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31 January 2019
North Carolina Mechanic Sentenced to 36 Months for Embezzling Approximately $1.4 Million from his Employer and Filing a False Tax ReturnRead the Press Release
A North Carolina mechanic was sentenced to prison today for wire fraud and filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
Albert Strong, 59, a resident of Union, South Carolina, was sentenced to 36 months in prison by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina. On April 12, 2018, Strong pleaded guilty to one count of wire fraud and one count of filing a false tax return for tax year 2013.
According to the documents filed with the court, Strong worked as a machinist/mechanic for a company at its Charlotte, North Carolina location. From 2008 to 2015, Strong embezzled funds from the company using a fraudulent purchasing and billing scheme. Strong created a purported parts vendor, and then caused the company to order fictitious parts from the vendor. As part of the scheme, Strong created false invoices and submitted them to the company for payment. In all, Strong embezzled approximately $1,488,000 from the victim company. Strong also failed to report the embezzled funds on his 2009 through 2015 tax returns, resulting in an approximate $450,000 tax loss.
In addition to the term of imprisonment imposed, Strong was order to serve two of supervised release and to pay restitution in the amount of $1,941,377.32.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, U.S. Postal Inspection Service, and U.S. Secret Service, who conducted the investigation, and Assistant U.S. Attorney Taylor Phillips and Trial Attorney Mara Strier of the Tax Division, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Mechanic Sentenced to 36 Months for Embezzling Approximately $1.4 Million from His Employer and Filing A False Tax ReturnRead the Press Release
CHARLOTTE, N.C. - A North Carolina mechanic was sentenced to prison today for wire fraud and filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
Albert Strong, 59, a resident of Union, South Carolina, was sentenced to 36 months in prison by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina. On April 12, 2018, Strong pleaded guilty to one count of wire fraud and one count of filing a false tax return for tax year 2013.
According to the documents filed with the court, Strong worked as a machinist/mechanic for a company at its Charlotte, North Carolina location. From 2008 to 2015, Strong embezzled funds from the company using a fraudulent purchasing and billing scheme. Strong created a purported parts vendor, and then caused the company to order fictitious parts from the vendor. As part of the scheme, Strong created false invoices and submitted them to the company for payment. In all, Strong embezzled approximately $1,488,000 from the victim company. Strong also failed to report the embezzled funds on his 2009 through 2015 tax returns, resulting in an approximate $450,000 tax loss.
In addition to the term of imprisonment imposed, Strong was order to serve two of supervised release and to pay restitution in the amount of $1,941,377.32.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, U.S. Postal Inspection Service, and U.S. Secret Service, who conducted the investigation, and Assistant U.S. Attorney Taylor Phillips and Trial Attorney Mara Strier of the Tax Division, who prosecuted this case.
North Carolina Man Sentenced for Stock Manipulation SchemeRead the Press Release
BOSTON – A North Carolina man was sentenced yesterday in federal court in Boston for his role in a market manipulation scheme which was actually part of an undercover operation.
David Aubel, 60, of Matthews, N.C., was sentenced by U.S. District Court Chief Judge Patti B. Saris to 87 months in prison, five years of supervised release and ordered to pay restitution in the amount of $242,553. In November 2017, Aubel pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and three counts of wire fraud.
In 2016, Aubel and co-conspirator Robert Raffa, of Penacook, N.H., were arrested and charged in a criminal complaint in connection with their involvement in a scheme to manipulate the market for the publicly traded securities of Green Energy Renewable Solutions, Inc., a penny stock company that claimed to be in the business of developing and operating waste processing and recycling facilities near Detroit, MI. Raffa previously pleaded guilty and was sentenced in January 2018 to two years in prison and two years of supervised release.
In early 2012, Raffa and Aubel used four foreign entities to covertly acquire nearly all of Green Energy’s unrestricted stock without reporting their controlling interest as required by law. They then hired a promoter to send blast e-mails touting Green Energy to potential investors, all while selling shares without disclosing that they had orchestrated the campaign encouraging investors to buy.
The initial promotion enabled Raffa and Aubel to sell more than 1.5 million shares of Green Energy stock for proceeds of about $900,000. However, Raffa and Aubel continued to control a substantial amount of Green Energy stock after the promotion ended, and they used manipulative trading techniques to stabilize Green Energy’s stock price while they searched for another promoter to run a second touting campaign. Their search led them to a stock promoter who was secretly cooperating with federal agents and an undercover agent who claimed to have access to a network of corrupt stockbrokers who would buy their shares in exchange for kickbacks. Raffa and Aubel executed a trade in which they sold 174,000 shares of their Green Energy stock to an account purportedly controlled by a corrupt broker, which was in fact controlled by federal authorities. Following the trade, the conspirators wired a $6,000 kickback payment to an account they believed to be controlled by the corrupt broker, but which was actually controlled by federal authorities.
In November 2018, Aubel was charged with bail jumping after repeatedly failing to appear for sentencing before Judge Saris. U.S. Marshals located and apprehended Aubel as he exited a hotel in Charlotte, NC.
In a parallel action, the Securities and Exchange Commission (SEC) previously charged Aubel and Raffa with securities fraud in connection with the scheme.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. Gregory Allyn Forest, U.S. Marshal of the Western District of North Carolina, and John Gibbons, U.S. Marshal of the District of Massachusetts provided assistance with the apprehension. The United States Attorney’s Office received valuable assistance from the SEC. SEC Attorney Andrew Palid, who was appointed as a Special Assistant U.S. Attorney, and Jordi de Llano, Deputy Chief of Lelling’s Securities & Financial Fraud Unit, prosecuted the case.
Muldrow Man Sentenced to 120 Months, $8,500 Restitution for Possession of Material Involving Sexual Exploitation of MinorsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Ryan Edward Offineer, age 41, of Muldrow, Oklahoma, was sentenced to 120 months’ imprisonment, 15 years’ supervised release, and ordered to pay restitution in the amount of $8,500.00 for Possession Of Certain Material Involving The Sexual Exploitation Of Minors, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and 2252(b)(2). The charges arose from an investigation by the Muldrow Police Department and Homeland Security Investigations (HSI).
The Indictment alleged that beginning in or about June 2013, to on or about March 7, 2018, within the Eastern District of Oklahoma, the defendant knowingly possessed, attempted to possess and accessed with intent to view, matters which contained visual depictions, as that term is defined in Title 18, United States Code, Section 2256(5). Those visual depictions involved the use of minors engaging in sexually explicit conduct, and had been transported in interstate commerce by computer.
United States Attorney Brian J. Kuester said, “People who possess child pornography should never feel comfortable that their despicable acts will go undetected. Across the country there are law enforcement agencies working diligently to detect, investigate and prosecute those who exploit children. This defendant’s sentence is a result of that work.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney John David Luton represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Morgan County man admits to failing to update his sex offender registrationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Douglas Brett Bishop, of Great Capacon, West Virginia, has admitted to failing to register as a sex offender charge, United States Attorney Bill Powell announced.
Bishop, age 51, pled guilty to one count of “Failure to Register.” Bishop admitted to failing to register as a sex offender in Morgan County, West Virginia from May to September 2018. Bishop was convicted of a crime in Union County, South Carolina that required him to register as a sex offender under the Sex Offender Registration and Notification Act.
Bishop faces up to 10 years incarceration and a fine of up to $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara K. Omps-Botteicher is prosecuting the case on behalf of the government. The United States Marshal Service and the West Virginia State Police investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Monroe felon pleads guilty to possessing two handguns, ammunition and bullet drumRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that a Monroe felon pleaded guilty Wednesday to possessing two handguns, multiple rounds of ammunition and a large capacity drum magazine.
Kendrick Darnell Williams, 21, of Monroe, pleaded guilty before U.S. District Judge Terry Doughty to one count of being a felon in possession of a firearm. When Monroe police officers stopped a car on October 17, 2017 for a traffic violation, Kendrick Williams jumped out of the passenger door and ran. Officers caught Williams and brought him back to the scene where they searched the car and found a loaded Ruger .357-caliber revolver and a loaded Smith & Wesson .9 mm-caliber pistol in a natural void behind the glove compartment. They also found a 60-round Magpul drum-style magazine in the back seat, and one round of .45-caliber ammunition, one round of .380 caliber ammunition and eight rounds of .40 caliber ammunition in the trunk. When officers checked the status of the firearms, the Smith & Wesson pistol came back stolen. Williams admitted to handling the Smith & Wesson pistol before police stopped the vehicle.
Williams is a convicted felon and prohibited from possessing a firearm. Williams pleaded guilty to aggravated second-degree battery in Ouachita Parish on April 26, 2012. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition.
Williams faces up to 10 years in prison, three years of supervised release and a $250,000 fine. Judge Doughty set the sentencing date for May 1, 2019.
The ATF, Ouachita Parish Metro Narcotics Unit, and the Monroe Police Department conducted the investigation. Assistant U.S. Attorney Mike O’Mara is prosecuting the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Mineral County man admits to firearms chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – Phillip Arnold Bennett, of Piedmont, West Virginia, has admitted to a firearms charge, United States Attorney Bill Powell announced.
Bennett, age 30, pled guilty to one count of “Unlawful Possession of a Firearm.” Bennett admitted to illegally possessing a .380 caliber pistol in September 2017 in Mineral County.
Bennett faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorney Lara K. Omps-Botteicher is prosecuting the case on behalf of the government. The Potomac Highlands Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the West Virginia State Police investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Miami Resident Sentenced to 13 Years in Prison for Robbing Miami Shores TD Bank Branch at Gunpoint and Discharging the Firearm During the RobberyRead the Press Release
A Miami resident was sentenced today to a total of thirteen years in federal prison for robbing a Miami Shores TD Bank Branch at gunpoint and discharging the firearm during the course of the robbery.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) made the announcement.
Following a one-week jury trial, on September 21, 2018, Joudanorve Lafleur, 24, of Miami, Florida, was convicted of armed bank robbery, and brandishing and discharging a firearm in furtherance of the armed robbery. U.S. District Judge Jose E. Martinez sentenced Lafleur to a total of 161 months in prison, to be followed by 5 years of supervised release and was ordered to pay $3,000 in restitution.
According to the evidence presented at trial, at approximately 9:20 a.m. on April 20, 2018, Lafleur, wearing a black ski mask, black hoodie, and pants, robbed two bank tellers and one bank customer at gunpoint. After demanding “all of the hundreds” from his victims repeatedly, Lafleur fired a bullet into the ceiling of the bank. Then, he fled, with more than $2,000.
The FBI tracked Lafleur to his residence within an hour of the robbery, and after a search of Lafleur’s home, investigators recovered Lafleur’s disguise (mask and hoodie); the stolen money; and the firearm used in the robbery, among other items. Evidence at trial also showed that Lafleur robbed one of his elderly neighbors, stealing his clothes in the minutes before law enforcement arrived, in an attempt to distance himself from the crime and change his appearance. The evidence against Lafleur presented at trial included witness testimony, bank surveillance video, DNA expert testimony, cellular telephone analysis, and other evidence. The jury found Lafleur guilty of all counts of the Indictment.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Jessica K. Obenauf.
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 on http://pacer.flsd.uscourts.gov.
Miami County Man Sentenced to 25 Years in Prison for Recording Sexual Abuse of Two MinorsRead the Press Release
DAYTON – Shawn Bradley, 37 of Miami County, Ohio, was sentenced in U.S. District Court to 25 years in prison for creating child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Steve Francis, Special Agent in Charge, U.S. Homeland Security Investigations (HSI), announced the sentence handed down yesterday by U.S. District Judge Thomas M. Rose.
According to court documents, between 2015 and 2018, Bradley coerced minors to engage in sexually explicit conduct for the purpose of producing child pornography.
Bradley recorded himself in multiple videos sexually abusing a child under the age of 15. Bradley admitted that the videos were created on different dates during a span of nearly three years.
At least one video depicts the sexual abuse of a second minor. The first victim is also present in video with the second victim.
Bradley pleaded guilty in September 2018 to producing child pornography.
“At sentencing the district judge called Bradley’s conduct depraved, and I agree,” said U.S. Attorney Glassman. “The sexual exploitation of children is among the most depraved conduct that we investigate and prosecute. We’ve seen that predators come in all shapes and sizes, and they can be in any community. Victims and witnesses should not be afraid to step forward to law enforcement when they experience or suspect wrongdoing. Thanks to law enforcement’s good work, this particular predator won’t come anywhere close to a child for the next quarter of a century.”
“While no amount of prison time can undo the devastating harm inflicted by the defendant, this significant sentencing assures that no additional children will be harmed by this defendant,” said Special Agent in Charge Francis. “Working closely with our state, local and federal law enforcement partners, HSI will continue aggressively pursuing those who victimize the most vulnerable segment of our society, our children.”
U.S. Attorney Glassman commended the cooperative investigation by HSI, as well as Assistant United States Attorney SaMee Harden, who is representing the United States in this case.
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Members of Counterfeit Ticket Rings Indicted for Trafficking Counterfeit Tickets for Marquee Events, Including the Super BowlRead the Press Release
ATLANTA, GEORGIA – United States Attorney William M. McSwain announced six separate indictments charging 13 individuals with a multitude of crimes, including conspiracy to traffic in counterfeit goods, trafficking in counterfeit goods, conspiracy to commit wire fraud, wire fraud, and aiding and abetting. U.S. Attorney McSwain announced the charges at the NFL’s annual anti-counterfeit merchandise press conference event held in connection with Super Bowl LIII.
The indictments filed in the Eastern District of Pennsylvania and announced today all relate to the production, distribution, and sale of counterfeit tickets to sporting and concert events. This criminal behavior spanned several states and targeted multiple marquee sporting events, including Super Bowl LI, in Houston, Texas, and Super Bowl LII, in Minneapolis, Minnesota. The details of each indictment, including the individuals charged and the sporting events that were targeted, are described more fully below. The individual defendants face a range of penalties, largely depending on the amount of financial loss attributable to each.
Case No. 2:18-cr-00306 (RBS) (Smith) and Case No. 2:18-cr-00596 (RBS) (Ferguson)
Eugene Smith, 45, of Lithonia, Georgia, and Eric Ferguson, 50, of Riverdale, Georgia, were both charged by indictment with conspiracy to commit wire fraud; wire fraud; conspiracy to traffic in counterfeit goods; and trafficking in counterfeit goods. The indictments allege that Smith purchased real tickets to sporting events and concerts, provided them to his associate, Ferguson, who then printed counterfeit tickets for resale. The indictments further allege that the counterfeit tickets were distributed to a network of individuals who would advertise and sell the counterfeit tickets to unsuspecting fans. The indictments allege that from December 2016 to April 2018, the defendants conspired to traffic in counterfeit tickets for various sporting events, including Super Bowl LI; Super Bowl LII; a College Football Playoff game played in Tampa, Florida; and the Army-Navy Game played in Philadelphia.
