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21 December 2018
Former Pasco County Assistant Principal Pleads Guilty to Producing, Distributing, and Possessing Child PornographyRead the Press Release
Tampa, Florida – United States Attorney Maria Chapa Lopez announces that Kyle Dale Ritsema (36, Land O’ Lakes) today pleaded guilty to producing, distributing, and possessing child pornography. Ritsema faces a minimum mandatory of 15 years, and up to 30 years, for producing child pornography, a minimum mandatory term of 5 years, and up to 20 years, in federal prison for each of the two child pornography distribution charges, and a maximum penalty of 10 years’ imprisonment for the possession charge. In total, Ritsema faces up to 80 years in federal prison. A sentencing date has not yet been set.
According to
court documents , starting at least as early as November 2014 until his arrest in February 2018, Ritsema enticed a 14-year-old child on the internet application “Grindr.” Ritsema knew that the boy was a minor during the time when they were in contact. Ritsema met the child in person and had sex with him on at least five occasions over the course of approximately one year. On one such occasion, Ritsema had sex with the child and used his smartphone to take several explicit photos of the child. That same day, Ritsema shared graphic details of that encounter and transmitted the explicit photos to multiple other individuals.Beginning in March 2017, and continuing until his arrest in this case, Ritsema had been an Assistant Principal (Vice Principal) at Cypress Creek Middle High School in Pasco County. Before holding that position, Ritsema was the Assistant Principal at Pine View Middle School (appointed in July 2015), an Assistant Principal Administrative Intern at River Ridge Middle School (appointed in January 2015), and a math teacher and math coach at Paul R. Smith Middle School, Gulf Highland Elementary School, and Seven Springs Middle School (beginning in 2006).
This investigation has revealed that there may be multiple child victims as well as a public health concern. Any person who had unprotected sexual contact with Ritsema, or any person who was, or knows of someone who may have been, a possible child victim is urged to contact Homeland Security Investigations at 1-866-DHS-2ICE or http://www.ice.gov/webform/hsi-tip-form.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Frank Murray.
Former Local Doctor, Nurse, and Three Others Charged with Illegally Distributing Controlled SubstancesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that five defendants were charged by criminal complaint with conspiracy to possess with intent to distribute, and distribution of, oxycodone, hydrocodone, amphetamine, and buprenorphine, all Schedule II controlled substances, and carisoprodol, alprazolam, phentermine, tramadol, and zolpidem tartrate, all Schedule IV controlled substances. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Named in the complaint are:
• Dr. James T. Keefe, 38, of Florida; • Benjamin Rivera, 40, of Buffalo, NY; • Laura Ricotta, 27, of Williamsville, NY; • Takeya Rainey, 43, of Buffalo, NY; • Phousavath Luangrath, 29, of Buffalo, NY.
Assistant U.S. Attorneys Timothy C. Lynch and Joshua Violanti, who are handling the case, stated that according to the complaint, Dr. Keefe is a New York State licensed physician who was previously employed as a contracted physician at the Erie County Medical Center (ECMC), Mercy Hospital of Buffalo, and the Monsignor Carr Institute. In February 2018, the Drug Enforcement Administration began investigating the drug diversion and fraudulent prescription activities of Keefe. On March 6, 2018, after previously being questioned by DEA investigators regarding the issuance of fraudulent prescriptions, Dr. Keefe voluntarily surrendered his DEA Registration, preventing him from continuing to issue any prescriptions for controlled substances.
During the investigation, Dr. Keefe admitted to law enforcement officers to being active user of cocaine, Adderall, and prescription opiates, and to writing false prescriptions to some “friends,” and sharing the prescriptions.
While employed at ECMC, and even after he was terminated, Dr. Keefe issued controlled substance prescriptions to four coworkers, all medical professionals, including co-defendant Phousavath Luangrath, a nurse at ECMC. Luangrath is Dr. Keefe’s ex-girlfriend. Records show that Dr. Keefe issued Luangrath 10 prescriptions of Adderall, a Schedule II controlled substance, between February 2, 2017, and December 21, 2017, totaling 420 dosage units. Of the 10 prescriptions, three were issued after Dr. Keefe was terminated from ECMC.
Records also show that between April 20, 2015, and February 20, 2018, Dr. Keefe issued defendant Ricotta 15 prescriptions for Schedule II controlled substances, including dextroamphetarnine, oxycodone-acetaminophen, hydrocodone-acetaminophen, and carisoprodol, a Schedule IV controlled substance, totaling 535 dosage units. The prescriptions were issued in her name or the names of her relatives. In addition, Dr. Keefe wrote seven prescriptions for Ricotta’s boyfriend, Benjamin Rivera, for Schedule II controlled substances, including dextroamphetamine, oxycodone-acetaminophen, hydrocodone-acetaminophen, and carisoprodol, a Schedule IV controlled substance, from December 17, 2017, through February 17, 2018, totaling 290 dosage units.
Defendant Takeya Rainey was issued 14 prescriptions by Dr. Keefe for dextroamphetamine and oxycodone, both Schedule II controlled substances, as carisoprodol and alprazolam, both Schedule IV controlled substances, from between September 18, 2017, and February 15, 2018, totaling 1,380 dosage units.According to the complaint, Dr. Keefe issued 178 fraudulent prescriptions, totaling 9,718 dosage units.
“For the second time this week, a medical professional with an addiction problem has found himself on the wrong side of the law,” stated U.S. Attorney Kennedy. “Where, as here, a physician ignores his Hippocratic Oath to ‘do no harm,’ but instead sells out his medical license for personal or financial gain, my Office will do all that we can to see that strong consequences follow.”
DEA Special Agent-in-Charge Ray Donovan stated, “This sentence sends a message that there is no place in medicine for doctors to prescribe medications for no medical purpose. Opioid addiction is the leading cause of overdoses nationwide and law enforcement is doubling down on rogue doctors as well as drug trafficking organizations to stop the opioid flow on our streets.”
Dr. Keefe made an initial appearance this afternoon before U.S. Magistrate Judge Michael J. Roemer and was released on conditions. Defendants Rivera, Ricotta, Rainey, and Luangrath made an initial appearance on December 19, 2018. Defendants Rainey, Ricotta, and Luangrath were released, defendant Rivera was detained.
The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan.
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Former Government Consultant Indicted on Federal Charges in Bribery and Fraud SchemeRead the Press Release
WASHINGTON – A consultant and independent contractor for a company that did business with the District of Columbia Department of Human Resources was indicted today on charges that he paid more than $140,000 in bribes to a former D.C. government employee and that he stole payments on city contracts that should have gone to his employer.
John Woods, 56, of Sterling, Va., was indicted by a grand jury in the U.S. District Court for the District of Columbia on three counts of wire fraud, four counts of mail fraud, one count of bribery, and two counts of engaging in illegal monetary transactions. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Woods will be arraigned on the charges on a date to be determined by the Court.
The announcement was made by U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and District of Columbia Inspector General Daniel W. Lucas.
According to the indictment, Woods worked as a consultant and independent contractor for a firm identified in the court documents as “Company A.” The firm had agreements with the District of Columbia Department of Human Resources (DCHR) to provide organizational skills training courses and human resources consulting to various D.C. government agencies. Woods was the company’s main point of contact with DCHR and handled the submission of invoices.
The indictment alleges that, beginning in April 2013, and continuing through August 2017, Woods schemed to defraud “Company A” and the D.C. government.
As part of the scheme, according to the indictment, between April 2013 and February 2015, Woods stole $214,910 in D.C. government checks that were issued to “Company A.” Beginning in March 2015, the indictment alleges, Woods began usurping “Company A’s” role under the contracts and keeping the profits for himself. The indictment alleges that Woods fraudulently deposited approximately 27 checks issued by the D.C. government to “Company A” into a bank account he controlled, totaling approximately $1,040,023, from March 2015 through August 2017.
In order to keep his scheme in place, the indictment alleges that Woods paid more than $140,000 in bribes to Latasha Moore, then a DCHR employee. As a resource allocation analyst, Moore was the main point of contact for “Company A” and in a position to ensure that no complaints or suspicions about the contracts reached others in the government. For example, Moore failed to report problems that arose while Woods was managing the work, including complaints of contractors arriving late, leaving early or failing to show up at all for training.
Moore, 38, of Washington, D.C., pled guilty on Oct. 11, 2018 to a federal bribery charge. She is awaiting sentencing.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
Mail fraud and wire fraud charges carry statutory maximum of 20 years in prison. The bribery charge carries a statutory maximum of 15 years in prison, and the charge involving illegal monetary transactions carries a statutory maximum of 10 years. The charges also carry potential financial penalties. The maximum statutory sentence for federal offenses is prescribed by Congress and is provided here for informational purposes. The sentencing will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case is being investigated by the FBI’s Washington Field Office and Office of the Inspector General of the District of Columbia. It is being prosecuted by Assistant U.S. Attorney Michael Marando, of the U.S. Attorney’s Office for the District of Columbia.
Former Custer County High School athletic trainer charged with coercionRead the Press Release
BILLINGS—An indictment filed today in U.S. District Court charges former Custer County High School athletic trainer James “Doc” Jensen, of Miles City, with coercion and enticement of minors to engage in sexual activity, U.S. Attorney Kurt G. Alme announced.
If convicted of the crime, Jensen, 78, faces a maximum 15 years in prison, a $250,000 fine and three years of supervised release.
The indictment is merely an accusation. Jensen remains innocent until proven guilty.
The indictment charges that beginning in 1995 and continuing until about 1999 in Miles City, Jensen used means of interstate commerce, including the Internet, to entice and coerce an individual who he believed was a minor to engage in sexual activity.
Chief U.S. District Judge Dana L. Christensen is assigned to the case.
Assistant U.S. Attorneys Zeno Baucus and Bryan Dake are prosecuting the case, which is being investigated by the FBI and Montana Department of Justice’s Division of Criminal Investigation.
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Former Corsica Borough Secretary/Treasurer Indicted on 26 Fraud ChargesRead the Press Release
PITTSBURGH, PA - A resident of Corsica, Jefferson County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of wire fraud, United States Attorney Scott W. Brady announced today.
The 26-count Indictment, returned on Dec. 18 and unsealed today, named Tammy Laird, 46, as the sole defendant.
According to the Indictment presented to the court, from January 2009 through August 2017, while Laird was employed as the Secretary and Treasurer of Corsica Borough, she defrauded the borough of more than $300,000, by issuing checks from the borough’s bank accounts to her father, her husband, and herself, by extracting funds from the borough’s bank accounts to pay personal expenses and credit card bills, and by making personal purchases on the borough’s business account at Staples. To hide her activity, Laird is charged with supplying the Corsica Borough Council and state auditors with altered bank statements and other falsified financial information.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Laird remains on bond pending the resolution of this case.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Chief and President of Briarcliff Manor Fire Department Sentenced to 1 Year in Prison for Embezzling More Than $120,000Read the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ROBERT GARCIA, the former president and chief of the Briarcliff Manor Fire Department (“BMFD”), was sentenced today by U.S. District Judge Cathy Seibel to one year and one day in prison for charges arising out of his embezzlement of more than $120,000 from the BMFD. GARCIA pled guilty before Judge Seibel on July 2, 2018, to one count of embezzlement from a program receiving federal funds.
U.S. Attorney Geoffrey S. Berman said: “Robert Garcia lined his pockets with Briarcliff Manor Fire Department and Fire Council money to pay personal expenses, and then lied about it to cover his tracks. Now Garcia will go to prison for his crime.”
According to documents filed in court, GARCIA was elected to the position of Second Assistant Chief of the BMFD in or about April 2013. His election to that position also made him an officer of the Briarcliff Manor Fire Council, which oversees the Briarcliff Manor Fire Department. GARCIA was thereafter elected to different administrative and operational positions within the BMFD, including first assistant chief, chief, treasurer and president. As a result, GARCIA was also an officer of the Fire Council from in or about April 2013 through in or about April 2017. GARCIA was given signatory authority over bank accounts held by the Fire Council and the BMFD starting in April 2013.
From in or about May 2013 to in or about March 2017, GARCIA embezzled money from the BMFD and the Fire Council by writing checks drawn on the BMFD's and Fire Council's bank accounts that he made payable to himself. GARCIA then deposited these checks into his personal bank accounts. He used the embezzled proceeds to pay personal expenses. GARCIA covered up his thefts by making material misstatements on written reports he gave to the Fire Council about the purposes and payees of the checks he had written to himself when he acted as the BMFD’s treasurer from in or about 2014 through in or about April 2017. GARCIA embezzled more than $120,000 from the BMFD and the Fire Council by writing approximately 150 checks to himself.
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In addition to the prison sentence, GARCIA, 51, of Ossining, New York, was sentenced to two years of supervised release and assessed a $20,000 fine. GARCIA paid full restitution to the BMFD prior to sentencing.
Mr. Berman praised the outstanding investigative work of the IRS, FBI, New York State Comptroller, and New York State Police.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney James McMahon is in charge of the prosecution.
Former Arts Center Director Sentenced to 18 Months in Prison for Wire and Tax FraudRead the Press Release
PANAMA CITY, FLORIDA – Vicki Dyer Middlemas, 49, of Panama City, was sentenced Thursday in the U.S. District Court in Tallahassee to 18 months in prison after pleading guilty to wire and tax fraud on August 2. She was ordered to pay $44,696.00 in restitution. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Between May 2010 and May 2015, Middlemas used her position as Executive Director of the Visual Arts Center of Northwest Florida (“the VAC”) in Panama City to fraudulently obtain money by writing herself checks on the VAC bank account and by making unauthorized charges for personal expenses on the VAC debit card. Middlemas falsified invoices and VAC records to conceal her thefts and underreported her income and tax owed.
Middlemas’s personal, unauthorized expenditures from the VAC account included:
- a custom painting of her daughter;
- designer handbags, a dress, a trench coat, and other clothing;
- perfumes;
- air travel tickets to Las Vegas;
- a down payment on annual Walt Disney World park passes for Middlemas and her three daughters;
- Alys Beach vacation home rentals on two occasions;
- tattoos;
- rugs; and
- payment of 27 cellular phone bills for her family.
The tax investigation revealed that the Forms 1040 and 1040X Middlemas filed for the years 2012 through 2015, grossly underreported the income Middlemas earned and embezzled from the VAC.
This case resulted from an investigation by the Internal Revenue Service—Criminal Investigation, the Panama City Police Department, and the IRS Emerald Coast Financial Crimes Task Force. Assistant United States Attorney Aine Ahmed prosecuted the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Five Aliens Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned indictments charging BRAYAN ALEXANDER FUNEZ-ESPINOZA, age 28, of Mexico, ROMERO FLORES-AGUILAR, age 30, of Mexico, JESUS GARCIA-HERNANDEZ, age 43, of Mexico, RODOLFO ROA-SAUCEDO, age 35, of Mexico, and JUAN ZARAGOZA-ZARAGOZA, age 36, of Mexico, with Illegal Reentry of a Deported Alien.
If convicted of illegal reentry of a deported alien, FUNEZ-ESPINOZA, previously deported twice and found in Wake County, FLORES-AGUILAR, previously deported twice and found in Johnston County, GARCIA-HERNANDEZ, previously deported three times and found in Franklin County, ROA-SAUCEDO, previously deported twice and found in Pitt County, and ZARAGOZA-ZARAGOZA, previously deported four times and found in Beaufort County, would face maximum penalties of two years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The cases are being investigated by ICE’s Enforcement and Removal Operations and Homeland Security Investigations.
Felons in Lake Charles and Shreveport prosecuted for illegally possessing firearmsRead the Press Release
LAKE CHARLES/SHREVEPORT La. – United States Attorney David C. Joseph announced one felon pleaded guilty and two were sentenced this week for firearms violations under the Justice Department’s Project Safe Neighborhoods initiative.
