the Inspector General Dallas Field Office.
Bottley faces a maximum statutory penalty of up to 10 years in prison and a fine of up to $250,000. 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 Department of Justice, Office of the Inspector General, and was prosecuted by Trial Attorney Katherine G. DeVar of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Michael A. Anderson of the Eastern District of Texas.
Former President of Little Falls Credit Union Sentenced to 96 Months in Prison for $2.5 Million Fraud SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of MARGURITE MARY COFELL, 62, to 96 months in prison for orchestrating a multimillion dollar credit union fraud scheme. COFELL, who pleaded guilty on April 3, 2019, to one count of credit union fraud, was sentenced on December 3, 2019, before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from at least June 2006 through January 2014, COFELL was the Manager, Chief Operating Officer and/or President of the St. Francis Campus Credit Union located in Little Falls, Minnesota. In that capacity, COFELL was responsible for the oversight of the daily operations of the credit union, and ensuring proper documentation of the credit union transactions. COFELL used her access and position to fraudulently divert credit union funds to herself and other members of the credit union, including family members, friends and businesses in the Little Falls and Flensburg area. COFELL did so by authorizing fictitious loans or increasing the balances on existing, legitimate loans without the knowledge or authorization of the borrowers, issuing checks from the credit union despite the absence of any corresponding deposits into the credit union, making fictitious electronic deposits into the accounts of credit union members that they did not contribute but later withdrew from the credit union, including an account held in her name, and accounts in the names of various family members and friends, taking cash from the tellers’ cash drawers and the credit union’s vault, and recording fictitious cash payments on loans held by family members. In total, COFELL caused a loss amount of $2,513,360.77 to the St. Francis Campus Credit Union. As a result of COFELL’s fraud, the St. Francis Campus Credit Union, which had served the Little Falls community for more than 50 years, was placed into liquidation due to insolvency.
This case was the result of an investigation conducted by the FBI.
Assistant United States Attorney Michelle E. Jones prosecuted the case.
Defendant Information:
MARGURITE MARY COFELL, 62
Little Falls, Minn.
Convicted:
- Credit union fraud, 1 count
Sentenced:
- 96 months in prison
- Five years of supervised release
- $2,513,360.77 in restitution
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former FAA Aviation Safety Inspector Sentenced to More than Six Years in Prison for Bribery and Fraud SchemeRead the Press Release
MIAMI, FL - A former Federal Aviation Administration (FAA) Safety Inspector Manuel R. Fernandez, 42, of Miami, was sentenced to 75 months in prison today, after having been convicted by a trial jury of twenty-one criminal counts related to his participation in a bribery and fraud scheme.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Todd A. Damiani, Regional Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), and George L. Piro, Special Agent in Charge, FBI’s Miami Field Office made the announcement.
According to the evidence at trial, from 2010 through June 28, 2013, Fernandez served as a FAA Aviation Safety Inspector with the FAA South Florida Flight Standards District Office (“FSDO”). Patricia Suarez and Rolando Suarez were the co-owners, officers, and directors of AVCOM, a Miami aviation repair company, which was subject to the jurisdiction and official responsibility of the FAA South Florida FSDO. The evidence showed that, at the same he was working for the FAA, Fernandez held various positions at AVCOM, including Vice President of Operations.
In exchange for Patricia Suarez and Rolando Suarez corruptly providing over $150,000 in cash, as well as jewelry, a cruise, clothing, and approximately $15,000 funneled to Fernandez’s mother, Fernandez violated his lawful and official duties as an FAA Aviation Safety Inspector. Fernandez provided AVCOM with advanced notice and warnings as to pending FAA inspections of AVCOM, disclosed financial information about AVCOM’s competitors, and provided AVCOM with improperly obtained aviation repair manuals produced by original equipment manufacturers such as Honeywell and Delta, saving AVCOM from paying vast sums of money for this proprietary information. The evidence further showed that Fernandez provided materially false statements to the FAA and DOT in order to hide his participation in these AVCOM-related activities. Additionally, Fernandez submitted a fraudulent sick leave request to the FAA, utilizing a forged doctor’s note.
Fernandez was convicted on June 13, 2019. Today, U.S. District Court Judge Marcia G. Cooke sentenced Fernandez to concurrent terms of 51 months in prison for his convictions on one conspiracy to commit bribery, fifteen counts of bribery, one count of providing false statements to a federal agency, and two counts of wire fraud. He was also ordered to serve 24 months in prison, to run consecutively to the sentence of 51 months in prison, for his conviction on the two counts of aggravated identity theft (Case No. 17-20780-Cr-Cooke).
The Court ordered Fernandez to surrender to authorities on January 6, 2020, to begin his federal prison sentence. A restitution hearing is scheduled for February 26, 2020 at 2:00 p.m.
Rolando Suarez previously pled guilty and was sentenced to 24 months in prison. Patricia Suarez previously pled guilty and was sentenced to 5 years’ probation with 240 days of electronic monitoring. Rolando and Patricia Suarez were ordered to jointly pay $711,940.46 in restitution.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the DOT-OIG and FBI in this matter. She also thanked the Hialeah Police Department, Miami Beach Police Department, and Miami-Dade Police Department for their assistance. This case was prosecuted by Assistant U.S. Attorneys Michael Davis and Yeney Hernandez. Assistant U.S. Attorney Alison Lehr is handling the asset forfeiture aspects of the case.
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 Chief Executive Officer of Publicly Traded Brand Management Company Charged with Accounting Fraud and Obstruction of JusticeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Carl W. Hoecker, the Inspector General of the Office of Inspector General of the U.S. Securities and Exchange Commission (“SEC-OIG”), announced today the unsealing of an Indictment in Manhattan federal court charging NEIL COLE, the former chief executive officer of Iconix Brand Group, Inc. (“Iconix”), a publicly traded brand management company, with engaging in a scheme to fraudulently inflate Iconix’s revenue and earnings per share and obstruct justice. The case is assigned to U.S. District Judge Edgardo Ramos.
Mr. Berman also announced today the unsealing of charges against Seth Horowitz, the former chief operating officer of Iconix, who pled guilty on December 2, 2019, and is cooperating with the Government.
COLE is expected to be presented and arraigned later today before U.S. Magistrate Judge Barbara C. Moses in Manhattan federal court.
United States Attorney Geoffrey S. Berman said: “As alleged, Neil Cole entered into illegal secret agreements with joint venture partners to artificially inflate the value to his company. Further, as alleged, Cole lied to outside auditors and to the SEC, and took steps to destroy evidence. Now Neil Cole is in custody and facing serious criminal charges for his alleged conduct. This is the third accounting fraud case brought by our Office in the last four months, which illustrates both the pervasiveness of this crime and my Office’s commitment to policing it.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Cole and Horowitz falsely represented the financial standing of Iconix’s revenue at the expense of its shareholders and the investing public. To aggravate matters further, they allegedly destroyed and concealed evidence from the SEC during their inquiry into the company’s joint ventures. This is not a crime to be taken lightly, and as our charges today prove, this type of alleged dishonorable behavior will not go unpunished.”
SEC Inspector General Carl W. Hoecker said: “We are committed to tracking down and bringing to justice those who are alleged to have deliberately undermined the integrity of the SEC’s mission. The charges announced by the U.S. Attorney’s Office are a result of the superb collaborative efforts of our law enforcement partners.”
According to the allegations contained in the Indictment[1] unsealed today in Manhattan federal court:
Iconix, whose shares traded on the NASDAQ, was in the business of acquiring various brands, including clothing and fashion brands, and then licensing those brands to retailers, wholesalers, and suppliers, who, in turn, produced and sold clothing and other products bearing the brand names.
Iconix utilized joint ventures (“JVs”) to profit from its brands in foreign markets. With respect to these JVs, Iconix transferred ownership of a trademark or brand to the JV while maintaining a 50 percent ownership interest in the JV itself. The other party involved in the JV purchased a 50 percent interest in the JV from Iconix. As part of the JV agreements, each JV partner was generally entitled to 50 percent of the JV’s licensing revenue. When it entered into a JV, Iconix recognized as revenue the buy-in purchase price paid by the JV partner, less Iconix’s cost basis in the trademarks.
Among the most critical financial metrics disclosed in Iconix’s public filings with the SEC were Iconix’s quarterly and annual revenue and non-GAAP diluted earnings per share (“EPS”). Iconix executives, including COLE, publicly identified revenue and EPS as the principal metrics demonstrating Iconix’s growth. They also touted Iconix’s consistent record of revenue and earnings growth and of meeting or exceeding Wall Street analyst consensus with respect to these metrics.
The Accounting Fraud Scheme
COLE and Horowitz engaged in a scheme to falsely inflate Iconix’s reported revenue and EPS by orchestrating a series of “round trip” transactions in which COLE and Horowitz induced a JV partner, a Hong Kong-based international apparel licensing company (“Company-1”), to pay artificially inflated buy-in purchase prices for JV interests, with the understanding that Iconix would then reimburse Company-1 for the overpayments. COLE and Horowitz executed the scheme for the purpose of enabling Iconix to report fraudulently inflated revenue and EPS figures based on the inflated buy-in purchase prices it obtained from Company-1.
COLE arranged for Iconix to enter into three JVs with Company-1 that included inflated buy-in purchase prices from Company-1: (1) the Southeast Asia JV, which closed on or about October 1, 2013 (“SEA-1”), (2) the Southeast Asia first amendment, which closed on or about June 30, 2014 (“SEA-2”), and (3) the Southeast Asia second amendment, which closed on or about September 17, 2014 (“SEA-3”), (collectively, the “SEA JVs”). Each of the SEA JVs involved a fraudulent “round trip” transaction, lacking in economic substance, in which Company-1 paid an artificially inflated buy-in purchase price for its interest in the JV, in exchange for COLE’s agreement that Iconix would give back the inflated portion of the purchase price to Company-1. COLE and Horowitz hid from Iconix’s lawyers and outside auditors that COLE had reached an understanding with Company-1 to artificially increase the consideration Company-1 paid Iconix in exchange for COLE’s agreement to round-trip the overpayment back to Company-1.
Through the scheme, COLE and Horowitz caused Iconix to report fraudulently inflated revenue and EPS figures to the investing public. COLE and Horowitz did so, in part, to ensure that the reported figures met analyst consensus and to fraudulently convey the impression to the investing public that Iconix was growing quarter after quarter, as COLE had touted to the investing public. Absent the false inflation of revenue from SEA-2 and SEA-3, Iconix would have missed its quarterly revenue consensus in the second and third quarters of 2014 and its annual revenue consensus for the full year 2014. Absent the false inflation of EPS from SEA-2 and SEA-3, Iconix would have missed its annual non-GAAP diluted EPS consensus for the full year 2014.
Obstruction of Justice
In late 2014 and early 2015, the SEC Division of Corporate Finance (“Corp Fin”) conducted an inquiry into Iconix’s accounting treatment for the formation of certain Iconix international JVs, including the SEA JVs. Although the SEC directed Iconix to disclose to the SEC the “business purpose” and material terms of the SEA JVs, COLE intentionally and falsely omitted from an Iconix response letter to the SEC that Company-1 had agreed to inflate the purchase prices for SEA-2 and SEA-3 by $5 million and $6 million, respectively, in exchange for COLE’s secret agreement that Iconix would reimburse Company-1 for these overpayments. COLE also took steps during the Corp Fin inquiry to destroy and conceal relevant evidence, including by deleting emails related to the SEA JVs and directing Horowitz to do the same, in order to prevent the scheme from being detected.
* * *
COLE, 62, of New York, New York, was charged in the Indictment with one count of conspiracy to commit securities fraud, make false filings with the SEC, and improperly influence the conduct of audits; one count of securities fraud; six counts of making false filings with the SEC; one count of improperly influencing the conduct of audits; and one count of conspiracy to destroy, alter, and falsify records in federal investigations. The conspiracy charges carry a maximum prison term of five years. The charges of securities fraud, making false filings with the SEC, and improperly influencing the conduct of audits each carry a maximum prison term of 20 years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by the judge.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mr. Berman praised the investigative work of the FBI and the SEC Office of the Inspector General. Mr. Berman also thanked the SEC Division of Enforcement, which brought a separate civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward A. Imperatore, Scott A. Hartman, and Jared Lenow are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Former Casino Dealer Sentenced to Federal Prison for Participating in a Cheating SchemeRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Ming Zhang, age 32, of Alexandria, Virginia, yesterday to 18 months in federal prison, followed by three years of supervised release, for conspiracy to transport stolen funds, in connection with a scheme to defraud Maryland casinos by cheating at the game of baccarat. The total loss caused by Zhang and his co-conspirators was $1,046,560. Judge Grimm also entered an order requiring Zhang to pay restitution in the total amount of the loss.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.
According to Zhang’s plea agreement, Zhang worked as a dealer at Casino 1 in Maryland. Zhang’s role in the conspiracy was to alert co-conspirator A as to when Zhang was scheduled to deal baccarat at the casino. Baccarat is a card game in which players compare the value of two hands of cards—a “player” and a “dealer” hand. Each card has a point value, and before any cards are dealt, bettors place bets on which hand will be closest to nine. The dealer then distributes the cards between the player and dealer hands according to fixed rules. If a bettor knows the order in which cards appear in the deck, they can predict the outcome of any given baccarat hand with near-perfect accuracy and place their bets accordingly.
Specifically, Zhang admitted that he notified co-conspirator A that he would be dealing baccarat at Casino 1 on September 27, 2017. Once co-conspirator A arrived at the baccarat table at which Zhang was dealing, Zhang exposed a portion of the baccarat deck to co-conspirator A and allowed the co-conspirator to take a picture of the deck, then placed that portion unshuffled into the “shoe,” which is a plastic box that keeps the cards in order until they are dealt. Co-Conspirator A and other players placed large bets when the unshuffled portion of the deck came into play.
On September 28, 2017, Zhang lied to investigators at Casino 1 about his knowledge of and participation in the cheating scheme.
Zhang admitted that between July and September 2017, he was present with co-conspirator A and other co-conspirators when they executed the scheme at Casino 2, which was also in Maryland. In August 2017, Zhang met with co-conspirator A at a hotel near Casino 2 and learned how to execute the scheme. Co-conspirator A agreed that Zhang would receive a percentage of the winnings for participating in the scheme and Zhang did benefit financially from executing the scheme.
United States Attorney Robert K. Hur praised the FBI for its work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Molissa H. Farber and Erin B. Pulice, who prosecuted the case.
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Former COO and CFO of Publicly Traded Transportation Company Charged with Securities Fraud, Bank Fraud, and Lying to AuditorsRead the Press Release
INDIANAPOLIS – United States Attorney Josh J. Minkler and the Department of Justice announced today that the former chief operating officer (COO) and chief financial officer (CFO) of Celadon Group Inc. (Celadon), a publicly traded transportation and trucking company headquartered in Indianapolis, Indiana, were charged in an indictment unsealed today for their alleged role in a complex securities and accounting fraud scheme that resulted in a loss of more than $60 million in shareholder value.