Smith has pleaded guilty to all counts in the indictment and awaits sentencing. Ferguson has pleaded not guilty and is awaiting trial, currently scheduled for February 11, 2019.
Case No. 2:19-cr-00053 (RBS) (Williams et al.)
Sean Williams, 48, Damon Daniels, 48, Rahiem Watts, 30, Jermaine Jones, 41, all of New York, New York, and Rakee Russ, 40, of Philadelphia, are charged in a single indictment with conspiracy to commit wire fraud; wire fraud; conspiracy to traffic in counterfeit goods; and trafficking in counterfeit goods. The indictment alleges a similar pattern of behavior: defendants Daniels and Watts created counterfeit tickets to various sporting events and worked with others, including their indicted co-defendants, to advertise and sell the tickets to unsuspecting victims. It further alleges that that defendants conspired together to produce and sell counterfeit tickets to several sporting and concert events, including Super Bowl LI; an NCAA men’s college basketball game (Villanova University–University of Virginia) played in Philadelphia; an ACC men’s basketball tournament game played in New York City; and a FIFA World Cup qualifier soccer match between the United States and Costa Rica, played in Philadelphia.
Case No. 2:19-cr-0054 (RBS) (Warren and Higginbottom)
Khiale Warren, 52, and Rodney Higginbottom, 51, both of Philadelphia, are charged in a single indictment with trafficking in counterfeit tickets and wire fraud. The indictment alleges that these defendants advertised through a third-party website and sold counterfeit tickets to several events, including the 1916-2016 Copa America Centenario soccer game played in Philadelphia; a Philadelphia Eagles–Minnesota Vikings NFL football game played in Philadelphia; an NCAA Football National Championship game played in Atlanta, Georgia; and a Phish concert in Philadelphia, in June 2018.
Case No. 2:19-cr-0055 (RBS) (Tucker et al.)
Mustafa Tucker, 36, Malik Brown, 38, Kevin Sadat, 41, all of Philadelphia, are charged in a single indictment with conspiracy to commit wire fraud; wire fraud; conspiracy to traffic in counterfeit goods; and trafficking in counterfeit goods. This indictment alleges that the defendants obtained copies of Ferguson-printed counterfeit tickets from Smith, advertised counterfeit tickets online, and sold tickets to unsuspecting victims. The indictment alleges the defendants conspired with Smith, Ferguson, and others to traffic in counterfeit tickets to Super Bowl LI and the NBA All-Star Game played in New Orleans, Louisiana. It further alleges that Brown trafficked in counterfeit goods by selling tickets to the following events: a Phish concert held in Philadelphia in June 2018, the 1916-2016 Copa America Centenario soccer game played in Philadelphia, and a Philadelphia Eagles-Atlanta Falcons game in Philadelphia, on September 8, 2018.
Case No. 2:19-cr-0056 (RBS) (Dunmore)
Edward Dunmore, 61, of Philadelphia, was charged with two counts of trafficking in counterfeit goods. The indictment alleges that on two occasions, Dunmore sold tickets to a Phish concert in Philadelphia, in June 2018.
“Criminal counterfeiting and piracy are serious crimes,” said U.S. Attorney McSwain. “When fans spend their hard-earned money on tickets and merchandise, they deserve the real deal. These defendants repeatedly targeted events based on profitability and perpetrated a fraud on unsuspecting fans. These indictments send a clear message that phony ticket sales are a federal case – one that we will pursue to the fullest extent of the law.”
“This case grew out of the public safety partnership between FBI Philadelphia's special events program, the NFL, and the Philadelphia Eagles,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “But as the scope of the investigation expanded nationwide, it truly became a collaboration, and for that I'd like to thank all of our law enforcement partners. There were no less than 30 local, state, and federal law enforcement agencies and 23 FBI field offices that directly contributed on this case, allowing us to achieve our ultimate goal of protecting the ticket-buying public.”
The case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, New York Police Department, with assistance from the United States Attorney’s Office for the Northern District of Georgia, the Pennsylvania Attorney General’s Office, the New York District Attorney’s Office, and multiple local law enforcement authorities, including the Duluth, Georgia Police Department. The case is being prosecuted by Assistant United States Attorneys Joan Burnes and Anita Eve.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Announces New Agreement for Fundamental Reform at NYCHARead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York (“SDNY”), Ben Carson, Secretary of the U.S. Department of Housing and Urban Development (“HUD”), and Andrew Wheeler, Acting Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today the signing of an administrative agreement (“Agreement”) with the NEW YORK CITY HOUSING AUTHORITY (“NYCHA”) and the CITY OF NEW YORK (the “City”) requiring NYCHA, under the supervision of a federal monitor, to fundamentally reform its operations and remedy living conditions for its residents, including lead paint hazards, mold growth, pest infestations, lack of heat, and inadequate elevator service. The Agreement, which went into effect immediately and does not require court approval, resolves the United States’ claims against NYCHA detailed in the Complaint filed in United States District Court on June 11, 2018 (the “Complaint”), which will be dismissed without prejudice. The Complaint alleged that for years NYCHA had violated and was continuing to violate basic federal health and safety regulations, including regulations requiring NYCHA to protect children from lead paint and otherwise provide decent, safe, and sanitary housing. The Complaint further alleged that NYCHA repeatedly made false statements to HUD and the public regarding its lead paint compliance, and intentionally deceived HUD inspectors.
U.S. Attorney Geoffrey S. Berman stated: “NYCHA’s failure to provide decent, safe, and sanitary housing is simply unacceptable, and illegal. Children must be protected from toxic lead paint, apartments must be free of mold and pest infestations, and developments must provide adequate heat in winter and elevator service. This Office has not wavered from its commitment to better living conditions for NYCHA residents. Today’s Agreement will improve the lives of the more than 400,000 New Yorkers who call NYCHA home. The Agreement goes beyond the prior proposed Consent Decree by providing strict, enforceable standards that NYCHA must meet by particular deadlines for the five critical living conditions, including requiring both the immediate remediation of lead paint in apartments with children under 6 years old and, over time, 100 percent abatement of all lead paint in all NYCHA developments, as well as a change in NYCHA leadership.”
HUD Secretary Ben Carson said: “This is a very positive outcome, one that I believe can bring meaningful change to living conditions of the many thousands of families who depend upon NYCHA for their housing. But there is still a lot of work to be carried out. We look forward to continuing what has been a productive working relationship with the Mayor and his team. HUD will continue to advocate for the hundreds of thousands of children, women, and men in New York City whose lives and livelihoods depend on having safe, fair, and affordable housing. They deserve nothing less.”
Acting EPA Administrator Andrew Wheeler said: “Under today’s agreement, New York City commits to provide the resources and institutional reforms needed to end NYCHA’s pattern and practice of endangering the health of children living in New York’s public housing. EPA will be vigilant and is prepared to reinstate our litigation should they fail to meet those commitments and continue to harm children by violating lead paint safety regulations.”
Based on NYCHA’s misconduct as detailed in the Complaint, the Secretary of HUD declared today that NYCHA is in substantial default of its covenant to provide decent, safe, and sanitary housing. The purpose of the Agreement is to remedy the deficient physical conditions in NYCHA properties, ensure that NYCHA complies with its obligations under federal law, reform the management structure of NYCHA, and facilitate cooperation and coordination between HUD, NYCHA, and the City.
Specifically, the Agreement requires NYCHA to remediate living conditions at NYCHA properties by specific deadlines and meet strict, objective compliance standards regarding lead paint hazards, mold growth, pest infestations, and inadequate heating and elevator service. With respect to lead paint hazards, for example, the Agreement requires NYCHA to take action within 30 days to visually inspect all non-exempt units built before 1978 where NYCHA believes a child under 6 resides or routinely visits and remediate any deteriorated lead-based paint in the apartment, and, over time, to abate all lead paint in all NYCHA developments. The Agreement further obligates NYCHA to establish three new critical functions: a Compliance Department, an Environmental Health and Safety Department, and a Quality Assurance Unit. In addition, the Agreement requires the City to select a new chief executive officer for NYCHA from a list of qualified professionals jointly compiled by HUD, the U.S. Attorney’s Office, and the City.
The Agreement also renews the City’s commitment, reflected in the June 2018 proposed Consent Decree, to provide an additional $1 billion in capital funds to NYCHA over the next four years and an additional $200 million in capital funds each subsequent year for the duration of the Agreement. Also, the agreement locks in an additional $4 billion in City funds budgeted through 2027.
Pursuant to the Agreement, a federal monitor, selected by HUD and the U.S. Attorney’s Office in consultation with NYCHA and the City, will oversee NYCHA’s reform efforts. Beyond the specifically enumerated remedial actions required under the Agreement, NYCHA will develop action plans, subject to the monitor’s approval, to remediate living conditions at NYCHA and meet the compliance standards set forth in the Agreement. The monitor and NYCHA also will collaboratively develop a plan to overhaul NYCHA’s organizational, management, and workforce structure, informed by a new comprehensive study from an independent third-party consultant. Throughout the term of the Agreement, the monitor is required to engage with the community, including NYCHA residents, resident groups, and stakeholders, regarding matters covered by the Agreement, and provide public reports detailing NYCHA’s progress. The cost of the monitor shall be paid by the City.
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Mr. Berman thanked HUD, HUD Office of Inspector General, and EPA for their invaluable assistance in this matter.
This case is being handled by the Office’s Environmental Protection Unit in the Civil Division. Assistant United States Attorneys Robert William Yalen, Mónica P. Folch, Jacob Lillywhite, Talia Kraemer, and Sharanya Mohan are in charge of the case.
Manchester Man Sentenced to 60 Months for Felon in Possession of FirearmsRead the Press Release
CONCORD – United States Attorney Scott W. Murray announced that Hector Velez, 23, of Manchester, was sentenced to 60 months in prison for being a felon in possession of firearms.
According to court documents and statements made in court, on July 30, 2017, Manchester Police stopped a car driven by Velez. Upon seeing what appeared to be drugs in plain view inside the car, the officers impounded the car and applied for a search warrant. A search of the vehicle resulted in the seizure of two firearms, as well as marijuana and cocaine. Velez, as a previously convicted felon, is legally prohibited from possessing firearms.
“Federal firearms laws are designed to keep guns out of the hands of criminals,” said U.S. Attorney Murray. “By enforcing these laws, we seek to prevent felons from using guns to commit crimes. Through Project Safe Neighborhoods, law enforcement officers throughout the Granite State are working together to protect the public from armed criminals. This case is another example of the important progress that we are making to improve the safety of our communities.”
“Today’s sentencing demonstrates the outstanding partnership between ATF and the Manchester Police Department as well as the commitment we share to work together to interdict illegal firearms and the criminals that compromise the safety of our communities,” said Special Agent in Charge Kelly Brady of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Manchester Police Department. The case is being prosecuted by Assistant U.S. Attorney Anna Z. Krasinski.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Malaysian Nationals Charged with Conspiring to Illegally Export Firearms and Firearm Parts to Hong KongRead the Press Release
BOSTON – Two Malaysian nationals were arrested today and charged with conspiring to illegally export firearms and firearm parts from the United States to an individual located in Hong Kong, China.
Lionel Chan, 35, who resided in Brighton, Mass., and Muhammad Radzi, 26, who resided in Brooklyn, N.Y., were each charged by criminal complaint with one count of conspiring to violate the Arms Export Control Act. Chan was also charged with one count of obstruction of justice. Chan will appear this afternoon in federal court in Boston and Radzi will appear in federal court in the Eastern District of New York.
According to the criminal complaint, beginning in or around March 2018, Chan began purchasing a variety of U.S.-origin firearm parts, including parts used to assemble AR-15 assault rifles and 9MM semi-automatic handguns, at the request of a buyer in Hong Kong. Chan purchased the parts online through a variety of websites, including eBay and gunbroker.com. These firearm parts are restricted items and cannot be exported from the United States without a license. Nevertheless, Chan allegedly shipped the firearm parts via Federal Express to the buyer in Hong Kong without first obtaining the necessary export licenses. Chan intentionally concealed the contents of the shipments by providing false descriptions of the items contained in each shipment and by concealing the parts inside the package. For example, in one text exchange, Chan and the Hong Kong buyer discussed how to illegally ship a Glock 19 semi-automatic handgun. The Hong Kong buyer wrote, “this is how we are shipping the Glock 19 and USP compact barrel. I usually stuff them into a pair of sneakers, and cover it with Doritos or chips.” Between March and May 2018, Chan shipped 12 packages from Brighton, Mass., to the buyer in Hong Kong.
In or around April 2018, Radzi allegedly joined the conspiracy and began illegally exporting firearm parts to Hong Kong as well. Between May and October 2018, Radzi allegedly shipped 21 packages from Brooklyn, N.Y., to the buyer in Hong Kong. In October 2018, two of those packages were interdicted by Hong Kong authorities and found to contain numerous firearms parts, including a firing pin and gun sight, which were export-controlled. Like Chan, Radzi failed to obtain an export license for any of these shipments.
Chan allegedly obstructed justice by deleting numerous text messages relating to illegally exporting firearms during a flight from Dublin, Ireland, to Boston, Mass.
The charge of conspiring to illegally export firearms provides for a sentence of no greater than five years in prison, one year of supervised release and a $250,000 fine. The charge of obstructing justice provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew Lelling and Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. The Massachusetts State Police and U.S. Customs and Border Protection also assisted in the investigation. Assistant U.S. Attorneys George P. Varghese and Jason A. Casey of Lelling’s National Security Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Los Angeles Dentist Pleads Guilty to Health Care Fraud Charges Stemming from False and Fraudulent BillingsRead the Press Release
A Los Angeles, California-based dentist pleaded guilty on Thursday to a March 2018 indictment charging him with health care fraud arising from his false and fraudulent billings for crowns and fillings, which were never provided to patients.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Assistant Director in Charge Nancy McNamara of the FBI’s Washington, D.C. Field Office and Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Field Office made the announcement.
Benjamin Rosenberg, D.D.S., 58, of Los Angeles, pleaded guilty to one count of health care fraud before U.S. District Judge John A. Kronstadt of the Central District of California. Sentencing will take place on May 23 before Judge Kronstadt.
As part of his guilty plea, Rosenberg admitted that he submitted and caused to be submitted approximately $3,853,931 in false and fraudulent claims to various insurance companies for dental care that Rosenberg knew had not been rendered. Rosenberg further admitted that he submitted these false and fraudulent claims to Metlife, Anthem, Cigna, Delta Dental, Guardian, LMCO-DHA, United Health, and United Concordia (the “carriers”), which caused the carriers to pay Rosenberg approximately $1,415,011.
