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2 July 2019
Louisville Metro Police Officer’s Credit Union Vice President Pleads Guilty to FraudRead the Press Release
LOUISVILLE, Ky. – The former Vice President of the Louisville Metro Police Officer’s Credit Union has been charged and pleaded guilty to a two count Information with fraud and aggravated identity theft, announced United States Attorney Russell Coleman.
“We expect our bankers to be of the highest integrity, especially those that serve the families of Louisville’s Finest,” stated U.S. Attorney Russell Coleman. “When financial professionals abandon this high standard, robust federal prosecution awaits.”
Josephine M. Crowe, 46, of Louisville, Kentucky, was charged in a criminal Information with one count of financial institution fraud and one count of aggravated identity theft as part of a scheme to defraud the Louisville Metro Police Officer’s Credit Union of over $3 million during a four year period.
According to the Information, beginning no later than January 2013, and continuing to on or about November 22, 2017, Crowe stole cash from the Credit Union’s vault and teller drawers. In order to compensate for the depletion of cash the defendant engaged in various methods to obtain cash for day-to-day operations including: instructing Credit Union employees, members, and others to withdraw cash from an ATM using either a debit card she provided or the individual’s personal debit card and return the cash to her for Credit Union operating needs; (b) obtaining credit card cash advances from members’ credit cards; (c) wire transferring funds to external accounts at various other financial institutions and then obtaining cash from the transfer; and (d) recording fictitious, unauthorized loans and using the proceeds of these loans to issue an Official Check, which she directed individuals to cash at local pawn shops or financial institutions and to return the cash proceeds to her so that she could then place it in the Credit Union’s vault and teller drawers.
As part of the scheme, Crowe created hundreds of fictitious, unauthorized loans by generating fraudulent loan documents and agreements between the Credit Union and unwitting Credit Union members in order to cover up her theft of cash from the Credit Union’s vault and teller drawers and to obtain funds owned by and under the custody and control of the Credit Union. She also created additional fictitious, unauthorized loans to generate proceeds that she used to make payments on legitimate loans that had outstanding balances at the Credit Union, without the knowledge of the either the Credit Union member in whose identity she was creating the fictitious loan, or the member for whose benefit the loan payment was being made.
On or about September 15, 2016, Crowe created a fictitious, unauthorized loan for $100,000 in the name of a member of the Credit Union (“Member 1”) without the knowledge and consent of Member 1, collateralizing the loan with a certificate of deposit owned by Member 1. She then deposited the loan proceeds, into an account held by Member 1 at the Credit Union and, approximately fifteen days later withdrew the entirety of the $100,000 loan proceeds from the account in the form of cash. Crowe used the name, social security number, and date of birth of Member 1 of the credit union, during and in relation to the fraud.
At sentencing, Crowe could receive a minimum term of imprisonment of 24 months, a maximum term of imprisonment of 32 years, a combined maximum fine of $1.25 million, followed by no more than 3 years of supervised release. The defendant could also be ordered to pay restitution to the National Credit Union Administration, as the liquidating agent for the Louisville Metro Police Officer’s Credit Union.
The case is being prosecuted by Assistant United States Attorney Stephanie Zimdahl and is being investigated by the Federal Bureau of Investigation.
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Long-Time Ridgeland Drug Dealer and Associates Sentenced to Federal PrisonRead the Press Release
Charleston, South Carolina ---- United States Attorney Sherri A. Lydon announced today that Demetrius Dwayne Swinton, a/k/a “Million Dolla Meat,” age 31, of Ridgeland, was sentenced in federal court after pleading guilty to conspiring to possess with intent to distribute and to distribute cocaine. United States District Judge Richard M. Gergel, of Charleston, sentenced Swinton to 22 years in federal prison, to be followed by 5 years of supervised release. There is no parole in the federal system. Swinton also agreed to forfeit $500,000, two vehicles, and several pieces of jewelry.
Evidence presented in the case established that Swinton was the leader of a cocaine trafficking organization that was responsible for bringing a large volume of cocaine into South Carolina, primarily into Beaufort and Jasper Counties. Agents and prosecutors established that Swinton was receiving multiple kilograms of cocaine at a time from a source of supply in Atlanta, Georgia, and that he used a number of associates to assist in both the distribution of drugs and the collection of drug proceeds. Swinton was responsible for moving at least 74 kilograms of cocaine into those communities, and he used violence and intimidation to maintain his status as a main drug supplier to that area. During the course of the investigation, agents seized over 47 kilograms of cocaine, 782 grams of crack cocaine, 6 kilograms of marijuana, 97 grams of heroin, 10 firearms, 5 vehicles, over $50,000 worth of jewelry, and over $68,000 cash.
In addition to Swinton, three of his co-defendants have also been sentenced by Judge Gergel. Travis Wiggins, a/k/a “Trap”, age 28, of Ridgeland, was sentenced to 15 years in federal prison, to be followed by 5 years of supervised release, after pleading guilty to conspiring to possess with intent to distribute and to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime.
Ernest Fields, a/k/a “Fly”, age 39, of Hilton Head, was sentenced to 6 years in federal prison, to be followed by 4 years of supervised release, after pleading guilty to conspiring to possess with intent to distribute and to distribute cocaine.
Boston Brown, age 32, of Bluffton, was sentenced to 5 years in federal prison, to be followed by 4 years of supervised release, after pleading guilty to conspiring to possess with intent to distribute and to distribute cocaine.
“It is our hope and belief that the significant sentences handed down to Swinton and his associates send a message to those hoping to fill their void and allow these communities, which have been ravaged by drug trafficking and violence, an opportunity to heal,” said U.S. Attorney Lydon. “We appreciate the efforts of our federal, state, and local law enforcement partners in working together to hold these men accountable for such serious crimes.”
"The 14th Circuit is safer today because Swinton is in prison," added Fourteenth Circuit Solicitor Duffie Stone. "It's fortunate that we've had this tremendous partnership with the U.S. Attorney's Office in place for a number of years now. It has been invaluable in our efforts to get dangerous people like Swinton off the streets."
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division stated, "DEA and the entire law enforcement community are committed to making our society safe by removing such criminals from the streets. These notorious drug dealers distributed poison to the community and caused fear through means of violence and intimidation. The success of this investigation was due to the skillful investigative efforts of our federal, state and local law enforcement counterparts."
“Identifying and investigating drug trafficking organizations is one of Homeland Security Investigations’ major priorities to protect the public from the serious harm these criminals inflict without any regard for the violence and public health damage they cause,” said John Eisert, Acting Special Agent in Charge of Homeland Security Investigations (HSI) Charlotte. “This case also illustrates the importance of collaborative working relationships between HSI and our federal, state and our local law enforcement partners to keep communities safe, and HSI is appreciative of their cooperation as well as the U.S. Attorney’s office in successfully bringing these individuals to justice.”
The case was investigated by agents of the Drug Enforcement Administration, Homeland Security Investigations, Beaufort County Sheriff’s Office, Hampton County Sheriff’s Office, Jasper County Sheriff’s Office, Charleston County Sheriff’s Office, Berkeley County Sheriff’s Office, Hardeeville Police Department, City of Charleston Police Department, Summerville Police Department, North Charleston Police Department, Mount Pleasant Police Department, South Carolina Highway Patrol, Fourteenth Circuit Solicitor’s Office, and South Carolina National Guard. Assistant United States Attorney Nick Bianchi of the Charleston Office and Special Assistant United States Attorney Carra Henderson of the Fourteenth Circuit Solicitor’s Office are prosecuting the case.
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Long Island Felon Convicted of Violent Drug Robbery, Firearms Offense and Obstruction of JusticeRead the Press Release
A federal jury in Central Islip returned a guilty verdict today against Spencer Jean for Hobbs Act robbery of a marijuana trafficker, discharging a firearm during a crime of violence, possession with intent to distribute marijuana, conspiracy to obstruct justice and obstruction of justice. The verdict followed a two-week trial before United States District Judge Joanna Seybert. When sentenced, Jean faces a mandatory minimum sentence of 25 years’ imprisonment on the firearms discharge count, and up to a total of 45 years on the other four counts.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.
The evidence at trial established that on March 20, 2018 in Middle Island, Jean robbed $1,500 worth of marijuana from a drug dealer he had met at a halfway house following a 2016 firearms conviction. During the robbery, Jean brandished a 9mm Glock handgun loaded with hollow-point ammunition, and shot the victim in the leg at close-range. Shortly thereafter, Jean directed a former girlfriend to provide an alibi for him by lying to law enforcement and falsely testifying at trial that he was at a nursing home in Medford at the time of the shooting.
“Spencer Jean is a dangerous felon who used a handgun to commit a violent crime, and in doing so put others in the community at grave risk,” stated United States Attorney Donoghue. “Stopping gun violence in the district is a continuing priority of this Office and our federal and local law enforcement partners, and we will be unrelenting in our efforts to hold violent offenders like Jean accountable.” Mr. Donoghue thanked the Federal Bureau of Investigation, New York Field Office, for its outstanding work on the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Anthony Bagnuola and Allen L. Bode are in charge of the prosecution.
The Defendant:
SPENCER JEAN (also known as “Cash”)
Age: 33
Westbury, New YorkE.D.N.Y. Docket No. 19-CR-123 (JS)
Kinsey Man Sentenced to 12 Years in Federal Prison for Federal Firearm and Assault ChargesRead the Press Release
Montgomery, Alabama- On July 2, 2019, Jaccarlus Montrail Dawsey, 18, of Kinsey, Alabama, was sentenced to 12 years in prison for shooting at officers during an arrest on state charges, announced U.S. Attorney Louis V. Franklin, Sr. and U.S. Marshal Jessee Seroyer.
The federal case began when the United States Marshals Service’s Gulf Coast Regional Fugitive Task Force (GCRFTF) was assisting the Houston County Sheriff’s Office with locating and apprehending Dawsey, who was wanted on multiple state charges including assault and robbery. On January 4, 2019, Task Force Officers with the GCRFTF, including members from the U.S. Marshals Service, Houston County Sheriff’s Office, Houston County District Attorney’s Office, Dothan Police Department, and Covington County Sheriff’s Office, discovered his location in Dothan. When Task Force Officers approached Dawsey, he fled and fired at them multiple times as they pursued. Thankfully, no one was struck during the exchange of gunfire and he was eventually taken into custody.
On March 26, 2019, Dawsey pled guilty to assaulting federal officers and discharging a firearm in in relation to a crime of violence. The 12-year prison sentence will be followed by five years of supervised release. There is no parole in the federal system. State charges are still pending.
U.S. Attorney Franklin would like to thank the U.S. Marshals Service, the Houston County Sheriff’s Office, the Houston County District Attorney’s Office, the Dothan Police Department, and the Covington County Sheriff’s Office for their assistance in this case. Assistant U.S. Attorneys Eric M. Counts and Curtis Ivy, Jr. prosecuted the case.
Jury convicts two Cleveland men of using firearms to rob MetroPCS storesRead the Press Release
A federal jury convicted two Cleveland men of brandishing firearms while robbing MetroPCS stores last year and shooting at an off-duty Cleveland police officer.
Shawn Ford, 20, and Charles Rogers, 24, were each convicted on multiple counts of Hobbs Act robbery and using firearms during a crime of violence. They are scheduled to be sentenced October 9.
Ford and Rogers robbed the MetroPCS story at 10959 Kinsman Road on March 21, 2018, at 11100 Lorain Ave. on March 25, 2018, and at 5853 Broadway Ave., on March 27, 2018, and attempted to the rob the store at 14701 Kinsman Road, also on March 27, 2018.
Ford and Rogers fled from the store on Broadway after taking more than $1,000 from the register. An off-duty Cleveland police officer, who was a customer in the store, followed them out of the store. He identified himself as a police officer and ordered them to stop. One of the suspects began shooting at the officer and spent 9 mm shell casings were recovered nearby, according to court documents.
About 30 minutes later, an officer saw a vehicle that matched the description of the car the suspects got into after shooting at the officer. The car was pulled over with Ford and Rogers inside. Inside the car was a spent 9 mm round, blue latex gloves and clothing that matched clothing worn by suspects in other MetroPCS robberies, according to court documents.
Rogers was wearing an electronic monitoring device with GPS capabilities on March 21, the date of the first MetroPCS robbery. The GPS placed Rogers in the vicinity of the Kinsman Road store a few minutes before the robbery. Sometime later the GPS device was tampered with or taken off Rogers, according to court documents.
This case was investigated by the Cleveland Division of Police and Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Ohio Adult Parole Authority and the Cuyahoga County Prosecutor’s Crime Strategies Unit. It is being prosecuted by Assistant U.S. Attorneys Kelly L. Galvin and Margaret Kane and Special Assistant U.S. Attorney Eleina Thomas.
These cases are part of Project Safe Neighborhoods, a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN was reinvigorated in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Jackson Man Pleads Guilty under Project EJECT to Illegally Possessing a Firearm as a Convicted FelonRead the Press Release
Jackson, Miss. – Deviassi Adams, 41, of Jackson, pled guilty yesterday before U.S. District Court Judge Henry T. Wingate to possessing a firearm as a convicted felon, announced U.S. Attorney Mike Hurst and Acting Special Agent in Charge Steven J. Jensen with the Federal Bureau of Investigation.
On September 10, 2018, the United States Marshals Service Gulf Coast Regional Fugitive Task Force arrived at a Jackson residence to serve a felony arrest warrant on Adams. While conducting a protective sweep inside the home, task force members observed two firearms: one pistol and one AR-style rifle. In a subsequent interview, Adams confessed to possessing both firearms. Adams has previous convictions for manslaughter in Hinds County and other felony crimes.
On December 6, 2018, Adams was charged in a federal indictment with possessing a firearm as a convicted felon. He will be sentenced on October 3, 2019, by Judge Wingate, and faces a maximum penalty of ten years in prison and a $250,000 fine.
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Bert Carraway.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry and awareness. EJECT stands for "Empower Justice Expel Crime Together." PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Hazelton Inmate admits to indecent exposureRead the Press Release
CLARKSBURG, WEST VIRGINIA – Marco Charles Gilbert, an inmate at Federal Correction Institution Hazelton in Bruceton Mills, West Virginia, has admitted to indecent exposure, United States Attorney Bill Powell announced.