William Eric Meek, 39, and Bobby Lee Peavler, 40, both of Indianapolis were each charged in an indictment filed in the Southern District of Indiana with one count of conspiracy to commit wire fraud, bank fraud, and securities fraud; five counts of wire fraud; two counts of securities fraud; one count of conspiracy to make false statements to a public company’s accountants and to falsify books, records, and accounts of a public company; and one count of making false statements to a public company’s accountants. Peavler was charged with two additional counts of making false statements to a public company’s accountants.
Meek and Peavler were arrested this morning and appeared before U.S. Magistrate Judge Mark J. Dinsmore of the Southern District of Indiana. Both Meek and Peavler were released on bail. The case is assigned to Chief Judge Jane E. Magnus-Stinson for U.S. District Court of the Southern District of Indiana.
"These senior corporate executives at Celadon allegedly orchestrated a securities and accounting fraud scheme that misled shareholders, banks, accountants, and the investing public," said Assistant Attorney General Benczkowski. "The Department of Justice and our law-enforcement partners will continue to safeguard market integrity by holding executives who violate the law responsible for their misconduct."
"Through their scheme of lies, fraud and misrepresentations as alleged in the Indictment, Meek and Peavler damaged the integrity of the market, the corporation, its shareholders and public investors," said U.S. Attorney Josh J. Minkler of the Southern District of Indiana. "The U.S. Attorney’s Office is committed to prosecuting those individuals in corporate America, who choose to commit corporate fraud, in violation of federal law, and have blatant disregard for those with a financial interest in the corporation."
"This sends a clear message that those who commit financial fraud will be held accountable. Investors should expect nothing less than complete candor and truth from companies and their executives," said Special Agent in Charge Grant Mendenhall of the FBI’s Indianapolis Field Office. "The FBI and our agency partners will continue to identify, investigate and pursue those who perpetrate criminal schemes for their own profit."
"The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes. A goal of the Postal Inspection Service is to protect investors, as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions," said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group at National Headquarters. "Anyone who engages in this type of financial fraud scheme should know they will be found and held accountable for their dishonest practices."
According to the indictment, by approximately 2016, Meek, Peavler, and others at Celadon knew the value of a substantial portion of Celadon’s trucks declined in value in part to a slowdown in the trucking market. In addition, many of those trucks, which were owned by Quality Companies (Quality), one of Celadon’s divisions, had serious mechanical issues that made them unattractive to drivers, further depressing their value. Instead of accounting for this decline in truck values, Meek, Peavler and others allegedly devised a scheme that caused Celadon to conceal tens of millions of dollars in losses to its shareholders, banks and the investing public.
Their scheme involved Quality trading away hundreds of its older and unused trucks to a large truck dealer in exchange for newer used trucks. During the trades, they intentionally inflated the prices on invoices associated with those trades so Celadon’s books would not reflect the fact that Celadon’s trucks were worth significantly less than reported to investors, the indictment alleges. Although they were actually trades, Meek, Peavler, and others allegedly sought to portray the transactions as independent "purchases" and "sales" of trucks in order to avoid heightened scrutiny.
Meek and Peavler also allegedly structured one of the trades in an effort to artificially improve one of Celadon’s quarterly financial statements. Quality received approximately $25 million from the truck dealer just before the end of Celadon’s fiscal quarter, which Celadon used
to pay down its debt and appear to be in compliance with certain lending agreements. Meek, Peavler, and others allegedly failed to disclose, however, that as part of this deal, Quality had agreed to pay a similar amount of money back to the truck dealer three days after quarter-end. Celadon’s quarterly financial statements made no mention of this secret agreement, the indictment alleges.
In late 2016 and early 2017, Celadon’s independent auditors began to ask questions about the truck trades that Meek, Peavler, and others had used to hide the drop in truck values. In response, Meek, Peavler and others allegedly made false and misleading statements to the auditors about the nature of the trade transactions, falsely denying they were trades and concealing the terms of these trades, including Quality’s agreement to pay money back to the truck dealer shortly after quarter-end. Peavler also directed a senior executive and co-conspirator to delete certain emails after the auditor had make a request for relevant documents.
In May 2017, Celadon announced that its financial statements issued for fiscal year 2016, which ended June 30, 2016, as well as the quarters ending in September and December 2016 could no longer be relied on, not could the related reports of the independent auditor for those three time periods. Following this announcement, Celadon’s share price dropped significantly, causing a one-day loss in Celadon’s market value of approximately $62.3 million.
An indictment is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Previously, Danny Williams, 36, of New Palestine, Indiana, the former head of a Celadon subsidiary, pled guilty in April 2019 to conspiracy to commit securities fraud, make false statements to a public company’s accountants, and falsify books, records, and accounts of a public company. Also in April 2019, Celadon itself entered a Deferred Prosecution Agreement with the government, under which it is obligated to pay restitution of $42.2 million.
The FBI’s Indianapolis Field Office and USPIS are investigating the case. The U.S. Securities and Exchange Commission provided assistance and has also filed a civil complaint against the defendants for related conduct. Trial Attorney Kyle W. Maurer and Assistant Chief L. Rush Atkinson of the Criminal Division’s Fraud Section, and Deputy Chief Steven D. DeBrota and Assistant U.S. Attorney Nicholas J. Linder of the Southern District of Indiana are prosecuting the case.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting complex, large-scale fraud schemes, particularly those that exploit positions of trust. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 5.1.
Former COO and CFO of Publicly Traded Transportation Company Charged with Securities Fraud, Bank Fraud and Lying to AuditorsRead the Press Release
The former chief operating officer (COO) and chief financial officer (CFO) of Celadon Group Inc. (Celadon), a publicly traded transportation and trucking company headquartered in Indianapolis, Indiana, were charged in an indictment unsealed today for their alleged role in a complex securities and accounting fraud scheme that resulted in a loss of more than $60 million in shareholder value.
William Eric Meek, 39, and Bobby Lee Peavler, 40, both of Indianapolis were each charged in an indictment filed in the Southern District of Indiana with one count of conspiracy to commit wire fraud, bank fraud, and securities fraud; five counts of wire fraud; two counts of securities fraud; one count of conspiracy to make false statements to a public company’s accountants and to falsify books, records, and accounts of a public company; and one count of making false statements to a public company’s accountants. Peavler was charged with two additional counts of making false statements to a public company’s accountants.
Meek and Peavler were arrested this morning and appeared before U.S. Magistrate Judge Mark J. Dinsmore of the Southern District of Indiana. Both Meek and Peavler were released on bail. The case is assigned to Chief Judge Jane E. Magnus-Stinson for U.S. District Court of the Southern District of Indiana.
“These senior corporate executives at Celadon allegedly orchestrated a securities and accounting fraud scheme that misled shareholders, banks, accountants, and the investing public,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Department of Justice and our law-enforcement partners will continue to safeguard market integrity by holding executives who violate the law responsible for their misconduct.”
“Through their scheme of lies, fraud and misrepresentations as alleged in the Indictment, Meek and Peavler damaged the integrity of the market, the corporation, its shareholders and public investors,” said U.S. Attorney Josh J. Minkler of the Southern District of Indiana. “The U.S. Attorney’s Office is committed to prosecuting those individuals in corporate America, who choose to commit corporate fraud, in violation of federal law, and have blatant disregard for those with a financial interest in the corporation.”
“This sends a clear message that those who commit financial fraud will be held accountable. Investors should expect nothing less than complete candor and truth from companies and their executives,” said Special Agent in Charge Grant Mendenhall of the FBI’s Indianapolis Field Office. “The FBI and our agency partners will continue to identify, investigate and pursue those who perpetrate criminal schemes for their own profit.”
“The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes. A goal of the Postal Inspection Service is to protect investors, as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group at National Headquarters. “Anyone who engages in this type of financial fraud scheme should know they will be found and held accountable for their dishonest practices.”
According to the indictment, by approximately 2016, Meek, Peavler, and others at Celadon knew the value of a substantial portion of Celadon’s trucks declined in value in part to a slowdown in the trucking market. In addition, many of those trucks, which were owned by Quality Companies (Quality), one of Celadon’s divisions, had serious mechanical issues that made them unattractive to drivers, further depressing their value. Instead of accounting for this decline in truck values, Meek, Peavler and others allegedly devised a scheme that caused Celadon to conceal tens of millions of dollars in losses to its shareholders, banks and the investing public.
Their scheme involved Quality trading away hundreds of its older and unused trucks to a large truck dealer in exchange for newer used trucks. During the trades, they intentionally inflated the prices on invoices associated with those trades so Celadon’s books would not reflect the fact that Celadon’s trucks were worth significantly less than reported to investors, the indictment alleges. Although they were actually trades, Meek, Peavler, and others allegedly sought to portray the transactions as independent “purchases” and “sales” of trucks in order to avoid heightened scrutiny.
Meek and Peavler also allegedly structured one of the trades in an effort to artificially improve one of Celadon’s quarterly financial statements.. Quality received approximately $25 million from the truck dealer just before the end of Celadon’s fiscal quarter, which Celadon used to pay down its debt and appear to be in compliance with certain lending agreements. Meek, Peavler, and others allegedly failed to disclose, however, that as part of this deal, Quality had agreed to pay a similar amount of money back to the truck dealer three days after quarter-end. Celadon’s quarterly financial statements made no mention of this secret agreement, the indictment alleges.
In late 2016 and early 2017, Celadon’s independent auditors began to ask questions about the truck trades that Meek, Peavler, and others had used to hide the drop in truck values. In response, Meek, Peavler and others allegedly made false and misleading statements to the auditors about the nature of the trade transactions, falsely denying they were trades and concealing the terms of these trades, including Quality’s agreement to pay money back to the truck dealer shortly after quarter-end. Peavler also directed a senior executive and co-conspirator to delete certain emails after the auditor had make a request for relevant documents.
In May 2017, Celadon announced that its financial statements issued for fiscal year 2016, which ended June 30, 2016, as well as the quarters ending in September and December 2016 could no longer be relied on, not could the related reports of the independent auditor for those three time periods. Following this announcement, Celadon’s share price dropped significantly, causing a one-day loss in Celadon’s market value of approximately $62.3 million.
An indictment is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Previously, Danny Williams, 36, of New Palestine, Indiana, the former head of a Celadon subsidiary, pled guilty in April 2019 to conspiracy to commit securities fraud, make false statements to a public company’s accountants, and falsify books, records, and accounts of a public company. Also in April 2019, Celadon itself entered a Deferred Prosecution Agreement with the government, under which it is obligated to pay restitution of $42.2 million.
The FBI’s Indianapolis Field Office and USPIS are investigating the case. The U.S. Securities and Exchange Commission provided assistance and has also filed a civil complaint against the defendants for related conduct. Trial Attorney Kyle W. Maurer and Assistant Chief L. Rush Atkinson of the Criminal Division’s Fraud Section, and Deputy Chief Steven D. DeBrota and Assistant U.S. Attorney Nicholas J. Linder of the Southern District of Indiana are prosecuting the case.
Former Brockton, Massachusetts Man Indicted for Sex TraffickingRead the Press Release
A former Brockton, Massachusetts, man was indicted today by a federal jury in Boston on sex trafficking charges.
Matthew Engram, 32, was indicted on two counts of sex trafficking by force, fraud, or coercion, one count of attempted sex trafficking by force, fraud or coercion, two counts of transportation of an individual for purposes of prostitution, and one count of conspiracy to commit interstate travel in aid of a racketeering enterprise.
“The Department of Justice is committed to eradicating the horrendous and immoral crime of sex trafficking as demonstrated by today’s indictment,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Civil Rights Division will continue to prosecute human traffickers and seek out justice on behalf of victims and survivors of all forms of human trafficking.”
“Sex traffickers prey on especially vulnerable young people and exploit them for profit in terrible ways,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “This is one of the most serious crimes we prosecute, and we will continue to devote significant resources to targeting and punishing those who commit this offense.”
As alleged in the indictment, from January 2009 until summer 2015, Engram recruited and trafficked three victims from a residence in Brockton, and elsewhere, and took all or part of the proceeds. Engram advertised on websites, exchanged text messages to share advertisements, organized prostitution dates, and reserved hotel rooms. It is alleged that Engram also transported, or caused to transport, the victims to other states, including Connecticut, Pennsylvania, New York, Virginia, Florida and Maine, to perform commercial sex acts.
The charges of sex trafficking through force, fraud, or coercion or attempted sex trafficking each provides for a mandatory minimum sentence of 15 years and a maximum of life in prison, up to five years of supervised release, and a fine of up to $250,000. The charges of transportation of an individual for purposes of prostitution provides for a sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000. The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Homeland Security Investigations conducted the investigation with assistance from the Boston Police Department. Assistant U.S. Attorney Suzanne Sullivan Jacobus, of U.S. Attorney Lelling’s Major Crimes Unit, and Trial Attorneys Shan Patel, Vasantha Rao and Maryam Zhuravitsky of the Civil Rights Division are prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Brockton Man Charged with Sex TraffickingRead the Press Release
BOSTON – A former Brockton man was indicted today by a federal jury in Boston on sex trafficking charges.
Matthew Engram, 32 was indicted on two counts of sex trafficking by force, fraud, or coercion, one count of attempted sex trafficking by force, fraud or coercion, two counts of transportation of an individual for purposes of prostitution, and one count of conspiracy to commit interstate travel in aid of a racketeering enterprise.
“Sex traffickers prey on especially vulnerable young people and exploit them for profit in terrible ways,” said United States Attorney Andrew E. Lelling. “This is one of the most serious crimes we prosecute, and we will continue to devote significant resources to targeting and punishing those who commit this offense.”
“The Department of Justice is committed to eradicating the horrendous and immoral crime of sex trafficking as demonstrated by today’s indictment,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Civil Rights Division will continue to prosecute human traffickers and seek out justice on behalf of victims and survivors of all forms of human trafficking.”
As alleged in the indictment, from January 2009 until summer 2015, Engram recruited and trafficked three victims from a residence in Brockton, and elsewhere, and took all or part of the proceeds. Engram advertised on websites, exchanged text messages sharing advertisements, organized prostitution dates and reserved hotel rooms. Engram also allegedly transported, or caused to transport, the victims to other states, including Connecticut, Pennsylvania, New York, Virginia, Florida and Maine, to perform commercial sex acts.
The charges of sex trafficking through force, fraud, or coercion or attempted sex trafficking each provides for a mandatory minimum sentence of 15 years and a maximum of life in prison, up to five years of supervised release and a fine of up to $250,000. The charges of transportation of an individual for purposes of prostitution provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Lelling; Assisting Attorney General Dreiband; and Jason Molina, Acting Special Agent in Charge of the Homeland Security Investigations in Boston, made the announcement today. Assistance was provided by the Boston Police Department. Assistant U.S. Attorney Suzanne Sullivan Jacobus, of Lelling’s Major Crimes Unit, and Trial Attorneys Shan Patel, Vasantha Rao and Maryam Zhuravitsky of the Civil Rights Division are prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five former VA employees plead guilty to stealing federal funds set aside for veteransRead the Press Release
Five former VA employees pleaded guilty theft charges from the Department of Veterans Affairs in Federal Court.
Michele Whaley, age 53, of Alliance, Ohio, pleaded guilty to one count of theft of federal funds totaling approximately $71,247.
Sarah Stipkovich, age 32, of North Ridgeville, Ohio, pleaded guilty to one count of theft of federal funds totaling approximately $34,746.
