Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 8 March 2019
Sutton Man Sentenced on Federal Drug ChargesRead the Press Release
BOSTON – A Sutton man was sentenced today in federal court in Worcester in connection with a large scale marijuana grow operation.
Eric Vallee, 38, was sentenced by U.S. District Court Judge Timothy S. Hillman to six months in prison and two years of supervised release. In June 2018, Vallee pleaded guilty to two counts of manufacturing marijuana and possessing marijuana with intent to distribute.
A search of Vallee’s home in Auburn, Mass., where he maintained a large, commercial-style marijuana grow operation, resulted in the seizure of more than 100 marijuana plants as well as approximately seven pounds of marijuana packaged for distribution, a cash-counting machine, and approximately $13,000. Vallee then moved to a house in Sutton, Mass. where he continued to oversee a large, commercial-style marijuana grow operation. A search of the Sutton home resulted in the seizure of 55 marijuana plants as well as approximately seven pounds of marijuana packaged for distribution and a cash-counting machine.
United States Attorney Andrew E. Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Office, made the announcement today. The Internal Revenue Service’s Criminal Investigation in Boston and the Auburn and Sutton Police Departments provided valuable assistance with the investigation. Assistant U.S. Attorney Bill Abely of Lelling’s Criminal Division prosecuted the case.
Springfield Man Charged with Failing to Register as a Sex OffenderRead the Press Release
BOSTON – A Springfield man was charged in federal court in Springfield yesterday with failing to register as a sex offender.
Ruben Pagan, 48, was charged with one count of failing to register as a sex offender. He is currently in state custody on unrelated charges.
According to the charging document, Pagan, having been convicted of a sex offense, engaged in interstate travel and failed to register, as required by law, as a sex offender between October 2017 and March 2018.
Pagan faces no greater than 10 years in prison, a lifetime of supervised release and a $250,000 fine. 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 John Gibbons, United States Marshal for the District of Massachusetts, made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Southern District takes part in largest-ever nationwide elder fraud sweepRead the Press Release
SAVANNAH, Ga: Attorney General William P. Barr and U.S. Attorney Bobby L. Christine today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
In the Southern District, a Liberty County woman has been federally charged with defrauding an elderly dementia patient in an effort to steal nearly half a million dollars.
Sailor Jones, 57, of Midway, Ga., is charged with wire fraud in United States District Court in Savannah, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. She faces up to 20 years in federal prison.
According to an information filed in the case, Jones, who is not a licensed nurse, owned a company purporting to provide at-home health services that was not licensed with the state of Georgia. From about December 2016 to June 2017, Jones provided cleaning and other minor tasks for a now-90-year-old woman who lived at a Savannah retirement community that provided the dementia patient with 24-hour skilled nursing services.
During this period, according to court documents, Jones fraudulently gained access to the woman’s checking and retirement accounts by posing as the victim, taking more than $300,000 and depositing the funds in Jones’ own personal accounts.
“Sailor Jones exploited an elderly dementia patient to enrich herself,” said Southern District of Georgia U.S. Attorney Bobby L. Christine. “Rather than serving this vulnerable woman’s needs, Jones instead fed her own greed. Our office and the Department of Justice will not tolerate fraud and abuse of our elder citizens, particularly those who have no choice but to trust others for their care.”
“The U.S. Secret Service has invested in identifying and investigating elder abuse and exploitation. Because eliminating this crime requires coordinated action, we work together with other federal, state and local agencies so that, together, we can build a more responsive network and give seniors the tools to avoid financial scams and elder abuse before it starts” stated Resident Agent in Charge Glen Kessler of the U.S. Secret Service Savannah Resident Office. “These senior citizens have earned the right to enjoy their retirement years with a sense of security.”
The charge is merely an allegation, and defendants are presumed innocent unless and until proven guilty.
The case was investigated by the United States Secret Service and is being prosecuted by the United States Attorney’s Office.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
The Department of Justice took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at more than three fourths of one billion dollars.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Sanborn Woman to Federal Prison for MethRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced March 8, 2019, to 8 years in federal prison.
Jamie Williams, 33, from Sanborn, Iowa, received the prison term after a May 21, 2018, guilty plea to one count of conspiracy to distribute methamphetamine within 1000 feet of a protected location.
Evidence at the guilty plea and sentencing showed that from 2015 through January 2018, Williams distributed more than six pounds of methamphetamine from her residence. Williams lived within 1000 feet of Hartley Melvin Sanborn Middle School. In January 2018, law enforcement executed a search warrant at Williams’ residence and seized over 120 grams of pure methamphetamine from her purse.
Williams was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Williams was sentenced to 96 months’ imprisonment. She must also serve an eight-year term of supervised release after the prison term. There is no parole in the federal system. Williams is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Mikala M. Steenholdt and investigated by the Clay County Sheriff’s Office, O’Brien County Sheriff’s Office, Dickinson County Sheriff’s Office, and Iowa Division of Criminalistics Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-4010. Follow us on Twitter @USAO_NDIA.
San Francisco Acupuncturist Indicted on Health Care Fraud Charges for False Billing SchemeRead the Press Release
SAN FRANCISCO– A federal grand jury has indicted Haichao Huang, charging him with health care fraud and making false statements relating to health care matters, announced United States Attorney David L. Anderson, Office of Personnel Management Office of the Inspector General Deputy Assistant Inspector General for Investigations Thomas W. South, and U.S. Department of Labor Office of Inspector General Special Agent in Charge Abel Salinas.
According to the indictment, filed March 7, 2019, and unsealed today, from February 2013 through June 2018, Huang, 46, of San Francisco, was a health care provider who offered acupuncture, physical therapy, massage, and other services at his office in San Francisco. The indictment alleges that Huang submitted claims for reimbursement to his patients’ health insurance plans, claiming that he provided reimbursable services and treatments when, in fact, he knew that the billings were false and not properly reimbursable. The indictment gives three examples of the ways in which Huang allegedly submitted billings for reimbursement. First, Huang submitted requests for reimbursement for acupuncture and other treatments when, in fact, the patient had received either much shorter periods of treatment or no treatment at all. Second, after a patient reached the limit of acupuncture sessions allowed by the relevant insurance plan, Huang billed the plan for other types of treatments and services that were not provided in order to continue receiving improper reimbursements. Third, Huang submitted claims for services rendered on days when the patient beneficiaries were not seen and received no services at all—including days when Huang was not in California.
Huang is charged with six counts of health care fraud, in violation of 18 U.S.C. § 1347, and one count of false statement relating to health care matters, in violation of 18 U.S.C. § 1035(a)(2).
An indictment merely alleges that crimes have been committed, and Huang, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 10 years in prison and $250,000 for each violation of 18 U.S.C. § 371. The defendant faces five years in prison and a fine of $250,000 if convicted of the violation of 18 U.S.C. § 1035(a)(2). The court may also order additional fines, restitution, and additional periods of supervised release at sentencing. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Huang made an initial appearance today before U.S. Magistrate Judge Joseph C. Spero. Huang pleaded not guilty and was released on bond. Judge Spero scheduled Huang’s next court appearance for March 12, 2019, for a further bond hearing. Huang’s first appearance before a district court judge is scheduled for March 22, 2019, before the Hon. Susan Illston, U.S. District Judge.
Assistant U.S. Attorney Ross Weingarten is prosecuting the case with the assistance of Marina Ponomarchuk. This prosecution is the result of investigations by the Office of Personnel Management Office of Inspector General and the Department of Labor Office of Inspector General, with assistance from the San Mateo County District Attorney’s Office.
Salem Man Sentenced to over a Year in Prison for Tax EvasionRead the Press Release
CONCORD- Blake Ruggiero, 44, of Salem, New Hampshire, was sentenced to 12 months and one day in prison for tax evasion, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, the defendant has owned and operated Romano’s Pizza in Salem since 1994. The defendant paid a substantial portion of wages to Romano’s employees in cash and failed to declare these wages to the Internal Revenue Service in order to reduce his tax liability. The defendant kept multiple sets of books that were seized as part of a search warrant. These documents showed the amounts that the defendant paid in cash but did not report. As a result of the defendant’s conduct, between 2011 and 2016, the defendant failed to pay to the IRS $621,614.88 of employment-related taxes.
Ruggiero previously plead guilty on November 27, 2018.
“As we approach the tax filing season, this case is a sobering reminder that tax evasion is a serious crime,” said U.S. Attorney Murray. “Those who act dishonestly to avoid paying their fair share of taxes undermine the integrity of the tax system. We will continue to work with the IRS to identify and prosecute those who violate our tax laws.”
“Our nation's tax system requires all of us to pay what we owe, or else our society cannot function,” said Kristina O’Connell, Special Agent in Charge of IRS Criminal Investigations in Boston. “This is an appropriate sentence for an individual who failed to pay significant employment taxes owed by his restaurant. Those who skirt the law in this manner gain a competitive advantage that is unfair to honest taxpayers. Violators will be prosecuted, punished and obligated to repay their taxes, along with substantial penalties and interest.”
This matter was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Seth Aframe.
###
Salem County, New Jersey, Man Sentenced to Eight Years in Prison for Dealing Guns Without a LicenseRead the Press Release
CAMDEN, N.J. – A Salem County, New Jersey, man with a previous felony record was sentenced today to 96 months in prison for illegally possessing guns and selling guns without a license, U.S. Attorney Craig Carpenito announced.
Corey Moore, 33, of Salem, previously pleaded guilty before U.S. District Judge Noel L. Hillman to two counts of an indictment charging him with dealing in firearms without a license and unlawfully possessing firearms after having been convicted of a felony offense. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From July 20, 2016, through Dec. 20, 2016, Moore sold firearms. On Oct. 24, 2016, Moore sold two loaded firearms – an Intratec, Model AB10, 9 millimeter Luger pistol, and a Smith & Wesson, Model 642 (marked LadySmith), .38 caliber revolver – to a man who was a confidential informant working with federal law enforcement officers. Moore, who did not have a license, sold the firearms to the informant at a convenience store in Logan Township, New Jersey. He also unlawfully possessed two additional loaded firearms: an Iberia Firearms Inc. (Hi-Point), Model JCP, .40 caliber pistol, and a Ruger, Model Security-Six, .357 magnum caliber revolver. Both of those firearms were fully operable and had been transported in interstate commerce prior to Moore’s possession of them.
In addition to the prison term, Judge Hillman sentenced Moore to X years of supervised release.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Acting Special Agent in Charge Christopher Taylor, with the investigation with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the Criminal Division in Camden.
Saint Paul Man Pleads Guilty to Armed Robbery of Two Eagan BanksRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of DAMIEN JAMES McDONALD, 40, to two counts of armed bank robbery. McDONALD, who was indicted on July 18, 2018, pleaded guilty today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea, on April 14, 2018, McDONALD entered the US Bank branch in the Lunds & Byerly’s grocery store in Eagan, Minnesota, pointed a firearm at two tellers and demanded money. The tellers complied with his demands and McDONALD fled the store with $2,739 in cash. On June 6, 2018, McDONALD entered the Associated Healthcare Credit Union in Eagan, Minnesota. McDONALD pointed a firearm at a teller, threw a bag on the counter and demanded that the teller fill it with cash. After the teller complied, McDONALD ordered the teller to pass the bag to an adjacent teller, who was also instructed to fill the bag with cash. McDONALD ordered the two tellers to a back room and then fled the credit union with $8,236 in cash, which included ten pre-recorded $20 bait bills. Upon review of the surveillance video of the credit union robbery, law enforcement recognized McDONALD and executed a search warrant at his residence and for his vehicles later that day. Law enforcement recovered clothing that matched the clothing worn by the robber during the two robberies and thousands of dollars in cash hidden in the residence. Additionally, investigators found over one-thousand dollars cash in McDONALD’S pocket following his arrest, including cash that matched some of the pre-recorded bait bills from the credit union robbery.
This case is the result of an investigation conducted by the FBI and Eagan Police Department. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat violent crime.
This case is being prosecuted by Assistant U.S. Attorneys Benjamin Bejar, Thomas Calhoun-Lopez, and Charles J. Kovats.
Defendant Information:
DAMIEN JAMES McDONALD, 40
Saint Paul, Minn.
