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Friday 29 March 2019
Springfield Man Pleads Guilty to Armed RobberyRead the Press Release
BOSTON – A Springfield man pleaded guilty today in federal court in Springfield in connection with an armed robbery of a convenience store and firearms charges.
Emilio Rivera, 30, pleaded guilty to one count of interference with commerce by robbery, one count of using a firearm in relation to crime of violence, and one count of being a felon in possession of a firearm and ammunition. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for July 9, 2019.
On Nov. 14, 2018, Rivera and alleged co-defendant Alfredo Aldeco, 32, of Holyoke, robbed a clerk in a West Springfield convenience store at gunpoint. After forcibly taking cash and cigarettes from the clerk, Aldeco warned the clerk, “If you call the cops, I will come back and kill you.” When law enforcement later executed a search warrant on Rivera’s home, they found the firearm used in the robbery along with another firearm and ammunition. At the time, Rivera was prohibited from possessing a firearm or ammunition due to a prior felony conviction.
Aldeco has pleaded not guilty and is awaiting trial.
The charges of interference with commerce by robbery and using a firearm in relation to a crime of violence provides for a sentence of no greater than 20 years in prison, up to three years of supervised release, and a fine of up to $250,000. The charge of being a felon in possession of a firearm and ammunition provides for a sentence of no greater than 10 years in prison, up to three years of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement. The West Springfield, Holyoke, Agawam, Chicopee, Northampton, and Springfield Police Departments and the Massachusetts State Police provided valuable assistance to the investigation. Assistant U.S. Attorney Deepika Bains Shukla of Lelling’s Springfield Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Sex Offender Sentenced to Fifteen Years for Child Pornography Offenses, Violating Supervised ReleaseRead the Press Release
Orlando, Florida – United States District Judge Paul G. Byron has sentenced Vincenzo (Vincent) G. Savarese (36, Melbourne) to 15 years in federal prison, for accessing with the intent to view child pornography and for violating the terms of his supervised release. The court also ordered Savarese to serve a lifetime of supervision following his release from prison.
Savarese pleaded guilty on October 5, 2018.
According to court documents, in 2009, Savarese was convicted in the United States District Court in Utah of possession of child pornography. Savarese was sentenced to 6 years and 6 months in federal prison, to be followed by 10 years of supervised release. On June 9, 2015, Savarese completed his prison term and returned to Brevard County, Florida, where he began his supervised release.
On May 24, 2018, while on supervised release, Savarese accessed and attempted to access child pornography with the intent to view it, using a computer at a job placement business that was open to the public. Savarese stated that he had gone to the business several times a week and used the computers there to search for child pornography. Law enforcement officers searched the computer used by Savarese and located more than 85 searches for child pornography and 4 images depicting child pornography.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Brevard County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Karen L. Gable.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Rockville Man Who Posed as a Modeling Agent to Obtain Sexually Explicit Images of Minor Female Victims Sentenced to 22 Years in Federal Prison for Child Pornography ChargesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Stephen McGrath, age 44, of Rockville, Maryland, today to 22 years in federal prison, followed by 25 years of supervised release, for federal charges of coercion and enticement of a minor to engage in sexual activity in order to produce child pornography, and possession of child pornography. Upon his release from prison, McGrath will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to McGrath’s plea agreement, between June 16 and October 9, 2017, McGrath used Internet-based chat applications “MeetMe” and “KIK” to communicate with six minor female victims, ranging in age from 12 to 16 years old. In his communications with the victims, McGrath, posing as a female modeling agent, confirmed the ages of the victims and requested photographs, including nude and sexually explicit images, which the victims then sent to McGrath as part of their “modeling evaluation.” McGrath also admitted that he distributed sexually explicit images of Victim 6, a 14-year-old girl, to two of her male friends, whose account information he had requested from Victim 6.
Subscriber information for the accounts used to communicate with Victim 1 showed that the user connected to each account through the same IP address, which was assigned to McGrath in Rockville. Law enforcement agents executed a federal search warrant at McGrath’s residence on October 13, 2017, and seized his cellular phone. The phone had an application for password-protected digital storage. McGrath supplied the password, which revealed folders within the application labeled with female names and containing pictures and videos constituting more than 600 images of child pornography, including images of the victims described above. The KIK application was also found on the phone as well as numerous chat conversations with minor females.
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 Attorney’s 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.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
United States Attorney Robert K. Hur commended HSI-Baltimore and the Maryland State Police for their work in the investigation and thanked the Montgomery County Police Department for its assistance. Mr. Hur thanked Assistant U.S. Attorney Joseph R. Baldwin, who prosecuted the federal case.
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Pittsburgh Felon Pleads Guilty to Drug Trafficking ChargesRead the Press Release
PITTSBURGH - A former resident of Pittsburgh, Pennsylvania, pleaded guilty on March 26, 2019, in federal court to felony drug trafficking charges, United States Attorney Scott W. Brady announced today.
Nathaniel Smiley, age 39, pleaded guilty to charges from two separate incidents before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Smiley was on federal Supervised Release after serving his prior federal prison sentence of 100 months for the illegal possession of a firearm, when, on December 19, 2016, the Drug Enforcement Administration purchased 500 stamp bags, containing 9.2 grams of heroin, from Smiley. A search warrant was executed at his residence that day and $11,999 in cash was recovered.
On April 2, 2017, Smiley was apprehended. Two-hundred stamp bags containing 4.108 grams of fentanyl and 20.143 grams of powder cocaine were seized from his rental vehicle.
Judge Cercone scheduled sentencing for July 22, 2019 at 11 a.m. The law provides for a total sentence of up to 60 years in prison, a fine of up to $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history of the defendant.
The court ordered Smiley’s continued detention pending sentencing.
Assistant United States Attorney Ross E. Lenhardt is prosecuting this case on behalf of the government.
The DEA conducted the investigation that led to the prosecution of Smiley, with the valuable assistance of the Pennsylvania State Police and officers from multiple federal, state and local law enforcement agencies.
Owner of Former Springfield Medical Supply Business Sentenced to Two Years in Prison for Medicaid FraudRead the Press Release
SPRINGFIELD, Ill. – A former Springfield, Ill., man whose business supplied incontinence products to Medicaid recipients, Kevin W. Schaul, was sentenced today for defrauding Illinois’ Medicaid program. U.S. District Judge Sue E. Myerscough ordered that Schaul, 53, currently of Augusta, Mo., serve 24 months in federal prison and pay restitution in the amount of $582,844. Schaul’s prison term will be followed by a three-year term of supervised release, with the first six months as home confinement. Schaul was ordered to report to serve his prison term on a date to be determined by the federal Bureau of Prisons.
On Aug. 30, 2018, Schaul pleaded guilty to five counts of health care fraud related to his business, Childrite Medical Supply, Inc., which he operated from a residence at 201 N. Natchez Trace, in Springfield, Ill. Childrite supplied incontinence products, such as diapers, pull-ups and underpads, to Medicaid recipients, specifically to special-needs adults and children. Medicaid paid Childrite approximately $2.3 million based on submitted claims. The Childrite corporation was involuntarily dissolved in October 2014.
Schaul admitted that from August 2009 through at least September 2013, he repeatedly submitted and caused false claims to be submitted to the Illinois Department of Healthcare and Family Services for delivery of incontinence products. The false claims represented that products had been delivered to Medicaid recipients when no products were delivered or were not delivered in the amount claimed. Schaul used the fraudulent Medicaid payments for his personal use, including for clothing, food, entertainment, fuel, travel, mortgage payments and payments to a family member.
The charges were investigated by the Illinois State Police Medicaid Fraud Control Bureau and the U.S. Department of Health and Human Services, Office of Inspector General. The Illinois Department of Healthcare and Family Services, Office of Inspector General provided assistance in the investigation. Assistant U.S. Attorney Timothy A. Bass prosecuted the case.
Ohio County man sentenced for failing to update his sex offender registrationRead the Press Release
WHEELING, WEST VIRGINIA – Joshua Phillip Sweet, of Triadelphia, West Virginia, was sentenced today to eight months incarceration for not updating his sex offender registration, United States Attorney Bill Powell announced.
Sweet, age 37, pled guilty to one count of “Failure to Update Sex Offender Registration” in February 2019. Sweet admitted to moving from Niagra Falls, New York, to Triadelphia, West Virginia in July 2017 and not updating his sex offender registration, as required by law.
Assistant U.S. Attorney Brandon S. Flower prosecuted the case on behalf of the government. The United States Marshals Service and the West Virginia State Police investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
New US Marshals Director Takes Oath of OfficeRead the Press Release
Donald Washington was sworn in as the director of the U.S. Marshals Service today in a ceremony at the Tom Stagg U.S. District Court in Shreveport, Louisiana, with Chief Judge S. Maurice Hicks Jr. presiding and Chief Judge Carl E. Stewart of the 5th U.S. Circuit Court of Appeals administering the oath of office.
Washington becomes the agency’s 11th director since the office was established in 1970.
The Department of Justice will hold a ceremonial installation service for Washington when he arrives at Marshals headquarters.
“We are thrilled to have Director Washington return to the Department. He brings a wealth of experience as a former U.S. Attorney and lawyer in various private and corporate capacities,” said U.S. Attorney General William Barr. “We look forward to formally welcoming him to the U.S. Marshals Service at a ceremony April 11th.”
President Donald Trump nominated Washington Oct. 2, 2018, to lead the U.S. Marshals. The U.S. Senate confirmed his nomination March 14.
A 1977 West Point graduate, Washington served in the U.S. Army and U.S. Army Reserve until 1987. In 1989, he received his Juris Doctor from South Texas College of Law, Houston, Texas. After law school, Washington began his legal career as an attorney at Conoco Inc.
In 2001, President George W. Bush appointed him U.S. Attorney for Western Louisiana, a 42-parish federal jurisdiction that includes Lafayette, Shreveport, Alexandria, Monroe and Lake Charles. Washington served on several U.S. Attorney General’s Advisory Committees, as well as subcommittees on Civil Rights, Controlled Substances, and Native American Issues. Washington also served as the Chairman of the Southeastern U.S. Organized Crime Drug Enforcement Task Force. In 2010, he returned to private practice in Lafayette, Louisiana.
Medicaid Fraud Provider PleaRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announced that in federal court, United States Magistrate Judge Robert B. Jones, Jr. accepted a guilty plea in a health care fraud matter.
ANDREA BOATMAN HALL, now known as, ANDREA MONIQUE PURNELL, 32 years of age, from Sanford N.C., pled guilty to one count of Medicaid Provider Fraud.
The investigation revealed that PURNELL was the owner, operator, manager and/or CEO of Extended Reach Day Treatment for Children and Adolescents (”Extended Reach”), a Medicaid provider of behavioral health services, including “day treatment” services. From on or about October 1, 2013, through October 26, 2016, PURNELL engaged in a scheme to defraud Medicaid by “adding” units of Day Treatment services not actually provided to Medicaid recipients in Extended Reach’s billed claim submissions. These “added” units were added to those units of service that were actually provided to Medicaid recipients on a particular date of service. For example, a particular beneficiary may have been at Extended Reach for four (4) hours on a particular day, but the Defendant billed the maximum six (6) hours for the individual on that day. The defendant engaged in an extensive and systematic scheme to fraudulently bill “added” unit claims for “day treatment” services provided to Medicaid recipients.
Additionally, PURNELL engaged in a scheme to defraud Medicaid by billing for “day treatment” services allegedly provided to Medicaid recipients on dates of service when those recipients were absent, and where such services were not in fact provided. As such, these false claims differ from “added” claims because no “day treatment” services at all were provided to the Medicaid recipients on the alleged dates of service. These “absent” client billings include billings for clients who were simply absent on a particular billed day of the week (for example, if a client was only present on Monday, Wednesday and Friday of a week, the defendant would bill for services for every day of that week even when the client was absent); billing for clients who were physically present at and receiving services in some other facility that day (such as a psychiatric residential treatment facility), and; billing for services on days when the Extended Reach facility was actually closed – such as a snow day on February 17, 2015, and on Labor Day of 2014.
PURNELL also engaged in a scheme to bill for psychotherapy services as if they had been performed by a licensed medical doctor, when those services were not provided by the doctor for Extended Reach. Investigators interviewed the doctor and he informed the investigators that he did not perform psychotherapy services for Extended Reach.
The total fraudulent billing for all schemes is $372,917.74. The total loss amount due to Medicaid is $337,615.42.
United States Attorney Higdon commented: “Medicaid beneficiaries face complex and costly needs for care and rely on, and trust, their health care providers to provide quality care. This defendant violated their trust by using their information to unlawfully line her pockets with money. This should never happen. The USAO-EDNC will continue to thoroughly investigate and prosecute to the fullest those who commit health care fraud to unlawfully obtain money to which they are not entitled.”
The investigation of this case was conducted by the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Attorney General’s Office Medicaid Investigations Division. Special Assistant United State Attorney, Daniel Spillman, of the North Carolina Attorney General’s Office Medicaid Investigations Division, represented the United States.
Maryland Man Pleads Guilty to Fraud Scheme and Making a False Statement to the FBIRead the Press Release
WASHINGTON – James Benjamin, 57, of Ellicott City, Maryland, pled guilty yesterday to a federal charge stemming from making a false statement to the FBI, and to a District of Columbia charge stemming from a scheme to defraud individuals that trusted the defendant to invest money on their behalf announced U.S. Attorney Jessie K. Liu and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office.