This case was investigated by the FBI. Trial Attorney Emily Z. Culbertson of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services (HHS) to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Local Woman Pleads Guilty to Fraudulently Obtaining Federal FundsRead the Press Release
DAYTON – Cynthia A. Faulkner, 32, of Dayton, Ohio, pleaded guilty in U.S. District Court to fraudulently obtaining food card benefits and submitting false income tax documents.
Specifically, she pleaded guilty to three counts of making a false document, two counts of aiding in the filing of a false income tax return and one count of misprision of a felony.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Anthony V. Mohatt, Special Agent in Charge, U.S. Department of Agriculture (USDA) Office of Inspector General Investigations, Midwest Region, and Brad Geary, Special Agent in Charge, U.S. Department of Housing and Urban Development (HUD) Office of Inspector General announced the plea entered into yesterday before U.S. District Judge Thomas M. Rose.
According to court documents, Faulkner made false statements on her April 2013 application to receive SNAP (Supplemental Nutrition Assistance Program) benefits. As part of her request to reapply for cash and food assistance, Faulkner misrepresented the cost of her rental residence in Mason, Ohio, for which she paid more than $2,000 per month.
On a similar application in 2014, Faulkner falsely reported her and her husband’s total gross income as approximately $36,000. In fact, their total gross income for the application period was nearly $91,000.
Faulkner also aided in the filing of materially false income tax returns by underreporting business receipts by nearly $125,000 over tax years 2011 and 2012.
Further, Faulkner had first-hand knowledge of a bank fraud scheme and failed to report it to authorities. The scheme involved Capital Group Properties and Consultants Corp of Mason and Cincinnati, Ohio, and National Appraisal Sources, LLC of Cincinnati, Ohio, which are both co-owned by Faulkner. The scheme included receiving payment for fraudulent real estate appraisal reports.
During her federal case, Faulkner submitted false documents to the Court asking for continuance on a court hearing. She told the Court she had received a hysterectomy and provided a false patient medical discharge summary from the Tampa General Hospital in Tampa, Fla. In fact, Faulkner underwent no such surgery.
The parties in this case have agreed upon a recommended sentence of up to 21 months in prison.
U.S. Attorney Glassman commended the investigation of this case by the IRS Criminal Investigation, USDA OIG and HUD OIG, as well as Assistant United States Attorney Dwight Keller, who is prosecuting the case.
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Lantana Resident Sentenced to More Than 21 Years in Prison for Distributing Heroin and Fentanyl and Possessing a Firearm in Furtherance of Drug TraffickingRead the Press Release
A Lantana resident was sentenced yesterday to more twenty-one years in prison for distributing heroin and fentanyl and possessing a firearm in furtherance of drug trafficking.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Sean Scheller, Chief, Lantana Police Department, and Dave Aronberg, State Attorney, Palm Beach County State Attorney made the announcement.
Kerry Maurice McCray, 41, of Palm Beach County, was sentenced by U.S. District Judge Robin L. Rosenberg to a total of 262 months in prison, to be followed by 5 years of supervised release, after previously pleading guilty to two counts of possession with intent to distribute heroin and fentanyl, and one count of knowingly possessing a firearm in furtherance of drug trafficking (Case No. 18-80159-CR).
Following a number of undercover purchases of heroin from McCray, law enforcement obtained search warrants for his vehicles, cell phones, and motel room. As officers approached McCray’s motel room he fled, tossing items from his person and refusing to obey their lawful orders to stop. He was eventually apprehended and taken into custody. Several pieces of crack cocaine were discovered around McCray’s person, along with three cell phones. Additionally, officers found a baggie containing heroin and fentanyl that had fallen from McCray, when he was fleeing the police. The search of McCray’s motel room revealed additional pre-packaged heroin, marijuana, a scale, a cutting agent, a Ruger 9mm handgun and two magazines containing ammunition.
Based upon an analysis of telephone records and two victim reports, McCray was connected to eight non-fatal overdoses of narcotics.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA and Lantana Police Department. She thanked the Palm Beach County State Attorney’s Office for their assistance in this matter. This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci and Special Assistant U.S. Attorney John Parnofiello.
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.
Lake Charles couple admits to selling Oxycodone pills, financing construction of $600k houseRead the Press Release
LAKE CHARLES, La. – A Lake Charles couple admitted on Wednesday in U.S. District Court to selling hundreds of Oxycodone pills, announced U.S. Attorney David C. Joseph.
John Homer Legros Jr. 39, and his wife, Veronica Gray Legros, 39, of Lake Charles, Louisiana, each pleaded guilty to conspiracy to distribute and possess with intent to distribute controlled substances. United States Magistrate Judge Kathleen Kay presided at the hearing. The plea will become final when accepted by U.S. District Judge Donald E. Walter.
During their plea hearings, each defendant admitted to selling Oxycodone pills. John Legros sold 100 Oxycodone pills on May 19, 2016, and 95 Oxycodone pills on June 16, 2016. On September 28, 2016, John Legros gave Veronica Legros 100 Oxycodone pills with instructions to deliver and sell them to a contact on his behalf. On October 25, 2016, John Legros asked co-defendant Billy Winbush, 41, also of Lake Charles, to sell 100 Oxycodone pills. During this investigation, law enforcement discovered that Legros was financing the construction of a house that appraised at $600,000 with the drug sale proceeds. As a result, the property is being forfeited to the United States.
The defendants face up to 20 years in prison, three years of supervised release and a $1 million fine. Winbush pleaded guilty on January 14, 2019 to conspiracy to distribute and possess with intent to distribute controlled substances. All defendants are scheduled to be sentenced on May 9, 2019.
The FBI and the Calcasieu Parish Combined Anti-Drug Task Force conducted the investigation. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
Krebs Man Sentenced to 96 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Jared Robert Faulkner, age 30, of Krebs, Oklahoma, was sentenced to 96 months’ imprisonment and 3 years’ supervised release for Felon In Possession Of Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). Mr. Faulkner was tried on August 16th and 17th, 2018. The jury returned a guilty verdict. Faulkner was sentenced on December 13, 2018.
Evidence presented at trial showed that police officers responded to a disturbance in Krebs. As officers investigated they discovered that Faulkner possessed a firearm and that he was a convicted felon. The verdict was the result of an investigation coordinated as part of the Project Safe Neighborhoods effort in the Eastern District of Oklahoma to reduce violent crime. Project Safe Neighborhoods (“PSN”) is an initiative led and coordinated by the United States Attorney’s Office. The agencies involved in the investigation were the McAlester Police Department, the Krebs Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“Project Safe Neighborhoods has been a great success in Oklahoma and across the country. I believe one of the reasons it has been such a success is the emphasis it places on interagency cooperation to achieve the shared goal of combatting and reducing violent crime,” United States Attorney Brian J. Kuester said. “This investigation and prosecution is a PSN success story.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Dean Burris represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Kalispell man sentenced to prison for mineral lease fraud scheme; firearms possessionRead the Press Release
GREAT FALLS – A Kalispell man, previously convicted of a felony, was sentenced to more than 10 years in federal prison on Wednesday for illegally possessing firearms and for a multi-million dollar scheme to defraud investors who gave him money for oil and gas leases and art work, U.S. Attorney Kurt Alme said today.
U.S. District Judge Brian M. Morris sentenced John Kevin Moore, also known as Kevin Moore, 62, to a total of 10 years and five months in prison and to three years of supervised release. Judge Morris also ordered $2,222,817 restitution and a $1,926,725 forfeiture.
In the fraud case, a jury convicted Moore in an August 2018 trial on all 21 counts in an indictment, including 11 counts of wire fraud, nine counts of money laundering and one count of false statement to a federal agent. In the firearms case, Moore pleaded guilty in September 2018 to being a felon in possession of firearms.
“I want to thank Assistant U.S. Attorneys Ryan Weldon and Timothy Racicot, the FBI, IRS and the Montana Auditor’s Office for putting a stop to Moore’s wide-ranging pyramid scheme that could have continued for years and defrauded many more investors,” U.S. Attorney Alme said. “Potential investors and the public in general need to know that fraud schemes like this one are not uncommon in Montana and can ruin lives. We will continue to aggressively prosecute individuals like Moore who scheme to defraud unwitting investors,” Alme said.
“Kevin Moore operated a classic “Ponzi” scheme, gaining the trust of unwitting investors who suffered devastating financial losses,” said Supervisory Senior Resident Agent Rick Shelbourn, of the FBI’s Salt Lake City’s Field Office. “The FBI acknowledges our law enforcement partners and the cooperation of the tenacious victims who helped bring Moore to justice. The FBI aggressively investigates fraud schemes like these and urges the public to be aware of investment opportunities that make exaggerated earnings claims. The public should always exercise due diligence before investing their hard-earned money.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Steven Osborne, IRS Criminal Investigation, Special Agent in Charge, Denver Field Office. “The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel. IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime."
Montana’s Commissioner of Securities and Insurance Matt Rosendale, whose office assisted with the fraud case, said, “We were pleased to be able to work with federal authorities to bring John Kevin Moore to justice. I’d like to thank our team at the State Auditor’s office, the U.S. Attorney’s Office, and everyone else for their diligent work in resolving this case.”
In the fraud case, prosecutors presented evidence that Moore set up two companies, Big Sky Mineral Resources, LLC, in 2014, and Glacier Gala, in 2012, and used them to solicit money from investors by purporting to buy oil and gas leases and to buy and sell lucrative art work. Instead, prosecutors presented evidence that Moore used investors’ money to pay off earlier investors and to pay for personal expenses, including payments on multi-million-dollar properties.
To convince investors to give him money and to provide a sense of comfort about their investments, Moore would reference his wealth and connections with influential people, prosecutors said.
Moore received from investors more than $2 million, based on false claims he made regarding the mining of oil and gas and minerals and the sale of art work, prosecutors said.
When seeking money through Big Sky Mineral Resources, Moore claimed the funds would be used to buy leases and for mining activities in Montana and Arizona and that there was little to no risk. The investment would result in large returns in a short time frame, ranging from 30 days to a few months.
Moore gave some investors in Big Sky Mineral Resources checks and instructed them not to cash the checks until a later date, prosecutors said. The checks bounced when various investors attempted to cash their checks.
When soliciting funds for Glacier Gala, Moore represented he could turn a profit by buying, flipping and storing high-end art. When he received investments for Glacier Gala, Moore kept the money, failed to provide the art as promised and failed to return the art in his possession.
Prosecutors also presented evidence that Moore funneled money from Big Sky Mineral Resources through Glacier Gala to make it look like the money originated from the sale of a painting, when in fact, the money came from investors in Big Sky Mineral Resources.
Moore returned some of the money to investors after they raised concerns about the legitimacy of Big Sky Mineral Resources. Other times, rather than return the money, Moore promised to repay investors through alternative means and then failed to do so.
The fraud scheme ran from about April 2013 until September 2016 in Great Falls and Kalispell.
In the firearms case, Moore, having been convicted in 2003 of mail fraud and barred from possessing firearms, possessed numerous firearms in Glasgow, Kalispell and elsewhere from about November 2015 until the spring of 2017.
In a recording with a confidential informant, Moore said, “I have about 200 guns hidden. They can’t touch me being in possession. They just can’t do it.” Moore then showed the informant the firearms, which law enforcement later identified and photographed. The firearms ranged from shotguns to semi-automatic rifles.
Assistant U.S. Attorneys Ryan Weldon and Timothy Racicot prosecuted the cases, which were investigated by the FBI, IRS and the Montana State Auditor.
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Justice Department Reaches Settlement with Selma Medical Associates Inc. to Resolve ADA ViolationsRead the Press Release
The Justice Department today reached a settlement agreement with Selma Medical Associates Inc. (Selma Medical), a privately owned medical facility located in Winchester, Virginia, that provides primary and specialty care to patients.
The settlement agreement resolves a complaint under Title III of the Americans with Disabilities Act (ADA) that Selma Medical refused to accept a prospective new patient for an appointment because he takes Suboxone, a medication used to treat opioid use disorder. The Justice Department’s investigation concluded that Selma Medical regularly turned away prospective new patients who lawfully take controlled substances to treat their medical conditions.
Under the agreement, Selma Medical will not deny services on the basis of disability, including opioid use disorder, or apply standards or criteria that screen out individuals with disabilities. The agreement also requires Selma Medical to adopt non-discrimination policies, train staff on its non-discrimination obligations, and report on compliance. Selma Medical will also pay $30,000 in damages to the complainant and a $10,000 civil penalty to the United States.
“This agreement ensures that people in recovery from an opioid use disorder do not face discriminatory barriers to health care services,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Unlawfully denying services to individuals with disabilities because of their medical conditions subjects these individuals to unwarranted stigma and harm, and will not be tolerated by the Department of Justice.”
People interested in finding out more about the ADA or this settlement agreement can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.
Justice Department Announces Multiple Charges for Price-Fixing Conspiracies in Customized Promotional Products IndustryRead the Press Release
G Nova Corporation and Its CEO Indicted for Conspiracy to Fix Prices of Insulated Beverage Containers; Netbrands Media Corporation and Two of Its Top Executives Agree to Plead Guilty to Conspiracy to Fix Prices of Wristbands, Lanyards, Temporary Tattoos, and Buttons
A federal grand jury in Houston returned an indictment yesterday against Taiwan-based G Nova Corporation and its Chief Executive Officer Yeh Fei Chu, aka Jim Chu, for participating in a conspiracy to fix prices of insulated beverage containers sold in the United States, the Department of Justice announced today.
The Department of Justice also announced that it has filed criminal charges against Netbrands Media Corporation and two of Netbrands’ top executives, Mashnoon Ahmed and Mueen Akhter, for their roles in a separate conspiracy to fix prices of wristbands, lanyards, temporary tattoos, and buttons sold in the United States. Netbrands has agreed to plead guilty and pay a criminal fine of over $6 million. Ahmed and Akhter entered guilty pleas on January 8, 2019.
Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division, U.S. Attorney Ryan K. Patrick for the Southern District of Texas, and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Division made the announcements.
“The results announced today are the latest in a series of charges against eleven defendants filed in the Division’s ongoing investigation into conspiracies that corrupted the online marketplace and deprived consumers of the benefits of competition,” said Assistant Attorney General Delrahim. “Whether the conspiracy takes place in smoke-filled rooms that are real or virtual, the Department of Justice and its law enforcement partners are committed to uncovering and prosecuting collusion.”
