Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
12 March 2019
Union County, New Jersey, Man Charged with Distribution of Child PornographyRead the Press Release
NEWARK, N.J. – A Union County man was arrested today on a charge of distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Jeffrey Shreve, 35, of Scotch Plains, New Jersey, was arrested at his home by agents of the Department of Homeland Security, Homeland Security Investigations (HSI). He is charged by complaint with one count of distributing child pornography. Shreve made his initial appearance today before U.S. Magistrate Judge James B. Clark III in Newark federal court and was released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
Shreve used peer-to-peer file sharing software to seek and obtain images of child sexual abuse, including images of prepubescent children.
The charge of distributing child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of HSI, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s charges.
The government is represented by Counsel to the U.S. Attorney Caroline Sadlowski of the U.S. Attorney’s Office in Newark.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Twenty-six charged in series of federal indictments for drugs, illegal firearmsRead the Press Release
AUGUSTA, GA: Twenty-six people, including associates of a violent criminal street gang, have been indicted on drugs and firearms charges after a series of investigations in Georgia and South Carolina.
The arrests in Operation Gunsmoke were announced Tuesday, March 12, in a joint press conference held at the Aiken Department of Public Safety J. Carrol Busbee Headquarters by the United States Attorneys for the Southern District of Georgia and the District of South Carolina.
The investigations were initiated by the Regional Anti-Gang Enforcement (RAGE) Task Force of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. It began in 2017 as an investigation of a member of the Bloods criminal street gang who is alleged to have coordinated continued criminal activity while being held in the Aiken County Detention Center awaiting retrial for murder in a 2008 drug-related home invasion.
From 2017 to the present, ATF agents in Georgia and South Carolina identified multiple targets in the investigation. Nine were named in 25 criminal charges listed in three separate indictments by a federal grand jury in the Southern District of Georgia, while 17 additional defendants have been indicted in the South Carolina District.
The defendants indicted in Georgia are:
George Edward Powell, 51, of Blythe, charged with Conspiracy to Distribute Methamphetamine, and multiple counts of Possession of a Firearm by a Convicted Felon and Distribution of Methamphetamine;
Keldrick Demonta Streetman, 36, of Augusta, charged with Conspiracy to Distribute Methamphetamine, Distribution of Cocaine and Distribution of Methamphetamine;
Jermarce Antonio Smith, 32, of Augusta, charged with Conspiracy to Distribute Methamphetamine and Distribution of Methamphetamine;
Brandon Jermal Jenkins, 29, of Augusta, charged with Conspiracy to Distribute Methamphetamine and Distribution of Methamphetamine;
Carl Walker, 56, of Augusta, charged with Conspiracy to Distribute Methamphetamine, and multiple counts of Distribution of Methamphetamine and Possession of a Firearm by a Convicted Felon;
Gwendolyn Johnson-Hill, 53, of Augusta, charged with Conspiracy to Distribute Methamphetamine and Distribution of Methamphetamine;
John Willie Powell, 39, of Augusta, charged with Conspiracy to Distribute Methamphetamine and multiple counts of Distribution of Methamphetamine;
Ziquane Sandford, 21, of Hephzibah, charged with Conspiracy to Engage in the Business of Dealing in Firearms Without a License, False Statements in Acquisition of Firearms, Engaging in the Business of Dealing in Firearms Without a License, Possession of an Unregistered Short-Barreled Shotgun, and False Statements Concerning Information Kept by Firearms Dealer; and,
Jacquetta Yarbray, 23, of Hephzibah, charged with Conspiracy to Engage in the Business of Dealing in Firearms Without a License, False Statements in Acquisition of Firearms, and False Statements Concerning Information Kept by Firearms Dealer.
The 17 defendants charged in South Carolina are:
Ronald Gartrell, a/k/a “RJ,” 33, of Aiken, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, multiple counts of Distribution of Crack Cocaine, and Possession of a Firearm by a Convicted Felon;
Heather Collins, 42, of Aiken, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, and multiple counts of Distribution of Methamphetamine and Crack Cocaine;
Cornelious F. McKie, 42, of Aiken, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, and Possession with Intent to Distribute Cocaine, Crack Cocaine, and Methamphetamine;
Reihn Dracon Jennings, a/k/a “Red,” 28, of Aiken, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, Distribution of Crack Cocaine, multiple counts of Possession of a Firearm by a Convicted Felon, and Using and Carrying a Firearm During and In Relation to and in Furtherance of a Drug Trafficking Crime;
Christopher Johnson, a/k/a “Crip,” 32, of Aiken, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, Distribution of Crack Cocaine, and multiple counts of Possession of a Firearm by a Convicted Felon;
Quinton De’Shaun White, a/k/a “Q,” 29, of North Augusta, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, Distribution of Methamphetamine, and Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime;
Kevin D. Sheppard, a/k/a “Bean O”, 35, of Jackson, charged with Conspiracy to Distribute Cocaine, Crack Cocaine, and Methamphetamine, multiple counts of Possession of a Firearm by a Convicted Felon, Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime, and Dealing in Firearms without a License;
Benjamin Roper, 42, of Aiken, charged with Possession of a Firearm by a Convicted Felon, and Dealing in Firearms without a License;
Jerome Morris Simmons, 38, of Aiken, charged with Distribution of Cocaine, Possession of a Firearm by a Convicted Felon, Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime, and Dealing in Firearms without a License;
Antonio Maurice Scrivens, a/k/a “Bucko,” 34, of Aiken, charged with Possession of a Firearm by a Convicted Felon, Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime, and Dealing in Firearms without a License;
Keith Williams, 29, of Beech Island, charged with Conspiracy to Distribute Methamphetamine, Distribution of Methamphetamine, Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime, and Dealing in Firearms without a License;
Larry Thomas, 20, of Aiken, charged with Conspiracy to Distribute Methamphetamine, Distribution of Methamphetamine, Using and Carrying a Firearm During and In Relation to and In Furtherance of a Drug Trafficking Crime, and Dealing in Firearms without a License;
Charlie Edward Carter, 31, of Beech Island, charged with Distribution of Methamphetamine, Possession of a Firearm by a Convicted Felon, and Dealing in Firearms without a License;
Rudolph Keith Scott, 27, of Beech Island, charged with Distribution of Methamphetamine;
Ray Hampton Baughman, 48, of New Ellenton, charged with Possession of a Firearm by a Convicted Felon;
Xavier Mathaney, 26, of Aiken, charged with Possession of a Firearm by a Convicted Felon; and
Rashad Lundy, 27, of Aiken, charged with Possession of a Firearm by a Convicted Felon.
“Our federal, state, and local law enforcement agencies and prosecutors continue our relentless and unwavering effort to identify, arrest, and prosecute those who threaten the safety of our neighborhoods,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “City limits, county lines, and state borders are no barrier to the professionals who fight tirelessly to eliminate drug-dealers and illegal firearms from our communities.”
“We will not stand by and let violent criminal enterprises continue victimizing our communities,” said South Carolina District U.S. Attorney Sherri A. Lydon. “The U.S. Attorney’s Office in South Carolina is locking arms with our law enforcement partners, and we will spare no resource to take back our neighborhoods from criminal actors who are mixing violence and illegal drug distribution. I am proud to stand with our federal, state, and local partners, and the U.S. Attorney’s Office in the Southern District of Georgia, and I applaud their excellent work in these cases.”
“ATF will continue to dedicate federal resources in conjunction with those crucial law enforcement contributions of local agencies to the pursuit of eradicating and forestalling criminal gang activity in Augusta, Ga., and its surrounding areas,” said Beau Kolodka, Assistant Special Agent in Charge of the Atlanta Field Division of the ATF.
Agencies involved in the investigation in Georgia include the ATF; U.S. Marshals Service; Georgia State Patrol Aviation; Georgia Department of Community Supervision; Richmond County Sheriff’s Office; Burke County Sheriff’s Office; the Augusta Judicial Circuit District Attorney’s Office; and the U.S. Attorney’s Office for the Southern District of Georgia. Additional agencies in South Carolina involved in the investigation include the South Carolina Law Enforcement Division; the South Carolina Department of Probation, Pardon and Parole Services; the Aiken Department of Public Safety; the Aiken County Sheriff’s Office; the North Augusta Department of Public Safety; and the U.S. Attorney’s Office for the District of South Carolina. The Wheeling, W.V., Police Department and Wheeling Satellite Office of the ATF also participated in the investigation.
An indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
The cases in Georgia are being prosecuted by Assistant United States Attorney Tara Lyons and Special Assistant United States Attorney Michael Marchman.
Torrington Man Involved in Kickback Scheme Sentenced to 18 Months in Federal Prison for Tax EvasionRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that SERAFINO CANINO, 53, of Torrington, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 18 months of imprisonment, followed by three years of supervised release, for tax evasion.
According to court documents and statements made in court, Canino was employed by, and had an ownership interest in, Innovative Concepts Corporation (“ICC”), a company that manufactured and distributed small power and hand tools. ICC contracted with factories in Asia through intermediaries located in Taiwan. The intermediaries negotiated with the factories in Asia, ensured the shipment of manufactured products to ICC, and invoiced ICC for the manufacturing of its products.
From 2008 through 2011, Canino engaged in fraudulent billing using two of ICC’s intermediaries in Taiwan. Canino instructed the intermediaries to charge ICC an inflated price and kick back the overage to Canino using overseas bank accounts and an overseas corporate entity. Through this scheme, Canino improperly received more than $633,000 in income. Canino failed to disclose this illegal income to his accountants who prepared his federal tax returns, and he failed to report the income on his 2008, 2009, 2010 and 2011 tax returns. The total tax loss to the Internal Revenue Service was $186,358.
Judge Underhill ordered Canino to cooperate with the IRS to pay more than $430,000 in back taxes, interest and penalties.
On September 24, 2018, Canino pleaded guilty to one count of tax evasion.
Canino is required to report to prison on June 5, 2019.
This matter was investigated by the Internal Revenue Service, Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Susan L. Wines.
Topeka Man Sentenced for Robbing Credit UnionRead the Press Release
TOPEKA, KAN. – A Topeka man was sentenced today to five years in federal prison for robbing a local credit union, U.S. Attorney Stephen McAllister said.
Robert Charles Frazier, 63, Topeka, Kan., pleaded guilty to one count of robbery. In his plea, he admitted that on Aug. 20, 2018, he robbed the Azura Credit Union at 1129 S. Kansas Avenue in Topeka. He told a teller, “This is a robbery. Give me your twenties, fifties and hundreds.” After receiving the money, he left the building and sat down on a nearby wall. An off-duty Topeka police officer working security arrested him.
McAllister commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Three defendants and an India-based call center indicted in phone scam targeting U.S. victimsRead the Press Release
ATLANTA – Mohit Devendrabhai Sharma, Julliette Belle Carter, Kunal Jagdishbhai Sharma, and a call-center named Skyz International Outsourcing BPO have been indicted for their alleged involvement in a transnational criminal organization that victimized United States residents through a tele-fraud scheme that led victims to believe they owed taxes and fees to the Internal Revenue Service. Julliette Belle Carter was arrested in Canada pursuant to an extradition request. In connection with the scheme, two other defendants and a call center in India were also charged for their alleged involvement.
“IRS phone schemes profit by victimizing United States residents, including vulnerable members of our community,” said U.S. Attorney Byung J. “BJay” Pak. “This indictment and the arrest in Canada demonstrate our commitment to identifying and prosecuting those who perpetuate phone scams on our citizens no matter where the perpetrators are located.”
J. Russell George, the Inspector General for the Treasury Inspector General for Tax Administration (TIGTA) advised that “since 2013, IRS impersonation scams have been on a relentless path, claiming more than 15,000 victims who have lost upwards of $74 Million to the scammers. Today’s unsealed indictment makes clear that TIGTA will continue to be just as relentless in our pursuit of individuals who fraudulently represent themselves as IRS officials in order to extort money from taxpayers. We will not back down from our pursuit of these criminals, and will continue to work with all law enforcement partners to bring them to justice.”
According to U.S. Attorney Pak, the charges, and other information presented in court: The indictment alleges that the defendants were involved in a sophisticated international telephone scheme. Using lists of U.S. residents’ personal identifiable information, co-conspirators allegedly called potential victims while impersonating officials from the Internal Revenue Service.
The callers would then threaten potential victims with prosecution or arrest if they did not pay alleged tax debts immediately. After the victims agreed to pay, the callers would instruct the victims to send the money electronically using banks or money transmitters, such as MoneyGram, to defendants Mohit Devendrabhai Sharma, Julliette Belle Carter, and others. Victims, including residents of Georgia, believed the threats and sent money. Defendants Mohit Devendrabhai Sharma and Julliette Belle Carter retrieved the fraud proceeds from various MoneyGram locations in states such as Illinois, Ohio, Michigan, and Wisconsin.
The indictment charges Mohit Devendrabhai Sharma, Julliette Belle Carter, Kunal Jagdishbhai Sharma, and Skyz International Outsourcing BPO with conspiracy to commit wire fraud and wire fraud. The indictment also charges Mohit Devendrabhai Sharma and Julliette Belle Carter with conspiracy to commit money laundering.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Treasury Inspector General for Tax Administration.
Assistant U.S Attorneys Jolee Porter and Jeffrey A. Brown, Deputy Chief, Complex Fraud Section, are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Suffolk Man Sentenced to Prison for Distributing FentanylRead the Press Release
NORFOLK, Va. – A Virginia Beach man was sentenced today to more than 11 years in prison for his role in a heroin and fentanyl distribution conspiracy that resulted in an overdose death.
According to court documents, Christopher Allen Bardall, 34, sold at least 550 grams of fentanyl, which could translate to approximately 5,500 individual doses. He did so as a part of conspiracy with Michelle Best, whose drugs killed one young woman, K.R., and caused several other non-fatal overdoses. Best was sentenced on March 14 to 30 years in prison.
