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Monday 10 June 2019
British Man Found Guilty of Participating in Fraudulent Investment Scheme Related to Co-Working BusinessRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JAMES MOORE was convicted at trial last Friday of wire fraud and conspiracy for engaging in a scheme to defraud investors by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities (“Bar Works”). MOORE was found guilty on June 7, 2019, of both counts he faced, after a one-week trial before the U.S. District Judge Richard M. Berman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “James Moore was part of a ring of insiders who helped conceal that Bar Works was run by a known fraudster. Innocent and unaware investors lost millions of dollars thanks to his contributions to the scheme. We will continue to work with our law enforcement partners to bring to justice those who prey upon the investing public.”
According to the Complaint and Indictment in the case and evidence presented at trial:
From 2015 to 2016, MOORE and others partnered with Renwick Haddow, who is also a British citizen, in soliciting investments into workspace leases in a co-working business called Bar Works through material misrepresentations concerning, among other things, the identity of Bar Works’ management. Previously, Haddow had been disqualified as a director of any United Kingdom company for eight years, and was sued by the Financial Conduct Authority, a British regulator, for operating investment schemes that lost investors substantially all of their money. These sanctions and lawsuit were publicized extensively online.
In order to conceal his role at Bar Works because of the negative publicity on the internet related to past investment schemes and government sanctions in the U.K., Haddow adopted the alias “Jonathan Black.” Notwithstanding Haddow’s control over Bar Works, MOORE and others knowingly distributed the Bar Works offering materials listing Black as the Chief Executive Officer of Bar Works and claiming that Black had an extensive background in finance and past success with start-up companies. As MOORE well knew, “Jonathan Black,” was an entirely fictitious person, created to mask Haddow’s control of Bar Works. Among other things, MOORE helped devise pitch materials that contained the misrepresentation, coordinated a substantial sales force to recruit investors knowing that the materials contained the falsehood, advised Haddow as to how to continue to conceal the truth concerning the identity of “Jonathan Black,” and affirmatively represented to agents for investors that he was communicating with CEO “Jonathan Black.” MOORE also received in excess of $1.6 million in commissions for his participation in the scheme.
Last month, U.S. Attorney Berman announced the unsealing of a guilty plea, on May 8, 2019, by Haddow in which he admitted to his own involvement in the fraudulent scheme related to Bar Works, as well as to making material misrepresentations and misappropriating investment funds in another company created by Haddow called Bitcoin Store Inc. (“Bitcoin Store”), and agreed to cooperate with the Government. Haddow’s case has been assigned to U.S. District Judge Laura Taylor Swain.
Further, last month Mr. Berman also announced the unsealing of charges against
Savraj Gata-Aura, another citizen of the United Kingdom, in connection with the same scheme. As alleged in the Superseding Indictment containing those charges, Gata-Aura also partnered with Haddow in soliciting investments into workspace leases through material misrepresentations similar to MOORE’s by affirmatively misrepresenting that “Jonathan Black” ran the company. Overall, the scheme is believed to have fraudulently raised more than $50 million from unwitting investors.
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MOORE, 58, of the United Kingdom and Miami, Florida, was convicted of one count of wire fraud and one count of wire fraud conspiracy. Each charge carries a maximum sentence of 20 years in prison.
Savraj Gata-Aura, a/k/a “Sam Aura,” 33, of the United Kingdom and New York City, has been charged with one count of wire fraud and one count of wire fraud conspiracy relating to the Bar Works scheme. Each charge carries a maximum sentence of 20 years in prison.
Haddow, 50, pled guilty to one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme, and one count each of wire fraud and wire fraud conspiracy relating to the Bitcoin Store scheme. Each charge carries a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the respective judges. The charges against Gata-Aura are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mr. Berman praised the investigative work of the FBI and thanked the Securities and Exchange Commission, which has separately brought civil actions against MOORE, Haddow, and Gata-Aura, for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Vladislav Vainberg and Martin S. Bell are in charge of the prosecution.
Annapolis MS-13 Member Sentenced to 24 Years in Federal Prison for a Racketeering Conspiracy and for Discharging a Firearm Related to His MS-13 Gang ActivitiesRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge James K. Bredar sentenced Manuel Martinez-Aguilar, a/k/a “El Lunatic” and “Zomb”, age 20, of Annapolis, Maryland, today to 24 years in federal prison, followed by five years of supervised release, for conspiracy to participate in a racketeering enterprise and for using, carrying, and discharging a firearm during a crime of violence, in connection with his MS-13 gang activities.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Baltimore Office; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Baltimore Field Division; Chief Timothy J. Altomare of the Anne Arundel Police Department; and State’s Attorney Anne Colt Leitess of the Anne Arundel County State’s Attorney Office.
MS-13 is a gang composed primarily of immigrants or descendants of immigrants from El Salvador, with members operating in the State of Maryland, including Anne Arundel County, Montgomery County, Prince George’s County, and Frederick County, and throughout the United States. Branches or “cliques” of MS-13 often work together cooperatively as “Programs,” with the purpose of increasing the gang’s levels of organization, violence, extortion, and other criminal activity, and to assist one another in avoiding detection by law enforcement. In Maryland and the surrounding area, these cliques include Hempstead Locos Salvatruchas (“HLS”), Parkview Locos Salvatrucha (“PVLS”), Normandie Locos Salvatrucha (“NLS” or “Normandie”), Sailors Locos Salvatrucha Westside (“SLSW” or “Sailors”), Langley Park Salvatrucha (“LPS”), Weedoms Locos Salvatrucha (“Weedoms”), and Cabanas Locos Salvatruchas (“Cabanas”). A person within the participating cliques is selected as the Program leader.
To protect the gang and to enhance its reputation, MS-13 members and associates are expected to use any means necessary to force respect from those who show disrespect, including acts of intimidation and violence. MS-13’s creed is based on one of its mottos, “Mata, roba, viola, controla,” which translates to, “kill, steal, rape, control.” One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
According to Martinez-Aguilar’s plea agreement, prior to 2015, and continuing through 2017, Martinez-Aguilar was a member and associate of the Hempstead clique of MS-13, and participated in a racketeering conspiracy that included assaults, murder, attempted murder, robbery, and drug trafficking. For example, Martinez-Aguilar conspired to and attempted to murder two victims in Annapolis, for the purpose of gaining entrance to, maintaining, and increasing position in MS-13.
As detailed in his plea agreement on October 23, 2016, Martinez-Aguilar and other MS-13 members met in a park to discuss the plan to murder Victim 2, an unlicensed cab driver who was believed to be a member of a rival gang. At the meeting, each member of the conspiracy was assigned a task to complete the murder and dispose of the evidence. The group planned to use machetes, knives, and guns to kill the victim. All the members of the conspiracy, including Martinez-Aguilar, were aware that guns would be used in the murder. Martinez-Aguilar and another MS-13 member were tasked with disposing of Victim 2’s vehicle after the murder. The group planned to bury the victim’s body in the park.
According to the plea agreement, a member of the conspiracy called Victim 2 using another member’s cell phone to arrange for an unlicensed taxi ride. Victim 2 arrived with another passenger, Victim 3. The conspirator asked Victim 2 to drive to the area of 700 block of Annapolis Neck Road in Annapolis. When they arrived, another MS-13 member approached the vehicle and pointed a gun at the victims and the MS-13 member in the car also produced a gun and pointed it at the victims. Victim 3 attempted to run away and was shot in the leg, while another MS-13 member attacked the victim with a machete. Victim 2 also tried to run. Martinez-Aguilar and another MS-13 member took Victim 2’s vehicle and attempted unsuccessfully to run him over with the car. Two MS-13 members chased Victim 2 and repeatedly struck Victim 2 with a sharp instrument, causing stab wounds. The conspirators fled when they heard police sirens. Both victims were transported to the University of Maryland Shock Trauma Center with life threatening injuries. Both victims survived but have permanent injuries as a result of the attack.
On October 24, 2016, police detectives located Victim 2’s car, which smelled of gasoline. Officers recovered burned cigarettes from the car the contained DNA from Martinez-Aguilar.
Further, Martinez-Aguilar admitted that between January 2016 and February 2017, he and other members of MS-13 sold cocaine and marijuana to raise funds for the gang. The proceeds were used for the purchase of more narcotics, weapons, and to send to MS-13 members and associates in other states and in El Salvador, among other purposes.
Co-defendant David Diaz-Alvarado, age 20, pleaded guilty to murder in aid of racketeering related to a murder committed on March 11, 2016, in connection with his MS-13 gang activities. Charges remain pending against four other co-defendants, who all remain detained pending trial.
United States Attorney Robert K. Hur commended HSI, ATF, Anne Arundel Police Department, and Anne Arundel State’s Attorney Office. Mr. Hur thanked Assistant U.S. Attorney Zachary Stendig, Trial Attorney Matthew Hoff of the Criminal Division’s Organized Crime and Gang Section, as well as Special Assistant U.S. Attorney Samantha Mildenberg, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
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ATM Installer Sent to Prison for Tax EvasionRead the Press Release
A Tulsa man, who attempted to prevent the Internal Revenue Service (IRS) from collecting more than $200,000 in taxes, penalties and interest he owed for 2005, and didn’t file tax returns for the years 2006 through 2012, despite earning commissions totaling nearly $5 million during these years, was sentenced in federal court in Tulsa, Oklahoma, today by U.S. District Court Judge Gregory Frizzell to 24 months in prison, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Trent Shores.
John D. Petrig, 49, of Tulsa, pleaded guilty on Feb. 5, 2019, to one count of tax evasion. From 2000 to 2012, Petrig worked for a company as an independent contractor installing ATM machines inside casinos. The company paid him commissions based on the number of transactions that were executed at the ATMs. In 2012, Petrig filed his 2005 tax return with the IRS, reporting a tax due of just over $110,000. In fact, Petrig owed taxes, penalties and interest of more than $217,000 and took steps to evade payment of those funds. When the IRS sent a levy to his employer, Choice ATM Enterprises, directing his commission payments be sent to the IRS to pay his 2005 tax debt, Petrig instructed Choice to pay his future commission payments to a nominee entity, and thereby prevent those funds from being used to satisfy his tax debt. According to court documents, Petrig earned commissions totaling nearly $5 million for the years 2006 through 2012, but did not file tax returns for any of those years.
“Evading the payment of taxes constitutes serious criminal activity,” stated Principal Deputy Assistant Attorney General Zuckerman. “In partnership with the United States Attorney’s Office and IRS-Criminal Investigation, the Tax Division is committed to holding tax evaders accountable for such criminal activity and seeking prison sentences for such crimes.”
“Petrig tried to beat the system and lost. Over a seven year period, he earned a commission income of almost $5 million and failed to pay the nearly $1 million owed in income taxes. When the United States attempted to collect those back taxes, he directed his commission payments to be sent to fictitious corporations,” said U.S. Attorney Trent Shores. “This egregious behavior warrants the sentence Judge Frizzell handed down today in federal court. Tax evaders beware, your criminal conduct will be brought to light, investigated, and prosecuted by the Department of Justice.”
In addition to prison, Petrig was ordered to pay restitution to the IRS in the amount of $974,350.48 and to serve three years of supervised release after completion of his sentence.
The Department of Treasury, Internal Revenue Service-Criminal Investigation investigated the case. Special Assistant U.S. Attorney/ Assistant Chief Andrew J. Kameros of the Tax Division and Assistant U.S. Attorneys Charles M. McLoughlin and Victor S. Régal prosecuted the case.
"Tech Support" Telemarketing Scheme Leader SentencedRead the Press Release
PROVIDENCE – A college intern from India who led a group of college students in Newport in their participation in a “tech support” fraud scheme that duped close to two dozen individuals out of nearly a million dollars was sentenced today in federal court in Providence to 60 months in federal prison and ordered to re-pay his victims, announced United States Attorney Aaron L. Weisman, Newport Police Chief Gary T. Silva, and Homeland Security Investigations (HSI) Special Agent in Charge Peter C. Fitzhugh.
The Newport-based operation was tied to a large-scale telemarketing operation based in India.
Bishwajeet Kumar Jha, 21, and several other interns from the same college in India who were in the United States on hospitality industry internships defrauded a number of individuals of their retirement savings. The victims ranged in age from 58 years-old to 93 years-old and were duped out of between $1,180 dollars and $174,300 dollars. Over approximately three-months, the conspiracy defrauded individuals of at least $937,280.