Gilbert, age 33, pled guilty to two counts of “Indecent Exposure.” Gilbert admitted to exposing himself to staff at FCI Hazelton in December 2018 and January 2019.
Gilbert was sentenced to 180 days incarceration for the crimes.
Assistant U.S. Attorney Brandon S. Flower prosecuted the case on behalf of the government. FCI Hazelton Special Investigative Services investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Gun Charge Leads to 5-Year Sentence for Jackson County ManRead the Press Release
Billy Jack Reed, 24, of Murphysboro, Illinois, was sentenced today to 60 months in federal prison on a federal firearm violation. Earlier this year, Reed pled guilty to a one-count indictment charging unlawful possession of a firearm by a convicted felon.
Evidence at the plea and sentencing hearings established that, on February 18, 2018, Reed knowingly possessed a 9mm pistol in Jackson County. At the time, Reed was prohibited from possessing a gun because of multiple prior felony convictions. In handing down the sentence, U.S. District Judge Staci M. Yandle also took into consideration that the gun was stolen and that Reed attempted to obstruct justice after his arrest by encouraging a witness to lie for him.
Reed’s sentence includes three years of supervised release.
The investigation was conducted by the Jackson County Sheriff’s Office and the Murphysboro Police Department.
Greece Man Sentenced for Lying to the FBIRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that Thomas Alonzo Bolin, a/k/a Peter Vincent, 22, of Greece, NY, who was convicted of making a false statement to the FBI, was sentenced to serve time served (three months) and three years supervised release by U.S. District Judge David G. Larimer. As a condition of supervised release, the judge ordered the defendant to submit to monitoring of his computer usage and online activities. Bolin also forfeited a Mossberg 12-gauge shotgun seized during the investigation along with 39 rounds of ammunition.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that the FBI began investigating the defendant and others in March 2019 for potential violations of federal civil rights and firearms laws. On March 15, 2019, a Facebook user named “Ragnar Odinson” – who was a member of a Facebook group called “Odin’s Warriors” – made statements on Facebook referencing the mosque attacks that occurred in Christchurch, New Zealand, and indicated that he was willing to “do something” the following week. The defendant was a member of and administrator for the “Odin’s Warriors” Facebook group. The defendant used Facebook – under the user name “Peter Vincent” – to post messages consistent with white supremacist ideology, statements threatening violence against Muslims and others, and messages containing derogatory terms for Muslims and other minority groups.
On March 30, 2019, members of the FBI, as part of their investigation, interviewed the defendant. During the interview, Bolin falsely stated that he did not possess any firearms in New York State. At the time of the statement, the defendant knew that he possessed a Mossberg 12-gauge shotgun in his bedroom closet at 34 Third Avenue in Greece. This false statement was material to the FBI’s investigation of possible civil rights and firearms violations by Bolin and others. The FBI recovered the shotgun during a subsequent search of the defendant’s bedroom closet.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.
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Gates Man Who Attempted to Lure A Teenager for Sex Going to Prison for 10 YearsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Dillon T. Boyington, 35, of Gates, NY, who was convicted of attempted online enticement of a minor, was sentenced to serve 120 months in prison and 10 years supervised release by U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Kyle P. Rossi, who handled the case, stated that the defendant utilized a social media application in an attempt to meet a 14 year-old child for sex. As he traveled to meet such child on October 24, 2018, Boyington was intercepted by members of the New York State Police. Upon his arrest, the defendant was found to be in possession of condoms and candy, which he intended to give to the child.The sentencing is the result of an investigation by the New York State Police, under the direction of Major Eric Laughton, and the Rochester Office of the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.
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Gates Man Sentenced on Child Pornography ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Sean Blackwell, 35, of Gates, NY, who was convicted of possession of child pornography, was sentenced to serve 48 months in prison by U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Kyle P. Rossi, who handled the case, stated that Blackwell was discovered actively trading child pornography from an apartment in Gates during an operation conducted by the FBI. Special Agents executed a search warrant at a residence that the defendant occupied during the period in question and seized digital items belonging to Blackwell. A forensic examination determined that the items contained multiple images and videos of child pornography, including images that depicted the sexual abuse of prepubescent minors.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Gary Loeffert.
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Fugitive Returned to U.S. to Face Federal Charges in $50 Million Health Care Fraud Scam Run Out of Coachella Valley Surgery CenterRead the Press Release
SANTA ANA, California – A Rancho Mirage woman who faces federal charges related to a scheme that fraudulently billed insurance companies $50 million for “medically necessary” cosmetic surgeries has been returned the United States after fleeing to Israel two years ago.
Linda Morrow, 67, who fled the United States after being named in a 31-count federal grand jury indictment, arrived in Southern California on Monday morning after being deported by Israel, which had determined that she had entered that nation on a fraudulent Mexican passport.
Linda Morrow appeared in United States District Court in Santa Ana on Tuesday afternoon and entered a not guilty plea to a separate grand jury indictment that charges her with contempt of court for fleeing while free on bond. During that hearing, she was ordered detained and a trial date in the contempt case was scheduled for August 27. She will make another court appearance later this month to discuss the status of the pending health care fraud case.
Linda Morrow and her husband, David Morrow, 74, were arrested in Israel on June 16. David Morrow, who pleaded guilty in 2016 in the health care fraud case and was sentenced in absentia to 20 years in federal prison, is pending extradition proceedings in Israel. David Morrow also faces contempt of court charges for fleeing while he was pending sentencing.
Linda Morrow, who was the executive director of The Morrow Institute (TMI) in Rancho Mirage, is charged with participating in a scheme to defraud health insurance companies by submitting bills for more than $50 million for procedures that were claimed as “medically necessary” – but in fact were cosmetic procedures such as “tummy tucks,” “nose jobs,” breast augmentations and vaginal rejuvenation. The indictment outlines a scheme in which patients were lured to TMI with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. The indictment further alleges that some patients who underwent multiple surgeries at TMI suffered severe medical complications from the procedures.
The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP) and Cigna. When insurance companies refused to pay for the cosmetic procedures for patients who happened to be employed by public entities such as school districts, TMI made formal claims against those public entities, demanding payments totaling more than $15 million from the California Highway Patrol, the Desert Sands Unified School District, the Palm Springs Unified School District and the City of Palm Springs.
The indictment naming Linda Morrow with conspiracy, 23 counts of mail fraud, six identity theft charges, and one count of misprision of a felony for allegedly failing to report the health care fraud scheme to authorities. If she were to be convicted, Linda Morrow would face a potential sentence of more than 500 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. A defendant is presumed to be innocent until and unless proven guilty in court.
The investigation into the Morrows and TMI was conducted by the FBI, IRS Criminal Investigation and the California Department of Insurance. The FBI’s Legal Attaché in Tel Aviv and the Israeli National Police provided considerable assistance relative to the capture of Linda and David Morrow. The United States Marshals Service handled the transportation of Linda Morrow from Israel.
The case is being prosecuted by Assistant United States Attorney Charles Pell of the Santa Ana Branch Office.
Four Lafourche Parish Men Indicted for Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – KENDALL MATHEWS, a/k/a “DOT,” age 36, EARL JOHNSON, a/k/a “MUD,” age 39, MONTRELL CLEVELAND, a/k/a “NOON,” age 32, and DONTRELL MATHEWS, age 40, all residents of Thibodaux, Louisiana, were charged June 14, 2019, in a fifteen-count indictment by a Federal Grand Jury with several narcotics offenses, including conspiring to distribute and possess with intent to distribute fifty grams or more of methamphetamine, five kilograms or more of cocaine hydrochloride, use of a communication facility to facilitate a drug trafficking crime, and distribution of methamphetamine, announced U.S. Attorney Peter G. Strasser.
According to the indictment, beginning at a time unknown and continuing until September 28, 2018, Kendall MATHEWS, JOHNSON, CLEVELAND, and Dontrell MATHEWS conspired with each other to distribute and possess with intent to distribute fifty grams or more of methamphetamine. During that same period, Kendall MATHEWS and JOHNSON engaged in a conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine hydrochloride and a quantity of heroin. Kendall MATHEWS and Dontrell MATHEWS are also charged with distribution of methamphetamine and all four individuals are charged with using a communication facility, a telephone, to facilitate drug conspiracies.
If convicted, Kendall MATHEWS, JOHNSON, CLEVELAND, and Dontrell MATHEWS face a mandatory minimum term of imprisonment of 10 years and a maximum of life imprisonment, a fine of up to $10,000,000.00 and at least five years of supervised release following any term of imprisonment.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
U.S. Attorney Strasser reiterated that the indictment is merely a charging document and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was investigated by the Drug Enforcement Administration, Office of Homeland Security Investigations, Terrebonne Parish Sheriff’s Office, and the Lafourche Parish Sheriff’s Office. The prosecution is being handled by Assistant United States Attorney André Jones.
Former Swink Public School Treasurer Sentenced for Theft of Federal FundsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that the former treasurer of Swink Public School, Lori Rae Baskin, age 50, of Swink, Oklahoma, was sentenced to 4 years’ probation for Theft from Organization Receiving Federal Program Funds, in violation of Title 18, United States Code, Section 666(a)(1)(A). Baskin was also ordered to pay total restitution of $27,738.80. The charges arose from an investigation by the Department of Education Office of Inspector General (OIG) and the Federal Bureau of Investigation (FBI).
The Information alleged that from on or about February 3, 2012, until on or about June 30, 2015, in the Eastern District of Oklahoma, the defendant, being an agent, employee, and officer of Swink Dependent School District No. C-21, an agency of a State government, which received in excess of $10,000 in federal benefits in each one year period from 2012 through 2015, stole, obtained by fraud, and without authority knowingly converted to the use of a person not the rightful owner, property of a value of $5,000 or more, owned by, under the care of, and under the control of Swink Dependent School District No. C-21.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. First Assistant United States Attorney Christopher Wilson represented the United States.
Former State Delegate Sentenced for Role in Defrauding United StatesRead the Press Release
NORFOLK, Va. – A former member of the Virginia General Assembly was sentenced today to two and a half years in prison for his role in a conspiracy that resulted in the fraudulent award of over $80 million in government contracts.
According to court documents, Ronald A. Villanueva, 49, participated in a nine-year conspiracy involving over $80 million in fraudulently obtained government contracts. More specifically, Villanueva conspired with others to help two Virginia Beach companies secure Small Business Administration contracts that had been set aside for minority-owned businesses. Villanueva began working for one company, SEK Solutions, in or about 2005. When that company’s 8(a) status was set to expire in 2010, Villanueva and his co-conspirators set up a new company, Karda Systems, which on paper was run by Villanueva’s brother-in-law. However, in reality Karda’s contracting business was managed by Villanueva and others associated with SEK.
As part of the conspiracy, Villanueva and others misrepresented whether SEK and Karda were eligible for government contracts under the 8(a) program. In fact, neither company was eligible to participate in the program, yet Villanueva and his co-conspirators made numerous false statements and certifications to the contrary. During part of the conspiracy, Villanueva was a member of the Virginia General Assembly, and in one instance used his House of Delegates letterhead to send a letter to the SBA in support of Karda’s application to participate in the 8(a) program, knowing that it contained false and misleading statements about who actually operated the company. As a result of the fraud, the two companies were awarded over $80 million dollars in government contracts for which they were not eligible.
As part of the sentence, Villanueva was ordered to pay $524,533 in restitution.
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, Carol Fortine Ochoa, Inspector General, General Services Administration (GSA), Hannibal “Mike” Ware, Inspector General of the Small Business Administration (SBA), and Glen A. Fine, Acting Inspector General, Department of Defense (DoD), made the announcement after sentencing by U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorneys Alan Salsbury and Daniel Young prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-2.
Former Postal Carrier Sentenced for Stealing Mail, Drug TraffickingRead the Press Release
KANSAS CITY, Mo. – A former postal carrier was sentenced in federal court today for stealing mail from dozens of residents and for possessing methamphetamine to distribute.
Brandy Manning, 40, of Liberty, Missouri, was sentenced by U.S. District Judge Greg Kays to six years in federal prison without parole. The court also ordered Manning to pay $3,993 in restitution.
Manning, who was employed as a mail carrier for the U.S. Postal Service from June 9, 2007, to June 5, 2017, pleaded guilty on Jan. 17, 2019, to one count of mail theft by a postal employee and one count of possessing methamphetamine with the intent to distribute. Manning admitted that she stole driver’s licenses mailed to customers on her route, as well as credit cards, debit cards, rebate cards, checks, and other mail matter. Manning also admitted that she used the stolen identifications, credit and debit cards, and checks to unlawfully purchase items and to create counterfeit checks.
Brandy Manning was arrested by Kansas City, Mo., police officers on Feb. 21, 2017. She was in possession of dozens of items she stole from the U.S. Postal mail in her position as a U.S. Postal mail carrier. Police recovered from her personal truck: 14 driver’s licenses issued to different people; 15 credit/debit cards issued to different people; 15 gift cards; 12 personal or business checks issued to/from different people; a counterfeit check bearing information matching a stolen check and driver’s license; four receipts related to fraudulent uses of stolen cards; a Missouri Bar card belonging to another person; a health insurance card issued to another person; a physician certificate belonging to another person; a vehicle registration renewal receipt for another person; and unopened mail – in all, items in 45 other people’s names and addresses. Manning also possessed an oxycodone tablet for which she did not have a prescription.
When interviewed after this arrest, Manning admitted to police that she used methamphetamine, cocaine, opiates, “just about everything.” Manning did not return to work at the U.S. Postal Service after her arrest. She was separated from employment on June 5, 2017.
The U.S. Postal Inspection Service and U.S. Postal Service, Office of Inspector General sent questionnaires to all the identifiable victims and everyone on Manning’s postal route. The agencies received a total of 54 victim impact responses.
