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25 November 2019
Michigan Man Sentenced for Fraudulent Use of Social Security Numbers and Aggravated Identity TheftRead the Press Release
United States Attorney Joe Kelly announced today that on November 25, 2019, Senior United States District Court Judge Laurie Smith Camp sentenced Christopher Charles Heinz, age 30, of Romulus, Michigan, to 54 months’ imprisonment, placed him on supervised release for three years, and ordered him to make restitution in the amount of $22,126 for his conviction for the fraudulent use of Social Security numbers and aggravated identity theft.
From December 2017 through June 2018, Heinz and another used stolen identifications of credit worthy individuals to purchase high-end cellphones at retail stores in Kearney, Holdrege, Norfolk, Beatrice, Columbus, Grand Island, Hastings, Ainsworth and O’Neill, Nebraska. Heinz provided counterfeit driver’s licenses and Social Security numbers belonging to actual people to stores to qualify for credit.
This case was investigated by the Federal Bureau of Investigation, the Social Security Administration - Office of Inspector General, the Nebraska States Patrol, Sheriff’s Offices of Brown County and Holt County Nebraska and the Police Departments in Lexington, Kearney, Holdrege, Norfolk, Beatrice, Columbus, Grand Island and Hastings.
Member of Hacker Collective Pleads Guilty to Federal Charges of Making Online Threats to Schools and Possessing Child PornographyRead the Press Release
LOS ANGELES – A North Carolina man pleaded guilty today to federal charges of making bogus threats of shootings and bombings to schools in the United Kingdom and the United States, including numerous schools in Southern California.
Timothy Dalton Vaughn, 21, of Winston-Salem, North Carolina, also admitted making false reports of a plane hijacking and conducting computer attacks, as well as possessing child pornography.
Vaughn – who used online handles that include “WantedbyFeds” and “Hacker_R_US” – pleaded guilty this afternoon to possession of child pornography, conspiring to make threats and damage a computer, and computer hacking.
Authorities have linked Vaughn to the Apophis Squad, a worldwide collective of computer hackers and swatters intent on using the Internet to cause chaos. The collective caused disruptions by making threatening phone calls, sending bogus reports of violent school attacks via email, and launching distributed denial-of-service (DDoS) attacks on websites. Vaughn and another man were named earlier this year in a grand jury indictment that alleged a series of cyber and swatting attacks in 2018, including threats of bombs and school shootings that were “designed to cause fear of imminent danger and did cause the closure of hundreds of schools on two continents on multiple occasions.”
Vaughn specifically admitted today that he provided to his co-defendant contact information for at least 86 school districts that received emailed threats of an armed student. The threatened attacks included the imminent detonation of a bomb made with ammonium nitrate and fuel oil, bombs placed under school transportation vehicles, and the placement of explosives under school buses and on sports fields, according to Vaughn’s plea agreement.
In a plea agreement filed in relation to today’s hearing, Vaughn admitted that in early 2018 he demanded 1.5 bitcoin (then worth approximately $20,000) from Hoonigan, a Long Beach motorsport company, to prevent denial-of-service attacks on its website. When the company refused to pay, he launched a DDoS attack that disabled hoonigan.com.
Vaughn also admitted helping his co-defendant make a false report of a hijacking on a United Airlines plane flying from London to San Francisco.
In relation to the child pornography count, Vaughn admitted possessing nearly 200 sexually explicit images and videos depicting children, including at least one toddler.
As a result of his guilty pleas, Vaughn will face a statutory maximum sentence of 35 years in federal prison when he is sentenced by United States District Judge Otis D. Wright II on June 8.
The second defendant named in the indictment – George Duke-Cohan, 20, of Hertfordshire, United Kingdom, who used online handles that included “DigitalCrimes” and “7R1D3N7” – is currently serving a prison sentence in Britain for the false report of the hijacking. Duke-Cohan is charged in the indictment with nine counts. If he were to be convicted, Duke-Cohan would face a statutory maximum sentence of 65 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the result of an investigation by the FBI with assistance provided by the United States Secret Service as part of the Electronic Crimes Task Force.
This case is being prosecuted by Assistant United States Attorney Julia S. Choe of the Cyber and Intellectual Property Crimes Section.
Manhattan U.S. Attorney Announces Charges Against Austin Man for Computer Hacking and Fraud Scheme to Steal Unreleased Music from Music Industry ProfessionalsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, the Special Agent in Charge of the New York Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today the filing of a criminal indictment against CHRISTIAN ERAZO for conspiring with others to commit wire fraud and computer intrusion, as well as committing aggravated identity theft, by hacking a music producer’s social networking account to impersonate the producer in order to solicit and obtain unreleased music from other artists, which he then directed the artists to send to a fake email account in the producer’s name. In addition, ERAZO hacked the online accounts of two music management companies in order to steal unreleased music of numerous music industry professionals. ERAZO was arrested today in Austin, Texas. He will be presented in federal court in the Western District of Texas tomorrow before United States Magistrate Judge Mark Lane.
U.S. Attorney Geoffrey S. Berman said: “Christian Erazo and his co-conspirators allegedly hacked the accounts of music producers and management companies in order to steal over 50 gigabytes of content – including some music that had yet to be publicly released – and leaked it on the internet. Not only did this scheme cause the companies, producers, and artists financial harm, Erazo deprived the artists of the ability to release their own exclusive content at their discretion. Erazo’s conduct is a reminder of the potential destruction hackers can inflict, and the need for all users to practice strong measures against cyber intrusions.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “Erazo’s alleged involvement in a hacking scheme to commit wire fraud and downloading 50 gigs of music, some unreleased, has affected the finances and reputations of a producer and several recording artists. Fraud schemes like this don’t just affect the victim, but can also trickle down negative effects to the consumer. New York’s robust cyber capabilities allow agents to track down criminals hiding behind their computer screen anywhere in the world to face the consequences of their actions.”
According to the Superseding Indictment filed today in Manhattan federal court:
From at least in or about late 2016 through at least in or about April 2017, CHRISTIAN ERAZO, the defendant, and others known and unknown, unlawfully obtained unauthorized access to Internet cloud storage service accounts of two music management companies and a music producer (“Producer Victim-1”) by, among other things, using the credentials, or usernames and passwords, of individuals with authorized access to those accounts. From those accounts, ERAZO and his co-conspirators stole over approximately 50 gigabytes of music, including music that had not yet been publicly released from over 20 recording artists, as well as usernames and passwords to other online accounts, among other things. ERAZO and his co-conspirators also leaked on public online forums music that had not yet been publicly released, causing financial and reputational harm to Producer Victim-1 and other recording artists.
In addition, from at least in or about late 2016 through at least in or about late 2017, CHRISTIAN ERAZO, and others known and unknown, unlawfully accessed without authorization a social networking account belonging to Producer Victim-1, from which ERAZO and a co-conspirator (“CC-1”) impersonated Producer Victim-1 and sent private messages to numerous recording artists to solicit music from them that they had not yet released. ERAZO and CC-1 directed these artists to send their music to a fake email account that ERAZO created that incorporated Producer Victim-1’s professional name, which numerous artists did.
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ERAZO, 27, of Austin, Texas, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years; one count of conspiracy to commit computer intrusion, which carries a maximum sentence of five years; and one count of aggravated identity theft, which carries a mandatory minimum term of imprisonment of two years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of HSI.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Kristy J. Greenberg and Alexandra N. Rothman are in charge of the prosecution.
Madison Man Sentenced for Illegally Possessing FirearmRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Malcolm M. Whiteside, 27, Madison, Wisconsin, was sentenced today by U.S. District Judge James D. Peterson to 21 months in federal prison for being a felon in possession of a firearm. Whiteside pleaded guilty to this charge on September 9, 2019.
On July 9, 2019, while investigating a domestic violence complaint, police officers arrested Whiteside outside of an apartment complex on the west side of Madison. During the arrest, Whiteside admitted he had a gun hidden inside the front of his pants. Officers found a stolen handgun inside of Whiteside’s sweatshirt pocket. Whiteside, a convicted felon, was prohibited from possessing firearms.
At sentencing, Judge Peterson expressed concern that Whiteside’s criminal history shows he has the potential of being a danger to the community. Judge Peterson specifically noted that other courts had given Whiteside “breaks,” but his criminal activity was “starting to escalate.”
The charge against Whiteside was the result of an investigation conducted by the Madison Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant U.S. Attorney Chadwick M. Elgersma.
This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition, and violent crimes and drug crimes that involve the use of firearms.
Latin King Gang Member Sentenced to Life in PrisonRead the Press Release
HAMMOND-Darrick Vallodolid, 30, of Hobart, Indiana, and a member of the Chicago-based Latin Kings, was sentenced by Judge Simon to life in prison following his conviction at trial in May 2018 of conspiracy to participate in racketeering activity and conspiracy to distribute and possess with intent to distribute cocaine and marijuana, announced U.S. Attorney Kirsch.
The jury found that, to support a racketeering conspiracy, on Sunday, April 12, 2009, Vallodolid shot and killed Victor Lusinski, 16, of Lansing, Illinois, as Lusinski rode a bicycle near an elementary school in Hammond, Indiana. Vallodolid killed Lusinski because he thought Lusinski was a rival gang member. The jury also found that Vallodolid conspired to distribute or possess with intent to distribute at least five kilograms of cocaine and 100 kilograms of marijuana as part of the racketeering conspiracy.
“The sentence imposed today demonstrates that senseless gang violence that too often results in the loss of innocent life will never be tolerated,” said U.S. Attorney Kirsch. “Those who engage in this type of conduct will be prosecuted to the full extent of the law.”
Approximately 43 defendants have been charged with racketeering conspiracy as members of the Latin Kings in a criminal conspiracy extending back to 2003. The racketeering conspiracy charge alleges that gang members and associates were participants in a racketeering conspiracy that involved murder, attempted murder, aggravated assault, sex trafficking, and narcotics distribution.
This case is the result of the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the East Chicago Police Department, the Federal Bureau of Investigation, the Gary Police Department, the Hammond Police Department, the Lake County, Indiana, Sheriff’s Department and Lake County High Intensity Drug Trafficking Area officers and agents. The Lake County Prosecutor’s Office and the U.S. Attorney’s Office, Northern District of Illinois, has also provided assistance. The Latin King case is being prosecuted by Northern District of Indiana Assistant U.S. Attorney David J. Nozick, Assistant U.S. Attorney Joseph A. Cooley, formerly of the Criminal Division’s Organized Crime and Gang Section, and Assistant U.S. Attorneys Dean R. Lanter and Nicholas J. Padilla.
Kansas Man Swindled Buyer of Online Pharmacy BusinessRead the Press Release
KANSAS CITY, KAN. - A Kansas man pleaded guilty today to swindling the buyer of an online pharmacy business, U.S. Attorney Stephen McAllister said.
Jeffrey P. Wilson, 37, Olathe, Kan., pleaded guilty to one count of wire fraud. In his plea, Wilson admitted he placed an ad on Craigslist offering to sell Medx1.com, an online pharmacy business he claimed used a fulfillment pharmacy in India. When a man from Texas responded, Wilson made false statements and sent him fabricated bank records for the business. Wilson claimed the business was generating gross revenues of $15,000 to $40,000 a month, which was not true.
After paying Wilson $120,000, the victim learned the business had virtually no revenue and the website for the business had been shut down because Wilson failed to pay for monthly maintenance and hosting.
Sentencing is set for Feb. 18. He could face up to 20 years in federal prison and a fine up to $250,000. McAllister commended the FBI and Assistant U.S. Attorney Chris Oakley for their work on the case.
Justice Department Upgrades Amber Alert Website, Adds Resources for TribesRead the Press Release
The Department of Justice Office of Juvenile Justice and Delinquency Prevention (OJJDP), within the Office of Justice Programs (OJP), recently upgraded the America’s Missing: Broadcast Emergency Response (AMBER) Alert website, which now includes access to AMBER Alert in Indian Country.
The AMBER Alert program was established in 1996 when Dallas-Fort Worth broadcasters teamed with local police to develop an early warning system to help find abducted children. The program was created as a legacy to 9-year-old Amber Hagerman, who was kidnapped while riding her bicycle in Arlington, Texas, and then murdered. Other states and communities soon set up their own AMBER plans as the idea was adopted across the nation. Born Nov. 25, 1986, Amber Hagerman would have turned 33 today.
The website, managed by OJP, provides historical data on the program, publications, statistics, points of contact and other valuable information to help regional and state-level AMBER Alert training and coordination efforts. OJP helps states develop AMBER Alert plans and provides guidance on the issuance and dissemination of AMBER Alerts. States’ plans establish a framework to synchronize communication with law enforcement and the public and to coordinate search efforts for abducted children. Since its inception 23 years ago, the AMBER Alert program has helped 967 abducted children return home safely.
“We know that when an AMBER Alert is part of the response, the odds are high that an abducted child will come home safely,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan, who is the National Coordinator for the AMBER Alert Program. “This updated website gives our AMBER Alert partners more information, greater access to resources and a better chance to rescue endangered children.”
The website upgrade gives much needed access to Native American and Alaska Native communities who suffer rates of violence that far exceed the national average, including disproportionate rates of missing and murdered women and children. The website will also feature a summary of the AMBER Alert in Indian Country Initiative. This Initiative is a part of the 2018 Ashlynne Mike AMBER Alert in Indian Country Act which was born out of the abduction and murder of 11-year-old Ashlynne Mike of the Navajo Nation in 2016. At the time, tribal law enforcement officers did not have an AMBER Alert plan to notify people living on the reservation — a serious problem shared by tribes across the country. The legislation makes grants available to federally recognized tribes and villages and permits the use of grant funds to integrate state or regional AMBER Alert communication plans with tribes across the nation. The website updates will also provide other training and technical assistance resources. A Justice Department survey of 100 federally recognized tribes from 26 states revealed that 76 tribes participate in a state or regional AMBER Alert plan.