The victims, who believed that they had purchased technology support, were led to believe that money had been erroneously refunded to their bank accounts by the tech support company. The victims were asked to return the erroneous refund and directed to send the money to the defendant and others. Some of the victims were told to send the money overseas.
The scheme was interrupted by Newport Police on November 20, 2018, when, as part of the investigation, detectives executed a court-authorized search of the residence of Jha and the other members of the conspiracy.
During the court-authorized search, Newport Police seized numerous items related to the operation of the telemarketing scheme. A subsequent investigation by members of the Newport Police Department and HSI agents determined that after the co-conspirators operating in Newport shared some of the proceeds of the scheme, large sums of money garnered from the scheme were transferred to a bank account in California. From there, the majority of funds were transferred internationally to India, China, and Singapore.
“The Department of Justice takes very seriously, and will advocate for the imposition of substantial criminal penalties for targeting vulnerable, especially elderly, victims through the commission of federal crimes such as this,” said United States Attorney Aaron L. Weisman. “Investigations like this one by the Newport Police Department and Homeland Security Investigations show the strength of law enforcement working together to identify and hold accountable those whose mission it is to steal, and in some instance bankrupt, the elderly and most vulnerable in our community.”
Newport Police Chief Gary T. Silva commented, “This type of criminal activity is disturbing. Those who prey on citizens, particularly those citizens who are vulnerable, are deliberately calculating in their persistent efforts to defraud honest people. This investigation and successful prosecution of those responsible should provide notice to others contemplating similar acts that law enforcement and prosecutors are committed to actively bring to justice those responsible.”
“Today’s sentence is fitting and appropriate in light of the serious nature of the charges this defendant was convicted of,” said Peter C. Fitzhugh, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Boston. “HSI remains strongly committed to investigating those who wrongly believe they can exploit the generous nature of our immigration system to scam Americans via financial fraud schemes.”
At sentencing, U.S. District Court Judge John J. McConnell, Jr., sentenced Jha to 60 months in prison. A restitution order will be issued by the Court at a later date.
Jha will face deportation proceedings upon completion of his term of incarceration.
The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
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Sunday 9 June 2019
Former Executive Director of Lessie Bates Davis Neighborhood House Indicted for EmbezzlementRead the Press Release
A federal grand jury for the Southern District of Illinois has returned an indictment charging Christopher K. Coleman, 42, of Troy, Illinois, with embezzlement from the Lessie Bates Davis Neighborhood House, an organization that receives federal funds. The indictment alleges that Coleman embezzled the funds from July 2016 to December 2017, while he was serving as the organization’s executive director. The indictment further alleges that Coleman concealed his crime by creating and using false invoices.
According to the indictment, the Lessie Bates Davis Neighborhood House is a non-profit, faith-based organization in East St. Louis, Illinois, whose mission is to improve the quality of life for residents of all ages by providing quality early childhood development services, comprehensive youth services, individual and family support services, services to older adults, and housing economic development services, which will help move individuals and families out of poverty.
Embezzling money from an organization that receives federal funds carries a maximum sentence of ten years in prison, a fine of up to $250,000, and restitution. Coleman is scheduled to make his initial appearance at the federal courthouse in East St. Louis, Illinois, on June 25, 2019.
An indictment is merely a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation was conducted by the Southern Illinois Public Corruption Task Force, which consists of agents with the FBI, Internal Revenue Service/Criminal Investigation, and the Illinois State Police. The prosecution is being handled by Assistant U.S. Attorney Norman R. Smith. Citizens are encouraged to report suspicions of public corruption to the Southern Illinois Public Corruption Task Force Tip Line at (618) 589-7373.
Friday 7 June 2019
Westford Man Charged with Fraud and Embezzlement SchemeRead the Press Release
BOSTON – The former CEO and co-founder of a Boston-based mobile phone music streaming service, was charged in connection with a scheme to embezzle hundreds of thousands of dollars from his employer.
David Fondots, 56, was charged by criminal complaint on one count of wire fraud. Fondots was arrested yesterday evening and made an initial appearance in federal court in Boston this afternoon.
According to the complaint affidavit, Fondots misappropriated company funds which he used for his personal benefit. It is alleged that between 2014 through 2016, Fondots caused his company to pay significant sums of money directly to himself, to a family member, and to companies controlled by a family member. Fondots used the embezzled funds to pay personal expenses for himself and his family, including car payments, legal fees, and travel, among other things.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities & Financial Fraud Unit is prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Wagner Man Convicted of Sexual AbuseRead the Press Release
United States Attorney Ron Parsons announced that Jeremy Aungie, age 33, of Wagner, South Dakota, was found guilty of two counts of Aggravated Sexual Abuse of a Child, as a result of a federal jury trial in Sioux Falls, South Dakota. The verdict was returned on June 5, 2019.
The charges carry a maximum penalty of life in federal prison and/or a $500,000 fine, up to life of supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
Aungie was indicted by a federal grand jury on June 6, 2018.
From on or about June 22, 2012, until on or about May 16, 2018, Aungie sexually abused a juvenile female from the time she was 8 years old until she was 13 years old. They lived together in a house in Wagner. The sexual abuse was often accompanied by physical abuse such as hitting, slapping, pulling of hair, and choking.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Jeffrey C. Clapper and Ann M. Hoffman prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 19, 2019. The defendant was remanded to the custody of the U.S. Marshals Service.
United States Settles False Claims Act Cases Against Home Health AgencyRead the Press Release
Tampa, FL – The United States has settled two cases against Nurse on Call, a home health agency with locations in Sarasota and Orlando, that allege False Claims Act violations arising from having a medical director approve care for patients without having seen the patients, the alleged payment of kickbacks in the form of a sham medical director agreement, and payments to the spouses of referring physicians.
Nurse on Call allegedly paid kickbacks in the form of a sham medical directorship to a physician to refer patients to Nurse on Call. The physician allegedly did little, if any, of the work for which Nurse on Call paid him as medical director. Sham medical director agreements to induce patient referrals violate the Anti-Kickback Statute and the Stark Law. Nurse on Call also allegedly paid some employees in a manner that accounted for the volume of referrals by their physician spouses, in violation of the Stark Law. Finally, Nurse on Call allegedly requested another medical director to approve plans of care for patients whom the director never saw, in violation of Medicare regulations.
“The Anti-Kickback Statute and the Stark Law help to ensure that financial interests do not compromise the medical decision-making process,” said U.S. Attorney Maria Chapa Lopez. “Additionally, Medicare regulations requiring physicians to have face-to-face contact with patients helps to ensure that any care provided is necessary and reasonable. Our office will continue to use every tool at our disposal to combat fraud and abuse in our health care programs.”
The Anti-Kickback Statute prohibits anyone from offering or paying remuneration in order to induce or reward referrals for services paid for under federal healthcare programs. The Stark Law forbids certain medical providers, including home health agencies, from submitting claims to Medicare for services provided to patients who were referred by a physician with whom the provider has a prohibited financial relationship, unless that relationship falls within an applicable exception. Finally, Medicare regulations require home health care to be provided pursuant to a plan of care reviewed and approved by a physician who has had recent, face-to-face contact with the patient.
The lawsuits were filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and receive a share of any recovery. The act permits the United States to intervene in the cases and settle them, as it has done here. A defendant who violates the act is subject to three times the government’s losses, plus applicable penalties.
This case is being handled by Assistant U.S. Attorney Charles Harden of the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the Federal Bureau of Investigation.
The claims made in the complaints are allegations only, and there has been no determination of liability. The cases are captioned U.S. ex rel. Spencer, et al. v. Emeritus Corp., Nurse on Call, et al., Case No. 8:13-cv-3194-T-30-TGW, and U.S. ex rel. Doe v. Nurse on Call, Case No. 8:15-cv-1043-T-17-TBM.
United States Attorney Shores Announces the Hiring of Two New Assistant United States AttorneysRead the Press Release
United States Attorney Trent Shores announced today the appointment of Kristin Harrington as an Assistant U.S. Attorney in the Civil Division and Scott Proctor as an Assistant U.S. Attorney in the Criminal Division for the Northern District of Oklahoma. They are scheduled to be sworn in Friday, June 7, at 10:00 a.m., at the United States District Courthouse by Chief United States District Judge John E. Dowdell.
“Kristin and Scott are valuable additions to our justice team here in the Northern District of Oklahoma. Kristin brings extensive experience, knowledge, and passion to the fight against opioids as part of our affirmative civil enforcement unit. Scott - with his service as an officer in the U.S. Navy and education at Harvard - brings a unique blend of mission readiness and legal aptitude to our Indian Country team,” said U.S. Attorney Shores. “We are lucky to have selfless civil servants like Kristin and Scott on our team. They will make a positive impact on our community and help further our mission at the Department of Justice.”
As an Assistant U.S. Attorney for the Affirmative Civil Enforcement unit, Ms. Harrington will prosecute civil actions on behalf of the United States of America to recover damages for fraud and other offenses and impose civil penalties for violations of the federal health, safety and economic welfare laws. One of her primary focuses will be combating the opioid crisis in northeastern Oklahoma. Previously, Ms. Harrington served as an Assistant U.S. Attorney for the Eastern District of Oklahoma. While there, she also served as the Opioid Coordinator, a position responsible for community outreach to address the opioid crisis and prosecution of cases involving opioids, including heroin, fentanyl and other controlled substances. Ms. Harrington has also served at the Oklahoma Attorney General’s Office, prosecuting white collar crime and healthcare matters, and as an Assistant District Attorney for the Tulsa County District Attorney’s Office. Ms. Harrington received her undergraduate degree at DePauw University and her J.D. from the University of Tulsa College of Law.
As a Criminal Division Assistant U.S. Attorney, Mr. Proctor will represent the United States of America in the prosecution of criminal cases in Indian Country. Mr. Proctor joined the office from the Attorney General’s Honors Program, where he was selected as “Indian Country Fellow.” Previously, he clerked for U.S. Circuit Judge Jeffrey Sutton at the United States Court of Appeals for the Sixth Circuit in Columbus, Ohio. He has also worked as an intern at the Justice Department’s National Security Division, Counterterrorism Section, the U.S. Attorney’s Office for the District of Massachusetts, and on Capitol Hill for U.S. Senator Tom Cotton. Mr. Proctor has further served in the United States Navy and Navy Reserve for ten years, attaining the rank of Lieutenant Commander. Mr. Proctor received his undergraduate degree from Yale University and his J.D. from Harvard University where he graduated magna cum laude. While at Harvard, he served as executive editor of the Harvard Law Review.
U.S. Attorney’s Office Launches Project Safe Neighborhoods LubbockRead the Press Release
The U.S. Attorney’s Office for the Northern District of Texas – in partnership with the Lubbock Police Department and a host of other federal, state, and local law enforcement partners – today launched Project Safe Neighborhoods Lubbock, its third PSN initiative in North Texas, announced U.S. Attorney Erin Nealy Cox.
A nationwide program spearheaded by the Justice Department, Project Safe Neighborhoods surges federal and local resources to communities’ most violent neighborhoods in order to root out the area’s worst offenders and build positive relationships with crime victims and witnesses.
The PSN Lubbock Taskforce – which includes officers, agents, and staff from the Lubbock Police Department, Lubbock County Sheriff’s Office, Lubbock County District Attorney’s Office, Texas Department of Public Safety, U.S. Attorney’s Office, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms & Explosives, Drug Enforcement Administration, U.S. Marshals Service and Homeland Security Investigations – worked with a university criminologist to analyze city-wide crime data and zeroed in on a violent crime “hotspot” in central Lubbock, west of I-27 and north of the South Loop:
Data showed violent crime –including assault, and robberies – creeping up in the region. Aggravated assaults, for example, rose more than 28% over four years. The Taskforce felt the region could benefit from Project Safe Neighborhood’s three-pronged approach, which combines traditional enforcement with community outreach and recidivism reduction.
To that end, the Taskforce created an email tip line where members of the community can reach out: [email protected]. The inbox is monitored by federal agents who will route comments and concerns to the appropriate authority. Lubbock’s Crime Line will offer monetary rewards for information leading to the successful federal prosecution of PSN crimes in Lubbock.