Daniel Folliett, age 35, of Brunswick, Ohio, pleaded guilty to one count of theft of federal funds totaling approximately $30,819.
Michelle N. Macklin, age 43, of Garfield Heights, Ohio, pleaded guilty to one count of theft of federal funds totaling approximately $17,113.
Edwin Orin, age 38, of Richmond Heights, Ohio, pleaded guilty to one count of theft of federal funds totaling approximately $15,323.
The five individuals were employed by the VA Office of Community Care (“OCC”) and were stationed at the Cleveland VA Medical Center. The VA OCC was responsible for processing and paying claims submitted by non-VA entities for veteran care. VA OCC had granted overtime compensation to employees strictly for computer-based clinical tracking, clinical reviews and claims processing since approximately 2014. After an investigation, it was determined that the five employees falsely claimed to work overtime and fraudulently received overtime compensation from the VA.
A sixth former VA OCC employee, Demetria Sims-Leeper, age 54, was indicted on charges of Wire Fraud, Theft and False Statements related to her theft of VA overtime compensation.
“Theft from the Department of Veterans Affairs is an affront to the military men and women who have earned every penny of their benefits,” said U.S. Attorney Justin Herdman. “These VA employees were trusted by the public to administer health care to veterans, but they failed all of us in stealing tens of thousands of dollars. This case is a tremendous credit to the VA’s Office of Inspector General, the Cuyahoga County Prosecutor’s Office, and the United States Attorney’s Office.”
“Our nation’s veterans have earned the right to be assisted by VA employees of the highest integrity. This case should serve as a deterrent to those tempted to enrich themselves through fraud,” VA Office of Inspector General’s Special Agent in Charge Gregg Hirstein said.
The VA Office of Inspector General, Criminal Investigations Division, Cleveland investigated these cases with the assistance of the Cuyahoga County Prosecutor’s Office. These cases are being prosecuted by Assistant U.S. Attorney Brian McDonough.
The defendants’ sentences will be determined by the Court after review of factors unique to this case, including each defendants’ prior criminal records, if any, their role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The indictment pending against Sims-Leeper is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Five Felons Appeared in Court This Week in Connection with Federal Gun Crime OffensesRead the Press Release
Seven-Time Convicted Felon Pleads Guilty to Illegal Possession of a Firearm and Ammunition
LAFAYETTE, La. – United States Attorney David C. Joseph announced that Nacorvrick S. Green, 40, of Lafayette, Louisiana, pleaded guilty on December 2, 2019, before U.S. District Judge Dee D. Drell to possession of a firearm and ammunition by a convicted felon.
On June 13, 2018, Lafayette Police Department officers conducted a stop on Green’s vehicle for a traffic violation and found a Ruger .380 semi-automatic pistol and six rounds of ammunition. Green has seven prior felony convictions in the 15th Judicial District Court, Lafayette Parish, for possession with intent to distribute cocaine (2001 and 2008), three counts of distribution of cocaine (2001), attempted possession with intent to distribute a Schedule I Controlled Dangerous Substance - Delta-9-Tetrahydrocannabional (2008), and possession of marijuana, second offense (2013).
At sentencing Nacorvrick Green faces up to 15 years in prison, three years of supervised release and a $250,000 fine. Judge Drell set the sentencing date for March 19, 2020.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Lafayette Police Department and Lafayette Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorneys Daniel J. Vermaelen and Jamilla A. Bynog are prosecuting the case.
Two Bunkie Men Sentenced for Trafficking Heroin; One Defendant Receives Additional Prison Time for Firearms Violation
ALEXANDRIA, La. – United States Attorney David C. Joseph announced that Joel Shaun Michael Gaines, 32, of Bunkie, Louisiana, was sentenced December 2, 2019, by U.S. District Judge Dee D. Drell, to 12 years, 7 months in prison followed by three years of supervised release, for conspiracy to distribute or possess with intent to distribute heroin and possession of a firearm by a convicted felon. Gaines pleaded guilty on August 8, 2019.
In January of 2018, various law enforcement agencies participated in an investigation into heroin distribution in Central Louisiana, which identified Gaines as a source of heroin who distributed the drug to members of his drug trafficking organization. Gaines distributed heroin to multiple people in Central Louisiana from various locations utilizing stash houses and members of his organization to distribute heroin on his behalf. In May and July of 2018, law enforcement conducted three controlled purchases from Gaines and later intercepted communications that showed Gaines was distributing heroin and directing Roosevelt Dewayne Larcarte, 19, also of Bunkie, to distribute heroin for him. For each transaction, Larcarte received instructions from Gaines as to how much heroin a customer wanted to purchase. Based on information obtained through the intercepted communications, agents executed court-authorized search warrants at three locations and found multiple firearms, ammunition, heroin, a digital scale, and $6,123 in U.S. currency. Both Gaines and Larcarte are responsible for approximately 40 grams of heroin.
On September 17, 2018, law enforcement stopped Gaines’ vehicle for a traffic violation and discovered he was in possession of a Ruger .380 pistol with a magazine containing five bullets. Gaines was previously convicted in February of 2012 for possession with intent to distribute a Schedule I controlled substance.
Roosevelt Larcarte pleaded guilty on August 22, 2019, to conspiracy to distribute or possess with intent to distribute heroin. He was sentenced on November 22, 2019, by U.S. District Judge Dee D. Drell, to two years in prison and three years of supervised release following his prison confinement.
The FBI Safe Streets Task Force and Louisiana State Police investigated the case. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
Convicted Felon Pleads Guilty to Illegally Possessing Firearms During the Filming of a Rap Video
SHREVEPORT, La. – United States Attorney David C. Joseph announced that Xavier Briggs, 27, of Shreveport, Louisiana, pleaded guilty on December 3, 2019, before U.S. District Judge Donald E. Walter to felon in possession of firearms.
On April 25, 2019, officers with the Shreveport Police Department responded to AB Palmer Park in Shreveport where a large crowd was filming a rap video with numerous firearms. Officers encountered 10 individuals standing around a Chevrolet Malibu and recovered multiple firearms from the scene. A camera being used to shoot the video was also seized and a search warrant was obtained to view its contents. Briggs can be seen in the video recordings in possession of a Jiminez Arms Model JA Nine 9mm pistol loaded with 4 rounds of 9mm ammunition, and a loaded DPMS Model A15, 5.56 mm rifle containing two 30-round magazines, and 41 rounds of 5.56 ammo.
Briggs has a 2011 armed robbery felony conviction in Caddo District Court and was released from prison in December 2018.
At sentencing Xavier Briggs faces up to 10 years in prison, three years of supervised release and a $250,000 fine. Judge Walter set the sentencing date for March 24, 2020.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Brandon B. Brown is prosecuting the case.
Monroe Felon Sentenced to 10 Years in Federal Prison for Illegal Possession of a Firearm and Ammunition
MONROE, La. – United States Attorney David C. Joseph announced that Stanley Charleston, 55, of Monroe, was sentenced December 3, 2019, by U.S. District Judge Terry A. Doughty to 10 years in federal prison, followed by three years of supervised release, for illegal possession of a firearm and ammunition. Charleston pleaded guilty to this charge on September 4, 2019.
According to court documents, on August 17, 2017, officers of the Monroe Police Department executed a court-authorized search warrant at Charleston’s home and found a Ruger, Model SR9, 9 mm pistol. The pistol was loaded with 17 rounds of ammunition. Charleston is a convicted felon who pleaded guilty on December 8, 2005 to unauthorized entry into an inhabited dwelling.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Monroe Police Department conducted the investigation. Assistant U.S. Attorney Cadesby B. Cooper is prosecuted the case.
It is a violation of federal law for a person previously convicted of a felony offense to possess firearms or ammunition.
These cases were brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
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Financial Advisor Pleads Guilty to Fraud ChargesRead the Press Release
Memphis, TN – Stephen Douglas Fry, 72, a Memphis-area financial advisor, pled guilty to a three-count information charging him with mail and wire fraud and interstate transportation of monies taken by fraud, U.S. Attorney D. Michael Dunavant for the Western District of Tennessee announced today.
According to the information, Fry was an accountant and financial advisor doing business in Germantown, TN as Fry Financial Services. Count one of the information alleged that between 2009 and 2019, Fry stole and embezzled funds from a client who had given him power of attorney to prepare tax returns and manage and invest monies following the death of her husband. The information alleged that Fry obtained in excess of $1.3 million from the client as a result of the scheme.
Count two of the information alleged that after Fry was served with a civil suit and notice of lien filed in Shelby County Chancery Court on behalf of the client, he defrauded a mortgage lender, title company and closing agent in connection with the sale of his personal residence. The information alleged that Fry falsely represented on an Owner’s Affidavit that there was no pending litigation or liens affecting the property being sold. As a result of the misrepresentation Fry caused the disbursement of $325,827.84 in loan proceeds.
Count three of the information alleged Fry defrauded another client located in Mississippi of $410,000 by requesting a loan and falsely representing that the funds were going to be used to purchase and resell an accounting firm. In fact, Fry used the funds to replace funds he embezzled from an estate of which he was the named executor.
U.S. Attorney D. Michael Dunavant said, "Financial fraud can happen anywhere, and can be devastating to lending institutions and individual investors. The defendant used his position of trust and authority to steal proceeds for his personal benefit, and his dishonesty has been exposed. We are pleased that justice has been achieved on behalf of the victims, and we commend the FBI for their outstanding investigation in this disturbing case. Wherever fraud occurs in the Western District of Tennessee, this office will be prepared to hold offenders accountable."
The sentencing hearing is set for Thursday, March 5, 2020, before U.S. District Court Judge John T. Fowlkes Jr.
Fry faces up to 60 years imprisonment, fines of up to $1,500,000 and five years supervised release.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Carroll L. André III is prosecuting this case on behalf of the government.
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Fentanyl Distribution Organization Disrupted in Kern CountyRead the Press Release
FRESNO, Calif. — A federal grand jury returned an eight-count indictment today against Bakersfield residents Wilfredo Medina-Perez, 31; Uriel Ivan Portillo, 33; and Rojelio “Roy” Garcia, 47, charging them with various drug trafficking crimes involving the distribution of fentanyl, U.S. Attorney McGregor W. Scott announced.
According to court documents, between Feb. 11 and Nov. 21, Medina-Perez sold more than 8,000 fentanyl pills and 1 pound of methamphetamine to an undercover officer. Portillo, who was working with Medina-Perez, delivered 5,000 fentanyl pills to the undercover officer. Garcia, obtained fentanyl from Medina-Perez with the intention of distributing the drug to his customers in the Bakersfield area.
This case is the product of an investigation by the Drug Enforcement Administration, the Bakersfield Police Department, and the Kern County Sheriff’s Office. Assistant U.S. Attorneys Melanie L. Alsworth and Vincente Tennerelli are prosecuting the case.
If convicted, Medina faces a maximum statutory penalty of life in prison and a fine of up to $10 million; Portillo faces a maximum statutory penalty of 40 years in prison and a fine of up to $5 million; and Garcia faces a maximum statutory penalty of 20 years in prison and a fine of up to $1 million. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Beaumont Correctional Officer Pleads Guilty to Civil Rights Offense for Assaulting InmateRead the Press Release
BEAUMONT, Texas – Tavoris Bottley, 34, a former Senior Correctional Officer at the Federal Correctional Complex (FCC) in Beaumont, Texas, pleaded guilty in court today to assaulting a federal inmate housed at the facility, announced Eastern District of Texas U.S. Attorney Joseph D. Brown.
According to documents filed in connection with the guilty plea, on June 8, 2017, Bottley, while on duty as a federal correctional officer at FCC Beaumont, punched A.A, an inmate, in the face and head multiple times without justification. Bottley admitted that he and his supervisor, Lieutenant Khristal Ford, intentionally unlocked and entered the secured cell where A.A. was being held with the intention of assaulting the inmate for being disrespectful and throwing a food tray. Bottley admitted that he then punched A.A., even though the inmate did not pose any threat at the time.
Khristal Ford previously pleaded guilty on May 29, 2019, to aiding and abetting in the assault of A.A., and admitted to submitting written reports that omitted any reference to the assault in an effort to cover up the incident and make it appear justified.
“This conduct by a federal correctional officer erodes public trust,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department of Justice will continue to vigorously prosecute those who violate the civil rights of inmates.”
“Correctional officers have an obligation to be professional,” said United States Attorney Joseph D. Brown of the Eastern District of Texas. “Unprovoked violence not only violates the rights of the inmate, but hurts the reputations of law enforcement professionals who do things the right way.”
“When Bottley assaulted this inmate, he violated the inmate’s civil rights and he betrayed the oath of office he swore to uphold when he became a federal Corrections Officer,” said Robert A. Bourbon, Special Agent in Charge of the Department of Justice Office of the Inspector General Dallas Field Office.
Bottley faces a maximum statutory penalty of up to 10 years in prison and a fine of up to $250,000. 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 Department of Justice, Office of the Inspector General, and was prosecuted by Trial Attorney Katherine G. DeVar of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Michael A. Anderson of the Eastern District of Texas.
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Driving School Owner Sentenced to over 3 Years in Prison for Bribing DMV Employees to Issue Commercial Driver’s Licenses to Unqualified DriversRead the Press Release
SACRAMENTO, Calif. — Jagpal “Paul” Singh, 61; of Los Angeles, was sentenced today to three years and three months in prison for his participation in a scheme to bribe DMV employees to provide California commercial driver’s licenses (CDLs) to unqualified drivers, U.S. Attorney McGregor W. Scott announced.
On March 1, Singh pleaded guilty to conspiracy to commit bribery, to commit identity fraud, and to commit unauthorized use of a computer, and for identification document fraud. According to court documents, Singh paid bribes to two DMV employees, Lisa Terraciano and Kari Scattaglia, both of whom pleaded guilty. Terraciano was sentenced to three years and four months in prison, and Scattaglia was sentenced to two years and eight months in prison, for, in part, accessing and altering records in the DMV’s database in Sacramento for Singh’s students. Records were altered to show that applicants for CDLs had passed the required tests when, in truth, they had not done so, and in some cases had not even taken the tests. This caused the DMV to issue permits and completed CDLs despite the applicants not having taken or passed those tests.
This case is the product of an investigation by the California Department of Motor Vehicles, Office of Internal Affairs, the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI), and the Department of Transportation, Office of Inspector General. Assistant U.S. Attorney Rosanne L. Rust is prosecuting the case.
Charges are pending against co-defendants Tajinder Singh, 34, driving school owner; Parminder Singh, 29, broker; and Shawana Denise Harris, 49, DMV employee at the Rancho Cucamonga DMV Office. They are schedule to go to trial on June 1, 2020. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt. If convicted, the defendants each faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Davenport Man Sentenced to 20 Years in Prison for Child Pornography OffensesRead the Press Release
DAVENPORT, Iowa – On December 4, 2019, United States District Court Chief Judge John A. Jarvey, sentenced Christopher Lee Collins, age 35, of Davenport, to 240 months in prison for receiving child pornography and possessing obscene visual representations of the sexual abuse of children announced United States Attorney Marc Krickbaum. Collins was ordered to serve ten years of supervised release to follow his prison term, pay $200 to the Crime Victims’ Fund, and comply with the sex offender registry requirements upon release.