The website links to resources that support the AMBER Alert program through national partners and grantees of the OJJDP. These partners include the National Center for Missing & Exploited Children, Fox Valley Technical College, the Federal Communications Commission and the Federal Emergency Management Agency.
In addition to the website upgrade, the Department will conduct its annual National AMBER Alert Symposium next summer. The 2020 event will be a joint event to include AMBER Alert coordinators, Missing Persons Clearinghouse managers, as well as those working on issues implementing AMBER Alert in Indian Country.
The website can be accessed at https://amberalert.ojp.gov/.
About the Office of Justice Programs
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.
Justice Department Seeks to Shut down South Florida Tax Return PreparersRead the Press Release
WASHINGTON – The United States filed a civil injunction suit seeking to bar Dimary Cordero, aka Dimary Cordero Torres, and her businesses—NMB Accounting and Tax Services LLC (NMB), and WFS Accounting and Tax Services LLC (WFS)—from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today. The complaint also seeks an order that Cordero, NMB and WFS disgorge ill-gotten fees that they obtained through their alleged misconduct.
According to the complaint, filed in the U.S. District Court for the Southern District of Florida, Cordero operates tax preparation stores in North Miami Beach and Miami, Florida through her businesses. The complaint alleges that the defendants falsely increase their customers’ refunds and profit through high, often undisclosed fees, at the expense of their customers and the Treasury.
The complaint alleges that the defendants engage in the following misconduct:
- Falsely claiming the Earned Income Tax Credit;
- Fabricating businesses and related business income and expenses;
- Fabricating deductions, such as personal expenses and phony job-related expenses;
- Claiming education credits based on fabricated education-related expenses and
- Charging deceptive and unconscionable fees.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Iowa Man Pleads Guilty to Fraud Charge for Role in Crude Oil Futures Trading SchemeRead the Press Release
An Iowa man pleaded guilty today to a fraud charge for his role in a crude oil futures trading scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington.
Lon Olen Friedrichsen, 61, of Alton, Iowa, pleaded guilty to one count of wire fraud before U.S. Magistrate Judge Kelly K.E. Mahoney of the Northern District of Iowa. Sentencing has been not yet been scheduled.
As part of his guilty plea, Friedrichsen admitted that he solicited victims on Craigslist by falsely advertising himself as an experienced and successful trader handling millions of dollars in investor funds. In fact, Friedrichsen had no such experience; he was not handling millions of dollars in funds; and regularly incurred massive losses in victims’ accounts, he admitted. In furtherance of his scheme, Friedrichsen repeatedly sent victims account performance records showing tens of thousands of dollars in profits. Friedichsen admitted that these records were in fact from practice accounts and that he sent these emails intending that the victims believe that the practice accounts were actual trading accounts.
Friedrichsen further admitted that, as a result of these misrepresentations, he induced victims to enter into agreements obligating them to open trading accounts that the victims were to fund with thousands of dollars. Victims would then provide Friedrichsen with login credentials so he could access the accounts and agreed to split any profits with Friedrichsen. Friedrichsen, however, took risky positions that resulted in investors incurring losses of hundreds of thousands of dollars, at which point Friedrichsen disappeared and refused to engage in further communications with investors. Friedrichsen admitted to causing approximately 40 victims to incur losses exceeding $550,000.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys Michelle Pascucci and Kevin Mahne of the Criminal Division’s Fraud Section are prosecuting the case. The Commodity Futures Trading Commission provided assistance in this case.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Huntington Parolee Sentenced for Possessing FirearmRead the Press Release
HUNTINGTON, W.Va. – A Huntington man was sentenced to federal prison for a gun crime, announced United States Attorney Mike Stuart. Zachary Whitmore, 28, was sentenced to 24 months in prison and three years of supervised release for being a felon in possession of a firearm.
Whitmore previously admitted that on November 1, 2018, a Trooper with the West Virginia State Police assisted the West Virginia Division of Corrections Probation and Parole with locating a parolee. Whitmore was found walking on a street in Huntington. Officers found a 22 Magnum American Arms Revolver in his pocket. Whitmore was prohibited from possessing a firearm under federal law because of a 2015 felony conviction in Cabell County, West Virginia.
The West Virginia State Police and the West Virginia Division of Corrections Probation and Parole conducted the investigation. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Stephanie S. Taylor handled the prosecution.
This case is being prosecuted as part of the Project Safe Neighborhoods (PSN) program, 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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Hubert Man Sentenced to More Than 15 Years Imprisonment on Child Pornography ChargesRead the Press Release
RALEIGH — The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, United States District Judge James C. Dever, III, sentenced JAMES ROBERT BONNETTE, 39, of Hubert, NC to 188 months’ imprisonment, followed by a lifetime term of supervised release. BONNETTE pled guilty on July 22, 2019 to one count of receipt of child pornography.
A 2017 investigation into a file sharing network identified BONNETTE’s IP address as advertising known child pornography files and files were directly downloaded from BONNETTE’s IP address. An administrative subpoena identified BONNETTE’s residence and a search warrant was obtained. On October 27, 2017, investigators executed the search warrant and multiple devices were seized.
BONNETTE agreed to speak with investigators and, during the interview, admitted to downloading and storing child pornography. A forensic review of the seized devices uncovered two hard drives containing thousands of images and videos of child pornography.
This case is part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national initiative, go to www.projectsafechildhood.gov.
The Federal Bureau of Investigation’s Child Exploitation Task Force investigated this case. Assistant United States Attorneys Melissa Belle Kessler and Bryan M. Stephany represented the government.
Holyoke Operation Results in Arrest of 42 IndividualsRead the Press Release
BOSTON – 42 individuals have been charged with federal drug and firearm offenses as part of a coordinated enforcement operation in the City of Holyoke dubbed “Operation Open Air.”
The enforcement operation, which took place during October, was a coordinated effort by federal, state and local partners to focus on drug distribution activity in the City of Holyoke. The operation targeted the distribution of opioids, including heroin, and resulted in charges against a total of 17 people for federal drug offenses and an additional 25 for state firearms and drug offenses.
“These defendants sold heroin and fentanyl so they could profit from a crisis that is killing about 2000 Massachusetts residents a year,” said United States Attorney Andrew E. Lelling. “During this operation, law enforcement targeted and dismantled illegal drug markets operating in plain sight. Thanks to the coordinated partnership of local, state and federal law enforcement, dangerous drugs have been removed from the streets and Holyoke and surrounding communities are safer for all residents.”
“The catastrophic abuse of opioids is filling emergency rooms and graveyards. ‘Operation Open Air’ was carried out to temper future casualties of this crisis in the Pioneer Valley by shutting down the open peddling of deadly drugs in public spaces,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI and our law enforcement partners take pride in having struck one more serious blow to ruthless traffickers preying on our vulnerable neighbors.”
The majority of criminal charges resulted from “sweeps” in the City of Holyoke that targeted individuals distributing opioids in open, public spaces. The enforcement actions brought together federal, state and local officers from Western Massachusetts to conduct surveillance, investigate and arrest defendants.
The following defendants were arrested on federal charges:
- Dennis Roman, 34, of Holyoke, conspiracy to distribute heroin and distribution of heroin;
- Ronny Authier, 21, of Holyoke, distribution of and possession with intent to distribute heroin;
- Christopher Lebron, 31, of Holyoke, distribution of heroin;
- Alexis Santana, 18, of Holyoke, distribution of heroin;
- Jayson Quinones, 35, of Holyoke, distribution of heroin;
- Herman Gomez, 20, of Holyoke, distribution of heroin;
- Joevani Pagan, 28, of Holyoke, distribution of heroin;
- Alexis Tapia, 34, of Holyoke, distribution of heroin and cocaine;
- Juan Rivera-Velez, distribution of heroin;
- Milagros Gaetan, 50, distribution of heroin;
- Jose Cruz, 42, distribution of cocaine;
- Jeffrey Caride, 38, of Holyoke, distribution of heroin;
- Miquiana Laboy, 22, of Holyoke, distribution of heroin and cocaine;
- Gilbert Ramos, 25, of Holyoke, distribution of heroin;
- Manuel Sanchez, 26, of Holyoke, distribution of heroin;
- Pedro Rivas-Morales, 21, of Holyoke, distribution of and possession with intent to distribute heroin; and
- Roberto Santiago; 44, of Holyoke, distribution of and possession with intent to distribute heroin.
The charge of drug distribution provides for a sentence of up to 20 years in prison, at least three years of supervised release and a $1 million fine. The charge of conspiracy to distribute provides for a sentence of up to 20 years in prison. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Lelling; Hampden District Attorney Anthony D. Gulluni; FBI SAC Bonavolonta; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Holyoke Police Chief Manuel Febo made the announcement today. Valuable assistance was provided by the FBI’s Western Massachusetts Gang Task Force and the Holyoke Police Department. Assistant U.S. Attorneys Todd Newhouse, Neil Desroches, Christopher Morgan, and Catherine Curley of Lelling’s Springfield Branch Office are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Hartford Man Sentenced to 4 Years in Federal Prison for Distributing Drugs, Violating ProbationRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that CHARLES KELLEY, 45, of Hartford, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 48 months of imprisonment, followed by four years of supervised release, for distributing narcotics, and for violating the conditions of his probation from a prior federal drug conviction.
According to court documents and statements made in court, in April 2018, law enforcement received information that Kelley was engaged in drug trafficking activity in Hartford. On April 5, 2018, a court-authorized search of Kelley’s residence revealed approximately 66 grams of fentanyl, 42 grams of cocaine, 76 grams of crack cocaine, cocaine base, eight grams of heroin, items used to process and package narcotics for street sale, and $6,542 in cash. Kelley was arrested on state charges at that time.
Kelley has been detained since his federal arrest on November 7, 2018. On April 25, 2019, he pleaded guilty to possession with intent to distribute cocaine base (“crack”).
This is Kelley’s third federal narcotics conviction, and he was on federal probation following a conviction in January 2016 for distributing heroin and cocaine.
Judge Meyer sentenced Kelley to 36 months of imprisonment for distributing narcotics, and a consecutive 12 months of imprisonment for violating the conditions of his probation.
This matter was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Gang Task Force and the Hartford Police Department, with the assistance of the Massachusetts State Police. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorney Dave Vatti.
Harrison County man sentenced for role in a methamphetamine distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Paul Casto, of Clarksburg, West Virginia, was sentenced today to 108 months incarceration for his involvement in a methamphetamine distribution conspiracy, U.S. Attorney Bill Powell announced.
Casto, age 56, pled guilty to one count of “Distribution of Methamphetamine” in May 2019. Casto admitted to selling methamphetamine in Harrison County in June 2018.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge Thomas S. Kleeh presided.
HDS Gang Members and Associates Charged with Fentanyl and Other Drug Trafficking in Allegheny County’s Eastern CommunitiesRead the Press Release
PITTSBURGH - Thirteen residents of Allegheny County, have been indicted by a federal grand jury in Pittsburgh, and six other defendants have been charged by criminal complaint, on charges of violating federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today. The indictments and complaints detail a group of drug traffickers identifying themselves as "Hustlas Don’t Sleep" (HDS), who sold a variety of controlled substances, including fentanyl, fentanyl analogues, crack cocaine, and heroin, primarily out of the McKeesport, Turtle Creek, Wilkinsburg and Monroeville areas if Allegheny County.
"This investigation and prosecution of the HDS gang is the result of sustained, coordinated work by federal, state and local law enforcement working together," said U.S. Attorney Brady. "As long as there are neighborhoods in western Pennsylvania terrorized by gang violence and drug dealers, we will continue to fight for you and your families."
"Violent groups don't belong in our neighborhoods," said FBI Pittsburgh Special Agent in Charge Robert Jones. "Last year, Allegheny, Beaver and Washington Counties were designated as High Intensity Drug Trafficking Areas or HIDTA's. Today's arrests are just one example of the work the Allegheny County HIDTA Task Force is doing to rid the community of dangerous drugs and destructive behavior. The message is clear. The FBI and our law enforcement partners are committed to investigating, arresting and prosecuting those who make a living off of selling drugs."
The five-count superseding indictment named the following individuals:
• Robert Howell Jr., age 31, of Monroeville, PA 15146;
• Brandoun Calhoun, age 27, of Pittsburgh, PA 15218;
• Pressley Calhoun, III, age 57, of Wilkinsburg, PA 15221;
• Brandon Campbell-Taylor, age 27, of Pittsburgh, PA 15233;
• Duane Eugene Cash, Jr., age 48, of Monroeville, PA 15146;
• Wesley Ellis-Barnes, age 31, of Pittsburgh, PA 15218;
• Timothy Harper, age 37, of Monroeville, PA 15146;
• Jason Jackson, age 26, of Pittsburgh, PA 15221;
• Jamal Knox, age 25, of Verona, PA 15147;
• Maurice Miller, age 32, of Pittsburgh, PA 15235;
• Joseph Posey, Jr., age 22, of Wilkinsburg, PA 15221;
• Curtis Saxton-Smith, age 30, address unknown; and
• Che Williams, age 33, of Pittsburgh, PA 15221.