Lake Charles felon pleads guilty to unlawfully possessing rifle
LAKE CHARLES, La. – Forrest Cecil Coker II, 33, of Lake Charles, pleaded guilty Monday before U.S. Magistrate Judge Kathleen Kay to one count of felon in possession of a firearm. According to the guilty plea, Calcasieu Parish Sheriff’s deputies searched a Laurel Avenue home to execute a pending felony warrant. Upon searching the home, where Coker was living, deputies found a stolen DPMS Model AR-10, .308-caliber rifle, a small amount of suspected methamphetamine, four suspected Alprazolam pills and two suspected Citalopram pills. Coker’s criminal history revealed that he was a felon, having previously been convicted of felony offenses on three separate occasions in the State of Louisiana’s 14th Judicial District Court.
Coker faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set the sentencing date for March 25, 2019.
The ATF and the Calcasieu Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorneys Daniel J. McCoy is prosecuting the case.
Shreveport felon sentenced to 46 months in prison for possessing a loaded pistol
SHREVEPORT, La. – Kevin Summerfield, 26, of Shreveport, was sentenced Wednesday to four years and 10 months in prison by U.S. District Judge Elizabeth E. Foote on one count of felon in possession of a firearm. He was also sentenced to three years of supervised release. According to the September 7, 2018 guilty plea, a Shreveport Police officer encountered Summerfield at a hotel on Monkhouse Drive. The officer observed that Summerfield had a firearm in his waistband, and he was subsequently arrested. The firearm was a Hi-Point, Model CF380, .380-caliber pistol and was loaded with 13 rounds of ammunition. Summerfield was previously convicted of two burglary felonies in 2011 and is not allowed to possess a firearm according to federal law.
The ATF and the Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Brian C. Flanagan prosecuted the case.
Shreveport felon sentenced to 37 months in prison for possessing pistol in car
SHREVEPORT, La. – Kenneth W. Robinson, 33, of Shreveport, Louisiana, was sentenced Thursday to three years and one month in prison by U.S. District Judge Elizabeth E. Foote on one count of felon in possession of a firearm. He was also sentenced to three years of supervised release. According to the September 7, 2018 guilty plea, law enforcement officers observed Robinson on January 25, 2018 sitting in a vehicle on Dickinson Street. When officers approached, Robinson fled the vehicle on foot to a nearby apartment. Officers saw a Smith & Wesson SW9VE, 9 mm pistol on the driver’s side floorboard where Robinson had been sitting. They also located Robinson’s mobile phone next to the firearm. He was later arrested and admitted that the firearm was his. Robinson was previously convicted of illegal use of a weapon in 2004, possession of a controlled dangerous substance in 2008 and possession of a firearm by a convicted felon in 2013. The felonies restricted him from possessing a firearm under federal law.
The ATF, Caddo-Shreveport Narcotics Unit and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted 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.
Felon Indicted for Allegedly Stealing Firearms from St. Mary’s County Federally Licensed Firearms DealerRead the Press Release
Greenbelt, Maryland – A federal grand jury has indicted Robert Jacob Eberle, age 30, of Lexington Park, Maryland, on federal charges including theft of firearms, possession of stolen firearms, and being a felon in possession of firearms. The indictment was returned on December 10, 2018. Eberle is detained and is scheduled to have his initial appearance in U.S. District Court in Greenbelt on December 28, 2018.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and St. Mary’s County Sheriff Tim Cameron.
The indictment alleges that on July 21, 2018, Eberle stole 11 firearms from a federally licensed firearms dealer in St. Mary’s County, Maryland. The guns included seven 9mm-caliber pistols, two .45-caliber pistols, a .40-caliber pistol, and a .380-caliber pistol. According to the indictment, Eberle had a previous felony conviction and was prohibited from possessing firearms.
If convicted, Eberle faces a maximum sentence of 10 years in prison for each count.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF and the St. Mary’s County Sheriff’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Ray D. McKenzie, who is prosecuting the case.
Engineering Firm Agrees to Pay over $5 Million to Settle False Claims Act Allegations Related to Small Business, Veterans Set-AsidesRead the Press Release
LOS ANGELES – IMEG Corp., an engineering and construction services firm, has agreed to pay $5.27 million to settle allegations that one of its predecessor entities defrauded the government by conspiring to submit fraudulent bills related to contracts designated for small businesses and small businesses owned by service-disabled veterans, the Justice Department announced today.
IMEG Corp., headquartered in Rock Island, Illinois, was formed in January 2017 through the merger of engineering firms TTG Corporate and KJWW Corp.
In August 2009, TTG, a large engineering services company, formed a company named TTG Schwab, Inc. – later known as Schwab Engineering, Inc. – with Jerome Schwab, a service-disabled veteran. The federal government, primarily the U.S. Department of Veterans Affairs, awarded Schwab Engineering over a dozen contracts that had been “set aside” for service-disabled, veteran-owned small business (SDVOSB) and small businesses.
On paper, Jerome Schwab was the majority owner, and later the sole owner, of Schwab Engineering. In reality, TTG provided nearly all the staffing and support, including financial and administrative services, for the federal set-aside contracts it was awarded – which violated the rules of the set-aside programs. TTG received up to 95 percent of the fees that Schwab Engineering earned from the SDVOSB and small business set aside contracts, according to the settlement.
Following the TTG-KJWW merger in 2017, IMEG discovered the wrongful conduct, informed the government, and has cooperated with federal authorities in this matter.
The settlement in this matter was finalized today. The claims resolved by the settlement are allegations only; there has been no determination of liability.
The settlement was the result of a coordinated effort by the U.S. Department of Veterans Affairs, Office of Inspector General; the U.S. Small Business Administration, Office of Inspector General; and the U.S. Department of Defense, Defense Criminal Investigative Service.
Assistant United States Attorney Donald Yoo of the Civil Fraud Section represented the government in this matter.
Eight Members of Springfield-to-Vermont Drug Trafficking Organization ChargedRead the Press Release
BOSTON - Eight members of a drug trafficking organization operating between Springfield, Mass., and Barre, Vt., were indicted in federal court in Springfield in connection with a drug conspiracy involving money laundering and illegal firearms trafficking. A Hampden County Superior Court employee was also charged in the indictment.
The following eight individuals were charged in a 24 count superseding indictment unsealed today in connection with a heroin trafficking conspiracy. Each of the defendants were charged with conspiracy to distribute heroin, cocaine, and crack cocaine. Six of the defendants are alleged to have engaged in money laundering offenses, two of the defendants allegedly conspired to engage in the unlicensed dealing of firearms, and a Hampden County Superior Court employee is alleged to have made false statements to federal agents in connection with the investigation. Four of the defendants are already in federal custody having been originally charged and arrested on Jan. 12, 2018; three defendants were arrested today and one is a fugitive.
- Nia Moore-Bush, also known as “Nia Dinzey,” 28, of Springfield, currently in federal custody;
- Dinelson Dinzey, 35, of Springfield, currently in federal custody;
- Jamieson Gallas, 37, of Barre, currently in federal custody;
- Tracy Parsons, 46, of Barre, currently released on conditions pending trial;
- Daphne Moore, 55, of Springfield, was arrested today;
- Oscar Rosario, 33, of Springfield, was arrested today;
- Luis Niko Santos, 24, of Springfield; is a fugitive; and
- Amanda Atkins, 35, of Barre, was arrested today.
According to court documents, the organization was trafficking heroin and cocaine base from Springfield to central Vermont. It is alleged that Moore-Bush and Dinzey obtained narcotics in the Springfield area and transported the narcotics to Vermont themselves or via couriers and distributed the drugs in the Barre area, where drug prices are much higher than in Springfield.
It is further alleged that Moore-Bush, Dinzey, Parsons, Gallas, Moore, and Atkins laundered the proceeds of the drug conspiracy through bank accounts held by Moore in trust for Moore-Bush. The organization allegedly made cash deposits in Vermont, and Moore-Bush and Moore facilitated the withdrawal of those funds from the accounts in Massachusetts. It is further alleged that Moore-Bush and Dinzey conspired to launder drug proceeds through the purchase of an Audi vehicle.
The superseding indictment also alleges that Moore-Bush and Dinzey conspired to engage in the unlicensed dealing of firearms. Moore-Bush allegedly sold two firearms on Feb. 16, 2017, and four firearms on May 5, 2017. Dinzey is charged with the conspiracy and assisting in the May 5, 2017, firearms sale. According to court documents, federal law enforcement traced all six firearms involved in these two sales to individuals connected to Vermont or New Hampshire. Both Moore-Bush and Dinzey are also charged with being felons in possession of the firearms they sold on May 5, 2017, or aiding and abetting that offense. Court records indicate that Dinzey has at least two prior felony drug convictions.
Finally, the superseding indictment charges Moore with making three false statements to federal agents on Jan. 12, 2018. Court records reveal that Moore is Moore-Bush’s mother and an assistant clerk magistrate at Hampden Superior Court in Springfield. Moore-Bush and Dinzey were residing with Moore at the time of their arrest on Jan. 12, 2018. Moore allegedly falsely stated that she did not know where Moore-Bush conducted her banking when, in fact, she knew that Moore-Bush used accounts held in Moore’s name in trust for Moore-Bush. She also falsely stated that she did not know that individuals from Vermont had been at her house and the whereabouts of a black Audi when, in fact, Moore had met and interacted with individuals from Vermont at her home and knew that Moore-Bush had sold the black Audi.
Conspiracy to distribute and possess with intent to distribute 280 grams or more of cocaine base provides for a mandatory minimum sentence of 10 years and up to life in prison, a minimum of five years of supervised release, and a fine of up to $10 million. Dinzey and Gallas, who each have at least one prior felony drug conviction, face mandatory minimum sentences of 20 years and up to life in prison, a minimum of 10 years of supervised release, and a fine of up to $20 million. The charge of conspiring to distribute and possess with intent to distribute 28 grams or more of cocaine base provides for a mandatory minimum sentence of five years and no greater than 40 years in prison, at least four years of supervised release, and a fine of up to $5 million. For Santos, who has at least one prior felony drug conviction, the narcotics counts against him provide for a sentence of no greater than 30 years in prison, at least six years of supervised release, and a fine of up to $2 million. The narcotics charges against Rosario and Moore provide for sentences of no greater than 20 years in prison, at least three years of supervised release, and a fine of up to $1 million. Each money laundering charge carries a sentence of no greater than 20 years in prison, up to three years of supervised release, and a fine of up to $250,000. The charges of conspiring to engage in the unlicensed dealing of firearms and engaging in the unlicensed dealing of firearms each carry a sentence of no greater than five years in prison, up to three years of supervised release, and a fine of up to $250,000. The charge of making false statements to a federal agent provides for a sentence of up to five years in prison, up to three years of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Kristina O'Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Valuable assistance was provided by the Massachusetts State Police, the Vermont State Police, and the Montpelier (VT) and Barre (VT) Police Departments. Assistant U.S. Attorney Katharine A. Wagner of Lelling’s Springfield Branch Office is prosecuting the cases.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dubuque Meth User Who Possessed a Loaded Firearm During “One Man Crime Spree” Sentenced to Federal PrisonRead the Press Release
A man who was convicted of nine crimes committed in the first few months of 2018 was sentenced on December 17, 2018, to more than a year in federal prison.
Patrick Andrew Lugrain, age 22, from Dubuque, Iowa, received the prison term after an August 2, 2018 guilty plea to one count of being an unlawful drug user in possession of a firearm.
In a plea agreement, Lugrain admitted he was using methamphetamine in early 2018. In February 2018, he purchased a .45 caliber pistol from a business in Dubuque. On March 3, 2018, Lugrain was stopped in a traffic stop by Dubuque police and arrested on outstanding warrants. Officers then found a Smith & Wesson .45 caliber pistol loaded with seven rounds and a large number of baggies used for drug packaging in the car. Lugrain later stated he had been living in his car and admitted he possessed the firearm for his own protection.
Court records reflect that at the time he was charged in federal court, Lugrain had fourteen pending criminal cases in the state of Iowa arising from conduct occurring in the first four months of 2018. In December, Lugrain was convicted of eight of those charges, with the remaining charges being dismissed. During an earlier federal court hearing, a federal magistrate judge described Lugrain’s early-2018 behavior as a “one-man crime spree.”
Lugrain was sentenced in Cedar Rapids by United States District Court Chief Judge Leonard T. Strand. Lugrain was sentenced to 12 months and 1 day of imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Lugrain was released on the bond previously set and is to surrender to the United States Marshal on December 27, 2018.
The case was investigated by the Dubuque Police Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives, and prosecuted by Assistant United States Attorney Dan Chatham.
This case was brought as part of Project Safe Neighborhoods (PSN). 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.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-1018-LTS.
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District Teenager Sentenced to 10 ½-Year Prison Term on Carjacking and Armed Robbery ChargesRead the Press Release
WASHINGTON – Deonta King, 17, of Washington, D.C., was sentenced today to a prison term of 10 ½ years on carjacking and armed robbery charges stemming from violent crimes committed this year in Southeast Washington, U.S. Attorney Jessie K. Liu announced.
King, who was 17 at the time of the offenses, was charged as an adult because of the nature of the crimes. He pled guilty in April 2018 in the Superior Court of the District of Columbia. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of 10 to 12 years in prison. The Honorable Todd E. Edelman accepted the plea and sentencing King accordingly. Following his prison term, King will be placed on three years of supervised release.
Three co-defendants, all from Washington, D.C., also were charged as adults and pled guilty to charges for their roles in one or both of the crimes. Deandre Bullock, 17, and Darius McNeal, 18, were sentenced earlier this month by Judge Edelman to prison terms of 10 years and nine years, respectively. Javon Coe, 17, is awaiting sentencing.
McNeal, Bullock, King, and Coe pled guilty to an incident that took place shortly after 9 p.m. on Feb. 4, 2018, at the Benco Shopping Center located at East Capitol Street SE and Benning Road SE. According to the government’s evidence, the victim parked his Jeep Compass in front of a carry-out restaurant at the shopping center and went inside the store to pick up food. As the victim returned to his vehicle and got back into the driver’s seat, McNeal, Bullock, King, Coe, and another individual approached his vehicle. McNeal approached the passenger side. Bullock, King, and Coe approached the driver side and worked together to pull the victim from the driver’s seat of his vehicle, drag him to the ground, and assault him. King took the victim’s keys from his hand. Coe, who had a handgun, tried to take the victim’s cellphone, but the victim refused to let go of it. McNeal, Bullock, King, Coe, and another individual got into the victim’s vehicle and drove away.
McNeal, Bullock, and King also pled guilty to an incident that took place at about 6 p.m. on Feb. 18, 2018, near Johnson Middle School in the 3100 block of Bruce Place SE. According to the government’s evidence, McNeal communicated with the victims about buying a pair of shoes through the application OfferUp and told the victims to come to the school. When the victims arrived, McNeal and another member of the group approached them and asked to see the shoes for sale. One of the victims showed the shoes and asked for the money. King and Bullock then approached. Bullock was wearing a mask and had a black and silver handgun with a laser sight on it. Bullock ordered one of the victims out of the car and to the ground at gunpoint. King ordered the other victim out of the driver’s seat of the car, demanded her car keys, and took her phone. One of the victims struggled with Bullock over the gun, while the other defendants told Bullock to “shoot him.” The gun went off, firing one round that hit McNeal in the leg. The victims ran away, and McNeal, Bullock, King, and another individual got into the victims’ vehicle and followed them.
In announcing the sentences, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department (MPD). She also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Tiffany Fogle and Victim/Witness Advocate James Brennan. Finally, U.S. Attorney Liu commended Assistant U.S. Attorney Natasha Smalky, who investigated and prosecuted the case with assistance from Assistant U.S. Attorney Jennifer Kerkhoff.