On July 22, 2019, Collins pleaded guilty to two child pornography offenses. This investigation began in 2017, while Collins was on supervised release for a prior possession of child pornography conviction. A laptop used by Collins was found to contain 26 images of child pornography, downloaded by Collins from August 16, 2017 to August 26, 2017. Further review of the computer revealed 28 images of anime depicting child pornography.
Prior to this conduct, Collins pleaded guilty in 2008 to possession of child pornography and was sentenced to 78 months imprisonment and ten years of supervised release on February 26, 2009. Collins was found in violation of his supervised release due to committing the above offense. On December 4, 2019, he was sentenced to five years imprisonment for that violation.
This matter was investigated by Davenport Police Department and the National Center for Missing and Exploited Children (NCMEC). This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
DOJ Announces $1.1 Million to Support Crime-Fighting Efforts in the Northern District of New YorkRead the Press Release
ALBANY, NEW YORK - The Department of Justice announced yesterday that it has awarded more than $376 million in grant funding to enhance state, local and tribal law enforcement operations and reinforce public safety efforts in jurisdictions across the United States. Over $1.1million dollars will support public safety activities in the Northern District of New York. The awards were made by the Department’s Office of Justice Programs.
“Crime and violence hold families, friends and neighborhoods hostage, and they rip communities apart,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “These programs help restore the health and safety of crime-ravaged communities by supporting prevention activities, aiding in the apprehension and prosecution of perpetrators, facilitating appropriate sentencing and adjudication, and providing communities and their residents the means for recovery and healing.”
The awards announced support an array of crime-fighting initiatives, including the quarter-billion dollar Edward Byrne Justice Assistance Grants Program, which funds public safety efforts in 929 state, local and tribal jurisdictions. Funding also supports sex offender registration and notification, law enforcement-based victim services, the testing of sexual assault kits, and programs designed to address youth with sexual behavioral problems. Other awards will focus on wrongful convictions, intellectual property enforcement, innovative prosecution strategies and the safety and effectiveness of corrections systems.
United States Attorney for the Northern District of New York Grant C. Jaquith said, “These Department of Justice grant awards demonstrate our commitment to support our state and local partners in their efforts to investigate and prosecute criminals, assist victims and witnesses, prevent crime, and address drug addiction and the opioids epidemic.”
The following awards were made to organizations in the Northern District of New York:
- City of Syracuse and the Onondaga County Sheriff’s Office: $100,628 ($50,314 each)
- City of Binghamton Police: $27,158
- City of Watertown Police: $12,347
- City of Troy Police: $30,231
- City of Albany: $66,741
- City and County of Schenectady: $42,604
- City of Utica and Oneida County: $28,403
- Cayuga Counseling Services in Cayuga County: $475,000
Under the BJA Innovative Prosecution Solutions for Combating Violent Crime Program:
- County of Onondaga, District Attorney’s Office: $360,000
Information about the programs and awards announced today is available here: OJP Awards Data webpage.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
Corrupt Terre Haute Federal Correctional Officer Sentenced to 30 Months in Federal PrisonRead the Press Release
TERRE HAUTE – United States Attorney Josh J. Minkler announced today that Leon Perry III, 43, Linton, Indiana, was sentenced today in federal court, by U.S. District Judge James P. Hanlon, to 30 months in federal prison, after pleading guilty to charges of conspiracy for officer to permit escape, conspiracy to bribe public officials, officer permitting escape, and public official accepting a bribe.
"Correctional Officers are entrusted to keep the prison and inmates at the facility safe," said Minkler. "Perry not only violated the public’s trust for his own selfish greed, but also threatened the safety of prison employees, inmates, and the Terre Haute community."
Perry worked as a Reservation Patrol Officer at the Federal Prison Camp in Terre Haute, Indiana, and had served as a correctional officer at the Bureau of Prisons for approximately 10 years. Perry was responsible for the security of the prison, which included patrolling the prison grounds to prevent and stop any escape attempts.
While employed at the Camp, Perry accepted bribes from inmates in the form of cash, prescription medication, and other items. In exchange, Perry allowed inmates to leave the prison grounds without permission from the Warden, to have sexual relations with their girlfriends, wives, and other female acquaintances on prison grounds and at nearby hotels, and to smuggle contraband into the prison, including cellular telephones, controlled substances, and alcohol.
This case was investigated by the Federal Bureau of Investigation, the U.S. Department of Justice Office of the Inspector General and the BOP Special Investigative Services.
"This sentence sends a strong message that corruption by law enforcement officers will not be tolerated. These illegal actions undermine the public's confidence in the majority of law enforcement officers who are trustworthy public servants," said Special Agent in Charge Grant Mendenhall, FBI Indianapolis. "The FBI and our law enforcement partners will continue to work diligently to ensure that correctional officers who abuse their position are identified, investigated and prosecuted."
"By accepting bribes in exchange for turning a blind eye to inmates leaving the prison and bringing in dangerous contraband, Perry placed inmates, his fellow Correctional Officers, and the public in harm’s way," said William J. Hannah, Special Agent in Charge of the Chicago Field Office of the Department of Justice Office of the Inspector General.
According to Assistant U.S. Attorney Kyle M. Sawa, who prosecuted this case for the government, Perry will serve two years’ supervised release following his prison sentence.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s priority of investigating and prosecuting public corruption, including those individuals the public trusts to enforce the law in this State and District. This prosecution also shows the Office’s firm commitment maintaining the safety of the employees of the Federal Bureau of Prisons, as well as the safety of the prisoner population. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 5.3 and 2.5.
Columbus County Woman Sentenced to 45 Months Imprisonment for Stealing from Her Elderly In-LawsRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that today United States District Judge James C. Dever III sentenced ELIZABETH WILLIAMSON, age 55, of Evergreen, NC, to 21 months imprisonment for bank fraud and 24 months imprisonment for aggravated identity theft, to run consecutively for a total of 45 months. Judge Dever also ordered WILLIAMSON to pay $95,691.95 in restitution to the victims and to forfeit $30,320.30 to the United States.
On June 17, 2019, WILLIAMSON pled guilty to one count of bank fraud and one count of aggravated identity theft. According to the investigation, between 2015 and 2017, WILLIAMSON stole her elderly in-laws’ life savings for her own benefit. To assist in carrying out her scheme, WILLIAMSON submitted a Power of Attorney to BB&T for use on the their bank accounts, stole their checkbooks, wrote checks listing herself as payee, and forged their signatures on the checks. WILLIAMSON also used their bank account information to pay her bills and shop online. WILLIAMSON submitted a fraudulent change of address form to the United States Post Office redirecting all of her in-laws’ mail from their home to her home. On at least five occasions, WILLIAMSON stole checks mailed to her in-laws and deposited them into her own State Employees’ Credit Union account. The investigation also determined that, as the money dwindled, WILLIAMSON stopped refilling her in-laws’ medication. In issuing its sentence, the Court noted WILLIAMSON stole the victims’ “peace of mind” and “systematically deceived them.” After serving her sentence, WILLIAMSON will be placed on supervised release for five years.
For more information about DOJ’s efforts to prevent and combat elder abuse, please visit the Elder Justice Website at https://www.justice.gov/elderjustice. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. You can also contact the Victim Connect Hotline between 9am-6pm, Monday through Friday, at: 1- 855-4VICTIM (1-855-4842846), or contact the Elder Justice Coordinator at the U.S. Attorney’s Office for the Eastern District of North Carolina at (919) 856-4530.
The U.S. Postal Inspection Service conducted investigation of this case. Special Assistant United States Attorney Tamika Moses prosecuted the case for the government.
Chugiak Man Sentenced to Federal Prison for Failing to Register as a Sex OffenderRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Donald Eugene Phillips, 37, of Chugiak, was sentenced today by Sr. District Judge Ralph R. Beistline, to serve nine months in federal prison, followed by three years of supervised release, for failing to register as a sex offender. In July 2019, Phillips was charged with one count of failure to register, and he subsequently pleaded guilty without a plea agreement.
According to court documents, in 2010, when he was 27 years old, Phillips was convicted of a sex offense in Oregon stemming from abuse of a 15-year-old girl who became pregnant with his child. Phillips has been required to register as a sex offender ever since, but prior to the filing of charges in Alaska, the last time he registered was in Oregon in July 2015. This last registration came shortly before he fled an Oregon arrest warrant and moved to Alaska. As a result of Phillips’ sex offense conviction in the State of Oregon, he was required under federal law to register as a sex offender for a period of 15 years. While in Alaska, Phillips knowingly failed to register as a sex offender as required by the Sex Offender Registration and Notification Act.
Phillips’ longstanding failure to register was discovered after an Oregon law enforcement officer, who suspected Phillips had moved to Alaska, contacted the Alaska Sex Offender Registry office and reported Phillips was not in compliance.
At Phillips’ sentencing hearing, Judge Beistline noted the importance of deterring other sex offenders from failing to register, explaining that, “the law has to have backbone.”
The United States Marshals Service (USMS) conducted the investigation, with assistance from the Alaska Department of Public Safety and the Oregon State Police, leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Allison O’Leary.
Cambridge Internist Pays More Than $176,000 to the United States to Resolve False Claims Act Allegations that He Administered Medically Unnecessary ProceduresRead the Press Release
Baltimore, Maryland – Noman Thanwy, M.D., an internist in Cambridge, Maryland, associated with the medical practice known as M.S. Shariff, M.D., P.A., has paid the United States $176,686.00 to settle allegations that he submitted false claims to the United States for medically unnecessary autonomic nervous function tests and vestibular function tests.
The settlement agreement was announced today by United States Attorney for the District of Maryland Robert K. Hur and Maureen Dixon, Special Agent in Charge of the Office of Inspector General for the Department of Health and Human Services.
In his practice, Dr. Thanwy administered peripheral autonomic nervous function tests and vestibular function tests. Autonomic nervous function disorders are relatively uncommon disorders and tests conducted to determine such disorders should be done only after a clinician suspects an autonomic nervous function disorder. Furthermore, such tests should be conducted only one time per beneficiary, with the necessary equipment, and only by clinicians with specialized training to administer and interpret these tests. Vestibular function tests are tests of function intended to determine whether there is something wrong with the vestibular portion of the inner ear.
According to the settlement agreement, from October 1, 2015 to May 30, 2019, Dr. Thanwy submitted claims to Medicare for medically unnecessary autonomic nervous function tests. The United States alleged that autonomic nervous function tests were not medically necessary because Dr. Thanwy lacked the necessary equipment or specific training to conduct the tests, the patients did not have an autonomic nervous function disorder before the test was conducted, and Dr. Thanwy only used the tests to monitor patient symptoms, not make any clinical decisions about future patient care. Further, the United States alleged that the vestibular function tests were not medically necessary, because an evaluation of a patient’s symptoms was not done prior to ordering the tests, nor were the test results used for clinical decision making.
The claims resolved by this settlement are allegations. The settlement is not an admission of liability by Dr. Thanwy, nor a concession by the United States that its claims are not well founded.
The civil settlement reached by the U.S. Attorney’s Office for the District of Maryland arose from an initiative inside the U.S. Attorney’s Office, which involves the use dedicated resources and personnel to review Medicare billing data. The review of that data has enabled the United States Attorney’s Office to identify areas of concern where it appears that billing irregularities may have taken place. Partnering with the effected agencies, the United States Attorney’s Office has developed the ability to investigate these billing irregularities to determine whether the matter is appropriate for treatment under the False Claims Act.
United States Attorney Robert K. Hur commended the Office of Inspector General for the Department of Health and Human Services for its work in the investigation. Mr. Hur also thanked Assistant United States Attorneys Thomas Corcoran and Neil White, who handled the case.
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Billings meth dealer sentenced to prisonRead the Press Release
BILLINGS—A Billings man who admitted possessing methamphetamine for distribution and to having a firearm was sentenced today to six years in prison and five years of supervised release, said U.S. Attorney Kurt Alme.
Gary Hollister Ainsworth, 34, pleaded guilty in October 2018 to possession with intent to distribute meth and to possession of a firearm in furtherance of drug trafficking crime.
U.S. District Judge Susan P. Watters presided.
In court records filed in the case, the prosecution said that in April 2018, Yellowstone County Sheriff’s Office deputies responded to a suspicious activity report at a storage facility in Billings. The person who made the report told deputies he had watched a man driving a Suzuki, later identified as Ainsworth, attempt to steal a vehicle off of a nearby lot and had followed Ainsworth to the storage facility. When deputies approached, Ainsworth tried to flee, but stopped and surrendered.
Deputies noted that Ainsworth had several active arrest warrants, was acting erratic and nervous and was wearing latex gloves. Deputies also saw a marijuana pipe, a handgun and a blow torch in plain view in the Suzuki. Deputies detained Ainsworth and impounded the vehicle.
An initial search of the vehicle, based on a warrant, by officers with the Eastern Montana High Intensity Drug Trafficking Area Task Force found only the handgun and drug paraphernalia. Information from an anonymous source led to a second search of the vehicle, which resulted in agents finding about 54 grams of pure meth. Ainsworth subsequently admitted to law enforcement that he was dealing meth.
Assistant U.S. Attorney Colin Rubich prosecuted the case, which was investigated by the EMHIDTA Task Force, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, FBI and Yellowstone County Sheriff’s Office.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Billings man sentenced to prison for firearms crimes after admitting guns were for protection while selling methamphetamineRead the Press Release
GREAT FALLS—A Billings man convicted of firearms crimes after he admitted distributing methamphetamine on the Fort Belknap and Fort Peck reservations was sentenced to today to six years and eight months in prison and three years of supervised release, U.S. Attorney Kurt Alme said.
Gabriel Greg Hazard, 36, pleaded guilty in August to prohibited person in possession of a firearm and to possessing a firearm during a drug trafficking crime.
U.S. District Judge Brian M. Morris presided.
In court records filed in the case, the prosecution said Hazard had been convicted of felony robbery in 2014 and was paroled in 2018. Hazard’s felony conviction prohibited him from possessing firearms or ammunition. One month after being released, Hazard began selling meth on the Fort Belknap and Fort Peck reservations.
On Dec. 16, 2018, a law enforcement officer pulled over Hazard for erratic driving on Highway 2 between Wolf Point and Poplar, on the Fort Peck Reservation. Hazard was under the influence of meth at the time of the traffic stop. In his vehicle were three firearms and an assortment of ammunition. Hazard also had a military style vest in the vehicle and a few grams of meth in his wallet. Hazard cooperated with officers and indicated he used the firearms for protection.
Assistant U.S. Attorney Cassady Adams prosecuted the case, which was investigated by the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, the Roosevelt County Sheriff’s Office and the Fort Peck Tribal law enforcement.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Beckley Man Sentenced to Federal Prison for Drug CrimeRead the Press Release
BECKLEY, W.Va. – A Beckley man was sentenced to federal prison for a federal drug crime, announced United States Attorney Mike Stuart. Kendall Cotten, 30, was sentenced to 30 months in prison for possession of heroin with intent to distribute.
“Cotten was selling fentanyl-laced heroin,” said United States Attorney Mike Stuart. “These cases are tragic and outrageous. We continue to focus on prosecuting the traffickers of these deadly poisons with the goal of removing them from society so that they cannot harm our families or communities any longer.”
