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Thursday 8 August 2019
U.S. Attorney’s Office Recognizes the Contributions of State and Local Law Enforcement Partners to the Mission of the U.S. Department of JusticeRead the Press Release
SACRAMENTO, Calif. — U.S. Attorney McGregor W. Scott is pleased to announce the recipients of the 2018 Eastern District of California Law Enforcement Awards. These awards are presented annually to law enforcement agencies and investigators in the District’s Sacramento and Fresno divisions to recognize outstanding collaboration between federal, state, and local law enforcement in addressing public safety issues in this region.
U.S. Attorney Scott stated: “Congratulations to all of our award recipients on being chosen and for their efforts to address violent crime and violent gangs. The residents of the Eastern District of California owe a debt of gratitude to these agencies and detectives who persist in intensive, long-term investigations until the desired result is achieved. It is a privilege for our office to work alongside them to keep our communities safe.”
The Outstanding Law Enforcement Agency Award is presented to a local or state law enforcement agency that has demonstrated outstanding professionalism, commitment to public safety partnerships, and strong support for the U.S. Attorney’s Office’s initiatives.
The California Department of Justice’s Special Operations Unit – Central California Team is the 2018 recipient of the Eastern District of California Law Enforcement Award for Outstanding Law Enforcement Agency in the Fresno Division. The Special Operations Unit received the award for its role in an investigation that dismantled MS-13 in Mendota. This violent gang had terrorized the small town resulting in at least 14 brutal murders. Due to the multi-agency enforcement operation, more than 40 individuals were arrested on state and federal charges. The operation reflected the incredible teamwork between federal, state, and local law enforcement partners, and our shared commitment to keeping our communities safe from violent criminal gangs like MS-13.
The recipient of the Outstanding Law Enforcement Agency award for the Sacramento Division is the Solano County District Attorney’s Office for its support for Project Safe Neighborhoods. The DA’s office facilitated federal adoption of cases, including a March 2018 attempted homicide in which two co-conspirators pipe-bombed a residential home with a family of five inside; a series of five convenience store robberies, during which the lead defendant brandished a firearm and threatened a clerk at gunpoint; and five additional felon-in-possession cases that merited federal prosecution.
The Outstanding Investigator Award is presented to a local or state law enforcement officer who has demonstrated outstanding professionalism; timely, thorough, quality investigations; exceptional knowledge and investigative skill; energy and commitment to public safety; and commitment to law enforcement partnerships and teamwork.
The Outstanding Investigator award for the Fresno Division was given to Fresno Police Department Detective Cory Hastings for his significant contributions to several multi‑defendant gang cases including the MS-13 takedown. Hastings is known for his positive attitude, hard work, volunteerism, and ability to get along well with people within and outside his agency.
Two awards were given for the Sacramento Division’s Outstanding Investigator: Vacaville Police Department Detective Michael A. Miller and Vallejo Police Department Detective Jason R. Thompson, who were lead members of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation that targeted a Sureno street gang in Vallejo. The investigation involved purchases or seizure of over two pounds of meth and 25 firearms. Miller coordinated evidence collection across three counties in the case described above, including the robbery of five convenience stores. Thompson is working on a long-term gang investigation for gun and drug trafficking. Miller and Thompson have also sought out and referred multiple significant gun and drug cases initiated with state charges that we have adopted for federal prosecution. The success of Project Safe Neighborhoods in Solano County has been largely dependent on the investigative work of these two detectives on the task force.
Two Men Sentenced for Immigration CrimesRead the Press Release
CHARLESTON, W.Va. – Two men were sentenced by United States District Judge Irene C. Berger for immigration crimes today, announced United States Attorney Mike Stuart.
“Six prior removals between these two men,” said United States Attorney Mike Stuart. “Line skippers. They need to get in line and obtain permission to legally enter our country.”
Juan Carlos Reyes-Molina, 23, a Honduran man, was sentenced for “time served” Reyes-Molina previously entered a guilty plea to the felony offense of Reentry of a Removed Alien on May 29, 2019 and has been incarcerated since March 1, 2019. Reyes-Molina was remanded to ICE agents for administrative removal proceedings. The West Virginia State Police and Immigrations and Customs Enforcement (ICE) conducted the investigation.
On March 9, 2019, a West Virginia State Police Trooper saw a car that was stopped at Mile Marker 52 on the West Virginia Turnpike outside of Beckley, Raleigh County, West Virginia. Three men were standing outside a car with its emergency blinkers on. When the Trooper pulled in, the men ran to the car and began to drive away. The Trooper asked the driver what was happening and for a driver’s license. The driver could not communicate with the Trooper due to a language barrier and did not have a driver’s license. The Trooper contacted a translator service provided by ICE to assist. The driver and two other individuals spoke with ICE agents telephonically and all three were found to be in the United States illegally. All three men were taken into custody and fingerprinted. Reyes, one of the three men, was found to be a prior reentry case. Specifically, his prints matched four prior removals from Arizona and California in 2017 and 2018. Reyes admitted to ICE agents that he was in the United States illegally and had not obtained permission to legally enter the United States. He had not otherwise sought legal status or citizenship. Reyes further admitted to ICE agents that he was a Honduran citizen.
Baltazer Victorino Tulul-Ajqui, a Guatemalan national man, was sentenced to “time served.” Tulul-Ajqui, 30, was immediately remanded to ICE custody for administrative hearings concerning removal. Tulul-Ajqui previously pled guilty to the felony offense of Reentry of a Removed Alien on June 5, 2019 and has been in federal custody since May 1, 2019. The U.S. Immigration and Customs Enforcement (ICE) conducted the investigation.
On May 1, 2019, Tulul-Ajqui was found in Charleston, Kanawha County, West Virginia by ICE agents who received a tip that he was working illegally in the United States. ICE agents located Tulul-Ajqui’s residence and arrested him when he confirmed that he was in the United States illegally. Tulul-Ajqui had no identification documents permitting him legal status in the United States.
Fingerprinting matched Tulul-Ajqui to two prior removals from the United States in 2010 and 2015. In both cases, Tulul-Ajqui was found by immigration judges to be in the United States illegally and he was deported to Guatemala. He had not obtained permission to legally enter the United States and had not sought legal status or citizenship. Tulul-Ajqui further admitted to ICE agents that he was a Guatemalan citizen.
Assistant United States Attorney Erik S. Goes is responsible for the prosecutions.
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Two Eastside Hollygrove Residents Sentenced in Conspiracy to Sell Heroin and Fentanyl, Discharge FirearmsRead the Press Release
NEW ORLEANS – The U.S. Attorney’s Office announced that BRANDON HALL, a/k/a “B-Hilly,” age 29, and DWAYNE LABRANCH, a/k/a “Mondo,” a/k/a “Black,” age 37, both of New Orleans, were sentenced on Wednesday, August 7, 2018 after pleading guilty to conspiring to distribute 100 grams or more of heroin and a quantity of fentanyl, along with firearm charges.
United States District Judge Sarah S. Vance sentenced HALL to 196 months of imprisonment followed by four years of supervised release. LABRANCH was sentenced to 70 months of imprisonment followed by four years of supervised release.
According to court records, during the timeframe of the charged drug conspiracy, HALL and LABRANCH conspired with codefendants Jonathan LAWRENCE, Aloysius KORIEOCHA, Brian MAXSON, Donald MARCELIN, Lance STOVALL, Vonzo MAGEE, and others, to distribute heroin and fentanyl throughout the New Orleans area. These individuals were members of a drug-trafficking organization that operated primarily in the Eastside Hollygrove neighborhood of New Orleans. Collectively, the group referred to their neighborhood as “The Zoo,” a name derived from a popular rap song and video filmed in the neighborhood. Each of the eight defendants has been linked to drug activity in Eastside Hollygrove through law enforcement controlled purchases, Title III wire and electronic interceptions, witness statements, drug seizures, and other evidence. Each of the eight defendants in this case has pleaded guilty. Thus far, MARCELIN, KORIEOCHA, HALL, and LABRANCH have been sentenced.
The FBI New Orleans Gang Task Force (NOGTF), which led this investigation and was assisted by the Drug Enforcement Administration, New Orleans Police Department, St. Tammany Parish Sheriff’s Office, Jefferson Parish Sheriff’s Office, and the Orleans Parish District Attorney’s Office. Assistant United States Attorneys Brandon S. Long, David Haller, and Edward Rivera are in charge of the prosecution.
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Tulsa Man Who Fled from Smuggling Charge Pleads GuiltyRead the Press Release
A Tulsa man pleaded guilty Wednesday to smuggling ecstasy into the United States from a German supplier in December 2018, announced U.S. Attorney Trent Shores.
Jeremy Daniel Singer, 36, stated in a signed plea agreement that he placed an order for 3, 4-methylenedioxymethamphetamine, commonly known as “MDMA” or ecstasy, through an encrypted site on the “dark web” and had it shipped to his Tulsa home under a pseudonym. Singer stated that he planned to sell the ecstasy for profit. Customs and Border Protection officials intercepted the package containing the pills when it entered the United States. Undercover agents with Homeland Security Investigations, the Oklahoma Bureau of Narcotics, and the Tulsa County Sheriff’s Office later delivered the package to Singer’s home in Tulsa and arrested Singer when he signed for the package.
While on bond awaiting a hearing on state drug charges relating to the ecstasy shipment, Singer agreed to appear in federal court on March 12 on federal drug charges and the smuggling charge. Instead of appearing in court, Singer fled the state. Authorities searched for Singer for nearly a month, when, on April 9, authorities in Johnson County Wyoming attempted to stop Singer’s vehicle. Singer led them on an off-road chase before abandoning his vehicle and disappearing into nearby fields. He was found the next day and attempted to elude authorities on a bulldozer he had stolen, before he was finally arrested.
“The ‘dark web’ is a one-stop shop for goods and services not found in legitimate streams of commerce. Singer used the ‘dark web’ to illegally purchase and smuggle ecstasy into the United States,” said U.S. Attorney Shores. “As Mr. Singer now knows, our collaborative law enforcement network in northeastern Oklahoma is a highly effective partnership. We will enforce our nation’s drug laws to protect Oklahomans from Darknet purchases.”
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Oklahoma Bureau of Narcotics, Tulsa County Sheriff’s Office, U.S. Marshals Service, U.S. Postal Inspection Service and U.S. Customs and Border Protection conducted the investigation. Assistant U.S. Attorney Thomas E. Duncombe is prosecuting the case.
Tulsa Man Charged with Two Bank RobberiesRead the Press Release
A federal grand jury indicted a man this week for two bank robberies during which he claimed he had a bomb and firearms, announced Trent Shores.
Thomas Lawrence Dean, 50, of Tulsa, is charged with two counts of bank robbery using a dangerous weapon, conveying false information on hoaxes, and being a felon in possession of a FIE Corp. TITAN TIGER BLU .38 Special Caliber Revolver and associated ammunition.