Benjamin pled guilty before the Honorable Paul L. Friedman in the United States District Court for the District of Columbia to engaging in a scheme with intent to defraud, and to obtaining money by means of materially false and fraudulent pretenses, representations, and promises, and to unlawfully obtaining over $100,000 for his own personal enrichment. Benjamin also pled guilty to making a false statement to the FBI, after the FBI had seized approximately $450,000 that Benjamin had obtained from investors. In connection with the guilty plea, Benjamin admitted that he had falsely told the FBI that the $450,000 had been “held in trust” for the benefit of an investor, when in fact Benjamin kept the funds in his own bank account. Judge Friedman scheduled a sentencing hearing for September 24, 2019, at which Benjamin faces statutory maximum sentences of ten years and five years in prison, respectively.
In announcing the plea, U.S. Attorney Liu and Assistant Director in Charge McNamara commended the work of those who investigated the case from the FBI’s Washington Field Office. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office including Paralegal Specialists Jessica McCormick and Chela Okonji, and Assistant U.S. Attorneys Demian Ahn and Thomas Swanton, who prosecuted the case.
Manhattan Jeweler Pleads Guilty to Insider TradingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JEREMY MILLUL pled guilty to participating in a scheme to trade on material, nonpublic information in advance of the Sherwin-Williams Company’s acquisition of the Valspar Corporation. MILLUL pled guilty to one count of conspiracy to commit securities fraud before U.S. District Judge Jed S. Rakoff.
U.S. Attorney Geoffrey Berman said: “As he admitted today, Manhattan jeweler Jeremy Millul received inside information about a publicly traded stock from a friend who worked as an analyst for a credit rating agency. Millul then used that information to make illegal trades which earned him over $100,000 in illicit gains. The integrity of financial institutions is critical to ensuring that the stock-buying public is trading in a fair market. We will continue to aggressively prosecute those who share and utilize nonpublic information for their own personal gain.”
According to the allegations contained in the Complaint and Indictment filed against MILLUL and his co-conspirators, and statements made in related court filings and proceedings:[1]
Rating Evaluation Services and the Insider
When a company announces an acquisition, the acquiring company’s credit rating agency often evaluates, and ultimately issues a press release relating to, the impact that the acquisition could have on the acquiring company’s credit rating. Therefore, companies often contact rating agencies before an acquisition is publicly announced in order to secure the rating agency’s views on how a possible acquisition could impact a company’s credit rating. All the major rating agencies offer a service – sometimes known as a Rating Evaluation Service (“RES”) – that provides the company with a rating committee decision with respect to a proposed acquisition.
In March 2016, a credit rating agency in Manhattan (the “Firm”) assigned a credit ratings analyst (the “Analyst”), to work on an RES for the Sherwin-Williams Company (“Sherwin-Williams”) in advance of its contemplated but unannounced acquisition of the Valspar Corporation (“Valspar”). In connection with this assignment, the Analyst had access to material, nonpublic information (the “Inside Information”) about Sherwin-Williams’ acquisition of Valspar prior to the public announcement of the acquisition. The Firm’s written policies prohibited the unauthorized disclosure of confidential information, which included the Inside Information. During his tenure at the Firm, the Analyst reviewed and certified his duties of loyalty and confidentiality to the Firm and its clients.
The Insider Trading Scheme
In March 2016, the Analyst misappropriated the Inside Information about Sherwin-Williams’ acquisition of Valspar and passed it to MILLUL and Abell Oujaddou so that they could use it to make profitable trades. On March 21, 2016, the first trading day after the public announcement of the acquisition, the price of Valspar stock increased approximately 23 percent over the prior day’s close.
MILLUL is a Manhattan jeweler who had a close personal friendship with the Analyst, as well as with a member of the Analyst’s immediate family. The Analyst repeatedly provided MILLUL with Inside Information about the Valspar acquisition. Although MILLUL had never owned a brokerage account in the United States and had never traded in U.S. securities prior to March 2016, he opened a brokerage account on March 13, 2016, and shortly thereafter purchased 480 shares of Valspar common stock. On March 18, 2016, the last trading day before the acquisition was publicly announced, MILLUL also purchased 75 out-of-the-money Valspar call options. After the acquisition was publicly announced, MILLUL sold his Valspar stock and options for approximately $106,806 in profits.
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JEREMY MILLUL, 32, of New York, New York, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the Court.
MILLUL is scheduled to be sentenced before Judge Rakoff on July 30, 2019 at 4:00 p.m.
Abell Oujaddou previously pled guilty and awaits sentencing before U.S. District Judge Jed S. Rakoff.
Mr. Berman praised the work of the FBI, and thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christine I. Magdo and Andrew Thomas are in charge of the prosecution.
[1] As for the defendant who has pled not guilty, the description of the charges set forth herein constitute only allegations.
Man Sentenced to Prison for $1.8 Million in Real Estate Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – A Culpepper man was sentenced today to nine years in prison for operating a Ponzi scheme that took in approximately $9 million and defrauded over 20 victims of $1.8 million.
According to court documents, from 2014 through 2018, Brian Thomas Sapp, 38, formerly of Alexandria, committed wire fraud and aggravated identity theft in executing the scheme. Sapp preyed on his closest friends and their families, many of whom described Sapp as a “best friend” and “like a brother.” He caused financial hardship to many victims, including those with special needs children.
To execute the scheme, Sapp set up Novus Properties, claiming he had identified distressed single family homes in the District of Columbia, Maryland and Virginia, which he would purchase and then resell to guaranteed buyers. All he needed was investor funds to finance the property flips. On hundreds of occasions, Sapp fabricated a sophisticated set of interlocking purchase, sale, guarantee, and HUD-1 settlement documents to induce victims to part with money. He stole real identities of sellers and buyers and digitally forged their signatures hundreds of times. Sapp bragged that he was “killing it” and “dominating the market.” In reality, he never closed a single deal.
Instead, Sapp used investor money to fund a lavish lifestyle, including golf trips, meals out, and attending wealth-building seminars. Sapp spent $80,000 to purchase and customize a Mercedes van that he outfitted with special rooftop satellite TV antennas and flat screen TVs. Sapp loaded the van with professional grilling equipment, tents, food and beverage service stations, and other amenities so that he could host elaborate tailgating parties at Penn State football games, where he ate and drank with his victims at their expense, unbeknownst to them at the time.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Matthew J. DeSarno, Special Agent in Charge, Criminal Division, FBI Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorney Russell L. Carlberg 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 is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-446.
MS-13 Member Sentenced to 26 Years in Federal Prison for His Participation in a Violent Racketeering Conspiracy, Including a Murder and Attempted MurderRead the Press Release
A Riverdale, Maryland man was sentenced to 312 months in prison, followed by five years of supervised release, for his participation in the racketeering enterprise known as La Mara Salvatrucha, or MS-13, including a murder and attempted murder.
Assistant Attorney General Brian A. Benczkowski for the Justice Department’s Criminal Division, U.S. Attorney Robert K. Hur for the District of Maryland, Assistant Director in Charge Nancy McNamara of the FBI Washington Field Office (WFO)’s Safe Streets/HIDTA Task Force, Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore Field Office, Special Agent in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration (DEA) Washington Field Division, Chief J. Thomas Manger of the Montgomery County Police Department, Chief Henry P. Stawinski III of the Prince George’s County Police Department, Chief Amal Awad of the Hyattsville Police Department, Prince George’s County State’s Attorney Aisha Braveboy and Montgomery County State’s Attorney John McCarthy made the announcement.
Kevin Soriana-Hernandez, aka “Brocha,” 19, of Riverdale, Maryland, was sentenced by U.S. District Judge Paula Xinis. According to the plea agreement, MS-13 is a gang composed primarily of immigrants or descendants of immigrants from El Salvador, with members operating in the State of Maryland, including Montgomery County and Prince George’s County, and throughout the United States. Branches or “cliques” of MS-13 often work together cooperatively to engage in criminal activity and to assist one another in avoiding detection by law enforcement. MS-13 members and associates are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
“MS-13’s stock-in-trade is violence and intimidation, as shown by the brutal and premeditated murder that Kevin Soriana-Hernandez and his fellow MS-13 members committed in Riverdale on Sept. 16, 2017,” said Assistant Attorney General Benczkowski. “The Department of Justice will not rest in our mission to dismantle MS-13 and put an end to the gang’s evil efforts to terrorize our streets.”
“This sentence sends a message that the violence perpetrated by MS-13 members and associates will not be tolerated,” said U.S. Attorney Hur. “Our ongoing work with our law enforcement partners to bring other gang members to justice, demonstrates our unflagging commitment to eliminate MS-13 and its campaign of wanton violence.”
As detailed in his plea agreement, Soriana-Hernandez admitted that since at least September 2017, he was a member and associate of the Sailors clique of MS-13, in Riverdale, Maryland. Beginning in approximately August 2017, members of the Sailors clique, including Soriana-Hernandez, engaged in an ongoing and escalating altercation with a group of individuals also residing in Riverdale, whom they believed to be members of a rival gang. The two groups threatened each other with physical violence, brandished firearms, and shot at each other.
Soriana-Hernandez also admitted that on Sept. 16, 2017, he and other MS-13 members and associates planned and conspired to murder individuals in the rival group. Specifically, Soriana-Hernandez admitted that on Sept. 16, 2017, he and four co-conspirators drove to the area in Riverdale where two of the suspected gang rivals were located, and parked on a hill overlooking the area. Soriana-Hernandez and two co-conspirators covered their faces and proceeded down the hill toward the location. At the time, one victim was seated in a car and the other was near the car. Soriana-Hernandez fired multiple shots at the car and at both victims, but did not strike either victim. One co-conspirator fired a single shot at the victim who was sitting in the car, after which the firearm jammed. Another co-conspirator then approached the vehicle and stabbed that victim multiple times. The victim later died. According to the Office of the Chief Medical Examiner, the victim died from a single gunshot wound and 13 stab wounds.
Five of Soriana-Hernandez’s co-defendants remain charged in the eighth superseding indictment with various racketeering violations, including conspiracy to participate in a racketeering enterprise, murder in aid of racketeering, conspiracy to commit murder in aid of racketeering, drug trafficking conspiracy and extortion conspiracy. The trial of the remaining defendants is scheduled to begin on Jan. 6, 2020. Those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by the FBI Washington Field Office, HSI Baltimore, the DEA Washington Field Office, the Prince George’s County Police Department, the Montgomery County Police Department, the Hyattsville Police Department, the Prince George’s State’s Attorney’s Office and the Montgomery County State’s Attorney’s Office. The WFO’s Safe Streets/HIDTA Task Force is composed of FBI agents along with detectives from the Capital Region engaged in identifying, disrupting and dismantling the most prolific gangs in the region to include MS-13. Trial Attorneys Francesca Liquori and Julie Finocchiaro of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Catherine K. Dick of the District of Maryland are prosecuting this Organized Crime Drug Enforcement Task Force case.
MS-13 Member Sentenced to 26 Years in Federal Prison for His Participation in a Violent Racketeering Conspiracy, Including a Murder and Attempted MurderRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paula Xinis sentenced Kevin Soriana-Hernandez, a/k/a “Brocha,” age 19, of Riverdale, Maryland, today to 26 years in federal prison, followed by five years of supervised release, for his participation in the racketeering enterprise known as La Mara Salvatrucha, or MS-13, including a murder and attempted murder.
The sentence was announced by U.S. Attorney Robert K. Hur for the District of Maryland, Assistant Attorney General Brian A. Benczkowski for the Justice Department’s Criminal Division, Assistant Director in Charge Nancy McNamara of the FBI Washington Field Office’s Safe Streets/HIDTA Task Force, Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore Field Office, Special Agent in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration (DEA) Washington Field Division, Chief J. Thomas Manger of the Montgomery County Police Department, Chief Henry P. Stawinski III of the Prince George’s County Police Department, Chief Amal Awad of the Hyattsville Police Department, Prince George’s County State’s Attorney Aisha Braveboy; and Montgomery County State’s Attorney John McCarthy.
“This sentence sends a message that the violence perpetrated by MS-13 members and associates will not be tolerated,” said United States Attorney Robert K. Hur. “Our ongoing work with our law enforcement partners to bring other gang members to justice, demonstrates our unflagging commitment to eliminate MS-13 and its campaign of wanton violence.”
“MS-13’s stock-in-trade is violence and intimidation, as shown by the brutal and premeditated murder that Kevin Soriana-Hernandez and his fellow MS-13 members committed in Riverdale on Sept. 16, 2017,” said Assistant Attorney General Benczkowski. “The Department of Justice will not rest in our mission to dismantle MS-13 and put an end to the gang’s evil efforts to terrorize our streets.”
According to the plea agreement, MS-13 is a gang composed primarily of immigrants or descendants of immigrants from El Salvador, with members operating in the State of Maryland, including Montgomery County and Prince George’s County, and throughout the United States. Branches or “cliques” of MS-13 often work together cooperatively to engage in criminal activity and to assist one another in avoiding detection by law enforcement. MS-13 members and associates are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
As detailed in his plea agreement, Soriana-Hernandez admitted that since at least September 2017, he was a member and associate of the Sailors clique of MS-13, in Riverdale, Maryland. Beginning in approximately August 2017, members of the Sailors clique, including Soriana-Hernandez, engaged in an ongoing and escalating altercation with a group of individuals also residing in Riverdale, whom they believed to be members of a rival gang. The two groups threatened each other with physical violence, brandished firearms, and shot at each other.
Soriana-Hernandez also admitted that on September 16, 2017, he and other MS-13 members and associates planned and conspired to murder individuals in the rival group. Specifically, Soriana-Hernandez admitted that on September 16, 2017, he and four co-conspirators drove to the area in Riverdale where two of the suspected gang rivals were located, and parked on a hill overlooking the area. Soriana-Hernandez and two co-conspirators covered their faces and proceeded down the hill toward the location. At the time, one victim was seated in a car and the other was near the car. Soriana-Hernandez fired multiple shots at the car and at both victims, but did not strike either victim. One co-conspirator fired a single shot at the victim who was sitting in the car, after which the firearm jammed. Another co-conspirator then approached the vehicle and stabbed that victim multiple times. The victim later died. According to the Office of the Chief Medical Examiner, the victim died from a single gunshot wound and 13 stab wounds.