Cotten previously admitted that on three separate occasions between November 28, 2017 and December 7, 2017, he sold what he believed to be heroin, but in fact turned out to be a mix of heroin and fentanyl, to a confidential informant working with the Beckley/Raleigh County Drug and Violent Crime Task Force. The drugs sold on these dates were tested by the West Virginia State Police Crime Lab and confirmed to contain heroin and fentanyl. Cotten also admitted that on December 13, 2017, police executed a search warrant at his residence. During the search police officers recovered 122 bindles of heroin, $727 in cash that were the proceeds of drug trafficking activities, and a Ruger LCP .380 pistol. Cotten admitted that he intended to distribute the heroin found during the execution of the search warrant.
Stuart commended the investigative efforts of the Beckley/Raleigh County Drug and Violent Crime Task Force and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Assistant United States Attorney Timothy D. Boggess handled the prosecution. United States District Judge Frank W. Volk imposed the sentence.
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Alien Indicted on Illegal Reentry ChargeRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned an indictment charging ANGEL EVARISTO IBARRA-RIVERA, age 30, of Mexico, with Illegal Reentry of a Deported Alien subsequent to a Felony Conviction.
Therefore, if convicted, IBARRA-RIVERA, previously deported five times and found in Wake County, would face a maximum imprisonment term of 10 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
ICE’s Enforcement and Removal Operations and Homeland Security Investigations are investigating the case.
Akron man charged with possessing a firearm and ammunition in furtherance of a drug trafficking offenseRead the Press Release
A federal grand jury in Cleveland returned a three-count superseding indictment charging Christopher M. Wilson, age 43, of Akron, Ohio, with being a felon in possession of a firearm and ammunition, possessing with the intent to distribute methamphetamine, and possessing a firearm in furtherance of drug trafficking crime.
The superseding indictment alleges that the defendant, after having previously been convicted of burglary, robbery, illegal possession of chemicals for the manufacture of drugs, and aggravated drug possession and heroin possession, knowingly possessed a loaded Ruger .22 caliber pistol. The superseding indictment further alleges that, at the time the defendant was found with the firearm, he also had 50 grams or more of methamphetamine.
The investigation preceding the indictment was conducted by ATF and the Akron Police Department. The case is being prosecuted by Assistant United States Attorney Peter E. Daly.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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Additional Charges Filed Against Two Men Related to 2018 Homicide and Armed Robbery of Florida CoupleRead the Press Release
Fort Myers, Florida – United States Attorney Maria Chapa Lopez announces the return of a superseding indictment charging Alex Jared Zwiefelhofer (22, Wisconsin) and Craig Austin Lang (29, Arizona and North Carolina) with six federal offenses. In addition to the offenses of conspiracy to commit robbery affecting commerce and discharging a firearm during and in relation to a crime of violence, robbery interfering in commerce, and discharging a firearm during and in relation to a crime of violence, which resulted in death, Zwiefelhofer and Lang are also charged with conspiring to kill, kidnap, or maim persons in a foreign country and a violation of the Neutrality Act. If convicted on all counts, Zwiefelhofer and Lang face a maximum sentence of life in federal prison or death. Zwiefelhofer’s arraignment on the superseding indictment is set for December 10, 2019, in Fort Myers. Lang is currently in custody, in Ukraine, pursuant to a provisional arrest request from the United States.
According to court documents, on April 10, 2018, two individuals, S.L., Jr. and D.L., were found dead in Estero, Florida from multiple gunshot wounds to the head and body. Further investigation revealed that the couple had traveled to Estero from Brooksville, Florida to complete the purchase of several firearms from an individual that had listed them for sale on a website known as Armslist. As a result of the investigation, Zwiefelhofer and Lang were identified as the individuals that were believed to have murdered the couple during the course of an armed robbery of the $3,000 that the couple had intended to use to purchase the firearms.
The superseding indictment further alleges that Zwiefelhofer and Lang formed and pursued a plan to fight the Venezuelan government and committed the robbery of S.L., Jr. and D.L. to obtain money to fund their travel to Venezuela for that purpose.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Lee County Sheriff’s Office. It will be prosecuted by Assistant United States Attorneys Jesus M. Casas and Josephine W. Thomas.
superseding indictmentA Total of Eight Now Indicted in Insurance Fraud Scheme Involving Staged AccidentsRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Peter G. Strasser announced today the Superseding Indictment charging three additional defendants: GENETTA ISREAL (“ISREAL”), age 51, of Houston, Texas; MARIO SOLOMON (“SOLOMON”), age 48, of New Orleans; and LARRY WILLIAMS (“LARRY WILLIAMS”), age 46, also of New Orleans. Previously, the following five defendants were indicted: DAMIAN K. LABEAUD (“LABEAUD”), age 47, of New Orleans; LUCINDA THOMAS (“THOMAS”), age 63; MARY WADE (“WADE”), age 55; JUDY WILLIAMS (“JUDY WILLIAMS”), age 59; and DASHONTAE YOUNG (“YOUNG”), age 25; all of Houma, Louisiana.
The Superseding Indictment adds three new defendants, expands the conspiracy, adds two new counts of wire fraud, and charges an entirely new staged accident that occurred on June 12, 2017.
According to the Superseding Indictment, before on or about June 6, 2017, Attorney A and LABEAUD met at a restaurant in New Orleans. During their meeting, Attorney A and LABEAUD agreed that Attorney A would pay LABEAUD $1,000 per passenger for staged and legitimate accidents with tractor-trailers. Attorney A and LABEAUD agreed that Attorney A would pay $500 per passenger for staged and legitimate accidents that did not involve tractor-trailers. The Grand Jury alleges that Attorney A knew LABEAUD was staging accidents and Attorney A paid LABEAUD for at least forty (40) illegally staged automobile accidents. In addition, LABEAUD and Attorney A would discuss the staging of accidents before they happened. Attorney A also directed LABEAUD to change the locations of the staged accidents, to vary the number of passengers, to avoid talking to the police, and to avoid cameras. Attorney A would advance LABEAUD thousands of dollars for accidents and would instruct LABEAUD that he owed Attorney A a certain number of accidents based on the amount of money advanced.
LABEAUD, SOLOMON, LARRY WILLIAMS, and ISREAL are charged with staging an accident on June 12, 2017, that occurred on Chef Mentuer Highway near the Danziger Bridge in New Orleans. According to the Superseding Indictment, LABEAUD and LARRY WILLIAMS planned to stage an automobile accident to obtain money through fraud. During their planning, LABEAUD told LARRY WILLIAMS that he had an Attorney who would handle everything. The Superseding Indictment alleges that LARRY WILLIAMS recruited ISREAL and another individual (now deceased) to participate in the fraudulent scheme, that LARRY WILLIAMS borrowed a Chevrolet Trailblazer, and that LABEAUD operated the Trailblazer to collide with a 2015 Peterbilt tractor-trailer. After the staged accident, LABEAUD fled the scene and LARRY WILLIAMS got behind the wheel to make it appear that he was operating the Trailblazer during the staged accident. SOLOMON picked up LABEAUD after the staged accident. LARRY WILLIAMS told the New Orleans Police Department (“NOPD”) that he was the driver of the Trailblazer and that the tractor-trailer was at fault. After the staged accident, LABEAUD introduced LARRY WILLIAMS and ISREAL to Attorney A.
The Superseding Indictment alleges that LARRY WILLIAMS and ISREAL were treated by doctors and healthcare providers at the direction of Attorney A. Attorney A told LARRY WILLIAMS that he would get more money if he had shoulder surgery. On June 12, 2018, Attorney A’s law partner, Attorney B, filed the Larry Williams Lawsuit in Civil District Court (“CDC”) for the Parish of Orleans and on September 14, 2018, Attorney B demanded approximately $60,000.00 in settlement for the deceased passenger and approximately $56,155.00 in settlement for ISREAL. After the suit was filed, LARRY WILLIAMS and ISREAL each provided false testimony in depositions taken in conjunction with the lawsuit filed by Attorney B.
According to the Superseding Indictment and as previously alleged, on June 6, 2017, THOMAS, WADE, JUDY WILLIAMS, and YOUNG drove from Houma, LA, to meet with LABEAUD for the purpose of staging an automobile accident in order to obtain money through fraud. After their meeting, THOMAS, WADE, JUDY WILLIAMS, and YOUNG agreed to allow LABEAUD to drive THOMAS’ 2009 Chevrolet Avalanche vehicle. The defendants then drove around the vicinity of Chef Menteur Highway and Downman Road of New Orleans until they located a 2017 Freightliner tractor-trailer operated by an Arkansas trucking company. At approximately 12:30 P.M., LABEAUD intentionally collided with the tractor-trailer. LABEAUD then exited THOMAS’ vehicle and instructed THOMAS to get behind the wheel of THOMAS’ Avalanche to make it appear that THOMAS was driving the vehicle at the time of the staged accident.
THOMAS, WADE, JUDY WILLIAMS, and YOUNG contacted the NOPD and falsely reported that THOMAS had been the driver of the Avalanche and that the traitor-trailer had struck her vehicle. LABEAUD then returned to the scene and also made false statements to the NOPD that he had witnessed the accident and that the driver of the tractor-trailer had been at fault.
According to the Superseding Indictment, before and after the staged accident, LABEAUD contacted Attorney A and arranged a meeting with THOMAS, WADE, JUDY WILLIAMS, and YOUNG at a fast food restaurant on Chef Menteur Highway. It is further alleged that Attorney A paid LABEAUD $7,500.00 on the day of the staged accident. Attorney A then demanded approximately $1,000,000.00 per plaintiff in settlement for THOMAS, WADE, and JUDY WILLIAMS. Attorney A then filed two lawsuits in CDC. Both of the lawsuits filed in CDC by Attorney A were removed to the U.S. District Court for the Eastern District of Louisiana. The Superseding Indictment alleges that THOMAS, WADE, and JUDY WILLIAMS each provided false testimony in various depositions taken in conjunction with the lawsuits filed by Attorney A.
The Superseding Indictment now additionally alleges that Attorney A contacted LABEAUD because Attorney A was worried about a telephone call made by WADE to LABEAUD prior to the staged accident and Attorney A instructed LABEAUD to contact THOMAS and WADE to instruct them to “get their stories straight.” During a subsequent meeting, Attorney A gave LABEAUD an envelope containing phone records, pleadings, and depositions establishing THOMAS and WADE lied under oath in their September 13, 2018 depositions. Attorney A then met with THOMAS and WADE at a fast-food restaurant outside of New Orleans where Attorney A suggested to THOMAS and WADE a fraudulent scenario to explain a telephone call from WADE to LABEAUD prior to the staged accident.
On or about April 9, 2019, THOMAS, WADE, and JUDY WILLIAMS each provided false testimony in depositions taken in conjunction with the lawsuits filed by Attorney A. Ultimately, but only after a year of pursuing their fraudulent lawsuits, did THOMAS, WADE, and JUDY WILLIAMS settle their cases for $7,500.00 each.
These eight defendants are charged in an eight-count Superseding Indictment. Defendants LABEAUD and SOLOMON are charged with one (1) count of Conspiracy to Commit Wire Fraud (“Conspiracy Count”) in violation of Title 18, United States Code, Section 371 and seven (7) counts of Wire Fraud (“Wire Fraud Counts”) in violation of Title 18, United States Code, Section 1343. THOMAS, WADE, JUDY WILLIAMS, and YOUNG are charged in the Conspiracy Count and six Wire Fraud Counts. ISREAL and LARRY WILLIAMS are charged in the Conspiracy Count and two Wire Fraud Counts. If convicted, the defendants face a maximum penalty of five (5) years for Count 1 and twenty (20) years as to Counts 2-8. Upon their release from prison, each defendant can be placed on a term of supervised release up to three (3) years and fined up to $250,000.00 per count.
All eight defendants were ordered to appear for an initial appearance and arraignment on this Superseding Indictment.
The U.S. Attorney’s Office would like to acknowledge the assistance of the Federal Bureau of Investigation, Louisiana State Police, and the Metropolitan Crime Commission with this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit; Assistant U.S. Attorney Edward Rivera; Assistant U.S. Attorney Shirin Hakimzadeh; and Trial Attorney Jared Hasten of the U.S. Department of Justice’s Fraud Section, Health Care Fraud Unit.
10 Bronx and Westchester-Based Members and Associates of the Gambino Crime Family Indicted in Brooklyn Federal Court for Crimes, Including Racketeering Conspiracy, Loansharking, Obstruction of Justice and BriberyRead the Press Release
Two indictments and one complaint were unsealed today in federal court in Brooklyn variously charging 12 defendants with racketeering conspiracy, bribery, loansharking, fraud, obstruction of justice and related offenses. Those charged with racketeering conspiracy were Andrew Campos, an alleged captain in the Gambino organized crime family of La Cosa Nostra; James Ciaccia, George Campos, Vincent Fiore and Richard Martino, alleged Gambino family soldiers; and Renato Barca, Jr., Benito DiZenzo, Mark Kocaj, Frank Tarul and Michael Tarul, alleged Gambino family associates. The charges relate to the defendants’ criminal activities throughout the New York metropolitan area since February 2013.
Eleven defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. One defendant is a fugitive.
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); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.
“The outstanding investigative work by this Office’s prosecutors and our law enforcement partners uncovered a litany of crimes allegedly committed by members and associates of the Gambino organized crime family, who still don’t get it – handcuffs and a jail cell are waiting for criminals who threaten violence and commit fraud, money laundering and bribery in furtherance of their enterprise,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Queens County District Attorney’s Office, the United States Probation Departments for the Eastern and Southern Districts of New York and the Waterfront Commission of New York Harbor for their assistance during the investigation.
“The Gambino members arrested in this case ran the gamut of criminal activity. Everything from the usual thuggish behavior of beating people up, forcing people to take the fall for their crimes, all the way to defrauding the federal government,” stated FBI Assistant Director-in-Charge Sweeney. “Several suspects even went to prison, were released, and allegedly went right back to breaking the law. At some point, these crime families should realize we see what they're doing, and their actions are going to lead them right back to the same prison cells.”
“Financial gain is the primary motivation of any criminal enterprise and these allegations are no different,” stated IRS-CI Special Agent-in-Charge Larsen. “The criminal investigators of IRS-Criminal Investigation specialize in unraveling such serious charges where multiple financial frauds and extreme measures are utilized for personal enrichment.”
“The NYPD and its law enforcement partners remain committed to eradicating organized crime in New York City,” stated NYPD Commissioner Shea. “Associates of the Gambino Crime Family – or any other enterprise that seeks to enrich its members through racketeering, bribery, loansharking and fraud – should know that investigators will build strong cases against them, and they will be prosecuted. I commend the members of the NYPD, the FBI, and the U.S. Attorney’s Office for their work on this case.”
As alleged in the government’s court filings and summarized below, Andrew Campos and members of his crew used bribery, fraud and extortion schemes to infiltrate the construction industry and earn millions of dollars in criminal proceeds.
