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11 July 2019
Portsmouth Gang Member Pleads Guilty to Violent Racketeering ConspiracyRead the Press Release
NORFOLK, Va. – A Portsmouth man pleaded guilty today for his role in a violent racketeering conspiracy and other related firearm charges.
According to court documents, Timothy Sawyer-House, aka “Trouble”, 28, was a member of a Portsmouth-based “line” of the Nine Trey Gangsters (NTG), a gang affiliated with the United Blood Nation. In March 2014, Sawyer-House was in a vehicle with a fellow gang member who opened fire and murdered 23-year old Portsmouth resident, Delante Eley.
As a member of the NTG, Sawyer-House also sold narcotics and firearms on multiple occasions to a confidential informant who was working for the FBI.
Sawyer-House pleaded guilty to racketeering conspiracy and possessing a firearm during and in relation to a drug trafficking crime. Sawyer-House faces a mandatory minimum sentence of 10 years and a maximum term of life in prison when he is sentenced on October 23. 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.
The case was investigated as part of the Organized Crime Drug Enforcement Task Forces (OCDETF), Operation Billy Club. 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, and Angela Greene, Chief of Portsmouth Police, made the announcement after U.S. District Judge Raymond A Jackson accepted the plea. Assistant U.S. Attorneys John F. Butler, Andrew C. Bosse, and Joseph E. DePadilla 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. 2:19-cr-36.
Pittsburgh Twins Sentenced to 13 Years and 16 Years for Running Heroin and Fentanyl Ring that Resulted in Numerous OverdosesRead the Press Release
PITTSBURGH, Pa – Two former residents of Pittsburgh, PA were sentenced today for running a heroin and fentanyl ring that resulted in numerous fatal and non- fatal overdoses, United States Attorney Scott W. Brady announced today.
On July 3, 2019 Senior United States District Judge Arthur Schwab imposed the sentence of 13 years (156 months) on Greg Reed, 28, on counts of Conspiracy To Possess With The Intent To Distribute 40 Grams or More of Fentanyl and 100 Grams or More of Heroin, Possession With The Intent To Distribute Heroin and Fentanyl, and Maintaining a Drug Involved Premises. Greg Reed also accepted responsibility for causing the non-fatal overdose of victim, C.B. C.B. was revived by Narcan after ingesting narcotics supplied by Greg Reed. On July 11, 2019, Judge Schwab imposed the sentence of 16 years (192 months) on Greg Reed’s twin brother, Brad Reed, 28, on counts of Conspiracy To Possess With The Intent To Distribute 40 Grams or More of Fentanyl and 100 Grams or More of Heroin, Possession With The Intent To Distribute Heroin and Fentanyl, Distribution of Fentanyl, Destruction or Removal of Evidence, and Maintaining a Drug Involved Premises. Brad Reed also accepted responsibility for causing the non-fatal overdose of victim, J.M. J.M. was revived by Narcan after ingesting narcotics supplied by Brad Reed.
According to information presented to the court, Brad and Greg Reed, Justin McBride, Richard Ruby, and Antoinette McBride operated a family run heroin and fentanyl ring in the City of Pittsburgh and Allegheny County from 2014 – 2017. Brad and Greg Reed ran the operation out of a residence on Lytle Street in Pittsburgh while Justin McBride and Antoinette McBride utilized a location in Munhall, PA, and Richard Ruby at a location on Glenwood Avenue in Pittsburgh. Utilizing these locations and others, members of this drug trafficking ring sold to hundreds of drug customers in Allegheny County. Ultimately, the ring was responsible for causing two fatal drug overdoses and three non-fatal drug overdoses.
Co-defendant Richard Ruby was previously sentenced to 151 months on a separate, but related indictment and a concurrent five-year sentence on this Indictment. Co-defendant Antoinette McBride was sentenced to time served of one year and two months and three years of supervised release. Justin McBride has pleaded guilty and is pending sentencing on July 18, 2019.
Assistant United States Attorneys Timothy Lanni and Heidi Grogan are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation – Western District of Pennsylvania Opioid Task Force, Pittsburgh Bureau of Police – Narcotics and Vice Division, and West Mifflin Police Department conducted the investigation leading to the guilty pleas and sentences in this case. The Federal Bureau of Investigation – Western District of Pennsylvania Opioid Task Force Task Force is comprised of FBI Special Agents and state and local Task Force Officers, including officers from the Pittsburgh Bureau of Police, Allegheny County Sherriff’s Department, Allegheny County Police, Port Authority Police, Munhall Police Department, Stowe-Rox Police Department, and Pennsylvania Attorney General’s Office.
Owner of S&D Gun and Knife Show Pleads Guilty to Illegally Possessing Firearms and Ammunition as a FelonRead the Press Release
NEW BERN – United States Attorney Robert J. Higdon, Jr. announced that today in federal court, before United States Magistrate Judge Robert B. Jones, Jr., SHERWOOD WATSON CARAWAY, 62, of Merritt, North Carolina pled guilty to illegally possessing firearms and ammunition while being a felon.
During the defendant’s guilty plea hearing, the Government summarized the evidence supporting the defendant’s guilty plea. CARAWAY had been convicted in federal court in 2005 of unlawfully dealing in firearms without a license. Despite his status as a felon, CARAWAY continued to possess firearms and ammunition at his house. On September 2, 2017, officers with the Pamlico County Sheriff’s Office obtained a search warrant for CARAWAY’s residence and discovered nine firearms and dozens of boxes of ammunition. Another 33 firearms were seized from CARAWAY’s daughter’s house nearby.
This case is part of the Take Back North Carolina Initiative of The United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement. For more information about this initiative click here: https://www.justice.gov/usao-ednc/tbnc
At sentencing, the defendant faces up to 10 years’ imprisonment and up to $250,000 in fines.
The investigation of this case was conducted by the Pamlico County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). Assistant United States Attorney Laura S. Howard prosecuted this case on behalf of the government.
Orlando Woman Sentenced for Making and Using Falsified Documents in Passport ApplicationsRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced Erika Margarita Cordova (41, Orlando) to 8 months in federal prison for making and using false documents in passport applications. She had pleaded guilty on March 21, 2019.
According to court documents, Cordova and her co-defendant, Manuel Domingo Santana, 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 then submitted that form in support of a passport application for her child, without actually having received permission from the child’s father. In total, Cordova made and used false documents in support of passport applications on three separate occasions, for two different children.
In addition, according to evidence presented at sentencing, Cordova tampered with a witness by urging the witness to destroy potential evidence and provide false information to law enforcement.
Santana pleaded guilty on March 21, 2019, and was sentenced to 15 months’ imprisonment on June 7, 2019.
This case was investigated by the U.S. Department of State, Diplomatic Security Service and the Department of Homeland Security’s Document and Benefit Fraud Task Force. It was prosecuted by Assistant United States Attorney Emily C. L. Chang.
Northern Nevada Task Force Receives National Recognition for "Dirty Doctor" ProsecutionRead the Press Release
RENO, Nev. – The northern Nevada Organized Crime Drug Enforcement Task Force (OCDETF) received the 2018 Multi-Agency Exploitation of Opioid Strategic Initiatives national award at a presentation held today by the Department of Justice’s OCDETF Regional Board at the United States District Court in Reno.
The Department of Justice’s prestigious national award recognized more than 50 agents, officers, investigators, and prosecutors from local, state, and federal agencies involved in the investigation of a prescription drug ring. The investigation, dubbed “Operation Raging Bully,” resulted in the indictment of Dr. Robert Gene Rand, a Nevada-licensed physician, and eight others involved in a conspiracy to possess and distribute controlled substances, including oxycodone. Dr. Rand was sentenced to 10 years in prison for illegally prescribing oxycodone. Rand’s illegal prescriptions resulted in the death of at least one patient.
“Today’s ceremony is bittersweet. We celebrate law enforcement’s incredible investigative work to stem the tide of northern Nevada’s opioid crisis, but we also honor our friends, family, and neighbors who have fallen victim to addiction created by the epidemic,” said United States Attorney Nicholas A. Trutanich. “I congratulate task force members for their dedication to ridding our streets of dangerous and addictive prescription opioids, and to the community for its prevention efforts.”
“The success achieved on the Rand case is due in large part to the collaboration between DEA and our law enforcement partners,” said DEA Assistant Special Agent in Charge Daniel Neill. “This alliance, coupled with a resolve to do everything we can to attack the opioid epidemic, resulted in a significant impact on the illicit prescription drug supply in the Reno area.”
“We are honored and appreciative of this award recognizing the dedicated effort of federal, state and local law agencies in their campaign against opioid abuse. Our work does not end here, it merely continues until all neighborhoods across Nevada are safe.” said Aaron C. Rouse, Special Agent in Charge of the FBI Las Vegas Division.
The investigation was led by the DEA and FBI with significant assistance by the IRS-Criminal Investigation; Homeland Security Investigations; Bureau of Alcohol, Tobacco, Firearms and Enforcement; Reno Police Department; Washoe County Sheriff’s Office; Carson City Sheriff’s Office; Nevada Department of Corrections; Nevada Gaming Control; Nevada Department of Public Safety; Lyon County Sheriff’s Office; the State of Nevada Division of Welfare, Office of Investigations and Recovery; and the Susanville, California Police Department. Assistant United States Attorney James E. Keller prosecuted the case with assistance by Branch Chief Sue Fahami, Assistant United States Attorney Tony Lopez, and former Assistant United States Attorneys Carla Baldwin Carry and Shannon Bryant.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the U.S. Attorney General’s national drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. There are nine OCDETF Regions throughout the nation.
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North Port Man Sentenced for Conspiracy to Distribute Cocaine and Heroin, Firearm ViolationsRead the Press Release
Tampa, Florida –U.S. District Judge Susan Bucklew today sentenced Ashanti Roundtree (44, North Port) to 40 years in federal prison for conspiracy to distribute cocaine and heroin, possessing a firearm in furtherance of a drug trafficking offense, and possessing a firearm as a convicted felon. Due to his prior convictions for armed robbery and firearms and narcotics offenses, he qualified for an increased penalty as an Armed Career Criminal.
A federal jury found Roundtree guilty on April 4, 2019.
According to testimony presented at trial, from an unknown date through October 2014, and continuing through February 26, 2015, Roundtree directed the illegal narcotics distribution activities at a “trap house” located at 200 Granada Boulevard, in North Port, Florida. Roundtree supplied drugs to the residents of the house, who then sold the drugs to others on Roundtree’s behalf, purchased the drugs for their own use, or used them (with the promise of paying Roundtree later). Along with supplying the residents with heroin, cocaine, cocaine base, spice, marijuana, and a variety of prescription pills for sale or personal consumption, Roundtree supervised the sale of the drugs, including setting their price and the hours of sale. He also collected the proceeds from the various drug transactions and participated in drug transactions by either selling drugs directly to customers or giving the drugs in exchange for sexual favors.
During the illegal activities, Roundtree used violence, fear, and intimidation to maintain his position as leader of the conspiracy. While at the trap house, he commonly carried a firearm for protection. Additionally, co-conspirators and others witnessed Roundtree pistol-whip an individual with the gun, and point it at others. As a previously convicted felon, Roundtree is prohibited from possessing a firearm or ammunition under federal law.
On February 26, 2015, law enforcement executed a search warrant at the trap house and recovered a loaded firearm. Forensic testing confirmed Roundtree’s DNA on the firearm and ammunition magazine. Agents also recovered an assortment of controlled substances, including heroin, marijuana, cocaine, prescription pills and drug paraphernalia.
“This sentencing represents ATF’s expertise in firearms investigations and is an example of how our law enforcement partnerships solve these unnecessary crimes that negatively impact the lives of the citizens that reside in the neighborhoods,” said ATF Special Agent in Charge Daryl McCrary.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Sarasota County Sheriff’s Office, and the North Port Police Department. It was prosecuted by Assistant United States Attorneys Michael C. Baggé-Hernández and Kaitlin R. O’Donnell.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
North Dakota U.S. Attorney’s Office Continues Attack on Transnational Criminal Organizations in “Operation Hard Copy”Read the Press Release
Providence, Rhode Island, Woman Sentenced to Four Years Imprisonment for Transnational Crimes, including Fraud and Conspiracy to Commit International Money Laundering
BISMARCK – United States Attorney Drew H. Wrigley announced that on July 10, 2019, Chief United States District Judge Daniel L. Hovland sentenced Melinda Bulgin, of Providence, Rhode Island, on charges of Conspiracy to Commit Wire Fraud or Mail Fraud, Wire Fraud, Mail Fraud, and Conspiracy to Commit International Money Laundering, in connection with her participation in a transnational criminal advance fee telemarketing (“lottery”) fraud. Judge Hovland sentenced Bulgin to serve four years imprisonment, followed by three years of supervised release, a payment of $333,251.00 restitution, and $1,500 special assessment to the Crime Victims’ Fund. On September 14, 2018, a federal jury found Bulgin guilty on 15 criminal counts.
The Federal Bureau of Investigation led the investigation of Bulgin and others that resulted in the extradition of 14 Jamaican nationals and successful prosecution of 31 defendants in North Dakota. The FBI, United States Postal Inspection Service, Homeland Security Investigations, Customs and Border Protection, and a host of state and local authorities throughout the United States have assisted in the investigation, along with the Jamaican Constabulary Force, Major Organized Crime and Anti-Corruption Agency, Jamaican Operations Linked to Telemarketing Task Force, and other U.S. and international authorities.
Bulgin was found guilty of conspiring with Sanjay Williams and others. A federal jury in North Dakota found Williams guilty of similar charges in 2015. Williams was sentenced to serve 20 years imprisonment following his conviction. He was the first Jamaican national tried and convicted in the United States for selling lead lists for use in international cyber-fraud schemes. Lead lists or “client” lists consist of the names, telephone numbers, and personal information of potential victims. Such lists are compiled by brokers and sold to scammers. Lead lists are created by wholesalers who send out bogus mass mailings, purporting to be sweepstakes entries. Consumers, thinking the mailings are legitimate, pay to enter the non-existent sweepstakes. The list wholesalers pocket the entry fee and then sell the prospective victims’ contact information to scammers for as much as $10 per name. These scammers target victims over the age of 55 and would sometimes threaten the safety of the victims and their families.
Over 100 known victims of the conspiracy were personally identified, with reported losses totaling over $6 million. The FBI identified and interviewed known victims of the conspiracy in 31 states and 97 cities across the United States. Thousands more victims were located, whose losses were not personally identified. Individual victims lost as little as $199 and as much as $850,000. Nationwide, the number of victims targeted by scammers is likely in the millions, with estimates of annual losses in excess of $1 billion.