District Court Enters Permanent Injunctions Shutting Down International Mail Fraud Scheme and Approving Civil Penalty of over $700,000Read the Press Release
The U.S. District Court for the Eastern District of New York has permanently barred 10 individuals and businesses from operating an alleged multi-million dollar international mail-fraud scheme. The consent decrees entered by United States District Judge Brian M. Cogan resolve civil fraud claims brought by the United States Attorney’s Office for the Eastern District of New York. Five of the defendants – Kimberly Anne Stamps of Gilbert, Arizona and her companies, KPS Productions, LLC, KPS Promotions, LLC, JKS Ventures, LLC and JJMK Enterprises, LLC – also agreed to pay a $726,539.20 penalty, the largest civil penalty ever collected in the EDNY for a violation of a United States Postal Service (USPS) cease and desist order against a mass mailer.
The United States alleged that beginning as early as 2012, the defendants operated a multi-million dollar mass-mailing scheme that preyed upon elderly and vulnerable individuals. From May 2015 to January 2018, the defendants mailed over 4.8 million solicitation letters to recipients in New York, throughout the United States and abroad falsely indicating that the recipients had won large cash prizes ranging from hundreds of thousands of dollars to millions of dollars, but were required to return processing fees of $20 to $50 to receive payment. The solicitations were sent on behalf of fictitious organizations and departments, such as “Global Servicing Center,” “Premium Award Center,” “Notification Committee” and “Winners Search Advisory,” and included fake signatures from fictitious corporate officers. The victims who paid the processing fees never received the promised cash prizes.
In one month alone, the defendants received over 16,000 responses to their schemes from victims worldwide. One victim of the defendants’ scheme, who resides in Brooklyn, returned more than 400 responses to defendants’ fraudulent solicitations, with total payments exceeding $10,000. The United States estimates that before the scheme was shut down, the defendants received more than $3 million in victim payments annually.
The foregoing are allegations, which the defendants dispute, and there has been no trial or any permanent judicial finding of fact or law.
“The defendants misled elderly and vulnerable victims by promising life-changing cash prizes that never arrived,” stated United States Attorney Donoghue. “The court-ordered injunctions permanently stop these schemes, and the civil penalty should serve as a warning to other fraudulent mass-mailers that we are committed to protecting the public from these schemes, and will hold the perpetrators and enablers of such schemes accountable.” Mr. Donoghue thanked the United States Postal Inspection Service for its investigatory support.
“Sweepstakes mailers thought they were winning the big prize. That is, until Postal Inspectors learned of the misleading solicitations being sent to unsuspecting victims,” stated Melisa Llosa, USPS, Inspector in Charge of the Phoenix Division. “As the law enforcement branch of the Postal Service, the U.S. Postal Inspection Service has a long history of successfully investigating these fraud schemes. Postal Inspectors work tirelessly to protect the American public from exploitation through the U.S. Mail.”
The case is being handled by Assistant U.S. Attorneys Evan P. Lestelle and John Vagelatos.
Additional information on the original enforcement actions and mass mailing schemes is available at: https://www.justice.gov/usao-edny/pr/justice-department-coordinates-nationwide-elder-fraud-sweep-more-250-defendants. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
The Defendants:
KIMBERLY ANNE STAMPS
Age: 42
Gilbert, ArizonaYURIKO ESPINO RAMOS
Age: 30
Mesa, ArizonaBARBARA TRICKLE
Age: 74
Las Vegas, NevadaKPS Productions, LLC
KPS Promotions, LLC
JJMK Enterprises, LLC
JKS Ventures, LLC
YR Mail Services, LLC
Western Mailing Services
Cyber Solutions, Inc.
E.D.N.Y. Docket No. 18-CV-1106 (BMC)Department of Corrections Nurse Arrested on Drug ChargesRead the Press Release
BOSTON – A nurse at the Department of Correction’s Massachusetts Alcohol and Substance Abuse Center (MASAC) in Plymouth, was arrested yesterday and charged with distribution of Suboxone strips to inmates in that facility.
Julie Inglis-Somers, 39, of Kingston, Mass., was arrested yesterday in Jacksonville, Fla. after fleeing the District of Massachusetts last week. She is charged by criminal complaint with one count of distribution of a controlled substance. She will appear for a detention hearing this afternoon in the Middle District of Florida.
According to charging documents, on or about Nov. 18, 2018, and Dec. 4, 2018, Inglis-Somers provided Suboxone to two inmates at MASAC. Suboxone, a Class III controlled substance used to treat heroin addiction, is sometimes misused to get high. Suboxone is a coveted contraband in prisons across the nation and is particularly popular in New England.
MASAC is one of five facilities in Massachusetts where, under Massachusetts General Laws, a state court judge can send a person who the judge has determined to be a danger to self or others due to substance abuse. MASAC is the only such facility overseen by the Massachusetts Department of Corrections.
The charge of distribution of a controlled substance provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $500,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Commissioner Thomas A. Turco III of the Massachusetts Department of Correction made the announcement today. The FBI Jacksonville (FL) Field Division and the Suwannee County (FL) Sheriff’s Office provided assistance with the arrest. Assistant U.S. Attorney Eugenia M. Carris of Lelling’s Public Corruption and Special Prosecutions Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Dallas Man Sentenced in Methamphetamine-Trafficking ConspiracyRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that MICHAEL LEVERIDGE, age 45, of Dallas, Texas, was sentenced yesterday after previously pleading guilty to participating in a methamphetamine distribution conspiracy throughout the New Orleans area. Specifically, LEVERIDGE pleaded guilty to conspiring to distribute and possess with intent to distribute 500 grams or more of a mixture of methamphetamine, in violation of 21 U.S.C. '' 841(a)(1), 841(b)(1)(A) and 846.
U.S. District Judge Jane Triche Milazzo sentenced LEVERIDGE to 84 months’ incarceration, followed by five years of supervised release.
According to court documents, in 2014, during the New Orleans Decadence Festival, LEVERIDGE traveled to New Orleans with approximately 21 ounces (over one-half kilogram) of a mixture containing methamphetamine. LEVERIDGE intended to resell the methamphetamine in the New Orleans area. Agents recovered the 21 ounces of methamphetamine, along with other contraband, during a search pursuant to a warrant of LEVERIDGE’s room at the Bourbon Orleans Hotel in the French Quarter over Decadence Festival weekend.
U.S. Attorney Strasser praised the work of the Drug Enforcement Administration’s Gulf Coast High Intensity Drug Trafficking Area (HIDTA) Program. The DEA’s HIDTA Group #11, operating out of the New Orleans Field Division, includes members of the Louisiana State Police, Jefferson Parish Sheriff’s Office, and other local agencies. Assistant United States Attorney Brandon S. Long is in charge of the prosecution.
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Covington Man Pleads Guilty to Possessing and Making SilencersRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that ROBERT LYONS, age 33, of Covington, has pleaded guilty yesterday to federal firearms violations.
According to court documents, on March 3, 2017, LYONS possessed firearm silencers that were not registered to him in the National Firearms Registration and Transfer Record (“NFRTR”), in violation of Title 26, United States Code, Sections 5841, 5861(d), and 5871. LYONS also made firearm silencers without obtaining prior approval from the federal government or paying the requisite tax, in violation of in violation of Title 26, United States Code, Sections 5822, 5861(f), and 5871.
The Court set sentencing in this matter for March 21, 2019. LYONS faces, as to each count of the indictment, a maximum term of imprisonment of 10 years, a fine of $10,000, up to three years per count of supervised release after imprisonment, and a $100 special assessment.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U. S. Attorney Strasser praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives in investigating this matter. The case is being prosecuted by Assistant United States Attorneys Maria M. Carboni.
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Columbia County Man Pleads Guilty to Drug Distribution Resulting in DeathRead the Press Release
WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jeffrey Scott Jones, age 62, pleaded guilty before United States District Court Judge Matthew W. Brann to the distribution of a controlled substance that resulted in the death of a Bloomsburg man in 2016.
According to United States Attorney David J. Freed, Jones sold heroin laced with fentanyl to a Bloomsburg man in July 2016, at which time the victim consumed the heroin and fatally overdosed.
The case was investigated by the Scott Township Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Geoffrey W. MacArthur is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Jones faces a mandatory minimum sentence of 20 years in prison and a potential life sentence as well as a maximum fine of $1,000,000. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Colombian National Sentenced for Role in International Maritime Cocaine Trafficking ConspiracyRead the Press Release
Tampa, FL – U.S. District Judge James D. Whittemore has sentenced Carlos Arturo Cuerro Borja (51), a Colombian national, to 18 years in federal prison, for his role in an international maritime cocaine trafficking conspiracy. In August 2018, a federal jury found him guilty of one count of conspiracy to distribute and to possess with the intent to distribute five kilograms or more of cocaine while onboard a vessel subject to the jurisdiction of the United States, and one count of possession with the intent to distribute five kilograms or more of cocaine on that vessel.
According to evidence presented at trial, Cuerro Borja was part of an international maritime drug smuggling operation involving approximately 240 kilograms of cocaine bound for the United States. Cuerro Borja was the load guard for an Ecuador-based cocaine smuggling crew. While in international waters, hundreds of miles off the coast of Mexico, Cuerro Borja and his crew offloaded eight bales of cocaine to a Sinaloa, Mexico-based smuggling go-fast vessel. They then joined the Mexican crew for the run to Sinaloa, after scuttling their vessel in the Pacific Ocean.
On October 10, 2017, a U.S. Navy maritime patrol aircraft spotted the go-fast vessel speeding towards Mexico. The U.S. Coast Guard Cutter ASPEN and its crew launched two over-the-horizon boats to catch the go-fast smuggling vessel crewed by Cuerro Borja and his five co-conspirators. The ASPEN crew seized cartel cocaine smuggling equipment and approximately 102 kilograms of jettisoned cocaine.
This case was investigated by the Panama Express Strike Force, an Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the U.S. Coast Guard Investigative Service, the Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted by Assistant United States Attorney Thomas Palermo and Special Assistant United States Attorney Nicholas DeRenzo.
Clarks Summit Man Pleads Guilty to Violations of Clean Water Act and Tampering with Government WitnessRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that David D. Klepadlo, age 63, of Clarks Summit, and the company he owns, David D. Klepadlo & Associates, Inc., pleaded guilty on December 19, 2018, before United States District Court Judge A. Richard Caputo to making false statements in violation of the Clean Water Act and tampering with a government witness.
According to United States Attorney David J. Freed, Klepadlo was certified by the Commonwealth of Pennsylvania as a waste water treatment plant operator. Klepadlo and his company contracted with local municipalities to operate and manage the municipalities’ waste water treatment plants in accordance with regulations and limitations in permits issued by the Pennsylvania Department of Environmental Protection (PADEP) and the U.S. Environmental Protections Agency (EPA).
The permits required that the permittee at all times maintain in good working order, and properly operate all facilities and systems installed and used to achieve compliance with the terms and conditions of the permits. For approximately two years, beginning in May 2012 and continuing through June 2014, Klepadlo and his company failed to properly operate and maintain the facilities (Greenfield Township Sewer Authority, Lackawanna County, and the Benton/Nicholson Sewer Authority, both Lackawanna and Wyoming Counties) and systems of treatment and control, in accordance with terms and conditions of the permits.
Klepadlo knowingly failed to take daily and weekly samples and measurements required for the purpose of monitoring pollutants discharged into waterways of the United States; knowingly created false test results and falsely reported those results in discharge monitoring reports submitted monthly to the PADEP and the EPA.
Klepadlo also admitted to attempting to persuade a government witness to fabricate a false explanation for the Clean Water Act violations for the purpose of influencing testimony of a witness in an official proceeding involving the testing and registering requirements of the permits.
Waste water from the Greenfield publicly-owned treatment plan is discharged into a tributary of Dundaff Creek, which flows into Tunkhannock Creek, which flows into the Susquehanna River. Waste water from the Benton/Nicholson facility flows into a tributary of South Branch Tunkhannock Creek, which also flows into the Susquehanna River.
“For personal profit, the Defendant in this case violated the Clean Water Act and tampered with a government witness,” said U.S. Attorney Freed. “His failure to complete appropriate and necessary testing violated the trust of our citizens who depend upon public entities to ensure clean, safe drinking water. The one constant uniting the diverse communities of the Middle District of Pennsylvania is the Susquehanna River, providing us with an abundant natural resource as well as commercial and recreational opportunities. Working with our partners at EPA Criminal Enforcement, the FBI and the Pennsylvania DEP we are committed to protecting this important asset and ferreting out violations of the Act.”
“The defendant not only violated the Clean Water Act by failing to properly operate a waste water treatment facility, but also created false test results to mislead state and federal officials,” said Special Agent in Charge Jennifer Lynn of EPA’s criminal enforcement program in Pennsylvania. “He then attempted to persuade a government witness to fabricate a false explanation of the violations. EPA and its law enforcement partners are committed to the protection of public health and will continue to pursue those who undermine those efforts.”
“At every turn, it seems, David Klepadlo opted to cut corners and tell lies,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “After tampering with his water samples, he sought to do the same with a government witness. The FBI will continue to work with our state and federal partners to investigate and stamp out such corruption.”
The charges stem from an investigation jointly conducted by the Environmental Protection Agency, the Pennsylvania Department of Environmental Protection, and the Federal Bureau of Investigations. Assistant United States Attorney Michelle Olshefski is prosecuting the case.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty for the Clean Water Act violation is punishable by up to 2 years’ imprisonment and a sliding scale for fines of $5,000 to $25,000 per violation, per day. The maximum penalty under the tampering with a witness statute is 20 years’ imprisonment, and a $250,000 fine. Each crime also carries a term of supervised release following imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Clark County Man Pleads Guilty to Stealing Money from Friend's EstateRead the Press Release
COLUMBUS, Ohio – Ronald E. Martin, Sr., 65, of Medway, Ohio, pleaded guilty in U.S. District Court to crimes related to stealing from the estate of a deceased friend, to the detriment of the intended beneficiary.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation announced the plea entered into today before Chief U.S. District Judge Edmund A. Sargus, Jr.
According to court documents, Martin and Robert L. Mollwitz were close friends for decades during the lifetime of Mollwitz. In September 2010, Mollwitz signed his will and living trust, naming Martin as executor of the will and trustee of the trust. Neither of the documents assigned any money to Martin for his personal use. Rather, money was assigned to be maintained for the support of a different individual.
Mollwitz died in June 2012, and, at that time, his estate was valued at more than $1.7 million. In November 2013, Martin opened a bank account in the name of Robert L. Mollwitz Trust, Ronald E. Martin TTEE.
From approximately February 2014 through May 2017, Martin requested more than $1 million be transferred from the estate to a bank account in his name. During that time, Martin issued approximately 146 checks from the new account, primarily made payable to himself or his inactive business, Total Mobile Home Services. He wrote checks to the business to hide his wrongdoing.
He spent a majority of the funds on personal expenses, including multiple trips to Hollywood Casino in Dayton, Ohio. Martin went to the casino multiple days per week to play slot machines, betting $9 per turn.
Martin also conducted approximately 80 check bill pay or ACH debit transactions at credit card vendors, to pay his personal loans, and to provide money to family members. These transactions totaled more than $200,000.
Bank personnel became concerned with Martin’s financial activity in the trust account and funds were subsequently frozen.
When questioned, Martin lied to bank personnel about how he was using the money. He also made several attempts to release the funds, including telling bank personnel that the victim – the intended recipient of the funds – had provided him with a signed and notarized letter stating she wanted the funds released to Martin. He never provided any letter to the bank.
