Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Thursday 1 November 2018
Two Rhode Island Men Face Bank Robbery ChargesRead the Press Release
BOSTON – Two Rhode Island men appeared in federal court in Boston yesterday to face charges in connection with two bank robberies, one in Brockton and one in Abington, that resulted in high-speed chases.
Dong Lee, 48, and Charles Lamont Wheeler, 46, were each charged with two counts of bank robbery. Both defendants are currently in custody on related state charges.
According to court documents, on Sept. 14, 2018, two individuals stole $3,890 from a branch of the Abington Savings Bank in Avon and $3,621 from a branch of the Crescent Credit Union in Brockton by means of a demand note and threatening to possess a gun. The two individuals were observed exiting both areas in a white sedan.
Tellers at both institutions described one of the robbers as an Asian male and the other as a tall black male. Bank surveillance cameras at both institutions captured images of the robbers, wearing distinctive clothing, entering the banks, robbing the tellers, and then exiting the banks.
A few minutes after the robbery of Crescent Credit Union in Brockton, local law enforcement were dispatched to a hit-and-run accident involving a white sedan, whose driver was described as a black male. The white sedan’s license plate number was taken, and a Be-On-The-Lookout (“BOLO”) was issued for the vehicle, which, law enforcement subsequently learned was stolen.
The white sedan was observed on Route 1 in Foxboro by a Massachusetts State Trooper, who pursued the vehicle, but the driver did not pull over. A lengthy high-speed pursuit ensued and eventually ended when the driver lost control of the vehicle and crashed into the wood line. The driver and the passenger then fled the vehicle and ran into the woods. The passenger, later identified as Lee, was captured a short time later in the woods, wearing clothing consistent with that worn by the robber, and in possession of thousands of dollars and a demand note.
The driver, later identified as Wheeler, initially eluded law enforcement, and then stole a vehicle from a nearby gas station. A BOLO was issued for that vehicle, and, after another high-speed chase, the driver eventually stopped after being boxed in by law enforcement on Route 1. Wheeler was wearing clothing consistent with the clothing worn by the robber in the two robberies and law enforcement recovered thousands of dollars from him.
Lee and Wheeler each face a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police Department; Avon Police Chief Jeffrey Bukunt; Brockton Police Chief John Crowley, Attleboro Police Chief Kyle P. Heagney; and North Attleboro Police Chief John J. Reilly made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Men Charged with Trafficking Methamphetamine in Eddy CountyRead the Press Release
ALBUQUERQUE – A federal grand jury sitting in Las Cruces, N.M., indicted two men, Kenny Sanchez, 53, a former resident of Carlsbad, N.M., who currently resides in Balch Springs, Tex., and Joseph Hernandez, 41, a resident of Carlsbad, charging them with trafficking methamphetamine in Eddy County, N.M. The charges against Sanchez and Hernandez, which are contained in separate indictments that were filed in Sept. 2018, are the result of investigation by the DEA and the Pecos Valley Drug Task Force into methamphetamine trafficking in Carlsbad. Sanchez’s indictment was announced this week after he was transferred from Texas to New Mexico to face the charges against him.
Sanchez is charged in a four-count indictment that was filed on Sept. 19, 2018, and charges him with participating in a methamphetamine trafficking conspiracy in April 2018, and with distributing methamphetamine on April 18, 2018, April 27, 2018 and May 9, 2018. The indictment alleges that Sanchez committed the four offenses in Eddy County.
The Abilene Police Department arrested Sanchez on a federal arrest warrant issued based on the federal indictment in Abilene, Tex., on Sept. 21, 2018. Sanchez was transferred from Texas to New Mexico on Oct. 26, 2018, and he made his initial appearance in federal court in Las Cruces, N.M., on Oct. 29, 2018. Sanchez was ordered detained pending trial, which has yet to be scheduled.
If convicted, Sanchez faces a mandatory minimum penalty of five years and a maximum of 40 years of imprisonment on the conspiracy charge and one of the distribution charges, and a mandatory minimum of ten years and a maximum of life of imprisonment on the two remaining distribution charges.
Hernandez is charged in a two-count indictment with distributing methamphetamine on March 21 and 22, 2018, in Eddy County. The PVDTF arrested Hernandez at his residence in Carlsbad on Sept. 25, 2018, and Hernandez made his initial appearance in federal court in Las Cruces. Hernandez was ordered detained pending trial, which has yet to be scheduled.
If convicted, Hernandez faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison on each of two distribution charges.
Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
These cases were investigated by the DEA and the Pecos Valley Drug Task Force and are being prosecuted by Assistant U.S. Attorney Clara N. Cobos of the U.S. Attorney’s Las Cruces Branch Office.
The Pecos Valley Drug Task Force is comprised of agents and officers from the Bureau of Land Management, Eddy County Sheriff’s Office and Carlsbad Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Two Individuals and a Corporation Sentenced for Their Roles in Multi-Million Health Care Fraud and Money Laundering Scheme Involving Alcohol and Drug Addiction Treatment Centers and Clinical LaboratoriesRead the Press Release
Smart Lab LLC, and the corporation’s Chief Executive and Chief Operating Officers were sentenced for their participation in a multi-million health care fraud scheme that involved the filing of fraudulent insurance claim forms and defrauding health care benefit programs.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida; Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Jimmy Patronis, Florida Chief Financial Officer; Michael J. Waters, Special Agent in Charge, Amtrak Office of Inspector General (Amtrak OIG); Isabel Colon, Regional Director, U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA); Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB); and John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) made the announcement.
H. Hamilton Wayne, a/k/a “Hawkeye,” 40, of Palm Beach Gardens, Justin Morgan Wayne, 39, of Boca Raton, and Smart Lab LLC, of Palm Beach Gardens, previously pled guilty to one count of conspiracy to commit health care fraud. Today, U.S. District Judge Donald M. Middlebrooks sentenced Smart Lab Chief Executive Officer (CEO) H. Wayne to 63 months in prison, to be followed by 3 years of supervised release; Smart Lab Chief Operating Officer (COO) J. Wayne to 46 months in prison, to be followed by 3 years of supervised release; and the corporation to 3 years of probation. The three defendants were jointly and severally ordered to pay $2,897,389.50 in restitution to the victims of their offenses. H. Wayne was separately ordered to pay $954,344 to the TRICARE program for his involvement in fraud at RX to You, along with a $50,000 fine. J. Wayne was separately ordered to pay a $20,000 fine.
According to court documents, Smart Lab LLC was established by CEO H. Wayne, and COO J. Wayne, to perform confirmatory urinalysis testing. Smart Lab, H. Wayne and J. Wayne established bank accounts to receive proceeds of insurance claims for medically unnecessary urinalysis testing and to pay kickbacks and bribes to individuals and entities that referred urine samples to Smart Lab for testing.
H. Wayne and J. Wayne established employment agreements wherein H. Wayne and co-conspirators would solicit bodily fluid samples from substance abuse treatment centers that would be submitted to Smart Lab for expensive confirmatory drug testing. In exchange, Smart Lab would kick back a portion of the insurance reimbursements, disguised as payments for sales commissions, to co-conspirators, understanding that a portion of these payments would then be paid, directly or indirectly, to owners, operators, or clinicians at the substance abuse treatment centers that referred the testing of urine samples from insured patients.
To achieve the goal, Smart Lab, H. Wayne, J. Wayne, and co-conspirators developed form standing orders and drug testing protocols that provided for duplicative, medically unnecessary, and expensive confirmatory testing regardless of the individual needs of any patients. To further the scheme, co-conspirator treatment center owners required the insured substance abuse treatment center patients to submit to confirmatory drug testing approximately three times per week, which Smart Lab, H. Wayne, J. Wayne, and others could bill to the insurance plans. Smart Lab, H. Wayne and J. Wayne elected not to collect mandatory co-payments, deductibles, and other co-insurance from patients that could cause patients to be unable or unwilling to submit to testing. The defendants did not inform the insurance plans that they were not collecting the required co-insurance payments.
In addition, Lanny Fried, a top Smart Lab sales representative, had an agreement with Smart Lab to receive commissions of approximately 50% of the insurance reimbursements for the substance abuse treatment facilities he referred to Smart Lab. These payments were classified as commissions when in reality they were kickbacks for the referral of excessive, medically unnecessary, fraudulent and duplicative confirmatory drug testing. Fried served as the sales representative for Smart Lab’s largest account, Reflections Treatment Center in Margate, Florida. Fried used a portion of these commissions to pay Reflections’ owner, Kenneth Chatman, illegal cash kickbacks to induce him to continue referring urine samples to Smart Lab. Using Fried as a “middleman” for the payments to Chatman disguised the true ownership and purpose of the funds. From 2005 through 2017, Smart Lab paid Fried over $600,000. These payments came from proceeds of health care fraud.
Fried also recruited friends and business associates to engage in similar activity. These individuals signed employment agreements with Smart Lab that purported to make them “sales representatives”. These agreements were used to make it appear that monies paid to Fried and others were for services rendered. The employment contracts were created to hide the true purpose and recipient of the payments. Fried and the others involved did not perform any actual services for Smart Lab and they were paid “commissions” from the proceeds of health care fraud. These funds were then disbursed to others, per Fried’s instructions.
Fried previously pled guilty to one count of conspiracy to commit money laundering and is scheduled to be sentenced by U.S. District Judge Robin I. Rosenberg on November 29, 2018.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, Florida Division of Investigative and Forensic Services, Amtrak OIG, DOL-EBSA, NICB and DCIS. These cases are being prosecuted by Assistant U.S. Attorneys A. Marie Villafaña and Alexandra Chase.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov at www.usdoj.gov/usao/fls.
Two Indicted in Credit Card Skimming SchemeRead the Press Release
PROVIDENCE, RI – A federal grand jury in Providence today indicted two men in an alleged scheme to create and install credit card skimming machines they used to steal thousands of credit card numbers and personal identifying information of credit card owners.
It is alleged in the indictment that skimming machines were placed in gas stations and other locations in multiple states between April 2016 and June 2018. Stolen credit card and personal identifying information was used to create fraudulent credit and debit cards that were used to make at least $1.2 million dollars worth of purchases.
The indictment charges Juan Jose Rodriguez-Castro, 36, and Wilberd Armando Reyes-Castro, aka “Jose M. Robels-Burgos,” 25, with conspiracy to commit bank fraud, possession of unauthorized access devices, possession of device making equipment, possession of document making implements, and aggravated identity theft.
The return of the indictment is announced by United States Attorney Stephen G. Dambruch, Special Agent in Charge of the United States Secret Service Stephen Marks, Homeland Security Investigations Special Agent in Charge Peter C. Fitzhugh, and Pawtucket Police Chief Tina Goncalves.
According to court documents, on June 6, 2018, Pawtucket Police responded to a 911 call for a reported armed home invasion in progress. When officers entered the residence, they discovered several computers, credit card skimming machines, equipment and supplies used to create fraudulent credit, debit and identification cards, a photo identification card printer, a laminating machine, and identification holograms from various states.
A forensic examination of the computers by agents from the United States Secret Service and Homeland Security Investigations revealed more than 18,000 stolen credit card numbers and stolen personal identifying information.
It is alleged in the indictment that the defendants used the stolen data to create hundreds of counterfeit credit, debit, and state identification cards. Fraudulently created credit cards were used to make at least $1.2 million dollars in purchases.
Reyes-Castro and Rodriguez-Castro have been detained since their arrest on June 6, 2018. Immigration detainers have been lodged against both defendants, Dominican nationals, by Immigration and Custom Enforcement.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
###
Twisp Pharmacist Surrendered License, is Sentenced to 5 Years Probation and is Ordered to Pay a Fine for Illegally Possessing OpioidsRead the Press Release
Spokane – Joseph H. Harrington, United States Attorney for the Eastern District of Washington, announced that Brian Shane Johnson, age 41, of Twisp, Washington, was sentenced today after having pleaded guilty on June 6, 2018, to possessing Oxycodone without a valid prescription or order. As part of the plea agreement, Johnson agreed to forfeit and surrender his pharmacist license to the State of Washington, Department of Health (DOH), Pharmacy Quality Assurance Commission (PQAC). United States Magistrate Judge John T. Rodgers sentenced Johnson to a 5-year term of probation and ordered him to pay a $7,500 fine.
According to information disclosed during court proceedings, DEA initiated an investigation after receiving information from DOH that Johnson, the owner/operator of Brewster Drug, in Brewster, Washington, was working at the pharmacy while impaired. In July and October 2017, Douglas Okanogan Fire District No. 15 responded to two medical emergencies at Brewster Drug and administered Narcan, a nasal spray used for the treatment of an opioid emergency, to Johnson. On another occasion, Johnson was arrested for driving under the influence. After conducting an onsite audit, DEA served an Immediate Suspension Order (ISO) on Brewster Drug’s DEA Registration. The ISO suspended Brewster Drug’s authority to order or dispense Schedule II-IV controlled substances. When interviewed, Johnson told DEA investigators he diverted and used approximately 8-10 Oxycodone 30mg pills a day. DEA’s audit and criminal investigation revealed Johnson diverted approximately 10,594 Oxycodone 30mg pills, 1,099 Morphine IR 15mg pills, 189 Morphine ER 100mg pills, and 11,125 Carisoprodol 350mg pills, for personal use. On October 19, 2018, Johnson surrendered his credential to practice as a pharmacist and agreed to never resume the practice of pharmacy in the state of Washington.
U.S. Attorney Harrington said, “We rely on pharmacists to safeguard the integrity of our prescription drug system. Johnson took advantage of his unique position to divert prescription drugs for his personal use. A pharmacist’s diversion of prescription drugs for personal use is particularly troubling because it removes prescription drugs from lawful distribution channels, potentially putting patients’ health at risk. The sentence imposed holds Johnson accountable for his conduct. The United States Attorney’s Office for the Eastern District of Washington is committed to prosecuting those who divert prescription drugs from their authorized controlled distribution system.”
“We are in a real struggle to reign in opioids plaguing our communities,” stated DEA Special Agent in Charge of the Pacific Northwest Region Keith Weis. “This individual has lost his DEA License because there is absolutely no place for the unaccountability surrounding his reckless and illegal dispensing.”
This case was investigated by the U.S. Drug Enforcement Administration, U.S. Department of Health & Human Services, Office of Inspector General, and the State of Washington Department of Health. This case was prosecuted by George J.C. Jacobs, III, and Dan Fruchter, Assistant United States Attorneys for the Eastern District of Washington.
Ten Charged in Brockton Fentanyl and Cocaine ConspiracyRead the Press Release
BOSTON – Ten individuals, most of whom are from Brockton, were charged today in federal court in Boston in a wide-ranging fentanyl and cocaine conspiracy.
Seven individuals were arrested today, two are currently in state custody, and one is at-large. The following 10 individuals were charged by criminal complaint with one count of conspiracy to distribute and possess with intent to distribute fentanyl and cocaine:
- Djuna Goncalves, 32, of Brockton, currently in state custody;
- Cody Goncalves, 26, of Brockton, currently in state custody;
- Anthony Goncalves, 20, of Brockton, currently at-large;
- Angelo Pina, 27, of Brockton;
- Calvin Mendes, 40, of Brockton;
- Carlos Antunes, 33, of Brockton;
- Jermaine Gonsalves, 32, of Brockton;
- Ozair Pereira, 30, of Brockton;
- Joseph Greene, 21, of Taunton; and
- Brian Donahue, 38, of Truro
“This morning’s arrests should remind all gang members and drug traffickers that they cannot operate freely in this state,” said United States Attorney Andrew E. Lelling. “Over the past year, in conjunction with our federal, state, and local law enforcement partners, we have removed dozens of violent criminals from our communities, and we will continue to do so.”
“Today’s operation illustrates Homeland Security Investigations’ commitment to public safety and highlights our unrelenting pursuit of justice,” said Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston. “Through successful partnerships with the Massachusetts State Police, Drug Enforcement Administration and Brockton Police Department, we have dealt a severe blow to a violent drug trafficking organization here in the commonwealth.”
“DEA is committed to investigating and dismantling violent poly drug trafficking organizations like this one operating in the Brockton area,” said Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division. “As we all know, drug trafficking, along with the gun and physical violence that often accompanies it, is a serious threat to our families and our communities. This investigation demonstrates the strength of collaborative local, state and federal law enforcement efforts in Massachusetts to bring to justice anyone who engages in these crimes.”
“We are proud to work with our federal and local law enforcement partners to help dismantle this significant drug trafficking organization,” said Colonel Kerry A. Gilpin, Superintendent, Massachusetts State Police. “I would like to especially note the work in this investigation of our regional narcotics task force, which was established last year as part of our new State Police Division of Homeland Security. We remain committed to disrupting drug trafficking in Plymouth County and across the state and quelling the street violence associated with the narcotics trade.”
“Operation Red Heat dismantled a large scale Fentanyl distribution ring making its home base on Addison Avenue, but with a trafficking reach far outside of Brockton’s borders,” said Plymouth County District Attorney Timothy J. Cruz. “I commend the work of Massachusetts State Police CINRET, Detectives in the Plymouth County District Attorney’s Office, Homeland Security, DEA and Brockton Police to take five guns and a half kilo of Fentanyl off the street. Their diligent police work quieted the drug activity in a Brockton neighborhood and made much of Plymouth County safer today.”