Dean allegedly robbed an International Bank of Commerce (IBC) on July 1, 2019, and an Arvest Bank on July 10, 2019. In the IBC robbery, he is alleged to have approached a teller and handed her a note demanding money. In the note, Dean indicated that he was in possession of a bomb and firearm. Later, at Arvest Bank, Dean also demanded money, indicating in a note that he had a firearm.
“Ensuring public safety is paramount for state and federal law enforcement. Robbing banks by threatening to use guns and bombs is going to draw our combined attention,” said U.S. Attorney Shores. “Perpetrators of violence and threatened violence will find themselves front and center in a court of law. The allegations in this case will be vigorously pursued.”
The Tulsa Police Department and FBI are the investigative agencies. Assistant U.S. Attorney Robert T. Raley is prosecuting the case. AUSA Raley is the National Security Anti-Terrorism (ATAC) Prosecutor for the U.S. Attorney’s Office in the Northern District of Oklahoma.
A return of an indictment is a method of informing a defendant of alleged federal crimes, which the government would need to prove beyond a reasonable doubt. Defendants are presumed innocent until proven guilty in a court of law.
Toledo man pleads guilty to his role in conspiracy to use explosives to launch mass-casualty attackRead the Press Release
A Toledo man pleaded guilty to his role in a conspiracy to use explosives to kill and injure others.
Vincent Armstrong, 23, pleaded guilty to one count of conspiracy to transport or receive an explosive with intent to kill, injure, or intimidate any individual, and maliciously damage or destroy by fire or explosive.
“This defendant has admitted to helping plot and plan a mass-casualty attack in Toledo,” U.S. Attorney Justin Herdman said. “His guilty plea today is an important step as we seek justice in this case, and the facts to which he admitted today reflect the serious nature of the charges against him and his co-conspirator.”
“Vincent Armstrong has accepted responsibility for the steps he took to put his unfathomable desire of committing mass murder into action,” FBI Special Agent in Charge Eric B. Smith said. “Law enforcement urges the public to report suspicious, concerning behavior - see something, say something.”
Toledo Police Chief George Kral said: “This week should show all Ohioans the threats that are ever present in our communities. With this plea, a dangerous potential mass murderer will be off our streets. Our citizens have to be a part of the solution. I strongly encourage people to report suspicious behavior to law enforcement. It quite honestly could be a matter of life or death.”
According to the plea agreement and other documents filed in the case:
Armstrong, from April 2018 through December 10, 2018, conspired with Elizabeth Lecron to use an explosive device to kill others and destroy property. Lecron’s case is pending and she has pleaded not guilty.
The two met in February 2018, started dating a few months later and moved in together at residence in Toledo. Shortly after meeting, Lecron expressed her interest in mass murderers in introduced Armstrong to the “True Crime Community” or TCC. Lecron allegedly engaged with members of the community via Tumblr, under the username “ligaturemarkings” and “charlestonchurchmiracle.” Armstrong joined the Tumblr TCC community with the username “societysheretic.”
Lecron routinely posted items about the Columbine High School shooters and the Charleston church shooter. Armstrong and Lecron privately discussed committing their own mass murder in the Toledo area. They referred to the attack as “D-Day” and discussed using guns and explosives. Armstrong owned an AK-47 while Lecron purchased a shotgun with Armstrong. Both guns were to be used in the attack and Lecron and Armstrong went to the shooting range to practice their firearm skills.
Armstrong printed instructions on how to make a pipe bomb from a website Lecron showed him. The two agreed to build a pipe bomb. Armstong purchased end caps from a local hardware store and they discussed the additional parts they needed to buy to build the pipe bomb.
The pair agreed what to wear during the attacks, looking to emulate the Columbine shooters. Armstrong purchased a trench coat and t-shirt that read “Society Failed Us.” Lecron purchased combat boots -- that she felt would not slip on all the blood during the attack – and a t-shirt that read “False Prophet.”
They discussed numerous possible targets for the attack and settled on a bar in downtown Toledo.
Armstrong wrote about “D-Day” in his journal. In a journal entry dated June 8, 2018, he wrote: “I have a vision. A vision to kill. To hunt the unwilling. These peasants to society. The hatred of the human race is so bewildering. It feels so good to know I will end it all. Very soon. I am buying a knife this weekend to slay my prey. To shake up the world…I have also bought caps from the local hardware store for bombs – pipe bombs to be exact. Soon we will bring destruction on society.”
Armstrong and Lecron flew to Denver in August 2018 to visit sights related to the shooting at Columbine High School. Lecron posted that their next trip would be to Charleston to visit “the church.” They also developed a cover story and agreed to say their plan to commit mass murder was merely “role playing.”
Law enforcement agents executed search warrants on Armstrong and Lecron’s house and vehicles on December 10, 2018. The trunk of Armstrong’s vehicle contained a duffel bag with a tactical vest with two loaded magazines for an AK-47, two loaded magazines for a pistol, a white t-shirt that stated “Society Failed Us,” a black trench coat, a gas mask and printed instructions on how to construct various bombs. In the house, law enforcement found an AK-47, two shotguns, two handguns and ammunition.
Upon questioning, Armstrong stated all their planning was “role playing” but later admitted they genuinely planned on committing the attack.
The Federal Bureau of Investigation’s Joint Terrorism Task Force, which is comprised of members of the FBI, Homeland Security Investigations, U.S. Customs and Border Protection, Ohio State Highway Patrol and Toledo Police Department, investigated the case. It is being prosecuted by Assistant U.S. Attorneys Michael Freeman and Tracey Tangeman.
Three indicted for illegal drug and gun sales in Riverdale strip mallRead the Press Release
ATLANTA - Kyle C. Sims, Herman A. Fields, and Peter Armour have been indicted for selling illegal guns and drugs out of a store in Riverdale, Georgia. Sims and Armour were charged with possessing a machinegun, which they sold for $1,250 in cash. Sims and Fields were charged with conspiring to distribute marijuana, cocaine, heroin, methamphetamine and Xanax. Sims was also charged with two counts of possessing a firearm after being convicted of a felony.
“Illegal possession and sales of firearms goes hand in hand with drug trafficking and violence,” said U.S. Attorney Byung J. “BJay” Pak. “In this case, law enforcement quickly put an end to the defendants’ illicit business.”
“The defendants in this case showed no regard for the safety of the Riverdale community,” said ATF Special Agent in Charge Arthur Peralta. “The illegal sale of firearms endangers everyone and we will continue to identify, investigate and arrest those individuals who choose to go down this path.”
“The City of South Fulton is pleased to get these violent criminals off our city streets. We would like thank the ATF and US Attorney’s Office for their partnership in helping us to achieve our ultimate goal of crime reduction,” said Keith Meadows, South Fulton Chief of Police.
According to U.S. Attorney Pak, the indictment, and other information presented in court: Sims and Fields allegedly worked together to sell a variety of guns and drugs out of a T-shirt printing shop. Through undercover operations in the spring and summer of 2019, the ATF bought marijuana, cocaine, heroin, methamphetamine, and Xanax from Sims and Fields.
Using connections with various individuals, Sims also offered his customers a wide range of firearms for cash, with no questions asked, no ID check, and without the paperwork required for a legal gun purchase. Through the same undercover operations, the ATF allegedly purchased 9mm pistols and a machinegun at the storefront.
Both Kyle C. Sims, a/k/a K-Rock, 33, of Fayetteville, Georgia, and Herman A. Fields, a/k/a Tip, 38, of Riverdale, Georgia, have been previously convicted of felony drug offenses. Both Sims and Fields were charged with conspiring to distribute marijuana, cocaine, heroin, methamphetamine and alprazolam (Xanax).
Sims and Peter Armour, a/k/a Petey, 24, of Riverdale, Georgia, were charged with possessing a machinegun. The machinegun was a Norinco, MAK-90 Sporter (7.62 x 39mm caliber), with the shoulder stock removed. Allegedly, Armour, with assistance from Sims, sold the machinegun and a high capacity magazine on May 16, 2019 for $1,250 in cash. Under federal law, the term “machinegun” includes any weapon which automatically shoots more than one shot, without manual reloading, by a single function of the trigger.
Sims was additionally charged with two counts of being a felon in possession of a firearm. Those charges relate to 9mm pistols that Sims allegedly sold in April and May, 2019. Sims also has two prior felony convictions for possessing a firearm after being convicted of a felony.
Sims is a registered sex offender, and was on probation at the time of the criminal conduct alleged in the indictment. Sims was arrested on May 31, 2019. On August 6, 2019, a federal magistrate judge entered a detention order holding Sims pending further proceedings in this case.
Herman Antonio Fields, a/k/a “Tip” is currently a fugitive. Individuals with information about the whereabouts of Fields should call the ATF or the U.S. Marshal Service with information. Tips may be submitted anonymously to the U.S. Marshal Service via mobile phone through the USMS Tips app, or on the world wide web at https://www.p3tips.com/USMS.aspx.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the South Fulton Police Department.
Assistant U.S. Attorney Alana R. Black is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Three New Jersey Residents Charged with Sex Trafficking ConspiracyRead the Press Release
Jean Noriega, 48, Enna Gonzalez, 53, and John Oyola, 32, of Paterson, New Jersey, were charged in a criminal complaint with one count of conspiracy to commit sex trafficking. The charges were announced by Assistant Attorney General Eric Dreiband for the Justice Department’s Civil Rights Division and U.S. Attorney Craig Carpenito for the District of New Jersey.
According to the allegations in the complaint, the defendants conspired to coerce multiple women to engage in commercial sex in New Jersey and New York. Specially, Noriega used violence, threats of violence, threats of drug withdrawal, and other means, to compel the victims to engage in commercial sex for his profit, including after his incarceration in New York in 2017. Oyola and Gonzalez helped Noriega control the victims through various means, collect the proceeds, and otherwise carry out his sex trafficking activities while Noriega was incarcerated.
Noriega, who is incarcerated in New York on a previous conviction, made his initial appearance today before U.S. Magistrate Judge Thérèse Wiley Dancks in Syracuse federal court in the Northern District of New York. Oyola made his initial appearance Aug. 7, 2019, before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Gonzalez appeared before Judge Mannion on Aug. 5.
The charges in the complaint are merely allegations, and the defendants are presumed to be innocent unless and until convicted. If convicted of conspiracy to commit sex trafficking, the defendants face a maximum sentence of life imprisonment, a $250,000 fine, and mandatory restitution.
This case is being investigated by the FBI and the Passaic County Prosecutor’s Office’s Human Trafficking Unit. It is being prosecuted by Assistant U.S. Attorney Sophie Reiter for the District of New Jersey and Trial Attorney Kate Hill for the Civil Rights Division’s Human Trafficking Prosecution Unit.
Three New Jersey Residents Charged with Sex Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – Three New Jersey residents have been charged by complaint for their roles in a sex trafficking conspiracy, U.S. Attorney Craig Carpenito for the District of New Jersey and Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division announced today.
Jean Noriega, 48, Enna Gonzalez, 53, and John Oyola, 32, all of Paterson, New Jersey, were each charged in a criminal complaint with one count of conspiracy to commit sex trafficking.