“Project Safe Neighborhoods is a collaborative initiative that draws upon the collective wisdom of our local, state and federal law enforcement partners to reach a common goal: Reducing violent crime inside the PSN hotspot and citywide,” said U.S. Attorney Erin Nealy Cox. “We’ve found that when crime lacks a geographic locus, it dissipates. And when a community trusts law enforcement, it thrives.”
“The Lubbock Police Department takes the protection of its citizens and their quality of life very seriously. We use all the available tools and resources to bring criminals to justice and make our communities stronger through active engagement,” said Lubbock Police Chief Jerry D. Brewer.
"The FBI is pleased to continue our support for the Project Safe Neighborhoods initiative," said FBI Dallas Special Agent in Charge Matthew J. DeSarno. "We remain committed to working closely with our federal, state, and local law enforcement partners to ensure the safety and well being of the Lubbock community."
To date, the Northern District of Texas has launched two other PSN initiatives: PSN Dallas and PSN Amarillo. Both have proved enormously successful. For more information on PSN, visit: https://www.justice.gov/usao-ndtx/project-safe-neighborhood-psn-revitalized-2018.
U.S. Attorney's Office Reaches ADA Settlement with Danbury Sports FacilityRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that the U.S. Attorney’s Office has reached a settlement agreement with Danbury Sports Dome in Danbury to resolve allegations that the sports facility was not operating in compliance with the Americans with Disabilities Act of 1990 (“ADA”).
The settlement agreement resolves an ADA complaint filed by the parents of a child with severe food allergies alleging that Danbury Sports Dome refused to admit the child to its summer camp program because of the child’s food allergies. Under the terms of the settlement agreement, Danbury Sports Dome will implement new nondiscriminatory policies, practices and procedures regarding the admission of and programming for children with disabilities who wish to attend their camps, programs, services and activities. Danbury Sports Dome will designate an employee to serve as its ADA coordinator and will train its employees on compliance with Title III of the ADA. Additionally, Danbury Sports Dome will revise its registration materials to inform parents of children with disabilities of their right to request reasonable modifications of the facility’s programs and will post to its website the nondiscrimination policy approved by the U.S. Attorney’s Office.
Under federal law, private entities that own or operate places of “public accommodation,” including gymnasiums and other places of exercise and recreation, are prohibited from discriminating on the basis of disability. The ADA authorizes the U.S. Department of Justice to investigate complaints and undertake periodic reviews of compliance of covered entities. The Justice Department is also authorized to commence a civil lawsuit in federal court in any case that involves a pattern or practice of discrimination or that raises issues of general public importance, and to seek injunctive relief, monetary damages, and civil penalties.
U.S. Attorney Durham noted that the management of Danbury Sports Dome was cooperative with the U.S. Attorney’s Office and is committed to addressing the issues raised by the ADA investigation without litigation.
“The U.S. Attorney’s Office enforces the Americans with Disabilities Act, which ensures that individuals are able to access and enjoy places of public accommodation in Connecticut, including the state’s gymnasiums and other places of exercise and recreation,” stated U.S. Attorney Durham. “Throughout our investigation, the management of Danbury Sports Dome showed its commitment to complying with the ADA and making all changes necessary to accommodate children with disabilities at its facility.”
Any member of the public who wishes to file a complaint alleging that any place of public accommodation or public entity in Connecticut is not accessible to persons with disabilities may contact the U.S. Attorney’s Office at 203-821-3700.
Additional information about the ADA can be found at www.ada.gov, or by calling the Justice Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TTY). More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
This matter was handled by Assistant U.S. Attorney Jessica H. Soufer of the District of Connecticut in coordination with the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
U.S. Attorney's Office and FBI to Host Elder Fraud Prevention Telephone Town Hall to Promote Elder Justice InitiativeRead the Press Release
LAS VEGAS, Nev. – The United States Attorney’s Office for the District of Nevada and the FBI Las Vegas Division are promoting the Department of Justice’s (DOJ) Elder Justice Initiative with an interactive telephone town hall on June 10, announced U.S. Attorney Nicholas A. Trutanich and Special Agent in Charge Aaron C. Rouse for the FBI Las Vegas Division.
One of the best ways to protect yourself or a loved one from financial fraud is to remain informed. The U.S. Attorney’s Office, the FBI, and AARP Nevada have partnered to raise awareness and educate Nevada’s seniors about the latest financial scams. The free telephone town hall will be live on Monday, June 10, from 9:30 a.m. to 10:30 a.m. PDT.
The Internet Crime Complaint Center (IC3) was established to provide the public with a reliable and convenient reporting mechanism to submit information to the FBI. The IC3 aggregates and forwards suspected criminal internet activity to the appropriate local, state, federal, and international law enforcement agencies for possible investigation. In 2018, the IC3 received a total of 351,936 complaints with losses in excess of $2.7 billion.
To join the free telephone town hall, register at https://vekeo.com/event/aarpnevada-45728/.
The DOJ Elder Justice Initiative aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educating older adults on how to identify scams and avoid getting ripped off by scammers; and promoting greater coordination with law enforcement partners.
Elder fraud complaints may be filed with the Federal Trade Commission at 1-877-FTC-HELP or online at www.ftccomplaintassistant.gov or the IC3 at www.ic3.gov.
The DOJ provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime at www.ovc.gov. Additional elder justice resources, training, and outreach materials can be found at the Elder Justice Website at www.elderjustice.gov.
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U.S. Attorney D. Michael Dunavant Completes Class VI of the Leadership Tennessee Signature ProgramRead the Press Release
Memphis, TN - On June 3, 2019, U.S. Attorney D. Michael Dunavant was among 45 Class VI members to complete and graduate from the Leadership Tennessee Signature Program. Starting in August, 2018, Class VI members participated in a ten month, five session course of study that allowed them to visit each region of the state, engage in analytical conversations of importance to critical state issues, learn from state and national experts on those issues, and experience the cultural diversity of the region. The study of those issues by Leadership Tennessee members resulted in increased statewide networking, collaborative conversations, and concrete plans to continue that dialogue and actions beyond the yearlong commitment.
The 45 Class VI members represented each geographic region of the state, including the communities of Memphis, Martin, Jackson, Nashville, Clarksville, Murfreesboro, Knoxville, Kingsport, Johnson City and Chattanooga. Professional sectors represented included healthcare, education, economic development, government, tourism and agriculture.
Finishing its sixth year, Leadership Tennessee selects a new class of leaders annually to visit different regions and communities of Tennessee, learning best practices and analyzing important issues faced by Tennesseans. To date, Leadership Tennessee has built a network of over 200 leaders across the state.
As part of its mission to foster dialogue and increase connection on issues of statewide importance, Leadership Tennessee hosted Sam Quinones, author of "Dreamland: The True Tale of America’s Opiate Epidemic" in Kingsport and Knoxville in November, 2018, and also co-hosted the West Tennessee Opioid Summit in Memphis in April, 2019, to discuss the opioid crisis and create learning
and community collaboration to combat the epidemic and support those at risk of or recovering from addiction. In addition, throughout the ten month sessions, Class VI members focused on the issues of education and workforce development, access to healthcare, urban blight and poverty, rural economic development, public safety, and civic engagement.
U.S. Attorney D. Michael Dunavant said, "Being selected to participate in the Leadership Tennessee Signature Program was a high honor for me, and I was thankful to join so many other talented and dedicated leaders in productive dialogue and learning in order to tackle the urgent challenges in our state. I am confident that the connections made and insights gained will help me better represent and protect the citizens of the Western District of Tennessee."
Leadership Tennessee, an initiative of the College of Leadership & Public Service at Lipscomb University, fosters collaborative, non-partisan dialogue on issues of state importance, connecting a network of diverse leaders and engaged citizens from rural and urban communities across Tennessee.
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Two USP Canaan Inmates Charged with Assault and Possession of ContrabandRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Joshua Truesdale, age 37, and James Brooks, age 34, inmate as United States Penitentiary Canaan (USP Canaan) in Waymart, Pennsylvania, were indicted by a federal grand jury on June 4, 2019. for conspiracy and assault with a dangerous weapon.
According to United States Attorney David J. Freed, the indictment alleges that on August 13, 2018, Truesdale and Brooks conspired and attacked another inmate with a sharpened piece of metal and plastic, commonly referred to as a “shank.”
The investigation was conducted by agents of the Federal Bureau of Investigation and officers at USP Canaan. Assistant United States Attorney Alisan V. Martin is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for both conspiracy and assault with a deadly weapon is 10 years of imprisonment, 3 years of supervised release, and a fine of $250,000. The maximum penalty for possession of contraband is 5 years of imprisonment, 3 years of supervised release, and a fine of $250,000. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Two Rapid City Men Charged in RobberyRead the Press Release
United States Attorney Ron Parsons announced that two Rapid City, South Dakota, men were charged in federal district court with Interference with Commerce by Robbery, Use and Brandishing of a Firearm During the Commission of a Crime of Violence, and Conspiracy.
Corbin Conroy, age 40, and Wesley Dillon, age 18, were indicted on April 16, 2019. Conroy and Dillon appeared before U.S. Magistrate Judge Daneta Wollmann and pleaded not guilty to the charges. The maximum penalty upon conviction is life in federal prison and/or a $250,000 fine, 5 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Conroy and Dillon robbing a Rapid City casino in March 2019, and brandishing a pistol at a casino employee.
The charges are merely an accusation and Conroy and Dillon are presumed innocent until and unless proven guilty.
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 is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Rapid City Police Department. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Conroy and Dillon were detained pending trial. A trial date has not been set.
Two North Pole Men Sentenced for Orchestrating Identity Theft ConspiracyRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that two North Pole men were sentenced to federal prison for orchestrating a sophisticated fraud, identity theft, and mail theft conspiracy involving numerous victims and thousands of dollars in fraudulent purchases in Fairbanks and North Pole, Alaska.
Andrew Mac Saunders, 43, and Ian David Bowman, 30, were sentenced in Fairbanks today by Senior U.S. District Judge Ralph R. Beistline to serve 40 months and 52 months in federal prison, respectively. In March 2019, Saunders and Bowman both pleaded guilty to federal identity theft charges. Saunders and Bowman also agreed to pay $29,418 in restitution to the victims in this case, plus other yearly payments to compensate victims for costs associated with identity theft protection. The Court set a final restitution hearing for Aug. 16, 2019.
According to court documents, on Jan. 19, 2018, the Alaska State Troopers (AST) responded to a report that Saunders and Bowman were perpetrating a scheme to manufacture and use counterfeit identification documents and counterfeit checks. A search warrant was executed on their shared residence in North Pole, where AST seized computers, hard drives, and printers that revealed that extent of the criminal scheme. The seized computers contained 51 unique counterfeit identification documents, of which ten displayed Saunders’ photograph, 21 displayed Bowman’s photograph, and 20 others displayed the photographs of their co-conspirators, and all of which included the names and addresses of victims. Numerous stolen identity documents were also seized that contained victims’ personal information.
The investigation revealed that Saunders and Bowman would steal mail from the mailboxes of victims who reside in Fairbanks and North Pole. They would then use that mail to create false driver’s licenses using specialized computer programs and printing equipment procured by Bowman, inserting his own and his co-conspirators’ photos along with the true name, address, and driver’s license number of victims. Saunders and Bowman would then create counterfeit checks printed in the victims’ names, open lines of credit at various retailers, and open accounts at stores like Verizon and AT&T to purchase high-value merchandise, often presenting the false driver’s licenses to complete the transactions. Saunders, Bowman and their co-conspirators sold this merchandise for cash, which they then used to purchase illegal narcotics.
At the sentencing hearings, Judge Beistline noted that this crime “involved greed,” was “sophisticated” and “premeditated,” and “required thought, effort, and work.” Judge Beistline also noted the sharp rise in identity theft crimes in recent years, as well as the importance of general deterrence in fashioning the sentences that Saunders and Bowman received.
The Federal Bureau of Investigation (FBI), the Alaska State Troopers (AST), the Fairbanks Police Department (FPD), the U.S. Bureau of Land Management (BLM) Office of Law Enforcement and Security, and the Alaska State Park Rangers conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Ryan D. Tansey.