Manning was again arrested on May 3, 2017, by a Cass County sheriff’s deputy after Manning left the scene of an accident in which she rear-ended a stopped vehicle. Deputies searched her truck and found a loaded Smith & Wesson .40-caliber handgun, a second loaded firearm magazine, a box of 100 rounds of .40-caliber ammunition, .56 grams of cocaine; 1.83 grams of marijuana, 26.229 grams of pure methamphetamine, 414 Alprazolam pills, drug paraphernalia, $1,593, three cell phones; three debit cards issued to other people, and unopened mail addressed to another person.
This case was prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the U.S. Postal Inspection Service, the U.S. Postal Service – Office of Inspector General, the Kansas City, Mo., Police Department, and the Cass County, Mo., Sheriff’s Department.
Former Postal Carrier Sentenced for Deserting Approximately 49 Plastic Tubs of MailRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that, in the largest “mail dumping” case in Alaska history, a former U.S. Postal Service employee has been sentenced to federal prison for deserting more than 49 plastic tubs of mail that he was responsible for delivering.
Thomas Gerald Hilty, 48, of Wasilla, was sentenced yesterday by Chief U.S. Magistrate Judge Deborah M. Smith to serve three years of probation, to complete 300 hours of community service, and to pay a $1,000 fine. In April 2019, Hilty pleaded guilty to one count of desertion of mail.
According to court documents, over the course of two years, Hilty abandoned some of the mail along the route in unused mail receptacles, kept some of it in and around his home, and even destroyed mail by burning it. The deserted mail included a passport, insurance correspondence, PFD letters, college acceptance letters, child support payments, among other unknown types of mail that Hilty burned. The investigation revealed that Hilty simply tired of delivering the mail he was entrusted with delivering, and did not want to complete his assigned rounds. This was the largest “mail dumping” case in Alaska history, as measured by the mail volume and number of victims – there were 467 identifiable victims in this case.
At the sentencing hearing, Judge Smith noted that a higher fine could have been imposed, however federal law required the judge to consider Hilty’s inability to pay.
The U.S. Postal Service-Office of Inspector General (USPS-OIG) conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Jonas M. Walker.
Former Military Serviceman Sentenced to Federal Prison for Theft of Government MoneyRead the Press Release
GAINESVILLE, FLORIDA – U.S. Attorney Lawrence Keefe for the Northern District of Florida today announced the sentencing of William Larry Johns, 69, of Gainesville, after he was sentenced on June 24 in the United States District Court in Gainesville to a federal grand jury indictment that charged him with one count of theft of government money.
Johns served in the United States Marine Corps for less than a year in 1967, and years later applied for the United States Department of Veterans Affairs (“VA”) Disability Pension claiming to be unable to work due to a non-service connected disability. Johns failed to regularly report his employment history, net worth, and income received from all sources as he was required to do. Further, during visits to the VA Medical Center, Johns falsely indicated that he was retired and failed to report to the VA the income he was earning through his plumbing and drain cleaning businesses between 2004 and 2017.
In addition to receiving a sentence of incarceration in federal prison and supervised release, Johns was ordered to pay restitution to the Department of Veterans Affairs in the amount of $157,949.
Assistant United States Attorney Justin M. Keen prosecuted the case, which was investigated by the Department of Veterans Affairs Office of Inspector General (VA-OIG). David Spilker, Special Agent in Charge, VA-OIG, stated, "The defendant’s deceitful actions stole VA’s limited resources from eligible veterans deserving of the financial assistance they earned through military service. VA-OIG is committed to safeguarding the integrity of VA’s healthcare and benefits programs."
United States Attorney Keefe added, “Military benefits exist for those who truly earned them, individuals who need the help of a public on whose behalf they sacrificed so much. Not only should these benefits be denied to those who do not earn them, but we owe it to the real heroes to prosecute anyone who seeks to benefit unjustly at their expense.”
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html
Former LMPD Officer Sentenced to 16 Years for Enticing Minors, Distribution, and Possession of Child PornRead the Press Release
LOUISVILLE, Ky. – United States District Judge David J. Hale has sentenced Kenneth R. Betts to 16 years’ imprisonment, followed by 20 years of Supervised Release, after he pleaded guilty in December of 2018 to enticement, attempted enticement, possession of child pornography, transfer of obscene materials to a minor, and distribution of child pornography, announced United States Attorney Russell Coleman. The Court ordered Betts to pay a $5,000.00 special assessment under the Justice for Victims of Trafficking Act of 2015. And, an Agreed Order of Restitution in the amount of $20,000.00 will be entered with regard to John Doe 1.
“We know all too well that LMPD officers place their lives at jeopardy daily to protect our kids,” stated U.S. Attorney Russell Coleman. “Mr. Betts’ foul conduct tarnished his badge and earned him over a decade and a half in federal prison with no parole.”
Kenneth R. Betts, 34, of Shelbyville, Kentucky, was charged in an Indictment returned by a federal Grand Jury on November 7, 2018, with one count of distribution of child pornography, one count of possession of child pornography, three counts of enticement of individuals under the age of 18 years to engage in sexual activity, one count of transfer of obscene materials to an individual under the age of 16, and one count of attempted enticement of an individual under the age of 18. All of his criminal conduct occurred in Jefferson County, Kentucky.
According to the Plea Agreement, in or about and between February 2006 and February 2008, Betts communicated with an individual (John Doe 1), who had not attained the age of eighteen years. Betts communicated with John Doe 1 via Facebook and other social media. During those communications, Betts knowingly persuaded, induced, and enticed John Doe 1 to engage in sexual activity, including sharing sexually explicit images with Betts. The resending of such images is sexual activity that constitutes a criminal offense.
On or about May 14, 2014, Betts knowingly distributed child pornography. He sent two of the images referenced above to John Doe 1. Betts transmitted the images to John Doe 1 using Facebook.
Law enforcement officials executed a state search warrant on Betts’ residence on October 13, 2016. Among other things, they seized digital devices – including an external hard drive. Forensic examination of the digital devices revealed Betts’ possession of child pornography. Namely, he possessed the four images he originally requested and received from John Doe 1.
John Doe 2 (Counts 4 and 5). On or about and between May 2010 and May 2014, Betts communicated via the Internet with an individual (John Doe 2), who had not attained the age of eighteen years. The two met and became acquainted through the LMPD Explorers Program. Betts communicated with John Doe 2 via Facebook and other social media platforms. During those communications, Betts knowingly persuaded, induced, and enticed John Doe 2 to engage in sexual activity. The sexual activities included a one-time in-person sexual encounter involving oral sex between Betts and John Doe 2 and repeated requests for sexually explicit images to be shared with Betts. The oral sex and requests for photos are activities for which a person may be prosecuted for a criminal offense.
From May 2010 through May 2012, Betts used a facility and means of interstate commerce to send pictures of himself to John Doe 2. During that time period, Betts knew John Doe 2 had not attained the age of 16 years.
Jane Doe 1 (Count 6) On or about and between June 2013 and July 2013, Betts used a facility and means of interstate commerce, that is, a cellular telephone and its text messaging feature, to communicate with Jane Doe 1. At that point in time, Jane Doe 1 was 16. The two met and became acquainted through the LMPD Explorers Program. During the communications, Betts asked Jane Doe 1 to meet for sexual activity. He also asked Jane Doe 1 for sexually explicit photos, which Jane Doe 1 provided to him. The photos Jane Doe 1 provided constituted a violation of Kentucky law. Law enforcement officials with LMPD observed the images as well as the receipt of those images by Betts. However, the images were destroyed during the initial investigation.
John Doe 3 (Count 7) On or about and between September 2014 and November 2014, Betts used a facility and means of interstate commerce, that is, a cellular telephone, Facebook and SnapChat (a social media platform), to communicate with John Doe 3. At that point in time, John Doe 3 was 17. Betts and John Doe 3 had met and become acquainted through the LMPD Explorers Program. During the communications, Betts asked John Doe 3 to meet for sexual activity. He also asked John Doe 3 for sexually explicit photos. He attempted to persuade, induce, entice, or coerce John Doe 3 to engage in unlawful sexual activity. Betts sent John Doe 3 a photograph of himself wearing an LMPD uniform and in the company of a young woman during some of the communications encouraging a three-way. However, John Doe 3 refused to meet Betts for sexual activity or to send the requested sexually explicit images of himself.
Assistant United States Attorney Jo E. Lawless prosecuted the case, and it was investigated by the Federal Bureau of Investigation (FBI) and the Louisville Metro Police Department’s Public Integrity Unit.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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."
Former Jackson County substitute teacher sentenced for possession of child pornographyRead the Press Release
GAINESVILLE, Ga. - Ernest Leander Shaw has been sentenced for possession of child pornography. Shaw, a former substitute teacher, taught at various schools throughout the county.
“Child pornography is abuse of society’s most vulnerable population—young children,” said U.S. Attorney Byung J. “BJay” Pak. “Children trust that adults and those in leadership positions will be their protector. Shaw chose to betray that trust.”
“There is no sentence that can ever make the victims of child pornography whole again,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “It is even more disheartening when a person entrusted to protect children, our most vulnerable citizens, is the person who promotes this abuse. We can only hope that Shaw's sentence will discourage others from this depraved behavior.”
“It is my hope that Shaw is monitored to the fullest extent and can never have access to children again, as he had access here in Jackson County in our schools. He committed horrendous acts when he possessed child pornography for his gratification and then had access to our children here in Jackson County,” said Jackson County Sheriff Janis Mangum.
According to U.S. Attorney Pak, the charges and other information presented in court: In or around May 2018, the Jackson County Sheriff’s Office received information that Shaw possessed an electronic device that contained child pornography. During their subsequent interview with Shaw, he admitted that the images belonged to him. Based upon Shaw’s consent to a search of his residence, telephones, and other electronic devices, and a search warrant obtained from a Jackson County Magistrate Judge, the Jackson County Sheriff’s Office eventually found hundreds of images and videos of child pornography on various electronic devices in Shaw’s residence.
Ernest Leander Shaw, 66, of Nicholson, Georgia, was sentenced today by U.S. District Court Judge Richard W. Story to two years in prison, to be followed by 10 years of supervised release of which the first two years will be served on home confinement. Shaw was indicted by a federal grand jury on September 18, 2018. He pleaded guilty to the sole count in the indictment, pursuant to a written plea agreement.
This case was investigated by the Federal Bureau of Investigation, with the initial investigation handled by the Jackson County Sheriff’s Office.
Assistant U.S. Attorney Sekret T. Sneed prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Clymer School Teacher Pleads Guilty to Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Scott Aikens, 60, of Clymer, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possession of child pornography involving a prepubescent minor. The charge carries a maximum penalty of 20 years in prison, lifetime supervised release, and a $250,000 fine.
Special Assistant U.S. Attorney Jeremy Murray, who is handling the case, stated that in late June 2018, Homeland Security Investigations in Buffalo received information that a user, identified as "EJD," was active on the Thai based child pornography open website "Boyxzeed2.net.” Investigators traced the email address utilized by “EJD” to Scott Aikens.
On September 14, 2018, Homeland Security Investigations and the New York State Police executed a search warrant at the defendant’s residence on Route 474 in Clymer and interviewed Aikens, who admitted that he viewed child pornography and that child pornography would be found on his laptop computer. Investigators seized the laptop and other electronic devices, which were found to contain a total of 683 videos and 22 images of child pornography.
Some of the child pornography possessed by the defendant depicted prepubescent minors or minors less than 12 years of age, and some of the child pornography possessed by the defendant contained sadistic or masochistic conduct or other depictions of violence.
At the time of his arrest, the Aikens was a 7-12 grade school teacher with the Clymer Central School District.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the New York State Police, under the direction of Major Edward Kennedy.
Sentencing is scheduled for October 24, 2019, at 10:30 a.m. before Judge Wolford.
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Five Perrine Residents Arrested for their Involvement in a Drug Trafficking NetworkRead the Press Release
Five Perrine residents were arrested this morning for their involvement in a drug trafficking network believed to be the largest source of narcotics supply in the neighborhood of Perrine, as part of the Southern District of Florida’s Violence Reduction Partnership (“VRP”) initiative.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida; Special Agent in Charge George L. Piro for the Federal Bureau of Investigation (FBI), Miami Field Office; Special Agent in Charge Adolphus P. Wright for the U.S. Drug Enforcement Administration (DEA), Miami Field Division; and Director Juan J. Perez of the Miami-Dade Police Department (MDPD), made the announcement.
The Criminal Complaint charges Tedrick “Ted” King, 45, Wilhemnia Nottage, 35, Corey Evans, 28, Christopher McCollur, a/k/a “Block,” 32, Keyon Harris, 37, and Jonis Webster, a/k/a “J.J.,” 39, all of Miami-Dade County, with a conspiracy, that spanned from October 2018 through June 2019, to possess with intent to distribute narcotics, and possession with intent to distribute narcotics (Case No. 19-MJ-3049). The defendants are scheduled to have their initial appearances before U.S. Magistrate Judge Jacqueline Becerra tomorrow at 2:00 p.m.
The Criminal Complaint arises from a joint investigation conducted by the FBI, DEA, and MDPD involving Ted King and his criminal associates (the “King Enterprise”), including the charged defendants, for crimes including narcotics distribution and money laundering. Since the start of the investigation, law enforcement officers have conducted approximately 30 controlled narcotics purchases from the King Enterprise, including cocaine, marijuana, and Molly. Law enforcement, through the course of physical surveillance, controlled purchases of narcotics, and debriefs with witnesses, believes that the King Enterprise is the largest current source of cocaine distribution in the neighborhood of Perrine, located in the Southern District of Florida. The investigation has revealed that the King Enterprise utilizes multiple locations to distribute narcotics, store narcotics, and conceal the proceeds of the narcotics sales.
Fourteen individuals have also been arrested and face state charges for related criminal conduct. The investigation remains pending and additional individuals involved in the sales of illegal drugs may also be arrested and prosecuted. If convicted of possessing with intent to distribute controlled substances, or conspiracy to do same, the defendants face up to 20 years in prison.