Convicted:
- Bank robbery (armed), 2 counts
###
Additional news available on our website.
Follow us on Twitter and Facebook.
United States Attorney’s Office, District of Minnesota: (612) 664-5600
Repeat Offender Sentenced to Prison for Child PornographyRead the Press Release
ALEXANDRIA, Va. – A Springfield man was sentenced today to total of 16 years in prison and a lifetime of supervised release for receipt of child pornography and a supervised release violation.
According to court documents, William Hemphill, 39, admitted that he downloaded thousands of images and videos of child pornography in February and March 2018. Hemphill, who is currently serving a term of federal supervised release as part of his sentence for an earlier 2006 conviction for possession of child pornography, fled from supervision in Virginia in February 2018. He was arrested in Utah aboard a California-bound train in March 2018, in possession of cocaine and several electronic devices, including a laptop computer. A subsequent forensic examination of these devices revealed that Hemphill had used multiple anonymous Internet services to download and view large quantities of child pornography while on the run in Virginia and elsewhere.
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 U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Robert Mathieson, U.S. Marshal 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 Senior U.S. District Judge T.S. Ellis III. Assistant U.S. Attorney Whitney Dougherty Russell and Special Assistant U.S. Attorney William G. Clayman prosecuted the case.
This case was initiated and investigated by the FBI’s Washington Field Office’s Child Exploitation and Human Trafficking Task Force, which is composed of FBI Agents, along with Detectives from the Washington Metropolitan Police Department, Fairfax County Police, Arlington County Police, Prince William County Police, Alexandria City Police, Loudoun County Sheriff’s Department, Leesburg Police Department, USMS and other federal Offices of Inspector Generals. Additional assistance in this case was provided by the FBI’s Salt Lake Field Office, the United States Marshal’s Office, and the United States Probation and Pretrial Services in the District of Utah.
The U.S. Attorney’s Office for the District of Utah provided significant assistance.
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-414.
Rapid City Man Found Guilty of Attempted Commercial Sex Trafficking of ChildrenRead the Press Release
United States Attorney Ron Parsons announced that Zam Lian Mung, age 29, was found guilty of Attempted Commercial Sex Trafficking of Children following a federal trial in Rapid City, South Dakota.
The charge carries a mandatory minimum of 10 years up to life in federal prison and/or a $250,000 fine, 5 years up to lifetime supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Evidence at trial established that on August 7, 2018, Mung responded to a prostitution advertisement on CityxGuide.com posted by Division of Criminal Investigation undercover agents, which purported to offer young girls for sex. Following several messages with a person Mung believed to be associated with a 15-year-old girl, but who was in fact an undercover agent, he proceeded to negotiate the time and place they would meet, along with the $150 he would pay to engage in sex acts with the minor.
The undercover operation and arrest was a joint effort between the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah Collins prosecuted and tried the case.
A sentencing date has not been set. Mung was remanded to the custody of the U.S. Marshals Service pending sentencing.
Randolph County Resident Pleads Guilty to Federal Credit Card Fraud ChargesRead the Press Release
GREENSBORO, N.C. - Matthew G.T. Martin, United States Attorney for the Middle District of North Carolina, announced today that ANTHONY THOMAS HARRELSON, 39, of Sophia, North Carolina, pleaded guilty in federal court in Greensboro before the Honorable N. Carlton Tilly, to seven felony charges of use of an unauthorized access device (i.e., a credit card).
HARRELSON pleaded guilty to using credit cards fraudulently obtained from J.P. Morgan Chase Bank and American Express. The indictment alleges that HARRELSON purchased merchandise, jewelry, gold coins, meals at restaurants, vehicles, and firearm parts in excess of $350,161.47 with the fraudulent credit cards. The exact amount of the loss will be determined by the Court at sentencing.
The defendant faces a maximum potential penalty of seventy years imprisonment. The plea agreement requires HARRELSON to make restitution and to forfeit money and goods acquired from use of the fraudulent credit cards. Sentencing is scheduled for federal court in Greensboro on June 27, 2019, at 2 p.m.
The case was investigated by the United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Randolph County Sheriff's Department. The case was prosecuted by Assistant United States Attorneys Frank J. Chut, Jr. and Steven N. Baker.
###
Pittsfield Man Sentenced to 130 Months for Methamphetamine TraffickingRead the Press Release
CONCORD - John F. Kelekci, 35, of Pittsfield, New Hampshire, was sentenced in federal court on Thursday to serve 130 months in prison for conspiracy to distribute, and possess with intent to distribute, methamphetamine, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, beginning in late 2016, the DEA and the Postal Inspection Service investigated numerous parcels mailed from Las Vegas, Nevada, to New Hampshire suspected of containing methamphetamine. Law enforcement officers also investigated parcels mailed from New Hampshire to Las Vegas, Nevada, suspected of containing United States currency, and money transfers from New Hampshire to Las Vegas. Eventually, law enforcement officers identified Edward Espejo as the individual in Las Vegas who was shipping methamphetamine to New Hampshire in return for money transfers or packages of cash mailed to him.
On December 19, 2017, a Priority Express Mail parcel was mailed from "Brian C Sullivan" at an address in Las Vegas, to a business in Suncook, New Hampshire. On December 20, 2017, an employee of the business contacted local law enforcement to report concerns that the parcel contained illegal narcotics. Police responded to the business and discovered that the parcel contained a plastic vacuum-sealed bag containing 123.9 grams of 100 percent pure methamphetamine. After interviewing witnesses at the business, law enforcement identified the defendant as the intended recipient of the parcel and determined that, earlier in the day on December 20, 2017, the defendant had been waiting at the business for a parcel to arrive, but had departed the business before the mail arrived. Further investigation revealed that the day before the package was shipped, the defendant had wired $2,400 to Espejo in Las Vegas as payment for the drugs.
In January of 2018, the defendant drove from New Hampshire to Las Vegas and met with
Espejo in person. While in Las Vegas, the defendant was wired money by several New Hampshire residents. On January 16, 2018, the defendant mailed two packages to New Hampshire, each containing more than five grams of actual methamphetamine. The first package was intercepted and seized pursuant to a search warrant. On January 20, 2018, the defendant flew home to New Hampshire, leaving behind the car he had driven to Las Vegas at Espejo's house.
On March 9, 2018, the defendant was arrested in New Hampshire by local police following a vehicle chase. During a search of the vehicle the defendant was driving, police seized multiple items, including $6,150 in cash, a Wal-Mart money transfer receipt for $1,500 with Edward Espejo's name on it, and 27.8 grams of 100 percent pure methamphetamine.
Records obtained in the investigation confirmed hundreds of telephone contacts between the defendant and Espejo, as well as multiple money transfers to Espejo and one of Espejo’s associates.
Kelekci previously pleaded guilty on September 27, 2018.
Espejo previously pleaded guilty and is awaiting sentencing. Two other defendants in this conspiracy, Michael Bean and Mark Moore, are also awaiting sentencing.
“This case highlights the emergence of methamphetamine as a lethal substance that threatens the health and safety of New Hampshire communities,” said U.S. Attorney Murray. “Traffickers will use any available means, including the U.S. Mail, to transport their deadly products across the country, making them available for sale on our streets. As is apparent from the lengthy sentence imposed in this case, those who choose to bring methamphetamine into New Hampshire should understand that they face severe consequences for this unlawful conduct.”
“DEA is committed to bring to justice those that distribute methamphetamine,” said DEA Special Agent in Charge Brian D. Boyle. “DEA and its local, state and federal partners will do everything in our power to keep this highly addictive drug off the streets of New Hampshire.”
“The sentence imposed should give fair warning that the U.S. Postal Inspection Service will seek justice for those who traffic illegal narcotics through the U.S. Mail,” said U.S. Postal Inspection Service's Inspector in Charge, Joseph W. Cronin of the Boston Division. “This highly addictive drug has no place in our communities. We will continue to identify and investigate those who engage in this type of drug trafficking."
This matter was investigated by the DEA and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney John Davis.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
###
Pittsburgh Man Pleads Guilty in Multi-year Marijuana Trafficking Operation that Distributed Primarily to College CampusesRead the Press Release
PITTSBURGH - A resident of Pittsburgh, PA, pleaded guilty in federal court to charges of conspiracy to distribute 100 kilograms or more of marijuana and conspiracy to launder proceeds of marijuana trafficking, United States Attorney Scott W. Brady announced today.
Christopher Schanck, 36, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that the Drug Enforcement Administration and other agencies conducted a multi-year investigation of the marijuana trafficking conspiracy of Schanck and his co-conspirators. From 2012 through 2017, Schanck and his co-conspirators arranged for marijuana to be supplied from the West Coast and mailed to the Pittsburgh area through the United States Postal Service. Schanck and his co-conspirators would then distribute the marijuana in the Western District of Pennsylvania, primarily on college campuses, such as Indiana University of Pennsylvania. During the operation of the conspiracy, Schanck conspired to distribute from 100 to 400 kilograms of marijuana. He also conspired to launder approximately $258,404 in proceeds from marijuana trafficking.
Judge Cercone scheduled sentencing for July 25, 2019, at 11:45 a.m. The law provides for a total sentence of not less than five years and up to 40 years in prison, a fine of $5,000,000, 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.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation, the Pittsburgh Bureau of Police, and the Indiana Borough Police conducted the investigation that led to the prosecution of Schanck. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Pittsburgh Drug Felon Pleads Guilty to Illegal Gun Possession ChargeRead the Press Release
PITTSBURGH - A resident of Pittsburgh pleaded guilty in federal court to a charge of violating federal firearms laws, United States Attorney Scott W. Brady announced today.
Phil Bradford, 24, pleaded guilty to one count before Senior United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Bradford, an individual with a prior felony drug conviction, knowingly and unlawfully possessed a firearm. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing a firearm.
Judge Cercone scheduled sentencing for July 25, 2019 at 1 p.m. The law provides for a total sentence of not more than 10 years in prison, a fine of not more than $250,000, 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 Heidi M. Grogan is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Bradford.
Pearl Man Sentenced to Five Years in Federal Prison for Heroin ConspiracyRead the Press Release
Gulfport, Miss. – Howard Lee Walker, 30, of Pearl, Mississippi, was sentenced yesterday by U.S. District Judge Sul Ozerden to 60 months in federal prison, followed by three years of supervised releas,e for conspiring with others to possess with intent to distribute heroin, announced U.S. Attorney Mike Hurst and DEA Assistant Special Agent in Charge Derryle Smith. Walker was also ordered to pay a $3,000 fine.
On July 6, 2018, Biloxi police responded to a call about a female attempting to pass a $100.00 counterfeit bill at Walmart. When officers arrived, they stopped a van driven by Erica Wooldridge of Jackson. Walker was a passenger in the vehicle. Both individuals had warrants for their arrest. Upon searching the vehicle, officers found a loaded 9mm pistol under the front console and numerous pills. Walker admitted to riding with Wooldridge from Jackson to Biloxi to sell the pills. Wooldridge and Walker thought they were selling Percocet or Oxycodone. However, after testing, analysts determined the pills actually contained 295 grams of heroin.
Walker pled guilty on December 4, 2018. Wooldridge was sentenced on January 14, 2019, to 51 months in federal prison, followed by three years of supervised release, and ordered to pay a fine of $7,500.00.
The case was investigated by the Drug Enforcement Administration and the Biloxi Police Department. It was prosecuted by Assistant U.S. Attorney Kathlyn R. Van Buskirk.
Palo Pinto General Hospital CEO Pleads Guilty to Multi-Million Dollar Healthcare Fraud SchemeRead the Press Release
The former CEO of Palo Pinto General Hospital has pleaded guilty to defrauding three major insurance providers – BlueCross BlueShield of Texas, CIGNA Texas, and United Healthcare – out of millions of dollars, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
According to his plea papers, Palo Pinto General Hospital CEO Harris Brooks, along with his co-conspirators, used PPGH’s in-network contracts with large health insurance companies to engage in pass-through billing for laboratory services, a scheme that lasted from September 2017 through June 2018.
Using PPGH’s national provider identification number, Mr. Brooks and his co-conspirators submitted claims to insurance companies for allergy and genetic testing purportedly performed at PPGH, Harris admits. In reality however, PPGH did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment at various spas and clinics throughout Texas and elsewhere, not PPGH. The patients did not know about the pass-through charges using PPGH’s insurance contracts.