Two Men Plead Guilty to Firearms ConspiracyRead the Press Release
ALEXANDRIA, Va. – Two Washington, D.C. area men pleaded guilty this week to their roles in a conspiracy to transport with the intent to engage in unlawful interstate dealing in firearms.
“The illegal purchase, transportation and resale of firearms presents risks of violence and a serious danger to our communities and the law enforcement officers who keep us safe,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “I would like to thank our local and federal law enforcement partners for their work in keeping illegal firearms off the streets and out of our communities.”
According to court documents, Daryl Antonio Pearce, 21, and his half-brother, Darius Antonio Giles, 22, conspired together to travel from Maryland and Washington, D.C.—where they resided—to Virginia to acquire firearms with the intent to engage in the business of dealing firearms. During the course of this conspiracy, Pearce and Giles purchased well over 33 firearms within the Eastern District of Virginia and elsewhere. After they purchased these firearms, they transported them from Virginia to Maryland and Washington, D.C., where Pearce and Giles resold the firearms to various individuals for profit. Several of the firearms have been recovered by law enforcement in Washington, D.C. and Maryland, including from a convicted felon. Giles was arrested in February following a controlled firearm buy with undercover ATF agents.
Pearce and Giles pleaded guilty to conspiracy to transport firearms interstate and to act with the intent to engage in interstate dealing in firearms. They both face a maximum penalty of five years in prison when sentenced on September 20. In addition, Giles pleaded guilty to being a felon in possession of a firearm, and faces an additional maximum penalty of 10 years in prison at sentencing. 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 after U.S. District Judge Liam O’Grady accepted the plea. Special Assistant U.S. Attorney Joel H. Feil and Assistant U.S. Attorney Nicholas U. Murphy II 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-139.
Two Defendants Plead Guilty to Cattle RustlingRead the Press Release
OKLAHOMA CITY – ANTHONY WHITTLEY, 28, of Parsons, Kansas, and JASMINE BOONE, a/k/a Jasmine Thomas, 28, of Wister, Oklahoma, have pleaded guilty to cattle rustling, announced United States Attorney Timothy J. Downing.
On March 19, 2019, a federal grand jury returned a two-count indictment that charged Whittley and Boone with transporting seventeen stolen cattle in interstate commerce on December 11, 2018, by moving them from Cherokee County, Kansas, to the Oklahoma National Stockyards Company in Oklahoma City.
Agents arrested the pair when the sale was complete. They have been in the custody of the U.S. Marshals Service since early April.
On June 5, both Whittley and Boone pleaded guilty to transporting cattle in interstate commerce. They acknowledged in a written plea agreement that they committed similar thefts in Crawford County, Kansas, and LeFlore County, Oklahoma, in the second half of 2018. They admitted they sold these cattle in Tulsa and Springfield, Missouri, respectively. They also admitted they sold cattle stolen in Cherokee County, Kansas, in Siloam Springs, Arkansas.
Whittley has agreed to pay more than $43,000 in restitution, including more than $15,000 to the Farm Service Agency, part of the U.S. Department of Agriculture, for the sale of mortgaged cattle without the lender’s authorization. Boone has agreed to pay more than $28,000 in restitution.
Each defendant could be sentenced to a maximum of five years in prison, in addition to three years of supervised release, and fined up to $250,000. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the Major Theft Task Force of the FBI Oklahoma City Division; the Oklahoma Department of Agriculture; the Missouri Highway Patrol; the Kansas Attorney General’s Office; the County Attorney’s Offices and Sheriff’s Offices in Cherokee County and Crawford County, Kansas; and the District Attorney’s Office of LeFlore County, Oklahoma. Assistant U.S. Attorney Edward J. Kumiega is prosecuting the case.
Reference is made to public filings for further information.
Tulare County Man Charged with Unlawfully Possessing a Machinegun and CocaineRead the Press Release
FRESNO, Calif. — A federal grand jury returned a three-count indictment on Thursday against Francisco Fernandez, 26, of Earlimart, charging him with possessing cocaine for distribution, unlawfully possessing a machinegun, and possession of an unregistered firearm, U.S. Attorney McGregor W. Scott announced.
According to court documents, on April 19, 2019, agents searched Fernandez’s residence and storage unit and found cocaine, several assault rifles, a Glock pistol that was converted into a machinegun, and several auto sears. An auto sear is a part that is used to convert a semi‑automatic pistol into a fully automatic machinegun. Fernandez is prohibited from possessing firearms because he is an unlawful user of cocaine.
This case is the product of an investigation by Bureau of Alcohol, Tobacco, Firearms and Explosives and Homeland Security Investigations. Assistant U.S. Attorney Thomas Newman is prosecuting the case.
If convicted, Fernandez faces a maximum statutory penalty of 20 years in prison and a $1 million fine for possessing with the intent to distribute cocaine and a maximum statutory penalty of 10 years in prison and a $250,000 fine for the firearms charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Three Members of Virginia Family Arrested and Charged with Conspiring to Force Victim to Labor in Their Home for YearsRead the Press Release
An indictment was unsealed today in federal court following the arrests of Zahida Aman, 77, Mohammed Naumann Chaudhri, 51, and Mohammed Rehan Chaudhri, 45, all of Midlothian, Virginia. The indictment charges the defendants with conspiracy, forced labor, and document servitude. Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division, U.S. Attorney G. Zachary Terwilliger Eastern District of Virginia and David W. Archey, Special Agent in Charge of the FBI’s Richmond Field Office made the announcement.
According to the allegations set forth in the indictment, between March 2002 and August 2014, the defendants conspired to force the victim, who had been married to Aman’s son, to provide labor and services at their Midlothian home, to include cleaning the house, painting the house, and mowing the lawn. The indictment further alleges that the defendants subjected the victim to physical, psychological, and verbal abuse, withheld her food, restricted her communications with family and neighbors, confiscated her immigration and identification documents, limited her access to her own children, and threatened to separate her from her children, among other coercive means.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty. If convicted of forced labor, the defendants face sentences of up to 20 years in prison, as well as mandatory restitution.
The case is being investigated by the FBI’s Richmond Division. It is being prosecuted by Assistant United States Attorney Heather Mansfield for the Eastern District of Virginia and Trial Attorneys Vasantha Rao and Maryam Zhuravitsky for the Civil Rights Division’s Human Trafficking Prosecution Unit.
Three Child Predators Sentenced in Federal Court This WeekRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that three men from across the Eastern District of Pennsylvania have been sentenced to prison this week by federal judges for child exploitation offenses in separate cases. Arthur Schlegel, 48 of Roseto, PA was sentenced to fifteen years imprisonment, twenty years supervised release and $10,000 restitution by Judge Joseph Leeson on June 4, 2019; Kenneth Laporte, 43, of Philadelphia, PA was sentenced to fifteen years imprisonment and lifetime supervised release by Judge Harvey Bartle III on June 4, 2019; and Michael Seibert, 32, of Allentown, PA was sentenced to thirty years imprisonment and lifetime supervised release by Judge Joseph Leeson on June 6, 2019.
In the Schlegel case, the defendant pleaded guilty to multiple counts of possession and distribution of child pornography. For years, Schlegel amassed a collection of over a thousand images and videos depicting the sexual abuse of children. He also shared child sexual assault images and videos online.
In the Laporte case, the defendant pleaded guilty to multiple counts of receipt and possession of child pornography for events that occurred within months of the defendant being released from federal prison after serving a sentence for similar charges.
In the Seibert case, the defendant pleaded guilty to multiple counts of manufacturing and possession of child pornography. Posing as a teenage boy, Seibert visited internet chat rooms to communicate with multiple minor girls between the ages of 10 and 14, and persuaded them to take pornographic images of themselves and send the images to him. The defendant also downloaded hundreds of digital images and dozens of videos of child pornography from internet websites.
“The nature of these crimes is horrifying and the negative impact on the victims can never be fully understood or appreciated, which is why my Office is committed to working with our law enforcement partners to identify, investigate and prosecute these dangerous predators,” said U.S. Attorney William M. McSwain. “Child exploitation is a pervasive problem — made more so by the accessibility of the internet — that demands an aggressive response. We thank the Judges in these cases for delivering justice to these defendants through lengthy sentences.”
“Laporte took advantage of the justice system by sexually exploiting children just months after being released from federal prison for similar offenses,” said Michael Harpster, Special Agent in Charge of the Philadelphia Division of the FBI. “Not only did he blatantly disregard the court, but he continued exploiting innocent children. This lengthy sentence makes certain that Laporte will not be afforded any further opportunity to commit these heinous acts. Society is a safer place with Laporte behind bars.”
“Child sexual exploitation is one of the most despicable crimes committed,” said Marlon V. Miller, special agent in charge of HSI Philadelphia. “These substantial prison sentences serve as a reminder of the strong commitment by Homeland Security Investigations to collaborate with our law enforcement and community partners to bring online child predators to justice.”
These cases were 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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to 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.projectsafechildhood.gov.
The Schlegel case was investigated by the Department of Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Sherri Stephan. The Laporte case was investigated by the Federal Bureau of Investigation and the United States Probation Office, and is being prosecuted by Assistant United States Attorney Everett Witherell. The Seibert case was investigated by Department of Homeland Security Investigations and the Delaware County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Frank Labor.
Tampa Man Arrested and Charged with Trafficking Two Teen GirlsRead the Press Release
Tampa, Florida – Luis Berrios-Trinidad (29, Tampa) has been arrested on a criminal complaint charging him with the human trafficking of minors. If convicted, Berrios-Trinidad faces a mandatory minimum sentence of 10 years, up to life, in federal prison.
According to court documents beginning on May 23, 2019, Homeland Security Investigations agents engaged in undercover communications with Berrios-Trinidad regarding his representations that he was offering underage girls for sex acts in exchange for money. From May 23 to June 6, 2019, agents continued to communicate with Berrios-Trinidad and ultimately set up a meeting with him. On June 6, 2019, Berrios-Trinidad brought two minor girls to a Tampa-area hotel for the express purpose of engaging in commercial sex acts with the undercover agents, who were posing as adult male customers. Shortly after his arrival at the hotel, Berrios-Trinidad was arrested and the two girls were taken into protective custody.
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case is being investigated by Homeland Security Investigations. It will be prosecuted by Assistant United States Attorney Candace Rich.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Strafford Woman Sentenced to 12 Years for Meth ConspiracyRead the Press Release
SPRINGFIELD, Mo. – A Strafford, Mo., woman has been sentenced in federal court for her role in a conspiracy to distribute methamphetamine in the Springfield, Mo., area.
Cynthia A. House, 50, was sentenced by U.S. District Judge M. Douglas Harpool on Thursday, June 6, to 12 years in federal prison without parole.
On Dec. 6, 2018, House pleaded guilty to conspiracy to distribute methamphetamine and to two counts of possessing methamphetamine with the intent to distribute. House admitted that she participated in a conspiracy from November 2015 to February 7, 2017, in which multiple pounds of methamphetamine were purchased from a supplier in Kansas City, Mo., for distribution in the Springfield area.
According to court documents, House contacted her source in Kansas City by telephone to order one or two pounds of methamphetamine each week. House paid approximately $9,000 per pound for the methamphetamine, which was delivered via courier within 24 hours.
From May 2016 to February 2017, according to court documents, significant quantities of methamphetamine were discovered by law enforcement officers in a series of arrests and searches. In total, officers seized approximately 977.89 grams of methamphetamine from House during that time. Additionally, a total of over $21,000 was seized from House (who was unemployed) during the investigation.
This case was prosecuted by Assistant U.S. Attorney Byron H. Black. It was investigated by the Drug Enforcement Administration, the Springfield, Mo., Police Department, and the Strafford, Mo., Police Department.
St. Croix Man Pleads Guilty to Possessing Twenty Pounds of Marijuana at Henry E. Rohlsen AirportRead the Press Release
St. Croix, USVI – Dequan Forde, 21, of St. Croix, pled guilty on June 6, 2019, in District Court to one federal count of Possession of Marijuana with Intent to Distribute, United States Attorney Gretchen C.F. Shappert announced.
This offense carries a possible sentence of incarceration of up to 5 years, a maximum fine of up to $250,000 dollars, and a term of supervised release of at least 2 years. Sentencing is set for October 9, 2019.