According to the superseding indictment, from September 2017 until November 2019, the defendants conspired to possess with the intent to distribute and did distribute 1 kilogram or more of heroin, a Schedule I controlled substance, 280 grams or more of cocaine base, in a form commonly known as crack, 100 grams or more of fentanyl and 400 grams or more of fentanyl, Schedule II controlled substances. The superseding indictment further alleges that on December 7, 2017, Duane Eugene Cash, Jr., possessed with intent to distribute 100 grams or more of an analogue of fentanyl, 100 grams or more of heroin, 40 grams or more of fentanyl, 50 grams or more of methamphetamine, and quantities of cocaine, marijuana and tramadol. The superseding indictment further alleges that Cash, a convicted felon, possessed a firearm in furtherance of his drug trafficking activities. The superseding indictment further alleges that on September 27, 2019, Brandon Calhoun possessed a firearm and ammunition, knowing he had been convicted of a crime punishable by imprisonment exceeding one year. Federal law prohibits an individual who has been convicted of a felony from possessing a firearm.
In addition, six other defendants connected to the HDS drug trafficking organization were charged by criminal complaint. For the defendants charged by complaint, the law requires subsequent presentation of the case to a federal grand jury.
"The Allegheny County Police Drug Task Force is committed to working with our federal, state and local partners to pursue the parasites who continue to traffic poison in our communities without regard to the effects of their crimes on society," said Allegheny County Police Superintendent Coleman McDonough. "I want to thank the United States Attorney’s Office for vigorously pursuing the HIDTA designation for Southwest Pennsylvania: this designation helped to ensure our Task Force is adequately funded and equipped for long term investigations of this nature. This operation shows what we can accomplish working together."
"The people of Pittsburgh and western Pennsylvania deserve to live in drug-free and violence-free neighborhoods. This coordinated effort illustrates the unwavering commitment of the Pittsburgh Bureau of Police and our partner law enforcement agencies to guard, protect and serve our communities," Pittsburgh Police Chief Scott Schubert said. "We applaud the work of the Pittsburgh Police and Allegheny County HIDTA Task Forces, and we remain committed to our involvement in the task force and to stamping out all forms of violence and illegal drug trafficking in our neighborhoods."
The law provides for a maximum total sentence of life in prison, a fine of $10,000,000, or both for all of the indicted defendants. Cash faces an additional $10,500,000 fine. Calhoun faces an additional $250,000 fine. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway and Brian M. Czarnecki is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Monroeville Police Department, the Attorney General’s Office, the Drug Enforcement Agency’s Maryland Office, and the Allegheny County Police Department conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
GBK Gang Member Sentenced to 12½ Years in Federal Prison for Drug CrimeRead the Press Release
PITTSBURGH - A resident of Pittsburgh, PA, has been sentenced in federal court to 12½ years’ (150 months’) imprisonment on his conviction of conspiracy to distribute crack cocaine, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on Tyree Davis, age 35.
According to information presented to the court, in 2017, the Federal Bureau of Investigation and the Drug Enforcement Administration initiated a wiretap investigation, primarily targeting the GBK street gang and drug trafficking in and around an area known as the Greenway Projects, located in the West End of the City of Pittsburgh. The wiretap investigation revealed that from in and around November 2017 through in and around June 2018, Tyree Davis conspired to distribute quantities of crack cocaine, primarily in and around the Greenway Projects.
Prior to imposing sentence, Senior Judge Schwab stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.
Assistant United States Attorneys Tonya Sulia Goodman and Yvonne M. Saadi prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation and the Drug Enforcement Administration jointly with the Pittsburgh Bureau of Police, Allegheny County Sheriff’s Office, Pennsylvania State Police, Robinson Township Police Department, Stowe Township Police Department, Pennsylvania Attorney General’s Office, Wilkinsburg Borough Police Department, and the McKees Rocks Police Department, for the investigation leading to the successful prosecution of Davis.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Fredonia Man Charged with Producing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Dustin Post, 24, of Fredonia, NY, was arrested and charged by criminal complaint with production of child pornography. The charge carries a mandatory minimum penalty of 15 years in prison, a maximum of 30 years in prison, and a fine of $250,000.
Special Assistant U.S. Attorney Catherine Dagonese, who is handling the case, stated that according to the criminal complaint, the New York State Police in Fredonia, in August 2019, received a parental complaint involving the commission of a possible sex offense upon a minor. According to the parent, the parent’s eight-year old child (Minor Victim 1) told the parent that the child had been sexually abused by the defendant, a family friend, sometime in the summer of 2018. When interviewed by the Child Advocacy Center, Minor Victim 1 stated that Post took the minor victim to a house, blindfolded her, and sexually abused her. Minor Victim 1 believes that the defendant likely video-recorded the abuse, adding that defendant showed her pictures of other children and explained that he had videos of other children engaging in similar conduct.
The complaint further alleges that defendant, also in the summer of 2019, video-recorded his abuse of a 12 year-old girl (Minor Victim 2) and, in 2018, received images of an 11 year-old girl (Minor Victim 3), via Snapchat.
On November 15, 2019, investigators removed a cellular telephone, a laptop computer, and four flash drives from defendant’s residence. An initial review of the electronic devices recovered multiple images and videos of suspected child pornography.
The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and was being held pending a November 26, 2019, detention hearing.
Members of the public who have specific information related to this case are urged to contact HSI at 716-464-6070 or [email protected]. HSI victim-witness specialists will be available to assist any parent or guardian should they need victim-related resources. The complaint is a result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the New York State Police, under the direction of Major Edward Kennedy.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Four Georgia Residents Charged in South Florida with Participating in a Scheme to Defraud Retirees and Federal Benefit ProgramsRead the Press Release
On November 21, 2019, four Georgia residents had their initial appearances in South Florida on charges related to their alleged involvement in an international scheme to defraud retirees of their veterans and social security benefits.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge David Spilker of the Veteran Affairs Office of Inspector General (VA OIG), Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s (USPIS) Charlotte Division, Special Agent in Charge Anthony Salisbury of Homeland Security Investigations’ (HSI) Miami Field Office, and Special Agent in Charge Rodregas W. Owens of the Social Security Administration Office of the Inspector General (SSA OIG), Atlanta Field Division made the announcement.
Jamare Mason, 25, of Lithonia, Ronaldo Garfield Green, 27, of Snellville, Mario Andre Ricketts, 24, of Carrollton, and Omar Shaquille Bailey, 24, of Snellville, all of Georgia, and three other individuals were charged with conspiracy to commit bank fraud and wire fraud (Case No. 19-CR-60313). The four Georgia residents had their initial appearances before U.S. Magistrate Judge Patrick M. Hunt in Fort Lauderdale, Florida.
According to allegations in the indictment, between May 2012 and July 2017, the defendants and three other individuals participated in a scheme to defraud the U.S. Department of Veterans Affairs and the Social Security Administration by fraudulently redirecting retirees’ benefits to accounts controlled by them. The scheme, which was international in scope, involved conspirators in Jamaica, Georgia, and Florida. The conspirators obtained the personal identifying information of veterans and social security beneficiaries and used that information unlawful access and gain control of beneficiaries’ accounts at the U.S. Department of Veterans Affairs and/or Social Security Administration. After doing so, the conspirators redirected the benefits to bank accounts, as well as prepaid debit cards and accounts, which they controlled. The subjects then withdraw the funds from ATM machines or transferred funds to other accounts, for their own personal use.
An indictment is a charging instrument containing accusations. A defendant is presumed innocent unless proven guilty in a court of law.
A calendar call for defendants Mason, Green, Ricketts and Bailey has been scheduled for January 14, 2020 at 1:30 p.m. in Fort Lauderdale before U.S. District Judge Roy K. Altman. A jury trial has been scheduled for January 21, 2020.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the Transnational Elder Fraud Strike Force, including our partners at the VA OIG, USPIS, HSI, and SSA OIG. The case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers. Assistant U.S. Attorney Alison Lehr is responsible for the asset forfeiture component of the case.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. The mission of the Department’s Elder Justice Initiative is to support and coordinate the Department’s enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. To learn more visit https://www.justice.gov/elderjustice. The public is encouraged to report their victimization and suspected fraud schemes. To find the right reporting agency visit https://www.justice.gov/elderjustice/roadmap or call the victim connect hotline at 1-855-484-2846.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep. The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Four Charged in Lottery Ticket Scheme that Targeted Elderly Hispanic Women across Southern CaliforniaRead the Press Release
LOS ANGELES – One man and two women are scheduled to be arraigned this morning on federal charges of defrauding elderly women by convincing the victims they needed financial assistance to cash purported winning lottery tickets.
A federal grand jury indictment returned on November 12 charges a total of four defendants with conspiracy to commit wire fraud for their roles in a multi-year scheme that targeted elderly female victims, robbing them of cash and other valuables in a scheme known as the “Latin Lotto Scam.”
The three defendants scheduled for arraignment today in United States District Court in downtown Los Angeles are:
- Luisa Camargo, 38;
- Mercedes Montanez, 68; and
- Tito Lozada, 49.
These defendants – all Colombian nationals who reside in the Los Angeles area – were arrested in Long Beach and are being held in federal custody without bond after initially being arrested on state charges filed by the Los Angeles County District Attorney’s Office. After the United States Attorney’s Office filed a criminal complaint in late October, the three defendants in Los Angeles were transferred to federal custody on November 5.
The fourth defendant in this case – Maria Luisa Henao, 43, who recently became a U.S. citizen – was arrested in San Diego and arrived in Los Angeles on November 18, when she was arraigned on the indictment. Henao pleaded not guilty, was ordered held without bond, and was ordered to stand trial on January 14.
The four defendants are linked to at least 11 incidents in which an older woman was approached by a combination of the defendants who falsely claimed that one of the co-conspirators had a winning lottery ticket and needed help cashing the ticket.
As part of the scheme outlined in court documents, the defendants pretended to call lottery officials, who actually were co-conspirators. The purported lottery officials falsely confirmed to victims that they were looking at winning lottery tickets, but the funds would be released only if a deposit or fee was paid in advance. At that point, another defendant engaged with the victim and, knowing the lottery ticket was worthless, would offer to help cash the ticket. This allegedly served to encourage victims to contribute money or jewelry for the ticket’s deposit or fee. The defendants would then drive the victims to their homes and/or to their banks so the victims could get money and other valuables.
The defendants falsely told victims that other people agreed to contribute money to fully fund the ticket’s deposit or fee, and then dropped victims outside a random residence where the defendants falsely claimed the remainder of the funds would be delivered. At that point, the defendants would flee with the victim’s money, jewelry, and other valuables.
The indictment specifically charges the defendants with defrauding six victims; however, the Major Theft Task Force in Los Angeles and its partners have linked the defendants to at least 11 incidents since 2017 in the Southern California communities of Long Beach, Maywood, Baldwin Park, Hawaiian Gardens, Fontana, Lakewood, San Pedro and Chula Vista. One incident allegedly took place in the Bay Area city of Vallejo.
“This was an organized group that singled out older women for the sole purpose of ripping off these vulnerable victims with bogus promises of a big payday,” said United States Attorney Nick Hanna. “While law enforcement will do everything possible to bring criminals like this to justice, this case should serve as a reminder to potential victims and their family members that no one should ever pay an upfront fee in relation to any prize, sweepstakes or lottery.”
“Our elderly community is often a convenient and lucrative target for con artists and, while we’ve charged some of the perpetrators in this case, we know many others are at work to take their place,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Educating ourselves, as well as our aging family members and friends, is crucial so that they can take precautions and avoid victimization.”
“It is important that we stop these financial predators, especially when they target elderly victims within the Spanish-speaking community,” said San Diego County District Attorney Summer Stephan. “I am proud of our investigators, who collaborated with local and federal law enforcement to bring down this network of thieves preying on victims in supermarket parking lots.”
“Not in our city,” said Los Angeles Chief of Police Michel Moore. “We will collaborate with our law enforcement partners at all levels and across jurisdictions to ensure this scam targeting elderly victims comes to an end.”
The indictment also names defendant Lozada in a separate count charging him with possessing device-making equipment, commonly known as a credit card reader/writer and used to replicate credit cards to commit fraud and identify theft.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of conspiracy to commit wire fraud, each defendant would face a statutory maximum penalty of 20 years in federal prison.
This case is a result of a joint and continuing investigation by the FBI’s Major Theft Task Force in Los Angeles, which is comprised of FBI agents and Los Angeles Police Department detectives. San Diego County District Attorney investigators were instrumental in identifying the defendants in this case and tying the San Diego County incident to several others in California. The Los Angeles County District Attorney’s Office provided considerable assistance during this investigation.
This case is being prosecuted by Assistant United States Attorneys Ian Yanniello and Anna Farias-Eisner of the General Crimes Section.
Founder of Purported Snack and Pet Food Companies Sentenced to 7 Years in Prison for Defrauding Investors of More Than $2.9 MillionRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that LISA BERSHAN was sentenced to 7 years in prison on Friday, November 22 by U.S. District Judge Jed S. Rakoff for participating in two schemes to defraud more than 50 investors in the Starship Snacks Corporation and the All American Pet Company of more than $2.9 million, by making false and fraudulent representations about, among other things, the status of the companies’ products, guarantees that purportedly backed the investments, and the interest of large multi-national corporations in acquiring the companies. BERSHAN was also sentenced for using the stolen identities of three individuals to commit the All American Pet Company scheme, money laundering, illegally receiving a firearm in New York without the proper licenses, and conspiracy to distribute and to possess with the intent to distribute cocaine.