According to documents filed in this case and statements made in court:
The three defendants conspired to coerce multiple women to engage in commercial sex in New Jersey and New York. Noriega used violence, threats of violence, threats of drug withdrawal, and other means, to compel the victims to engage in commercial sex for his profit, including after his incarceration in New York in 2017. Oyola and Gonzalez helped Noriega control the victims through various means, collect the proceeds, and otherwise carry out his sex trafficking activities while Noriega was incarcerated.
Noriega, who is incarcerated in New York on a previous conviction, made his initial appearance today before U.S. Magistrate Judge Thérèse Wiley Dancks in Syracuse federal court in the Northern District of New York. Oyola made his initial appearance Aug. 7, 2019, before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Gonzalez appeared before Judge Mannion on Aug. 5, 2019.
The count of conspiracy to commit sex trafficking carries a maximum penalty of life in prison, a $250,000 fine, and mandatory restitution.
U.S. Attorney Carpenito credited special agents of the FBI’s Newark Child Exploitation Human Trafficking Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, the Passaic County Prosecutor’s Office’s Human Trafficking Unit, under the direction of Prosecutor Camelia M. Valdes, and the New York State Department of Corrections and Community Supervision Office of Special Investigations, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sophie Reiter of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Kate Hill for the Civil Rights Division’s Human Trafficking Prosecution Unit.
The charge and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until convicted.
Statement of United States Attorney Mike Stuart Regarding Oak Hill Hometown PharmacyRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart issued the following statement regarding Oak Hill Hometown Pharmacy today:
Prescribing controlled drugs is a privilege and not a right. Every pharmacy that fills prescriptions of scheduled narcotics has a corresponding responsibility to assure that those prescriptions do not include unresolvable red flags and are for a legitimate medical purpose. It is the proper role of law enforcement and the Drug Enforcement Administration to ensure public safety with respect to the dispensing of controlled substances by pharmacists and providers. We take this responsibility seriously.
Today, an Order to Show Cause and Immediate Suspension of Registration was issued to Oak Hill Hometown Pharmacy located in Oak Hill, West Virginia. Pursuant to Sections 303 and 304 of the Controlled Substances Act, Title 21, United States Code, Sections 823 and 824, Oak Hill Hometown Pharmacy has had its Drug Enforcement Administration Certificate of Registration suspended because it constitutes an “imminent danger to the public health or safety.” Oak Hill Hometown Pharmacy is registered with the DEA to handle substances in Schedules II through V at its 819 Main Street East, Oak Hill, WV location. Martin Njoku is the owner and pharmacist in charge. The suspension was based on improper dispensing from at least December 2016 to March 2019, filling approximately 2,000 prescriptions for a widely-abused Schedule III narcotic, Subutex, in the face of obvious red flags of drug abuse and diversion. Over half the prescriptions came from an out-of-state clinic located almost 200 miles away from Oak Hill. The Pharmacy’s customers drove long distances – in some cases more than 600 miles – to obtain and fill their prescriptions and many of them paid in cash. The prescriptions were for Subutex; The prescriptions were issued by out-of-state physicians; Approximately 96% of the prescriptions were paid for in cash; Multiple patients frequently presented prescriptions that had been written on the same day; and the patients travelled long distances for even partial refills. The Pharmacy continued to fill prescriptions for Subutex in the face of obvious red flags of abuse and diversion through at least March 2019. The DEA executed an administrative inspection warrant on November 28, 2018 and, following the inspection, the Pharmacy curtailed filling out-of-state Subutex prescriptions. However, since that time the Pharmacy’s pharmacists have resumed filling prescriptions with the same unresolvable red flags. The suspension of Oak Hill Hometown Pharmacy’s Registration will continue until a final determination is reached. This is a suspension and net yet a revocation, but none the less, during the period of the suspension, Oak Hill Hometown Pharmacy may not fill any prescriptions for Schedule II through Schedule V narcotics.
Oak Hill Hometown Pharmacy will have an opportunity to show cause before the DEA at a location to be determined on October 15, 2019, as to why its Registration should not be revoked. Within 30 days after the date the Pharmacy received its Order to Show Cause and Immediate Suspension of Registration, the Pharmacy may file a written request for a hearing or file a waiver of hearing with a written statement regarding its perspective on the matters of fact and law involved in the Order. If the pharmacy fails to request a hearing or fails to file a waiver, the Pharmacy shall be deemed to have waived its right to a hearing and a final order may be issued.
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St. Louis Man Sentenced for Two Armed CarjackingsRead the Press Release
St. Louis, MO –Malachiah Williams, 23, of St. Louis, MO, was sentenced to 180 months in prison for carjacking and brandishing a firearm. Williams appeared today before U.S. District Judge Richard Webber.
According to court documents, on July 25, 2018, Williams, armed with a semi-automatic firearm, approached a man in his vehicle parked in front of a residence in the 5500 block of Cote Brilliante. Williams tapped on the driver’s side door with the firearm and ordered the victim out of the vehicle. After the victim exited, Williams entered the vehicle and drove away.
On July 31, 2018, a mother and her four-year-old daughter were sitting inside a vehicle near the 5400 block of Dr. Martin Luther King Drive. Williams approached their vehicle and stuck his head into the passenger side window. He pointed a semi-automatic firearm at the mother and child while ordering them out of the vehicle. Williams then entered the vehicle and drove away.
Williams pled in May 2019, to two counts of carjacking and two counts of brandishing a firearm.
The St. Louis Metropolitan Police Department investigated this case. Assistant United States Attorney Tom Mehan prosecuted the case.
South Charleston Man Pleads Guilty to Drug ChargeRead the Press Release
CHARLESTON, W.Va. – A man from South Charleston, West Virginia, pled guilty to a federal drug trafficking offense today, announced United States Attorney Mike Stuart. Willie James Coleman, 55, pled guilty to possession with intent to distribute cocaine base, also known as “crack,” before United States District Judge Irene C. Berger. Stuart commended the investigation conducted by the Jackson County Sheriff’s Department, the Putnam County Sheriff’s Department, and the Drug Enforcement Administration.
“As I’ve said, crack is back,” said United States Attorney Mike Stuart. “Fentanyl dealers, heroin dealers, meth dealers, crack dealers. We prosecute all drug dealers. We’re tough on all drug dealers.”
Police investigators used a confidential informant to accomplish three undercover purchases of cocaine base from Coleman on December 17, 2018; January 9, 2019; and January 18, 2019. On January 31, 2019, Coleman was driving south on Interstate 77 in Jackson County, West Virginia, returning to his house in South Charleston after purchasing approximately four ounces of cocaine from his supplier in Cleveland, Ohio. Investigators stopped Coleman’s vehicle after he almost struck another vehicle on the interstate. Coleman’s passenger gave up the cocaine to investigators.
Investigators then executed a search warrant at Coleman’s house and recovered a stash of several grams of cocaine base in a safe and items used for manufacturing cocaine base out of cocaine powder. Investigators also found a gun under a pillow on Coleman’s bed.
Coleman faces up to 30 years in federal prison when he is sentenced on November 20, 2019. Assistant United States Attorney Drew O. Inman is handling the prosecution.
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###South Carolina Man Charged with Filing False Tax ReturnRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Christopher Kauffman, 37, of Summerville, South Carolina was charged in a criminal Information with filing a false tax return.
According to the Information, Kauffman operated an accounting and tax preparation service in South Philadelphia in 2011 and 2012. In 2012, Kauffman deposited fees from his clients into his personal bank account. Some of the receipts included money Kauffman was supposed to use to pay the tax obligations of some of his clients. Instead, Kauffman used the money to pay for his personal expenses. He subsequently failed to report $160,347 in business receipts on his personal income tax return for the year 2012.
“Our tax system requires tax payers to truthfully report their income. Professional accountants and tax preparers know that better than anyone, and yet the defendant here breached that duty,” said U.S. Attorney McSwain. “He compounded his crime by using his clients’ money as his own. My Office will continue to aggressively pursue business people who operate in such an illegal manner.”
If convicted, the defendant faces a maximum possible sentence of three years imprisonment and a $250,000 fine.
The case was investigated by the Internal Revenue Service and the Treasury Inspector General’s Office for Tax Administration, and is being prosecuted by Assistant United States Attorney Richard P. Barrett.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Sioux Falls Man Sentenced for Preparation of False and Fraudulent Tax ReturnsRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man convicted of Preparation of False and Fraudulent Tax Returns was sentenced on July 26, 2019, by U.S. District Judge Karen E. Schreier.
Isaiah H. Rangel, age 50, was sentenced to 24 months in federal prison, followed by 1 year of supervised release, restitution to the U.S. Department of Treasury in the amount of $46,648, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Rangel was indicted by a federal grand jury on April 4, 2018. He pled guilty on April 3, 2019.
The conviction stemmed from incidents between January 29, 2015, and April 15, 2015, when Rangel, who owned 1st Global Tax in Sioux Falls and in Huron, prepared false tax returns for the tax year 2014 by preparing false Schedules C and Forms 1099, which resulted in fraudulent refunds for clients.
This case was investigated by the Internal Revenue Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Rangel was ordered to report to the custody of the U.S. Marshals Service by August 23, 2019.
Sioux City Man Sentenced to Federal Prison for Illegal Possession of a FirearmRead the Press Release
A man from Sioux City, IA was sentenced August 7, 2019 to more than 4 years in federal prison.
Victor Chavarria, age 21, from Sioux City, IA received the prison term after pleading guilty to possession of a firearm by a prohibited person.
Evidence presented at his detention, change of plea, and sentencing hearings revealed Chavarria was an unlawful user and distributor of marijuana who knowing possessed firearms and ammunition in furtherance of his drug trafficking. In fact, when this activity was discovered, one of the handguns had been stored under a mattress upon which a 3-year old child was sleeping. Evidence also revealed Chavarria has a history of domestic violence. On one occasion, he and another male handcuffed a victim, causing her pain and physical injury, held her against her will and used an electric trimmer to shave her head.
Chavarria was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand to 50 months’ imprisonment. Chavarria must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
The case was investigated by the Sioux City Police Department and prosecuted by Assistant United States Attorney Forde Fairchild
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-4090.
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Salvadoran national indicted after he was stopped on the Ohio Turnpike transporting people who were in the country illegallyRead the Press Release
A citizen of El Salvador was indicted in federal court after he was stopped on the Ohio Turnpike transporting people who were in the country illegally.
Melvin Enriquez Rios, 37, was indicted on seven counts of transportation of aliens not lawfully in the United States.
Rios was in a Toyota Sequoia with a Texas license plate that was stopped by an Ohio State Patrol trooper on July 15 in Wood County.
None of the occupants of the van had any personal items with them and their cell phones were stored together inside a bag in the front glove compartment. The van’s windows were tinted. Only Rios spoke and only he had access to the cell phones, according to court documents.