“This is another example of the ongoing efforts of the Brockton Police Department and the administration of Brockton Mayor Bill Carpenter to partner with federal, state and local law enforcement partners to take the most violent repeat offenders off the streets and make Brockton a safer City,” said Brockton Police Chief John Crowley.
According to the charging document, in 2018, federal, state, and local law enforcement began investigating Djuna Goncalves and other alleged members of A Block, a violent Brockton Street gang whose members typically come from Addison Avenue or the surrounding neighborhood, which have for years been plagued by shootings, including two murders, and other crimes of violence.
It is alleged that during the investigation, Djuna Goncalves and his brothers Cody and Anthony Goncalves distributed large quantities of fentanyl, cocaine, and other drugs from an apartment on Addison Avenue to A Block members and other drug traffickers in Brockton and southeastern Massachusetts. Djuna and Cody Goncalves and Calvin Mendes distributed drugs while on pre-trial release for pending state drug trafficking and gun possession charges. Djuna Goncalves and Angelo Pina were previously convicted of drug trafficking offenses in federal court in Boston, and Pina is still on supervised release from his prior federal conviction.
On Oct. 21, 2018, Djuna Goncalves survived an assassination attempt after an unidentified assailant fired multiple shots into his basement apartment. It is alleged that when law enforcement officers executed a search warrant at Goncalves’ home, they recovered an AK-47 assault rifle, a Glock .45 caliber pistol, a large number of ammunition clips to various types of firearms and accompanying ammunition, fentanyl, cocaine, crack cocaine, marijuana, suboxone strips, a hydraulic press, packaging materials, digital scales, and approximately $12,000 in cash. Djuna and Cody Goncalves were subsequently arrested on state charges as a result of the evidence seized during the execution of the search warrant.
The charge of conspiracy to distribute and possess with intent to distribute fentanyl and cocaine provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of up to $1 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Lelling; HSI SAC Fitzhugh; DEA SAC Boyle; Colonel Gilpin; DA Cruz; and Chief Crowley made the announcement today. The United States Marshals Service provided valuable assistance with the investigation. Assistant U.S. Attorney Christopher Pohl of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
St. Petersburg Man Involved in Shootout Pleads Guilty to Felon in Possession of A FirearmRead the Press Release
Tampa, Florida – Lavonta Hill (27, St. Petersburg) has pleaded guilty to possessing a firearm as a convicted felon. He faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to court documents, on January 25, 2017, at approximately 3:45 a.m., Hill was involved in a shootout in a residential area on 15th Avenue South, near 16th Street South, in St. Petersburg. Shortly after the shooting, St. Petersburg Police Department (SPPD) officers found Hill on the ground in the parking lot of a nearby liquor store, bleeding from his head and one arm. Hill, who at the time was a convicted felon and prohibited from possessing a firearm or ammunition, denied knowing where the shooting occurred, who shot him, or why. He was taken to a hospital and treated for gunshot wounds.
Further investigation by SPPD determined that the shooting had occurred in an area on 15th Street South encompassing several houses, where at least 62 rounds of ammunition had been fired. In the front yard of one of the residences, an officer found a blue recycling container with blood smeared on it. Under the container, the officer found a firearm with blood on it and investigators discovered a trail of blood drops leading from that residence to the liquor store parking lot, ending at the spot where the officers had found Hill. A surveillance video from the grocery store showed a man staggering across the parking lot and crossing the street toward the liquor store at approximately 3:46 a.m., and witnesses described seeing Hill stumble and sway as he approached the liquor store. DNA from the blood on the firearm and recycling bin matched Hill’s DNA and a firearms and ballistics expert determined that two of the cartridge cases from the shooting scene were fired from the firearm linked to Hill.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the St. Petersburg Police Department, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Michael Sinacore.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Siblings Plead Guilty for Receiving Payment from Federally-Funded Organization for Work Not DoneRead the Press Release
COEUR D’ALENE –Amber Annette Hosking, 39, and Jessica Fay Barnes, 32, sisters, from Spokane Valley, Washington, pleaded guilty Tuesday to conspiracy to commit federal program theft, U.S. Attorney Bart M. Davis announced.
According to court records, from 2015 to February 2018, both women conspired with an unnamed agent of the North Idaho Housing Coalition to commit federal program theft. The conspiracy involved the sisters receiving money from the Coalition after an agent for the Coalition submitted false bills for work never performed. The Coalition’s agent, knowing the bills were false, still paid the sisters from the Coalition’s bank accounts. The sisters knew the bills submitted to the Coalition were false. Hosking agreed to forfeit at least $16,500 obtained from the crime, while Barnes agreed to forfeit at least $15,000 obtained from her part in the crime.
Hosking and Barnes’ sentencings are set for January 29, 2019 before Senior U.S. District Court Judge Edward J. Lodge at the federal courthouse in Coeur d’Alene. Each faces a maximum punishment of up to five years imprisonment and up to a $250,000 fine.
U.S. Attorney Davis commended the collaborative efforts of the Federal Bureau of Investigation, the City of Coeur d’Alene Police Department, the Kootenai County Prosecutors Office and his office staff. “We are always at our strongest when we work together for the good of the public we serve,” said Davis.
This case was worked collaboratively by the Federal Bureau of Investigation and the City of Coeur d’Alene Police Department.
# # #
Schuylkill County Woman Guilty of Methamphetamine Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Laverne Schaeffer, age 46, of Schuylkill Haven, Pennsylvania, pleaded guilty on October 30, 2018 before U.S. District Court Judge Robert D. Mariani to conspiracy to distribute more than 50 grams of methamphetamine.
According to United States Attorney David J. Freed, Schaeffer admitted to conspiring with her husband, Ernest Schaeffer and others to distribute methamphetamine to customers in the Schuylkill County area. Schaeffer committed the offense between July 2016 and May 24, 2017, in Schuylkill County and elsewhere.
Schaeffer was indicted by a grand jury along with three other persons in August 2017. Schaeffer’s husband Ernest previously pleaded guilty and is awaiting sentencing.
As part of a plea agreement, Schaeffer agreed to forfeit dozens of acres of real estate in Schuylkill County—property that Schaeffer and her husband used to store and distribute methamphetamine.
Judge Mariani ordered a presentence report to be completed and sentencing will be scheduled at a later date.
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and local police from Schuylkill County. Assistant U.S. Attorney Francis P. Sempa 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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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.
The maximum penalty under federal law is 40 years in prison, a term of supervised release following imprisonment, and a fine. The charge also carries a mandatory minimum penalty of five years’ 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.
# # #
San Diego County Man Found Guilty of Laundering Ransom Money Paid by Relatives of Kidnapping Victims Held Hostage in TijuanaRead the Press Release
LOS ANGELES – A man who laundered ransom money for a violent kidnapping organization that held hostage two dozen Mexican nationals has been convicted on federal conspiracy charges.
Luis Francisco Murillo Morfin, 33, of National City, was found guilty Wednesday of conspiracy to commit money laundering. United States District Judge John F. Walter issued the verdict after a two-day bench trial.
The kidnapping victims were lured by false promises of being smuggled into the United States. In August 2015, members of the Mexico-based conspiracy picked up victims in Northern Mexico, drove them in the trunks of cars through a fake border “checkpoint,” and then took them to a stash house in Tijuana, where they were threatened, beaten and raped. One kidnapping victim testified at trial about being raped, while another testified about being sexually assaulted.
While the kidnapping victims were held hostage in Tijuana, their captors extorted their relatives in the United States, ordering them to deposit ransom money in U.S. bank accounts and wire ransom money to co-conspirators in Mexico. Extortion victims testified at trial about being threatened that, if they did not pay, their relatives would be beaten, murdered or disemboweled.
As relatives of the kidnapping victims deposited money, Murillo, a lawful permanent resident of the United States, twice drove from Mexico to the United States and withdrew the ransom payments from his bank account for delivery to his co-conspirators to Mexico.
The evidence at trial showed that Murillo opened a Wells Fargo bank account in his name on April 30, 2015, and made monthly payments to keep it open, but did not use the account until August 4, 2015 – one day after his co-conspirators kidnapped and held for ransom nine victims.
The extortion victims deposited $62,000 in ransom money into Murillo’s account from bank branches in Ontario, Santa Maria, Northern California, Idaho and Mississippi. Murillo withdrew all $62,000 within less than 48 hours, lying to a Wells Fargo bank employee about the money’s purpose. Murillo did not use the account again, and Wells Fargo closed it on August 19, 2015. Murillo later admitted to law enforcement that he knew the money constituted the proceeds of criminal activity.
Judge Walter is scheduled to sentence Murillo on February 4, 2019, at which time he will face a statutory maximum penalty of 10 years in federal prison.
Murillo was charged along with four other defendants, all of whom are Mexican nationals believed to be residing in Mexico. The other defendants are: Jesus Antonio Rivera Gaxiola, a.k.a. “The Cook,” Manuel Roman Velazquez, a.k.a. “The Caller,” Alberto Jimenez Bautista, a.k.a. “Jefe,” and Luis Perez Martinez.
The case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation, with the assistance of U.S. Customs and Border Protection.
This case is being prosecuted by Assistant United States Attorneys Victoria Degtyareva and Carley Palmer of the Organized Crime Drug Enforcement Task Force Section.
Rocky River businessman C. David Snyder sentenced to two years in prison, ordered to pay $781,000 in restitution for embezzlement and tax crimesRead the Press Release
Rocky River business executive C. David Snyder was sentenced to two years in prison for embezzlement and tax crimes.
Snyder was also ordered to pay approximately $781,000 in restitution.
A federal jury convicted Snyder earlier this year on six charges related to embezzling $126,000 from an employee retirement fund and collecting nearly $860,000 from his employees but not paying the money to the IRS.
Snyder, 61, served as chairman, president and chief executive officer of Attevo, Inc., a technology consulting company headquartered in Cleveland. He also served as chairman and primary shareholder at Ruralogic, Inc., headquartered in Bryan, Ohio.
Attevo employees prepared financial records and schedules, quarterly and annual returns and reports for Attevo, at Snyder’s direction. Snyder ranked Attevo’s payables in order of importance, according to court documents.
Snyder, on behalf of Attevo, and the IRS in 2011 agreed to a monthly payment plan of $48,350 per month to repay the company’s outstanding payroll tax liabilities. Attevo made 10 payments totaling $483,500 then made no further payments, according to court documents.
Snyder withheld payroll tax from employees but failed to pay it to the IRS. Snyder failed to pay over approximately $328,355 of employee’s portion of payroll taxes in 2010 and approximately $530,778 in 2012, according to court documents.
Snyder created a 401(k) and profit-sharing plan for Attevo employees in 2009. Ruralogic was added to the plan in 2010. The plan was funded through employee payroll deferrals. Between 2010 and 2012, Snyder failed to pay into the plan approximately $126,000 in contributions and loan repayments withheld from Attevo and Ruralogic employee wages, according to court documents.
During the time of his criminal conduct, instead of paying Attevo’s employment taxes, Snyder paid $20,000 per month for the rental of a personal residence in Lakewood and his vacation home in Chautauqua, New York, leases on four vehicles and other personal expenses, according to trial testimony and court documents.
He also used Attevo’s American Express to pay personal expenses, including women’s clothing at Ann Taylor, Nieman-Marcus and other stores, beauty supplies at Oro Gold in Las Vegas, travel to resorts in Florida and for pool/spa renovations, according to trial testimony and court documents.
Snyder earned income from Attevo totaling approximately $1.6 million between 2009 and 2012, according to the court documents and trial testimony.
“This defendant embezzled money from his employees and pocketed taxes he took out of their paychecks, which he used to pay for his vacation home, swimming pool renovation and to otherwise fund his lifestyle,” U.S. Attorney Justin Herdman said. “This sentence demonstrates that we take fraud seriously and criminals will be held accountable, whether they operate on street corners or in corner suites.”
“C. David Snyder was placed in the utmost position of trust by Attevo, Inc. and Ruralogic, Inc., but he chose to abuse that position of trust for his own personal greed,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “These companies ended up being his own personal piggy bank as he used their money to pay for his residence, vacation home, vehicles, and other personal expenses. Now he is a convicted felon and owes a substantial amount of money to the IRS.”
“Charles David Snyder embezzled over $126,000 from his employees’ 401(k) retirement plan. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Employee Benefits Security Administration to protect the retirement assets covered by the Employee Retirement Income Security Act,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
This case was investigated by the Internal Revenue Service – Criminal Investigations and the U.S. Department of Labor – Office of Inspector General. It is being prosecuted by Assistant U.S. Attorneys Megan R. Miller and Michael L. Collyer.
Richland County Boy Scout official arrested and charged production of child pornography after surreptitiously recording children changingRead the Press Release
A Richland County man affiliated with the Boy Scouts of America was arrested and charged in federal court with production of child pornography after he surreptitiously recorded children changing.
Thomas Close, 39, of Shelby, was charged with sexual exploitation of children and receiving and distributing child pornogrpahy. The investigation is ongoing.
According to an affidavit filed in the case:
Homeland Security Investigations agents received information from the Cyber Crimes Center regarding videos taken of minor boys changing before or after swimming at the YMCA in Sandusky.
A review of several videos revealed they were recorded at the YMCA facility in Sandusky, which sometimes rented its pool to the Boy Scouts, inside teepees used at the Firelands Scout Reservation in Wakeman, as well as inside the bathroom of a home that appeared to have a swimming pool.
Investigators met with Boy Scouts of America officials in Cleveland, whose area includes seven counties. Due to the fact that all of the photos appear to revolve around changing before or after swimming, Boy Scout officials alerted investigators to an incident report from June 2017 documenting an occurrence at the Firelands Scout Reservation they felt could be related. The report was made by a den leader regarding a Boy Scouts of America staff member named Thomas Close, also known as “Aqua Joe,” according to the affidavit.
Close is associated with Boy Scout Troop 406 and has a pool in his back yard.
HSI investigators went to Close’s home on Nov. 1. Upon viewing his bathroom, they realized it is the same bathroom depicted in one of the videos. Close admitted to making the videos and said he created videos between 2011 and the summer of 2018, according to the affidavit.
He also admitted to downloading child pornography and said he had approximately five terabytes of child pornography on his computer, according to the affidavit.
“This case was solved because of good investigative work but also because a parent who was trained to look for signs of suspicious activity raised their concerns to Scout leadership,” said U.S. Attorney Justin Herdman. “We all have an obligation to be aware of what is taking place around us and let authorities know when there are concerns.”
“This individual is accused of violating his position of trust with the Boy Scouts and as a teacher to exploit and take advantage of young people under his supervision," said Steve Francis, special agent in charge of HSI for Michigan and Ohio. "The exploitation of children is reprehensible, and HSI has highly skilled and dedicated special agents to investigate child exploitation crimes to ensure that we identify and arrest perpetrators while protecting our most vulnerable population, our children."
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than maximum.
This case was investigated by Homeland Security Investigations, the Ohio Internet Crimes Against Children Task Force and the Shelby Police Department. It is being prosecuted by Assistant U.S. Attorney Carol M. Skutnik.
A charge is only an allegation and not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Anyone with knowledge of the man’s unsupervised contact with children should contact HSI at 216-749-9602.
Pleasanton Man Convicted of Online Enticement and International Sexual Abuse of A ChildRead the Press Release
OAKLAND – A federal jury convicted David John Telles, Jr. of online enticement of a minor, travel with intent to engage in illicit sexual conduct, and engaging in illicit sexual conduct with a minor in a foreign place, announced United States Attorney Alex G. Tse and Homeland Security Investigations Special Agent in Charge Ryan Spradlin. The guilty verdict was handed down October 29, 2018, following a jury trial before the Honorable Jeffrey S. White, U.S. District Judge.
Evidence at trial showed that Telles, then 38 years old, lived in Pleasanton, California, and used the internet to entice and induce a child to engage in sexual activity. Specifically, Telles used an online messaging application to groom the 14-year-old victim for weeks before he traveled to England with the intent to sexually abuse her in June of 2014. After arriving in England, Telles took the victim to two different hotels where he sexually abused her over the course of two days. Police officers from the Devon and Cornwall Constabulary in England ultimately apprehended Telles and rescued the child.
On October 13, 2016, a federal grand jury returned an indictment charging defendant with: online enticement of a minor, in violation of 18 U.S.C. § 2422(b); traveling with intent to engage in illicit sexual conduct in foreign places, in violation of 18 U.S.C. § 2423(b); and engaging in illicit sexual conduct in foreign places, in violation of 18 U.S.C. § 2423(c).
The investigation began when HSI received a request for assistance from the Devon and Cornwall Constabulary in the United Kingdom in locating a missing 14-year-old child. HSI arrested Telles on October 20, 2016, at San Francisco International Airport, following his deportation from the United Kingdom.