Over the nine-month period, Brooks and his co-conspirators submitted claims to health insurance providers for laboratory services totaling more than $55 million, the vast majority of which were fraudulent. As a result of these claims, the insurance companies paid PPGH more than $9 million.
The purpose of the scheme was to receive higher rates of reimbursement from the insurance companies, Harris said.
According to his plea agreement, Brooks faces up to five years in prison and will be required to pay restitution to those he defrauded.
The Federal Bureau of Investigation conducted the investigation; Assistant U.S. Attorney Megan Fahey prosecuted the case.
Omaha Man Sentenced for Armed Credit Union RobberyRead the Press Release
United States Attorney Joe Kelly announced that Joseph Lanckriet, 28, was sentenced on Thursday March 7, 201,9 in Omaha, Nebraska, by United States District Judge Robert F. Rossiter, Jr., for the crime of armed bank robbery. Judge Rossiter sentenced Lanckriet to 56 months’ imprisonment, a five-year term of supervised release, and ordered Lanckriet to make restitution in the amount of $27,278 to the SAC Federal Credit Union.
On December 7, 2012, Joseph Lanckriet and co-defendant Thomas Woodard, who was sentenced in February, robbed the SAC Federal Credit Union located at 219 S 23rd St. in Plattsmouth, Nebraska, and took $27,278 in credit union funds.
Brandishing a pellet gun, the two robbers confronted a credit union employee at the entrance of the credit union as she was preparing to open for business. After being forced to open the vault and providing them with money, the employee’s hands were zip tied behind her back and her driver’s license was taken from her. She was told if she called the police, they now knew where she lived and they would come back to harm her.
The case went cold but ultimately Lanckriet and Woodard were apprehended in Sioux City, Iowa, in 2014, after they committed another robbery in that city.
This case was investigated by the Federal Bureau of Investigation, the Plattsmouth Police Department, and the Nebraska State Patrol.
New Haven Man Pleads Guilty to Robbing West Haven BankRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MALCOLM LYTELL, 65, of New Haven, pleaded guilty today before U.S. District Judge Janet C. Hall in New Haven to one count of bank robbery.
According to court documents and statements made in court, on December 21, 2018, Lytell, wearing a hooded jacket, dark gloves and a mask that covered most of his face, entered the TD Bank located at 636 Campbell Avenue in West Haven. He then provided a black bag and a note demanding money to bank employees, and threatened to shoot employees if they did not comply. Bank employees filled the bag with $1,260 in cash and Lytell exited the bank. West Haven Police apprehended Lytell shortly after the robbery.
Lytell has been detained since his arrest.
Lytell has prior federal convictions for burglary and firearm offenses related to multiple armed bank robberies in Connecticut. In January 1994, he was sentenced to 248 months of imprisonment and five years of supervised release for those offenses. He was released from federal prison in April 2018.
The charge of bank robbery carries a maximum term of imprisonment of 20 years. Judge Hall scheduled sentencing for May 31, 2019.
Lytell faces additional penalties for violating the conditions of his supervised release.
This matter has been investigated by the Federal Bureau of Investigation and the West Haven Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Margaret E. Maigret.
Nashua Man Pleads Guilty to Fentanyl Trafficking and Firearms ChargesRead the Press Release
CONCORD - Grant Michallyszyn, 22, of Nashua, pleaded guilty in federal court to possession of fentanyl with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, law enforcement officers executed a search warrant at a hotel room in Nashua where Michallyszyn was staying. During the search, law enforcement seized two handguns, nine rounds of ammunition, digital scales, and various drugs, including over 39 grams of fentanyl. Under federal law, it is unlawful to possess a firearm to protect one’s drug trafficking activities or the location from which one distributes narcotics.
Michallyszyn is scheduled to be sentenced on June 10, 2019.
“The illegal sale of fentanyl poses a serious and well-known risk to public health and safety” said U.S. Attorney Murray. “When fentanyl dealers use firearms to further sales, the danger to the public is greatly increased. Accordingly, the aggressive prosecution of armed fentanyl dealers will continue to be a priority for the U.S. Attorney’s Office.”
“Today Mr. Michallyszyn finally accepted responsibility for illegally possessing firearms to protect his stash of narcotics in pursuit of his drug trafficking activities. This case is another example of how the FBI will continue to work in lock-step with our law enforcement partners to eliminate guns, drugs and violence from our neighborhoods,” said Joseph R. Bonavolonta, Special Agent in Charge, FBI Boston Division.
This matter was investigated by the FBI and Nashua Police Department, with assistance from the New Hampshire Attorney General's office. The case is being prosecuted by Assistant U.S. Attorney Anna Krasinski.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
###
NDTX Roundup - 3/8/2019Read the Press Release
SENTENCING – Gary Morris (AUSA David Jarvis)
Following a four-day sentencing hearing, 70-year-old Gary Ronald Morris, of McKinney, was sentenced on March 6 to 5 years in federal prison and ordered to pay more than $2.2 million in restitution for his role in an investor fraud scheme. Mr. Morris pleaded guilty to wire fraud in May 2018. In his plea papers, Mr. Morris admitted he devised a scheme to defraud investors by deceiving them about the true state of his business, Greystone Digital Technologies. He admits he sent emails to investors falsely claiming that a third party was willing to invest millions in Greystone’s “cargo scanner” project; that he was working closely with Federal Express on the scanner project; and that other companies had partnered with him on the scanner project. At the conclusion of the hearing, a U.S. District Judge ordered Mr. Morris taken into custody immediately.INDICTMENT – Charles Grant (AUSA Walt Junker)
On March 7, a federal grand jury indicted Charles Edward Grant, of Dallas, on two counts of bank robbery. Mr. Grant, 23, allegedly robbed two Dallas banks, a Chase Bank and a Bank of America, in January 2019. He faces up to 20 years in prison on each count.PLEA -- Louis Medford (AUSA John Boyle)
Louis Douglas Medford pleaded guilty on March 7 to firearm and drug charges. Mr. Medford – who was an already convicted felon at the time -- admits he fled the scene of a June 2017 traffic stop after Garland police officers noticed marijuana in his vehicle. Search of the vehicle later revealed a 9 mm Glock under the driver’s seat. Less than a month later, Mr. Medfords admits, he was stopped again, this time with 486 grams of marijuana, a digital scale, and several small plastic bags. This week, he pleaded guilty to two counts of possession with intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of felon in possession of a firearm. The Garland Police Departmet] investigated.INDICTMENT* – Bertha Garay (AUSA Danielle Jones)
On March 6, 2019, a federal grand jury indicted Bertha Garay, 46, for theft of government funds, false statement to the Social Security Administration and Representative Payee Fraud. She was allegedly receiving SSA benefits on behalf of her minor daughter as her representative payee. However, her minor daughter was not in her custody and Ms. Garay was not using the benefits on her daughter. She mislead SSA by submitting signed paperwork stating that her daughter lived with her and she was using the benefits for the care of her daughter. If convicted of this case, Ms. Garay could potentially be compelled to pay back over $82,000. The SSA Office of the Inspector General investigated the case.SENTENCING -- Tony Contreras (AUSA George Leal)
On March 4, 39-year old Tony Contreras, of Hutchins, Texas, was sentenced to more than 8 years behind bars for conspiracy to possess with intent to distribute methamphetamine. According to court documents reflect, in February 2016, he ordered two kilograms of cocaine and one kilogram of methamphetamine from a co-defendant, and complained about a previous kilogram of methamphetamine being wet. The co-defendant told Contreras he would call Contreras when the methamphetamine was ready but that no cocaine was available. The case was investigated by the FBI and the Criminal Investigations Division of the Internal Revenue Service.SENTENCING -- Jose Juan Ortiz-Pacheco (AUSA George Leal)
On March 4, 23- year-old Jose Juan Ortiz-Pacheco, of Michoacán, Mexico, was sentenced to more than 7 years in federal prison for conspiracy to possess with intent to distribute cocaine by United States District Judge Sam A. Lindsay. Court documents reflect that in March 2017, Ortiz-Pacheco and his two co-defendants were arrested with three kilograms of cocaine at an apartment complex after they offered to sell it to another individual. It was noted at sentencing the defendant is an undocumented alien and should not have been in the United States at the time of the offense. The case was investigated by the Drug Enforcement Administration and the Lewisville Police Department.* An indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.
Mobile County Man Receives 60 Months After Conviction for Conspiring to Steal FirearmsRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces that Simeon C. Taylor, a 27 year old resident of Citronelle, Alabama was sentenced to 60 months incarceration for conspiring to receive, possess and steal firearms.
On November 29, 2018, Taylor entered a guilty plea pursuant to a plea agreement and admitted in open court that on July 5, 2018, Taylor and a co-conspirator burglarized the home of M. J. in Creola, Alabama. During the burglary they stole four (4) firearms, namely, two Anderson, .30 caliber rifles, model 300 Blackout, an Anderson, .223 caliber rifle; and a Marlin, .22 caliber rifle.
Shortly after the burglary, a Creola police officer attempted to stop a red Nissan truck, registered to the co-conspirator, for speeding. First the driver of the Nissan truck tried to flee by speeding up and attempting to elude the police following behind. Next, the Nissan truck stopped and the three occupants inside jumped out and ran. Two of the occupants were caught and one got away. The three occupants were Taylor, his co-conspirator and unidentified man. The co-conspirator was caught. Taylor got away after Taylor pointed a gun at the officer chasing him. All of the stolen firearms were recovered from the Nissan truck. Additionally, two receipts with Taylor’s name were seized from the Nissan truck.
After waiving his Miranda Rights, the conspirator stated that he and Taylor burglarized the residence and stole the firearms. He also stated that the other man was not involved. He also said that Taylor told him to run from the police. The two officers who attempted to stop the Nissan truck for speeding picked Taylor out of a photo line-up as the person who fled and was not caught at the scene and as the person who pointed a handgun at one of the officers.
Officers of the Creola, Alabama Police Department along with special agents of the FBI investigated the case and brought it to the U. S. Attorney=s Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
McKees Rocks Woman Sentenced for Helping a Felon Get 2 FirearmsRead the Press Release
PITTSBURGH, PA - A resident of McKees Rocks, Pennsylvania, has been sentenced in federal court to three years of probation, including six months of home detention, on her conviction of aiding and abetting the possession of a firearm by a convicted felon, United States Attorney Scott W. Brady announced today.
United States District Judge David Cercone imposed the sentence on Talaya Thompkins, 36.
According to information presented to the court, from on or about August 27, 2016, and continuing thereafter to on or about August 7, 2017, Talaya Thompkins unlawfully aided and abetted Vincent Eggleton’s possession of firearms. Thompkins purchased the two firearms in August 2016 and February 2017 and made them available to Eggleton. Thompkins was aware that Eggleton had a prior felony conviction, which prohibits Eggleton from possessing any firearm.
On March 1, 2018, Eggleton pleaded guilty to possession of a firearm and ammunition by a felon, as well as conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine and a related drug-trafficking charge. On August 1, 2018, Eggleton was sentenced to a total of 10 years and one month in prison on those charges.
Assistant United States Attorney Adam N. Hallowell prosecuted this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, as well as a federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) conducted the investigation leading to the Indictment in this case. The task force is headed by the Drug Enforcement Administration and is comprised of members drawn from the Borough of Baldwin Police Department, McKees Rocks Police Department, Munhall Police Department, Allegheny County Sheriff’s Office, Pittsburgh Bureau of Police, and the Pennsylvania State Police.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Manhattan U.S. Attorney Announces Charges Against Leaders of “OneCoin,” A Multibillion-Dollar Pyramid Scheme Involving the Sale of A Fraudulent CryptocurrencyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Cyrus R. Vance Jr., the District Attorney for the County of New York, John R. Tafur, the Special Agent in Charge of the Newark Field Office of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), William F. Sweeney Jr., and the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that KONSTANTIN IGNATOV was arrested March 6, 2019, at the Los Angeles International Airport, on a wire fraud conspiracy charge stemming from his role as the leader of an international pyramid scheme that involved the marketing of a fraudulent cryptocurrency called “OneCoin.” An Indictment charging IGNATOV’s sister, RUJA IGNATOVA – a founder and original leader of OneCoin – with wire fraud, securities fraud, and money laundering offenses was unsealed yesterday. As a result of misrepresentations that IGNATOV, IGNATOVA, and others made about OneCoin, victims invested billions of dollars worldwide in the fraudulent cryptocurrency. Following his arrest, IGNATOV appeared in Magistrate Court in the Central District of California, and was detained on the charge contained in the Complaint.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants created a multibillion-dollar ‘cryptocurrency’ company based completely on lies and deceit. They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich. Our Office has a history of successfully targeting, arresting, and convicting financial fraudsters, and this case is no different.”