Rios said upon further questioning that he was being paid to drive the people from Houston to Chicago and then a location in Maryland and would be paid for transporting them upon his return to Houston, according to court documents.
“People who enter the U.S. illegally and end up working in places like Ohio are trafficked through the same criminal networks that move illegal narcotics, firearms and cash,” said U.S. Attorney Justin Herdman. “We will work with our law enforcement partners to prosecute anyone who seeks to profit off of other people’s desperation.”
“This case is the direct result of numerous law enforcement agencies working together to stop and arrest those who deliberately try to exploit our immigration laws,” said U.S. Customs and Border Protection Acting Chief Patrol Agent Travis Darling. “I hope this indictment today serves as a stern warning to anyone who chooses to participate in this type of activity, which is not only illegal but sometimes involve crimes being committed against those being smuggled. ”
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case was investigated by U.S. Customs and Border Protection and the Ohio State Highway Patrol. It is being prosecuted by Assistant U.S. Attorney Robert Melching.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Saint Pauls Man Sentenced to Eight Years for Drug DistributionRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that today in federal court, United States District Judge James C. Dever III sentenced STANLEY JAMAR RAGIN, 46, of Saint Pauls, North Carolina, to 96 months imprisonment, followed by 4 years of supervised release.
RAGIN was named in a three-count Superseding Indictment filed on May 2, 2018, charging him with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin (Count One) and two counts of distribution of a quantity of heroin (Counts Two and Three). On January 7, 2019, RAGIN pled guilty to conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and distribution of a quantity of heroin (Counts One and Two).
In 2016, agents began investigating RAGIN based on information that he was a large-scale heroin supplier in the Fayetteville area. On December 19, 2016, agents conducted a controlled purchase of 27.51 grams of heroin from RAGIN for $1,700. On December 22, 2016, agents conducted a controlled purchase of 26.89 grams of heroin from RAGIN for $1,870.
Agents also interviewed witnesses who stated that RAGIN had been actively selling heroin from at least 2014. One witness had repeatedly received large amounts of heroin from RAGIN, which the witness then further distributed to others. In total, RAGIN was held accountable for between 400 and 700 grams of heroin.
Additionally, a witness stated that while he and the Defendant were detained in this case, RAGIN made threatening statements to the witness.
This prosecution is part of an extensive investigation by the United States Attorney’s Office’s Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Investigation of this case was conducted by the Fayetteville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorney Scott A. Lemmon represented the government.
Romanian Man Pleads Guilty in Capital Region ATM Card Skimming ConspiracyRead the Press Release
ALBANY, NEW YORK - Gheorghe Cirstea, 32, a Romanian national, pled guilty yesterday to an indictment charging him with conspiring to steal bank customers’ account information and personal identification numbers (PINs) by using skimming devices that were secretly installed on bank ATMs in the Capital Region.
The announcement was made by U.S. Attorney Grant C. Jaquith and James Hendricks, Special Agent-in-Charge of the Albany Division of the Federal Bureau of Investigation.
The indictment was the basis for an international warrant for Cirstea’s arrest. On March 30, 2018, Cirstea was arrested on the warrant while travelling through Bogota, Colombia. On October 19, 2018, Cirstea was formally extradited by Colombian authorities to the Northern District of New York.
As part of his guilty plea, Cirstea admitted that from August 30, 2015 through October 24, 2015, he and co-conspirator Ilie Sitariu used skimming devices and pinhole cameras to secretly capture the account numbers and PINs of customers who used ATMs at First Niagara Bank, Trustco Bank, and Berkshire Bank in the capitol region of New York, and in Great Barrington, Massachusetts. The skimming devices captured the information encoded on the magnetic strips of customers’ bank debit cards, while the pinhole cameras allowed the defendants to record the PINs used by the customers. The conspirators then used the information to steal approximately $127,000 from the customers’ accounts by making withdrawals at ATMs in New York City.
Sitariu, who was arrested on October 24, 2015, was sentenced to 48 months in prison by Senior United States District Judge Lawrence E. Kahn on May 10, 2017.
Cirstea faces a maximum sentence of 5 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years when he is sentenced on December 12, 2019. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the FBI, U.S. Secret Service, and the New York State Police, and is being prosecuted by Assistant U.S. Attorney Emmet O’Hanlon.
Rapid City Man Sentenced for Stealing Guns in Rooster BurglaryRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of Theft of a Firearm was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Matthew Keifer, age 31, was sentenced on August 5, 2019, to 5 years and 11 months in federal prison, followed by 3 years of supervised release, and was ordered to pay a $100 special assessment to the Federal Crime Victims Fund and $11,199.17 in restitution.
The charge related to Keifer breaking into The Rooster sporting goods store in Rapid City and stealing 24 firearms in August 2018. The firearms were taken to a co-defendant’s residence, and a Dremel tool was utilized to remove serial numbers from several of the firearms. Some of the firearms were later traded for methamphetamine. During the investigation, 22 of the 24 stolen guns were recovered by law enforcement.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent crime.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the South Dakota Department of Criminal Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Ben Patterson prosecuted the case.
Keifer was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced for Possession of a Firearm by a Prohibited PersonRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Michael S. Croyle, age 21, was sentenced on August 2, 2019, to 2 years in federal prison, followed by 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Croyle was indicted by a federal grand jury in October 2018. The conviction stems from Croyle being in possession of a handgun before jumping from a moving vehicle, following a police pursuit at Rapid City on August 8, 2018. Croyle is prohibited from possessing firearms based on a previous felony conviction for Possession of a Controlled Substance in 2017.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Croyle was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Pleads Not Guilty to Sexual Abuse of JuvenilesRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Assault and two counts of Abusive Sexual Contact.
Ira Little Bear, age 29, appeared before U.S. Magistrate Judge Daneta Wollmann and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is up to life in prison, lifetime supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Little Bear engaging in and attempting to engage in sexual contact and acts with juvenile females at Wounded Knee between 2015 and 2017.
The charges are merely accusations and Little Bear is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Cassandra DeCoste is prosecuting the case.
Little Bear was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for October 8, 2019.
Raleigh Man Sentenced to More Than 32 Years for Child Exploitation OffensesRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that today, in federal court, United States District Judge James C. Dever III sentenced PEDRO JAIME ENSENAT, 44, of Raleigh, North Carolina to 390 months’ imprisonment.
ENSENAT was named in an Indictment filed on August 16, 2017, and pleaded guilty on April 2, 2018, to production of child pornography and possession of child pornography.
On November 5, 2014, while executing a search warrant at ENSENAT’s residence, Raleigh Police Department officers and Federal Bureau of Investigation agents discovered images of child pornography involving a ten-year-old victim. Later analysis confirmed the identity of the victim and discovered other images of child pornography involving the victim and other children. The victim later disclosed that ENSENAT was sexually abusing her.
Investigation of this case was conducted by the Federal Bureau of Investigation and the Raleigh Police Department. Assistant United States Attorney Erin Blondel handled the prosecution of this case for the government.
Puerto Rico Man Indicted for Conspiring to Distribute CocaineRead the Press Release
BOSTON – A Puerto Rico man was charged today by a federal grand jury in Worcester with cocaine conspiracy.
William Torres, 34, of Toa Baja, P.R., was indicted on conspiracy to distribute and possession with intent to distribute 500 grams or more of cocaine. He was arrested in April 2019 and charged by criminal complaint. After appearing in federal court in San Juan, P.R., he was released on conditions. An arraignment date in federal court in Worcester has not yet been set.
According to court documents, Torres arranged for the distribution of approximately one kilogram of cocaine between two parties in Worcester on Nov. 1, 2018.
Torres faces a mandatory minimum sentence of five years and no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division, made the announcement today. Valuable assistance was provided by the Massachusetts Attorney General’s Office and the Massachusetts State Police. Assistant U.S. Attorneys Bill Abely and John Mulcahy of Lelling’s Criminal Division are prosecuting the case.
The details in the charging documents are allegations. That defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Poplar man sentenced for meth trafficking, firearms possessionRead the Press Release
GREAT FALLS—Poplar resident Richard Allen Granbois, who admitted to possessing methamphetamine for distribution and possessing a firearms in connection with drug trafficking, was sentenced today to six years in prison and five years of supervised release, U.S. Attorney Kurt Alme said.
Granbois, 36, pleaded guilty in January to possession with intent to distribute meth and to possession of a firearm in furtherance of a drug trafficking crime.
U.S. District Judge Brian Morris presided.
The prosecution said in court records that multiple persons confirmed to law enforcement they had bought meth from Granbois during the summer of 2017 on the Fort Peck Indian Reservation. Persons also confirmed that Granbois regularly had firearms while dealing drugs.
A Montana Highway Patrol trooper made a traffic stop of Granbois’ vehicle in June 2017 and ticketed him for driving while under the influence of drugs. Early in the stop, the trooper noticed Granbois to be nervous and physically shaking. He also noticed between the driver’s seat and center console a handgun that Granbois was trying to hide with his body and a backpack. The trooper drew his own service weapon and ordered Granbois out of the vehicle. The handgun between the seat and console was a .40-caliber handgun loaded with eight live rounds. After getting a tribal search warrant for the vehicle, the trooper found a 9mm handgun, a .22/410 gauge rifle, ammunition, meth and marijuana.
Assistant U.S. Attorney Jared Cobell prosecuted the case, which was investigated by the FBI, the Bureau of Indian Affairs, Fort Peck Tribes and Montana Highway Patrol.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Pittsburgh Resident Sentenced for Bank RobberyRead the Press Release
PITTSBURGH, PA - A resident of Pittsburgh, Pennsylvania has been sentenced in federal court to a term of imprisonment of time served (approximately 17 months), to be followed by three years of supervised release on a conviction of bank robbery, United States Attorney Scott W. Brady announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Darryl Leon Wilson, 61.
According to information presented to the court, on February 22, 2018, the defendant, entered the Key Bank, Downtown, Pittsburgh wearing a purple hat and scarf covering most of his face. When the teller requested that the defendant remove the scarf and hat, the defendant stated, "If I don’t get out of here fast, someone will get hurt." The defendant then placed a note on the counter which read, "Someone will get shot if you don’t give the 100’s 50’s 20’s and 10’s, No dye packs, smile and move fast Sorry." The teller gave the defendant lose $20 and $5 bills for a total of $540. Utilizing surveillance video from surrounding businesses, officers identified the defendant. When they went to the defendant’s house days later, Wilson answered the door with hands up and stated, "I did it." After officers identified themselves, Wilson stated, "I know why you’re here, I robbed the bank." Wilson provided a full confession, and admitted giving the teller a note that demanded money.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The Federal Bureau of Investigation, and the Pittsburgh Bureau of Police conducted the investigation leading to the prosecution of Wilson through 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.
Pine Ridge Man Sentenced to Ten Years in Prison for Abusive Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that a Pine Ridge, South Dakota, man convicted of Abusive Sexual Contact was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
James Janis, age 39, was sentenced on August 2, 2019, to 10 years in federal prison, followed by 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Janis was indicted by a federal grand jury in April 2018. The charge related to Janis forcibly engaging in sexual contact with a juvenile victim at the White Clay Dam in Pine Ridge on November 17, 2017.