A Criminal Complaint is only an accusation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Through the collaborative VRP, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks that plague communities throughout the Southern District of Florida. The VRP strives to combat violent crime, narcotics trafficking, gang activity and firearms offenses by prosecuting offenders and working with community leaders and non-profit entities to provide preventive services to the local populations. The charges announced today are the result of the VRP’s law enforcement initiatives. Additional information regarding the VRP initiatives is available at [email protected] (link sends e-mail) or by calling (305) 961-9134.
The members of the VRP include the U.S. Attorney’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, DEA’s Miami Field Office, Broward Sheriff’s Office, Sunrise Police Department, U.S. Marshals Service Fugitive Task Force, Miami-Dade Police Department, FBI’s Miami Field Office, Hollywood Police Department, Homestead Police Department, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), North Miami Beach Police Department, Miami-Dade Police Department, City of Miami Police Department, Palm Beach County Sherriff’s Office, Broward County Office of the State Attorney, and Miami-Dade Office of the State Attorney.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, DEA, and MDPD. She thanked the Miami-Dade State Attorney’s Office and Homestead Police Department for their assistance. This case is being prosecuted by Assistant U.S. Attorney Cary O. Aronovitz.
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.
Federal Jury Finds Buffalo Man Guilty of Multiple Cocaine ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal jury has convicted Darryl M. Greene, 48, of Buffalo, NY, of conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of cocaine and two counts of attempt to possess with intent to distribute cocaine. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and an $8,000,000 fine.
Assistant U.S. Attorneys Misha Coulson and Wei Xiang, who handled the trial of the case, stated that on July 27, 2017, the United States Postal Inspection Service (USPIS) executed a search warrant on a suspicious package mailed from San Diego, California. The package was addressed to an associate of the defendant. Inside, inspectors discovered one kilogram of suspected cocaine.
On July 28, 2017, USPIS and the Drug Enforcement Administration conducted a controlled delivery of the package. A package of sham cocaine was delivered to the associate’s Kensington Avenue residence. Within five minutes of the package’s delivery, Greene arrived at the residence and departed with the package. He was arrested a short time later and released.
On August 3, 2017, the USPIS executed a search warrant on another suspicious package from San Diego, California, which was addressed to a recipient identified as “W. Greene” at 1631 Hertel Avenue in Buffalo. The defendant resided at the residence with his mother. The second package contained a ½ kilogram of cocaine, and the defendant was once again arrested.
The verdict is the result of an investigation by the United States Postal Inspection Service, Boston Division, under the direction of Inspector-in-Charge Joseph W. Cronin, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan.
Sentencing is scheduled for November 14, 2019, before U.S. District Judge Lawrence J. Vilardo who presided over the trial of the case.
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Federal Judge Hands Down Life Sentences to Armored Car Murder CrewRead the Press Release
HOUSTON – Four Houston men will serve the rest of their lives behind bars for the robbery and murder of an armored car guard and attempted robbery and murder of another, announced U.S. Attorney Ryan K. Patrick.
A federal jury deliberated for eight hours before convicting Nelson Alexander Polk, 40, Marc Anthony Hill, 48, John Edward Scott, 43, and Bennie Charles Phillips Jr., 32, on March 29, 2019, following a nine-day trial. All were convicted of attempted interference with commerce by robbery and aiding and abetting discharge of a firearm during a crime of violence. The jury also convicted Hill and Polk of aiding and abetting interference with commerce by robbery and aiding and abetting discharge of a firearm during a crime of violence causing the death of another.
Today, U.S. District Judge David Hittner sentenced each man to life in prison for their roles in the offenses. At the hearing, the court heard from the victim’s family who described the impact of the murder on their lives. They described waiting for their son, brother and fiancé to come home from work and that he should have never had to die for “easy money.”
The sentences stemmed from the robbery and murder of a Brinks armored car guard Aug. 29, 2016, at Wells Fargo Bank located at 13120 Northwest Freeway as well as the attempted robbery of a Loomis armored car guard at Amegy Bank located at 400 N Sam Houston Pkwy E Dec. 7, 2016.
All members of the crew received at least life in prison because each member knew the scheme involved murdering the guard then stealing the money.
Hill and Polk were sentenced to two consecutive life terms followed by 240 months for their roles in both robberies and murder. Scott and Phillips received life in prison followed by a consecutive 240 months for their roles in the attempted robbery and murder of the Loomis guard at Amegy Bank.
Hill conducted extensive surveillance at both locations and was there during the time of the Wells Fargo murder and robbery. He was also near the Amegy Bank poised to pick up the robbery crew members in a getaway vehicle.
Polk, Hill’s nephew, drove the car that would pull up on the dying guard for another crew member to get out and steal the money. Polk confessed to his roles in the crimes and admitted he knew the leader intended to “lay [the guard] down” so he could easily steal the money from the dying armored guard.
Phillips recruited Trayvees Duncan-Bush, 32, also of Houston, who would take the money off of the dying guard. He made sure that Duncan-Bush had a phone, instructions and a hotel room in preparation for the robbery/murder plot. Scott acted as an outside perimeter lookout. He alerted the crew via cell phone when the armored truck was headed towards the bank and watched for law enforcement.
At trial, the jury heard that a now-deceased individual had allegedly led the robbery crew, which would conduct extensive surveillance of banks’ ATMs and armored car routes before executing the robberies. The plan involved the leader lying in wait for the guard to begin service of the ATM. He would then shoot the guard from a distance with a high caliber rifle so another member of the robbery crew could pull up and take the money.
When law enforcement moved in to arrest the subjects Dec. 7, 2016, the leader of the crew allegedly came out firing his weapon and police responded, killing him.
Those sentenced today will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Duncan-Bush had pleaded guilty to conspiracy to commit interference with commerce by robbery and aiding and abetting discharge of a firearm during a crime of violence prior to trial. He is set for sentencing Aug. 14, 2019, at which time he faces up to 20 years in prison.
The FBI, Houston Police Department and Bureau of Alcohol, Tobacoo, Firearms and Explosives conducted the investigation. Assistant U.S. Attorneys Heather Winter and Richard Hanes are prosecuting the case.
The case is an example of coordination between law enforcement who are part of the Houston Law Enforcement Violent Crime Initiative. The goal is to proactively fight and reduce violent crime across the Greater Houston area by targeting the region’s most violent offenders, augmenting investigative and prosecutorial efforts, and enhancing training, public awareness and education.
It was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
Federal Indictment Charges Lakeway Man with Production, Distribution and Possession of Child PornographyRead the Press Release
A 25–year-old Lakeway, TX, man faces federal production, distribution and possession of child pornography charges, announced U.S. Attorney John F. Bash, FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A 52-count federal indictment returned earlier this month and unsealed yesterday, charges Luann Fabric Campos Leao Hida (aka “Luann Hida,” “Luann Leao,” and “LOTR”) with 24 counts of production of child pornography, 27 counts of distribution of child pornography and one count of possession of child pornography.
According to the indictment, from October 2014 to July 2018, Hida allegedly produced images and videos depicting 15 children engaged in sexually explicit activities.
Each production charge calls for a minimum of 15 years in federal prison upon conviction. Each distribution charge calls for a minimum of five years in federal prison upon conviction. Possession of child pornography calls for up to ten years in federal prison upon conviction. Hida remains in federal custody following his initial appearance yesterday in federal court in Austin.
The FBI is seeking the public’s assistance in identifying other potential victims of Luann Hida, who is also known by his screen name “The LOTR” or "TXLOTR". If you believe your child or other children may have been in contact with Luann Hida, please contact the Austin FBI via email at [email protected]. You can also complete a secure, confidential, online questionnaire, and obtain additional information on the FBI's webpage www.fbi.gov/sanantonio. The FBI is legally mandated to identify victims of federal crimes it investigates and provide these victims with information, assistance services and resources.
The FBI together with the Lakeway Police Department, Hays County Sheriff’s Office, Bee Cave Police Department, Austin Police Department and the Travis County Sheriff’s Office are investigating this case. We also thank the Center for Child Protection, Travis County, for its assistance. Assistant U.S. Attorneys G. Karthik Srinivasan and Keith M. Henneke are prosecuting the case on behalf of the Government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Federal Grand Jury Indicts Lafourche Man for Being a Felon in Possession of a FirearmRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Peter G. Strasser announced that on June 20, 2019, MICHAEL LEWIS, age 33, a resident of Edgard, Louisiana, was charged in a one-count indictment by a federal grand jury. In count one, LEWIS is charged with being a convicted felon in possession of a firearm.
If convicted of count one, LEWIS faces a maximum sentence of 10 years imprisonment, a fine up to $250,000.00, a period of supervised release up to 3 years, and a mandatory special assessment fee of $100.00.
U. S. Attorney Strasser reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the Lafourche Parish Sheriff’s Office, the Lafourche Parish District Attorney’s Office, and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives (A.T.F.). Assistant United States Attorney Maurice Landrieu is in charge of the prosecution.
Federal Grand Jury Indicts Evanston Man on Robbery and Gun Charges in Connection with North Suburban Gas Station HeistsRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted an Evanston man on robbery and firearm charges in connection with three violent gas station heists in the north suburbs.
MARIO BANKS JR., 24, is charged with three counts of robbery and three counts of using, carrying, and brandishing a firearm during a crime of violence. The indictment accuses Banks of robbing three gas stations at gunpoint:
- Nov. 4, 2018: Bucky’s Express Mobil, 6400 block of North Cicero Avenue, Lincolnwood.
- Feb. 16, 2019: Shell Oil, 3300 block of Howard Street, Skokie.
- Feb. 19, 2019: Bucky’s Express Mobil, 6400 block of North Cicero Avenue, Lincolnwood.
The indictment was returned June 20, 2019, in federal court in Chicago. Banks has pleaded not guilty to the charges and he remains detained in federal custody. A status hearing is set for Sept. 12, 2019, before U.S. District Judge Virginia M. Kendall.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Demitrous Cook, Chief the Evanston Police Department; Jay Parrott, Chief of the Lincolnwood Police Department; Anthony F. Scarpelli, Chief of the Skokie Police Department; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI. The government is represented by Assistant U.S. Attorney Eric S. Pruitt.
The firearm counts each carry a mandatory minimum sentence of five years in prison and a maximum sentence of life, while each robbery count is punishable by up to 20 years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
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.
Executives of Staffing Companies Charged with Visa FraudRead the Press Release
NEWARK, N.J. – Four executives of two information technology staffing companies have been arrested on charges of fraudulently using the H-1B visa program to gain an unfair advantage over competitors, U.S. Attorney Craig Carpenito announced today.
Vijay Mane, 39, of Princeton, New Jersey; Venkataramana Mannam, 47, of Edison, New Jersey; Fernando Silva, 53, of Princeton; and Sateesh Vemuri, 52, of San Jose, California, are each charged by complaint with one count of conspiracy to commit visa fraud.
Vemuri made his initial appearance July 1, 2019, before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Mannam and Silva appeared before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court on June 25, 2019; Mane appeared before Judge Wettre on June 27, 2019. All were released on $250,000 bond.
According to the documents filed in this case and statements made in court:
Mane, Mannam, and Vemuri controlled two IT staffing companies located in Middlesex County, New Jersey – Procure Professionals Inc. and Krypto IT Solutions Inc. Silva and Mannam also controlled another New Jersey staffing company, referred to in the complaint as “Client A.” The defendants used Procure and Krypto to recruit foreign nationals and sponsor them for H-1B visas, which allow recipients to live and work temporarily in the U.S. in positions requiring specialized skills. To expedite their visa applications, the defendants caused Procure and Krypto to file H-1B applications falsely asserting that the foreign worker/beneficiaries had already secured positions at Client A, when, in reality, no such positions existed. Instead, the defendants used these fraudulent applications to build a “bench” of job candidates already admitted to the United States, who could then be hired out immediately to client companies without the need to wait through the visa application process, giving the defendants an advantage over their competitors in the staffing industry.
The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael; U.S. Citizenship and Immigration Services, Newark Office of Fraud Detection and National Security; the USCIS National Benefits Center; and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office’s Public Protection Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Engineering Firms’ CPA Sentenced to Prison for Role in Tax SchemeRead the Press Release
Michael H. Higa, the Certified Public Accountant (CPA) and controller of several engineering businesses, was sentenced yesterday to 40 months in prison in Honolulu, Hawaii, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Kenji M. Price for the District of Hawaii.
On Nov. 20, 2018, a jury convicted Higa of conspiracy to defraud the United States along with co-conspirator Wagdy Guirguis. In addition to the conspiracy conviction, Higa was also convicted of one count of assisting in the preparation of a false tax return. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and Internal Revenue Service (IRS) penalties.
According to the evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a CPA, was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed an $812,000 penalty, Guirguis and Higa took steps to place income and assets out of the reach of the IRS. For instance, Guirguis and Higa used a nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.
From 2001 through 2012, Guirguis and Higa also used a nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and concealment efforts, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000. In addition, Higa prepared a false corporate income tax return for one of Guirguis’ entities that failed to report over $1.3 million in gross receipts.
In addition to the term of imprisonment, U.S. District Judge Helen Gillmor ordered Higa to serve three years of supervised released and to pay $2,045,544.97 (jointly and severally with his co-defendant Guirguis) in restitution to the IRS.
On June 27, Guirguis was sentenced to five years in prison. In addition, Judge Gillmor ordered Guirguis to serve three years of supervised released and to pay $3,078,157.81 in restitution to the IRS minus any payments already made to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Price thanked special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant United States Attorney Rebecca Perlmutter, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Electrical Engineer Convicted of Conspiring to Illegally Export to China Semiconductor Chips with Missile Guidance ApplicationsRead the Press Release
LOS ANGELES – An electrical engineer has been found guilty of multiple federal criminal charges related to a scheme to illegally obtain integrated circuits with military applications that were exported to China without the required export license, the Justice Department announced today.
Yi-Chi Shih, 64, a part-time Los Angeles resident, was found guilty on June 26 of conspiracy to violate the International Emergency Economic Powers Act (IEEPA), a federal law that makes illegal, among other things, certain unauthorized exports. The jury also found Shih guilty of mail fraud, wire fraud, subscribing to a false tax return, making false statements to a government agency, and conspiracy to gain unauthorized access to a protected computer to obtain information. Shih was convicted of all 18 counts in a federal grand jury indictment.