U.S. Attorney Geoffrey Berman said: “Lisa Bershan defrauded more than 50 investors of more than $2.9 million by making materially false representations about the snack and pet food companies she purportedly ran. As part of her schemes, she and her co-conspirators used other people’s identities and created a slew of falsified documents to lure their victims. When victims poured money into purported business bank accounts Bershan controlled, she used those bank accounts as her personal piggy bank, spending the money to finance her lavish lifestyle of luxury real estate, jewelry, plastic surgery, and clothing. But Bershan’s crimes didn’t end with fraud. She also pled guilty to and was sentenced for serious firearms and narcotics distribution offenses. Lisa Bershan’s crime spree has come to an end, and she now faces a significant prison term for her crimes.”
According to the allegations contained in the superseding Information filed against LISA BERSHAN and statements made in related court filings and proceedings, including the trial of co-defendant Joel Margulies:
The All American Pet Company Fraud Scheme
From October 2013 through May 2017, BERSHAN, Joel Margulies, and a co-conspirator raised more than $575,000 in purported loans for the All American Pet Company (“AAPT”), a penny-stock company that produced, marketed, and sold food bars and other products for dogs, based on the following misrepresentations, among others: (a) that the Internal Revenue Service (“IRS”) had accepted an “offer in compromise” from AAPT that significantly reduced the back taxes AAPT owed to the IRS; (b) that BERSHAN had paid to the IRS the amount of this offer in compromise and had thus absolved AAPT of its outstanding tax liability; (c) that BERSHAN was the beneficial owner of a bank account containing over $6.9 million; (d) that BERSHAN would personally guarantee some of the loans; and (e) that Nestlé USA had proposed various business deals with AAPT. BERSHAN held herself out as president and chief executive officer of AAPT at various times.
Although BERSHAN and her co-conspirators had promised investors that they would use the loans to help improve AAPT’s manufacturing and distribution capacities, the conspirators instead used those funds largely for their personal expenses, including the rental of a luxury villa in the Bel Air neighborhood of Los Angeles where all three of them lived.
In connection with the AAPT fraud scheme, BERSHAN used the stolen identities of three individuals – an IRS employee, a Nestlé Purina employee, and a Manhattan attorney – to create false and fraudulent letters that were sent to AAPT investors to induce them to make loans to AAPT.
The Starship Snack Corporation Fraud Scheme
From approximately August 2015 through August 2017, BERSHAN, Margulies, and a co-conspirator, Barry Schwartz, raised more than $2.3 million from investors in a company originally called the Awake Company and later renamed Starship Snacks Corporation (“Starship”), which purported to be in the business of developing and manufacturing caffeinated snack products, based on the following misrepresentations, among others: (a) that investments in Starship were guaranteed against losses by BERSHAN; (b) that Starship was going to be acquired by Monster Beverage (“Monster”) in a one-for-one stock exchange; (c) that Starship was engaged in actual product development and had procured samples of candies infused with caffeine; (d) that BERSHAN and others at Starship had entered into non-disclosure agreements with Monster that prohibited them from discussing Starship’s purported acquisition by Monster and its purported product development. BERSHAN held herself out as the chief executive officer, president, and founder of Starship.
After receiving funds from Starship investors, BERSHAN and her co-conspirators used those funds to maintain their own extravagant lifestyles, spending hundreds of thousands of dollars on things like luxury clothing, plastic surgery, interior decorating, the rental of a high-end apartment in New York City, and the down payment for a multimillion-dollar house in Florida.
Money Laundering, Illegal Receipt of a Firearm, and Distribution of Narcotics
In addition to the fraud and identity theft charges set forth above, BERSHAN was sentenced for money laundering in connection with the AAPT and Starship schemes. She was also sentenced for illegally receiving a firearm and ammunition in New York that her co-conspirator, Margulies, sent to her from Tennessee via commercial courier. Neither BERSHAN nor Margulies held federal firearms licenses that would have allowed them to effect such a transfer legally. Finally, BERSHAN was also sentenced for conspiring to distribute cocaine from October 2015 through August 2017, during which conspiracy BERSHAN caused quantities of cocaine to be sent to her and Margulies via commercial courier in interstate commerce.
In addition to the prison term, BERSHAN, 62, was sentenced to five years of supervised release. BERSHAN was also ordered to forfeit $2,926,702.54 and to make restitution in the amount of $2,926,702.54.
Barry Schwartz previously pled guilty and is scheduled to be sentenced before Judge Rakoff on December 12, 2019. Margulies was convicted following a seven-day jury trial before Judge Rakoff and is scheduled to be sentenced on December 16, 2019.
Mr. Berman praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Negar Tekeei and Christine Magdo are in charge of the prosecution.
Former Rochester Resident Pleads Guilty to Producing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that David Roy Jones, 54, formerly of Rochester, NY, pleaded guilty before U.S. District Judge David G. Larimer to production of child pornography. The charge carries a minimum penalty of 15 years in prison, and maximum penalty of 30 years in prison.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that in the summer of 2006, the defendant produced child pornography involving two minors, one of whom was under Jones’ custody, care and control. The defendant saved the pornographic images to multiple storage media devices he possessed, and transported them from New York to Tennessee. Jones was later arrested and convicted in Tennessee on similar charges involving other minors.
The plea is the result of an investigation by the Hamblen County, Tennessee, Sheriff’s Office, under the direction of Sheriff Esco R. Jarnagin, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.
Sentencing is scheduled for May 19, 2020, at 11:00 a.m. before Judge Larimer.
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Former Ranger American Security Employee Sentenced to 21 Months for Stealing $70,000 from Banco Popular ATMRead the Press Release
St. Thomas, USVI – Clement Bougouneau, 52, of St. Thomas, was sentenced Thursday, November 21st for bank burglary and larceny, United States Attorney Gretchen C.F. Shappert announced.
District Court Judge Curtis V. Gomez sentenced Bougouneau to 21 months’ imprisonment, followed by a three-year term of supervised release and 300 hours of community service. Bougouneau must also pay $70,000 in restitution.
According to trial testimony, on September 4, 2017, shortly before Hurricane Irma made landfall, Bougouneau used his access and inside knowledge as a twelve-year Ranger American employee to steal $70,000 from the St. John Banco Popular de Puerto Rico ATM. Video tapes presented in the courtroom showed live footage of Bougouneau removing cash from the ATM machine on September 4th. Another video showed Bougouneau’s subsequent interview with law enforcement, where he provided several different explanations of the events surrounding the September 4th heist.
This case was investigated by the Virgin Islands Police Department and the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Meredith J. Edwards.
Former Executives and Employees of Health Technology Start-Up Charged in a $1 Billion Scheme to Defraud Clients, Lenders and InvestorsRead the Press Release
Four former executives and two former employees of Outcome Health (Outcome), a Chicago-based health technology start-up company founded in 2006, were charged for their alleged roles in a fraud scheme that targeted the company’s clients, lenders and investors, and involved approximately $1 billion in fraudulently obtained funds.
Charged in a superseding indictment filed in the Northern District of Illinois and unsealed today are:
- Rishi Shah, 33, of Chicago, Illinois, the co-founder and CEO of Outcome Health, which was known as ContextMedia prior to January 2017;
- Shradha Agarwal, 34, of Chicago, the president of Outcome Health, who was branded as a co-founder;
- Brad Purdy, 30, of San Francisco, California, the chief operating officer and chief financial officer; and
- Ashik Desai, 26, of Philadelphia, Pennsylvania, the executive vice president of business operations and, more recently, the chief growth officer of Outcome.
Charged in an information filed in the same district are:
- Kathryn Choi, 29, of New York, New York, a senior analyst; and
- Oliver Han, 29, of Chicago, an analyst.
An initial appearance and arraignment for Shah, Agarwal and Purdy in federal court in Chicago have not yet been scheduled. An initial appearance and arraignment for Desai are set for Dec. 3, 2019, at 10:00 a.m., before U.S. District Judge Thomas M. Durkin.
An initial appearance and arraignment for Choi and Han are set for Dec. 5, 2019, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey Gilbert.
“Outcome’s former executives and employees allegedly deceived lenders, investors, and their own auditors by falsely representing revenue for additional profit,” said Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division. “The charges announced today demonstrate that lies and deception cannot serve as the basis for any company, including start-up companies, to falsely grow revenue for additional capital and private gain.”
“The deception alleged to have been committed by the defendants tricked clients into paying for advertising it failed to deliver and served to falsely inflate the value of Outcome Health,” said Assistant U.S. Attorney Brian Hayes, Chief of the Criminal Division for the Northern District of Illinois. “Our office will continue to investigate and hold accountable those who perpetrate fraud schemes.”
“These charges demonstrate that the FBI and its partners will hold businesses accountable for their misconduct,” said Deputy Special Agent in Charge Larry L. Lapp of the FBI’s Chicago Field Office.
“The defendants were charged with allegedly over-inflating the company’s revenue figures in order to fraudulently obtain loans from banks,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG). “This scheme was orchestrated by former leaders of the organization who personally benefitted from hundreds of millions of dollars. We are committed to working with our law enforcement partners to investigate individuals involved in the crime and to preserve the integrity of the banking system.”
As alleged in the superseding indictment and information, from 2011 to 2017, the former executives and employees of Outcome, a digital provider of medical information and advertising in doctors’ offices, sold tens of millions of dollars of advertising inventory that did not exist. This allegedly resulted in inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017. Shah, Agarwal and Purdy are each charged with various counts of mail fraud, wire fraud and bank fraud. Purdy is also charged with one count of false statements to a financial institution, and Shah is also charged with two counts of transactions in criminal proceeds. Desai is charged with one count of wire fraud. Choi and Han are each charged with one count of conspiracy to commit wire fraud.
According to the allegations, the former executives and employees perpetrated a fraudulent scheme by selling clients—most of whom were pharmaceutical companies—advertising inventory the company did not have and then under-delivering on its advertising campaigns. Despite these under-deliveries, the company allegedly still invoiced its clients as if it had delivered in full. To conceal the under-deliveries, the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients’ contracts, and also inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets. Furthermore, Desai allegedly altered a number of studies presented to clients to make it appear that the campaigns were more effective than they actually were.
The charging documents also allege that the under-delivery resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries from the auditor. Shah, Purdy and Agarwal then allegedly used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017. The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and FDIC-OIG are investigating the case. Assistant Chief William E. Johnston and Trial Attorney Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Matthew F. Madden of the Northern District of Illinois are prosecuting the case. Daniel Olinghouse of the Criminal Division’s Money Laundering and Asset Recovery Section has assisted with forfeiture matters.
The U.S. Securities and Exchange Commission provided assistance in this case.
Former Executives and Employees of Health Technology Company Outcome Health Charged in $1 Billion Fraud SchemeRead the Press Release
WASHINGTON – Four former executives and two former employees of Outcome Health (Outcome), a Chicago-based health technology start-up company founded in 2006, were charged for their alleged roles in a fraud scheme that targeted the company’s clients, lenders and investors, and involved approximately $1 billion in fraudulently obtained funds.
Charged in a superseding indictment filed in the Northern District of Illinois and unsealed today are:
- RISHI SHAH, 33, of Chicago, the co-founder and CEO of Outcome Health, which was known as ContextMedia prior to January 2017.
- SHRADHA AGARWAL, 34, of Chicago, the president of Outcome Health, who was branded as a co-founder.
- BRAD PURDY, 30, of San Francisco, Calif., the chief operating officer and chief financial officer.
- ASHIK DESAI, 26, of Philadelphia, Penn., the executive vice president of business operations and, more recently, the chief growth officer of Outcome.
Previously charged in a criminal information filed in the same district are:
- KATHRYN CHOI, 29, of New York, N.Y., a senior analyst.
- OLIVER HAN, 29, of Chicago, an analyst.
An initial appearance and arraignment for Shah, Agarwal and Purdy in federal court in Chicago have not yet been scheduled. An initial appearance and arraignment for Desai are set for Dec. 3, 2019, at 10:00 a.m., before U.S. District Judge Thomas M. Durkin. An initial appearance and arraignment for Choi and Han are set for Dec. 5, 2019, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey Gilbert.
“The deception alleged to have been committed by the defendants tricked clients into paying for advertising it failed to deliver and served to falsely inflate the value of Outcome Health,” said Assistant U.S. Attorney Brian Hayes, Chief of the Criminal Division for the Northern District of Illinois. “Our office will continue to investigate and hold accountable those who perpetrate fraud schemes.”
“Outcome’s former executives and employees allegedly deceived lenders, investors, and their own auditors by falsely representing revenue for additional profit,” said Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division. “The charges announced today demonstrate that lies and deception cannot serve as the basis for any company, including start-up companies, to falsely grow revenue for additional capital and private gain.”
“These charges demonstrate that the FBI and its partners will hold businesses accountable for their misconduct,” said Deputy Special Agent in Charge Larry L. Lapp of the FBI’s Chicago Field Office.
“The defendants were charged with allegedly over-inflating the company’s revenue figures in order to fraudulently obtain loans from banks,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG). “This scheme was orchestrated by former leaders of the organization who personally benefitted hundreds of millions of dollars. We are committed to working with our law enforcement partners to investigate individuals involved in the crime and to preserve the integrity of the banking system.”
Assistant U.S. Attorney Matthew F. Madden of the Northern District of Illinois and Assistant Chief William E. Johnston and Trial Attorney Kyle C. Hankey of the Department of Justice Criminal Division’s Fraud Section are prosecuting the case. Daniel Olinghouse of the Criminal Division’s Money Laundering and Asset Recovery Section is handling forfeiture matters. The FBI and FDIC-OIG are investigating the case. The U.S. Securities and Exchange Commission provided assistance.
As alleged in the superseding indictment and information, from 2011 to 2017, the former executives and employees of Outcome, a digital provider of medical information and advertising in doctors’ offices, sold tens of millions of dollars of advertising inventory that did not exist. This allegedly resulted in inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017. Shah, Agarwal and Purdy are each charged with various counts of mail fraud, wire fraud and bank fraud. Purdy is also charged with one count of false statements to a financial institution, and Shah is also charged with two counts of transactions in criminal proceeds. Desai is charged with one count of wire fraud. Choi and Han are each charged with one count of conspiracy to commit wire fraud.