This case was investigated by the Bureau of Indian Affairs and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Janis was immediately turned over to the custody of the U.S. Marshals Service.
Pine Ridge Man Found Guilty of Aggravated Sexual Abuse of a MinorRead the Press Release
United States Attorney Ron Parsons announced that Robert Dowty, Sr., age 57, was found guilty of Aggravated Sexual Abuse of a Minor following a federal trial in Rapid City, South Dakota.
The charge carries a mandatory minimum sentence of 30 years in federal prison, up to life, and/or a $250,000 fine, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Evidence at trial established that between June and September of 2018, Dowty forcibly sexually assaulted a child under the age of 16 years. Additional victims testified at trial that they also were sexually assaulted in the past by Dowty.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen prosecuted and tried the case.
A sentencing date is set for December 16, 2019. Dowty was remanded to the custody of the U.S. Marshals Service pending sentencing.
Pine Ridge Man Charged with Assaulting Federal OfficerRead the Press Release
United States Attorney Ron Parsons announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Assault on a Federal Officer.
Joseph John Winters, age 44, appeared before U.S. Magistrate Judge Daneta Wollmann and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 8 years in prison, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Winters striking an officer in the face with a closed fist on March 3, 2019, at Pine Ridge.
The charge is merely an accusation and Winters is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs - Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Cassandra DeCoste is prosecuting the case.
Winters was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for October 8, 2019.
Pine Ridge Brothers Charged with KidnappingRead the Press Release
United States Attorney Ron Parsons announced that two brothers from Pine Ridge, South Dakota, were charged in federal district court with Kidnapping.
Jesse Sierra, age 33, and Dustin Sierra, age 35, were charged on July 30, 2019. Dustin Sierra appeared before U.S. Magistrate Judge Daneta Wollmann on July 31, 2019, and Jesse Sierra appeared on August 2, 2019, and pleaded not guilty to the charge. The maximum penalty upon conviction is life in federal prison and/or a $250,000 fine, 5 years supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to the Sierra brothers kidnapping a female from Rapid City, South Dakota, on July 13, 2019, transporting her against her will and holding her on the Pine Ridge Reservation for several days, and ultimately taking her across state lines to Nebraska. On July 21, 2019, the victim was dropped off at the hospital in Chadron, Nebraska, with severe injuries, including broken bones and bruising to her face and body.
The investigation is being conducted by the Federal Bureau of Investigation, the Bureau of Indian Affairs – Office of Justice Services, the Rapid City Police Department, the Nebraska State Patrol, and the Dawes County Sheriff’s Office. Assistant U.S. Attorneys Heather Sazama and Cassandra DeCoste are prosecuting the case.
Both Dustin Sierra and Jesse Sierra were remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for October 8, 2019.
Philadelphia Man Pleads Guilty in Johnstown Federal Court to Drug ChargeRead the Press Release
JOHNSTOWN, Pa. – A resident of Philadelphia, Pa., pleaded guilty in federal court in Johnstown to a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
Kenneth Watts, 35, pleaded guilty to one count in the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from Mar. 6, 2018, through Apr. 2, 2018, Watts and a co-defendant conspired to distribute and possess with the intent to distribute a quantity of cocaine base, heroin, and fentanyl.
Judge Gibson scheduled sentencing for Dec. 9, 2019, at 1 p.m. The law provides for a maximum total sentence for Watts of 20 years in prison, a fine of $1,000,000, or both. 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 Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Watts.
Newhall Man Sentenced to More Than Two Years in Federal Prison for Possessing a Weapon after Felony OWI ConvictionRead the Press Release
A convicted felon who unlawfully possessed a firearm was sentenced August 6, 2019, to more than two years in federal prison.
Travis Seeman, age 36, from Newhall, Iowa, received the prison term after a guilty plea to one count of possession of a firearm by a felon. Seeman was previously convicted of operating a vehicle while intoxicated, subsequent offense, a Class D felony in Iowa. Documents and statements at sentencing showed that Seeman possessed multiple firearms, including a handgun that he had in his hand when he grabbed and pushed his then-girlfriend during a domestic assault incident.
Seeman was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Newell was sentenced to an imprisonment term of 26 months and 20 days. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The case was prosecuted by Assistant United States Attorney Jacob Schunk and investigated by the Benton County Sheriff’s Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-123.
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New York Man Sentenced to over 26 Years for Sex Trafficking and Heroin and Crack DistributionRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Vincent Graham, a/k/a “Shawn” and “Mac,” 35, of Bronx, New York, was sentenced yesterday in U.S. District Court by Judge John A. Woodcock to 320 months in prison and six years of supervised release for sex trafficking by force, fraud and coercion; distributing heroin and cocaine base, commonly known as “crack;” and transporting a victim in interstate commerce with the intent that she engage in prostitution. Graham pleaded guilty on January 4, 2019.
According to court records, in 2015, Graham, using force and threats, recruited an adult female to engage in commercial sex acts in Biddeford, Maine. Graham verbally abused and assaulted the victim, threatened her with violence, and exploited her heroin and crack addictions. Graham distributed crack to the victim. He also supplied her with just enough heroin to avoid withdrawal and threatened to cut off her supply and cause her to suffer withdrawal if she refused to engage in commercial sex acts. Graham also caused the victim, and a second woman, to travel from Maine to New Hampshire and Massachusetts to engage in prostitution.
In imposing the sentence, Judge Woodcock said: “I don't know how to express how deplorable I think your conduct was. As a man, it's just unimaginable to me that you would treat a woman this way.” Judge Woodcock added: “The need to provide just punishment requires no further explanation. The need to protect the public is also self-explanatory.”
“The District of Maine’s human trafficking prosecutions are recognized nationally,” said U.S. Attorney Frank. “Our office brings many of these prosecutions and defendants receive lengthy sentences that should make it crystal clear that human trafficking is a despicable crime that will not be tolerated in Maine.”
The investigation was conducted by the Biddeford Police Department; the Maine Drug Enforcement Agency; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; and Maine’s Anti-Trafficking Coordination Team (ACTeam). ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Nebraska Man Sentenced for Sexual Abuse of a MinorRead the Press Release
United States Attorney Ron Parsons announced that a Gordon, Nebraska, man convicted of Sexual Abuse of a Minor was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Lawrence Martin, Jr., age 20, was sentenced on August 2, 2019, to time served, 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Martin was indicted by a federal grand jury in May 2018. The charge related to Martin engaging in a sexual relationship with a 13-year old female in 2017 and 2018.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Numerous Previously Detained Aliens with Small Children Released on Humanitarian GroundsRead the Press Release
Jackson, Miss. – As part of an immigration enforcement operation throughout central Mississippi yesterday, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) concluded their processing of detained aliens last night and followed their procedures by releasing many on humanitarian grounds, announced Jere Miles, HSI Special Agent in Charge in New Orleans, and Mike Hurst, U.S. Attorney for the Southern District of Mississippi.
Preliminarily, it appears that approximately 30 detained aliens were released yesterday on humanitarian grounds at the individual sites where they were initially encountered, and another 270 detained aliens were released after being processed by HSI at the National Guard base in Pearl and returned to the place where they were originally encountered.
Pursuant to HSI procedures as part of this operation, all those detained yesterday were asked when they arrived at the processing center whether they had any children who were at school or childcare and needed to be picked up. In order to make it possible for detained aliens to contact family members and address childcare issues, HSI made cell phones available for use by detained aliens to make arrangements for the care of their children or other dependents. In addition, HSI had liaison officers working with the school districts to facilitate this process.
As part of HSI procedures pursuant to this operation, if HSI encountered two alien parents with minor children at home, HSI released one of the parents on humanitarian grounds and returned that individual to the place from which they were arrested. HSI similarly released any single alien parent with minor children a home on humanitarian grounds and physically returned that person to the place where he or she was originally detained. Based on these procedures, it is believed that all children were with at least one of their parents as of last night.
If there are children who are without parents, individuals are required by state law to contact Mississippi Child Protective Services ("CPS") at 1-800-222-8000. CPS will assist in taking care of that child and placing the child in a safe foster care home or licensed facility.
Family members of those detained can call ICE’s toll-free detainee locator hotline for information about an individual’s detention location and status, as well as information about the removal process. This hotline operates in English and Spanish. The phone number is 1-888-351-4024.
This operation is part of multiple ongoing criminal investigations and these investigations continue.
NDTX Round-up August 8, 2019Read the Press Release
GUILTY PLEA – Bobby Dewayne Smith
On August 1, Bobby Dewayne Smith, 38, pled guilty to attempt and conspiracy to distribute cocaine. On a search warrant, the DEA searched Smith’s home to find a pistol, a scale, cookware associated with the conversion of cocaine, and crack cocaine for distribution. He faces up to 20 years imprisonment and up to a $1,000,000 fine. This case was investigated by the Drug Enforcement Agency and prosecuted by AUSA Suzanna Etessam.
GUILTY PLEA – Cesar Aranda-Delgado
On August 1, Cesar Aranda-Delgado, 40, pled guilty to aiding and abetting possession with intent to distribute cocaine. Law enforcement officials conducted a search on the vehicle Aranda-Delgado was driving and found 1.5 kilograms of cocaine. Aranda-Delgado confirmed that he came to the United States from Mexico to make money distributing narcotics. Aranda-Delgado faces up to 20 years in prison. This case was investigated by the Grand Prairie Police Department and the Drug Enforcement Agency and is prosecuted by AUSA Rachael Jones.
SENTENCING – Romulo Ramos-Diaz
On August 1, Romulo Ramos-Diaz was sentenced to 14 years in federal prison. Ramos-Diaz had pled guilty to conspiracy to possess with intent to distribute methamphetamine. Ramos-Diaz served as a look-out and protection for his co-conspirators and was eventually arrested after selling to an undercover officer. In the course of the investigation, officers discovered over two kilograms of methamphetamine. This case was investigated by the Drug Enforcement Agency and prosecuted by AUSA John Kull.
SENTENCING – Adrian Jimenez-Reynoso
On August 5, Adrian Jimenez-Reynoso was sentenced to 9 years in federal prison. Jimenez-Reynoso had pled guilty to charge of possession with the intent to distribute methamphetamine. Law enforcement officials had intercepted a variety of calls and other evidence that revealed Jimenez-Reynoso’s drug deals. This case was investigated by the Drug Enforcement Agency and prosecuted by AUSA John Kull.
INDICTMENT – Joshua Blake Browning
On August 7, a federal grand jury indicted Joshua Blake Browning, 38, for escaping from custody and possessing contraband in prison. Browning escaped a federal prison camp where he was serving time for the possession of a firearm in furtherance of a drug trafficking crime. Additionally, while serving his time in prison, Browning illegally possessed a mobile device. If convicted, Browing faces up to 6 years of imprisonment and a fine of up to $250,000. The case was investigated by the United States Marshall Service and is prosecuted by AUSA Suzanna Etessam.