The victim had never consented to Martin using the funds for his own use, and during the time of the scheme, the victim relied on Social Security Disability benefits as her sole source of income.
Martin pleaded guilty to one count of wire fraud and one count of money laundering. Each are punishable by up to 20 years in prison. As part of his plea, Martin has agreed to pay more than $890,000 in restitution. This represents the amount of funds he successfully used for his personal benefit.
U.S. Attorney Glassman commended the investigation of this case by IRS Criminal Investigation and Assistant United States Attorney Peter Glenn-Applegate, who is representing the United States in this case.
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Chinese National Charged with Committing Theft of Trade SecretsRead the Press Release
Hongjin Tan, a 35 year old Chinese national and U.S. legal permanent resident, was arrested on Dec. 20 and charged with theft of trade secrets. Tan is alleged to have stolen the trade secrets from his employer, a U.S. petroleum company.
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Trent Shores for the Northern District of Oklahoma, and Special Agent in Charge Kathryn Peterson of the FBI Oklahoma City Field Office.
“Hongjin Tan allegedly stole trade secrets related to a product worth more than $1 billion from his U.S.-based petroleum company employer, to use for the benefit of a Chinese company where he was offered employment,” said Assistant Attorney General Demers. “The theft of intellectual property harms American companies and American workers. As our recent cases show, all too often these thefts involve the Chinese government or Chinese companies. The Department recently launched an initiative to protect our economy from such illegal practices emanating from China, and we continue to make this a top priority.”
“The United States filed a criminal complaint against a Chinese national alleging the theft of intellectual property from a company with significant operations in Oklahoma,” said U.S. Attorney Shores. “The value of the trade secrets in this case is estimated to be more than $1 billion dollars. Theft of critical research, development, and other intellectual property harms the economic prosperity and security of the United States. My office and the Federal Bureau of Investigation will utilize all tools available to respond to these types of threats. We will protect Oklahomans and Oklahoma businesses by prosecuting those who violate the law.”
Tan made an initial appearance Thursday before U.S. Magistrate Judge Jodi F. Jayne. A preliminary and detention hearing has been set for Dec. 26.
According to the criminal complaint, Tan allegedly stole trade secrets from a U.S.-based petroleum company regarding the manufacture of a “research and development downstream energy market product.” The company’s methods of developing the product are of great value, both economically and to competitors. Until recently, Tan worked for the petroleum company and allegedly downloaded hundreds of files, including files related to the manufacture of the product. Investigators allege that Tan was offered a job at a company in China where he planned to use these files to benefit his new employer. Tan has been residing in the United States for the past 12 years.
A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI conducted this investigation.
Assistant U.S. Attorney Joel-lyn A. McCormick of the Northern District of Oklahoma is prosecuting the case, with assistance from Trial Attorneys Matthew R. Walczewski and Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section (CES) and Assistant Deputy Chief Brian J. Resler of the Criminal Division’s Computer Crimes and Intellectual Property Section (CCIPS).
Chinese National Charged with Committing Theft of Trade SecretsRead the Press Release
TULSA, Okla. – Hongjin Tan, a 35 year old Chinese national and U.S. legal permanent resident, was arrested on Dec. 20 and charged with theft of trade secrets. Tan is alleged to have stolen the trade secrets from his employer, a U.S. petroleum company.
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Trent Shores for the Northern District of Oklahoma, and Special Agent in Charge Kathryn Peterson of the FBI Oklahoma City Field Office.
“The United States filed a criminal complaint against a Chinese national alleging the theft of intellectual property from a company with significant operations in Oklahoma,” said U.S. Attorney Shores. “The value of the trade secrets in this case is estimated to be more than $1 billion dollars. Theft of critical research, development, and other intellectual property harms the economic prosperity and security of the United States. My office and the Federal Bureau of Investigation will utilize all tools available to respond to these types of threats. We will protect Oklahomans and Oklahoma businesses by prosecuting those who violate the law.”
"Hongjin Tan allegedly stole trade secrets related to a product worth more than $1 billion from his U.S.-based petroleum company employer, to use for the benefit of a Chinese company where he was offered employment," said Assistant Attorney General Demers. "The theft of intellectual property harms American companies and American workers. As our recent cases show, all too often these thefts involve the Chinese government or Chinese companies. The Department recently launched an initiative to protect our economy from such illegal practices emanating from China, and we continue to make this a top priority."
Tan made an initial appearance Thursday before U.S. Magistrate Judge Jodi F. Jayne. A preliminary and detention hearing has been set for Dec. 26.
According to the criminal complaint, Tan allegedly stole trade secrets from a U.S.-based petroleum company regarding the manufacture of a “research and development downstream energy market product.” The company’s methods of developing the product are of great value, both economically and to competitors. Until recently, Tan worked for the petroleum company and allegedly downloaded hundreds of files, including files related to the manufacture of the product. Investigators allege that Tan was offered a job at a company in China where he planned to use these files to benefit his new employer. Tan has been residing in the United States for the past 12 years.
A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI conducted this investigation.
Assistant U.S. Attorney Joel-lyn A. McCormick of the Northern District of Oklahoma is prosecuting the case, with assistance from Trial Attorneys Matthew R. Walczewski and Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section (CES) and Assistant Deputy Chief Brian J. Resler of the Criminal Division’s Computer Crimes and Intellectual Property Section (CCIPS).
Charter School Founder and CEO Agrees to Plead Guilty in Scheme to Misappropriate Approximately $2.5 Million of Public Education FundsRead the Press Release
LOS ANGELES – The founder and former chief executive officer of Celerity Educational Group, a Koreatown-based non-profit company that owned and operated charter schools, has agreed to plead guilty to a federal conspiracy charge for misappropriating approximately $2.5 million in public-education funds awarded to several Celerity charter schools.
In a plea agreement filed today in United States District Court, Vielka Maritza McFarlane, 56, of Sylmar, agreed to plead guilty to one count of conspiracy to misappropriate and embezzle public funds.
McFarlane admitted in the plea agreement that she used the money to pay for personal expenses, including first-class air travel, fine dining and luxury goods. The bulk of the misappropriated funds were used to purchase a building for another charter school in Ohio.
McFarlane is scheduled to make her initial appearance in United States District Court on January 7.
McFarlane founded Celerity Educational Group in 2004 and served as its CEO until April 2015. Between April 2012 and April 2017, McFarlane also was CEO of Celerity Global Development, a non-profit California corporation, which provided various management services to the Celerity charter schools in exchange for a percentage of the schools’ revenues.
According to her plea agreement, from July 2009 to April 2017, McFarlane and her co-conspirators caused the Celerity charter schools and Celerity Educational Group to falsely certify to federal, state and local authorities that they were complying with all rules and regulations governing the use of public funds that they received.
McFarlane admitted in her plea agreement that she used public funds – money that should have been spent on educational purposes at Celerity charter schools in Los Angeles, Compton and Pasadena – for a variety of personal expenses and improper expenditures.
For example, between 2009 and 2013, McFarlane used credit cards issued to Celerity Educational Groups and Celerity Global Development to make personal purchases, including luxury items from shops in Beverly Hills and Tokyo, customized recumbent bicycles for her and her spouse, and more than $5,000 in leather-making equipment used by a for-profit company in which McFarlane and her family members were partners. McFarlane further admitted that she did not reimburse Celerity Education Group or Celerity Global Development for any of the payments described in the plea agreement prior to the government’s criminal investigation.
The plea agreement also states that from late 2012 to June 2014, McFarlane conspired to use approximately $2.3 million in public funds – a substantial portion of which came from the United States Department of Education – awarded to Celerity’s charter schools in Los Angeles to purchase and renovate an office building in Columbus, Ohio, where she oversaw the founding of a separate charter school.
Additionally, McFarlane admitted using public funds awarded to the Celerity charters schools in 2013 to pay $157,957 for the security deposit, monthly rent and renovations at a soundstage and recording studio in Canoga Park, which was rarely used by the Celerity charter schools. McFarlane pursued a proposal to allow a digital-production company to use the studio space in exchange for 200,000 shares in the digital-production company, which would have been issued to a separate for-profit media-production business called The Muse Collective.
McFarlane admitted in her plea agreement that the payments for her personal use, the Ohio property purchase, and the Canoga Village studio were improper; she lacked authorization to make those payments and expenditures; and the payments violated rules, regulations and laws governing the use of public funds that the Celerity charter schools received.
“When anyone repurposes public school funds for self-serving reasons, students suffer,” said First Assistant United States Attorney Tracy L. Wilkison. “This case involving the former CEO of Celerity demonstrates our ongoing efforts to protect and safeguard public funds, and to hold accountable those who improperly use those funds for their own gain.”
“Today’s court filings allege that defendant McFarlane ‘knowingly and willfully’ abused her position of trust to steal funds from the very ones she promised to serve – the children and families of the Celerity schools. That is unacceptable,” said Adam Shanedling, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Western Regional Office. “Our Special Agents will continue to aggressively pursue those who seek to enrich themselves at the expense of our nation’s students. America’s students, their families, and taxpayers deserve nothing less.”
“Defendant McFarlane’s deception went on for years as she continually stole money intended for charter schools and the students who attended them,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners will continue to investigate crimes that threaten publicly funded entities and which result in losses suffered by victims for whom funds are intended, including children.”
“Through deception and manipulation, McFarlane devised a scheme to steal money that should have benefited children for her own financial gain,” said Nichole Cooper, Los Angeles Inspector in Charge, United States Postal Inspection Service. “The success of this investigation serves as an excellent example of the effective partnership between federal law enforcement agencies.”
“Vielka McFarlane committed a crime that systematically defrauded federal and state governments, the children of Celerity Educational Group, and the taxpaying public,” stated R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “IRS Criminal Investigation will not stand still while criminals line their pockets with illicit proceeds while our community charter school programs go underfunded.”
Once McFarlane pleads guilty, she will face a statutory maximum penalty of five years in federal prison for the conspiracy charge.
In June 2017, the U.S. Attorney’s Office entered into a Non-Prosecution Agreement with Celerity Educational Group, now known as ISANA Academies, in which ISANA recognized and acknowledged the misconduct committed by McFarlane, agreed to cooperate fully with the government’s investigation, and agreed to implement certain reforms designed to ensure that similar conduct does not occur again.
By entering into the Non-Prosecution Agreement, the U.S. Attorney’s Office recognized that ISANA is responsible for educating thousands of students from underserved neighborhoods throughout Los Angeles County, and has demonstrated a strong commitment to its students and their academic achievement. The reforms now implemented by ISANA should allow it to continue serving its students and communities. The United States Attorney’s Office recognizes the cooperation of ISANA and its board of directors throughout its ongoing investigation.
This case was investigated by the United States Department of Education, Office of Inspector General; the Federal Bureau of Investigation, the United States Postal Inspection Service; IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the United States Secret Service. The Los Angeles Unified School District’s Office of Inspector General was also part of the investigative team and has played an instrumental role in the ongoing investigation.
This case is being prosecuted by Assistant United States Attorneys Julian L. André and Valerie L. Makarewicz of the Major Frauds Section, and Assistant United States Attorney Saurish Appleby-Bhattacharjee of the Violent and Organized Crimes Section.
Celink Agrees to Pay $4.25 Million to Resolve Its Alleged Liability Relating to Its Servicing of Federally Insured Reverse MortgagesRead the Press Release
Fort Myers, FL – United States Attorney Maria Chapa Lopez announces that Compu-Link Corporation (Celink) has agreed to a civil settlement that will pay $4.25 million to the United States to resolve allegations that it violated the False Claims Act in connection with its participation in a federally insured Home Equity Conversion Mortgage (HECM) or “reverse mortgage” program.
Through reverse mortgage loans, older people are able to access the equity in their homes by borrowing money against the equity they have built in their homes. Reverse mortgages insured by the federal government are called Home Equity Conversion Mortgages (“HECMs”), and are only available through a Federal Housing Administration (“FHA”)-approved lender.
To encourage reverse mortgage loans, the FHA protects lenders from loss by providing mortgage insurance. Under FHA’s program, a loan becomes due and payable when the home is sold or vacant for more than 12 months, or upon the death of the homeowner, whichever comes first. The lender is then repaid the amount of the loan, including the costs of servicing the loan and any interest that accrues on lender expenses after a loan becomes due and payable. FHA will reimburse a lender that is unable to recoup the full amount of the loan. In order to claim recoupment, the servicer is required to meet a number of regulatory requirements and deadlines.
Celink is a Michigan corporation in the business of servicing HECM loans nationwide on behalf of reverse mortgage loan owners. The United States alleged that Celink obtained insurance payments for interest from FHA despite failing to disclose on the insurance claim forms that the mortgagee was not eligible for such interest payments because it had failed to meet deadlines relating to obtaining an appraisal of the property, commencing foreclosure proceedings, and/or exercising reasonable diligence in prosecuting the foreclosure proceedings to completion. As a result, between November 1, 2011, and May 1, 2016, the mortgagees on the relevant reverse mortgage loans serviced by Celink allegedly obtained additional interest that they were not entitled to receive.
“This settlement represents our office’s continued commitment to protecting the financial solvency of vital financial programs designed to benefit America’s seniors,” said United States Attorney Chapa Lopez. “HECM servicers must be held accountable for failing to adhere to FHA requirements that are designed to ensure the continued viability of the HECM program. We are pleased that Celink cooperated with the investigation and agreed to accept financial responsibility for these failures.”
“This investigation and settlement should serve as a stark reminder of our ongoing efforts to ensure that our mortgage industry partners adhere to mutually agreed upon program rules and business practices which help mitigate financial risk associated with FHA programs,” said Wyatt Achord, Acting Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General. “It is our mission to rigorously pursue cases such as this one to protect the integrity of federal housing programs designed to assist homeownership.”
This investigation is another example of the United States Attorney’s Office’s efforts to combat fraud in the reverse mortgage industry. In September of 2015, the Middle District of Florida, in conjunction with the Department of Justice, announced a $29.63 million settlement with Reverse Mortgage Solutions, a subsidiary of the Tampa based Walter Investment Management Corporation, to resolve allegations relating to its failure to adhere to FHA regulations in servicing HECM loans. Similarly, in May 2017, an $89 million settlement was reached with Financial Freedom relating to HECM servicing violations.
The investigation was handled by Assistant U.S. Attorney Kyle S. Cohen, with assistance from the United States Department of Housing and Urban Development Office of Inspector General.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Cedar Rapids Felon Sentenced to Federal Prison for Possessing a GunRead the Press Release
A felon and drug user was sentenced December 18, 2018, to six months in federal prison for possessing a gun.
Willie B. Hodges II, age 57, from Cedar Rapids, Iowa, received the prison term after a June 25, 2018 guilty plea to possession of a firearm by a felon.
At the guilty plea, Hodges admitted that, on December 22, 2017, he possessed a loaded handgun while driving a car on Highway 151 in rural Iowa County. Information at sentencing showed that Hodges was a regular marijuana user and had a prior conviction for being a felon in possession of a firearm.
Hodges was sentenced in Cedar Rapids by Chief United States District Court Judge Leonard T. Strand. Hodges was sentenced to six months’ imprisonment and must also serve a two-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). 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.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Iowa State Patrol. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 18-CR-44-LTS. Follow us on Twitter @USAO_NDIA.
Billings man sentenced for firearms violationsRead the Press Release
MISSOULA—Billings resident Joseph Wayne Waters was sentenced on Thursday to four years in federal prison and three years of supervised release for his conviction of illegally possessing firearms, U.S. Attorney Kurt Alme said.
Waters, 39, pleaded guilty in September to being a prohibited person in possession of firearms.
Chief U.S. District Judge Dana L. Christensen presided at sentencing.
