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7 March 2019
Virginia Man Pleads Guilty in Money Laundering SchemeRead the Press Release
PITTSBURGH -A resident of Salem, Virginia, pleaded guilty yesterday in federal court to a charge of money laundering conspiracy, United States Attorney Scott W. Brady announced today.
Thomas Powell, 64, pleaded guilty to one felony count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that during the period from January 2011 through May 2016, Powell agreed to become a member of a money laundering conspiracy. Powell conducted financial transactions affecting interstate commerce, knowing that the property involved in the financial transactions represented the proceeds of some form of unlawful activity. Powell knew that each of the financial transactions was designed in whole or in part to conceal or disguise the nature, location, source, ownership, and control of the proceeds. As part of the money laundering conspiracy, the defendant and his co-conspirators conducted the following financial transactions: 1) withdrew funds from prepaid debit cards and credit cards; 2) transmitted and received funds via MoneyGram, Walmart and Western Union; 3) cashed checks and money orders; and 4) sent and received wire transfers of funds. The funds involved in these transactions, which totaled thousands of dollars, were the proceeds of wire fraud.
Judge Cercone scheduled sentencing for July 23, 2019. The law provides for a maximum total sentence of twenty years in prison and a fine of $500,000 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.
Pending sentence, the court released Powell on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the Department of Homeland Security, Homeland Security Investigations, conducted the investigation leading to the conviction in this case.
Violent Pimp Convicted of Human Trafficking Following Eight Day TrialRead the Press Release
A Seattle area man with a prior history of promoting prostitution was convicted on March 6, 2019, in U.S. District Court in Seattle of five federal felonies including sex trafficking of a minor, announced U.S. Attorney Brian T. Moran. The jury deliberated less than three hours following an eight-day trial before convicting 32-year-old AUBREY TAYLOR, also known as “Uno,” of all counts. During the trial multiple victims testified about how Taylor used threats, violence, sexual assault, and manipulation to control them and force them to engage in commercial sex acts in cities in Washington, Idaho, and Nevada and then give him the money they earned. TAYLOR faces a mandatory minimum 15 years in prison when sentenced by U.S. District Judge Robert S. Lasnik on May 21, 2019.
According to records filed in the case and testimony at trial, TAYLOR forced one young victim into prostitution on a trip to Wenatchee in October 2014 when she was 17 years old. Three other victims testified about how TAYLOR controlled them with mental and physical abuse or promises of love and a better life. The women were transported to as far away as Las Vegas to engage in commercial sex acts. One victim was controlled by rationing doses of heroin–using her addiction to keep her working as a prostitute. Other victims were instructed to get tattoos of TAYLOR’s name and nicknames as a form of branding and to demonstrate TAYLOR’s control over them.
The victims under TAYLOR’s control were violently assaulted by him on multiple occasions. When law enforcement or medical professionals tried to get the victims to cooperate with law enforcement, they expressed fear of TAYLOR. Text messages seized in the case reveal TAYLOR’s attempts to recruit numerous additional women and his use of threats and violence.
“He is a sex trafficker and a predator,” Assistant United States Attorney Kate Crisham said in closing arguments. “He sold his victims a dream of a bright future…but what they got instead was a nightmare.”
“I commend the dedicated law enforcement officers and trial team who worked diligently to investigate and prosecute these crimes,” said U.S. Attorney Brian T. Moran. “And I want to recognize the strength and courage of the victims who came to court and described their darkest moments to the jury in order to hold this defendant accountable.”
The case was investigated by the FBI, the City of Kent Police Department, the City of Auburn Police Department, the Bellingham Police Department, the Wenatchee Police Department, and the Snohomish County Sheriff’s Office. The case was prosecuted by Assistant United States Attorneys Kate Crisham and Rebecca Cohen.
Vidor Felon Charged with Illegally Possessing FirearmsRead the Press Release
BEAUMONT, Texas – A 39-year-old Vidor, Texas man has been indicted by a federal grand jury and charged with firearms violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.
Brandon Aaron Holeman was named in a three-count indictment returned by a federal grand jury on Mar. 6, 2019, charging him with two counts of being a felon in possession of a firearm and one count of possession of an unregistered firearm.
The indictment alleges that on two separate occasions, Dec. 12, 2018, and Feb. 2, 2019, Holeman was pulled over by law enforcement in Vidor and during both traffic stops, Holeman attempted to evade police and was arrested after brief pursuits. Holeman was also in possession of firearms during both traffic stops, for a total of two revolvers, a pistol, and a sawed-off shotgun. Further investigation revealed Holeman is a convicted felon and prohibited from owning or possessing firearms or ammunition.
If convicted, Holeman faces up to 10 years in federal prison.
This case is being investigated by the Vidor Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney Russell James.
It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
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Upshur County man admits to methamphetamine chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Joshua Langbien, of Buckhannon, West Virginia, has admitted to a drug charge, United States Attorney Bill Powell announced.
Langbien, age 28, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine.” Langbien admitted to distributing methamphetamine in March 2018 in Harrison County.Langbien 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.
U.S. Attorney’s Office for the Eastern District of Pennsylvania Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
PHILADELPHIA, PA – Attorney General William P. Barr and United States Attorney William M. McSwain today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of whom are elderly.
Two cases from the Eastern District of Pennsylvania are included in this nationwide sweep. In United States v. John Conner, the defendant was a lawyer who took advantage of his 85-year old client by using a power of attorney agreement to withdraw more than $95,000 from her bank account so he could gamble with her money at casinos. A jury convicted the attorney of 19 counts of wire fraud and one count of making a false statement to the FBI following a one-week trial in February 2019; he awaits sentencing. The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Mark Dubnoff.
The second case from this District is United States v. Jacoya Brazzle. There, the defendant was a nursing assistant at the Veterans Affairs Medical Center (“VAMC”) in Coatesville, Pennsylvania. She allegedly obtained the ATM PIN of a veteran who resides in the assisted living unit at the VAMC, went to ATMs near the VAMC on more than a dozen occasions over the course of six months, and withdrew over $11,000. The trial is scheduled for later this spring. The case was investigated by the U.S. Department of Veterans Affairs, Office of Inspector General and is being prosecuted by Assistant United States Attorney Nancy Rue.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today, we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Our Office will continue to prioritize prosecuting criminals who prey on our elderly residents,” said U.S. Attorney McSwain. “I would like to thank Attorney General Barr for his leadership in this initiative; AUSAs Mark Dubnoff and Nancy Rue for their work on the Conner and Brazzle prosecutions; and AUSA Tiwana Wright for her work overseeing the elder abuse cases for our Office.”
The Department took action in every federal district across the country by filing criminal or civil cases or by engaging in consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three quarters of a billion dollars.
The charges in the Brazzle case are allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (“EAPPA”) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that have protected seniors. The Justice Department has also conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
U.S. Attorney's Office Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
LAS VEGAS, Nev. – Attorney General William P. Barr and U.S. Attorney Nicholas A. Trutanich today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Our goal is to reduce crime against Nevada’s seniors,” said U.S. Attorney Trutanich. “Each year an estimated $3 billion is stolen or defrauded from millions of American seniors. The U.S. Attorney’s Office has actively pursued and continues to pursue criminals who prey upon and exploit Nevada’s seniors. I commend the tremendous efforts by our partners who work tirelessly every day to bring justice for our seniors.”
Edgar Del Rio, 51, of Las Vegas, pleaded guilty to conspiring with others to defraud more than $1.5 million from senior citizens using a prize promotion scam. Between May 2011 and February 2018, Del Rio and others carried-out a direct-mail prize scam targeting seniors. The mailings misled victims to believe they would receive a large sum of money, if they paid a small fee. He faces up to 20 years in prison at the May 30, 2019, sentencing hearing.
Patti Kern, 49, of Henderson, was charged by a criminal information for her involvement in the same prize promotion scam as Del Rio. She is scheduled to plead guilty on March 14.
The U.S. Attorney’s Office has a designated Elder Justice Coordinator to help prevent crime by educating seniors about scams and other threats. The District of Nevada has a customized strategy to protect seniors and coordinates prosecutions with state and local partners.
The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The Department’s Elder Justice Initiative published its Elder Abuse Guide for Law Enforcement (EAGLE) last year. EAGLE contains helpful information for prosecutors, including overviews of state and local law as well as best practices for evidence collection, interviewing older adults, and for documenting elder abuse. EAGLE is free and available to every law enforcement officer in the country.
A fact-sheet with technical-support fraud case information can be found here.
A fact-sheet with cases on mass mailing fraud can be found here.
A fact-sheet with examples of a few elder fraud cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
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U.s. Attorney’s Office for the Eastern District of Wisconsin Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
Attorney General William P. Barr and United States Attorney Matthew D. Krueger today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
In the Eastern District of Wisconsin, Milwaukee resident Chris Kubiak, former financial advisor for Freedom Investors Corp, and Calton & Associates, Inc., was indicted on charges of elder fraud January 15, 2019. The indictment, which charges seven counts of wire and mail fraud, alleges a scheme wherein Kubiak arranged to make withdrawals or to liquidate the investment accounts of his elderly clients. The indictment identifies a total of six clients, from whom he is alleged to have wrongfully appropriated approximately $370,000 over a five year period.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Schemes that target the elderly are too common and can cause devastating harm,” said U.S. Attorney Krueger. “Today’s announcement makes clear that federal, state, and local law enforcement partners are committed to bringing justice to criminals who take advantage of our seniors.”
The Department took action in numerous federal districts across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
A fact-sheet with technical-support fraud case information can be found here.
A fact-sheet with cases on mass mailing fraud can be found here.
A fact-sheet with examples of a few elder fraud cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
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Two Passaic County, New Jersey, Men Charged in Seizure of over 20 Kilograms of CocaineRead the Press Release
NEWARK, N.J. – Two Passaic County, New Jersey, men are charged in connection with the seizure of more than 20 kilograms of cocaine, U.S. Attorney Craig Carpenito announced today.
Carlos Nieves, 24, and Yocadis Montas-Cepeda, 24, both of Paterson, New Jersey, were arrested in Bergen County, New Jersey, on Nov. 19, 2018. They are charged by complaint with one count each of conspiracy to distribute more than five kilograms of cocaine. Nieves is scheduled to appear later today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. Montas-Cepeda is expected to make his initial appearance at a later date.
According to documents filed in this case and statements made in court:
Nieves was driving a car that was the subject of a motor vehicle stop on Interstate 80. Montas-Cepeda was a passenger in the car. The defendants’ statements and other suspicious activities caused law enforcement to believe that the vehicle was being used to traffic narcotics. After receiving consent to search the vehicle, law enforcement officers recovered approximately 20 kilograms of cocaine from the interior.
The count of conspiracy to distribute more than five kilograms of cocaine carries a mandatory minimum sentence of 10 years in prison, a maximum of life in prison, and a maximum fine of $10 million.
U.S. Attorney Craig Carpenito credited special agents of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, New Jersey Division, with the investigation leading to today’s charges. He also thanked the Bergen County Prosecutor’s Office and that office’s Narcotics Task Force.
The government is represented by Assistant U.S. Attorney Ryan L. O’Neill of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Nieves: Lauriano Guzman Esq., Bronx, New York
Montas-Cepeda: Victor Molina Esq., Bergenfield, New JerseyTwo Mexican Women Plead Guilty to Heroin PossessionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Maria Guadalupe Martinez-Plascencia, 48, of Guadalajara, Mexico, pleaded guilty to possession with intent to distribute 100 grams or more of heroin before Senior U.S. District Judge William M. Skretny. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine. In addition, co-defendant Claudia Anel Cuevas-Sandoval, 38, also of Guadalajara, Mexico, pleaded guilty to possession with intent to distribute one kilogram or more of heroin and faces a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Assistant U.S. Attorney Seth T. Molisani, who is handling the case, stated that in early June 2018, the Drug Enforcement Administration and the Niagara Frontier Transportation Authority Police began investigating the activities of Martinez, who was associated with an individual arrested on May 26, 2018, in Laredo, Texas. The individual was in possession of a backpack and a laptop bag that concealed heroin. Martinez was identified in a Customs and Border Protection report, which included instructions to conduct an inspection of the defendant during any border crossing.
On June 9, 2018, the NFTA identified Martinez and Cuevas traveling together. The defendants purchased tickets for a Greyhound bus departing from Philadelphia, PA, late in the evening of June 9, 2018, and arriving in Buffalo on June 10, 2018. When the defendants arrived, law enforcement officers surveilled them at the Hyatt Regency Buffalo Hotel in downtown Buffalo.
In the early morning hours of June 11, 2018, officers executed a New York State search warrant in the room the defendants were staying in. During the search, officers found two backpacks and two laptop bags in plain view which were heavy but contained no visible contents. Sewn into the baggage were 10 packages containing heroin. Martinez and Cuevas were arrested at that time.
The pleas are the result of an investigation by the Niagara Frontier Transportation Authority Police, under the direction of Chief George Gast, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
Maria Guadalupe Martinez-Plascencia is scheduled to be sentenced on June 10, 2019 before Judge Skretny. Sentenced for Claudia Anel Cuevas-Sandoval will be scheduled at a later date.
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Trenton Man Admits Role in Heroin Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – A Trenton man today admitted his role in a violent drug trafficking conspiracy that allegedly distributed more than one kilogram of heroin in Trenton and the surrounding area, U.S. Attorney Craig Carpenito announced today.
Donte Ellis, a/k/a “Shalant,” 41, pleaded guilty today before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin. Ellis also admitted to possessing a firearm during the offense.
In October 2018, Ellis and 25 other members of a drug trafficking conspiracy operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. Ellis is the first of the defendants to plead guilty. On Feb. 21, 2019, a grand jury returned a two-count indictment charging four defendants, Jakir Taylor, a/k/a “Jak”; Jerome Roberts, a/k/a “Righteous”; David Antonio, a/k/a “Papi,” a/k/a “Victor Arias”; and Wayne K. Bush, with conspiracy to distribute one kilogram or more of heroin. Taylor also was charged in the indictment with possessing of a firearm in furtherance of a drug trafficking crime. The charges in the criminal complaint remain pending against the other 20 defendants.
According to documents filed in this case and statements made in court:
From as early as October 2017 to October 2018, the defendants and others engaged in a narcotics conspiracy that operated in the areas of Martin Luther King Boulevard, Sanford Street, Middle Rose Street, Southard Street, Hoffman Avenue, and Coolidge Avenue in Trenton, and which sought to profit from the distribution of heroin and numerous other controlled substances. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that defendants Jakir Taylor and Jerome Roberts obtained regular supplies of hundreds of “bricks” of heroin from defendant David Antonio, whom they referred to as “Papi.” The investigation revealed that in September and October 2018, Ellis—who had been released from state prison in August 2018 for a prior conviction for conspiracy to commit first-degree murder—obtained large quantities of heroin on multiple occasions from Jakir Taylor, which he redistributed to others in and around Trenton. The investigation also revealed that, on several occasions when he obtained supplies of heroin from Taylor, he also obtained a firearm from Taylor for protection in re-distributing the narcotics.
The drug conspiracy count to which Ellis pleaded guilty carries a statutory mandatory minimum term of five years in prison, a maximum potential penalty of 40 years in prison, and a maximum fine of $5 million. Sentencing is scheduled for June 13, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Satellite Office, under the direction of Acting Special Agent in Charge Christopher Taylor; officers of the Trenton Police Department, under the direction of Acting Police Director Pedro Medina; officers of the Princeton Police Department, under the direction of Chief of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; officers of the Burlington Township Police Department, under the direction of Police Director Bruce Painter; and detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott A. Coffina, with the investigation leading to today’s charges. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the case, including with today’s coordinated takedown.
The government is represented by Assistant U.S. Attorneys J. Brendan Day and Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
The charges and allegations against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.
