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16 October 2018
Springfield Man Sentenced to 15 Years for Sexual Exploitation of a ChildRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Mo., man was sentenced in federal court today for the sexual exploitation of a child.
Kelly Martin Roods, 26, was sentenced by U.S. District Judge M. Douglas Harpool to 15 in federal prison without parole. The court also sentenced Roods to 15 years of supervised release following incarceration.
On April 19, 2018, Roods pleaded guilty to the sexual exploitation of a child. Roods admitted that he used his cellphone to record a video of himself and a 17-year-old minor engaged in sexually explicit conduct.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Greene County, Mo., Sheriff’s Department and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
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."
Seven People Sentenced to Prison on Federal Charges Following Investigation into Drug Sales in Southwest WashingtonRead the Press Release
WASHINGTON –Antonio Spencer, 25, of Washington, D.C., was sentenced today to a five-year prison term after pleading guilty to a federal drug offense stemming from an investigation into the trafficking of PCP, crack cocaine and heroin in Southwest Washington. Six co-defendants previously were sentenced to prison terms in the case.
The announcement was made by U.S. Attorney Jessie K. Liu, Thomas L. Chittum III, Special Agent in Charge of the Washington Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Spencer is among eight people to plead guilty to federal charges as a result of an investigation by ATF and the MPD targeting the area near the King Greenleaf Recreation Center, in the 200 block of N Street SW. The investigation began after authorities noticed an increase in drug sales and violent activity in the area, which is in MPD’s First Police District.
According to the government’s evidence, in addition to the area near the recreation center, drug sales took place in various alleys and corners, including near a church in the 1300 block of First Street SW, near a food market in the 1300 block of Half Street SW, and near a convenience store in the 1100 block of South Capitol Street SW.
All eight defendants are from Washington, D.C.
Spencer pled guilty in August 2018, in the U.S. District Court for the District of Columbia to one count of conspiring to distribute and possess with intent to distribute PCP, heroin, and crack cocaine. He was sentenced by the Honorable Senior Judge Thomas F. Hogan.
The six defendants who previously were sentenced include:
-Maurice Spencer, 20. He pled guilty to conspiracy to distribute PCP and was sentenced to 12 months and a day in prison. He is the younger brother of Antonio Spencer.
-Kione Banks, 21. He pled guilty to conspiring to distribute PCP and was sentenced to 33 months in prison.
-Raymond Boston 27. He pled guilty to conspiring to distribute PCP and was sentenced to two years in prison.
-Jerome Fuller, 33. He pled guilty to distribution of PCP and was sentenced to five years and three months in prison.
-Damion Littman, 32. He pled guilty to distribution of PCP and was sentenced to 37 months in prison.
-Morriko Washington, 24. He pled guilty to possession of a firearm in furtherance of a drug trafficking crime and was sentenced to five years in prison.
Following their prison terms, the defendants will be placed on periods of supervised release.
The eighth defendant, Davon Warren, 22, is to be sentenced on Nov. 28, 2018.
This case was investigated by ATF and MPD. It is being prosecuted by Assistant U.S. Attorney Kevin L. Rosenberg and William Schurmann, of the Violent Crime and Narcotics Trafficking Section of the U.S. Attorney’s Office for the District of Columbia.
Schuele Boys Gang Drug Supplier Sentenced to over 10 Years in Federal PrisonRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Julio Contreras, a/k/a Blue Demon, 34, of McAllen, Texas, who was convicted of racketeering conspiracy involving five kilograms or more of cocaine, and conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine, was sentenced to serve 121 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Wei Xiang, who handled the case, stated that the defendant was a main source of supply of cocaine for the Schuele Boys Gang in Buffalo. The gang operated in the Schuele Avenue area of the East Side of Buffalo and was responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine, and marijuana. Contreras was arrested in July 2015 at the Anzalduas Port of Entry in Mission, Texas as he attempted to return to the United States from Mexico.