New York County District Attorney Cyrus R. Vance Jr., said: “As alleged in the indictment, these defendants executed an old-school pyramid scheme on a new-school platform, compromising the integrity of New York’s financial system and defrauding investors out of billions. Our Office urges all crypto investors to scrutinize investment opportunities, recognize the prevalence of fraud in this underregulated space, and proceed with caution. I commend U.S. Attorney Berman and my Office’s Major Economic Crimes Bureau for their globe-spanning investigative work and shared commitment to protecting our markets from sophisticated white-collar fraudsters.”
IRS Special Agent in Charge John R. Tafur said: “This is an old scam with a virtual twist. As alleged in court documents, the cryptocurrency OneCoin was established for the sole purpose of defrauding investors. IGNATOV and IGNATOVA allegedly convinced victims to invest in OneCoin based on complete lies about the virtual currency. IRS Criminal Investigation is committed to investigating cryptocurrency scams in an effort to protect the American public and bring cryptocurrency crooks to justice.”
FBI Assistant Director-in-Charge William Sweeney Jr. said: “As we allege, OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators. Whether you’re dealing with virtual currency or cold, hard cash, we urge the public to exercise due diligence with any investment.”
According to the allegations contained in the Complaint charging KONSTANTIN IGNATOV and the Indictment charging RUJA IGNATOVA, and in other court papers, and other documents in the public record:[1]
IGNATOV currently serves as the top leader of OneCoin Ltd., a company marketing a purported cryptocurrency named “OneCoin,” which the investigation has revealed is in fact a fraudulent pyramid scheme. OneCoin Ltd. was co-founded in 2014 by IGNATOVA, and is based in Sofia, Bulgaria. IGNATOVA served as OneCoin’s top leader until her disappearance from public view, in October 2017. Starting in late 2017, IGNATOV, who is IGNATOVA’s younger brother, assumed high-level positions at OneCoin, rising to the top leadership position by mid-2018.
OneCoin Ltd. operates as a multi-level marketing network through which members receive commissions for recruiting others to purchase cryptocurrency packages. This multi-level marketing structure appears to have influenced rapid growth of the OneCoin member network. Indeed, OneCoin Ltd. has claimed to have more than 3 million members worldwide, including victims living and/or working within the Southern District of New York. OneCoin continues to operate to this day.
As a result of misrepresentations made by IGNATOV, IGNATOVA, and other OneCoin representatives, victims throughout the world wired investment funds to OneCoin-controlled bank accounts in order to purchase OneCoin packages. Records obtained in the course of the investigation show that, between the fourth quarter of 2014 and the third quarter of 2016 alone, OneCoin Ltd. generated €3.353 billion in sales revenue and earned “profits” of €2.232 billion.
Among a number of other representations, OneCoin Ltd. has claimed that the OneCoin cryptocurrency is “mined” using mining servers maintained and operated by the company, and that the value of OneCoin is based on market supply and demand. The purported value of a OneCoin has steadily grown from €0.50 to approximately €29.95 per coin, as of January 2019. In fact, the value of OneCoin is determined internally and not based on market supply and demand; and OneCoins are not mined using computer resources. Moreover, the investigation has revealed that IGNATOVA and her co-founder conceived of and built the OneCoin business fully intending to use it to defraud investors. For example, in one email between IGNATOVA and her co-founder, IGNATOVA described her thoughts on the “exit strategy” for OneCoin. The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .”
Additionally, OneCoin Ltd. has claimed to have a private “blockchain,” or a digital ledger identifying OneCoins and recording historical transactions. The investigation has revealed that OneCoin lacks a true blockchain, that is, a public and verifiable blockchain.[2] Moreover, by approximately March 2015, IGNATOVA and her co-founder had started allocating to OneCoin members coins that did not even exist in OneCoin’s purported private blockchain, referring to those coins as “fake coins.”
As the founder and leader of OneCoin Ltd., IGNATOVA participated in efforts to market OneCoin to U.S. victim-investors. For example, on July 4, 2015, IGNATOVA participated in an online webinar, later posted to YouTube.com, in which IGNATOVA announced the official opening of the United States market for OneCoin.
Since taking over leadership of OneCoin following IGNATOVA’s disappearance from publicly running the company, IGNATOV has himself made false representations to OneCoin members to solicit trader package purchases and investments into the company. For example, IGNATOV has repeatedly represented that an “initial public offering” of OneCoin would occur on various dates in 2018 and 2019, in an effort to generate excitement and solicit additional investments from member victims. However, the purported offering was repeatedly postponed, and no such offering has taken place. Moreover, IGNATOV has been personally involved in manually setting and increasing the purported Euro value of OneCoin, contradicting claims that the value is set by supply and demand. Finally, the investigation has revealed that IGNATOV is aware that OneCoin-derived funds have been routed through a series of purported “investment fund” accounts used to hide the origin of the money, i.e., to launder OneCoin fraud proceeds.
Between February 27, 2019, and March 6, 2019, IGNATOV travelled to the United States to conduct OneCoin-related business, including in Las Vegas, Nevada, where he stayed at a casino resort. While in Las Vegas, IGNATOV met with a number of OneCoin affiliates. During the meeting, one of the first questions posed to IGNATOV was when OneCoin members would be able to monetize, or “cash out,” their OneCoins. IGNATOV reportedly responded, “if you are here to cash out, leave this room now, because you don’t understand what this project is about.”
IGNATOVA, a third defendant, MARK S. SCOTT, and others agreed to launder the proceeds of the OneCoin fraud scheme. Specifically, IGNATOVA, SCOTT, and others agreed with others to conduct transactions involving OneCoin fraud proceeds in order to conceal and disguise the nature, location, source, ownership, and control of the proceeds. SCOTT, a former partner of a major United States law firm, assisted IGNATOVA and others in laundering more than $400 million through a series of purported investment funds holding bank accounts at financial institutions in the Cayman Islands and the Republic of Ireland, among other locations. The indictment charging SCOTT was previously unsealed, and SCOTT was arrested in Barnstable, Massachusetts, on September 5, 2018. SCOTT’s case is currently pending before U.S. District Judge Edgardo Ramos.
* * *
IGNATOVA, 38, of Sofia, Bulgaria, is charged with one count each of wire fraud, conspiracy to commit wire fraud, securities fraud, and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years sentence, and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison. IGNATOVA remains at large.
IGNATOV, 33, of Sofia, Bulgaria, is charged by Complaint with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.
SCOTT, 50, of Coral Gables, Florida, is charged by Indictment with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman and Mr. Vance praised the outstanding investigative work of IRS-CI and the FBI, which jointly conducted this investigation with the Special Agents from the U.S. Attorney’s Office and analysts from the New York County DA’s Office Major Economic Crimes Bureau.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Securities and Commodities Fraud Task Force. Assistant United States Attorneys Christopher J. DiMase and Nicholas Folly, and Special Assistant United States Attorney Julieta V. Lozano of the New York County District Attorney’s Office, are in charge of the prosecution.
The charges contained in the Indictments and Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
If you think you may have been a victim in this case or have additional information, please contact the United States Attorney’s Office at 866-874-8900, or by email at [email protected].
[1] As the introductory phrase signifies, the entirety of the texts of the Complaint and Indictment constitute only allegations, and every fact described herein should be treated as an allegation.
[2] OneCoin Ltd.’s private blockchain may be contrasted with Bitcoin’s blockchain, which is decentralized and public.
Man Sentenced for Importing and Selling Parts of Endangered SpeciesRead the Press Release
ALEXANDRIA, Va. – An Upperville man was sentenced today to 30 days in prison and one year of supervised release for selling endangered species and other wildlife parts that were illegally imported into the United States.
According to court documents, Keith R. Foster, 60, is a golf course architect who also operated a store in Middleburg known as “the Outpost.” Between 2014 and 2018, Foster imported at least 35 separate shipments of merchandise for resale at the Outpost, some of which contained wildlife and wildlife parts, but he failed to declare any of the wildlife within those shipments to the U.S. Fish and Wildlife Service upon import, as required by law. To conceal the existence of wildlife pieces in the shipments and evade detection by the U.S. Fish and Wildlife Service, he caused many pieces to be labeled in a manner that obscured their true nature. Foster then sold at his store the wildlife pieces that he illegally imported.
During the five-year period in question, Foster sold nearly $400,000 worth of items that constituted or contained parts of endangered species and other wildlife that he illegally imported into the United States. These items included Endangered Species Act items such as sawfish blades, crocodile skin bags, wallets and flasks, and handicrafts made of sea turtle shell.
In a telephone call with a customer in January 2017, Foster admitted that he should not be importing sawfish blades. Foster stated, “Rest assured, I’m gonna bring more in, ‘cause I’m the only fool in the States that probably wants to risk it.”
In December 2018, Foster was ordered to perform 50 hours of community service, forfeit scores of individual pieces of wildlife and wildlife parts, and ordered to forfeit $275,000.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Edward Grace, Assistant Director of Law Enforcement for the U.S. Fish and Wildlife Service, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Gordon D. Kromberg 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-456.
Man Found Guilty for Evasion of Federal Tax PaymentsRead the Press Release
James D. Pieron Jr., a former resident of Mount Pleasant, Michigan, was found guilty on March 7, 2019 of one count of evasion of payment of his federal income taxes for 2008 and 2009, U.S. Attorney Matthew Schneider announced today.
Joining Schneider in the announcement was Manny Muriel, Special Agent in Charge of the Detroit Office of the Internal Revenue Service - Criminal Investigation.
The seven-day jury trial was conducted by U.S. District Judge Thomas L. Ludington in Bay City, Michigan.
The jury found that from approximately April of 2009 until July 18, 2018, James D. Pieron Jr. willfully evaded payment of income taxes due and owing by him for the calendar years 2008 and 2009.
Pieron, a U.S. citizen, operated a foreign currency exchange business in Zurich, Switzerland before he moved back to Mount Pleasant, Michigan in 2009. Pieron earned capital gains on a stock sale while living in Switzerland. Pieron wired millions of dollars from Swiss bank accounts to business accounts of his corporate interests in Mount Pleasant. Pieron filed his 2008 and 2009 personal income tax returns in 2011, reporting capital gains from his sale of stock but without paying the taxes he owed on those gains. Instead of paying his taxes, Pieron kept his personal money in his business accountants and purchased luxury items such as an $18,900 custom motorcycle, a $38,000 Steinway piano, and a $139,500 Mercedes SUV for his own use. In 2012, Pieron submitted an installment agreement request to the IRS, acknowledging that he owed $444,880 in taxes for 2007, 2008 and 2009, and claiming that he could only afford to pay $1,500 per month to get current on his taxes.
Manny Muriel, Special Agent in Charge of the Detroit’s IRS Criminal Investigation, stated, “Our tax system is based on voluntary compliance. Mr. Pieron intentionally failed to pay over his fair share.” Muriel continued, “The jury’s verdict demonstrates that there are consequences for those who willfully evade their taxes."
The maximum penalty for tax evasion is 5 years of imprisonment and a fine of twice the gain or loss.
Pieron’s sentencing hearing currently is set for June 20, 2019.
The case was investigated by agents of the Internal Revenue Service – Criminal Investigation. The case was prosecuted by attorneys from the Flint and Bay City branch offices of the U.S. Attorney’s Office.
Macomb Mother Indicted for Wire Fraud Related to Fraudulent Adoption SchemeRead the Press Release
On March 7, 2018, a federal grand jury returned an indictment charging Macomb County resident Tara Lynn Lee with eighteen counts of wire fraud, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation.