United States Attorney Drew H. Wrigley said, “The defendant stands convicted for her very significant role in a conspiracy that involved over 30 criminal defendants, crossed international borders, targeted elderly and other victims, led one victim to commit suicide, and gutted savings accounts for so many victims who had worked a lifetime to provide for their retirements. After speaking with one of the defendant’s victims today, it underscored how deeply damaging these crimes remain for the victims and their families. The United States fought for a sentence that would reflect the severity of these complex financial crimes. Judge Hovland saw things differently and significantly departed downward with the sentence. While that part of this defendant’s penalty is out of our hands, the Department of Justice will continue to fight for every dollar of restitution we can secure for every victim of this fraudulent ring of financial predators.”
“I want to compliment the outstanding work of FBI Special Agent Frank Gasper and the team of investigators he led, and the remarkable prosecutors who have seen this case through to its end,” Wrigley stated.
The investigation was begun and led by Special Agent Frank Gasper of the North Dakota office of the FBI and the United States Postal Inspection Service in Florida, with assistance from many other federal and state law enforcement agencies, as well as Jamaican law enforcement agencies.
The case was prosecuted by Assistant U.S. Attorneys James Patrick Thomas, Jonathan O’Konek, First Assistant U.S. Attorney Nicholas W. Chase, and former Assistant U. S. Attorney Clare Hochhalter, and Department of Justice Trial Attorney Leila Babaeva.
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Newly Unsealed Federal Indictment Charges Software Engineer with Theft of Trade SecretsRead the Press Release
CHICAGO — A software engineer at a suburban Chicago locomotive manufacturer stole proprietary information from the company and took it to China, according to an indictment unsealed this week in federal court in Chicago.
XUDONG YAO, also known as “William Yao,” 57, is charged with nine counts of theft of trade secrets. Yao is currently at large. He is believed to be residing in China.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The government is represented by Assistant U.S. Attorney Peter M. Flanagan.
According to the indictment, Yao began working for the suburban Chicago manufacturer in August 2014. Within two weeks, Yao downloaded more than 3,000 unique electronic files containing proprietary and trade secret information relating to the system that operates the manufacturer’s locomotives, the indictment states. Over the next six months, Yao downloaded numerous other electronic files containing proprietary and trade secret information, including technical documents and software source code, the indictment states. During that time, Yao allegedly sought, negotiated, and accepted employment with a business in China that provided automotive telematics service systems.
The suburban Chicago manufacturer terminated Yao in February 2015 for reasons unrelated to the alleged theft, which at that time had not been discovered. Shortly thereafter, Yao made copies of the stolen trade secret information, the indictment states. He allegedly traveled to China in July 2015 and began working for the Chinese company.
On Nov. 18, 2015, Yao traveled from China to O’Hare International Airport in Chicago, according to the indictment. At the time, he had in his possession the stolen trade secret information, including nine complete copies of the suburban Chicago company’s control system source code and the systems specifications that explained how the code worked, the indictment states. Yao returned to China at some point thereafter.
The indictment was returned in December 2017 and ordered unsealed Wednesday.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Theft of trade secrets is punishable by a maximum sentence of ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Newly Unsealed Federal Indictment Charges Software Engineer with Taking Stolen Trade Secrets to ChinaRead the Press Release
A software engineer at a suburban Chicago locomotive manufacturer stole proprietary information from the company and took it to China, according to an indictment unsealed this week in federal court in Chicago.
Xudong Yao, also known as “William Yao,” 57, is charged with nine counts of theft of trade secrets. Yao is currently at large and believed to be residing in China.
The indictment was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois and Special Agent-in-Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office. The government is represented by Assistant U.S. Attorney Peter M. Flanagan of the Northern District of Illinois.
According to the indictment, Yao began working for the suburban Chicago manufacturer in August 2014. Within two weeks of being hired, Yao downloaded more than 3,000 unique electronic files containing proprietary and trade secret information relating to the system that operates the manufacturer’s locomotives, the indictment states. During the next six months, Yao downloaded numerous other electronic files containing proprietary and trade secret information, including technical documents and software source code, the indictment states. During the time of this illicit downloading of trade secrets, Yao allegedly simultaneously sought, negotiated, and accepted employment with a business in China that provided automotive telematics service systems.
The suburban Chicago manufacturer terminated Yao in February 2015 for reasons unrelated to the alleged theft, which at that time had not been discovered. Shortly thereafter, according to the indictment, Yao made copies of the stolen trade secret information and then traveled to China in July 2015 and began working for the Chinese company.
On Nov. 18, 2015, Yao traveled from China to O’Hare International Airport in Chicago, according to the indictment. At the time, he had in his possession the stolen trade secret information, including nine complete copies of the suburban Chicago company’s control system source code and the systems specifications that explained how the code worked, the indictment states. Yao returned to China at some point thereafter.
The indictment was returned in December 2017 and ordered unsealed Wednesday.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Theft of trade secrets is punishable by a maximum sentence of 10 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
New Haven Man Who Illegally Possessed Ammunition is SentencedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that RONNELL ROGERS, 26, of New Haven, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to approximately 17 months of imprisonment, time already served, and three years of supervised release, for illegally possessing ammunition.
According to court documents and statements made in court, on April 11, 2018, New Haven Police detectives encountered Rogers and another individual sitting in a car in a parking lot in New Haven. One of the detectives observed through the car window a marijuana cigarette and a clear plastic bag containing marijuana. Rogers was asked to exit the car and was detained in handcuffs. A search of the vehicle revealed a loaded Glock 21, .45 caliber firearm with an altered serial number. When the detectives found the firearm, Rogers, who was still handcuffed, began to run. He was quickly apprehended, and a search of his person revealed a .45 caliber round in his pants pocket and a quantity of crack cocaine concealed in his underwear.
Rogers’ criminal history includes felony convictions for firearm, larceny and risk of injury offenses.
Rogers has been detained since his arrest. On April 17, 2019, he pleaded guilty to one count of possession of ammunition by a convicted felon.
This matter was investigated by the New Haven Police Department and the Bureau of Alcohol, Firearms, Tobacco and Explosives. The case was prosecuted by Assistant U.S. Attorneys Peter D. Markle and Jocelyn Courtney Kaoutzanis.
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 neighborhoods safer for everyone.
New Bedford Man Charged with Distributing HeroinRead the Press Release
BOSTON – A New Bedford man was charged yesterday in federal court in Boston in connection with heroin distribution.
Ramon Serrano, 41, was charged with possession with intent to distribute 100 grams or more of heroin. He is currently in state custody and will be arraigned in federal court in Boston on July 23, 2019.
According to court documents, on or about Feb. 20, 2019, Serrano was found in New Bedford in possession of over 100 grams of heroin.
The charge of possession with intent to distribute over 100 grams of heroin provides for a mandatory minimum sentence of five years and no greater than 40 years in prison, at least four years of supervised release, and a fine of up to $5 million. 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 and New Bedford Police Chief Joseph C. Cordeiro made the announcement. Assistant U.S. Attorney Craig Estes of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
NDTX Round-up July 11, 2019Read the Press Release
Indictment – Staci West League
On July 9, a federal grand jury indicted Staci West League, 48, for bank robbery and brandishing a firearm during a crime of violence. League allegedly entered the bank concealing a firearm and demanded large bills. Within minutes, Irving Police reported that League was in the police department with the intention of turning herself in for the bank robbery she just committed. This case was investigated by the Violent Crimes Task Force within the FBI-Dallas Division and prosecuted by AUSA Shane Read.
Indictment – Tracie Turner and Justin Wheeler
On July 9, Turner, 55, and Wheeler, 35, were charged with conspiracy to commit theft of government funds. The pair allegedly conspired to take advantage of the SSI disability benefits available when Wheeler began working full-time and was no longer eligible for disability benefits, but did not report this. Wheeler’s disability checks were deposited into Turners account, and Wheeler opted out of his employer’s health insurance to use Medicaid for his health insurance. They are also charged with theft of government funds and aiding and abetting. This case was prosecuted by AUSA Danielle Renee Jones and investigated by Jeffery Green with the Social Security Administration. If convicted, the defendants will face a maximum sentence of 6-12 months.
Sentencing – Alvin Tedvorick Hayes
On July 8, Hayes, 33, was sentenced to 147 months in prison following his conviction of possession of marijuana with the intent to distribute. He possessed seven guns in furtherance of his drug trafficking crime. The Desoto Police Department responded to multiple shooting calls, where they found a man whose trail of blood led to Hayes residence. After obtaining a search warrant, the authorities discovered 223 grams of a substance containing a designer drug, seven pounds of marijuana. This case was prosecuted by AUSA John Boyle.
Indictment – Orfilia Sanchez Benitez and Osbaldo Rangel
Benitez, 26, and Rangel, 33, are charged with conspiracy to possess with intent to distribute a controlled substance. Benitez and Rangel allegedly planned to distribute 500 grams or more of methamphetamine, a Schedule II controlled substance and 100 grams or more of a substance containing heroin. The pair are also charged with the intent to distribute a controlled substance. If convicted, the defendant face life sentences. This case was prosecuted by AUSA John Kull and investigated by the Drug Enforcement Administration Strike Force One.
Indictment – Martin Alberto Cardoza-Cavazos
On July 9, Cardoza-Cavazos, 45, was charged as an illegal alien in possession of 6 firearms. This case was prosecuted by AUSA Cathy Richardson and investigated by Special Agent Rick Parker of Homeland Security Investigations and ICE Enforcement and Removal Operations. If convicted, the defendant will face a maximum sentence of 10 years.
Middleton Bar Owners Plead Guilty to Tax Charge for Not Reporting Cash Skim from Gambling MachinesRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Dudley Hellenbrand, 67, and Cherie Hellenbrand, 45, both of Middleton, Wisconsin, pleaded guilty today in U.S. District Court in Madison, Wisconsin to filing a false 2017 U.S. Individual Income Tax Return, Form 1040 with the IRS, that underreported their adjusted gross income.
According to the information filed by the U.S. Attorney’s Office, the Hellenbrands owned and operated Middleton Sports Bowl (MSB), in Middleton, Wisconsin since 1997. The defendants contracted with a video gambling machine (“VGM”) vendor to have VGMs placed at MSB. The defendants split the profits generated by the VGMs with the vendor, with the defendants most recently receiving 75% of the VGM profits, and the vendor receiving the remaining 25%. According to the information, the defendants were required to report as income on their state and federal income tax returns, their share of the VGM profits, and pay income taxes on these profits. The VGM vendor was required to report on their state and federal income tax returns, their share of the VGM profits, and pay income taxes on these profits. The VGM vendor was also required to report 100% of the VGM gross receipts on their state sales tax returns, and pay sales taxes on the gross receipts.
At today’s plea hearing, both defendants admitted that they skimmed the VGM cash receipts and did not report the skimmed receipts on their state and federal income tax returns. The tax loss from the skim for both state and federal income taxes for the years 2010-2017 totaled $268,852.04.
The government proffered at today’s hearing that the investigation involved an IRS Criminal Investigations Special Agent working as an undercover agent and posing as a buyer of MSB, which had been listed for sale by the defendants in late 2017. According to the government, the undercover agent met with the defendants and the VGM vendors at MSB on May 31, 2018. At that meeting, the defendants admitted to the undercover agent that they skimmed the cash receipts from the VGMs and did not report the skim on their tax returns. The defendants told the undercover agent they stored the skimmed VGM cash receipts at a safe in their home and used the cash to pay for various things, including a car, spending money for vacation, $40,000 in landscaping, and cash wages to some of their employees. One of the VGM vendors told the undercover agent that he prepared false collection tickets that underreported the true gross receipts and profits generated from the VGMs, and stated “you got to steal in this business or you ain’t going to make any money.”
Sentencing for both defendants is set for October 3, 2019, at 1:00 p.m. before Chief U.S. District Judge James D. Peterson at the U.S. Courthouse in Madison.
The charges against these defendants are the result of an investigation conducted by IRS Criminal Investigation and the Wisconsin Department of Revenue, Office of Criminal Investigation. The prosecution of this case is being handled by Assistant U.S. Attorney Daniel Graber and Special Assistant U.S. Attorney Chadwick Elgersma.
Michigan Man Sentenced to 45 Months in Prison for Stalking Ex-GirlfriendRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of SHAWN KELLY THOMASON, 39, to 45 months in prison for engaging in repeated interstate stalking. THOMASON, who pleaded guilty on March 20, 2019, was sentenced before Judge Eric C. Tostrud in U.S. District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, THOMASON devised a plan to digitally stalk, harm, and abduct his ex-girlfriend. THOMASON handwrote lists that he titled “Tactics” and “Preparations,” which included items such as gloves, cable ties, cuffs, stun guns, pistol, and knife. At least four times between October 30 and December 7, 2018, THOMASON drove from his home in Hazel Park, Michigan, to the home where the victim was living in Mankato, Minnesota. During each of these visits THOMASON stalked the victim. THOMASON attached GPS trackers to the victim’s vehicle, recorded her daily travel to and from her home, and surveilled her at her place of employment. THOMASON’s conduct was discovered on December 6, 2018, when he made contact with the victim in Mankato and was arrested the following day.
This case was the result of an investigation conducted by the FBI, the Mankato Department of Public Safety, and the St. Peter Police Department.
Assistant U.S. Attorneys Emily Polachek and Katharine T. Buzicky prosecuted the case.
Defendant Information:
SHAWN KELLY THOMASON, 39
Hazel Park, Mich.
Convicted:
- Interstate stalking, 1 count
Sentenced:
- 45 months in prison
- Three years of supervised release
- Restitution amount to be determined
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Mexican Nationals Indicted for Methamphetamine Trafficking in Stanislaus CountyRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Antonio Ochoa Mejia, (“Mejia”), 48, Ramon Ortega (“Ortega”), 33, and Jorge Armando Gonzalez Martinez (“Martinez”), 38, all Mexican nationals, charging them with conspiring to distribute and possessing with intent to distribute methamphetamine, United States Attorney McGregor Scott announced.
According to court documents, on April 18, 2019, Mejia and Ortega sold one kilogram of methamphetamine for $4,500 during an undercover transaction in Empire, CA. On May 14, 2019, Mejia sold two kilograms of methamphetamine for $9,000 during an undercover transaction in Ceres. On May 30, 2019, Mejia and Martinez were arrested in Ceres after attempting to deliver 10 kilograms of methamphetamine during an undercover transaction.