Honest Services Wire Fraud Bribery Schemes
Andrew Campos, Fiore, Kocaj and DiZenzo operated a carpentry company, CWC Contracting Corp. (“CWC”), and are charged with paying bribes and kickbacks to employees of numerous construction companies and real estate developers. In exchange, these employees took steps to benefit CWC, including awarding contracts and approving change orders to add or delete from the original scope of a contract. Specifically, between approximately June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes and kickbacks to multiple employees of a real estate development company (described in the indictment as “Construction Company #1”), including John Simonlacaj, the company’s current Managing Director of Development. CWC paid the bribes in the form of hundreds of thousands of dollars’ worth of free labor and materials used for renovations on Simonlacaj’s residence that was paid for by a fraudulently approved change order. As Kocaj stated, although the work was paid for by a change order, “it should have been pro bono” because Construction Company #1 “do[es] 50 million a year in business”, and it was “worth it to do some of the paperwork.” In another intercepted conversation, Fiore described the benefits provided by Simonlacaj, “This director, John. There’s a beautiful in there. There’s things we can do with [Kocaj] there, he whispers what he needs to whisper and we get things done.”
Obstruction of Justice – Martino’s Concealment of Financial Assets
In 2005, Andrew Campos and Martino were convicted in the Eastern District of New York for their role in a massive scheme to defraud users of adult entertainment services. Martino was ultimately sentenced to 108 months’ imprisonment and ordered by the court to pay $9.1 million in forfeiture. After his release from prison, Martino, together with Frank Tarul and others, concealed Martino’s substantial wealth and income, falsely reporting that Martino had limited assets and worked for Tarul’s flooring company. In reality, as revealed by court-authorized wiretaps, Martino operated multiple companies that earned millions of dollars, including construction work, investments in pizzerias and other business ventures.
Loansharking and Extortion
As detailed in the government’s court filings, various defendants used extortionate means to collect money. For example, Andrew Campos and Fiore used threats of violence to collect at least $100,000 from one victim. In a lawfully wiretapped phone conversation on March 13, 2019, Fiore warned the victim, “When you get punched in the face and your teeth get knocked out . . . you’re not going to laugh no more, okay? . . . At the end of the day, when you’re upside down [i.e., unable to make certain payments], you deal with him,” referring to Campos.
Kocaj and Lopez, a former professional boxer, are charged with loansharking, including Kocaj’s recovery of tens of thousands of dollars of a gambling debt on behalf of an Albanian organized crime figure. Kocaj bragged about his ability to violently collect money, stating that he could send “a couple of my Albanian guys” and have somebody “grab [a potential victim] by the f-----g neck.” Kocaj helped collect over $30,000, threatening that if the victim did not pay, “[h]e’s going to get his head split open. . . . These are not the guys to f--- around with. . . . These Albanians, you know what they’ll do.” Earlier this morning, law enforcement officers executed a search warrant at Lopez’s home and seized $25,000 in cash, brass knuckles and several large knives.
Retaliation Against Grand Jury Witness – Obstruction of Justice
Andrew Campos allegedly directed that a CWC worker believed to have testified before the grand jury be fired. Subsequently, during a lawfully recorded conversation on November 22, 2019, Fiore directed that the CWC worker be fired as “a personal favor to Andrew,” because the worker “could’ve pled the Fifth.”
Additional Charged Schemes
The indictments and complaint include additional alleged criminal schemes, including (1) laundering money by cashing checks made out to others, purportedly for work performed in connection with CWC construction projects; (2) fraudulently procuring cards from the United States Department of Labor indicating completion of certain Occupational Safety and Health Administration training courses when, in fact, the courses were never completed; (3) defrauding the U.S. government by paying CWC employees millions of dollars in cash without making the required payroll tax withholdings and payments; (4) overbilling CWC clients by causing them to pay for fraudulent or inflated work orders; and (5) evading taxes and money laundering, including by having CWC construct Andrew Campos’s residence.
The charges in the indictments and complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Keith D. Edelman and Kayla C. Bensing are in charge of the prosecution, assisted by EDNY Special Agent Erik Nesbitt. Assistant United States Attorney Claire S. Kedeshian is handling forfeiture matters.
The Defendants:
E.D.N.Y. Docket No. 19-CR-575 (FB)
RENATO BARCA, JR. (also known as “Ronny”)
Age: 32
Bronx, New YorkANDREW CAMPOS
Age: 50
Scarsdale, New YorkGEORGE CAMPOS
Age: 72
Peekskill, New YorkJAMES CIACCIA
Age: 51
Bronx, New YorkBENITO DIZENZO (also known as “Benny”)
Age: 53
New Rochelle, New YorkVINCENT FIORE
Age: 57
Briarcliff, New YorkMARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New YorkRICHARD MARTINO
Age: 60
Rye, New YorkJOHN SIMONLACAJ (also known as “John Si” and “Smiley”)
Age: 50
Scarsdale, New YorkFRANK TARUL (also known as “Bones”)
Age: 45
Bronx, New YorkMICHAEL TARUL (also known as “Perkins”)
Age: 43
Bronx, New YorkE.D.N.Y. Docket No. 19-CR-577 (FB)
MARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New YorkE.D.N.Y. Docket No. 19-MJ-1126
ADRIAL LOPEZ (also known as “Adriel Lopez” and “Andrew Lopeck”)
Age: 56
Bronx, New York
4 December 2019
Woman sent to prison for smuggling drugs in vehicle doorsRead the Press Release
BROWNSVILLE, Texas – A 26-year-old Brownsville woman has been ordered to federal prison after she admitted to possession with the intent to distribute more than 17 kilograms of cocaine, announced U.S. Attorney Ryan K. Patrick.
Micxi Rueda pleaded guilty Sept. 3.
Today, U.S. District Judge Rolando Olvera sentenced her to 36 months in federal prison to be immediately followed by three years of supervised release. In handing down the sentence, the court noted her age and lack of criminal history.
On May 18, Rueda attempted to enter the United States through the vehicle lanes at the Brownsville & Matamoros International Bridge. An alert for Rueda and her vehicle led to a secondary inspection, where a scan revealed an anomaly located in the vehicle’s passenger-side quarter panel. Authorities extracted 15 packages of cocaine, weighing 17.74 kilograms with an estimated street value of $355,000.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Nikki Piquette is prosecuting the case.
Wisconsin Man Sentenced for Sending Unauthorized EmailsRead the Press Release
St. Louis, MO – Christopher Crivolio, 47, of Sun Prairie, Wisconsin, was sentenced to a four year term of probation for knowingly using, with the intent to commit harassment, the means of identification of another person. Crivolio appeared before U.S. District Court Judge John A. Ross who ordered him to pay $44,847.76 in restitution within 15 days as well as a $2,000 fine.
According to court records, in August 2018, Crivolio sent unauthorized emails claiming to be someone else, an employee of “MH.” Crivolio was previously been employed with and terminated from MH. He sent the emails to more than 10 job applicants who had applied for positions at MH. The rejection emails were offensive in nature. Crivolio signed the emails using the full name of a nurse practitioner who still worked at MH.
Crivolio pled guilty in July 2019 to one count of identity theft.
The case was investigated by the F.B.I. offices in St. Louis and Milwaukee with assistance from the Western District of Wisconsin. Assistant United States Attorney Gwen Carroll handled the case for the U.S. Attorney's Office.
United States Joins Suit against Navistar Defense LLC Alleging False Claims under Marine Corps ContractRead the Press Release
The United States has intervened in a whistleblower suit filed in the United States District Court for the District of Columbia against Navistar Defense LLC. Navistar Defense manufactured armored vehicles for the United States military and is a subsidiary of Navistar International LLC, headquartered in Melrose Park, Illinois. The suit alleges that Navistar Defense violated the False Claims Act by submitting fraudulent invoices to support inflated prices for commercial parts under its contract to supply Mine Resistant Ambush Protected (MRAP) vehicles.
“The Department of Justice will hold accountable those contractors who falsify information and thereby cause the military to pay inflated prices,” said Assistant Attorney General Jody Hunt for the Civil Division. “We will take steps necessary to protect the military’s procurement process from abuse.”
“Through rigorous enforcement of the False Claims Act, we protect taxpayer dollars from waste, fraud, and abuse,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is meant to ensure that our men and women in uniform are adequately protected as they serve our country.”
In 2007, the United States Marine Corps awarded Navistar Defense a contract to build several hundred MRAP vehicles to replace the Humvee, which proved to be vulnerable to roadside explosive devices. Navistar Defense ultimately provided nearly 4,000 MRAPs under the contract. In 2009, as the focus of the war effort transitioned from the paved roads and flat terrain of the Iraqi deserts to Afghanistan’s rocky terrain, the Marine Corps sought to upgrade its MRAP vehicles with a modified Independent Suspension System (ISS). During the course of negotiations for the ISS, the Marine Corps asked Navistar Defense to provide evidence of prior commercial sales of the various parts that made up the ISS to ensure that the prices paid were fair and reasonable. The lawsuit alleges that Navistar Defense knowingly submitted fraudulent invoices that falsely purported to show prior, comparable commercial sales to conceal the inflated prices it was charging the Marine Corps. In reality, the lawsuit alleges, those sales never occurred.
The lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Duquoin Burgess, a former government contracts manager for Navistar Defense. Under the acts, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. The act permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.
The lawsuit is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Columbia. Investigative support is being provided by the Defense Contract Audit Agency, the Naval Criminal Investigative Service, the Defense Criminal Investigative Service, the Army Criminal Investigation Command, and the Federal Bureau of Investigation.
The case is captioned United States ex rel. Burgess v. Navistar Defense, LLC (D.D.C). The claims alleged in the lawsuit are allegations only, and there has been no determination of liability.
United States Joins Suit Against Navistar Defense LLC Alleging False Claims Under Marine Corps ContractRead the Press Release
WASHINGTON – The United States has intervened in a multimillion dollar whistleblower suit filed in the United States District Court for the District of Columbia against Navistar Defense, LLC. Navistar Defense manufactured large and armored vehicles for the United States military and is a subsidiary of Navistar International, LLC, headquartered in Melrose Park, Illinois. The suit alleges that Navistar Defense violated the False Claims Act (FCA) by submitting fraudulent invoices to support inflated prices for commercial parts on the Mine Resistant Ambush Protected (MRAP) vehicle.
“Contractors who falsify information to induce the military to pay inflated prices will be held accountable,” said Jody H. Hunt, Assistant Attorney General for the Civil Division. “We will continue to protect the military’s procurement process from such abuse.”
“Through rigorous enforcement of the False Claims Act, we protect taxpayer dollars from waste, fraud, and abuse,” said Jessie K. Liu, U.S. Attorney for the District of Columbia. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is meant to ensure that our men and women in uniform are adequately protected as they serve our country.”
In 2007, the United States Marine Corps awarded Navistar Defense a contract to build several hundred MRAP vehicles to replace the Humvee, which proved to be vulnerable to roadside bombs. Navistar Defense ultimately provided nearly 4,000 MRAPs under the contract. In 2009, as the focus of the war effort transitioned from the paved roads and flat terrain of the Iraqi deserts to Afghanistan’s rocky terrain, the Marine Corps sought to upgrade its MRAP vehicles with a modified (?) Independent Suspension System (ISS). During the course of negotiations for the ISS, the Marine Corps asked Navistar Defense to provide evidence of prior commercial sales of the various parts that made up the ISS to ensure that the prices paid were fair and reasonable. The government alleges that Navistar Defense knowingly submitted forged documents of prior, comparable commercial sales to conceal the inflated prices it was charging the Marine Corps. In reality, those sales never occurred.
The suit was filed under the qui tam or whistleblower provisions of the FCA by Duquoin Burgess, a former government contracts manager for Navistar Defense. Under those FCA provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Under the FCA, the United States may recover three times the amount of its losses plus civil penalties.
The government’s complaint alleges claims under the FCA, which prohibits knowingly submitting false claims for federal funds, and other common law claims. The lawsuit is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Columbia. Investigative support is being provided by the Defense Contract Audit Agency, the Naval Criminal Investigative Service, the Defense Criminal Investigative Service, the Army Criminal Investigation Command, and the Federal Bureau of Investigation.
The case is captioned United States ex rel. Burgess v. Navistar Defense, LLC (D.D.C). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Two drug traffickers linked to fatal overdose in Bellingham arrested in Skagit CountyRead the Press Release
Seattle – Two Skagit County residents are charged in U.S. District Court in Seattle in connection with a drug distribution ring selling fake oxycodone pills laced with fentanyl in Whatcom and Skagit Counties, announced U.S. Attorney Brian T. Moran. The pills are linked to the overdose death of a 17-year-old Bellingham teen. ROSALIANA LOPEZ-RODRIGUEZ, 21, of Mount Vernon, Washington, was arrested last week, and her supplier, GIOVANNI ALEJANDRO NUNEZ, 21, was arrested December 3, 2019, following a rapidly moving investigation to track down the source of the tainted pills. Both remain in custody.
“Getting these tainted pills off the street are a top priority for law enforcement,” said U.S. Attorney Brian T. Moran. “It is heartbreaking to meet with the families of these overdose victims who lost their children to fentanyl. We will hold those spreading these poisons accountable.”
According to the criminal complaint, a family member found the 17-year-old unresponsive on November 9, 2019. Despite the effort of emergency responders, he could not be revived. Investigators found a whole and a partial pill near the young man. The pills were designed to look like oxycodone 30 mg pills with the letter M and 30 stamped on them. However, they were not genuine and were tainted with fentanyl. Similar pills have been linked to other overdose deaths throughout the Puget Sound region.
The investigation identified LOPEZ-RODRIGUEZ as the person who sold the pills to the victim. In an effort to identify her source of supply, law enforcement utilized undercover officers and confidential sources to purchase pills. Law enforcement subsequently identified NUNEZ as LOPEZ-RODRIGUEZ’s supplier.
Court-authorized search warrants were served last week on the residences of LOPEZ-RODRIGUEZ and NUNEZ. At NUNEZ’s residence, law enforcement located a safe with hundreds of fake oxycodone pills, which matched the appearance of the fentanyl-laced pills linked to the fatal overdose.
“Ingesting any part of these fentanyl-laced pills can be life ending,” warned DEA Special Agent in Charge Keith Weis. “Investigating the sources of these pills remains a top priority for law enforcement along with alerting the public that these pills are dangerous drugs representing dire consequences to our communities.”
“The recent overdose death associated with counterfeit pills laced with fentanyl highlights the growing impact of the opioid crisis,” said Whatcom County Undersheriff Doug Chadwick. “The Whatcom County Sheriff’s Office and the Whatcom Gang and Drug Task Force will continue to aggressively investigate those that bring these drugs into our communities”.
Currently both LOPEZ-RODRIGUEZ and NUNEZ are charged with possession of narcotics with intent to distribute. The charge is punishable by up to twenty years in prison.
The charges contained in the criminal complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the Whatcom County Sheriff’s Office, the Drug Enforcement Administration (DEA), and the Whatcom County Drug and Gang Task Force, which is made up of members of the Whatcom County Sheriff’s Office, Bellingham Police Department, U.S. Customs and Border Protection (CBP) and Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Seungjae Lee.
nunez_complaint.pdfTwo Sapulpa Sisters Sentenced for Illegally Collecting More Than $350,000 in Death BenefitsRead the Press Release
Two Sapulpa sisters were sentenced today in U.S. District Court for illegally taking more than $350,000 in Social Security and military retirement benefits that were meant for their mother, announced U.S. Attorney Trent Shores.