Contreras supplied the Schuele Boys with upwards of $1,000,000 of cocaine on a monthly basis. In addition, the defendant purchased and built assault rifles in Texas that he then sold or traded to Mexican sources in connection with his cocaine trafficking. Contreras traveled to Buffalo on multiple occasions to meet with co-defendants Aaron Hicks and Letorrance Travis. On December 18, 2010, Hicks and the defendant were arrested by police outside a residence belonging to Travis on Courtland Avenue.
Contreras was one of 28 Schuele Boys Gang members, associates and other individuals arrested and convicted in this case.The sentencing is the culmination of an investigation by Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent-in-Charge Gary Loeffert; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent-in-Charge, New York Field Division; the New York State Police, under the direction of Major Edward Kennedy; and the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard. Additional assistance was provided by the Erie County District Attorney’s Office, the Edinboro University Police Department in Pennsylvania, the West Tennessee Judicial Drug Task Force, the City of McAllen, Texas Police Department, HSI Harlingen, Texas, and the FBI offices in Houston, Texas and Jackson, Mississippi.
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Reno Man Sentenced to 15 Years in Prison for Selling Methamphetamine and HeroinRead the Press Release
RENO, Nev. – LeCharles Edward Baldon Sr. was sentenced Monday to 184 months in federal prison for distributing methamphetamine and heroin in the Reno area, announced U.S. Attorney Dayle Elieson for the District of Nevada, Special Agent in Charge Aaron C. Rouse for the FBI Las Vegas Division, and Assistant Special Agent in Charge Daniel W. Neill for the DEA Las Vegas office.
Baldon pleaded guilty in May to one count of possession with intent to distribute methamphetamine. United States District Judge Larry R. Hicks presided over the sentencing hearing.
Between November 18, 2016 and January 17, 2017, Baldon possessed and distributed 339.74 grams of pure methamphetamine and 91.73 grams of heroin in the Reno area. Specifically, on November 18, 2016, Baldon sold heroin to an individual at the Winco Foods parking lot. Then, during three separate drug transactions in December, he sold heroin and methamphetamine to an individual at a Target parking lot and Winco Foods parking lot. On January 17, 2017, task force agents executed search warrants on Baldon’s residence and storage unit. During execution of the warrants, law enforcement recovered methamphetamine and heroin, a firearm, and two scales (which are known to law enforcement to aid in the distributions of narcotics).
Baldon is a multi-convicted felon. He has previously been convicted of carjacking and robbery in California, and has two additional convictions for being a felon in possession of a firearm.
The case was investigated by the Northern Nevada Safe Streets Task Force and the DEA. Assistant U.S. Attorney Megan Rachow prosecuted the case.
Led by the FBI, the Northern Nevada Safe Streets Task Force pursues violent gangs through sustained, proactive, coordinated investigations to obtain prosecutions on violations such as racketeering, drug conspiracy, and firearms violations. The Safe Streets Task Force concept expands cooperation and communication among federal, state, and local law enforcement agencies, increasing productivity and avoiding duplication of investigative efforts.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN. For more information about PSN, visit www.justice.gov/usao-nv.
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Randolph County woman admits to methamphetamine distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Sara Payge Gibson, of Elkins, West Virginia, has admitted to distributing methamphetamine, United States Attorney Bill Powell announced.
Gibson, age 25, pled guilty today to one count of “Distribution of Methamphetamine.” Gibson admitted to selling methamphetamine, also known ‘Ice,” in Randolph County in November 2016.
Gibson faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the cases on behalf of the government. The Mountain Region Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Randolph County residents indicted for drug distributionRead the Press Release
ELKINS, WEST VIRGINIA – Three Elkins, West Virginia residents were indicted today by a federal grand jury on drug charges, United States Attorney Bill Powell announced.