Lee operated in Michigan under the name Always Hope Pregnancy and Education Center. Neither Lee nor her organization were licensed by the State of Michigan to facilitate adoptions or match birth mothers to adoptive families. Yet from 2014 to 2018, Lee repeatedly paired birth mothers with adoptive parents. Lee represented herself to adoptive parents as a licensed social worker with a legitimate adoption agency.
The indictment sets forth specific allegations of wire fraud. On several occasions, Lee matched more than one set of adoptive parents to a birth mother. Other times, Lee matched adoptive parents with birth mothers that did not exist, were not pregnant, or had not decided to place their child into adoption. Lee accepted payment from prospective adoptive parents for these fraudulent matches. The indictment identifies over $200,000 that Lee received from fraudulent matches in 2018 alone.
“The evidence in this case will show that this is a terrible scam of parents who simply want to make our world better by adopting a child. We are encouraging any victims of this dishonest scheme to come forward and call the FBI hotline at 313-965-2227.”
“The wire fraud allegations against Ms. Lee do not begin to address the devastating emotional impact her cruel behavior has had on expectant mothers, adoptive parents, and families across the United States,” said SAC Slater. “The FBI Detroit Field Office is continuing to identify additional victims and investigate new allegations against Ms. Lee. We encourage anyone with information on Tara Lee or her organizations to contact the FBI’s hotline at 313-965-2227.”
A webpage has been created to provide case related information to those effected by the alleged offenses. Please visit www.justice.gov/usaeo-edmi and click the link titled U.S. v. Tara Lee.
The case is assigned to U.S. District Court Judge Bernard A. Friedman. The case was investigated by the Detroit FBI, and it is being prosecuted by Assistant U.S. Attorney Sara Woodward
Lower Brule Man Charged with Assaulting a Federal OfficerRead the Press Release
United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting, and Impeding a Federal Officer.
Alan Thompson, Sr., age 55, was indicted on February 13, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 6, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 8 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on December 29, 2018, Thompson forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with a federal officer while they were engaged in the performance of their official duties, and said conduct did involve physical contact.
The charge is merely an accusation and Thompson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Thompson was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Joe Kelly announced that Michael Dean Elmshauser, 33, of Lincoln, was sentenced today to seven years (84 months) in federal prison for his involvement in a conspiracy to distribute, and possess with the intent to distribute, 500 grams or more of a mixture or substance containing methamphetamine. Following the prison term, Elmshauser will serve four years on supervised release.
Information provided to law enforcement indicated that Elmshauser was responsible for the distribution of at least 1.5 kilograms (approximately three pounds) of methamphetamine in the Lincoln area between January of 2014 and December of 2017. In June of 2017, Elmshauser and his co-defendant, Shannon Gillispie, were stopped by Lincoln Police officers, and Gillispie was found to have a small amount of methamphetamine in her purse. In November of 2017, Elmshauser sold small amounts of methamphetamine to an undercover officer on two occasions.
Gillispie also pleaded guilty to the conspiracy charge and is scheduled for sentencing in May of 2019.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
KC Man Sentenced to 15 Years for Possessing Carfentanil to DistributeRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man was sentenced in federal court today for possessing carfentanil (a synthetic opioid) to distribute, after a teenager who ingested half of one of the pills without knowing what it contained suffered a nearly fatal overdose.
Gage S. Lankas, 21, was sentenced by U.S. District Judge Howard F. Sachs to 15 years in federal prison without parole.
On Oct. 30, 2018, Lankas pleaded guilty to possessing carfentanil with the intent to distribute.
The investigation began on Aug. 2, 2017, when Grain Valley, Mo., police officers responded to a 17-year-old male having a drug overdose. He mistakenly thought he had ingested half an oxycodone pill, but it actually contained carfentanil. Carfentanil is a synthetic opioid that is 10,000 times more potent than morphine and 100 times more potent than fentanyl, which itself is 50 times more potent than heroin. Carfentanil has been linked to a significant number of overdose deaths across the country.
The teenager survived the incident and told officers he had snorted an oxycodone pill and blacked out. At his home, the officers located 375 pills stamped “XANAX” on one side and a sideways “2” on the other. They also found some other pills stamped “A215.” The teenage victim told officers he acquired the pills from Lankas, whom he met in the Westport area of Kansas City, Mo. When he returned home, he took a few of the Xanax pills and snorted one-half of what he thought was an oxycodone pill (stamped “A215”). He immediately blacked out and does not remember anything except waking up and passing out again in the ambulance. He told officers he had snorted oxycodone before and could not understand his reaction.
On Aug. 5, 2017, Kansas City, Mo., police officers responded to a report of a suicidal party. When the officers arrived at the apartment, they were met by a woman who told them she and Lankas, her boyfriend, had been arguing. She told him she wanted to break up and she wanted him to leave their apartment. She told the officers Lankas threatened to kill himself by jumping out the window and picked up a handful of pills and acted as if he was going to take them. She left and called 9-1-1. The officers placed Lankas under arrest.
Officers found a large stack of white pills sitting on the kitchen table in the apartment. There were 1,332 white pills, as well as 67 partial pills, stamped “XANAX” (later determined to contain alprazolam). There were also 3.25 blue pills stamped “A215” (later determined to contain carfentanil), $6,583 inside a safe in the bedroom, and drug paraphernalia. Lankas told officers that he purchased the pills from the dark web. Lankas admitted that he intended to distribute the pills.
This case was prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department and the Grain Valley, Mo., Police Department.
KC Man Pleads Guilty to Possessing Stolen Firearms Taken in Auto TheftsRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man pleaded guilty in federal court today to possessing firearms stolen overnight from parked vehicles.
Jerel D. Jones, 26, pleaded guilty before U.S. District Judge Howard F. Sachs to possessing at least seven stolen firearms.
Jones sold most of the stolen firearms to Blue Steel Guns & Ammo in Raytown, Mo. Jones sold two of the stolen firearms to Blue Steel Guns & Ammo on Sept. 22, 2015. One of the firearms was a Glock .40-caliber pistol that had been stolen overnight between Sept. 20 and 21, 2015, from a Chevrolet Tahoe in a parking lot in Olathe, Kan. The vehicle had the rear driver’s side window broken out. Also missing was $47,000 from the vehicle’s console. The second stolen firearm was a General George S. Patton Commemorative .45-caliber revolver that had been stolen overnight between Sept. 18 and 19, 2015. It was one of eight firearms taken from a parked Ford F150 in Olathe.
Jones also sold four more firearms that had been stolen from the Ford 150 to Blue Steel Guns & Ammo on other occasions, including a Remington 7mm rifle, a Ruger 10/22 Carbine .22-caliber rifle, and a Benelli 12-gauge shotgun sold on Sept. 19, 2015; and a Springfield 30-06 caliber rifle sold on Sept. 22, 2015.
On the same night the Glock .40-caliber pistol was stolen from the Chevrolet Tahoe between Sept. 20 and 21, a Ford Fusion was broken into in the same parking lot. The vehicle’s front passenger window had been broken out. Investigators recovered a palm print above the passenger door handle that was a match for Jones.
Jones also admitted that he traded a Glock 9mm pistol to Blue Steel Guns & Ammo for a different Glock (a .40-caliber pistol). In order to complete the trade, Jones had to fill out an ATF form that required him to answer 15 prohibiting questions, including, “Are you under indictment or information in any court for a felony, or any other crime for which the judge could imprison you for more than one year.” Jones answered “NO” to this question, although he had been charged with receiving stolen property and had been to court four times prior to filling out the form. Jones later pawned the Glock .40-caliber pistol at Smart Pawn in Kansas City, Mo., for $300.
Under federal statutes, Jones is subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Bruce A. Rhoades. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Johnstown Man Arrested on Heroin and Fentanyl ChargeRead the Press Release
ALBANY, NEW YORK – Victor M. Diaz, age 29, of Johnstown, New York, was arrested yesterday for possessing and intending to distribute a controlled substance.
The announcement was made by United States Attorney Grant C. Jaquith; Special Agent in Charge Ray Donovan, U.S. Drug Enforcement Administration (DEA), New York Division; and City of Amsterdam Police Chief Gregory J. Culick.
The charge in the complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty.
According to the criminal complaint, law enforcement executing a search warrant yesterday found Diaz in possession of approximately 1,500 small bags of heroin and/or fentanyl.
Diaz appeared today before United States Magistrate Judge Christian F. Hummel, who ordered Diaz detained pending further proceedings. If convicted, Diaz faces up to 20 years in prison, and a term of post-imprisonment supervised release of at least 3 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the DEA and the Amsterdam Police Department, with assistance from the New York State Police and the Gloversville Police Department, and is being prosecuted by Assistant U.S. Attorney Michael Barnett.
John Galanis Sentenced to 10 Years in Prison for His Participation in A Scheme to Defraud A Native American Tribe and Various InvestorsRead the Press Release
Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that JOHN GALANIS was sentenced today by the U.S. District Judge Ronnie Abrams to 10 years in prison for defrauding a Native American tribal entity and various investment advisory clients of tens of millions of dollars in connection with the issuance of bonds by the tribal entity and the subsequent sale of those bonds through fraudulent and deceptive means.
Mr. Khuzami said: “This complex and brazen securities fraud scheme lined the pockets of John Galanis and his co-defendants but left the Native American tribal entity, the Wakpamni Lake Community Corporation, $60 million in debt, and numerous pension funds with bonds they never wanted and could not sell. A jury saw the defendant’s lies for what they were, and John Galanis, a career fraudster, now faces a significant prison term as a result of his crimes.”
According to the allegations contained in the Indictment filed against JOHN GALANIS and statements made in related court filings and proceedings, including the trial of JOHN GALANIS and two co-defendants in May and June of 2018:
From March 2014 through April 2016, JOHN GALANIS, Jason Galanis, Gary Hirst, Bevan Cooney, Michelle Morton, Hugh Dunkerley, and others engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by Hirst, Morton, and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.
The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by JOHN GALANIS. Simultaneously, Jason Galanis, JOHN GALANIS’s son, with the backing of other co-conspirators, worked to acquire Hughes Capital Management (“Hughes”), a registered investment adviser. Hirst and Morton were installed as Hughes’s chief investment officer and chief executive officer, respectively. Within weeks of taking control of Hughes, Hirst and Morton placed the entire $28 million first series of Tribal Bonds with Hughes clients but failed to disclose material facts about the Tribal Bonds, including that the Tribal Bonds fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients. In addition, Hughes’ clients were not told about substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.
JOHN GALANIS and his co-conspirators then misappropriated the proceeds of the first Tribal Bond issuance. Specifically, although the Tribal Bonds were supposed to be invested in an annuity, the proceeds were deposited into an account opened by Hirst and over which both Hirst and Dunkerley had signatory authority. Hirst and Dunkerley, at the direction of Jason Galanis, then transferred significant amounts of the bond proceeds from that account to support the defendants’ business and personal interests. Jason Galanis, for example, used a portion of the proceeds of the first Tribal Bond issuance to finance the purchase of a $10 million luxury apartment in Tribeca. JOHN GALANIS, similarly, secretly received $2.35 million in proceeds of the first bond issuance, which he spent on a variety of personal expenses and luxury items, including cars, jewelry, and hotel expenses.
In addition, JOHN GALANIS induced the WLCC to issue a second round of Tribal Bonds, which were purchased using $20 million of bond proceeds from the first issuance. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase. In addition, millions of dollars in bond proceeds from the bond issuances were used to finance the acquisition of companies that the defendants and their co-conspirators acquired as part of their aspiration to build a financial conglomerate.
In the spring of 2015, JOHN GALANIS induced the WLCC to issue an additional $16 million worth of Tribal Bonds. Simultaneously, Jason Galanis and others purchased a second investment adviser, Atlantic Asset Management (“Atlantic”), and installed Morton as the chief executive officer. Within days of obtaining control of Atlantic, Morton placed the entirety of the $16 million Tribal Bond with an Atlantic client, without the client’s consent and without disclosing the fact that the Tribal Bonds were outside the client’s investment parameters and that numerous conflicts of interest existed. The proceeds of the $16 million issuance were again not invested in an annuity as promised, but instead were diverted to, among other things, finance the defendants’ acquisition of another company in furtherance of their hope to build a financial conglomerate and to make payments to one of the broker dealers in which certain co-conspirators had interests.