“We will continue to prosecute those who seek to harm consumers by conspiring to fix prices,” said U.S. Attorney Patrick. “It doesn’t matter if the products are fifty cent insulated beverage containers or million dollar pieces of oil field equipment, the U.S. Attorney’s Office is committed to protecting competition in the marketplace and protecting consumers from people who cheat the system.”
“Antitrust violations raise prices and suppress competition, hurting businesses who play by the rules as well as consumers who pay more for products or services,” said Special Agent in Charge Turner. “In these cases, people got greedy and their greed usurped the consumers’ right to choose between competitors. The defendants in these cases took advantage of the niche in the markets they created and thought they could get away it. Well, they didn’t thanks to the FBI’s unique partnership with the DOJ’s Antitrust Division and our commitment to put an end to this type of unlawful activity.”
Including the results announced today, the investigation into the customized promotional products industry has resulted in charges against five companies and six individuals.
The charges announced today against G Nova and Chu are the first that relate to a conspiracy to fix prices of insulated beverage containers.
Including Netbrands, Akhter, and Ahmed, nine defendants have been charged for their roles in a separate price-fixing conspiracy related to sales of other customized promotional products, including wristbands. All nine of those defendants have agreed to plead guilty.
The Case Against G Nova and Chu:
The indictment against G Nova and Chu, filed in the U.S. District Court for the Southern District of Texas in Houston, charges the two defendants with participating in a conspiracy to fix prices of insulated beverage containers (also known as can coolers or coolies) beginning in about May 2012 and continuing until at least February 2014. The one-count felony indictment charges that G Nova and Chu carried out the conspiracy by agreeing to fix the prices of insulated beverage containersduring meetings and other communications.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The Cases Against Netbrands, Ahmed, and Akhter:
According to the felony charge filed against Netbrands on January 24, 2019, the felony charges filed against Ahmed and Akhter on December 3, 2018, and the plea documents filed in the cases against Ahmed and Akhter on January 8, 2019, in the U.S. District Court of the Southern District of Texas in Houston, the defendants and their co-conspirators agreed to fix the prices of customized promotional products, including wristbands, lanyards, temporary tattoos, and buttons, sold online from as early as May 2014 until at least June 2016. The defendants and their co-conspirators used social media platforms and encrypted messaging applications, such as Facebook, Skype, and Whatsapp, to reach and implement their illegal agreements.
In addition to pleading guilty, Netbrands has agreed to pay a $6,531,687 million criminal fine and cooperate with the Antitrust Division’s ongoing investigation. As part of their guilty pleas, Ahmed and Akhter also agreed to cooperate with the ongoing investigation.
A criminal violation of Section 1 of the Sherman Act carries a maximum sentence of 10 years in federal prison and a fine of $1 million for individuals, and a maximum fine of $100 million for corporations. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This prosecution arose from an ongoing federal antitrust investigation into price fixing in the customized promotional products industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Houston Field Division, with assistance from the U.S. Attorney’s Office for the Southern District of Texas. Anyone with information on price fixing or other anticompetitive conduct related to other products in the customized promotional products industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
**An earlier version of this release incorrectly referred to “insulated beverage containers” as “Koozies,” a trademarked term.**
Jury Convicts Las Vegas Man of Conspiring to Traffic MethamphetamineRead the Press Release
Abingdon, VIRGINIA – The final defendant charged in Operation Leaving Las Vegas, a 32-defendant conspiracy that trafficked methamphetamine and other drugs between Las Vegas and Southwest Virginia, was convicted earlier this week in U.S. District Court in Abingdon following a two-day jury trial. United States Attorney Thomas T. Cullen made the announcement.
Kevin Thomas Seigler, 36, of Las Vegas, Nevada, was convicted on Tuesday, January 29, 2019 of one count of conspiracy to distribute 500 grams or more of methamphetamine and conspiracy to use a communication facility to facilitate a drug-trafficking offense.
“As a result of Operation Leaving Las Vegas, a massive drug-trafficking organization, which operated in Virginia and Nevada, has been dismantled and nearly three dozen of its members are serving lengthy terms in federal prison,” United States Attorney Cullen stated today. “I am grateful to our federal, state, and local partners for their dedication and commitment to this important investigation over the last three years. We will continue our joint efforts to reduce the scourge of illegal drugs in Southwest Virginia.”
“ATF is committed to working with our partners to reduce violent crime and keep our communities safe by removing illegal firearms and dangerous drugs from our streets,” said Special Agent in Charge Ashan M. Benedict, ATF Washington Field Division. “We will do everything in our power to dismantle organizations like these and put these individuals behind bars where they belong.”
“The successful culmination of this investigation is a prime example of what can be accomplished when federal, state, and local law enforcement agencies work together side by side. DEA will continue to work with our law enforcement partners and the U.S. Attorney’s Office for the Western District of Virginia in order to combat the flow of dangerous drugs into Southwest Virginia and to hold those individuals and organizations that attempt to do so accountable for their actions,” said DEA Special Agent in Charge Jesse R. Fong.
In late 2016, numerous law enforcement agencies, led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration, charged 32 individuals with conspiring to commit money laundering and to distribute methamphetamine, oxycodone, and buprenorphine from Las Vegas into Southwest Virginia, Eastern Kentucky and elsewhere. Evidence presented at trial demonstrated that Seigler was a member of the organization and was responsible for supplying methamphetamine that was shipped to Southwest Virginia. In March 2016, the Las Vegas Metropolitan Police Department seized two pounds of methamphetamine that had been sold by Seigler to another conspirator and also recovered $19,669 in U.S. currency from Seigler’s residence. Seigler was also previously convicted of failing to appear for a trial scheduled in May 2017.
A sentencing hearing has been set for May 6, 2019. Seigler faces a mandatory minimum sentence of ten years in prison and a maximum statutory penalty of up to life imprisonment. In addition, he faces $10,250,000 in fines. To date, all 32 charged defendants have been convicted of federal drug conspiracy and money laundering charges and all but Seigler have been sentenced. Additionally, throughout the course of the investigation, more than $60,000 in currency was seized and money judgments totaling an additional $995,074 have been ordered.
As a result of the investigation, the following defendants have been sentenced:
- Richard Henry Kayian was sentenced to 324 months imprisonment and ordered to pay a forfeiture money judgment in the amount of $743,441.52, for one count of conspiracy to distribute 500 grams of methamphetamine and oxycodone, and one count of money laundering.
- Stephen Cino, 52, Henderson, Nevada – 292 months imprisonment and ordered to pay a forfeiture money judgment of $251,633.00 for one count of conspiracy to distribute 500 grams or more of methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- Tracey Allen Callihan, 49, Glade Spring, Virginia - 324 months imprisonment and ordered to pay a forfeiture money judgment of $30,000.00 for one count of conspiracy to distribute 500 grams or more of methamphetamine and oxycodone, and one count of money laundering.
- Brandon Lee Stone, 33, Abingdon, Virginia – 300 months imprisonment for one count of conspiracy to distribute 500 grams or more of methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- Misael Reyes Tajimaroa, 32, Spokane, Washington – 192 months imprisonment for one count of conspiracy to distribute 500 grams or more of methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- Bradley Lee Chapman, 28, Bristol, Virginia - 135 months imprisonment for one count of conspiracy to distribute methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- Kaitlynn Elizabeth Chapman, 26, Bristol, Virginia – 72 months imprisonment for one count of conspiracy to distribute methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- John Williams, 50, Glade Spring, Virginia – 18 months imprisonment and a $2,500 fine for one count of conspiracy to use a communications facility to facilitate a drug trafficking offense.
- Rebecca Williams, 51, Abingdon, Virginia – 108 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Heather Michelle Sullins, 27, Abingdon, Virginia – 30 months imprisonment for one count of conspiracy to distribute methamphetamine, oxycodone and buprenorphine.
- Alex Michael Kayian, 23, Bristol, Virginia - 72 months imprisonment for one count of conspiracy to distribute methamphetamine, oxycodone and buprenorphine, and one count of money laundering.
- Ralph Stewart Dingus, 27, Abingdon, Virginia - 37 months imprisonment for one count of conspiracy to distribute methamphetamine.
- John Dewayne Farmer, 32, Abingdon, Virginia - 240 months imprisonment for one count of conspiracy to distribute methamphetamine and one count of money laundering.
- Lola Virginia Farmer, 52, Abingdon, Virginia - 87 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Shauna Nicole Chafin, 36, Abingdon, Virginia - 97 months imprisonment for one count of conspiracy to distribute 500 grams or more of methamphetamine, oxycodone and buprenorphine.
- William Wesley Fleenor, 29, Abingdon, Virginia - 79 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Jeffrey Nathaniel Gobble, 25, Abingdon, Virginia - 46 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Preston Kyle Lawson, 21, Abingdon, Virginia - 46 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Gary Chapman, 47, Clay City, Kentucky - 151 months imprisonment for one count of conspiracy to distribute 500 grams or more of methamphetamine.
- Daniel Corey Cantrell, 25, Abingdon, Virginia - 37 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Tanner Morris Curd, 23, Meadowview, Virginia - 84 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Amy Lorene Moser, 52, Abingdon, Virginia -100 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Steven Salyer, 27, Abingdon, Virginia - 87 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Brandon Cody Trivett, 23, Abingdon, Virginia - 30 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Brian Edward Widener, 30, Abingdon, Virginia – 46 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Justin Lowe, 24, Abingdon, Virginia – 41 months imprisonment for one count of conspiracy to distribute methamphetamine.
- Lamar Skipper, 27, Chilhowie, Virginia - four years probation for one count of conspiracy to distribute oxycodone and one count of money laundering
- Gary Brandon Childress, 25, Abingdon, Virginia - three years probation. for one count of conspiracy to distribute oxycodone.
- Austin Obranovic Boardwine, 24, Abingdon, Virginia - four years probation for one count of conspiracy to distribute oxycodone and buprenorphine.
- Caleb Dean, 28, Damascus, Virginia – 48 months imprisonment for one count of conspiracy to distribute methamphetamine and oxycodone.
- Charlene Hale, 25, Bristol, Tennessee – four years probation for one count of conspiracy to distribute methamphetamine and oxycodone
The investigation of the case was conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Internal Revenue Service Criminal Investigations, United States Marshals Service, Virginia State Police, Washington County, Virginia Sheriff’s Office, Abingdon Police Department, Marion Police Department, Smyth County, Virginia Sheriff’s Office and Las Vegas Metropolitan Police Department. Assistant United States Attorneys Cagle Juhan and Zachary T. Lee are prosecuting the case for the United States.
Judge Denies Bond for Defendant Charged in Renasant Bank RobberyRead the Press Release
ALBANY – The man charged with holding up an Albany bank at gunpoint has been denied bond today by a Federal Magistrate Judge, said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia. Shataz Hampton, 25, of Albany is charged with one count of Bank Robbery and one count of Possession of a Firearm, along with co-defendant Kamilyah Whitlock, 25, of Albany. The two defendants are charged in the armed robbery of the Renasant Bank at 721 N. Westover Blvd., Albany, GA on November 6, 2017. The Honorable Thomas Langstaff, U.S. District Magistrate Court, detained Mr. Hampton on January 30, 2019 until trial. No date has been set.
“I am pleased the Court granted our motion to detain Mr. Hampton, a man alleged to have brandished a gun and robbed a bank in broad daylight, with innocent customers and employees inside,” said Charles “Charlie” Peeler, the U.S. Attorney for the Middle District of Georgia. “Rest assured, we will prosecute those accused of violent acts to the fullest extent of the law, and we will continue to vigorously seek the highest level of punishment for people who commit the most egregious crimes.”
The case was investigated by the Albany Police Department and the FBI. Assistant U.S. Attorney Leah McEwen is prosecuting the case for the Government.
Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Indianapolis man convicted of Sex trafficking of a minorRead the Press Release
Indianapolis - United States Attorney Josh Minkler announced today that Elijah Vines, 27, was convicted on January 28, 2019 following a trial by jury for charges involving the sex trafficking of a minor child, transportation of that child across state lines for the purpose of trafficking her, as well as involvement in an organization that promoted the prostitution of other women. Vines is a lifetime resident of Indianapolis, Indiana.
“Vines coerced a vulnerable minor child into performing sex acts for money. In short, he profited through the exploitation of a child,” said United States Attorney Minkler. “Holding this predator and others like him responsible took stalwart determination and cooperation of federal, state and local law enforcement. But it also involved community citizens standing up and proactively holding the line on behalf of our children. We cannot do it alone, and this case demonstrates again the resolve and fortitude of American citizens.”
In April 2018, the Justice Department seized Backpage.com and shutdown the website, which had become well known to law enforcement as a website that advertised commercial sex.
According to the criminal complaint, Elijah Vines trafficked Minor Victim 1 in Indianapolis motels in September 2016 after transporting her from Ohio to Indiana. Evidence at trial revealed that Vines took suggestive photographs of the child in clothing that he purchased for her. Vines used his account on Backpage.com to post advertisements for the child, offering her for sale. Vines’s iCloud account showed the emailed responses by a number of men who sought to have sexual contact with the child in exchange for money.
The case came to the attention of law enforcement when the child was recovered on October 6, 2016 and treated at Riley Hospital for Children. This case was a joint investigation involving the Indianapolis Metropolitan Police Department’s Vice and Human Trafficking Unit as well as the FBI. The Indiana State Police provided computer forensics assistance, and Dr. Tara Harris of Riley Hospital for Children testified as an expert in Child Abuse Pediatrics.
“Human Trafficking is about money, plain and simple. Mr. Vines preyed upon a vulnerable child and used her as a commodity to fulfill his own greed. It is one of our fundamental responsibilities to protect the most vulnerable in our society and we are pleased that justice was served for this victim,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI is proud of the work our agents and our law enforcement partners conduct each and every day to protect the children of our communities.”
“Keeping Indianapolis residents safe means building strong connections in our neighborhoods and removing the most dangerous offenders from our community. And that’s exactly what the men and women of IMPD who serve our city each day remain focused on,” said IMPD Chief Bryan Roach. “When our resources are coordinated along with our federal, state, and local law enforcement partners through collaborative efforts like this investigation, the Indianapolis community benefits.”
“Sex trafficking continues to be a crime in our community, often victimizing young people lured into a dangerous life under someone else’s control. The intentional and vigorous prosecution of traffickers in our state and federal courts is intended to send a clear message that we will not tolerate this crime,” Marion County Prosecutor Terry Curry added. “Increasing education and public awareness are critical components in fulfilling our shared commitment to restore safety for sex trafficking victims and seek justice on their behalf.”