Three SoCal Men Arrested in Scheme in Which Chinese Money Allegedly Funded Seven Inland Empire Marijuana Grow HousesRead the Press Release
LOS ANGELES – Three men were arrested this morning on federal charges alleging they took part in a scheme that used millions of dollars wired from China to purchase seven residential homes in San Bernardino County that were converted into illegal marijuana grow houses.
The three defendants arrested today pursuant to a federal criminal complaint are:
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Lin Li, a.k.a. Aaron Li, 37, of Chino, the U.S.-based coordinator of the alleged scheme;
- Ben Chen, 42, of Alhambra, who allegedly took care of the marijuana grows; and
- Jimmy Yu, 44, of Pasadena, a second alleged grow house caretaker.
The complaint charges the three defendants with one count of manufacturing, distributing, and possessing with the intent to distribute marijuana. The three men are expected to make their initial appearances this afternoon in United States District Court in Los Angeles.
In conjunction with the arrests, law enforcement executed search warrants at Li’s home and seven marijuana grow houses in Chino, Ontario and Chino Hills. As a result of the searches, authorities seized approximately 1,650 marijuana plants from several grow houses, as well as cash at Li’s house currently estimated to be at least $80,000.
Today’s takedown is the result of a 14-month investigation that was initiated by the San Bernardino County Sheriff’s Department and soon after was joined by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
In relation to the criminal charges, the U.S. Attorney’s Office, in coordination with the HSI’s Asset Identification and Removal Group, has begun the process to forfeit the seven homes where marijuana was being grown. The properties are cumulatively worth more than $5 million.
According to a 120-page affidavit in support of the criminal complaint, Li, a real estate agent, orchestrated a scheme that purchased residential properties through transactions designed to conceal the homes’ true owners, converted the houses to marijuana grow operations, and trafficked marijuana, with most of the processed marijuana being sold to customers in California and Nevada.
After receiving financing from sources in China, Li “acted as the realtor for the purchase of [seven residences], which he then converted into illegal marijuana grow houses,” the affidavit states. “Li coordinated the purchase of the properties, managed them after purchase, paid their utilities and taxes, and established shell companies for the purpose of managing the properties’ finances.”
Investigators believe Li attempted to distance himself from the conspiracy by using Chen and Yu to manage day-to-day operations at the grow houses, to help with out-of-state distribution of the marijuana, and to return marijuana sale proceeds. Li also used bypasses to physically divert electricity directly from power lines, thus stealing power from the electric companies, hiding the grow houses’ high power usage from law enforcement, and creating fire risks in neighborhoods. According to the affidavit, Li’s attempts to insulate himself from culpability went as far as creating fake leases for some of the properties, documents that included fake tenants, forged electronic signatures, and special clauses that purported to prohibit the fake tenants from cultivating marijuana at the homes.
“In states that have decriminalized marijuana, we have seen an influx of foreign money used to establish grow operations, with much of the marijuana being destined for out-of-state consumers,” said United States Attorney Nick Hanna. “By establishing illegal drug operations in residential neighborhoods, the defendants increased the risks to law-abiding homeowners, caused neighborhood blight, and stole power from utilities.”
“HSI, together with our law enforcement partners, will continue to target transnational criminal organizations that think they can use our neighborhoods as locations for criminal activity,” said Joseph Macias, Special Agent in Charge for HSI Los Angeles. “Today’s arrests and searches, coordinated jointly with the San Bernardino Sheriff’s Department and the U.S. Attorney’s office, are the next step in shutting down criminals who would trash our communities for their own greed.”
“Deputies and detectives from the San Bernardino County Sheriff’s Department assisted HSI with multiple narcotic search warrants. We assist our federal law enforcement partners regularly when requested,” said Sheriff John McMahon. “Our county does not support criminal operations like this and will make every effort to eliminate these threats to our local communities.”
According to the affidavit, down payments for most of the grow houses were traced back to wire transfers from China, and several of the properties were bought by “straw buyers” who actually had nothing to do with the transaction. The titles for most of the homes were transferred, shortly after they were purchased, to limited liability companies associated with Li, who served as the homes’ property manager.
For example, in relation to one of the homes, the affidavit describes how a straw buyer purchased a Chino Hills residence in 2015 for $782,000. The purported buyer was named as chief executive officer of an LLC that Li had established, and that LLC received a $1 million wire transfer from a Hong Kong-based investment group. The vast majority of the purchase price of the house was then wired from the LLC’s bank account. Li received a commission check as the realtor for the sale and also served as the home’s property manager, the affidavit alleges. In early 2018, a neighbor complained to law enforcement about the “overwhelming” smell of marijuana coming from the Chino Hills home and how no one seemed to live there, court papers state.
The total purchase price for the seven homes, which were bought between July 2013 and September 2017, was $4,067,882, according to the affidavit.
In June 2018, deputies and HSI agents executed a search warrant and seized 1,038 marijuana plants at an eighth grow house in Chino Hills believed to be part of the same criminal scheme.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This matter is being prosecuted by Assistant United States Attorneys Carley Palmer of the Organized Crime Drug Enforcement Task Force Section and Jonathan Galatzan of the Asset Forfeiture Section.
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Three Men Charged in Conspiracy to Distribute Heroin and Fentanyl from Bronx, New York, Drug MillRead the Press Release
NEWARK, N.J. – Three New York men have been charged for their participation in a conspiracy to distribute heroin and fentanyl after they were arrested at a heroin mill in Bronx, New York, U.S. Attorney Craig Carpenito announced today.
Jhan Carlos Capellan Maldonado, 30, Jose Antonio Vasquez Pena a/k/a “Tono,” 46, and Dilson Vasquez Genao, 22, all of Bronx, are charged by complaint with one count of conspiracy to possess with intent to distribute approximately 100 grams of more of suspected heroin and fentanyl. Maldonado appeared March 6, 2019, before U.S. Magistrate Judge Joseph A. Dickson, and was detained. Pena and Genao appeared last week before U.S. Magistrate Judge Michael A. Hammer and were detained.
According to documents filed in this case and statements made in court:
In early February 2019, law enforcement officers learned Maldonado used an apartment in Bronx to store, mix, and package heroin and fentanyl in distribution quantities. Pena lived at the apartment in order to safeguard the narcotics and narcotics supplies. Maldonado employed approximately five workers at a time to assist in preparing the heroin and fentanyl for distribution, which Maldonado then distributed to customers in New Jersey.
On February 25, 2019, law enforcement officers saw Maldonado drive to a retail store and emerge with several full shopping bags and then drove to the apartment. Genoa came out of the building and met with Maldonado, who got out of his vehicle and gave Genoa the plastic shopping bags. Through its investigation, law enforcement later learned that the plastic shopping bags contained materials to package heroin and fentanyl.
Genoa went back inside the building and was followed by law enforcement office3rs, who watched as Genoa entered Maldonado’s apartment with a key, still carrying the shopping bags. On Feb. 27, 2019, law enforcement searched Maldonado’s apartment and found several individuals inside, including Maldonado, Pena, and Genao. The three defendants attempted to escape out a window in the bedroom but were apprehended and arrested by law enforcement officers waiting outside.
Each defendant faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine.
U.S. Attorney Craig Carpenito credited the Homeland Security Investigations (HSI)’s New Jersey Division, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the Opioid Abuse Prevention and Enforcement Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel: Maldonado: Kathleen Theurer Platts Esq., Jersey City, New Jersey
Pena: Peter Carter Esq., Assistant Public Defender, Newark
Genao: Edward Kratt Esq., New YorkThree Indicted on Conspiracy to Commit Marriage Fraud and Related Immigration ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned an indictment charging LEVAN LOMTATIDZE, age 44, a citizen of the country of Georgia, MELISSA ANNE GODSHALL, age 31, a citizen of the United States, ROBERT J. KENNERLEY, age 46, a citizen of the United States, with conspiracy to commit marriage fraud, marriage fraud, aiding and abetting, visa fraud and false statements in immigration proceedings.
The indictment alleges that GODSHALL and KENNERLEY, who were romantically involved, were panhandling for money on the side of the road in Granville County, North Carolina. An individual approached them and asked GODSHALL if she would be willing to marry a foreign-born national for money. GODSHALL agreed to engage in the marriage to LOMTATIDZE in exchange for $12,000, housing, and a vehicle. LOMTATIDZE and GODSHALL got married in Granville County, North Carolina. The marriage ceremony was witnessed by KENNERLEY and another individual.
LOMTATIDZE, GODSHALL and KENNERLEY entered into a rental agreement for a house located in Raleigh, North Carolina. The rent was paid for by LOMTATIDZE as part of the payment for the sham marriage. Thereafter, GODSHALL and LOMTATIDZE submitted fraudulent applications to United States Citizenship and Immigration Services (USCIS) requesting LOMTATIDZE’s adjustment of status as a lawful permanent resident in the United States. LOMTATIDZE and GODSHALL were interviewed at the USCIS office in Durham, North Carolina. Both attested under oath they were married in good faith. As a result of the interview, USCIS approved the request and LOMTATIDZE was granted “conditional” resident status in the United States. Later, LOMTATIDZE and GODSHALL submitted to USCIS another application attesting they were still married in good faith and requesting LOMTATIDZE’s removal of conditions on his resident status.
If convicted of conspiracy to commit marriage fraud, marriage fraud, visa fraud, and false statements in immigration proceedings, LOMTATIDZE and GODSHALL would each face maximum penalties of thirty years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
If convicted of conspiracy to commit marriage fraud, and aiding and abetting marriage fraud, KENNERLEY would face maximum penalties of ten years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina led by Homeland Security Investigations and assisted by USCIS’s Fraud Detection and National Security.
Three Former Mozambican Government Officials and Five Business Executives Indicted in Alleged $2 Billion Fraud and Money Laundering Scheme That Victimized U.S. InvestorsRead the Press Release
BROOKLYN, NY – An indictment was unsealed on March 4, 2019, charging Najib Allam, an executive of the Privinvest family of maritime services companies, and Teofilo Nhangumele and Antonio do Rosario, former Mozambican government officials, for their roles in a $2 billion fraud and money laundering scheme that victimized investors in the United States and around the world. The indictment was previously unsealed on January 3, 2019 as to co-defendants Jean Boustani, a Privinvest executive, Manuel Chang, the former Finance Minister of Mozambique, and Andrew Pearse, Surjan Singh and Detelina Subeva, former high-ranking investment bankers at an international investment bank (the Investment Bank). Each defendant is charged with wire fraud conspiracy and money laundering conspiracy. In addition, Boustani, Allam, Chang, do Rosario, Pearse, Singh and Subeva are charged with securities fraud conspiracy. Pearse, Singh and Subeva are also charged with conspiracy to violate the anti-bribery and internal controls provisions of the Foreign Corrupt Practices Act (FCPA).
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As charged in the indictment, the defendants orchestrated an immense fraud and bribery scheme that took advantage of the United States financial system, defrauded its investors and adversely impacted the economy of Mozambique, in order to line their own pockets with hundreds of millions of dollars,” said United States Attorney Donoghue. “This indictment underscores the Department of Justice’s continuing efforts to end such fraudulent and corrupt practices and to hold those responsible to account for their crimes.”
“The indictment unsealed today alleges a brazen international criminal scheme in which corrupt Mozambique government officials, corporate executives, and investment bankers stole approximately $200 million in loan proceeds that were meant to benefit the people of Mozambique,” said Assistant Attorney General Benczkowski. “The Department of Justice and our law enforcement partners are dedicated to using all tools at our disposal to prosecute those who engage in money laundering, financial fraud and corruption at the expense of U.S. investors, wherever those individuals may be located.”
“Today’s indictment proves that no matter who you are, or what position of power you’re in, you’re not immune from prosecution,” stated FBI Assistant Director-in-Charge Sweeney. "The FBI will continue to use all resources at our disposal to uncover crimes of this nature and expose them for what they really are.”
The Fraudulent Scheme
The indictment alleges that between approximately 2013 and 2016, Boustani, Allam, Nhangumele, do Rosario, Chang, Pearse, Singh, Subeva and their co-conspirators ensured that the Investment Bank, and another foreign investment bank, would arrange for more than $2 billion to be extended, in three loans, to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM) and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services. Specifically, Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing and MAM was to build and maintain shipyards.
Instead, the defendants and their co-conspirators illegally facilitated Privinvest’s criminal diversion of more than $200 million of the proceeds of the loans. These stolen funds included more than $150 million that Privinvest — at the direction of Boustani, Allam and others — used to bribe Chang, Nhangumele, do Rosario and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government would enter into the loan arrangements, and that the government of Mozambique would guarantee those loans. In addition, Privinvest diverted approximately $50 million in kickback payments to Pearse, Singh and Subeva, who assisted the co-conspirators to obtain financing for the loans through the Investment Bank and the other foreign investment bank. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In doing so, the participants in the scheme conspired to defraud these investors by misrepresenting how the loan proceeds would be used, the amount and maturity dates of other financial obligations held by Mozambique and the ability of the government of Mozambique to repay the loans.
To date, the companies controlled by the government of Mozambique have failed to make more than $700 million of loan repayments that have become due.
The Defendants
Boustani, a citizen and resident of Lebanon and Antigua and Barbuda, was the lead salesperson and negotiator for Privinvest, and is charged for his role in coordinating the payment by Privinvest of more than $200 million in bribe and kickback payments to Mozambican government officials and investment bankers in order to facilitate the three loans. He is alleged to have personally received at least $15 million from the scheme. Boustani was arrested in Queens, New York on January 2, 2019 and arraigned later that day in federal court in Brooklyn. Boustani has pleaded not guilty to the charges, and a trial date has not yet been set.
Allam, a citizen of Lebanon, was the Chief Financial Officer of Privinvest, and is charged for his role in helping Boustani and others coordinate the payment by Privinvest of more than $200 million in bribe and kickback payments. Allam remains at large.
Nhangumele, a citizen and resident of Mozambique, acted in an official capacity on behalf of the President of Mozambique during the charged scheme, and is charged for his role in facilitating the payment by Privinvest of over $150 million to Mozambican government officials to gain approval for the maritime projects, and to cause Mozambique to borrow more than $2 billion from the two investment banks in government-guaranteed loans to finance the projects. Nhangumele has not yet been arrested on the charges in this indictment and Nhangumele is not currently in U.S. custody.
Do Rosario, a citizen and resident of Mozambique, held positions within the Mozambican government, including with the Mozambican state intelligence service, known as “SISE,” and managerial roles for each of the three state-owned entities formed to undertake the maritime projects that are the subject of the indictment. He is charged for his role in ensuring that Mozambique would undertake the maritime projects and award the contracts for those projects to Privinvest, and that Finance Minister Chang would issue government guarantees binding Mozambique to repay $2 billion in loans to undertake the projects. He is alleged to have personally received more than $12 million from the scheme. Do Rosario has not yet been arrested on the charges in this indictment and is not currently in U.S. custody.
Chang, a citizen and resident of Mozambique, was the former Finance Minister of Mozambique, and is charged for signing guarantees on behalf of Mozambique for the three corrupt loans. He is alleged to have personally received at least $5 million from the scheme. Chang was arrested on December 29, 2018, in South Africa, pursuant to a provisional arrest warrant issued at the request of the United States. The United States is seeking his extradition.
Pearse, a citizen of New Zealand, Singh, a citizen of the United Kingdom and Subeva, a citizen of Bulgaria, reside in the United Kingdom. At the time of the charged scheme, Pearse and Singh were managing directors, and Subeva was a vice president, of the Investment Bank. Each has been charged for facilitating bribe payments to government officials in Mozambique and for circumventing the internal accounting controls of the Investment Bank, which arranged two of the three loans. Pearse, Singh and Subeva were arrested on January 3, 2019, in the United Kingdom, pursuant to provisional arrest warrants issued at the request of the United States. The United States is seeking their extradition.