Bardall was a street dealer who distributed fentanyl, supplied by Best, directly to K.R. Bardall knew the fentanyl he was dealing was strong and that it had resulted in multiple overdoses by clients of his who used it. On Dec. 17, 2017, within hours of K.R.’s coma and death, officers from the Virginia Beach Police Department located Bardall and arrested him after a vehicle and foot pursuit.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, and James A. Cervera, Chief of Virginia Beach Police, made the announcement after sentencing by Chief U.S. District Judge Mark S. Davis. Assistant U.S. Attorneys John F. Butler and Andrew C. Bosse 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. 2:18-cr-147-3.
South Bend Man Convicted Following 2-Day Jury TrialRead the Press Release
SOUTH BEND – Joshua Banks, age 31, of South Bend, Indiana was convicted of being a felon in possession of a firearm, announced U.S. Attorney Kirsch.
U.S. District Court Judge Jon E. DeGuilio, presided over this 2-day trial.
According to documents in this case, on about October 5, 2018, Mr. Banks possessed a .357 caliber revolver after one or more felony convictions. On October 4, 2018 a vehicle was reported stolen. On October 5, 2018, South Bend Police Officers located that stolen vehicle parked and unoccupied. Around that same time, Banks was walking near the vehicle with a backpack and a gas can. As officers approached Banks fled on foot. He was caught and the backpack was found nearby. Also nearby, officers found the firearm which had been stolen from a Warsaw, Indiana, firearms dealer in September 2018.
Sentencing of Mr. Banks has been set for June 12, 2019.
The case was investigated by the ATF with the assistance of the South Bend Police along with the Kosciusko County Sheriff’s Department. The case was prosecuted by Assistant United States Attorney Joel R. Gabrielse.
###
Solar Companies and Corporate Officer Ordered to Pay over $5 Million Relating to Allegations They Defrauded A Renewable Energy ProgramRead the Press Release
DENVER – The United States obtained judgments against two companies and an individual officer of those companies relating to allegations that they violated the False Claims Act when they submitted applications to obtain payments from the U.S. Department of the Treasury for renewable energy projects.
Under a program created by the American Recovery and Reinvestment Act of 2009, companies could apply to get reimbursements for up to 30 percent of the costs they incurred in initiating and placing into service “renewable energy properties,” such as solar and wind projects. Companies submitted applications for these payments to the National Renewable Energy Laboratory (NREL) in Golden, Colorado. The funds for the reimbursement came from Treasury Department funds. Those funds were set aside under section 1603 of the 2009 Act, under a program commonly known in the renewable energy industry as the 1603 Program.
Defendant New World Renewable Energy Leasing, Inc. (New World) was involved in solar projects across several states, including Colorado. It had a related shell company, Infinergy Solar and Wind, Inc. (Infinergy). Defendant Murray Hambrick was an officer of both companies.
On September 14, 2017, the United States filed a complaint in federal district court in Colorado alleging that Infinergy, New World, and Hambrick had obtained payments from this program by using false or fraudulent statements. The United States alleged that, rather than submit to Treasury and NREL its true cost in the projects, Infinergy engaged in a sham sale of the projects to New World. Through the sham sale, Infinergy attempted to artificially inflate the costs of the projects. New World, in turn, submitted these false claims to Treasury and NREL. In 41 instances, New World obtained 1603 funds to which it was not entitled. Murray Hambrick orchestrated the fraud.
That lawsuit has now been resolved by judgments requiring the defendants to pay more than $5 million. New World and Infinergy failed to appear in court to defend the case, and on July 23, 2018, Judge Raymond P. Moore entered default judgment for the United States against the corporate defendants in the amount of $5,055,467. Hambrick litigated the case, then filed for bankruptcy. To resolve the United States’ claims against him, Hambrick agreed to a non-dischargeable judgment of $225,500. This judgment was approved by the Bankruptcy Court for the Western District of Texas on March 6, 2019.
“This program had important goals: jump-starting the economy at a time of crisis, and helping companies that move our renewable energy industry forward. Taxpayers paid for that program. Companies and individuals who lie to take advantage of government programs like this one will face consequences,” said U.S. Attorney Jason Dunn.
“The U.S. Department of the Treasury Office of Inspector General would like to thank the U.S. Attorney’s Office and the U.S. Department of the Treasury for their hard work and partnership on this case and previous cases involving the American Recovery and Reinvestment Act. This settlement reinforces the commitment of the Treasury OIG to pursue cases against those who defraud the U.S. Treasury Department and misuse public funds,” said U.S. Department of the Treasury, Office of Inspector General Eric Thorson.
This matter was investigated by the U.S. Department of the Treasury’s Office of Inspector General. It was handled by Assistant U.S. Attorneys Zeyen Wu and Andrea Wang.
Silver Spring Man Convicted After Five-Day Federal Trial of Bank Fraud Conspiracy and Aggravated Identity Theft with Losses of Hundreds of Thousands of DollarsRead the Press Release
Greenbelt, Maryland – A federal jury today convicted Emmanuel Kusi Appiah, a/k/a Manny, age 47, of Silver Spring, Maryland, today for a years-long bank fraud conspiracy with losses of hundreds of thousands of dollars.
The jury’s guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Chief Robert D. MacLean of the U.S. Park Police; and Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service.
According to the evidence presented at his five-day trial, from June 2013 through March 2018, Appiah committed a bank fraud scheme that defrauded individuals and financial institution victims of several hundred thousand dollars.
Specifically, the trial evidence proved that Appiah conspired with others to open bank accounts at 10 different financial institutions using the stolen identities of at least five individual victims, and under the business names of five shell corporations, including Global Tax Services Incorporated, Merchandise Services Incorporated, Imperial Pipe Incorporated, SJ Metal Incorporated, and Morgan Incorporated. Appiah and his conspirators then used those fraudulent accounts to deposit stolen and altered business checks, convenience checks, and tax refunds. Witnesses testified that Appiah then withdrew the fraudulent proceeds in cash, transferred the proceeds to other fraudulent accounts, or laundered the proceeds through the purchase of money orders, which Appiah and others used for their personal benefit.
The government is also seeking restitution in the full amount of the victims’ losses.
Appiah faces a maximum sentence of 30 years in prison for conspiracy to commit bank fraud and for each of four counts of bank fraud; and a mandatory two years in prison, consecutive to any other sentence imposed, for each of two counts of aggravated identity theft. U.S. District Judge Theodore D. Chuang has scheduled sentencing for June 1, 2019, at 9:30 a.m.
United States Attorney Robert K. Hur commended the U.S. Park Police and the U.S. Postal Inspection Service for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Gregory Bernstein and Burden H. Walker, who are prosecuting the case.
# # #
Shelby County Man Sentenced for Drug and Firearm OffensesRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on March 7, 2019, Andrew Joseph Nielsen, age 30, was sentenced by United States Senior District Court Judge Robert W. Pratt for Possession with Intent to Distribute Methamphetamine and Possession of a Firearm During a Drug Trafficking Crime. Nielsen was sentenced to 180 months in prison to be followed by a term of supervised release for five years.
In April 2018, Nielsen was stopped by a Shelby County Deputy for speeding after trying to elude the deputy. In a search subsequent to the stop, methamphetamine and marijuana were found on Nielsen, along with baggies and scale in the vehicle. After further investigation, Shelby County Deputies and the fire department executed a controlled burn in the area of the stop and located a Phoenix Arms HP22 and a magazine with four rounds in it.
This case was investigated by the Shelby County Sheriff’s Department, Pottawattamie County Sheriff’s Department and Iowa Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Sawyer County Woman Sentenced to 4 Years for Methamphetamine DistributionRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Tabatha Case, 32, Stone Lake, Wisconsin, was sentenced last week by U.S. District Judge William Conley to four years in federal prison for possessing methamphetamine with intent to distribute. Case pleaded guilty to this charge on January 3, 2019, and was sentenced on March 8.
The government’s investigation revealed that Case regularly traveled to Minnesota between 2016 and 2018 to purchase large amounts of methamphetamine. Case transported the methamphetamine back to Wisconsin and sold it in the Minong area.
During the investigation, Case sold methamphetamine to a confidential source working with law enforcement on six separate occasions. Case also sold over 20 firearms to methamphetamine suppliers and customers while she was actively dealing methamphetamine.
The charge against Case was a result of an investigation conducted by the Washburn County Sheriff’s Office, Sawyer County Sheriff’s Office, Wisconsin Department of Justice Division of Criminal Investigation, and Federal Bureau of Investigation. The prosecution of this matter was handled by Assistant U.S. Attorney Aaron Wegner.
San Jose Felon Sentenced to Six Years in Prison for Possessing A Firearm and AmmunitionRead the Press Release
SAN JOSE– Sean Finn was sentenced to 72 months in prison for being a felon in possession of a firearm and ammunition, announced United States Attorney David L. Anderson and U.S. Postal Inspection Service Inspector in Charge Rafael Nuñez. The sentence was handed down by the Honorable Beth L. Freeman, United States District Judge.
Finn, 38, of San Jose, Calif., pleaded guilty to the charge on June 19, 2018. According to the plea agreement, Finn admitted that on February 3, 2017, while in a department store in Santa Clara, he possessed a loaded Colt Mk IV .380 caliber semi-automatic firearm. The firearm had an obliterated serial number. Further, Finn admitted that on February 3, 2017, he was a convicted felon and was not eligible to possess a firearm. According to court documents, Finn also possessed at the time a stolen vehicle and about 400 pieces of stolen mail.
On April 13, 2017, a federal grand jury indicted Finn, charging him with being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g), and being in possession of stolen matter, in violation of 18 U.S.C. § 1708. Finn pleaded guilty to the first count and the second count was dismissed.
In addition to the prison term, Judge Freeman ordered Finn to serve a three-year term of supervised release to begin at the conclusion of his prison term.
Assistant United States Attorney Patrick Delahunty is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the United States Postal Inspector Services and the Santa Clara Police Department.
Rochester Felon Sentenced for Possessing A GunRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Marcus Lynch, 32, of Rochester, NY, who was convicted of possession of a firearm by a convicted felon, was sentenced to serve 30 months in prison by U.S. District Judge Charles Siragusa.
Assistant U.S. Attorney Cassie Kocher, who handled the case, stated that the defendant went to the Firing Pin Shooting Range in the Town of Bergen to target shoot a rifle. Lynch was previously convicted in January 2008 of Robbery in the Third Degree; in August 2007 of Burglary in the Second Degree and Grand Larceny in the Fourth Degree; and in May 2007 of Burglary in the Second Degree. As a result, the defendant is legally prohibited from possessing a firearm.
Today’s sentencing is the result of an investigation by New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.
# # # #
Robstown Man Receives Significant Sentence for Child Pornography ConvictionRead the Press Release
CORPUS CHRISTI – A 22-year-old resident of Robstown has been ordered to prison following his conviction of distributing child pornography, announced U.S. Attorney Ryan K. Patrick. Trey Escareno pleaded guilty Nov. 29, 2018.
Today, Senior U.S. District Judge Janis Graham Jack sentenced Escareno to 170 months in prison. The sentence will be immediately followed by a lifetime term of supervised release, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. Escareno will also be ordered to register as a sex offender.
The investigation into Escareno began when an undercover FBI agent entered an online chatroom and observed a user, later identified as Escareno, posting links. He had posted several items, all of which would automatically download large amounts of child pornography onto the computer of the user who clicked on them.
Agents later executed a search warrant in Robstown on Escareno’s residence. That resulted in the discovery of several items, including a cellular telephone on which a forensic analysis identified numerous images of child pornography. Law enforcement also uncovered evidence that Escareno had engaged in sexual contact with a minor relative.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation with the assistance of the Corpus Christi Police Department - Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Brittany L. Jensen prosecuted the case which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood or internet safety education, please visit the DOJ website.
Ringleader of ‘Palm Tree Bandits’ that Committed Nine Armed Bank Robberies in Six Months Sentenced to More than 32 Years in PrisonRead the Press Release
LOS ANGELES – A Las Vegas, Nevada man who led the “Palm Tree Bandits” armed robbery crew that victimized a series of bank branches in Los Angeles and Kern counties in 2016, netting more than $85,000 in stolen money, has been sentenced to 387 months in federal prison.
Gary Lamar Henry, a.k.a. “G-Thing,” 38, was given the 32-year, 4-month term on Monday by United States District Judge Robert H. Whaley.
After a six-day trial in May 2018, Henry was found guilty of his role in bank robberies that occurred in Brentwood, Santa Monica, San Marino, Arcadia, South El Monte, Bakersfield, Stevenson Ranch and Hacienda Heights. The jury found Henry guilty of 11 felonies: one count of conspiracy to commit armed bank robbery, seven counts of bank robbery and three counts of using a firearm in furtherance of a crime of violence.
Between April 14, 2016 and October 7, 2016, Henry contacted his co-conspirators, organized the crews, planned the robberies, and gave his co-conspirators the guns for the robberies, according to the evidence presented at trial. Henry watched outside the bank branches while he sent his armed co-conspirators inside to rob them. On some occasions, the co-conspirators pointed the firearms at bank employees and customers. Though no bank employees or customers suffered physical injuries during the robberies, Henry’s actions placed innocent lives in danger and inflicted considerable emotional trauma on the dozens of victims present during the robberies, according to court documents. In total, the robberies netted Henry and his co-conspirators $85,354, according to the government’s sentencing memorandum.
All of Henry’s co-defendants in the case already have been sentenced with three of them receiving prison terms in excess of 12 years.
This case was investigated by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department.
This matter is being prosecuted by Assistant United States Attorney Jeffrey M. Chemerinsky and Joseph D. Axelrad of the Violent and Organized Crime Section.
Richmond Resident Pleads Guilty to Filing More Than 200 Fraudulent Income Tax ReturnsRead the Press Release
OAKLAND – Jeremy Orr pleaded guilty today in federal court in Oakland to wire fraud, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter. The plea was accepted by the Honorable Jeffrey S. White, U.S. District Judge.
According to his guilty plea, Orr, 36, of Richmond, Calif., admitted he devised a scheme to attempt to defraud the IRS of hundreds of thousands of dollars by filing false federal income tax returns. Orr obtained the personal identification information of individuals in and around the Bay Area and prepared false 2011 federal income tax returns in the names of those individuals. The false tax returns reported false wages, false education expenses, or both, which generated a fraudulent income tax refund. Orr electronically filed more than 200 false tax returns with the IRS resulting in claimed fraudulent tax refunds in the amount of $335,142.