This case was the product of an investigation by the Federal Bureau of Investigation and the San Joaquin Metropolitan Narcotics Task Force. Assistant United States Attorney Jessica A. Massey is prosecuting the case.
If convicted, the defendants face a mandatory minimum statutory penalty of ten years imprisonment, a maximum statutory penalty of life in prison, and a $10,000,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Maurice resident pleads guilty in federal court for lying on firearm purchase formRead the Press Release
LAFAYETTE, La. – Alex Joseph Suire, 25, of Maurice, Louisiana, pleaded guilty Tuesday before U.S. Magistrate Judge Carol Whitehurst for making a false statement during the purchase of a firearm, U.S. Attorney David C. Joseph announced.
According to the guilty plea, Suire attempted to purchase a Smith & Wesson SD9VE, 9 mm semi-automatic pistol on January 25, 2019, at a Lafayette sporting goods store. In order to purchase the firearm, he was required to fill out an ATF Form 4473 in order to complete a background check. Suire answered “no” to the question which asks the applicant to report pending felony charges. At the time, he was aware that he had been charged with a variety of felony offenses in state court, which included home invasion, simple battery, domestic abuse battery, simple assault, intimidating witnesses and simple burglary.
Suire faces up to 10 years in prison, three years of supervised release and a $250,000 fine. Sentencing is scheduled for November 7, 2019.
The ATF investigated the case. Assistant U.S. Attorney Danny Siefker is prosecuting the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods 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.
Martinsburg man admits to drug traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Levar Glenwood Crawford, of Martinsburg, West Virginia, has admitted to distributing cocaine, United States Attorney Bill Powell announced.
Crawford, age 42, pled guilty to one count of “Aiding and Abetting Possession with Intent to Distribute Cocaine Base.” Crawford admitted to working with another to distribute cocaine base in November 2018 in Berkeley County.
Crawford is facing not less than five and up to 40 years incarceration and a fine of up to $5,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. Magistrate Judge Robert W. Trumble presided.
Marshfield Woman Pleads Guilty to Stealing $115,000 in Federal WagesRead the Press Release
SPRINGFIELD, Mo. – A Marshfield, Missouri woman pleaded guilty in federal court today to stealing more than $115,000 from the federal government by claiming wages for work she never performed.
Kathleen Miner, 64, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to an information that charges her with theft of government property.
Miner worked as a contractor for the Office of Foreign Disaster Assistance (OFDA), an office within the U.S. Agency for International Development (USAID), which is responsible for leading the United States’ response to natural and man-made disasters overseas. The OFDA deploys Disaster Assistance Response Teams to coordinate an on-ground response to assist with disasters and disaster relief efforts in foreign countries.
Macfadden is a company that provides staff contractors, such as Miner, for the OFDA. Miner was hired by Macfadden as a contractor employee on Oct. 26, 2006. She was deployed outside the United States on a Disaster Assistance Response Team until February 2017. After returning to the United States, Miner continued claiming that she was working from home on matters specifically related to OFDA tasks. Due to Miner’s false timesheets, she received money from USAID in the form of wages that would not have been otherwise provided, resulting in Miner stealing approximately $115,647.
By pleading guilty today, Miner admitted she submitted timesheets that claimed 1,533 hours and was paid $115,647 from March 1, 2017, to Jan. 31, 2018, for work that she never performed.
Under federal statutes, Miner is subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Agency for International Development (USAID).
Man Sentenced for Falsely Claiming to be a Federal Officer Pursuing Suspects with a BombRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that CHRISTIAN GERALD DESGROUX, age 59, of Raleigh, was sentenced today by Chief United States District Court Judge Terrence W. Boyle to 30 months imprisonment followed by three years of supervised release.
According to information presented in court, DESGROUX, pretending to be a United States Federal Officer, utilized the 911 Raleigh-Wake Communication Center to report that a bomb was contained in a van, being operated by illegal immigrants, who were planning to take the bomb to Washington D.C.
As detailed in the public record, DESGROUX, falsely stated that while he was in pursuit of the vehicle, the occupants were firing at him. Eighteen Raleigh Police Officers responded resulting in Glenwood Avenue being shut down in both directions for over 45 minutes. Ultimately, Raleigh Police discovered the entire incident was a hoax.
At the time of this offense, DESGROUX, was serving a term of supervised release after pleading guilty to impersonating a military officer and landing a helicopter at SAS in Cary, North Carolina. Due to the revocation of his supervised release because of the current charge, the court imposed a 10 month sentence to run concurrently.
The case was investigated by the Raleigh Police Department and the Department of Homeland Security. Assistant United States Attorney Gabriel Diaz prosecuted the case on behalf of the government.
Man Previously Committed to a Mental Institution Sentenced to Prison for Possessing Guns and Receiving Drugs in JailRead the Press Release
A man who possessed guns illegally and received drugs in the mail while in jail was sentenced July 10, 2019, to more than a year in federal prison.
John Conrad Walgren, age 25, from Dubuque, Iowa, received the prison term after pleading guilty to being a prohibited person in possession of a firearm and possession of contraband while in prison.
Walgren had previously been the subject of state proceedings regarding his mental health that made it illegal for him to possess firearms. His girlfriend obtained multiple guns which he then accessed and possessed. After being arrested and while in custody for possessing the guns, a family member mailed cards to the jail for Walgren. Concealed within those cards was alprazolam, commonly called Xanax.
Walgren was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Walgren was sentenced to a total of 14 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Walgren is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, the Dubuque County Sheriff’s Office, and the Linn County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 18-cr-1041 and 19-cr-0052.
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Man Heads to Prison After Communicating Desire to Have Sex with TeenagerRead the Press Release
LAREDO, Texas – A 47-year old Zapata resident has been ordered to federal prison for enticement of a minor, announced U.S. Attorney Ryan K. Patrick. Matthew David Pascoe pleaded guilty April 3, 2019.
Today, U.S. District Judge Diana Saldaña sentenced Pascoe to 120 months. He was also to serve five yearson supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender.
In November 2018, Pascoe communicated through an online messaging application with whom he believed was a 15-year-old girl. During these exchanges, Pascoe communicated his desire to engage in sexual intercourse and other sexual acts with the purported minor.
Pascoe arranged a date and time to meet with her with the intent to engage in sexual intercourse. He was taken into custody as he arrived at that location in Laredo Nov. 10, 2018.
Pascoe will remain in the custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Zapata County Sheriff’s Department and Laredo Police Department.
Assistant U.S. Attorney (AUSA) April Ayers-Perez and former AUSA Giselle Guerra prosecuted the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Madison Man Sentenced to 25 Years for Sex TraffickingRead the Press Release
MADISON, WIS. – Erin J. Graham, 37, of Madison, Wisconsin, was sentenced today to 25 years in federal prison for sex trafficking and transporting individuals across state lines with the intent that they engage in prostitution, announced Scott C. Blader, United States Attorney for the Western District of Wisconsin. The sentence was imposed by Chief U.S. District Judge James D. Peterson.
Graham was convicted following a five-day jury trial in Madison in April. The evidence presented at trial established that between 2015 and 2017, Graham engaged in sex trafficking by force, coercion and fraud, and transported individuals across state lines with the intent that they engage in prostitution. Graham posted advertisements on Backpage.com and forced or coerced individuals to commit commercial sex acts with those who responded to the advertisements. In addition, Graham transported two individuals between Wisconsin and Virginia with the intent that they engage in prostitution.
The scheme was uncovered in April 2017 when law enforcement officials encountered one of the victims at a Madison hotel when an employee called 911 after the victim ran from her room bleeding and hid behind the front desk. The victim told a nurse at a Madison hospital that she had been strangled to the point of unconsciousness by Graham when she told him she wanted to leave.
At the trial, four victims testified that they were forced to engage in multiple acts of prostitution and turn over money they earned to Graham and his girlfriend, Patience Moore. The victims testified that they were the only source of income for Graham and Moore. One victim was with Graham and Moore for 18 months, from age 18 to 20. They convinced her that they would help her make money to care for her ill mother, to be able to go to school, and to purchase a car. Instead, testimony at trial showed that Graham was physically abusive to the victim on many occasions and controlled everything from her access to food to when she could speak to her family.
In a written victim impact statement provided to the Court, one of Graham’s victims said, “When I realized the truth was to sell my body so that he could have money and never work another day in his life, I didn’t feel like a person, and I felt I didn’t have value.”
Judge Peterson said, “This case was about vulnerable women degraded by a heartless predator.” The judge said the lengthy sentence was necessary to make the public safe from Graham’s future efforts to exploit women.
“The defendants’ actions in using violence, intimidation, coercion, and fear to exploit these young women is abhorrent,” said U.S. Attorney Blader. “My office will continue to work with our law enforcement partners to prosecute those who engage in this despicable crime.”
"This case shows the level of power and control traffickers have over their victims. This highly successful investigation and prosecution is a clear message to those who engage in sex trafficking in our community -- they will face the combined efforts of local and federal officials to bring them to justice,” said Dane County Sheriff David Mahoney, whose agency led the investigation. "This case exemplifies the outstanding working relationship between my office and the U.S. Attorney's Office."
Patience Moore, Graham’s co-conspirator, pleaded guilty for her role in this sex trafficking scheme on March 14. She was sentenced on June 18 by Judge Peterson to three years in federal prison on June 18 for her role in this trafficking scheme.
The charges against Graham and Moore are the result of an investigation by the Dane County Sheriff’s Office, the Wisconsin Department of Justice Division of Criminal Investigation, with the assistance of the Madison, Grand Chute, Wisconsin State Capitol and Hampton (Virginia) Police Departments. Assistant U.S. Attorneys Julie Pfluger and Kevin Burke prosecuted the case.
Man from Counselor, N.m. Pleads Guilty to Sexual Abuse of a Minor in Indian CountryRead the Press Release
ALBUQUERQUE – Nathanial Atencio, 24, of Counselor, N.M., pleaded guilty in federal court in Albuquerque today to a charge of sexual abuse of a minor in Indian Country.
A grand jury previously returned an indictment against Atencio on January 29, 2019. According Atencio’s plea agreement, he committed this crime in Sandoval County sometime between November 1, 2016, and November 8, 2016. Atencio engaged in a sexual act with a 14-year-old girl who became pregnant and gave birth to a child. Atencio is an enrolled member of the Navajo Nation where this crime occurred.
Atencio is currently out of custody pending sentencing. He faces up to 15 years in prison.
The Farmington office of the FBI investigated this case. Assistant U.S. Attorney Allison Jaros is prosecuting the case.
Man from Colorado Pleads Guilty to Federal Charges Arising from Deadly Crime Spree Near Las Cruces in 2017Read the Press Release
ALBUQUERQUE – Daniel Lowell, 35, of Pueblo, Colo, pleaded guilty in federal court in Las Cruces today to carjacking resulting in death and other offenses stemming from a crime spree in Doña Ana and Luna Counties on November 27, 2017.
According to court records and statements made on the record in court, Lowell took part in the crime spree with Trista Schlaefli, 32, of Colorado Springs, Colo. It began at an immigration checkpoint on Interstate 10. Lowell approached the checkpoint in a stolen vehicle and could not produce identification. A Border Patrol agent directed Lowell to secondary inspection. However, Lowell sped away with Schlaefli in the stolen vehicle driving more than 100 miles per hour.
After fleeing the checkpoint, one of the tires on the truck blew out. Lowell approached another vehicle with a family inside, including two small children. Lowell threatened the driver at gunpoint and demanded they give him their vehicle. Lowell carjacked the vehicle and took off with Schlaefli.
From there, Lowell stole some spark plugs from a store that he intended to use to break into other cars. However, before Lowell could do that, police tried to pull Lowell and Schlaefli over in the stolen vehicle. Lowell and Schlaefli took off driving recklessly and speeding with police chasing them. During their flight, they crashed into a motorcyclist, who died from the impact of the collision.
Lowell and Schlaefli continued to attempt to evade law enforcement. Lowell tried to carjack another vehicle, but the driver resisted. Eventually, a team of law enforcement officers stopped Lowell and Schlaefli and arrested them. Lowell had a stolen firearm and at least fifteen stolen credit cards with him at the time of his arrest.
Schlaefli previously pleaded guilty on November 13, 2018, to an indictment charging her with carjacking resulting in death, high-speed flight from an immigration checkpoint, carjacking, attempted carjacking, aiding and abetting brandishing a firearm during a crime of violence, and possession of unauthorized access devices. She is awaiting sentencing at a future date.
On June 19, 2019, a federal grand jury in Las Cruces returned a second superseding indictment against Lowell. Today, he pleaded guilty to all charges including carjacking resulting in death, attempted carjacking, high-speed flight from an immigration checkpoint, brandishing a firearm during a crime of violence, possession of a stolen firearm, transportation of a stolen vehicle, being a felon in possession of a firearm, and possession of unauthorized access devices.
Lowell is currently in custody. At sentencing, he faces up to life in prison for carjacking resulting in death, 15 years in prison for attempted carjacking, 5 years in prison for flight from an immigration checkpoint, 7 year in prison for brandishing a firearm, 10 years in prison for possession of a stolen firearm, 10 years in prison for transportation of a stolen vehicle, 10 years in prison for being a felon in possession of a firearm, and 10 years in prison for possession of an unauthorized access device.
The Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. Border Patrol, the New Mexico State Police Department, the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the Pikes Peak Community College Campus Police, the Colorado Springs Police Department, the Pueblo Police Department, the Pueblo County Sheriff’s Office, the Fountain Police Department, and the Colorado State Patrol investigated this case. Assistant U.S. Attorneys Marisa A. Ong and Aaron Jordan are prosecuting the case.
Man from Arizona Sentended to 20 Years in Prison for Murdering Two People in Indian CountryRead the Press Release
ALBUQUERQUE – Michael Yonnie, 28, of Winslow, Ariz., was sentenced in federal court on Monday to 20 years in prison on two counts of second-degree murder in Indian Country.
Yonnie previously pleaded guilty to this offense on March 20, 2019. According to his plea agreement, he committed the murders on July 18, 2014. Yonnie became upset when he saw the first victim with his mother. Yonnie confronted the first victim with a knife and stabbed the first victim to death. Yonnie then went to the second victim’s home, where he pulled a knife and stabbed the second victim fatally. Law enforcement officers arrested Yonnie when he returned home a short time later.