Telles is currently being held in the custody of the United States Marshal. Judge White scheduled Telles’s sentencing hearing for February 26, 2019. The maximum statutory penalty for the violation of 18 U.S.C. § 2422(b) is life imprisonment and a fine of $250,000, plus restitution. There is also a mandatory minimum 10-year term of imprisonment for the offense. The maximum statutory penalties for the violations of 18 U.S.C. §§ 2423(b) and (c) are 30 years imprisonment and a fine of $250,000, plus restitution. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Christina McCall and Vanessa Baehr-Jones are prosecuting the case with the assistance of Vanessa Quant, Michelle Alter Eck, Katie Turner, and Noble Hughes. This prosecution is the result of investigations carried out by HSI and the Devon and Cornwall Constabulary.
Pittsburgh man sentenced for selling heroinRead the Press Release
CLARKSBURG, WEST VIRGINIA – Christopher A. Cobbs, of Pittsburgh, Pennsylvania, was sentenced today to 12 months incarceration for selling heroin, United States Attorney Bill Powell announced.
Cobbs, also known as “Bro-Bro,” age 25, pled guilty to one count of “Distribution of Heroin” in June 2018. Cobbs admitted to selling heroin in July 2015 in Harrison County.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Greater Harrison Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Irene M. Keeley presided.Paris Farmer Indicted for Crop Insurance FraudRead the Press Release
LEXINGTON, Ky. – A Paris man was indicted by a federal grand jury today, and charged with engaging in crop insurance fraud.
The grand jury, sitting in Lexington, returned a five-count indictment charging 49-year-old Keith A. Foley with four counts of making false statements to influence the Federal Crop Insurance Corporation (“FCIC”) and companies the FCIC reinsures, and one count of conspiring to commit wire fraud in the course of defrauding private insurance companies.
The indictment alleges that as early as crop year 2010, Foley, a tobacco producer in Bourbon and Jessamine Counties, hid his tobacco production from insurance companies, in order to claim damage to his crop sufficient to trigger crop insurance indemnity payments or generate larger indemnity payments, which are funded by the federal government through the FCIC. The indictment also charges Foley with conspiracy to commit wire fraud, for the purpose of profiting through the filing of false and fictitious insurance claims. The wire fraud conspiracy count alleges that Foley submitted Tobacco Test Sheets to his private insurance companies that were supposed to accurately reflect the amount of damage to his tobacco crop. Instead, according to the indictment, Foley, with the help of others, submitted Tobacco Test Sheets that were slightly altered duplicates of those submitted for other producers or that he had already submitted. Additionally, the indictment charges that Foley’s private crop insurance policy claim for crop year 2015 included a duplicated photograph submitted on another producer’s insurance claim.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture Office of Inspector General; Michael A. Christmas, Acting Special Agent in Charge, Federal Bureau of Investigation, Louisville Division; Christopher Altemus, Special Agent in Charge, Internal Revenue Service-Criminal Investigation; and Dwayne Depp, Director, Kentucky Department of Insurance Fraud Investigation Division, jointly announced the indictment.
The investigation preceding the indictment was conducted by the United States Department of Agriculture Office of Inspector General, United States Department of Agriculture Risk Management Agency, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and Kentucky Department of Insurance. The indictment was presented to the grand jury by Assistant U.S. Attorneys Kathryn M. Anderson and Erin M. Roth.
A date for Foley to appear in court has not yet been scheduled. For each charge of making false statements to the FCIC, Foley faces up to 30 years in prison and a fine of $1,000,000. For the conspiracy to commit wire fraud, Foley faces up to 20 years in prison and a fine of $250,000. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
PRC State-Owned Company, Taiwan Company, and Three Individuals Charged with Economic EspionageRead the Press Release
A federal grand jury indicted a state-owned enterprise of the People’s Republic of China (PRC), a Taiwan company, and three individuals, charging them with crimes related to a conspiracy to steal, convey, and possess stolen trade secrets of an American semiconductor company for the benefit of a company controlled by the PRC government. All of the defendants are charged with a conspiracy to commit economic espionage, among other crimes. Attorney General Jeff Sessions, FBI Director Christopher Wray, Assistant Attorney General for National Security John Demers, Assistant Attorney General for the Criminal Division Brian A. Benczkowski, United States Attorney Alex G. Tse of the Northern District of California, and FBI Special Agent in Charge for the San Francisco Field Office John F. Bennett made the announcement.
In addition, the United States filed a civil lawsuit seeking to enjoin the further transfer of the stolen trade secrets and to enjoin certain defendants from exporting to the United States any products manufactured by UMC or Jinhua that were created using the trade secrets at issue. The indictment was filed on September 27, 2018, and unsealed today. The civil lawsuit was filed today.
“I am announcing that a grand jury in San Francisco has returned a multi-defendant indictment alleging economic espionage on the part of a state-owned Chinese company, a Taiwanese company, and three Taiwan individuals for an alleged scheme to steal trade secrets from Micron, an Idaho-based semi-conductor company,” said Attorney General Sessions. “The worldwide supply for DRAM is worth nearly $50 billion; Micron controls about 20 to 25 percent of the dynamic random access memory industry—a technology not possessed by the Chinese until very recently. As this and other recent cases have shown, Chinese economic espionage against the United States has been increasing—and it has been increasing rapidly. I am here to say that enough is enough. With integrity and professionalism, the Department of Justice will aggressively prosecute such illegal activity.”
“The theft of intellectual property is not only unfair, but stifles technological innovation by disincentivizing investment in long-term research and development,” said U.S. Attorney Alex Tse. “The theft of intellectual property on a continuing basis by nation-state actors is an even more damaging affront to the rule of law. We in the Northern District of California, one of the world’s great centers of intellectual property development, will continue to lead the fight to protect U.S. innovation from criminal misappropriation, whether motivated by personal greed or national economic ambition.”
"No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China," said FBI Director Christopher Wray. "The Chinese government is determined to acquire American technology, and they’re willing use a variety of means to do that – from foreign investments, corporate acquisitions, and cyber intrusions to obtaining the services of current or former company employees to get inside information. If China acquires an American company's most important technology – the very technology that makes it the leader in a field – that company will suffer severe losses, and our national security could even be impacted. We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China."
According to the indictment, the defendants were engaged in a conspiracy to steal the trade secrets of Micron Technology, Inc. (Micron), a leader in the global semiconductor industry specializing in the advanced research, development, and manufacturing of memory products, including dynamic random-access memory (DRAM). DRAM is a leading-edge memory storage device used in computer electronics. Micron is the only United States-based company that manufactures DRAM. According to the indictment, Micron maintains a significant competitive advantage in this field due in large part from its intellectual property, including its trade secrets that include detailed, confidential information pertaining to the design, development, and manufacturing of advanced DRAM products.
Prior to the events described in the indictment, the PRC did not possess DRAM technology, and the Central Government and State Council of the PRC publicly identified the development of DRAM and other microelectronics technology as a national economic priority. The criminal defendants are United Microelectronics Corporation (“UMC”), a Taiwan semiconductor foundry; Fujian Jinhua Integrated Circuit, Co., Ltd. (“Jinhua'”), a state-owned enterprise of the PRC; and three Taiwan nationals: Chen Zhengkun, a.k.a. Stephen Chen, age 55; He Jianting, a.k.a. J.T. Ho, age 42; and Wang Yungming, a.k.a. Kenny Wang, age 44. UMC is a publicly listed semiconductor foundry company traded on the New York Stock Exchange; is headquartered in Taiwan; and has offices worldwide, including in Sunnyvale, California. UMC mass produces integrated-circuit logic products based on designs and technology developed and provided by its customers. Jinhua is a state-owned enterprise of the PRC, funded entirely by the Chinese government, and established in February 2016 for the sole purpose of designing, developing, and manufacturing DRAM.
According to the indictment, Chen was a General Manager and Chairman of an electronics corporation that Micron acquired in 2013. Chen then became the president of a Micron subsidiary in Taiwan, Micron Memory Taiwan (“MMT”), responsible for manufacturing at least one of Micron’s DRAM chips. Chen resigned from MMT in July 2015 and began working at UMC almost immediately. While at UMC, Chen arranged a cooperation agreement between UMC and Fujian Jinhua whereby, with funding from Fujian Jinhua, UMC would transfer DRAM technology to Fujian Jinhua to mass-produce. The technology would be jointly shared by both UMC and Fujian Jinhua. Chen later became the President of Jinhua and was put in charge of its DRAM production facility.
While at UMC, Chen recruited numerous MMT employees, including Ho and Wang, to join him at UMC. Prior to leaving MMT, Ho and Wang both stole and brought to UMC several Micron trade secrets related to the design and manufacture of DRAM. Wang downloaded over 900 Micron confidential and proprietary files before he left MMT and stored them on USB external hard drives or in personal cloud storage, from where he could access the technology while working at UMC.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the individual defendants face a maximum sentence of 15 years imprisonment and a $5,000,000 fine for economic espionage charges, and 10 years imprisonment for theft of trade secrets charges. If convicted, each company faces forfeiture and a maximum fine of more than $20 billion. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
PRC State-Owned Company, Taiwan Company, and Three Individuals Charged with Economic EspionageRead the Press Release
SAN FRANCISCO – The Department of Justice announced that a federal grand jury indicted a state-owned enterprise of the People’s Republic of China (PRC), a Taiwan company, and three individuals, charging them with crimes related to a conspiracy to steal, convey, and possess stolen trade secrets of an American semiconductor company for the benefit of a state-owned enterprise of the PRC. In addition, the United States filed a civil lawsuit seeking to enjoin the further transfer of the stolen trade secrets and to enjoin certain defendants from exporting to the United States any products manufactured by UMC or Jinhua that were created using the trade secrets at issue. The indictment was filed on September 27, 2018, and unsealed today. The civil lawsuit was filed this morning.
“I am announcing that a grand jury in San Francisco has returned a multi-defendant indictment alleging economic espionage on the part of a state-owned Chinese company, a Taiwanese company, and three Taiwan individuals for an alleged scheme to steal trade secrets from Micron, an Idaho-based semi-conductor company,” said Attorney General Sessions. “Micron is worth an estimated $100 billion and has a 20 to 25 percent share of the dynamic random access memory industry—a technology not possessed by the Chinese until very recently. As this and other recent cases have shown, Chinese economic espionage against the United States has been increasing—and it has been increasing rapidly. I am here to say that enough is enough. With integrity and professionalism, the Department of Justice will aggressively prosecute such illegal activity.”
“The theft of intellectual property is not only unfair, but stifles technological innovation by disincentivizing investment in long-term research and development. The theft of intellectual property on a continuing basis by nation-state actors is an even more damaging affront to the rule of law,” said U.S. Attorney Alex Tse. “We in the Northern District of California, one of the world’s great centers of intellectual property development, will continue to lead the fight to protect U.S. innovation from criminal misappropriation, whether motivated by personal greed or national economic ambition.”
"The attempts by foreign governments to illegally obtain U.S. intellectual property and trade secrets pose a substantial threat to our national security and economy," said Special Agent in Charge John F. Bennett. "The San Francisco Bay Area, with its unique blend of human talent and innovative technologies, is often a target of economic espionage and theft of trade secrets by foreign individuals and governments. This indictment demonstrates the FBI's commitment to protecting American innovation, research, and development."
According to the indictment, the defendants were engaged in a conspiracy to steal the trade secrets of Boise, Idaho-based Micron Technology, Inc. (Micron), a leader in the global semiconductor industry specializing in the advanced research, development and manufacturing of memory products, including dynamic random-access memory (DRAM). DRAM is a leading-edge memory storage device used in computer electronics. In the worldwide DRAM supply, Micron holds approximately a 20-25% of the market share. Micron is the only United States-based company that manufactures DRAM. According to the indictment, Micron maintains a significant competitive advantage in this field due in large part from its intellectual property, including its trade secrets that include detailed, confidential information pertaining to the design, development, and manufacturing of advanced DRAM products.
Prior to the events described in the indictment, the PRC did not possess DRAM technology, and the Central Government and State Council of the PRC publicly identified the development of DRAM and other microelectronics technology as a national economic priority. The indictment describes the manner and means by which the defendants conspired to steal Micron’s intellectual property related to DRAM and convey it to a company controlled by the PRC government.
The criminal defendants are United Microelectronics Corporation (“UMC”), a Taiwan semiconductor foundry; Fujian Jinhua Integrated Circuit, Co., Ltd. (“Jinhua'”), a state-owned enterprise of the PRC; and three Taiwan nationals: Chen Zhengkun, a.k.a. Stephen Chen, age 55; He Jianting, a.k.a. J.T. Ho, age 42; and Wang Yungming, a.k.a. Kenny Wang, age 44. UMC is a publicly listed semiconductor foundry company traded on the New York Stock Exchange; is headquartered in Taiwan; and has offices worldwide, including in Sunnyvale, Calif. UMC mass produces integrated-circuit logic products based on designs and technology developed and provided by its customers. UMC did not possess advanced DRAM technology prior to misappropriating it from Micron.
Jinhua is a state-owned enterprise of the PRC, funded entirely by the Chinese government, and established in February 2016 for the sole purpose of designing, developing, and manufacturing DRAM. The indictment describes how UMC, Jinhua, and employees of both, conspired to bypass many years of research and development by illegally obtaining Micron’s proprietary technology. The DRAM technology at issue is based on research and development and other proprietary information worth at least hundreds of millions and up to billions of dollars.
According to the indictment, Chen was a General Manager and Chairman of an electronics corporation that Micron acquired in 2013. Chen then became the president of a Micron subsidiary in Taiwan, Micron Memory Taiwan (“MMT”), responsible for manufacturing at least one of Micron’s DRAM chips. Chen resigned from MMT in July 2015 and began working at UMC thereafter. While at UMC, Chen helped negotiate a cooperation agreement between UMC and Jinhua whereby, with funding from Jinhua, UMC would transfer DRAM technology to Jinhua to mass-produce. The technology would be jointly shared by both UMC and Jinhua. Chen became the head of UMC’s division tasked with fulfilling the terms of the cooperation agreement, namely developing DRAM technology to transfer to Jinhua. Chen later became the President of Jinhua and was put in charge of its DRAM production facility.
While at UMC, Chen recruited numerous MMT employees, including Ho and Wang, to join him at UMC. Prior to leaving MMT, Ho and Wang both stole and brought to UMC Micron trade secrets related to the design and manufacture of DRAM. For example, Ho and Wang stole confidential and proprietary materials pertaining to the past, current, and future generations of DRAM technology, some still in the research and development phase. Wang downloaded over 900 Micron confidential and proprietary files before he left MMT and stored them on USB external hard drives or in personal cloud storage, from where he could access the technology while working at UMC.
In sum, all defendants are charged with one count of conspiracy to commit economic espionage, in violation of 18 U.S.C. § 1831(a)(5); one count of conspiracy to commit theft of trade secrets, in violation of 18 U.S.C. § 1832(a)(5); and one count of economic espionage (receiving and possessing stolen trade secrets), in violation of 18 U.S.C. § 1831(a)(3). Additionally, Wang is charged with two counts of substantive economic espionage and Ho is charged with one count each of economic espionage and theft of trade secrets.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the individual defendants face a maximum sentence of 15 years imprisonment and a $5,000,000 fine for economic espionage charges, and 10 years imprisonment for theft of trade secrets charges. If convicted, each company faces forfeiture and a maximum fine of more than $20 billion. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The defendants have been summoned to appear on November 19, 2018 before U.S. Magistrate Judge Susan van Keulen.
In the civil complaint, the United States sues UMC, Jinhua, and Chen to enjoin them from exporting to the United States any products containing DRAM manufactured by Jinhua or UMC. The lawsuit also seeks an order preventing the civil defendants from transferring the trade secrets to anyone else. As authority for the lawsuit, the complaint cites 18 U.S.C. § 1836(a), a statute that permits the Attorney General to “obtain appropriate injunctive relief” against violations of 18 U.S.C. §§ 1831 and 1832.
This prosecution is a result of an investigation by the FBI. Substantial assistance was provided by Taiwan’s Ministry of Justice and the Ministry of Justice Investigation’s Bureau, MJIB.
Omak Man Sentenced to 115 Months in Federal Prison for Assault on a Colville Tribal OfficerRead the Press Release
Spokane – Joseph H. Harrington, United States Attorney for the Eastern District of Washington, announced that Brandon Shea Marchand, age 44, of Omak, Washington, and an enrolled member of the Confederated Tribes of the Colville Reservation, was sentenced today after having pleaded guilty on September 25, 2018, to Assault on a Federal Officer Resulting in Bodily Injury. United States District Judge Rosanna Malouf Peterson sentenced Marchand to a 115-month term of imprisonment, to be followed by a 3-year term of court supervision after he is released from federal prison. The sentence was at the high end of the advisory range recommended by the United States Sentencing Guidelines.
According to information disclosed during court proceedings, a Colville Tribal Officer, who is an enrolled member of the Oglala Sioux Tribe in South Dakota, attempted to serve an arrest warrant on Marchand in February 2018, on the Colville Reservation. Marchand drove away on a four-wheeler, causing the officer to pursue him over wintry terrain while Marchand yelled he was not going to jail, and this would be an officer-assisted suicide call.