The guilty verdicts were announced today, one day after United States District Judge John A. Kronstadt discharged the jury that returned the guilty verdicts last week. That jury previously had been scheduled today to consider allegations in the indictment against Shih that seek the forfeiture of hundreds of thousands of dollars. Judge Kronstadt, who presided over a trial that spanned seven weeks, decided on Monday that he will later consider the forfeiture allegations.
Judge Kronstadt will also schedule a sentencing hearing, where Shih will face a statutory maximum sentence of 219 years in federal prison.
“This defendant schemed to export to China semiconductors with military and civilian uses, then he lied about it to federal authorities and failed to report income generated by the scheme on his tax returns,” said United States Attorney Nick Hanna. “My office will enforce laws that protect our nation’s intellectual property from being used to benefit foreign adversaries who may compromise our national security.”
“The Department’s China Initiative is focused on preventing and prosecuting thefts of American technology and intellectual property for the benefit of China,” said Assistant Attorney General for National Security John C. Demers. “The defendant has been found guilty of conspiring to export sensitive semiconductor chips with military applications to China. I would like to thank the prosecutors and agents, including those from the Royal Canadian Mounted Police, for their efforts in this successful investigation and prosecution.”
“The FBI is committed to protecting institutions from adversaries who seek to steal sensitive American technology under the guise of research,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We will continue to work collaboratively with our federal partners to identify and hold accountable individuals who plunder our research or intellectual property at the expense of the American people and our national security.”
According to the evidence presented at trial, Shih and co-defendant Kiet Ahn Mai, 65, of Pasadena, conspired to illegally provide Shih with unauthorized access to a protected computer of a United States company that manufactured wide-band, high-power semiconductor chips known as monolithic microwave integrated circuits (MMICs).
Shih defrauded the U.S. company out of its proprietary, export-controlled items, including its design services for MMICs, according to trial evidence. As part of the scheme, Shih accessed the victim company’s computer systems via its web portal after Mai obtained that access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the United States. Shih used Mai to conceal his true intent to export the U.S. company’s MMICs to the People’s Republic of China. The MMICs that Shih sent to China required a license for national security reasons from the Commerce Department before being exported to China, and a license was never sought or obtained for this export.
The victim company’s semiconductor chips have a number of commercial and military applications, and its customers include the Air Force, Navy, and the Defense Advanced Research Projects Agency. MMICs are used in missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures and radar applications.
“This investigation demonstrates the Office of Export Enforcement’s strong commitment to enforcing our nation’s export control and public safety laws,” said Richard B. Weir, Special Agent in Charge of the U.S. Department of Commerce’s Office of Export Enforcement. “We will continue to work with our law enforcement partners to identify, deter, and keep the most sensitive U.S.-origin goods and technology out of the most dangerous hands.”
Shih was the President of Chengdu GaStone Technology Company (CGTC), a Chinese company that was building a MMIC manufacturing facility in Chengdu. In 2014, CGTC was placed on the Commerce Department’s Entity List, according to court documents, “due to its involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and items for unauthorized military end use in China.”
Shih used a Hollywood Hills-based company he controlled – Pullman Lane Productions, LLC – to funnel funds provided by Chinese entities to finance the manufacturing of the MMICs by the victim company. Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC “on the basis of its involvement in activities contrary to the national security and foreign policy interests of the United States,” according to court documents.
“Today’s announcement serves as a reminder that the government will hold individuals accountable who intend to profit from the theft of United States protected technology and conceal the proceeds derived from this activity,” stated IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “The IRS plays an important role in tracing illicit funds through both domestic and international financial intuitions. Let this conviction serve as a warning to those who are considering similar conduct.”
Shih and Mai were indicted in this case in January 2018. Mai pleaded guilty in December 2018 to one felony count of smuggling and is scheduled to be sentenced on September 19, at which time he will face a statutory maximum sentence of 10 years in federal prison.
This case was investigated by the Federal Bureau of Investigation; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement; and IRS Criminal Investigation, with assistance from the Royal Canadian Mounted Police.
The matter is being prosecuted by Assistant United States Attorneys Judith A. Heinz, Melanie Sartoris, Khaldoun Shobaki and William Rollins of the National Security Division, Assistant United States Attorney James C. Hughes of the Major Frauds Section, Assistant United States Attorney John J. Kucera of the Asset Forfeiture Section, and Trial Attorney Matthew Walczewski of the Department of Justice’s National Security Division.
Electrical Engineer Convicted of Conspiring to Illegally Export to China Semiconductor Chips with Missile Guidance ApplicationsRead the Press Release
An electrical engineer has been found guilty of multiple federal criminal charges, including engaging in a scheme to illegally obtain integrated circuits with military applications that later were exported to China without the required export license. Assistant Attorney General for National Security John C. Demers, U.S. Attorney Nicola T. Hanna for the Central District of California and Assistant Director in Charge Paul Delacourt of the FBI’s Los Angeles Field Office made the announcement.
After a six-week trial, Yi-Chi Shih, 64, a part-time Los Angeles resident, was found guilty on June 26 of conspiracy to violate the International Emergency Economic Powers Act (IEEPA), a federal law that makes illegal, among other things, certain unauthorized exports. The jury also found Shih guilty of mail fraud, wire fraud, subscribing to a false tax return, making false statements to a government agency and conspiracy to gain unauthorized access to a protected computer to obtain information. Shih was convicted of all 18 counts in a federal grand jury indictment.
United States District Judge Kronstadt, who presided over a trial that spanned seven weeks in Los Angeles, California, decided on Monday that he will later consider the forfeiture allegations in the indictment, where the government is seeking that Shih should forfeit hundreds of thousands of dollars. Judge Kronstadt discharged the jury that previously had been scheduled today to consider forfeiture allegations against Shih.
United States District Judge John A. Kronstadt will also schedule a sentencing hearing, where Shih faces a statutory maximum sentence of 219 years in federal prison.
“The Department’s China Initiative is focused on preventing and prosecuting thefts of American technology and intellectual property for the benefit of China,” said Assistant Attorney General Demers. “The defendant has been found guilty of conspiring to export sensitive semiconductor chips with military applications to China. I would like to thank the prosecutors and agents, including those from the Royal Canadian Mounted Police, for theirs efforts in this successful investigation and prosecution.”
“This defendant schemed to export to China semiconductors with military and civilian uses, then he lied about it to federal authorities and failed to report income generated by the scheme on his tax returns,” said United States Attorney Nick Hanna. “My office will enforce laws that protect our nation’s intellectual property from being used to benefit foreign adversaries who may compromise our national security.”
“The FBI is committed to protecting institutions from adversaries who seek to steal sensitive American technology under the guise of research,” said Assistant Director in Charge Delacourt. “We will continue to work collaboratively with our federal partners to identify and hold accountable individuals who plunder our research or intellectual property at the expense of the American people and our national security.”
According to the evidence presented at trial, Shih and co-defendant Kiet Ahn Mai, 65, of Pasadena, California, conspired to illegally provide Shih with unauthorized access to a protected computer of a United States company that manufactured wide-band, high-power semiconductor chips known as monolithic microwave integrated circuits (MMICs).
Shih defrauded the U.S. company out of its proprietary, export-controlled items, including its design services for MMICs, according to trial evidence. As part of the scheme, Shih accessed the victim company’s computer systems via its web portal after Mai obtained that access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the United States. Shih and Mai concealed Shih’s true intent to transfer the U.S. company’s products to the People’s Republic of China. The MMICs that Shih sent to China required a license from the Commerce Department before being exported to China, and a license was never sought or obtained for this export.
The victim company’s semiconductor chips have a number of commercial and military applications, and its customers include the Air Force, Navy and the Defense Advanced Research Projects Agency. MMICs are used in missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures and radar applications.
The semiconductor chips at the heart of this case were shipped to Chengdu GaStone Technology Company (CGTC), a Chinese company that was building a MMIC manufacturing facility in Chengdu. Shih was the president of CGTC, which in 2014 was placed on the Commerce Department’s Entity List, according to court documents, “due to its involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and items for unauthorized military end use in China.”
Shih used a Hollywood Hills-based company he controlled – Pullman Lane Productions LLC – to funnel funds provided by Chinese entities to finance the manufacturing of MMICs by the victim company. Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC “on the basis of its involvement in activities contrary to the national security and foreign policy interests of the United States,” according to court documents.
Shih and Mai were indicted in this case in January 2018. Mai pleaded guilty in December 2018 to one felony count of smuggling and is scheduled to be sentenced on September 19, at which time he will face a statutory maximum sentence of 10 years in federal prison.
This case was investigated by the Federal Bureau of Investigation; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement; and IRS Criminal Investigation, with assistance from the Royal Canadian Mounted Police.
The matter is being prosecuted by Assistant United States Attorneys Judith A. Heinz, Melanie Sartoris, Khaldoun Shobaki and William Rollins of the National Security Division, Assistant United States Attorney James C. Hughes of the Major Frauds Section, Assistant United States Attorney John J. Kucera of the Asset Forfeiture Section, and Trial Attorney Matthew Walczewski of the Department of Justice’s National Security Division.
Doctor Who Operated Oxycodone and Fentanyl Diversion Scheme Sentenced to 5 Years in PrisonRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ERNESTO LOPEZ, a New York-licensed medical doctor who wrote thousands of medically unnecessary prescriptions for oxycodone and fentanyl over an approximately three-year period, was sentenced today in Manhattan federal court to five years in prison. LOPEZ was previously found guilty, in February 2019, of conspiring to distribute narcotics and distribution of narcotics after a jury trial before United States District Judge Denise L. Cote, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman stated: “Today’s sentence serves as a message that a doctor who doles out narcotics without regard to his patients’ medical needs and addictions is no more than a drug dealer. Lopez will serve a substantial sentence for his reprehensible conduct, having betrayed the public’s and his patients’ trust for his own financial gain.”
According to the allegations contained in the Complaint, Indictment, Superseding Indictment, evidence presented during the trial, and statements made in Manhattan federal court:
Oxycodone and fentanyl are highly addictive, narcotic opioids that are used to treat severe pain conditions. Oxycodone prescriptions are in high demand and have significant cash value to drug dealers, who sell them on the street for large amounts of money. For example, 30-milligram oxycodone tablets have a current street value of approximately $20 to $30 per pill in New York City, with street prices even higher in other parts of the country. Thus, a single prescription for 120 30-milligram tablets of oxycodone can net an illicit distributor $2,400 in cash or more. Fentanyl patches are also commonly abused and sold for cash on the street by drug dealers. Because it is so potent, fentanyl frequently results in overdoses that can lead to respiratory depression and death.
From approximately 2015 until his arrest in November 2017, LOPEZ operated medical clinics located in New York, New York; Jackson Heights, New York; and Franklin Square, New York, where LOPEZ wrote thousands of prescriptions for large quantities of oxycodone and fentanyl in exchange for cash payments. In total, LOPEZ wrote prescriptions for nearly one million oxycodone pills, with a street value of approximately $20 million. LOPEZ typically charged $200 to $300 in cash for patient visits, despite the fact that nearly 80 percent of his patients maintained health insurance. During many of these visits, LOPEZ performed no meaningful physical examination of patients and did not attempt to diagnose them. LOPEZ prescribed large quantities of oxycodone, most frequently 120 30-milligram tablets, and fentanyl patches, often to patients who demonstrated clear signs of drug addiction and whose test results showed that they were not taking – and therefore were redistributing – the oxycodone he prescribed.
In addition to prescribing medically unnecessary oxycodone and fentanyl patches, LOPEZ also prescribed to many patients a fentanyl-based spray intended to treat breakthrough cancer pain, for which those patients had no legitimate medical need. In connection with those prescriptions, LOPEZ submitted an application to INSYS Therapeutics to join a “speaker’s program,” wherein doctors received payments in exchange for prescribing the fentanyl-based spray to patients.
At the time of LOPEZ’s arrest, agents recovered hundreds of fentanyl sprays and patches from the closet of his residence, along with approximately $729,000 in cash.
* * *
In addition to the prison sentence, LOPEZ, 76, of Flushing, New York, was sentenced to three years of supervised release, was ordered to pay a fine in the amount of $50,000, and was ordered to forfeit $1,400,000.
Mr. Berman praised the outstanding investigative work of the DEA’s New York Tactical Diversion Squad. Mr. Berman also thanked the New York City Police Department, the Department of Health and Human Services, the New York City Department of Investigation, the New York State Office of the Medicaid Inspector General, the New York City Human Resources Administration, the Nassau County Police Department and Asset Forfeiture Unit, the Nassau County District Attorney’s Office, the New York County District Attorney’s Office, and the New York State Department of Financial Services for their work on the investigation.
Parts of this case were conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Nicholas Folly, Elizabeth Hanft, Michael McGinnis, and Daniel Richenthal are in charge of the prosecution.
District Man Sentenced to 12 Years in Hold-Up of Northwest Washington DinerRead the Press Release
WASHINGTON – Willie Quinones, 28, of Washington, D.C., was sentenced today to 12 years in prison on charges stemming from a hold-up robbery that took place in October 2016 at a diner in Northwest Washington.
The announcement was made by U.S. Attorney Jessie K. Liu, Charles A. Dayoub, Acting Special Agent in Charge, Criminal Division, FBI Washington Field Office, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Quinones pled guilty in March 2019 in the U.S. District Court for the District of Columbia to charges of interference with interstate commerce by robbery (Hobbs Act) and using, carrying, brandishing, and possessing a firearm during a crime of violence. The plea, which was contingent upon the Court’s approval, called for a sentencing maximum of 20 years in prison for the robbery charge and a mandatory minimum of seven years for the firearms offense. The Honorable Tanya S. Chutkan accepted the plea and Quinones was sentenced on July 02, 2019, to 70 months on the robbery charge and 84 months on the firearm charge. Following his prison term, Quinones will be placed on three years of supervised release.