The Albuquerque office of the FBI investigated this case with the Navajo Nation Police Department. Assistant U.S. Attorney Nicholas J. Marshall prosecuted the case.
Lancaster County Man Sentenced to 18 Months in Federal Prison on Firearm ChargeRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon announced today that Ezekiel Jahpari Patterson, age 21, was sentenced to 18 months in federal prison after pleading guilty to being a felon in possession of a firearm.
Evidence presented in court established that on January 11, 2018, a deputy with the Lancaster County Sheriff’s Office stopped the driver of a 1998 Buick near Evans Drive for a traffic violation. Patterson was seated in the backseat of the car. As the deputy approached the car, he observed Patterson reaching under the seat and asked Patterson to step out of the car. The deputy searched Patterson and found two loaded firearms hidden in Patterson’s clothing. One of the firearms was stolen.
Federal law prohibits Patterson from possessing any firearm because of his 2017 felony conviction for assault and battery first degree. Patterson was on probation when he was found with the two firearms.
Senior United States District Judge Cameron M. Currie, of Columbia, accepted Patterson’s guilty plea and sentenced him to 18 months in federal prison followed by two years of court-ordered supervision. Assistant United States Attorney Christopher D. Taylor prosecuted the case.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) alongside officers with the Lancaster County Sheriff’s Office. It was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in our communities and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally-based prevention and reentry programs for lasting reductions in crime.
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Lake Oswego Man Sentenced to Federal Prison for Distributing Fentanyl from China Leading to Overdose DeathRead the Press Release
PORTLAND, Ore.—Joseph Richard Caruso, 34, a prolific darknet narcotics vendor residing in Lake Oswego, Oregon, was sentenced today to 87 months in federal prison and three years’ supervised release for illegally distributing fentanyl that was linked to a 2017 fatal overdose in Wisconsin.
“A highly-coordinated effort by four law enforcement agencies led to Mr. Caruso’s arrest less than two days after his most recent inbound fentanyl package was discovered. It’s this sort of nimble and decisive law enforcement work that’s required to keep synthetic opioids off of our streets and prevent additional overdoses,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “I applaud the tremendous work of everyone involved in this case.”
“This sentence is a significant step forward in eliminating deadly drugs from our community,” said Brad Bench, Special Agent in Charge of HSI Seattle. “Fentanyl is an extremely deadly substance. Blatant disregard for the safety of those who could have come into contact with it will not be tolerated. This case is a testament to the hard work HSI, and our law enforcement partners, do every day to combat these drugs from making it to our streets.”
According to court documents, on November 19, 2017, a U.S. Postal Inspection Service inspector discovered a suspicious package addressed to Caruso at the U.S. Postal Service Portland Air Cargo Center. The package was transported to the Portland Police Bureau’s Drugs and Vice Division for further examination in a safe environment. Wearing a ventilated hood for protection, a Homeland Security Investigations (HSI) agent assigned to the High Intensity Drug Trafficking Area Interdiction Taskforce opened the heat-sealed package and found a clear Ziploc baggie containing a fine powdery substance. A test conducted the following day at the Oregon State Police Laboratory confirmed the substance was cyclopropylfentanyl, a power opioid and Schedule I controlled substance.
Investigators removed the cyclopropylfentanyl from the package and replaced it with an inert powder similar in appearance. On November 21, 2017, they conducted a controlled delivery of the package with the inert powder to Caruso’s residence in Lake Oswego. Shortly thereafter, Caruso was observed retrieving the package from his apartment postal box. HSI agents and other task force officers confronted Caruso and placed him under arrest.
On April 3, 2019, Caruso pleaded guilty to one count of distributing a controlled substance resulting in death. At sentencing, he was ordered to forfeit more than $764,000 and a 2013 Audi A4 sedan.
This case was investigated by the High Intensity Drug Trafficking Area Interdiction Taskforce, Homeland Security Investigations, the U.S. Postal Inspection Service and the Portland Police Bureau Drugs and Vice Division. It was prosecuted by Scott M. Kerin and Julia E. Jarrett, Assistant U.S. Attorneys for the District of Oregon.
The Oregon HIDTA program was established by the White House Office of National Drug Control Policy (ONDCP) in June of 1999. In 2015 the program expanded into Idaho and was renamed the Oregon-Idaho HIDTA. The Oregon-Idaho HIDTA consists of 14 counties and the Warm Springs Indian Reservation. Counties in the HIDTA include Oregon’s Clackamas, Deschutes, Douglas, Jackson, Lane, Linn, Malheur, Marion, Multnomah, Umatilla and Washington counties, and Idaho’s Ada, Bannock and Canyon counties.
Drug abuse affects communities across the nation, and opioid abuse continues to be particularly devastating. The CDC reports that from 1999 to 2016, more than 630,000 people have died from a drug overdoses. In 2016, 66% of drug overdose deaths involved an opioid. Drug overdose is now the leading cause of injury or death in the United States. In Oregon, the total number of deaths related to drug use increased 11 percent between from 2013 to 2017, with 546 known drug related deaths in 2017.
If you or someone you know suffers from addiction, please call the Lines for Life substance abuse helpline at 1-800-923-4357 or visit www.linesforlife.org. Phone support is available 24 hours a day, seven days a week. You can also text “RecoveryNow” to 839863 between 8am and 11pm Pacific Time daily.
La Crosse Man Sentenced on Crack Cocaine ChargeRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Earl Hill, 40, La Crosse, Wisconsin, pleaded guilty and was sentenced today by U.S. District Judge James D. Peterson to 42 months in federal prison for possessing crack cocaine with the intent to distribute.
In October 2018, a concerned neighbor called the La Crosse Police Department to report a lot of short-term vehicle and pedestrian traffic at Hill’s home. Ultimately a search of Hill’s residence revealed over 22 grams of crack cocaine and packaging materials consistent with drug distribution and he was arrested.
Hill’s arrest came less than three months after being released from a lengthy prison sentence in Illinois. He has eight prior criminal convictions in Illinois, including convictions for drug conspiracy, domestic battery, possessing weapons, and reckless conduct. At the time of his arrest, Hill was also on supervision in Wisconsin for delivering cocaine.
The charge against Hill was the result of an investigation conducted by the La Crosse Police Department. The prosecution of the case has been handled by Assistant U.S. Attorney Diane Schlipper.
KC, Grandview Men Sentenced for Armed RobberiesRead the Press Release
KANSAS CITY, Mo. – Two men have been sentenced for their roles in a three-months-long conspiracy that included at least 27 armed robberies, culminating in the armed robbery of a Walgreens in Blue Springs, Mo., in which a suspect was fatally shot by law enforcement officers.
Demetrius E. Nelson, 26, of Kansas City, Missouri, was sentenced by U.S. District Judge Greg Kays on Wednesday, July 10, to eight years in federal prison without parole. Co-defendant Parrise K. Black, also known as “Kilo,” 27, of Grandview, Missouri, was sentenced on Tuesday, July 9, to 10 years in federal prison without parole.
On May 30, 2018, Nelson pleaded guilty to one count of conspiracy to commit robbery, four counts of robbery, and four counts of possessing a firearm in furtherance of a crime of violence. On May 21, 2018, Black pleaded guilty to one count of conspiracy to commit robbery, three counts of robbery, and three counts of possessing a firearm in furtherance of a crime of violence.
Seven co-conspirators robbed 27 businesses in Blue Springs, Independence, North Kansas City, Raytown, Kansas City, Mo., and Kansas City, Kan., at gunpoint from Jan. 2 to March 24, 2016. In addition to the armed robberies charged in the indictment, evidence was introduced during Thomas’s trial of other, uncharged robberies that were committed in furtherance of the conspiracy. Victim businesses included convenience stores, pharmacies, and other businesses.
The robberies followed a similar pattern: Two or three conspirators entered the business armed with handguns, wearing gloves, hoodies, and/or masks. The hoodies were drawn tightly over their faces to obscure their features. The employees were forced at gunpoint to hand over money from the cash register and the safe. The thieves wore the same hoodies in nearly all the robberies; Thomas wore a blue Kansas City Royals hoodie for the majority of the robberies he committed.
The spree of robberies culminated on March 24, 2016. Co-defendants Shannon R. Thomas, 28, of Kansas City, Missouri, and Deonte J. Collins-Abbott, 24, of Grandview, Missouri, along with Jermon Seals of Shawnee, Kansas, robbed the Walgreens at 7 Highway and Duncan in Blue Springs. Thomas placed a Springfield Armory .40-caliber semi-automatic pistol to the back of an employee’s head and took money from the front register. Collins-Abbott and Seals went over the pharmacy counter and took prescription grade cough syrup at gunpoint from the pharmacist. They left the business but were confronted by law enforcement officers as they were walking back to the vehicle. They failed to comply with the officers’ commands; Seals turned towards the officers, pointing a gun in their direction. Officers returned fire and Seals was fatally struck in the exchange. Thomas and Collins-Abbott were apprehended by officers after a short foot chase.
Thomas was found guilty at trial on May 9, 2019, of participating in the conspiracy as well as participating in 10 armed robberies. He was also found guilty of 10 counts of brandishing a firearm in furtherance of a violent crime, and one count of being a felon in possession of a firearm. Thomas faces a mandatory minimum sentence of 70 years in federal prison without parole and awaits sentencing.
Collins-Abbott pleaded guilty and was sentenced to 25 years in federal prison without parole. Collins-Abbott admitted that he committed eight armed robberies between Feb. 3, 2016, and March 24, 2016.
Co-defendants Kevin T. Thompson-Randell, 23, of Kansas City, Missouri, and Frank A. Garner, Jr., 25, of Grandview, have also pleaded guilty and await sentencing.
This case is being prosecuted by Assistant U.S. Attorney Adam Caine and Special Assistant U.S. Attorney Mary Kate Butterfield. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Independence, Mo., Police Department, the North Kansas City, Mo., Police Department, the Kansas City, Kan., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service.
Justice Department launches National Public Safety Partnership with Cleveland Division of PoliceRead the Press Release
Today, officials from the Department of Justice's Bureau of Justice Assistance, the United States Attorney's Office, Northern District of Ohio, and the Cleveland Division of Police convened at the United States Attorney Offices in Cleveland to initiate the National Public Safety Partnership (PSP) program with the Cleveland Police Department. This Justice Department program is a three-year engagement that seeks to leverage department assets in support of a local jurisdictions' commitment to drive down violent crime.
On June 3, 2019, Attorney General William Barr announced the selection of the Cleveland Police Department as one of ten FY 2019 PSP sites where the Justice Department will work collaboratively to provide training and technical assistance in areas such as crime analytics, emerging technology and community engagement.
Since 2017, the Justice Department has directed nearly $14.9 million in customized training and technical assistance to help build crime fighting capacity in PSP sites, including $6.6 million to support the FY 2019 sites through FY 2022. PSP seeks to bring law enforcement stakeholders together to work collaboratively in reducing violent crime attributed to felonious firearm use, drug trafficking and human trafficking.
“Today our team is on-site in Cleveland to collaborate with local law enforcement officials in their mission to improve public safety and drive down violent crime,” said Jon Adler, Director of the Bureau of Justice Assistance. "Through the Public Safety Partnership, we are committed to fulfilling the Attorney General's priority of supporting local law enforcement combat violent gangs, felonious firearms use and drug trafficking," added Adler.
“We are excited to bring the PSP team’s expertise to Cleveland to add to the outstanding collaboration already underway addressing violent crime,” said U.S. Attorney Justin E. Herdman. "We know targeted, vigorous enforcement actions combined with meaningful crime prevention and reentry efforts have a demonstrated track record of reducing homicides, shooting and other violence.”
Cleveland Police Chief Calvin D. Williams said: “The Cleveland Division of Police welcomes the assistance of the PSP team in our efforts to reduce violent crime in our community. Our commitment to the safety of our residents is our primary focus and this program will increase our ability to provide the highest level of service.”
Since 2017, the Justice Department has worked with more than 30 local jurisdictions under the nationwide PSP program. Many participating cities have already seen dramatic reductions in violent crime. New Orleans ended 2018 with 146 murders, the lowest number of murders since the early 1970s. In Milwaukee, homicides declined in 2018 for a third straight year after hitting a deadly peak in 2015.
Agencies in attendance at this meeting included the U.S. Attorney’s Office, Northern District of Ohio; the Office of Justice Programs; the Federal Bureau of Investigation; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; the U.S. Drug Enforcement Administration; the Cleveland Police Department; the Cuyahoga County Prosecutor’s Office; the Ohio Adult Parole Authority and Mayor Frank Jackson’s Office.
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Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a Case Concerning an Opioid Drug in United States HistoryRead the Press Release
Global consumer goods conglomerate Reckitt Benckiser Group plc (RB Group) has agreed to pay $1.4 billion to resolve its potential criminal and civil liability related to a federal investigation of the marketing of the opioid addiction treatment drug Suboxone. The resolution – the largest recovery by the United States in a case concerning an opioid drug – includes the forfeiture of proceeds totaling $647 million, civil settlements with the federal government and the states totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. Suboxone and its active ingredient, buprenorphine, are powerful and addictive opioids.
“The opioid epidemic continues to be a serious crisis for our nation, and I’m proud of the work the Department of Justice and our partners are doing to address this epidemic,” said Principal Deputy Associate Attorney General Claire Murray.
“We are confronting the deadliest drug crisis in our nation’s history. Opioid withdrawal is difficult, painful, and sometimes dangerous; people struggling to overcome addiction face challenges that can often seem insurmountable,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Drug manufacturers marketing products to help opioid addicts are expected to do so honestly and responsibly.”
Resolution of the Criminal Investigation
Until December 2014, RB Group’s wholly owned subsidiary, Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals Inc.) marketed and sold Suboxone throughout the United States. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. On April 9, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The United States’ criminal trial against Indivior is scheduled to begin on May 11, 2020, in the United States District Court in Abingdon, Virginia. Indivior is presumed innocent until proven guilty.
To resolve its potential criminal liability stemming from the conduct alleged in the indictment of Indivior, RB Group has executed a non-prosecution agreement that requires the company to forfeit $647 million of proceeds it received from Indivior and not to manufacture, market, or sell Schedule I, II, or III controlled substances in the United States for three years. In addition, RB Group has agreed to cooperate fully with all investigations and prosecutions by the Department of Justice related, in any way, to Suboxone.