* * * * *
The charges in the indictment are allegations, and the defendants are presumed innocent until proven guilty.
The investigation is being conducted by the FBI’s New York Field Office. The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York (EDNY), the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and the Fraud Section. Assistant United States Attorneys Matthew S. Amatruda and Mark E. Bini of the EDNY, Trial Attorneys Margaret Moeser and Sean W. O’Donnell of MLARS and Trial Attorney David M. Fuhr of the Fraud Section are prosecuting the case.
The Criminal Division’s Office of International Affairs provided critical assistance in this case. The Department appreciates the significant cooperation and assistance provided by the United States Securities and Exchange Commission. The Department also appreciates the assistance provided by law enforcement authorities in the United Kingdom and in South Africa.
The Defendants: JEAN BOUSTANI
Age: 40
Lebanon, Antigua and BarbudaNAJIB ALLAM
Age: 58
LebanonMANUEL CHANG
Age: 63
MozambiqueANTONIO DO ROSARIO
Age: 44
MozambiqueTEOFILO NHANGUMELE
Age: 50
MozambiqueANDREW PEARSE
Age: 49
United KingdomSURJAN SINGH
Age: 44
United KingdomDETELINA SUBEVA
Age: 37
United KingdomE.D.N.Y. Docket No. 18-CR-681 (WFK)
Third Mercenary Sentenced to Life in Prison for Conspiring to Kidnap and Murder as Part of A Murder-For-Hire Scheme OverseasRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JOSEPH MANUEL HUNTER was sentenced to life in prison in connection with his participation in the murder of a woman in the Philippines. HUNTER and his co-defendants, Adam Samia and Carl David Stillwell, were convicted on April 18, 2018, following a 12-day trial before U.S. District Judge Ronnie Abrams of the Southern District of New York. Judge Abrams sentenced HUNTER today and had previously sentenced both Stillwell and Samia to mandatory life terms.
U.S. Attorney Geoffrey S. Berman said: “With zero regard for human life, Joseph Hunter callously helped to arrange the murder of a Filipino woman in exchange for money. He and his co-defendants have now been sentenced to life behind bars for their heartless crimes.”
According to the Superseding Indictment against HUNTER, Samia, and Stillwell, other filings in Manhattan federal court, and the evidence admitted at trial:
HUNTER served from 1983 to 2004 in the U.S. Army, where he attained the rank of sergeant first class. While in the Army, HUNTER led air-assault and airborne infantry squads; served as a sniper instructor; and trained soldiers in marksmanship and tactics as a senior drill sergeant. Since leaving the Army in 2004, HUNTER arranged for the murders of multiple victims in exchange for money, among other completed acts of violence undertaken for pay.
Samia was a self-described “Personal Protection/Security Industry” professional. According to Samia’s résumé, he worked as an “Independent Contractor” for clients in the Philippines, China, Papua New Guinea, the Democratic Republic of the Congo, and the Republic of the Congo; and had training in tactics and weapons, including handguns, shotguns, rifles, sniper rifles, and machineguns. Stillwell also purported to have training and experience in the field of information technology and to have worked at a firm in North Carolina that provides firearms training.
In 2011 and 2012, HUNTER, Samia, and Stillwell agreed to commit murders-for-hire in overseas locations in exchange for salaries and bonus payments for each victim. In early 2012, Samia and Stillwell traveled from North Carolina to the Philippines, where HUNTER provided them with, among other things, information about their intended victims and firearms to use to commit the murders.
In January and February 2012, Samia and Stillwell surveilled their intended victims in the Philippines as they formulated their murder plans. On February 12, 2012, Samia and Stillwell killed one of their intended victims – a Filipino woman – in the Philippines by shooting her multiple times in the face (“Victim-1”). After killing Victim-1, Samia and Stillwell disposed of her body on a pile of garbage, where it was later found by local authorities. HUNTER paid Samia and Stillwell $35,000 each for completing the murder, and Samia and Stillwell sent thousands of dollars from the payments they received to the United States using, among other methods, structured wire transfers in amounts under $10,000.
In late February and early March 2012, Samia and Stillwell returned from the Philippines to North Carolina, where they continued to reside until their July 2015 arrests on these charges.
* * *
HUNTER, 53, of Owensboro, Kentucky, Samia, 44, of Roxboro, North Carolina, and Stillwell, 51, of Roxboro, North Carolina, were each convicted of one count of conspiring to commit murder-for-hire and one count of committing murder-for-hire, each of which carries a maximum sentence of life in prison and mandatory minimum sentence of life in prison; and one count of conspiring to murder and kidnap in a foreign country and one count of using and carrying a firearm during and in relation to a crime of violence, each of which carries a maximum sentence of life in prison. Samia and Stillwell were also each convicted of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison.
The charges against the defendants were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division, Bilateral Investigations Unit; DEA’s Manila Country Office; DEA’s Atlanta Field Division, Raleigh Resident Office; DEA’s Louisville Field Division; the Durham Police Department; the Raleigh Police Department; the Harnett County Sherriff’s Office; the Wake County Sherriff’s Office; the Person County Sherriff’s Office; the Cary Police Department; the North Carolina State Bureau of Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives, Greensboro Field Office; the Customs and Border Protection’s National Targeting Center; the Royal Thai Police; the Philippines National Bureau of Investigation; and the Philippines National Police; and the Department of Justice’s Office of International Affairs. Mr. Berman also thanked the United States Attorney’s Office for the Middle District of North Carolina and the Department of Justice’s Computer Crime and Intellectual Property Section for their support and assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Patrick Egan, Emil J. Bove III, and Rebekah Donaleski were in charge of the prosecution.
The U.S. Attorney’s Office for the Middle District of Pennsylvania Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
HARRISBURG – Attorney General William P. Barr and U.S. Attorney David J. Freed today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
- Omoefe Okoro, age 48, a citizen of Canada, was charged in the Middle District of Pennsylvania. Okoro and others are alleged to have engaged in an attorney “collection scam” in Ontario, Canada, and elsewhere. In particular, Okoro and his co-conspirators are alleged to have conducted a scheme in which they contacted businesses and individuals, including elderly victims, and requested, among other things, to collect an outstanding debt. The suspects, posing as the third party, then sent a counterfeit check to the victim for deposit and requested that the victim wire funds to an account overseas, typically in Japan, South Korea, or China. Canada surrendered Okoro to the United States on Aug. 29, 2018. Okoro is currently scheduled for trial on May 6, 2019.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Perpetrators of Elder Abuse and Elder Financial Fraud purposefully choose their victims, hoping that they will be unable or unwilling to ask for help, using ever more sophisticated methods to support their scams,” said U.S. Attorney Freed. “We are proud to join our efforts today with those of our colleagues in Washington and throughout the nation, and to work with our state and local colleagues to bring federal resources to tackling this persistent problem.”
The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Do not remain silent if you were a victim of financial fraud, speak out and tell someone. Find the right reporting agency by going to Elder Abuse Resource Roadmaps: elderjustice.gov/roadmap or call the Victim Connect Hotline at 1-855-4Victim.
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A fact-sheet with technical-support fraud case information can be found here.
A fact-sheet with cases on mass mailing fraud can be found here.
A fact-sheet with examples of a few elder fraud cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
The Northern District of West Virginia takes part in largest-ever nationwide elder fraud sweepRead the Press Release
WHEELING – Attorney General William P. Barr and U.S. Attorney Bill Powell today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Crimes against the elderly are particularly heinous as they often involve taking advantage of already vulnerable people. The crimes are often compounded when the elderly victims are reluctant to report them. We encourage the reporting of these crimes so they can be fully investigated and aggressively prosecuted,” said Powell.
In the Northern District of West Virginia, there were several cases involving elder fraud, including the case of Karen Kinsley, a former bank branch manager, who pled guilty in September 2018 to bank fraud, admitted to taking out loans in customers’ names and reopening customers’ savings and checking accounts without the customers’ consent. She is scheduled to be sentenced in April.
The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
A fact-sheet with technical-support fraud case information can be found here.
A fact-sheet with cases on mass mailing fraud can be found here.
A fact-sheet with examples of a few elder fraud cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
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Tax Preparers Indicted for Identify Theft, Wire Fraud, and Filing False ReturnsRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain, along with Principal Deputy Assistant Attorney General Richard E. Zuckerman, announced today that the owner and operator of a Philadelphia-based tax preparation business and his employee were charged with preparing fraudulent tax returns and related crimes in order to reduce taxes and inflate federal tax refunds for their clients.
Nvahbulai Quisiah, 43, of Philadelphia, and Gofin Kosia, 43, of Philadelphia, were charged by federal indictment with one count of conspiracy to defraud the United States, 17 counts of aiding and assisting in the preparation and filing of a false tax return, 6 counts of wire fraud, and 6 counts of aggravated identity theft. Quisiah is the owner of First Premier Tax Service, a tax preparation business, and Kosia is a tax preparer employed there.
According to the indictment, Quisiah and Kosia prepared tax returns for clients for tax years 2009 through 2016 that fraudulently inflated itemized deductions, claimed fictitious Schedule C businesses, and claimed false dependents. As a result of these false items and deductions, the defendants allegedly inflated claimed tax refunds for their clients. The indictment alleges that the defendants knew their clients were not entitled to such refunds. One of the clients was an IRS agent acting in an undercover capacity. The indictment also alleges that the defendants bought and sold personal identifying information of children in order to falsely claim the children as dependents on tax returns for the defendants’ clients.
If convicted of aggravated identity theft, the defendants face a mandatory minimum sentence of two years in prison. Each count of wire fraud carries a maximum sentence of twenty years in prison, while each count of aiding and assisting in the preparation of false tax returns carries a maximum three year prison term. The defendants also face a period of supervised release, fines, and the payment of restitution.
“Tax preparers are supposed to follow and apply our tax laws to assist clients to accurately report their income and pay their fair share of federal taxes, not bend or ignore the rules to suit their client’s needs,” said U.S. Attorney McSwain. “As alleged, the defendants enriched themselves and their clients at the expense of taxpayers who take seriously their legal obligation to file complete and accurate federal income taxes each year. My Office will continue to aggressively prosecute these kinds of cases.”
An indictment alleges that crimes have been committed. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was investigated by Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Anthony Wzorek and Department of Justice Tax Division Attorney Ann M. Cherry.
Struthers man indicted for failing to register as a sex offenderRead the Press Release
A Struthers man was indicted for failing to register as a sex offender.
Dustin M. Wynn, 22, was arrested last month on a probation violation warrant out of West Virginia. Wynn is a convicted sex offender who failed to register despite living in the Youngstown area for more than four months, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation preceding the indictment was conducted by the United States Marshals Service. The case is being prosecuted by Assistant United States Attorney Jason Katz.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Southern Illinois Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
Attorney General Focuses on Threats Posed by Technical-Support Fraud
East St. Louis, IL – Attorney General William P. Barr and U.S. Attorney Steven D. Weinhoeft today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over $750 million.
"Crimes against the elderly target some of the most vulnerable people in our society," Attorney General William P. Barr said. "But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America’s seniors."
"Fraud is a multi-billion dollar problem that impacts banks, retailers, health care providers, industries, and individuals. Truly, none of us are beyond the reach of these thieves who constantly find new and innovative ways to lie, cheat, and steal," said Steven D. Weinhoeft, United States
Attorney for the Southern District of Illinois. Weinhoeft also noted that according to a 2018 FTC report, while Americans of all ages are susceptible to fraud schemes, people ages 80 and older reported the highest median losses – over twice the median loss amount reported by those under age 60.
Telemarketing fraud is a primary tool for those who target the elderly. For this reason, the U.S. Attorney’s Office for the Southern District of Illinois has made telemarketing fraud a top priority. The Southern District of Illinois is recognized as a national leader in telemarketing fraud prosecutions, particularly on schemes that victimize seniors. This year’s sweep included three Canadian citizens – Fawaz Sebai, 41, Vassilios Klouvatos, 34, and Lefkothea Klouvatos, 27 – charged with conspiracy to commit mail and wire fraud in the Southern District of Illinois. According to the indictment, Sebai and Vassilios Klouvatos owned and operated a telemarketing business located in Quebec, Canada. Lefkothea Klouvatos managed the call center for the business. The telemarketers employed by the business allegedly made unsolicited telephone calls to elderly victims in the United States. By making false statements and misrepresentations, the telemarketers convinced the U.S. victims to purchase supposed prescription drug discount cards. The fee for these products was typically $299. The Office of International Affairs sought extradition in 2015. Canada extradited Sebai to the United States on Sept. 19, 2018. Vassilios and Lefkothea Klouvatos were surrendered to the United States on Oct. 4, 2018. The trio pleaded guilty earlier this year and are set to be sentenced on March 26, 2019.
This year’s sweep also includes additional Southern Illinois prosecutions and convictions of defendants engaged in tech support scams. In May 2018, two former owners of a Florida-based company, Client Care Experts, LLC (formerly known as First Choice Tech Support, LLC), and a Costa Rican-based company, ABC Repair Tech, Ltd., were indicted by a federal grand jury in East St. Louis with criminal conspiracy and 13 counts of wire fraud. Michael Austin Seward, 31, of Deerfield Beach, Florida, and Kevin James McCormick, 45, of Delray Beach, Florida, were named in a superseding indictment charging them and their former vice president, Grant Clark Wasik, 35, of Boynton Beach, Florida, with running a fraudulent tech support scheme. The inbound call center they operated allegedly generated calls through pop-up messages that falsely claimed consumers had serious viruses or malware on their computers. According to the charging documents, telemarketers convinced consumers to grant remote access and ultimately used false representations and scare tactics to induce consumers to send money. In three years, the scheme allegedly brought in over $25 million, a large portion of which came from older Americans. At least 57 victims of the alleged scams were located in 22 counties within the Southern District of Illinois, with multiple victims in both St. Clair and Madison Counties.
Sixteen other defendants involved in the same fraudulent scheme have been prosecuted in the Southern District of Illinois, including three during the sweep. Michael Cary Lawing, 33, of Lincolnton, North Carolina, Kyle Evan Swinson, 27, of New Bern, North Carolina, and Erica Marie Crowell, 29, of Marlton, New Jersey, were recently charged in separate cases for their
involvement in the conspiracy. The cases against Seward, McCormick, and Crowell are scheduled for trial in the coming months. The other defendants have all entered guilty pleas.
Members of the public are reminded that all charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Fact sheets with more information on the Department’s tech support fraud cases, mass mailing fraud cases, and cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
More information on the tech support fraud prosecutions being brought in the Southern District of Illinois is available here.
Seven People, Including Three Filipinos, Charged with Fraudulently Selling Jewelry Imported from the Philippines as Native American-MadeRead the Press Release
On Feb. 26, a federal grand jury in Phoenix, Arizona returned a 38-count indictment against U.S. and Philippines-based conspirators for operating a fraudulent scheme to import Native American-style jewelry and sell it to retail stores and individuals across the southwest United States as authentic jewelry made by Native Americans. The conspirators allegedly perpetrated this international fraud and money laundering scheme for several years in violation of federal laws, including the Indian Arts and Crafts Act (IACA).
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Assistant Director Edward Grace of the U.S. Fish and Wildlife Service (FWS) Office of Law Enforcement and Special Agent in Charge A. Scott Brown of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Phoenix Field Office made the announcement.