Marchand threatened the officer with a machete and a makeshift flame-thrower constructed out of a propane torch, and sprayed the officer with bear mace, hitting him in the face, eyes, and upper body. Marchand also threw a paint can at the officer’s head, causing lacerations and bleeding on his face and head. As Marchand admitted in court documents, his conduct recklessly created a substantial risk of death or serious bodily harm to the pursuing officer.
Marchand continued to refuse to comply with the pursuing officer’s instructions and started to enter a residence the officer believed contained weapons. The officer discharged his service weapon, hitting Marchand in the leg. The officer immediately administered first aid to Marchand, including applying a tourniquet around his leg, until first responders from the Okanagan County Sheriff’s Department and Omak Police Department could respond. The officer and Marchand were taken to separate hospitals to receive medical treatment. To prevent flight, Marchand was kept under watch at the hospital by the Lincoln County Sheriff’s Department, the Spokane Police Department, the Safe Streets Task Force, and the Federal Bureau of Investigation.
During the sentencing proceedings, Judge Peterson noted Marchand’s violent criminal history and years of drug use, and expressed appreciation to the Tribal officer for embracing the challenging task of acting as a law enforcement officer on the Colville Reservation. Judge Peterson observed that Marchand had not only created a dangerous situation by attempting to elude the officer, but he had also engaged in a years-long course of violent criminal conduct affecting numerous other individuals on the Colville Reservation.
United States Attorney Harrington said, “Tribal, local, state and federal law enforcement officers place themselves in harm’s way every day to protect the community. When individuals engage in criminal conduct and place our law enforcement officers and the public in danger of physical harm, it is a serious matter and warrants serious consequences. The sentence imposed holds Marchand accountable for his actions.”
This case was prosecuted under the Project Safe Neighborhoods (PSN) program. PSN is a federal, state, and local law enforcement collaboration to identify, investigate, and prosecute individuals responsible for violent crimes in our neighborhoods. The U.S. Attorney’s Office is partnering with federal, state, local, and tribal law enforcement to specifically identify the criminals responsible for violent crime in the Eastern District of Washington and pursue criminal prosecution.
This case was investigated by the Colville Tribal Police Department and the Federal Bureau of Investigation. The case was prosecuted by David M. Herzog, an Assistant United States Attorney for the Eastern District of Washington.
Ohio Man Sentenced to Prison for Passing Counterfeit NotesRead the Press Release
ERIE, Pa. – A former resident of Ohio pleaded guilty and was sentenced in federal court to one year and a day in jail, and ordered to make $4,000 in restitution on his conviction of passing and uttering counterfeit money, obligations, or securities, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on David Edward Johnson, 51.
According to information presented to the court, on eight separate dates, Johnson passed 65 counterfeit United States Federal Reserve notes in Western Pennsylvania.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Secret Service, the Millcreek Township Police Department and the Pennsylvania State Police for the investigation leading to the successful prosecution of Johnson.
New York State Lobbyist Arrested, Charged with BriberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Robert Scott Gaddy, 48, of Albany, NY, was arrested and charged by criminal complaint with bribery concerning programs receiving federal funds, and honest services wire fraud. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that according to the complaint, the defendant, a lobbyist registered with the State of New York, owns and operates the lobbying firm Excelsior Advocates, LLC. At various times, Excelsior Advocates maintained lobbying contracts with the Rochester Genesee Regional Transportation Authority, and the Rochester City School District.
During an investigation into allegations of fraud and corruption involving a large re-development project in the City of Rochester, the FBI identified potential corrupt acts by Gaddy and various public officials. As a result, special agents began an investigation into the relationship between the defendant and New York State Assemblyman Joseph Errigo.
Working with an individual known to the FBI, special agents arranged for that individual to approach Gaddy about paying a bribe to Member A in order to introduce certain legislation.
On September 4, 2017, the individual met with Gaddy who and stated that he represented a wealthy client who wanted to stop the proposed development in Monroe County and was willing to pay $15,000 in order to do so. The defendant responded, “Yeah . . . yeah, no problem.” Over the next few weeks, the individual met with Gaddy to discuss and plan the bribery scheme, including the roles of Assemblyman Joseph Errigo and another assembly member identified as Member A.
On February 9, 2018, Gaddy arranged for a meeting between the individual and Errigo at Errigo’s Pittsford, NY office. During that meeting, the individual gave $1,500 cash to Errigo and $2,500 to Gaddy. On March 16, 2018, the individual gave Errigo another $2,000.
On March 27, 2018, Errigo introduced a bill consisting of the proposed legislation, which was assigned bill number A10227. The individual paid Gaddy another $2,000. On April 13, 2018, the individual paid Errigo another $2,000.
The individual paid Errigo and Gaddy a total of $10,500 to obtain the introduction of proposed legislation in the New York State Assembly, and begin the process of obtaining passage of a State law.
Joseph Errigo was arrested on October 10, 2018, and also charged with bribery concerning programs receiving federal funds, and honest services wire fraud.“The people of Western New York, like all our citizens, deserve to have representatives who act in the public’s interest, not for their own personal financial gain,” noted U.S. Attorney Kennedy. “Where, as alleged here, legislative acts are undertaken not on their merits but in exchange for the payment of bribes and in hopes of personal financial gain, then all involved in the corruption of our legislative process ought to expect to face criminal charges.”
“Today's complaint, like other recent cases, highlights a common theme: bribery crimes are fueled by greed,” said Gary Loeffert, Special Agent-in-Charge of the FBI's Buffalo Office. “A bribe is a bribe - plain and simple. Public corruption is the FBI's top criminal priority for good reason. When a person or group can buy legislation by bribing a public official, it is the community and constituents who suffer and the public official who benefits.”
The defendant made an initial appearance before U.S. Magistrate Judge Marian W. Payson and was released. Gaddy is due back in court on December 18, 2018, for a status conference.
The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.
# # # #
New Orleans Man Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
U.S. Attorney Peter G. Strasser announced that ELTON WILLIAMS, age 28, of New Orleans, pleaded guilty today before United States District Judge Nannette Jolivette Brown, to conspiracy to possess with the intent to distribute heroin, cocaine hydrochloride, marijuana, and Tramadol.
According to court documents, ELTON WILLIAMS, an inmate at the Orleans Justice Center jail, solicited the assistance of his relative, Ciboney Parker (a civilian employee of the Orleans Parish Sheriff’s Office), and two friends, Brittany Theophile and Rachelle Kelson, to smuggle drugs into the jail. Theophile and Kelson provided the drugs, including marijuana, heroin, and Tramadol, to Parker during her work shift. The Orleans Parish Sheriff’s Office Intelligence Division became aware of the plan through audio and visual surveillance and detained Parker before she could gain access to WILLIAMS. Theophile and Kelson pleaded guilty and await sentencing. Parker is scheduled to plead guilty on December 4, 2018.
WILLIAMS faces a maximum term of imprisonment of twenty (20) years, is subject to a fine of up to $1,000,000, and, upon release, will serve a three (3) year term of supervised release. Sentencing before Judge Brown is scheduled for February 7, 2019.
U.S. Attorney Peter Strasser praised the work of the FBI and the Orleans Parish Sheriff’s Office Investigative Service Bureau. Assistant United States Attorney Tracey Knight is in charge of this prosecution.
Munhall Man Pleads Guilty in Shadyside/North Oakland Stolen Packages SchemeRead the Press Release
PITTSBURGH, PA- A resident of Munhall, Pa., pleaded guilty in federal court to charges of conspiracy and mail theft, United States Attorney Scott W. Brady announced today.
Christopher Eric Carr, 46, pleaded guilty to four counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that from February through May of 2018, Carr, along with his co-defendant Ron Matthew Sharp, entered multiple apartment buildings in the Shadyside and North Oakland areas of Pittsburgh, and opened United States Postal Service packages or other mail items that were not addressed to them, stole packages, and stole items from within packages that had been left at authorized mail depositories. Defendants then provided items they had stolen from the mail, including gift cards, to others, who redeemed the gift cards at various locations, including Giant Eagle and GETGO. Defendants also re-sold, and instructed others to attempt to re-sell, items defendants had stolen from the mail.
Judge Bissoon scheduled sentencing for March 12, 2019, at 11 a.m. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Carr remains incarcerated pending the sentencing hearing.
Assistant United States Attorney Christy C. Wiegand is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the United States Department of Homeland Security conducted the investigation leading to the prosecution of Christopher Eric Carr.
Monmouth County, New Jersey, Doctor Charged with Illegally Distributing Prescription Controlled SubstancesRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, doctor to appear in court today on charges of illegally prescribing prescription drugs, U.S. Attorney Craig Carpenito announced.
Martin Fried, 60, a pediatric gastroenterologist in Ocean Township, New Jersey, was charged in a three-count complaint with attempting to distribute oxycodone and distribution of Adderall and Xanax outside the usual course of professional practice and not for a legitimate medical purpose. Fried is scheduled to make his initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to documents filed in this case and statements made in court:
Fried owned and was the sole practitioner at a medical practice, Healthy Days LLC, specializing in pediatric gastroenterology, and touting specialties in “nutrition,” “Lyme disease and co-infection,” and “genetic/DNA testing.”On July 20, 2018, Fried accompanied two men – referred to in the complaint as “Individual-1” and “Individual-2” – to two pharmacies in the area of Toms River, New Jersey, to obtain oxycodone, a Schedule II controlled substance; Adderall, a Schedule II controlled substance; and alprazolam, a Schedule IV controlled substance, using prescriptions Fried had written. When the first pharmacy refused to fill the prescriptions, Fried and the two men went to a second pharmacy. Fried prescribed the controlled substances to Individual-1 and Individual-2 outside the usual course of professional practice and with no legitimate medical purpose.
Two days earlier, Fried had accompanied the same two men to another pharmacy obtain Adderall, Xanax, and gabapentin, using prescriptions he had written. Based on Fried’s prescriptions, Individual-1 obtained approximately 120 tablets of Adderall, 90 tablets of Xanax, and 120 tablets of gabapentin (a drug commonly abused with opioids because it enhances the euphoria caused by the opioid). The drugs were prescribed by Fried outside the usual course of professional practice and with no legitimate medical purpose.
On July 31, 2018, Fried surrendered to the U.S. Drug Enforcement Administration his DEA registration to prescribe controlled substances. In a consent order with the N.J. Board of Medical Examiners filed in September, Fried agreed to an indefinite suspension of his medical license, pending a future demonstration of his fitness to practice, and further action by the Board.
Each count of the complaint is punishable by a maximum of 20 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greater.U.S. Attorney Carpenito credited special agents of the DEA, under the direction of Special Agent in Charge Valerie Nickerson in Newark, with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Colin J. Keiffer of the U.S. Attorney’s Office Opioid Abuse Prevention and Enforcement Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Matthew Adams Esq., Morristown, New Jersey
Mobile Man Sentenced to 95 Months for Possession with the Intent to Distribute MethamphetamineRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announced that United States District Court Senior Judge Callie V. S. Granade sentenced Anthony Lee Mitchell on October 22, 2018 to serve a term of imprisonment of 95 months followed by 5 years of supervised release for possession with the intent to distribute methamphetamine in violation of Title 21 USC § 841(a)(1). The defendant previously pled guilty to the offense on July 23, 2018.
According to admissions the defendant made as part of his guilty plea, on May 9, 2017, Mobile Police Department officers received a complaint of a man breaking into a house. Officers responded to the location and they stopped Mitchell in a vehicle leaving the house. Mitchell gave a false name to officers by providing his brother’s name, who had active arrest warrants. Officers arrested Mitchell and received consent to search his vehicle. Officers found approximately 48 grams of methamphetamine in the vehicle. Mitchell was read his rights and he admitted that another man “fronted” him the methamphetamine and that he still owed over $1,200 to the man that fronted him the methamphetamine. Fronting drugs means the supplier provides the drugs to the buyer essentially on credit. The buyer then sells the drugs to generate the money to pay the supplier and also to make some profit.
The case was investigated by Mobile Police Department and referred for federal prosecution through the Department of Homeland Security, Homeland Security Investigations. The case was prosecuted by Organized Crime Drug Enforcement Task Force (OCDETF) Lead Attorney, George F. May for the United States Attorney’s Office for the Southern District of Alabama.
Michigan Man Sentenced to 46 Months in Prison for Dog Fighting ConspiracyRead the Press Release
Damiane Buehrer, 40, of North Adams, Michigan, was sentenced to 46 months in prison for his role in a dog fighting conspiracy based in the surrounding counties of Grand Rapids, Michigan, by U.S. District Court Judge Paul L. Maloney yesterday. His prison term will be followed by three years of supervised release.
Buehrer pleaded guilty in June 2018 to one felony count of conspiracy to sponsor and exhibit a dog in a dog fight and unlawful possession of dogs intended to be used for the purpose of dog fighting. The Justice Department’s Environment and Natural Resources Division and U.S. Attorney Andrew Byerly Birge of the Western District of Michigan made the announcement.
“Damiane Buehrer and his codefendants participated in a sick and brutal underground activity that, because of its interstate and international nature, is subject to Federal criminal jurisdiction” stated U.S. Attorney Birge. “Because of the uniquely barbarous and cruel nature of this activity, my Office, along with the rest of the West Michigan law-enforcement community, is committed to investigating, punishing and deterring criminals like Buehrer and his coconspirators.”
Buehrer and four co-defendants were indicted in a superseding indictment on April 18, 2018, for one conspiracy count and multiple counts of unlawful possession of animals intended to be used for the purpose of dog fighting. The remaining co-defendants, including Charles Joseph Miller, Kian Maliak Miller, Charles Deon Davis Jr., and Jarvis Jason-Roy Askew, have pleaded guilty and are awaiting sentencing.
Between November 14, 2016, and December 7, 2017, as part of the conspiracy, Buehrer acquired and kept four dogs for the purposes of breeding, training, conditioning, and developing dogs for participation in dog fighting. The dogs, together with those owned by his co-conspirators, for a total of 37 dogs, were seized by law enforcement as part of the investigation. Buehrer was also found to possess medication for the purpose of treating dogs for wounds received during dog fighting, as well as equipment for training the dogs, including treadmills, weighted chains, break sticks, spring cables, flirt poles, and a jenny mill. The co-defendants frequently exchanged electronic communications for the purpose of sharing information about training and conditioning dogs for fighting, breeding fighting dogs, contracting for and sponsoring dog fights, collecting forfeited funds when a contracted dog fight resulted in a forfeit, and sharing results of dog fights.
The government is represented by Assistant U.S. Attorneys Kate Zell and Hagen Frank, and Senior Trial Attorney Jennifer Blackwell of the Justice Department’s Environmental Crimes Section. The case is being investigated by the U.S. Department of Agriculture – Office of Inspector General, the Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, and Firearms, and the Ingham County Animal Control Office. The ASPCA assisted with the care of the dogs seized by federal law enforcement.
Mexican National Man Sentenced for Immigration CrimeRead the Press Release
Defendant had four prior deportations to Mexico
BECKLEY, W.Va. – A Mexican national man was sentenced to “time served” after his guilty plea to the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Alonso Tapia-Gomez has been incarcerated since May 15, 2018. Tapia-Gomez was immediately remanded to ICE custody for deportation proceedings. Stuart commended the investigative efforts of the U.S. Immigration and Customs Enforcement (ICE) and the West Virginia State Police.
“What a revolving door,” said United States Attorney Mike Stuart. “Tapia-Gomez is being deported now for the fifth time. One would think he would have gotten the message by now. He needs to get in line and follow our laws.”
On May 15, 2018, Tapia-Gomez was found in Beckley, Raleigh County, West Virginia. Specifically, agents with ICE received a cellular phone call from the West Virginia State Police about an individual in a traffic stop who was possibly in the United States illegally. This suspicion was based on a Mexican identification document that was given to the West Virginia State Police trooper by Tapia-Gomez. Pursuant to this phone call and request for assistance, ICE agents immediately spoke with Tapia-Gomez telephonically. Tapia-Gomez admitted to being in the United States illegally. ICE agents responded to the scene and took Tapia-Gomez into federal custody. Agents again confirmed in person that Tapia-Gomez was not in the United States legally.
Tapia-Gomez’s fingerprints matched him to four prior encounters where he was found in the United States illegally and deported from the United States to Mexico. Tapia-Gomez again illegally reentered the United States prior to his arrest in 2018. Tapia-Gomez had not obtained permission to legally enter the United States and had not sought legal status or citizenship. Tapia-Gomez also admitted to ICE agents that he was a Mexican citizen.
Assistant United States Attorney Erik S. Goes was responsible for the prosecution. United States District Judge Irene C. Berger presided over the hearing.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Mexican National Man Pleads Guilty to Immigration CrimeRead the Press Release
Defendant had four prior deportations to Mexico
CHARLESTON, W.Va. – A Mexican national man entered a guilty plea to the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Arturo Chagala-Chigo faces up to two years of incarceration when he is scheduled to be sentenced on March 6, 2019. Chagala-Chigo is also subject to deportation proceedings at the conclusion of any sentence. Stuart commended the investigative efforts of the U.S. Immigration and Customs Enforcement (ICE).