A federal grand jury indicted Orr on January 15, 2015, charging him with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and four counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Today, Orr pleaded guilty to one count of wire fraud. If Orr complies with the plea agreement, the remaining counts will be dismissed at sentencing.
Orr has been in federal custody since his arrest in May of 2018. Judge White scheduled Orr’s sentencing hearing for May 28, 2019. The maximum statutory penalty for wire fraud is 20 years in prison and a fine of $250,000, however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney José A. Olivera is prosecuting the case with the assistance of Larry Garland and Kathy Tat. The prosecution is the result of an investigation by the IRS-CI.
Restructuring of U.S. Attorney’s Office Leads to Significant Results in First YearRead the Press Release
District of New Jersey sees Increase in Prosecutions of both Violent and White Collar Crime
NEWARK, N.J. – One year after U.S. Attorney Craig Carpenito reorganized the structure of the U.S. Attorney’s Office for the District of New Jersey, overall criminal prosecutions have increased 51 percent, including a 65 percent jump in violent crime prosecutions, a 39 percent jump in narcotics related prosecutions, and a 15 percent jump in white collar crime prosecutions.
U.S. Attorney Carpenito’s goal in restructuring the office was to focus on areas of criminal and civil enforcement that would pay the biggest dividends in protecting New Jersey’s citizens. To that end, he established three new units in the Criminal Division (the Opioids, Violent Crime, and Cyber Units), increased the number of prosecutors by approximately 25 percent, doubled the size of the office’s paralegal corps, and implemented an “eLitigation” program to improve the way the office receives and processes information. One year later, the results of these improvements have been felt across the state of New Jersey.
“Over the past year, we have focused our efforts in gun and drug cases to target the most violent offenders,” U.S. Attorney Carpenito said. “The results have been very encouraging. Both Newark and Camden, for example, have seen significant drops in their respective crime rates, year-over-year, and both are at their lowest crime rates in 50 years. But statistics only tell part of the story. These results also have a positive impact on the lives of the people who live here.”
“The New Jersey U.S. Attorney’s Office’s responsiveness and flexibility in dealing with a shifting threat picture is a true model for progressive prevention,” FBI Special Agent in Charge Gregory W. Ehrie said. “The reorganization of critical assets has greatly increased prosecutorial efficiency, allowing New Jersey local, state, and federal law enforcement agencies to more effectively combat criminal and national security challenges. This is yet another example of the outstanding partnership U.S. Attorney Carpenito and his office have continually displayed.”
“U.S. Attorney Carpenito’s new vision for his office is bringing great results,” Susan A. Gibson, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division, said. “His formation of the Opioid Abuse Prevention and Enforcement Unit sends a clear message that his office will prosecute those who choose to poison our communities with these very dangerous drugs. It is very reassuring for the men and women of DEA’s New Jersey Division to know the U.S. Attorney fully supports their investigations.”
“The safety and well-being of our citizens is a vital part of our mission,” ATF Newark Field Division Acting Special Agent in Charge Christopher Taylor said. “ATF, in partnership with the United States Attorney’s Office and our other federal, state and local law enforcement partners, will continue to focus our investigative resources on arresting and prosecuting the most violent criminals who use firearms to terrorize our communities and on those individuals who supply firearms to this criminal element. Protecting our neighborhoods from violent crime is a priority for the citizens of New Jersey and ATF.”
In the fiscal year that ended Sept. 30, 2017, the U.S. Attorney’s Office charged 467 defendants by indictment or information. By contrast, in the one year since U.S. Attorney Carpenito’s reorganization, the U.S. Attorney’s Office charged 707 defendants by indictment or information, an increase of 51 percent.
The U.S. Attorney’s Office leads “Violent Crime Initiatives,” partnerships among federal, state and local law enforcement, in two major areas in New Jersey, Newark and Jersey City. (A similar model, known as “C-4,” has been active in Camden for several years.) The VCIs collect information from more than a dozen law enforcement agencies, identify and prioritize the offenders posing the highest threats to public safety, and coordinate responses to those threats. Through the VCIs, the U.S. Attorney’s Office spearheads targeted investigations into individuals and organizations responsible for significant violent activity.
In October 2018, the U.S. Attorney’s Office announced two significant takedowns of violent drug gangs. On Oct. 11, the office charged 17 members, associates, and drug suppliers of the Famous Boyz – a subset of the Brick City Brims set of the Bloods street gang – which dealt significant quantities of heroin and crack cocaine in Newark and possessed and used firearms in furtherance of the gang’s drug trafficking activities. And on Oct. 25, the office charged 27 individuals who used violence as part of a conspiracy to distribute significant quantities of heroin and other narcotics in Trenton, and whose members possessed numerous firearms in furtherance of the gang’s activities.
The program has already shown success:
• Crime is down 15 percent in Newark from 2017 to 2018.
• Shooting incidents are down 30 percent in Newark between 2017 and 2018, and down another 39 percent between comparable periods in 2018 and 2019.
• The office has taken more than 100 new cases arising from Newark since the reorganization.
• The VCI program has recently started in Jersey City, and shooting incidents are down 69 percent in Jersey City between comparable periods in 2018 and 2019.
• Violent crime was down 18 percent in Camden from 2017 to 2018.“The remarkable progress we’ve had in Camden is built on many things,” Chief Thomson said. “Its foundation is establishing trust with the community, but also trust among local, state and federal law enforcement partners. We have that kind of trust with the U.S. Attorney’s Office in New Jersey, and U.S. Attorney Carpenito has worked hard to provide his Camden office with the people and resources needed to be valuable contributors to the law enforcement team we’ve assembled here.”
“One of the advantages of the reorganization of the U.S. Attorney’s Office is the targeting of resources on the mission of reducing violent crime,” Public Safety Director Anthony Ambrose said. “In 2018 the U.S. Attorney’s office handled over 120 cases that specifically helped Newark, resulting in more than 100 fewer shooting victims compared to 2017 and a 35 percent reduction in robberies.”
“Violent crime, specifically related to shootings and gun offenses, has been priority number one for the Jersey City Police Department, along with its essential partner, the Hudson County Prosecutor,” Jersey City Police Chief Michael J. Kelly said. “Now, with the ‘Violent Crime Initiative’ and the Office of U.S. Attorney Craig Carpenito fully engaged, Jersey City is about to become even safer. Partnership with the U.S. Attorney’s Office is a major win for all our neighborhoods in Jersey City and bad news for those that perpetuate violence in our community.”
Along with the renewed focus on violent criminal offenders, the U.S. Attorney’s Office has continued to pursue and prosecute white collar criminals, with the number of those defendants charged by information or indictment up 15 percent in the year since the reorganization was announced. In 2019 alone, the U.S. Attorney’s Office has announced charges in several significant white collar cases, including:
• The Jan. 15, 2019, unsealing of a significant indictment charging two Ukrainian men for their roles in a large-scale, international conspiracy to hack into the Securities and Exchange Commission’s (SEC) computer systems and profit by trading on critical information they stole.
• The Feb. 13, 2019, complaint charging Gene Levoff, a former senior attorney at a global technology company, with insider trading.
• The Feb. 14, 2019, indictment charging the former President and former General Counsel of Cognizant, a Fortune 500 company, with FCPA violations for allegedly bribing officials in India.“I could not be prouder of the way this office and our federal, state and local law enforcement partners have worked to implement these changes, or the results we have achieved so far,” U.S. Attorney Carpenito said. “It’s because we are a team, no one person or entity more important to the mission than any other, that we succeed. But challenges remain and we must remain vigilant if we hope to build on our success. As the current caretaker of this office, I’m proud to have the opportunity to continue the outstanding traditions of this place and law enforcement in New Jersey.”
Registered Sex Offender Pleads Guilty to Possessing Child PornographyRead the Press Release
PROVIDENCE - Michael Llorca, 48, of Providence, a registered sex offender previously convicted of rape of a child in Massachusetts in 1997, pled guilty in U.S. District Court in Providence today to possessing child pornography, announced United States Attorney Aaron L. Weisman, Rhode Island State Police Colonel James M. Manni, and Homeland Security Investigations Special Agent in Charge Peter C. Fitzhugh.
According to information presented to the Court, on October 31 and November 1, 2017, members of the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force, using proprietary law enforcement software, observed that a device connected to an IP address associated with Llorca was sharing files of suspected child pornography via a Peer-to-Peer Network. A direct connection was made by law enforcement to a device connected to the IP address and numerous files of suspected child pornography were downloaded.
Separately, in November 2017, the ICAC Task Force received information from the National Center for Missing and Exploited Children that an individual in Rhode Island had sent sexually explicit text messages and illicit images to a minor female via a social media application with which users can communicate and share images via text messages. The ICAC Task Force determined that the IP address used to send the text messages and images belonged to Michael Llorca.
On January 18, 2018, members of the ICAC Task Force executed a federal court-authorized search of Llorca’s Providence residence and seized a laptop computer, among several other electronic storage devices. A forensic audit of the computer revealed at least 18 videos files containing child pornography.
Llorca, who has been detained in federal custody since his arrest, is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on June 17, 2019.
Possession of child pornography in this matter is punishable by statutory penalties of 20 years imprisonment, with a mandatory minimum term of 10 years imprisonment; a fine of $250,000; a term of supervised release of life; and a $5,000 special assessment imposed as required by the Justice for Victims Trafficking Act in child sexual exploitation cases where the Court makes a finding that the defendant is not indigent.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
Redwood City Resident Sentenced to Seven Years in Prison for Drug and Weapons ChargesRead the Press Release
SAN FRANCISCO– Craig William Nitsche, II, was sentenced today to 84 months in prison for distributing methamphetamine and being a felon in possession of ammunition, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree. The sentence was handed down by the Honorable Richard Seeborg, U.S. District Judge.
Nitsche, 35, of Redwood City, Calif., pleaded guilty to the charges on October 9, 2018. According to his plea agreement, Nitsche admitted that on July 30, 2018, he was driving a beige pickup truck without license plates in Redwood City. After Nitsche stopped at a gas station, law enforcement officers approached the car. As they approached, Nitsche pulled a black handgun from his pants pocket, raised the handgun, and then dropped it on the ground. The law enforcement officers took him into custody. Nitsche admitted that he knew he had one round chambered in the handgun and twelve additional rounds in the magazine, and that he had 27.1 grams of methamphetamine in the center console of his pickup truck. Nitsche also admitted he possessed the methamphetamine with the intent to distribute it by selling it to other people.
On August 21, 2018, a federal grand jury indicted Nitsche charging him with one count of being a felon in possession of ammunition, in violation of 18 U.S.C. § 922(g)(1); one count of being in possession with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C); and one count of using or carrying a handgun in furtherance of his possession with intent to distribute methamphetamine, in violation of 18 U.S.C. § 924(c). Nitsche pleaded guilty to all three counts.
In addition to the prison term, Judge Seeborg ordered Nitsche to serve a three-year term of supervised release that will begin at the conclusion of his prison term.
Assistant U.S. Attorney Jonathan Lee is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is the result of an investigation by the ATF, the San Mateo County Sheriff’s Department, and the San Mateo Vehicle Theft Task Force.
Puerto Rican Indicted in Payment Processing Fraud SchemeRead the Press Release
PITTSBURGH, PA - A resident of San Juan, Puerto Rico, has been indicted by a grand jury on charges of conspiracy to commit mail fraud, wire fraud, and bank fraud, United States Attorney Scott W. Brady announced today.
The one-count Indictment, returned on Feb. 19, named Lancelot De Montsegur, aka Patrice Berthome, 38, as the sole defendant.
According to the Indictment, De Montsegur was involved in a complex fraud that involved fraudulently processing credit card payments. The credit card companies will not allow their products and services to be used to pay for certain precluded activities, including the on-line sales of recreational and designer drugs, kratom, and CBD oil. De Montsegur participated in a conspiracy designed to conceal from the credit card companies the fact that De Montsegur and his co-conspirators used their products and services to pay for precluded activities and to subvert the internal controls the credit card companies had in place to detect and prevent this type of activity.
The fraud involved establishing shell corporations and web sites associated with the shell companies that falsely claimed that they sold a product other than designer drugs, kratom, or CBD oil. The conspirators then applied for PayPal, Stripe, Square, or merchant accounts from the credit card companies in the names of the shell corporations and the fake web sites. Once the accounts were established, they were used to process payments for designer drugs, kratom, or CBD oil. Additionally, the conspirators arranged for the credit card statements sent to the consumers to have the names of the shell corporations and telephone numbers. The conspirators set up a telephone bank to receive calls from customers questioning billings on their credit card statements, and the conspirators explained to the customers the true nature of the transactions in hopes of avoiding charge-backs that could cause the credit card companies to question the legitimacy of the transactions.
The law provides for a maximum total sentence of 30 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Brendan T. Conway and Jeffrey R. Bengel are prosecuting this case on behalf of the government.
The Food and Drug Administration Office of Criminal Investigations and Homeland Security Investigations conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Prolific Dark Web Dealer of Carfentanil and Fentanyl ArrestedRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and James P. O’Neill, the Commissioner of the Police Department for the City of New York (“NYPD”), announced today that RICHARD CASTRO, a/k/a “Chemsusa,” a/k/a “Chems_usa,” a/k/a “Chemical_usa,” and LUIS FERNANDEZ, have been charged with participating in a conspiracy to distribute carfentanil, fentanyl, and a fentanyl analogue over the “dark web,” including on AlphaBay and Dream Market. Fentanyl is a synthetic opioid that is significantly stronger than heroin, and carfentanil is a fentanyl analogue that is approximately 100 times stronger than fentanyl. CASTRO was arrested this morning in Windermere, Florida, and appeared before Magistrate Judge Leslie Hoffman in Orlando. FERNANDEZ was arrested this morning in the Bronx, New York, and is expected to be presented today before Chief U.S. Magistrate Judge Gabriel W. Gorenstein.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Fentanyl is a chief culprit in the opioid crisis and carfentanil is 100 times stronger than fentanyl. Carfentanil is intended to be a tranquilizer for large animals. These were two of the terrifying drugs that Richard Castro and Luis Fernandez allegedly distributed in large quantities, including over the dark web, where they thought they could hide. I want to thank our partners at the FBI, USPIS, and NYPD for bringing this dark web conspiracy to light.”