INDICTMENT – Abel Cardenas Segundo and Guillermo Zarco Villasenor
On August 7, a federal grand jury indicted Abel Cardenas Segundo, 30, and Guillermo Zarco Villasenor, 26, for conspiracy to possess with intent to distribute a controlled substance and possession with intent to distribute methamphetamine. Both defendants face up to 40 years in prison. This case was investigated by the Federal Bureau of Investigation and is prosecuted by AUSA P.J. Meitl.
INDICTMENT – Garibaldi Gutierrez Solorio
On August 7, a federal grand jury indicted Garibaldi Gutierrez Solorio, 25, for conspiracy to possess with the intent to distribute one kilogram or more of heroin and possession with the intent to distribute heroin. If convicted, Solorio faces a maximum sentence of life in prison and a maximum fine of $11,000,000. This case was investigated by the Drug Enforcement Agency and is prosecuted by AUSA Suzanna Etessam.
INDICTMENT – Santos Ramos
On August 7, a federal jury indicted Santos Ramos, 26, as an illegal alien in possession of a firearm. Ramos allegedly was in possession of two pistols. If convicted, Ramos must forfeit any firearms involved in the offense and he faces up to 10 years imprisonment. This case was investigated by the Irving Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and is prosecuted by AUSA Gary Tromblay.
Monongalia County man admits to his role in a drug distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jesse Tichenor, of Morgantown, West Virginia, admitted to his involvement in a drug distribution operation, United States Attorney Bill Powell announced.
Tichenor, age 27, pled guilty to one count of “Unlawful Use of a Communication Facility.” Tichenor admitted to using a phone to help distribute “crack” cocaine in March 2017 in Monongalia County.
Tichenor faces up to four years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda E. Wesley is prosecuting the case on behalf of the government. The Mon Metro Drug and Violent Crime Drug Task Force, a HIDTA-funded initiative, led the investigation.
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.
U.S. Magistrate Judge Michael John Aloi presided.
Michigan woman indicted for allegedly embezzling $300,000 from Sylvania electrical company and using it to gamble and pay for electronics, airline tickets and other personal expensesRead the Press Release
A former Toledo resident was indicted in federal court for allegedly embezzling more than $300,000 from her employer and using it to gamble and pay for electronics, airline tickets and other personal expenses.
Traci Ann Grillo, 47, of Ida, Michigan, was indicted on nine counts of wire fraud and one count of aggravated identity theft.
According to the indictment:
Grillo worked for King Electrical Service in Sylvania from September 2014 through March 2019. As part of her job, King Electrical entrusted financial accounts to Grillo, including bank accounts, credit card accounts, and check-writing authority.
Grillo embezzled more than $300,000 from King Electrical. She did this through several fraudulent means, including: salary overpayments to herself; personal use of the King Electrical checking account, such as writing check to pay her son’s tuition at Kent State University; personal use of King Electrical credit cards, including for clothing, home furnishings, electronics, airline tickets and to pay her online gambling account, and obtaining high-interest rate loans under fraudulent pretenses, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the Toledo Police Department and the Federal Bureau of Investigation. The case is being handled by Assistant U.S. Attorneys Jody L. King and Gene Crawford.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Medicare Advantage Provider and Physician to Pay $5 Million to Settle False Claims Act AllegationsRead the Press Release
Beaver Medical Group L.P. (Beaver) and one of its physicians, Dr. Sherif Khalil, have agreed to pay a total of $5,039,180 to resolve allegations that they reported invalid diagnoses to Medicare Advantage plans and thereby caused those plans to receive inflated payments from Medicare, the Justice Department announced. Beaver is headquartered in Redlands, California.
“The United States relies on healthcare providers to submit accurate diagnosis data to Medicare Advantage plans to ensure those plans receive the appropriate compensation from Medicare,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will pursue those who undermine the integrity of the Medicare program and the data it relies upon.”
Under the Medicare Advantage program, also known as the Medicare Part C program, Medicare beneficiaries may opt to obtain health care coverage through private insurance plans that are owned and operated by private insurers known as Medicare Advantage Organizations (MAOs). Medicare pays MAOs a fixed, monthly amount to provide health care coverage to Medicare beneficiaries who enroll in their plans. Medicare adjusts these monthly payments to reflect the health status of each beneficiary. In general, Medicare pays MAOs more for sicker beneficiaries and less for healthier ones.
MAOs often contract with physician groups and other healthcare providers to provide care to Medicare beneficiaries enrolled in their plans. These healthcare providers report diagnoses and other information to the MAOs, which the MAOs then submit to Medicare in order to obtain higher risk-adjusted payments.
In this case, several MAOs in California contracted with Beaver to provide health care to Medicare beneficiaries enrolled in their plans. The MAOs often compensated Beaver with a share of the payments that the MAOs received from Medicare for the beneficiaries under Beaver’s care. Thus, Beaver had a financial incentive to submit additional diagnosis codes to the MAOs in order to increase the payments that the MAOs received from Medicare. The settlement resolves allegations that Beaver and Dr. Khalil knowingly submitted diagnoses that were not supported by the beneficiaries’ medical records in order to inflate the payments that the MAO received from Medicare.
“As enrollment in Medicare Advantage continues to grow, investigation into accuracy of diagnosis data becomes ever more important,” said Timothy B. Francesca, Acting Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Those who inflate bills sent to government health programs can expect to pay a heavy price.”
The settlement resolves allegations originally brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Dr. David Nutter, a former employee of Beaver. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. Dr. Nutter will receive approximately $850,000.
The government’s intervention in this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
This matter was handled by the Civil Division’s Commercial Litigation Branch and the Department of Health and Human Services, Office of Inspector General.
The case is docketed as United States ex rel. David Nutter, M.D., and David Nutter, M.D., individually, v. Sherif F. Khalil, M.D., Beaver Medical group, L.P., The Beaver Medical Clinic, Inc., Epic Management, L.P., and Epic Management, Inc., No. CVC17-02035-PSG-KKX (C.D. Cal.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Mastermind of $1.3 Billion Investment Fraud (Ponzi) Scheme - One of the Largest Ever - Sentenced to Twenty-Five Years in Prison on Conspiracy and Tax Evasion ChargesRead the Press Release
Today, a Sherman Oaks, California native, Robert Shapiro, 61, was sentenced to a total of a total of twenty-five years in in prison by U.S. District Judge Cecilia M. Altonaga in Miami, Florida after previously pleading guilty to orchestrating and leading a massive investment fraud scheme, in which more than 7,000 victims suffered financial losses, as well as tax evasion. Shapiro is the former owner, president, and CEO of Woodbridge Group of Companies LLC (“Woodbridge”).
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and the Florida Office of Financial Regulation (OFR), made the announcement.
According to the indictment and court documents, Shapiro spearheaded and concealed an enormous Ponzi scheme through his business, Woodbridge. Woodbridge employed approximately 130 people and had offices located throughout the United States, including in Boca Raton, Florida; Sherman Oaks, California; Colorado; Tennessee; and Connecticut. The scheme ran from at least July 2012 to December 2017, when Woodbridge filed for Chapter 11 bankruptcy and defaulted on its obligations to investors.
Throughout the conspiracy, Woodbridge’s main business model was to solicit money from investors and, in exchange, issue investors promissory notes reflecting purported loans to Woodbridge that paid high monthly interest rates. Woodbridge falsely claimed that these investments were tied to real property owned by third parties and that the third parties would be making the interest payments to Woodbridge and its investors; it was portrayed as an investment in a hard-money lending business. Using high pressure sales tactics, Shapiro and his co-conspirators marketed and promoted these investments as low-risk, safe, simple, and conservative. And at minimum, investors were made to believe that Woodbridge’s real estate dealings would generate the funds used to pay the return on their investments.
Despite Woodbridge’s claims that these investments would be backed by properties owned by third-parties, in fact, to the extent that the properties existed, they were secretly owned by Shapiro. Unbeknownst to investors, Shapiro created and controlled a network of more than 270 limited liability companies, which he used to acquire and sell the properties pitched to investors.
Shapiro and his co-conspirators falsely claimed that Woodbridge was profitable and advertised high rates of return to investors. However, Shapiro’s real estate portfolio failed to generate sufficient cash flow to satisfy the loan obligations and interest payments owed to investors. To make up for the cash deficiency, Shapiro and his co-conspirators resorted to making Ponzi payments, i.e., hundreds of millions of dollars invested by new investors were used to pay “returns” to older, existing Woodbridge investors. In some instances, Shapiro made these fraudulent “interest” payments even when the advertised investment properties were never acquired.
The Woodbridge sales operation functioned as a “boiler room” and featured high-pressure sales tactics, deception, and manipulation. Woodbridge promoted investments through telephone and in-person conversations, emails and website displays. The scheme also involved misrepresentations to financial planners who helped Woodbridge to sell investments to potential investors.
At least five states issued cease and desist orders against one or more of the Woodbridge entities based on their unregistered sale of securities. Shapiro and his co-conspirators nonetheless continued to sell Woodbridge investments to residents of those states, and engaged in deceptive conduct with respect to pending state regulatory actions against Woodbridge, in violation of the cease and desist orders.
At some point in 2017, Shapiro made the decision that Woodbridge would file for bankruptcy. Without disclosing to investors that Woodbridge was insolvent and on the verge of bankruptcy, Shapiro caused Woodbridge to collect additional money from investors through the filing of Woodbridge’s bankruptcy in December 2017. Shapiro also admitted that, immediately prior to Woodbridge’s bankruptcy filing, he diverted millions of dollars in investor funds to several bank accounts opened in the name of his wife, J.S., which he used for new ventures.
In total, Shapiro and his co-conspirators convinced more than approximately 9,000 investors to invest more than $1.29 billion to Woodbridge. According to the Indictment, at least 2,600 of these investor victims invested their retirement savings, totaling approximately $400 million. Of that, Shapiro misappropriated approximately $25 million to $95 million in investor money for himself and for the benefit of his immediate family members. Shapiro spent millions on personal expenditures, such as $3.1 million for chartering private planes and travel, $6.7 million on a personal home, $2.6 million on home improvements, $1.8 million on personal income taxes, and over $672,000 on luxury automobiles. Shapiro further admitted that he used bank accounts and credit cards opened in the name of his wife, J.S., to divert millions of dollars to his family.
Shapiro also pled guilty to tax evasion based upon his failure to pay more than $6 million in taxes due and owing to the IRS for calendar years 2000 through 2005.