Five of Soriana-Hernandez’s co-defendants remain charged in the eighth superseding indictment with various racketeering violations, including conspiracy to participate in a racketeering enterprise, murder in aid of racketeering, conspiracy to commit murder in aid of racketeering, drug trafficking conspiracy, and extortion conspiracy. The trial of the remaining defendants is scheduled to begin on January 6, 2020. Those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Robert K. Hur and Assistant Attorney General Brian A. Benczkowski commended the FBI Washington Field Office’s Safe Streets/HIDTA Task Force, HSI Baltimore, the DEA Washington Field Office, the Prince George’s County Police Department, the Montgomery County Police Department, the Hyattsville Police Department, the Prince George’s County State’s Attorney’s Office, and the Montgomery County State’s Attorney’s Office for their work in the investigation. The WFO’s Safe Streets/HIDTA Task Force is composed of FBI Agents along with Detectives from the Capital Region engaged in identifying, disrupting and dismantling the most prolific gangs in the region to include MS-13.
Mr. Hur and Mr. Benczkowski thanked Assistant U.S. Attorneys William D. Moomau and Catherine K. Dick and Trial Attorneys Francesca Liquori and Julie Finocchiaro of the Criminal Division’s Organized Crime and Gang Section, who prosecuted this Organized Crime Drug Enforcement Task Force case.
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Lewiston Man Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Demetrius Davenport, 30, of Lewiston, pled guilty today in U.S. District Court to being a felon in possession of a firearm.
According to court records, in June 2018, Davenport travelled to Gray, Maine, where he rented a firearm, purchased ammunition, and fired the weapon at a shooting range. Investigators identified Davenport and the shooting range from a video that was uploaded to YouTube. Davenport was prohibited from possessing the firearm as a result of two prior felony convictions for illegal possession of firearms and theft.
Davenport faces up to 10 years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated jointly by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lewiston Police Department.
Lempster Man Pleads Guilty to Methamphetamine TraffickingRead the Press Release
CONCORD - Jesse R. Lohman, 37, of Lempster, pleaded guilty in federal court to possession of methamphetamine with intent to distribute, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on August 31, 2018, police encountered Lohman in the driver’s seat of a parked car at the Route 3A Park and Ride parking lot in Bow, New Hampshire. Lohman was alone in the car. After determining that there was a warrant for Lohman’s arrest, officers detained him and impounded the car. During a subsequent search of the car, officers discovered six bags containing approximately 76.1 grams of 99 percent pure methamphetamine.
Lohman is scheduled to be sentenced on July 12, 2019.
“Methamphetamine is a very dangerous drug that is appearing with more frequency in New Hampshire,” said U.S. Attorney Murray. “Because of the dangers associated with this substance, we will work closely with our law enforcement partners to identify and prosecute those who are responsible for distributing methamphetamine. I am grateful to the police offices from Bow whose efforts prevented a significant amount of highly-pure methamphetamine from being sold in our community.”
This matter was investigated by the Federal Bureau of Investigation and the Bow Police Department. The case is being prosecuted by Assistant U.S. Attorney John S. Davis.
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Leader of Old York Money Gang Sentenced to Life in Federal Prison and Gang Member Sentenced to 30 Years in Federal Prison for Charges Related to Their Gang Activities, Including Racketeering Murder, Drug Conspiracy, Drug Dealing, and Gun CrimesRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III today sentenced Trevon Beasley, a/k/a Tre, age 25, of Baltimore, to life in federal prison and on March 28, 2019, sentenced Darrin Mosley, a/k/a Legs and Scoop, age 25, also of Baltimore, to 30 years in federal prison, each followed by five years of supervised release. Beasley was convicted after a 12-day jury trial on federal racketeering charges, including murders he committed, related to his membership in the Old York Money Gang (OYMG); a federal drug distribution conspiracy; conspiracy to use and carry a firearm during and in relation to a crime of violence and a drug trafficking crime; and eight counts of distribution and possession with intent to distribute crack cocaine, powder cocaine, and/or heroin.
Just prior to trial, Mosley pleaded guilty to the racketeering and drug conspiracies, and to conspiracy to use and carry a firearm during and in relation to a crime of violence and a drug trafficking crime. While Mosley did not admit to any violent acts committed by himself or other gang members, the sentencing Court held that the evidence – including evidence presented by the government at Beasley’s trial, court documents, and other evidence – proved that as part of his gang activities, Mosley participated in and knew about murders committed by OYMG gang members.
The sentences were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.
“OYMG gang members and other violent drug dealers must know that gun crime will lead to federal time, which has no parole – ever,” said U.S. Attorney Robert K. Hur. “I hope the community will take some comfort from the fact that we are holding accountable the criminals who turned their Northeast Baltimore neighborhood into a war zone.”
“This gang used firearms to defend and expand their drug territory, committing numerous violent crimes in pursuit of that goal,” said ATF Baltimore Special Agent in Charge Rob Cekada. “Fear of being caught in the crossfire of a gang turf war is a terrible reality that affects too many in Baltimore. ATF is determined to identify, investigate, and incarcerate this city’s most vicious criminals so that neighborhoods can be free of violence.”
According to the evidence presented at Beasley’s trial, Mosley’s plea agreement, and other court documents, from January 2013 to April 2017, Beasley and Mosley were members of the OYMG, a violent drug trafficking organization operating in the Waverly neighborhood in the northeastern district of Baltimore. OYMG was involved in criminal activity including murder, robbery, extortion, burglary, and narcotics trafficking in and around Baltimore. OYMG is a neighborhood gang, limiting its membership to persons that originate from or live in the Waverly neighborhood, and generally excluding “outsiders.” The gang extensively and frequently endorsed and promoted its existence through social media accounts and rap music videos, whereby members would display their association and advertise membership and activities of the gang. OYMG sustained itself in part through drug sales, including crack cocaine, as well as through murder for hire and other violent crimes.
The evidence elicited at trial showed that Trevon Beasley occupied a leadership role in the gang, which obtained its revenue from murder for hire and drug distribution. Mosley admitted that he distributed marijuana, crack cocaine and heroin and was heard on recorded jail calls discussing the distribution and supply of crack cocaine, prescription pills, and marijuana. Witnesses at trial testified that OYMG accepted money for contract killings as part of its business, and that Beasley specifically accepted and executed the contract murder of Tyrone Servance on November 15, 2016. Further, witnesses testified that Mosley drove Beasley to and from the murder. Recorded jail calls between Beasley and Mosley discuss the fallout from that contract killing. Witnesses testified that after the homicide, associates of the victim engaged in a war with OYMG over the next weeks. This culminated in two additional attempted murder of two other people on December 1, 2016, within weeks of the Servance murder. Beasley and Mosley believed that one of the December 1 victims had been hired to avenge the death of Mr. Servance. The other December 1 victim was simply an innocent person who happened to be in the first victim’s company. Those murders were planned and carried out by Beasley and Mosely. In Mosley’s own words, on his own social media, Beasley was Mosley’s own “shooter,” and Mosley was proud to pronounce Beasley as such. Other OYMG members regularly carried firearms to defend the gang’s territory and violently expelled OYMG rivals or antagonists.
Nine other defendants charged in the case previously pleaded guilty to racketeering and/or drug conspiracy charges and eight have been sentenced.
The final defendant to be sentenced, Terrell Plummer, a/k/a Rell, age 30, of Baltimore, is scheduled for sentencing on May 10, 2019. At his guilty plea on November 2, 2018, Plummer admitted that he shot and killed three-year-old McKenzie Elliott during a shoot-out, as she stood on the front porch of her home.
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 U.S. Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
United States Attorney Robert K. Hur commended the ATF and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys David Metcalf and Michael C. Hanlon, who are prosecuting the case.
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Law Enforcement Officers Charged in Federal Court with Taking Bribes to Falsify Immigration Documents and Protect Drug Trafficking ProceedsRead the Press Release
Columbia, South Carolina --- United States Attorney Sherri A. Lydon announced today that nine individuals, including seven law enforcement officers, have been indicted in federal court in South Carolina on visa fraud and drug charges.
One of the schemes alleged in the Indictment involved fraudulent U Nonimmigrant Visas (“U-Visas”), which are set aside for victims of certain crimes who have suffered mental or physical abuse as a result of the crime. To obtain a U-Visa, a law enforcement official must certify that the alien is assisting that law enforcement agency in the investigation or prosecution of the crime of which the alien was a victim. According to the Indictment, four officers helped individuals obtain fraudulent U-Visas by taking bribes for fraudulent certifications and creating fraudulent incident reports indicating that aliens were victims of crimes.
The Indictment further alleges that officers took bribes in exchange for protecting methamphetamine and cocaine or the proceeds of drug trafficking.
The charges as to each defendant are:
Springfield Police Department Chief Lacra Sharod Jenkins: Conspiracy, Visa Fraud, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
Springfield Police Department Officer Allan Hunter, Jr.: Conspiracy, Visa Fraud, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
Orangeburg County Sheriff’s Office Deputy Carolyn Colter Franklin: Conspiracy, Visa Fraud, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
Orangeburg County Sheriff’s Office Deputy Nathaniel Miller Shazier, III: Conspiracy, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime
Orangeburg County Sheriff’s Office Deputy Stanley Lavalle Timmons: Conspiracy, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
Orangeburg County Sheriff’s Office Reserve Deputy James Albert Tucker: Conspiracy, Conspiracy to Possess with Intent to Distribute Controlled Substances, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime;
Orangeburg County Sheriff’s Office Deputy Willie Paul David Rogers: Conspiracy and Visa Fraud;
Saurabhkumar B. Patel, of Orangeburg, South Carolina: Conspiracy; and
Tarang Patel, of Newport, Kentucky: Conspiracy and Visa Fraud.
If convicted, Jenkins, Hunter, Franklin, Timmons, Shazier, and Tucker face a maximum penalty of life in federal prison. Rogers, Saurabhkumar Patel, and Tarang Patel face a maximum penalty of 10 years imprisonment.
“With this Indictment, we honor the hard work and dedication of the very fine officers across South Carolina who put on the police uniform every day and risk their lives to protect the rest of us,” said U.S. Attorney Lydon. “If these allegations are proved, these defendants do not deserve to wear the badge and should not be allowed to bring disrepute on the overwhelming majority of men and women in blue who serve South Carolina with integrity. We will not tolerate the hypocrisy of those who would pretend to enforce the law, while violating it themselves as they seek to line their own pockets. We call that public corruption, and we will always call it out.”
The investigation was led by the Federal Bureau of Investigation, with assistance from ICE - Homeland Security Investigations and the South Carolina Law Enforcement Division. The case is being prosecuted by Assistant United States Attorneys William Camden Lewis and Alyssa Leigh Richardson of the Columbia office.
U.S. Attorney Lydon stated that all charges in the Indictment are merely accusations, and all defendants are presumed innocent until and unless proven guilty.
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20190328-2_-_indictment.pdfLancaster County Man Pleads Guilty to Federal Court to Illegally Possessing a GunRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon announced today that Deangelo Raheem Roseboro, age 25, of Lancaster, South Carolina, entered a guilty plea in federal court to possession of a firearm by a person who had been convicted of a crime punishable by imprisonment for a year. United States District Judge J. Michelle Childs of Columbia accepted the guilty plea and will impose sentence after she has received and reviewed a presentence report prepared by the United States Probation Office.
Evidence presented to the court established that on December 6, 2017, a Lancaster County deputy made a routine traffic stop on a vehicle driven by Roseboro. As the deputy approached the vehicle, he saw Roseboro reaching in the floor board of the passenger side of the vehicle. The deputy asked Roseboro for his driver’s license, insurance, and registration. Roseboro stated the car belonged to his uncle and that he only had a driver’s permit, which he did not have with him. The deputy told Roseboro that he smelled marijuana and asked why he was reaching into the floorboard of the vehicle. Roseboro told the deputy that there was no marijuana in the car but that there was a gun in the car that belonged to his uncle. As the deputy tried to get Roseboro out of the car to detain him, Roseboro ran away. After a brief search, Roseboro was found hiding in a friend’s apartment. Deputies searched the vehicle and found a fully loaded SCCY, model CPX-1, 9mm pistol. Federal law prohibits Roseboro from possessing firearms and ammunition based on a previous conviction for his involvement in the murder of a Chester City councilman.
Roseboro faces a maximum penalty of 10 years in federal prison and/or a fine of $250,000.
The case was investigated by agents of the Federal Bureau of Investigation and the Lancaster County Sheriff's Office and was prosecuted as part of the joint federal, state, and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Project CeaseFire is South Carolina’s implementation of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant United States Attorney William K. Witherspoon of the Columbia office is prosecuting the case.
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Kansas Man Sentenced to Nearly 18 Years in Prison for Use of Child Pornography in Southeast Asia with Intent to Import into the United StatesRead the Press Release
A retired Kansas native, who was residing in Panama, was sentenced today to 210 months in prison, for use of sexually explicit depictions of a minor for importation into the United States, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.
Jebediah Dishman, 72, of Fredonia, Kansas, pleaded guilty on April 6, 2018, to an information charging him with use of sexually explicit depictions of a minor for importation into the United States. Today, U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas imposed the nearly 18-year sentence to be followed by 25 years of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. At the hearing today, he was also ordered to pay a $5,000 fine and $3,000 in restitution. Dishman will also be ordered to register as a sex offender.