According to the indictment, the defendants and their conspirators used various jewelry businesses—including Last Chance Jewelers and LMN Jewelers—to design and manufacture jewelry in the Native-American style at factories in the Philippines where Filipino jewelry-makers made all of the jewelry. The conspirators allegedly took several measures to ensure that the jewelry resembled authentic Native American-made jewelry, including copying jewelry designs from genuine Native American artists, using traditional Native American motifs and symbols in the jewelry, and stamping the jewelry with the initials of alleged Native American artists. According to the indictment, the jewelry was then imported into the United States by FedEx, or smuggled into the United States by hand or through the Philippines Postal System, to end destinations in Arizona. From there, it was allegedly advertised and sold to the general public as authentic jewelry made by Native Americans, at jewelry and crafts stores that purported to specialize in Native American pieces. The indictment alleges that none of these jewelry items were indelibly marked with the country of origin as required by customs law.
The indictment alleges that Richard Dennis Nisbet, 70, and his daughter Laura Marye Lott, 31, both of Peoria, Arizona, conspired with others to design and manufacture the Native American-style jewelry in the Philippines and import the jewelry to the United States. Lott then allegedly delivered the jewelry to retail stores in Arizona, Texas, and other states and collected payments. Christian Coxon, 45, of Selma, Texas, was the owner and operator of Turquoise River Trading Company, a jewelry store in San Antonio, Texas that claimed to specialize in Indian-made jewelry. Waleed Sarrar, 43, of Chandler, Arizona, owned and operated Scottsdale Jewels LLC, a jewelry store in Scottsdale, Arizona that advertised as selling authentic Indian-made jewelry. According to the indictment, Coxon and Sarrar conspired with Nisbet, Lott, and others to pass off imitation jewelry manufactured abroad to the public as authentic Native American-made jewelry. Additionally, Mency Remedio, a factory manager in the Philippines, and Orlando Abellanosa and Ariel Adlawan Canedo, both of whom worked as jewelry smiths in the Philippines for the operation, were also charged with participating in the multi-year fraud and money laundering schemes.
The IACA prohibits the offer or display for sale, or the sale of any good in a manner that falsely suggests that it is Indian produced, an Indian product, or the product of a particular Indian and Indian tribe. The law is designed to prevent products from being marketed as “Indian made,” when the products are not, in fact, made by Indians. It covers all Indian and Indian-style traditional and contemporary arts and crafts produced after 1935, and broadly applies to the marketing of arts and crafts by any person in the United States. The IACA provides critical economic benefits for Native American cultural development by recognizing that forgery and fraudulent arts and crafts diminish the livelihood of Native American artists and craftspeople by lowering both market prices and standards.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FWS Office of Law Enforcement for the Southwest Region and HSI Phoenix, with assistance from the Arizona Game and Fish Department, the Bureau of Land Management Office of Law Enforcement and Security and the Indian Arts and Crafts Board, the U.S. Forest Service Law Enforcement and Investigations and the Texas Game Wardens. Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Peter Sexton and Mark Wenker of the District of Arizona are prosecuting the case.
Second Rochester Man Pleads Guilty to Stealing MailRead 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 Michael Harris, 31, of Rochester, NY, pleaded guilty to conspiracy to steal mail before U.S. Magistrate Judge Marian W. Payson. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Harris was employed by a U.S. Postal Service contractor at the Greater Rochester International Airport. While performing his job, the defendant conspired with two other individuals, co-defendants Cordell James and Chansen Diaz, to steal gift cards and cash from the mail. The three men then used the stolen items to finance their lifestyles.
Chansen Diaz was previously convicted and is awaiting sentencing. Charges remain pending against Cordell James. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of a joint investigation by the United States Postal Service Office of Inspector General, under the direction of Special Agent-in-Charge Kenneth Cleevely, Eastern Area Field Office, Pittsburgh, PA, and Inspectors with the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin.
Sentencing is scheduled for June 6, 2019, before U.S. District Judge David G. Larimer.
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Queens Man Sentenced to Three Years’ Imprisonment for Bribery and FraudRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Charles Gallman, also known as “T.A.,” was sentenced by United States District Judge Carol Bagley Amon to three years’ imprisonment for conspiring to violate the Travel Act by bribing a witness to testify falsely in a double-homicide trial in Suffolk County Supreme Court, and for conspiring to make false statements to the Bureau of Prisons (BOP). Gallman pleaded guilty to the charges on November 8, 2018.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Gallman was the driving force behind brazen criminal conduct designed to undermine our criminal justice system,” stated United States Attorney Donoghue. “Today, the defendant has been held accountable, thanks to the outstanding work of this Office’s prosecutors and our law enforcement partners.” Mr. Donoghue expressed his grateful appreciation to the Offices of the Queens County and Suffolk County District Attorneys for their assistance in the investigation.
The charges in the case stemmed from an investigation led by the Queens County District Attorney’s Office. Court-authorized intercepted communications between Gallman and an attorney revealed the two plotting to bribe a witness, Luis Cherry, to testify falsely in a criminal trial against Reginald Ross in Suffolk County. Ross was ultimately convicted of murdering two men in separate attacks in 2010. The intercepted communications also captured Gallman scheming with three others co-conspirators, including another attorney, to defraud the BOP by submitting a fraudulent letter to help an inmate obtain early release from prison.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution.
The Defendant:
Charles Gallman (also known as “T.A.”)
Age: 57
Queens, New YorkE.D.N.Y. Docket No. 18-CR-123 (CBA)
Princeton Woman Pleads Guilty to Federal Gun CrimesRead the Press Release
BLUEFIELD, W.Va. – A Princeton woman pled guilty today to federal gun crimes, announced United States Attorney Mike Stuart. Kimberly Addair, 46, of Princeton, West Virginia, entered her guilty pleas to one count of making false or fictitious statements, and one count of disposing of firearms to a convicted felon. Stuart commended the investigative efforts of federal agents from West Virginia and New Jersey offices of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
“Don’t lie for the other guy,” said United States Attorney Mike Stuart. “Lying and buying for someone else- a serious, serious crime. Making false statements on ATF Forms in order to purchase guns for those that shouldn’t have them, will land you in federal court and facing a potentially significant sentence in federal prison.”
During Addairs’s plea hearing, it was established that on March 30, 2016, Kimberly Addair made false and fictitious statements on a Department of Justice ATF Form 4473 by indicating she was the actual purchaser of firearms when in reality, she was purchasing the firearms for a convicted felon. Addair had previously admitted to law enforcement officers that she purchased the firearms for another person that she knew was a convicted felon. She then admitted to transferring the firearms to the person she knew to be a convicted felon and was prohibited from possessing any firearms according to federal law. One of the firearms purchased by Addair on March 30, 2016 was recovered in New Jersey in the possession of a convicted felon.
Addair now faces a sentence of up to ten years in prison and a fine of up to $250,000 on each count. Addair’s sentencing will be held on July 2, 2019.
Assistant United States Attorney Timothy D. Boggess is responsible for the prosecution. The plea hearing was held before Senior United States District Judge David A. Faber.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The United States Attorney General reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Previously Convicted Sex Offender Sentenced for Trying to Meet Minor for SexRead the Press Release
LOUISVILLE, Ky. – Convicted sex offender Torey Phillip Cranston has been sentenced to 20 years’ imprisonment, followed by 20 years of supervised release by Judge Claria Horn Boom for seeking sex with a person he believed to be a minor, announced United States Attorney Russell M. Coleman. There is no parole in the federal system.
“As Mr. Cranston’s two decades in federal prison will attest, we will protect our kids,” said U. S. Attorney Russell Coleman.
Cranston, age 29, of Louisville, Kentucky, pleaded guilty on November 19, 2018, to a two count federal Indictment charging him with attempted enticement of a minor, and being a registered sex offender committing a felony offense involving a minor.
On August 16, 2017, Cranston responded to a Craigslist ad and began communicating with an undercover investigator working with the Kentucky Attorney General’s Department of Criminal Investigations, who was posing as a female minor living in Jefferson County, Kentucky. After being advised that the person he was talking to was a minor, Cranston, via text message, sought to meet the girl in person to smoke marijuana and engage in sex acts.
On August 22, 2017, Cranston arrived at a previously agreed upon location driving the vehicle he had told the undercover investigator he would be driving. Cranston communicated with the undercover agent up to the date and time specified for the meeting. He gave real-time updates via text messages while en route to the location. Law enforcement officials identified Cranston as he pulled into the parking lot and arrested him. Cranston had in his possession an apple iPhone (used for communicating with the undercover investigator), sex related items and marijuana.
In 2010, Cranston pled guilty to an amended charge of Sexual Abuse Second Degree in Jefferson District Court. The victim in the 2010 case was a 13-year-old girl.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Kentucky Office of Attorney General’s Department of Criminal Investigations conducted the investigation with assistance from the Louisville Metro Police Department.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims.
Pitcairn Man Obtained Heroin and Fentanyl from Outside PA to Set up Distribution Network in PittsburghRead the Press Release
PITTSBURGH, Pa.-A former resident of Pitcairn, Pennsylvania, pleaded guilty in federal court to a charge of possession with intent to distribute heroin and fentanyl, United States Attorney Scott W. Brady announced today.
William Kelly Penn, 33, pleaded guilty to one count before United States District Court Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that, on March 27, 2018, agents executed search warrants on Penn and his residence in Pitcairn, PA. From the residence, agents recovered unpackaged heroin/fentanyl, one brick of heroin/fentanyl, packaging materials including blank stamp bags, a stamper, $3,820 in U.S. currency, three cellphones, and a digital scale. Penn also had two bricks of heroin stamped "Hot Shots" on his person. Penn admitted to obtaining drugs from an out of state supplier in order to set up a heroin distribution network in Pittsburgh.
Judge Fischer scheduled sentencing for August 14, 2019. The law provides for a maximum total sentence of not more than 30 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Penn remain detained.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Penn.
Operation Mountaineer Highway -- Fayette County Man Sentenced to Prison for Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced today that a Fayette County man was sentenced in federal court on his conviction for conspiracy to distribute oxycodone. Gary Harvey, 48, of Fayetteville, was sentenced to 70 months in federal prison. Harvey was one of the defendants charged in connection with Operation Mountaineer Highway, which resulted in a large scale takedown in September 2018. Stuart commended the cooperative investigative efforts of the Drug Enforcement Administration and the Central West Virginia Drug Task Force, with the support of the West Virginia State Police, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Fayette County Sheriff’s Department, the Beckley/Raleigh County Drug Task Force, the Southern Regional Drug and Violent Crime Task Force, the Fayetteville Police Department, and Oak Hill Police Department.
“Operation Mountaineer Highway dismantled a multi-state, poly-drug network,” said United States Attorney Mike Stuart. “I am extremely proud of the work of law enforcement throughout the operation and the lasting positive impact it has had on Fayette County and the surrounding area.”
Harvey previously entered a guilty plea to conspiracy to distribute oxycodone. During the plea hearing, Harvey admitted that in June 2018, he worked with other members of a drug trafficking organization operating in Fayette County to distribute oxycodone pills. Harvey admitted that he distributed approximately 550 30mg oxycodone tablets to other members of the drug trafficking organization knowing it was the plan of those individuals to resell the pills illegally for profit.
Assistant United States Attorney Timothy D. Boggess handled the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
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Northern District of Oklahoma Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
Attorney General William P. Barr and U.S. Attorney Trent Shores today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
The Northern District of Oklahoma was actively involved during the sweep. In February, a federal grand jury indicted Charles D. Parnell, 36; Rodney A. Mosley, 39; and Brittany Mayall, 30, for conspiracy to steal mail, theft of mail, and possession of stolen mail from the Mounds Post Office. The stolen items were used to fraudulently create identities of local senior citizens and to defraud those citizens of more than $5,000.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Criminals steal more than an estimated $3 billion from senior citizens every year. Those who target the elderly will receive the attention of our law enforcement officials in northeastern Oklahoma. We will work with our senior citizens to empower them with knowledge and awareness so that they can defend themselves,” said U.S. Attorney Trent Shores. “Fake prizes, health care, tech support, IRS imposters, and grandkids scams are just a few of the schemes used to target seniors and deprive them of their hard earned savings.”
The Department of Justice took action in every federal district, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The U.S. Attorney’s Office in the Northern District of Oklahoma participates in the Justice Department’s Elder Justice Initiative, which supports and coordinates the enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. Assistant U.S. Attorney Joseph Wilson is the district’s Elder Abuse Coordinator. He is responsible for leading federal law enforcement elder justice investigations and community outreach programs. Since October, Assistant U.S. Attorneys and Victim Witness Specialists have held four outreach events attended by more than 200 seniors and healthcare specialists. For more information about the Elder Justice Initiative and available resources, click here.
A fact-sheet with technical-support fraud case information can be found here.
A fact-sheet with cases on mass mailing fraud can be found here.
A fact-sheet with examples of a few elder fraud cases involving extradition in which the Office of International Affairs played a substantial role can be found here.
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
New Jersey Man Sentenced to 21 Months Prison for Participation in Ticket Investment SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MICHAEL WRIGHT was sentenced to 21 months in federal prison for his participation in a scheme to defraud investors who invested millions of dollars based on false representations that their funds would be used to purchase tickets to various live events for re-sale at a profit on the secondary market. WRIGHT pled guilty on September 27, 2018 before Magistrate Judge Stewart D. Aaron to one count of wire fraud. His plea was accepted by Chief U.S. District Judge Colleen McMahon, who also imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Michael Wright previously admitted to his conduct related to an elaborate ticket-buying scheme to defraud investors of millions of dollars. Wright and his co-defendants induced their clients to invest in their phony business through false representations and lies, when in fact, it was a Ponzi-like enterprise. While Michael Wright’s ticket-buying business operated as a fiction, now a 21 month term in federal prison will be his stark reality.”
According to allegations in an Indictment filed in Manhattan federal court, previous court filings, and statements made in public court proceedings:
WRIGHT participated in a scheme along with Craig Carton and Joseph Meli to induce investors to provide them with millions of dollars, based on representations that the investor funds would be used to purchase blocks of tickets to concerts and other live events, which would then be re-sold on the secondary market. Carton and Meli purportedly had access to those blocks of tickets based on agreements that Meli had with a company that promotes live music and entertainment events (the “Concert Promotion Company”) and that Carton had with a company that operates two arenas in the New York metropolitan area (the “Sports and Entertainment Company”). In fact, neither the Concert Promotion Company nor the Sports and Entertainment Company had any such agreement with Carton, Wright, or Meli, or any entity associated with them. After receiving the investor funds, Carton, Wright, and Meli misappropriated those funds, using them to, among other things, pay personal debts and repay prior investors as part of a Ponzi-like scheme.
For example, on December 8, 2016, a New York-based hedge fund (the “Hedge Fund”) and Carton executed a revolving loan agreement (the “Revolving Loan Agreement”), under which the Hedge Fund agreed to provide Carton with up to $10 million, for the purpose of funding investments in the purchase of tickets of events. The Revolving Loan Agreement provided, in sum and substance, that the proceeds of the loan would be used only to purchase tickets pursuant to agreements for the acquisition of tickets and for limited business expenses. The Hedge Fund would receive a share of the profits from the resale of the tickets.
Later in December 2016, Carton induced the Hedge Fund to wire $2 million to the Sports and Entertainment Company, based on a purported agreement he had with the Sports and Entertainment Company (the “Sports and Entertainment Company Agreement”). Under this supposed agreement, the Sports and Entertainment Company Agreement gave an entity controlled by Carton (the “Carton Entity”) the right to purchase $2 million of tickets to concerts at one of the venues operated by the Sports and Entertainment Company. Carton, among other things, sent the Hedge Fund a copy of the Sports and Entertainment Company Agreement that purportedly had been signed by the chief executive officer of the Sports and Entertainment Company. However, this agreement was fraudulent and had never been entered into by the Sports and Entertainment Company or signed by the chief executive officer.