Jeffrey Lynn Woods, age 57, was indicted on one count of “Conspiracy to Distribute More than 5 Grams of Methamphetamine,” two counts of “Distribution of Methamphetamine,” one count of “Maintaining Drug-Involved Premises – Aiding and Abetting,” two counts of “Possession with Intent to Distribute Methamphetamine – Aiding and Abetting,” one count of “Unlawful Possession of Firearm,” two counts of “Possession with Intent to Distribute Methamphetamine,” one count of “Possession with Intent to Distribute Heroin,” one count of “Possess a Firearm in Futherance of a Drug Trafficking Crime,” and one count of “Possession with Intent to Distribute Fentanyl – Aiding and Abetting.”
Christine Kay Woods, age 57, was indicted on one count of “Conspiracy to Distribute More than 5 Grams of Methamphetamine,” one count of “Maintaining Drug-Involved Premises – Aiding and Abetting,” two counts of “Possession with Intent to Distribute Methamphetamine – Aiding and Abetting,” one count of “Possession with Intent to Distribute Methamphetamine,” and one count of “Possession with Intent to Distribute Fentanyl – Aiding and Abetting.”
Crystal Key Hensley, age 38, was indicted on one count of “Conspiracy to Distribute More than 5 Grams of Methamphetamine,” one count of “Distribution of Methamphetamine,” and one count of “Maintaining Drug-Involved Premises.”
The three are accused of distributing more than five grams of methamphetamine in Randolph County from the fall of 2016 6o July 2018. Jeffrey and Christine Woods are also accused of using a business called “Lost Treasures” in Elkins to distribute methamphetamine.
During the investigation, more than $3500 was seized, along with multiple firearms.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the cases on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives; the Mountain Region Drug & Violent Crimes Task Force, a HIDTA-funded initiative; and the Elkins Police Department investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Randolph County man admits to heroin distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA –Mark Jay Courtney, of Montrose, West Virginia, has admitted to distributing heroin, United States Attorney Bill Powell announced.
Courtney, age 39, pled guilty today to one count of “Distribution of Heroin.” Courtney admitted to selling heroin in Randolph County in January 2018.
Courtney faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the cases on behalf of the government. The Mountain Region Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Raleigh Man Sentenced to 180 Months in Prison for Drug Trafficking, Firearms OffensesRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today in federal court, United States District James C. Dever III sentenced STEVEN WILLIAM NOWELL, a/k/a “Shoota,” 28, of Raleigh, North Carolina, to 180 months in prison, followed by 3 years of supervised release.
NOWELL was charged in a three-count Indictment that was issued by the grand jury for the Eastern District of North Carolina on January 10, 2018. The indictment charged him with two counts of distribution and possession with the intent to distribute a quantity of cocaine base (crack) and one count of possession of a firearm by a felon. On July 9, 2018, NOWELL pled guilty to one count of distribution and possession with the intent to distribute a quantity of cocaine base (crack) and possession of a firearm by a felon.
In June of 2016, the Raleigh Police Department conducted controlled purchases of cocaine base (crack) from NOWELL on Bragg Street in Raleigh. On October 27, 2017, a Garner Police Department officer conducted a traffic stop on a vehicle driven by NOWELL. NOWELL then jumped and ran from the vehicle, and he was observed placing his hands on his waist as if he was carrying a weapon. NOWELL was later found in a nearby wooded area. A subsequent search was conducted of that area, and a .40 caliber handgun was located, along with marijuana and NOWELL’s jacket.
This case was brought by the United States Attorney’s Office through partnerships with the Raleigh Police Department, Garner Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant United States Attorney Scott A. Lemmon.
Project Safe Neighborhoods Yellowstone County shows progress in fighting violent crimeRead the Press Release
BILLINGS – In the past six months, law enforcement officers have charged 106 persons in federal and state court, seized 160 pounds of methamphetamine and confiscated 52 firearms from the Yellowstone County community as part of Project Safe Neighborhoods, a federal program to reduce violent crime through a multi-jurisdictional law enforcement effort.
Violent crime in the community is a serious problem. Billings Police Department information shows the violent crime rate has increased 75 percent from 2010 to 2017. And violent crime in Montana has increased almost 35 percent from its low in 2010 through 2016, according to the FBI’s Uniform Crime Reports.