Waters was charged after an incident on Jan. 20, 2018 in Bozeman in which Waters fired a shot at a truck, hitting it in the tailgate, during a pursuit. Waters and two others were driving in Bozeman when the driver of Waters’ vehicle saw her ex-husband and began following his vehicle at a fairly high rate of speed. Waters called the ex-husband during the pursuit and law enforcement officers obtained phone records that reflected those calls. Eventually, Waters fired a shot at the truck.
When the chase ended, the driver consented to a search of her vehicle and officers seized three firearms from Waters’ backpack. The firearms included a .32 caliber revolver, a 9mm pistol and a .40 caliber pistol.
Waters, having been convicted of a felony aggravated assault in 1997 in Montana, was prohibited from possessing firearms.
Assistant U.S. Attorney Timothy Racicot prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bozeman Police Department and the Missoula Police Department.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Beaumont Man Sentenced for Child Pornography ViolationsRead the Press Release
BEAUMONT, Texas – A 45-year-old Beaumont, Texas man has been sentenced for child pornography violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Willie Lampley was found guilty on Aug. 22, 2018, of receipt of child pornography and possession of child pornography. Today, Lampley was sentenced to 210 months in federal prison on count one and 120 months on count two by U.S. District Judge Marcia A. Crone. Judge Crone ordered the sentences to run concurrently and also ordered Lampley to pay restitution in the amount of $18,000.
According to information presented in court, beginning in July 2017, Lampley began searching for and downloading child pornography using Peer-to-Peer file sharing networks. Lampley stored more than 300 videos and 100 images of children being sexually abused on the hard-drive of his computer. Some of the material depicted children as young as infants and toddlers. Lampley was convicted by a jury following a two-day trial in August.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by the Beaumont Police Department and Homeland Security Investigations and prosecuted by Assistant U.S. Attorneys Russell E. James and Christopher T. Tortorice.
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Busby Man Sentenced to Life in Murder of WomanRead the Press Release
BILLINGS – A Busby man convicted of first degree murder in the 2016 death of a woman, who was beaten, strangled, lit on fire and left to die in a field, was sentenced to life in prison today in federal court, while two co-defendants also received prison terms for their roles in the crime, U.S. Attorney Kurt G. Alme said.
Dimarzio Swade Sanchez, 21, was sentenced to mandatory life in prison, five years of supervised release and ordered to pay $14,276.72 restitution. A jury convicted Dimarzio Sanchez on Dec. 4, 2017 of first degree murder/aiding and abetting murder.
Angelica Jo Whiteman, 26, of Lame Deer, was sentenced to 40 years in prison, five years of supervised release and ordered to pay $14,276.72 restitution. Whiteman pleaded guilty in August 2017 to aiding and abetting first degree murder.
Frank James Sanchez, 21, of Lame Deer, was sentenced to nine in prison, three years of supervised release and ordered to pay $14,276.72 restitution. Frank Sanchez pleaded guilty in March 2017 to accessory after the fact and to misprision of a felony.
U.S. District Judge Susan P. Watters presided at the sentencing hearings.
Dimarzio Sanchez, his brother, Frank Sanchez, and Whiteman were charged in the death of the victim, who died on June 28, 2016 in a Utah hospital where she was flown for treatment after being attacked on April 17, 2016.
“This was an extraordinarily heinous crime. Our condolences go out to the victim’s family, friends and the entire community,” said U.S. Attorney Alme. “The Department of Justice is committed to fighting and reducing the significant levels of violence against women in Indian Country. Today’s sentences reflect the seriousness of the crime and will protect the community from future harm by these individuals.”
“I would like to thank Deputy Criminal Chief Lori Suek, former Assistant U.S. Attorney John Sullivan, the FBI and Bureau of Indian Affairs agents, the victim specialists and other staff of the FBI, BIA and U.S. Attorney’s Office for their hard work on this case,” Alme said.
During the four-day jury trial of Dimarzio Sanchez, the government presented evidence that Dimarzio Sanchez, the two co-defendants and others picked up the victim at the Kirby Saloon on the Northern Cheyenne Indian Reservation on April 17, 2016 and offered to give her a ride to her Crow Agency home. The defendants and victim had not met until that night.
The group stopped at a residence, where one of the individuals remained while the rest of the group headed toward Crow Agency. Along the way, a fight erupted between Whiteman and the victim. Dimarzio Sanchez, the driver, drove to Castle Rock Road, a dirt road off of Highway 212 on the Crow Indian Reservation, and parked.
The entire group initially got out and the assault on the victim continued. At one point, Dimarzio Sanchez showed Whiteman how to strangle the victim using a bandana, and Whiteman strangled her.
Frank Sanchez retrieved a gas can from the trunk of the car. Dimarzio Sanchez poured gasoline onto the victim and set her on fire. Dimarzio Sanchez and the rest of the group left the area. The victim remained in the field for about 14 hours until a motorist found her and called for help, prompting the start of the investigation. The victim ultimately was flown to a Salt Lake City hospital where she died.
Frank Sanchez was present and witnessed the assault but failed to notify authorities. He lied to law enforcement about his knowledge of the crime when he was first interviewed by denying he was present and giving investigators a false alibi. When re-interviewed almost two weeks later, Frank Sanchez provided a truthful account. In addition, Frank Sanchez failed to turn over to law enforcement the victim’s jeans, which Dimarzio Sanchez had given to him and another person.
Deputy Criminal Chief Lori Suek and former Assistant U.S. Attorney John Sullivan prosecuted the case, which was investigated by the FBI and Bureau of Indian Affairs.
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Armored Car Employee and Two Others Indicted for Theft of over $500,000 from Armored Car on Long IslandRead the Press Release
Earlier today, an indictment was unsealed in federal court in Central Islip charging Alexis Laguerra, Raymond Soto, also known as “Rambo,” and his father, Raymond Soto, also known as “Razor,” with bank larceny in connection with the theft of $510,000 from an armored car in Valley Stream on November 2, 2018. Raymond Soto (Sr.) was arrested this morning, and is scheduled to be arraigned this afternoon before Magistrate Judge A. Kathleen Tomlinson. Laguerra was previously arrested on a complaint, and was released on bail. Raymond Soto (Jr.) is a fugitive.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the charges.
“As alleged, Laguerra was a trusted employee of GardaWorld who used his knowledge of the armored car company’s operations to steal more than $500,000,” stated United States Attorney Donoghue. “I commend our partners in the FBI and Nassau County Police Department for their work bringing the defendants to justice and proving once again that crime does not pay.”
“As alleged, Alexis Laguerra broke his employer’s trust, conspiring with the Sotos to steal an armored car and more than half a million dollars,” stated FBI Assistant Director-in-Charge Sweeney. “As today’s arrests indicate, the FBI and our law enforcement partners are committed to finding those responsible for committing theft and ensuring that they face justice for their crimes.”
“The arrest of defendants Soto, Laguerra and Soto is another example of exceptional investigative work by multiple law enforcement agencies to bring closure to a major case,” stated NCPD Commissioner Ryder. “These defendants showed little regard for the safety of our residents, the bank and Garda employees, thus stealing over $500,000 from an armored car in a calculated heist. I would like to congratulate all members and agencies on a job well done.”
As alleged in the indictment and complaint, the defendants stole bank funds contained in three bags inside the GardaWorld armored car. Two employees of GardaWorld, Laguerra and John Doe #1, were working as the driver of the armored car and messenger, respectively. Their assignment that night was to empty ATM machines at bank branches and refill each ATM machine with “fresh money” of between $99,800 to $275,000. On November 2, 2018, upon arrival at a bank on Sunrise Highway in Valley Stream at 2:22 a.m., Laguerra and John Doe #1 exited the armored car and entered the bank. The unoccupied armored car was then stolen and later recovered nearby. Additionally, Laguerra and Raymond Soto (Jr.) had an agreement to destroy text messages they had exchanged setting up the theft. Earlier this morning, law enforcement officers executed a search warrant at the Sotos’ residence, and recovered an undetermined amount of cash believed to be proceeds of the theft.
The charges in the complaint and indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 10 years’ imprisonment on the bank larceny count. Defendants Laguerra and Raymond Soto (Jr.) also face up to 20 years’ imprisonment on the conspiracy to obstruct justice charge.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendants:
ALEXIS LAGUERRA
Age: 30
Brooklyn, New YorkRAYMOND SOTO, also known as “Rambo”
Age: 48
Richmond Hill, QueensRAYMOND SOTO, also known as “Razor”
Age: 28
Richmond Hill, QueensE.D.N.Y. Docket Nos. 18-MJ-1229 and 18-CR-678 (SJF)
Albany Man Pleads Guilty in Connection with Fatal OverdoseRead the Press Release
ALBANY, NEW YORK – Daniel J. Fillerup, age 33, of Albany, pled guilty yesterday to selling fentanyl that caused the death of its user.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his plea, Fillerup admitted that on September 29, 2016, he arranged, via text message and phone call, with K.C. to supply K.C. with two bags of heroin. Fillerup met with K.C. in Schenectady, New York, and K.C. gave Fillerup $36. He acquired bags of what he believed to contain heroin, and gave K.C. two of the bags. K.C. ingested the substance Fillerup gave her, which was fentanyl. The ingestion of the fentanyl caused K.C.’s death due to fentanyl intoxication.
Fillerup faces up to 20 years in prison when sentenced by Senior United States District Judge Lawrence E. Kahn. He also faces a fine of up to $1 million and a term of post-imprisonment supervised release of at least 3 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the FBI and its Capital District Safe Streets Gang Task Force, which includes FBI Special Agents and members of federal, state and local law enforcement agencies, including the Schenectady County District Attorney’s Office and the Schenectady Police Department. This case is being prosecuted by Assistant U.S. Attorney Douglas Collyer.
Acting Attorney General Whitaker Announces Justice Department Rescission of 69 Guidance DocumentsRead the Press Release
WASHINGTON –Acting Attorney General Matthew Whitaker today announced that, pursuant to President Trump’s Executive Order 13777 and the Department of Justice’s November 2017 memorandum ending the practice of regulation by guidance, the Department is rescinding 69 additional guidance documents that are unnecessary, outdated, inconsistent with existing law, or otherwise improper.
In making the announcement, Acting Attorney General Whitaker said:
"Under the Constitution, Congress writes our laws and the Executive Branch carries them out," Acting Attorney General Whitaker said. "Congress has given us a specific process for implementing regulations, and we have to follow it. Unfortunately, not every previous Administration has done that, and some have overstepped their lawful authority by issuing guidance documents that impose new obligations on parties outside of the Executive Branch and go further than existing law allows. The Trump Administration has already rescinded dozens of guidance documents that were improper, outdated, unnecessary, or inconsistent with current law, and today we are rescinding dozens more. We will continue this effort to restore the rule of law and our constitutional order because this government is accountable to the American people.”
In March 2017, President Donald Trump issued Executive Order 13777, which calls for agencies to establish Regulatory Reform Task Forces, chaired by a Regulatory Reform Officer, to identify existing regulations for potential repeal, replacement, or modification. Principal Deputy Associate Attorney General Jesse Panuccio chairs the Department of Justice Task Force, which is continuing its review of existing guidance documents that should be repealed, replaced, or modified.
The Task Force identified 25 guidance documents for repeal in December 2017, 24 guidance documents for repeal in July 2018, and has identified 69 more documents to announce for repeal this month.
The list of 69 total guidance documents that the Department of Justice is announcing withdrawal of today is as follows:
- ATF Rev. Ruling 69-114.
- ATF Ruling 77-25.
- ATF Ruling 77-26.
- ATF Ruling 75-30.
- ATF Ruling 77-13.
- ATF Ruling 80-22.
- ATF Procedure 80-7.
- ATF Ruling 80-23.
- Open Letter to all FFLs dated Aug. 31, 2006.
- Open Letter dated Aug. 22, 2001.
- Open Letter dated Nov. 20, 2001.
- Open Letter dated Nov. 4, 2008.
- Open Letter to Washington FFLs dated Aug. 12, 2011.
- 53 Open Letters dated February 1994.
- Open Letter to all Federal Explosives Licensees and Permittees dated Feb. 12, 2003.
- Dear Colleague Letter on Nondiscriminatory Administration of School Discipline dated Jan. 8, 2014.
- Overview of the Supportive School Discipline Initiative dated Jan. 8, 2014.
Acting Attorney General Matthew G. Whitaker's Statement Regarding the 30th Anniversary of the Pan Am 103 BombingRead the Press Release
Acting Attorney General Matthew G. Whitaker today released the following statement:
"The Pan Am 103 bombing changed this country and it changed law enforcement forever," Acting Attorney General Matthew Whitaker said. "At the time, it was the deadliest terrorist attack on American civilians in our history. The victims came from across America and from every walk of life. College students coming home for Christmas, a couple on their honeymoon, an outstanding Department of Justice prosecutor, and more than 200 other innocent people were targeted by terrorists. In response to that unspeakable tragedy, law enforcement changed the way we investigate terrorism, the way we collaborate with one another, and the way we provide services to crime victims. It is right that the law enforcement community stops today to remember this tragedy, to honor the victims and their families, and to once again recommit ourselves to preventing acts of terror from victimizing the American people ever again."
3 Pittsburgh Residents Indicted on Drug and Gun ChargesRead the Press Release
PITTSBURGH - Three residents of Pittsburgh, Pennsylvania, have been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today.
The six-count Indictment, returned on Dec. 12 and unsealed Dec. 19. named Daniel Espy, 34, Vincent Daniele, 36, and Brittany Zietak, 28, as defendants.
According to the Indictment, from on or about November 1, 2016, and continuing thereafter to on or about April 4, 2017, Espy, Daniele and Zietak conspired to distribute and possess with intent to distribute 100 grams or more of heroin, a Schedule I controlled substance, a quantity of furanyl fentanyl, a Schedule I controlled substance, and a quantity of fentanyl, a Schedule II controlled substance. Additionally, on or about March 3, 2017, Espy possessed with the intent to distribute quantities of heroin, furanyl fentanyl and fentanyl. On or about April 4, 2017, Daniele and Espy possessed with the intent to distribute a quantity of heroin. Also on April 4, 2017, Daniele maintained a drug involved premises. The indictment further charges Daniele with possession of a firearm by a convicted felon, as well as possessing said firearm in furtherance of the drug trafficking crime on April 4, 2017. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm
The law provides for a maximum total sentence of not less than five years to a maximum of 40 years in prison, a fine not to exceed $5,000,000, or both for Espy and Zietak. For Daniele, the law provides for not less than 10 years to a maximum of 40 years in prison, a fine not to exceed $5,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Timothy M. Lanni is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the City of Pittsburgh Bureau of Police conducted the investigation leading to the Indictment in this case. This case was brought as part of Project Safe Neighborhoods (PSN). 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.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
15 Individuals Arrested on Federal Drug Trafficking and Firearm ChargesRead the Press Release
CONCORD - United States Attorney Scott W. Murray announced today that 15 individuals were arrested on federal drug trafficking and firearm offenses. The arrests are the culmination of a year-long investigation into drug trafficking in and around the Rochester, Farmington, Somersworth, and Dover areas of New Hampshire by the Drug Enforcement Administration (DEA) in coordination with federal, state and local authorities in New Hampshire and Maine. The following individuals were arrested and charged as follows:
- Thomas Blanchette, 42, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Christopher Stearns, 46, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Amy Patch, 37, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Nicholas Barton, 34, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Randy Stevens, 28, Farmington, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Kyle Forest, 25, Rochester, NH- conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Derek Rand, 30, Farmington, NH, - conspiracy to possess with the intent to distribute, and to distribute, fentanyl;
- Sasha Rand, 33, Farmington, NH - conspiracy to possess with the intent to distribute and to distribute fentanyl;
- James Nesbitt, 42, Rochester, NH- conspiracy to possess with the intent to distribute, and to distribute, fentanyl and methamphetamine;
- Haley Hansler, 32, Rochester, NH- conspiracy to possess with the intent to distribute and to distribute fentanyl and methamphetamine;
- William McKay, 45, Rochester, NH- conspiracy to possess with the intent to distribute and to distribute fentanyl and methamphetamine;
- Angel Wilson, 33, Rochester, NH – possession of fentanyl with the intent to distribute;
- Stephanie Joy, 42, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
- Joshua George, 37, Somersworth, NH - conspiracy to possess with the intent to distribute, and to distribute, fentanyl; and
- Dean Smoronk, 57, Farmington, NH – possession of a firearm by a prohibited person and possession of a stolen firearm.