* * *
In addition to the prison term, JOHN GALANIS, 75, was sentenced to three years of supervised release. JOHN GALANIS was also ordered to forfeit $2,585,000 and to make restitution in the amount of $43,785,176.
Jason Galanis, who pled guilty to conspiracy to commit securities fraud, securities fraud, and investment adviser fraud, was sentenced to a term of 173 months in prison on August 11, 2017. Gary Hirst, who pled guilty to securities fraud, conspiracy to commit securities fraud, investment adviser fraud, and conspiracy to commit investment adviser fraud, was sentenced to 96 months in prison on September 7, 2018. Michelle Morton, who pled guilty to conspiracy to commit securities fraud and investment adviser fraud, is awaiting sentencing. Bevan Cooney, who was convicted with JOHN GALANIS at trial of conspiracy to commit securities fraud and securities fraud, is scheduled to be sentenced on April 4, 2019. Hugh Dunkerley, who pled guilty to conspiracy to commit securities fraud, two counts of securities fraud, bankruptcy fraud and falsification of records with the intent to obstruct a government investigation, is scheduled to be sentenced on July 19, 2019.
This conviction represents JOHN GALANIS’s fourth conviction in this District for fraud-related offenses. JOHN GALANIS is currently serving a 72-month sentence imposed by the Honorable P. Kevin Castel in February 2017, resulting from GALANIS’s involvement in a scheme to manipulate the stock price of Gerova Financial Group, a publicly traded company listed on the New York Stock Exchange, and to defraud the shareholders of that company. At today’s sentencing, Judge Abrams directed that 48 months of the sentence she imposed today be served consecutive to the sentence in the Gerova matter. Previously, in July 1988, JOHN GALANIS was convicted after trial of offenses related to his involvement in another fraudulent scheme and sentenced to 324 months’ in prison. In February 1973, JOHN GALANIS was convicted of conspiring to make false statements to the Securities and Exchange Commission and committing mail fraud.
Mr. Khuzami praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein, Brendan F. Quigley, and Negar Tekeei are in charge of the prosecution.
Jacksonville Man Arrested and Charged with Soliciting Child Pornography on Internet Blog WebsitesRead the Press Release
Jacksonville, Florida – United States Attorney Maria Chapa Lopez announces that Colum Patrick Moran, Jr. (40, Jacksonville) has been arrested and charged by federal criminal complaint with soliciting child pornography using the internet. If convicted, Moran faces a minimum mandatory penalty of 15 years, and up to 30 years, in federal prison. Moran was arrested on March 6, 2019, and is currently detained.
According to the
complaint , from on or about December 28, 2016, through October 31, 2018, Moran, using the name “Emily lover” and the email address [email protected], made numerous postings to several internet blog websites hosted by mothers. These blog sites were designed and intended to share and exchange information about motherhood, raising children, and other related topics. Moran repeatedly posted sexually explicit comments about young children on these motherhood blogs and also solicited others to produce and post sexually explicit photos and videos of children on the blog sites.On March 6, 2019, FBI agents and other officers executed a search warrant at Moran’s apartment where Moran lived alone. The agents found a plastic storage bin containing at least 50 pairs of female child-sized underwear, a smart phone containing over 300 images depicting child pornography, a number of credit cards and Florida driver licenses that did not belong to Moran, and several firearms and a bulletproof vest. Moran was placed under arrest.
This case was investigated by the Federal Bureau of Investigation in Jacksonville and Los Angeles, and the Jacksonville Sheriff’s Office, with assistance from the National Center for Missing and Exploited Children (NCMEC). It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This 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.
Jacksonville Convicted Felon Pleads Guilty to Federal Firearms OffenseRead the Press Release
Jacksonville, Florida – United States Attorney Maria Chapa Lopez announces that Todd Levant Asbey, Sr. (48, Jacksonville) has pleaded guilty to possessing a firearm as a convicted felon. Asbey, who qualifies as an Armed Career Criminal, faces a minimum mandatory sentence of 15 years, and up to life, in federal prison. A sentencing date has not yet been set.
According to the
plea agreement , on March 11, 2018, Asbey entered a Waffle House in Jacksonville carrying a 9 mm pistol, in search of an individual whom he believed had stolen his cellphone. After accosting a customer and striking him in the head, Asbey went out into the restaurant parking lot and discharged the pistol toward the customer and another individual, missing both. Patrol officers from the Jacksonville Sheriff’s Office responded pursuant to 911 calls and arrested Asbey as he was leaving the scene in a vehicle driven by a friend. In the vehicle, officers found the pistol Asbey had fired and two other firearms. The officers also located a cartridge case in the Waffle House parking lot that matched the pistol fired by Asbey. As a previously convicted felon, Asbey is prohibited under federal law from possessing a firearm.This case was investigated by the Jacksonville Sheriff’s Office, the Florida Department of Law Enforcement, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorneys David B. Mesrobian and Frank Talbot.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Jackson Man Pleads Guilty under Project EJECT to Possessing a Firearm as a Convicted FelonRead the Press Release
Jackson, Miss – Mark Cassity, 22, of Jackson, pled guilty today before U.S. Chief District Judge Daniel P. Jordan III, to possession of a firearm by a convicted felon, announced U.S. Attorney Mike Hurst and Dana Nichols, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
On June 8, 2018, during a traffic stop conducted by an officer of the Jackson Police Department, Cassity was arrested for providing false information. At the time of the arrest, a handgun was found in his front pocket. Cassity has a previous felony conviction for receiving stolen goods in 2015.
On December 11, 2018, Cassity was charged in a federal indictment with possession of a firearm by a convicted felon. He will be sentenced on June 14, 2019, at 9:00 a.m., by Judge Jordan, and faces a maximum penalty of ten years in prison and a $250,000 fine.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Bert Carraway.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry and awareness. EJECT stands for "Empower Justice Expel Crime Together." PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Honduran Man Pleads Guilty to Cocaine and Firearm TraffickingRead the Press Release
ALEXANDRIA, Va. – A Honduran national pleaded guilty today to multiple cocaine and firearms trafficking charges.
According to court documents, Reyes Barrera Alachan, 38, sold a total of about 3/4 of a kilogram of cocaine to undercover law enforcement over the course of about six months. Alachan traveled from his residence in Maryland to North Carolina at least every other weekend to meet his sources of supply and obtain cocaine, which he redistributed to his customers in the greater Washington, DC metropolitan area. Alachan and his co-conspirators used coded language to communicate about drugs, such as the word “tires” to refer to cocaine, and “fajitas” to refer to methamphetamine.
In addition to his involvement in distributing cocaine, Alachan was also involved in illegal distribution of firearms, and sold a total of six firearms, as well as magazines and ammunition, to undercover law enforcement. The firearms he sold included semi-automatic weapons capable of carrying large-capacity magazines. When Alachan was arrested, law enforcement found him in possession of 5 ounces of cocaine, 4 grams of methamphetamine, drug paraphernalia, and gun ammunition.
Alachan pleaded guilty to conspiracy to distribute 500 grams or more of cocaine, distribution of cocaine, and one count of engaging in the business of dealing firearms without a license. He faces a mandatory minimum sentence of five years in prison when sentenced on June 28. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated as part of the Organized Crime Drug Enforcement Task Forces (OCDETF) Operation Tomb Stone. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of a 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Matthew J. DeSarno, Special Agent in Charge of the Criminal Division at the Washington Field Office, Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, and Barry M. Barnard, Chief of Prince William County Police, made the announcement after U.S. District Judge Claude M. Hilton accepted the plea. Assistant U.S. Attorneys Katherine E. Rumbaugh and James P. Gillis are prosecuting the case.
This investigation was led by FBI Washington Field Office’s Safe Streets/HIDTA Task Force. The Task Force is composed of FBI Agents along with investigators from the Prince William County Police, the Fairfax County Police, the Loudoun County Sheriff’s Office, Leesburg Police Department, Alexandria City Police, Vienna Police, Herndon Police and ICE. Significant assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, FBI’s Charlotte Field Office, DEA’s Greensboro Resident Agency, and the Police Departments of Sanford, North Carolina and Fayetteville, North Carolina.
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 Nos. 1:18-cr-380 and 1:19-cr-73.
Homeland Security Investigations Analyst Found Guilty of False StatementsRead the Press Release
TUCSON, Ariz. – On March 6, 2019, Gregg A. Johnson, 42, of Tucson, Ariz., was found guilty by a federal jury of three counts of submitting false statements to a government agency. The case was tried before U.S. District Court Judge James A. Soto. Sentencing is set for May 20, 2019.
The evidence at trial established that, beginning in October, 2015, Johnson submitted three applications for federal employment with Homeland Security Investigations. In each application, Johnson falsely claimed that he had a Master of Arts in Theology and a Bachelor of Science in Sociology. Johnson worked as a Computer Forensic Analyst for Homeland Security Investigations. All of the positions Johnson applied for required a Top Secret Security clearance.
A conviction for false statements to a government agency is a felony that carries a maximum penalty of five (5) years in prison, and a $250,000 fine.
The investigation in this case was conducted by the Office of Professional Responsibility, Department of Homeland Security-ICE. The prosecution was handled by the United States Attorney’s Office for the District of Arizona.
CASE NUMBER: CR-19-114-TUC-JAS (EJM)
RELEASE NUMBER: 2019-029_ Johnson
# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Harrison County residents admit to role in methamphetamine distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Byron Higginbotham and Erica Herron, both of Clarksburg, West Virginia, have admitted to their roles in a methamphetamine distribution operation, United States Attorney Bill Powell announced.
Higginbotham, age 36, pled guilty to one count of “Possession of Unregistered Firearm.” Higginbotham admitted to having an unregistered .20 caliber sawed-off shotgun in March 2018 in Harrison County.Erica Herron, age 38, pled guilty to one count of “Distribution of Methamphetamine.” Herron admitted to selling methamphetamine in September 2017 in Harrison County.
Higginbotham faces up to 10 years incarceration and a fine of up to $250,000. Herron faces up to 20 years incarceration and a fine of up to $1,000,000. 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 Zelda E. Wesley is prosecuting the cases on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated. The United States Marshal Service assisted.
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 Michael John Aloi presided.
Georgia Man Sentenced for Jamaican Lottery ScamRead the Press Release
BOSTON – A Georgia man was sentenced yesterday in federal district court in Boston for his role in a bogus advance fee Jamaican lottery scheme in which victims were defrauded of more than $1 million.
Peter Anthony Chin Jr., 35, of Atlanta, Ga., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 57 months in prison, two years of supervised release, and ordered to pay $1,139,828 in restitution. In December 2018, Chin pleaded guilty to one count of conspiracy to commit mail and wire fraud.
From 2012 to 2017, Chin was part of a scheme that targeted elderly individuals throughout the United States, including Massachusetts. The victms were informed via phone, email and mail that they had won millions of dollars in a lottery, but that they had to pay the taxes on their purported winnings before the funds could be released. Chin’s co-conspirators directed the victims to mail or wire funds to Chin or to his associates. Chin kept a portion of the funds for himself and then distributed the rest as directed by his co-conspirators, including sending significant amounts to Jamaica.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, Boston Field Division, made the announcement today. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Criminal Division prosecuted the case.
Galva Man to Federal Prison for Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced on March 7, 2019, in federal court in Sioux City.
Lee Charles Mercer, 42, from Galva, Iowa, pled guilty to conspiracy to distribute methamphetamine on August 21, 2018. Mercer was previously convicted of three separate felony drug offenses in the Iowa District Court in 2013, 2004 and 1998.
Evidence at the plea and sentencing hearings, showed that from November 2017 through March 2018, Mercer was involved in a conspiracy that distributed more than 2500 grams of methamphetamine near Galva, Iowa. On March 12, 2018, Mercer was stopped for a traffic violation in Woodbury County, Iowa, and found in possession of meth, and $5,000 in cash. Mercer admitted he planned to distribute the methamphetamine to other persons. Mercer further admitted that he planned to use the $5,000 to purchase a pound of methamphetamine in Sioux City, Iowa.