“Several prior deportations,” said United States Attorney Mike Stuart. “How many times does someone need to be deported before they take the proper and appropriate steps to legally enter this country?”
On September 13, 2018, Chigala-Chigo was found in Summersville, Nicholas County, West Virginia by members of ICE after receiving a tip that individuals were in the country illegally and working in the area. Pursuant to this investigation, ICE agents approached Chagala-Chigo and he surrendered to them. Agents immediately confirmed that Chagala-Chigo was not in the United States legally, and took him into federal custody.
Chagala-Chigo’s fingerprints matched him to four prior encounters where he was found in the United States illegally and deported from the United States to Mexico. He was also previously convicted of illegally entering the United States in September 12, 2015 in the Southern District of Texas. Chagala-Chigo illegally reentered the United States prior to his capture in 2018. Chagala-Chigo had not obtained permission to legally enter the United States and had not sought legal status or citizenship. Chagala-Chigo also admitted to ICE agents that he was a Mexican citizen
Assistant United States Attorneys Drew Inman and Erik S. Goes are responsible for the prosecution. Senior United States District Judge David A. Faber presided over the hearing.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Mercer County, New Jersey, Man Sentenced to 100 Months in Prison for Armed Robbery Spree of Electronics Stores in New Jersey and PennsylvaniaRead the Press Release
CAMDEN, N.J. – A Trenton, New Jersey, man was sentenced today to 100 months in prison for robbing Metro PCS stores in Willingboro, New Jersey, Lumberton, New Jersey, and Levittown, Pennsylvania, in September and October 2016, U.S. Attorney Craig Carpenito announced.
Rodney Day, 27, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit Hobbs Act robberies. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
On Sept. 29, 2016, Day, Zeldrick Nance, 31, of Trenton, and Lisa Anderson, 35, of Griffithville, Arkansas, drove to the Willingboro Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped the store occupants and placed them into a store bathroom. Meanwhile, Anderson stole cellular telephones and money from the cash registers. During the robbery, Day demanded the keys to a car owned by one of the victims. Day, Nance, and Anderson fled with the stolen cellular telephones and money in that stolen car.
On Oct. 7, 2016, Day, Nance, and Anderson drove to the Lumberton Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped a store occupant, put that victim in a storage room, and took the victim’s wallet and keys. Meanwhile, Anderson stole cellular telephones and money from the cash registers.
On Oct. 12, 2016, Day, Nance, and Anderson drove to the Levittown Metro PCS Store. Day once again brandished what appeared to be a firearm while Nance duct taped the victims inside the store and put them in a store bathroom. Anderson subsequently entered the store and stole cellular telephones and money from the cash registers.
In addition to the prison term, Judge Rodriguez sentenced Day to three years of supervised release and ordered to pay $26,307 in restitution.
Nance has previously pleaded guilty and is scheduled to be sentenced Nov. 8, 2018. Anderson has previously pleaded guilty to her role in the robberies and is currently scheduled for sentencing on Nov. 13, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the Willingboro, Lumberton, and Levittown police departments, as well as the Burlington and Mercer County Prosecutor’s Offices for their assistance in this case.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.Defense counsel: Peter A. Levin Esq., Philadelphia
Married Couple Indicted for Conspiracy to Sexually Exploit a Two-Year Old ChildRead the Press Release
SYRACUSE, NEW YORK – Amber Decker, 24, of Philadelphia, New York and her husband, Logan Decker, 26, of Sioux, Falls, South Dakota, were indicted yesterday by a federal grand jury for conspiring to sexually exploit a two-year old child, announced United States Attorney Grant C. Jaquith and James Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
The indictment alleges that from July to September, 2018 the Deckers conspired with one another to use the child to engage in sexually explicit conduct for the purpose of producing visual depictions of the abuse.
Amber Decker was arraigned in federal court today and was ordered detained pending resolution of her case. Logan Decker is currently incarcerated in Sioux Falls, South Dakota, on related charges, and will be transported to federal court in Syracuse for prosecution.
The charge filed against the Deckers carries a mandatory minimum sentence of 15 years, and a maximum sentence of 30 years in prison, a fine of up to $250,000, and a term of supervised release of at least 5 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. If convicted, the Deckers will be required to register as sex offenders.
The charge in the indictment is merely an accusation. The defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the Federal Bureau of Investigation (FBI), the New York State Police, the Jefferson County Sheriff’s Office and the Sioux Falls, South Dakota Police Department, and is being prosecuted by Assistant U.S. Attorney Lisa M. Fletcher, Project Safe Childhood Coordinator for the Northern District of New York.
Marijuana Distributor Sentenced to Two Years in Prison for Tax FraudRead the Press Release
SAN FRANCISCO – Charles T. Woods was sentenced today to 24 months in prison, and ordered to pay a fine of $10,000 and restitution of $466,707 for willfully filing a false individual income tax return with the Internal Revenue Service, announced United States Attorney Alex G. Tse, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Internal Revenue Service (IRS), Criminal Investigation, Acting Special Agent in Charge Tara Sullivan. The sentence was handed down by the Honorable Susan Illston, U.S. District Judge.
Woods, 44, of Santa Rosa, Calif., pleaded guilty to the charge on May 25, 2018. In pleading guilty, Woods admitted he engaged in marijuana distribution in 2012, 2013, and 2014, and that he knowingly and willfully filed federal tax returns for those years that underreported income from his marijuana distribution. For all three years, Woods consistently reported business gross receipts on his tax returns of under $85,000 per year despite earning hundreds of thousands of dollars more. To evade bank currency transaction reporting requirements and to conceal his income, Woods deposited more than $1 million into numerous bank accounts under his control in amounts less than $10,000. In total, Woods failed to report more than $1.1 million in gross receipts from his marijuana distribution business, which resulted in a tax loss of $466,707 to the United States.
Woods was charged by information on April 25, 2018, with two counts of willfully making and subscribing a false tax return to the Internal Revenue Service, in violation of 26 U.S.C § 7206(1). He pleaded guilty to one count.
In addition to the prison term, Judge Illston also ordered the defendant to serve a year of supervised release following his prison term. Judge Illston ordered the defendant to surrender on or before January 11, 2019, to begin serving his sentence.
Assistant U.S. Attorney José A. Olivera and U.S. Department of Justice, Tax Division, trial attorney Christopher Magnani are prosecuting this case with the assistance of Kathy Tat and Larry Garland. The prosecution is the result of an investigation by IRS Criminal Investigation.
Man Sentenced to Prison for Role in Firearms Trafficking SchemeRead the Press Release
RICHMOND, Va. – A Richmond man was sentenced today to 33 months in prison for his role in a firearms trafficking scheme.
According to court documents, Jason Fields, 28, illegally purchased a total of 13 firearms in 10 separate transactions on three different days in the summer of 2016 from federally licensed firearms dealers. For each transaction, Fields represented on forms required for the transactions that he was the true purchaser of the firearms, when he was actually purchasing the firearms for other individuals. Fields later told authorities that the individuals told him they were from Washington, D.C., which would have made their transactions in Virginia illegal.
At sentencing, the Court applied a sentencing enhancement, finding that Fields knew or should have known that the individuals for whom he obtained the firearms intended to dispose of the firearms unlawfully. Indeed, three of the firearms were subsequently recovered by police officers in Richmond, Prince George County, Maryland; and Washington, D.C. The other 10 firearms have not been recovered.
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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Thomas L. Chittum, III, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by Senior U.S. District Judge Robert E. Payne. Assistant U.S. Attorney Stephen W. Miller prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:18-cr-43.
Malaysian Financier Low Taek Jho, Also Known as “Jho Low,” and Former Banker Ng Chong Hwa, Also Known as “Roger Ng,” Indicted for Conspiring to Launder Billions of Dollars in Illegal Proceeds and to Pay Hundreds of Millions of Dollars in BribesRead the Press Release
A three-count criminal indictment was unsealed today in federal court in the Eastern District of New York charging Low Taek Jho, 36, also known as “Jho Low,” and Ng Chong Hwa, 51, also known as “Roger Ng,” with conspiring to launder billions of dollars embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Abu Dhabi officials. As part of the three-count indictment, Ng is also charged with conspiring to violate the FCPA by circumventing the internal accounting controls of a major New York-headquartered financial institution (Financial Institution), which underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013, while Ng was employed at the Financial Institution as a managing director. Ng was arrested earlier today in Malaysia, pursuant to a provisional arrest warrant issued at the request of the United States. Low remains at large.
Also unsealed today in federal court in the Eastern District of New York was the guilty plea of Tim Leissner, 48, the former Southeast Asia Chairman and participating managing director of the Financial Institution, to a two-count criminal information charging Leissner with conspiring to launder money and conspiring to violate the FCPA by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal accounting controls of the Financial Institution while he was employed by it. According to court filings, Leissner has been ordered to forfeit $43.7 million as a result of his crimes.
Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI New York Field Office, and Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation (IRS-CI) Los Angeles Field Office announced the charges.
The Criminal Scheme
1MDB is a Malaysian state-owned and controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. As alleged in court filings, between approximately 2009 and 2014, as 1MDB raised money to fund its projects, billions of dollars were misappropriated and fraudulently diverted from 1MDB, including funds 1MDB raised in 2012 and 2013 through three bond transactions that it executed with the Financial Institution. As part of the scheme, and as alleged in court filings, Low, Ng, Leissner, and others conspired to bribe government officials in Malaysia, including at 1MDB, and Abu Dhabi to obtain and retain lucrative business for the Financial Institution, including the 2012 and 2013 bond deals. They also allegedly conspired to launder the proceeds of their criminal conduct through the U.S. financial system by purchasing, among other things, luxury residential real estate in New York City and elsewhere, and artwork from a New York-based auction house, and by funding major Hollywood films.
As alleged, Low’s close relationships with high-ranking government officials in Malaysia and Abu Dhabi were central to the scheme. Ng, Leissner, and others at the Financial Institution allegedly knew Low was close to these government officials, including a high-ranking Malaysian government official who had authority to approve 1MDB business decisions (Malaysian Official #1). According to allegations in court filings, beginning in approximately 2009 and continuing through 2014, Low, Ng, Leissner, and the other co-conspirators used Low’s relationships to obtain and retain business for the Financial Institution through the promise and payment of hundreds of millions of dollars in bribes, including to ensure 1MDB awarded the Financial Institution a role on three bond transactions known internally at the Financial Institution as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.” As a result of its work for 1MDB during that time, the Financial Institution allegedly received approximately $600 million in fees and revenues along with increased reputational prestige. At the same time, Ng, Leissner and others allegedly received large bonuses and enhanced their own reputations at the Financial Institution. In total, according to allegations in court filings, more than $2.7 billion was misappropriated from 1MDB and Low, Ng, Leissner and others conspired to launder this money through the U.S. financial system to pay bribes to foreign officials and for the personal benefit of themselves and their relatives.
Project Magnolia
In early 2012, according to allegations in court filings, following a series of meetings in Malaysia and the United Kingdom, Low, Leissner, Ng and the co-conspirators agreed that, with the assistance of the Financial Institution, 1MDB would issue $1.75 billion in bonds guaranteed by an entity wholly-owned and controlled by the government of Abu Dhabi. Low allegedly explained to Ng, Leissner, and others at the time that, to complete the transaction, bribes would need to be paid to officials in Malaysia and Abu Dhabi and hundreds of millions of dollars were allegedly paid to officials in these countries. Court filings also allege that Low, Ng, Leissner, and other co-conspirators knew that Low intended to use funds misappropriated from the bond transaction to bribe and influence the officials to obtain the necessary approvals and any additional assistance to execute Project Magnolia for the Financial Institution and to pay kickbacks to Ng, Leissner, and others.
In or around March 2012, 1MDB allegedly selected the Financial Institution to be the sole bookrunner and arranger for Project Magnolia. As part of the scheme, Low and other co-conspirators allegedly enlisted the assistance of 1MDB officials, promising to pay them bribes and kickbacks. In one instance, as alleged in court filings, in connection with Project Magnolia, Low told one 1MDB official that he would “[g]ive [the official a] big present” when the transaction closed. According to allegations in court documents, the fact that bribes and kickbacks were being paid in connection with Project Magnolia was known to Ng, Leissner, and other employees of the Financial Institution.
After Project Magnolia closed on or about May 21, 2012, more than $500 million of the bond proceeds were allegedly misappropriated and diverted from 1MDB through numerous wire transfers to bank accounts in the name of shell companies beneficially owned and controlled by Low, Leissner, Ng, and other co-conspirators, including a high-level official at the Abu Dhabi entity that guaranteed the Project Magnolia bonds and a close relative of Malaysian Official #1. As alleged, the bond proceeds transferred to Malaysian Official #1’s close relative were later used by the relative’s U.S. motion picture company to assist in the production of the film “The Wolf of Wall Street.”
Project Maximus and Project Catalyze
Court filings further allege that from May 2012 and continuing through 2013, Low, Ng, Leissner, and their co-conspirators continued to work to ensure that the Financial Institution obtained and retained additional 1MDB business, including the bond transactions known as “Project Maximus” and “Project Catalyze,” which transactions generated substantial fees and revenues for the Financial Institution. As alleged, although both transactions were designed to raise more than $4 billion for 1MDB’s investment and development projects, Low, Ng, Leissner, and other co-conspirators used the transactions to further the criminal scheme, ultimately laundering hundreds of millions of dollars of diverted funds from these transactions into bank accounts beneficially owned and controlled by, among others, the co-conspirators, including Low, Leissner and officials in Malaysia and Abu Dhabi. As alleged in court filings, throughout this time, Ng, Leissner, and at least one other employee of the Financial Institution knew that Low would and did pay bribes to influence officials in Malaysia and Abu Dhabi to obtain the necessary approvals to execute Project Maximus and Project Catalyze. Low, Ng, Leissner, and others also allegedly knew that large portions of the bond proceeds would be illegally diverted to themselves and others, including to foreign government officials.
As part of the scheme alleged in court filings, Low, Ng, Leissner and other co-conspirators again used a series of wire transfers to launder billions of dollars of misappropriated and fraudulently diverted funds from Project Maximus and Project Catalyze. Following the close of Project Maximus, approximately $790 million of the bond proceeds was allegedly transferred through a series of shell company accounts beneficially owned and controlled by Low, Leissner and others, including accounts of officials in Malaysia and Abu Dhabi. In particular, Leissner and Ng allegedly caused millions of dollars of these funds to be transferred to accounts of 1MDB officials or relatives of such officials in exchange for their assistance in obtaining and retaining business for the Financial Institution. Over $35 million of the bond proceeds also allegedly was used by a co-conspirator to help acquire a condominium in New York, New York beneficially owned by Low.
Similarly, according to allegations in court filings, after Project Catalyze closed in March 2013, more than $1 billion of diverted funds, traceable to the transaction, were laundered, at Low’s direction, to bank accounts in the name of entities beneficially owned and controlled by Low, Leissner, and others, including 1MDB officials. As alleged, more than $4 million of the funds were transferred to a bank account beneficially owned by a relative of Ng. Additionally, as part of the scheme, Low allegedly used a shell company account to receive more than $1 billion of the Project Catalyze bond proceeds and spent approximately $137 million of these funds to purchase works of art at a high-end art auction house in New York, New York.
Post-Catalyze 1MDB Transactions at the Financial Institution
The Financial Institution continued to seek business from 1MDB after Project Catalyze. As alleged, Leissner and others were particularly focused on securing a role for the Financial Institution on a proposed initial public offering (IPO) of 1MDB’s energy assets. To influence certain officials to award the Financial Institution a role in the proposed IPO, Low and Leissner allegedly continued to pay bribes to certain officials at 1MDB.
For example, as alleged, in an online chat between Low and Leissner in June 2014, Low and Leissner discussed the need to “suck up to” a 1MDB official and to send “cakes” to a person believed to be the wife of Malaysian Official #1. A few months after this chat, a bank account owned and controlled by Leissner and his relative was used to transfer approximately $4.1 million to a high-end New York jeweler, in part, to pay for gold jewelry for the wife of Malaysian Official #1.
The charges in the indictment as to Low and Ng are merely allegations, and those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was jointly conducted by the FBI’s International Corruption Unit and IRS-CI. The government’s criminal case is being handled by the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Fraud Section and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York. MLARS Trial Attorneys Jennifer E. Ambuehl, Woo S. Lee, and Mary Ann McCarthy, Fraud Section Trial Attorneys Katherine A. Nielsen and Nikhila Raj, and Assistant U.S. Attorneys Jacquelyn M. Kasulis and Drew Rolle of the Eastern District of New York are prosecuting the case. Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures.
The Criminal Division’s Office of International Affairs provided critical assistance in this case. The Department also appreciates the significant cooperation and assistance provided by the U.S. Securities and Exchange Commission and the Board of Governors of the Federal Reserve System along with the Federal Reserve Bank of New York. The Department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg, and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.
The International Unit of the Criminal Division’s MLARS is home to the Kleptocracy Asset Recovery Initiative—a team of dedicated prosecutors working to prosecute individuals and forfeit the proceeds of foreign official corruption that has affected the U.S. financial system and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office. MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].