According to court documents, on January 31, 2018, the defendant traveled on American Airlines flight #2317 from Miami, Florida, to St. Croix. Upon his landing at the Henry E. Rohlsen Airport on St. Croix, an x-ray examination of Forde’s luggage displayed unusual packaging. A physical examination of the luggage revealed a laundry bag that contained two vacuumed-sealed bags containing suspected marijuana. The luggage was subsequently placed on the baggage carousel where the defendant retrieved it. The total gross weight of the marijuana was approximately 9.40 kilograms, or approximately 20 pounds.
The case was investigated by Customs and Border Protection and Homeland Security Investigations. The marijuana was analyzed by the DEA Southeast Laboratory in Miami. Assistant U.S. Attorney Daniel H. Huston prosecuted the case.
St. Cloud Woman Sentenced for Stealing Social Security and Veterans BenefitsRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Lisa Browne (47, St. Cloud) to five months in federal prison, followed by three years of supervised release, for theft of government property. As part of her sentence, the court also ordered Browne to pay restitution in the amount of $68,319 to the Social Security Administration (SSA) and $66,693.48 to the Department of Veterans’ Affairs (VA).
Browne had pleaded guilty on March 21, 2019.
According to court documents, Browne’s grandfather, C.Z., was receiving Social Security Retirement Insurance Benefits and VA disability benefits. C.Z. passed away on or about February 2, 2014, and C.Z.’s death was never reported to either the SSA or the VA. Consequently, the SSA and VA continued to make benefit payments to C.Z. Browne accessed the funds and used them for personal expenses from in or around February 2014 through in or around March 2018. In total, Browne knowingly and willfully stole or converted approximately $68,319 in SSA benefits and $66,693.48 in VA benefits to which she was not entitled.
This case was investigated by the Social Security Administration, Office of the Inspector General and the Department of Veterans’ Affairs, Office of the Inspector General. It was prosecuted by Special Assistant United States Attorney Suzanne Huyler.
Sisseton Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that a Sisseton, South Dakota, man convicted of abusive sexual contact was sentenced on June 3, 2019, by U.S. District Jude Charles B. Kornmann.
Joel Michael Max, age 30, was sentenced to 120 months in federal prison, to be followed by 10 years of supervised release. He was ordered to pay $100 to the Federal Crime Victims Fund.
According to court documents, between March 23, 2018, and June 2, 2018, Max did knowingly engage in, and attempt to engage in, sexual contact with a child. Max acted with an intent to abuse, humiliate, harass, and degrade the child, and to arouse and gratify his sexual desires.
The investigation was conducted by the Federal Bureau of Investigation and the Sisseton-Wahpeton Sioux Tribe’s Law Enforcement. Assistant U.S. Attorney Jeremy R. Jehangiri prosecuted the case.
Max was remanded to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced to 20 Years for Conspiring to Distribute MethamphetamineRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance has been sentenced by Chief Judge Jeffrey L. Viken.
Michael Carey, age 57, was sentenced to 20 years in federal prison, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
“This is an appropriate prison sentence for a defendant who has been a major source of meth sold in western South Dakota,” said U.S. Attorney Parsons. “The public can be assured that federal, state, local, and tribal law enforcement agencies are working together to do everything possible to dismantle the drug trafficking organizations bringing this poison into our communities. And anyone still trafficking illegal drugs in this state should understand that they are next on the list.”
Carey was indicted by a federal grand jury on November 20, 2018, for Conspiracy to Distribute a Controlled Substance and Possession with Intent to Distribute a Controlled Substance. He pled guilty to the conspiracy charge on February 15, 2019.
On multiple occasions, Carey traveled to California to obtain methamphetamine from a California supplier. Upon Carey’s return, Carey would coordinate with others to distribute the methamphetamine in the Black Hills area. After months of investigation, a traffic stop was conducted while Carey was returning to South Dakota, and approximately 10 pounds of methamphetamine were found in his possession. Federal drug charges against an additional co-conspirator with Carey are pending.
This case was investigated by the Drug Enforcement Agency, the South Dakota Highway Patrol, and the local Unified Narcotics Enforcement Team. Assistant U.S. Attorney Gina Nelson prosecuted the case.
Carey was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Indicted for Failure to Register as a Sex OffenderRead 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 Failure to Register as a Sex Offender.
Eugene Leon Featherman, age 30, was indicted on November 14, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 31, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Featherman was convicted of Abusive Sexual Contact in January 2012. As a result of this conviction, he is required to register as a sex offender for a period of 25 years. It is alleged that between August 25, 2018, and November 14, 2018, Featherman, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of conviction under Federal Law, failed to properly register as a sex offender.
The charge is merely an accusation and Featherman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Michael J. Elmore is prosecuting the case.
Featherman was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Rapid City Man Charged with Wire Fraud and Theft of Government PropertyRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man was charged in federal district court with 18 counts of Wire Fraud and one count of Theft of Government Property.
Robert Rodney Bland, age 51, was indicted on May 21, 2019. He appeared before U.S. Magistrate Judge Daneta Wollmann on June 6, 2019, and pleaded not guilty to the charges. The maximum penalty upon conviction is 20 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Bland fraudulently billing for windshield rock chip repairs that were never done on General Services Administration vehicles. The charges are merely an accusation and Bland is presumed innocent until and unless proven guilty.
The investigation is being conducted by the General Services Administration-Office of Inspector General, the Department of Health and Human Services-Office of the Inspector General, and the Department of Defense-Office of the Inspector General. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Bland was released pending trial. A trial date has not been set.
Raleigh Investment Advisor Convicted on Twenty Counts of Investment FraudRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that a federal jury has convicted STEPHEN CONDON PETERS, 45, of Raleigh, North Carolina, on multiple counts of investment fraud. PETERS was convicted of:
- one count – Investment Advisor Fraud;
- one count – Fraud in the Sale of Unregistered Securities;
- nine counts – Wire Fraud;
- four counts – Engaging in Monetary Transactions in Criminally Derived Property;
- one count – Corruptly Endeavoring to Influence a Federal Agency;
- one count – Aggravated Identity Theft;
- one count – Conspiracy to Make and Use False Documents and to Falsify and Conceal Records;
- one count – Making and Using False Documents; and,
- one count – Falsifying and Concealing Documents During an SEC Examination.
The jury also found that PETERS was to forfeit multiple assets for the benefit of victims, including: his primary residence (known as “Whispering Hope Farm”), his luxury vacation home in Costa Rica (known as “House of the Beloved Princess”), the financial accounts tied to the fraud he committed, and numerous watches and firearms.
United States Attorney Higdon commented, “When people put their trust in a financial advisor, they expect honesty and professionalism. Instead, Mr. Peters violated that trust and breached his fiduciary duties for his own personal gain. This simply will not be tolerated. The United States Attorney’s Office will continue to partner with local, state, and federal law enforcement to vigorously enforce federal law in order to protect the citizens of Eastern North Carolina.”
"Stephen Peters abused his position and defrauded clients who trusted him with their life savings. This is a case about greed and abuse of trust. The FBI will continue to work with our partners to ensure this kind of malicious behavior is investigated and prosecuted. Mr. Peters will now face serious consequences for his fraudulent actions,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
The original Indictment, issued in December of 2017, charged PETERS with one count of Investment Advisor Fraud; one count of Fraud in the Sale of Unregistered Securities; nine counts of Wire Fraud; four counts of Engaging in Monetary Transactions in Criminally Derived Property; and one count of Corruptly Endeavoring to Influence a Federal Agency. Read more
A Superseding Indictment was subsequently filed which included four additional charges: one count of Aggravated Identity Theft; one count of Conspiracy to Make and Use False Documents and to Falsify and Conceal Records; one count of Making and Using False Statements and Documents; and, one count of Falsifying and Concealing Documents During an SEC Examination. The Superseding Indictment also included additional assets to be forfeited upon conviction. Read more
The jury heard evidence that, as stated in the Superseding Indictment, beginning in 2009, and continuing into 2017, PETERS orchestrated the sale of VisionQuest Capital LLC promissory notes (the “Capital LLC Notes”), primarily to VisionQuest Wealth Management LLC clients. In exchange for an investment of funds, the Capital LLC Notes purported to promise investors an 8% or 9% annual return on principal over a five year term. In connection with the sale of the Capital LLC Notes, PETERS represented and caused to be represented to investors that the Capital LLC Notes were a low risk investment, and that the note proceeds would be invested into revenue generating or income-producing businesses. In fact, PETERS stole large portions of the investor proceeds and carried out a "Ponzi" scheme on investors.
PETERS, both directly and through his staff at VisionQuest Wealth Management, LLC, forged, fabricated, and concealed documents and records in an effort to thwart an examination by the United States Securities and Exchange Commission (SEC) in late 2016. Additionally, PETERS forged and backdated a letter to his former compliance officer purporting to place the burden of disclosing PETERS’ conflicts of interest upon the compliance officer. PETERS further directed the fabrication of numerous other records given to the SEC examiners, including client balance sheets, wealth management contracts, outside business activity disclosures, and internal compliance memoranda.
At sentencing, PETERS faces the following penalties: Investment Advisor Fraud, not more than 5 years imprisonment; Fraud in the Sale of Unregistered Securities, five years imprisonment; Wire Fraud, twenty years imprisonment per count; Engaging in Monetary Transactions in Criminally Derived Property, ten years imprisonment per count; Corruptly Endeavoring to Influence a Federal Agency, five years imprisonment; Aggravated Identity Theft, not less or more than 2 years imprisonment, consecutive to any other sentence imposed; Conspiracy to Make and Use False Documents and to Falsify and Conceal Records, not more than 5 years imprisonment; Making False Statements and Documents, not more than 5 years imprisonment; and, Falsifying and Concealing Documents During an SEC Examination, not more than 20 years imprisonment. Additionally, PETERS faces up to $1 Million in additional fines, as well as further forfeiture of property.
The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. Assistant United States Attorney William M. Gilmore represents the United States.
Queens Man Who Wanted to Attack Times Square Arrested for Purchasing Firearms with Obliterated Serial NumbersRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging Ashiqul Alam with knowingly receiving two firearms with obliterated serial numbers in Brooklyn, New York. Alam was arrested yesterday and is scheduled to be presented this afternoon before United States Magistrate Judge Cheryl L. Pollak.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the arrest.
“As alleged, Ashiqul Alam bought illegal weapons as part of his plan to kill law enforcement officers and civilians in a terrorist attack on Times Square,” stated United States Attorney Donoghue. “What he did not know was that he was buying weapons from government agents, who were monitoring his plans and intervening to prevent those plans from escalating into deadly violence. This Office, together with our law enforcement partners, will continue to exercise extreme vigilance to prevent terrorists from attacking our city and our country.”
“There is more to this case than just talk and the desire to carry out a terrorist attack. Individuals who believe in the distorted and deadly propaganda of terrorist organizations and work toward acting on those deadly impulses are incredibly dangerous and unpredictable,” said FBI Assistant Director-in-Charge Sweeney. “Mr. Alam allegedly then took the steps to follow through on his deadly impulse, purchasing weapons to kill New Yorkers, target an elected official and attack police officers. The FBI New York Joint Terrorism Task Force and the NYPD Intelligence Bureau will simply not allow individuals to execute their plots, and our team will use every legal tool available to us to protect our community and remain ahead of the threat individuals like Alam pose to our communities.”
“Mr. Alam discussed guns, suicide vests, hand grenades, and surveilled crowded New York targets such as Times Square”, said Police Commissioner O’Neill. “Our job is to prevent these terrorist attacks whenever we can before they are carried out. This case is another example of the tightly-knit teamwork of the JTTF and the NYPD’s Intelligence Bureau. Mr. Alam is charged with illegally purchasing untraceable firearms from undercover officers. That was a clear indicator of his intent to move his plot forward.”
As alleged in the complaint, between August 2018 and the present, Alam repeatedly expressed a desire to purchase firearms and explosives for use in a terrorist attack. Alam identified two targets, either Times Square or Washington, D.C., in order to kill a senior government official. In January 2019, Alam conducted several “recon” trips to Times Square, using his cellular telephone to make a video recording of the area as he searched for potential targets. Alam considered multiple ways to conduct such an attack, including by using a “suicide vest” and by obtaining AR-15 assault rifles to kill law enforcement officers.