“Today’s announcement demonstrates that this office will work tirelessly to address all facets of the opioid epidemic,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said. “This historic resolution is the product of a continued partnership with the Virginia Medicaid Fraud Control Unit, FDA, HHS, and the U.S. Postal Service.”
“This is a landmark moment in our fight to hold drug companies responsible for their role in the opioid crisis,” said Virginia Attorney General Mark Herring. “We will not allow anyone to put profits over people, or to exacerbate or exploit the opioid crisis for their own benefit. The Virginia Medicaid Fraud Control Unit’s expertise, capacity, and diligent investigation, combined with strong relationships with local, state, and federal partners, helped make this resolution possible.”
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one the FDA’s highest priorities,” said Acting FDA Commissioner Ned Sharpless, M.D. “Providing misleading information about product benefits puts the public at risk. We also are particularly concerned with schemes to game the drug approval process to prevent generic competition for important medicines. The FDA, including criminal investigators in our Office of Regulatory Affairs and the lawyers in our Office of Chief Counsel, will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
“The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact our special agents at www.uspsoig.gov or 888-USPS-OIG.”
According to the indictment, Indivior—including during the time when it was a subsidiary of RB Group—promoted the film version of Suboxone (Suboxone Film) to physicians, pharmacists, Medicaid administrators, and others across the country as less-divertible and less-abusable and safer around children, families, and communities than other buprenorphine drugs, even though such claims have never been established.
The indictment further alleges that Indivior touted its “Here to Help” internet and telephone program as a resource for opioid-addicted patients. Instead, however, Indivior used the program, in part, to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a careless and clinically unwarranted manner.
The indictment also alleges that, to further its scheme, Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure” to tablets, despite Indivior executives’ knowledge that the primary reason for the discontinuance was to delay the Food and Drug Administration’s approval of generic tablet forms of the drug.
The indictment alleges Indivior’s scheme was highly successful, fraudulently converting thousands of opioid-addicted patients over to Suboxone Film and causing state Medicaid programs to expand and maintain coverage of Suboxone Film at substantial cost to the government.
The Civil Settlement
Under the civil settlement, RB Group has agreed to pay a total of $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $700 million settlement amount includes $500 million to the federal government and up to $200 million to states that opt to participate in the agreement. The claims settled by the civil agreement are allegations only and there has been no determination of liability.
The civil settlement addresses allegations by the United States that, from 2010 through 2014, RB Group directly or through its subsidiaries knowingly: (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions without any counseling or psychosocial support and for uses that were unsafe, ineffective, and medically unnecessary and that were often diverted for uses that lacked a legitimate medical purpose; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone in order to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“With the nation continuing to battle the opioid crisis, the availability of quality addiction treatment options is critical. When treatment medications are used, it is essential they be prescribed carefully, legally, and based on accurate information, to protect the health and safety of patients in federal healthcare programs,” said Gary L. Cantrell, Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services. “Along with our federal and state law enforcement partners we will continue working to protect these vulnerable beneficiaries.”
“Opioid manufacturers – like all drug manufacturers – have a duty to market their products both truthfully and safely,” said Craig Carpenito, U.S. Attorney for New Jersey. “Opioid manufacturers have an additional and critically important duty to maintain effective controls to prevent their highly dangerous products from being abused and diverted.”
“The opioid crisis has caused devastation throughout the country, including in the lives of Federal employees, annuitants, and their families,” said Thomas W. South, Deputy Assistant Inspector General for Investigations for the Office of Personnel Management. “The OPM OIG is committed to working with the Department of Justice and our other law enforcement partners to combat this epidemic. As always, patient safety is our number one priority.”
The civil settlement resolves the claims against RB Group in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), RB Group has agreed to pay $50 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC is filing a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by RB Group designed to impede competition from generic equivalents of Suboxone. RB Group no longer manufactures or markets drug products. As part of a consent decree, RB Group agreed that it would notify the FTC if it began marketing drug products in the United States. RB Group further agreed that if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. RB Group further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“Buprenorphine products are approved for use in the treatment of Americans struggling to overcome opioid addiction, and, in the middle of the nation’s opioid crisis, RB Group allegedly sought to deny those consumers a lower-cost generic alternative to maintain its lucrative monopoly on the branded drug,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition.
A Multilateral Effort
The criminal resolution with RB Group was handled by the U.S. Attorney’s Office for the Western District of Virginia and the Department of Justice’s Consumer Protection Branch based on an investigation by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General. The civil settlement was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, and the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a Case Concerning an Opioid Drug in United States HistoryRead the Press Release
Note: Relevant documents can be found here:
Forfeiture Settlement Agreement 1 (Includes Non Prosecution Agreement, Civil Settlement Agreement, and Tolling Agreement) Forfeiture Complaint Forfeiture Settlement Agreement 2 FTC Joint Motion for Stipulated Order FTC ComplaintABINGDON, VA – Global consumer goods conglomerate Reckitt Benckiser Group plc (RB Group) has agreed to pay $1.4 billion to resolve its potential criminal and civil liability related to a federal investigation of the marketing of the opioid addiction treatment drug Suboxone. The resolution – the largest recovery by the United States in a case concerning an opioid drug – includes the forfeiture of proceeds totaling $647 million, civil settlements with the federal government and the states totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. Suboxone and its active ingredient, buprenorphine, are powerful and addictive opioids.
“The opioid epidemic continues to be a serious crisis for our nation, and I’m proud of the work the Department of Justice and our partners are doing to address this epidemic,” said Principal Deputy Associate Attorney General Claire Murray.
“We are confronting the deadliest drug crisis in our nation’s history. Opioid withdrawal is difficult, painful, and sometimes dangerous; people struggling to overcome addiction face challenges that can often seem insurmountable,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Drug manufacturers marketing products to help opioid addicts are expected to do so honestly and responsibly.”
Resolution of the Criminal Investigation
Until December 2014, RB Group’s wholly owned subsidiary, Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals Inc.) marketed and sold Suboxone throughout the United States. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. On April 9, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The United States’ criminal trial against Indivior is scheduled to begin on May 11, 2020, in the United States District Court in Abingdon, Virginia. Indivior is presumed innocent until proven guilty.
To resolve its potential criminal liability stemming from the conduct alleged in the indictment of Indivior, RB Group has executed a non-prosecution agreement that requires the company to forfeit $647 million of proceeds it received from Indivior and not to manufacture, market, or sell Schedule I, II, or III controlled substances in the United States for three years. In addition, RB Group has agreed to cooperate fully with all investigations and prosecutions by the Department of Justice related, in any way, to Suboxone.
“Today’s announcement demonstrates that this office will work tirelessly to address all facets of the opioid epidemic,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said. “This historic resolution is the product of a continued partnership with the Virginia Medicaid Fraud Control Unit, FDA, HHS, and the U.S. Postal Service.”
“This is a landmark moment in our fight to hold drug companies responsible for their role in the opioid crisis,” said Virginia Attorney General Mark Herring. “We will not allow anyone to put profits over people, or to exacerbate or exploit the opioid crisis for their own benefit. The Virginia Medicaid Fraud Control Unit’s expertise, capacity, and diligent investigation, combined with strong relationships with local, state, and federal partners, helped make this resolution possible.”
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one the FDA’s highest priorities,” said Acting FDA Commissioner Ned Sharpless, M.D. “Providing misleading information about product benefits puts the public at risk. We also are particularly concerned with schemes to game the drug approval process to prevent generic competition for important medicines. The FDA, including criminal investigators in our Office of Regulatory Affairs and the lawyers in our Office of Chief Counsel, will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
“The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact our special agents at www.uspsoig.gov or 888-USPS-OIG.”
According to the indictment, Indivior—including during the time when it was a subsidiary of RB Group—promoted the film version of Suboxone (Suboxone Film) to physicians, pharmacists, Medicaid administrators, and others across the country as less-divertible and less-abusable and safer around children, families, and communities than other buprenorphine drugs, even though such claims have never been established.
The indictment further alleges that Indivior touted its “Here to Help” internet and telephone program as a resource for opioid-addicted patients. Instead, however, Indivior used the program, in part, to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a careless and clinically unwarranted manner.
The indictment also alleges that, to further its scheme, Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure” to tablets, despite Indivior executives’ knowledge that the primary reason for the discontinuance was to delay the Food and Drug Administration’s approval of generic tablet forms of the drug.
The indictment alleges Indivior’s scheme was highly successful, fraudulently converting thousands of opioid-addicted patients over to Suboxone Film and causing state Medicaid programs to expand and maintain coverage of Suboxone Film at substantial cost to the government.
The Civil Settlement
Under the civil settlement, RB Group has agreed to pay a total of $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $700 million settlement amount includes $500 million to the federal government and up to $200 million to states that opt to participate in the agreement. The claims settled by the civil agreement are allegations only and there has been no determination of liability.
The civil settlement addresses allegations by the United States that, from 2010 through 2014, RB Group directly or through its subsidiaries knowingly: (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions without any counseling or psychosocial support and for uses that were unsafe, ineffective, and medically unnecessary and that were often diverted for uses that lacked a legitimate medical purpose; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone in order to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“With the nation continuing to battle the opioid crisis, the availability of quality addiction treatment options is critical. When treatment medications are used, it is essential they be prescribed carefully, legally, and based on accurate information, to protect the health and safety of patients in federal healthcare programs,” said Gary L. Cantrell, Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services. “Along with our federal and state law enforcement partners we will continue working to protect these vulnerable beneficiaries.”
“Opioid manufacturers – like all drug manufacturers – have a duty to market their products both truthfully and safely,” said Craig Carpenito, U.S. Attorney for New Jersey. “Opioid manufacturers have an additional and critically important duty to maintain effective controls to prevent their highly dangerous products from being abused and diverted.”
“The opioid crisis has caused devastation throughout the country, including in the lives of Federal employees, annuitants, and their families,” said Thomas W. South, Deputy Assistant Inspector General for Investigations for the Office of Personnel Management. “The OPM OIG is committed to working with the Department of Justice and our other law enforcement partners to combat this epidemic. As always, patient safety is our number one priority.”
The civil settlement resolves the claims against RB Group in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), RB Group has agreed to pay $50 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC is filing a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by RB Group designed to impede competition from generic equivalents of Suboxone. RB Group no longer manufactures or markets drug products. As part of a consent decree, RB Group agreed that it would notify the FTC if it began marketing drug products in the United States. RB Group further agreed that if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. RB Group further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“Buprenorphine products are approved for use in the treatment of Americans struggling to overcome opioid addiction, and, in the middle of the nation’s opioid crisis, RB Group allegedly sought to deny those consumers a lower-cost generic alternative to maintain its lucrative monopoly on the branded drug,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition.
A Multilateral Effort
The criminal resolution with RB Group was handled by the U.S. Attorney’s Office for the Western District of Virginia and the Department of Justice’s Consumer Protection Branch based on an investigation by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General. The civil settlement was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, and the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
Jury Convicts Postal Clerk of Embezzling Postal Funds and Making False RecordsRead the Press Release
OKLAHOMA CITY – JAMES BRYAN BARNES, 53, of Norman, has been convicted by a jury of embezzlement of postal funds, theft of government money, and making false postal record entries, announced United States Attorney Timothy J. Downing.
According to a second superseding indictment, Barnes was the lead Sales and Service Associate at the Midwest City Branch Post Office when he conducted a scheme to steal postal funds by taking cash for stamps without properly accounting for the sales. He was charged with one count of embezzlement of postal funds in excess of $1,000, one count of theft of government money in excess of $1,000, and four counts of making false entries in the U.S. Postal Service’s records.
Today, a jury convicted Barnes on those six counts. The jury heard that Barnes made false record entries into his cash register at least 178 times from October 2015 through June 2018 and took almost $3,000 belonging to the Postal Service.
At sentencing, Barnes faces up to ten years in prison on each of the six counts of conviction, in addition to a fine of up to $250,000 per count. He will also be subject to up to three years of supervised release after imprisonment. Sentencing will take place in approximately ninety days.
These charges are the result of an investigation by the U.S. Postal Service—Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys William E. Farrior and Nick M. Coffey.
Judge Sentences Jamaican to Time Served for Gun Offense, Orders Transfer of Defendant to Homeland Security for DeportationRead the Press Release
PITTSBURGH, PA - A citizen of Jamaica has been sentenced in federal court to time served, totaling 14 months’ imprisonment, and three years of supervised release on his conviction of violating a federal firearm law, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on Kevin Ruddock, 35, formerly of Verona, Pennsylvania.
According to information presented to the court, in May 2018 Ruddock possessed a Ruger Model 9E, 9 millimeter handgun, along with 123 rounds of ammunition with an extended magazine, and that the possession was illegal both because Ruddock was admitted into the United States on a non-immigrant visa and because he was in the United States at the time of his possession illegally and unlawfully. Ruddock, who is from Jamaica, was under investigation based on suspicion that he entered into a fraudulent marriage, and during that investigation law enforcement obtained photographs of Ruddock with a firearm. Law enforcement then executed a search warrant at his home, which led to the recovery of the firearm, along with the ammunition and the extended magazine. As part of his purchase of the firearm, Ruddock falsely represented on federal forms that he was a citizen of the United States.
After imposing sentence, Judge Schwab ordered that the defendant be transferred to the custody of the Department of Homeland Security for his deportation.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
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.
United States Attorney Brady commended the U.S. Immigration and Customs Enforcement (ICE)/Homeland Security Investigations (HSI), United States Postal Inspection Service, Pennsylvania State Police, and the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation leading to the successful prosecution of Ruddock.
Judge Delgado ConvictedRead the Press Release
HOUSTON – A federal jury has convicted a Texas state district judge of bribery, announced U.S. Attorney Ryan K. Patrick and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
The jury convicted Rodolfo “Rudy” Delgado, 65, of Edinburg, following a six-day trial of one count of conspiracy, three counts of federal program bribery, three counts of travel act bribery and one count of obstruction of justice.
“The bribery of a judge may be the worst break of the publics’ trust in government,” said Patrick. ”Rudy Delgado used his position to enrich himself. He didn’t just tip the scales of justice, he knocked it over with a wad of cash and didn’t look back. Delgado’s actions unfairly tarnish all his former colleagues.”
“No one – especially a judge – is above the law,” said Benczkowski. “Corrupt judges erode the confidence we have in our judicial system, but this verdict goes a long way in restoring that confidence.”