The Defendants:
LOW TAEK JHO and NG CHONG HWA
E.D.N.Y. Docket No. 18-CR-538 (MKB)
TIM LEISSNER
E.D.N.Y. Docket No. 18-CR-439 (MKB)
Malaysian Financier Low Taek Jho, AKA “Jho Low,” and Former Banker Ng Chong Hwa, AKA “Roger Ng,” Indicted for Conspiring to Launder Billions of Dollars in Illegal Proceeds and to Pay Hundreds of Millions of Dollars in Bribes in Connection with 1MDB FundRead the Press Release
BROOKLYN, NY – A three-count criminal indictment was unsealed today in federal court in the Eastern District of New York charging Low Taek Jho, also known as “Jho Low,” and Ng Chong Hwa, also known as “Roger Ng,” with conspiring to launder billions of dollars embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Abu Dhabi officials. As part of the three-count indictment, Ng is also charged with conspiring to violate the FCPA by circumventing the internal accounting controls of a major New York-headquartered financial institution (Financial Institution), which underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013, while Ng was employed at the Financial Institution as a managing director. Ng was arrested earlier today in Malaysia, pursuant to a provisional arrest warrant issued at the request of the United States. Low remains at large.
Also unsealed today in federal court in the Eastern District of New York was the guilty plea of Tim Leissner, the former Southeast Asia Chairman and participating managing director of the Financial Institution, to a two-count criminal information charging Leissner with conspiring to launder money and conspiring to violate the FCPA by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal accounting controls of the Financial Institution while he was employed by it. According to court filings, Leissner has been ordered to forfeit $43,700,000 as a result of his crimes.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John P. Cronan, Principal Deputy Assistant Attorney General of the Department of Justice’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and R. Damon Rowe, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), Los Angeles Field Office, announced the charges.
The Criminal Scheme
1MDB is a Malaysian state-owned and controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. As alleged in court filings, between approximately 2009 and 2014, as 1MDB raised money to fund its projects, billions of dollars were misappropriated and fraudulently diverted from 1MDB, including funds 1MDB raised in 2012 and 2013 through three bond transactions that it executed with the Financial Institution. As part of the scheme, and as alleged in court filings, Low, Ng, Leissner and others conspired to bribe government officials in Malaysia, including at 1MDB, and Abu Dhabi to obtain and retain lucrative business for the Financial Institution, including the 2012 and 2013 bond deals. They also allegedly conspired to launder the proceeds of their criminal conduct through the U.S. financial system by purchasing, among other things, luxury residential real estate in New York City and elsewhere, and artwork from a New York-based auction house, and by funding major Hollywood films.
As alleged, Low’s close relationships with high-ranking government officials in Malaysia and Abu Dhabi were central to the scheme. Ng, Leissner, and others at the Financial Institution allegedly knew Low was close to these government officials, including a high-ranking Malaysian government official who had authority to approve 1MDB business decisions (Malaysian Official #1). According to allegations in court filings, beginning in approximately 2009 and continuing through 2014, Low, Ng, Leissner and the other co-conspirators used Low’s relationships to obtain and retain business for the Financial Institution through the promise and payment of hundreds of millions of dollars in bribes, including to ensure 1MDB awarded the Financial Institution a role on three bond transactions known internally at the Financial Institution as “Project Magnolia,” “Project Maximus” and “Project Catalyze.” As a result of its work for 1MDB during that time, the Financial Institution allegedly received approximately $600 million in fees and revenues along with increased reputational prestige. At the same time, Ng, Leissner and others allegedly received large bonuses and enhanced their own reputations at the Financial Institution. In total, according to allegations in court filings, more than $2.7 billion was misappropriated from 1MDB and Low, Ng, Leissner and others conspired to launder this money through the U.S. financial system to pay bribes to foreign officials and for the personal benefit of themselves and their relatives.
Project Magnolia
In early 2012, according to allegations in court filings, following a series of meetings in Malaysia and the United Kingdom, Low, Leissner, Ng and the co-conspirators agreed that, with the assistance of the Financial Institution, 1MDB would issue $1.75 billion in bonds guaranteed by an entity wholly owned and controlled by the government of Abu Dhabi. Low allegedly explained to Ng, Leissner and others at the time that, to complete the transaction, bribes would need to be paid to officials in Malaysia and Abu Dhabi and, as alleged, hundreds of millions of dollars were actually paid to officials in these countries. Low, Ng, Leissner and other co-conspirators also knew that Low intended to use funds misappropriated from the bond transaction to bribe and influence the officials to obtain the necessary approvals and any additional assistance needed to execute Project Magnolia for the Financial Institution and to pay kickbacks to Ng, Leissner and others.
In or around March 2012, 1MDB allegedly selected the Financial Institution to be the sole bookrunner and arranger for Project Magnolia. As part of the scheme, Low and other co-conspirators enlisted the assistance of 1MDB officials, promising to pay them bribes and kickbacks. In one instance, as alleged in court filings, in connection with Project Magnolia, Low told one 1MDB official that he would “[g]ive [the official a] big present” when the transaction closed. According to allegations in court documents, the fact that bribes and kickbacks were being paid in connection with Project Magnolia was known to Ng, Leissner and other employees of the Financial Institution.
After Project Magnolia closed on or about May 21, 2012, more than $500 million of the bond proceeds were misappropriated and diverted from 1MDB through numerous wire transfers to bank accounts in the name of shell companies beneficially owned and controlled by Low, Leissner, Ng and other co-conspirators, including a high-level official at the Abu Dhabi entity that guaranteed the Project Magnolia bonds and a close relative of Malaysian Official #1. As alleged, the bond proceeds transferred to Malaysian Official #1’s close relative were later used by the relative’s U.S. motion picture company to assist in the production of the film “The Wolf of Wall Street,” a movie based on a previous Eastern District of New York prosecution.
Project Maximus and Project Catalyze
Court filings further allege that from May 2012 and continuing through 2013, Low, Ng, Leissner and their co-conspirators continued to work to ensure that the Financial Institution obtained and retained additional 1MDB business, including the bond transactions known as “Project Maximus” and “Project Catalyze,” which transactions generated substantial fees and revenues for the Financial Institution. As alleged, although both transactions were designed to raise more than $4 billion for 1MDB’s investment and development projects, Low, Ng, Leissner and other co-conspirators allegedly used the transactions to further the criminal scheme, ultimately laundering hundreds of millions of dollars of diverted funds from these transactions into bank accounts beneficially owned and controlled by, among others, the co-conspirators, including Low, Leissner and officials in Malaysia and Abu Dhabi. As alleged in court filings, throughout this time, Ng, Leissner, and at least one other employee of the Financial Institution knew that Low would and did pay bribes to influence officials in Malaysia and Abu Dhabi to obtain the necessary approvals to execute Project Maximus and Project Catalyze. Low, Ng, Leissner and others allegedly knew that large portions of the bond proceeds would be illegally diverted to themselves and others, including to foreign government officials.
As part of the scheme alleged in court filings, Low, Ng, Leissner and other co-conspirators again used a series of wire transfers to launder billions of dollars of misappropriated and fraudulently diverted funds from Project Maximus and Project Catalyze. As alleged, following the close of Project Maximus, approximately $790 million of the bond proceeds was transferred through a series of shell company accounts beneficially owned and controlled by Low, Leissner and others, including accounts of officials in Malaysia and Abu Dhabi. In particular, Leissner and Ng caused millions of dollars of these funds to be transferred to accounts of 1MDB officials or relatives of such officials in exchange for their assistance in obtaining and retaining business for the Financial Institution. Over $35 million of the bond proceeds also allegedly was used by a co-conspirator to help acquire a condominium in New York, New York beneficially owned by Low.
Similarly, according to allegations in court filings, after Project Catalyze closed in March 2013, more than $1 billion dollars of diverted funds, traceable to the transaction, were laundered, at Low’s direction, to bank accounts in the name of entities beneficially owned and controlled by Low, Leissner and others, including 1MDB officials. As alleged, more than $4 million of the funds were transferred to a bank account beneficially owned by a relative of Ng. Additionally, as part of the scheme, Low used a shell company account to receive more than $1 billion of the Project Catalyze bond proceeds and spent approximately $137 million of these funds to purchase works of art at a high-end art auction house in New York, New York.
Post-Catalyze 1MDB Transactions at the Financial Institution
The Financial Institution continued to seek business from 1MDB after Project Catalyze. As alleged, Leissner and others were particularly focused on securing a role for the Financial Institution on a proposed initial public offering (“IPO”) of 1MDB’s energy assets. To influence certain officials to award the Financial Institution a role in the proposed IPO, Low and Leissner allegedly continued to pay bribes to certain officials at 1MDB.
For example, as alleged, in an online chat between Low and Leissner in June 2014, Low and Leissner discussed the need to “suck up to” a 1MDB official and to send “cakes” to a person believed to be the wife of Malaysian Official #1. A few months after this chat, a bank account owned and controlled by Leissner and his relative was used to transfer approximately $4.1 million to a high-end New York jeweler, in part, to pay for gold jewelry for the wife of Malaysian Official #1.
The charges in the indictment as to Low and Ng are allegations, and those defendants are presumed innocent unless and until proven guilty.
The investigation was jointly conducted by the FBI’s International Corruption Unit and IRS-Criminal Investigation. The government’s criminal case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis and Drew Rolle and Trial Attorneys Jennifer E. Ambuehl, Woo S. Lee, Mary Ann McCarthy, Katherine A. Nielsen and Nikhila Raj are prosecuting the case. Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures.
The Criminal Division’s Office of International Affairs provided critical assistance in this case. The Department also appreciates the significant cooperation and assistance provided by the U.S. Securities and Exchange Commission, and the Board of Governors of the Federal Reserve System along with the Federal Reserve Bank of New York. The Department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General of Switzerland, the Judicial Investigating Authority of the Grand Duchy of Luxembourg, and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.
The Defendants:
LOW TAEK JHO
Age: 36NG CHONG HWA
Age: 51E.D.N.Y. Docket No. 18-CR-538 (MKB)
TIM LEISSNER
Age: 48E.D.N.Y. Docket No. 18-CR-439 (MKB)
MS-13 Member Sentenced for RICO Conspiracy and Unlawful Possession of a FirearmRead the Press Release
BOSTON – An MS-13 member was sentenced today in federal court in Boston for RICO conspiracy and unlawful possession of a firearm and ammunition by an illegal alien.
Manuel Landaverde, a/k/a “Scooby,” 26, a Salvadoran national, was sentenced by U.S. District Court Judge William G. Young to 21 months in prison and three years of supervised release. Landaverde will face deportation proceedings upon completion of his sentence. In July 2018, Landaverde pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO or racketeering conspiracy, and being an alien in possession of a firearm and ammunition.
The investigation revealed that Landaverde was a member of MS-13 and conspired with other MS-13 members to commit acts of violence, including murder and attempted murder, in Massachusetts. Landaverde, who is unlawfully present in the United States, also possessed and sold a firearm and ammunition knowing it would be used in connection with the racketeering conspiracy.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney John P. Pappas; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Gross; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; and Somerville Police Chief David Fallon made the announcement today. The U.S. Marshals Service has provided crucial assistance with the case.
MPLX LP to Cut Harmful Air Pollution at Natural Gas Processing Facilities Improving Air Quality for Communities in Six StatesRead the Press Release
Today, the U.S. Department of Justice, the U.S. Environmental Protection Agency (EPA), the State of Oklahoma, the Pennsylvania Department of Environmental Protection, and the State of West Virginia announced a settlement agreement with MPLX LP (MPLX) and 11 of its subsidiaries that will strengthen air pollution controls at 20 natural gas processing plants located in Pennsylvania, Ohio, West Virginia, Kentucky, Texas and Oklahoma.
The settlement addresses alleged violations of federal and state clean air laws governing the control of emissions from equipment leaks, pressure relief devices, storage tanks, truck and railcar loading, combustion devices, and process heaters. As part of the settlement, MPLX will also perform Supplemental Environmental Projects (SEPs), install equipment to control volatile organic compound (VOC) emissions from truck loading operations at two natural gas compressor stations, and pay a $925,000 penalty.
“This agreement will eliminate harmful air pollutants and create cleaner air for communities in six states,” said EPA Office of Enforcement and Compliance Assurance Assistant Administrator Susan Bodine. “By improving air pollution control at 20 of their gas processing facilities, MPLX will reduce VOC emissions by more than 1,500 tons a year.”
Under the terms of the settlement, MPLX is expected to spend approximately $2.78 million to install and operate new technologies as well as improve and expand existing control techniques that minimize VOC emissions at its natural gas processing plants. Certain provisions of the consent decree also include measures to ensure MPLX’s compliance with nitrogen oxide (NOx) emission limits applicable to process heaters at MPLX’s facilities. In addition, MPLX will implement a mitigation project to reduce VOC emissions at two natural gas compressor stations in Pennsylvania and Ohio, respectively, through the installation of new technology to capture and control VOC emissions during truck loading operations, which is expected to cost at least $700,000. MPLX will also implement SEPs involving the installation and operation of ambient air monitoring stations adjacent to four natural gas processing plants located in Pennsylvania, West Virginia, Kentucky, and Texas, respectively, at a cost of $2.5 million. Finally, MPLX will implement a SEP involving the study of the effectiveness of computer predictive modeling of fugitive leaks as a potential emission reduction tool, at a cost of $75,000.
VOCs include a variety of chemicals that may produce adverse health effects such as eye, nose, and throat irritation, headaches, nausea, and damage to the liver, kidney, and the central nervous system. VOCs also contribute to the formation of ground level ozone, which is not emitted directly into the air, but is created by chemical reactions between NOx and VOCs in the presence of sunlight. Breathing ozone can trigger a variety of health problems, particularly for children, the elderly, and anyone with lung diseases such as asthma. Ground level ozone can also have harmful effects on sensitive vegetation and ecosystems. Besides ground level ozone, NOx emissions also contribute to acid rain, particulate matter, water quality deterioration, and visual impairment.
The consent decree has been lodged with the U.S. District Court for the Northern District of Ohio and is subject to public comment for a period of at least 30 days. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.
For more information on the settlement, please visit: https://www.epa.gov/enforcement/mplx-lp-clean-air-act-settlement-information-sheet.
Luzerne County Individuals Convicted of Heroin Trafficking, Firearms, and C-4 Plastic Explosives OffensesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Roberto Torner, age 45, Liza Robles, age 34, both of Freeland, Pennsylvania, and David Alzugaray-Lugones, age 49, of Weatherly, Pennsylvania, were convicted on October 31, 2018, of heroin trafficking, firearms, and stolen military C-4 explosives offenses. The 12-day trial was held before United States District Court Judge Malachy E. Mannion in Scranton.
According to United States Attorney David J. Freed, the jury returned the guilty verdict on all counts charged in the superseding indictment after approximately three hours of deliberation. Torner was convicted of one count each of conspiring to distribute heroin, distributing heroin, conspiring to be a felon in possession of firearms and ammunition, being a felon in possession of firearms and ammunition, possessing stolen explosives, and being a felon in possession of explosives.
Robles was convicted of one count each of conspiring to distribute heroin, distributing heroin, conspiring to have a felon possess firearms and ammunition, and one count of providing firearms and ammunition to a felon. Alzugaray-Lugones was convicted of one count of conspiring to distribute heroin, and one count of distributing heroin.
The evidence presented at trial showed that in June 2015, Torner, Robles, and Alzugaray-Lugones worked together to sell approximately five grams of heroin (which is approximately 200 individual doses of heroin) to a confidential informant. The United States also presented evidence that over the course of nearly a decade, Robles purchased numerous handguns, assault rifles, a shotgun, a rifle, and ammunition that she made available to her fiancé, Torner, who was prohibited from possessing firearms and ammunition as a three-time convicted felon.
After the defendants were charged in an initial indictment for the heroin trafficking and firearms offenses, Torner was released on pretrial supervision. The evidence at trial showed that while on pretrial supervision, he planted a brick of stolen U.S. military C-4 plastic explosives on one of his rental properties, last inhabited by Alzugaray-Lugones. Law enforcement officials recovered 1.5 lbs. of stolen C-4, which resulted in additional explosives charges being filed against Torner.
The United States forfeited approximately 1,500 rounds of ammunition, and several firearms seized during the investigation. The firearms are:
- Magnum Research 1911U .45acp;
- Hi-Point JHP .45acp;
- Stag Arms STAG-15, .223 cal. (a semiautomatic firearm that is capable of accepting a large capacity magazine);
- Mossberg 500 12-gauge shotgun; and
- Norinco MAC90 (a semiautomatic firearm that is capable of accepting a large capacity magazine); and a
- Tikka T3, 30.06 rifle.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Weatherly Police Department, the Luzerne County Drug Task Force, the Pennsylvania State Police, and other federal, state, and local law enforcement agencies. Assistant United States Attorneys Phillip Caraballo and Todd Hinkley prosecuted 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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The case also was 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.
The combined maximum penalty under federal law for Torner is up to life imprisonment, for Robles up to 20 years of imprisonment, and for Alzugaray up to 20 years of imprisonment. There is also a term of supervised release following imprisonment, and a fine. 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.