According to admissions made in conjunction with a plea agreement, in September 2014, Dishman began an approximately six-month trip to several countries in Southeast Asia. During his trip to Indonesia, another tourist observed Dishman engaging in suspicious interactions with minors, masturbating while watching minors and using a tablet to take photographs of a three-year-old German child. The tourist confronted Dishman, seized his tablet and turned it over to local authorities. U.S. law enforcement later reviewed the tablet pursuant to a search warrant and discovered sexually explicit images of minors, including the German child, as well as internet searches indicating an interest in the sex trafficking of minors in Southeast Asia.
The FBI Houston Field Office conducted the investigation with the cooperation of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Trial Attorneys James E. Burke IV and William M. Grady of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas prosecuted the case. Assistant U.S. Attorney Elly Peirson of the Central District of Illinois, previously on detail at CEOS, also served as a vital member of the prosecution team at earlier stages of the litigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Kansas Man Sentenced in Texas for Use of Child Pornography in Southeast Asia with Intent to Import into the U.S.Read the Press Release
HOUSTON - A retired Kansas native who was residing in Panama has been ordered to serve a 210-month prison term, announced U.S. Attorney Ryan K. Patrick and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
Jebediah Dishman, 72, of Fredonia, Kansas, pleaded guilty April 6, 2018, to an information charging him with use of sexually explicit depictions of a minor for importation into the United States. Today, U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas imposed the nearly 18-year sentence to be followed by 25 years of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. At the hearing today, he was further ordered to pay a $5,000 fine and $3,000 in restitution. Dishman will also be ordered to register as a sex offender.
According to admissions made in conjunction with a plea agreement, in September 2014, Dishman began an approximately six-month trip to several countries in Southeast Asia. During his trip to Indonesia, another tourist observed Dishman engaging in suspicious interactions with minors, masturbating while watching minors and using a tablet to take photographs of a three-year-old German child. The tourist confronted Dishman, seized his tablet and turned it over to local authorities. U.S. law enforcement later reviewed the tablet pursuant to a search warrant and discovered sexually explicit images of minors, including the German child, as well as internet searches indicating an interest in the sex trafficking of minors in Southeast Asia.
The FBI conducted the investigation with the cooperation of Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney (AUSA) Sherri Zack is prosecuting the case along with Trial Attorneys James E. Burke IV and William M. Grady of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). and of the Southern District of Texas prosecuted the case. AUSA Elly Peirson of the Central District of Illinois, previously on detail at CEOS, also served as a vital member of the prosecution team at earlier stages of the litigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Jury Convicts Crew in Murder of Armored Car GuardRead the Press Release
HOUSTON – A federal jury in Houston has just returned guilty verdicts on all counts as charged against four men involved in the murder of a Brinks armored car guard, among other charges, announced U.S. Attorney Ryan K. Patrick. The jury deliberated for approximately eight hours following a nine-day trial before convicting Nelson Alexander Polk, 40, Marc Anthony Hill, 48, John Edward Scott, 43, and Bennie Charles Phillips Jr., 31, all of Houston.
All four 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.
The trial centered on the robbery and murder of a Brinks armored car guard on 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 on Dec. 7, 2016.
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. According to testimony, 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.
The jury heard that in the August robbery and murder, the leader of the crew allegedly shot and killed the guard. Polk then drove a vehicle up to the guard, at which time another crew member got out and took the Brinks’ bag of money. Hill had been in the area conducting surveillance.
The men played the same roles in December Amegy robbery attempt. The jury heard that law enforcement watched and listened to calls over the leader’s phone as they prepared to rob the Loomis guard. He and Hill spent hours and took shifts surveilling the bank. On the date of the attempted robbery, the crew leader sat across from the ATM in an apartment complex parking lot ready to take his shot.
When law enforcement moved in to arrest the subjects, the crew leader allegedly came out firing his weapon and police responded, killing him.
On that day, Polk and Trayvees Duncan Bush, 31, also of Houston, sat ready to drive up to the slain guard to steal the money. Phillips recruited Bush and ensured he would be ready on the morning of Dec. 7. Hill was nearby conducting surveillance and would meet up with Polk and Bush to provide them a different getaway vehicle. Scott was further away from the Amegy bank doing surveillance and watching for the armored truck to approach the location.
The jury also heard dozens of wiretap calls as the defendants planned the attempted robbery of the armored truck, which they frequently referred to as commissary or Bentley. They saw video and heard audio from a recording device placed in the Jeep Cherokee the crew leader had allegedly stolen for purposes of the crime. The jury was able to watch and hear as he set up his rifle shot from the back seat and placed mylar over the driver side window to avoid deflecting the bullet.
Testimony also included a cell site location expert who tracked phone locations of the crew leader, Hill and Polk in the weeks leading up to the August murder and robbery. He was able to show how Hill and Polk played similar roles, surveilling the bank and being near the bank during the time of the murder and robbery.
The defense claimed the deceased crew leader planned the whole thing and they had no knowledge of his intentions. Further, Polk and Hill argued that they were not there during the August robbery and murder. The jury was not convinced and convicted them on all counts as charged.
All of the defendants convicted today face up to 20 years for the robbery and another 10-year-minimum and up to life for the firearms charge which must be served consecutively to any other prison term imposed. Hill and Polk face the same terms for the additional charges for which they were convicted.
U.S. District Judge Hittner presided over the trial.
They will remain in custody pending their sentencing.
Bush had pleaded guilty prior to trial.
The FBI, Houston Police Department and ATF 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.
They were 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.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges and indictments handed down by the Grand Jury were unsealed. Indictments are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on March 25 was:
DYLAN BLAKE LAPLANT, 21, of Arlee, on charges of distribution of child pornography and receipt of child pornography. LaPlant is detained. If convicted of the most serious crime, LaPlant faces a five years to 20 years in prison, a $250,000 fine and five years to life of supervised release. The FBI investigated the case. Pacer case reference. 19-13.
ISSAC ELIAS SAENZ, 27, of Box Elder, on charges of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute meth and possession of a firearm in furtherance of a drug trafficking crime. Saenz is detained. If convicted of the most serious crime, Saenz faces a minimum mandatory 10 years to life in prison, a $10 million fine and five years of supervised release. The FBI and Tri-Agency Drug Task Force investigated the case. Pacer case reference. 19-18.
JOSE DANIEL LOZOYA-CAMACHO, 25, of Mexico, on charges of illegal re-entry of a deported alien. Lozoya-Camacho is detained. If convicted of the most serious crime, Lozoya-Camaco faces a maximum two years in prison, a $250,000 fine and three years of supervised release. The case was investigated by the U.S. Border Patrol. Pacer case reference. 19-14.
LUIS RAUL LOZOYA-CAMACHO, 29, of Mexico, on charges of illegal re-entry of a deported alien. Lozoya-Camacho is detained. If convicted of the most serious crime, Lozoya-Camacho faces a maximum two years in prison, a $250,000 fine and three years of supervised release. The case was investigated by the U.S. Border Patrol. Pacer case reference. 19-14.
Appearing on March 28 was:
LAWRENCE MATTHEW BRASDA, 27, on charges of prohibited person in possession of a firearm and possession of a stolen firearm. If convicted of the most serious crime, Brasda faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. He was detained. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Pacer case reference. 17-47.
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on March 26 was:
JACK PRESTON COVERSUP, 56, of Moiese, on charges of sexual abuse of a minor and abusive sexual contact. If convicted of the most serious crime, Coversup faces a maximum life in prison, a $250,000 fine and five years to life of supervised release. Coversup was released pending trial. The case was investigated by the FBI. Pacer case reference. 19-15.
CAMERON RIDESTHEHORSE, 35, of Lodge Grass, on charges of failure to register as a sexual offender. If convicted of the most serious crime, Ridesthehorse faces a maximum 10 years in prison, a $250,000 fine and five years to life of supervised release. Ridesthehorse was detained. The case was investigated by the U.S. Marshals Service. Pacer case reference. 19-37.
Appearing in Billings for an initial hearing on a complaint before U.S. Magistrate Judge Timothy J. Cavan on March 26 was:
JEREMY AARON SCHULER, 31, of Bellevue, WA, on charges of possession with intent to distribute controlled substances. If convicted of the most serious crime, Schuler faces a minimum mandatory five years to 40 years in prison, a $5 million fine and four years of supervised release. He was detained. The case was investigated by the Drug Enforcement Administration. Pacer case reference. 19-29.
Appearing in Billings and pleading not guilty before U.S. Magistrate Judge Timothy J. Cavan on March 27 was:
FRANKLIN NORTON, 41, of Billings, on charges of conspiracy to possess methamphetamine with intent to distribute and possession with intent to distribute meth. If convicted of the most serious crime, Norton faces a minimum mandatory 10 years to life in prison, a $10 million fine and five years of supervised release. Norton was detained. The case was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force. Pacer case reference. 19-35.
Appearing on March 28 was:
DANA BEARROBE, 39, of Busby, on charges of failure to register as a sex offender. If convicted of the most serious crime, Bearrobe faces a maximum 10 years in prison, a $250,000 fine and five years of supervised release. He was detained. The case was investigated by the U.S. Marshal’s Service. Pacer case reference. 19-38.
DANIEL MARK TANNER, 32, of Cut Bank, on charges of abusive sexual contact. If convicted of the most serious crime, Tanner faces a maximum of life in prison, a $250,000 fine and five years of supervised release. He was detained. The case was investigated by the FBI. Pacer case reference. 19-19.
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Informational: Federal Court appearanceRead the Press Release
The U.S. Attorney’s Office announced that the following person had an initial appearance today in Missoula before U.S. Magistrate Jeremiah C. Lynch on a criminal complaint. Criminal complaints are merely accusations and defendants are presumed innocent until proven guilty.
CHARLES GIBSON BAILEY, 32, of West Yellowstone, on charges of possession of a firearm by a person who is subject to a court order that restrains such person from harassing, stalking or threatening an intimate partner of such person. If convicted of the most serious crime, Bailey faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Bailey was detained. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Yellowstone Police Department. Pacer case reference. 19-26-m-JCL.
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Honduran National Arrested for Illegally Reentering the United States Following DeportationRead the Press Release
A criminal complaint was filed today in federal court in Central Islip charging Gerson Eli Turcios Maradiaga with illegal reentry into the United States. The defendant was arrested Thursday and made his initial appearance this afternoon before United States Magistrate Judge Arlene R. Lindsay at the federal courthouse in Central Islip.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Thomas R. Decker, Field Office Director, U.S. Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO), announced the arrest.
“As alleged, Turcios illegally returned to the United States after his deportation for a homicide conviction,” stated United States Attorney Donoghue. “This Office will prosecute felons who reenter the United States. The message to deported felons is clear – if you are deported from the United States, stay out or the only thing you will be returning to is prison.” Mr. Donoghue expressed his appreciation to the Nassau County Police Department and the United States Marshals NY/NJ Regional Fugitive Task Force, Long Island Division, for their assistance with the case.
Turcios has a felony conviction and was sentenced in the United States before being removed to his home country,” stated ERO New York Field Director Decker. “This case is one of a convicted criminal who re-entered the country illegally, only to be right back in our New York neighborhoods. ERO officers will continue to seek out those criminals aliens who enter the country with no regard for the laws of this nation, protecting the public with steadfastness and professionalism.”
According to the complaint, Turcios, a Honduran national, was deported from the United States in November 2012, after having been convicted in December 2008 of manslaughter in connection with the February 17, 2008 shooting outside Don Juan’s La Boom Club in Westbury, New York, killing one and wounding several others. At the time of the shooting, the defendant was a member of the 18th Street gang.
If convicted, Turcios faces a maximum term of imprisonment of 20 years’ incarceration.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Catherine M. Mirabile is in charge of the prosecution.
The Defendant:
GERSON ELI TURCIOS MARADIAGA
Age: 28
Levittown, New YorkE.D.N.Y. Docket No. 19-MJ-289 (ARL)
Grant County man admits to methamphetamine distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – Robert Lee Pauley, Jr., of Mount Storm, West Virginia, has admitted to methamphetamine distribution, United States Attorney Bill Powell announced.
Pauley, age 40, pled guilty to one count of “Conspiracy to Distribute Methamphetamine.” Pauley admitted to working with others to distribute more than 500 grams of methamphetamine from March 2018 to May 2018 in Mineral, Grant, and Randolph Counties.Pauley faces not less than ten years and up to life incarceration and a fine of up to $10,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Federal Bureau of Investigation; the Potomac Highlands Drug & Violent Crimes Task Force, a HIDTA-funded initiative; the West Virginia State Police; and the Ravenswood Police Department investigated.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. Magistrate Judge Robert W. Trumble presided.
Georgia Man Found Guilty for His Involvement in Methamphetamine Distribution RingRead the Press Release
Montgomery, Alabama – On Thursday, March 28, 2019, Dennis Reinaldo Peralta, 38, of Lawrenceville, Georgia, was found guilty of conspiracy to sell methamphetamine, announced U.S. Attorney Louis V. Franklin, Sr.
According to the evidence presented at trial, Peralta was working in concert with many others to bring drugs to the Southeast, including Alabama. The overall conspiracy was importing large of amounts of methamphetamine from Mexico, and then distributing those drugs out of the Atlanta area. The conspirators would sometimes possess 30 kilograms (66 pounds) or more of methamphetamine at a time to be available for distribution. The jury heard testimony that Peralta himself sold one kilogram (2.2 pounds) of methamphetamine on one occasion as a part of the overall conspiracy.
The investigation also revealed that at least five kilograms (11 pounds) was distributed to one of Peralta’s co-conspirators, Bryant Pouncy, who would then sell it to various drug users in Enterprise and the greater Wiregrass Region with the assistance of others.
During this investigation, at least seven additional co-conspirators were identified and charged. Each of the following have pled guilty and are awaiting sentencing.