More recently, the 2018 first quarter figures of murders, robberies and aggravated assaults in Yellowstone County were up more than 29 percent from the first quarter average of the prior two years.
Since PSN began in April, violent crime in the community has decreased back to previous levels.
Montana U.S. Attorney Kurt Alme said the six-month figures, for the second and third quarters, indicate that murders, aggravated assaults and robberies are down 1 percent below the average of the previous two years.
“We believe the numbers show that PSN is working to reduce violent crime but that more work needs done,” Alme said.
Alme thanked all of PSN’s law enforcement partners for their work and commitment in investigating, arresting and prosecuting individuals accused of violent crimes.
Yellowstone County Attorney Scott Twito said PSN’s message continues to be, “If you commit armed robbery, push meth or commit a firearms offense, you will be arrested and you will be prosecuted to the full extent of the law.”
PSN is a reinvigorated U.S. Department of Justice initiative that identifies the most violent criminals in high-crime areas and works with federal, state and local law enforcement and community partners to develop a crime-reduction and substance abuse prevention and treatment strategy. DOJ celebrated PSN’s one-year anniversary earlier this month.
PSN Yellowstone County has been working to arrest armed robbers, methamphetamine traffickers and violent felons possessing firearms. Law enforcement officials have identified methamphetamine as a primary cause for the increase in violent crime.
Information from PSN Yellowstone County’s first six months shows that 106 individuals have been charged, with 87 individuals being prosecuted in U.S. District Court and 19 individuals, who face more than 40 serious felony charges, being prosecuted in state District Court. The state cases include persons charged and revocations. Federal prosecutors intend to present charges against another 14 individuals soon.
The crimes charged include drug trafficking, armed robberies, firearms violations and other offenses.
Statewide, the PSN program since January has resulted in 187 individuals being charged in federal court.
In addition, the U.S. Marshal’s Service Montana Violent Offender Task Force has served warrants on 288 individuals since April 1.
Methamphetamine seized through PSN Yellowstone County has totaled 160 pounds, which is the equivalent of about 579,840 doses and has a street value of about $7,273,200. Law enforcement also seized marijuana, heroin and cocaine.
Law enforcement has confiscated 52 firearms, including six semi-automatic assault rifles and an assortment of semi-automatic handguns and shotguns.
To help fund PSN in Montana, DOJ earlier this month awarded $136,802 to the Montana Board of Crime Control for PSN initiatives in Yellowstone and Missoula counties. The funding is part of $30 million in grants issued nationwide at PSN’s one-year anniversary. Some of the money will help the Billings Police Department analyze PSN cases to understand where and when violence is happening and who is committing it so law enforcement can better focus its resources.
PSN Yellowstone County’s partners include the U.S. Attorney’s Office; Yellowstone County Attorney’s Office; Montana Department of Justice’s Prosecution Services Division, Highway Patrol and the Division of Criminal Investigation; the Montana Department of Correction’s Adult Probation and Parole Division; the Billings and Laurel police departments; the Yellowstone County Sheriff’s Office; Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI, Homeland Security Investigations and the U.S. Marshal’s Service.
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Pleasants County man found guilty of firearms violationRead the Press Release
CLARKSBURG, WEST VIRGINIA – After a two-day trial, Willard Lee Moss, Jr., of Saint Marys, West Virginia, was found guilty by a jury of a firearms violation, United States Attorney Bill Powell announced.
Moss, age 37, was found guilty of one count of “Domestic Violence Offender in Possession of a Firearm.” Moss, having previously been convicted of two separate domestic violence offenses in Pleasants County, possessed one handgun, three rifles, and two shotguns in his home in February 2018.
Moss faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Assistant U.S. Attorney Davis J. Perri is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives, the West Virginia State Police, and the Pleasants County Sheriff’s Office investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Pittsburgh Resident Admits Robbing Key Bank in Downtown in February 2018Read the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of bank robbery, United States Attorney Scott W. Brady announced today.