Delgado is currently a justice in the 13th Court of Appeals for the State of Texas. He was previously the presiding judge for the 93rd District Court for the State of Texas, which has jurisdiction over Texas criminal and civil cases located within Hidalgo County. As a district judge, Delgado conspired with an attorney from January 2008 to November 2016 to accept bribes in exchange for favorable judicial consideration on criminal cases pending in his courtroom.
As part of the investigation, Delgado also accepted bribes on three separate occasions in exchange for agreeing to release three of the attorney’s clients on bond in cases pending before his court. The first two bribes totaled approximately $520 in cash and the third bribe - in January 2018 - totaled approximately $5,500.
After Delgado learned of the FBI’s investigation, he also attempted to obstruct justice by contacting the attorney and providing a false story about the payments.
Sentencing has been set for Sept. 25, 2019. Delgado was permitted to remain on bond pending that hearing.
The FBI conducted the investigation. Assistant U.S. Attorneys Arthur “Rob” Jones and Robert Guerra are prosecuting the case along with Trial Attorney Peter Nothstein of the Criminal Division’s Public Integrity Section.
Japanese Fishing Company Convicted of Obstruction of Justice and Falsifying Records to Cover up Illegal Oil and Garbage PollutionRead the Press Release
A Japanese fishing company, Fukuichi Gyogyo Kabushiki Kaisha (“Fukuichi”), was convicted and sentenced today in the District of Guam for two violations of the Act to Prevent Pollution from Ships and one count of obstruction of an agency proceeding.
The charges stemmed from discharges of waste oil and oily bilge water from the F/V Fukuichi Maru No. 112 (“the vessel”) into international waters and the attempt to cover up those discharges when the vessel was inspected by the U.S. Coast Guard in Apra Harbor, Guam. The charges also included failing to properly document the discharge of fishing gear and plastics from the vessel, and obstructing a Coast Guard Port State Control inspection.
“When Fukuichi broke the law when they intentionally discharged oily bilge waste into the ocean. To make matters worse, they tried to cover up their unlawful acts by obstructing the routine Coast Guard inspection, said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department will continue to work with its partners to ensure that companies, both foreign and domestic, comply with the rule of law.”
U.S. Attorney Shawn N. Anderson stated, “Fukuichi’s fishing vessel plied the waters of the Western Pacific for decades in disregard of basic environmental precautions. It would have continued to do so but for the United States asserting jurisdiction in this criminal prosecution. Our waters and reefs are worthy of protection through punitive enforcement action. We will target any companies or persons who engage in similar unlawful conduct.”
Fukuichi pleaded guilty to one count of obstruction of an agency proceeding, and two counts of violating the Act to Prevent Pollution from Ships. The company was ordered to pay a $1.5 million criminal fine and serve a five-year term of probation, during which vessels owned and/or operated by the company will be banned from entering the Exclusive Economic Zone, Territorial Sea, or a port or terminal belonging to the United States without prior approval. Fukuichi will also be required to implement a comprehensive Environmental Compliance Plan (ECP) that includes vessel audits. The ECP and associated audits must be sent to the nearest U.S. Coast Guard Captain of the Port prior to any of the company’s vessels entering U.S. waters or a U.S. port. The COTP will have the discretion whether to allow such entry based upon the company’s compliance with international and domestic laws governing pollution and safety.
Fukuichi was the owner and operator of the vessel, which conducted fishing operations throughout the Pacific Ocean. The vessel entered Apra Harbor, Guam, on April 1, 2019, for repairs to its cargo refrigeration system. Members of the U.S. Coast Guard boarded the vessel and discovered fifteen pollution and safety deficiencies and detained the vessel. The inspectors discovered numerous leaks of water and oil into the bilges, and asked the Chief Engineer to demonstrate operation of the Oil Water Separator (OWS). The Chief Engineer was unable to demonstrate how to operate the OWS and the inspectors determined the OWS had not been used. According to court documents, the Chief Engineer confessed that the practice on the vessel was to discharge waste oil and oily bilge water directly into the ocean using an emergency bilge pump system and buckets. The inspectors discovered these systems coated with heavy oil. The inspectors examined the vessel’s Oil Record Book, which, oddly, was a single volume that spanned thirty years. The inspectors discovered two hundred and thirty-three incorrect or false entries in the ORB. Later during the inspection, the inspector discovered that the Chief Engineer obstructed their proceeding by erasing forty-two of the fraudulent or incorrect entries and replacing them with new information. The inspectors also examined the vessel’s Garbage Record Book (GRB) and discovered that it contained a series of “ditto” marks instead of the signature of the officer in charge of managing the garbage. The inspectors determined based on crew interviews that animal carcasses and fishing gear, which included plastic, had been discharged from the vessel and not recorded in the GRB.
“I want to highlight the diligent work of the marine investigators who first identified these issues and worked closely with the vessel crew and the Department of Justice for several months to bring it to a conclusion," said Capt. Christopher Chase, Captain of the Port Coast Guard Sector Guam. "Marine pollution prevention and response is a cooperative effort requiring the support of many partner agencies in order to hold those who violate international and U.S. law accountable for their actions. The preservation of the ecosystem here and throughout the Pacific is a top priority for the Coast Guard, and this case is one example of how we complete that mission.”
“This exceptional collaborative effort continues to deter maritime organizations from these types of devastating illegal practices that threaten to destroy our natural living marine resources as well as level the playing field for the many responsible companies who obey the laws and regulations created to protect these finite resources,” said Coast Guard Special Agent-in-Charge Kelly Hoyle.
The case was investigated by U.S. Coast Guard Marine Safety Unit Guam, with assistance from the Coast Guard Investigative Service. The prosecution was handled by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the U.S. Department of Justice and Assistant United States Attorneys Mikel Schwab and Marivic David of the District of Guam.
Japanese Fishing Company Convicted of Obstruction of Justice and Falsifying Records to Cover up Illegal Oil and Garbage PollutionRead the Press Release
A Japanese fishing company, Fukuichi Gyogyo Kabushiki Kaisha (Fukuichi), was convicted and sentenced today in the District of Guam for two violations of the Act to Prevent Pollution from Ships and one count of obstruction of an agency proceeding.
The charges stemmed from discharges of waste oil and oily bilge water from the F/V Fukuichi Maru No. 112 (the vessel) into international waters and the attempt to cover up those discharges when the vessel was inspected by the U.S. Coast Guard in Apra Harbor, Guam. The charges also included failing to properly document the discharge of fishing gear and plastics from the vessel, and obstructing a Coast Guard Port State Control inspection.
“Fukuichi broke the law when the company intentionally discharged oily bilge waste into the ocean. To make matters worse, Fukuichi tried to cover up their unlawful acts by obstructing the routine Coast Guard inspection,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department will continue to work with its partners to ensure that companies, both foreign and domestic, comply with the rule of law.”
U.S. Attorney Shawn N. Anderson stated, “Fukuichi’s fishing vessel plied the waters of the Western Pacific for decades in disregard of basic environmental precautions. It would have continued to do so but for the United States asserting jurisdiction in this criminal prosecution. Our waters and reefs are worthy of protection through punitive enforcement action. We will target any companies or persons who engage in similar unlawful conduct.”
Fukuichi pleaded guilty to one count of obstruction of an agency proceeding, and two counts of violating the Act to Prevent Pollution from Ships. The company was ordered to pay a $1.5 million criminal fine and serve a five-year term of probation, during which vessels owned and/or operated by the company will be banned from entering the Exclusive Economic Zone, Territorial Sea, or a port or terminal belonging to the United States without prior approval. Fukuichi will also be required to implement a comprehensive Environmental Compliance Plan (ECP) that includes vessel audits. The ECP and associated audits must be sent to the nearest U.S. Coast Guard Captain of the Port prior to any of the company’s vessels entering U.S. waters or a U.S. port. The COTP will have the discretion whether to allow such entry based upon the company’s compliance with international and domestic laws governing pollution and safety.
Fukuichi was the owner and operator of the vessel, which conducted fishing operations throughout the Pacific Ocean. The vessel entered Apra Harbor, Guam, on April 1, 2019, for repairs to its cargo refrigeration system. According to court documents, members of the U.S. Coast Guard boarded the vessel and discovered fifteen pollution and safety deficiencies and detained the vessel. The inspectors discovered numerous leaks of water and oil into the bilges and the Chief Engineer confessed that the practice on the vessel was to discharge waste oil and oily bilge water directly into the ocean using an emergency bilge pump system and buckets. The inspectors discovered these systems coated with heavy oil. The inspectors examined the vessel’s Oil Record Book and discovered two hundred and thirty-three incorrect or false entries. Later during the inspection, the inspector discovered that the Chief Engineer obstructed their proceeding by erasing forty-two of the fraudulent or incorrect entries and replacing them with new information. The inspectors also examined the vessel’s Garbage Record Book (GRB) and discovered that it contained a series of “ditto” marks instead of the signature of the officer in charge of managing the garbage. The inspectors determined based on crew interviews that animal carcasses and fishing gear, which included plastic, had been discharged from the vessel and not record in the GRB.
“I want to highlight the diligent work of the marine investigators who first identified these issues and worked closely with the vessel crew and the Department of Justice for several months to bring it to a conclusion," said Capt. Christopher Chase, Captain of the Port Coast Guard Sector Guam. "Marine pollution prevention and response is a cooperative effort requiring the support of many partner agencies in order to hold those who violate international and U.S. law accountable for their actions. The preservation of the ecosystem here and throughout the Pacific is a top priority for the Coast Guard, and this case is one example of how we complete that mission.”
“This exceptional collaborative effort continues to deter maritime organizations from these types of devastating illegal practices that threaten to destroy our natural living marine resources as well as level the playing field for the many responsible companies who obey the laws and regulations created to protect these finite resources,” said Coast Guard Special Agent-in-Charge Kelly Hoyle.
The case was investigated by U.S. Coast Guard Marine Safety Unit Guam, with assistance from the Coast Guard Investigative Service. The prosecution was handled by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the U.S. Department of Justice and Assistant United States Attorneys Mikel Schwab and Marivic David of the District of Guam.
Jamaican Man Sentenced to Twenty-One Years in Prison for Heading Alien Smuggling Organization from Freeport, BahamasRead the Press Release
Michael Stapleton, 44, of Jamaica, was sentenced by U.S. District Judge Donald M. Middlebrooks to a total of 262 months in prison after having been convicted by a South Florida jury of running an international alien smuggling organization out of Freeport, Bahamas.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge for U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, and Thomas G. Martin, Acting Chief Patrol Agent for U.S. Border Patrol Miami Sector, made the announcement.
Stapleton was convicted by a federal jury on January 30, 2019, of forty-seven criminal counts related to his involvement in an alien smuggling scheme (Case No 14-CR-80151). The trial evidence showed that Stapleton was the head of a smuggling organization operating out of Freeport, Bahamas. For several years, he coordinated the smuggling of aliens to the United States through Freeport from around the world. He arranged for them to be hidden in stash houses, hired smuggling captains, and arranged for boats to make crossing from the Bahamas to the United States. Testimony at trial showed he also used the vulnerability of the aliens to exploit them by demanding more money from them after they were in his power, keeping them in deplorable conditions, mistreating them, and sending them out in unsafe boats. In one smuggling venture, the aliens were pushed overboard in rough seas far from the beach, despite some of them not being able to swim. Stapleton was extradited to the United States in 2018.
U.S. Attorney Ariana Fajardo Orshan said, “The U.S. Attorney’s Office and our law enforcement partners are committed to the vigorous prosecution of those individuals who engage in the dangerous and illicit practice of alien smuggling. Today’s sentencing shows those who plan and commit these crimes while abroad will not have impunity from federal prosecution in the United States but will instead face more than twenty years in prison.”
“These smuggling organizations place no value on human life and are constantly putting people’s lives at risks. Stapleton’s actions clearly proved that,” said Anthony Salisbury, Special Agent in Charge of HSI Miami. “Our goal is to identify, disrupt and dismantle the type of organization that Stapleton headed and we are committed to do everything within our powers to put these individuals behind bars.”
U.S. Border Patrol Miami Sector Acting Chief Patrol Agent Thomas G. Martin stated, “Smuggling organizations like these pose a great risk. Without the combined efforts of all law enforcement agencies involved, the actions of Stapleton would continue to endanger migrants’ lives and threaten U.S. border security.”
The Court found that Stapleton was the leader/organizer of the smuggling venture that involved between 20-99 victims, that he created a risk of substantial bodily harm, sexually assaulted two women, and possessed a firearm. In addition to the term of incarceration, Stapleton was ordered to serve two years of supervised release and pay a special assessment of $4,700.
U.S. Attorney Fajardo Orshan commended ICE-HSI, along with the United States Coast Guard, U.S. Border Patrol, the Palm Beach County Sheriff’s Office, the Jupiter Police Department, the Juno Beach Police Department, and the Manalapan Police Department, for the investigative assistance provided in support of this matter. This case was prosecuted by Special Assistant U.S. Attorney Philip Jones and Assistant U.S. Attorney Stephanie Evans.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Indictment Charges West Jordan Man with Distribution of Fentanyl Resulting in DeathRead the Press Release
SALT LAKE CITY – A West Jordan man faces federal charges of distribution of fentanyl resulting in death and conspiracy to distribute fentanyl in a two-count indictment returned by a grand jury late Wednesday afternoon.
The indictment alleges that John Aaron Favro, age 24, of West Jordan, distributed fentanyl on Nov. 18, 2016, resulting in the overdose death of a person identified in the indictment as M.K.K.
According to a complaint filed in the case, M.K.K. was pronounced dead Nov. 21, 2016, from an apparent overdose at an apartment in Murray. M.K.K. was found during a welfare check after not being seen or heard from since Nov. 18, 2016. According to the complaint, a shoe box containing two small blue pills labelled A215, an imprint that signifies oxycodone, was found next to her on the bed. A toxicology analysis of M.K.K.’s blood revealed high levels of fentanyl. According to the Utah Medical Examiner, she died as a result of fentanyl intoxication.
Salt Lake City DEA agents spoke with M.K.K.’s parents regarding her death. According to the complaint, the parents told the agents about an individual with whom they had been in contact at the time of M.K.K.’s death when they had been desperately trying to find M.K.K, the complaint alleges. They tracked a phone number on their family cellular phone plan records to Favro.
The DEA investigation of Favro started in 2016. It continued into 2019 as agents gathered evidence, completed an examination of M.K.K.’s cell phone records leading up to her death, and conducted interviews with others, including a confidential source who told agents in January 2019 that he/she believed Favro was M.K.K.’s supply source for fentanyl at the time of her death. According to the complaint, M.K.K. who was participating in Drug Court, was introduced to Favro through another Drug Court participant.