- Bryant Pouncy of Enterprise, Alabama
- Antonio Pouncy of Enterprise, Alabama
- Kimberly Pouncy of Enterprise, Alabama
- Ervin Bradham of Enterprise, Alabama
- Lynn Donaldson of Enterprise, Alabama
- Santos Rivera-Fernandez of Atlanta, Georgia
- Rogelio Israel Pimentel of Rex, Georgia
Each of the defendants, including Peralta, are now facing a minimum sentence of ten years in prison, and a maximum sentence of life. There is no parole in the federal system. All of the defendants are currently in the custody of the United States Marshals Service pending their sentencing hearing, which is expected to occur in the next few months.
U.S. Attorney Franklin would like to thank the following entities for their assistance in investigating this case: the Federal Bureau of Investigation (FBI), the Enterprise Police Department, the Houston County Sherriff’s Office, the Dothan Police Department, the Coffee County Sheriff’s Office, the Alabama Law Enforcement Agency (ALEA), Homeland Security Investigations (HSI), the Coffee County District Attorney’s Office, the Georgia Highway Patrol, the Clayton County (Georgia) Police Department, and the Drug Enforcement Administration (DEA). This case was prosecuted by Assistant United States Attorneys Bradley Bodiford and Curtis Ivy.
Fresenius Medical Care Agrees to Pay $231 Million to Resolve Foreign Corrupt Practices Act ChargesRead the Press Release
BOSTON – Fresenius Medical Care AG & Co. KGaA (Fresenius), a German-based provider of medical products and services, has agreed to pay approximately $231 million to resolve the Department of Justice (DOJ) and Securities and Exchange Commission’s (SEC) investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Fresenius’s participation in various corrupt schemes to obtain business in multiple countries.
“Bribery, in all forms, is corrosive and illegal,” said United States Attorney Andrew E. Lelling of the District of Massachusetts. “As today’s announcement makes clear, this Office will continue its long tradition of aggressively investigating companies and individuals who use bribes and kickbacks to gain an unfair and illicit business advantage, or who deliberately turn a blind eye to that conduct.”
“Fresenius doled out millions of dollars in bribes across the globe to gain a competitive advantage in the medical services industry, profiting to the tune of over $140 million,” said Assistant Attorney General Benczkowski. “Today’s resolution, under which Fresenius has agreed to retain an independent compliance monitor for at least two years, reflects the Department’s firm commitment to both rooting out bribery and promoting the kind of effective corporate compliance programs that will prevent misconduct going forward.”
“This case shows the continued commitment of the FBI and our partners to investigate bribery and corruption worldwide,” said FBI Assistant Director Robert Johnson. “The FBI's dedicated International Corruption Squads across the United States will continue to combat foreign corruption that reaches our shores and send a strong message that, no matter how long it takes, we will not wane in our efforts to uphold the law.”
“This case shows the FBI will hold accountable those who treat corruption as the cost of doing business,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Fresenius’s admissions are incredibly concerning because no company should break the law by paying-off international partners to obtain or retain business. We will continue to work with our law enforcement partners to root out corrupt schemes and ensure they do not become common practice at the expense of other hard-working businesses.”
According to Fresenius’s admissions, between 2007 and 2016, the company paid bribes to publicly-employed health and/or government officials to obtain or retain business in Angola and Saudi Arabia. In Angola and Saudi Arabia, as well as in Morocco, Spain, Turkey, and countries in West Africa, Fresenius knowingly failed to implement reasonable internal accounting controls over financial transactions, and failed to maintain books and records that accurately and fairly reflected the transactions.
In Angola, Fresenius offered or provided bribes to an Angolan military health officer and his family, as well as prominent Angolan government-employed nephrologists. Specifically, Fresenius offered these individuals shares in a joint venture, storage contracts, and consultancy agreements, all for the purpose of securing an improper advantage and assisting Fresenius with obtaining and retaining business in Angola.
In Saudi Arabia, Fresenius employed a check cashing scheme, entered into sham consulting and commission agreements for which no services were ever performed, entered into fake collection commission agreements, made payments to a government charity, gave gifts, and made payments for travel with no business or educational justification, the company admitted.
In Morocco, Fresenius paid bribes to a Moroccan state official for the purpose of obtaining contracts to develop kidney dialysis centers at Moroccan state-owned military hospitals.
In Spain, Fresenius entered into fake consulting agreements with publicly-employed doctors or professionals who could influence or provide information about public tenders, gave gifts or provided other benefits such as travel to medical conferences, and made donations to fund projects for the doctors.
In Turkey, Fresenius entered into joint ventures with publicly-employed doctors in exchange for those doctors directing business from their public employer to Fresenius Turkey clinics.
In West Africa, Fresenius paid bribes to publicly-employed health officials in various countries, including Benin, Burkina Faso, Cameroon, the Ivory Coast, Niger, Gabon, Chad, and Senegal. Fresenius paid these bribes through a combination of direct payments, payments made through third parties, and payments through a third-party distributorship, all to obtain and retain business in those countries.
In total, Fresenius earned more than $140 million in profits from the corrupt schemes.
To resolve the case, Fresenius entered into a non-prosecution agreement (NPA) with DOJ and agreed to pay a total criminal penalty of $84,715,273. As part of the NPA, Fresenius also agreed to continue to cooperate with DOJ’s investigation, enhance its compliance program, implement rigorous internal controls, and retain an independent corporate compliance monitor for at least two years.
DOJ reached this resolution based on a number of factors. Notably, although Fresenius voluntarily self-disclosed the misconduct in April 2012, the company did not timely respond to certain requests by the DOJ and, at times, did not provide fulsome responses to requests for information. In addition, misconduct occurred in 13 countries, yielded profits of more than $140 million, and continued in certain countries until 2016, and the company has not yet had the opportunity to test the effectiveness of its compliance enhancements. Therefore, the company did not qualify for a declination under the Corporate Enforcement Policy, and instead received a discount of 40 percent below the low end of the U.S. Sentencing Guidelines fine range, and an independent compliance monitor for a term of two years, followed by an additional year of self-reporting to the DOJ.
Fresenius settled a related FCPA matter with the SEC today and will pay $147 million in disgorgement and prejudgment interest to the SEC, which the DOJ credited in its resolution, bringing the total monetary amount to over $231 million.
Assistant U.S. Attorney Jordi de Llano of the District of Massachusetts and Trial Attorneys Paul A. Hayden and Sonali D. Patel of the Department’s Criminal Division’s Fraud Section are prosecuting this matter. The Department appreciates the significant cooperation and assistance provided by the U.S. Securities and Exchange Commission in this matter.
Fresenius Medical Care Agrees to Pay $231 Million in Criminal Penalties and Disgorgement to Resolve Foreign Corrupt Practices Act ChargesRead the Press Release
Fresenius Medical Care AG & Co. KGaA (Fresenius), a German-based provider of medical products and services, has agreed to pay approximately $231 million to resolve investigations by the Department of Justice and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Fresenius’s participation in various corrupt schemes to obtain business in multiple foreign countries.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling of the District of Massachusetts, Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division and Special Agent in Charge Joseph R. Bonavolonta of the FBI Boston Field Division made the announcement.
According to Fresenius’s admissions in connection with the resolution, between 2007 and 2016, Fresenius paid bribes to publicly employed health and/or government officials to obtain or retain business in Angola and Saudi Arabia. In Angola and Saudi Arabia, as well as in Morocco, Spain, Turkey and countries in West Africa, Fresenius knowingly and willfully failed to implement reasonable internal accounting controls over financial transactions and failed to maintain books and records that accurately and fairly reflected the transactions, the company admitted.
“Fresenius doled out millions of dollars in bribes across the globe to gain a competitive advantage in the medical services industry, profiting to the tune of over $140 million,” said Assistant Attorney General Benczkowski. “Today’s resolution, under which Fresenius has agreed to retain an independent compliance monitor for at least two years, reflects the Department’s firm commitment to both rooting out bribery and promoting the kind of effective corporate compliance programs that will prevent misconduct going forward.”
“Bribery, in all forms, is corrosive and illegal,” said U.S. Attorney Lelling. “As today’s announcement makes clear, this Office will continue its long tradition of aggressively investigating companies and individuals who use bribes and kickbacks to gain an unfair and illicit business advantage, or who deliberately turn a blind eye to that conduct.”
“This case shows the continued commitment of the FBI and our partners to investigate bribery and corruption worldwide,” said FBI Assistant Director Robert Johnson. “The FBI's dedicated International Corruption Squads across the United States will continue to combat foreign corruption that reaches our shores and send a strong message that, no matter how long it takes, we will not wane in our efforts to uphold the law.”
“This case shows the FBI will hold accountable those who treat corruption as the cost of doing business,” said FBI Special Agent in Charge Bonavolonta. “Fresenius’s admissions are incredibly concerning because no company should break the law by paying-off international partners to obtain or retain business. We will continue to work with our law enforcement partners to root out corrupt schemes and ensure they do not become common practice at the expense of other hard-working businesses.”
In Angola, Fresenius offered or provided things of value to an Angolan military health officer who exercised authority over the Angolan state-owned military hospital in his role as an officer in the Medical Services Division of the Angolan Armed Forces and his family, as well as prominent Angolan government-employed nephrologists. Specifically, Fresenius offered these individuals shares in a joint venture in Fresenius’s local subsidiary, specifically, 15 percent to the Angolan military health officer and 15 percent to a publicly employed doctor, storage contracts with a company owned by the sons of the Angolan military health officer, to provide warehousing space, however, no Fresenius products were ever stored at the warehouse, and consultancy agreements with publicly employed doctors for which no services were ever performed, all for the purpose of securing an improper advantage and assisting Fresenius with obtaining and retaining business in Angola.
In Saudi Arabia, Fresenius offered or provided things of value to Saudi Arabian health officials and publicly employed doctors who directed or were employed by a Saudi medical organization and a governmental charity. Specifically, Fresenius engaged in a check-cashing scheme where employees were directed to cash checks that had been made payable in their names and return the cash to the general manager of Fresenius’s distributor and agent where he [the agent] then arranged to have the cash delivered to Saudi government doctors and others. In addition, publicly employed doctors were awarded sham consulting and commission agreements for which no services were ever performed. Fresenius also entered into fake collection commission agreements, made payments to a government charity, and gave gifts and made payments to publicly employed doctors for travel with no business or educational justification, the company admitted.
In Morocco, Fresenius paid bribes through a sham commission to a Moroccan state official for the purpose of obtaining contracts to develop kidney dialysis centers at Moroccan state-owned military hospitals. The sham commission would pay 10 percent of the value of the contract to the Moroccan state official and was disguised as a bonus payment to a Fresenius employee. In Spain, Fresenius entered into fictitious consulting agreements with publicly employed doctors or professionals who could influence or provide information about public tenders. For example, between 2008 and 2011, Fresenius paid a publicly employed doctor more than €81,000 without a consulting agreement or contract in place. This publicly employed doctor was the head of nephrology at a Spanish state-owned hospital that ultimately awarded Fresenius a tender in 2011. Further, Fresenius gave gifts or provided other benefits such as travel to medical conferences, and made donations to fund projects for the doctors, the company admitted. In Turkey, Fresenius entered into joint ventures with publicly employed doctors in exchange for those doctors directing business from their public employer to Fresenius clinics in Turkey. For example, in or around 2006, Fresenius entered into a joint venture with a publicly employed Turkish doctor, who received 35 percent of the joint venture shares (worth approximately $74,000 at the time) at the time it was formed. In 2010, Fresenius purchased the doctor’s shares and never required the doctor to pay for his shares in the joint venture resulting in $356,000 profit to the doctor. In West Africa, Fresenius knowingly paid bribes to publicly employed health officials and government-employed doctors in numerous countries, including Benin, Burkina Faso, Cameroon, the Ivory Coast, Niger, Gabon, Chad and Senegal. For example, Fresenius employees met with representatives of a Gabon state-owned hospital and proposed a five-year agreement that would include the “prices plus the commission” that the officials would receive for each kit sold. A Fresenius employee responsible for sales in West Africa reported that the agreement would provide for a €12 commission for each kit sold, which was intended as a “commission for the three persons who sign the contract with us.” Fresenius paid these bribes through a combination of direct payments, payments through third parties and payments through a third-party distributorship, all to obtain and retain business in those countries, the company admitted.
In total, Fresenius admitted to earning more than $140 million in profits from the corrupt schemes.
To resolve the case, Fresenius entered into a nonprosecution agreement (NPA) with the Department and agreed to pay a total criminal penalty of $84,715,273. As part of the NPA, Fresenius also agreed to continue to cooperate with the Department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for at least two years.
The Department reached this resolution based on a number of factors. Notably, although Fresenius voluntarily self-disclosed the misconduct in April 2012, the company did not timely respond to certain requests by the Department and, at times, did not provide fulsome responses to requests for information. In addition, misconduct occurred in 13 countries, yielded profits of more than $140 million and continued in certain countries until 2016. Moreover, the company has not yet had the opportunity to test the effectiveness of its compliance enhancements. In light of all the factors, the company did not qualify for a declination under the Corporate Enforcement Policy; however, the company was afforded a reduction of 40 percent below the low end of the U.S. Sentencing Guidelines fine range. As part of the resolution, the company agreed to an independent compliance monitor for a term of two years, followed by an additional year of self-reporting to the Department.
Fresenius settled a related FCPA matter with the U.S. Securities and Exchange Commission (SEC) today, and will pay $147 million in disgorgement and prejudgment interest to the SEC, which the Department credited in its resolution, bringing the total amount paid by Fresenius to over $231 million.