FBI Assistant Director William F. Sweeney Jr. said: “Carfentanil is 10,000 more times potent than morphine. Nothing that dangerous and potentially lethal should be in the hands of users who don’t know what they’re taking, and don’t realize how quickly it can kill someone. The FBI New York and our law enforcement partners use sophisticated methods to seek out these secret and well-hidden operations, to stop the deadly epidemic sweeping through our communities and country right now.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “The defendants allegedly thought they could use the mail to distribute deadly narcotics, specifically carfentanil and fentanyl, for their own profit, without concern for the communities they destroy. Their customers allegedly placed orders on the Dark Web, and encrypted email. As alleged, the defendants were counting on the anonymity of the Dark Web to conceal their crimes. Despite their best attempts at hiding their crimes, today they learned the price for using the mail to ship drugs – JUSTICE and possibly JAIL.”
NYPD Commissioner James P. O’Neill said: “As long as individuals – wherever they operate – are involved in narcotics trafficking, the NYPD and our partners will relentlessly work to stop the threat to public safety. Anyone who deals in illegal opioids should understand that the nation’s best investigators will stop at nothing to keep our community safe. I commend our colleagues at the Southern District of New York, and the investigators of the New York Office of the U.S. Postal Inspection Service, and the Joint Organized Crime Task Force for their work in this investigation.”
According to the allegations contained in the Complaint[1] charging RICHARD CASTRO and LUIS FERNANDEZ:
From at least in or about November 2015 through the present, CASTRO and FERNANDEZ conspired to distribute carfentanil, fentanyl, and phenyl fentanyl (an analogue of fentanyl). For most of this period, the conspiracy dealt drugs over the dark web, using the monikers “Chemsusa,” “Chems_usa,” and “Chemical_usa.” CASTRO was an operator of these online monikers and was paid in bitcoin. On one dark web marketplace, Dream Market, “Chemsusa” boasted that it had completed more than 3200 transactions on other dark web markets, including more than 1,800 on AlphaBay. The customer feedback for “Chemsusa” included, “Extremely potent and definitely the real Carf,” as well as “The Carfent is unbelievably well synthesized, keep up the amazing work.”
In June 2018, “Chems_usa” informed its customers that it was moving its business off dark net marketplaces and would accept purchase requests for narcotics only via encrypted email. To learn the off-market email address, “Chems_usa” required willing customers to pay a fee. An undercover law enforcement officer paid this fee, obtained the encrypted email address, and placed orders with CASTRO. CASTRO’s co-conspirator, FERNANDEZ, shipped narcotics on behalf of the conspiracy, including from New York City. From November 2018 to the present, at least 94 packages have been linked to this conspiracy; several of them have tested positive for carfentanil or fentanyl. All of these packages were shipped using USPS Priority Mail envelopes, and for most of them, the sender’s purported return address was a law office or a governmental entity.
CASTRO also laundered his narcotics proceeds, including by funneling more than approximately $1.77 million through bitcoin wallets of his, and by buying approximately 100 quadrillion Zimbabwe bank notes, among other valuables, which were shipped to his residence.
* * *
RICHARD CASTRO, 36, of Windermere, Florida, and LUIS FERNANDEZ, 41, of the Bronx, New York, are each charged with one count of conspiracy to distribute and possess with the intent to distribute three controlled substances – carfentanil, phenyl fentanyl, and fentanyl – as well as one count of distributing these controlled substances via the Internet. Each of these counts carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. CASTRO is also charged with one count of laundering narcotics proceeds, which carries a maximum sentence of 20 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the FBI, USPIS, and NYPD for their outstanding work on the investigation. Mr. Berman also thanked the Internal Revenue Service and the Orange County, Florida Sheriff’s Office for their assistance in this investigation. He added that the investigation is continuing.
This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Michael D. Neff, Aline R. Flodr, and Ryan B. Finkel are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Pittsburgh Man Pleads Guilty to Drug ConspiracyRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court for violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
Mark Fisher, 40, pleaded guilty on March 6, 2019, to one count before United States District Judge David Stewart Cercone.
In connection with the guilty plea, the court was advised that from in and around April 2016, and continuing thereafter to in and around October 2016, Fisher conspired with others to distribute and possess with intent to distribute 28 grams or more of crack. During his plea colloquy, the defendant admitted that he obtained crack from a co-defendant on numerous occasions during the period of the conspiracy, and that on one occasion, he fled his vehicle, leaving five grams of crack on the floor, when law enforcement initiated a traffic stop.
With his guilty plea, the defendant is the last of nine co-defendants to admit guilt in connection with the Indictment returned on August 1, 2017.
Judge Cercone scheduled sentencing for July 23, 2019, at 1 p.m. The law provides for a term of imprisonment of not less than 5 and not more than 40 years, a fine not to exceed $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.
Assistant United States Attorney Eric G. Olshan is prosecuting this case on behalf of the government.
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 comprises 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. The Stowe Township Police Department also provided assistance in this investigation. 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.
Pinellas Man Sentenced to Seven Years in Prison for Telemarketing ScamRead the Press Release
Tampa, FL – U.S. District Judge Virginia Hernandez Covington has sentenced Mark Boring (47, St. Petersburg) to seven years in federal prison for his role in a telemarketing scheme. As part of Boring’s sentence, the court also entered a money judgment of $75,000, the proceeds of the wire fraud conspiracy. In addition, Boring was directed to pay a total of $895,011.03 to victims of the scheme.
According to court records, from 2016 through at least 2018, Boring conspired with others to take money from victims throughout the United States who wanted to sell their timeshare properties or other parcels of land. Boring and others placed telephone calls to these victims impersonating real estate professionals. They misled the timeshare owners to believe the conspirators had identified buyers for the victims’ timeshares and other property. The conspirators further advised the victims that the timeshare and property sales could be completed if the victims made one or more advanced payments to the conspirators for various fees purportedly associated with the sales, such as closing costs, courier services, title searches, transfer fees, and legal fees. Once the victims agreed to pay the bogus fees, the conspirators directed the victims to send funds via wire transfers to one of the conspirators. That conspirator then withdrew the fraud proceeds and shared them with the others, based on each conspirator’s role in the fraudulent transaction. The conspirators often repeatedly re-contacted their victims and fraudulently advised them that additional fees were needed in order to complete the sales, and they continued to dupe the victims into sending bogus advanced fees until the victims either ran out of money or became aware of the scam.
Gary Kinard previously pleaded guilty and was sentenced to 7 years and 11 months in federal prison for his role in the scheme. Martin Steele, Troy Cater, and David Bell have also pleaded guilty to participating in the scheme and are pending sentencing.
This case was investigated by the Federal Bureau of Investigation, the St. Petersburg Police Department, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Rachel K. Jones.
Page County Man Sentenced to Prison for CounterfeitingRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on March 7, 2019, Alexander Sterling Potter Milledge, age 26, was sentenced by United States Senior District Court Judge Robert W. Pratt for Counterfeiting Federal Reserve Notes. Milledge was sentenced six months in prison, to be followed by a term of supervised release for two years.
In March 2018, Clarinda Police were called to Casey’s General Store regarding a patron that passed a counterfeit bill. Upon review of the surveillance tape, officers identified Alexander Milledge as the person who passed the counterfeit money. A search warrant was obtained for his residence and officers recovered numerous computers, printers, printer paper and approximately $35,000 in counterfeit Federal Reserve notes in different stages of manufacturing.
This case was investigated by Clarinda Police Department and the United States Secret Service. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Ohio Man Sentenced to 17.5 Years in Prison for Cocaine TraffickingRead the Press Release
PITTSBURGH – A former resident of Akron, Ohio, was sentenced in federal court last week for violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
United States District Judge Reggie B. Walton sentenced Adolph Brown, 48, to serve 210 months (17.5 years) in prison following his conviction of possession with intent to distribute 500 grams or more of cocaine. Judge Walton previously found the defendant guilty at the conclusion of a bench trial on July 9, 2018.
According to the evidence presented at trial, on March 2, 2015, the defendant traveled from Akron, Ohio, to Farrell, Pennsylvania, for the purpose of completing a sale of approximately 722 grams of cocaine. En route to Farrell, law enforcement officers conducted a traffic stop of the vehicle in which Brown was traveling. A subsequent search resulted in the discovery of the cocaine concealed inside a children’s car seat in the back seat of the vehicle. Brown subsequently provided a voluntary statement, admitting that the cocaine was his and that he was on his way to sell the cocaine to a customer in Farrell.
At the time of the offense in this case, the defendant was awaiting sentencing in Summit County, Ohio, following his guilty plea to state heroin and cocaine trafficking charges.
Assistant United States Attorney Eric G. Olshan prosecuted this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Adolph Brown, with assistance from the Southwest Mercer County Regional Police Department, the Pennsylvania State Police, and the Pennsylvania Attorney General’s Office.
New York City Man Transported Heroin to Western PA for DistributionRead the Press Release
PITTSBURGH - A resident of New York, NY, pleaded guilty in federal court to a charge of conspiracy to distribute 100 grams or more of heroin, United States Attorney Scott W. Brady announced today.
Jose Ortega, 32, pleaded guilty to one count before United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that from in and around November 2016 through in and around February 2017, Ortega conspired with his codefendants, David Francis and William Rosario, to possess with intent to distribute and distribute 100 grams or more of heroin, which he transported from New York to the Western District of Pennsylvania.
Judge Conti scheduled sentencing for July 10, 2019, at 3:30 p.m. The law provides for a total sentence of not less than five 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 offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Monroeville Police Department, Stowe Township Police Department, Ingram Borough Police Department, Pennsylvania State Police, and Monaca Police Department conducted the investigation that led to the prosecution of Ortega.
New Orleans Man Sentenced for Heroin Conspiracy and Firearm Possession ChargesRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that PATRICK SCHEXNAYDER, age 28, of New Orleans, was sentenced March 7, 2019 for heroin conspiracy and firearm possession charges.
According to court documents, SCHEXNAYDER conspired with others to possess with the intent to distribute 100 grams or more of heroin. In addition, on February 23, 2018, SCHEXNAYDER, a convicted felon, was in possession of a firearm.
U. S. District Court Judge Eldon E. Fallon sentenced SCHEXNAYDER to serve 60 months in prison, to be followed by three years of supervised release. Judge Fallon also imposed a $200 dollar special assessment.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U. S. Attorney Strasser praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New Orleans Police Department Multi-Agency Gang Unit in investigating this matter. The case is being prosecuted by Assistant United States Attorneys Maria M. Carboni and Matthew R. Payne.
* * *
New London Felon Admits to Trafficking Guns from Georgia to ConnecticutRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that QUADELL DANIELS, 32, of New London, pleaded guilty yesterday before U.S. District Judge Michael P. Shea in Hartford to one count of possession of a firearm by a convicted felon.
According to court documents and statements made in court, on July 20, 2017, members of the Connecticut Statewide Narcotics Task Force East and New London Police Department conducted a court-authorized search of a New London residence and seized a Beretta, Model BU9 Nano, 9mm pistol, and a Jimenez Arms, Model J.A. Nine, 9mm pistol. Subsequent investigation revealed that, in April 2017, Daniels and his girlfriend entered a pawn shop in Hinesville, Georgia. Daniels, who had provided cash to his girlfriend before entering the shop, selected two firearms for his girlfriend to purchase on his behalf. After his girlfriend completed the purchase, she provided the firearms to Daniels. Daniels transported the firearms to Connecticut.
In July 2017, Daniels and his girlfriend similarly purchased another five firearms at the same pawn shop, and they transported the guns to Connecticut.
Two of the seven firearms purchased by Daniels and his girlfriend were seized during the search of the New London residence on July 20, 2017.
In 2012, Daniels was convicted in Connecticut state court of attempted assault in the second degree, and possession of a firearm without a permit. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Daniels was arrested on December 1, 2017.
Judge Shea scheduled sentencing for June 3, 2019, at which time Daniels faces a maximum term of imprisonment of 10 years.
Daniels is released on a $100,000 bond.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Connecticut State Police Statewide Narcotics Task Force East and New London Police Department. The case is being prosecuted by Assistant U.S. Attorney Alina P. Reynolds.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
New Hampshire Man Arrested for Possessing Firearm During Attempted Robbery of THC Products in Springfield, VermontRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Ira Flowers, 36, of Claremont, New Hampshire was arrested yesterday after having been indicted by a Vermont grand jury for possessing a 9mm semi-automatic pistol after having been convicted of multiple felonies. Flowers appeared before United States Magistrate Judge Andrea K. Johnston, in Concord, New Hampshire, and consented to his detention pending transfer to the District of Vermont.
According to court records, the charge in the Indictment stems from defendant Flowers’s possession of a firearm on January 6, 2019, at the Holiday Inn in Springfield, Vermont. Defendant Flowers and three others met in one of the hotel rooms to exchange thousands of dollars for tetrahydrocannabinol (THC)-infused products. During the meeting, Flowers brandished a 9mm pistol, and attempted to rob the seller of the THC products. A struggle ensued, and Flowers was stabbed in the neck, shot once in the leg (with the pistol he unlawfully possessed), and left in the hotel hallway bleeding profusely from his wounds. A search of the hotel room by the Vermont State Police resulted in the seizure of the 9mm pistol possessed by the defendant, as well as a single 9mm casing.
If convicted, Flowers faces a maximum of ten years of imprisonment, and a $250,000 fine. The actual sentence however, would be determined by the Court with guidance from the advisory Federal Sentencing Guidelines. The United States Attorney emphasizes that the charge in the complaint is merely an accusation, and that the defendant is presumed innocent unless and until he is proven guilty.