Alam conducted research about firearms on the internet and discussed purchasing firearms with an undercover law enforcement officer (“UC-1”). In March 2019, Alam told UC-1 that he would be interested in buying a Glock 9mm pistol. UC-1 introduced Alam to an “associate,” who offered to help Alam procure two illegal Glock G19 pistols. In April 2019, Alam underwent Lasik eye surgery, a procedure whose value he explained: “Let’s say we are in an attack, right, say that my glasses fall off. What if I accidentally shoot you? You know what I mean. Imagine what the news channel would call me the ‘Looney Tunes Terrorist’ or the ‘Blind Terrorist.’”
In May 2019, Alam was told that the firearms he wanted to buy would have obliterated serial numbers, and he replied “Oh, that’s good man.” Alam then had repeated conversations and meetings with individuals he believed were going to sell him firearms, including one meeting in which he was shown hand grenades for purchase. Alam subsequently discussed buying grenades because a grenade could “take out at least eight people.” Alam also asked to order ammunition as well as weapons because, he said, “What is the point of getting a gun without ammo?”
On June 6, 2019, Alam met the individual he believed was going to sell him firearms and was shown two Glock 19 semiautomatic pistols with obliterated serial numbers. The defendant provided $400 towards the purchase of the two pistols and asked whether he could also buy a silencer. The defendant was arrested shortly thereafter.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys David K. Kessler, Michael Keilty and Jonathan Algor are in charge of the prosecution, with assistance from Trial Attorney Jacqueline L. Barkett of the Department of Justice’s Counterterrorism Section.
The Defendant:
Ashiqul Alam
Age: 22
Queens, New YorkE.D.N.Y. Docket No. 19-M-0531
Pukwana Man Charged with AssaultRead the Press Release
United States Attorney Ron Parsons announced that a Pukwana, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
Sidney DuBray, age 24, was indicted on May 14, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 31, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on December 20, 2018, DuBray assaulted an individual with a knife causing serious bodily injury to the victim.
The charges are merely accusations and DuBray is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
DuBray was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Poplar man sentenced in death of infantRead the Press Release
GREAT FALLS—Poplar resident Dennis Red Boy, who admitted causing the death of an infant who would not stop crying, was sentenced on Wednesday to five and one-half years in prison and to two years of supervised release. U.S. Attorney Kurt Alme said.
Red Boy, 28, pleaded guilty in February to involuntary manslaughter in the Aug. 15, 2017 death of a six-month old baby girl in Poplar on the Fort Peck Indian Reservation.
U.S. District Judge Brian M. Morris presided. Judge Morris also ordered $3,500 restitution.
The prosecution said in court records that Red Boy was taking care of children when the infant would not stop crying. He placed the baby on her back, then flipped her over by her foot. He then placed a heavy blanket over her. When he returned about an hour later, the infant was dead. Red Boy initially told law enforcement that the baby had choked on a bottle then admitted that story was incorrect.
Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the FBI.
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Pinellas Man Sentenced to More Than Seven Years in Prison in Telemarketing ScamRead the Press Release
Tampa, FL – U.S. District Judge Elizabeth Kovachevich today sentenced Martin Steele (46, St. Petersburg) to seven years and five months in prison for his role in a telemarketing fraud scam. As part of his sentence, the court also entered a money judgment in the amount of $75,000, the proceeds of the wire fraud conspiracy. The court also directed that Steele pay a total of $1,162,142.68 to the scheme’s victims.
According to court records, from 2016 through at least 2018, Steele conspired with others to extract money from victims throughout the United States who owned timeshare properties or other pieces of land they desired to sell. Steele and other conspirators placed telephone calls to these victims; impersonated attorneys, real estate officers, and other professionals; and misled those timeshare owners to believe the conspirators had buyers for the victims’ timeshares and other property. The conspirators further advised the victims that the timeshare and property sales could be consummated if the victims made one or more advanced payments to the conspirators for various fees purportedly associated with the sales, such as closing costs, courier services, title searches, transfer fees, and legal fees. Once the victims agreed to pay the bogus fees, the conspirators directed the victims to send money via wire transfers to the defendant or another conspirator, who then withdrew the cash and divided it among the conspirators according to each conspirator’s role in the fraudulent transaction. The conspirators often repeatedly contacted the victims, fraudulently advised them that additional fees were needed in order to complete the sales of their respective timeshares, and continued to dupe them into sending bogus advanced fees until the victims either ran out of money or became aware of the scam.
Several related defendants have pleaded guilty to charges related to this timeshare scheme. Gary Kinard and Mark Boring were sentenced to 7 years and 11 months in federal prison, and 7 years in federal prison, respectively, for wire fraud conspiracy and aggravated identity theft for their roles in the scheme. David Bell was sentenced to 27 months in prison for money laundering conspiracy relating to his role in the scheme. Troy Cater and Richard Bell have each pleaded guilty to money laundering conspiracy and are awaiting sentencing.
This case was investigated by the Federal Bureau of Investigation, the St. Petersburg Police Department, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Rachel K. Jones.
Perry County Woman Sentenced for Role in Defrauding Disabled VeteranRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Laurie Ehrhart, age 48, of New Bloomfield, Pennsylvania was sentenced yesterday by Chief United States District Court Judge Christopher C. Conner to 6 months home confinement and 2 years probation for helping her former husband defraud a disabled veteran out of $316,360.
According to United States Attorney David J. Freed, Laurie Ehrhart pleaded guilty on December 7, 2018, to one count of Health Care Fraud. Ehrhart’s former husband, Jason Ehrhart, also pleaded guilty to Health Care Fraud and was sentenced on April 15, 2019, by Judge Conner to 19 months’ incarceration. The charges against the couple related to their misappropriation of Michael Ehrhart’s veteran’s disability benefits.
While serving in the U.S. Army in 1985, Michael Ehrhart, a former resident of Perry County, Pennsylvania, was diagnosed with multiple sclerosis. In 1998 Michael Ehrhart began receiving disability benefits from the Department of Veterans Affairs (VA). Michael was eventually hospitalized on a permanent basis at the VA hospital in Lebanon, Pennsylvania in November of 2004 and began receiving disability benefits from the Social Security Administration (SSA) in 2006.
In August of 2006 Michael was deemed by the VA to be incompetent to handle his own financial affairs. As a result, on October 2, 2006, Michael’s brother, Jason Ehrhart, applied to serve as Michael’s VA Fiduciary and Legal Custodian. Under the terms of a Fiduciary Agreement, Jason Ehrhart agreed to use all of Michael’s VA disability benefits exclusively for Michael’s benefit. The agreement warned Jason that the funds were not for his personal use. The Fiduciary Agreement also required Jason Ehrhart to submit an annual accounting to the VA with respect to the amount of money received and spent on Michael’s behalf.
While Jason Ehrhart served as Michael’s VA Fiduciary and Legal Custodian, all of Michael’s VA benefits, plus most of his Social Security disability checks, were deposited into a checking account Jason opened at The Orrstown Bank. Altogether, $476,260 in federal benefits ($422,828 in VA disability, $48,187 in Social Security disability, and $5,244 in VA clothing allowance) were deposited into the account between January 2009 and August 2016.
However, during that same time period $316,360 of the $476,260 was misappropriated by Jason and Laurie Ehrhart and converted to their own use Checks totaling $218,832 ($96,202 payable to Jason and $122,630 payable to Laurie), were drawn against the account. Of the $218,832, $157,742 was deposited into Jason and Laurie Ehrhart’s joint checking account at the Juniata Valley Bank (JVB) and at least $23,496 was converted to cash. Thereafter, the funds in the joint JVB account were employed by Jason and Laurie Ehrhart to pay personal expenses.
Checks totaling $7,174 were also made payable to Jason and Laurie Ehrhart’s two minor children. Jason Ehrhart would instruct the children to take the checks to the bank, cash them, and surrender the cash to him.
Checks totaling $19,890 were also made payable to another couple who were Jason and Laurie Ehrhart’s best friends. Jason Ehrhart regularly treated the couple and their children to dinners out and at least two, all-expense paid vacations to Disney World in Florida. Jason also purchased two automobiles for the family and paid for the wife’s dental work.
To conceal his embezzlements, Jason Ehrhart submitted eight false annual accountings to the VA in which he falsely claimed he spent $402,408 on Michael’s behalf. The itemized expenditures in the annual accountings were grossly inflated. For example, Jason Ehrhart claimed he paid the mortgage on the veteran’s residence ($1,631 per month) plus Michael’s share of the mortgage on his mother’s residence ($881) after she died in May 2011. However, the lenders for both properties obtained default judgments and both properties were eventually foreclosed and sold.
Jason Ehrhart also falsely claimed in the annual accountings that he spent thousands on miscellaneous expenditures for the veteran, including storage unit rentals, vehicle maintenance bills, state and local taxes, life and auto insurance, and credit card bills. However, in 2016 the veteran’s specially equipped wheelchair van, for which Jason Ehrhart claimed he spent approximately $32,395 on maintenance, was found broken down and abandoned along a Perry County roadside. Laurie Ehrhart admitted she helped Jason complete the 8 false annual accountings in her handwriting.
Michael Ehrhart died at the Lebanon VA Hospital on July 30, 2018. As part of their sentences Judge Conner ordered Laurie and Jason Ehrhart to pay $316,360 restitution to Michael’s son, his only known heir.
The Department of Veteran Affairs Office of Inspector General, the Pennsylvania State Police, and the Social Security Administration’s Office of Inspector General investigated the case. Assistant United States Attorney Kim Douglas Daniel prosecuted the case.
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Peever Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that a Peever, South Dakota, man convicted of abusive sexual contact was sentenced on June 3, 2019, by U.S. District Judge Charles B. Kornmann.
David Seaboy, Sr., age 57, was sentenced to 120 months in federal prison, to be followed by 10 years of supervised release. He was ordered to pay $100 to the Federal Crime Victims Fund.
According to court documents, in November 2007, Seaboy did knowingly engage in, and attempt to engage in, sexual contact with a person who had not attained the age of 12. Seaboy acted with an intent to abuse, humiliate, harass, and degrade the child, and to arouse and gratify his sexual desires.
The investigation was conducted by the Federal Bureau of Investigation and the Sisseton-Wahpeton Sioux Tribe’s Law Enforcement. Assistant U.S. Attorney Jeremy R. Jehangiri prosecuted the case.
Seaboy was remanded to the custody of the U.S. Marshals Service.
Orlando Man Sentenced to 15 Months for Conspiring to Make and Use Falsified Document in Passport ApplicationRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Manuel Domingo Santana (41, Orlando) to 15 months in federal prison for conspiracy to make and use a false document.
Santana had pleaded guilty on March 21, 2019.
According to court documents, Santana and his co-defendant, Erika Cordova, conspired to make a fraudulent document in support of a passport application for one of Cordova’s children. Because the child was a minor, Cordova was required to present a notarized form from the child’s father, confirming his consent to the passport application. Instead of obtaining a consent form from the father, Cordova and Santana made the form appear to have been signed by the father. Santana also recruited an unidentified individual to pose as the father before a notary, so that the form could be notarized before Cordova submitted it with her child’s passport application.
Cordova pleaded guilty on March 21, 2019. Her sentencing is scheduled for July 10, 2019.
“The Diplomatic Security Service (DSS) is firmly committed to making sure those who commit fraud in an attempt to circumvent the two-parent consent law regarding the issuance of a United States passport for a minor face the consequences for their criminal actions. Additionally, we are committed to protecting children and denying the risk or opportunity for parental abduction, while protecting the rights of both parents,” said Frederick R. Stolper, Special Agent-in-Charge of the U.S. Department of State’s (DSS) Miami Field Office. “The strong relationship we have with the Department of Homeland Security’s Document and Benefit Fraud Task Force (DBFTF), the U.S. Attorney’s Office in the Middle District of Florida, and other law enforcement agencies around the world is vital towards ensuring the integrity of U.S. travel documents and protecting greater U.S. interests.”
This case was investigated by the U.S. Department of State’s Diplomatic Security Service and the Department of Homeland Security’s Document and Benefit Fraud Task Force (DBFTF). It is being prosecuted by Assistant United States Attorney Emily C. L. Chang.