Mercer was sentenced by United States District Court Chief Judge Leonard T. Strand. Mercer was sentenced to 180 months’ imprisonment. He must also serve a term of ten years of supervised release following any imprisonment. Mercer is being held in the United States Marshal’s custody until he can be transported to a federal prison
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Woodbury County Sheriff’s Office, Sioux City Police Department, and the Drug Enforcement Administration Laboratory.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-4018.
Follow us on Twitter @USAO_NDIA.
Galesburg Man Sentenced to Prison for Straw Purchase of GunsRead the Press Release
ROCK ISLAND, Ill. – A Galesburg, Ill., man, Marvin Louis Davis, 28, has been ordered to serve four years in federal prison after admitting that he lied when he purchased multiple guns from a licensed firearms dealer in Galesburg. On Sept. 27, 2018, Davis pleaded guilty to providing a false address to the firearms dealer in April 2016, when he purchased eight handguns and one long gun. At the time of purchase, Davis, in fact, lived in a public housing complex where firearms are prohibited.
At sentencing, on March 5, 2019, before U.S. District Judge Sara Darrow, the government presented evidence that one of the guns Davis purchased was later recovered at the scene of an armed robbery in Peoria; another was recovered at the scene of a shooting in Peoria. Other firearms were in the possession of a convicted felon.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; the Galesburg Police Department and the Peoria MEG conducted the criminal investigation. Assistant U.S. Attorneys Alyssa Raya and Kevin Knight represented the government in the case prosecution.
Davis has been in the custody of the U.S. Marshals Service since Jan. 11, 2019, when Davis’s pretrial release was revoked for violating his bond conditions.
Fraudulent "Credit Profile Number" Results in Two Years in PrisonRead the Press Release
OKLAHOMA CITY – DEMARR FANNELL GREER, 39, of Edmond, Oklahoma, has been sentenced to 24 months in prison for fraudulent use of a Social Security Number, announced Robert J. Troester of the U.S. Attorney’s Office.
On April 17, 2018, a federal grand jury charged Greer with using interstate wire communications to defraud credit card issuers, automobile dealers, and other lenders between February and August 2016. According to the indictment, Greer obtained the Social Security Number of a person born in 2004 and used it as a "credit profile number"—also known as "credit privacy number" or a "credit protection number"—to establish what appeared to be good credit with consumer reporting agencies, such as TransUnion and Experian. After establishing good credit, he allegedly used the number to apply for a Discover Card and for a lease on a 2016 Dodge crew cab pickup. The indictment alleges he made little to no payments on his obligations and thus caused losses to businesses that had extended credit to him.
Greer pleaded guilty on October 20, 2018.
On March 7, 2019, U.S. District Judge David L. Russell sentenced Greer to 24 months in prison, to be followed by three years of supervised release. The sentence includes $22,734.08 in restitution: $16,528.95 to Motors Insurance Corporation, $5,000.00 to David Stanley Dodge, and $1,205.13 to Discovery Financial Services.
This case is the result of an investigation by the Social Security Administration—Office of Inspector General, the FBI, and the U.S. Postal Inspection Service. Assistant U.S. Attorney Timothy W. Ogilvie prosecuted the case.
Reference is made to public filings for further information.
Four Romanian Nationals Indicted for Using the Identity of Another to Obtain "Skimmer" EquipmentRead the Press Release
St. Louis, MO – Four Romanian nationals from Glendale, Arizona, were indicted for conspiring to commit bank fraud by using counterfeit credit and debit cards to make automated teller machine withdrawals, and to obtain the shipment of device-making equipment through U.S. Postal Service through the use of the identity of others.
On February 13, 2019, officers with the St. Louis Metropolitan Police Department discovered a package that was being mailed to a UPS store in Richmond Heights, Missouri. After obtaining a search warrant for the package they discovered that it contained two point-of-sale terminals with skimming devices attached. The point of sale terminals were of the type used by retail establishments when customers desire to pay with their credit and debit cards. Through use of the attached skimming devices, individuals are able to harvest the account information of the stores’ customers, and produce counterfeit cards embedded with the stolen information.
Stefan Unguru and wife, Gina Unguru, were arrested as they tried to retrieve the package from the UPS Store personnel. They also sought to pick up another package mailed to Stefan Unguru. That package contained an additional nine point-of-sale terminals.
A subsequent investigation by agents of the United States Secret Service and detectives of the St. Louis County Police Department revealed that between March 24, 2018 and March 26, 2018, Stefan Unguru, Banta Unguru, and Marcu Unguru used counterfeit cards embedded with the account information of more than nine people to make automated teller machine withdrawals in the St. Louis Metropolitan Area.
Stefan Unguru, 47, was indicted on conspiracy to commit bank fraud; bank fraud; access device fraud; possession of device-making equipment; and, aggravated identity theft;
Gina Unguru, 46, was indicted on conspiracy to commit bank fraud; possession of device-making equipment; and, aggravated identity theft;
Banta Unguru, 27, was indicted on conspiracy to commit bank fraud; bank fraud; access device fraud; and aggravated identity theft; and
Marcu Unguru, 19, was indicted on conspiracy to commit bank fraud; bank fraud; and aggravated identity theft.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offenses and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum of: 30 years for the offenses of conspiracy to commit bank fraud and bank fraud; 15 years for the crime of possession of device-making equipment; and, 10 years for the crime of access device fraud. The crime of aggravated identity theft carries a mandatory term of incarceration of two years for each count of conviction.
As is always the case, charges set forth in the indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
This case is being investigated by the U.S. Secret Service, the St. Louis Metropolitan Police Department, and the St. Louis County Police Department. Assistant United States Attorney Tracy Berry is handling the case for the U.S. Attorney’s Office.
Former Washington University Official Sentenced for Embezzling from Medical SchoolRead the Press Release
St. Louis, MO – Barbara “Basia” Skudrzyk, a/k/a Barbara “Basia” Najarro, 38, of St. Louis, was sentenced to 30 months in prison for three counts of mail fraud. She appeared in federal court today before U.S. District Court Judge Sippel and ordered to pay restitution in the amount of $381,583.50.
Skudrzyk was employed as the Business Director for the Division of Medical Education at Washington University. According to the plea agreement, beginning in May 2010 and continuing through July 31, 2018, Skudrzyk defrauded Washington University in St. Louis, Missouri of approximately $400,000 through various means. On many occasions, Skudrzyk hired contractors and other service providers to perform personal services for her benefit, and at her personal residence. She would then create, submit and approve false invoices and false W-9 tax forms for these contractors and other service providers to make it appear as if they had performed work for the Division of Medical Education when they had not. Skudrzyk approved and processed payment to these contractors and other service providers from Washington University’s funds. These service providers included a moving company, a home cleaning service, a divorce law firm, residential painters and construction companies, a jewelry boutique, a babysitter, and various other vendors and contractors. Further, Skudrzyk purchased VISA gift cards at the Washington University bookstore, forging another Washington University employee’s signature on the receipts and charging the purchases to the Division of Medical Education. Skudrzyk then used the VISA gift cards for her own personal use, including for purchases at restaurants, a jewelry store, and a number of other retailers. Additionally, Skudrzyk falsified and changed invoices from two different travel companies for airline flights for herself and her family to such places as Krakow, Poland, Munich, Germany, Bangkok, Thailand, Toronto, Canada, West Palm Beach, Florida, New York City, and Dallas and San Antonio, Texas. Skudrzyk submitted, processed and approved these falsified invoices in order to get Washington University to pay for the personal trips.
This case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Washington University Police Department, with the assistance and cooperation of Washington University. Assistant U.S. Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
Former President of Union Local Sentenced for Embezzling More than $300,000 in Union FundsRead the Press Release
Southfield resident Mervin E. Hawk, 59, the former president of Local 1640 of the American Federation of State, County, and Municipal Employees (AFSCME), was sentenced yesterday for embezzling over $300,000 in union funds, U.S. Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Special Agent in Charge Timothy Slater of the Detroit, Michigan Office of the Federal Bureau of Investigation (FBI) and by Irene Lindow, Acting Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
United States District Judge Gershwin Drain sentenced Hawk to serve a prison term of 30 months. Hawk was also ordered to pay restitution in the amount of $362,623 and, upon release from incarceration, to serve a three-year term of supervised release.
Hawk pleaded guilty on November 16, 2018 to one count of Embezzlement of Union Funds. According to court records, Hawk was the president of AFSCME Local 1640 in Detroit, Michigan from approximately 2013 through 2015. As president, Hawk had signatory authority on the Local’s primary bank account. Hawk embezzled over $100,000 from this account, diverting the great bulk of these funds into his personal bank account for his personal use. In addition, acting without authorization of the Local’s Executive Board, Hawk opened two additional bank accounts in the name of AFSCME Local 1640. Hawk was the sole signor on these additional accounts. Over the course of his scheme, Hawk deposited some $200,000 in union dues into these unauthorized accounts, and used these monies for his personal enrichment and enjoyment, including considerable expenditures at Detroit casinos. All told, Hawk willfully stole over $300,000 in union monies, dues, and assets.
“Union leaders hold positions of trust and union members deserve honest representation,” stated United States Attorney Matthew Schneider. “When leaders use their positions to line their pockets rather than represent their members, they should expect to face justice.”
“Mervin Hawk abused his fiduciary position as the former President of AFSCME Local 1640 by embezzling over $330,000 in union dues for personal gain. We will continue to work with our law enforcement partners to safeguard the assets of union members,” stated Irene Lindow, Acting Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
This case was investigated by special agents from both the FBI and the DOL-OIG, and was prosecuted by Assistant United States Attorney John K. Neal and former Assistant United States Attorney Charles J. Kalil II.
Former Police Officer Sentenced for Transferring Obscene Material to a MinorRead the Press Release
PROVIDENCE - A former police officer who admitted to engaging in sexually explicit discussions via social media and text message with a 15-year-old girl and transferring obscene material to her while employed by the Narragansett Police Department was sentenced today to 21 motnths in federal prison, announced United States Attorney Aaron L. Weisman, Special Agent in Charge of the FBI Boston Division Joseph R. Bonavolonta, and Colonel James M. Manni, Superintendent of the Rhode Island State Police.
Mathew C. Riley, 52, of Narragansett, previously admitted to the Court that beginning in late 2015 or early 2016, he engaged in a series of sexually explicit and graphic communications with the 15-year-old 9th grade student using various social media platforms and text messaging. Riley admitted that he identified himself to the 15-year-old as being 29-year-old “Chris M.” who lived in Boston, and that he was in the Navy and that he worked as a physical therapist.
Riley admitted that the minor female repeatedly informed him that she was 15-years-old. During a series of communications on May 9, 2016, Riley discussed with the girl the fact that she was a 9th grade student who would not turn sixteen until October. They also discussed what time her high school day ended. Riley admitted that his messaging with the 15-year-old included graphic, sexually explicit pictures of himself and videos of himself committing a sex act.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Riley to serve 3 years supervised release upon completion of his term of incarceration and ordered that he register as a sex offender. An amount of restitution to be paid by the defendant to the victim and her family is to be determined.
Riley pleaded guilty on November 8, 2018, to a charge of transfer of obscene material to a minor.
The case was prosecuted by Assistant U.S. Attorney Denise M. Barton. The matter was investigated by the FBI and Rhode Island State Police.
United States Attorney Aaron L. Weisman acknowledges and thanks the Nebraska State Patrol for their assistance investigating and preparing this matter for prosecution.
###
Note: This is an unattended email. Do not reply to this message. If you have questions, please use the contacts in the message.
Former Nassau County Executive Edward Mangano and His Wife Linda Mangano Convicted of Corruption and Related Charges by a Federal JuryRead the Press Release
Earlier today, following a seven-week trial, a federal jury in Central Islip, New York, returned guilty verdicts against former Nassau County Executive Edward Mangano on multiple counts of accepting bribes and kickbacks in exchange for official government action, and for conspiracy to obstruct justice. Linda Mangano, the wife of Edward Mangano, was also convicted of conspiracy to obstruct justice, obstruction of justice and making false statements to Federal Bureau of Investigation (FBI) agents in connection with her employment by Long Island restaurateur Harendra Singh.