As part of his plea, Shapiro and his wife agreed to forfeit certain assets, many of which were seized during a search executed by federal agents at his home in Sherman Oaks, California. They include, but are not limited to: artworks by Pablo Picasso, Alberto Giacometti, Marc Chagall, and Pierre-August Renoir; a collection of 603 bottles of wine; a 1969 Mercury convertible; luxury jewelry, including a pair of 14-karat, white gold earrings with two black diamonds (61.81 carats), two grey diamonds (23.92 carats), two rose-cut diamonds, and 266 round diamonds; a platinum ring with an oval-cut ruby (10.91 carats), two trapezoid diamonds and 70 round-cut diamonds; a platinum ring with certified Colombia emerald-cut emerald (9.54 carats), trapezoid-cut diamonds, and 166 round-cut diamonds; and other items detailed in court documents. The Court entered a Preliminary Order of Forfeiture today (Case No. 19cr20178). A restitution hearing has been scheduled for Jan. 17, 2020 at 9:30 a.m.
Shapiro was sentenced to concurrent terms of 300 months in prison on Count 1 and Count 10 of the indictment. Upon his release from prison, Shapiro will be placed on supervised release for three years.
The indictment also charged two co-defendants, Dane Roseman, a/k/a “Dayne Roseman,” and Ivan Acevedo, who are scheduled for trial in June 2020 (Case No. 19cr20178). The U.S. Securities and Exchange Commission (SEC) filed parallel civil enforcement actions against Woodbridge, Shapiro, his wife, and co-defendants Acevedo and Roseman related to the Ponzi scheme.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI and OFR in this matter. She thanked the SEC Miami Regional Office and the U.S. Attorney’s Office for the Central District of California for their assistance. This case was prosecuted by Assistant U.S. Attorneys Roger Cruz and Lisa H. Miller. Assistant U.S. Attorneys Nalina Sombuntham and Alison Lehr are responsible for the asset forfeiture component of the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Martin, Tennessee Man Sentenced to 108Months Imprisonment for Conspiracy to Distribute MethamphetamineRead the Press Release
Jackson, TN – Robert Thomas, 46, has been sentenced to 108 months imprisonment for conspiracy to distribute 50 grams or more of actual methamphetamine. U.S. Attorney D. Michael Dunavant announced the sentence today.
This is the first sentencing in a case involving multiple defendants including Keith Norris, Charles Settles, Justin Tyler Bynum and Solomon Clay on charges of conspiracy to distribute actual methamphetamine.
According to information presented in court, the Weakley County Sheriff’s Department began an investigation into Keith Norris’ drug trafficking organization in late April, 2018. This investigation included search warrants, traffic stops, statements of cooperators and phone records. Agents learned that Thomas was a member of Norris’ drug trafficking organization.
On April 15, 2018, Weakley County Sheriff’s Office stopped Thomas for a traffic violation and recovered approximately 21 grams of methamphetamine. During a mirandized statement, Thomas confessed to selling approximately 88 ounces of methamphetamine in Weakley County within a seven-month period.
U.S. Attorney D. Michael Dunavant said, "Methamphetamine that is trafficked in and through West Tennessee is increasing in dangerous purity, and continues to destroy individuals, families, and communities. Drug dealers who profit from the pain, addiction, violence and death caused by these dangerous substances deserve proper punishment, and this sentence does just that."
On August 6, 2019, United States Chief District Court Judge S. Thomas Anderson sentenced Thomas to 108 months in federal prison followed by 5 years supervised release.
This case was investigated by the Weakley County Sheriff’s Department and the Martin Police Department.
Assistant U.S. Attorney Jerry Kitchen prosecuted this case on behalf of the government.
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Maple Heights woman sentenced to nine years in prison for robbing the same consignment store on Chagrin Boulevard on consecutive days, including using a firearm in the second robberyRead the Press Release
A Maple Heights woman was sentenced to more than nine years in prison for robbing the same consignment store on Chagrin Boulevard on consecutive days, including using a firearm in the second robbery.
Rachellette McKissack, 26, was sentenced to 114 months in federal prison. She previously pleaded guilty to two counts of Hobbs Act robbery and one count of using a firearm during a crime of violence.
McKissack robbed the Cleveland Consignment Shoppe at 28790 Chagin Blvd. in Woodmere on November 15, 2018, according to court documents.
McKissack again robbed the Cleveland Consignment Shoppe on November 16, 2018, this time using a firearm during the robbery, according to court documents.
“For two consecutive days, this defendant terrorized people who were simply going about their day,” U.S. Attorney Justin Herdman said. “We will pursue a long prison sentence for anyone who uses a firearm during a robbery.”
This case was prosecuted by Assistant U.S. Attorneys Margaret Kane and John C. Hanley following an investigation by the FBI and Woodmere Police Department.
Man Indicted for Straw Purchasing and Making False StatementsRead the Press Release
ALEXANDRIA, Va. – A federal grand jury returned an indictment today charging a Woodbridge man with straw purchasing two firearms in November 2016 and then giving those firearms to a Boston man.
According to the indictment, Carl Napper, 26, was allegedly paid $250 to straw purchase two firearms on behalf of a Boston man, who then transported the firearms back to Boston. One of these firearms was recovered in Boston a month later after having been used in a shooting incident.
Napper is charged with making false statements on an ATF form in connection with the purchase of the firearms, and transferring the firearms to a resident of another state). If convicted, he faces a maximum penalty of five years in prison for each count of conviction. 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, and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement. Assistant U.S. Attorney Nicholas U. Murphy II and Special Assistant U.S. Attorney Jason Trigger are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-230.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Man Arrested for Theft of Military PropertyRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announces that BRYAN ALLEN faces federal charges of theft of government property.
ALLEN was named in an indictment filed on August 6, 2019, charging him with theft of military property and conspiracy to steal such property, in violation of 18 U.S.C. §§ 371 and 641, and two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. The indictment charges that ALLEN used his position as property book officer for the 4th Battalion, 3rd Special Forces Group at Ft. Bragg, North Carolina, to decrease the number of items shown in the possession of specific companies, which reduced the number of those items expected to be located in a physical inventory of those items. In a two and a half year period from December 2016 through June 20, 2018, it is alleged ALLEN stole more than $2 million of military property. The stolen property included 43 enhanced night vision goggles, a U.S. military sensitive item made to military specifications, which require “demilitarization” and disposal/destruction in accordance with Department of Defense policies.
If convicted, ALLEN would face up to a maximum term of 19 years’ imprisonment, a $250,000 fine as to each of the four counts, and a term of up to three years supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
Investigation of this case is being conducted by the Defense Criminal Investigative Service, Federal Bureau of Investigation, U.S. Army Criminal Investigative Division, and the Department of Homeland Security, Investigations.
Lebanese Businessman Tied by Treasury Department to Hezbollah is Sentenced to Prison for Money Laundering Scheme Involving the Evasion of U.S. SanctionsRead the Press Release
The operator of a network of businesses in Lebanon and Africa whom the U.S. Department of the Treasury designated as a financier of Hezbollah, the Lebanon-based terrorist group, was sentenced to five years in prison and ordered to forfeit $50 million by U.S. District Judge Reggie B. Walton of the District of Columbia.
Kassim Tajideen, 63, had previously pleaded guilty to one count of conspiracy to launder monetary instruments in furtherance of violating the International Emergency Economic Powers Act (IEEPA). In 2009, the U.S. Department of the Treasury designated Tajideen as a Specially Designated Global Terrorist based on his tens of millions of dollars of financial support of Hezbollah. The designation prohibited Tajideen from being involved in, or benefiting from, transactions involving U.S. persons or companies without a license from the Department of the Treasury.
“This defendant knowingly violated sanctions and put our nation’s security at risk,” said Assistant Attorney General Brian A. Benczkowski of the Criminal Division. “His sentencing and the $50 million forfeiture in this case are just the latest public examples of the Department of Justice’s ongoing efforts to disrupt and dismantle Hezbollah and its support networks.”
“Today’s sentencing highlights our efforts to prosecute those who violate sanctions meant to stem the flow of money to terrorists groups,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “Our message to those who violate sanctions is that you will be found, and you will be prosecuted to the full extent of the law.”
“This is the latest example of DEA’s success against Hezbollah’s global criminal support network and our commitment to interagency collaboration in combatting the overall threat posed by this transnational criminal organization,” said Acting Special Agent in Charge of DEA’s Special Operations Division Michael J. Machak.
According to the statement of facts signed by Tajideen in conjunction with his plea, after his designation, Tajideen conspired with at least five other persons to conduct over $50 million in transactions with U.S. businesses that violated these prohibitions. In addition, Tajideen and his co-conspirators knowingly engaged in transactions outside of the United States, which involved transmissions of as much as $1 billion through the United States financial system from places outside the United States.
Tajideen’s case falls under DEA’s Project Cassandra, which targets Hezbollah’s global criminal support network, which operates as a logistics, procurement and financing arm for Hezbollah. This investigation and others are part of the Department of Justice’s Hezbollah Financing and Narcoterrorism Team (HFNT). The HFNT was formed in January 2018 to ensure an aggressive and coordinated approach to prosecutions and investigations, including Project Cassandra cases, targeting the individuals and networks supporting Hezbollah. Comprised of experienced international narcotics trafficking, terrorism, organized crime, and money laundering prosecutors and investigators, the HFNT works closely with partners like the DEA, the Department of the Treasury, and the FBI, among others, to advance and facilitate prosecutions of Hezbollah and its support network in appropriate cases.
This case was investigated by DEA SOD’s Counter Narcoterrorism Operations Center (CNTOC) and the DEA New Jersey Field Division, with support from the CPB’s National Targeting Center/Counter Network Division, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), the Criminal Division’s Office of International Affairs, and the Counterintelligence and Export Control Section of the National Security Division.
The case was prosecuted by Trial Attorney Joseph Palazzo of the Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Thomas A. Gillice, Luke Jones, Karen Seifert and Deborah Curtis and Special Assistant U.S. Attorney Jacqueline L. Barkett of the U.S. Attorney’s Office for the District of Columbia.
Lebanese Businessman Tied by Treasury Department to Hezbollah is Sentenced to Prison for Money Laundering Scheme Involving the Evasion of U.S. SanctionsRead the Press Release
WASHINGTON – The operator of a network of businesses in Lebanon and Africa whom the U.S. Department of the Treasury designated as a financier of Hezbollah, the Lebanon-based terrorist group, was sentenced to five years in prison and ordered to forfeit $50 million by U.S. District Judge Reggie B. Walton of the District of Columbia.
Kassim Tajideen, 63, had previously pleaded guilty to one count of conspiracy to launder monetary instruments in furtherance of violating the International Emergency Economic Powers Act (IEEPA). In 2009, the U.S. Department of the Treasury designated Tajideen as a Specially Designated Global Terrorist based on his tens of millions of dollars of financial support of Hezbollah. The designation prohibited Tajideen from being involved in, or benefiting from, transactions involving U.S. persons or companies without a license from the Department of the Treasury.
“This defendant knowingly violated sanctions and put our nation’s security at risk,” said Assistant Attorney General Brian A. Benczkowski of the Criminal Division. “His sentencing and the $50 million forfeiture in this case are just the latest public examples of the Department of Justice’s ongoing efforts to disrupt and dismantle Hezbollah and its support networks.”