This case is being investigated by the FBI’s International Corruption Squad in New York and the FBI’s Boston Field Office. Trial Attorneys Paul A. Hayden and Sonali D. Patel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jordi de Llano of the District of Massachusetts are prosecuting the case.
The Department appreciates the significant cooperation and assistance provided by the SEC in this matter.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s Fraud Section FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Former Shakopee School Superintendent Sentenced to Prison for Soliciting BribesRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of RODNEY KEITH THOMPSON, 53, to 24 months in prison for corruptly soliciting a bribe. THOMPSON, who pleaded guilty on November 15, 2018, was sentenced before Judge Susan R. Nelson in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from 2011 through June 2017, THOMPSON served as the Superintendent of the Shakopee School District. In his official capacity, THOMPSON had the authority to select contractors to perform construction and related services for the School District. THOMPSON used his position and authority to obtain personal benefits from a company interested in being awarded contracts with the School District. THOMPSON solicited things of value from the company, such as home improvement projects, personal travel, and attendance at sporting events, in exchange for contracts with the School District. For example, between July 2010 and November 2015, at THOMPSON’s demand, the company spent more than $44,000 remodeling and improving the basement of THOMPSON’s Shakopee house.
“Mr. Thompson abused his position of trust throughout his entire tenure with the Shakopee School District. And now, his greedy and corrupt dealings have earned him a prison sentence,” said U.S. Attorney Erica H. MacDonald.
“Today’s sentence of Mr. Thompson demonstrates our collective commitment to hold public officials accountable”, said Jill Sanborn, Special Agent in Charge of the FBI’s Minneapolis Division. “The success of this investigation was due in large part to the collaboration between the FBI, Department of Justice, the Scott County Attorney’s Office and the Shakopee Police Department. Together with our law enforcement partners, the FBI will continue to investigate public officials who abuse their positions and violate the public trust.”
This case was the result of an investigation conducted by the FBI.
Assistant U.S. Attorney David J. MacLaughlin prosecuted the case.
Defendant Information:
RODNEY KEITH THOMPSON, 53
Shakopee, Minn.
Convicted:
- Corrupt solicitation of a bribe, 1 count
Sentenced:
- 24 months in prison
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former New Jersey Heroin Courier Sentenced to More than 8 Years in PrisonRead the Press Release
PITTSBURGH - A former resident of East Orange, New Jersey was sentenced in federal court on Tuesday to eight years and four months (100 months) in prison on his conviction of federal drug crimes, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Marvin Anthony, 41.
According to information presented to the court, in March of 2018, Anthony brought 475 "bricks" of heroin to Western Pennsylvania from New Jersey in an effort to sell it. DEA agents and Task Force Officers then apprehended Anthony.
Judge Ambrose required Anthony to undergo an eight-year period of supervision by the United States Probation Office to follow his eventual release from incarceration.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
United States Attorney Brady commended the Drug Enforcement Administration (DEA) and their many state, county and local police department partners, including the Canonsburg Police Department, the Monessen Police Department, the Pennsylvania State Police and the Washington County Sheriff’s Office, for the investigation leading to the successful prosecution of Anthony.
Former Hillsborough Community College Professor Pleads Guilty to Possession and Distribution of Child PornographyRead the Press Release
Tampa, Florida – Howard Joseph Vorder Bruegge, III (36, Tampa) pleaded guilty today to possessing and distributing child pornography. Vorder Bruegge, a former mathematics professor at Hillsborough Community College (HCC), faces a minimum mandatory penalty of five years, and up to 40 years, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Vorder Bruegge, using the internet monikers “JoeBlow73” and “JoeBlowFL,” distributed child pornography on multiple occasions. He also collected child pornography on his cellphone, including sex-abuse videos of babies and toddlers.
Vorder Bruegge also used his phone to film and publically share voyeur videos on the internet. He employed peepholes in bathrooms on the HCC campus to film college students while they were in restroom stalls. He then distributed those videos on websites that host voyeur content. Vorder Bruegge’s phone contained at least four videos capturing adult males through peepholes in public HCC restrooms.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Frank Murray.
This is another case 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.justice.gov/psc.
Former Baltimore Police Commissioner Darryl De Sousa Sentenced to Federal Prison for Failing to File Tax ReturnsRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced former Baltimore Police Commissioner Darryl De Sousa, age 54, of Baltimore, Maryland, today to 10 months in federal prison, followed by one year of supervised release, for three counts of failing to file individual federal tax returns. Judge Blake also ordered DeSousa to perform 100 hours of community service, and ordered him to pay restitution in the full amount of the government’s loss, which is $67,587.72. Counting payments already made, the amount still owed is $60,645.11.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“As a law enforcement officer, Darryl DeSousa knew that he had a duty to file tax returns. His failure to file was a crime – not an oversight,” said U.S. Attorney Robert K. Hur. “Corrupt public employees rip off the taxpayers and undermine everyone’s faith in government.”
“This investigation confirms the principle that no one is above the law,” said Acting FBI Baltimore Special Agent in Charge Jennifer L. Moore. “The FBI will continue to work tirelessly to make sure those in a position of power uphold the law and are held to the highest standards.”
“IRS-CI works hard to ensure faith in our tax laws,” said Kelly Jackson, IRS-CI Special Agent in Charge. “The prosecution of those who willfully violate their known duty of filing and paying their fair share is a vital element of the IRS’ enforcement strategy.”
According to his plea agreement, De Sousa was employed by the Baltimore Police Department beginning in 1998. De Sousa announced his resignation from BPD on May 15, 2018. On June 10, 1999, De Sousa submitted an Employee’s Withholding Exemption Certificate (W-4) to the City of Baltimore falsely claiming nine allowances for both federal and state tax purposes. By virtue of this claim, De Sousa substantially reduced the amount of taxes withheld from his salary each year. When he filed his federal and state income taxes for calendar years 2008 through 2012, he falsely claimed deductions to which he was not entitled, including for unreimbursed employee expenses when he had no such expenses, mortgage interest deductions and deductions for local property taxes when he did not have a mortgage or own any real property, and business losses when he did not operate any businesses. By virtue of these improper deductions, De Sousa fraudulently reduced the amount of taxes he owed to the Internal Revenue Service (IRS) and the State of Maryland.
De Sousa admitted that for calendar years 2011 and 2012, he did not file tax returns at all and did not do so until 2014. When he did file returns for those years he falsely claimed unreimbursed employee expenses and donations to charity. De Sousa also failed to pay penalties and interest on those late-filed returns despite having been told to do so by the IRS. In addition, as of May 5, 2018, De Sousa had not filed taxes for 2013, 2014, or 2015, despite knowing that he had a legal obligation to do so. By virtue of the nine allowances he falsely claimed, De Sousa also owed additional money to the United States and the State of Maryland in each of those years, as he also knew.
As a result of De Sousa’s actions, the total combined tax due to the United States and to the State of Maryland is $67,587.72.
United States Attorney Robert K. Hur commended the FBI and IRS-CI for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Leo J. Wise, Derek E. Hines, and Sean R. Delaney, who prosecuted the case.
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Florida Man Sentenced to More Than Three Years in Prison for Credit Card FraudRead the Press Release
Tampa, Florida – U.S. District Judge James D. Whittemore has sentenced Nicholas Whitetto (39, Quincy) to 42 months in federal prison for conspiracy to commit access device fraud. As part of his sentence, the court also entered a money judgment of $65,000, the proceeds of the credit card fraud.
Whitetto pleaded guilty on January 11, 2019.
According to court documents, Whitetto and others devised a scheme wherein they called a credit card company (referred to in court documents as the Banking Institution) and provided the personal identifying information of actual credit card account holders. Whitetto or another coconspirator then requested to be added as an authorized user on the credit card accounts and directed that the new authorized user’s credit cards be mailed to addresses controlled by the conspirators. The conspirators utilized this plan to fraudulently obtain at least 50 unauthorized credit cards.
Once they received the fraudulently-obtained credit cards in the mail, the conspirators went to various banks and made cash advance withdrawals. The conspirators also used the fraudulently-obtained cards to make unauthorized purchases. The Banking Institution suffered a loss exceeding $100,000.
On January 11, 2019, co-conspirator Frank Tillman pleaded guilty to his role in the scam. His sentencing hearing is scheduled for April 8, 2019.
This case was investigated by the United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Rachel K. Jones.
Felon with Drugs and Gun Sentenced to 6 Years in Federal PrisonRead the Press Release
PITTSBURGH - A former resident of Westmoreland and Washington Counties in southwestern Pennsylvania has been sentenced in federal court to six years (72 months) in prison on his conviction of federal drug and firearms offenses, United States Attorney Scott W. Brady announced today.
United States District Judge Cathy M. Bissoon imposed the sentence on Laurenti James Robertson, 28, of Monessen and Venetia, Pennsylvania.
According to information presented to the court, Robertson was stopped in a rental car on October 19, 2015, and found to be in possession of 158 stamp bags of heroin and $1,315.00 in cash. Five days later, on October 24, 2015, Robertson was stopped in a different vehicle and found to be in possession of 15 stamp bags of heroin and a loaded semi-automatic pistol. Robertson is precluded from possessing a firearm as a result of his separate 2013 felony convictions for Robbery and Theft. Federal law prohibits a felon from lawfully possessing a firearm or ammunition.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
United States Attorney Brady commended the Drug Enforcement Administration (DEA) for the investigation leading to the successful prosecution of Robertson and acknowledged the many law enforcement agencies that provided valuable assistance, including the Canonsburg Police Department, the Monessen Police Department, The Pennsylvania State Police, the Charleroi Police Department, the Homestead Police Department and the Washington County Sheriff’s Office.
This case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Federal Court Shuts Down Texas Tax Return PreparerRead the Press Release
A federal court in Beaumont, Texas, entered a permanent injunction against Sylvia Rodriguez, aka Sylvia Ornelas, barring her from preparing federal tax returns for others and owning or operating a tax preparation business, the Justice Department today announced.
The court found that Rodriguez engaged in fraudulent and deceptive conduct that substantially interfered with the administration of the tax laws.
In its complaint, the government alleged that Rodriguez prepared tax returns making false or fraudulent claims for the Earned Income Tax Credit, the fuel tax credit, and the American Opportunity Credit. In addition, Rodriguez allegedly reported fictitious business and inflated federal income tax withholdings on her customers’ returns. Also, according to the complaint, Rodriguez did not give some customers copies of their filed tax returns, or gave them returns that were different from those that were filed.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website about selecting a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Federal Court Bars Texas Return Preparer and Business from Preparing Tax ReturnsRead the Press Release
A federal court in Dallas, Texas, permanently enjoined Jhane Broadway, individually and doing business as Jeprofessionalz (aka MaxTaxPros), from preparing federal income tax returns for others, the Justice Department announced today.
The order, issued by District Judge David C. Godbey, also requires Broadway to mail or email notice of the injunction order to all customers for whom she prepared a federal tax return or claim for refund for tax years 2015 through 2017.
The government alleged that Broadway unlawfully prepared federal income tax returns that understate the tax liabilities of her customers by claiming false, improper, or inflated deductions, including fabricated Schedule A itemized deductions and Schedule C business losses.
The court’s order also prohibits Broadway from having an ownership interest in or working for any entity that prepares tax returns or represents clients before the Internal Revenue Service. Broadway consented to the order.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fatal Overdose on the Menominee Indian Reservation Leads to Murder and Drug Distribution Charges for Two PeopleRead the Press Release
Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, announced that on March 26, 2019, a federal grand jury returned a three-count indictment against two people who allegedly distributed controlled substances on the Menominee Indian Reservation and led to the death of a man, and another who deleted messages between one of the defendants and the deceased. The indictment named Alissa M. Waupoose (Age: 28), Ronald J. Frechette (Age: 39), and Kelly Nacotee (Age: 41), all of whom are enrolled members of the Menominee Indian Tribe of Wisconsin. The three all reside in Keshena, which is on the Menominee Indian Reservation in Wisconsin.
Count One of the indictment charged Waupoose and Frechette with Distribution of Controlled Substance Analogue Resulting Death in violation of 21 U.S.C. §§ 813 and 841. Waupoose and Frechette face a mandatory minimum of 20 years, and up to life, in prison; up to a $5 million fine; and from 3 years to life on supervised release. The charge also carries a $100 special assessment.
Count Two of the indictment charged Waupoose and Frechette with Second-Degree Murder in violation of 18 U.S.C. §§ 1111, 1153, and 2. Waupoose and Frechette each face a maximum sentence of life in prison, up to a $250,000 fine, and up to 5 years of supervised release. The charge also carries a $100 special assessment.
Count Three of the indictment charged Kelly Nacotee with Misprision of a Felony in violation of 18 U.S.C. § 4. Nacotee faces a maximum sentence of 3 years in prison, up to a $250,000 fine, up to 3 years on supervised release, and a $100 special assessment.
According to the indictment, on or about September 13, 2016, Waupoose and Frechette killed a man by distributing a chemical analogue of fentanyl to him. Nacotee deleted messages between Frechette and the deceased after learning of his overdose.
The case was investigated by the Menominee Tribal Police Department, Menominee County Sheriff’s Office, and the Federal Bureau of Investigation, with assistance from the U.S. Drug Enforcement Administration’s Diversion Control Division and the Wisconsin State Crime Laboratory. The case will be prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
For additional information contact: Public Information Officer Kenneth Gales at 414 297-1700
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Edmond Man Pleads Guilty to Embezzling over $750,000 and Tax FraudRead the Press Release
OKLAHOMA CITY – ODIS AUBREY KING, 74, of Edmond, has pleaded guilty to embezzling over $750,000 from his employer and filing a false federal income tax return, announced Robert J. Troester of the U.S. Attorney’s Office.