According to Assistant United States Attorneys Kristina M. Korobov and Lawrence Hilton, who prosecuted this case for the government, Vines faces up to a lifetime of imprisonment.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the office’s firm commitment to utilize and partner with law enforcement agencies to prosecute individuals engaged in the sexual exploitation of children. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Section
Idaho Man Sentenced for Engaging in Penny Stock Fraud and Making False Statements to the SECRead the Press Release
BOSTON – An Idaho man was sentenced yesterday in federal court in Boston for participating in a market manipulation scheme involving the stock of Endeavor Power Corp., and then making false statements to the U.S. Securities and Exchange Commission (SEC) in connection with its investigation of the fraud scheme.
Samuel Brown, 38, of Bonners Ferry, Idaho, was sentenced by U.S. District Court Judge Indira Talwani to three years of probation – with the first five months to be served in home detention – and ordered to pay restitution in the amount of $22,237. In July 2015, Brown pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, and one count of making false statements to the SEC.
Between approximately July 2012 and March 2013, Brown conspired to manipulate the securities of Endeavor. In September 2013, Brown provided sworn testimony to the SEC relating to questions about trading in the stock. In pleading guilty, Brown admitted that he misled the SEC during the course of its examination.
In October 2015, Edward Withrow III and Marco Babini were charged in an indictment for conspiring with Brown. Withrow’s trial ended in a hung jury in December 2017, and he subsequently pleaded guilty to also making false statements to the SEC. Babini remains at large and is charged with one count of conspiracy, one count of securities fraud and two counts of wire fraud.United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. SEC Attorney Eric A. Forni, who was appointed as a Special Assistant U.S. Attorney, prosecuted the case.
The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Honduran Man Sentenced for Immigration OffenseRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Peter G. Strasser announced thatCARLOS PAIZ-CARDENAS, age 29, a native of Honduras, was sentenced yesterday after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
United States District Court Judge Martin L.C. Feldman sentenced PAIZ-CARDENAS to time served (5 months of imprisonment), followed by 1 year of supervised release, and a $100 special assessment fee. The defendant will be surrendered to the custody of Immigration and Customs Enforcement for removal proceedings.
According to court documents, on August 21, 2018, PAIZ-CARDENAS was found in the United States after having been previously removed from the United States on June 14, 2013.
U.S. Attorney Strasser praised the work of Immigration and Customs Enforcement agents in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
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High school swim coach receives 200 months for sexually exploiting student-athleteRead the Press Release
Indianapolis - United States Attorney Josh Minkler announced today the conviction and sentencing of a former swim coach with Carmel High School and Carmel Swim Club, John Goelz, age 30, to 200 months in federal prison after his admission of guilt to charges that he sexually exploited one of his student-athletes.
“Today’s sentence sends a strong message to those whom we put trust in to supervise and coach our children, that this behavior is illegal and those who take advantage of our children will face real consequences,” said Minkler. “Protecting our youth from sexual predators will always remain a top priority of this office.”
Goelz exploited his position of trust and authority with one of his student-athletes, a minor, for his own sexual gratification. From at least September 2017 through June 30, 2018, Goelz first built the victim’s trust as her coach and confidant, and then began enticing the victim to engage in sexual acts with him. During that time period, Goelz contacted the victim via text messages and other messaging applications that concealed the conversations to arrange sexual encounters at locations such as Goelz’s residence, community parks, and motels.
On June 30, 2018, Goelz used his cellular telephone to take videos of the victim engaging in sexual activity with him at a motel room in Anderson, Indiana. Two video files, along with multiple images, were recovered by federal investigators on Goelz’s cellular telephone after the execution of a search warrant, depicting the victim engaging in oral sex with Goelz. Computer evidence showed that the video files were filmed with Goelz’s phone.
This case was investigated by the U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) and the Hamilton County Metro Child Exploitation Task Force.
“This is yet another example of a selfish and criminal act on the part of an individual who took advantage of a position of authority over a child,” said Lieutenant Cameron Ellison, Hamilton County Metro Child Exploitation Task Force. “Cases involving adults in such positions have become far too common in our society. Each member of our community should take note of these cases, commit to remaining off the sidelines, and communicate with law enforcement when these types of abuses are suspected. It was a community tip that led to the investigation, arrest and prosecution in this case. Law enforcement and prosecutorial authorities, at all levels, will continue to work together when such allegations are made. We will work together, with laser focus, to first protect our children, then to investigate these crimes and separate the individuals responsible from our children and society.”
“Sexual exploitation is one of the most depraved crimes committed against humanity and this case is especially disturbing given Goelz’s position of trust,” said Special Agent in Charge James M. Gibbons, Chicago HSI. “This sentence serves as a reminder that HSI is committed to collaborating with its community partners to bring those who exploit children to justice.”
According to Assistant United States Attorney MaryAnn T. Mindrum, who prosecuted this case for the government, Goelz must also serve ten years of supervised release following his sentence.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting those who exploit or harm children and to work closely with Project Safe Childhood. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 4.1 and 4.2
Havre woman sentenced for trafficking OxycodoneRead the Press Release
GREAT FALLS – Havre resident Charly McLain Rosette was sentenced today to three years in prison and three years of supervised for conspiring to distribute prescription pain pills on the Rocky Boy’s Indian Reservation, U.S. Attorney Kurt Alme said today.
Rosette, 26, pleaded guilty in October to conspiracy to distribute and possess with intent to distribute Oxycodone.
U.S. District Judge Brian M. Morris presided.
Prosecutors presented evidence that Rosette, and two co-defendants, Isaiah Starr Standingrock and Devon Draper, conspired to sell Oxycodone pills on the Rocky Boy’s Reservation in 2017 and 2018. During the investigation, law enforcement used confidential sources to buy pills from Rosette.
A task force agent pulled over Standingrock’s and Rosette’s vehicle in December 2017 in Havre. The agent had information that the two were selling Oxycodone on the reservation. The agent found pills and currency in the vehicle. Standingrock’s and Rosette’s phones were seized during the search and a search warrant was obtained for the phones. Rosette’s phone contained drug-related messages between her, Standingrock and Draper.
In an August text message to Draper, Rosette asked for a “half pack,” which agents believed referred to a pre-set amount of Oxycodone. In another text message to Draper, Rosette stated she would sell the pills on the reservation for $45 a pill. Rosette also asked Draper to fly to Great Falls, where she would pick him up and take him to the reservation. Draper messaged Rosette and Standingrock that he would bring 120 pills to Montana. Rosette and Standingrock said they would be able to sell the pills for $60 to $65 each on the reservation within a couple of hours.
Standingrock and Draper pleaded guilty to charges in the case and awaiting sentencing.
Assistant U.S. Attorney Brendan McCarthy prosecuted the case, which was investigated by the Drug Enforcement Administration, and the Tri-Agency Task Force.
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Guilty pleas and prison sentences wrap up Cuyler-Brownsville sweepRead the Press Release
SAVANNAH, GA – With the final sentences now pronounced, the initial operation to help rid a historic neighborhood of violent crime and drug activity has reached a successful conclusion as cleanup activity in the community continues.
All 33 defendants charged in the sweep of Savannah’s Cuyler-Brownsville neighborhood have received sentences ranging from three years to nearly 17 years in federal prison, without possibility of parole, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Every defendant arrested in the multi-agency investigation pled guilty.
The investigation began in 2017 when federal, state and local law enforcement agencies responded to complaints from residents of the historic neighborhood about frequent gunfire, violent crime and drug sales and use in their community near downtown Savannah. Through extensive surveillance and undercover purchases of drugs and firearms, law enforcement agencies built a case that resulted in raids and arrests leading to indictments for drug distribution, robbery and illegal firearms possession. Officers seized dozens of firearms, body armor and quantities of cocaine, crack cocaine, heroin, oxycodone, MDMA (ecstasy) and marijuana.
Notable sentences in the case include:
Leonard Washington, a/k/a “Guzzi,” 37, 203 months in prison;
Deandre Davis, 31, 188 months;
Tyrone Williams, a/k/a “T Y,” 42, 160 months;
Frederick Brown, a/k/a “Freddie B,” 36, 151 months;
Trishon Collins, 23,130 months;
Deonta Young, a/k/a “Fluid,” “Flow,” “Lil D,” or “D,” 27, 120 months;
Joseph Price, age 32, 105 months; and,
Dennis Grubbs, a/k/a “Lil Red,” age 33, 84 months.
In addition, each of the defendants will face periods of supervised release after completion of their prison sentences.
“These sentences bring a successful closure to the first phase of a significant operation aimed at eradicating violent crime in a community whose law-abiding residents deserve to live without fear,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “But completion of this operation doesn’t mean our law enforcement agencies and prosecutors are taking a holiday; it means we’re just getting started. We will continue to find, arrest, prosecute and remove violent criminals from all of our communities until no one lives in fear.”
“This case is the product of a concerted collaborative effort on the part of ATF and its local partners to target, investigate, and eliminate the perpetrators of violent crime,” said Beau Kolodka, Assistant Special Agent in Charge of the Atlanta Field Division of the bureau of Alcohol, Tobacco, Firearms and Explosives.
The operation was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Georgia Bureau of Investigation (GBI) and the Savannah Police Department, with assistance from the U.S. Marshals Service, the Chatham-Savannah Counter Narcotics Team (CNT) and the Chatham County Sheriff’s Office. Assistant United States Attorneys Greg Gilluly, Tania Groover and Matthew Josephson prosecuted the cases for the United States.
This investigation took place under the umbrella of the U.S. Department of Justice’s Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer.
Guatemalan National Charged with Transporting Aliens for Financial Gain, Illegally Re-Entering Country After Four Previous RemovalsRead the Press Release
SALT LAKE CITY – A federal grand jury returned an indictment Wednesday afternoon charging Rolando Gomez-Gomez, a Guatemalan national residing in Los Angeles, with three counts of transporting an alien for financial gain and one count of re-entry of a previously removed alien.
The charges in the indictment allege that Gomez-Gomez knowingly transported individuals, who were in the country illegally, within the United States for financial gain.
Gomez-Gomez was arrested Jan. 29, 2019, following a traffic stop in Summit County. Summit County Deputy Sheriff Vincent Nguyen, who is also a task force officer for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, executed a traffic stop on a vehicle. Gomez-Gomez, who was driving the vehicle, produced a Guatemalan driver’s license with characteristics indicating it could be fraudulent. The officer observed numerous male passengers in the back of the van. HSI special agents and officers with ICE Enforcement and Removal Operations joined Deputy Nguyen in continuing the investigation and eventually transported nine individuals to the ICE field office in West Valley City.
In addition to charges against Gomez-Gomez, the three individuals referred to by initials in the indictment are being charged with illegal re-entry of a previously removed alien. The remaining five, including three minors, will be processed as appropriate by ICE ERO.
Gomez-Gomez, who was initially arrested for possession of a fraudulent Guatemalan identification card, has been deported from the United States four times.
The defendant is scheduled to make an initial appearance on the indictment Thursday at
3 p.m. before Chief U.S. Magistrate Paul M. Warner. An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.The potential maximum penalty for each count of conspiracy to transport aliens is 10 years in prison. Re-entry of a previously removed alien has a two-year potential maximum sentence.
Georgia Man Sentenced to 10 Years for Trafficking Lethal Synthetic Opioid He Purchased on the Dark Web Using CryptocurrencyRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Marcus Lenard Armstrong, 35, of McDonough, Georgia, was sentenced to 120 months in prison and three years of supervised release on drug trafficking conspiracy charges, for buying the deadly synthetic opioid “U-47700” on the dark web using cryptocurrency.
“As Armstrong can attest, traffickers buying deadly drugs on the dark web in hopes of avoiding prosecution is a strategy fraught with peril,” said U.S. Attorney Murray. “The opioid abuse crisis is serious, and fighting an epidemic that is affecting communities across the Western District is a priority for my office. From the virtual street corner to the concrete one, those who pour lethal synthetic drugs into our neighborhoods will be investigated and prosecuted.”
Robert J. Murphy, the Special Agent in Charge of the Drug Enforcement Administration (DEA) Atlanta Field Division stated, “Whether you’re hiding behind the veil of the dark web or pushing drugs on a street corner or in a back alley, DEA, its law enforcement allies and the U.S. Attorney’s Office will relentlessly pursue you until you are brought to justice. With this case, the powerful and potentially deadly opioid “U47700” will no longer be distributed by this individual who is deserving of his lengthy sentence.”
“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs or other harmful substances,” said David M. McGinnis, U.S. Postal Inspector in Charge of the Charlotte Division. “Postal Inspectors’ objectives are to rid the mail of illicit drug trafficking, preserve the integrity of the mail and, most importantly, provide a safe environment for postal employees and the American public. The sentencing handed down today should serve as a reminder to other perpetrators engaged in this type of criminal activity that we will continue to work closely with our law enforcement partners to ensure they are brought to justice.”
According to filed court documents, from November 2016 to January 2018, Armstrong engaged in a conspiracy to traffic a lethal synthetic opioid, known as “U-47700.” Court records show that in June 2017, Armstrong arranged for a package containing the deadly opioid to be mailed to a residential address in Charlotte. Over the course of the investigation, law enforcement determined that Armstrong was using cryptocurrency to purchase “U-47700” on multiple dark web markets that sell and purchase illegal drugs.
On June 30, 2017, law enforcement visited the residence the parcel was addressed to in Charlotte and spoke with an individual who admitted to accepting packages for a “family friend,” later identified as Armstrong. Law enforcement seized the package, and confirmed that it contained 1,003.38 grams of the U-47700 drug. Court records show that two more packages were scheduled for delivery to the same residential address. On the same day, Armstrong went to a local post office in Charlotte to inquire about the delivery of the package. A U.S. Postal Inspector on site approached Armstrong and asked the defendant for more information about the package. After Armstrong became suspicious, he assaulted the Postal Inspector and attempted to flee the scene. Armstrong was apprehended outside of the post office.
According to court records, following his arrest, Armstrong was placed on pretrial release with electronic monitoring. While on pretrial release, Armstrong cut the transmitter he was required to wear at all times and attempted to elude authorities. He was arrested by law enforcement and was placed in federal custody. In April 2018, Armstrong pleaded guilty to drug trafficking conspiracy.
According to the DEA, U-47700 is a novel synthetic opioid, and its abuse parallels that of heroin and morphine, prescription opioids, and other novel opioids. In November 2016, after receiving multiple reports of confirmed fatalities in multiple states, including in North Carolina, DEA responded to the imminent threat to public health and safety by placing U-47700 into Schedule I of the Controlled Substances Act. Emergency scheduling of dangerous drugs such as U-47700 on a temporary basis is one of the most significant tools utilized to address the problems associated with deadly new street drugs.
In making today’s announcement, U.S. Attorney Murray thanked the DEA, the U.S. Postal Inspection Service, and the Charlotte-Mecklenburg Police Department for their investigation of this case.
Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, was in charge of the prosecution.
Fresno Man Charged with Assaulting Postal EmployeeRead the Press Release
FRESNO, Calif. — A federal grand jury returned an indictment today against Pablo Rivera, 34, of Fresno, charging him with assaulting a federal employee, a letter carrier for the U.S. Postal Service who was engaged in the performance of his duties, U.S. Attorney McGregor W. Scott announced.
According to court documents, on January 19, 2019, the letter carrier was sitting in his mail truck near Jackson Avenue and E. Shaw Avenue in Fresno, when Rivera ran up to him and stopped him from closing the door. Rivera shoved the letter carrier into the vehicle and sped off with the mail truck. According to police officers on the scene, after Rivera crashed the mail truck into a telephone support cable on Maroa Avenue, he was apprehended.
This case is the product of an investigation by the United States Postal Inspection Service. Assistant U.S. Attorney Thomas Newman is prosecuting the case.
If convicted, Rivera faces a maximum statutory penalty of eight years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former VA Employee Pleads Guilty to Fraud in Fake Invoice SchemeRead the Press Release
HOUSTON – A 75-year-old resident of Houston has been convicted of conspiring to commit fraud, announced U.S. Attorney Ryan K. Patrick and Special Agent in Charge James Ross of the Department of Veterans Affairs Office of Inspector General (VA-OIG).
Eduora McDaniel admitted she generated purchase orders for fictitious goods and services.
“Today’s guilty plea and associated charges underscore VA-OIG’s commitment to protecting the integrity of the funds intended for veterans,” said Ross.
As a prosthetics representative for the VA, McDaniel had the authority to obtain prosthetic goods and services if a VA physician found it medically necessary. McDaniel was authorized to pay for the goods using a government-issued VISA credit card.
As part of the scheme, she created bogus purchase orders for her co-conspirator’s company and paid them using her government credit card. McDaniel and co-conspirator Angela Hunter, 54, also of Houston, then split the payments.
Hunter previously pleaded guilty as well. McDaniel and Hunter are set for sentencing April 30 and 24, respectively.
Conspiracy to commit wire fraud carries a possible sentence of five years as well as a $250,000 maximum possible fine.
VA-OIG conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
Former Supervisor at Louisiana Correctional Facility Pleads Guilty to Violating Civil Rights of Five InmatesRead the Press Release
The Justice Department today announced that defendant Roderick Douglas, a former supervisor at the Richwood Correctional Center, pleaded guilty in federal court yesterday for his role in a conspiracy to violate the civil rights of five inmates. Douglas, 38, of Monroe, Louisiana, pleaded guilty to conspiring with five other officers to violate the Constitutional prohibition against cruel and unusual punishment. Assistant Attorney General Eric Dreiband for the Civil Rights Division and U.S. Attorney for the Western District of Louisiana David C. Joseph made the announcement.
“Correctional officers who abuse their power and inflict cruel and unusual punishment against the inmates under their care, violate the Constitution,” said Assistant Attorney General Eric Dreiband. “The Justice Department will continue to investigate and prosecute unlawful misconduct by correctional officers to protect victims of these abuses and to ensure the integrity of our civil rights laws.”
“The men and women who work in our prison system have a difficult and dangerous job,” U.S. Attorney David C. Joseph stated. “However, we expect our correctional facility employees to be professional and respectful of others’ rights. Those who fail to do so will be held accountable.”
According to his guilty plea, Douglas worked as a Captain at the Richwood Correctional Center in Richwood, Louisiana, where on Oct. 30, 2016 he and other officers conspired to inflict cruel and unusual punishment upon five inmates by spraying a chemical agent in their face and eyes while the inmates were handcuffed, compliant, kneeling on the floor, and not posing a physical threat to anyone. Douglas admitted that he and the other officers attempted to hide their conduct by submitting a false story in their official reports concerning the incident.
The count of conviction carries a maximum penalty of five years in prison and a criminal fine of up to $250,000. Douglas is scheduled to be sentenced on June 10, 2019 by U.S. District Judge Terry A. Doughty of the Western District of Louisiana, who accepted the plea.
This case is being prosecuted by Assistant U.S. Attorney Mary Mudrick of the U.S. Attorney’s Office of the Western District of Louisiana, and Trial Attorney Anita Channapati of the Civil Rights Division, Criminal Section, U.S. Department of Justice. The case was investigated by the Monroe Division of the FBI.
Former San Pablo Resident Pleads Guilty to Filing False Tax ReturnsRead the Press Release
SAN FRANCISCO – Marcus Wilson pleaded guilty in federal court in San Francisco today to filing a false claim with the Internal Revenue Service, announced United States Attorney David L. Anderson and Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), Kareem Carter. The plea agreement was accepted by the Honorable Jon S. Tigar, U.S. District Judge.
In pleading guilty, Wilson, 32, formerly of San Pablo, admitted that during 2011 and 2012 he filed numerous false tax returns on behalf of others. Wilson admitted he told people that they may qualify for “Obama Stimulus” or “Renter’s Rebates” if they had not filed any tax return in a given year. In reliance on his representations, the individuals provided Wilson with information sufficient for him to file a tax return on their behalf. Nevertheless, the individuals generally did not provide any financial or other tax-related information; instead, Wilson falsified information regarding the individuals’ wage and business income so he could obtain refunds from the IRS. Wilson admitted he caused the IRS to fund over $1 million worth of refunds to numerous individuals for tax year 2011 by presenting tax returns he knew contained false information.
A federal grand jury indicted Wilson on January 17, 2017. He was charged with one count of conspiracy to file false claims, in violation of 18 U.S.C. § 286; five counts of filing false claims, in violation of 18 U.S.C. § 287; five counts of wire fraud, in violation of 18 U.S.C. § 1343; and five counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Wilson pleaded guilty to one count of filing a false claim and, if he complies with the terms of the agreement, the remaining counts will be dismissed at sentencing.
Wilson currently is released on bond. His next court appearance is scheduled for May 31, 2019, for a sentencing hearing before Judge Tigar. The maximum statutory penalty for a violation of 18 U.S.C. § 287 is 5 years’ imprisonment and a fine of $250,000 plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. In this case, Wilson has agreed to pay restitution in an amount to be set by the Court, but in no event less than $1,026,340.
Assistant U.S. Attorneys Robert Rees and Meredith Osborn are prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the IRS-CI.
Former Richwood correctional supervisor pleads guilty to role in physical assault of inmatesRead the Press Release
MONROE, La. – The Justice Department and U.S. Attorney David C. Joseph announced that Roderick Douglas, a former supervisor at the Richwood Correctional Center, pleaded guilty Wednesday in federal court for his role in a conspiracy to violate the civil rights of five inmates.
Douglas, 38, of Monroe, Louisiana, pleaded guilty to conspiring with five other officers to violate the Constitutional prohibition against cruel and unusual punishment. Assistant Attorney General Eric Dreiband of the Civil Rights Division and Western District of Louisiana U.S. Attorney David C. Joseph made the announcement.
“Correctional officers who abuse their power and inflict cruel and unusual punishment against the inmates under their care, violate the Constitution,” said Assistant Attorney General Eric Dreiband. “The Justice Department will continue to investigate and prosecute unlawful misconduct by correctional officers to protect victims of these abuses and to ensure the integrity of our civil rights laws.”
“The men and women who work in our prison system have a difficult and dangerous job,” U.S. Attorney David C. Joseph stated. “However, we expect our correctional facility employees to be professional and respectful of others’ rights. Those who fail to do so will be held accountable.”
According to his guilty plea, Douglas worked as a Captain at the Richwood Correctional Center in Richwood, Louisiana, where on October 30, 2016, he and other officers conspired to inflict cruel and unusual punishment upon five inmates by spraying a chemical agent in their face and eyes while the inmates were handcuffed, compliant, kneeling on the floor, and not posing a physical threat to anyone. Douglas admitted that he and the other officers attempted to hide their conduct by submitting a false story in their official reports concerning the incident.
The count of conviction carries a maximum penalty of five years in prison and a criminal fine of up to $250,000. Douglas is scheduled to be sentenced on June 10, 2019 by U.S. District Judge Terry A. Doughty of the Western District of Louisiana, who accepted the plea.
The case was investigated by the Monroe Division of the FBI. Assistant U.S. Attorney Mary Mudrick of the U.S. Attorney’s Office, Western District of Louisiana, and Trial Attorney Anita Channapati of the Civil Rights Division, Criminal Section, U.S. Department of Justice, are prosecuting the case.
Former New York City Police Department Official Sentenced to 18 Months for Conspiring to Bribe Fellow Officers in Connection with Gun License Bribery SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that PAUL DEAN was sentenced to 18 months in prison by the U.S. District Judge Edgardo Ramos today in connection with a bribery scheme involving the approval of gun licenses by the New York City Police Department (“NYPD”) License Division. Specifically, DEAN, who as second-in-command of the License Division had accepted gifts and favors in connection with his approval of gun licenses, conspired upon his retirement from the NYPD to open his own “expediting” business in which he would pay bribes to his fellow NYPD officers, once his subordinates in the License Division, to issue gun licenses to DEAN’s clients.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As a high-ranking officer and supervisor in the NYPD’s License Division, Paul Dean was entrusted with ensuring the integrity of the process for issuing gun licenses in New York City. Instead of embracing that trust and focusing on the safety of New Yorkers, he monetized it for his own benefit, and enabled officers under his command to do the same. Together with our partners in law enforcement, my office has worked tirelessly to make sure those efforts by Dean and others involved ended not with dollar signs, but in prison cells. We will continue to root out corrupt law enforcement officers where we find them, while commending the vast majority of officers who, unlike Dean, serve the City of New York honestly and honorably.”
According to the Indictment and Complaint filed in this case, other public filings, and statements made during the plea proceeding:
DEAN was a member of the NYPD from 1994 through 2016, and was assigned to the License Division from 2008 through 2016. DEAN, a lieutenant, was one of the highest-ranking members of the License Division and, from approximately November 2014 through November 2015, regularly ran its day-to-day operations. Co-defendant Robert Espinel was a member of the NYPD from 1995 through his retirement in 2016, and was assigned to the License Division from 2011 through 2016.
From at least 2013 through 2016, multiple NYPD officers in the License Division serving under DEAN’s command, including David Villanueva and Richard Ochetal, solicited and accepted bribes from gun license expediters – including Frank Soohoo, Alex Lichtenstein, a/k/a “Shaya,” and co-defendant Gaetano Valastro, a former NYPD detective – in exchange for providing assistance to the expediters’ clients in obtaining gun licenses quickly and often with little to no diligence. DEAN, aware of this bribery arrangement, approved many of the gun license applications submitted by these expediters, despite the fact that no substantial due diligence had been performed on them. As part of the scheme, licenses were issued for individuals with substantial criminal histories, including arrests and convictions for crimes involving weapons or violence, and for individuals with histories of domestic violence.
DEAN accepted things of value from the expediters whose applications he approved, including $1,000 cash from Lichtenstein, catered meals and alcohol from Soohoo, and gun equipment from Valastro. DEAN also accepted gifts and favors directly from applicants whose licenses he approved, including free meals at restaurants, free liquor from a liquor distributor, free beer and soda from a beverage distributor, free car repairs from car shops, and free entertainment.
In 2015, dissatisfied with the fact that private gun expediters were profiting thousands of dollars per gun license applicant when DEAN and others did the work to approve those applications, DEAN and Espinel decided to retire and go into the expediting business themselves. In order to ensure the success of their business, DEAN and Espinel planned to bribe Villanueva and Ochetal, who were still in the License Division, to enable their clients to get special treatment. They also agreed with Valastro to run their expediting and bribery scheme out of Valastro’s gun store. According to the plan, Valastro would benefit from the scheme because DEAN and Espinel would steer successful applicants to Valastro’s store to buy guns. They also tried to corner the expediting market by forcing other expediters to work through them. Specifically, DEAN and Espinel attempted to coerce Frank Soohoo, another gun license expediter, into sharing his expediting clients with them by threatening to use their influence in the License Division to shut down Soohoo’s expediting business if Soohoo refused to work with, and make payments to, DEAN and Espinel.
Espinel and Valastro have previously pled guilty and are awaiting sentence. Villanueva, Ochetal, Lichtenstein, and Soohoo have also pled guilty in case number 16 Cr. 342 (SHS). Lichtenstein was sentenced by the U.S. District Judge Sidney H. Stein to 32 months in prison, and the remaining defendants are awaiting sentence.
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In addition to the prison term, DEAN, 46, was sentenced to two years of supervised release, a fine of $7,500, and forfeiture of $1,000.
Mr. Berman thanked the Federal Bureau of Investigation and the New York City Police Department, Internal Affairs Division, for their outstanding investigative work in this matter.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorney Kimberly Ravener is in charge of the prosecution.
Former Military Dependent Sentenced for Sexual Exploitation of a ChildRead the Press Release
A 39-year-old man has been ordered to federal prison following his conviction for sexual exploitation of a child, announced U.S. Attorney Trent Shores.
U.S. District Judge Claire V. Eagan sentenced Robert Patrick King, of Suffolk, Virginia, to 20 years in prison. Upon, release from prison, King is required to register as a sex offender.
This case was prosecuted under the Military Extraterritorial Jurisdiction Act, which allows for civilians accompanying the military outside the United States to be prosecuted for violations of federal law.
“Possession of child pornography is not a victimless crime. The United States Attorney’s Office will give voice to those child victims. And, with our law enforcement partners, we will hold accountable those who sexually exploit children,” said U.S. Attorney Trent Shores. “In this case, NCIS investigators partnered with Assistant U.S. Attorney Chris Nassar to bring a child predator to justice. That’s a formidable team fighting for child victims. I am proud of the work they do daily to achieve justice.”
At a plea hearing, King admitted that in the summer of 2017, at a U.S. Naval Base in Yokosuka, Japan, he took sexually explicit photographs of a 5-year-old child after coercing the child to take a bath at his home. At the time, King was the spouse of a U.S. Navy service member. Investigators also discovered similar photographs of other child victims taken in the United States, where he lived prior to his move to Japan.
King has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility.
The Naval Criminal Investigative Service conducted the investigation. Assistant U.S. Attorney Christopher J. Nassar prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims.
For more information about Project Safe Childhood, please visit www.justice.gov/psc. Internet safety education can be found on the tab labeled "resources” on the left column of the page.
Former Microsoft Director of Sports Marketing Pleads Guilty to Wire FraudRead the Press Release
The former Director of Sports Marketing and Alliances at Microsoft pleaded guilty today in U.S. District Court in Seattle to wire fraud for his scheme to profit by stealing from Microsoft, announced U.S. Attorney Brian T. Moran. JEFF TRAN, a/k/a TRUNG TRAN, 45 of Seattle, used his position at Microsoft to attempt to steal more than $1.5 million through the creation and submission of fraudulent invoices and the unauthorized use of other Microsoft assets. Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing for May 10, 2019.