U.S. District Judge Gregory K. Frizzell sentenced Patricia Lee Kendall, 66, and Peggy Lee Larue, 63, both of Sapulpa, to six months in federal prison to be followed by three years on supervised release.
“It is disgraceful that these two sisters fraudulently stole Social Security death benefits and military retirement benefits,” said U.S. Attorney Trent Shores. “Their fraud was ongoing for nearly 20 years. In addition to serving time in federal prison, they will be required to make payments to compensate these federal programs for the more than $350,000 in stolen funds.”
Kendall and Larue pleaded guilty to two-counts of aiding and abetting each other to illegally take and conceal government property in the form of money from both the Social Security Administration and the Department of Defense Military Retirement Fund. The women admitted in court that they failed to notify authorities of their mother’s death in December 2000. Previously, their mother had received the death benefit payments as a result of her husband’s military service. After their mother passed away, the payments should have ceased.
Kendall and Larue illegally took money from the Social Security Administration in the aggregate value of $224,237 in Social Security income as well as money from the Department of Defense Military Retirement Fund in the aggregate value of $129,765 in military retirement funds. During sentencing, Judge Frizzell further ordered the two sisters to repay the $354,002.
The Social Security Administration- Office of Inspector General and Department of Defense Criminal Investigative Service conducted the investigation. Assistant U.S. Attorneys Scott Proctor and Shannon Cozzoni prosecuted the case.
Two Men Charged with Child Sex TraffickingRead the Press Release
OKLAHOMA CITY – A federal grand jury has indicted ROLANDO CIFUENTES-LOPEZ, 36, and ERI LEONARDO CIFUENTES-LOPEZ, 40, both of Oklahoma City, on charges of child sex trafficking, announced U.S. Attorney Timothy J. Downing.
According to separate indictments returned by a federal grand jury today, each defendant obtained, solicited, and patronized two minor victims after having had a reasonable opportunity to observe them and knowing and in reckless disregard of the fact that each minor would be caused to engage in a commercial sex act. The indictment against Rolando Cifuentes-Lopez states he engaged in this conduct from November 2016 to January 18, 2019. The indictment against Eri Cifuentes-Lopez states he engaged in this conduct from January 2018 to January 18, 2019. Eri Cifuentes-Lopez is also charged with illegally re-entering the United States; he was removed from the country on November 2, 2005, and was found in the United States on November 20, 2019, without the consent of the Attorney General or the Secretary of Homeland Security.
According to court documents, FBI and Oklahoma City Police Department investigators determined that Rolando Cifuentes-Lopez owned the trailer where the two minor victims lived and threatened to evict their family if they did not comply with requests for sex. He allegedly had sex on multiple occasions with each of the minors, who were as young as 14, in exchange for cash or reduced rent. Eri Cifuentes-Lopez also allegedly had sex with each of the minors for cash.
Both men were arrested by Homeland Security Investigations after traffic stops on November 20, 2019. They have been in federal custody since that time.
If found guilty of child sex trafficking, each defendant faces a mandatory punishment of at least ten years and up to life in prison. If sentenced to less than life, they would be required to comply with terms of supervised release for at least five years and up to life and be required to register as sex offenders. Eri Cifuentes-Lopez also faces up to twenty years in prison for re-entering the United States illegally. Each defendant could also be fined up to $250,000 on each count and be ordered to pay restitution to trafficking victims.
Two other defendants in this investigation have entered guilty pleas to child sex trafficking. On August 28, 2019, Wilson Leonel Gramajo-Maldonado, 29, of Oklahoma City, pleaded guilty to a superseding information that charged him with obtaining the two minor victims for commercial sex acts between June 2018 and January 18, 2019. On September 5, 2019, Natalie Dawn Halbert pleaded guilty to two counts of child sex trafficking, one for each of the minors. She admitted before U.S. District Judge Charles Goodwin that she maintained the minors between November 2018 and January 18, 2019; provided them with condoms; and caused them to engage in commercial sex acts. Both of these other defendants face a mandatory punishment of at least ten years and up to life in prison. Both are in the custody of the U.S. Marshals Service.
These charges are the result of an investigation by the Federal Bureau of Investigation—Oklahoma City Field Office, the Oklahoma City Police Department, and U.S. Homeland Security Investigations. Assistant U.S. Attorneys K. McKenzie Anderson and Mary E. Walters are prosecuting the case.
The public is reminded that the charges against Rolando Cifuentes-Lopez and Eri Cifuentes-Lopez are merely allegations and that they are presumed innocent unless and until proven guilty beyond a reasonable doubt. Reference is made to public filings for more information.
Tugboat Owner Charged with Production, Possession and Receipt of Child PornographyRead the Press Release
A Detroit man was indicted yesterday on charges of production, possession and receipt of child pornography, First Assistant United States Attorney Saima Mohsin announced today.
Mohsin was joined in the announcement by Special Agent in Charge Steven M. D'Antuono of the Federal Bureau of Investigation, Detroit Division (FBI).
Indicted was Wade Preston Streeter, 49. Streeter was arrested on November 21, 2019 on a criminal complaint and is being held in custody during the pendency of this case.
According to court records, Streeter is alleged to have sexually assaulted and covertly produced sexually graphic photographs of minor boys as well as engaged in sexually explicit conversations with the minor victims. This alleged conduct took place both at his home in Detroit and on his tugboat.
The FBI is asking for the public’s help to identify potential victims of Streeter, who would befriend young boys on Facebook and other social media sites and then arrange to meet them privately.
Anyone who may have been victimized by Wade Preston Streeter, or anyone who may have information about his alleged criminal behavior, is encouraged to call 313-426-3880 or email the FBI at [email protected].
The FBI is legally mandated to identify victims of federal crimes that it investigates. Identified victims may be eligible for certain services and rights under federal and/or state law. Victims in this investigation can find information about the hearings in this case at https://www.justice.gov/usao-edmi/united-states-v-wade-streeter-docket-19-mj-30602.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
The case is being investigated by special agents of the FBI and is being prosecuted by Assistant United States Attorneys April Russo and Barbara Lanning.
Tomahawk Woman Sentenced for Long-Term Methamphetamine ConspiracyRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Becky L. Peterson, 64, Tomahawk, Wisconsin was sentenced yesterday by U.S. District Judge James D. Peterson to 66 months in federal prison for conspiring with Mark W. Moore to distribute more than 50 grams of methamphetamine in Ashland County, Wisconsin over the past several years. Becky Peterson pleaded guilty to the conspiracy charge on June 11, 2019. Moore pleaded guilty to the same charge on November 28, 2018 and was sentenced to 66 months in federal prison on March 13, 2019.
Peterson and Moore engaged in a years-long conspiracy to distribute methamphetamine from a farm near Butternut, Wisconsin in the Town of Peeksville. Drug investigators with the Wisconsin Department of Justice Division of Criminal Investigation developed information that Peterson and Moore were selling methamphetamine from a location known as the “Meth Farm.” Beginning in August 2017, an undercover investigator made contact with Moore and began making purchases of methamphetamine from him on the 80-acre farm. During the investigation police confirmed that Moore was working with Peterson to distribute methamphetamine.
Between August 2017 and June 2018, the undercover officer conducted seven controlled buys of methamphetamine from Moore and one from Peterson, each of these occurred at the farm, either in the residence or in a workshop nearby. The sales to the undercover officer alone totaled more than 60 grams. During the course of these buys, Moore stated that Peterson set the prices and weighed and packaged the methamphetamine for sale. Moore also stated on several occasions that he needed to confirm with Peterson whether he could give a discount for large quantity sales.
On June 26, 2018, police executed a search warrant at the farm. During the search, they recovered approximately 30 grams of methamphetamine and $11,412 in US currency. Another $2,000 was later recovered from a separate location. Peterson and Moore each admitted to their involvement in a multi-year ongoing business of distributing methamphetamine.
In sentencing Peterson, Judge Peterson stated that this was long-term dealing in methamphetamine, which is an epidemic in that part of the state. Judge Peterson told Peterson that while her age and health were mitigating considerations, they were not a free pass to commit crime, and he wasn’t fully confident that she might not reoffend given that she had a past drug trafficking conviction.
In addition to the prison sentences received by Peterson and Moore, the court ordered the forfeiture of the farm property used in distributing the methamphetamine, as well as the $13,412 in cash recovered.
The charges against Peterson and Moore were the result of an investigation conducted by the Wisconsin Department of Justice Division of Criminal Investigation, Ashland County Sheriff’s Department, and Drug Enforcement Administration. The prosecution of the case has been handled by Assistant U.S. Attorney Robert A. Anderson.
Texas Mexican Mafia Member Sentenced to 35 Years in Federal PrisonRead the Press Release
In San Antonio this afternoon, a federal judge sentenced 51-year-old Texas Mexican Mafia member Robert Eugene Hernandez (aka “Gino”) to 35 years in federal prison for his role in a conspiracy to extort money from drug traffickers operating in their territory without permission, announced U.S. Attorney John Bash and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, U.S. District Judge Xavier Rodriguez ordered that Hernandez pay a $5,000 fine and be placed on supervised release for a period of five years after completing his prison term.
On July 2, 2019, a federal jury convicted Hernandez of one count of interference with Commerce by threats or extortion, one count of conspiracy to distribute and possess with intent to distribute methamphetamine and heroin, one count of conspiracy to possess a firearm in furtherance of a drug trafficking crime, one substantive count of possession of a firearm in furtherance of a drug trafficking crime, one count of possession with intent to distribute methamphetamine, and one count of prohibited person in possession of a firearm.
According to court records, Hernandez, a San Antonio Eastside Lieutenant, carried out his duties under the direction of Raul Ramos, Texas Mexican Mafia (TMM) Free World General based in San Antonio. The TMM leadership controls and directs collection of the drug tax. All members who participate in the collection of the tax, and the leaders who direct them, understand and agree that drug dealers are not permitted to sell drugs without paying the tax. Dealers have no choice; payment of the tax is mandatory and this rule is enforced through violence.
Once a drug dealer is identified, this information is passed up to the leadership. The leadership will make an effort to confirm this information, usually through a purchase from the drug dealer. If the information is confirmed, TMM soldiers are instructed to visit the drug dealer. If the dealer denies dealing in TMM territory without permission he is ordered to pay more. If the dealer refuses, he usually is robbed and beaten immediately. If the first visit does not convince the dealer to comply, the second visit will be a “door kick.” The front door is kicked in, armed gang members storm the home, all occupants are beaten and sometimes tied up, and anything of value is taken such as narcotics, jewelry, electronics, guns, and automobiles. After a “door kick,” all dealers begin paying the tax.
This prosecution has resulted in 37 convictions of members and associates of the Texas Mexican Mafia; 27 of which have resulted in sentences ranging from 63 months to life in federal prison. Ten defendants are awaiting sentencing.
This federal prosecution stems from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation conducted by the FBI, New Braunfels Police Department, Texas Department of Public Safety and the San Antonio Police Department. Homeland Security Investigations (HSI) and the Bureau of Prisons (BOP) assisted in this investigation.
The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking operations, weapons trafficking operations, money laundering operations, violent street gangs and those primarily responsible for the nation’s illegal drug supply.
Tax Return Preparers Plead Guilty to Filing False Tax ReturnsRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced that Gregory Doneal Mack, 56, of Charlotte, appeared in federal court today and pleaded guilty to preparing false tax returns while working for a tax return preparation business. The owner of the tax preparation business, Sean Dalton Williams, 48, of Charlotte, previously pleaded guilty to aiding and assisting the preparation of a false tax return.
U.S. Attorney Murray is joined by Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), in making today’s announcement.
“Tax preparers are the gatekeepers of our tax system, tasked with safeguarding its integrity and complying with our nation’s tax laws, not using their expertise to help clients evade their tax obligations at the expense of honest taxpayers. My office’s tax prosecutors are dedicated to uncovering tax fraud and holding cheats accountable for their actions,” said U.S. Attorney Murray.
“Taxpayers should choose carefully when hiring a tax return preparer. While most return preparers are honest and provide excellent service, a few unscrupulous tax preparers file false returns to defraud the government and their clients. All taxpayers should know that IRS Criminal Investigation will vigorously pursue those dishonest tax return preparers and hold them accountable for their illegal actions,” said Special Agent in Charge Line.
According to filed plea documents and today’s plea hearing, from 2012 to 2017, Mack worked as a tax return preparer at SW Financial Group (SWFG), a Charlotte-area tax preparation business owned and operated by Williams. According to court records, while working at SWFG, Mack and Williams prepared fraudulent U.S. Individual Income Tax Returns, Forms 1040, and related IRS Schedules and Forms, that contained fabricated and/or fraudulent items on Schedules A and C. As a result, the defendants’ clients’ tax liabilities were reduced, resulting in inflated refunds.
According to court records, the tax loss to the government associated with the inaccurate tax returns prepared by Mack for tax years 2012 to 2017 is approximately $282,967. The tax loss associated with the fraudulent tax returns prepared by Williams for tax years 2012 to 2015 is $276,540. Court records show that during the time that Williams perpetrated the tax fraud, he was also on pretrial release on federal charges related to a mortgage fraud scheme.
Both defendants pleaded guilty to aiding and assisting the preparation of a false tax return. The charge carries a maximum penalty of three years in prison and a $250,000 fine. A sentencing date for Mack and Williams has not been set.
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In a separate case, Cletise Hammonds, 48, of Charlotte, has pleaded guilty to preparing false tax returns. Court documents filed in this case show that, from 2011 to 2017, Hammonds owned and operated Accurate Tax and Bookkeeping LLC (Accurate Tax), a tax preparation business located in Charlotte. As Hammonds previously admitted in plea documents, through Accurate Tax, Hammonds prepared and filed false tax returns for clients that included fraudulent Schedule C income expenses, education credits, and dependents, among other things. The false and fraudulent items resulted in the fraudulent reduction of the clients’ tax liabilities, and the receipt of fraudulently inflated refunds. According to court records, Hammonds charged between $200 to $700 for preparation of tax returns, and his tax preparation fees were taken directly from the clients’ tax refunds. According to court records, the tax loss associated with the fraudulent returns prepared and filed by Hammonds is $329,568. Hammonds has pleaded guilty to aiding and assisting in the preparation of false tax returns and is currently awaiting sentencing.
In making today’s announcement, U.S. Attorney Murray commended IRS-CI for handling these investigations.
Assistant United States Attorney Caryn Finley of the U.S. Attorney’s Office in Charlotte is prosecuting the cases.
Suspended Pharmacist Charged with Health Care Fraud Conspiracy, Fraudulently Obtaining Controlled Substances and Misbranding DrugsRead the Press Release
PITTSBURGH, PA - A suspended pharmacist has been indicted by a federal grand jury in Pittsburgh, PA, on charges of obtaining controlled substances by fraud, misbranding of drugs, and health care fraud conspiracy, United States Attorney Scott W. Brady announced today.
The 12-count superseding Indictment named Timothy W. Forester, 43, of Venetia, PA 15367, as the sole defendant.
According to the indictment presented to the court, from on or about November 14, 2018, to on or about February 14, 2019, Forester, a registered pharmacist who owned four pharmacies in Pittsburgh’s South Hills, knowingly, intentionally and unlawfully obtained oxycodone and hydrocodone, Schedule II controlled substances, by misrepresentations, fraud, and deception. In addition, the indictment alleges that Forester placed generic drugs into empty bottles of name brand drugs and sold the drugs as if they were name brand drugs. The superseding indictment alleges that Forester conspired with others to commit health care fraud.