New York Man Pleads Guilty to Bribing Naval Employee to Allow Him to Make Unauthorized Liquor PurchasesRead the Press Release
A New York resident pleaded guilty today to providing cash bribes to an employee of the U.S. Department of the Navy to make unauthorized liquor purchases at a Navy Exchange (NEX), announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Leo Lamont of the Naval Criminal Investigative Service’s (NCIS) Northeast Field Office.
Edwin D. Fragoso, 45, of Freeport, New York, pleaded guilty to one count of conspiracy before U.S. Magistrate Judge Gary R. Brown of the Eastern District of New York. Sentencing is scheduled for Dec. 9, 2019 before U.S. District Judge Sandra J. Feurstein of the Eastern District of New York.
According to admissions made in connection with his guilty plea, Fragoso agreed with NEX supervisory sales associate Eric J. Jex to arrange repeated large purchases of liquor from the NEX at Mitchel Field in Garden City, New York. Official policies limited access to the NEX’s goods to authorized personnel, including Navy service members, and required NEX employees to confirm purchasers’ identities. Over more than a year, until December 2016, Fragoso paid Jex over $95,000 in cash bribes to make unauthorized purchases of NEX liquor at significant discounts. He ultimately resold the liquor purchased from the NEX for profit.
On Aug. 1, 2017, Jex pleaded guilty to accepting more than $250,000 in cash bribes from Fragoso and two other individuals, Adam Agaev and David Manasherov. Agaev and Manasherov each pleaded guilty to conspiracy on Jan. 7, 2019, and are pending sentencing on Sept. 24, 2019.
The Naval Criminal Investigative Service (NCIS), Alcohol and Tobacco Tax and Trade Bureau (TTB) and New York State Department of Taxation and Finance, Criminal Investigations Division investigated the case. Trial Attorney Jessica C. Harvey is prosecuting the case.
Natchez Man Pleads Guilty under Project EJECT to Receiving a Firearm While Under Felony IndictmentRead the Press Release
Natchez, Miss. – Jarvanti Doss, 22, of Natchez, pled guilty yesterday before U.S. District Judge David C. Bramlette, III to receiving a firearm while under a felony indictment, announced U.S. Attorney Mike Hurst and Dana Nichols, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
On August 25, 2017, Jarvanti Keyon Doss was indicted by an Adams County Grand Jury on felony charges. On March 22, 2019, ATF agents, Adams County deputies, Natchez police officers, and probation agents of the Mississippi Department of Corrections were conducting a "saturation detail" in high-crime areas when Doss was observed by members of the detail removing a pistol from his pants. After a brief foot chase, Doss was apprehended. On April 16, 2019, Doss was charged in a federal indictment with receiving a firearm while under a felony indictment.
Doss will be sentenced by Judge Bramlette on October 1, 2019 and faces a maximum penalty of five years in prison and a $250,000 fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant United States Attorney Bert Carraway.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry and awareness. EJECT stands for "Empower Justice Expel Crime Together." PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s 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 the local community to develop effective, locally-based strategies to reduce violent crime.
Muskegon Man Sentenced to over 8 Years in Prison for Straw Purchase of FirearmsRead the Press Release
GRAND RAPIDS, MICHIGAN — Bobby Butch Pollard, age 39, of Muskegon, was sentenced in U.S. District Court to 103 months in prison for manipulating his girlfriend into purchasing four firearms and hundreds of rounds of ammunition for him in late 2017. He could not lawfully acquire or possess firearms or ammunition because he was a convicted felon. The Hon. Janet T. Neff also imposed a term of three years of court supervision to follow Pollard’s release from prison. The sentencing follows a trial that took place in February in which a jury found Pollard guilty of being a felon in possession of firearms and ammunition—the guns and bullets his girlfriend had purchased for him at his direction. His lengthy prior record includes convictions for drug offenses, assault and battery, assault with a dangerous weapon, domestic assault, failures to pay child support and various criminal traffic offenses.
"ATF, in conjunction with our state and local partners, will continue to protect the public by identifying and arresting violent offenders in the community who illegally possess firearms, as well as anyone who knowingly provides firearms to them," said James Deir, Special Agent in Charge of ATF’s Detroit Field Division.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, in conjunction with the Muskegon Police Department. This case was prosecuted by Assistant U.S. Attorneys Jonathan Roth and Clay Stiffler as part of the Department of Justice’s Project Safe Neighborhoods, a nationwide initiative to reduce violent crime. The U.S. Attorney’s Office, county prosecutor’s offices, and federal, state, local, and tribal law enforcement work closely together to identify and prosecute individuals responsible for driving violent crime in our communities in order to make neighborhoods safer for everyone. Individuals with information or concerns about violent crime or firearms offenses should contact local law enforcement. For more information about Project Safe Neighborhoods, visit: https://www.justice.gov/psn.
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Murfreesboro Dentist Sentenced to 33 Months in Federal Prison for Healthcare Fraud SchemeRead the Press Release
NASHVILLE, Tenn. – June 7, 2019 - Richard N. Schott, 51, of Murfreesboro, Tennessee, was sentenced today to 33 months in federal prison for operating a scheme to defraud healthcare benefit programs, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Chief U.S. District Judge Waverly D. Crenshaw, Jr., also ordered Schott to pay $956,448.00 in restitution.
Schott, a licensed dentist, and his former practice administrator, Kendra Glenn, were charged in November 2018 with conspiracy to commit healthcare fraud. Schott pleaded guilty in November and Glenn, also facing seven counts of healthcare fraud, is scheduled for trial on December 3, 2019.
Schott owned and operated Dental Excellence, a dental practice with three locations in Murfreesboro and one location in Lebanon, Tennessee. Between November 2013 and January 2018, Schott caused the submission of false and fraudulent claims to healthcare benefit programs, including Delta Dental, Cigna, TennCare and DentaQuest, TennCare’s dental benefits program administrator. The fraudulent claims included billing for dental work that had not been completed or performed at all; falsifying dates of service to appear to comply with benefit programs’ timeframe and preauthorization requirements; falsifying claims to appear that services had been rendered by a benefits program credentialed dentist; falsifying supporting documents and adding false narratives to support the upcoding of claims; and others, including continuing to submit false claims after being advised by insurance companies that audits had determined a pattern of false claims and that the Tennessee Bureau of Investigation was conducting a criminal investigation into the company’s billing practices.
Schott took steps to conceal the fraud by discouraging employees from questioning billing practices; instructing employees to lie if questioned by insurance companies; and disciplining and even firing employees who questioned the legality of the billing practices. Schott used the proceeds from the fraudulent scheme for his own personal use and paid bonuses to Glenn based on the amount of money collected from the fraudulent scheme.
As a result of Schott’s fraudulent scheme, many patients were forced to wait months and even years in pain, to have necessary dental work completed by other dentists, while their insurance companies resolved the false claims.
As noted above, Schott was ordered to pay restitution to TennCare, Tennessee’s Medicaid program, which is funded by state and federal tax dollars and provides medical and dental care to certain minors and indigent individuals.
This case was investigated by the FBI and the Tennessee Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Kathryn W. Booth, Sarah K. Bogni and Byron Jones.
Kendra Glenn is presumed innocent until proven guilty in a court of law.
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Mission Man Indicted for AssaultRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Assault of an Intimate Partner by Strangulation and Suffocation, Assault With a Dangerous Weapon, and Assaulting, Resisting, and Impeding a Federal Officer.
Logan James Fast Horse, age 21, was indicted on May 14, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 29, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on April 1, 2019, Fast Horse assaulted his intimate partner and dating partner, by strangling and suffocating her, and on that same date, Fast Horse kicked her with shod feet with the intent to do bodily harm. The Indictment further alleges that on April 5, 2019, Fast Horse did forcibly assault, oppose, impede, intimidate, and interfere with a law enforcement officer who was employed by the Rosebud Sioux Tribe Law Enforcement Services, and that such conduct involved the use of a dangerous weapon.
The charges are merely accusations and Fast Horse is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Michael J. Elmore is prosecuting the case.
Fast Horse was released on bond pending trial. A trial date has not been set.
Mexican Citizen Pleads Guilty in Federal Court to Drug Distribution and Firearms Charges and Transporting Women in Interstate Commerce for Purposes of ProstitutionRead the Press Release
Matthew Krueger, United States Attorney for the Eastern District of Wisconsin, announced that on June 6, 2019, Jose Facio-Santos (age 39), a Mexican citizen, pleaded guilty to three felony counts related to drug distribution, illegal firearm possession, and the transportation of a female in interstate commerce for purposes of prostitution. Specifically, this includes one count of distribution of heroin, in violation of Title 21, United States Code, §§ 841(a)(1) and (b)(1)(C); one count of possession of a firearm by an illegal alien, in violation of Title 18, United States Code, § 922(g)(5); and one count of transporting and aiding and abetting the transportation of an individual in interstate commerce with the purpose being for the individual to engage in prostitution, in violation of Title 18, United States Code, §§ 2421 and 2.
According to admissions made in connection with his plea, Facio-Santos led a prostitution brothel from his Milwaukee residence from approximately 2013 through October 2018. On a weekly basis, he traveled to various pre-determined meet locations to pick up a different woman, whom he then prostituted at his residence, expecting each to perform a certain number of sex acts during that week in which she stayed at his residence. Facio-Santos collected payment for the woman's services and promoted his prostitution brothel through the use of business cards and mass text messages each week broadcasting the woman he transported back to his house. Facio-Santos’ Milwaukee brothel was connected to a network of out-of-state brothels.
In addition to the operation of his Milwaukee brothel, Facio-Santos was also involved in trafficking cocaine, heroin, and firearms, mostly from his Milwaukee residence. During the investigation, Facio-Santos sold two firearms, specifically, a Romarm WASR rifle with a 30-round magazine, and a Norinco SKS rifle, also containing a high-capacity magazine, to an individual acting under the direction and control of law enforcement. Furthermore, as part of the investigation, law enforcement executed a search warrant at Facio-Santos’ residence, at which time they located, among other items, a 9 mm Smith and Wesson, semi-automatic pistol, which had previously been reported stolen.
Facio-Santos faces a maximum term of imprisonment of up to 20 years for his drug trafficking, up to 10 years for being an illegal alien in possession of a firearm, and up to 10 years for transporting women for purposes of prostitution. He also faces up to life on supervised release and deportation from the United States. His sentencing hearing is set for December 17, 2019 at 9:30 a.m. before U.S. District Judge Pamela Pepper.
The case was investigated by Milwaukee Police Department, the United States Immigration and Customs Enforcement - Homeland Security Investigations, the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant U.S. Attorneys Karine Moreno-Taxman and Elizabeth M. Monfils.
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McLaughlin Man Charged with Third Degree Burglary and Aiding and Abetting, Co-Conspirator SentencedRead the Press Release
United States Attorney Ron Parsons announced that a McLaughlin, South Dakota, man has been indicted by a federal grand jury for third degree burglary and aiding and abetting.
Lyle Daniel Mousseau, age 42, was indicted on February 13, 2019. He appeared before U.S. Magistrate Judge William Gerdes on June 4, 2019, and pled not guilty to the Indictment.
According to the Indictment, on or about July 11, 2018, Lyle Daniel Mousseau and Alexander Guy Jones unlawfully entered and remained in an unoccupied structure, that is, NAPA Auto and Truck of McLaughlin, with intent to commit the crime of larceny.
The charges are merely accusations and Mousseau is presumed innocent until and unless proven guilty.
Alexander Guy Jones, age 26, was sentenced on June 4, 2019, by U.S. District Judge Charles B. Kornmann to 11 months of imprisonment, followed by 3 years of supervised release, and ordered to pay $100 to the Federal Crime Victims Fund for the same burglary. Jones was indicted on October 16, 2018.
The investigation is being conducted by the Bureau of Indian Affairs. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting both cases.
Mousseau was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Maryland Auto Parts and Scrap Metal Dealers Convicted of Tax FraudRead the Press Release
Greenbelt, Maryland – Robert Mason Underwood, Sr., age 72, and his wife, Deborah Jean Underwood, age 63, both of Clinton Maryland, were convicted by a federal jury today of one count of conspiracy to defraud the Internal Revenue Service (IRS) and four counts of filing false income tax returns.