According to the plea agreement and other records in the case, TRAN oversaw Microsoft’s promotional relationship with the National Football League (NFL). In March 2017, TRAN caused a fraudulent $775,000 invoice to be issued to Microsoft, supposedly for services related to the 2017 Super Bowl. Tran caused the $775,000 payment from Microsoft to be routed through two Microsoft vendors and then to Tran’s personal bank account. Tran then attempted to cause Microsoft to make a second payment for $670,000, based on another fraudulent invoice. Tran intended to route that payment to a company Tran controlled. When Microsoft vendors became suspicious of Tran’s activity and reported the conduct to Microsoft, Tran destroyed electronic communications and told the vendors to lie to Microsoft about the $775,000 payment. After Microsoft confronted Tran, Tran returned the $775,000.
Tran also stole blocks of Super Bowl tickets and Super Bowl Party tickets belonging to Microsoft. Because of his position, Tran was responsible for determining which Microsoft employees would receive Microsoft Super Bowl tickets. However, instead of distributing all of the tickets to Microsoft employees, TRAN sold over 60 of the tickets through a ticket broker and pocketed more than $200,000. In one instance, TRAN accepted payment from a Microsoft co-worker for Super Bowl tickets claiming that he had personally paid for the tickets – in fact TRAN was selling the other employee tickets belonging to Microsoft.
Wire Fraud is punishable by up to 20 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentence of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Prosecutors have agreed to recommend a sentence of no more than three years in prison.
TRAN has already paid restitution to Microsoft of $1,036,000. No further restitution is anticipated.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Former Corrections Officer Sentenced for Felony Possession of Cocaine with Intent to DistributeRead the Press Release
St. Croix, USVI – Chief District Court Judge Wilma A. Lewis, on January 18, 2019, sentenced Yasmeen Massicott, age 40, of St. Croix, to three years of supervised release with six months of home confinement, for possession of cocaine with intent to distribute, United States Attorney Gretchen C.F. Shappert announced. Judge Lewis also ordered Massicott to pay a fine of $1,000.00 and a special assessment of $100.00.
On October 11, 2016, Massicott pleaded guilty to possession of cocaine with intent to distribute. According to court documents, on December 14, 2013, Massicott was stopped and searched by corrections officers as she entered Golden Grove Correctional Facility. The search uncovered cocaine powder and marijuana in a bag that she was carrying. Massicott admitted that she was bringing the drugs to an inmate for a fee. At the time of the event, Massicott was employed as a corrections officer with the Golden Grove Correctional Facility.
The case was investigated by the U.S. Drug Enforcement Administration and the Virgin Islands Bureau of Corrections. It was prosecuted by Assistant U.S. Attorney Alphonso G. Andrews, Jr.
Former Chief Executive Officer and Senior Vice President of Barbadian Insurance Company Charged with Laundering Bribes to Former Minister of Industry of BarbadosRead the Press Release
BROOKLYN, N.Y. – Ingrid Innes, the former chief executive officer, and Alex Tasker, a former senior vice president of Insurance Corporation of Barbados Limited (ICBL), a Barbados-based insurance company, were charged in a superseding indictment unsealed on January 18, 2019, with laundering bribes to the former Minister of Industry of Barbados in exchange for his assistance in securing government contracts for ICBL. Innes and Tasker are not in U.S. custody.
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.
Innes and Tasker were charged with one count of conspiracy to launder money and two counts of money laundering in the superseding indictment. The former Minister of Industry of Barbados, Donville Inniss, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was charged with the same crimes in an indictment unsealed on August 6, 2018, and as a co-defendant of Innes and Tasker in the superseding indictment. Inniss is scheduled for trial on June 24, 2019, before United States District Judge Kiyo A. Matsumoto.
The superseding indictment alleges that in 2015 and 2016, Innes and Tasker participated in a scheme to launder into the United States approximately $36,000 in bribes that they paid to Inniss, who at the time was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce and Small Business Development of Barbados.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
ICBL voluntarily disclosed to the government the payments to Inniss and received a prosecution declination under the FCPA Corporate Enforcement Policy. ICBL disgorged to the government $93,940.19 in illicit profits that it earned from the scheme.
The FBI’s New York Field Office and International Corruption Squad is investigating the case. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.
Assistant United States Attorney Sylvia Shweder of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Gerald M. Moody, Jr., of the Criminal Division’s Fraud Section are in charge of the prosecution.
The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The Defendants:
DONVILLE INNISS
Age: 52
BarbadosINGRID INNES
Age: 63
CanadaALEX TASKER
Age: 58
BarbadosE.D.N.Y. Docket No. 18-CR-134 (S-1) (KAM)
Federal Prosecutors Unseal Indictments Naming 19 People Linked to Chinese ‘Birth Tourism’ Schemes that Helped Thousands of Aliens Give Birth in U.S. to Secure Birthright Citizenship for Their ChildrenRead the Press Release
SANTA ANA, California – Following the arrests this morning of three defendants who allegedly operated “birth tourism” outfits that catered to Chinese clients, federal authorities today unsealed indictments that charge a total of 19 people linked to three schemes that operated across Southern California and charged clients tens of thousands of dollars to help them give birth in the United States.
The indictments charge operators and clients of three “maternity house” or “birthing house” schemes that were dismantled in March 2015 when federal agents executed 35 search warrants, which resulted from international undercover operations.
The 17 cases unsealed today contain the first-ever federal criminal charges brought against operators and customers of birth tourism businesses. The birth tourism operations not only committed widespread immigration fraud and engaged in international money laundering, they also defrauded property owners when leasing the apartments and houses used in their birth tourism schemes, according to the indictments.
The indictments describe birth tourism schemes in which foreign nationals, mostly from China, applied for visitor visas to come to the United States and lied about the length of their trips, where they would stay, and the purposes of their trips – which were to come to the U.S. for three months to give birth so their children would receive U.S. birthright citizenship.
According to the indictments that charge the operators of the schemes, they coached their Chinese customers how to pass the U.S. Consulate interview in China by falsely stating that they were going to stay in the U.S. for only two weeks. Their clients were also coached to trick U.S. Customs at ports of entry by wearing loose clothing that would conceal their pregnancies. The indictments also allege that the customers were directed to fly to Hawaii from China – instead of directly to Los Angeles – because it was easier to get through U.S. Customs in Hawaii. The indictments allege that many of the Chinese birth tourism customers failed to pay all of the medical costs associated with their hospital births, and the debts were referred to collection.
“These cases allege a wide array of criminal schemes that sought to defeat our immigration laws – laws that welcome foreign visitors so long as they are truthful about their intentions when entering the country,” said United States Attorney Nick Hanna. “Statements by the operators of these birthing houses show contempt for the United States, while they were luring clients with the power and prestige of U.S. citizenship for their children. Some of the wealthy clients of these businesses also showed blatant contempt for the U.S. by ignoring court orders directing them to stay in the country to assist with the investigation and by skipping out on their unpaid hospital bills.”
“America’s way of life is not for sale,” said Joseph Macias, Special Agent in Charge of Homeland Security Investigations Los Angeles. “HSI will aggressively target those who would make a mockery of our laws and our values to benefit and enrich themselves. No one needs to be reminded about the national security and public safety implications of visa fraud and the crimes associated with it. Anyone who would exploit our nation’s generosity and our legal immigration system should be on notice – they may end up being the ones to pay a very steep price.”
“Receiving a tourist visa from the United States Government is a privilege, not a right,” stated IRS Criminal Investigation Acting Special Agent in Charge Bryant Jackson. “The indictments announced today confirm IRS Criminal Investigation’s commitment to following the money – from China to the United States – to help identify the promoters of this alleged illegal international birth tourism scheme. Using cash, fabricated financial documents, and nominee names for the transfer of money from China to the U.S., the promoters attempted to further their lucrative birth tourism enterprise.”
Three indictments returned Wednesday by a federal grand jury charge the operators of large birth tourism operations based in Orange, Los Angeles and San Bernardino counties. Pursuant to this week’s indictments, federal authorities this morning arrested three defendants: Dongyuan Li (李冬媛), 41, of Irvine; Michael Wei Yueh Liu (刘维岳), 53, of Rancho Cucamonga; and Jing Dong (董晶), 42, of Fontana. All three are charged with conspiracy to commit immigration fraud, international money laundering and identity theft. Liu is also charged with filing three false tax returns.
According to the indictments charging the operators, all three businesses touted the benefits of giving birth in the U.S., rather than in China, with claims of the U.S. having “the most attractive nationality”; “better air” and less pollution; “priority for jobs in U.S. government”; superior educational resources, including “free education from junior high school to public high school”; a more stable political situation; and the potential to “receive your senior supplement benefits when you are living overseas.”
The indictment naming Li alleges that she operated an Orange County-based business named You Win USA that advertised its “100-person team” in China and the U.S. had served more than 500 Chinese birth tourism customers. Li allegedly used 20 apartments in Irvine, charged each customer $40,000 to $80,000, and received $3 million in international wire transfers from China in just two years. The indictment details communications in which Li referred to U.S. immigration authorities as “the foreigners” and also discussed whether to refund a downpayment because, once the customer found out “the baby is a girl, her husband arranged abortion for her.”
(The investigation into Li’s operation led to another investigation, which resulted in criminal charges against the 20th person to be charged in this matter. Attorney Ken Zhiyi Liang was sentenced to 21 months in federal prison for helping material witnesses flee to China in violation of court orders.)
Another indictment filed this week charges Wen Rui Deng (邓文瑞), 65, a former Irvine resident who is believed to now be in China, with operating Star Baby Care, a Los Angeles County-based operation that is believed to have been the largest birth tourism scheme in the U.S. On its websites, Star Baby Care boasted that it was founded in 1999 as the “number one designated maternity service to the pregnant mother from China, Hong Kong, and Taiwan,” and had “provided services to 8,000 pregnant women (4,000 from China) since we established.” The indictment alleges that Deng’s scheme used 30 apartments in Rowland Heights and 10 properties in Irvine, including some houses. Deng’s scheme served many customers alleged to be Chinese officials, including some associated with Chinese Central Television, China Telecom, Bank of China, and two local taxation bureaus.
In the third indictment filed this week, Liu and Dong are accused of operating USA Happy Baby Inc., a San Bernardino County-based company that charged “VIP” customers as much as $100,000. Using apartments in Rancho Cucamonga and Irvine, USA Happy Baby allegedly also served Chinese officials, including people associated with the Henan People’s Radio Station in Zhengzhou, the Public Security Bureau in the Beijing Municipal Government, and the Harbin Medical University in Heilongjiang Province. Liu and USA Happy Baby are also charged with filing false tax returns that failed to report more than $1.9 million received over three years. The indictment also alleges that Liu and Dong used 14 different bank accounts to receive more than $3.4 million in international wire transfers from China during 2013 and 2014 alone.
There are 16 fugitive defendants whose indictments were unsealed today. They are:
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Qiang Yan (闫强), 42, who is Dongyuan Li’s husband, was indicted in December 2018 on three counts of visa fraud for filing an application for an “O” visa premised upon being an “alien of extraordinary ability,” which falsely claimed that he had co-authored two books and attached fake copies of those books. The indictment naming his wife notes that when Yan was interviewed during a search of Li’s multi-million-dollar residence in Irvine, he told the federal agents that his birth tourism business investment was “chump change,” because he had more than $10 million in his bank accounts in China.
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Xiao Yan Liu (刘小燕), 39, who was indicted in November 2018 for two counts of visa fraud and one count of lying to federal law enforcement. According to her visa application, she was the “Chief Physician” at the Henan Shangqiu Power Supply Company Staff Hospital.
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Jun Xiao (肖俊), 30, and LongJing Yi (易珑静), 30, who were indicted in February 2018 on charges of conspiracy, visa fraud, obstruction of justice, and criminal contempt. According to their indictment, Xiao and Yi made false statements on their visa applications, namely that they would be staying in the United States for only 15 days. According to court documents in their case, Xiao and Yi paid only $4,600 of the $32,291 in hospital charges related to the birth of their baby. The indictments detail communications from Xiao after he had fled to China, where he continued to denigrate the Court’s Order requiring him to stay in the U.S.: “Anyway, I’m already home. U.S. can’t do anything to me.”
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Dongjiang He (贺东江), 46, was indicted in February 2018 for fleeing with his wife to China, in violation of a federal court order. On his visa application, He listed his occupation as “Government” and his position as “Project Manager and Secretary General” for the China Nonferrous Metals Techno Economic Research Institute, which is located in the Haidian District in Beijing. His wife, Zhichan Yu (余芝婵), 40, also was indicted in February 2018 on charges of visa fraud, obstruction of justice, and contempt of court after fleeing to China in violation of a federal court order.
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Jia Luo (罗佳), 30, was indicted in February 2018 for fleeing to China in violation of a federal court order. According to court documents, Luo lied on her visa application and lied to U.S. Customs officers in Hawaii when asked her if she was planning on having a baby in the United States.
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Renlong Chen (陈人龙), 34, and his wife Wei Wang (王伟), 33, were indicted in February 2018 for fleeing to China, in violation of federal court orders. Chen and Wang are accused of making false statements on their visa applications by stating they would be visiting the United States for only eight days, when they actually made arrangements to stay at a maternity house in Rancho Cucamonga for three months so that Wang could give birth in the United States.
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Jie He (何洁), 29, was indicted in February 2018 for fleeing to China in violation of federal court order. She allegedly made false statements on her visa application, including that she planned to stay in the United States for only 20 days, when she actually entered into a contract to pay approximately $50,000 to obtain a visa and stay in the United States for several months to give birth. According to court documents, Jie He told investigators that she flew into Las Vegas, rather than Los Angeles, because the Chinese maternity operator had advised her that it was easier to enter through Las Vegas.
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Eryun Zhang (张尔芸), 25; her husband, Liang Ni (倪梁), 25; and her mother, Ji Xu (徐激), 50, were indicted in February 2018 for fleeing to China in violation of federal court orders. According to court documents, Ni admitted that, during an interview conducted at the U.S. Consulate in China, he falsely stated that the purpose of their trip was for their honeymoon, rather than the true reason for Zhang to give birth in the United States.
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Chao Chen (陈超), 34, a partner in the You Win USA scheme, was indicted in December 2018 with one count of contempt of court for fleeing the U.S. while he was pending sentencing. Chen previously pleaded guilty to visa fraud, marriage fraud and tax fraud.