According to the complaint, confidential sources indicated Favro sold more than 10,000 fentanyl-laced fake oxycodone pills. A second confidential source, who worked as Favro’s co-conspirator, told agents he/she personally supplied Favro with 500-1000 pills at a time on at least 20 occasions over the months they worked together selling pills. Agents seized fentanyl-laced fake oxycodone pills from the second confidential source and test results confirmed the pills contained fentanyl. The second confidential source sold fentanyl-laced fake oxycodone pills in Utah from before June 2015 through May 2017. Two other confidential sources told agents they supplied Favro with fentanyl-laced fake oxycodone pills for resale during the summer of 2016.
Favro is scheduled to be arraigned on the charges in the indictment Thursday at 2:45 p.m. before U.S. Magistrate Judge Paul M. Warner. The potential maximum penalty for each count the Favro indictment is life in prison. Both counts have minimum mandatory sentences. The distribution count resulting in death has a potential 20-year minimum mandatory sentence and the conspiracy count has a 10-year minimum mandatory sentence.
Earlier this summer, U.S. Attorney John W. Huber encouraged law enforcement officers to screen all cases involving fentanyl with his office for potential federal prosecution.
“Fentanyl is at a high threat level for us. We are asking our law enforcement partners to help us disrupt, dismantle, and deter fentanyl distribution in Utah and prevent fentanyl-related overdose deaths,” U.S. Attorney John W. Huber said. “We need to use every tool we have.”
Huber said he has a clear message for drug traffickers: bring fentanyl into Utah and plan on having an initial appearance in federal court.
According to DEA information, fentanyl is a synthetic opioid that is 80-100 times stronger than morphine and 50 times stronger than heroin. Pharmaceutical fentanyl was developed for pain management treatment. Because of its powerful opioid properties, Fentanyl is also diverted for abuse. Clandestinely produced fentanyl is primarily manufactured in Mexico.
Given the risks of fentanyl, federal prosecutors believe there is a compelling federal interest in reviewing every case. Huber says his prosecutors will screen for evidence of distribution or simple possession. Additionally, his office will pursue any appropriate sentencing enhancements.
Indictments and complaints are not findings of guilt. Individuals charged in these documents are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys with the U.S. Attorney’s Office in Salt Lake City are prosecuting the case. Special agents and task force officers from the DEA Metro Narcotics Task Force and IRS-Criminal Investigations are investigating the case. The U.S. Marshals Service is also assisting with the case.
Indiana Residents Indicted on Terrorism and Firearms ChargesRead the Press Release
A federal grand jury has charged brothers Moyad Dannon, 21, and Mahde Dannon, 20, both of Fishers, Indiana, with multiple firearms charges and one count of attempting to provide material support and resources, including firearms, to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, in violation of 18 U.S.C. § 2339B. Assistant Attorney General for National Security John C. Demers and U.S. Attorney Josh J. Minkler for the Southern District of Indiana made the announcement. The defendants are also charged with various firearms offenses. The federal indictment was handed down on July 2, 2019. The defendants have been in federal custody since their arrest on May 15, 2019 pursuant to a federal criminal complaint.
This indictment is the result of a months-long investigation led by the FBI’s Joint Terrorism Task Force.
As alleged in the last week’s indictment and the previously filed Criminal Complaint, in June 2018, Mahde Dannon, who was awaiting trial on felony theft charges in Lake County, Indiana, hatched a scheme to deliver firearms, including stolen firearms, to a convicted felon who was cooperating with the FBI. The following month, Mahde Dannon introduced his brother Moyad Dannon to the cooperating individual, and the cooperating individual later introduced the Dannon brothers to an FBI agent who was acting in an undercover capacity.
Between July 2018 and December 2018, the Dannon brothers sold a number of illegally-obtained firearms to the cooperating individual. Around the same time period, the Dannon brothers also began to manufacture untraceable “ghost guns” by purchasing unserialized firearms parts online and assembling those parts into fully-functioning, .223 caliber, semi-automatic rifles, which they sold to the FBI undercover agent.
In late 2018, the Dannon brothers approached the cooperating source and FBI undercover agent about manufacturing untraceable, fully-automatic, .223 caliber rifles, using much the same process they used to manufacture the semi-automatic rifles. In February of 2019, the Dannon brothers built one fully-automatic rifle which they provided to the FBI undercover agent.
Shortly thereafter, Moyad Dannon accompanied the undercover agent to a location near the U.S. southwest border in an effort to market that rifle, and additional fully-automatic rifles, to a potential buyer. During that trip, Moyad Dannon learned that the potential buyer sought to ship the fully-automatic weapons to a location in the Middle East, where they would be used by ISIS. Despite learning of the ultimate destination of the weapons, the Dannon brothers agreed to manufacture at least 55 additional fully automatic “ghost guns” which they believed would be shipped to the Middle East to ISIS and its members.
In furtherance of that agreement, on May 15, 2019, Mahde and Moyad Dannon manufactured five untraceable, fully-automatic, .223 caliber rifles from parts they had purchased online. At that time, the Dannon brothers were fully aware that the plan was to send the five automatic rifles overseas to ISIS. After building the fully-automatic rifles, the Dannon brothers sold all five weapons to undercover FBI agents posing as employees of the buyer from near the southwest border. Almost immediately thereafter, the Dannon brothers were arrested by the FBI.
Mahde and Moyad Dannon appeared in U.S. District Court in Indianapolis on Thursday, July 11, 2019, to be arraigned on the charges in the indictment. The Dannons were previously ordered detained, without bond, pending a trial in this matter.
The Dannon brothers face a maximum of 10 years’ imprisonment on each of the firearms charges, and a maximum of 20 years’ imprisonment on the attempt to provide material support to ISIS charge. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. The charges in the indictment are allegations. The defendants are presumed innocent until proven guilty in court.
The prosecution is being handled by Assistant United States Attorney Matthew Rinka, Chief of the National Security Unit in the U.S. Attorney’s Office and Trial Attorney Paul Casey of the National Security Division’s Counterterrorism Section.
Hudson Man Sentenced to 120 Months for Crack Cocaine ConspiracyRead the Press Release
ALBANY, NEW YORK – Archie “A.J.” Evans, age 42, of Hudson, New York, was sentenced yesterday to 120 months in prison for his involvement in a crack cocaine distribution ring that operated in Columbia County.
The announcement was made by United States Attorney Grant C. Jaquith; Keith M. Corlett, Superintendent of the New York State Police; James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); and Chief L. Edward Moore of the Hudson Police Department.
As part of his guilty plea, Evans admitted that between August and December 2017, he was involved in a conspiracy to distribute crack cocaine in Columbia County. The defendant further admitted that members of the conspiracy made weekly trips to New York City where they purchased hundreds of grams of powder cocaine, returned it to Hudson, converted it to crack cocaine, and then sold it to customers. The defendant admitted that the organization sold at least 464 grams of crack cocaine between August and December 2017.
Senior United States District Judge Thomas J. McAvoy also imposed a 5-year term of supervised release, to begin after Evans’s release from prison.
This case was investigated by the New York State Police’s Special Investigations Unit, the FBI, and the Hudson Police Department, and was prosecuted by Assistant U.S. Attorneys Wayne A. Myers and Joshua R. Rosenthal.
Hephzibah man admits drug charges in court plea, faces up to 40 years in prisonRead the Press Release
AUGUSTA, GA: A Hephzibah man has admitted owning a stash of drugs and a handgun that led to his arrest on federal charges.
In U.S. District Court on Wednesday, July 10, Eric Bernard Ferguson, 37, of Hephzibah, pled guilty to one count of Possession with Intent to Distribute Cocaine, Methamphetamine and Marijuana, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Ferguson faces a sentence of five to 40 years in federal prison.
As described in court documents and testimony, Richmond County Sheriff’s Office investigators, including a member of a Drug Enforcement Administration task force, served a search warrant in August 2018 at Ferguson’s home. The search discovered packages containing more than 180 grams of cocaine, more than 5 grams of methamphetamine and quantities of marijuana, along with cash and a loaded handgun hidden under a mattress. As noted in court, Ferguson has three prior convictions in state court for possession with intent to distribute controlled substances.
“This case represents excellent work from our federal and local law enforcement partners to target and remove drug distributors from our community,” said U.S. Attorney Christine. “The prospect of real, significant time in federal prison, with no parole, should help deter those who likewise would push poison in our neighborhoods.”
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division said of the guilty plea, "Cocaine, methamphetamine and marijuana are dangerous drugs that pose a clear and present danger to the community. Because of the collective efforts of our local, state and federal law enforcement counterparts, this defendant was brought to justice. This case is a shining example of what can be achieved when law enforcement agencies at all levels and the U.S. Attorney's Office work collaboratively."
The case was investigated by the Drug Enforcement Administration and the Richmond County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorney Alejandro V. Pascual IV.
Hedge Fund Founder, CEO, and CIO Anilesh Ahuja and Former Trader Jeremy Shor Convicted of Securities Fraud Related Offenses in Manhattan Federal CourtRead the Press Release
Audrey Strauss, the Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that ANILESH AHUJA, a/k/a “Neil,” the founder, chief executive officer, and chief investment officer of Premium Point Investments LP (“PPI”), a Manhattan-based investment firm that managed hedge funds, and JEREMY SHOR, a former trader at PPI, were found guilty today of securities fraud-related offenses. AHUJA and SHOR were convicted after a six-week trial in Manhattan federal court presided over by U.S. District Judge Katherine Polk Failla, for their participation in a scheme to inflate the net asset value (“NAV”) reported to investors for hedge funds managed by PPI, by more than $100 million.
Ms. Strauss said: “Investors in our markets must be able to count on the truth and accuracy of the information they receive from those they entrust with their money. As the jury’s verdict reflects, Ahuja and Shor failed to live up to that fundamental responsibility and investors lost significant money as a result.”
According to the Indictment and based on the evidence presented at trial:
Premium Point Investments
In or about 2008, AHUJA co-founded PPI, where he was the chief executive officer and chief investment officer. PPI managed hedge funds focused primarily on structured credit products, including residential mortgage backed securities (“RMBS”). PPI’s flagship mortgage credit fund (the “Hedge Fund”) was launched in or about October 2009. A segregated ERISA fund held the same positions as the Mortgage Credit Fund. In 2013, PPI launched a new fund (the “New Issue Fund”) that purchased and securitized pools of mortgages that were not issued or guaranteed by a government agency. At various relevant times between 2008 and 2016, PPI managed billions in assets. JEREMY SHOR was employed by PPI as a trader, where he focused on non-agency RMBS – i.e., RMBS securities that were not issued by a government agency.
The Scheme to Mismark Securities
From at least in or about 2014 through at least in or about 2016, AHUJA and SHOR participated in a scheme to defraud PPI’s investors and potential investors in the Hedge Fund and the New Issue Fund by deceptively mismarking each month the value of certain securities held in these funds, and thus fraudulently inflating the NAV of those funds as reported to investors and potential investors.
PPI fraudulently obtained inflated quotes, including from corrupt brokers, and manipulated its valuation process to inflate the purported value of securities held by the funds. The effect of the mismarking scheme was to materially overstate the reported NAV – at times by more than $100 million across the funds managed by PPI. This benefited PPI in at least two ways. First, PPI was able to charge its investors higher management and performance fees. Second, the PPI was able to forestall redemptions by investors who would have requested a return of their funds had they known PPI’s true performance and operating health.
The mismarking scheme evolved as a result of demands by AHUJA that PPI maintain its track record of success and keep pace with the performance of peer funds, regardless of market conditions or the actual performance of the funds. To achieve the goal of posting competitive returns, AHUJA, along with another partner, set an inflated “target” return for the Hedge Fund and New Issue Fund at the end of each month, which was at times based in part on the performance of peer funds. The traders at PPI were then tasked with “reverse engineering” marks to meet the “targets.”
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AHUJA, 51, of New Rochelle, New York, and SHOR, 44, of New York, New York, were each found guilty on all four counts of the indictment: one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison, and one count each of securities fraud, conspiracy to commit wire fraud, and wire fraud, each of which carries a maximum potential sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
SHOR and AHUJA will be sentenced by Judge Failla at a future date.
Ms. Strauss praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Andrea M. Griswold, Joshua A. Naftalis, and Max Nicholas are in charge of the prosecution.
Hearing Set for Michael Lambert Seabrooke in Federal CourtRead the Press Release
Greenville, South Carolina --- United States Attorney Sherri A. Lydon announced today that Michael Lambert Seabrooke, of Columbia, was arrested on a federal criminal complaint and charged with possessing firearms (destructive devices) which are not registered to him in the National Firearms Registration and Transfer Record.
Seabrooke will have a detention and preliminary hearing at 10:00 a.m. on Monday, July 15, 2019, on the third floor of the Clement F. Haynsworth Federal Courthouse, 300 East Washington Street, Greenville, South Carolina. United States Magistrate Judge Kevin McDonald will preside.
This case is being investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Pickens Police Department. It is being prosecuted by Assistant United States Attorney Max Cauthen of the Greenville Office.
U.S. Attorney Lydon stated that all charges in this case are merely allegations and that the defendant is presumed innocent until and unless proven guilty.
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20190710-3_-_advisory_-_seabrooke_complaint.pdfHarrison County man admits to selling methamphetamineRead the Press Release
CLARKSBURG, WEST VIRGINIA – John Robert Lyons, of Salem, West Virginia, has admitted to distributing methamphetamine near a playground, United States Attorney Bill Powell announced.
Lyons, age 46, pled guilty to one count of “Distribution of Methamphetamine in Proximity to a Protected Location.” Lyons admitted to selling methamphetamine near Jackson Park playground in Harrison County in February 2017.
Lyons is facing at least one year and up to 40 years incarceration and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Traci M. Cook is prosecuting the case on behalf of the government. The Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Happy Valley Man Sentenced to 57 Months in Federal Prison for Distributing Fentanyl and Possessing a Machine GunRead the Press Release
PORTLAND, Ore.—Johnell Lee Cleveland, 37, of Happy Valley, Oregon, was sentenced today to 57 months in federal prison and three years’ supervised release for distributing cyclopropyl fentanyl, possessing a machine gun and money laundering.