According to the allegations, the former executives and employees perpetrated a fraudulent scheme by selling clients—most of whom were pharmaceutical companies—advertising inventory the company did not have and then under-delivering on its advertising campaigns. Despite these under-deliveries, the company allegedly still invoiced its clients as if it had delivered in full. To conceal the under-deliveries, the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients’ contracts, and also inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets. Furthermore, Desai allegedly altered a number of studies presented to clients to make it appear that the campaigns were more effective than they actually were.
The charging documents also allege that the under-delivery resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries from the auditor. Shah, Purdy and Agarwal then allegedly used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017. The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.
Former Executive Director of Non-Profit Religious Organization Charged with Two Embezzlement SchemesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Ruth M. Mendonça, the Assistant Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrest today of JEROME DIMITRIOU, the former executive director of a non-profit religious organization (“Organization-1”), on wire fraud charges. Specifically, DIMITRIOU is charged with committing two embezzlement schemes: In one, he allegedly embezzled more than $488,000 from Organization-1 by directing subordinates to issue him unauthorized excess salary payments; in the other, he allegedly charged hundreds of personal expenses to his Organization-1 credit card, without authorization, costing Organization-1 at least tens of thousands of dollars. DIMITRIOU will be presented today in federal court in the Southern District of New York before United States Magistrate Judge Robert W. Lehrburger.
U.S. Attorney Geoffrey S. Berman stated: “As the executive director of a non-profit religious organization, Jerome Dimitriou was supposed to serve the organization, not himself. As alleged, over several years, he abused his leadership position and embezzled over half a million dollars through two different schemes. This Office is committed to protecting non-profit organizations from those who allegedly steal rather than serve.”
USPIS Assistant Inspector in Charge Ruth M. Mendonça said: “Mr. Dimitriou allegedly used his position of trust at a religious organization to steal from his employer. His undoing came when Postal Inspectors used their trusted and sworn law enforcement position to bring him to justice.”
According to the allegations in the Complaint unsealed today[1]:
From in or around 2000 until late 2017, JEROME DIMITRIOU was the executive director of Organization-1. While serving as executive director, DIMITRIOU engaged in at least two separate, long-running embezzlement schemes. One of his fraud schemes involved his unauthorized use of an Organization-1 credit card to pay for at least hundreds of personal expenses. For instance, from in or around May 2011 through in or around September 2017, DIMITRIOU charged the following to his Organization-1 credit card: at least approximately 204 charges for airline travel with his family (who were not employed by Organization-1); at least approximately 552 iTunes charges; at least approximately 71 charges for a gym membership at David Barton Gym; and at least approximately 44 retail charges, including at such stores as Sears, Home Depot, CVS, Duane Reade, Walgreens, and Vitamin Shoppe. The value of the airline travel with his family, for instance, was at least approximately $61,286.20.
Another of DIMITRIOU’s fraud schemes involved directing subordinates to issue him excess salary and paychecks, over many years, without the authorization or approval of Organization-1. During just 2013 through September 2017, for instance, the total value of these excess salary and paychecks was at least approximately $488,290. During the period of DIMITRIOU’s embezzlement schemes, Organization-1 was enduring financial difficulties, a fact of which DIMITRIOU was well aware.
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DIMITRIOU, 55, of Greenlawn, New York, is charged with two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised USPIS for its outstanding work on this case and noted that the investigation is ongoing.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Michael D. Neff and Michael C. McGinnis are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Former Erie Man Pleads Guilty to 12 Counts of Producing Child PornographyRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
Joshua Davis Loucks, 36, pleaded guilty to twelve counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Loucks took sexually explicit photos and produced videos of a minor victim who was ten years of age. He also received computer images depicting minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Judge Cercone scheduled sentencing for April 20, 2020. The law provides for a total sentence of 350 years in prison, a fine of $3,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police and the Erie Police Department conducted the investigation that led to the prosecution of Loucks.
Former Chinese Diplomat and Head of U.S. Operations for Chinese Construction Business Sentenced to 190 Months’ Imprisonment for Engaging in Forced Labor and Related ChargesRead the Press Release
Earlier today, in federal court in Brooklyn, Dan Zhong, a former diplomat of the People’s Republic of China (PRC), was sentenced by United States District Judge Ann M. Donnelly to 190 months’ imprisonment and a $50,000 fine. Zhong, the former head of U.S. operations of Chinese Liaoning Rilin Construction (Group) Co. Ltd. (also known as China Rilin) and U.S.-based subsidiaries, including U.S. Rilin, was convicted by a federal jury in March 2019 following a three-week trial on charges of conspiracy to provide forced labor, providing and benefitting from forced labor, concealing passports and immigration documents in connection with forced labor, conspiracy to commit alien smuggling and conspiracy to commit visa fraud. The Court also ordered Zhong to forfeit his interests in multiple real estate properties and pay approximately $23,000 in restitution as part of the sentence.
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), Peter C. Fitzhugh, Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI), and Timothy W. Dumas, Special Agent-in-Charge, U.S. Department of State’s Diplomatic Security Service, New York Field Office (DSS), announced the sentence.
“Unlike Chinese Communist elites, Americans do not practice, condone or tolerate forced labor,” stated United States Attorney Donoghue. “Mr. Zhong, a former long-time PRC diplomat, oppressed and coerced Chinese construction workers in New York, forcing some to work for years without pay under the threat of physical harm and financial ruin. Zhong will now pay a heavy price for those crimes.” Mr. Donoghue expressed his appreciation to the Department of State’s Office of Foreign Missions and the FBI’s Field Office in Newark, New Jersey, for their assistance on the case.
“Zhong forced his workers to work 14-hour days and live in cramped, unsafe conditions, with locks on the doors so they could not escape,” stated HSI Special Agent-in-Charge Fitzhugh. “Through forced labor, Zhong took advantage of those seeking a new life in America. Today’s sentencing is a testament to law enforcement’s resolve to arrest and prosecute anyone seeking to exploit people for person gain.”
“The Diplomatic Security Service works to identify and prevent situations where vulnerable individuals are exploited in human trafficking schemes such as this,” stated DSS Special Agent-in-Charge Dumas. “This case is an especially serious abuse of the legal and immigration systems as it involved a former diplomat of the People’s Republic of China. DSS agents stationed throughout the world are well-positioned to work with U.S. and foreign partners to stop those individuals who would manipulate instruments of international travel, and profit from the selling of human beings.”
Zhong’s company performed construction work on a variety of PRC government facilities in the United States, including the Permanent Mission of the PRC to the United Nations, the Embassy of the PRC to the United States and PRC Consulates General in the United States. Zhong and his co-conspirators obtained visas for PRC workers that required them to work only at PRC diplomatic facilities. In fact, they were forced to work on private construction projects, including a commercial building in midtown Manhattan, and private residences in Queens and on Long Island. Zhong also used the workers as personal servants – preparing meals, chauffeuring him and performing yard work at his home.
Zhong and his co-conspirators required PRC workers to turn over substantial “security deposits,” including the deeds to their family homes that were subject to forfeiture if they refused to work, as a key element of the “debt bondage” contracts the workers signed. Once in the United States, the workers were forced to surrender their passports to Zhong’s co-conspirators. The workers were required to work 14-hour days, seven days a week, for years without receiving any pay. Twenty or more workers were housed in one and two-family houses in Jersey City. Inspections of these houses revealed numerous fire code violations, as well as illegal locks to prevent the workers from escaping. Zhong and his co-conspirators resorted to physical force and threats to prevent escape by the workers, including forcing the workers’ family members out of their homes in the PRC. Zhong’s co-defendant in the indictment, Landong Wang, is a fugitive who is believed to be in the PRC.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, Ian C. Richardson and Craig R. Heeren are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian Morris of the Office’s Civil Division which is handling the forfeiture aspect of the case.
The Defendant:
DAN ZHONG
Age: 49
Livingston, New JerseyE.D.N.Y. Docket No. 16-CR-614 (AMD)
Farmersville Man Charged with Drug and Firearms OffensesRead the Press Release
FRESNO, Calif. — On November 22, 2019, federal authorities arrested Miguel Deniz, 29, of Farmersville, who is charged in a three-count indictment with possession with intent to distribute methamphetamine, being a felon in possession of firearms, and possession of a machinegun, United States Attorney McGregor Scott announced.
Deniz ordered four “auto-sear” devices over the internet to his home address. Auto-sear devices are used to convert semi-automatic firearms to fire as fully automatic machineguns. The package was intercepted by law enforcement, and on May 1, 2019, law enforcement officers conducted a controlled delivery of the package to Deniz’s residence. During a subsequent search executed at the residence, law enforcement officers recovered over a pound of methamphetamine, an AK-style rifle, a Mossberg pump action shotgun, six handguns, eighteen magazines, two handgun silencers, a ballistic vest, thousands of rounds of live ammunition, and firearm accessories. During the search, law enforcement officers also found additional auto-sear devices. Deniz is a convicted felon prohibited from possessing firearms or ammunition.
This case was the product of an investigation by Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Postal Inspection Service, and the California Department of Justice. Assistant United States Attorney Katherine Schuh is prosecuting the case.
If convicted, Deniz faces a maximum statutory penalty of life years in prison and a $10,000,000 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
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 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.
Fairmont man sentenced to life for enticing minorsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Quionte Jordan Crawford, of Fairmont, West Virginia, was sentenced to five life sentences to run concurrently for using his smart phone to convince minors to send explicit pictures and videos, U.S. Attorney Bill Powell announced.
Crawford, also known as “Kayla Stevens,” age 27, pled guilty to five counts of “Enticement of a Minor” in June 2019. Crawford admitted to using his smart phone to persuade five different teenage boys to send sexually explicit pictures and videos to him. The crimes took place from November 2017 to December 2018 in Marion County.
“The defendant’s conduct was reprehensible and directed at children. Unfortunately, technology provides many options for those with evil intent. The defendant will now spend the rest of his life in a place where he cannot continue the vile activities he orchestrated,” said Powell.
Crawford preyed on teenagers by using a fake persona and picture of a teenage girl to attract their attention and to coerce them into sharing the inappropriate pictures and videos. Crawford used threats at times to gain the explicit materials.
Crawford deftly, and sometimes cruelly, employed emotional and psychological coercion in order to obtain gratification for his sexual interests.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bridgeport Police Department investigated.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
U.S. District Judge Thomas S. Kleeh presided.
Essex County Man Charged with Production, Receipt, and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man appeared in court today on charges of producing, receiving, and possessing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Ramon Zelaya, 36, of Newark, is charged by indictment with one count of sexual exploitation of a child, one count of receiving child pornography, and one count of possessing child pornography. Zelaya was initially charged by complaint in April 2019.
According to documents filed in this case and statements made in court:
Between Aug. 20, 2018, and Sept. 23, 2018, Zelaya used Instagram messages to entice, threaten, and coerce a minor into creating and sending him sexually explicit images and videos. Zelaya also used multiple Facebook accounts to contact the victim’s parent and to send at least nude image of the victim.
The charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum penalty of 30 years in prison, and a $250,000 fine. The charge of receipt of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and a $250,000 fine. The charge of possession of child pornography carries a maximum penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, and officers of the Union City Police Department, under the direction of Chief Nichelle Luster, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office Cybercrime Unit in Newark.
The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Elk County Man Sentenced to 6 Years in Prison for Receiving Child PornographyRead the Press Release
ERIE, Pa. - A resident of Johnsonburg, Pennsylvania, has been sentenced in federal court to 72 months in jail on his conviction of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on Clarence Robert Neal IV, 36.
According to information presented to the court, Neal received computer images and movies depicting minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation, the Pennsylvania State Police and the Johnsonburg Borough Police Department for the investigation leading to the successful prosecution of Neal.
Eastern Shore Felon Sentenced to Five Years in Federal Prison for Illegal Possession of Stolen FirearmsRead the Press Release
Baltimore, Maryland – U.S. District Judge Deborah K. Chasnaow today sentenced Ricky Sanabria, Jr., age 27, of Salisbury, Maryland, to five years in federal prison, followed by three years of supervised release, for possession of stolen firearms.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Wicomico County Sheriff Michael A. Lewis; Dorchester County Sheriff James W. Phillips, Jr.; and Salisbury Police Chief Barbara Duncan.
According to his guilty plea, on June 10, 2017, Sanabria burglarized a firearms store in Federalsburg, Maryland. Surveillance video shows that Sanabria entered the store by cutting a hole into an exterior wall. He wore a hoodie and gloves, with a mask that partially covered his face. Sanabria stole 27 weapons from the Federalsburg firearms store, and left the scene. Sanabria stole at least 30 weapons total.
Sanabria was not apprehended until July 16, 2017, when Nebraska state troopers arrested Sanabria for speeding on a highway in Lincoln County, Nebraska. Sanabria initially evaded the troopers and abandoned his car, but the troopers found Sanabria in a park nearby and arrested him. They found one of the firearms stolen from the store in Federalsburg—a .40-caliber Glock handgun—directly in front of the driver seat under the floorboard of Sanabria’s car. Sanabria subsequently waived his rights, and admitted that he was driving the car. On recorded jail calls, Sanabria acknowledged that the firearm was his, and that he put the firearm in the car.