On December 20, 2016, when the Hedge Fund wired the $2 million to the Sports and Entertainment Company for the purchase of tickets, Carton contacted the Sports and Entertainment Company and told them, in sum and substance, that the wire had been sent in error and should be sent to the bank account for an entity operated by Carton and WRIGHT, for which WRIGHT is the signatory. The prior day, December 19, 2016, WRIGHT had e-mailed Carton wire information for this account. After the Sports and Entertainment Company’s $2 million investment was diverted to that account, WRIGHT wired $966,000 to WRIGHT’s bank account, of which WRIGHT sent approximately $690,000 to repay a gambling loan of Carton’s which WRIGHT had guaranteed and approximately $250,000 to repay WRIGHT’s personal home equity line of credit. WRIGHT further diverted $40,000 of the Hedge Fund’s investment for his own personal expenses, including to pay off credit card debt, and nearly $1 million to Carton’s personal bank account.
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WRIGHT, 42, of Upper Saddle River, New Jersey, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Carton was convicted on November 7, 2018, of securities fraud, wire fraud, and conspiracy to commit those offenses, and will be sentenced before Chief U.S. District Court Judge Colleen McMahon on April 5, 2019.
Meli pled guilty to securities fraud in October 2017 and is currently serving a 78-month sentence imposed by U.S. District Court Judge Kimba M. Wood in April 2018.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the Boston Regional Office of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brendan F. Quigley and Elisha J. Kobre are in charge of the prosecution.
National award honors U.S. Attorney's Office, other agencies for dismantling major drug traffickersRead the Press Release
SAVANNAH, GA: A multi-agency operation in the Southern District of Georgia is receiving national recognition for dismantling a major drug trafficking organization whose methods included delivering contraband to prisons with drones and using funding from a lottery winner.
The Southern District’s Organized Crime Drug Enforcement Task Force (OCDETF) received the national award for Overcoming Technology Obstacles for Operation Cellmate, an investigation and prosecution of a transnational, multi-district drug trafficking organization that used gangs to distribute large quantities of methamphetamine throughout the Southeastern United States, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
Ten investigators and prosecutors from the agencies who coordinated Operation Cellmate received the award from OCDETF Region Director Mike Smith at 2 p.m. Thursday, March 7, in a ceremony at the U.S. Attorney’s Office, 22 Barnard St., Savannah.
“We are honored that our Assistant United States Attorneys are among the recipients of this award, and even more honored at the recognition of the law enforcement officers and prosecutors who coordinate their efforts to drive criminals out of our communities,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “Being chosen for this prestigious award from among the 94 U.S. Attorney’s Offices in the country is truly evidence that the Southern District of Georgia is punching above its weight class.”
Operation Cellmate began in 2014 when the bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Georgia Bureau of Investigation (GBI) learned that a violent drug trafficking organization was operating from within a Georgia Department of Corrections facility. The investigation identified Daniel Roger Alo, an associate of the Ghost Face Gangsters, as leading the criminal group from inside the prison where he was serving a life sentence for multiple violent felonies.
Alo developed a source of supply for methamphetamine from the Sinaloa Cartel, the Mexican crime syndicate previously operated by the notorious Joaquin “El Chapo” Guzman. In addition to other Ghost Face Gangsters, Alo recruited help from other violent street gangs, including the Bloods and Gangster Disciples.
The organization used drones and compromised prison guards to smuggle phones and contraband into the prison, where the conspirators used the devices to coordinate drug trafficking throughout the Southeast. In the largest seizure, agents in 2015 seized 10.9 pounds of crystal methamphetamine, multiple firearms and more than $600,000 in a Brunswick sting operation. The methamphetamine had been purchased with some of the $3 million won months earlier in the Georgia Lottery by Ronnie Music.
By September 2016, a federal grand jury in the Southern District of Georgia indicted 21 defendants on drug trafficking and firearms related charges. The strength of the legal case rested on the exhaustive, detailed work provided by Assistant United States Attorneys E. Greg Gilluly Jr. and Tania Groover, and within a year, all of the defendants indicted in the operation pled guilty and were later sentenced to a combined 170 years in federal prison.
The OCDETF award recognizes the significant technical obstacles investigators encountered in investigating the drug organization that operated from inside a prison using drones, cell phones, Facebook and Green Dot cards.
Agencies and their members receiving the award are:
- U.S. Attorney’s Office: Assistant U.S. Attorneys E. Greg Gilluly Jr. and Tania Groover with the Southern District of Georgia, and Assistant U.S. Attorney Theodore Hertzberg with the Northern District of Georgia;
- Bureau of Alcohol, Tobacco, Firearms and Explosives: Special Agent Thomas J. Crawford III, Special Agent James C. Turner, Forensic Auditor Christa K. Morgan, and Forfeiture Investigator Richard Ruka;
- Georgia Bureau of Investigation: Special Agent Bobby Banks;
- Drug Enforcement Administration: Special Agent Robert L. Livingston and Special Agent Christopher J. Atkins, at the time of the investigation representing the Glynn County Police Department; and,
- Georgia Department of Corrections: U.S. Marshals Task Force Officer Keith Lank.
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Division stated, “This investigation demonstrates the effectiveness of the Organized Crime Drug Enforcement Task Force program in encouraging cooperation between federal, state and local agencies. I am proud of the hard work that our men and women in law enforcement have put into this investigation along with our partners at the United States Attorney’s Office. Cooperation is an essential component of efforts by law enforcement in disrupting drug organizations that seek to operate in our communities.”
“As the facts of this investigation indicate, drug investigations have become more complex in the 21st century,” said Jamie Jones, Special Agent in Charge of the GBI’s Southeastern Regional Drug Enforcement Office. “Though the challenges evolve and present more obstacles, a seasoned team of determined investigators can adapt and overcome. The teamwork demonstrated by these determined federal, state, and local agents took this challenge to task and successfully dismantled this sophisticated operation, which was pushing its poison into Southeast Georgia homes and neighborhoods.”
“Although this investigation occurred before my time as Police Chief for Glynn County, I am still proud of past employees who dedicated their lives to making Glynn County a safer community,” said Glynn County Police Chief John Powell. “Special Agent Christopher Atkins worked for the Glynn County Police Department for five years, a large part of which he spent investigating illegal narcotics. His involvement with ‘Operation Cellmate’ is just one testimony of his passion. Special Agent Atkins left the department in August of 2016 to continue his dedication to combating illegal narcotics with the United States Drug Enforcement Administration. I am thankful for the cooperation which existed between the department and our federal counterparts back in 2015 and 2016, and we strive to continue and improve upon these partnerships.”
In addition to the OCDETF award, Operation Cellmate also was named 2017 Case of the Year by the Georgia Bureau of Investigation.
OCDETF is the centerpiece of the United States Attorney General’s national drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking and money laundering organizations and related criminal enterprises.
NYPD Officer Convicted of Drug Trafficking and Firearms Offenses in Manhattan Federal CourtRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that YESSENIA JIMENEZ, an officer in the New York City Police Department (“NYPD”), was found guilty today of conspiring to distribute heroin, fentanyl, and cocaine, possession of heroin and fentanyl, and using a firearm in furtherance of drug trafficking. A unanimous jury convicted JIMENEZ on all three counts after a one-week trial before United States District Judge Valerie E. Caproni.
U.S. Attorney Geoffrey S. Berman said: “As proven at trial, Yessenia Jimenez, an NYPD officer, trafficked heroin, fentanyl, and cocaine in New York City, a city she took an oath to serve and protect, and used her NYPD service firearm to carry out her drug dealing. Simply put, Jimenez was a drug dealer in a cop’s uniform. Thankfully, Jimenez now stands convicted and faces at least 15 years in prison.”
According to court documents and the evidence at trial:
This case arises from a Drug Enforcement Administration (“DEA”) investigation into a large-scale narcotics trafficking operation that brought heroin, fentanyl, and cocaine across the border from Mexico into the United States, and then into New York City. From at least June 2017 through March 2018, JIMENEZ, an NYPD officer, participated in the conspiracy. JIMENEZ used her apartment in the Bronx, New York, to store multiple kilograms of heroin, fentanyl, and cocaine that were brought into the city by other members of the conspiracy. Along with other co-conspirators, JIMENEZ distributed these drugs in New York and also in the Boston area. Over the course of the conspiracy, she collected hundreds of thousands of dollars in drug profits, which she also stored in her apartment, and delivered large amounts of cash to other co-conspirators to bring back to drug suppliers in Mexico. On March 13, 2018, the DEA and NYPD apprehended JIMENEZ and a co-conspirator as they returned to her apartment carrying approximately $52,000 in U.S. currency, which represented the proceeds from narcotics transactions in Boston. JIMENEZ, who was not in uniform and was off duty, was carrying her loaded NYPD service firearm in her purse, alongside approximately $25,000 of the drug proceeds. At the time of her arrest, JIMENEZ lied to law enforcement, telling them she was “on the job,” meaning on official NYPD business at the time. Following the arrest, law enforcement agents obtained a search warrant for JIMENEZ’s apartment and discovered approximately 250 grams of heroin and fentanyl.
* * *
JIMENEZ, 32, of the Bronx, New York, was convicted of one count of conspiracy to distribute at least one kilogram of heroin and fentanyl, and at least five kilograms of cocaine, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison, one count of possession of at least 100 grams of heroin and fentanyl with intent to distribute, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of five years in prison, and one count of using a firearm in furtherance of narcotics trafficking, which carries a maximum sentence of life in prison and a consecutive mandatory minimum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the investigative work of the DEA, NYPD, and New York State Police in this investigation.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Thane Rehn and Louis Pellegrino are in charge of the prosecution.
Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that Victimized U.S. InvestorsRead the Press Release
A four-count indictment was returned on Dec. 19, 2018, by a grand jury in the Eastern District of New York, charging two executives of a shipbuilding company, three former senior Mozambican government officials, and three former London-based investment bankers for their roles in a $2 billion fraud and money laundering scheme that victimized investors from the United States and elsewhere.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.
“The indictment unsealed today alleges a brazen international criminal scheme in which corrupt Mozambique government officials, corporate executives, and investment bankers stole approximately $200 million in loan proceeds that were meant to benefit the people of Mozambique,” said Assistant Attorney General Benczkowski. “The Department of Justice and our law enforcement partners are dedicated to using all tools at our disposal to prosecute those who engage in money laundering, financial fraud and corruption at the expense of U.S. investors, wherever those individuals may be located.”
“As charged in the indictment, the defendants orchestrated an immense fraud and bribery scheme that took advantage of the U.S. financial system, defrauded its investors and adversely impacted the economy of Mozambique, in order to line their own pockets with hundreds of millions of dollars,” said U.S. Attorney Donoghue. “This indictment underscores the Department of Justice’s continuing efforts to end such fraudulent and corrupt practices and to hold those responsible to account for their crimes.”
“Today’s indictment proves that no matter who you are, or what position of power you’re in, you’re not immune from prosecution,” said FBI Assistant Director in Charge Sweeney. “The FBI will continue to use all resources at our disposal to uncover crimes of this nature and expose them for what they really are.”
Jean Boustani, 40, a citizen of Lebanon who worked for the Privinvest Group, a United Arab Emirates-based shipbuilding company, was arrested at John F. Kennedy Airport in New York on Jan. 2, 2019 and arraigned later that day in the Eastern District of New York on charges that he conspired with others to commit one count of wire fraud, one count of securities fraud, and one count of money laundering in connection with $200 million in bribe and kickback payments he helped organize relating to three loans totaling more than $2 billion that were marketed and sold to U.S. victim investors. Boustani has pleaded not guilty to the charges; a trial date has not yet been set. Alongside Boustani, Privinvest’s chief financial officer Najib Allam, 58, a citizen of Lebanon, was charged with the same counts. Allam is alleged to have worked with Boustani to make the bribe and kickback payments. Allam is not currently in U.S. custody.
Manuel Chang, 63, the former Mozambican minister of finance who is a citizen and resident of Mozambique, was charged with the same counts as Boustani, namely one count of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, and one count of conspiracy to commit money laundering. Chang was arrested at the request of the United States by South African authorities on Dec. 29, 2018. The United States is seeking Chang’s extradition.
Antonio do Rosario, 44, a citizen and resident of Mozambique, was an official with Mozambique’s State Information and Security Service and a director and officer of each of the three Mozambican entities that obtained the maritime loans. Do Rosario was charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, and one count of conspiracy to commit money laundering in connection with his receipt of bribe payments relating to the loans. Do Rosario is not currently in U.S. custody.
Teofilo Nhangumele, 50, a citizen and resident of Mozambique, acted on behalf of the Office of the President of Mozambique. Nhangumele was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering in connection with his negotiation and receipt of bribe payments relating to the loans. Nhangumele is not currently in U.S. custody.
The three investment bankers, Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37, each of whom is a resident of the United Kingdom, were also charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, and one count of conspiracy to commit money laundering. In addition, each banker was charged with one count of conspiracy to violate the anti-bribery and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) in connection with their roles in facilitating bribe payments to government officials in Mozambique and for circumventing the internal accounting controls of a foreign investment bank that arranged two of the loans. At the time, Pearse and Singh were managing directors of the investment bank, and Subeva was a vice president.
Pearse, Singh and Subeva were arrested on Jan. 3, in the United Kingdom, all pursuant to provisional arrest warrants issued at the request of the United States. The United States is seeking their extradition.
The indictment alleges that between approximately 2013 and 2016, the co-conspirators organized for more than $2 billion in three loans to be arranged by Investment Bank and another foreign bank. The loans were made to companies owned and controlled by the Mozambican government: Proindicus S.A., Empresa Moçambicana de Atum, S.A. (EMATUM) and Mozambique Asset Management (MAM). The money was purportedly to be used to fund three maritime projects for which the shipbuilder, Privinvest, would provide the equipment and services. Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing, and MAM was to build and maintain shipyards. Chang, in his capacity as minister of finance, signed guarantees on behalf of Mozambique for all three fraudulent loans. Singh signed the agreements on behalf of the investment bank for the two loans on which the bank acted as primary arranger. The investment bank subsequently paid the loans directly to Privinvest.
As further alleged in the indictment, the co-conspirators facilitated Privinvest’s criminal diversion of more than $200 million in loan proceeds, including more than $150 million in bribe payments to Chang and other Mozambican government officials that Privinvest paid to ensure that Mozambique would enter into the loan arrangements. In addition to the bribe payments, the alleged fraud also included approximately $50 million in kickback payments to Pearse, Singh, and Subeva, who assisted the conspirators to obtain financing for the loans through their investment bank and a second foreign investment bank. Pearse, Singh, and Subeva, along with the other members of the conspiracy, allegedly subsequently sold the loans to investors worldwide, including in the United States. Moreover, the participants in the scheme allegedly conspired to defraud these investors by misrepresenting how the loan proceeds would be used, the amount and maturity dates of other loans and debt Mozambique was obligated to pay, and the ability of Mozambique or its state-owned entities to repay the loans.
Mozambique and its state-owned entities have thus far allegedly failed to make more than $700 million of repayments that have become due on the loans.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being conducted by the FBI’s New York Field Office. The government’s case is being prosecuted by the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Fraud Section, and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York. MLARS Trial Attorneys Sean W. O’Donnell and Margaret A. Moeser, Fraud Section Trial Attorney David M. Fuhr, and Assistant U.S. Attorneys Matthew S. Amatruda and Mark E. Bini of the Eastern District of New York are prosecuting the case.
The Criminal Division’s Office of International Affairs provided critical assistance in this case. The Department appreciates the significant cooperation and assistance provided by the Securities and Exchange Commission. The Department also appreciates the assistance provided by law enforcement authorities in the United Kingdom and in South Africa.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Monongalia County man sentenced for child pornography productionRead the Press Release
ELKINS, WEST VIRGINIA – Ian Michael Toothman, of Morgantown, West Virginia, was sentenced today to 292 months incarceration for a child pornography charge yesterday, United States Attorney Bill Powell announced.