Darryl Leon Wilson, 61, pleaded guilty to one count before United States District Judge Nora Barry Fischer. In connection with the guilty plea, the court was advised that Wilson robbed a Key Bank.
The Court was further advised that on February 22, 2018, Wilson entered the Key Bank wearing a purple hat and scarf covering most of the defendant’s face. When the teller requested that the defendant remove the scarf and hat, the defendant stated, "If I don’t get out of here fast, someone will get hurt." The defendant then placed a note on the counter which read, "Someone will get shot if you don’t give the 100’s 50’s 20’s and 10’s, No dye packs, smile and move fast Sorry." The teller gave the defendant lose $20 and $5 bills for a total of $540.
Utilizing surveillance video from surrounding businesses, including the Warner Center, taken before, during and after the bank robbery, officers identified the defendant. When they went to the defendant’s house on March 2, 2018, Wilson answered the door with hands up and stated, "I did it." After officers identified themselves, Wilson stated, "I know why you’re here, I robbed the bank."
Wilson admitted robbing the bank, and admitted giving the teller a note that demanded money. After receiving the money, the defendant walked from the bank and discarded the scarf, knit cap and skirt. The defendant then walked through Downtown Pittsburgh and into the Warner Center before catching a bus. The defendant advised the money was used to pay back borrowed money and to purchase a cellphone. When the defendant was arrested, the defendant was wearing the same tennis shoes worn when the bank was robbed.
Judge Fischer scheduled sentencing for March 7, 2019. The law provides for a maximum total sentence of not more than 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Wilson remain detained.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the City of Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Wilson.
Pickens Man Pleads Guilty to Child Porn ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated today that Jeffrey Lee Harris, age 31, of Pickens, pled guilty in federal court in Spartanburg, to possession of child pornography, a violation of Title 18, United States Code, Section 2252A. United States District Judge Donald C. Coggins, of Spartanburg, accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that law enforcement conducted a proactive investigation involving individuals obtaining child pornography. Law enforcement learned that Harris had used Bitcoin to purchase a membership in a foreign website that specialized in child pornography.
Officers obtained Harris’s computers and interviewed him. On the computers, officers found multiple images and videos of children, some prepubescent, engaged in sexual activity and the lascivious display of the genitals. After being given his Miranda warnings, Harris admitted that he had sought out and downloaded the child pornography found on his computer.
Ms. Lydon stated the maximum penalty Harris can receive is a fine of $250,000 and/or imprisonment for 20 years, supervised release of up to life, plus a special assessment of $100.
The case was investigated by agents with the Department of Homeland Security, Office of Investigations. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.
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Owner of Pharmacies Charged with Conspiracy to Defraud IRSRead the Press Release
TRENTON, N.J. – The owner of several retail pharmacies, including a pharmacy in Piscataway, New Jersey, was arraigned today on charges he conspired to defraud the IRS, U.S. Attorney Craig Carpenito announced.
Rao Desu, 51, of Warren, New Jersey, was charged by indictment with two counts of conspiracy to defraud the IRS and four counts of aiding and assisting in subscribing to false tax returns. Desu was arraigned before U.S. District Judge Michael A. Shipp in Trenton federal court and pleaded not guilty.
According to documents filed in this case and statements made in court:
Rao Desu was a 50 percent owner in DVS Pharma Inc., (d/b/a Heights Pharmacy), a retail pharmacy in Piscataway. Darshna Desai was the other 50 percent owner and worked as the lead pharmacist. From April 2004 through November 2013, Desu conspired with Desai to conceal from the IRS the cash income that was earned by the pharmacy as part of a cash-skimming scheme. In particular, Desu’s relative, who assisted at times in the operation of several of Desu’s businesses, instructed Desai to separate the cash earned by Heights Pharmacy from other income received, remove a portion of the cash that was paid to Desai as cash salary, and then split the remainder in two, with one portion given to Desu and the other portion given to Desai.