# # #
Local physician placed under supervision and will pay restitutionRead the Press Release
WHEELING, WEST VIRGINIA – Dr. Roland F. Chalifoux, Jr., a physician associated with a pain management clinic in McMechen, West Virginia, will pay more than $28,000 in restitution as a part of an agreement, United States Attorney Bill Powell announced.
The United States filed a pre-trial diversion agreement as a part of a motion to dismiss charges against Chalifoux. Chalifoux, age 59, of St. Clairsville, Ohio, has agreed to pay restitution in the amount of $28,606.75, be under supervision by the United States Probation Office, and abide by all conditions set forth in the agreement for 12 months. If at any time, any violations are made, the United States can rescind the agreement and pursue said charges.
Chalifoux has agreed to pay the following:
• Centers for Medicare & Medicaid Services - $2,320.62
• WV Medicaid Fraud Control Unit - $9,860.95
• The Health Plan of the Upper Ohio Valley - $11,339.71
• Blue Cross Blue Shield - $5,085.47The Motion to Dismiss and the Pre-Trial Diversion Agreement were filed earlier this week.
Lewiston Man Pleads Guilty to Being a Felon in Possession of a FirearmRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Tony Leonard, a/k/a “Tom Cat,” 49, of Lewiston, Maine, pled guilty today in U.S. District Court to being a felon in possession of a firearm.
According to court records, on August 17, 2017, the Lewiston Police Department executed a search warrant at Leonard’s Lewiston residence and seized a Glock .40 caliber handgun and a loaded magazine concealed inside of his jacket located in a bedroom. Leonard was prohibited from possessing the handgun because of prior felony convictions for drug trafficking, forgery, and aggravated assault.
The defendant faces up to ten years in prison, a $250,000 fine, and up to three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the Lewiston Police Department, with assistance provided by the U.S. Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives. 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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Kentucky Resident Sentenced to More Than Three Years in Prison for Wire Fraud Conspiracy and Money Laundering SchemeRead the Press Release
SAN FRANCISCO – Bradley Howell was sentenced to 46 months in prison for conspiracy to commit wire fraud and money laundering, announced United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down today by the Honorable Susan Illston, United States District Judge.
Howell, 34, of Louisville, Ky., pleaded guilty to the charges on July 18, 2018. According to his plea agreement, from about April 2013 through March 2014, Howell and a co-conspirator devised a scheme in which they convinced potential investors the co-conspirators could help them receive millions of dollars’ worth of financial instruments (bank guarantees and standby letters of credit) in exchange for a much smaller down payment. Howell’s co-conspirator was an attorney licensed to practice in California. Howell and his co-conspirator told the investors that the co-conspirator would serve as an escrow agent in the transactions and that after the investors wired money to an attorney-client trust account, the co-conspirator would notify them when the bank had issued a bank guarantee or standby letter of credit. Howell admitted he was aware the investors’ money was not being held in escrow and that the co-conspirator did not obtain any of the financial instruments they promised the investors they would help them obtain. Howell further admitted that he and his co- conspirator used the investors’ money for their own personal expenses.
In his plea agreement, Howell described several instances in which he and his co- conspirator obtained hundreds of thousands of dollars from would-be investors in California. For example, in July of 2013, the co-conspirator convinced an investor to wire $100,000 to the attorney trust account, supposedly to secure a $2,000,000 bond; by August of 2013, the co-conspirator convinced another three victims to provide $250,000, ostensibly to obtain a $4,000,000 financial instrument; and in February of 2014, the co-conspirator tricked three more victims into wiring $300,000, supposedly to finance a $20,000,000 project. In sum, between May 2013 and February 2014, Howell admitted receiving over a $1 million from his co-conspirator pursuant to the scheme.
In addition, Howell admitted in his plea agreement that he was engaged in a money laundering scheme in Kentucky. Specifically, Howell admitted that in 2012, he defrauded a steel company of $500,000, and in 2015, he defrauded a married couple of $100,000.On September 17, 2015, federal grand jury in the Northern District of California indicted Howell, charging him with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and nine counts of wire fraud, in violation of 18 U.S.C. § 1343. In addition, on March 8, 2017, a federal grand jury in the Western District of Kentucky indicted Howell, charging him with two counts of wire fraud and two counts of money laundering, in violation of 18 U.S.C. § 1957. Based on the consent of both districts, the Kentucky proceedings were transferred to the Northern District of California. Pursuant to his plea agreement, Howell pleaded guilty to the conspiracy charge and one of the Kentucky money laundering counts.
In addition to the prison term, Judge Illston sentenced the defendant to a three-year period of supervised release and ordered him to pay $1,591,895 in restitution. Judge also ordered forfeiture of four parcels of real property, a Lamborghini automobile and a Campagna T Rex motorcycle. Howell has been in custody since May of 2018, and will begin serving his sentence immediately.
Assistant U.S. Attorneys Robin Harris and Chinhayi Cadet are prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the FBI and the Internal Revenue Service, Criminal Investigation.
Jamaican National Residing in New York Pleads Guilty to Passport Fraud OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that NEVILLE S. NICHOLSON, 60, formerly of the Bronx, New York, pleaded guilty today in Hartford federal court to passport fraud offenses.
According to court documents and statements made in court, in June 2014, Nicholson submitted an application for a U.S. passport, in the name of another individual, at the Ferguson Library in Stamford, Connecticut. With his application, Nicholson provided the passport acceptance agent with a false birth certificate, a fraudulent New York State driver’s license, and his photograph for inclusion in the passport. Nicholson then signed under oath claiming to be the other individual. The U.S. Department of State subsequently issued a passport to Nicholson.
Nicholson used the fraudulent passport to travel between New York and Jamaica in 2014 and 2016.
Nicholson pleaded guilty to one count of making a false statement in a passport application, and two counts of using a passport secured by false statement. Each offense carries a maximum term of imprisonment of 10 years. He is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson on January 24, 2019.
Nicholson has been detained since his arrest on related New York state charges on September 1, 2017.
This case has been investigated by the U.S. Department of State, Diplomatic Security Service, with assistance from the New York City Police Department. The case is being prosecuted by Assistant U.S. Attorney Hal Chen.
Justice Department Reports Major Increases in Victim Reporting and Number of Lawsuits Filed in One Year Since Launch of Initiative to Combat Sexual Harassment in HousingRead the Press Release
SIOUX FALLS – United States Attorney Ron Parsons and the Justice Department today announced the one-year anniversary of its initiative to combat sexual harassment in housing. Since its launch in October 2017 and nationwide expansion in April 2018, the Department has seen a major upswing in both reporting and enforcement. Over the past year, the Department has:
- Opened 34 new sexual harassment matters. This is more than any previous year and nearly five times the number of matters opened in the prior year.
- Filed six pattern-or-practice lawsuits challenging alleged sexual harassment in housing. This is more than the Department has filed in any previous year.
- Western District of Michigan - United States v. Tjoelker,
- District of Kansas - United States v. Cao Properties and Rentals,
- Southern District of Ohio - United States v. Klosterman,
- Northern District of New York - United States v. Waterbury,
- Northern District of Alabama - United States v. Hames,
- Western District of Oklahoma - United States v. Pelfrey.
“For landlords or property managers to try to use the power they have over tenants to extort sexual favors, or even commit assaults, is beyond reprehensible,” said U.S. Attorney Parsons. “No person should have to tolerate unwanted sexual advances in order to keep a roof over his or her head. Our District hosted a roundtable discussion in April regarding sexual harassment in housing, and we are dedicated to uncovering such violations wherever they exist and vigorously enforcing the law.”
“This important initiative is giving a voice to victims of sexual harassment in housing. It also sends the strong message that the Department is listening to victims and taking action against landlords and managers who attempt to prey on vulnerable individuals all over the country,” said Acting Assistant Attorney General John Gore for the Civil Rights Division. “The Justice Department remains committed to our goal to make more people aware that no one should have to choose between a home and the right to be free from sexual harassment.”
“A home can never be a place of peace and comfort for individuals who are subjected to sexual harassment,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “We still have work to do, but the initiative has taken tremendous steps this past year toward addressing this unlawful behavior and the Justice Department and HUD remain committed to doing even more to inform the public about their housing rights.”
The Department took several steps this past year to drive an increase in reporting and enforcement.
First, the Department held 20 roundtables about sexual harassment in housing at U.S. Attorneys’ Offices across the country. At these events, the Department creates opportunities for collaboration with local community partners, including engaging local law enforcement officers, legal aid offices, fair housing organizations, universities, civil rights organizations, and other groups.
U.S. Attorney Roundtables Hosted this Year:
Central District of California
District of Colorado
Middle District of Florida
Northern District of Georgia
Northern District of Iowa
District of Maryland
District of Massachusetts
Eastern District of Michigan
District of Minnesota
District of New Jersey (2)
Eastern & Southern Districts of New York (joint)
Northern District of Ohio
Eastern District of Pennsylvania
District of South Dakota
Northern District of Texas
District of Vermont
Western District of Virginia (2)
Second, the Department created an outreach toolkit designed to leverage the nationwide network of U.S. Attorney’s Offices and boost local outreach about sexual harassment in housing.
Third, the Department released a Public Service Announcement (PSA), in conjunction with the U.S. Department of Housing and Urban Development (HUD), featuring three women who were identified as victims of sexual harassment in DOJ lawsuits. The Department developed a 60-second video featuring three women who were injured parties in sexual harassment lawsuits brought by the Department under the Fair Housing Act. In the PSA, the women, in their own words, share the stories of how they were harassed and the impact the experience has on their lives. The PSA is posted on the Department’s YouTube channel.
Fourth, the Department launched a webpage on sexual harassment in housing. It is available in both English and Spanish. The webpage has resources available to download. This includes a partnership toolkit, flyers in 11 languages (English, Spanish, Arabic, Chinese (simplified), Chinese (traditional), Haitian Creole, Hindi, Korean, Tagalog, Urdu, and Vietnamese), palm cards in English and Spanish, and information sheets for advocates in English and Spanish.
Finally, the Department and HUD launched a new Task Force to Combat Sexual Harassment in Housing. It is focused on five key areas: continued data sharing and analysis, joint development of training, evaluation of public housing complaint mechanisms, coordination of public outreach and press strategy, and review of federal policies. The Task Force has facilitated collaboration between DOJ and HUD in drawing attention to the national PSA, including distributing it to public housing authorities, on HUD’s YouTube channel, and through social media.
More information about the Civil Rights Division and the civil rights laws it enforces is available at justice.gov/crt. If you believe you may be a victim of sexual harassment in housing, you should:
- call the Justice Department at 1-844-380-6178,
- send an e-mail to [email protected], or
- contact HUD at 1-800-669-9777.
If you have information or questions about any other housing discrimination, you can contact the Department at 1-800-896-7743.
Inmate Sentenced to 13 Months’ Imprisonment for Assaulting Correctional OfficerRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Daryl Johnson, age 33, formerly of Washington, D.C., was sentenced on October 30, 2018, by United States District Court Judge A. Richard Caputo to 13 months’ imprisonment and three years’ supervised release for assaulting a federal employee.
According to United States Attorney David J. Freed, Johnson, then serving a sentence for armed robbery, kicked a correctional officer in the face during an altercation at the United States Penitentiary at Canaan in September 2016. The correctional officer suffered minor injuries.
The case was investigated by the Federal Bureau of Investigation and officers at USP Canaan. Assistant U.S. Attorney Sean A. Camoni prosecuted the case.
# # #
Individual Arrested on Sex Trafficking and Other Offenses in Connection with Missing Person Corinna SlusserRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today that ISHI WONEY was charged with sex trafficking and other offenses involving the sexual exploitation of young women. WONEY was arrested yesterday in New Jersey and will be presented today before U.S. Magistrate Judge Sarah Netburn in federal court in Manhattan this afternoon.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Ishi Woney engaged in a vile form of exploitation, using force and other coercion to compel young women to engage in paid sex for his enrichment. We will continue to work with the FBI and NYPD to protect prospective victims of human trafficking and arrest and prosecute their predators.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, Woney compelled his victim to engage in prostitution through force and coercion, and he used both this victim and Corinna Slusser, who has been missing since September 2017, in online advertisements promoting prostitution. Human trafficking is a top priority for the FBI, and, as today’s charges demonstrate, we will continue to aggressively pursue justice for the victims of these heinous crimes. Ms. Slusser was last seen in Queens, New York, and we ask anyone with information concerning her whereabouts to contact us as 1-800-CALL-FBI or online at tips.fbi.gov.”
NYPD Commissioner James P. O’Neill said: “Today’s charges further affirm the NYPD’s unwavering commitment to protecting the victims of sex trafficking in and around the five boroughs of New York City. This crime is among the most heinous in society, and it is our job – and the job of all of our local, state, and federal law enforcement partners – to ensure that anyone who would seek to profit through the abuse and exploitation of another human being be brought to justice swiftly and successfully. I thank and commend the U.S. Attorney’s Office for the Southern District and the FBI for collaborating with us on this critical case. And we urge anyone who has any information related to this case, or any other, to contact law enforcement. Together, we will continue to make the safest large city in the nation even safer.”
According to the allegations in the Complaint sworn out in Manhattan federal court:[1]
Between approximately September 2017 and the present, WONEY engaged in sex trafficking by using force, fraud, and coercion to compel at least one female victim (“Victim-1”) to engage in sex acts in the Bronx and other locations in exchange for money. WONEY also transported Victim-1 to multiple states, including New York, to engage in prostitution, and purchased online advertisements promoting prostitution, some of which featured Victim-1 and Corinna Slusser, who has been a missing person since September 20, 2017, and was last seen in Queens, New York.
If you have any information related to the whereabouts of Corinna Slusser, please contact the FBI at 1-800-CALL-FBI or online at tips.fbi.gov, or the NYPD at 800-577-TIPS.
* * *
The charges in the Complaint against WONEY, 23, of New York, New York, are included in the chart below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of FBI and NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Daniel H. Wolf is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Count
Charge
Mandatory Minimum Prison Term
Maximum Prison Term
One
Use of an Interstate Facility to Promote, Manage, and Carry on Prostitution
N/A
5 Years
Two
Mann Act
N/A
10 Years
Three
Sex Trafficking by Means of Force, Threats, Fraud, and Coercion
15 Years
Life
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Huntingdon County Man Sentenced to 70 Year’s Imprisonment for Exploitation of MinorsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jay Eugene Reed, age 58, of Three Springs, Pennsylvania was sentenced on October 30, 2018, by United States District Court Judge Yvette Kane to 70 years’ imprisonment followed by a lifetime term of supervised release for exploitation of minors.
According to United States Attorney David J. Freed, the Pennsylvania State Police initially charged Reed in July 2015 with rape and sexual assault charges relating to a number of minors. During the investigation, the Pennsylvania State Police seized a cell phone, a computer, and other electronic devices belonging to Reed from his residence. On February 2, 2017, Reed pleaded guilty to all counts of the September 2015 federal indictment and admitted to both producing and possessing images of child pornography that were found on several of the seized devices. Reed also pleaded guilty to obstruction of justice for the letters he wrote to a minor victim and a family member asking that they not talk about what he had done.
Before the Court imposed the 70-year sentence, the defense offered testimony from defense expert Dr. Joseph Silverman, a psychiatrist. Dr. Silverman opined dementia, sleep apnea or brain dysfunction may have caused Reed to rape and molest the four minor victims when they were between the ages of 9 and 13, photograph their naked genitals approximately 200 times, collect 300 pornographic images of prepubescent children from the internet and then write letters trying to convince the witnesses not to talk about what he did. Judge Kane rejected the defense’s request to impose only the mandatory minimum of 15 years, describing Dr. Silverman’s testimony as “fanciful” and “not based in science.”
Reed also pleaded guilty to three counts of rape in the Court of Common Pleas of Huntingdon County on May 4, 2018. A sentencing date has not yet been scheduled.
This case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police and the Huntingdon County District Attorney’s Office. Assistant United States Attorney Meredith A. Taylor prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
# # #
Honduran National Man Pleads Guilty to Immigration CrimeRead the Press Release
Defendant had two prior deportations to Honduras
BECKLEY, W.Va. – A Honduran national man entered a guilty plea to the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Wilfredo Artiaga-Mejia faces up to two years of incarceration when he is scheduled to be sentenced on February 20, 2019. Artiaga-Mejia is also subject to deportation proceedings at the conclusion of any sentence. Stuart commended the investigative efforts of the U.S. Immigration and Customs Enforcement (ICE).
“My office is serious about prosecuting those who enter the United States illegally,” said United States Attorney Mike Stuart. “And we will continue to do so.”
On August 29, 2018, Artiaga-Mejia was found in Maxwelton, Greenbrier County, West Virginia by members of ICE after receiving a tip that individuals were in the country illegally and working in the area. Pursuant to this investigation, ICE agents approached Artiaga-Mejia and he surrendered to them. Agents immediately confirmed that Artiaga-Mejia was not in the United States legally, and took him into federal custody.