Toothman, age 29, pled guilty to one count of “Aiding and Abetting Production of Child Pornography” in October 2018. Toothman admitted to producing child pornography in December 2017 in Monongalia County.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The West Virginia State Police investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Mobile Telesystems Pjsc and Its Uzbek Subsidiary Enter into Resolutions of $850 Million with the Department of Justice for Paying Bribes in UzbekistanRead the Press Release
Moscow-based Mobile TeleSystems PJSC (MTS), the largest mobile telecommunications company in Russia and an issuer of publicly traded securities in the United States, and its wholly owned Uzbek subsidiary, KOLORIT DIZAYN INK LLC (KOLORIT), have entered into resolutions with the Department of Justice and Securities and Exchange Commission (SEC) and agreed to pay a combined total penalty of $850 million to resolve charges arising out of a scheme to pay bribes in Uzbekistan. In addition, charges were unsealed today against a former Uzbek official who is the daughter of the former president of Uzbekistan and against the former CEO of Uzdunrobita LLC, another MTS subsidiary, for their participation in a bribery and money laundering scheme involving more than $865 million in bribes from MTS, VimpelCom Limited (now VEON) and Telia Company AB (Telia) to the former Uzbek official in order to secure her assistance in entering and maintaining their business operations in Uzbekistan’s telecommunications market.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Geoffrey S. Berman of the Southern District of New York, Special Agent in Charge Raymond Villanueva of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. and Chief Don Fort of IRS Criminal Investigation (IRS-CI) made the announcement.
Gulnara Karimova, 46, a citizen of Uzbekistan, was charged in an indictment filed in the Southern District of New York on March 7 with one count of conspiracy to commit money laundering. Karimova is a former Uzbek official who allegedly had influence over the Uzbek governmental body that regulated the telecom industry. Bekhzod Akhmedov, 44, a citizen of Uzbekistan and the former Uzbek executive, was charged in the same indictment with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), two counts of violating the FCPA, and one count of conspiracy to commit money laundering. Karimova’s and Akhmedov’s case is assigned to U.S. District Judge Kimba Wood of the Southern District of New York.
“Gulnara Karimova stands accused of exploiting her official position to solicit and accept more than $865 million in bribes from three publicly traded telecom companies, and then laundering those bribes through the U.S. financial system,” said Assistant Attorney General Benczkowski. “The indictment and corporate resolution announced today, together with two prior corporate resolutions involving bribes allegedly paid to Karimova, demonstrate the Department’s comprehensive approach to foreign corruption: we will aggressively pursue both corrupt foreign officials and the companies and individuals who bribe them in order to gain unfair business advantages, and we will do everything we can to keep the proceeds of that corruption out of the U.S. financial system.”
“This is the third installment in a trilogy of cases arising from an almost $1 billion bribery scheme that reached the highest echelons of the Uzbekistan government and was orchestrated by some of the largest telecommunications companies in the world,” said U.S. Attorney Berman. “By funneling multimillion-dollar bribe payments through the U.S. financial system, the companies and individual defendants corruptly tried to tip the global economy in their favor and line their own pockets. But they are now paying the price. Today, my Office and our law enforcement partners are sending a bold, unequivocal message that the U.S. financial system is not in business to enable foreign bribery or money laundering. This Office stands ready to prevent, prosecute, and penalize foreign corrupt practices wherever in the world we find them.”
“Corruption of this level and reach poisons our integrity as a participant in the global marketplace,” said HSI Washington Special Agent in Charge Villanueva. “Thanks to our skillful and collaborative investigators at HSI and the IRS-CI, Karimova and Ahkmedov’s exploitive crimes will be presented before the just eye of our courts and no longer will such corruption be permitted to metastasize across our borders.”
“With the increase in globalization and ease with which funds can be moved, criminals think their financial transactions cannot be tracked—but they would be wrong,” said IRS-CI Chief Fort. “We will continue to investigate violations of the Foreign Corrupt Practices Act to ensure our country’s financial institutions are not used for devious purposes. We are committed to aggressively pursuing all who engage in corruption, money laundering, and bribery for their own personal gain and at the expense of the U.S. government.”
According to the indictment against Karimova and Akhmedov, in or around the early 2000s, they agreed that Akhmedov would solicit and facilitate corrupt bribe payments from telecommunications companies seeking to enter the Uzbek market. In exchange, Karimova allegedly used her influence over Uzbek authorities to help the telecommunications companies obtain and retain lucrative business opportunities in the Uzbek telecommunications market. In total, Akhmedov conspired with the telecom companies and others to pay Karimova more than $865 million in bribes, and Akhmedov and Karimova conspired with others to launder and conceal those funds to, from and through bank accounts in the United States, in order to promote the ongoing bribery scheme, the indictment alleges.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
MTS entered into a deferred prosecution agreement with the Department of Justice in connection with a criminal information filed yesterday in the Southern District of New York charging the company with one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA and one count of violating the internal controls provisions of the FCPA. KOLORIT pleaded guilty to a one-count criminal information filed in the Southern District of New York, charging the company with conspiracy to violate the anti-bribery and books and records provisions of the FCPA. Pursuant to its agreement with the department, MTS agreed to pay a total criminal penalty of $850 million to the United States, including a $500,000 criminal fine and $40 million in criminal forfeiture that MTS agreed to pay on behalf of KOLORIT. MTS also agreed to the imposition of an independent compliance monitor for a term of three years and to implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals such as Akhmedov and Karimova. The case against MTS and KOLORIT is assigned to U.S. District Judge J. Paul Oetken of the Southern District of New York.
In related proceedings, MTS reached a settlement with the SEC. Under the terms of its agreement with the SEC, MTS agreed to pay a $100 million civil penalty. Consistent with Coordination of Corporate Resolution Penalties in Parallel and/or Joint Investigations and Proceedings Arising from the Same Misconduct (Justice Manual 1-12.100), the Department of Justice agreed to credit the civil penalty paid to the SEC as part of its agreement with MTS. Thus, the combined total amount of criminal and regulatory penalties paid by MTS and KOLORIT to U.S. authorities will be $850 million.
According to the companies’ admissions, MTS and KOLORIT, through various managers and employees within MTS, MTS’s Uzbek subsidiaries Uzdunrobita LLC and KOLORIT, and other affiliated entities, paid approximately $420 million in bribes to Karimova, who had influence over the Uzbek governmental body that regulated the telecom industry. The bribes were paid on multiple occasions between 2004 and 2012 so that MTS could enter the Uzbek market through the acquisition of Uzdunrobita and so that Uzdunrobita could gain valuable telecom assets and continue operating in Uzbekistan. The companies admittedly structured and concealed the bribes through payments to shell companies that members of MTS’s and Uzdunrobita’s management knew were beneficially owned by Karimova. MTS and Uzdunrobita also acquired KOLORIT, knowing that the price MTS and Uzdunrobita paid was inflated, in order to bribe Karimova in exchange for Uzdunrobita’s continuing to operate in Uzbekistan. Uzdunrobita made payments to purported charities and for sponsorships to entities related to Karimova. The Uzbek government expropriated Uzdunrobita in 2012 as a result of MTS’s, Uzdunrobita’s and KOLORIT’s failure to meet Karimova’s demands for additional payments.
A number of factors contributed to the Department’s criminal resolution with the companies, including (1) the companies did not voluntarily disclose; (2) the companies’ level of cooperation and remediation was lacking, not proactive; (3) the nature and seriousness of the office, including $420 million in bribes to a high-level Uzbek official; and (4) the mitigating factors present in this case, including that the Uzbek government expropriated the companies’ telecommunications assets in Uzbekistan, resulting in no realized pecuniary gain to the companies as a result of the misconduct.
The resolution, reached in coordination with the SEC’s resolution, marks the third such resolution by a major international telecommunications provider for bribery in Uzbekistan. On Feb. 18, 2016, Amsterdam-based VimpelCom and its Uzbek subsidiary, Unitel LLC, entered into resolutions with the Department of Justice and admitted to a conspiracy to make more than $114 million in bribery payments to Karimova between 2006 and 2012. On Sept. 21, 2017, Stockholm-based Telia and its Uzbek subsidiary, Coscom LLC, also entered into resolutions with the Department and admitted to a conspiracy to make more than $331 million in bribery payments to Karimova. The investigation has thus far yielded a combined total of over $2.6 billion in global fines and disgorgement, including over $1.3 billion in criminal penalties to the United States. In related actions, the Department has also filed civil complaints seeking the forfeiture of more than $850 million held in bank accounts in Switzerland, Belgium, Luxembourg and Ireland, which constitute bribe payments made by MTS, VimpelCom and Telia, or funds involved in the laundering of those corrupt payments to Karimova.
The IRS-CI and HSI are investigating the cases as part of the IRS Global Illicit Financial Team in Washington, D.C. Assistant Chief Ephraim Wernick and Senior Litigation Counsel Nicola J. Mrazek of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Edward Imperatore and Daniel Noble of the Southern District of New York are prosecuting the case against MTS and KOLORIT. Assistant Chief Wernick and Trial Attorney Elina Rubin-Smith of the Fraud Section and Assistant U.S. Attorneys Imperatore and Noble are prosecuting the case against Karimova and Akhmedov. Trial Attorney Michael Khoo of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) is prosecuting the forfeiture case with substantial assistance from former MLARS Trial Attorney Marie M. Dalton, now an Assistant U.S. Attorney in the Western District of Washington.
Law enforcement authorities in Austria, Belgium, Cyprus, France, Ireland, Isle of Man, Latvia, Luxembourg, Norway, the Netherlands, Switzerland, Sweden and the United Kingdom have provided valuable assistance in this case. The Criminal Division’s Office of International Affairs provided significant assistance as well. The SEC referred the matter to the Department and also provided extensive cooperation and assistance.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].
Middle District of Florida Takes Part in Largest-Ever Nationwide Elder Fraud SweepRead the Press Release
Tampa, FL – Attorney General William P. Barr and U.S. Attorney Maria Chapa Lopez today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly. Twenty individuals have been charged in the Middle District of Florida (see below for case summaries).
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America's seniors.”
“Elder fraud and exploitation can have an especially severe effect on victims,” stated U.S. Attorney Maria Chapa Lopez. “The U.S. Attorney’s Office will continue to work together with our law enforcement partners to pursue financial fraudsters who exploit our seniors for personal and financial gain and, we’ll continue our outreach efforts to educate our seniors on ways to avoid and report fraud scams.”
The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The cases in the Middle District of Florida are being handled by Assistant United States Attorneys Rachel Jones, Jennifer Peresie, Nathan Hill, and Karen Gable.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Middle District of Florida Case Summaries
Tampa
Brenda Dozier has pleaded guilty to a one-count information charging her with money laundering conspiracy relating to her participation in an IRS impersonation scam. From July 2015 through at least November 2015, Dozier laundered money that had been extorted from U.S. residents by conspirators residing in the United States and overseas. India-based conspirators impersonated IRS officers and misled multiple victims to believe that they owed money to the IRS and would be arrested and fined if they did not immediately pay their alleged back taxes. Dozier received the fraud proceeds, typically via interstate wire transfers, and, once she received the funds, she provided them, less a fee, to other conspirators based in the United States. Dozier’s sentencing hearing is scheduled for April 10, 2019. She faces a maximum penalty of 20 years' imprisonment.
As alleged in the eleven-count indictment, from at least 2016 through January 2019, Glenn Francis conspired with India-based call centers to extract money from U.S. residents through a variety of confidence scams, including 1) impersonating IRS officers and misleading U.S. residents to believe that they owed money to the IRS and would be arrested and fined if they did not pay their alleged back taxes immediately; 2) impersonating loan officers and misleading U.S. residents to believe they would receive loan proceeds upon paying an advance fee to the defendant or others he hired; or 3) impersonating computer technicians and misleading U.S. residents to believe that their computers had been hacked, their identities had been stolen, and/or their computers were infected with viruses and in need of repair, and that the callers would resolve the purported computer problems if paid to do so. Francis collected the Fraud proceeds in the United States and transferred them back to his India-based conspirators. Francis is set for trial in September 2019. He faces a maximum penalty of 20 years in federal prison on each count of wire and mail fraud conspiracy, wire fraud, and mail fraud. He faces up to 10 years in federal prison for each of the three money laundering charges.
Anthony Trujillo has pleaded guilty to a one-count information charging him with receipt of stolen property relating to his participation in an IRS impersonation scam. In February 2016, Trujillo received approximately $8,200 in his bank account that had been defrauded from two California residents as a result of a confidence scam. Trujillo knew the money had been stolen but instead of reporting it, Trujillo withdrew the fraud proceeds and spent them of over the course of a month. Trujillo’s sentencing hearing is set for March 22, 2019. He faces a maximum penalty of 10 years' imprisonment.
Alejandro Juarez has pleaded guilty to a one-count information charging him with money laundering conspiracy for his participation in an IRS impersonation scam. From July 2015 through at least September 2015, Juarez laundered money that had been extorted from U.S. residents by conspirators residing in the United States and overseas. India-based conspirators impersonated IRS officers and misled multiple victims to believe that they owed money to the IRS and would be arrested and fined if they did not immediately pay their alleged back taxes. Juarez received the fraud proceeds, typically via interstate wire transfers, and, once he received the funds, he provided them, less a fee, to other conspirators based in the United States. Juarez is scheduled to be sentenced on March 15, 2019. He faces a maximum penalty of 20 years' imprisonment.
Nishitkumar Patel, Hemalkumar Shah, and Sharvil Patel have each pleaded guilty to conspiracy to commit wire fraud relating to their participation in an IRS impersonation fraud scam. N. Patel and Shah have each also pleaded guilty to one count of aggravated identity theft. From 2014 through at least 2016, the defendants conspired with India-based call centers to extort money from U.S. residents by impersonating IRS officers and misleading U.S. residents to believe that they owed money to the IRS and would be arrested and fined if they did not pay their alleged back taxes immediately. They collected the fraud proceeds by (1) withdrawing cash from prepaid cards purchased and funded by victims; (2) hiring other conspirators (runners) to retrieve money wired by the victims to those runners; and/or (3) hiring runners to open bank accounts into which victims deposited fraud proceeds. On October 23, 2018, law enforcement officers executed a search warrant at the home of Nishitkumar Patel and Hemalkumar Patel. Among other items, they seized approximately $50,000 in cash, hundreds of bank and wire receipts, and 20 electronic devices. Nishitkumar Patel is scheduled to be sentenced on March 28, 2019, the sentencing hearing for Hemalkumar Shah is set for April 18, 2019, and Sharvil Patel’s sentencing hearing is set for May 9, 2019. The defendants each face a maximum penalty of 20 years' imprisonment for the wire fraud conspiracy. N. Patel and Shah also face a minimum mandatory penalty of two years' imprisonment for aggravated identity theft to run consecutive to the term imposed for the fraud count.
Gary Kinard, Martin Steele, Mark Boring, Troy Cater and David Bell have each pleaded guilty for their roles in a timeshare fraud scam. The defendants conspired to take money from victims throughout the United States who wanted to sell their timeshare properties. They placed telephone calls to these victims, impersonated real estate professionals and attorneys, and misled the timeshare owners to believe the conspirators had identified buyers for the victims’ timeshares. They told the victims that the sales could be consummated 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. The conspirators often repeatedly re-contacted the 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 advance fees until the victims either ran out of money or became aware of the scam.
After the victims had depleted their assets or recognized that they had been defrauded, the conspirators evolved the scheme by re-contacting their victims via email or phone and, now posing as helpful attorneys, told the victims that they had been defrauded in a timeshare scam. They then offered to “represent” the victims against the “first attorneys,” and to obtain settlements on their behalves. Once they had regained the trust of the timeshare victims, they directed the victims to forward additional bogus fees purportedly associated with the cost of litigation, settlement expenses, and other related expenses. Some victims paid the conspirators hundreds of thousands of dollars for the purported “litigation.” Over the course of the conspiracy, many victims lost their retirement savings and their homes.