Desu was also a 50 percent owner of Manvihar Pharmacy (d/b/a Arthur Avenue Pharmacy) in Bronx, New York. The other 50 percent owner in Arthur Avenue Pharmacy worked at Arthur Avenue Pharmacy as the lead pharmacist. From June 2005 through November 2013, Desu conspired with the co-owner to conceal from the IRS the cash income that was earned by the pharmacy as part of a separate cash-skimming scheme. Specifically, Desu instructed the co-owner to separate the cash earned by Arthur Avenue Pharmacy from other income received, and to split the cash in two, giving half to Desu and giving half to the co-owner.
For tax years 2004 through 2012 Desu and Desai filed false corporate income tax returns, IRS Forms 1120S, for Heights Pharmacy, which failed to disclose the cash that Desai received in salary and that was split between Desu and Desai. From tax year 2005 through 2012, Desu and the co-owner filed false IRS Forms 1120S for Arthur Avenue Pharmacy, which failed to disclose the cash that was split between Desu and co-owner. Accordingly, for tax years 2004 through 2012, Desu filed false personal income tax returns, IRS Forms 1040, which failed to disclose the cash that Desu received from both Heights Pharmacy and Arthur Avenue Pharmacy.
Desai pleaded guilty to conspiracy to defraud the IRS in 2014. Her sentencing is pending.
Conspiracy to defraud the IRS carries a maximum potential penalty of five years in prison and a $250,000 fine. Assisting and aiding in subscribing to false tax returns carries a maximum potential penalty of three years in prison and a $100,000 fine.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with for the investigation leading to today’s charge. Carpenito also thanked special agents of the U.S. Department of Justice, Office of Inspector General, under the direction of Acting Special Agent in Charge Ron G. Gardella for their role in the investigation.
The government is represented by Assistant U.S. Attorneys Jacques S. Pierre and Karen D. Stringer of the Special Prosecutions Division.
The allegations and charges in the Indictment are only accusations and the defendant is considered innocent unless and until proven guilty.
Orange County Man Sentenced to Seventeen Years for Receipt of Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced Wesley Kenneth McVay, (41, Orlando) to 17 years in federal prison for receiving child pornography. McVay, a registered sex offender, was originally charged by criminal complaint on March 2, 2018, after a search warrant was conducted at his home. He pleaded guilty on June 19, 2018.
According to court documents and evidence presented at the sentencing hearing, McVay came to the attention of law enforcement after he distributed child pornography to an undercover law enforcement officer using a file-sharing program. McVay’s child pornography collection included 44 images and 38 videos. Many of these images depicted the sexual abuse of children under the age of 12.
“Wesley Kenneth McVay will be incarcerated for 17 years for his horrific acts. This case exemplifies HSI’s ability to coordinate and pursue investigative efforts with our state law enforcement partners,” said James Spero, special agent in charge of HSI Tampa. “Homeland Security Investigations is committed to bringing to justice those who sexually exploit children.”
“FDLE’s dedicated agents are committed to working with our federal partners to keep our community safe,” said FDLE Orlando Special Agent in Charge Danny Banks. “We will continue to arrest those who take advantage of our children in appalling ways, robbing them of their innocent nature.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Shawn P. Napier.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Operation Goodfellas Results in Arrests of Multiple Hampton Roads Men for $19 Million Drug Trafficking ConspiracyRead the Press Release
NORFOLK, Va. – Nearly 150 law enforcement officers from the FBI, DEA, Norfolk Police, and the U.S. Marshals participated in Operation Goodfellas this morning in Norfolk, executing arrest warrants on five Hampton Roads men for their alleged participation in a $19 million drug trafficking conspiracy. One man remains a fugitive.
“These defendants allegedly distributed approximately $19 million of illegal narcotics in Hampton Roads,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “The resources and collaborative efforts used to investigate this alleged drug trafficking organization is a prime example of the positive impact of federal, state, and local cooperation. My sincere thanks to our law enforcement partners for their outstanding efforts on this case.”