The conviction was announced by United States Attorney for the District of Robert K. Hur; Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“When criminals cheat the IRS, they rob all of us as taxpayers,” said U.S. Attorney Robert K. Hur. “Prosecutions like this demonstrate that we will not tolerate those who attempt to cheat the system and will hopefully deter others from stealing taxpayer funds.”
“The jury’s guilty verdicts embody the formidable commitment of the Tax Division, along with its partners in the United States Attorney’s Office and the IRS, to prosecute business owners, who cheat the tax system in violation of our criminal laws and in doing so also gain an unfair advantage over other small business owners,” stated Principal Deputy Assistant Attorney General Zuckerman.
“Today’s verdict confirms that choosing to evade the payment of taxes, causing hardworking taxpayers to bear the brunt, is an action that cannot be tolerated,” said IRS-CI Special Agent in Charge Kelly Jackson. “The conviction of the Underwood’s solidifies this agreement with the American public that everyone must pay their fair share.”
According to court documents and evidence presented in court at their seven-day trial, the Underwoods operated a used automobile parts and scrap metal business in Clinton under the names “B Underwood’s Used Auto Parts” and “B Underwood Used Auto Parts, LLC.” The business purchased used and salvage cars, stripped the cars for parts to resell, and sold the remaining scrap metal to a Baltimore-based scrap yard.
The Underwoods requested to be paid in cash for their scrap-metal sales and conspired to conceal from the IRS their subsequent receipt of substantial amounts of cash. The Underwoods filed a false amended individual income tax return for 2010 and false individual income tax returns for 2011 and 2012 with the IRS. The false tax returns did not include the full gross receipts from the sales. The Underwoods also filed a false 2012 partnership tax return for their business that did not report all gross receipts of the business.
The Underwoods each face a maximum sentence of five years in prison for the conspiracy count and three years in prison for each of four counts of filing a false tax return. U.S. District Judge Theodore D. Chuang has scheduled sentencing for September 30, 2019, at 2:00 p.m.
U.S. Attorney Hur and Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney David I. Salem and Trial Attorney Michael C. Vasiliadis of the Justice Department’s Tax Division, who are prosecuting the case.
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Maryland Auto Parts and Scrap Metal Dealers Convicted of Tax FraudRead the Press Release
A married Clinton couple were convicted by a federal jury today of one count of conspiracy to defraud the Internal Revenue Service (IRS) and four counts of filing false income tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert K. Hur for the District of Maryland.
“The jury’s guilty verdicts embody the formidable commitment of the Tax Division, along with its partners in the United States Attorney’s Office and the IRS, to prosecute business owners, who cheat the tax system in violation of our criminal laws and in doing so also gain an unfair advantage over other small business owners,” stated Principal Deputy Assistant Attorney General Zuckerman.
“When criminals cheat the IRS, they rob all of us as taxpayers,” said U.S. Attorney Robert K. Hur. “Prosecutions like this demonstrate that we will not tolerate those who attempt to cheat the system and will hopefully deter others from stealing taxpayer funds.”
“Choosing not to pay your taxes and causing hardworking taxpayers to bear the brunt cannot be tolerated and today’s verdict reinforces that principle,” said Don Fort, Chief, IRS Criminal Investigation. “The conviction of the Underwoods validates the most basic principle of our agreement with the American public that everyone must pay their fair share and we will hold those who cheat the system accountable.”
According to court documents and evidence presented in court, the Underwoods operated a used automobile parts and scrap metal business in Clinton under the names “B Underwood’s Used Auto Parts” and “B Underwood Used Auto Parts LLC.” The business purchased used and salvage cars, stripped the cars for parts to resell, and sold the remaining scrap metal to a Baltimore-based scrap yard.
The Underwoods requested to be paid in cash for their scrap-metal sales and conspired to conceal from the IRS their subsequent receipt of substantial amounts of cash. The Underwoods filed a false amended individual income tax return for 2010 and false individual income tax returns for 2011 and 2012 with the IRS. The false tax returns did not include the full gross receipts from the sales. The Underwoods also filed a false 2012 partnership tax return for their business that did not report all gross receipts of the business.
The Underwoods each face a maximum sentence of five years in prison for the conspiracy count and three years in prison for each count of filing a false tax return. The Underwoods also face a term of supervised release and monetary penalties, including restitution.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Hur thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney David I. Salem and Trial Attorney Michael C. Vasiliadis of the Justice Department’s Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Man Sentenced for Leading Methamphetamine ConspiracyRead the Press Release
ALEXANDRIA, Va. – A New York man was sentenced today to 14 years in prison and ordered to forfeit $500,000 for his role in a conspiracy to distribute methamphetamine.
According to court records and evidence presented at trial, Kendesia Juinize May, 40, was a leader of a sprawling, nationwide methamphetamine distribution network with ties to California, New York, Washington, DC, and the Eastern District of Virginia. The network utilized pirated and fraudulent Federal Express accounts to ship pound quantities of California-sourced methamphetamine throughout the United States.
In late 2017, May negotiated to buy into the conspiracy and assume distribution responsibilities to its Washington, DC area customers, many of whom were themselves distributors of methamphetamine. According to evidence presented at trial, May “took over” methamphetamine distribution in the northern Virginia and Washington, DC area and aspired to become “the biggest drug dealer on the East Coast.”
The government presented evidence showing that the conspiracy sent nearly 400 FedEx packages containing either pound quantities of methamphetamine or thousands of dollars in proceeds of drug sales. On May 25, 2018, officers of the Maryland Transportation Authority Police stopped May while driving his Mercedez Benz vehicle, and a search of the vehicle led to the discovery of more than five pounds of pure methamphetamine, along with FedEx packaging, digital scales, and other drug paraphernalia.
This case was prosecuted as part of Organized Crime Drug Enforcement Task Force (OCDETF) Operation Four Horsemen. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This investigation was led by the DEA Washington Field Office, with significant assistance from the Arlington County Police Department, U.S. Postal Inspector Service, the DEA Baltimore District Office, and the Maryland Transportation Authority Police.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, M. Jay Farr, Arlington County Chief of Police, and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorneys David A. Peters and Katherine E. Rumbaugh prosecuted 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-7.
Los Angeles Doctor and Patient Recruiter Found Guilty in $33 Million Medicare Fraud SchemeRead the Press Release
A federal jury found a Los Angeles doctor and patient recruiter guilty today for their roles in a $33 million Medicare fraud scheme in which Medicare was billed for clinic, home health, hospice services and durable medical equipment that patients did not need or did not receive.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Field Office and Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office and Acting Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigations of the Los Angeles Field Office made the announcement.
Following a seven-day trial, Robert Glazer, M.D., 73, of Los Angeles, California, the owner and operator of the Glazer Clinic located in Los Angeles, California, was found guilty of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. Co-defendant Marina Merino, 62, of Los Angeles, California, a marketer who recruited patients in exchange for kickback payments, was convicted of one count of conspiracy to commit health care fraud and eight counts of health care fraud. Glazer and Merino are expected to be sentenced on Sept. 9, 2019, by U.S. District Judge Otis D. Wright II of the Central District of California, who presided over the trial.
Glazer and Merino were charged in a June 2015 superseding indictment, along with Angela Avetisyan, the officer manager of Glazer Clinic and co-owner of Fifth Avenue Home Health located in Los Angeles, California (Fifth Avenue), and Ashot Minasyan, co-owner of Fifth Avenue.
According to the evidence presented at trial, Merino and other marketers received payments from Avetisyan and Minasyan to recruit Medicare beneficiaries to the Glazer Clinic. Thereafter, Glazer billed Medicare for office services and tests that patients did not need or did not receive. Glazer also referred Medicare patients for a variety of services, including home health and hospice services, as well as ordered durable medical equipment that patients did not need or did not receive. Based on referrals from Glazer, Avetisyan and Minasyan billed Medicare for home health services that were not rendered or were not medically necessary through their company, Fifth Avenue. Avetisyan, who worked as an office manager at the Glazer Clinic, also sold Glazer’s referrals to other home health and durable medical equipment agencies. Together, the defendants and their co-conspirators submitted and caused to be submitted claims of approximately $33 million, of which Medicare paid approximately $22 million, the evidence showed.
Avetisyan and Minasyan pleaded guilty in October 2018, and are awaiting sentencing.
The case was investigated by the FBI, HHS-OIG, the IRS, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Trial Attorneys Claire Yan, Robyn Pullio, and Emily Culbertson of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Long Island Man Who Worked at Melville-Based Boiler Room Sentenced to Two Years’ Imprisonment for His Role in $147 Million Stock Manipulation SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Emin L. Cohen, a cold-caller and account executive at My Street Research and its predecessors located in Melville, New York (the “boiler room”), was sentenced by United States District Judge Joanna Seybert to two years in prison and ordered to pay $86,168 in forfeiture. The amount of restitution will be determined by the court at a later date. Cohen pleaded guilty in June 2018 to conspiracy to commit securities fraud in connection with a multi-defendant, $147 million scheme to defraud investors in publicly traded companies.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Cohen played key roles in the boiler room, luring the victims, many of them elderly and vulnerable, into the fraudulent scheme with lies and subjecting them to high-pressure tactics to seal the deals,” stated United States Attorney Donoghue. “With today’s sentence, Cohen has been held accountable for taking advantage of victims of his telemarketing con job, designed solely to enrich himself and his co-conspirators.”
Between January 2014 and July 2017, Cohen and 15 co-defendants participated in a “pump and dump” stock fraud scheme that defrauded investors in publicly traded companies (the “manipulated companies”). As part of the scheme, the defendants artificially inflated the price and trading volume of stock of the manipulated companies, and made material misrepresentations and omissions in their communications with the victim investors, concerning the advisability of purchasing the stock and its potential profitability. The defendants, who controlled much of the stock of the manipulated companies, profited handsomely, while the victim investors lost millions of dollars when the price stock plummeted. Taped to the wall of the boiler room was a sign that read, “WE’LL POUND THE PHONE AND WITH A LITTLE BIT OF LUCK, WE’LL MAKE A TON OF MONEY AND WON’T GIVE A F---.” Ten of Cohen’s co-defendants have pleaded guilty and are awaiting sentencing. Five other co-defendants are scheduled for trial.
The government’s case is being prosecuted by Assistant United States Attorneys Whitman G.S. Knapp, Alicyn L. Cooley and Patrick T. Hein. Assistant United States Attorney Tanisha R. Payne of the Office’s Civil Division is handling the forfeiture aspect of the case.
The Defendant:
EMIN L. COHEN (also known as “Ian Grant”)
Age: 35
Coram, New YorkE.D.N.Y. Docket No. 17-CR-372-10 (JS)
Local Builder and Financial Advisor Head to PrisonRead the Press Release
St. Louis, MO - Paul Creager, 40, of St Louis County, and William Glaser, 61, of Ellisville, were sentenced to 78 months and 36 months imprisonment, respectively. Creager pleaded guilty to two counts of wire fraud on December 21, 2017 and appeared before U.S. District Court Ronnie White for sentencing. Glaser pleaded guilty to three counts of wire fraud on February 26, 2019 and appeared before U.S. District Court John Ross for sentencing.
According to court records, Creager solicited over $4 million from multiple investors in exchange for equity interests in his construction firm. Creager admitted that during his negotiations with the victims, he presented false financial records which omitted a massive debt owed by his company to a hard money lender which lender possessed a secured interest in virtually all of Creager’s business and personal assets. Soon after receiving victims’ investments, Creager’s business was not able to meet its financial obligations and stopped operating. By mid-2017, Creager’s primary lender foreclosed on virtually all of his assets rendering the investors’ equity stakes in his business worthless. While Creager’s business was failing and his subcontractors and vendors went unpaid, Creager maintained a luxurious lifestyle which included homes in Wildwood and the Lake of the Ozarks as well as a host of vehicles including a Bentley automobile and a 52-foot yacht.
One of Creager’s associates, William Glaser, admitted to misleading and defrauding clients by cashing out money from their retirement portfolios to fund investments with Creager.
"Paul Creager and Bill Glaser defrauded friends and business associates, some of whom were elderly and vulnerable, of hard-earned savings and financial security," said FBI-SL SAC Richard Quinn. "The FBI will continue to hold accountable those who defraud the public for their personal enrichment."
The St. Louis division of the FBI investigated this case. Gwen Carroll handled the case for the U.S. Attorney’s office.