According to federal charges filed on February 15, 2019, King worked as an accountant from 2002 until August 2017 for a company in Oklahoma City that sold pipe handling tools for drilling rigs. He was responsible for preparing checks drawn on the company’s bank account and recording those payments in the company’s check register. From July 2009 to July 2017, King forged the owner’s signature on over 200 company checks without the company’s permission or knowledge. He made the checks payable to himself and disguised the payments in the check register as legitimate business expenses. In total, King deposited approximately $755,000 into his personal bank account using forged company checks. He also did not report the embezzled funds as income on his federal income tax returns.
On March 28, King pleaded guilty to a single count of making and possessing a forged check written in October 2015, as well as a single count of filing a materially false federal income tax return covering calendar year 2014.
Sentencing will take into account the full scope of King’s embezzlement and tax fraud. He faces a sentence of up to ten years in prison and a fine of up to $250,000 on the embezzlement count. He also faces a sentence of up to three years in prison and a fine of up to $100,000 for filing a false federal income tax return. Sentencing will take place in approximately 90 days.
These charges are the result of an investigation by the FBI and the Internal Revenue Service–Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Jessica L. Perry.
Reference is made to court filings for further information.
East Bernstadt Woman Sentenced to 36 Months for Identity Theft and Bank FraudRead the Press Release
LONDON, Ky. – Sharon Hall, 68, of East Bernstadt, Kentucky was sentenced Wednesday, in United States District Court in London, on convictions for bank fraud and aggravated identity theft. United States District Judge Gregory Van Tatenhove sentenced Hall to 24 months imprisonment, on the aggravated identity theft conviction, which will run consecutively to 12 months, on the bank fraud conviction, for a total of 36 months in federal prison.
Hall was convicted by a jury, in January, 2018. The proof at trial established that, during a period of 18 months around 2007 and 2008, Hall applied for and received student loans from at least six different lenders, in the names of her children, niece, and nephew, without their knowledge. She forged the names of the students on loan applications and altered payroll documents to defraud the banks. She received over $93,000 on at least 11 different loans. She paid back approximately $23,000 on the loans, before the remaining amounts were written off by the lenders, resulting in bank losses of approximately $70,000. Hall was ordered to pay restitution to the banks and the students whose names she used.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, G. Michael Ishee, II, Assistant Special Agent in Charge of the U.S. Department of the Interior, Office of Inspector General (DOI OIG), and Edd Cole, Acting Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Midwest Regional Office (DOE OIG), jointly announced the sentence.
“I commend the efforts of DOI OIG and DOE OIG for jointly pursuing this investigation, which led to the defendant being held accountable for her fraudulent conduct,” said United States Attorney Duncan. “The defendant now faces the consequences of her criminal actions.”
“This verdict and sentencing are the direct result of two Federal investigative agencies working collaboratively to ensure the integrity of their designated Federal programs and personnel,” said Assistant Special Agent in Charge Ishee. “The DOI OIG is committed to working closely with our partner OIGs, including the U.S. Department of Education OIG, on behalf of the American taxpayers. This investigation and sentencing are significant in our continued efforts to combat fraud, waste and mismanagement within the DOI.”
“Accountability applies to everyone, and this is especially true for Federal employees, as we work on behalf of the American people,” said Acting Special Agent in Charge Cole. “That’s why I’m proud of the work of OIG special agents and our law enforcement colleagues in holding Ms. Hall accountable for her criminal actions.”
The investigation was conducted by the DOI OIG and the DOE OIG and Assistant United States Attorneys Ken Taylor and Erin Roth represented the United States.
Dorchester Man Charged with Distribution of HeroinRead the Press Release
BOSTON – A Dorchester man was charged on Wednesday, March 27, 2019, in federal court in Boston with distributing heroin.
John Doe, a/k/a “Manny,” whose true identity is unknown, was indicted by a federal grand jury for distribution of heroin. Doe was arrested on March 1, 2019, and charged by criminal complaint. He has been in custody since his arrest on March 1, 2019.
According to court documents, in September 2018, federal agents began investigating Doe for drug trafficking violations. On four separate occasions between Sept. 26, 2018, and Nov. 28, 2018, law enforcement conducted undercover controlled purchases of heroin from Doe.
The charge of distribution of heroin carries a sentence of no greater than 20 years in prison, at least three years of supervised release, and a fine of $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division, made the announcement. Assistance was provided by the Massachusetts State Police and the Attleboro, Norton, and Mansfield Police Departments. Assistant U.S. Attorney Alathea E. Porter of Lelling’s Narcotics and Money Laundering 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.
Credit Union Manager Who Allegedly Embezzled $40 Million from His Employer Faces Bank Fraud, Identity Theft ChargesRead the Press Release
LOS ANGELES – A long-time manager at CBS Employees Federal Credit Union is in federal custody on a criminal complaint alleging he embezzled $40 million from his employer over two decades and spent the money on gambling, expensive cars and watches, and travel by private jet.
Edward Martin Rostohar, 62, of Studio City, has been charged with two felony counts: bank fraud and aggravated identity theft. He was arrested on March 12 and has been ordered detained as both a flight risk and an economic danger to the community. Rostohar’s arraignment is scheduled for April 18.
The charges against Rostohar were made in conjunction with today’s announcement by the National Credit Union Administration (NCUA), a federal agency that regulates credit unions, that it has liquidated CBS Employees Federal Credit Union and discontinued its operations after determining CBS Employees was insolvent with no prospect of restoring viable operations on its own. University Credit Union, located in Westwood, immediately assumed CBS Employees’ assets, loans, and all member shares.
According to an affidavit filed with the criminal complaint, beginning before 2000 and continuing until this month, Rostohar used his position as a manager at the credit union, a federally insured financial institution, to make online payments from the credit union to himself or by forging the signature of another credit union employee on checks made payable to himself.
The alleged scheme was exposed beginning on March 6 when a credit union employee found a $35,000 check made payable to Rostohar, and the check did not include the reason for the high dollar amount, according to court documents. The employee conducted an audit of the credit union checks issued since January 2018 and discovered $3,775,000 in checks made payable to Rostohar and which contained the forged signature of another employee without the employee’s knowledge or consent. On March 12, the credit union informed Rostohar that he had been suspended from his job after an internal investigation uncovered “irregularities in the performance of your job duties,” according to court documents. Later that day, Rostohar’s wife called 911 and told the dispatcher that her husband had stolen money from work and was leaving the country, court papers state. Rostohar was taken into custody and admitted that he stole money from the credit union for 20 years, beginning by paying the monthly balances on his personal credit cards with funds from the credit union’s online accounts or by forging checks, and later by forging his coworker’s signature on credit union checks and depositing them into his personal accounts, court papers state. Rostohar allegedly estimated he stole $40 million from the credit union. An NCUA examination up to February 28 revealed a potential loss to the credit union of $40,541,130.
Prior to his 30 years of employment at the CBS Employees credit union, Rostohar was an examiner at NCUA, court documents state. Rostohar allegedly told law enforcement that this background gave him knowledge of what NCUA examiners look for when examining credit unions and allowed him to avoid detection, the affidavit states. Rostohar allegedly said he gambled away much of the money and spent the rest on traveling by private jet, buying expensive watches, and giving his wife a weekly allowance of $5,000. He also said he purchased two cars – a Porsche and a Tesla – with money he stole from the credit union, court papers state. Rostohar allegedly also admitted to starting a business in Reno, Nevada in December 2018, and he wrote tens of thousands of dollars’ worth of checks to himself to cover the business’s cost as well as to pay a $5,000 monthly mortgage on a home in Reno he recently purchased.
If convicted on both charges, Rostohar faces a statutory maximum sentence of 30 years in federal prison and a $1 million fine on the bank fraud count and a mandatory consecutive term of two years in federal prison on the aggravated identity theft count.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Los Angeles Police Department.
This case is being prosecuted by Assistant United States Attorney Andrew Brown of the Major Frauds Section.
Convicted Felon Sentenced to Prison for Possessing FirearmsRead the Press Release
ALEXANDRIA, Va. – A Fauquier County man was sentenced today to nearly three and a half years in prison for being a felon in possession of firearms.
According to court documents, Douglas Newton, 57, has several prior felony convictions, including convictions for unauthorized use of a vehicle and grand larceny, third degree homicide, and attempted unlawful wounding and use of a firearm during a felony. In October 2018, special agents with the ATF executed a search warrant at Newton’s residence and recovered three firearms and approximately 390 rounds of ammunition.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by Senior U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Patricia T. Giles 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 is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-422.
Convicted Felon Sentenced to Prison for Possessing FirearmRead the Press Release
ALEXANDRIA, Va. – A Springfield man was sentenced today to nearly six years in prison for being a felon in possession of a firearm.
According to court documents, Sang June Han, 24, unlawfully possessed a loaded Glock pistol, on March 23, 2018, in Springfield. Han unlawfully possessed the firearm while shooting a music video, which was later posted to YouTube showing Han brandishing the pistol. Prior to the YouTube video being posted, Han posted photographs of himself on Instagram brandishing the firearm.
Han had previously been convicted of five felony offenses in Virginia and was on supervised probation at the time of this offense. Han’s 2013 felony conviction for attempted robbery was the result of an armed attempt to rob a drug dealer of drugs and money. According to the victim, Han repeatedly pistol-whipped the victim during the attempted robbery. Han’s 2015 felony conviction for possession of a controlled substance with intent to distribute was the result of a traffic stop during which law enforcement recovered 8.5 ounces of marijuana and a Smith & Wesson pistol from Han’s trunk. Han’s 2016 felony convictions for possession of cocaine and pentylone were the result of a police search of his hotel room during which police recovered 2 ounces of marijuana, 10 bundles of crack cocaine, and multiple bags of Xanax.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis III. Assistant U.S. Attorney Nicholas U. Murphy II 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 is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-384.
Colorado Springs Man Found Guilty of Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
DENVER – Following a one-week trial, a jury found Perry Wayne Suggs, Jr., age 32, of Colorado Springs, Colorado, guilty of being a felon in possession of a firearm and ammunition, announced U.S. Attorney Jason Dunn and ATF Denver Field Division Special Agent in Charge Debbie Livingston. Suggs appeared at the trial in custody, and was remanded after the jury relayed their verdict. The trial was before U.S. District Court Judge William J. Martinez.
Suggs was indicted by a federal grand jury in Denver on February 21, 2018. The federal grand jury then returned a superseding indictment on April 19, 2018. The trial started on March 25, 2019, and concluded today, March 28, 2019, with the guilty verdict. The defendant is scheduled to be sentenced by Judge Martinez on August 28, 2019. He faces not more than 10 years in federal prison, and up to a $250,000 fine.
According to court documents and evidence presented at trial, on January 3, 2018, Colorado Springs Police Officers were dispatched to a shots fired call where a man in a BMW fired at a pedestrian crossing the street. Officers interviewed a mother and daughter who had witnessed the shooting. They had the make and model of the car, as well as its license plate number. The pedestrian had nothing in his hands and was legally crossing an intersection when an individual in a black BMW pointed a firearm at the pedestrian’s legs and fired. The driver then fled. A witness took a picture of the car’s license plate and then pointed out the shell casing in the intersection, which was retrieved by the officers.
The victim called 911 and was interviewed by the police officers. Based on the victim’s information as well as that of the witnesses, officers learned the black BMW was registered to Perry Suggs, Jr., the defendant, who lived in Colorado Springs. It was determined that Suggs was a member of the Gangster Disciples street gang who had at least one felony conviction and was likely to possess firearms. It is against federal law for felons to possess firearms.
Officers executed a search warrant at Suggs’ residence as well as the BMW. There were two firearms in plain view inside a vehicle at his residence, including a black handgun and a black semi-automatic rifle. Ultimately officers found a Glock handgun and an AR-15 style rifle as well as ammunition. A test using the NIBIN database (National Integrated Ballistic Information Network) as well as a full forensic examination, confirmed that the Glock recovered by officers matched the shell casings found at the scene.
“The defendant was a danger to the Colorado Springs community,” said U.S. Attorney Jason Dunn. “Thanks to the hard work of law enforcement and prosecutors, the defendant will now have to answer for his crime,”.
“This case is a prime example of technology and skilled investigators coming together to find the person responsible for acts of violence,” said ATF Denver Special Agent in Charge Debbie Livingston. “I am proud of our partnerships that made this case possible.”
This matter was investigated by the Colorado Springs Police Department and the ATF with the assistance of the Colorado Springs Metro Crime Lab. The defendant was prosecuted by Assistant U.S. Attorneys Emily Treaster and Hetal J. Doshi.
This case is part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Carroll County Man Pleads Guilty to Filing a False Federal Tax ReturnRead the Press Release
Jackson, TN – Joshua "Josh" Lynn Hicks, 32 of Huntingdon, Tennessee appeared before Judge J. Daniel Breen and entered a guilty plea to filing false tax returns. U.S. Attorney D. Michael Dunavant announced the guilty plea today.
According to the indictment, in 2015, Hicks was the owner of J. Hicks Appliances in Huntingdon, Tennessee, and Appliances and More in Lexington, Tennessee. Responsible for the business record keeping, he willfully underreported the businesses’ gross receipts by $98,031 for the taxable year of 2015. Hicks also filed false U.S. Individual Income Tax Returns by underreporting gross receipts on his Schedule C, profit or loss from business in 2012, 2013, and 2014, which resulted in an underreporting of income in the total amount of $335,000.00, which had a corresponding negative impact on the ability of the U.S. Treasury to accurately and completely collect income taxes due from the defendant for that 4 year period.
On November 13, 2018, a federal grand jury in Jackson, Tennessee returned a four-count indictment against Hicks for filing False and Fraudulent statements on Income Tax Returns for the years of 2012-2015. On March 27, 2019, Hicks pleaded guilty to one count of the indictment for calendar year 2015.