Most of the defendants were arrested on Thursday, December 20, 2018, and appeared in court that day. Joshua George first appeared in federal court on November 9, 2018.
“This coordinated sweep serves notice once again of law enforcement’s determination to disrupt the sale of fentanyl, methamphetamine and other dangerous drugs in New Hampshire” said U.S. Attorney Murray. “Drug trafficking has caused grave damage in Strafford County and throughout our state. Accordingly, we will continue to work closely with our law enforcement partners to arrest and prosecute those responsible. In order to keep the public safe from violent crime, we will also aggressively target those who unlawfully possess firearms. These prosecutions are an example of how federal, state, and local law enforcement agencies can work together to keep the Granite State safe.”
“The arrests today reflect DEA’s strong commitment to bring to justice those who distribute these dangerous drugs to our citizens,” said DEA Special Agent in Charge Brian D. Boyle. “As we all know, drug trafficking, along with the gun and physical violence that often accompanies it, ravages the very foundation of our families and communities. This investigation demonstrates the strength and continued commitment of our local, state and federal law enforcement partners.”
“The U.S. Postal Inspection Service, along with our federal and state law enforcement partners, are committed to providing the resources necessary to combat drug trafficking in our communities,” said U.S. Postal Inspection Service’s Inspector in Charge, Joseph W. Cronin of the Boston Division. “These arrests should send a clear message that drugs, firearms, and violence will not be tolerated. Fentanyl, and other highly addictive drugs, are destroying families across the country. U.S. Postal Inspection Service will continue to work diligently to rid the U.S. Mail of illegal drugs and their proceeds.
This investigation was the product of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation and prosecution of major drug trafficking organizations.
These cases were investigated by the DEA’s Tactical Diversion Squad; the New Hampshire State Police; the United States Postal Inspection Service; the United States Marshals Service; the Strafford County Drug Task Force; the Maine State Police; and the Dover (NH) Police Department. The cases are being prosecuted by Assistant U.S. Attorneys Jennifer Cole Davis and Anna Dronzek.
The charges are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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- Thomas Blanchette, 42, Rochester, NH - conspiracy to possess with the intent to distribute 40 grams or more of fentanyl;
20 December 2018
Wetzel County man sentenced for connection to a drug distribution operation in Wetzel and Tyler CountiesRead the Press Release
WHEELING, WEST VIRGINIA –Ronald Morgan, of New Martinsville, West Virginia, was sentenced today to 41 months incarceration for his involvement in methamphetamine, cocaine, and heroin distribution that spanned multiple states, United States Attorney Bill Powell announced.
Morgan, age 50, pled guilty in August 2018 to one count of “Aiding and Abetting Distribution of Methamphetamine.” Morgan admitted to selling methamphetamine in March 2017 in Tyler County.
Assistant U.S. Attorneys Robert H. McWilliams, Jr., and Shawn M. Adkins are prosecuting the case on behalf of the government. The Drug Enforcement Administration; the Bureau of Alcohol; Tobacco, Firearms, and Explosives; the Marshall County Drug and Violent Crimes Task Force, a HIDTA-funded initiative; the West Virginia State Police; the Tyler County Sheriff’s Office; the Wetzel County Sheriff’s Office; the Sistersville Police Department; the Paden City Police Department; and the New Martinsville Police Department investigated. The Columbus, Ohio, Police Department Gang Crimes Unit assisted in the case.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge John Preston Bailey presided.
Westwego Man Sentenced to 70 Months Imprisonment for Drug Trafficking and Money LaunderingRead the Press Release
NEW ORLEANS, LOUISIANA –U.S. Attorney Peter G. Strasser announced that MICHAEL KWAN, age 34, of Westwego, was sentenced Tuesday, December 18, 2018 to 70 months in prison.
On March 20, 2018, KWAN pleaded guilty to conspiring to distribute more than 1,000 kilograms of marijuana and conspiring to launder his drug trafficking proceeds. According to court documents, drug traffickers in California were shipping KWAN marijuana in 55-gallon drums, and Louisiana State Police seized a shipment with 12 drums, containing 420 pounds of marijuana. KWAN’s warehouse in Westwego had an additional 161 identical drums, and shipping records showed numerous similar shipments from California to KWAN’s warehouse.
KWAN admitted that he laundered the proceeds of his drug trafficking, using seafood purchases. Specifically, KWAN used the drug money to buy fresh seafood, which he resold to seafood restaurants and distributors, who then wrote checks that KWAN caused to be deposited in bank accounts. Shortly after KWAN was initially arrested based on the 420-pound seizure, KWAN’s codefendant, Tram NGUYEN, made a $35,000 transfer out of the bank account used for the seafood transactions, and NGUYEN also transferred additional funds out of the seafood transaction account and into a bank account in the name of a newly-created corporation.
NGUYEN pleaded guilty on October 1, 2018, to helping conceal the drug trafficking and money laundering, and is scheduled to be sentenced on January 8, 2019.
Judge Jay C. Zainey sentenced KWAN to 70 months in the Bureau of Prisons, as well as 5 years of supervised release following the term of imprisonment.
U.S. Attorney Strasser praised the work of the Drug Enforcement Administration and the Louisiana State Police. Assistant United States Attorneys Nicholas D. Moses and Jeffrey Sandman are in charge of the prosecution.
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West Virginia Man Pleads Guilty to Interstate Transportation of Fraud ProceedsRead the Press Release
PITTSBURGH, PA - A resident of Wellsburg, West Virginia, pleaded guilty in federal court to a charge of interstate transportation of fraud proceeds, United States Attorney Scott W. Brady announced today.
James E. Miller, III, age 47, pleaded guilty on Tuesday to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the Court was advised that, from November 2016 through April 2017, Miller fraudulently induced his employer in Charleroi, Pennsylvania, to issue three checks totaling $59,129.10, payable to a fictitious business that Miller had created. Miller transported two of the checks totaling $32,671.50 from Charleroi, Pennsylvania, to Wellsburg, West Virginia, knowing that the checks were taken by fraud, and deposited those checks into a bank account that he controlled.
Judge Fischer scheduled sentencing for May 3, 2019. The law provides for a total sentence of not more than 10 years in prison, a fine of not more than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Adam N. Hallowell is prosecuting this case on behalf of the government.
The United States Postal Inspection Service – Criminal Investigation conducted the investigation that led to the prosecution of James E. Miller, III.
Walnut Man Sentenced to Nearly 4 Years in Federal Prison for Scheme to Smuggle Rifle Scopes and Tactical Equipment to SyriaRead the Press Release
SANTA ANA, California – An Inland Empire man was sentenced this morning to 46 months in federal prison for his role in a scheme to smuggle rifle scopes and other tactical gear to Syria in violation of the International Emergency Economic Powers Act and sanctions imposed on Syria by the United States.
Rasheed Al Jijakli, 57, a Syrian-born naturalized U.S. citizen who resides in Walnut, was sentenced by United States District Judge James V. Selna.
During today’s sentencing hearing, Judge Selna agreed with prosecutors that the goods Jijakli took to Syria were “instruments of death.”
Jijakli pleaded guilty to a felony conspiracy charge on August 13 and admitted he conspired with others to export tactical gear from the United States to Syria. That tactical gear included U.S.-origin laser boresighters, and day- and night-vision rifle scopes.
From June through July of 2012, Jijakli and a co-conspirator purchased the Tactical Gear. On July 17, 2012, Jijakli traveled with the tactical gear from Los Angeles to Istanbul with the intent that it would be provided to Syrian rebels training in Turkey and fighting in Syria.
Jijakli provided some of the tactical gear, specifically the laser boresighters, to a second co-conspirator, who Jijakli learned was a member of the militant group Ahrar Al-Sham. Jijakli also provided the goods to other armed Syrian insurgent groups in Syria and Turkey.
Jijakli and his co-conspirators knowingly provided at least 43 laser boresighters, 85 day rifle scopes, 30 night-vision rifle scopes, tactical flashlights, a digital monocular, five radios, and a bulletproof vest to Ahrar Al-Sham and other Syrian rebels in Syria, or with knowledge that the tactical gear was going to Syria.
Additionally, in August and September 2012, Jijakli directed co-conspirators to withdraw thousands of dollars from Palmyra Corporation, where Jijakli was the chief executive officer, to pay for tactical gear that would be provided to Syrian rebels. In his plea agreement, Jijakli specifically admitted directing that $17,000 from Palmyra be used to purchase tactical gear intended for Syrian rebels.
The case against Jijakli was the result of an investigation conducted by the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Department of Commerce’s Office of Export Enforcement, and IRS Criminal Investigation.
The case against Jijakli was prosecuted by Assistant United States Attorney Mark Takla of the Terrorism and Export Crimes Section in the United States Attorney’s Office and Trial Attorney Christian Ford of the Counterintelligence and Export Control Section of the Justice Department’s National Security Division.
Virgin Islands Police Department Achieves Substantial Compliance with Policing Consent DecreeRead the Press Release
St. Thomas, USVI – The Justice Department announced today that the federal district court for the District of the Virgin Islands yesterday found the Virgin Islands Police Department (VIPD) in substantial compliance with a consent decree relating to VIPD’s use of force practices. The consent decree requires VIPD to now maintain compliance for a period of two years. The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of the Virgin Islands have worked cooperatively throughout the duration of this matter.
The consent decree was entered in 2009 to address allegations of a pattern or practice of uses of force by VIPD officers that deprived persons of rights, privileges, or immunities secured or protected by the Constitution or the laws of the United States. Pursuant to the consent decree, VIPD reviewed and revised its use of force policies, improved force investigations, modified its citizen complaint process, updated its risk management system, and provided more training to its officers. VIPD also worked closely with a court-appointed Independent Monitoring Team (IMT) to ensure full implementation of the consent decree.
"The Department of Justice applauds the Virgin Islands Police Department for implementing reforms that protect constitutional rights while enhancing the safety of police officers and the public," said Assistant Attorney General Eric Dreiband for the Civil Rights Division. "The court’s finding that VIPD is in substantial compliance with the consent decree is an important step, and we are pleased with the fundamental changes that VIPD has made to its practices and procedures. We will continue to monitor VIPD’s progress over the next two years to ensure that these changes are sustained and that the people of the U.S. Virgin Islands receive the effective, constitutional policing that they deserve."
"Completion of this portion of the consent decree process is vitally important to the future of the Territory," said U.S. Attorney Gretchen C.F. Shappert. "We are grateful for the hard work and dedication of so many VIPD officers who have worked to ensure that constitutional policing is the policy for law enforcement in the Virgin Islands. Today’s finding by the District Court underscores VIPD’s commitment to protecting the rights of all Americans, as Territorial officers work to enhance public safety."
U.S. District Court Judge Curtis V. Gomez announced in open court that the Virgin Islands Police Department has achieved substantial compliance with the terms of the consent decree and that VIPD will commence the two-year sustainment period. Judge Gomez congratulated the VIPD for achieving substantial compliance, noting in particular the contributions of Assistant Commissioner Curtis Griffin, Chief Compliance Manager for implementation of the consent decree. Judge Gomez also expressed appreciation for the work of the IMT and their "hands-on approach."
Virgin Islands Police Department Achieves Substantial Compliance with Policing Consent DecreeRead the Press Release
The Justice Department today announced that the federal district court for the District of the Virgin Islands yesterday found the Virgin Islands Police Department (VIPD) in substantial compliance with a consent decree relating to VIPD’s use of force practices. The consent decree requires VIPD to now maintain compliance for a period of two years. The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of the Virgin Islands have worked cooperatively throughout the duration of this matter.
The consent decree was entered in 2009 to address allegations of a pattern or practice of uses of force by VIPD officers that deprived persons of rights, privileges, or immunities secured or protected by the Constitution or the laws of the United States. Pursuant to the consent decree, VIPD reviewed and revised its use of force policies, improved force investigations, modified its citizen complaint process, updated its risk management system, and provided more training to its officers. VIPD also worked closely with a court-appointed Independent Monitoring Team (IMT) to ensure full implementation of the consent decree.
“The Department of Justice applauds the Virgin Islands Police Department for implementing reforms that protect constitutional rights while enhancing the safety of police officers and the public,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The court’s finding that VIPD is in substantial compliance with the consent decree is an important step, and we are pleased with the fundamental changes that VIPD has made to its practices and procedures. We will continue to monitor VIPD’s progress over the next two years to ensure that these changes are sustained and that the people of the U.S. Virgin Islands receive the effective, constitutional policing that they deserve.”
“Completion of this portion of the consent decree process is vitally important to the future of the Territory,” said U.S. Attorney Gretchen C.F. Shappert. “We are grateful for the hard work and dedication of so many VIPD officers who have worked to ensure that constitutional policing is the policy for law enforcement in the Virgin Islands. Today’s finding by the District Court underscores VIPD’s commitment to protecting the rights of all Americans, as Territorial officers work to enhance public safety.”
U.S. District Court Judge Curtis V. Gomez announced in open court that the Virgin Islands Police Department has achieved substantial compliance with the terms of the consent decree and that VIPD will commence the two-year sustainment period. Judge Gomez congratulated the VIPD for achieving substantial compliance, noting in particular the contributions of Assistant Commissioner Curtis Griffin, Chief Compliance Manager for implementation of the consent decree. Judge Gomez also expressed appreciation for the work of the IMT and their “hands-on approach.”
USAO NDTX Roundup -- 12/20/2018Read the Press Release
IDICTMENT* – Joseph McDonell, 40
On Dec. 18, a federal grand jury returned a nine-count indictment against Joseph Heath McDonell, of Dallas, charging access device fraud and identity theft. McDonell was found in possession of credit and debit card making equipment, stolen personal identifying information, thousands of counterfeit credit card numbers, and several counterfeit Texas DPS drivers permits. If convicted, Mr. McDonell faces up to more than 4 years in federal prison. The FBI and Dallas Police Department investigated the case.INDICTMENT* – Vinson Burnett, 53
On Dec. 18 a federal grand jury indicted Vinson Burnett of Mesquite, Texas for using a peer-peer file sharing program to share and receive child pornography. Two different law enforcement agencies were able to download child pornography from Burnett over a two month period. Upon execution of a search warrant, child pornography was found on a cell phone and a computer hard drive. If convicted, Mr. Burnett faces up to 40 years in federal prison. The Mesquite Police Department and HSI investigated the case.INDICTMENT* - Quentin Amoako, 30
On Dec. 18, a federal grand jury indicted Quentin Amoako, of Dallas, for possessing with intent to distribute crack cocaine. Amoako was also indicted for possessing a firearm in furtherance of his drug trafficking activities. If convicted, Mr. Amoako faces up to 25 years in prison, with a mandatory minimum of 5 years in federal prison. The FBI investigated. This case stemmed from a Project Safe Neighborhood investigation, an initiative bringing together federal and local law enforcement to stem violent crime in hard-hit communities.INDICTMENT – RXpress owners & marketers
Eight Dallas-area pharmacy owners and marketers were indicted for their roles in a scheme involving approximately $92 million in compound drug claims to TRICARE and the U.S. Labor Department, which were allegedly the product of over $9.1 million in illegal kickbacks. DCIS, HHS, the FBI, and the VA – Inspector General investigated the case. Release here.INDICTMENT* – Katie Jeanne Johnson, 30
On Dec 18, a federal grand jury indicted Katie Jeanne Johnson for intent to rob a Bank of America in Garland, Texas. If convicted, Ms. Johnson faces up to 20 years in federal prison. The FBI investigated the case.SENTENCING -- Kenneth Wines, 44
On Dec. 17, Kenneth Wines was sentenced to 13 months’ imprisonment for his role in a prison bribery scheme. Wines, an inmate at the Federal Correctional Institute at Seagoville, Texas, was serving a 35-year sentence for drug trafficking when he and another inmate bribed a prison employee to smuggle contraband, including cigarettes and K2, into the prison in exchange for money. The court ordered Wines to serve the 13-month sentence consecutive to his undischarged 35-year sentence.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Two Men Sentenced for Illegally Possessing FirearmsRead the Press Release
CHARLESTON, W.Va. – Two men were sentenced by Senior United States District Judge David A. Faber for illegally possessing firearms, announced United States Attorney Mike Stuart.