Artiaga-Mejia’s fingerprints matched him to two prior encounters where he was found in the United States illegally and deported from the United States to Honduras. He was also previously convicted of illegally entering the United States on December 4, 2012 in the Western District of Texas. Artiaga-Mejia-Chigo illegally reentered the United States prior to his capture in 2018. Artiaga-Mejia had not obtained permission to legally enter the United States and had not sought legal status or citizenship. Artiaga-Mejia also admitted to ICE agents that he was a Honduran citizen.
Assistant United States Attorney Erik S. Goes is responsible for the prosecution. United States District Judge Irene Berger presided over the hearing.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Guatemalan Drug Trafficker Who Coordinated Maritime Cocaine Loads on High Seas Pleads GuiltyRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287SAN DIEGO – Defendant Luis Carlos Melgar-Morales, aka Aquaman, pled guilty today in a San Diego federal district court to international conspiracy to distribute over 10,000 kilograms of cocaine, knowing that the cocaine would be distributed in the United States, in violation of Title 21, United States Code, Sections 959, 960 and 963. He also admitted to criminal forfeiture in the amount of $1,000,000.
Melgar-Morales, 28, admitted engaging in a two-year conspiracy to import and distribute cocaine in the United States and conceded he was a manager and leader of the responsible drug trafficking organization. In furtherance of the charged conspiracy, and at direction of Willian Lemus, Melgar-Morales arranged for multiple go-fast vessels to travel in international waters on many occasions to transport bulk cocaine from Colombia and Ecuador, known source countries for the cocaine, to Costa Rica and Guatemala, and from there the drugs would be transported to Mexico and smuggled into the United States.
Melgar-Morales also facilitated and coordinated the points of travel of the cocaine-laden go fast vessels as they met with refueling vessels on the high seas and communicated to the transportation network about the vessels’ status as they journeyed north. In addition, he facilitated and coordinated the successful delivery of cocaine vessels from Columbia and Ecuador to Costa Rica and Guatemala.
Melgar-Morales admitted that the international conspiracy involved the distribution of over 10,000 kilograms of cocaine during the two-year period from January 2016 to January 2018. Melgar-Morales was also involved in multiple events that resulted in law enforcement seizures including the following: May 19, 2017 (810 kilograms of cocaine); May 23, 2017 (980 kilograms of cocaine); November 9, 2017 (750 kilograms of cocaine); December 16, 2017 (1,082 kilograms of cocaine); and January 27, 2018 (601 kilograms of cocaine).
Homeland Security Investigation (HSI) Special Agents and Customs and Border Protection officers arrested Melgar-Morales at the Los Angeles airport on January 26, 2018, as he was returning to Guatemala, where he resided. Melgar-Morales’ associate, Willian Lemus-Lara, charged in a separate indictment, was arrested in Guatemala pursuant to an outstanding arrest warrant from the Southern District of California in June 2018, identified in United States v. Willian Lemus-Lara, 18CR0390DMS. Willian Lemus-Lara is currently in extradition proceedings.
“Federal law enforcement officials worked together in three countries to successfully disrupt a dangerous drug trafficking ring that sought to smuggle 10,000 kilos of cocaine (with a retail value of $600 million) into the U.S.,” said U.S. Attorney Adam Braverman. “Through effective partnerships and excellent intelligence gathering tools, we intercepted significant loads of this highly addictive stimulant, stripped traffickers of drug profits, and helped to safeguard our communities.”
“Today’s guilty plea highlights the success of collaborative efforts by HSI San Diego, DEA, Customs and Border Protection and other agency partners, as well as our HSI counterparts overseas. This joint effort has resulted in significant seizures of narcotics, firearms and other contraband and has helped law enforcement identify high ranking targets of this criminal organization,” said David Shaw, Special Agent in Charge for HSI San Diego. “HSI will remain committed in our investigative efforts to bring additional members to justice.”
“This case is an excellent example of the whole government approach set forth by the OCDETF Task Forces throughout our country,” said Drug Enforcement Administration Acting Special Agent in Charge Nathan Jones. “It is a testament to the outstanding men and women in federal law enforcement who work tirelessly day in and day out to identify, target, and bring to justice the drug trafficking and transnational organized crime groups that seek to import illicit drugs into the United States and undermine the very fabric of our nation.”
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise of federal, state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises.
Melgar-Morales’ sentencing date is scheduled for January 18, 2019 at 9:00 a.m. before the Honorable Dana M. Sabraw, United States District Court Judge.
DEFENDANT Case Number 18CR0391DMS
Luis Carlos Melgar-Morales, aka Aquaman Age: 28 Guatemala
SUMMARY OF CHARGES
International Conspiracy To Distribute 10,000 kilograms of cocaine into the United States
Maximum penalty: 10 years minimum to life; $1,000,000 fine; supervised release; $100 special assessment)
INVESTIGATING AGENCIES
Homeland Security Investigations (HSI)
Drug Enforcement Administration (DEA)
Customs and Border Protection (CBP)
U.S. Coast Guard
HSI Joint Task Force Investigations (JTF-I)
HSI Attaché Guatemala City, Guatemala
HSI Attaché Mexico City Mexico
Joint Interagency Task Force-South (JIATF-S)
Four Alleged Members of the Aryan Circle Gang Charged with Aggravated Assault in Aid of RacketeeringRead the Press Release
Four alleged members or associates of the Aryan Circle (AC) have been indicted and three arrested for their alleged roles in a Nov. 9, 2013 aggravated assault in Jefferson County, Missouri.
The indictments were announced by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Jeffrey B. Jensen of the Eastern District of Missouri.
Thomas B. Wilson, 43, of Villa Ridge, Missouri; Daniel B. Jerome, 31, of Wentzville, Missouri; Thomas Tisher, 34, of St Louis, Missouri; and Dustin M. Haney, 28, of Hermann, Missouri are charged in an indictment, returned by a federal grand jury on Oct. 31, and unsealed today, with aggravated assault in aid of racketeering. Daniel B. Jerome remains at large.
“These four defendants are alleged to have brutally assaulted their victim in order to establish or maintain their own status in the Aryan Circle gang,” said Assistant Attorney General Benczkowski. “Gangs like the Aryan Circle threaten the safety and security of all Americans, and the Criminal Division will target and aggressively prosecute any individual who commits acts of violence on behalf of a gang.”
According to the indictment, the AC is a powerful race-based, multi-state organization that operates inside and outside of state and federal prisons throughout the United States, and particularly in Missouri, Texas, Oklahoma and Louisiana. The AC was established in the mid-1980s within the Texas prison system (TDCJ). Recently, the AC’s structure and influence expanded to rural and suburban areas throughout Missouri, Texas, and Louisiana. The AC emerged as an independent organization during a period of turmoil within the Aryan Brotherhood of Texas (ABT). The AC was relatively small in comparison to other prison-based gangs, but grew in stature and influence within TDCJ in the 1990s, largely through violent conflict with other gangs, white and non-white alike.
The indictment further alleges that the AC enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, assault, robbery and threats against those who violate the rules or pose a threat to the organization. Members, and often, associates, are required to follow the orders of higher-ranking members without question.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by an Organized Crime Drug Enforcement Task Force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; FBI; Texas Department of Public Safety; Houston Police Department-Gang Division; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Montgomery County (TX) Precinct 1 Constable’s Office; Louisiana State Police; Indiana State Police; Indiana Department of Corrections; Carrollton (TX) Police Department; Waller (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office and the Tarrant County (TX) Sheriff’s Office.
The case is being prosecuted by Trial Attorney David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Angie Danis of the Eastern District of Missouri, in cooperation with the U.S. Attorney’s Office of the Western District of Louisiana and the U.S. Attorney’s Office of the Eastern District of Texas.
# # #
Four Alleged Members of the Aryan Circle Gang Charged with Aggravated Assault in Aid of RacketeeringRead the Press Release
Four alleged members or associates of the Aryan Circle (AC) have been indicted and three arrested for their alleged roles in a Nov. 9, 2013 aggravated assault in Jefferson County, Missouri.
The indictments were announced by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Jeffrey B. Jensen of the Eastern District of Missouri.
Thomas B. Wilson, 43, of Villa Ridge, Missouri; Daniel B. Jerome, 31, of Wentzville, Missouri; Thomas Tisher, 34, of St Louis, Missouri; and Dustin M. Haney, 28, of Hermann, Missouri are charged in an indictment, returned by a federal grand jury on Oct. 31, and unsealed today, with aggravated assault in aid of racketeering. Daniel B. Jerome remains at large.
“These four defendants are alleged to have brutally assaulted their victim in order to establish or maintain their own status in the Aryan Circle gang,” said Assistant Attorney General Benczkowski. “Gangs like the Aryan Circle threaten the safety and security of all Americans, and the Criminal Division will target and aggressively prosecute any individual who commits acts of violence on behalf of a gang.”
According to the indictment, the AC is a powerful race-based, multi-state organization that operates inside and outside of state and federal prisons throughout the United States, and particularly in Missouri, Texas, Oklahoma and Louisiana. The AC was established in the mid-1980s within the Texas prison system (TDCJ). Recently, the AC’s structure and influence expanded to rural and suburban areas throughout Missouri, Texas, and Louisiana. The AC emerged as an independent organization during a period of turmoil within the Aryan Brotherhood of Texas (ABT). The AC was relatively small in comparison to other prison-based gangs, but grew in stature and influence within TDCJ in the 1990s, largely through violent conflict with other gangs, white and non-white alike.
The indictment further alleges that the AC enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, assault, robbery and threats against those who violate the rules or pose a threat to the organization. Members, and often, associates, are required to follow the orders of higher-ranking members without question.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by an Organized Crime Drug Enforcement Task Force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; FBI; Texas Department of Public Safety; Houston Police Department-Gang Division; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Montgomery County (TX) Precinct 1 Constable’s Office; Louisiana State Police; Indiana State Police; Indiana Department of Corrections; Carrollton (TX) Police Department; Waller (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office and the Tarrant County (TX) Sheriff’s Office.
The case is being prosecuted by Trial Attorney David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Angie Danis of the Eastern District of Missouri, in cooperation with the U.S. Attorney’s Office of the Western District of Louisiana and the U.S. Attorney’s Office of the Eastern District of Texas.
Former Reality Television Series “Bad Girl” Pleads Guilty to FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that SHANNADE CLERMONT pled guilty to one felony count of wire fraud for making and attempting more than $20,000 in fraudulent charges using the stolen debit card information of a deceased man she had visited for a prostitution date. CLERMONT pled guilty before U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Geoffrey S. Berman said: “Former reality TV ‘Bad Girl’ Shannade Clermont stole debit card information from a man she visited for a prostitution date in his Manhattan apartment. When he died of an overdose, Clermont used the deceased man’s identity to make tens of thousands of dollars in fraudulent purchases. She has now pled guilty to fraud and faces time in federal prison. This case demonstrates that in reality, those who commit debit card fraud will be prosecuted to the fullest extent of the law.”
According to the allegations contained in the Complaint and Indictment to which CLERMONT pled guilty:
The NYPD and the United States Attorney’s Office for the Southern District of New York have been investigating the overdose death of a male individual (the “Victim”), who was found dead on the morning of February 1, 2017, in his apartment at 250 East 53rd Street in Manhattan, New York (the “Victim Apartment”). During the course of that investigation, law enforcement learned that CLERMONT visited the Victim for a prostitution date at the Victim Apartment the previous evening (January 31, 2017), and stole two debit cards from his wallet. CLERMONT then used the stolen debit card information to make or attempt to make more than $20,000 in fraudulent purchases during the months following the Victim’s death, including to pay her rent and phone bills, purchase flights, and make several online purchases of thousands of dollars of clothing and other merchandise.
CLERMONT also created and used a fake email account in the Victim’s name to falsely represent to third parties that she was the Victim, in order to commit fraud using the Victim’s identity. Specifically, on or about April 3, 2017, approximately two months after the Victim’s death, the fake email account was used to register an account with Western Union in the name of the Victim, which was used to initiate a fraudulent money transfer of $1,000 from the Victim to CLERMONT.
* * *
CLERMONT, 24, of Georgia, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years. Sentencing before Judge Buchwald is scheduled for February 13, 2019 at 2:30pm.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD.
The prosecution of this 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.
Former Philadelphia Police Officer Pleads Guilty to Conspiring with Former Baltimore Police GTTF Detective to Distribute Heroin and Other NarcoticsRead the Press Release
Baltimore, Maryland –Former Philadelphia Police officer Eric Troy Snell, age 34, of Philadelphia, Pennsylvania, pleaded guilty today to conspiracy to distribute and possess with intent to distribute heroin and cocaine. Snell admitted that he conspired with former Baltimore Police Gun Trace Task Force (GTTF) Detective Jemell Rayam and others to sell heroin and cocaine seized by GTTF members. Snell pleaded guilty on the fourth day of his trial, which began on October 29, 2018.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
“The community needs to know that when we have evidence of wrongdoing, we will follow that evidence and prosecute you--whether you wear a badge or not,” said Maryland U.S. Attorney Robert K. Hur. “Prosecuting law enforcement officers is painful, but necessary if we are to restore the public’s trust in our justice system. No one is above the law.”
“Law enforcement officers are given incredible power to enforce the law and ensure justice. Thwarting abuse of this authority is necessary to protect the rights of our citizens and uphold confidence in law enforcement. Anyone who takes advantage of their position for personal gain or in persistence of criminal misconduct must and will be held accountable,” said Special Agent in Charge Gordon B. Johnson of the FBI Baltimore Field Office.
According to court documents and statements at his plea hearing today, Snell is a former Baltimore Police Department (BPD) Officer, who received his training at the Baltimore Police Academy with Jemell Rayam, a former Detective with the BPD Gun Trace Task Force. Snell left the BPD in March 2008, and became an officer in the Philadelphia Police Department on September 29, 2014.
Snell admitted that from at least October 2016 through June 26, 2017, he conspired with Rayam and others to sell heroin and cocaine seized by members of the BPD in Maryland. On October 3, 2016, GTTF Sergeant Wayne Jenkins, Rayam, and other detectives, engaged in a high-speed police chase of G.H. G.H. threw nine ounces of cocaine out of the window of his vehicle before crashing near Mondawmin Mall in Baltimore. The BPD officers retrieved the cocaine and Jenkins told Rayam to sell most of the cocaine and give Jenkins the proceeds of the sale, which Rayam agreed to do.
On October 18, 2016, after learning about the cocaine from Rayam, Snell asked Rayam to give him the cocaine that was stolen from G.H. and not submitted as evidence to BPD. Rayam agreed and on October 20, 2016, traveled to Philadelphia to meet Snell at his residence. Ryam provided the cocaine to Snell, who made arrangements to meet with Snell’s brother, who would sell the cocaine for Snell and Rayam. Later that day. Snell, Rayam, and Snell’s brother met and discussed: the sale of the cocaine; the price the cocaine should be sold for; the amount of money that Snell’s brother would pay Snell after the sale of the cocaine; and the amount of money that Snell would pay Rayam after the sale of the cocaine. On October 23, 2018, Rayam and Snell agreed that Rayam would provide Snell with heroin for Snell to sell and distribute.
Snell admitted that he communicated with Rayam on October 27, 2016, to advised that Snell had received “2K” ($2,000) from the sale of illegal drugs and subsequently deposited $1,000 into Rayam’s bank account. Snell met Rayam several other times to coordinate the drug trafficking and exchange drugs and cash. Snell admitted that he paid Rayam on subsequent occasions for drug proceeds, including making a $2,500 deposit into Rayam’s bank account.
Following Rayam’s arrest on June 26, 2017, Snell spoke with Rayam on the recorded phone system in place at the jail where Rayam was detained. Snell instructed Rayam to “say less” on the recorded jail phones so that law enforcement would not detect their illegal drug trafficking.
On November 14, 2017, Snell was arrested and transported to Baltimore for his initial appearance. During the transport, Snell admitted that he lied to FBI agents when he told them that the payments he made to Rayam were for the repayment of a gambling debt, when in fact, the payments were for drugs he received from Rayam.
During a search of Snell’s residence on November 14, 2017, law enforcement recovered a box in which Snell stored items containing cocaine residue, next to a package of razor blades that were used to cut and process narcotics for distribution, as well as .40-caliber and 9 mm handgun ammunition. From the master bedroom, law enforcement recovered Snell’s Philadelphia Police Department service weapon, a 9 mm handgun, as well as a 40-caliber handgun, and two unregistered short-barrel assault rifles.
Snell admits that the amount of narcotics reasonably foreseeable to him in furtherance of the conspiracy is the equivalent of at least 100 kilograms of marijuana.
Snell faces a maximum sentence of 20 years in prison. United States District Judge Catherine C. Blake has scheduled sentencing for January 30, 2019, at 2:15 p.m.
Jemell Lamar Rayam, age 38, of Owings Mills, Maryland, previously pleaded guilty to one count of racketeering conspiracy including multiple robberies, and overtime fraud, and is awaiting sentencing.
United States Attorney Robert K. Hur commended the FBI for its work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Derek E. Hines and Leo J. Wise, who prosecuted these Organized Crime Drug Enforcement Task Force cases.
# # #