Gary Kinard, Martin Steele, and Mark Boring have each pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft relating to their participation in a timeshare fraud scam. On February 27, 2019, Kinard was sentenced to 7 years and 11 months in federal prison. Steele and Boring have not yet been sentenced. Each faces a maximum penalty of 20 years in federal prison for the wire fraud conspiracy and a minimum mandatory consecutive term of 2 years’ imprisonment for the aggravated identity theft count. Troy Cater and David Bell each pleaded guilty to one count of money laundering conspiracy. They each face a maximum penalty of 20 years in federal prison. A sentencing date has not yet been scheduled.
Orlando
Between February 2012 and October 2014, six individuals defrauded mostly elderly victims out of more than $3.6 million based on false promises that they had won a multi-million dollar sweepstakes prize. These individuals then used stolen identity information to transfer the fraud proceeds to prepaid debit cards and ultimately transmitted the proceeds to their co-conspirators in Jamaica. In November 2018, a federal jury convicted two of the defendants, Nadine Alexander and Shameer Hassan, of conspiracy to commit wire fraud, conspiracy to commit money laundering, and three counts of aggravated identity theft. The jury also found Hassan guilty of eight counts of money laundering. Alexander and Hassan each face a maximum penalty of 20 years in prison on each of the conspiracy charges, and a mandatory minimum of two years’ imprisonment for the aggravated identity theft charges. Hassan also faces up to 20 years’ imprisonment on each of the money laundering charges. Their sentencing hearings are scheduled for March 25, 2019.
Four of the defendants pleaded guilty and have been sentenced. Robert Madurie was sentenced to eight years’ imprisonment, Danny Lopez was sentenced to seven years and eight months in federal prison, Treysier Mikael LaPalme was sentenced to 7 years and 3 months' imprisonment, and Oral Stewart was sentenced to prison term of five years. In a related case, Charlton Morris, a money launderer for the Jamaican lottery scheme, pleaded guilty to conspiracy to commit money laundering. He was sentenced to 10 years and 1 month of imprisonment.
Rohan Brown has pleaded guilty to one count wire fraud, one count mail fraud, and one count of aggravated identity theft for his participation in two conspiracies targeting elderly victims. In one conspiracy, victims in the United States received a phone call from a conspirator in Jamaica who told them they had won a sweepstakes. The victims were told that before they could receive their winnings, they had to send money for “taxes” to Brown in Orlando. The second scheme involved using the stolen personal identification information of Social Security beneficiaries to redirect Social Security benefits into a bank account controlled by Brown. Between both schemes, Brown and his conspirators stole more than $170,000 from more than two dozen elderly victims across the United States. Brown faces a maximum penalty of 20 years in federal prison for each fraud count and a mandatory consecutive of penalty 2 years’ imprisonment for the aggravated identity theft count.
Michigan man admits to role in a drug distribution operation in Monongalia CountyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Daron Buford, of Detroit, Michigan, has admitted to his involvement in a heroin, oxycodone, and cocaine distribution operation, United States Attorney Bill Powell announced.
Buford, age 27, pled guilty to one count of “Aiding and Abetting Distribution of Heroin.” Buford admitted to selling heroin in July 2017 in Monongalia County.Buford 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 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.
Miami CPA Sentenced to Prison for Tax EvasionRead the Press Release
A Miami, Florida, certified public accountant (CPA) was sentenced today to 39 months in prison for tax evasion, announced U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI).
U.S. Attorney Fajardo Orshan stated, “Rather than uphold the ethical obligations and professional code of conduct of a dutiful tax professional, Darryl Sharpton defrauded the federal government to avoid paying his own taxes, as well as taxes withheld from his employees’ pay. As millions of hard-working taxpayers prepare and file their tax returns this season, today’s prison sentence should serve as a reminder of the stiff penalties that will be imposed on those who undermine the integrity of the U.S. tax system.”
“Tax professionals, such as Darryl Sharpton, who use their expertise to commit tax fraud and enrich themselves rather than to assist honest taxpayers will be fully prosecuted by the Department of Justice and held accountable for their criminal conduct,” stated Principal Deputy Assistant Attorney General Zuckerman. “Employment tax fraud is a violation of the trust of employees and all honest taxpayers.”
“For years, Darryl Sharpton, a CPA with three decades of public accounting and consulting experience, cheated the government and egregiously evaded the payment of substantial amounts of income taxes,” stated Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentencing is an important victory for American taxpayers who play by the rules and have no tolerance for those who fail to pay their fair share. IRS-CI will continue to investigate and recommend prosecution for individuals such as Mr. Sharpton who ignore the law and shun their tax responsibilities.”
In December 2018, Darryl Sharpton, a CPA living in Miami, Florida, pleaded guilty to willfully evading the payment of federal income taxes for tax years 2004 through 2008, and 2010. Sharpton was an owner of The Sharpton Group, formerly known as Sharpton, Brunson and Company. The Sharpton Group specialized in financial and management consulting, audit and attestation, and tax and wealth planning. Sharpton filed personal income tax returns for years 2004 through 2008 and 2010, but willfully evaded payment of the taxes he owed for those years. To facilitate his fraud, Sharpton caused The Sharpton Group to pay his personal expenses through its corporate bank accounts, and then falsely stated to an IRS Revenue Officer that he did not pay his personal expenses from the corporate bank accounts.
The indictment also alleged that, after the IRS issued levies and liens against Sharpton to collect his unpaid tax liabilities, Sharpton took affirmative steps to evade the IRS’s collection efforts, including removing himself from The Sharpton Group’s payroll after the IRS issued a levy against his wages in 2007. Sharpton also admitted to not filing personal income tax returns for the years 2009 and 2011 through 2016.
Sharpton also failed to pay over to the IRS payroll taxes for The Sharpton Group for the quarters ending Dec. 31, 2012 through Dec. 31, 2013 and Dec. 31, 2014 through Dec 31, 2017.
In addition to the term of imprisonment imposed, U.S. District Court Judge Cecilia M. Altonaga ordered Sharpton to serve three years of supervised release and to pay $1,380,602 in restitution to the Internal Revenue Service.
U.S. Attorney Fajardo Orshan and Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS Criminal Investigation, who investigated the case, and Assistant U.S. Attorney for the Southern District of Florida Christopher J. Clark and Trial Attorneys Mara Strier and Sean Beaty of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Miami CPA Sentenced to Prison for Tax EvasionRead the Press Release
A Miami, Florida, certified public accountant (CPA) was sentenced today to 39 months in prison for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, and Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI).
“Tax professionals, such as Darryl Sharpton, who use their expertise to commit tax fraud and enrich themselves rather than to assist honest taxpayers will be fully prosecuted by the Department of Justice and held accountable for their criminal conduct,” stated Principal Deputy Assistant Attorney General Zuckerman. “Employment tax fraud is a violation of the trust of employees and all honest taxpayers.”
U.S. Attorney Fajardo Orshan stated, “Rather than uphold the ethical obligations and professional code of conduct of a dutiful tax professional, Darryl Sharpton defrauded the federal government to avoid paying his own taxes, as well as taxes withheld from his employees’ pay. As millions of hard-working taxpayers prepare and file their tax returns this season, today’s prison sentence should serve as a reminder of the stiff penalties that will be imposed on those who undermine the integrity of the U.S. tax system.”
“For years, Darryl Sharpton, a CPA with three decades of public accounting and consulting experience, cheated the government and egregiously evaded the payment of substantial amounts of income taxes,” stated Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentencing is an important victory for American taxpayers who play by the rules and have no tolerance for those who fail to pay their fair share. IRS-CI will continue to investigate and recommend prosecution for individuals such as Mr. Sharpton who ignore the law and shun their tax responsibilities.”
In December 2018, Darryl Sharpton, a CPA living in Miami, Florida, pleaded guilty to willfully evading the payment of federal income taxes for tax years 2004 through 2008, and 2010. Sharpton was an owner of The Sharpton Group, formerly known as Sharpton, Brunson and Company. The Sharpton Group specialized in financial and management consulting, audit and attestation, and tax and wealth planning. Sharpton filed personal income tax returns for years 2004 through 2008 and 2010, but willfully evaded payment of the taxes he owed for those years. To facilitate his fraud, Sharpton caused The Sharpton Group to pay his personal expenses through its corporate bank accounts, and then falsely stated to an IRS Revenue Officer that he did not pay his personal expenses from the corporate bank accounts.
The indictment also alleged that, after the IRS issued levies and liens against Sharpton to collect his unpaid tax liabilities, Sharpton took affirmative steps to evade the IRS’s collection efforts, including removing himself from The Sharpton Group’s payroll after the IRS issued a levy against his wages in 2007. Sharpton also admitted to not filing personal income tax returns for the years 2009 and 2011 through 2016.
Sharpton also failed to pay over to the IRS payroll taxes for The Sharpton Group for the quarters ending Dec. 31, 2012 through Dec. 31, 2013 and Dec. 31, 2014 through Dec 31, 2017.
In addition to the term of imprisonment imposed, U.S. District Court Judge Cecilia M. Altonaga ordered Sharpton to serve three years of supervised release and to pay $1,380,602 in restitution to the Internal Revenue Service.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Fajardo Orshan commended special agents of IRS Criminal Investigation, who investigated the case and Assistant U.S. Attorney for the Southern District of Florida Christopher J. Clark and Trial Attorneys Mara Strier and Sean Beaty of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Mexican National Sentenced for Immigration CrimeRead the Press Release
Defendant had three prior deportations to Mexico
CHARLESTON, W.Va. – A Mexican national man was sentenced to seven months incarceration for the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Gilberto Espino-Velasquez, 41, has been in custody since November 8, 2018. Espino-Velasquez will be remanded to ICE custody to institute deportation proceedings at the conclusion of his sentence. Stuart commended the investigative efforts of the U.S. Immigration and Customs Enforcement (ICE).
“They just keep coming,” said United States Attorney Mike Stuart. “Espino-Velasquez had three prior deportations. I applaud ICE for their tireless work in enforcing our immigration laws.”
On November 8, 2018, Espino-Velasquez was found in Nitro, Kanawha County, West Virginia by members of ICE after receiving a tip that individuals were in the country illegally and working on a construction crew in the area. Pursuant to this investigation, ICE agents approached Espino-Velasquez and he surrendered to them. Agents immediately confirmed that Espino-Velasquez was not in the United States legally, and took him into federal custody.
Espino-Velasquez fingerprints matched him to three prior encounters in 2003 where he was found in the United States illegally and deported from the United States to Mexico. He was also previously convicted of illegally entering the United States in September 8, 2003 in the Western District of Texas. Espino-Velasquez again illegally reentered the United States prior to his capture in 2018. Espino-Velasquez had not obtained permission to legally enter the United States and had not sought legal status or citizenship. Espino-Velasquez also admitted to ICE agents that he was a Mexican citizen.
Assistant United States Attorney Erik S. Goes is responsible for the prosecution. United States District Judge John T. Copenhaver Jr. presided over the hearing.
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Meadowlands Man Sentenced to 15 Months in Prison for Stealing Social Security BenefitsRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of STEVEN PHILLIP SVOBODA, 37, to 15 months in prison for stealing more than $100,000 in Social Security benefits. SVOBODA, who pleaded guilty to one count of theft of government funds on November 6, 2018, was sentenced by Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from July 2010 through August 2017, SVOBODA applied for and received survivor benefits as the representative payee on behalf of his two minor children. In his application and in subsequent annual paperwork submitted to the Social Security Administration (“SSA”), SVOBODA repeatedly lied by saying the two minor children lived with him, that he was the sole provider of financial support and care, and that the survivor benefit funds were being used to pay for the children’s care. In reality, the minor children resided with their grandparents and SVOBODA spent the survivor benefit funds on himself. In total, SVOBODA stole approximately $113,804.00 from the SSA.
This case was the result of an investigation by the Social Security Administration-Office of the Inspector General. Special Assistant U.S. Attorney Lindsey E. Middlecamp prosecuted the case.
Defendant Information:
STEVEN PHILLIP SVOBODA, 37
Meadowlands, Minn.
Convicted:
- Theft of government funds, 1 count
Sentenced:
- 15 months in prison
- Three years of supervised release
- $113,804.00 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
McAllen Woman Pleads Guilty to Multi-Million Dollar Kickback ConspiracyRead the Press Release
McALLEN, Texas – A local pharmacy marketer entered a guilty plea in connection with her role in a multi-million dollar illegal kickback conspiracy involving a pharmacy in the Rio Grande Valley and doctors throughout Texas, announced U.S. Attorney Ryan K. Patrick.
Victoria Renee Guerra, 35, a licensed pharmacist of McAllen, entered her guilty plea before U.S. District Judge Micaela Alvarez this morning.
At the hearing, Guerra admitted that as part of her role as a purported marketer, she recruited physicians to write prescriptions for expensive compound drugs to be filled by Pharmacy A and for which the pharmacy would bill federal health care programs.
During an approximately two-year period starting in late 2014, the owner of Pharmacy A paid Guerra approximately $7.5 million in return for compound drug prescriptions written by physicians Guerra recruited. In turn, Guerra paid a cut of the payments from Pharmacy A to the prescribing physicians. For example, Guerra admitted she paid approximately $2.1 million in kickbacks to one of the physicians sending prescriptions to Pharmacy A, identified in the Criminal Information as “Doctor 1.”
During the conspiracy, pharmacy A submitted claims totaling approximately $42.2 million to the U.S. Department of Labor, Office of Workers Compensation Program, for prescriptions that doctor 1 wrote for beneficiaries of the Federal Employee’s Compensation Act.
Guerra pleaded guilty to conspiracy to violate the federal anti-kickback statute, which prohibits the payment of kickbacks to induce physicians to write prescriptions for which payment may be made in whole or in part under a federal health care benefit program. At sentencing, which is scheduled for May 29, 2019, Guerra faces up to five years in federal prison and a possible $25,000 maximum fine.
She was permitted to remain on bond pending that hearing.
The U.S. Postal Service – Office of Inspector General (OIG), Department of Labor – OIG, FBI, Veterans Affairs – OIG, Defense Criminal Investigative Service and the Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Andrew Swartz is prosecuting the case.
Marion County man sentenced for drug chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – Fredrick L. Chapman, of Fairmont, West Virginia, was sentenced today to 87 months incarceration for drug charges, United States Attorney Bill Powell announced.
Chapman, also known as “Fred L. Chapman” and “Freddie,” age 62, pled guilty to one count of “Conspiracy to Distribute Methamphetamine,” one count of “Possession With the Intent to Distribute Methamphetamine,” one count of “Possession With the Intent to Distribute Opium,” one count of “Possession With the Intent to Distribute Marijuana,” and one count of “Conspiracy to Possess with the Intent to Distribute and Distribute Cocaine Hydrochloride and Heroin” in November 2018. Chapman committed the crimes in Marion County from October 2017 to May of 2018.
The United States is also seeking forfeiture of $37,829 as proceeds derived directly or indirectly from the alleged crime.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Three Rivers Drug & Violent Crimes Task Force investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Marion County man sentenced for drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – James Copen, of Fairmont, West Virginia, was sentenced to 188 months incarceration for methamphetamine distribution yesterday, United States Attorney Bill Powell announced.
Copen, age 42, pled guilty to one count of “Conspiracy to Distribute Methamphetamine” and three counts of “Distribution of Methamphetamine in Proximity of a Protected Location” in October 2018. Cope admitted to distributing methamphetamine in Marion County in October of 2017, March of 2018, and April of 2018.
The United States is also seeking forfeiture of $37,829 as proceeds derived directly or indirectly from the alleged crime.
Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The Three Rivers Drug & Violent Crimes Task Force investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Manhattan U.S. Attorney Files Fraud Suit Against Three Painting Contractors for Lying About Disadvantaged Business Participation on Federal ProjectsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Douglas Shoemaker, regional Special Agent-in-Charge of the United States Department of Transportation Office of Inspector General (“USDOT-OIG”), Margaret Garnett, the Commissioner of the New York City Department of Investigation (“DOI”), and Barry L. Kluger, Inspector General of the Metropolitan Transportation Authority (“MTA-OIG”), announced that the United States filed a civil fraud lawsuit against three New York-area painting contractors, AHERN PAINTING CONTRACTORS CO. (“AHERN”), SPECTRUM PAINTING CORP. (“SPECTRUM”), and TOWER MAINTENANCE CORP. (“TOWER”). The lawsuit alleges that these companies fraudulently obtained payments on two federally funded projects in New York City by lying about compliance with Disadvantaged Business Enterprise (“DBE”) rules, which require participation of businesses owned by women or minorities. Specifically, as alleged in the complaint, the defendants made it appear that TOWER, a certified disadvantaged business enterprise, was executing millions of dollars of steel painting work at the Brooklyn Bridge and the Queens Plaza transit line when in fact much of the work was performed by SPECTRUM, a non-DBE. In return for being included in the projects, SPECTRUM paid kickbacks to AHERN in the form of a $10,000 “commission payment” and a free trip to Atlantic City. By repeatedly submitting false statements to the New York City Department of Transportation (“NYC-DOT”) mischaracterizing Tower’s work at these projects, the defendants received millions of dollars in federal funds to which they were not entitled.
Manhattan U.S. Attorney Geoffrey Berman said: “Disadvantaged Business Enterprise regulations serve the important purpose of increasing legitimate participation by businesses owned by women and minorities that have been historically disadvantaged in federal contracting. We will not tolerate fraudulent schemes that exploit the DBE program and undermine its purpose. Contractors who lie about who is actually doing the work will be held to account.”
USDOT-OIG regional Special Agent-in-Charge Douglas Shoemaker said: “Disadvantaged Business Enterprise (DBE) fraud harms law-abiding contractors by disrupting the level playing field in which legitimate disadvantaged businesses seek to fairly compete for contracts. We remain steadfast in our commitment to preserve the integrity of the Department’s DBE program. Working with our law enforcement and prosecutorial partners, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from DBE fraud schemes that undermine DOT-funded programs and projects and the public trust.”
DOI Commissioner Margaret Garnett said: “These defendants used trickery, false documents, and a kickback scheme to game the Disadvantaged Business Enterprise program – stealing millions of dollars in federal funds. DOI was proud to assist in this investigation with our federal and state partners to ensure guidelines that empower legitimate Disadvantaged Business Enterprises are obeyed and businesses who attempt to take advantage of these programs are made to pay for their actions. DOI remains committed to the shared City and federal mission of protecting programs that safeguard inclusive hiring practices on public construction projects.”
MTA Inspector General Barry L. Kluger said: “Today’s filing of a civil complaint alleging Disadvantaged Business Enterprise fraud clearly reflects the firm commitment of our prosecutorial and investigative partners to utilize all avenues to ensure compliance with DBE requirements. I wish to thank the U.S. Attorney for devoting substantial resources and efforts to create and maintain a level playing field on which all qualified DBEs have a fair and equal opportunity to bid for and participate in construction projects.”
In 1980, the United States Department of Transportation (“USDOT”) issued regulations in connection with a program to increase the participation of minority and disadvantaged business enterprises in federally funded public construction contracts. To become certified as a DBE, a company must, among other things, be owned and controlled by socially and economically disadvantaged individuals, be an independent business whose viability does not depend on its relationship with other firms, employ its own work force and own equipment necessary to perform its work, and be able to meet its financial obligations.
Recipients of USDOT construction grants, such as the New York City Department of Transportation (“NYC-DOT”) and the MTA, are required to establish a DBE program that sets goals for the percentage of a project’s work that should be awarded to DBEs (“DBE goals”). NYC-DOT and MTA both have established DBE programs aimed at increasing the participation of minority- and women-owned businesses. Pursuant to the DBE programs, general contractors on federally funded public construction projects must make good faith efforts to encourage participation of DBEs in public works contracts.
General contractors can count funds paid to DBEs toward the attainment of the DBE goals only if the DBEs performed a “commercially useful function.” A DBE subcontractor performs a commercially useful function only when it is responsible for the execution of the work of the contract; actually performs, manages, and supervises the work involved; and furnishes the supervision, equipment, and labor necessary to perform its work.
As set forth in the complaint, AHERN, a steel painting company, was a contractor on the Brooklyn Bridge and Queens Plaza projects. Contracts for both projects required AHERN to hire DBEs to do a percentage of the work involved and adhere to the DBE regulations. Instead of making good faith efforts to hire qualified DBEs to do this work, AHERN agreed with SPECTRUM and TOWER to use TOWER’s status as a DBE to take credit for millions of dollars of DBE work. But TOWER did not perform a “commercially useful function” on the projects, as required under the DBE regulations. Rather, it was SPECTRUM, a non-DBE, that did much of the work, including directing, managing, and supervising the DBE work on the projects.
Defendants concealed their violations of the DBE regulations by, among other things, repeatedly having SPECTRUM employees pretend to be TOWER employees, wearing Tower vests, carrying Tower identification, and telling others on the worksites that they were Tower employees. In addition, AHERN and TOWER repeatedly submitted false statements and records to NYC-DOT and MTA misrepresenting that TOWER alone did all of the DBE work allocated to it and that TOWER did not hire a subcontractor to perform any of that work. SPECTRUM also paid kickbacks to AHERN in the form of a $10,000 “commission payment” and a free trip to Atlantic City. As a result of the false statements and records, the defendants obtained millions of dollars of federal money to which they were not entitled.
Mr. Berman praised the outstanding investigative work of the USDOT-OIG, DOI, and MTA-OIG.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Mónica Folch and Li Yu are in charge of this case.
Manhattan U.S. Attorney Announces Charges Against Former NYC Department of Homeless Services Police Sergeant for Violating the Constitutional Rights of NYC ResidentRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Margaret Garnett, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of a criminal complaint charging CORDELL FITTS, a former New York City Department of Homeless Services (“DHS”) police sergeant, in the assault of an individual at a homeless shelter. FITTS was charged with using excessive force against an individual seeking services (“Victim-1”) at the Bellevue Men’s Homeless Shelter in Manhattan (the “Bellevue Shelter”), in violation of Victim-1’s rights under the United States Constitution, and for filing a false report in order to cover up the assault. During an altercation with Victim-1, FITTS used excessive and unnecessary force, including by kicking, punching, and stomping on the head of Victim-1 more than 10 times. FITTS was arrested today and is expected to be presented before the U.S. Magistrate Judge Debra Freeman in federal court later today.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Cordell Fitts, a former sergeant in the New York City Department of Homeless Services Police Department, used excessive force against an individual seeking services at a city facility. Fitts’s alleged conduct not only betrayed his duty as an officer to protect those under his charge, but also violated the law. When the constitutional rights of individuals experiencing homelessness are violated, particularly by law enforcement officers, we will act aggressively to bring wrongdoers to justice.”
DOI Commissioner Margaret Garnett said: “Instead of upholding the law, this sworn officer allegedly broke it by violently attacking a man seeking assistance at a Manhattan homeless shelter, according to the charges. Shelters should provide a safe environment for the homeless of our City, not one where clients fear the officers employed to protect them. DOI thanks the Office of the U.S. Attorney for the Southern District of New York for its partnership on this investigation and prosecution.”
According to the Complaint[1] unsealed today in Manhattan federal court:
The Bellevue Shelter is a men’s homeless shelter located in Manhattan, New York. It is maintained by DHS and its security is provided for by, among others, DHS police officers. On the night of March 6, 2017, Victim-1 was seeking services at the Bellevue Shelter.
At the time of the incident Victim-1 was in the lobby of the Bellevue Shelter and interacting with approximately three DHS officers, including FITTS. In the initial moments of the interaction, FITTS and Victim-1 exchanged words for approximately five to ten seconds, and FITTS gestured toward an exit area of the Bellevue Shelter. FITTS then reached toward Victim-1, putting his hands on or about the chest area of Victim-1, and Victim-1 responded by swinging at FITTS with what appear to be closed fists.
For approximately 30 seconds, FITTS and other officers struggled with Victim-1 in a physical altercation, which resulted in Victim-1 being taken to the floor of the lobby. When Victim-1 was taken to the ground, two officers were on the legs and back of Victim-1, and FITTS was standing next to Victim-1. At this point, with Victim-1 on the ground and two other officers on top of Victim-1, FITTS punched Victim-1 in the area of his head approximately two times. Subsequently, while Victim-1 remained on the ground, FITTS kicked and stomped on the head of Victim-1 approximately 11 times.
After kicking and stomping on Victim-1’s head, FITTS backed away from Victim-1 for approximately 10 seconds, as two other officers were attempting to place handcuffs on Victim-1 while he was face-down on the floor. Following that brief period of disengagement, FITTS walked back to Victim-1 and punched him in the area of his head approximately two additional times.
In connection with this incident, FITTS dictated a report about the incident that stated, among other things, that “necessary force” was used to “safely detain” Victim-1. The Report also stated: “After initial medical assessment [Victim-1] stated ‘I am off my psych medication and going through a lot.’” These statements were false and were included in the report by FITTS in order to cover up and justify the assault.
* * *
CORDELL FITTS, 34, of Manhattan, New York, is charged with one count of deprivation of rights under color of law through use of excessive force, which carries a maximum penalty of 10 years in prison, and one count of falsifying a report, which carries a maximum penalty of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Berman praised the investigative work of the Special Agents at the United States Attorney’s Office and thanked the New York City Department of Investigations for its assistance.
This case is being handled by the Office’s Civil Rights and Public Corruption Units. Assistant U.S. Attorneys Alex Rossmiller and Jennifer Jude are in charge of the prosecution.
The charges and allegations 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 herein constitute only allegations, and every fact described should be treated as an allegation.
Man indicted for trafficking cocaine and methamphetamine from house in ToledoRead the Press Release
A Toledo man was indicted for trafficking large amounts of cocaine and methamphetamine.
Rudy Torres, 40, was indicted on one count of conspiracy to possess with the intent to distribute controlled substances and one count of maintaining drug-involved premises.
Torres conspired with others to distribute at least five kilograms of cocaine and 500 grams of methamphetamine. He also used a residence on Upton Avenue in Toledo as part of his drug trafficking, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Man Sentenced to Prison for Casino Robbery in PaysonRead the Press Release
PHOENIX – This week, Armando Pablo Ochoa, 32, of Payson, Ariz., was sentenced by U.S. District Judge Susan M. Brnovich to ten years in prison followed by three years of supervised release. Ochoa had previously pleaded guilty to use of a firearm in relation to a crime of violence.
Ochoa admitted to using a weapon, along with co-defendant, Ryan Pearson, to rob $652,000 in cash from the Mazatal Casino on the Tonto Apache Indian Reservation. Ochoa and Pearson entered the casino armed with handguns and demanded that employees open a vault. When they did not receive immediate compliance, Ochoa and Pearson each fired a round from their weapons. Both Ochoa and Pearson were employees of the casino at the time. Pearson pleaded guilty to possession of a firearm in relation to a crime of violence and is scheduled for sentencing on April 15, 2019.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Anthony W. Church, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-18-01169-PCT-SMB
RELEASE NUMBER: 2019-028_ Ochoa
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
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Madison Man Sentenced to 17 1/2 Years for Belleville Bank RobberyRead the Press Release
Suntez Pasley, 46, of Madison, Illinois, has been sentenced to 210 months in prison for robbing the Regions Bank on West Main Street in Belleville, the United States Attorney for the Southern District of Illinois, Steven D. Weinhoeft, announced today. Pasley pleaded guilty to the robbery back in November 2018.
Evidence presented in court showed that on July 22, 2017, Pasley entered the bank and handed the teller a note which read: "I HAVE A GUN PUT MONEY IN BAG." Pasley also threatened the teller, telling her he would "blow her head off." He made off with $2,450 before fleeing the scene. Pasley was apprehended two weeks later based in part on an anonymous tip.
In handing down the above-guidelines sentence, Chief United States District Judge Michael J. Reagan took into consideration Pasley’s criminal history, specifically his "history of violence," calling it "horrendous." Pasley has 14 prior felony convictions for crimes including robbery, aggravated robbery, domestic battery, violating an order of protection, and unlawful possession of a firearm by a convicted felon. He was on supervised release for a prior aggravated robbery when he committed the instant offense.
As part of his sentence, Pasley was ordered to make full restitution to the bank.
The case was investigated by the Belleville Police Department and the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Laura Reppert.
Long Island Woman Arrested for Stealing More Than $10 Million in Fraudulent Real Estate Investment SchemeRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Grace Kay with wire fraud related to a long-running scheme to solicit funds from real estate investors. Kay was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge James Orenstein.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
According to the indictment, between January 1, 2010 and April 15, 2018, Kay and co-conspirators falsely represented to investors that she had inherited real estate in Japan, including three skyscraper buildings, and required funds to pay various fees and taxes in order to sell the properties and return a large profit to the investors. Relying on Kay’s false representations, investors provided Kay with more than $10 million, which she stole for her personal use.
“As alleged in the indictment, Kay devised a real estate scheme built on tall tales to fleece investors out of millions of dollars,” stated United States Attorney Donoghue. “With today’s arrest, this Office begins the process of bringing justice to the victims.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of wire fraud, Kay faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Matthew S. Amatruda is in charge of the prosecution.
The Defendant:
GRACE KAY
Age: 74
Manhasset, New YorkE.D.N.Y. Docket No. 19-CR-113 (DLI)
Littleton Man Pleads Guilty to Participating in Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD – United States Attorney Scott W. Murray announced that Keith Baker, 24, of Littleton, New Hampshire, pleaded guilty to participating in a conspiracy to distribute fentanyl.
According to court documents and statements made in court, during an ongoing drug trafficking investigation that included wiretaps of certain telephones, investigators learned that on April 8, 2018, Baker intended to travel from New Hampshire to a location in Massachusetts to purchase fentanyl. The Woodstock, New Hampshire, Police Department later seized approximately 41.3 grams of fentanyl from a vehicle in which the defendant was a passenger. The investigation revealed that from February 23, 2018, and continuing through April 8, 2018, Baker ordered fentanyl from drug distributors in Massachusetts on various occasions. He then redistributed that fentanyl to customers in New Hampshire.
Baker is scheduled to be sentenced on June 13, 2019.
“Fentanyl trafficking has inflicted damage throughout New Hampshire. Dealers who transport this deadly substance into the state should be aware that they will be detected, arrested and prosecuted,” said U.S. Attorney Murray. “We will continue to work closely with all of our law enforcement partners to stop the flow of illegal drugs.”
The case was a collaborative investigation that involved the Drug Enforcement Administration; the New Hampshire State Police; the Hillsborough County Sheriff’s Office; the Nashua Police Department; the Massachusetts State Police; the Massachusetts Attorney General’s Office; the New Hampshire Attorney General’s Office; the Essex County District Attorney’s Office; the Internal Revenue Service; Immigration and Customs Enforcement’s Homeland Security Investigations; United States Customs and Border Protection Boston Field Office; the United States Marshals Service; the United States Department of State’s Diplomatic Security Service; the Manchester Police Department; the Lisbon Police Department; the Littleton Police Department; the Seabrook Police Department; the Haverhill (MA) Police Department; the Methuen (MA) Police Department; the Lowell (MA) Police Department; and the Maine State Police.
The case is being prosecuted by Assistant United States Attorneys Georgiana L. Konesky, Seth R. Aframe and Debra M. Walsh.
This investigation was conducted by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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