United States Attorney Christina Nolan commended the investigative efforts of the Vermont State Police, as well as the assistance of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). She stated: “Federal prosecutors in Vermont will show no tolerance for gun crime and violence in connection with the illicit drug trade, and prosecution of these crimes will remain the top priority of the U.S. Attorney’s Office. These principles apply with equal force to those who commit violent crime – such as robberies, burglaries, and gun offenses – in connection with the marijuana and THC trade.”
The United States is represented in this matter by Assistant U.S. Attorney Jonathan Ophardt. The defendant was represented in the District of New Hampshire by the Federal Public Defender.
Munhall Man Sentenced to 1.5 Years in Prison for Stealing Packages and Mail Items from Pittsburgh Apartment BuildingsRead the Press Release
PITTSBURGH, PA - A resident of Munhall, Pennsylvania, has been sentenced in federal court to 18 months’ imprisonment and a three-year term of supervised release, on his conviction of conspiracy and mail theft, United States Attorney Scott W. Brady announced today.
United States District Judge Cathy Bissoon imposed the sentence on Christopher Eric Carr, 46.
According to information presented to the court, from February through May of 2018, Carr, along with his co-defendant Ron Matthew Sharp, entered multiple apartment buildings in the Shadyside and North Oakland areas of Pittsburgh, and opened United States Postal Service packages or other mail items that were not addressed to them, stole packages, and stole items from within packages that had been left at authorized mail depositories. Defendants stole items from more than 40 victims, filling up trash bags, duffel bags, and backpacks with their loot. Defendants then provided items they had stolen from the mail, including gift cards, to others, who redeemed the gift cards at various locations, including Giant Eagle and GETGO. Defendants also re-sold, and instructed others to attempt to re-sell, items defendants had stolen from the mail.
Assistant United States Attorney Christy C. Wiegand prosecuted this case on behalf of the government.
The United States Postal Inspection Service and the United States Department of Homeland Security conducted the investigation leading to the successful prosecution of Christopher Carr.
Mizrahi-Tefahot Bank LTD. Admits Its Employees Helped U.S.Taxpayers Conceal Income and AssetsRead the Press Release
Mizrahi-Tefahot Bank Ltd., (Mizrahi-Tefahot) and its subsidiaries, United Mizrahi Bank (Switzerland) Ltd. (UMBS) and Mizrahi Tefahot Trust Company Ltd. (Mizrahi Trust Company), entered into a deferred prosecution agreement (DPA) with the Department of Justice filed today in the U.S. District Court for the Central District of California, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division, First Assistant United States Attorney Tracy L. Wilkison, and Chief Don Fort for Internal Revenue Service-Criminal Investigation. As part of the agreement, Mizrahi-Tefahot will pay $195 million to the United States.
Mizrahi-Tefahot is one of Israel’s largest banks, with more than 4,000 employees, and is publicly traded on the Tel-Aviv Stock Exchange. During the relevant period of criminal activity, Mizrahi-Tefahot had branches in Los Angeles, California, the Cayman Islands, and London, England. In 2014, the Cayman Islands branch surrendered its license and was closed. UMBS, a subsidiary of Mizrahi-Tefahot, had one branch in Zurich, Switzerland. Mizrahi Trust Company, a fully owned subsidiary of Mizrahi-Tefahot, operated under the regulatory authority of the Bank of Israel. Collectively, Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company provided private banking, wealth management, and financial services to high-net-worth individuals and entities around the world, including U.S. citizens, resident aliens and permanent residents.
“Mizrahi-Tefahot’s admission of guilt and agreement with the United States to pay significant penalties and pay over the fees earned from knowingly assisting tax evading Americans reflects the continuing efforts of the Tax Division to end the criminal role of international financial institutions in perpetuating offshore tax fraud,” said Principal Deputy Assistant Attorney General Zuckerman. “A financial institution is not a faceless entity, but is the embodiment of the acts of its bankers, relationship managers and all employees. When a bank’s employees, at any level, facilitate U.S. tax fraud, the bank facilitates tax fraud and will be held responsible.”
“For over a decade, this Israeli bank, through its employees, engaged in conduct designed to hide its clients’ funds so they could avoid paying U.S. income taxes,” said First Assistant United States Attorney Tracy L. Wilkison, “Mizrahi-Tefahot solicited customers in Los Angeles and other U.S. cities to open offshore accounts with the hope they would never be linked to the American clients. As a result of this criminal conduct, the bank will surrender fees it earned, repay the United States for lost tax revenue, and pay a substantial fine.”
“Today’s announcement sends a clear message that banks, who promote the use of offshore tax schemes against the United States, will be held accountable and face substantial fines and penalties,” said Don Fort, Chief, IRS-Criminal Investigation. “Any financial institution – no matter where it operates – will be held accountable if it helps U.S. residents dodge their tax responsibilities. This agreement with Mizrahi-Tefahot is the latest notice to American taxpayers, who might flout the law, that we can and will uncover your hidden assets.”
In the DPA and related court documents, Mizrahi-Tefahot admitted that from 2002 until 2012 the actions of its bankers, relationship managers, and other employees defrauded the United States and specifically the Internal Revenue Service (IRS) with respect to taxes by conspiring with U.S. taxpayer-customers and others. Mizrahi-Tefahot employees’ acts of opening and maintaining bank accounts in Israel and elsewhere around the world and violating Mizrahi-Tefahot’s Qualified Intermediary Agreement (QI Agreement) with the IRS enabled U.S. taxpayers to hide income and assets from the IRS.
According to the filed statement of facts and the DPA, these employees took steps to assist U.S. customers in concealing their ownership and control of assets and funds held at Mizrahi-Tefahot, Mizrahi Trust Company and UMBS, which enabled those U.S. customer-taxpayers to evade their U.S. tax obligations, including:
- Assisting and referring U.S. customers to professionals to open and maintain accounts at Mizrahi-Tefahot and UMBS in the names of pseudonyms, code names, Mizrahi Trust, and foreign nominee entities in offshore locations, such as St. Kitts and Nevis (Nevis), Liberia, Turks & Caicos, and the British Virgin Islands (BVI), and thereby enabling those U.S. taxpayers to conceal their beneficial ownership in the accounts and maintain undeclared accounts;
- Opening customer accounts at Mizrahi-Tefahot and UMBS for known U.S. customers using non-U.S. forms of identification, and failing to maintain copies of required identification and account opening documents;
- Opening and maintaining foreign nominee bank accounts for certain U.S. clients holding U.S. securities, enabling those U.S. taxpayers to evade U.S reporting requirements on securities’ earnings in violation of Mizrahi-Tefahot’s QI Agreement with the IRS;
- Entering into “hold mail” agreements with U.S. customers whereby Mizrahi-Tefahot and UMBS employees held bank statements and other account-related mail in their offices in Israel and Switzerland, and by doing so enabling documents reflecting the existence of the offshore accounts to remain outside the U.S.;
- Until 2008, providing U.S. customers at Mizrahi-Tefahot’s Los Angeles branch use of their funds held in offshore Mizrahi-Tefahot and UMBS accounts (pledge accounts) through back-to-back loans, while excluding any record of the offshore pledge account at its Los Angeles branch to take advantage of Israeli and Swiss privacy laws and prevent disclosure of the funds to U.S tax authorities;
- Failing to adhere to the requirements of Mizrahi-Tefahot’s QI Agreement by (i) permitting U.S. customers who refused to provide the bank with the proper IRS Forms W-8BEN and/or W-9 to continue trading in accounts holding U.S. securities, (ii) transferring assets to foreign entity accounts controlled by U.S. customers to avoid the proper QI reporting requirements, and (iii) failing to timely address compliance deficiencies in U.S. customer accounts holding U.S. securities; and
- Until 2008, periodically sending “Roving Representatives,” to the United States to solicit new customers and to meet with existing U.S. customers in Los Angeles, California, New York, and other locations in the U.S. for the purposes of opening accounts and surreptitiously reviewing and managing existing customers’ offshore accounts.
According to the terms of the DPA, Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company will cooperate fully, subject to applicable laws and regulations, with the United States, the IRS, and other U.S. authorities. The DPA provides that Mizrahi-Tefahot will ensure that all of its overseas branches and other companies under its control that provide financial services to customers covered by the Foreign Account Tax Compliance Act, 26 U.S.C. §§ 1471-1474 (FATCA), will continue to implement and maintain an effective program of internal controls with respect to compliance with FATCA in their affiliates and subsidiaries. The DPA also requires Mizrahi-Tefahot and its subsidiaries affirmatively to disclose certain material information it may later uncover regarding U.S.-related accounts, as well as to disclose certain information consistent with the Department’s Swiss Bank Program with respect to accounts closed between Jan. 1, 2009, and October 2017. Under the DPA, prosecution against the bank for conspiracy will be deferred for an initial period of two years to allow Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company to comply with the DPA’s terms.
The $195 million payment consists of: 1) restitution in the amount of $53 million, representing the approximate unpaid pecuniary loss to the United States as a result of the criminal conduct; 2) disgorgement in the amount of $24 million, representing the approximate gross fees paid to the bank by U.S. taxpayers with undeclared accounts at the bank from 2002 through 2012; and 3) a fine of $118 million.
This agreement marks the second time an Israeli bank has admitted to similar criminal conduct. In December 2014, the Bank Leumi Group entered into a DPA with the Department of Justice admitting that it conspired to aid and assist U.S. taxpayers to prepare and present false tax returns to the IRS by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world.
Principal Deputy Assistant Attorney General Zuckerman, First Assistant United States Attorney Wilkison and Chief Fort commended special agents of IRS-Criminal Investigation, who investigated this case, and Western Criminal Enforcement Section Chief Larry J. Wszalek and Trial Attorneys Melissa S. Grinberg and Lisa L. Bellamy of the Tax Division, who prosecuted this case. Principal Deputy Assistant Attorney General Zuckerman also thanked the United States Attorney’s Office for the Central District of California for their substantial assistance.
Michigan woman admits to role in a drug distribution operation in Monongalia CountyRead the Press Release
CLARKSBURG, WEST VIRGINIA –Marsawn Daggins, of Southfield, Michigan, has admitted to her involvement in a heroin, oxycodone, and cocaine distribution operation, United States Attorney Bill Powell announced.
Daggins, age 35, pled guilty to one count of “Unlawful Use of Communication Facility.” Daggins admitted to using a phone to further a drug distribution operation in April 2018 in Monongalia County.Daggins faces up to four years incarceration and a fine of up to $250,000. 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 case on behalf of the government. The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Mon Metro 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.
Mexican Nationals Plead Guilty to Illegal Firearms, MarijuanaRead the Press Release
KANSAS CITY, Mo. – Two Mexican nationals have pleaded guilty in federal court to illegally possessing firearms after police officers interrupted them shooting handguns in their backyard.
Juan Carlos Cuevas-Alvarez, 33, a citizen of Mexico unlawfully residing in Kansas City, Mo., pleaded guilty before U.S. District Judge Gary A. Fenner on Monday, March 11, 2019, to being an illegal alien in possession of firearms and to possessing marijuana to distribute. Co-defendant Nestor K. Rodriguez, 27, also a citizen of Mexico unlawfully residing in Kansas City, Mo., pleaded guilty on Feb. 27, 2019, to being an illegal alien in possession of firearms.
Kansas City, Mo., police officers were dispatched in response to a report of gunshots to the residence shared by Cuevas-Alvarez, Rodriguez and a third person at about 4:24 a.m. on Aug. 5, 2018. When officers arrived at the residence, they heard gunshots coming from behind the residence. Cuevas-Alvarez admitted that he shot two to three full magazines worth of ammunition in the backyard of the residence. Rodriguez admitted that he shot a fully loaded magazine of ammunition at a beer bottle in the backyard of the residence.
When officers searched the residence, they found a Cobray 9mm pistol, a Walther .380-caliber handgun, and a Sig Saur 9mm pistol. Officers also found $35,289 in cash and approximately 26 pounds (11.79 kilograms) of marijuana, which was contained in several individually wrapped and heat-sealed plastic bags inside of two black trash bags.
Under federal statutes, Cuevas-Alvarez is subject to a sentence of up to 15 years in federal prison without parole. Rodriguez 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 these defendants will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes IV. It was investigated by the Kansas City, Mo., Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Massachusetts Man Sentenced to 30 Months for Illegally Attempting to Buy Guns in HooksettRead the Press Release
CONCORD - Jose Rafael Soriano, 28, of Lynn, Massachusetts, was sentenced to 30 months in prison for aiding another in an illegal effort to purchase firearms, United States Attorney Scott W. Murray announced.
According to court documents and statements made during the prosecution of the case, on July 15, 2015, Soriano, and three friends, Michael Younge, Adrian Aleman and Tasha Gardner, visited a federally licensed firearms dealer in Hooksett, New Hampshire. Of the four, only Gardner was legally eligible to buy handguns. Soriano and Younge, with Aleman’s help, solicited Gardner to buy two handguns on their behalf. Gardner agreed to assist and attempted to purchase the two guns for Soriano and Younge. In connection with that attempt, Gardner filled out a form legally required for all intrastate over-the-counter handgun purchases on which she falsely certified that she was the “actual purchaser” of the two handguns, when she was really attempting to buy them for Soriano and Younge. The store never transferred the firearms because its employees became suspicious and declined to complete the transaction.
All of the individuals involved in this crime pleaded guilty. On July 30, 2017, Younge was sentenced to serve five years in prison. On March 13, 2017, Gardner was sentenced to three years of probation. On April 7, 2017, Aleman was sentenced to two years of probation.
Soriano previously pleaded guilty on October 12, 2018.
“In order to keep our communities safe, it is vital to keep guns out of the hands of criminals, said U.S. Attorney Murray. “Those who illegally possess firearms present a real danger to public safety. We will continue to be aggressive in our efforts to prevent criminals from obtaining guns and to prosecute those who illegally buy guns for criminals.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the Manchester Police Department. The case was prosecuted by Assistant United States Attorney Debra M. Walsh.
This case was prosecuted as part of Project Safe Neighborhoods, a national initiative undertaken by the U.S. Department of Justice to reduce gun crime in America through, among other things, community outreach and vigorous prosecution of firearms offenses.