“We are prosecuting prohibited persons for illegally possessing firearms in every corner of the District,” said United States Attorney Mike Stuart. “And the number of firearms cases we have prosecuted this year is off the charts.”
Reed Ryan Quick, 47, of White Sulphur Springs, West Virginia was sentenced to 46 months in prison. The investigation was conducted by the Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Quick previously pled guilty to being a prohibited person in possession of a firearm, admitting that on January 20, 2018, he possessed a Ruger 9mm pistol while attempting to purchase drugs in Charleston. Quick is prohibited from possessing any firearms due to a 2015 Greenbrier County felony conviction for operating a clandestine methamphetamine lab.
In addition, a Wood County felon was sentenced to 48 months in prison for illegally possessing two firearms. Scott Phillips, 33, of Parkersburg, previously pled guilty to being a prohibited person in possession of a firearm. The case was investigated by the Parkersburg Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On February 3, 2017, officers with the Parkersburg Police Department stopped a vehicle Phillips was riding in. Phillips fled the vehicle on foot and unsuccessfully attempted to hide two pistols as police pursued him. Phillips is prohibited from possessing any firearms due to a 2006 Wood County felony burglary conviction.
Assistant United States Attorney Matt Davis handled the prosecutions.
The cases were prosecuted as part of Project Safe Neighborhoods. 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.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Two Men Convicted on Heroin ChargesRead the Press Release
BOSTON – A New Jersey firefighter and a Puerto Rican man were convicted by a federal jury in Worcester yesterday in connection with a heroin conspiracy.
Ivan Cruz-Rivera, 50, of Dorado, P.R., and Carlos Jimenez, 52, of Englishtown, N.J., were each convicted after a 12-day trial of one count of possession with intent to distribute heroin and distribution of more than 100 grams of heroin, and one count of conspiracy to possess with intent to distribute heroin and to distribute heroin; Cruz-Rivera was found responsible for more than 100 grams of heroin with regards to the conspiracy charge. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Cruz-Rivera and Jimenez for March 20, 2019, and April 24, 2019, respectively.
On Oct. 4, 2013, federal agents were surveilling garages on Union Street in Leominster where they believed drugs were being sold. The agents observed two men in a Lexus with New Jersey plates entering the property and leaving over 90 minutes later. After the Lexus left, an individual at the garage sold heroin to a cooperating source for $7,500.
A law enforcement officer subsequently followed the Lexus and stopped the vehicle in Sturbridge after the driver committed a traffic violation. The trooper observed that the driver and passenger were visibly nervous – the driver’s hands were trembling and the passenger was avoiding eye contact and fidgeting. The driver provided the trooper with a New Jersey license and conspicuously displayed his firefighter badge, which identified him as Carlos Jimenez, and the passenger, Cruz-Rivera, presented a Puerto Rican identification card. When questioned about the purpose of the trip to Massachusetts, Jimenez gave conflicting answers and said that they had just come from Lawrence. Jimenez denied having weapons or drugs in the car, but indicated that his passenger had some cash in the car. When Cruz-Rivera was questioned about transporting large sums of cash in the car, he gave evasive answers before finally stating that there was $1,000 in the car. After Jimenez consented to a vehicle search, the trooper found $44,000 in a black bag in the back seat of the Lexus.
The cash was seized, but Jimenez and Cruz-Rivera were released. Subsequently, a cooperating witness provided law enforcement with information regarding Jimenez and Cruz-Rivera’s drug trafficking activity. In approximately 2012, the cooperating witness began purchasing heroin from Cruz-Rivera. On Oct. 4, 2013, Jimenez told the cooperator that he drove for the drug delivery because it was less likely that he would get in trouble if they were pulled over because he was a firefighter.
Both defendants face a mandatory minimum sentence of five years and no greater than 40 years in prison, four years of supervised release, and a fine of $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Worcester Police Chief Steven M. Sargent; Fitchburg Police Chief Ernest Martineau; Leominster Interim Police Chief Michael Goldman; and Lunenburg Police Chief James P. Marino made the announcement today. Assistant U.S. Attorneys Michelle L. Dineen Jerrett and William F. Abely of Lelling’s Worcester Branch Office are prosecuting the case.
Two Men Arrested for Conspiring to Distribute Heroin and FentanylRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Douglas Marra, also known as “Dougie,” and Joseph McClean, also known as “Max B,” with conspiracy to distribute and possess with intent to distribute heroin and fentanyl in Queens between January 2018 and September 2018. McClean and Marra were arrested earlier today, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Sanket J. Bulsara.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI), Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, the defendants repeatedly sold heroin and fentanyl, seeking to profit from these highly addictive and potentially lethal drugs,” stated United States Attorney Donoghue. “With today’s arrests, the defendants will be held accountable for contributing to the opioid epidemic plaguing our communities.”
“It is not shocking that drug traffickers lure customers by linking their product to overdoses; but the blatant disregard to human life is unconscionable,” stated DEA Special Agent-in-Charge Donovan. “Today’s arrests sends a message to dealers that at some point we will catch you and in some cases the charges will be more than just distribution.”
“Our communities have been plagued with fentanyl related deaths, and it is because of individuals like those arrested today, those who prey on vulnerabilities with no regard for life,” stated HSI Special Agent-in-Charge Melendez. “McClean and Marra are now in custody, unable to keep pushing these deadly drugs as alleged, and law enforcement will continue working opioid investigations and removing relentless drug dealers from our city streets.”
As alleged in the complaint, in January 2018, HSI and NYPD began investigating a heroin and fentanyl drug trafficking organization in Queens. Following a drug overdose death in Queens, law enforcement interviewed an individual who stated that the overdose victim had obtained heroin from “Dougie” and that “Dougie” works with “Max B.” A subsequent search of the victim’s cellphone by law enforcement revealed contact information for Marra and McClean. Law enforcement then initiated a series of undercover drug transactions with Marra. During one of those transactions, Marra told an undercover police officer, “This stuff is hot. My friend died off of it.” Ultimately, when Marra was not able to provide drugs, McClean directed other suppliers to complete the narcotics transaction.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the charges, the defendants face a mandatory minimum of 10 years’ imprisonment and a maximum of life imprisonment.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Marcia M. Henry and Penelope J. Brady are in charge of the prosecution.
The Defendants:
Douglas Marra (also known as “Dougie”)
Age: 34
Glendale, QueensJoseph McClean (also known as “Max B”)
Age: 34
Glendale, QueensE.D.N.Y. Docket No. 18-MJ-1236
Two Chinese Hackers Associated with the Ministry of State Security Charged with Global Computer Intrusion Campaigns Targeting Intellectual Property and Confidential Business InformationRead the Press Release
Defendants Were Members of the APT 10 Hacking Group Who Acted in Association with the Tianjin State Security Bureau and Engaged in Global Computer Intrusions for More Than a Decade, Continuing into 2018, Including Thefts from Managed Service Providers and More Than 45 Technology Companies
The unsealing of an indictment charging Zhu Hua (朱华), aka Afwar, aka CVNX, aka Alayos, aka Godkiller; and Zhang Shilong (张士龙), aka Baobeilong, aka Zhang Jianguo, aka Atreexp, both nationals of the People’s Republic of China (China), with conspiracy to commit computer intrusions, conspiracy to commit wire fraud, and aggravated identity theft was announced today.
The announcement was made by Deputy Attorney General Rod J. Rosenstein, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Director Christopher A. Wray of the FBI, Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) of the U.S. Department of Defense, and Assistant Attorney General for National Security John C. Demers.
Zhu and Zhang were members of a hacking group operating in China known within the cyber security community as Advanced Persistent Threat 10 (the APT10 Group). The defendants worked for a company in China called Huaying Haitai Science and Technology Development Company (Huaying Haitai) and acted in association with the Chinese Ministry of State Security’s Tianjin State Security Bureau.
Through their involvement with the APT10 Group, from at least in or about 2006 up to and including in or about 2018, Zhu and Zhang conducted global campaigns of computer intrusions targeting, among other data, intellectual property and confidential business and technological information at managed service providers (MSPs), which are companies that remotely manage the information technology infrastructure of businesses and governments around the world, more than 45 technology companies in at least a dozen U.S. states, and U.S. government agencies. The APT10 Group targeted a diverse array of commercial activity, industries and technologies, including aviation, satellite and maritime technology, industrial factory automation, automotive supplies, laboratory instruments, banking and finance, telecommunications and consumer electronics, computer processor technology, information technology services, packaging, consulting, medical equipment, healthcare, biotechnology, pharmaceutical manufacturing, mining, and oil and gas exploration and production. Among other things, Zhu and Zhang registered IT infrastructure that the APT10 Group used for its intrusions and engaged in illegal hacking operations.
“The indictment alleges that the defendants were part of a group that hacked computers in at least a dozen countries and gave China’s intelligence service access to sensitive business information,” said Deputy Attorney General Rosenstein. “This is outright cheating and theft, and it gives China an unfair advantage at the expense of law-abiding businesses and countries that follow the international rules in return for the privilege of participating in the global economic system.”
“It is galling that American companies and government agencies spent years of research and countless dollars to develop their intellectual property, while the defendants simply stole it and got it for free” said U.S. Attorney Berman. “As a nation, we cannot, and will not, allow such brazen thievery to go unchecked.”
“Healthy competition is good for the global economy, but criminal conduct is not. This is conduct that hurts American businesses, American jobs, and American consumers,” said FBI Director Wray. “No country should be able to flout the rule of law – so we’re going to keep calling out this behavior for what it is: illegal, unethical, and unfair. It's going to take all of us working together to protect our economic security and our way of life, because the American people deserve no less."
“The theft of sensitive defense technology and cyber intrusions are major national security concerns and top investigative priorities for the DCIS,” said DCIS Director O’Reilly. “The indictments unsealed today are the direct result of a joint investigative effort between DCIS and its law enforcement partners to vigorously investigate individuals and groups who illegally access information technology systems of the U.S. Department of Defense and the Defense Industrial Base. DCIS remains vigilant in our efforts to safeguard the integrity of the Department of Defense and its enterprise of information technology systems.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
Overview
Zhu Hua (朱华), aka Afwar, aka CVNX, aka Alayos, aka Godkiller, and Zhang Shilong (张士龙), aka Baobeilong, aka Zhang Jianguo, aka Atreexp, the defendants, both nationals of China, were members of a hacking group operating in China known within the cyber security community as the APT10 Group, or alternatively as “Red Apollo,” “CVNX,” “Stone Panda,” “MenuPass,” and “POTASSIUM.” The defendants worked for Huaying Haitai in Tianjin, China, and acted in association with the Chinese Ministry of State Security’s Tianjin State Security Bureau. From at least in or about 2006 up to and including in or about 2018, members of the APT10 Group, including Zhu and Zhang, conducted extensive campaigns of intrusions into computer systems around the world. The APT10 Group used some of the same online facilities to initiate, facilitate and execute its campaigns during the conspiracy.
Most recently, beginning at least in or about 2014, members of the APT10 Group, including Zhu and Zhang, engaged in an intrusion campaign to obtain unauthorized access to the computers and computer networks of MSPs for businesses and governments around the world (the MSP Theft Campaign). The APT10 Group targeted MSPs in order to leverage the MSPs’ networks to gain unauthorized access to the computers and computer networks of the MSPs’ clients and to steal, among other data, intellectual property and confidential business data on a global scale. For example, through the MSP Theft Campaign, the APT10 Group obtained unauthorized access to the computers of an MSP that had offices in the Southern District of New York and compromised the data of that MSP and certain of its clients involved in banking and finance, telecommunications and consumer electronics, medical equipment, packaging, manufacturing, consulting, healthcare, biotechnology, automotive, oil and gas exploration, and mining.
Earlier, beginning in or about 2006, members of the APT10 Group, including Zhu and Zhang, engaged in an intrusion campaign to obtain unauthorized access to the computers and computer networks of more than 45 technology companies and U.S. government agencies, in order to steal information and data concerning a number of technologies (the Technology Theft Campaign). Through the Technology Theft Campaign, the APT10 Group stole hundreds of gigabytes of sensitive data and targeted the computers of victim companies involved in aviation, space and satellite technology, manufacturing technology, pharmaceutical technology, oil and gas exploration and production technology, communications technology, computer processor technology, and maritime technology.
In furtherance of the APT10 Group’s intrusion campaigns, Zhu and Zhang, among other things, worked for Huaying Haitai and registered malicious domains and infrastructure. In addition, Zhu, a penetration tester, engaged in hacking operations on behalf of the APT10 Group and recruited other individuals to the APT10 Group, and Zhang developed and tested malware for the APT10 Group.
The MSP Theft Campaign
In furtherance of the MSP Theft Campaign, Zhu, Zhang, and their co-conspirators in the APT10 Group engaged in the following criminal conduct:
- First, after the APT10 Group gained unauthorized access into the computers of an MSP, the APT10 Group installed multiple variants of malware on MSP computers around the world. To avoid antivirus detection, the malware was installed using malicious files that masqueraded as legitimate files associated with the victim computer’s operating system. Such malware enabled members of the APT10 Group to monitor victims’ computers remotely and steal user credentials.
- Second, after stealing administrative credentials from computers of an MSP, the APT10 Group used those stolen credentials to connect to other systems within an MSP and its clients’ networks. This enabled the APT10 Group to move laterally through an MSP’s network and its clients’ networks and to compromise victim computers that were not yet infected with malware.
- Third, after identifying data of interest on a compromised computer and packaging it for exfiltration using encrypted archives, the APT10 Group used stolen credentials to move the data of an MSP client to one or more other compromised computers of the MSP or its other clients’ networks before exfiltrating the data to other computers controlled by the APT10 Group.
Over the course of the MSP Theft Campaign, Zhu, Zhang, and their co-conspirators in the APT10 Group successfully obtained unauthorized access to computers providing services to or belonging to victim companies located in at least 12 countries, including Brazil, Canada, Finland, France, Germany, India, Japan, Sweden, Switzerland, the United Arab Emirates, the United Kingdom, and the United States. The victim companies included at least the following: a global financial institution, three telecommunications and/or consumer electronics companies; three companies involved in commercial or industrial manufacturing; two consulting companies; a healthcare company; a biotechnology company; a mining company; an automotive supplier company; and a drilling company.