Two days later, Maryland investigators executed search warrants at two houses associated with Sanabria. At his home in Salisbury, Maryland, investigators found a 20-gauge shotgun, which was stolen during a separate burglary in August 2016. At his parents’ home in Hebron, Maryland, investigators found an antique weapon—a Colt black powder gun—that Sanabria stole from the Federalsburg gun store during the June 2017 burglary. Sanabria possessed both the shotgun and the antique weapon.
In addition, Sanabria’s DNA sample matched the DNA profile of blood left at the scene of another burglary of a firearms dealer in November 2016. During that burglary, Sanabria stole two firearms—a 9 mm Glock pistol and a .22-caliber Ruger pistol. Although investigators have only found one of those firearms, Sanabria possessed both firearms on the day they were stolen.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF, the Wicomico and Dorchester County Sheriffs’ Offices, and the Salisbury Police Department for their work in the investigation, and thanked the Nebraska State Police for its assistance. Mr. Hur thanked Assistant U.S. Attorney Brandon Moore, who prosecuted the case.
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Dominican National Sentenced for Passport FraudRead the Press Release
BOSTON - A Dominican national was sentenced today in federal court in Boston in connection with using a U.S. citizen’s identity for more than 11 years. The U.S. citizen died in Puerto Rico in 2018.
Ramon Alberto Mejia Garcia was sentenced by U.S. District Court Judge Richard G. Stearns to 17 months in prison. Mejia Garcia will face deportation proceedings upon completion of his sentence. In July 2019, Mejia Garcia was convicted by a federal jury of making a false statement on a passport application.
On an unknown date, Mejia Garcia obtained the birth certificate of a U.S. citizen from Puerto Rico, and used it to obtain various identification documents, including a Social Security card, a Massachusetts liquor identification card, a Massachusetts driver’s license and a MassHealth card.
On May 14, 2008, Mejia Garcia walked into a U.S. Postal Office in Roxbury and submitted a passport application with his picture attached, but used the U.S. citizen’s name and identifiers. The passport was ultimately issued. In July 2018, when the passport was about to expire, Mejia Garcia sent in a passport renewal application in the false identity. In September 2018, when his renewed passport did not arrive, Mejia Garcia went to the National Passport Center in Portsmouth, N.H., to check on his application. He was subsequently arrested and has remained in custody since that time.
Law enforcement began investigating Mejia Garcia after he pleaded guilty to a 2010 involuntary manslaughter and assault and battery charge after throwing a glass at a young man’s neck in a Boston bar. Mejia Garcia was prosecuted and served his jail time under the U.S. citizen’s identity.
United States Attorney Andrew E. Lelling; Scott Antolik, Special Agent in Charge of the Social Security Administration; and William B. Gannon, Special Agent in Charge of the U.S. Department of State, Diplomatic Security Service, Boston Field Office, made the announcement today. Assistant U.S. Attorneys David Tobin and Mackenzie Queenin of Lelling’s Criminal Division prosecuted the case.
District Man Sentenced to 12 Years in Prison for Armed RobberiesRead the Press Release
Saddiq Muhammad, 24, of Washington D.C., was sentenced today to 12 years in prison for his role in two armed robberies that occurred on May 8 and May 9, 2019. The incidents were part of a crime spree perpetrated by Muhammad on innocent civilians over the course of three days announced U.S. Attorney Jessie K. Liu.
Muhammad pled guilty to two counts of assault with intent to rob while armed on October 4, 2019, in the Superior Court of the District of Columbia. The Honorable Michael O’Keefe sentenced Muhammad to 12 years in prison to be followed by five years of supervised release.
According to the government’s evidence, on May 8, 2019, at about 11:16 p.m., Muhammad entered a 7-11 convenience store at 1344 Wisconsin Avenue, N.W., in Washington, DC. He approached the store counter, where the victim was working as a cashier. Muhammad leapt over the counter, brandishing what appeared to be a black semi-automatic handgun. Muhammad pointed the handgun at the victim and demanded that he open the cash register. The victim complied. Muhammad then reached into the drawer and stole $100. Muhammad exited the store and fled South on Wisconsin Avenue, N.W., in a car he had stolen the day before.
On May 9, 2019, at 12:30 a.m., two victims were sitting in front of an apartment building at 2517 25th Street, N.W., waiting for an Uber. Muhammad approached the victims on foot. He pulled out what appeared to be a semi-automatic handgun and pointed the gun in one of the victim’s face. Muhammad demanded the victim’s cellphone. The victim had his hands up and Muhammad grabbed the victim’s cellphone from his hand. Muhammad then pointed the handgun at the other victim and grabbed her purse. The victim held onto her purse and would not let go. Muhammad tried to pull the purse away and in the process dragged the victim several yards down the sidewalk before she surrendered her purse to Muhammad.
Several hours later, at about 7:34 a.m., another victim was standing near 950 Division Avenue, N.E. Muhammad pulled up in the stolen car and approached the victim. Muhammad said something to the victim but the victim could not understand him because the victim did not speak English. Muhammad hit the victim in the head with a gun and took his wallet and car keys. On that same day, Muhammad also robbed an Exxon gas station in Silver Spring, Maryland, at gunpoint.
After an investigation by the Metropolitan Police Department, obtaining surveillance video and talking to witnesses, law enforcement identified Saddiq Muhammad as the perpetrator of the armed robbery spree. Muhammad was arrested on May 10, 2019, and subsequently charged.
In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department. She also acknowledged the work of those who handled the case at the U.S. Attorney’s Office, including Assistant U.S. Attorneys Mark Hobel and Beth Kelley who investigated and prosecuted the case.
District Court Orders California Firm to Stop Manufacturing and Distributing Adulterated FoodRead the Press Release
A federal court permanently enjoined a food company in San Francisco from manufacturing and distributing adulterated food, the Department of Justice announced today.
In a complaint filed Nov. 22, 2019 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Golden Gate Soy Products Inc, violated the Federal Food, Drug and Cosmetic Act (FDCA) by manufacturing and distributing ready-to-eat tofu and other soy-based products, including marinated bean cake, soy milk, and tofu pudding, in a facility with chronic insanitary conditions. The complaint alleged that FDA inspections uncovered the prolonged presence of Listeria monocytogenes (L. mono) at the company’s facility, and that adequate measures were not put in place to reduce the risk of health hazards such as L. mono.
The complaint, filed in U.S. District Court for the Northern District of California, also named company owners/operators Yong Li Chen and Ling Hong Tang as defendants. All of the defendants agreed to be bound by a consent decree of permanent injunction filed with the complaint.
“Consumers should be able to trust that the food they eat is free of dangerous pathogens, like listeria,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice, working together with the FDA, does not hesitate to take action against food manufacturers and distributors when they fail to comply with consumer safety laws.”
“After documenting a pattern of food safety violations, the FDA worked with DOJ in order to prevent potentially contaminated food from reaching consumers. Listeria is a harmful pathogen and the company failed to take the appropriate corrective actions resulting in this action,” said FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier. “Americans rely on the FDA to keep their food safe. When a company fails to follow the law, the FDA will take action to protect the public health.”
According to the complaint, three FDA inspections of the defendants’ facility — in September-October 2017, June 2018, and February 2019 — all uncovered violations of FDA food safety regulations. Although the defendants were advised numerous times of their violative practices and the need to take corrective action, inspectors continued to find L. mono in the facility.
The consent decree entered by the court permanently enjoins the defendants from violating the FDCA. Under the order, the defendants may not manufacture or distribute food until they comply with specific remedial measures. Among other requirements, the defendants must hire a qualified independent expert to develop an effective sanitation control program. Before manufacturing or distributing any food, defendants must first receive FDA’s written determination that their manufacturing practices comply with the law.
This matter was handled by Trial Attorney Meredith B. Healy of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Noah T. Katzen of the FDA’s Office of the Chief Counsel and the United States Attorney’s Office for the Northern District of California.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
Detroit Man Sentenced to Federal Prison for Selling Fentanyl in HuntingtonRead the Press Release
HUNTINGTON, W.Va. – A Detroit, Michigan man was sentenced to federal prison today for selling fentanyl in Huntington, announced United States Attorney Mike Stuart. Marshal Franchuit Thomas Jr., 25, was sentenced to 43 months in prison for distribution of fentanyl. Thomas was also ordered to serve 3 years on supervised release after his release from prison.
“We’re sending another Detroit poison peddler to federal prison. Thomas was responsible for distributing up to 400 grams of heroin and fentanyl in Huntington between 2015 and 2018,” said United States Attorney Mike Stuart. “Many lives have been lost as a result of fentanyl dealers like Thomas. We’ve pushed back – we’re fighting for our communities and our families – and we’ve substantially increased our prosecution numbers.”
Thomas previously admitted that that, on February 8, 2018, an informant contacted him to purchase heroin. Thomas agreed to meet the informant in the area of 14th Street West in Huntington and, when the informant arrived, Thomas distributed what he purported to be 5 grams of heroin. After forensic testing, the substance distributed by Thomas was discovered to actually be fentanyl, a powerful opiate painkiller. Thomas further admitted that he was involved in distributing heroin and fentanyl in the Huntington area between July of 2015 and March of 2018, and that he was responsible for the distribution of up to 400 grams of heroin and fentanyl in Huntington during that period.
The Huntington Police Department and the Huntington Violent Crimes and Drug Task Force conducted the investigation. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of Operation Synthetic Opioid Surge (S.O.S.), a focused enforcement effort that seeks to reduce the supply of deadly synthetic opioids in high impact areas.
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Denver Developer Pleads Guilty to Arson in Conjunction with Grove Street FireRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Michael Marte, age 54, of Denver, pleaded guilty today before U.S. District Court Judge William J. Martinez to one count of arson in connection with the fire at 1920 and 1930 Grove Street. Marte appeared at the hearing in custody, and was remanded at the hearing's conclusion. He is scheduled to be sentenced by Judge Martinez on March 25, 2020, to an agreed upon mandatory 10 years in federal prison.
According to the stipulated facts contained in the plea agreement, starting in approximately May of 2017, the defendant was hired by an Australian real estate developer to oversee a substantial construction project in West Denver. The developer had purchased two residential lots for redevelopment on Grove Street. The project consisted of scrapping two single home residences and replacing them with two separate multi-unit buildings on each lot. Each building would consist of a three-story townhome, each with 7 units. Marte was paid an annual salary of $200,000 to supervise the construction. The project continued into early 2018, when both buildings were in the final phase, complete with roofing, siding, doors and windows. Interior finishing touches were still needed.
On May 10, 2018, the developer travelled to Denver from Australia for purposes of meeting with the developer and inspecting the progress of the project. However, around 2:00 a.m. on May 10, 2018, while the developer was still on a plane to Denver, both buildings became engulfed in a fire which caused total destruction of both units. The loss was estimated at $4 million. The Denver Fire Department characterized the fire as a “three-alarm blaze” meaning it required approximately half of Denver’s Fire Department to extinguish it. They fought the fire for approximately 8 hours.
Denver Fire Investigators and ATF agents quickly suspected arson. One key piece of evidence was surveillance from a video doorbell camera, which was provided by a nearby resident. It showed a vehicle identical to the defendant’s driving into the area shortly before the blaze began. It also showed large billows of smoke and flames rising from the buildings. Another surveillance video showed a man of Marte’s description quickly walking away after the fire started. Investigators found clothes that had fire accelerant on them that were matched to the defendant through DNA.
During construction Marte bought an insurance policy for $4 million dollars. Shortly after the fire he quickly attempted to obtain the insurance money. Those attempts failed.
“Arson for profit or any other reason is a crime, and the defendant got caught red handed thanks to the great work of the ATF and Denver Fire Department,” said U.S. Attorney Jason Dunn. “Because of his conduct, he’ll have 10 years in federal prison to think about his actions. Thankfully no residents or fire fighters were hurt as a result of his selfish actions.”
“Arson is a crime of violence that will not be tolerated,” said Acting Special Agent in Charge Bradley Engelbert. “ATF’s partnership with the Denver Fire Department, whose work was instrumental in the success of this investigation, will continue to ensure the safety of our communities.”
This case was investigated by the Denver Division of the ATF and the Denver Fire Department. The defendant is being prosecuted by Assistant U.S. Attorney Tim Neff.
Cranston Man Admits to Possessing, Distributing Child PornographyRead the Press Release
PROVIDENCE – A Cranston man who, two days after being arrested on domestic violence charges in May 2018, was discovered to be in possession of images of child pornography pleaded guilty in federal court on Friday to distributing and possessing child pornography.
According to information presented to the Court, Robert E. Soares, 39, was arrested by Cranston Police on May 28, 2018, on state domestic violence charges. Soares was arrested after his girlfriend called and reported to police that she and another woman had been forced by Soares into a bedroom in her home, and that Soares was prohibiting them from leaving the room and the residence. The woman told police she feared for her safety.
According to information presented to the Court, two days after the alleged domestic violence incident, the alleged victim called police to report that she received a call from an individual who told her that Soares had previously sent him “disgusting” images of child pornography. After further investigation, Cranston Police obtained a court-authorized search warrant to search Soares’ cell phone.
A forensic review of Soares’ cellphone resulted in the discovery of more than two-dozen images of child erotica and child pornography, a series of text messages sent and received by Soares discussing photographs depicting child pornography, and a browser history showing Internet searches and sites viewed that are associated with the viewing and the downloading of images and videos of child pornography.
Appearing November 22, 2018, before U.S. District Court Chief Judge William E. Smith, Soares pleaded guilty to distribution of child pornography and possession of child pornography, announced United States Attorney Aaron L. Weisman, Cranston Police Chief Colonel Michael J. Winquist, and Homeland Security Investigations Acting Special Agent in Charge Jason Molina.
Soares is scheduled to be sentenced on March 3, 2020.