###
Massachusetts Man Sentenced to 2½ Years for Firearm OffensesRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Jonathan Lara, 29, of Lynn, Massachusetts, was sentenced today in U.S. District Court by Judge George Z. Singal to 2½ years in prison and three years of supervised release for possessing a firearm after having been convicted of felony offenses and while being an unlawful user of heroin. He pled guilty on November 27, 2018.
According to court records, in August 2017, Lara’s Lewiston hotel room was searched. Agents and officers seized controlled substances, a handgun and $3,873. Lara was prohibited from possessing the handgun because in 2009, he had been convicted in Massachusetts of felony larceny from a person and armed robbery and because he had been a daily user of heroin for years.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, in conjunction with the Maine Drug Enforcement Agency and the Auburn and Lewiston Police Departments.
Massachusetts Man Pleads Guilty to Fentanyl Trafficking and Illegal Reentry after DeportationRead the Press Release
CONCORD - Leonardo Aybar, 35, formerly of Lawrence, Massachusetts, pleaded guilty in federal court to participating in a fentanyl trafficking conspiracy and illegally reentering the United States, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, from December of 2016 through February of 2017, Aybar conspired with Emmanuel Encarnacion, also formerly from Lawrence, to sell approximately 95 grams of fentanyl to an undercover New Hampshire State Police detective inside the Rockingham Mall in Salem, New Hampshire.
At the time of the offense, Aybar was unlawfully in the United States. He previously had been deported to the Dominican Republic in 2010.
Aybar is scheduled to be sentenced on June 25, 2019. Aybar is subject to potential deportation to the Dominican Republic after he completes his prison sentence. Co-conspirator Encarnacion previously was sentenced to 60 months in federal prison.
“Those who unlawfully distribute fentanyl in New Hampshire should understand that they will be prosecuted aggressively,” said U.S. Attorney Murray. “In order to protect the safety of our community, we will work closely with all of our law enforcement partners to identify, prosecute, and incarcerate those who bring this deadly substance into the Granite State.”
This matter was investigated by the Immigration and Customs Enforcement's Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Hampshire State Police. The case is being prosecuted by Assistant U.S. Attorney Jennifer Cole Davis.
###
Manchester Man Sentenced to 147 months for Drug Trafficking and Firearms OffensesRead the Press Release
LONDON, Ky. – Jason A. Cottongim, 39, of Manchester, Kentucky, was sentenced yesterday, to 147 months in federal prison, by United States District Judge Robert E. Wier, for possession with the intent to distribute Xanax, being a felon in possession of firearms, and using firearms in furtherance of drug trafficking. Judge Wier also ordered Cottongim forfeit $16,148 in cash, two firearms, and ammunition.
On April 26, 2018, Cottongim was discovered in the Save-a-lot parking lot in Manchester, armed with a loaded Smith & Wesson pistol in his pocket and a loaded semi-automatic M-11 at his feet. After rendering a hoax explosive device safe, law enforcement officers seized over 319 Xanax pills, $16,148 in cash, digital scales, distribution baggies, and ammunition from the vehicle.
Cottongim entered a guilty plea to all the charges, during his trial, in November of 2018. Under federal law, Cottongim must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for five years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge ATF; Chris Fultz, Chief Manchester Police Department; Richard Sanders, Commissioner of the Kentucky State Police; and Patrick Robinson, Clay County Sheriff; jointly made the announcement.
The investigation was conducted by the ATF, Manchester Police Department, KSP, and the Clay County Sheriff’s Office. The United States was represented by Assistant United States Attorney Jenna E. Reed.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Man Who Distributed over 17 Pounds of Meth Sentenced to More Than 10 Years in Federal PrisonRead the Press Release
A man who distributed more than 17 pounds of ice methamphetamine was sentenced on March 7, 2018, to more than ten years in federal prison.
Justin Lee Branon, age 35, from Clemons, Iowa, received the prison term after an August 1, 2018 guilty plea to conspiracy to distribute methamphetamine. Evidence during the case established that Branon received meth in pound or multiple pound quantities and distributed it throughout the Waterloo area.
Branon was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Branon was sentenced to 126 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system. Branon 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 Lisa C. Williams and was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of Federal Bureau of Investigation, Iowa Division of Narcotics Enforcement, Tri-County Drug Enforcement Task Force (Waterloo Police Department; Cedar Falls Police Department; Waverly Police Department; Bremer County Sheriff’s Office; Black Hawk County Sheriff’s Office; LaPorte City Police Department; Evansdale Police Department; Hudson Police Department), Mid Iowa Drug Task Force (Marshalltown Police Department; Marshall County Sheriff’s Office; Tama County), and Dubuque Drug Task Force (Dubuque Police Department; Dubuque County Sheriff’s Office).
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-cr-2002.
Follow us on Twitter @USAO_NDIA.
Lumber Liquidators Enters into Corporate Resolution for Securities Fraud and Agrees to Pay $33 Million PenaltyRead the Press Release
Lumber Liquidators Holdings Inc. (Lumber Liquidators) has agreed to pay a total penalty of $33 million for filing a materially false and misleading statement to investors regarding the sale of its laminate flooring from China to its customers in the United States.
Lumber Liquidators, a public corporation headquartered in Toano, Virginia, and one of the largest retailers of flooring products in the United States, entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Eastern District of Virginia charging the company with securities fraud. The case was primarily focused on the fact that Lumber Liquidators knowingly filed a false and misleading statement to investors broadly denying the allegations featured in a March 2015 episode of 60 Minutes, and affirming that the company complied with California Air Resources Board (CARB) regulations.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, Special Agent in Charge David W. Archey of the FBI’s Richmond Field Office, Special Agent in Charge Kelly R. Jackson of IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office and Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service Washington Division, made the announcement.
“Lumber Liquidators lied to investors and to the public about its compliance with formaldehyde regulations for the flooring it sold – all to protect its stock price,” said Assistant Attorney General Benczkowski. “False and misleading financial reports undermine the integrity of our securities markets and harm investors. The Department and our law enforcement partners are committed to doing everything we can to ensure that those who commit securities fraud are held accountable.”
“This resolution holds Lumber Liquidators accountable for misleading the investing public,” said U.S. Attorney Terwilliger. “It also recognizes that the company has cooperated with the government's investigation, completely replaced its senior executive team, and installed experienced executives who have displayed a commitment to building an ethical corporate culture. We will continue to ensure that market participants can trust information communicated by public companies when making investment decisions. My thanks to our prosecutorial team and our investigative partners for their outstanding work on this case.”
“This penalty should serve as a warning to other corporations who seek to mislead investors,” said FBI Special Agent in Charge Archey. “FBI Richmond is grateful for the commitment to this case of its partners at the U.S. Attorney’s Office, the Justice Department’s Fraud Section, the IRS Criminal Investigation and the U.S. Postal Inspection Service.”
“Lumber Liquidators knowingly deceived the shareholders they were entrusted to serve,” said IRS-CI Special Agent in Charge Jackson. “IRS-CI will continue to work diligently with our federal law enforcement partners to ensure that the punishment for such crimes matches the seriousness of the offense.”
“Those seeking to maximize profits while misleading investors should expect to pay a heavy price,” said U.S. Postal Inspector in Charge Rendina. “The U.S. Postal Inspection Service has investigated these kind of deceptive practices for years to protect investors and the integrity of the market place. Postal Inspectors work tirelessly to identify and hold accountable any company who uses the U.S. mail to defraud American citizens.”
According to court documents filed as part of the DPA, Lumber Liquidators was subject to various laws that regulated the chemicals used in wood products, including laminate flooring. Specifically, CARB enforced limits on formaldehyde emissions from composite wood products. In September 2013, CARB announced that it intended to use deconstructive testing to determine whether finished flooring products contained CARB compliant cores. In 2013 and 2014, CARB informed Lumber Liquidators that flooring samples collected from its California stores failed deconstructive testing for formaldehyde emissions. Lumber Liquidators’ own deconstructive tests of the same products yielded similar results.
Also in 2014, foreign and domestic flooring suppliers alerted Lumber Liquidators of CARB compliance concerns related to the company’s Chinese laminate products. In February 2014, Lumber Liquidators’ Chinese laminate suppliers requested a price increase citing concerns about the increased cost of CARB compliant cores and their ability to pass deconstructive testing for formaldehyde emissions. Approximately one month later, a U.S. laminate supplier informed Lumber Liquidators that it tested a Chinese laminate sample purchased from one of Lumber Liquidators’ stores in the United States and that the sample emitted high levels of formaldehyde. Lumber Liquidators took only limited steps to determine the validity of the suppliers’ concerns, and instead sought to generate support for its position that deconstructive testing was not a valid test method, the company admitted.
To that end, Lumber Liquidators visited two Chinese laminate suppliers in August 2014 to collect and test samples. While collecting samples from Supplier A, a then-Lumber Liquidators employee noticed a pallet of laminate flooring that factory workers indicated was Lumber Liquidators’ product, but the label on the pallet indicated that it contained non-CARB compliant cores. The former employee took samples from this suspect pallet for testing along with other samples manufactured in his and other employees’ presence. Laboratory A later provided Lumber Liquidators with test results that undermined the company’s criticisms of deconstructive testing. All but one of the products manufactured in front of the Lumber Liquidators employees passed deconstructive testing. But the samples from the suspect pallet, manufactured before employees arrived, failed deconstructive testing.
Lumber Liquidators representatives again visited Supplier A in September 2014 and January 2015. Following these visits, Lumber Liquidators concluded that Supplier A had numerous recordkeeping anomalies, refused to implement CARB-related corrective action requests made by the company, and could not reliably demonstrate that its laminate flooring contained CARB compliant cores. Accordingly, in January 2015, the company’s former senior management team decided to discontinue its relationship with Supplier A due to CARB compliance concerns. Nevertheless, that same day, Lumber Liquidators admitted it ordered more laminate flooring from Supplier A.
In Fall 2014, Lumber Liquidators learned that the CBS news program, 60 Minutes, also retained Laboratory A to conduct deconstructive testing of Lumber Liquidators’ products. Shortly thereafter, Laboratory A secretly notified Lumber Liquidators that the deconstructive tests commissioned by 60 Minutes yielded significant test failures. The lab then allowed a former Lumber Liquidators employee to review and take pictures of these test results. In December 2014, the lab owner told former Lumber Liquidators employees that a high deconstructive test failure was a strong indicator that the product was not CARB compliant, the company admitted.
On Feb. 25, 2015, Lumber Liquidators learned that 60 Minutes obtained undercover videos from three of its Chinese laminate suppliers, including Supplier A, in which the suppliers admitted that the laminates they made for Lumber Liquidators were not CARB compliant. Lumber Liquidators’ former senior management team retained outside counsel from Law Firm B to interview the suppliers in the undercover videos. On Feb. 28, 2015, Law Firm B informed former Lumber Liquidators executives that it recorded one person from each of the three factories in the undercover videos saying that the product they sold Lumber Liquidators was CARB compliant. Nevertheless, Law Firm B told these former executives that they had limited confidence in the suppliers’ statements because, among other things, a former Lumber Liquidators inspector alleged that suppliers offered bribes to him and other company employees, the company admitted.
On March 1, 2015, 60 Minutes aired a segment alleging that laminate flooring sold by Lumber Liquidators in the United States did not meet CARB emission standards for formaldehyde. The episode featured the undercover videos and test results previously shown to Lumber Liquidators.
The next morning, March 2, 2015, the New York Stock Exchange halted trading of the company’s stock, with the expectation that Lumber Liquidators intended to issue a statement responding to the 60 Minutes episode. Later that morning, Lumber Liquidators, through its employees, knowingly filed a false and misleading Securities and Exchange Commission (SEC) Form 8-K broadly denying the allegations in the 60 Minutes episode and affirming Lumber Liquidators complied with CARB regulations, the company admitted. Specifically, Lumber Liquidators omitted material facts from investors, including CARB’s investigation of the company’s Chinese laminate products; its own deconstructive test results; the company’s decision to discontinue sourcing from Supplier A due to CARB compliance concerns; and evidence that undermined the suppliers’ statements that all products provided to Lumber Liquidators were CARB compliant.
Pursuant to its agreement with the Department of Justice, Lumber Liquidators agreed to pay a total criminal penalty of $33 million to the United States, including a criminal fine of approximately $19 million, and approximately $14 million in forfeiture. This amount represents the company’s net profits from the sale of 100 percent of its Chinese laminate from approximately Jan. 16, 2015 through May 7, 2015.
Lumber Liquidators also agreed to implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals. Under the DPA, prosecution of the company for securities fraud will be deferred for an initial period of three years to allow Lumber Liquidators to demonstrate good conduct.
The SEC announced a separate settlement with Lumber Liquidators in connection with related, parallel proceedings. Under the terms of its resolution with the SEC, Lumber Liquidators agreed to a total of $6,097,298.42 in disgorgement of profits and prejudgment interest. The Department of Justice agreed to credit the amount paid to the SEC in disgorgement as part of its agreement. Thus, the combined total amount of criminal and regulatory penalties paid by Lumber Liquidators will be $33 million.
This penalty reflects the nature and seriousness of the conduct, as well as Lumber Liquidators’ ongoing cooperation with the United States and the company’s extensive efforts at remediation. Among other remedial efforts, Lumber Liquidators suspended the sale of all laminate flooring from China in May 2015; offered consumers in-home testing for already installed flooring; and implemented new policies and procedures regarding compliance with CARB emission standards and other environmental regulations, sourcing of flooring products, financial reporting and internal controls. The employees involved in wrongdoing either were terminated or resigned from Lumber Liquidators, and the company replaced its executive management team with experienced executives who have displayed a commitment to building an ethical corporate culture.
Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Katherine Lee Martin and Uzo E. Asonye of the Eastern District of Virginia prosecuted the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Lumber Liquidators Agrees to $33 Million Penalty for Securities FraudRead the Press Release
RICHMOND, Va. – Lumber Liquidators Holdings, Inc. has agreed to pay a total penalty of $33 million for filing a materially false and misleading statement to investors regarding the sale of its laminate flooring from China to its customers in the United States.