The law provides for a maximum per count sentence of four years in prison, a fine of $250,000 or both as to Counts 1-10. As to Count 11, the law provides for a maximum per count sentence of 3 years in prison, a fine of $ 250,000 or both. As to Count 12, the law provides for a maximum per count sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Defendant was released on a $100,000 secured bond.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations and the Pennsylvania Bureau of Licensing.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Strangulation death sends Birney man to prison for 25 yearsRead the Press Release
BILLINGS—A Birney resident with a history of domestic abuse convictions was sentenced today to 25 years in prison and five years of supervised release in the strangulation death last year of a woman on the Northern Cheyenne Indian Reservation, U.S. Attorney Kurt Alme said.
Randy Lee Littlebird, 36, pleaded guilty in July to second degree murder, strangulation and domestic abuse by habitual offender.
U.S. District Judge Susan Watters presided.
The prosecution said in court records that Littlebird killed the victim on Feb. 4, 2018 at a shared residence in Birney. Littlebird and the victim were drinking alcohol throughout the day and were drunk. Another individual in the house heard a confrontation between the two and the victim yell, “No Randy, don’t, don’t,” then her scream, followed by silence.
Littlebird entered the individual’s room and said that the victim was unresponsive. The individual found the victim lying on the floor near a rope. Littlebird claimed the victim had killed herself and he had moved the body.
An autopsy determined the cause of death was ligature strangulation and multiple blunt force injuries.
In an interview with FBI and Bureau of Indian Affairs agents, Littlebird confessed to fatally strangling the victim. He admitted to tying ropes around the victim’s ankles to prevent her from leaving and then he left the room. When he returned, the two argued some more. Littlebird grabbed the rope, which was now around the victim’s neck, and while standing, pulled on it, strangling her.
Littlebird has four prior domestic abuse convictions on the Northern Cheyenne Reservation.
Assistant U.S. Attorney Bryan Dake prosecuted the case, which was investigated by the FBI and BIA.
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Steelville Man Pleads Guilty to Felon in Possession of a FirearmRead the Press Release
St. Louis, MO – Johnathan K. Esparza, 27, of Steelville, MO, pleaded guilty to felon in possession of a firearm stemming from a police chase from Illinois into Missouri. Esparza appeared in federal court this afternoon before U.S. District Judge John A. Ross who accepted his plea and set his sentencing date for March 13, 2020.
According to court documents, on September 21, 2018, Brooklyn, Illinois Police Officers responded to a call regarding shots fired from a Nissan vehicle. As Brooklyn police officers attempted to bring the vehicle to a controlled stop, the driver of this vehicle accelerated and drove at a high rate of speed from Illinois into Missouri. Officers observed Esparza, the front seat passenger, throw a pistol out of the window of the vehicle in St. Louis and were able to recover and seize the pistol. The Nissan was eventually stopped and Esparza was apprehended. A computer check revealed that he was a convicted felon.
Esparza faces a maximum sentence of ten years in prison and a fine of not more than a $250,000. He may be subject to a mandatory minimum sentence of 15 years and a maximum sentence greater than described. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The Brooklyn, Illinois Police Department and St. Louis Metropolitan Police Department investigated this case. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney’s Office.
Springfield Man Pleads Guilty to Failing to Register as a Sex OffenderRead the Press Release
BOSTON – A Springfield man pleaded guilty yesterday in federal court in Springfield to failing to register as a sex offender.
Alberto Ayala pleaded guilty to one count of failure to register as a sex offender before U.S. District Court Judge Mark G. Mastroianni, who scheduled sentencing for March 26, 2020. Ayala was indicted in February 2019, and has been in custody since his arrest on Sept. 26, 2018, for violating his conditions of parole in another criminal case.
Ayala was convicted in New Jersey of sexual assault in 2006. While in New Jersey from 2011 to 2016, Ayala received, and complied with, many notices of his obligation to register as a sex offender. On Nov. 14, 2016, while Ayala was under parole supervision for the original sex offense, he submitted his last registration as a sex offender and vacated his address in New Jersey without advising his parole officer. Soon thereafter, a New Jersey parole warrant was issued for his arrest.
Ayala subsequently moved to Massachusetts, living in the Boston area in the summer of 2017 and in Springfield starting in April 2018. Ayala never registered as a sex offender in Massachusetts, and was arrested in Springfield on Sept. 26, 2018.
The charging statute provides for a sentence of up to 10 years in prison, a lifetime of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Andrew E. Lelling and John Gibbons, United States Marshal for the District of Massachusetts, made the announcement today. Assistant U.S. Attorney Alex J. Grant, of Lelling’s Springfield Branch Office, is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Spokane for-Profit College and General Manager to Pay over $120,000 to Resolve False Claims Act Liability in Connection with G.I. BillRead the Press Release
Spokane – William D. Hyslop, United States Attorney for the Eastern District of Washington, announced that Computer Solutions of Spokane, Inc., doing business as New Horizons Computer Learning Center (New Horizons Spokane), and its General Manager, Spirit Dorris, agreed to pay over $120,000 to resolve their liability in connection with alleged fraud against the Department of Veterans Affairs’ (VA) G.I. Bill program. New Horizons Spokane is a for-profit school located in Spokane Valley, Washington. It is one of over 60 franchises around the country doing business under the New Horizons name.
Under the G.I. Bill, veterans and service members of the United States Armed Forces and their families are eligible for tuition and fee assistance associated with higher education. Under the program, educational institutions such as New Horizons can request reimbursement from the VA for tuition and fee expenses incurred by qualifying veterans and service members and their eligible dependents, provided that the school meets certain eligibility requirements and complies with VA regulations designed to protect the G.I. Bill from overpayment and to ensure that its benefits go only to eligible institutions.
As part of the settlement agreement, New Horizons Spokane and Mr. Dorris admitted that they failed to comply with certain VA requirements, resulting in receiving payments from the VA to which they were not entitled. Specifically, New Horizons Spokane and Mr. Dorris admitted that New Horizons Spokane failed to comply with the “85/15 Rule,” which requires that no more than 85 percent of any course of study be filled with individuals funded by the G.I. Bill. The purpose of the 85/15 Rule is to ensure that the educational institution is offering legitimate courses of interest and value to the general public and not simply offering classes that solely take advantage of VA funding. As part of the settlement agreement, New Horizons Spokane and Mr. Dorris admitted that between 2015 and 2018, New Horizons sought and received reimbursement from the VA in violation of the 85/15 Rule.
Additionally, as part of the settlement agreement, New Horizons Spokane and Mr. Dorris admitted that between 2015 and 2018, New Horizons Spokane failed to comply with the “Last Payer Rule,” which requires that the amount of G.I. Bill reimbursement be reduced by the amount of any discounts, rebates, or other financial incentive provided to veterans. New Horizons Spokane and Mr. Dorris admitted that New Horizons failed to comply with the Last Payer Rule by failing to pass discounts and rebates on to the VA, resulting in overpayment to New Horizons Spokane.
New Horizons Spokane will pay $100,000 to resolve its liability, while General Manager Spirit Dorris will pay $20,950.
Also as part of the settlement agreement, New Horizons Spokane and Mr. Dorris admitted that New Horizons Spokane had received, and acted on, direction from its corporate parent and franchisor, New Horizons Computer Learning Center, Inc., which is headquartered in Conshohocken, Pennsylvania, regarding the 85/15 Rule and the Last Payer Rule.
United States Attorney Hyslop said, “The G.I. Bill is an essential and historic government program that expands opportunity and education to our men and women in uniform who have served and sacrificed on behalf of our Country. The False Claims Act serves as the government’s primary civil remedy to redress false claims for federal funds and property. This case is indicative of the United States Attorney’s Office for the Eastern District of Washington’s continuing commitment to rooting out alleged fraud involving government programs. We will continue to work with our law enforcement partners to ensure that G.I. Bill funds go only to eligible institutions and to hold accountable those who misuse this program.”
“This settlement demonstrates the VA Office of Inspector General’s unwavering commitment to protecting programs intended to assist veterans that have served this nation and rightfully earned their benefits,” said Special Agent in Charge James Wahleithner, VA Office of Inspector General, Criminal Investigations Division.
The investigation was conducted by the VA Office of Inspector General. This case was prosecuted by Dan Fruchter, Vanessa R. Waldref, and Tyler Tornabene, Assistant U.S. Attorneys for the Eastern District of Washington.
South Glens Falls Man Sentenced to 60 Months for Cocaine TraffickingRead the Press Release
ALBANY, NEW YORK – Carlo Varnado, age 41, of South Glens Falls, New York, was sentenced today to 60 months in prison for conspiring to distribute more than 500 grams of cocaine.
The announcement was made by United States Attorney Grant C. Jaquith and Special Agent in Charge Ray Donovan, U.S. Drug Enforcement Administration (DEA), New York Field Division.
As part of his guilty plea, Varnado admitted that between January 2013 and October 9, 2017, he distributed cocaine from his apartment in South Glens Falls and in areas around Glens Falls. Some of this cocaine was resold in and around Lake Placid, New York. On October 9, 2017, DEA Special Agents seized approximately 8.8 ounces of cocaine bound for Lake Placid after Varnado distributed it to another person. DEA Special Agents then executed a search warrant at Varnado’s apartment and recovered approximately 20 grams of cocaine, inositol (a common cutting agent for cocaine), approximately $1,000 in U.S. currency, a scale, a vacuum sealer, and plastic baggies. As part of his plea, Varnado admitted trafficking approximately 4 kilograms of cocaine during the conspiracy.
Senior U.S. District Judge Gary L. Sharpe also sentenced Varnado to serve a 4-year term of supervised release.
This case was investigated by DEA and prosecuted by Assistant U.S. Attorney Douglas Collyer.
Skiatook Woman Charged with 14 Counts of Aggravated Identity TheftRead the Press Release
In November, a federal grand jury returned an indictment charging Crystal Lynne Clark, 54, of Skiatook, with 14 counts of aggravated identity theft, announced U.S. Attorney Trent Shores.
Clark allegedly used credit card information from multiple victims to purchase gift cards. She then provided her associates with the gift card information. Clark also allegedly used the victims’ credit cards to make numerous personal purchases.
"Money mules facilitate fraud schemes by receiving funds from victims and forwarding that money to co-conspirators," said U.S. Attorney Trent Shores. "Identity theft and fraud schemes can be financially crippling to their victims. That's why I am proud of the excellent investigative work done by the Postal Inspector and Skiatook Police Department."
Recruiters of money mules lure their candidates in many different ways. This year, cases involving romance scams were reported on the rise, with criminals increasingly recruiting money mules on online dating sites and grooming their victims over time to convince them to open bank accounts under the guise of sending or receiving funds.
The U.S. Postal Inspection Service and Skiatook Police Department are conducting the investigation. Assistant U.S. Attorney Victor A.S. Régal is prosecuting the case.
Saint Louis County Man Charged with Federal Drug and Firearm ChargesRead the Press Release
St. Louis – Antonio Bright, 37, of St. Louis, MO, was charged by a federal complaint for possession of firearms and drugs.
According to the complaint, a federal search warrant was executed today by FBI SWAT St. Louis and the St. Louis Metropolitan Police Department at 6526 Leschen Avenue, St. Louis, MO 63121. Law enforcement located twelve firearms in the residence, two plastic bags containing suspected heroin and one plastic bag containing multiple large chunks of rock-like substance suspected to be heroin, two plastic bags containing multiple pills of suspected ecstasy and multiple bags and containers of marijuana.
Bright has been charged with possession with intent to distribute controlled substances; felon in possession of a firearm; and possessing one or more firearms in furtherance of a drug trafficking crime. Bright is presumed to be innocent unless and until proven guilty.
These charges are the result of a joint investigation by the St. Louis Metropolitan Police Department and Federal Bureau of Investigation. Special Assistant United States Attorney Nauman Wadalawala is handling this case.
Rochester Woman Pleads Guilty to Drug TraffickingRead the Press Release
CONCORD, N.H. - Leah M. Stevens, 32, of Rochester, pleaded guilty in federal court to drug trafficking, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court on September 10, 2018, a cooperating individual gave information to law enforcement officers that Stevens had traveled to Lawrence, Massachusetts to pick up drugs. Law enforcement officers conducted a motor vehicle stop as Stevens was returning to Rochester from Lawrence. During the stop, Stevens admitted that she had a number of “sticks” of narcotics in her possession and officers found approximately 288 grams of fentanyl.
On September 14, 2018, a cooperating source informed law enforcement officers that Stevens had received a new delivery of drugs at her residence, which she intended to distribute. Law enforcement officers executed another vehicle stop. During the search of the vehicle, law officers located fentanyl and methamphetamine.
Stevens is scheduled to be sentenced on March 11, 2020.
“Interstate fentanyl traffickers have made large quantities of this deadly drug available for purchase in New Hampshire,” said U.S. Attorney Murray. “In order to deter this illegal trade and thereby protect our citizens, we will continue to work closely with the FBI, Epping Police Department and all of law enforcement partners to identify and prosecute those who bring fentanyl into our state.”
"The transport of dangerous drugs like fentanyl between Massachusetts and New Hampshire is no different from recklessly spreading a deadly plague, and it's a problem the FBI and our law enforcement partners on both sides of the border have fought hard to obstruct for the safety of our neighborhoods," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. "Leah Stevens was caught in the act of interstate drug smuggling, only to opt for home delivery days later. We’re pleased to see that today she finally accepted responsibility for her criminal conduct.”
This matter was investigated by the Federal Bureau of Investigation’s Safe Streets Task Force and the Epping Police Department. The case is being prosecuted by Assistant U.S. Attorney Jarad Hodes.
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Roanoke Man Sentenced on Drug, Gun ChargesRead the Press Release
Roanoke, VIRGINIA – A Roanoke man, who possessed with the intent to distribute methamphetamine and illegally possessed a firearm in furtherance of his drug trafficking activities, was sentenced yesterday in federal court to 10 years in prison. United States Attorney Thomas T. Cullen made the announcement today as part of the Western District of Virginia’s ongoing Project Safe Neighborhoods [PSN] initiative to reduce violent crime in the City of Roanoke.
Tahlik Shine, 20, pleaded guilty October 7, 2019 to one count of possession with the intent to distribute methamphetamine and one count of possession of a firearm in furtherance of a drug trafficking crime.
“This case illustrates our focus on working with the Roanoke Police Department to target individuals who unlawfully use and possess firearms,” U.S. Attorney Cullen stated today. “We will continue to surge federal resources into this community to reduce violence, gang, and drug-related activity.”
According to court documents, on two separate dates, officers with the City of Roanoke Police Department conducted traffic stops during which time Shine was found to be in possession of a firearm and/or illegal substances. On July 27, 2018, Shine was stopped by police due to a tail light being out and was found to be in possession of a firearm and a measurable amount of cocaine. Again, on October 4, 2018, after being stopped by police for an outstanding arrest warrant, Shine was found to be in possession of 151 grams of methamphetamine.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms, Explosives, and the City of Roanoke Police Department. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven 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.