Distribution of child pornography is punishable by statutory penalties of a minimum of 5 years up to 20 years in federal prison, to be followed by 5 years to lifetime supervised release; a fine of up to $250,000; and a $5,000 special assessment as required by the Justice for Victims Trafficking Act in child sexual exploitation cases where the Court makes a finding that the defendant is not indigent.
The case is being prosecuted by Assistant United States Attorney Denise M. Barton.
The matter was investigated by the Cranston Police Department, with the assistance of members of Homeland Security Investigations Task Force and Warwick Police Department.
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Crack Cocaine Dealer Sentenced to 48 Months in PrisonRead the Press Release
PROVIDENCE – A Pawtucket man who was the focus of a four-month investigation by the FBI Safe Streets Task Force, the Rhode Island State Police, and the Pawtucket Police Department into his drug trafficking activities was sentenced today to 48 months in federal prison.
Samuel Hernandez, 24, was arrested on June 11, 2019, when, for the sixth time since February 25, 2019, while under law enforcement surveillance, he was preparing to deliver between 1.1 grams and 2.97 grams of crack cocaine for between $100 and $220.
The crack cocaine was seized by a member of law enforcement following each delivery.
According to information presented to the Court, Hernandez was arrested when he arrived at a pre-determined location while under law enforcement surveillance to deliver crack cocaine in exchange for cash. In addition to carrying 2.5 grams of crack cocaine packaged for sale, Hernandez was found to be carrying a package containing 26.3 grams of crack cocaine.
A court-authorized search of his home resulted in the seizure of $9,290 in cash and two digital scales.
Hernandez pleaded guilty on August 22, 2019, to possession with intent to deliver cocaine base.
At sentencing today, U.S. District Court Chief Judge William E. Smith sentenced Hernandez to 48 months of incarceration to be followed by 3 years supervised release and the forfeiture of the $9,290 seized from Hernandez’s residence, announced United States Attorney Aaron L. Weisman, Special Agent in Charge of the FBI Boston Division Joseph R. Bonavolonta, Superintendent of the Rhode Island State Police Colonel James M. Manni, and Pawtucket Police Chief Tina Goncalves.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
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Convicted Sex Offender Sentenced to 17 years in Prison for Possessing Child PornographyRead the Press Release
On November 14, 2019, sex offender Corey Laquan Witty, 49, of Miami, Florida was sentenced by U.S. District Court Judge Federico A. Moreno to 17 years in prison for possessing child pornography.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Juan J. Perez, Director, Miami-Dade Police Department (MDPD), and Anthony Salisbury, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.
Witty had previously been convicted of offenses, including possession of child pornography and lewd and lascivious battery on a child. As a result, he was ordered to register as a sex offender. His first conviction for lewd and lascivious battery on a child occurred in 1999. After Witty repeatedly failed to attend sex offender treatment, his probation was revoked and he was incarcerated for two years. In 2005, Witty was convicted of failing to register as a sex offender and for lewd and lascivious battery on a child. In 2008, he was convicted of possession of child pornography and sentenced to 121 months in federal prison and a lifetime of supervised release, by U.S. District Court Judge Marcia G. Cooke (Case No. 7-CR-20699).
In July 2019, during Witty’s semiannual sex offender registration meeting, he was found in possession of two cell phones, one of which was a smart phone, which Witty was prohibited from possessing. As a registered sex offender, Witty was barred from accessing the Internet. The phone contained child pornography, in violation of Witty’s supervised release conditions. On August 27, 2019, Witty pled guilty to possessing child pornography (Case No. 19-CR-20453).
Judge Moreno considered Witty’s background and criminal history, when sentencing him above the guideline range to 204 months in prison.
U.S. Attorney Fajardo Orshan commended the investigatory efforts of HSI and the MDPD in this matter. Assistant U.S. Attorney Michele S. Vigilance prosecuted 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 on http://pacer.flsd.uscourts.gov.
Convicted Felon Pleads Guilty to Possessing FirearmRead the Press Release
RICHMOND, Va. – A previously convicted felon pleaded guilty today to possessing a firearm with a high-capacity magazine.
According to court documents, in August, Richmond Police Department (RPD) officers observed Terrell Clarke-Conley, 22, of Richmond, as the passenger in a vehicle on a traffic stop at the intersection of Westwood Avenue and Chamberlayne Avenue in Richmond. After identifying Clarke-Conley as a wanted fugitive, he attempted to flee after RPD officers asked him to step out of the vehicle. Following a brief struggle, RPD officers recovered a Glock, Model 19X, 9mm caliber, semi-automatic pistol, loaded with 19 rounds in a high-capacity magazine, in Clarke-Conley’s possession. At the time of his possession of the firearm, Clarke-Conley had previously been convicted of a felony.
Clarke-Conley pleaded guilty to being a felon in possession of a firearm, and faces a maximum penalty of 10 years in prison when sentenced on Feb. 21, 2019. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; David W. Archey, Special Agent in Charge of the FBI’s Richmond Field Office; and William C. Smith, Chief of Richmond Police, made the announcement after Senior U.S. District Judge Henry E. Hudson accepted the plea. Assistant U.S. Attorney Erik S. Siebert is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:19-cr-129.
Conspirators sentenced in scheme that stole nearly quarter of a million dollars from Augusta attorneyRead the Press Release
AUGUSTA, Ga: Two people who stole nearly a quarter-million dollars from an Augusta attorney have been sentenced to federal prison.
Gloria Ifem Okolie, 39, of Dallas, Texas, was sentenced to 24 months in prison by U.S. District Court Chief Judge J. Randal Hall, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Her co-defendant, Paul Wilson Aisosa, 52, of Dallas, was sentenced to 30 months in prison. Each will also be required to serve three years on supervised release after completion of their prison terms. There is no parole in the federal system.
In addition, Okolie and Aisosa must pay $265,218.83 restitution. Both were ordered to surrender to the U.S. Marshals Service on Jan. 6.
Okolie, who was found guilty by a federal jury in March, and Aisosa, who pled guilty to the charges, participated in a scheme to steal $246,218.83 from an Augusta real estate attorney who was deceived into rerouting the proceeds from the sale of a West Lake home.
The money was sent to an account Okolie opened at a Dallas bank, where she, Aisosa and a co-conspirator who is currently in Nigeria withdrew large portions of the money that they sent to other conspirators who also are believed to be in Nigeria.
“These thieves schemed with other crooks to steal money from an honest citizen whose trust they cynically violated,” said U.S. Attorney Bobby L. Christine. “Our office will not hesitate to slam shut the prison doors on criminals who exploit law-abiding people to line their own pockets.”
“One of the FBI’s priorities is to bring to justice anyone who would choose to defraud our honest working citizens,” said Special Agent in Charge of FBI Atlanta, Chris Hacker. “Okolie and Aisosa must now pay the price for thinking they could get away with this elaborate scheme, thanks to the concerted effort of the FBI, Internal Revenue Service, and the U.S. Attorney’s Office.”
“Today’s sentencing of two co-conspirators highlights how seriously IRS Criminal Investigation and our law enforcement partners take the issue of defrauding honest working citizens,” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation Atlanta Field Office. “We will continue to pursue criminals who prey on innocent victims and we will continue to enforce our nation’s laws. Today’s sentencings should send a clear message to would-be criminals: You will be caught and you will be punished.”
This case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, and prosecuted for the United States by Assistant U.S. Attorneys Patricia Rhodes and Hank Syms.
Colebrook Man Sentenced to 24 Months for Distributing Suboxone in A School ZoneRead the Press Release
CONCORD – Dustin Grant, 34, of Colebrook, was sentenced today to 24 months in federal prison for the distribution of Suboxone, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on February 14, 2019, Grant sold Suboxone to an individual who was cooperating with law enforcement officers. The sale occurred within 1,000 feet of an elementary school.
Grant previously pleaded guilty on July 1, 2019. Following completion of his sentence, Grant will be on supervised release for a period of four years.
Suboxone is a Schedule III controlled substance that is often prescribed as a treatment for opioid withdrawal symptoms. As an opioid itself, however, it is still subject to abuse if injected or snorted and can produce a euphoria similar to other opioids like heroin and fentanyl.
“Drug trafficking has impacted families throughout the Granite State, including those located in rural as well as urban areas,” said U.S. Attorney Murray. “By trafficking in Suboxone, the defendant sold a prescription drug unlawfully and contributed to the opioid crisis that is gripping New Hampshire. We will continue to aggressively pursue federal prosecutions of those who jeopardize public health and safety by selling opioids.”
This matter was investigated by the DEA, with assistance from the Colebrook Police Department, the Pittsburg Police Department, the New Hampshire State Police, U.S. Customs and Border Protection, the Coos County Sheriff’s Office, the New Hampshire Liquor Commission’s Division of Enforcement and Licensing, the Office of Inspector General of the U.S. Department of Health and Human Services, and the New Hampshire Attorney General’s Office. The case was prosecuted by Assistant United States Attorneys Charles L. Rombeau and John S. Davis.
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Civil Complaint and Settlement Agreement Involving the Municipality of Sabana GrandeRead the Press Release
SAN JUAN, Puerto Rico – On November 22, 2019, the United States Attorney’s Office, District of Puerto Rico, filed a complaint and a settlement agreement against the Muncipality of Sabana Grande in the United States District Court, for violations of the False Claims Act, 31 U.S.C. §3729 et seq., announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
The Complaint alleges that in or about April of 2014, the Municipality of Sabana Grande (“MSG”), in conjunction with members of the Puerto Rico Olympic Committee (COPUR) and Mr. Irving Riquel Torres (Torres), through his company Administrative, Environmental and Sports Consultants (AESC), entered into a contract involving funds from the United States Department of Education (USDE), whereby MSG subcontracted COPUR and AESC to provide teachers’ training for MSG’s public school teachers. Based on the rules governing the USDE grant funds provided to the Puerto Rico Department of Education (PRDE), MSG was precluded from subcontracting the services for teachers’ training to non-governmental entities. This arrangement resulted in MSG submitting or causing the submission of false statements, false records and false representations to PRDE for purposes of obtaining federal funding under Title II, Part A of the Elementary and Secondary Education Act.
An investigation conducted by the U.S. Department of Education, Office of Inspector General (USDOE-OIG), showed that false representations caused the PRDE to disburse approximately $1,770,200 to MSG, which then disbursed the sum of $1,378,212 to COPUR in violation of the program’s applicable statutes and regulations, to include MSG’s subcontracting of COPUR to provide educational training services. Subsequently, COPUR disbursed approximately $439,587 as costs of the project, $375,449 to AESC, and retained the sum of $563,174, as proceeds for serving as an intermediary between MSG and AESC. MSG also retained $391,988.00 as proceeds not authorized under federal law.
Pursuant to the Settlement Agreement between MSG and the United States, MSG agreed to pay the United States $500,000. On October 23, 2019, prior to the filing of the complaint against MSG, COPUR paid the United States $700,000, pursuant to an out-of-court settlement agreement reached with the United States. Additionally, the United States seized in excess of one million dollars from bank accounts belonging to Torres relating to criminal charges filed against him.
“The United States Attorney for the District of Puerto Rico, together with our law enforcement partners, is fully committed to combatting fraud against government programs. We greatly appreciate the support and hard work from our partners at the USDOE-OIG, HUD-OIG, and FBI. This case also underscores the use of federal, civil enforcement laws, such as the False Claims Act, to fight and deter fraud,” said United States Attorney Muldrow.
“The Office of Inspector General has a unique and special law enforcement mission – to protect Federal education funds for eligible students. Today’s settlement is an example of our commitment to this mission,” said Neil Sánchez, Special Agent in Charge of the U S. Department of Education Office of Inspector General’s Southern Regional Office. “I’m proud of the work of OIG special agents and our law enforcement partners whose tireless efforts brought about this significant settlement. The OIG will continue to carry out our important public service and investigate allegations of fraud, abuse, public corruption, and violations of the False Claims Act.”
“Oftentimes, the most effective weapons we have against fraud and corruption are civil enforcement and asset forfeiture laws, which enable us to strike directly at the greed that motivates these types of crimes, and also give us the power to recover money on behalf of those who were meant to benefit from it: the People of Puerto Rico. We at the FBI were extremely proud to partner in this mission with the United States Attorney's Office, and the Offices of the Inspectors General of the U.S. Departments of Education and Housing and Urban Development, whose steadfast dedication to justice ensured this successful result, and will bring about many more in the future”, said Doug Leff, FBI Special Agent-in-Charge.
These matters were handled and prosecuted by Civil Division Assistant United States Attorneys Jorge L. Matos, David Martorani-Dale, and Civil Division Chief Héctor Ramírez-Carbó of the U.S. Attorney’s Office District of Puerto Rico, in conjunction with Special Agent Robert Wolfe of the USDOE-OIG, and in collaboration with Assistant United States Attorney Seth Erbe, Special Agent Juan Carlos López of the FBI, and Special Agent Héctor Mercado of HUD-OIG.
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Chicopee Man Pleads Guilty to Child Pornography OffensesRead the Press Release
BOSTON – A Chicopee man pleaded guilty on Friday, Nov. 22, 2019, in federal court in Springfield to receiving child pornography.
Victor Stepus, 51, pleaded guilty to three counts of receipt of child pornography and one count of possession of child pornography. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Feb. 20, 2020. Stepus has been in custody since his arrest in August 2015.
A search of Stepus’s residence resulted in the seizure of a personal computer that contained over 8,000 images and 33 videos of child pornography. These included images depicting the sexual abuse, including bondage, of girls as young as eight years old. During an interview with agents, Stepus admitted that, for the past several years, he used his home computer to access and download child pornography two to three times per week.