According to plea documents, on Oct. 17, 2016, at approximately 3:12 a.m., Quinones and an accomplice entered the Steak-N-Egg restaurant in the 4700 block of Wisconsin Avenue NW. Quinones approached employees to gain access to the cash register while his accomplice
pointed a gun at them. The employees raised their hands into the air and kneeled on the floor. Quinones then took money from the cash register before demanding access to a safe.
When an employee insisted that they did not have a key to the safe, Quinones yelled to his accomplice to shoot them. The accomplice, meanwhile, held the gun and pointed it around the room at people inside the restaurant. The accomplice asked which person to shoot, and Quinones responded that the accomplice could shoot all of them.
No shots were fired, and Quinones then approached and robbed three customers in the establishment. The two then fled the diner.
At the time of the robbery, Quinones was on probation for an armed robbery in Prince George’s County, Md., and was wearing a GPS tracking device. He was located at 11 a.m., hours after the crime, by MPD officers at an apartment building in Northeast Washington. He was arrested and has remained in custody ever since. No others have been arrested in the case.
This case was investigated by the FBI’s Washington Field Office and the Metropolitan Police Department with assistance from the U.S. Park Police. It is being prosecuted by Assistant U.S. Attorney Gregory P. Rosen, with assistance from former Assistant U.S. Attorney Kara Traster.
Defendants Sentenced in Federal CourtRead the Press Release
Bluefield, W.Va. - United States Attorney Mike Stuart announced today that two defendants were sentenced to prison in federal court in Bluefield. Senior United States District Judge David A. Faber imposed the sentences.
Alvin Gardner, 31, of Bluefield, was sentenced to 151 months in prison for distribution of oxymorphone. Gardner pled guilty in February, admitting that he sold a quantity of oxymorphone to an informant on August 15, 2018, in Bluefield. He further admitted that he sold oxymorphone to an informant on three other occasions in August of 2018, and that on August 21, 2018 authorities found 193 oxymorphone pills, 165 oxycodone pills and $4655 in his Bluefield residence. The case was investigated by the Southern Regional Drug and Violent Crime Task Force under the Bluefield Pill Initiative, part of a joint law enforcement effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illegal distribution of prescription pills and other drugs in communities across Southern West Virginia.
Antonio Lancaster, 36, an inmate at the Federal Correctional Institution at McDowell, was sentenced to 15 months in prison for possession of a weapon by an inmate. Lancaster pled guilty in March, admitting that on December 6, 2018, he possessed a handcrafted weapon known as a “shank” while he was incarcerated at the prison. The case was investigated by the Federal Bureau of Prisons.
“Two more convicted felons headed to the federal pen,” said United States Attorney Mike Stuart. “On average, 130 people each day die from opioids. 130 people. We have super-charged enforcement efforts and we are making a difference. We have taken a ‘tough on crime’ approach. Those in our community that break federal law, cause violence on our streets, and aid the deterioration of the social fabric of our families and communities will not be treated with kid gloves by this office. And once prosecuted and incarcerated, we fully expect each inmate to follow the rules. There is simply no excuse for breaking the law, being convicted and sentenced, and, while incarcerated, placing our prison guards and workers in harm’s way. No excuse whatsoever.”
The cases were prosecuted by Assistant United States Attorney John File.
Defendants Admit Coordinated Fraud on San Diego Bankruptcy CourtRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709 or Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – July 2, 2019
SAN DIEGO – Two residents of Laguna Beach admitted today to perpetrating a complicated scheme to defraud the bankruptcy court using sham transactions, fake people, and lies under oath.
During a hearing this morning before U.S. Magistrate Judge Barbara L. Major, both Evan P. Dameshek and David Greg Leppo pleaded guilty to Bankruptcy Fraud.
Dameshek, 57, owned and operated TriPharma LLC, a Laguna Beach company with claims against Imaginetix, Inc.—a company in bankruptcy before U.S. Bankruptcy Judge Margaret Mann. When Judge Mann directed Imaginetix to pay TriPharma’s former attorney, who held the money based on a fee dispute, Dameshek and Leppo devised a scheme to defraud all of them. Specifically, Dameshek and Leppo admitted in their guilty pleas that they created a fake agreement to make it appear that $3.2 million of TriPharma’s claims were sold to Leppo’s offshore company, Dutch Harbour Financial.
To make the fake “purchase” seem real, Dameshek and Leppo arranged for Dameshek’s associate to wire $200,000 to Leppo’s company, which Leppo then used to “purchase” Tripharma’s claim. Dameshek admitted that he actually returned the “purchase” money to his associate the same day it was received, minus $40,000 that Leppo kept for himself.
Leppo, also 57, admitted to directing two of his employees to sign agreements on behalf of Dutch Harbour, and using the name “David Greg” instead of his real full name, in order to distance himself from the sham transaction.
Dameshek admitted that after completing the phony sale, he instructed Leppo to send a letter as “David Greg” to Imaginetix, demanding money on Dutch Harbour’s behalf, in violation of the bankruptcy court’s order. When Imaginetix refused, Dameshek posed as “Dutch Harbour” to contact Imaginetix’s creditors, and made the same demand.
Based on the fraud, a payment of over $282,000 was made to “Dutch Harbour” before the bogus scheme came to light. Dameshek, however, persisted with the fraud by filing a declaration as “Robert Paige” – a person he invented – falsely claiming that the sham purchase was a real transaction.
“White collar criminals cannot escape justice by dressing up their lies in complex transactions or overseas shell companies,” said U.S. Attorney Robert Brewer. “The entire judicial process depends upon witnesses telling the truth. Our office will hold accountable anyone who tries to defraud the court—whether by simple perjury, or an elaborate scheme like this one.”
“The FBI is dedicated to uncovering all criminal conduct in the cases we investigate,” said Special Agent in Charge Scott Brunner. “This complicated fraud scheme, which has the effect of degrading the integrity of the bankruptcy system, is another example of the FBI’s determination to ensure no stone goes unturned to reveal the illegal acts of Defendants like Mr. Leppo and Mr. Dameshek.”
Dameshek and Leppo are scheduled to be sentenced on September 16, 2019, before U.S. District Judge Anthony J. Battaglia.
Leppo was also one of 12 individuals indicted in July 2016 for his involvement in Segal’s Lucky Lady Sports Book. On April 4, 2019, Leppo pleaded guilty to running an illegal gambling business in that matter in case number 16-cr-1695-BEN, which is now set for sentencing on September 16, 2019, before United States District Judge Roger T. Benitez.
DEFENDANTS Case Number 19-cr-0903-AJB
Evan P. Dameshek Laguna Beach, CA Age: 57
David Greg Leppo Laguna Beach, CA Age: 57
SUMMARY OF CHARGES
Bankruptcy Fraud – Title 18, U.S.C., Section 157
Maximum penalty: Five years in prison, $250,000 fine (or twice the pecuniary gain or loss), restitution and forfeiture.
DEFENDANT Case Number 16-cr-1695-BEN
David Greg Leppo Laguna Beach, CA Age: 57
SUMMARY OF CHARGES
Illegal Gambling Business – Title 18, U.S.C., Section 1955
Maximum penalty: Five years in prison, $250,000 fine (or twice the pecuniary gain or loss), forfeiture.
AGENCY
Federal Bureau of Investigation
Debt Collector Sentenced to 6 Years in Prison for FraudRead the Press Release
SACRAMENTO, Calif. — Charles V. Stanley Jr., 65, of Agua Dulce, was sentenced today by U.S. District Judge John A. Mendez to six years in prison for conspiring to commit bank fraud and wire fraud, U.S. Attorney McGregor W. Scott announced.
According to court documents, Stanley was the owner and operator of Creditor Specialty Service Inc. (CSS), a debt collection company that operated in California, Oregon, and Nevada. Various companies contracted with CSS to collect debts, including credit unions based in Folsom, Sacramento, and Bakersfield. At Stanley’s direction, CSS employees collected money from debtors but underreported to creditors the amounts CSS actually collected. During the scheme, Stanley caused CSS to file lawsuits or settle with debtors without client authorization. After one credit union terminated its contract with Stanley, he continued to demand and collect money from its debtors, and persisted in this fraudulent conduct even after a court ordered Stanley to cease collecting from the credit union’s debtors.
Evidence was presented at sentencing that Stanley’s business maintained three sets of books and that Stanley used about $839,608 of the collected funds for his own personal spending. He also used funds to pay other clients to whom CSS owed money and to cover CSS’s operating costs. Stanley’s conspiracies and schemes caused clients and debtors to lose over $4 million.
This case was the product of an investigation by the FBI and the IRS Criminal Investigation. Assistant U.S. Attorney Matthew Segal prosecuted the case.
Daniel Castelo Sentenced to 120 Months in Federal Prison for His Role in Federal Drug Trafficking OrganizationRead the Press Release
Memphis, TN – Daniel Castelo, 43, of Memphis was sentenced to 120 months in prison for his role in a conspiracy to distribute methamphetamine, cocaine and marijuana. U.S. Attorney D. Michael Dunavant announced the sentence today.
According to information presented in court, Castelo transported large shipments of cocaine, heroin, and marijuana, via 18-wheeler for his brother, Lorenzo Castelo’s drug trafficking organization. Castelo was charged with nine others in a 15-count superseding indictment on January 18, 2019. The indictment followed a six-month investigation involving agents of the FBI as well as other federal and state agencies in this joint operation.
On June 26, 2019, U.S. District Judge Sheryl H. Lipman sentenced Castelo to 120 months imprisonment. He was also ordered to serve five years supervised release. Judge Lipman also sentenced his brother Lorenzo Castelo to 300 months in federal prison along with five years of supervised release on January 18, 2019.
This prosecution is part of an extensive investigation by the Organized Crime and Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
U.S. Attorney D. Michael Dunavant said: "Distribution of illegal narcotics is not a victimless crime. In order to prevent needless addiction, injury, violence, and death in our communities, we must disrupt and dismantle drug trafficking organizations that deliver this deadly poison to citizens in West Tennessee. This significant sentencing of the leader of the organization will do just that, and I commend our federal and local law enforcement partners for their impactful work in this important case."
"This sentencing demonstrates the strength of joint local, state, and federal law enforcement efforts to investigate and dismantle drug trafficking organizations that seek to pollute our communities," said M.A. Myers, Special Agent in Charge of the Memphis Field Office of the federal Bureau of Investigation. "The FBI, along with all of our law enforcement partners, will continue to pursue and bring to justice anyone who engages in these crimes."
"Identifying and investigating drug trafficking organizations is one of Homeland Security Investigations major priorities to protect the public from the serious harm these criminals inflict without any regard for the violence and public health damage they cause," said John Condon, Acting Special Agent in Charge of Homeland Security Investigations (HSI) Nashville. "This case also illustrates the importance of collaborative working relationships between HSI and our federal, state and our local law enforcement partners to keep communities safe, and HSI is appreciative of their cooperation as well as the U.S. Attorney’s office in successfully bringing these individuals to justice."
MPD Director Michael Rallings said: "We will continue to work collective to identify and apprehend those who choose to bring illegal drugs through our city. We will not tolerate it and these criminals will be caught."
This case was investigated by the Federal Bureau of Investigation Safe Streets Task Force; Department of Homeland Security – Homeland Security Investigations (HSI); and the Memphis Police Department.
Assistant U.S. Attorney Jerry Kitchen and Gregory D. Allen prosecuted this case on behalf of the government.
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Crips Gang Member Charged with RacketeeringRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a superseding federal indictment charging JAHSON FEVERIE, a/k/a “Jah,” with racketeering conspiracy, including the September 27, 2016, murder of Yunior Manion, 21, in the Bronx, New York.
U.S. Attorney Geoffrey Berman said: “As alleged, the defendant was a member of a violent gang who killed an innocent young man in a pointless, gang-related dispute. We thank the FBI and the NYPD for their outstanding work investigating this terrible murder. We will continue our efforts with our law enforcement partners to prevent such senseless acts of violence.”
FBI Assistant Director William F. Sweeney Jr. said: “No one deserves to be killed at the hands of someone else, but Yunior Manion was innocently standing on the street and got caught in a gang war crossfire. He lost his life over drugs and guns. The FBI New York Metro Safe Streets Task Force won’t let the violence and crime these gangs thrive on go unchecked. We will use every method necessary to stop these criminals and restore safety in the communities they have terrorized.”
NYPD Commissioner James P. O’Neill said: “The individual arrested in this case allegedly took the life of an innocent bystander while recklessly discharging a firearm at a rival gang member. The NYPD and our partners in law enforcement will continue to target gun violence and street gangs by dismantling their networks and taking dangerous criminals off our streets.”
According to the Indictment[1]:
FEVERIE is a member of the “Wild Card” set of the Crips gang. Members of the gang sold drugs and used guns to further the aims of the Wild Cards. On September 27, 2016, FEVERIE fired a gun at rival gang members. FEVERIE instead hit and killed Yunior Manion, an innocent bystander.
* * *
FEVERIE, 18, of the Bronx, New York, was arrested this morning in the Bronx, New York, and presented and arraigned before U.S. Magistrate Judge Barbara C. Moses. This case is assigned to U.S. District Judge Loretta A. Preska.
FEVERIE is charged with conspiring to commit racketeering through the commission of various criminal acts, including murder, in violation of Title 18, United States Code, Section 1962(d), which carries a maximum term of life in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI and the NYPD.
The prosecution of this case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Adam Hobson, Gina Castellano, and Hagan Scotten are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Convicted Felon Sentenced for Federal Firearm OffenseRead the Press Release
BOSTON – A Lawrence man was sentenced yesterday in federal court in Boston for illegally possessing a firearm and ammunition.
Franklin Laras, 24, was sentenced by U.S. District Court Judge Allison D. Burroughs to 53 months in prison and three years of supervised release. In March 2019, Laras pleaded guilty to being a felon in possession of a firearm and ammunition.
On Aug. 2, 2018, the Lawrence Police Department received a 911 call from a landscaper working at nearby fast food restaurant reporting that a customer in the drive through lane had a firearm. The landscaper reported that the driver was in a black Acura, provided a partial plate number, and stated that the driver had pulled the firearm on him.