The Technology Theft Campaign
Over the course of the Technology Theft Campaign, which began in or about 2006, Zhu, Zhang, and their coconspirators in the APT10 Group successfully obtained unauthorized access to the computers of more than 45 technology companies and U.S. Government agencies based in at least 12 states, including Arizona, California, Connecticut, Florida, Maryland, New York, Ohio, Pennsylvania, Texas, Utah, Virginia and Wisconsin. The APT10 Group stole hundreds of gigabytes of sensitive data and information from the victims’ computer systems, including from at least the following victims: seven companies involved in aviation, space and/or satellite technology; three companies involved in communications technology; three companies involved in manufacturing advanced electronic systems and/or laboratory analytical instruments; a company involved in maritime technology; a company involved in oil and gas drilling, production, and processing; and the NASA Goddard Space Center and Jet Propulsion Laboratory. In addition to those victims who had information stolen, Zhu, Zhang, and their co-conspirators successfully obtained unauthorized access to computers belonging to more than 25 other technology-related companies involved in, among other things, industrial factory automation, radar technology, oil exploration, information technology services, pharmaceutical manufacturing, and computer processor technology, as well as the U.S. Department of Energy’s Lawrence Berkeley National Laboratory.
Finally, the APT10 Group compromised more than 40 computers in order to steal sensitive data belonging to the Navy, including the names, Social Security numbers, dates of birth, salary information, personal phone numbers, and email addresses of more than 100,000 Navy personnel.
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Zhu and Zhang are each charged with one count of conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the assigned judge. The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the FBI, including the New Orleans, New Haven, Houston, New York, Sacramento, and San Antonio Field Offices; DCIS; and the U.S. Naval Criminal Investigative Service (NCIS). Mr. Rosenstein, Mr. Berman and Mr. Demers praised the outstanding investigative work of, and collaboration among, the FBI, DCIS, and NCIS. They also thanked the U.S. Attorney’s Office for the District of Connecticut, and the Department of Defense’s Computer Forensic Laboratory for their assistance in the investigation.
Assistant U.S. Attorney Sagar K. Ravi of the Southern District of New York’s Complex Frauds and Cybercrime Unit is in charge of the prosecution, with assistance provided by Trial Attorney Matthew Chang of the National Security Division’s Counterintelligence and Export Control Section.
Two Chinese Hackers Associated with the Ministry of State Security Charged with Global Computer Intrusion Campaigns Targeting Intellectual Property and Confidential Business InformationRead the Press Release
Rod J. Rosenstein, the Deputy Attorney General of the United States, Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Dermot F. O’Reilly, Director of the Defense Criminal Investigative Service (“DCIS”) of the U.S. Department of Defense, and John C. Demers, the Assistant Attorney General for National Security, announced today the unsealing of an indictment charging ZHU HUA (朱华), a/k/a “Afwar,” a/k/a “CVNX,” a/k/a “Alayos,” a/k/a “Godkiller,” and ZHANG SHILONG (张士龙), a/k/a “Baobeilong,” a/k/a “Zhang Jianguo,” a/k/a “Atreexp,” both nationals of the People’s Republic of China (“China”), with conspiracy to commit computer intrusions, conspiracy to commit wire fraud, and aggravated identity theft.
ZHU and ZHANG were members of a hacking group operating in China known within the cyber security community as Advanced Persistent Threat 10 (the “APT10 Group”). The defendants worked for a company in China called Huaying Haitai Science and Technology Development Company (“Huaying Haitai”) and acted in association with the Chinese Ministry of State Security’s Tianjin State Security Bureau.
Through their involvement with the APT10 Group, from at least in or about 2006 up to and including in or about 2018, ZHU and ZHANG conducted global campaigns of computer intrusions targeting, among other data, intellectual property and confidential business and technological information at managed service providers (“MSPs”), which are companies that remotely manage the information technology infrastructure of businesses and governments around the world, more than 45 technology companies in at least a dozen U.S. states, and U.S. government agencies. The APT10 Group targeted a diverse array of commercial activity, industries, and technologies, including aviation, satellite, and maritime technology, industrial factory automation, automotive supplies, laboratory instruments, banking and finance, telecommunications and consumer electronics, computer processor technology, information technology services, packaging, consulting, medical equipment, healthcare, biotechnology, pharmaceutical manufacturing, mining, and oil and gas exploration and production. Among other things, ZHU and ZHANG registered IT infrastructure that the APT10 Group used for its intrusions and engaged in illegal hacking operations.
Rod J. Rosenstein, the Deputy Attorney General of the United States said: “The indictment alleges that the defendants were part of a group that hacked computers in at least a dozen countries and gave China’s intelligence service access to sensitive business information. This is outright cheating and theft, and it gives China an unfair advantage at the expense of law-abiding businesses and countries that follow the international rules in return for the privilege of participating in the global economic system.”
Manhattan U.S. Attorney Geoffrey S. Berman said: “It is galling that American companies and government agencies spent years of research and countless dollars to develop their intellectual property, while the defendants simply stole it and got it for free. As a nation, we cannot, and will not, allow such brazen thievery to go unchecked.”
FBI Director Christopher A. Wray said: “Healthy competition is good for the global economy, but criminal conduct is not. This is conduct that hurts American businesses, American jobs, and American consumers. No country should be able to flout the rule of law – so we’re going to keep calling out this behavior for what it is: illegal, unethical, and unfair. It's going to take all of us working together to protect our economic security and our way of life, because the American people deserve no less.”
DCIS Director Dermot F. O’Reilly said: “The theft of sensitive defense technology and cyber intrusions are major national security concerns and top investigative priorities for the DCIS. The indictments unsealed today are the direct result of a joint investigative effort between DCIS and its law enforcement partners to vigorously investigate individuals and groups who illegally access information technology systems of the U.S. Department of Defense and the Defense Industrial Base. DCIS remains vigilant in our efforts to safeguard the integrity of the Department of Defense and its enterprise of information technology systems.”
According to the allegations in the Indictment[1] unsealed today in Manhattan federal court:
Overview
ZHU HUA (朱华), a/k/a “Afwar,” a/k/a “CVNX,” a/k/a “Alayos,” a/k/a “Godkiller,” and ZHANG SHILONG (张士龙), a/k/a “Baobeilong,” a/k/a “Zhang Jianguo,” a/k/a “Atreexp,” the defendants, both nationals of China, were members of a hacking group operating in China known within the cyber security community as the APT10 Group, or alternatively as “Red Apollo,” “CVNX,” “Stone Panda,” “MenuPass,” and “POTASSIUM.” The defendants worked for Huaying Haitai in Tianjin, China, and acted in association with the Chinese Ministry of State Security’s Tianjin State Security Bureau. From at least in or about 2006 up to and including in or about 2018, members of the APT10 Group, including ZHU and ZHANG, conducted extensive campaigns of intrusions into computer systems around the world. The APT10 Group used some of the same online facilities to initiate, facilitate, and execute its campaigns during the conspiracy.
Most recently, beginning at least in or about 2014, members of the APT10 Group, including ZHU and ZHANG, engaged in an intrusion campaign to obtain unauthorized access to the computers and computer networks of MSPs for businesses and governments around the world (the “MSP Theft Campaign”). The APT10 Group targeted MSPs in order to leverage the MSPs’ networks to gain unauthorized access to the computers and computer networks of the MSPs’ clients and to steal, among other data, intellectual property and confidential business data on a global scale. For example, through the MSP Theft Campaign, the APT10 Group obtained unauthorized access to the computers of an MSP that had offices in the Southern District of New York and compromised the data of that MSP and certain of its clients involved in banking and finance, telecommunications and consumer electronics, medical equipment, packaging, manufacturing, consulting, healthcare, biotechnology, automotive, oil and gas exploration, and mining.
Earlier, beginning in or about 2006, members of the APT10 Group, including ZHU and ZHANG, engaged in an intrusion campaign to obtain unauthorized access to the computers and computer networks of more than 45 technology companies and U.S. government agencies, in order to steal information and data concerning a number of technologies (the “Technology Theft Campaign”). Through the Technology Theft Campaign, the APT10 Group stole hundreds of gigabytes of sensitive data and targeted the computers of victim companies involved in aviation, space and satellite technology, manufacturing technology, pharmaceutical technology, oil and gas exploration and production technology, communications technology, computer processor technology, and maritime technology.
In furtherance of the APT10 Group’s intrusion campaigns, ZHU and ZHANG, among other things, worked for Huaying Haitai and registered malicious domains and infrastructure. In addition, ZHU, a penetration tester, engaged in hacking operations on behalf of the APT10 Group and recruited other individuals to the APT10 Group, and ZHANG developed and tested malware for the APT10 Group.
The MSP Theft Campaign
In furtherance of the MSP Theft Campaign, ZHU, ZHANG, and their coconspirators in the APT10 Group engaged in the following criminal conduct:
- First, after the APT10 Group gained unauthorized access into the computers of an MSP, the APT10 Group installed multiple variants of malware on MSP computers around the world. To avoid antivirus detection, the malware was installed using malicious files that masqueraded as legitimate files associated with the victim computer’s operating system. Such malware enabled members of the APT10 Group to monitor victims’ computers remotely and steal user credentials.
- Second, after stealing administrative credentials from computers of an MSP, the APT10 Group used those stolen credentials to connect to other systems within an MSP and its clients’ networks. This enabled the APT10 Group to move laterally through an MSP’s network and its clients’ networks and to compromise victim computers that were not yet infected with malware.
- Third, after identifying data of interest on a compromised computer and packaging it for exfiltration using encrypted archives, the APT10 Group used stolen credentials to move the data of an MSP client to one or more other compromised computers of the MSP or its other clients’ networks before exfiltrating the data to other computers controlled by the APT10 Group.
Over the course of the MSP Theft Campaign, ZHU, ZHANG, and their coconspirators in the APT10 Group successfully obtained unauthorized access to computers providing services to or belonging to victim companies located in at least 12 countries, including Brazil, Canada, Finland, France, Germany, India, Japan, Sweden, Switzerland, the United Arab Emirates, the United Kingdom, and the United States. The victim companies included at least the following: a global financial institution, three telecommunications and/or consumer electronics companies; three companies involved in commercial or industrial manufacturing; two consulting companies; a healthcare company; a biotechnology company; a mining company; an automotive supplier company; and a drilling company.
The Technology Theft Campaign
Over the course of the Technology Theft Campaign, which began in or about 2006, ZHU, ZHANG, and their coconspirators in the APT10 Group successfully obtained unauthorized access to the computers of more than 45 technology companies and U.S. Government agencies based in at least 12 states, including Arizona, California, Connecticut, Florida, Maryland, New York, Ohio, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The APT10 Group stole hundreds of gigabytes of sensitive data and information from the victims’ computer systems, including from at least the following victims: seven companies involved in aviation, space and/or satellite technology; three companies involved in communications technology; three companies involved in manufacturing advanced electronic systems and/or laboratory analytical instruments; a company involved in maritime technology; a company involved in oil and gas drilling, production, and processing; and the NASA Goddard Space Center and Jet Propulsion Laboratory. In addition to those victims who had information stolen, ZHU, ZHANG, and their coconspirators successfully obtained unauthorized access to computers belonging to more than 25 other technology-related companies involved in, among other things, industrial factory automation, radar technology, oil exploration, information technology services, pharmaceutical manufacturing, and computer processor technology, as well as the U.S. Department of Energy’s Lawrence Berkeley National Laboratory.
Finally, the APT10 Group compromised more than 40 computers in order to steal sensitive data belonging to the Navy, including the names, Social Security numbers, dates of birth, salary information, personal phone numbers, and email addresses of more than 100,000 Navy personnel.
* * *
ZHU HUA (朱华), a/k/a “Afwar,” a/k/a “CVNX,” a/k/a “Alayos,” a/k/a “Godkiller,” and ZHANG SHILONG (张士龙), a/k/a “Baobeilong,” a/k/a “Zhang Jianguo,” a/k/a “Atreexp,” the defendants, are citizens and residents of China. ZHU and ZHANG are each charged with one count of conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the assigned judge.
The case was investigated by the FBI, including the New Orleans, New Haven, Houston, New York, Sacramento, and San Antonio Field Offices; DCIS; and the U.S. Naval Criminal Investigative Service (“NCIS”). Mr. Berman praised the outstanding investigative work of, and collaboration among, the FBI, DCIS, and NCIS. He also thanked the United States Attorney’s Office for the District of Connecticut and the Department of Defense’s Computer Forensic Laboratory for their assistance in the investigation.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution, with assistance provided by Trial Attorney Matthew Chang of the National Security Division’s Counterintelligence and Export Control Section.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Tulsa Man Sentenced to 13 Years in Federal Prison for Armed RobberyRead the Press Release
TULSA, Okla. – An armed robber has been sentenced in U.S. District Court for the robbery of a Broken Arrow QuikTrip, announced U.S. Attorney Trent Shores.
Today, U.S. District Judge Claire V. Eagan ordered Devon Deshon Thomas, 23, of Tulsa, to prison for 13 years to be followed by three years of supervised release.
“Thomas showed a complete disregard for the safety of the QuikTrip employees. He has a history of violence and intimidation. Over the past three years, he amassed four firearms and robbery arrests prior to committing the offense in this case. Thomas is the “alpha criminal” we aim to keep off the streets through Project Safe Neighborhoods,” said U.S. Attorney Trent Shores. “The citizens of Broken Arrow are fortunate that this conviction - an armed robbery for $300 - did not end in tragedy. Thomas will have plenty of time to reflect on his crime during his 13 year sentence. Meanwhile, our community will be safer with him behind bars.”
The United States prosecuted Thomas under the Hobbs Act, which specifically targets violent criminals who negatively impact interstate commerce. On Sept. 4, 2018, Thomas entered a guilty plea to robbery using coercion through force and fear. At his plea hearing, Thomas admitted to robbing a QuikTrip, located at 3502 West Kenosha Street, on May 30, 2018. Shortly after 3:30 a.m., two masked subjects brandishing what appeared to be firearms forced the QuikTrip attendant to open the cash register. The two stole nearly $300, then fled from the store in a four-door sedan with a damaged front-end.
Through the course of the investigation, the Broken Arrow Police Department, in conjunction with the FBI, linked Thomas to the vehicle used in the crime and identified him as one of the two subjects involved. Investigators then executed a search warrant and discovered two black air-propelled handguns that resembled actual firearms, as well as the clothes and mask matching descriptions previously provided to police. The two suspects were further implicated in surveillance video from a nearby Wal-Mart, where they could be seen shoplifting the air-propelled handguns shortly before the crime.
U.S. Marshals later apprehended Thomas at a residence in Louisiana. At the time, he continued to evade arrest, brandishing a large knife at officers until he was eventually taken into custody.
Thomas has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility.
Previously in 2016, Thomas was convicted in Tulsa County District Court for multiple robberies. As part of the sentence, he was granted a one year judicial review. His sentence was later modified to eight years supervised release during the review. Thomas was released in August 2017. Within ten months, he was arrested for the QuikTrip robbery.
This prosecution was part of the Department of Justice’s Project Safe Neighborhoods initiative and resulted from a joint investigation conducted by the Broken Arrow Police Department, the the FBI, and the U.S. Marshals Service. Assistant U.S. Attorney Ryan M. Roberts prosecuted the case.
Toledo man indicted for trafficking heroin, cocaine and fentanyl analoguesRead the Press Release
A 15-count indictment was filed in federal court charging a Toledo man with trafficking heroin, cocaine and fentanyl analogues.
Grant Black, 24, was charged with eight counts of possession with intent to distribute and seven counts of drug trafficking.
Black possessed fentanyl analogues, cocaine, heroin, oxycodone and amphetamine on Aug. 11, 2017. He also sold fentanyl analogues and heroin several times in June and July 2017, according to the indictment.
If convicted, the defendant's sentence will be determined by the Court after reviewing factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case was investigated by the FBI and Toledo Police Department. It is being prosecuted by Assistant U.S. Attorney Michael Freeeman.
An indictment is only a charge and is not evidence of guilt. The burden of proof is always on the government to prove a defendant guilty beyond a reasonable doubt.