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Ji Zhu (朱洁), 31, who was indicted in March 2018 for one count of marriage fraud, for allegedly marrying a U.S. citizen to obtain U.S. citizenship, even though she really was married to Chao Chen. Zhu fled to China with Chao Chen, where they remain fugitives from justice.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The three defendants arrested this morning are expected to be arraigned on the indictments this afternoon in United States District Court in Santa Ana.
The federal investigation into Dongyuan Li’s You Win USA scheme has resulted in seizure and/or forfeiture proceedings against three real properties with millions of dollars in equity, including her $2.1 million residence in Irvine; six vehicles, including four Mercedes Benz vehicles; more than $1 million from bank accounts; and many gold bars and coins.
These cases were investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS Criminal Investigation. The Federal Bureau of Investigation participated in the investigation of USA Happy Baby and the material witnesses related to that scheme who fled to China. Local law enforcement authorities, including the Irvine Police Department and the San Bernardino County Sheriff’s Department, provided substantial assistance during execution of search warrants in 2015.
These cases are being prosecuted by Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office.
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Federal Jury Finds Orlando Man Found Guilty of Walmart RobberiesRead the Press Release
Orlando, Florida – A federal jury has found Catrell Ivory (27, Orlando) guilty of two robberies, an attempted robbery, and two counts of brandishing a firearm during a robbery, in connection with a series of armed Walmart robberies he committed in Orlando. Ivory faces a maximum penalty of life in federal prison. His sentencing hearing is scheduled for April 24, 2019.
According to evidence presented at trial, shortly after midnight on June 2, 2017, Ivory and his accomplices robbed the Walmart Neighborhood Market located at 5559 Clarcona Ocoee Road in Orlando. The store managers were held at gunpoint and more than $74,000 was stolen from the vault inside the cash office. On July 31, 2017, at approximately 3:00 a.m., Ivory and his accomplices robbed another Walmart Market located at 2715 S. Orange Avenue in Orlando. They held a store manager at gunpoint and stole more than $24,000 from the cash office. On August 10, 2017, Ivory and his accomplices attempted to rob a third Walmart Market located at 8801 Conroy Windermere Road in Orlando, but they were unable to get into the cash office.
During each incident, Ivory and his accomplices carried and brandished firearms and wore masks and gloves to conceal their identities.
This case was investigated by the Federal Bureau of Investigation, the Orange County Sheriff’s Office, the Osceola County Sheriff’s Office, and the Orlando Police Department. It is being prosecuted by Assistant United States Attorney Chauncey A. Bratt.
Federal Jury Convicts Jacksonville Man for Crack Cocaine ConspiracyRead the Press Release
GREENVILLE – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that yesterday in Federal court, ANTHONY DEPREE SMITH, a 44-year-old resident of Jacksonville, was convicted following a two-day trial before Senior United States District Judge Malcolm J. Howard. The jury found SMITH guilty of Conspiracy to Possess with the Intent to Distribute Two Hundred Eighty (280) Grams or More of Cocaine Base (Crack). Sentencing is scheduled for the May 7, 2019 term of court in Greenville. SMITH faces at least ten years’ and up to life imprisonment.
The evidence at trial showed that SMITH had operated a long-standing crack cocaine organization in the city of Jacksonville, North Carolina, supplying multiple people with crack cocaine for resale on the street. Members of the Jacksonville Police Department conducted over a dozen controlled purchases of crack cocaine from members of SMITH’s organization and ultimately secured their cooperation against their supplier, SMITH. At trial, the evidence included a financial investigation, showing that SMITH had deposited over $118,000 in cash into a bank account that could not be accounted for from other, legitimate sources.
Mr. Higdon commented: “The prosecution of Anthony Smith, and others like him, highlights our focus as we seek to take our communities back from drug traffickers and violent criminals. Smith controlled a significant portion of the illegal drug trade which plagued Jacksonville for many years. His conviction is an important step in helping law enforcement and the people of Jacksonville to eliminate this problem.”
The case was investigated by the Jacksonville Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the United States Marshals Service. Laura S. Howard prosecuted the case on behalf of the United States.
Everett Man Sentenced for Scheme to Defraud the Massachusetts Department of Unemployment AssistanceRead the Press Release
BOSTON – An Everett man was sentenced today in federal court in Boston in connection with a scheme to defraud the Massachusetts Department of Unemployment Assistance (DUA) of more than $1.7 million.
Edison Delarosa, 53, was sentenced by U.S. Senior District Court Judge George A. O’Toole Jr. to two years in prison, three years of supervised release, and ordered to pay restitution in the amount of $27,227. In October 2018, Delarosa pleaded guilty to three counts of mail fraud and three counts of wire fraud. In February 2017, Delarosa was arrested and charged and subsequently released on conditions.
From approximately January 5 through November 24, 2016, Delarosa engaged in a scheme to defraud the Commonwealth of Massachusetts by exploiting DUA’s online system, which allows claimants to manage their unemployment insurance accounts over the internet. On multiple occasions, Delarosa, who did not actually owe DUA any money, submitted bogus “repayments” online, which triggered the release of “refund” checks payable to him in varying amounts. During the course of the scheme, Delarosa submitted a total of 136 fraudulent “repayments,” amounting to $1,763,418, for which DUA issued him 15 paper “refund” checks, totaling $1,251,283. DUA uncovered the scheme after six of those checks, totaling $27,227, were mailed to Delarosa and deposited into his account.
United States Attorney Andrew E. Lelling; Michael Mikulka, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Office of Investigations, New York Region; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The Commonwealth of Massachusetts’ Department of Unemployment Assistance provided valuable assistance to the investigation. Assistant U.S. Attorney Anne Paruti of Lelling’s Major Crimes Unit prosecuted the case.
Durant Man Sentenced to 28 Months for Wire FraudRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Ronnie Ray Neihart, age 68, of Durant, Oklahoma, was sentenced to 28 months’ imprisonment and 3 years’ supervised release for Wire Fraud, in violation of Title 18, United States Code, Section 1343. The charges arose from an investigation by the Federal Bureau of Investigation.
The Indictment alleged that beginning on or about June 3, 2010, and continuing through on or about August 31, 2017, within the Eastern District of Oklahoma and elsewhere, the defendant, knowingly and with the intent to defraud, devised and executed a scheme by making false statements to investors in order to sell them units of ownership in OG Land & Mineral, LLC, and EX-OG Energy, LLC.
United States Attorney Brian J. Kuester said, “For many years Neihart profited by defrauding unsuspecting and innocent people who believed they were investing their hard earned money in legitimate businesses. He did not concern himself with the economic hardships and heartache that his schemes inflicted on his victims. Fortunately, Neihart’s fraudulent conduct has been brought to an end and no more victims will fall prey to him.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. First Assistant United States Attorney Douglas Horn represented the United States. The defendant will remain on bond and must report to the designated federal facility on January 12, 2019 where the non-paroleable sentence will be served.
Dublin Man Pleads Guilty to Insider Trading Charges in Relation to Securities of Ross Stores, Inc.Read the Press Release
OAKLAND – Saleem Khan pleaded guilty in federal court in Oakland today to conspiracy and securities fraud charges arising from an insider trading scheme in which he obtained and traded on material, non-public information, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The plea was accepted by the Honorable Haywood S. Gilliam, Jr., United Stated District Judge.
In pleading guilty, Khan, 54, of Dublin, admitted that during the period July 2009 to October 2012, he obtained material, non-public information relating the sales and financial performance of Ross Stores, Inc. (“Ross”), a discount-clothing retailer then headquartered in Pleasanton, Calif., from a friend who worked in Ross’s finance department. Based on this material, non-public information, Khan entered into options contracts regarding Ross securities in advance of Ross’s monthly sales announcements in brokerage accounts held both in his name and in nominee names. These transactions included at least nine “call” option transactions that occurred between October 2011 and August 2012. In his plea agreement, Khan admitted he provided pecuniary benefits to the Ross “tipper,” including by providing $130,000 to the tipper through third parties and by purchasing items on the tipper’s behalf. Khan admitted he made profits in excess of $3,500,000 as a result of the scheme.
On November 2, 2017, federal grand jury returned a superseding indictment against Khan charging him with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349; nine counts of securities fraud, in violation of 18 U.S.C. § 1348; and one count of obstruction of justice, in violation of 18 U.S.C. § 1505. Khan pleaded guilty to the conspiracy and securities fraud counts. If Khan complies with the terms of the plea agreement, the remaining count will be dismissed at his sentencing.
Khan was previously sued in a civil case by the Securities and Exchange Commission (SEC), Securities and Exchange Commission v. Saleem Khan et al., Civil Action No. 3:14-cv-02743 HSG (N.D. Cal., filed June 13, 2014), pertaining to the same insider-trading scheme. In September 2016, the court entered a final judgment against Khan ordering him to pay more than $15 million in disgorgement, penalties, and prejudgment interest. In that case, Khan agreed to settle the charges against him without admitting or denying the allegations in the civil complaint, and he consented to the entry of final judgment.
Khan’s sentencing hearing is scheduled for June 24, 2019, before Judge Gilliam in Oakland. The maximum statutory penalty for each count in violation of 18 U.S.C. §§ 1348 and 1349 is 25 years’ imprisonment and a fine of $250,000, plus restitution and forfeiture, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Kyle F. Waldinger and Matthew L. McCarthy are prosecuting the case with the assistance of Hector Lopez and Bridget Kilkenny. The criminal prosecution is the result of an investigation by the Federal Bureau of Investigation. In addition, substantial cooperation and assistance was provided by the San Francisco Regional Office and the Market Abuse Unit of the SEC. The government also appreciates the cooperation and assistance of the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group.
Drug Traffickers Sentenced to A Total of 16 Years in PrisonRead the Press Release
RENO, Nev. – Two drug traffickers were sentenced today to a total of 16 years in federal prison after a traffic stop in Carson City for speeding led to the discovery of large quantities of methamphetamine and heroin in their car, announced U.S. Attorney Nicholas A. Trutanich of the District of Nevada and Special Agent in Charge Aaron C. Rouse for the FBI.
“Those who deal highly addictive drugs, like methamphetamine and heroin, prey on the addictions of others and damage communities,” said U.S. Attorney Trutanich. “We were able to successfully prosecute this case thanks to our strong law enforcement partnerships.”
“Drug traffickers will continue to be the focus of the FBI’s Northern Nevada Safe Streets Gang Task Force because no one in our community should have to live in fear of the activity that drug trafficking brings to their neighborhoods,” said Special Agent in Charge Rouse.
Danny Lyle Jensen II, 39, and Kimberly Lopes, 37, both of Henderson, were sentenced to 130 months and 63 months, respectively, and five years of supervised release by U.S. District Judge Howard D. McKibben. They previously pleaded guilty to conspiracy to possess with intent to distribute and to distribute at least 500 grams of methamphetamine.
On December 6, 2017, a deputy with the Carson City Sheriff’s Office observed a car speeding and attempted to conduct a traffic stop of the vehicle. During the traffic stop, the deputy noticed Jensen and Lopes’ hands were shaking as they looked for the vehicle registration and insurance, they avoided eye contact, and they provided different cities when asked about their destination. The deputy noticed in plain view a spoon in the passenger door compartment and a roll of shrink wrap in the back seat, both are items often associated with drug use and classified as drug paraphernalia. During a search of the vehicle with a drug detection K9, a total of two kilograms of methamphetamine and a half pound of heroin were discovered concealed in packages in the interior firewall of the trunk.
The case was investigated by the FBI and the Carson City Sheriff’s Office. Assistant U.S. Attorney Jim Keller prosecuted the case.
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Dominican National Pleads Guilty to Identity TheftRead the Press Release
BOSTON – A Dominican national, formerly residing in Lawrence, but presently serving a state prison term for fentanyl trafficking, pleaded guilty today in federal court in Boston to charges including identity theft.
Rafael Aguasviva Peralta, 32, pleaded guilty to one count of misuse of a Social Security number and one count of aggravated identity theft. U.S. District Court Judge Rya Zobel scheduled sentencing for May 2, 2019.
On Nov. 19, 2013, Aguasviva falsely represented that a Social Security number was his in an application for a learner’s permit, using the identity of a Puerto Rican man, at the Lawrence branch of the Registry of Motor Vehicles.
The charging statute for misuse of a Social Security number provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of up to $250,000. The charging statute for aggravated identity theft provides for a mandatory sentence of two years in prison, consecutive to any other sentence imposed, up to one year of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Major Crimes Unit is prosecuting the case.
District Men Plead Guilty to Federal Charges for Armed Robberies Targeting Commercial EstablishmentsRead the Press Release
WASHINGTON – Jarvell Kent, 21, and Olona Roba, 20, of Washington, D.C., pled guilty today to federal charges stemming from their involvement in a total of four armed robberies that were committed in three quadrants of the District of Columbia, announced U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Kent and Roba pled guilty before the Honorable Randolph D. Moss in the U.S. District Court for the District of Columbia, to one count of using, carrying, possessing, and brandishing a firearm during a crime of violence and two counts of interference with interstate commerce by robbery, for four separate incidents. Because a firearm was brandished during the commission of the offenses, both men face a mandatory seven years of incarceration, which must run consecutive to any sentence imposed for the additional two armed robberies. They are scheduled to be sentenced by Judge Moss on April 23, 2019.
The government’s evidence established that Kent and Roba robbed two 7-Eleven convenience stores at gunpoint, while wearing masks. During both armed robberies, one of the weapons used was a large black sub‑machine gun style firearm with an extended magazine. The first robbery took place on May 5, 2017, at approximately 11:40 p.m., at a store in the 3200 block of Pennsylvania Avenue SE. The second was on May 11, 2017, at approximately 1 a.m., at a store in the 4400 block of Benning Road NE.
In addition to the armed robberies that the defendants jointly committed, each defendant admitted involvement in additional armed robberies. Kent pled guilty to a May 15, 2017, armed robbery of another 7-Eleven located in the 900 block of 17th Street NW, and Roba pled guilty to a March 4, 2017, armed robbery of a carryout driver in the 5800 block of Southern Avenue SE, a crime in which shots were fired at the carryout driver as he fled from the scene.
Kent and Roba were arrested in May 2017 and have been in custody ever since.
In announcing the plea, U.S. Attorney Liu, Assistant Director in Charge McNamara, and Chief Newsham commended the work of the FBI Agents and MPD officers who linked together investigations that spanned three quadrants of the District of Columbia and arrested Kent and Roba. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Brittany Keil, Laura Crane, and William Schurmann, with assistance from Assistant U.S. Attorney Jennifer Kerkhoff, Paralegal Specialists Rommel Pachoca and Antoinette Sakamsa, and Legal Assistant Peter Gaboton.