Two police officers responded to the call and found the landscaper who explained that when he approached the drive through lane, the driver of the Acura (later identified as Laras) came out of the car and confronted the landscaper, claiming that the landscaper had “blown s***” into his car. Although the landscaper immediately apologized, Laras lifted his shirt and grabbed a firearm tucked into his waistband. Before Laras did anything with the firearm, however, the female passenger in the Acura excited the car and pushed Laras back in the car before driving away.
Soon after, police officers were able to locate and stop the Acura, and disarm Laras. The landscaper subsequently confirmed that Laras was the man who had displayed the firearm earlier at the restaurant. The firearm recovered from Laras’ waistband was a Ruger Model SR 9mm semi-automatic handgun that contained 12 rounds of .45 caliber ammunition.
Laras had previously been convicted of a crime punishable by more than one year in prison and was therefore prohibited from possessing a firearm and ammunition.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, New England Field Division; Essex County District Attorney Jonathan W. Blodgett; and Lawrence Police Chief Roy P. Vasque made the announcement.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Convicted Felon Headed Back to Prison on Firearms ChargeRead the Press Release
CORPUS CHRISTI, Texas – A 29-year-old Corpus Christi resident has been ordered to federal prison following his conviction for being a previously convicted felon in possession of a firearm and ammunition, announced U.S. Attorney Ryan K. Patrick. Lorenzo Cervantes pleaded guilty Feb. 19, 2019.
Today, U.S. District Judge Nelva Gonzalez Ramos sentenced Cervantes to 77 months to be immediately followed by three years of supervised release.
On Nov. 21, 2018, law enforcement was on patrol at an apartment complex in the 4600 block of Kostoryz when they observed several individuals trespassing inside a vacant apartment. Cervantes was attempting to leave as authorities approached the door. However, upon seeing the officers, he ran back into the vacant apartment. As they attempted to detain Cervantes, the officers discovered a loaded .40 caliber semi-automatic handgun on the floor next to him.
Cervantes was previously convicted of multiple felony offenses, including being a felon in possession of a firearm. As such, he is prohibited from possessing firearms and ammunition per federal law.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Corpus Christi Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Clark County Man Sentenced to 5+ Years in Prison for Dealing Methamphetamine while on Supervised Release for Gun CrimeRead the Press Release
A 33-year-old resident of Clark County, Washington was sentenced July 1, 2019 to 66 months in prison for distributing methamphetamine, announced U.S. Attorney Brian T. Moran. JOSHUA ADAM HOOVER was on supervised release for illegally selling a firearm in 2011, when he sold methamphetamine to a person working with law enforcement. U.S. District Judge Benjamin H. Settle imposed a four-year term of supervised release to follow this new prison term.
According to records filed in the case, HOOVER sold methamphetamine to the confidential source on two occasions in June and July 2018. The transactions were audio and video recorded and took place in the Battle Ground area of Clark County. HOOVER was arrested on State charges by Battle Ground PD officers on August 8, 2018. He was taken into federal custody on October 31, 2018. HOOVER pleaded guilty on February 7, 2019.
HOOVER has a lengthy criminal history including five felony convictions between 2003 and 2016.
The case was investigated by the Southwest Washington Interagency Gang Enforcement Team (also known as the FBI’s Safe Streets Taskforce), and the Battle Ground Police Department. It was prosecuted by Assistant United States Attorney Gregory A. Gruber.
City of Cleveland employee pleaded guilty to charges related to extortion, accepting bribes and other crimesRead the Press Release
A City of Cleveland employee pleaded guilty to charges related to extortion, accepting bribes and other crimes after he accepted below-market improvements on his property from a contractor seeking city business and directed city projects to benefit himself, his outside businesses, and his clients.
Khalil Ewais, 44, of Cleveland, is scheduled to be sentenced on October 16. He pleaded guilty to charges including Hobbs Act extortion, bribery, federal program theft, making false statements and filing false tax returns.
His brother Abdeljawad Ewais, of Cleveland, is charged with filing false tax returns and is scheduled for a change of plea hearing on July 8.
As detailed in the plea agreement, Ewais admitted to the following facts related to his crimes:
Ewais worked in the Mayor’s Office of Capital Projects (“MOCAP”) as the section chief of construction in the division of engineering and construction. In that capacity, he oversaw construction inspectors who inspect work on the city’s roads, bridges and sidewalks. He had a fiduciary duty to act in the best interests of the city and its citizens.
Ewais also owned and operated Pioneer Engineering, a private engineering and consulting business that did work for private clients. He also, along with Abedeljawad Ewais and other family members, owned commercial and residential rental properties in and around Cleveland.
Company 1 bid on jobs with the City of Cleveland. In April 2015, it was awarded a contract to perform most of the resurfacing of residential streets in certain wards of Cleveland for two years. Company 1 bid approximately $5.8 million for the work.
Khalil Ewais, in his job with the city, had input into whether Company 1 received additional contracts from the city. Company 1 could not receive payment for the work it did until Ewais certified it was done appropriately. He could also direct Company 1 to complete “corrective work” which would cost the company additional time and money. He could also use his official position to help Company 1 obtain faster payment for its services.
Ewais in August 2016 contacted multiple companies, including Company 1, about paving the parking lot adjacent to Captain’s Grill, a property at 6104 Storer Ave. that he and his brother owned. Quotes for the work ranged from $48,923 to $59,152.
Ewais contacted an owner of Company 1 on August 10, 2016, about the estimate for the parking lot and said “I need it to be in the $25K range.” The owner quickly responded, “I will do the job for a lump sum of $26,000.”
Even though the parking lot work was a private job for Ewais, he sent an email form his City email address to another City official regarding the sewer connection at the border of Ewais’s property and West 61st Street, and stated that “E&C [ MOCAP’s Division of Engineering & Construction] directed the roadway work and the connection fix in the street as part of the E&C Requirement Contract.” In fact, no City agency had directed any roadway work on West 61st Street at that time, and the work was related to Ewais’s private construction project.
Ewais also used his official position to cause the city to pay to repave most of the short public alleyway next to the parking lot, West 62nd Place. Around Oct. 25, 2016, Company 1— at the direction of Ewais — instructed a subcontractor to expand the scope of its work on the parking lot job to include milling and paving the part of West 62nd Place that adjoined the parking lot, but not the short additional distance to reach the home at the end of the alleyway.
The work was completed on Nov. 5, 2016, with the parking lot connected to West 62nd Place. Company 1 spent approximately $81,534 to complete the work. Ewais paid $31,336 for the work and Company 1 did not request any further payment.
In designating the portion West 62nd Place adjoining his property to be repaved, Ewais avoided the established process for selecting streets to be resurfaced. The city, through a contractor, had sought to rate the condition of all the streets in Cleveland leading up to the 2016 resurfacing program. The city’s pavement management group, which included Ewais, met to discuss the lowest-rated streets in each ward to recommend to the City Council members which streets to include as part of the resurfacing program. The list of streets to be resurfaced never included West 62nd Place, which never even received a rating in the evaluation process.
Ewais, without the necessary approvals and authorizations, created a task order to have West 62nd Place, the small alleyway next to the Captain’s Grill parking lot, resurfaced. As a result of Ewais’s actions, the City of Cleveland paid a total for $10,938 to have West 62nd Place resurfaced.
In December 2017, Ewais lied to federal agents when he was questioned about the repaving of West 62nd Place, falsely claiming that a Cleveland City Councilperson had selected West 62nd Place to be repaved.
Khalil Ewais also filed numerous false tax returns in which he failed to report rental income.
This case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, the U.S. Department of Housing and Urban Development – Office of Inspector General and the Cleveland Division of Police. It is being prosecuted by Assistant U.S. Attorneys Chelsea S. Rice and Elliot Morrison.
California man sentenced to 35 years for traveling to Atlanta to have sex with a nine-year-old childRead the Press Release
ATLANTA - Craig Alan Castaneda has been sentenced for traveling from San Diego, California, to Atlanta, Georgia, to have sex with a nine-year-old girl and enticing a minor to engage in illegal sexual activity.
“This sentence is a reminder of what child predators can expect if they seek to harm a child here,” said U.S. Attorney Byung J. “BJay” Pak. “There is no tolerance for their depraved conduct. Our mission is to protect citizens, especially the most vulnerable members of our community.”
“The severity of this sentence is the greatest message we can send to anyone who would even think about hurting a child in this way,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI won’t tolerate it, and we will continue to make predators like Castaneda a priority in our mission to uphold the Constitution and protect our citizens.”
According to U.S. Attorney Pak, the charges and other information presented in court: In early April 2015, an FBI agent acting in an undercover capacity posted an ad on Craigslist in which he portrayed himself as a mother in search of a “teacher” for her nine-year-old daughter. Craig Alan Castaneda responded to the ad the next day and described his previous experience in molesting children, including a child as young as four-years-old. He also said that had been “grooming” (that is, preparing) another child to be molested but that the family had moved away a few months earlier.
Castaneda continued to communicate with the undercover agent for the next several weeks, and he made plans to travel from San Diego to Atlanta. In one of his final communications with the undercover agent before boarding the plane, he instructed the mother to have sex toys and lubricant available. When he stepped off the plane at Hartsfield-Jackson Atlanta Airport on May 2, 2015, he was met by FBI agents and was taken into custody.
Later, friends staying at Castaneda’s apartment in California found that his computers contained suspected child pornography. The FBI searched the computers and found that he had hundreds of videos and images of children being sexually abused. They also found evidence that he paid minors to send him pornographic videos over Skype. Castaneda’s search history reflected that he had been searching Craigslist ads in eight states as well as Mexico for similar offers of sexual contact with children.
Craig Alan Castaneda, 40, of Imperial Beach, California, was sentenced by U.S. District Judge Eleanor L. Ross to 35 years in prison to be followed by 10 years of supervised release. He will also be required to register as a sex offender when he is released from prison. Castaneda was convicted on these charges at trial on December 12, 2018.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Nicholas Hartigan and Paul R. Jones prosecuted the case.
This case was brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Cabot Man Sentenced to 35 Years in Prison for Child PornographyRead the Press Release
LITTLE ROCK—A Cabot man was sentenced Tuesday on charges of attempted enticement of a minor, attempted production of child pornography, and possession of child pornography. United States District Court Judge Susan Webber Wright sentenced Robert Nathan Hensley, 57, to 420 months in federal prison. Cody Hiland, the United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI Little Rock Field Office, announced today’s sentencing.
During an online investigation in 2017, investigators placed an advertisement on Craigslist titled “young, fresh, petite.” The advertisement received hundreds of responses, and an undercover officer began texting some of those who responded to the ad, including Robert Hensley.
The undercover officer told Hensley he had a 14-year-old daughter, and Hensley told the officer to “bring her to me” because he had a “machine” that he would use to have sex with the child. Hensley also asked the undercover officer if he would “want to sell her” and offered $3,000 to buy the minor, stating, “She gets a lifetime of bondage and sex.” He also asked for nude photos of the minor.
Officers arranged to meet Hensley and drove to Cabot. Hensley provided his home address, where officers arrived and arrested him. They located a computer at his residence, which was examined and found to contain images of child pornography. On November 2, 2017, a grand jury indicted Hensley on charges of attempted enticement of a minor, attempted production of child pornography, and possession of child pornography. On March 5, 2019, Hensley was convicted by a jury on all counts.
“This defendant’s attempt to purchase a 14-year-old girl for sex is depraved behavior and will not be tolerated,” said U.S. Attorney Hiland. “Today’s lengthy sentence means this defendant is no longer free to prey upon the most vulnerable among us. Our office will continue to aggressively investigate and prosecute those who seek to victimize children.”
Before the 2017 investigation, Hensley had already been convicted of two sexual crimes involving minors. He had a 1996 conviction for sexual solicitation of a child and a 2003 conviction for criminal attempt to engage children in sexually explicit conduct. His prior convictions increased the mandatory minimum sentence in his case to 35 years. In addition to 35 years in prison, Judge Wright also sentenced Hensley to a lifetime of supervised release following his term of imprisonment.
The investigation was conducted by the FBI. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at http://www.justice.gov/edarTwitter: @EDARNEWS
CEO, CFO and Company Sentenced in Massive Pharmaceutical Scheme to Defraud, Launder Money and Obstruct JusticeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Dean Volkes, 55, Donna Fallon, 54, both of Long Island, NY, and Devos Ltd., doing business as Guaranteed Returns, also located in Long Island, were sentenced to five years’ incarceration, one year and one days’ incarceration, and five years’ probation, respectively, by U.S. District Judge Petrese Tucker. Additionally, Volkes and Guaranteed Returns were each ordered to forfeit $114,832,445.62 and pay restitution of $95,253,090.05, and Fallon was ordered to pay $515,221.89 in restitution. Volkes, Fallon, and the company were convicted at trial in March 2017 of mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements in connection with a scheme to steal money from clients who relied on the business to return unused pharmaceutical products.
Volkes was the President, Chief Executive Officer, and sole owner of Guaranteed Returns, a reverse pharmaceutical distributor located in Holbrook, New York. Fallon, who is Volkes’ sister, was the company’s Chief Financial Officer. As a reverse distributor, Guaranteed Returns managed the returns of pharmaceutical products for healthcare providers, including numerous hospitals, pharmacies, and long-term care facilities, as well as Department of Defense facilities. Pharmaceutical manufacturers often allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The evidence presented at trial proved that from approximately 1999 through 2014, Guaranteed Returns promised its clients that it would hold their “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, Guaranteed Returns, at CEO Volkes’ direction, stole indated drug products that it received from its clients, returned the drugs to manufacturers, and kept the refund money. Volkes created a system in which he classified clients as either “managed” or “unmanaged.” While both categories of clients were victimized, Volkes reserved special treatment for “unmanaged” clients by stealing what he could from them by ensuring that Guaranteed Returns kept the full value of the returned product for itself. The evidence demonstrated that through this fraud, Volkes and Guaranteed Returns stole more than $100 million from over 13,000 clients, including more than $20 million from numerous medical treatment facilities operated by the U.S. Department of Defense and other government agencies.