When they are sentenced by United States District Judge Joan M. Azrack, Edward Mangano faces up to 20 years’ imprisonment on honest services wire fraud charges and conspiracy to commit honest services wire fraud, up to 10 years’ imprisonment for federal program bribery, and up to five years’ imprisonment for conspiracy to commit federal program bribery. Edward Mangano and Linda Mangano each face up to 20 years’ imprisonment for each obstruction of justice charge, and up to five years’ imprisonment for each false statement charge.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office, and Jonathan D. Larsen, Acting Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI), announced the verdict.
“As found by the jury, Edward Mangano abused his power as a public official by taking bribes and kickbacks from a businessman in exchange for helping him obtain loans worth millions of taxpayer dollars,” stated U.S. Attorney Donoghue. “Among the personal benefits received was a lucrative no-show job for Linda Mangano. The defendants tried and failed to cover up their crimes by lying to the FBI and federal prosecutors, and will now be held responsible for these crimes. No one is above the law. The Eastern District and the FBI will be relentless in our efforts to root out corruption at all levels of government in New York.”
“In a quid-pro-quo wheeling and dealing, Edward Mangano effectively opened the door that unjustly benefitted restaurateur Harendra Singh, sat idly by while public funds were exchanged for favors, and waited patiently in the wings to accept a payout for the plan he put in motion,” stated FBI Assistant Director-in-Charge Sweeney. “In Linda Mangano’s case, she kept up the ruse with a bogus job as food taster and menu planner at one of Singh’s restaurants. Whether they believe it or not, today we’ve proven they bit off more than they could chew.”
“Serving the public is an honor, especially when that position is the result of being elected by the people,” stated IRS-Criminal Investigation Acting Special Agent-in-Charge Larsen. “Mr. Mangano abused his elected office and the trust of his constituents. Our agents from IRS-CI diligently utilized their investigative expertise to prove these complex financial transactions.”
The evidence at trial established that between January 2010 and February 2015, Edward Mangano engaged in schemes to solicit and receive bribes and kickbacks from Singh. In return for the cash and personal benefits he received, Mangano, who served as Nassau County Executive from January 2010 to December 2017, performed official actions to benefit Singh in connection with his businesses.
The TOB Loan Scheme
Several weeks after Edward Mangano took office as Nassau County Executive in January 2010, he urged the TOB Supervisor to help Singh obtain financing in order to make required capital improvements at TOBAY Beach and The Woodlands at the TOB golf course, by authorizing the TOB to indirectly guarantee four bank loans totaling approximately $20 million. Mangano used his official position to ensure that the TOB backed the loans. In April 2010, Singh hired Linda Mangano for a sham job as the purported Director of Marketing for Singh’s businesses. On June 8, 2010, the TOB board voted to authorize the town to back Singh’s personal loans for the beach and the golf course. Singh paid for five vacations, hardwood flooring, a custom-made office chair, a massage chair and a watch for the Manganos, as well as over $450,000 in total for Linda Mangano’s no-show job.
Obstruction of Justice
Edward and Linda Mangano conspired to obstruct a federal grand jury investigation when they schemed with Singh to fabricate examples of work never performed by Linda Mangano’s at the Water’s Edge, in an attempt to thwart a grand jury investigation. On May 20, 2015 and May 22, 2015, Linda Mangano made false statements to the FBI and federal prosecutors about the work she claimed to have performed for Singh.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Catherine M. Mirabile, Lara Treinis Gatz and Christopher Caffarone are in charge of the prosecution. Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is responsible for the forfeiture of assets.
The Defendants:
EDWARD MANGANO
Age: 56
Bethpage, New YorkLINDA MANGANO
Age: 56
Bethpage, New YorkE.D.N.Y. Docket No. 16-CR-540 (S-2) (JMA)
Former MLB All-Star Pitcher Esteban Loaiza Sentenced to Three Years for Cocaine TraffickingRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – March 8, 2019
SAN DIEGO – Former Major League Baseball All-Star pitcher Esteban Loaiza was sentenced in federal court today to 36 months in prison for knowingly and intentionally possessing 20 kilograms - about 44 pounds - of cocaine with intent to distribute.
In his plea agreement, Loaiza admitted that he took possession of a silver Mercedes-Benz sport utility vehicle on February 9, 2018 that he knew contained cocaine. He drove the SUV to a townhouse he’d rented in Imperial Beach, where he transferred the 20 kilograms to another vehicle in the garage. He admitted he did so with the intent to distribute the cocaine to another person.
“As a professional athlete, Esteban Loaiza earned tens of millions of dollars and the admiration of baseball fans across the U.S. and Mexico,” said U.S. Attorney Robert Brewer. “And yet he sacrificed his reputation - and now his freedom - to become a cocaine trafficker. No one is above the law, and that includes Major League all-star pitchers.”
“Mr. Loaiza lived every young boy’s dream as an All-Star baseball player. And yet, he chose to be a drug dealer,” said DEA Special Agent in Charge Karen Flowers. “He chose to break the law for profit. He chose to make a buck off someone’s addiction. Today, society chose to hold him accountable and took away his freedom.”
According to the government’s sentencing memorandum, Loaiza’s rented townhouse was a “stash house” used to distribute cocaine and lacked furniture or personal belongings. Law enforcement located the cocaine concealed within a factory-built compartment in the rear cargo area of a minivan parked in the garage under baseball bags bearing Loaiza’s name. The packages of cocaine are depicted in the attached photos from the government’s sentencing papers.
In court today, Assistant U.S. Attorney Larry Casper highlighted aggravating factors that he said make this crime more troubling, including the significant quantity of cocaine, Loaiza’s active and involved participation in the criminal venture, and his privileged background.
Casper described the amount of cocaine as “very substantial even in this border district. That quantity represents tens of thousands of doses of a highly addictive drug that so often has a devastating impact on the lives of so many - not only in our community but well beyond.”
Casper also noted that the defendant was not merely a courier. He had full knowledge of what he was transporting; he rented and maintained the stash house and he transported and transferred 20 packaged bricks of cocaine himself, from one vehicle to another.
“This defendant had every advantage before engaging in this crime,” Casper said. “Mr. Loaiza had fame, he had fortune. He earned significant accolades in baseball and had opportunities many can only dream of. He was certainly looked up to by many youngsters as a success and as a figure to emulate. These circumstances are very different from many of the defendants that this court sees. In some sense, this case is akin to circumstances in which an individual abuses a position of trust in committing a crime.”
After handing down the sentence, U.S. District Court Judge Janis L. Sammartino acknowledged the defendant’s history as a baseball star. “The story changes,” she told him. “It’s not just a success story…But it’s still something people can learn from.”
Loaiza was allowed to remain free on bond and ordered to report to authorities on April 19.
Brewer praised Assistant U.S. Attorneys Larry Casper and Jarad Hodes for their excellent work on the case. “Because of Larry, Jarad and our law enforcement partners, this defendant will no longer be free to bring destructive drugs into our communities.”
“We are grateful for the perseverance that our law enforcement partners have demonstrated during the past several months,” said San Diego Sector Chief Patrol Agent Rodney Scott. “Collaboratively, our efforts resulted in Esteban Loaiza’s just conviction and sentencing.”
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCEDTF), a partnership that brings together the combined expertise and unique abilities of federal, state, and local law enforcement agencies. The principal mission of the OCEDTF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANT Criminal Case Number 18CR1743-JLS
Esteban Antonio Loaiza Age: 47 Imperial Beach, California
SUMMARY OF CHARGES
Possession of Cocaine with Intent to Distribute – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Life in prison and $10 million fine
AGENCIES
United States Drug Enforcement Administration
United States Border Patrol
San Diego Sheriff’s Department
Former Glendale Police Officer Sentenced to Prison for Taking Bribes, Obstructing Justice and Lying about His Ties to Organized CrimeRead the Press Release
LOS ANGELES – A former Glendale police officer was sentenced today to 21 months in federal prison after he pleaded guilty to a series of charges and admitted that he provided information to the Mexican Mafia that allowed an associate of the prison gang to escape justice for a time and that he also repeatedly mislead investigators who were probing his connections to the Mexican Mafia and Armenian organized crime.
John Saro Balian, 46, of Seal Beach, was sentenced today by United States District Judge John F. Walter.
Balian pleaded guilty last July to federal charges of bribery, obstruction of justice and making false statements.
When he pleaded guilty, Balian admitted that he agreed to accept $10,000 – and actually received a $2,000 down payment – from a convicted felon who wanted Balian to locate individuals responsible for stealing property from the person’s business. As a result of the payment, Balian caused law enforcement resources to be expended as he attempted to locate the suspected burglars.
Balian also admitted that he obtained information about a task force takedown targeting street gangs under the control of the Mexican Mafia. After receiving the information, Balian contacted associates within the Mexican Mafia and informed them that authorities were planning on arresting the “shotcaller” of one of the targeted gangs. As a result, that gang member – who was the lead defendant in a federal racketeering indictment – fled and was a fugitive for a month before he was taken into custody. Balian “acted corruptly with the specific intent to subvert the due administration of justice for the purpose of enhancing his reputation with the Mexican Mafia,” he admitted in a plea agreement.
In relation to the false statement charge, Balian repeatedly lied to special agents with the FBI and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), who, along with the Los Angeles Police Department, were investigating the relationship between the Mexican Mafia and Armenian organized crime, a probe that was also looking into several murders. Among other things, Balian denied receiving money from the convicted felon, denied having a criminal business relationship with a Mexican Mafia associate, and covered up a close relationship with a member of the Mexican Mafia.
Balian “had a successful career as a law enforcement officer and small business owner, but then made a conscious decision to turn to a life of crime and join forces with Armenian Organized Crime and the Mexican Mafia,” prosecutors wrote in a sentencing memorandum filed with the court. “[Balian] blatantly disregarded his sworn oath to protect and serve, and instead chose to subvert law enforcement, place other officers at risk, and live the life of a gang member.”
The case against Balian is the result of an investigation by the Eurasian Organized Crime Task Force, which is made up of special agents with the FBI, HSI, IRS Criminal Investigation and the Department of Health and Human Services’ Office of Inspector General, as well as officers with the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the Glendale Police Department, the Burbank Police Department and the California Department of Health Care Services.
This matter was prosecuted by Assistant United States Attorney Jeff Mitchell of the Violent and Organized Crime Section.
Former Border Patrol Agent Sentenced to More Than Nine Years in Prison for Accepting Bribes to Facilitate the Trafficking of Illegal DrugsRead the Press Release
A former U.S. Border Patrol Agent (BPA) was sentenced to 112 months in prison followed by three years of supervised release for accepting bribes in return for helping to smuggle illegal drugs into the United States.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick for the Southern District of Texas, Special Agent in Charge Perrye Turner of the FBI’s Houston Field Office and Special Agent in Charge Juan Benavides of U.S. Customs and Border Protection (CBP) Office of Professional Responsibility (OPR) made the announcement.
Robert Hall, 45, of La Feria, Texas, a former BPA, was sentenced by U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas, who also ordered Hall to pay a fine in the amount of $20,000. Hall pleaded guilty to one count of bribery on Sept. 14, 2018, which was unsealed today.
According to the plea documents, between 2004 and 2014, Hall, working with others including Daniel Hernandez, 46, of Roseville, California, facilitated the trafficking of illegal drugs, including marijuana, into the United States from Mexico on behalf of a drug trafficking organization (DTO). In exchange for cash payments, he provided an individual in the DTO with CBP sensor locations, the locations of unpatrolled roads at or near the U.S.-Mexico border, the number of BPAs working in a certain area, keys to unlock CBP locks located on gates to ranch fences along the border and CBP radios. In total, Hall accepted over $50,000 in cash from the DTO in exchange for using his position as a BPA to enable the DTO’s drug shipments to cross the border into Texas without law enforcement detection.
Daniel Hernandez pleaded guilty Feb. 5 to one count of conspiracy to bribe a public official before U.S. Magistrate Judge Nancy K. Johnson in the Southern District of Texas. Sentencing has been scheduled for May 9, before U.S. District Judge Gray H. Miller, who accepted the plea on Feb. 8.
The FBI investigated the case with the assistance of CBP OPR. Trial Attorneys Rebecca Moses and Peter M. Nothstein of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Julie N. Searle of the Southern District of Texas are prosecuting the case.