U.S. Attorney D. Michael Dunavant said: "Protection of the United States Treasury is a core value and critical mission for this office and the Department of Justice. Income tax evasion and fraud strike at the very heart of our federal government’s financial ability to provide services and protection for our citizens, and will not be tolerated."
Hicks faces a statutory maximum sentence of three years in federal prison, a period of supervised release, and monetary penalties. As part of the plea agreement, Hicks will pay restitution in the amount of $95,210 to the United States. Sentencing is set for June 27, 2019, before United States District Court Judge J. Daniel Breen.
The Internal Revenue Service, Criminal Investigation Division, investigated this case.
Assistant U.S. Attorney Matt Wilson prosecuted this case on behalf of the government.
CareWell Urgent Care Center Agrees to Pay $2 Million to Resolve Allegations of False Billing of Government Health Care ProgramsRead the Press Release
BOSTON – The United States Attorney’s Office announced today that CareWell Urgent Care Centers of MA, P.C., CareWell Urgent Care of Rhode Island, P.C., and Urgent Care Centers of New England Inc. (CareWell), the owners and operators of urgent care centers located throughout Massachusetts and Rhode Island, have agreed to pay $2 million to resolve allegations that they violated the False Claims Act by submitting inflated and upcoded claims to Medicare, Massachusetts Medicaid (MassHealth), the Massachusetts Group Insurance Commission (GIC), and Rhode Island Medicaid.
Urgent care centers receive payment for Evaluation and Management (E/M) services by submitting Current Procedural Terminology (CPT) codes which reflect the level of E/M service performed. The level of E/M service is determined, in part, by the number of 14 possible body systems (e.g. cardiovascular, gastrointestinal, neurological, etc.) a physician, nurse practitioner, or other medical professional must review and examine to diagnose and treat a patient’s specific medical complaints. Generally, the more complex a patient’s medical complaints are, the more body systems may need to be reviewed, reflecting a higher level of E/M service performed. Urgent care centers are required to submit CPT codes for E/M services that are reasonable and medically necessary for an urgent care center to perform in light of the history of, examination into, and medical decision-making required for a patient’s medical complaints. In addition, urgent care centers must submit claims that properly identify whether a nurse practitioner, without the direct supervision of a physician, performed the E/M service in order to accurately determine the amount of payment they should receive.
The United States, the Commonwealth of Massachusetts, and the state of Rhode Island allege that, between March 1, 2013, and August 31, 2018, CareWell submitted false claims to Medicare, MassHealth, GIC, and Rhode Island Medicaid by falsely inflating the level of E/M services performed and by failing to properly identify the providers of E/M services. The governments contend that CareWell accomplished its fraud in several ways, including mandating that medical personnel examine and document at least 13 body systems during medical history inquiries, and at least nine body systems during physical examinations, even if patients’ specific medical complaints or symptoms did not justify such a comprehensive inquiry or examination.
CareWell instructed medical personnel to use encounter plan templates, loaded onto electronic medical records software, containing “yes or no” questions that CareWell directed its personnel to ask patients regarding specific body systems, even when such inquiries were not medically necessary. Even if medical personnel failed to ask a patient every question in an encounter plan template, the template contained a default “no” response to each inquiry. CareWell used the default “no” responses to assert that the associated body systems had been examined and billed accordingly, even when no such examination had occurred. The governments also allege that CareWell’s management told its medical personnel that the mandate of examining body systems unrelated to a patient’s specific medical complaints or symptoms was a requirement imposed by a malpractice insurance carrier, even though CareWell knew that no malpractice insurance carrier had ever imposed such a requirement on CareWell. In addition, the governments contend that CareWell failed to reduce the amounts of its claims to Medicare, MassHealth, GIC, and Rhode Island Medicaid for services performed by unsupervised nurse practitioners.
“The CareWell urgent care centers engaged in a calculated scheme to reap unjustified economic benefit for their own gain from precious government healthcare resources,” said United States Attorney Andrew E. Lelling. “Today’s result reinforces this office’s commitment to take action against providers that have defrauded government healthcare programs.”
“Inflating bills and submitting claims to government health insurance programs for needless services drains resources from legitimate patient care,” said Phillip Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Services. “Those seeking to enrich themselves at the expense of these taxpayer-funded programs must be held accountable.”
This civil settlement resolves allegations brought forth in a whistleblower lawsuit filed by a former employee of CareWell, Aileen Cartier, under the qui tam provisions of the False Claims Act, which permits private individuals, known as relators, to sue on behalf of the government for false claims and to share in any recovery. In connection with today’s announced settlement, Ms. Cartier will receive 17 percent of the recovery.
U.S. Attorney Lelling and HHS-OIG SAC Coyne made the announcement today. This case was handled by Assistant U.S. Attorney Steven Sharobem of Lelling’s Civil Division, Assistant Attorneys General Cassandra Arriaza, Jennifer Goldstein, and Ali Russo from the Massachusetts’ Attorney General’s Office and Assistant Attorney General James Dube of the Rhode Island’s Attorney General’s Office.
California Man Sentenced in Deadly Wichita Swatting CaseRead the Press Release
WICHITA, KAN. – A California man was sentenced Friday to 20 years in federal prison for making a hoax call to Wichita police that resulted in an innocent man who had no connection to the defendant or his co-conspirators being shot and killed by police, U.S. Attorney Stephen McAllister said.
Tyler Barriss, 26, Los Angeles, Calif., pleaded guilty to causing a deadly swatting incident in Wichita on Dec. 28, 2017, as well as dozens of similar crimes in which no one was injured. In those cases, Barriss pleaded guilty to charges filed in federal courts in California and the District of Columbia.
In the Wichita case, Barriss entered guilty pleas to one count of making a false report resulting in a death, one count of cyberstalking and one count of conspiracy. Barriss agreed to accept a sentence of 20-25 years as part of the plea. His counsel argued for the minimum 20, the government for the maximum 25, and the Court imposed a 20-year sentence, believed to be the longest sentence imposed for swatting or hoaxes.
“Swatting is no prank,” McAllister said. “Sending police and emergency responders rushing to anyone’s home based on utterly false information as some kind of joke shows an incredible disregard for the safety of other people.”
“I hope that this prosecution and lengthy sentence sends a strong message that will put an end to the juvenile and reckless practice of ‘swatting’ within the gaming community, as well as in any other context,” McAllister continued. “Swatting is just a terrible idea. I also hope that today’s result helps bring some peace to the Finch family and some closure to the Wichita community,” McAllister said.
In the Kansas case, Barriss admitted making hoax calls that resulted in Wichita police surrounding a house at 1033 W. McCormick. When officers arrived, they believed a man was inside who had killed his own father and was holding family members hostage. The man who came outside to face police, however, had done nothing wrong and did not know about the swatting call. As he stepped onto the porch, police told him to put up his hands. When he unexpectedly dropped his hands, he was shot and killed by a police officer.
DISTRICT OF COLUMBIA
In a case from the District of Columbia, Barriss pleaded guilty to making hoax bomb threats in phone calls to the headquarters of the FBI and the Federal Communications Commission in Washington, D.C.
CENTRAL DISTRICT OF CALIFORNIA
In a case from the Central District of California, Barriss pleaded guilty to 46 counts, including making calls with false reports that bombs were planted at high schools, universities, shopping malls and TV stations. He made the calls from Los Angeles to emergency numbers in Ohio, New Hampshire, Nevada, Massachusetts, Illinois, Utah, Virginia, Texas, Arizona, Missouri, Maine, Pennsylvania, New Mexico, New York, Michigan, Florida and Canada.
WICHITA
Two co-defendants in the Wichita case, Casey Viner, 19, North College Hill, Ohio, and Shane Gaskill, 20, Wichita, Kan., are awaiting trial.
In Barriss’ plea, he admitted he got involved with Viner and Gaskill after the two had a falling out while playing Call of Duty online. As a result, Viner, who was in Ohio, asked Barriss, who was in California, to swat Gaskill, who was in Wichita. Gaskill noticed Barriss was stalking him online. In messages over the internet, Gaskill dared Barriss to carry out the swat. Gaskill fooled Barriss, however, by claiming to live at 1033 W. McCormick. In fact, Gaskill no longer lived there.
McAllister and Assistant U.S. Attorney Debra Barnett prosecuted the Kansas case. McAllister commended the FBI, the Sedgwick County Sheriff’s Office and the Wichita Police Department for their work on the Kansas case. In the Middle District of California, Assistant U.S. Attorney George Emel Pence, IV, prosecuted. In the District of Columbia, Assistant U.S. Attorney Luke Matthew Jones prosecuted.
Brothers Who Allegedly Ran Unlicensed Financial Advisory Business Out of Their Parents’ Encino Home Face Wire Fraud ChargesRead the Press Release
LOS ANGELES – Two brothers who allegedly operated an unlicensed investment advisory business out of their parents’ Encino home were arrested today on federal wire fraud charges for an alleged scheme in which they used false account statements to hide multi-million dollar losses of their investors’ funds.
Motty Mizrahi, 46, of Encino, and Sassi Mizrahi, 53, of Sherman Oaks, were arrested this morning and made their initial appearances today in United States District Court.
According to the criminal complaint filed in this case, Motty Mizrahi falsely portrayed himself as a licensed broker, certified public accountant, and experienced trader who employed sophisticated financial option- and insurance-hedging strategies through the brothers’ business, MBIG Company. The Mizrahi brothers operated MBIG out of their parents’ home in Encino, court documents state. From November 2012 until March 2019, Motty Mizrahi raised millions of dollars from investors, promised them “guaranteed” returns between 2 percent and 3 percent per month, and assured them that their funds could be withdrawn after an initial holding period on an on-demand basis. Motty Mizrahi allegedly submitted phony monthly account statements that purported to show consistent monthly gains and also falsely showed that MBIG’s account balances were between $6 million and $9 million. However, Motty Mizrahi instead lost the investors’ money – losses he and Sassi Mizrahi denied when confronted by victims who unsuccessfully demanded their money back, the affidavit states.
The complaint also alleges that Motty Mizrahi distributed to investors a financial prospectus that contained false and fraudulent representations concerning MBIG’s past investment performance. The Mizrahi brothers also allegedly misled investors about their company’s E*Trade brokerage account, which was supposed to be used for investors’ money but in reality did not exist. Instead, Motty Mizrahi routed all victim-investor funds into his own personal trading account, the affidavit states. After E*Trade closed Motty Mizrahi’s personal accounts, Motty and Sassi Mizrahi allegedly continued to mislead investors by assuring them that MBIG had an E*Trade account containing adequate balances to cover the victim-investors’ initial investments.
If convicted on the wire fraud charges, the defendants would each face a statutory maximum sentence of 20 years in federal prison.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
In a related action, the U.S. Securities and Exchange Commission filed a civil fraud action against Motty Mizrahi and MBIG Company and obtained emergency relief including a temporary restraining order and an asset freeze order against the defendants.
The criminal case is being investigated by the Federal Bureau of Investigation.
This matter is being prosecuted by Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section.
Brevard Man Sentenced to 80 Years for Committing Sex Crimes Against ChildrenRead the Press Release
Orlando, Florida – United States District Judge Carlos E. Mendoza has sentenced Keneon Fitzroy Isaac (45, Cocoa) to 80 years in federal prison for production and possession of child pornography. The court also ordered Isaac to forfeit the smart phones that he used to commit the offenses.
Isaac was found guilty on January 4, 2019.
According to court documents, Isaac sexually abused a homeless, 13-year-old child on at least two occasions, and recorded the abuse using his smart phone. Isaac met the victim at a gas station, where she was panhandling with her mother. During the next two months, Isaac gained the family’s trust by providing basic necessities for the family including food, clothing, and shelter. Isaac also obtained 213 images of child pornography from the internet, some of which depicted the sexual abuse and exploitation of infants, toddlers and prepubescent children.
“This criminal abused the trust of a family under the worst of circumstances,” said HSI Tampa Special Agent in Charge James C. Spero. “While this predator has essentially received a life sentence, we hope it can provide some closure for the young victim during the healing process.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Brevard County Sheriff’s Office, and the Cocoa Beach Police Department. It was prosecuted by Assistant United States Attorney Karen L. Gable.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Beaver County Man Pleads Guilty in Fentanyl Trafficking ConspiracyRead the Press Release
PITTSBURGH - A resident of Monaca, Pennsylvania, pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
Nikia Perkins, 44, pleaded guilty on Tuesday to one count before Chief United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that from in and around September 2016, and continuing thereafter to in and around July 2017, Perkins conspired with others to distribute and possess with the intent to distribute at least 1.2 kilograms, but less than 4 kilograms of fentanyl, a Schedule II controlled substance.
Judge Hornak scheduled sentencing for July 23, 2019 at 9:30 a.m. The law provides for a total sentence of not less than 10 years to a maximum of life in prison, a fine not to exceed $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Robert C. Schupansky is prosecuting this case on behalf of the government.
This investigation was part of a long-term investigation by the FBI Greater Pittsburgh Safe Streets Task Force (GPSSTF), which targeted a large scale Drug Trafficking Organization operating in Butler, Beaver and Allegheny Counties. The GPSSTF is comprised of dedicated law enforcement professionals from the Wilkinsburg Police Department, Pennsylvania Attorney General’s Bureau of Narcotics Investigations, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pittsburgh Bureau of Police and the FBI. The GPSSTF and the United States Attorney’s Office, Western District of Pennsylvania, would like to recognize the significant contributions made to this investigation by the Pennsylvania State Police, United Sates Postal Inspection Service, Cranberry Township Police Department and the New Brighton Police Department. The Department of Homeland Security Investigators also assisted in the investigation that led to the prosecution of Nikia Perkins.
This investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.