The charge of receipt of child pornography provides a minimum mandatory sentence of five years and up to 20 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution, on each count. The charge of possession of child pornography provides a sentence of up to 10 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Chicopee Police Chief William R. Jebb made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Chicago Area Lawyer Indicted for Perjury and Obstructing JusticeRead the Press Release
WASHINGTON – John Lee, an attorney who once represented Hyundai Construction Equipment Americas LLC, was arraigned Nov. 21 on an indictment issued on Oct. 8, for knowingly making false statements while testifying under oath before a federal grand jury and for obstructing justice.
The indictment relates to Lee’s work for Hyundai, which entered a guilty plea and was sentenced to pay a criminal fine for violating the Clean Air Act and conspiring to defraud the United States on Nov. 14, 2018. Hyundai has satisfied its liability in that matter.
The case against Lee is about testimony he gave under oath and pursuant to a privilege waiver issued by Hyundai. The indictment includes three perjury charges and one obstruction of justice charge. It alleges that during his testimony before a grand jury, Lee denied giving Hyundai employees advice about submitting a “TPEM” report that contained false information to the U.S. Environmental Protection Agency (EPA) regarding Hyundai’s compliance with Clean Air Act regulations.
The indictment goes on to allege that this was a false statement because Lee both received the TPEM report by electronic mail and approved its filing. Lee is also charged with falsely denying that he directed Hyundai employees to use their personal email accounts—rather than work accounts—to discuss Hyundai’s regulatory issues, and falsely denying that he received emails about the regulatory issues on his own personal email account.
Lastly, the indictment alleges that Lee knowingly failed to produce relevant emails in response to a grand jury subpoena, in an effort to impede the grand jury investigation.
“Lying to the grand jury, concealing information, and obstructing a federal investigation undermines the public’s trust in the criminal justice system and will not be tolerated,” said Assistant Attorney General Jeffrey Bossert Clark of the Environment and Natural Resources Division. “The Department of Justice will aggressively investigate and prosecute those who seek to cover up or obstruct a federal investigation.”
“In order to safeguard the environment, it is essential that governments receive accurate and honest information,” said Susan P. Bodine, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “This indictment sends a clear message that EPA and its law enforcement partners will continue to hold companies and their employees fully accountable for illegal conduct that jeopardizes environmental protection.”
The case was investigated by EPA’s Criminal Investigation Division. Senior Counsel Krishna S. Dighe of the Department of Justice, Environmental Crimes Section, and Assistant U.S. Attorney Nathan Kitchens of the Northern District of Georgia are prosecuting the case.
An indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent unless and until proven guilty.
Chicago and Tennessee Man Convicted for Veteran’s Unemployment Compensation FraudRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Earl Lafayette Hall, III, age 38, previously of Chicago and Arlington, Tennessee, was convicted on Friday, November 22, 2019, by a federal jury on 2 counts of conspiracy, 12 counts of mail fraud, 10 counts of money laundering, and 4 counts of aggravated identity theft. The charges related to a veteran’s unemployment compensation fraud scheme. The five-day trial was held before United States District Court Judge Sylvia H. Rambo in Harrisburg.
According to United States Attorney David J. Freed, Hall was previously sentenced by Judge Rambo to 116 months’ imprisonment on February 16, 2018, and his wife, Renita Blunt, age 35, was previously sentenced to 22 months’ imprisonment on January 17, 2018, following their conviction after a jury trial on March 10, 2017. In that trial, Hall was convicted of conspiracy to commit mail fraud, conspiracy to commit money laundering, mail fraud, money laundering, and aggravated identity theft. Blunt was convicted of conspiracy to commit mail fraud and aggravated identity theft.
The couple appealed their convictions to the Third Circuit Court of Appeals, arguing that their trials should have been severed from one another and conducted separately. In August of 2019, the Third Circuit ruled in their favor by vacating their convictions and ordering they be retried separately. Blunt’s re-trial is currently scheduled for January 6, 2020.
The evidence presented during the trial showed that Hall applied for and received approximately $70,000 in unemployment compensation benefits under the Unemployment Compensation for Ex-Service Members Program, commonly known as “The UCX Program,” under the assumed identities (first name, last name, date of birth and Social Security Number) of six other individuals. The UCX Program is a federally funded, U.S. Department of Defense program administered by the States. The jury found that Hall fraudulently obtained the benefits paid on five false UCX applications submitted to Pennsylvania and another UCX application submitted to Hawaii in 2013 and 2014.
“It takes an especially devious and brazen criminal mind to defraud a program established to benefit those who have sacrificed so much for their fellow citizens,” said U.S. Attorney Freed. “Fortunately the Defense Criminal Investigation Service, the United States Department of Labor Office of Inspector General, the United States Postal Inspection Service and numerous other federal, state and local partners were on the case. Hall’s criminal conduct has now been recognized by two separate juries of his peers, and we look forward to presenting our arguments at his re-sentencing.”
“The conviction announced today is the result of a joint effort by the Defense Criminal Investigative Service (DCIS), the U.S. Department of Labor’s Office of Inspector General, and the U.S. Attorney’s Office, Middle District of Pennsylvania,” stated Special Agent in Charge Leigh-Alistair Barzey, DCIS Northeast Field Office. “The DCIS is committed to working with its law enforcement partners and the DOJ to protect the integrity of federally funded programs, such as the UCX Program, which provides unemployment benefits for eligible former service members who are unemployed following their separation from military service.”
"Earl Lafayette Hall III misused the identities of others to submit counterfeit forms and steal money intended for individuals who experience unemployment after serving in the U.S. Armed Forces,” stated Acting Special Agent-in-Charge, Derek Pickle, Philadelphia Region, U.S. Department of Labor Office of Inspector General. “We will continue to work with our law enforcement partners to investigate those who exploit the Unemployment Compensation for Ex-service Members Program.”
The investigation was conducted by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering & Fraud Investigations, the U.S. Defense Criminal Investigative Service, and the U.S. Postal Inspection Service in Harrisburg with the assistance of the Pennsylvania Department of Labor and Industry, Internal Audits Division, the Pennsylvania Department of Labor and Industry, Office of Unemployment Compensation Benefits and Policy, and the Pennsylvania Department of Treasury, Office of Unemployment Compensation Disbursements. Assistant U.S. Attorney Kim Douglas Daniel prosecuted the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for each conspiracy, mail fraud and money laundering offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Cedar Rapids Felon Sentenced to Federal Prison After Stealing Firearms from Grandfather and FriendRead the Press Release
A Cedar Rapids man who stole his grandfather’s pistol, was arrested by local authorities, and then just weeks later stole a rifle from his friend’s residence, was sentenced on November 20, 2019, to more than two years in federal prison.
Jeremy Keith Heldt, age 34, from Cedar Rapids, Iowa, received the prison term after a June 4, 2019, guilty plea to one count of felon in possession of ammunition.
In a plea agreement, Heldt admitted that, in April 2017, he was driving a truck around the southeast side of Cedar Rapids when he struck a parked car. Heldt was barred from driving at the time. Heldt initially drove away from the scene of the accident, but soon returned to survey the damage, parked the truck, and fled on foot with a duffel bag. A witness followed Heldt, and law enforcement officers eventually found Heldt sitting on the porch of nearby residence. On the porch, officers found the bag, which contained a loaded .45 caliber pistol, associated ammunition, four knives, two ninja throwing stars, marijuana, and drug paraphernalia. In the truck, officers found a matching .45 caliber magazine and 19 loose rounds of .45 caliber ammunition. Officers later traced the firearm to Heldt’s grandfather. Heldt admitted taking the firearm from his grandfather.
State authorities released Heldt from jail after he pled guilty to non-firearms related charges and received a 15-day jail sentence. Then, in May 2017, law enforcement officers responded to a burglary of the residence of Heldt’s friend in Hiawatha, Iowa. Heldt had stolen a laptop computer, a motor vehicle, a firearm, deck railing, and a screen door from the residence. Heldt also disassembled his friend’s water heater but left it in his friend’s garage. Officers later found Heldt in Cedar Rapids with four shotgun shells, the stolen laptop, a key to the stolen car, and brass knuckles. At the time of his second arrest, Heldt was wearing a fanny pack with 33 rounds of ammunition. Officers later recovered the stolen car, in which they found the friend’s stolen .22 caliber rifle and matching ammunition.
Heldt has an extensive criminal history dating back to at least 2003. In 2004, Heldt was convicted of felony third-degree burglary in Linn County and prohibited from possessing firearms and ammunition at that time. That same year, Heldt also was convicted of felony first-degree criminal mischief in Dallas County after he used a stolen handgun to fire multiple rounds of ammunition into a residence. In 2013 and 2015, Heldt was convicted of operating a motor vehicle while intoxicated in Linn County.
Heldt was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Heldt was sentenced to 28 months’ imprisonment. Heldt must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Heldt was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Federal Bureau of Investigation, the Cedar Rapids Police Department, and the Hiawatha Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-120.
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Business Owner Found Guilty of Committing Fraud Regarding Human Clinical Research TrialsRead the Press Release
Richland –William D. Hyslop, United States Attorney for the Eastern District of Washington, announced that Sami Anwar, 42, of Richland, WA, was found guilty late Friday of Conspiracy to Commit Wire Fraud, Conspiracy to Commit Mail Fraud, and 45 additional charged crimes including Wire Fraud, Mail Fraud, Obtaining Controlled Substances Through Fraud, and Furnishing False Information to the Drug Enforcement Administration (DEA).
According to the Superseding Indictment on which Sami Anwar was found guilty of all counts, and the evidence presented during the three-week long trial, between 2013 and 2018 Sami Anwar headed a conspiracy to have his companies fraudulently pose as legitimate human clinical research trial sites and provided mountains of false clinical research trial data regarding drug safety and drug efficacy to dozens of drug companies and, through them, the Food and Drug Administration (FDA). The false clinical research data that Sami Anwar injected into the public health system included safety data on dozens of different drugs and medicines designed to treat a wide variety of diseases and conditions including, but not limited to, heart disease, diabetes, asthma, pediatric illnesses, adolescent smoking, cirrhosis, scabies, depression, and opioid addiction to name just a few, according the evidence presented at trial. The evidence at trial indicated that Sami Anwar and his companies received over $5.6 million dollars from the fraud.
According to court documents and the evidence presented at trial, Sami Anwar, who is not a licensed medical doctor, would pose as a doctor and forge the signatures of the doctors he employed. In addition, over a dozen former employees of Sami Anwar testified that he directly instructed them to assist him in committing the fraud including falsifying medical records and data to admit dozens of ineligible research subjects; falsifying research data including electrocardiograms and vital signs, obtaining blood specimens from Sami Anwar’s employees or stealing them from unwitting medical patients of his medical center, disposing of study medications by shooting them down the drain and then falsely recording them as having been properly injected as required, dangerously hoarding opioids intended to be dispensed to study subjects, and fabricating required subject diary entries.
According to the evidence presented at trial and the Superseding Indictment, Sami Anwar not only directed the fraud but engaged in threats, retaliation, and intimidation in order to hide his crimes from drug companies, the FDA, which regulates human clinical trials in the United States, and law enforcement. At trial numerous former employees of Sami Anwar testified that Anwar filed false police reports, made false allegations to the Washington State Department of Health, the FDA, threatened them at their homes, at their places of work, slashed their tires, and stalked them in order to prevent them from cooperating with the authorities.
United States Attorney Hyslop stated, “Every day, Americans rely on the data from clinical research trials to keep us safe from deadly diseases and dangerous side effects. Injecting fraudulent and corrupt data into the system is an egregious breach of the trust and faith we all place in those who perform these vitally important trials.” Hyslop continued, “Based on the evidence presented at trial, and the jury’s unanimous verdict, Mr. Anwar profited from his blatant disregard for patient safety by running his fraudulent enterprise through fear and intimidation. “We will continue to work with our law enforcement partners to ensure that those who continue to abuse this trust and undermine our health care system are brought to justice.”
Two of Sami Anwar’s companies, Zain Research LLC and Mid Columbia Research LLC, were also convicted of participating in the conspiracy.
After the jury delivered their unanimous verdict Senior Judge Edward F. Shea set sentencing for March 11, 2020 at 10:00 a.m. in Richland, WA. Sami Anwar will remain in custody pending sentencing. The maximum term of incarceration for each count of fraud is 20 years in federal prison.
This case was prosecuted by Assistant U.S. Attorneys Dan Fruchter and Tyler Tornabene. The case was investigated by DEA Diversion Investigators Craig Tom and Kevin Tripp. Subject matter expertise was provided by the Food and Drug Administration.
Burlington Man Indicted on Child Pornography ChargesRead the Press Release
COVINGTON, Ky. - Jeremy Garey, 44, of Burlington, Kentucky, has been indicted on federal charges of Production and Distribution of Child Pornography.
The indictment alleges that, over the course of several months during 2017, Garey knowingly employed, used, persuaded, induced, enticed, and coerced a minor to engage in sexually explicit conduct, for the purpose of producing visual depictions. The indictment also alleges that Garey knowingly distributed child pornography. Garey appeared for his arraignment on November 15, 2019, in United States District Court.
The investigation preceding the indictment was conducted jointly by the Ft. Wright Police Department and Federal Bureau of Investigation (FBI). If anyone has additional information related to the case, they are encouraged to contact the FBI, at 859-341-3901.
Garey’s next appearance before the United States District Court is scheduled for January 10, 2020; his trial is currently scheduled for January 21, 2020. If convicted, Garey faces a maximum of 30 years in prison. However, any sentence following conviction would be imposed by the court after its consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
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