“Today’s sentencing highlights our efforts to prosecute those who violate sanctions meant to stem the flow of money to terrorists groups,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “Our message to those who violate sanctions is that you will be found, and you will be prosecuted to the full extent of the law.”
“This is the latest example of DEA’s success against Hezbollah’s global criminal support network and our commitment to interagency collaboration in combatting the overall threat posed by this transnational criminal organization,” said Acting Special Agent in Charge of DEA’s Special Operations Division Michael J. Machak.
According to the statement of facts signed by Tajideen in conjunction with his plea, after his designation, Tajideen conspired with at least five other persons to conduct over $50 million in transactions with U.S. businesses that violated these prohibitions. In addition, Tajideen and his co-conspirators knowingly engaged in transactions outside of the United States, which involved transmissions of as much as $1 billion through the United States financial system from places outside the United States.
Tajideen’s case falls under DEA’s Project Cassandra, which targets Hezbollah’s global criminal support network, which operates as a logistics, procurement and financing arm for Hezbollah. This investigation and others are part of the Department of Justice’s Hezbollah Financing and Narcoterrorism Team (HFNT). The HFNT was formed in January 2018 to ensure an aggressive and coordinated approach to prosecutions and investigations, including Project Cassandra cases, targeting the individuals and networks supporting Hezbollah. Comprised of experienced international narcotics trafficking, terrorism, organized crime, and money laundering prosecutors and investigators, the HFNT works closely with partners like the DEA, the Department of the Treasury, and the FBI, among others, to advance and facilitate prosecutions of Hezbollah and its support network in appropriate cases.
This case was investigated by DEA SOD’s Counter Narcoterrorism Operations Center (CNTOC) and the DEA New Jersey Field Division, with support from the CPB’s National Targeting Center/Counter Network Division, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), the Criminal Division’s Office of International Affairs, and the Counterintelligence and Export Control Section of the National Security Division.
The case was prosecuted by Trial Attorney Joseph Palazzo of the Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Thomas A. Gillice, Luke Jones, Karen Seifert and Deborah Curtis and Special Assistant U.S. Attorney Jacqueline L. Barkett of the U.S. Attorney’s Office for the District of Columbia.
Kyle Woman Sentenced for AssaultRead the Press Release
United States Attorney Ron Parsons announced that a Kyle, South Dakota, woman convicted of Assault by Striking, Beating, or Wounding was sentenced by Daneta Wollmann, U.S. Magistrate Judge.
Mattie Yankton, age 38, was sentenced on August 2, 2019, to 3 years of probation, 25 hours of community service work, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Yankton was indicted by a federal grand jury in December 2018. The charge related to Yankton assaulting a man while he slept on April 12, 2018, at Kyle. The assault resulted in him having to seek medical treatment for his injury.
This case was investigated by the Bureau of Indian Affairs - Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Heather Sazama prosecuted the case.
Kansas Man Sentenced to 84 Years for Producing Child PornographyRead the Press Release
WASHINGTON – A Kansas man who traveled to the Philippines and had sex with minor females there was sentenced to over 84 years in prison today.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Stephen R. McAllister of the District of Kansas made the announcement.
Anthony Shultz was charged by complaint in July 2016 and pleaded guilty to three counts of producing child pornography in July 2018 before U.S. District Judge Eric F. Melgren of the District of Kansas.
According to admissions made in conjunction with the guilty plea, Shultz engaged in sex acts with minor females in the Philippines. He videotaped his sexual encounters with two minors and transported the videos to his home in Kansas. Shultz would also sell the videos online. One of the girls was only 12 years old at the time; the other was 15 years old. In one of the videos, Shultz is seen giving the 15-year-old money after having sex with her. Shultz also produced child pornography of an 8-year-old girl in the Philppines by communicating on Skype with the child’s mother and directing the mother to expose the child’s genitals and live-stream it on web camera.
The FBI investigated the case. Trial Attorney Lauren E. Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jason Hart of the District of Kansas prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
Kansas Man Sentenced for Producing Child PornographyRead the Press Release
A Kansas man who traveled to the Philippines and had sex with minor females there was sentenced to over 84 years in prison today.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Stephen R. McAllister of the District of Kansas made the announcement.
Anthony Shultz was charged by complaint in July 2016 and pleaded guilty to three counts of producing child pornography in July 2018 before U.S. District Judge Eric F. Melgren of the District of Kansas.
According to admissions made in conjunction with the guilty plea, Shultz engaged in sex acts with minor females in the Philippines. He videotaped his sexual encounters with two minors and transported the videos to his home in Kansas. Shultz would also sell the videos online. One of the girls was only 12 years old at the time; the other was 15 years old. In one of the videos, Shultz is seen giving the 15-year-old money after having sex with her. Shultz also produced child pornography of an 8-year-old girl in the Philppines by communicating on Skype with the child’s mother and directing the mother to expose the child’s genitals and live-stream it on web camera.
The FBI investigated the case. Trial Attorney Lauren E. Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jason Hart of the District of Kansas prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
KC Man Sentenced to 20 Years for Armed RobberiesRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man was sentenced in federal court today for four armed robberies of local businesses committed during a month-long crime spree.
Montez L. Clayton, 29, was sentenced by U.S. District Judge Greg Kays to 20 years in federal prison without parole.
On Jan. 3, 2019, Clayton pleaded guilty to the armed robberies of four businesses in March and April 2018, and to brandishing a firearm during a crime of violence. Clayton admitted that he robbed the Subway restaurant at 1831 Independence Ave., Kansas City, on March 18, 2018; the 7-Eleven store at 1701 Independence Ave., Kansas City, on March 26, 2018; the Metro PCS store at 2506 Independence Ave., Kansas City, on April 5, 2018; and the Metro PCS store at 2217 E. 12th St., Kansas City, on April 9, 2018. Clayton used a Jimenez 9mm pistol in each of those robberies.
Clayton provided his phone number and account information when he asked an employee to check the balance on his account during the first Metro PCS robbery. Law enforcement officers traced the location of Clayton’s phone to a Kansas City residence, where he was arrested.
According to court documents, Clayton has an extensive criminal record that includes a history of violence. For example, in November 2013, he was charged with multiple counts of domestic assault for assaulting a mother of two of his children, and with one count of unlawful use of a weapon for exhibiting a firearm at her in an angry or threatening manner. In one of the assaults, Clayton’s child was in the arms of the victim while he assaulted her. In 2014, Clayton pleaded guilty to domestic assault for striking the victim in the head with a dumbbell and to unlawful use of a weapon. In 2015, while on probation, he was convicted of assaulting a different victim, also the mother of one of his children. In that assault, Clayton struck the victim in the face, pushed her, kicked her, pushed her down the stairs, and put his hands in her mouth. In February 2017, while he was under probation supervision on two cases and while he had an outstanding arrest warrant for probation violations, Clayton was charged with assault for kicking yet another female victim.
This case was prosecuted by Assistant U.S. Attorney Ashleigh A. Ragner. It was investigated by the Kansas City, Mo., Police Department.
KC Day Care Owner Sentenced for $556,000 Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – The owner of a Kansas City, Missouri, day care center was sentenced in federal court today for his role in a conspiracy to fraudulently receive more than $556,000 in federal benefits.
Sharif Karie, 41, of Olathe, Kan., was sentenced by U.S. District Judge Brian C. Wimes to four years and 10 months in federal prison without parole.
On Jan. 11, 2019, Karie was convicted at trial of participating in a conspiracy to steal government property, theft of government property, three counts of aggravated identity theft, three counts of wire fraud, 15 counts of money laundering, and six counts of mail fraud.
Karie, a naturalized U.S. citizen from Somalia, was the owner and CEO of a day care center established under two businesses and two names for the same location, with the same key employees: KARIE Day Care Center, LLC, and Tima Child Care Center, LLC, at 1019 Admiral Blvd., Kansas City, Mo. Tima Child Care Center was established under false pretense with a straw owner, according to court documents, apparently to circumvent the state’s oversight efforts.
Co-defendant Sheri Beamon, 48, of Kansas City, Missouri, was the director of KARIE/Tima Childcare Center. Beamon pleaded guilty on Sept. 10, 2018, to her role in the conspiracy and will be sentenced on Aug. 15, 2019.
The day care centers submitted false childcare claims to the state of Missouri that fraudulently inflated the number of hours and children who actually attended the childcare centers. The conspiracy, which lasted from October 2013 to June 2016, resulted in a loss of $536,833 to the Missouri Department of Health and Social Services. The Child Care and Development Fund provides daycare subsidies for low-income families where the parents are employed or engaged in job training. Providers contract with the Children’s Division of the Missouri Department of Health and Senior Services and submit claims electronically.
Additionally, Karie committed fraud by misleading the Department of Housing and Urban Development (HUD) when he understated his income and assets. Karie received Section 8 assistance, which is funded by HUD. The fraud scheme resulted in a loss of more than $40,000 to the Housing Authority.
This case was the result of a nationwide sweep that targeted child care center fraud schemes. The national law enforcement operation in Missouri and six other states was the result of separate, but related, federal investigations into childcare center fraud that resulted in a loss of more than $1 million to the government.
Pole cameras, which were installed near the day care center, captured footage of the entrances and exits of the building during two time periods in 2015 and in 2016. Timesheets and billing records were reviewed and compared to the children seen on the pole cameras being dropped off and picked up from the daycare center during that time. There were significant discrepancies between the timesheets, claims submitted, and the pole camera footage. According to court documents, even the fire evacuation records were falsified indicating a fire drill was performed on a date when pole cameras were capturing footage of the entrance/exit of the day care and the planned evacuation route as provided to the state. The drill never took place.
At no time during its operation, according to court documents, did Karie Day Care Center meet the minimum health and safety standards for operation as established by Missouri statute and agreed to by contract. Tima Child Care Center was conceived as the state was in process of shutting down Karie Day Care Center for failure to comply with standards for health, safety, and record keeping. Had the state known that Karie was actually operating the business, according to court documents, a license would not have been approved.
The state conducted a compliance review of the daycare center’s billing for May 2014 and July 2014. The review found several attendance records missing. The review also identified 14 out of the 15 families with children at the center who had a parent employed there. With only two classrooms, it is improbable that parents were not caring for their own children. One of these parents reported that her job was contingent on having all of her children placed in care at KARIE Day Care Center so her child care would be paid by the state. According to court records, nearly all children enrolled for services were those of employees, in violation of state regulations. This same 2014 audit found several discrepancies on the time sheets submitted to the state.
Subsequent unannounced inspections at KARIE Day Care Center found the facility in violation of state regulations pertaining to child care licensing rules, including health and safety, staff ratios, and the maintaining of attendance records. Each of the inspections resulted in violation findings.
This case is being prosecuted by Assistant U.S. Attorneys Rudolph R. Rhodes IV and Kathleen D. Mahoney. It was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, Office of Investigations, the U.S. Department of Housing and Urban Development - Office of Inspector General, the FBI, the Missouri Department of Social Services – Division of Legal Services Investigations and the Kansas City, Mo., Police Department.