“This resolution holds Lumber Liquidators accountable for misleading the investing public,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “It also recognizes that the company has cooperated with the government's investigation, completely replaced its senior executive team, and installed experienced executives who have displayed a commitment to building an ethical corporate culture. We will continue to ensure that market participants can trust information communicated by public companies when making investment decisions. My thanks to our prosecutorial team and our investigative partners for their outstanding work on this case.”
Lumber Liquidators, a public corporation headquartered in Toano and one of the largest retailers of flooring products in the United States, entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today charging the company with securities fraud. The case was primarily focused on the fact that Lumber Liquidators knowingly filed a false and misleading statement to investors broadly denying the allegations featured in a March 2015 episode of 60 Minutes, and affirming that the company complied with California Air Resources Board (CARB) regulations.
“Lumber Liquidators lied to investors and to the public about its compliance with formaldehyde regulations for the flooring it sold – all to protect its stock price,” said Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division. “False and misleading financial reports undermine the integrity of our securities markets and harm investors. The Department and our law enforcement partners are committed to doing everything we can to ensure that those who commit securities fraud are held accountable.”
According to court documents filed as part of the DPA, Lumber Liquidators was subject to various laws that regulated the chemicals used in wood products, including laminate flooring. Specifically, CARB enforced limits on formaldehyde emissions from composite wood products. In September 2013, CARB announced that it intended to use deconstructive testing to determine whether finished flooring products contained CARB compliant cores. In 2013 and 2014, CARB informed Lumber Liquidators that flooring samples collected from its California stores failed deconstructive testing for formaldehyde emissions. Lumber Liquidators own deconstructive tests of the same products yielded similar results.
“This penalty should serve as a warning to other corporations who seek to mislead investors,” said David W. Archey, Special Agent in Charge of the FBI’s Richmond Field Office. “FBI Richmond is grateful for the commitment to this case of its partners at the U.S. Attorney’s Office, the Justice Department’s Fraud Section, IRS Criminal Investigations and the U.S. Postal Inspection Service.”
Also in 2014, foreign and domestic flooring suppliers alerted Lumber Liquidators of CARB compliance concerns related to the company’s Chinese laminate products. In February 2014, Lumber Liquidators’ Chinese laminate suppliers requested a price increase citing concerns about the increased cost of CARB compliant cores and their ability to pass deconstructive testing for formaldehyde emissions. Approximately one month later, a United States laminate supplier informed Lumber Liquidators that it tested a Chinese laminate sample purchased from one of Lumber Liquidators’ stores in the United States and that the sample emitted high levels of formaldehyde. Lumber Liquidators took only limited steps to determine the validity of the suppliers’ concerns, and instead sought to generate support for its position that deconstructive testing was not a valid test method.
“Lumber Liquidators knowingly deceived the shareholders they were entrusted to serve,” said Kelly R. Jackson, Special Agent in Charge of IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office. “IRS-CI will continue to work diligently with our federal law enforcement partners to ensure that the punishment for such crimes matches the seriousness of the offense.”
To that end, Lumber Liquidators visited two Chinese laminate suppliers in August 2014 to collect and test samples. While collecting samples from Supplier A, a former Lumber Liquidators employee noticed a pallet of laminate flooring that factory workers indicated was Lumber Liquidators’ product, but the label on the pallet indicated that it contained non-CARB compliant cores. The former employee took samples from this suspect pallet for testing along with other samples manufactured in his and other employees’ presence. Laboratory A later provided Lumber Liquidators with test results that undermined the company’s criticisms of deconstructive testing. All but one of the products manufactured in front of the Lumber Liquidators’ employees passed deconstructive testing. But the samples from the suspect pallet, manufactured before employees arrived, failed deconstructive testing.
“Those seeking to maximize profits while misleading investors should expect to pay a heavy price,” said Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service. “The U.S. Postal Inspection Service has investigated these kinds of deceptive practices for years to protect investors and the integrity of the marketplace. Postal Inspectors work tirelessly to identify and hold accountable any company who uses the U.S. mail to defraud American citizens.”
Lumber Liquidators again visited Supplier A in September 2014 and January 2015. Following these visits, Lumber Liquidators concluded that Supplier A had numerous recordkeeping anomalies, refused to implement CARB-related corrective action requests made by the company, and could not reliably demonstrate that its laminate flooring contained CARB compliant cores. Accordingly, in January 2015, the company’s former senior management team decided to discontinue its relationship with Supplier A due to CARB compliance concerns. Nevertheless, that same day, Lumber Liquidators ordered more laminate flooring from Supplier A.
In Fall 2014, Lumber Liquidators learned that the CBS news program, 60 Minutes, also retained Laboratory A to conduct deconstructive testing of Lumber Liquidators’ products. Shortly thereafter, Laboratory A secretly notified Lumber Liquidators that the deconstructive tests commissioned by 60 Minutes yielded significant test failures. The lab then allowed a former Lumber Liquidators employee to review and take pictures of these test results. In December 2014, the lab owner told former Lumber Liquidators employees that a high deconstructive test failure was a strong indicator that the product was not CARB compliant.
On Feb. 25, 2015, Lumber Liquidators learned that 60 Minutes obtained undercover videos from three of its Chinese laminate suppliers, including Supplier A, in which the suppliers admitted that the laminates they made for Lumber Liquidators were not CARB compliant. Lumber Liquidators’ former senior management team retained outside counsel from Law Firm B to interview the suppliers in the undercover videos. On Feb. 28, 2015, Law Firm B informed former Lumber Liquidators executives that it recorded one person from each of the three factories in the undercover videos saying that the product they sold Lumber Liquidators was CARB compliant. Nevertheless, Law Firm B told these former executives that they had limited confidence in the suppliers’ statements because, among other things, a former Lumber Liquidators inspector alleged that suppliers offered bribes to him and other company employees.
On March 1, 2015, 60 Minutes aired a segment alleging that laminate flooring sold by Lumber Liquidators in the United States did not meet CARB emission standards for formaldehyde. The episode featured the undercover videos and test results previously shown to Lumber Liquidators.
The next morning, March 2, 2015, the New York Stock Exchange halted trading of the company’s stock, with the expectation that Lumber Liquidators intended to issue a statement responding to the 60 Minutes episode. Later that morning, Lumber Liquidators, through its employees, knowingly filed a false and misleading SEC Form 8-K broadly denying the allegations in the 60 Minutes episode and affirming Lumber Liquidators complied with CARB regulations. Specifically, Lumber Liquidators omitted material facts from investors, including: CARB’s investigation of the company’s Chinese laminate products; its own deconstructive test results; the company’s decision to discontinue sourcing from Supplier A due to CARB compliance concerns; and evidence that undermined the suppliers’ statements that all products provided to Lumber Liquidators were CARB compliant.
Pursuant to its agreement with the Department of Justice, Lumber Liquidators agreed to pay a total criminal penalty of $33 million to the United States, including a criminal fine of approximately $19 million, and approximately $14 million in forfeiture. This amount represents the company’s net profits from the sale of 100 percent of its Chinese laminate from on or about Jan. 16, 2015 through on or about May 7, 2015.
Lumber Liquidators also agreed to implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals. Under the DPA, prosecution of the company for securities fraud will be deferred for an initial period of three years to allow Lumber Liquidators to demonstrate good conduct.
The U.S. Securities and Exchange Commission (SEC) announced a separate settlement with Lumber Liquidators in connection with related parallel proceedings. Under the terms of its resolution with the SEC, Lumber Liquidators agreed to a total of $6,097,298.42 in disgorgement of profits and prejudgment interest. The Department of Justice agreed to credit the amount paid to the SEC in disgorgement as part of its agreement. Thus, the combined total amount of criminal and regulatory penalties paid by Lumber Liquidators will be $33 million.
This penalty reflects the nature and seriousness of the conduct, as well as Lumber Liquidators’ ongoing cooperation with the United States and the company’s extensive efforts at remediation. Among other remedial efforts, Lumber Liquidators suspended the sale of all laminate flooring from China in May 2015; offered consumers in-home testing for already installed flooring; and implemented new policies and procedures regarding compliance with California Air Resources Board (CARB) emission standards and other environmental regulations, sourcing of flooring products, financial reporting and internal controls. The employees involved in wrongdoing either were terminated or resigned from Lumber Liquidators, and the company replaced its executive management team with experienced executives who have displayed a commitment to building an ethical corporate culture.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; David W. Archey, Special Agent in Charge of the FBI’s Richmond Field Office; Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement. Assistant U.S. Attorneys Katherine Lee Martin and Uzo Asonye, and Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. X:XX-cr-XXX.
Leader in the Black Guerilla Family Gang Sentenced to 35 Years in Federal Prison for Racketeering Conspiracy, Including Authorizing MurderRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge James K. Bredar sentenced Shawn Thomas, a/k/a Bucky, age 38, of Baltimore, Maryland, today to 35 years in federal prison for participating in a racketeering conspiracy, as a leader in the Black Guerilla Family (BGF) gang.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office; Commissioner Michael Harrison of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
United States Attorney Robert K. Hur stated, “All too often, guns and drugs go hand in hand—and both are killers. Shawn Thomas’ sentencing today ensures that he will not be able to bring either to the Greenmount Avenue community he once controlled for a very long time. We are committed to working with our law enforcement partners to get guns and drugs off of our streets and to reduce violent crime in our neighborhoods.”
According to his plea agreement, from prior to 2010 through February 22, 2018, Thomas was employed by and associated with the BGF gang. BGF is a nationwide gang operating in prisons and in cities throughout the United States, including in Baltimore. BGF is involved in criminal activity including murder, robbery, extortion, drug trafficking, obstruction of justice, and witness intimidation.
BGF organizes its members into “regimes” or “bubbles” corresponding to particular regions or neighborhoods in Baltimore City and other Maryland communities. Each bubble reports to a bush member or bushman, who controls larger swaths of territory on behalf of BGF. Bush members are elder statesmen of BGF and maintain inter-bubble discipline and settle disputes among the various bubbles operating in the territory that the bush member controls.
Thomas admitted that he was a high-ranking member of BGF, controlling a regime in the 2700 block of Greenmount Avenue in North Baltimore. During the course of the conspiracy, Thomas obtained narcotics, including crack cocaine, which he distributed through BGF-controlled open-air drug shops. Thomas also collected gang dues for BGF.
As detailed in Thomas’ plea agreement, on December 9, 2016, Thomas ordered another BGF member to murder Keith Ramsey, a Bloods gang member, as part of an ongoing dispute between the two gangs.
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. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF, the FBI, the Baltimore Police Department, and the Office of the State’s Attorney for Baltimore City for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys James T. Wallner and Clinton J. Fuchs, who prosecuted this Organized Crime Drug Enforcement Task Force case.
# # #
Justice Department Reaches Agreement with Harris County, Texas, to Ensure Polling Place Accessibility for Voters with DisabilitiesRead the Press Release
The Justice Department today reached an agreement with Harris County, Texas, to resolve its lawsuit in the Southern District of Texas alleging that Harris County violated Title II of the Americans with Disabilities Act (ADA) by failing to provide an accessible voting program to voters with disabilities, including accessible polling places. Harris County’s voting program—the third largest in the country—includes over 750 polling places. The Justice Department’s complaint alleges that many polling places in Harris County have architectural barriers—such as steep ramps, gaps in sidewalks and walkways, and locked gates along the route barring pedestrian access—that make them inaccessible to voters with mobility and vision disabilities.
“Every eligible voter with a disability must have an equal opportunity to vote in person at his or her local polling place,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This fundamental right secures participation in our democracy and it must not be diminished or restricted by barriers to access.”
“The announcement today demonstrates my office’s continued commitment to enforcing all federal civil rights laws, including the ADA,” said U.S. Attorney Ryan K. Patrick. “I commend Harris County for its decision to enter into this agreement in order to achieve our shared goal of making polling places accessible to all eligible voters.”
Under the agreement, Harris County will create and implement policies, practices, and procedures to bring its voting program into compliance with the ADA. These policies, practices and procedures include: creating an effective system for selecting accessible facilities for polling places; surveying polling place facilities to identify accessibility barriers; procuring and implementing temporary accessibility remedies, such as mats or ramps, during elections; and providing effective curbside voting. Harris County will also conduct accessibility surveys of nearly two-thirds of its polling places. In addition, Harris County will hire subject matter experts to provide technical assistance and training to the County’s staff, vendors, and election officials on how to provide accessible polling places, as well as to provide reports to the parties on the County’s progress in complying with the agreement.
This settlement is part of the Department’s ADA Voting Initiative, which focuses on protecting the voting rights of individuals with disabilities. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at polling places. Through this Initiative, the Department has surveyed more than 1,600 polling places and increased polling place accessibility in more than 35 jurisdictions, including Chicago, Illinois; Hidalgo County, Texas; Cumberland County, Pennsylvania; and Coconino County, Arizona.
Those interested in finding out more about this settlement or the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Justice Department Reaches Agreement with Harris County to Ensure Polling Place Accessibility for Voters with DisabilitiesRead the Press Release
HOUSTON – The Justice Department today reached an agreement with Harris County to resolve its lawsuit alleging that Harris County violated Title II of the Americans with Disabilities Act (ADA) by failing to provide an accessible voting program to voters with disabilities, including accessible polling places. Harris County’s voting program - the third largest in the country - includes over 750 polling places. The Justice Department’s complaint alleges that many polling places in Harris County have architectural barriers - such as steep ramps, gaps in sidewalks and walkways and locked gates along the route barring pedestrian access - that make them inaccessible to voters with mobility and vision disabilities.
“Every eligible voter with a disability must have an equal opportunity to vote in person at his or her local polling place,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This fundamental right secures participation in our democracy and it must not be diminished or restricted by barriers to access.”
“The announcement today demonstrates my office’s continued commitment to enforcing all federal civil rights laws, including the ADA,” said U.S. Attorney Ryan K. Patrick. “I commend Harris County for its decision to enter into this agreement in order to achieve our shared goal of making polling places accessible to all eligible voters.”