The evidence also showed that Volkes, Fallon, and Guaranteed Returns stole clients’ refund money by diverting a percentage of the refunds into internal company accounts, conspired to launder the proceeds of the fraud, and obstructed justice in connection with a grand jury investigation.
“The defendants and their company took advantage of their own clients, stealing millions of dollars, and then committed further crimes by attempting to cover up the fraud,” said U.S. Attorney McSwain. “This kind of fraud netted the defendants exactly what they deserve – a trip to prison. My Office and our law enforcement partners will not allow dishonest businesses like this to steal from customers – which, in this case, included American taxpayers.”
“At each turn, these defendants’ guiding principle was greed,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “For years, they ripped off clients – among them, the U.S. government – to the tune of millions of dollars. They’re now being held accountable for their scheme, and for their brazen attempts to cover it up by obstructing justice. The FBI and our federal partners won’t stand for criminals stealing from the government and the taxpayers who fund it.”
“These sentencings are the direct result of a joint effort by the Defense Criminal Investigative Service (DCIS), the FBI and the U.S. Attorney’s Office, Eastern District of Pennsylvania,” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. “The fraudulent conduct in this case was particularly egregious and undermined the integrity of the U.S. Defense Department’s procurement system. DCIS is committed to working with its law enforcement partners to identify, investigative and prosecute individuals and companies who defraud the U.S. Government and the American taxpayer.”
The case was investigated by the Defense Criminal Investigative Service and the Philadelphia office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick J. Murray.
Burnsville Man Sentenced to 324 Months in Prison for Violent KidnappingRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DONTAY LAVARICE REESE, 38, to 324 months in prison for a violent kidnapping. REESE, who pleaded guilty on February 13, 2019, was sentenced today before Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota. During the sentencing hearing Judge Schiltz commented that the defendant is extremely dangerous and the public needs to be protected from him. Judge Schiltz further remarked that Mr. Reese is an extraordinarily cruel and selfish person, with one of worst records [the Judge] had ever seen among federal detainees at the Sherburne County Jail.
A second indictment against REESE was unsealed on June 26, 2019, charging him with assaulting a federal law enforcement officer while in custody on the kidnapping charge at the Sherburne County Jail. [1]
“The strength and resilience of this victim has helped ensure the defendant is held accountable for his heinous crimes, and that our community is safe from a violent offender with a long criminal record,” said United States Attorney Erica H. MacDonald. “We are grateful for her courage. We are also thankful to the family who witnessed the defendant’s brutality and called the police. ”
"Mr. Reese will be spending a significant amount of time in prison thanks in large measure to the remarkable courage of the victim in this case," said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. "Today, we thank our law enforcement partners for their excellent work and focus our support on the victim for showing immeasurable strength throughout this most difficult time."
According to the defendant’s guilty plea and documents filed in court, in the early morning hours of August 6, 2017, REESE met the victim, T.M., in downtown Minneapolis. REESE offered T.M. a ride home; however, instead of driving her home, he drove her around the Twin Cities metro area against her will, and eventually drove her out of Minnesota and into Wisconsin. The defendant told the victim that he was going to take her “several states away” and use her to make money as a prostitute. The victim attempted to escape multiple times - each time she was captured and violently restrained and assaulted by REESE. A family witnessed one of the escape attempts in Foster, Wisconsin and called 911.
After the 911 call, the Wisconsin State Patrol began looking for the victim and the defendant. The victim was eventually able to free herself from the defendant, and found the Wisconsin State Patrol as she ran out of a wooded area off of Interstate 94 in Jackson County, Wisconsin. The victim’s wrists were bound and she was screaming for help. REESE came out of the same wooded area shortly after, fully naked and attempted to cross the interstate on foot. He was taken into custody.
These cases are the result of an investigation conducted by the FBI, Wisconsin State Patrol, Jackson County (Wisconsin) Sheriff’s Department, Eau Claire County (Wisconsin) Sheriff’s Department, the Minneapolis Police Department, and the Sherburne County Sheriff’s Office.
These cases are being prosecuted by Assistant U.S Attorney Angela Munoz-Kaphing.
Defendant Information:
DONTAY LAVARICE REESE, 38
Burnsville, Minnesota
Convicted:
- Kidnapping, 1 count
Sentenced:
- 324 months in prison
- 5 years of Supervised Release
- Restitution pending
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
[1] The charges contained in the second indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Burlington Man Sentenced to 60 Months in Prison for Possessing A Firearm SilencerRead the Press Release
GREENSBORO, N.C. –A Burlington man who possessed firearms silencers and discussed using them to shoot into a Raleigh federal building was sentenced to five years in prison on June 28, 2019, announced Matthew G.T. Martin, United States Attorney for the Middle District of North Carolina.
BOBBY JOHN KOBITO, age 56, pleaded guilty on March 22, 2019, to one count of possession of a firearm silencer. KOBITO was sentenced by United States District Judge N. Carlton Tilley, Jr. to 60 months of imprisonment, followed by 3 years of supervised release.
In January 2018, KOBITO traveled to a Raleigh mosque and asked about the credibility of a video on social media purportedly depicting a Raleigh Imam’s statements regarding killing persons of another faith. While KOBITO was friendly and non-confrontational during that visit, a Raleigh police officer who happened to be in the area saw binoculars and shooting targets in KOBITO’S car. The FBI then began an investigation to determine whether KOBITO planned to commit a criminal act in relation to the mosque.
Using an informant, the FBI engaged KOBITO through social media and later in person. KOBITO told the informant that he had done “hardcore recon” at the Raleigh mosque, but was now looking at a Raleigh government building that KOBITO believed was part of the National Security Agency (NSA), which KOBITO believed was spying on everyone. KOBITO told the informant of his desire to shoot into the federal building in Raleigh where he believed the NSA was located. KOBITO later discussed making and possessing a firearms silencer, to be used in the planned shooting of the federal building. When a search warrant for KOBITO’S Burlington apartment was executed on October 25, 2018, two devices found were later determined by the ATF to qualify as firearms silencers. KOBITO had not obtained the registration required under federal law in order to possess those silencers.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and prosecuted by Assistant United States Attorney Terry M. Meinecke for the Middle District of North Carolina.
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Brockton Man Arrested on Federal Firearms ChargeRead the Press Release
BOSTON – A Brockton man was arrested on Friday, June 28, 2019, and charged in federal court in Boston with a firearms offense.
Tyrell Hampton, 30, was charged with being a felon in possession of firearms.
According to the complaint, Hampton sold two .9mm Luger pistols and 21 rounds of .9mm ammunition to an undercover officer in Brockton on June 27, 2019. In phone communications preceding this transaction, Hampton allegedly indicated that the buyer should move fast because “they [the firearms offered for sale] go quick but I can always get more.”
According to court records, Hampton has previously been convicted of multiple felony offenses including drug convictions and a prior firearm conviction. As a felon, Hampton is barred under federal law from possessing a firearm.
The charge of possessing a firearm after being convicted of a felony carries a sentence of no greater than 10 years in prison, three years of supervised release, and a $250,000 fine. In addition, if Hampton is deemed to be an Armed Career Criminal, he will face an enhanced mandatory minimum sentence of 15 years. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, New England Division, made the announcement today. Valuable assistance was provided by the Massachusetts State Police and the Brockton Police Department. Assistant U.S. Attorney Bill Abely of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Blair County Man Sentenced for Stealing U.S. Railroad Retirement Board Disability PaymentsRead the Press Release
JOHNSTOWN, Pa. - A resident of Roaring Springs, Pa., has been sentenced in federal court to three years’ probation with conditions of 180 days of home detention, and restitution due and owing to the United States Railroad Retirement Board in the amount of $50,985.21, on his conviction of theft of government funds, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence upon Glenn P. Rhykerd, 69.
According to information presented to the court, from Jan. 1, 2015, to May 31, 2016, Rhykerd did receive and convert falsely to his own use a total of $50,985.21 in United States Railroad Retirement Board disability payments made to him to which he was not entitled.
Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Mr. Brady commended the United States Railroad Retirement Board, Office of Inspector General, for the investigation that led to the successful prosecution of Rhykerd.
RRB-OIG Inspector General Martin J. Dickman said: "Lying in disability applications is a serious crime that honest taxpayers cannot abide, and that the RRB-OIG will aggressively continue to root out. Through our ongoing investigation, we will continue to hold accountable those who would abuse a system that is meant for legitimately disabled workers who have served our nation’s railroads. I would like to thank the agents from my Office for their outstanding work on this investigation, as well as our law enforcement partners at the United States Attorney’s Office.
Bank General Counsel Pleads Guilty to Conspiracy to Defraud First NBC BankRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that GREGORY ST. ANGELO (“ST. ANGELO”), age 54, a resident of St. Tammany Parish, pled guilty Friday, June 28, 2019 to conspiring to defraud First NBC Bank, the New Orleans-based bank that failed in April of 2017.
According to court documents, from in or around 2006 through the fall of 2016, ST. ANGELO was the general counsel of First NBC Bank. During this time, he and several businesses owned or controlled by him (the “Entities”) were First NBC Bank borrowers. Bank President A was a founder of First NBC Bank and acted as its president and Chief Executive Officer from in or around May 2006, until in or around December 2016. From in or around 2006 through April 2017, Bank Officer B was employed by First NBC Bank as its Chief Credit Officer, and was responsible for, among other things, the overall quality of the bank’s lending function.
Beginning at a time unknown, but at least in or around 2006, through in and around April 2017, in the Eastern District of Louisiana and elsewhere, the defendant, ST. ANGELO, and others known and unknown, conspired to defraud First NBC Bank by means of false and fraudulent pretenses, representations, and promises, relating to a material fact.
The purpose of the conspiracy was for the defendant, ST. ANGELO, Bank President A, Bank Officer B, and others to enrich themselves unjustly by disguising the true financial status of ST. ANGELO, the Entities, and other borrowers, concealing the accurate performance of loans, and misrepresenting the nature of payments to ST. ANGELO and certain Entities.
ST. ANGELO, Bank President A, Bank Officer B, and others sought to accomplish the conspiracy by engaging in the below activities:
ST. ANGELO, Bank President A, Bank Officer B, and others provided First NBC Bank with materially false and fraudulent documents and personal financial statements, which, among other things, overstated the value of ST. ANGELO’s and the Entities’ assets, understated their liabilities, and omitted material information. The materially false and fraudulent personal financial statements, collateral summaries, and other documents concealed ST. ANGELO’s and the Entities’ true financial condition.
Bank President A, Bank Officer B, and others disguised ST. ANGELO’s and the Entities’ true financial condition by, among other things, issuing new loans to ST. ANGELO and certain Entities to pay older loans that ST. ANGELO was unable to repay and to cover his overdrafts. The new loans then appeared to be current, while the old loans and overdrafts appeared to have been paid. In reality, the new loans were designed to avert the downgrading or impairment of ST. ANGELO’s and several Entities’ loans and to avoid reporting them as nonperforming or losses to the bank.
Another means the conspirators used to disguise ST. ANGELO’s and the Entities’ true financial condition was to extend the maturity date of older loans on which ST. ANGELO was unable to make payments, which allowed First NBC Bank to avoid downgrading, impairing, or reporting the loans as nonperforming or losses to the bank.
Bank President A, Bank Officer B, and others funded fraudulent tax credit investments that First NBC Bank purportedly made in certain Entities owned by ST. ANGELO. In reality, the supposed investments simply funneled money from First NBC Bank’s general ledger to ST. ANGELO and certain Entities, so that ST. ANGELO could make his loan payments and cure overdrafts, and so the bank could avoid downgrading, impairing, or reporting the loans as nonperforming or losses to the bank.
On multiple occasions, Bank President A and ST. ANGELO executed false documents entitled “Agreements to Purchase Tax Credits” designed to make it appear that First NBC Bank was paying ST. ANGELO and certain Entities money in exchange for ownership interests in entities supposedly owned by ST. ANGELO. In reality, these agreements were a way for Bank President A, Bank Officer B, and ST. ANGELO to justify the diversion of bank funds to ST. ANGELO and certain Entities to cure overdrafts and avoid reporting requirements. On multiple occasions, Bank Officer B directed the disbursement of payments to ST. ANGELO and certain Entities from First NBC Bank’s general ledger, purportedly for tax credit investments, knowing that the tax credit investments were false.
Yet another means by which Bank President A, ST. ANGELO, Bank Officer B, and others concealed the true financial condition of ST. ANGELO’s and certain Entities’ loans was to lend funds to ST. ANGELO’s associates as nominees. Bank President A and ST. ANGELO caused the nominees to sign loan documents, making it appear that the nominee entity was taking out the loan solely for its own use. In fact, the loan proceeds often were paid to ST. ANGELO or certain Entities, not the nominees, and were, in part, used to pay ST. ANGELO’s and the Entities’ existing debts to First NBC Bank or to enrich ST. ANGELO and certain Entities.
ST. ANGELO, Bank President A, and Bank Officer B caused employees of First NBC Bank to transfer the nominee loan proceeds directly to ST. ANGELO’s or the Entities’ deposit accounts, when ST. ANGELO, Bank President A, and Bank Officer B knew the loans were not solely for the nominee, but benefitted ST. ANGELO, who was not named in the loan documents or listed as a guarantor.
By April 28, 2017, First NBC Bank had advanced approximately $46 million to ST. ANGELO and the Entities based on the false personal financial statements and practice of advancing new loan proceeds to cover overdrafts and make payments for prior loans. First NBC Bank had also paid ST. ANGELO an additional $9.6 million dollars in false tax credit investment money.
ST. ANGELO could face up to 30 years’ imprisonment, a fine of more than $1 million or twice the gross gain to him or the gross loss of any victims, five years of supervised release, and a special assessment of $100.
Judge Carl J. Barbier set ST. ANGELO’s sentencing date for October 3, 2019 at 9:30am.
This case is being investigated by the Federal Bureau of Investigation; the Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau and Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman, Matthew R. Payne, Nicholas D. Moses, and J. Ryan McLaren are in charge of the prosecution.
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