According to court documents, in March 2018, the Portland Police Bureau (PPB), FBI, and IRS executed a series of search warrants on Cleveland’s residence in Happy Valley, his storage unit in Clackamas, Oregon and a stash house in Vancouver, Washington as part of an ongoing investigation of Cleveland, a suspected distributor of oxycodone pills in the Portland, Oregon metropolitan area.
During the search of Cleveland’s home in Happy Valley, investigators seized $27,372 in cash, seven firearms, a ballistic vest, and more than 300 suspected oxycodone pills wrapped in two plastic baggies. One of the firearms seized was a fully-automatic machine gun with a drum magazine. In Cleveland’s garage, investigators found a white Mercedes-Benz with exterior bullet holes believed to be involved in a December 2017 downtown Portland shooting that left one man critically injured.
In searches of Cleveland’s storage unit and the Vancouver stash house, investigators found an additional $124,040 in cash, more than 900 additional suspected oxycodone pills and more than $100,000 worth of jewelry and Rolex watches. Laboratory tests revealed that the suspected oxycodone were in fact counterfeit pills made with cyclopropyl fentanyl, a powerful synthetic opioid.
On March 22, 2019, Cleveland pleaded guilty to one count of conspiring to distribute cyclopropyl-fentanyl, one count of possessing a machine gun and two counts of money laundering. As part of his plea, Cleveland agreed to abandon any interest in the seized firearms and forfeit all criminally-derived proceeds as identified by the government.
Cleveland is currently awaiting trial in Multnomah County Circuit Court for attempted murder with a firearm related to the December 2017 shooting in Portland.
This case was investigated by PPB, FBI and IRS Criminal Investigation. It was prosecuted by Peter Sax and Benjamin Tolkoff, Assistant U.S. Attorneys for the District of Oregon.
Fraudster and Identity Thief Who Used the Personal and Account Information of AT&T Customers to Purchase Apple iPhones Sentenced to More Than Four Years in Federal PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paula Xinis today sentenced Toni Ann Bobet, age 30, of New York, New York, to 50 months in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud and for aggravated identity theft, in connection with a scheme to fraudulently obtain and charge the costs of upgraded Apple iPhones against true AT&T customers. Judge Xinis also ordered Bobet to pay restitution of $95,001.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Matthew S. Miller of the United States Secret Service - Washington Field Office; and Acting Chief Marcus Jones of the Montgomery County Police Department.
According to the plea agreements of Bobet, and co-defendants Alonia Anderson Perkins, age 42, of Tampa, Florida and Celeste Nyleen Carmona, age 23, of New York, New York, they conspired to obtain, charge, and finance the costs of upgraded Apple iPhones against true AT&T customers’ accounts. The defendants admitted that they used stolen account information, telephone upgrade eligibility, and personal identifying information of actual AT&T Mobility customers to obtain the iPhones, which Bobet then provided to her co-conspirators in New York City.
Specifically, in July 2015 and April 2016, respectively, Bobet recruited Carmona and Perkins into the scheme. In May 2016, Bobet drove Perkins and Carmona from New York City to Apple Stores located in Maryland and elsewhere to obtain Apple iPhones for resale. For example, on May 16, 2016, Bobet provided Perkins and Carmona with fraudulent identification cards that contained the stolen personal information of victim AT&T customers, but bore the photographs of Perkins and Carmona, as well as counterfeit credit and debit cards in the victim customers’ names. Bobet obtained the stolen identity information from her co-conspirators in New York City. Bobet drove Perkins and Carmona to the Apple Store located at The Mall in Columbia, Maryland. Perkins and Carmona entered the Apple store while Bobet remained in the car. Perkins and Carmona each posing as a victim customer, purchased an Apple iPhone on the victim customers’ accounts. Bobet then drove Perkins and Carmona to Westfield Montgomery Mall in Bethesda. Carmona, posing as a victim customer purchased two more iPhones on the account of that customer. Perkins attempted to purchase an iPhone on the account of a fourth victim customer, but that customer’s account reflected a past due balance of $100, and Perkins was unable to upgrade any lines on that victim’s account until the balance was paid. Perkins abandoned the transaction and left the store, while Carmona completed her transaction.
Police responded to the Westfield Mall and located Bobet’s vehicle in the parking lot. Bobet attempted to leave, but law enforcement stopped the vehicle. Bobet, Perkins, and Carmona were taken into custody and transported to police headquarters. A search of Bobet recovered two cellular phones which contained AT&T account information and personal identifying information of at least 20 individuals. Bobet’s vehicle was seized and a search warrant for the vehicle was obtained. Law enforcement recovered a laptop, a tablet, counterfeit identification cards, credit and debit cards, and a black duffle bag containing the four fraudulently obtained Apple iPhones.
AT&T records also showed that during the timeframe of the conspiracy, the name of Alonia Perkins was fraudulently added to four AT&T accounts in Florida and that three of these victims’ accounts had their billing addresses changed to Perkins’ address in Florida. The records also showed that Perkins later financed at least six Apple iPhones against the four victim customers’ accounts. AT&T records further showed that the name Nyleen C. Carmona, or derivatives of that name, were added to 24 victims’ accounts, and Carmona later financed at least 46 Apple iPhones against the victims’ accounts.
Perkins and Carmona previously pleaded guilty and were sentenced for their roles in the scheme.
United States Attorney Robert K. Hur praised the U.S. Secret Service and the Montgomery County Police Department’s Economic Crimes Task Force and Electronic Crimes Unit for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Jennifer R. Sykes, who prosecuted the case.
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Former U.S. Department of Veteran Affairs Fiduciary Pleads Guilty to Embezzling from Disabled VeteransRead the Press Release
OAKLAND – Raj Kumar Ditta pleaded guilty today in federal court to misappropriating and embezzling funds he held as a fiduciary for incompetent and disabled veterans, announced United States Attorney David L. Anderson and the U.S. Department of Veterans Affairs (VA), Office of Inspector General, Criminal Investigations Division, Special Agent in Charge James Wahleithner. The plea was accepted by the Hon. Yvonne Gonzalez Rogers, U.S. District Judge.
In pleading guilty, Ditta, 51, of San Ramon, admitted that from 2010 through 2012, he entered into fiduciary agreements with the VA. Under the agreements, he agreed to act as a fiduciary for eight different veterans or beneficiaries that the VA had determined were not competent to handle their own financial affairs. As a fiduciary, Ditta was required to establish bank accounts to receive each beneficiary’s VA income and to ensure the beneficiary’s debts were paid. Ditta admitted that in each case, he set up a separate bank account for the beneficiary and, within months, began syphoning funds from the beneficiary’s account. Ditta moved thousands of dollars to his own personal account and used those funds for his own benefit. In sum, Ditta misappropriated and embezzled no less than $39,500 from the veterans and beneficiaries.
Ditta was charged by Information on May 24, 2019, with one count of misappropriation of funds held by a fiduciary, in violation of 38 U.S.C. § 6101(a), and 15 counts of theft of government money, in violation of 18 U.S.C. § 641. Under the plea agreement, Ditta pleaded guilty to the misappropriation of funds count and, if he complies with the plea agreement, the remaining counts will be dismissed at sentencing.
Judge Gonzalez Rogers scheduled Ditta’s sentencing hearing for November 14, 2019 at 3:00 p.m. Ditta faces a maximum statutory penalty of five years’ imprisonment and a fine of $250,000 for the 38 U.S.C. § 6101(a) violation. In addition, as part of sentencing the court may order an additional period of supervised release and restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez. The prosecution is the result of an investigation by the VA Office of Inspector General, Criminal Investigations Division.
Former Hollywood Digital Marketing Executive and Professional Poker Player Charged with Embezzling $22 Million from His EmployerRead the Press Release
LOS ANGELES – A former executive at StyleHaul Inc., a digital marketing company that represents “influencers” on YouTube and Instagram, has been arrested pursuant to a federal grand jury indictment charging him with embezzling $22 million from his employer and using the stolen money for buy-ins at professional poker tournaments, crypto-currency investing, and other personal expenses.
Dennis Blieden, 29, formerly of Santa Monica and now residing in Nevada, was taken into federal custody yesterday in Las Vegas. The indictment, which a federal grand jury returned on Tuesday and was unsealed today, charges him with 11 counts of wire fraud, one count of aggravated identity theft, and two forfeiture counts.
Blieden made his initial court appearance today in United States District Court in Las Vegas, and he will be arraigned on the indictment in Los Angeles at a later date.
According to the indictment, between October 2015 and March 2019, Blieden was the controller and vice president of accounting and finance for StyleHaul, a digital company once based in Hollywood, but which relocated to London in April. In this role, Blieden had control over the company’s bank accounts, and allegedly abused this authority to wire the company’s money to his personal bank accounts.
Blieden is charged with disguising his fraudulent behavior in various ways, including creating a fictitious lease in May 2018 for the rental of a condominium in Rosarito Beach, Mexico, which bore a forged signature of a StyleHaul executive.
The indictment further alleges that Blieden illicitly transferred $230,000 of StyleHaul’s funds for his own personal use by falsely representing that the condominium was being rented for business purposes for StyleHaul’s clients and employees. Blieden also created fictitious wire transfer letters purportedly from Western Union to make it falsely appear that he had caused wire transfers from StyleHaul to a client to pay money due to the client, the indictment alleges.
Blieden, who has entered and won professional poker tournaments, also frequently engaged in online gambling with crypto-currency he purchased with embezzled money, according to the government’s motion requesting detention in this case. During the course of the alleged scheme, Blieden used money he stole from his employer to write $1,204,000 in personal checks to poker players, $1,134,956 was used to pay off his credit cards, and $8,473,734 was transferred to Blieden’s crypto-currency accounts, according to court documents.
Shortly before his dismissal from StyleHaul, on February 21 and 22, Blieden entered into two poker tournaments, wherein the buy-in amounts were $52,000 and $103,000, respectively, court papers state.
If convicted of all charges, Blieden would face a statutory maximum sentence of more than 200 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was investigated by the Federal Bureau of Investigation.
This matter is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.
Former CEO of Melrose Credit Union and Long Island Businessman Charged with Bribery Scheme in Manhattan Federal CourtRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ALAN KAUFMAN and TONY GEORGITON were arrested today and charged with bribery of a financial institution officer. KAUFMAN and GEORGITON were charged with participating in a scheme in which KAUFMAN, who was then the chief executive officer of Melrose Credit Union (“Melrose CU”), accepted free housing and financing for the purchase of his personal residence from GEORGITON in exchange for the approval of millions of dollars in loans to GEORGITON’s companies at favorable terms. KAUFMAN is also charged with accepting lavish vacations, including to Paris and Hawaii, as bribes from a media company, in exchange for Melrose CU purchasing increased advertising with that company. The defendants are expected to be presented this afternoon before U.S. Magistrate Judge Henry B. Pitman. The case is assigned to U.S. District Judge Lewis A. Kaplan.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Alan Kaufman conspired to take bribes from Tony Georgiton in exchange for favorable refinancing of millions of dollars of Melrose Credit Union loans to Georgiton’s companies. In addition, Kaufman is alleged to have accepted Paris and Hawaii vacations in exchange for directing increased advertising payments to a media company. Now, both Kaufman and Georgiton face criminal charges for their alleged self-dealing.”
FBI Assistant Director William F. Sweeney Jr. said: “Lavish vacations, rent-free housing, and even naming rights to a ballroom were among the high-ticket items Kaufman received in this alleged scheme. All of this was made possible through a series of illegal business dealings negotiated with Georgiton and a New York City-based media company – both of whom independently sought financial benefits of their own from Melrose Credit Union, where Kaufman served as chief executive officer. Today’s charges highlight a series of fraudulent behaviors that raised red flags along the way. The FBI will continue to be a major force in confronting those who think they can evade the law in order to make an easy profit.”
According to the Indictment[1] unsealed today in Manhattan federal court:
In 2010, GEORGITON purchased a home in Jericho, New York (the “Jericho Residence”), and permitted KAUFMAN to live in that home rent-free for over two years. While KAUFMAN was living rent-free at the Jericho Residence, KAUFMAN personally approved the refinancing of over $60 million worth of loans at Melrose CU held by a company owned by GEORGITON with favorable terms. The head of Melrose CU’s loan department refused to sign off on the loans given to GEORGITON because, among other things, he believed that the terms were too favorable and did not comply with Melrose CU’s loan policy.
In 2011, KAUFMAN sought approval from Melrose CU’s board of directors for Melrose CU to purchase the naming rights to a ballroom under construction in Astoria, Queens (the “Melrose Ballroom”). That ballroom was owned by a company owned by GEORGITON. KAUFMAN did not disclose to the Melrose board that he was living rent-free in a house owned by GEORGITON at the time he sought board approval for the naming rights acquisition. Over the next four years, Melrose CU paid approximately $2 million to GEORGITON’s company for the naming rights to the Melrose Ballroom.
In 2013, KAUFMAN purchased the Jericho Residence from GEORGITON, with financing that largely came from GEORGITON. To purchase the Jericho Residence, KAUFMAN took out a $200,000 loan from Melrose CU co-signed by GEORGITON and secured by GEORGITON’s shares in Melrose CU. GEORGITON also gave KAUFMAN a $240,000 unsecured personal loan. GEORGITON has never made a demand for payment on that personal loan and KAUFMAN has never made a payment on that personal loan.
In addition, from in or about 2010 through in or about 2015, KAUFMAN solicited and accepted lavish vacations and other gifts worth tens of thousands of dollars from a media company located in New York, New York (“Media Company-1”), in exchange for KAUFMAN’s approval of increased advertising spending by Melrose CU with Media Company-1. For example, in 2010, Media Company-1 paid for KAUFMAN and his girlfriend, who also worked at Melrose CU, to fly to Paris, France, and stay at the Four Seasons George V Paris. In 2012, Media Company-1 paid for KAUFMAN and his girlfriend to fly to Maui, Hawaii, and stay at the Four Seasons in Wailea. In 2013, Media Company-1 paid for KAUFMAN and his girlfriend to attend the Super Bowl in New Orleans.
KAUFMAN did not seek approval for these vendor-paid trips from the Melrose CU board, nor did he disclose these vendor-paid trips to the Melrose CU board, in violation of Melrose CU’s anti-bribery policy.
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KAUFMAN is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and two counts of bribery of a financial institution officer, each of which carries a maximum sentence of 30 years in prison. GEORGITON is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of bribery of a financial institution officer, which carries a maximum sentence of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding work of the FBI. He also thanked the National Credit Union Administration for their efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Complex Frauds Unit, and Assistant U.S. Attorney Dina McLeod is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.