Under the agreement, Harris County will create and implement policies, practices and procedures to bring its voting program into compliance with the ADA. These policies, practices and procedures include: creating an effective system for selecting accessible facilities for polling places; surveying polling place facilities to identify accessibility barriers; procuring and implementing temporary accessibility remedies, such as mats or ramps, during elections; and providing effective curbside voting. Harris County will also conduct accessibility surveys of nearly two-thirds of its polling places. In addition, Harris County will hire subject matter experts to provide technical assistance and training to the County’s staff, vendors and election officials on how to provide accessible polling places, as well as to provide reports to the parties on the County’s progress in complying with the agreement.
This settlement is part of the Department’s ADA Voting Initiative, which focuses on protecting the voting rights of individuals with disabilities. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at polling places. Through this Initiative, the Department has surveyed more than 1,600 polling places and increased polling place accessibility in more than 35 jurisdictions, including Chicago, Illinois; Hidalgo County, Texas; Cumberland County, Pennsylvania; and Coconino County, Arizona.
Those interested in finding out more about this settlement or the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Jury Convicts Two Men of Heroin Trafficking ConspiracyRead the Press Release
NEWPORT NEWS, Va. – A federal jury convicted two men late yesterday on charges of conspiracy to distribute heroin, crack cocaine, and fentanyl, and possession with intent to distribute heroin.
“Armed drug traffickers pose serious threats to the safety of our communities,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “The tactical acumen and flexible execution demonstrated by the joint task force in this case is testament to its keen leadership and depth of experience. Through quick thinking, decisive action and fluid coordination, a simple surveillance operation suddenly escalated into an unexpected but successful vehicle interdiction and drug trafficking arrest. This investigation and prosecution would not have been possible absent the critical partnerships we have formed with our local and federal law enforcement partners. My thanks to Homeland Security Investigations, and the Hampton and Newport News Police Departments for their outstanding work on this case.”
According to court records and evidence presented at trial, Terrence Dennis 37, of Norfolk, and Michael Guess, 36, of Newport News, caught the attention of law enforcement when they walked into an ongoing surveillance operation by a Homeland Security Investigations Task Force. After the tactical decision was made to observe Guess (driver) and Dennis (passenger), Guess failed to obey a stop sign, and agents attempted a traffic stop for the minor infraction. Guess accelerated and led the task force on a dangerous high-speed pursuit through Hampton and Newport News while his co-conspirator Dennis threw a loaded firearm and 33 grams of heroin out of the passenger window. Once detained, additional controlled substances and evidence of narcotics distribution was seized. The loaded firearm and heroin jettisoned during the chase were also recovered.
“Narcotics. Guns. A high-speed chase. This case had all the makings of a suspenseful movie plot. Unfortunately, it wasn’t part of a fictional storyline; it is the grim reality our agents and task force officers face right here in Hampton Roads,” said Michael K. Lamonea, Assistant Special Agent in Charge of Homeland Security Investigations’ Norfolk and Richmond offices. “I commend the task force for its quick actions. The arrests of these two individuals helped law enforcement remove lethal narcotics, as well as a firearm from our community.”
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Dennis, who was also convicted of being a felon in possession of a firearm, faces a mandatory minimum sentence of five years to life imprisonment consecutive to any additional sentence imposed for his multiple convictions when sentenced on June 19. Guess faces a maximum penalty of 20 years in prison when sentenced on June 20. 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Norfolk, Terry L. Sult, Chief of Hampton Police Division, and Steve R. Drew, Chief of Newport News Police, made the announcement after Chief U.S. District Judge Mark S. Davis accepted the verdict. Assistant U.S. Attorneys Howard J. Zlotnick and Peter G. Osyf are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:18-cr-72.
Jacksonville Man Sentenced to 20 Years for Distributing Child Sex Abuse Videos over the InternetRead the Press Release
Jacksonville, Florida – United States District Judge Brian J. Davis has sentenced Pryce Elijah Demars (25, Jacksonville) to 20 years in federal prison for distributing child pornography over the internet. Demars had pleaded guilty on May 25, 2018. As part of his sentence, Demars must also serve a lifetime term of supervised release and register as a sex offender.
Demars was arrested on November 15, 2017, and has been in custody since that day.
According to court documents, as well as evidence and testimony introduced during Demars’s sentencing hearing, FBI agents and other officers executed a federal search warrant at Demars’s residence in Jacksonville on November 15, 2017, in connection with an online child exploitation investigation. From August 3, 2016, through April 12, 2017, Demars had distributed videos depicting young children being sexually abused over the internet. He admitted, among other things, that he had searched for child pornography on the internet, downloaded it, and distributed it to another individual in exchange for $800-$1,000 and several video games.
FBI agents were also able to identify a minor child whom Demars had sexually molested on several occasions. Demars also had offered to take explicit photos of the child and had introduced the child to another individual, over the internet, to further victimize the child through online sexual exploitation.
“Investigating child abuse and exploitation is among the most important work in the FBI,” said Charles P. Spencer, Special Agent in Charge of the FBI Jacksonville Division. “This case represents both our relentless pursuit of predators who seek to harm innocent children, and steadfast determination to ensure they are sentenced to the maximum punishment possible under law.”
This case was investigated by the Federal Bureau of Investigation in Jacksonville, Plano (Texas), and Springfield (Illinois), and the Jacksonville Sheriff’s Office. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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.
Hudson County, New Jersey, Man Admits Distributing Child PornographyRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Todd Walsh, 41, of Hoboken, New Jersey, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of distributing child pornography.
According to documents filed in this case and statements made in court:
From September 2016 through November 2017, undercover officers accessed an Internet-based video conferencing application and observed that a user, identified as Walsh, used the application to display images of child sexual abuse, including images of prepubescent children, to other users of the application.
The count of distributing child pornography to which Walsh pleaded guilty carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for June 25, 2019.
U.S. Attorney Craig Carpenito credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea. He also thanked the Hudson County Prosecutor’s Office and the Hoboken Police Department for their work on this case.
The government is represented by Assistant U.S. Attorney Ailyn Abin of the U.S. Attorney’s Office in Newark.
Defense counsel: Saverio Viggiano Esq., Assistant Federal Public Defender, Newark
Harrison County woman admits to role in methamphetamine distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA –Brittany Miles, of Clarksburg, West Virginia, has admitted to her role in a methamphetamine distribution operation, United States Attorney Bill Powell announced.
Miles, age 29, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine.” Miles admitted to having methamphetamine in February 2018 in Harrison County.Miles 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 case 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.
Guatemalan Man Sentenced to Prison for Illegally Reentering the United States After Prior DeportationRead the Press Release
A man who illegally returned to the United States after being deported was sentenced today to almost four months in federal prison.
Victor Morales-Suar, age 42, a citizen of Guatemala illegally present in the United States and residing in Marshalltown, Iowa, received the prison term after a January 16, 2019, guilty plea to one count of illegal reentry into the United States.
At the guilty plea, Morales-Suar admitted he had previously been deported from the United States in June 2003 and illegally reentered the United States without the permission of the United States government. Morales-Suar was deported after he was found to be working at a meat packing plant in South Sioux City, Nebraska, under a fake name and using fraudulent identification documents.
In November 2018, Morales-Suar was found by immigration agents after he was detained by the Meskwaki Nation Police Department in Tama, Iowa, after Morales-Suar attempted to enter the Meskwaki Casino using a fraudulent identification card.
Morales-Suar was sentenced in Cedar Rapids by United States District Court Judge C. J. Williams. Morales-Suar was sentenced to 112 days’ imprisonment. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Morales-Suar is being held in the United States Marshal’s custody until he can be turned over to immigration officials.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-0116.
Follow us on Twitter @USAO_NDIA.
Georgia Woman Arrested for Conspiring to Provide Material Support to ISISRead the Press Release
Kim Anh Vo, a.k.a. “F@ng,” a.k.a. “SyxxZMC,” a.k.a. “Zozo,” a.k.a. “Miss.Bones,” a.k.a. “Sage Pi,” a.k.a. “Kitty Lee,” was arrested this morning in Hephzibah, Georgia. Vo was charged by a criminal Complaint with conspiring to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Vo is expected to be presented later today before Magistrate Judge Brian K. Epps in Augusta, Georgia, federal court.
Assistant Attorney General John C. Demers for National Security, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Assistant Director-in-Charge William F. Sweeney Jr. of the FBI New York Field Office and Commissioner James P. O’Neill of the Police Department for the City of New York (NYPD) made the announcement.
As alleged in the criminal Complaint, unsealed today:
In April 2016, Vo joined the United Cyber Caliphate (UCC), an online group that pledged allegiance to ISIS and committed to carrying out online attacks and cyber intrusions against Americans. Since that time, the UCC and its sub-groups have disseminated ISIS propaganda online, including “kill lists,” which listed the names of individuals – for example, soldiers in the United States Armed Forces and members of the State Department – whom the group instructed their followers to kill. For example, on or about April 21, 2016, the UCC posted online the names, addresses, and other personal identifying information of approximately 3,602 individuals in the New York City area and included a message that stated: “List of most important citizens of #New York and #Brooklyn and some other cities . . . We Want them #Dead.”
Between April 2016 and May 2017, Vo worked on behalf of the UCC to recruit others to join the group and assist with the group’s hacking efforts. Between January and February 2017, Vo recruited other individuals – including a minor residing in Norway – to create online content in support of ISIS, including a video (Video-1) threating a non-profit organization based in New York, New York, which was formed to find and combat the online promotion of extremist ideologies. Video-1 contained messages such as, “You messed with the Islamic State, SO EXPECT US SOON,” followed by a scene displaying a photograph of the organization’s chief executive officer and former U.S. Ambassador (CEO), along with the words: “[CEO], we will get you.”
On or about April 2, 2017, the UCC posted online a kill list containing the names and personal identifying information of over 8,000 individuals, along with a links to another video (Video-2). Video-2 displayed messages stating, in part: “We have a message to the people of the U.S., and most importantly, your president Trump: Know that we continue to wage war against you, know that your counter attacks only makes stronger. The UCC will start a new step in this war against you. . . .” and “We will release a list with over 8000 names, addresses, and email addresses, of those who fight against the US. Or live amongst the kuffar. Kill them wherever you find them!” In subsequent scenes, Video-2 contains what appears to be a graphic depiction of the decapitation of a kneeling man.
* * *
Vo, 20, of Georgia, is charged with one count of conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Demers and Mr. Berman praised the outstanding efforts of the FBI New York Field Office, New York Joint Terrorism Task Force, and Atlanta Field Office’s Augusta Resident Agency. Mr. Demers and Mr. Berman also thanked the United States Attorney’s Office for the Southern District of Georgia.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Shawn G. Crowley, Sidhardha Kamaraju, and Jane Kim are in charge of the prosecution, with assistance from Trial Attorney Elisabeth Poteat of the Counterterrorism Section.
The charges contained in the Complaint are merely
Georgia Woman Arrested for Conspiring to Provide Material Support to IsisRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Commissioner of the Police Department for the City of New York (“NYPD”), announced that KIM ANH VO, a/k/a “F@ng,” a/k/a “SyxxZMC,” a/k/a “Zozo,” a/k/a “Miss.Bones,” a/k/a “Sage Pi,” a/k/a “Kitty Lee,” was arrested this morning in Hephzibah, Georgia. VO was charged by a criminal Complaint with conspiring to provide material support to the Islamic State of Iraq and al-Sham (“ISIS” or the “Islamic State”), a designated foreign terrorist organization. VO is expected to be presented later today before Magistrate Judge Brian K. Epps in Augusta, Georgia, federal court.
As alleged in the criminal Complaint,[1] unsealed today:
In April 2016, VO joined the United Cyber Caliphate (the “UCC”), an online group that pledged allegiance to ISIS and committed to carrying out online attacks and cyber intrusions against Americans. Since that time, the UCC and its sub-groups have disseminated ISIS propaganda online, including “kill lists,” which listed the names of individuals – for example, soldiers in the United States Armed Forces and members of the State Department – whom the group instructed their followers to kill. For example, on or about April 21, 2016, the UCC posted online the names, addresses, and other personal identifying information of approximately 3,602 individuals in the New York City area and included a message that stated: “List of most important citizens of #New York and #Brooklyn and some other cities . . . We Want them #Dead.”
Between April 2016 and May 2017, VO worked on behalf of the UCC to recruit others to join the group and assist with the group’s hacking efforts. Between January and February 2017, VO recruited other individuals – including a minor residing in Norway – to create online content in support of ISIS, including a video (“Video-1”) threating a non-profit organization based in New York, New York, which was formed to find and combat the online promotion of extremist ideologies. Video-1 contained messages such as, “You messed with the Islamic State, SO EXPECT US SOON,” followed by a scene displaying a photograph of the organization’s chief executive officer and former U.S. Ambassador (the “CEO”), along with the words: “[CEO], we will get you.”
On or about April 2, 2017, the UCC posted online a kill list containing the names and personal identifying information of over 8,000 individuals, along with links to another video (“Video-2”). Video-2 displayed messages stating, in part: “We have a message to the people of the U.S., and most importantly, your president Trump: Know that we continue to wage war against you, know that your counter attacks only makes stronger. The UCC will start a new step in this war against you. . . .” and “We will release a list with over 8000 names, addresses, and email addresses, of those who fight against the US. Or live amongst the kuffar. Kill them wherever you find them!” In subsequent scenes, Video-2 contains what appears to be a graphic depiction of the decapitation of a kneeling man.
* * *
VO, 20, of Georgia, is charged with one count of conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Berman praised the outstanding efforts of the FBI New York Field Office, New York Joint Terrorism Task Force, and Atlanta Field Office’s Augusta Resident Agency. Mr. Berman also thanked the United States Attorney’s Office for the Southern District of Georgia and the Counterterrorism Section of the Department of Justice’s National Security Division.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Shawn G. Crowley, Sidhardha Kamaraju, and Jane Kim are in charge of the prosecution, with assistance from Trial Attorney Elisabeth Poteat of the Counterterrorism Section.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below are only allegations, and every fact described should be treated as an allegation.