According to allegations in the indictment, from approximately 2009 to present, several significant drug traffickers from the Ingleside section of Norfolk have been involved in distributing large quantities of heroin, cocaine, crack cocaine and marijuana. In September 2016, law enforcement began making controlled buys of cocaine from Reginald Sam Beale, 38, of Norfolk, and continued making controlled purchases of cocaine, heroin, and crack cocaine from Beale’s co-conspirators, including Maurice Antonio Barnes, 36, of Norfolk, Brandon Jaami Williams, 37, of Virginia Beach, Breon Lashawn Dixon, 39, of Chesapeake, and Johnell Deshawn Stepney, 34, of Norfolk. Through June 2018, law enforcement made a total of 29 controlled purchases from the defendants. Evidence obtained in the Summer of 2018 established that Barnes’ local source of supply was obtaining large amounts of cocaine and heroin from a Los Angeles based source of supply. The cocaine was being trucked to Virginia and off-loaded at a public storage facility in Virginia Beach in 10 and 20-kilo loads. In June 2018, Williams was arrested with 13 kilograms of cocaine (with a street value over $500,000) when he tried to transfer the cocaine from an apartment in the luxury ICON apartments in downtown Norfolk to another luxury apartment on Granby Street.
“This investigation represents the FBI's long-standing commitment to working with our law enforcement partners at every level to strangle the source and supply of dangerous drugs in our communities,” said Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office. “No one agency can do it alone and it is now more important than ever that we work together as one team in this fight. However, to make the greatest impact we also need allies in the community. Brazen criminals who poison and terrorize our neighborhoods often hide in plain sight, and citizens who come forward with information about criminal activity help law enforcement make Hampton Roads a safer place to live, work, and raise our families.”
Additional evidence led to the arrest of two members of the California and Mexico-based drug trafficking organization, Jose Moices Luna-Abrego, 20, of Los Angeles, and Ulises Abel Garcia-Razo, 39, of Mexico, after they flew to Virginia to attempt to retrieve some of the cocaine previously shipped, and collect over $500,000 in proceeds. Luna-Abrego, who is a United States citizen, and Garcia-Razo, a Mexican citizen, were arrested in July 2018 in a successful hotel sting operation conducted by FBI, DEA and Norfolk Police.
“For years, members of this organization have allegedly distributed significant quantities of narcotics throughout Hampton Roads,” said Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division. “These indictments and arrests represent the dismantling of an allegedly prominent drug trafficking organization responsible for the smuggling, transportation and distribution of substantial quantities of narcotics from Los Angeles to Norfolk. This successful investigation demonstrates the commitment of the DEA, FBI and Norfolk Police Department working together to protect the citizens of this community.”
A conservative estimate of the amount of narcotics this drug trafficking organization is responsible for distributing is 11 1/2 kilos of crack, 436 kilos of cocaine, 54 kilos of heroin, 1 ounce of fentanyl and over 20 pounds of marijuana, with a street value over $19 million.
The case was investigated as part of the Organized Crime Drug Enforcement Task Forces (OCDETF), Operation Goodfellas. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, and Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement. Assistant U.S. Attorney Sherrie S. Capotosto is prosecuting the case.
The U.S. Marshals provided significant assistance with the execution of arrest warrants this morning.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-156.
Omaha Woman Sentenced for Tax EvasionRead the Press Release
United States Attorney Joe Kelly announced that Becky Neeb, 37, was sentenced on Monday, October 15, 2018, in Omaha, Nebraska, by Chief United States District Judge Laurie Smith Camp for the crime of tax evasion. Judge Smith Camp sentenced Neeb to 5 years’ probation and ordered Neeb to make restitution to the IRS in the amount of $137,374, representing the total tax loss.
Neeb willfully attempted to evade and defeat the assessment of her individual income tax for years 2011, 2012, and 2013 on her Form 1040 U.S. Individual Income Tax Returns. She evaded the assessment of her income tax liability for those years by under reporting her business receipts and over reporting her business expenses for her business, Top Notch Charms, which she operated in the Westroads Mall in Omaha.
“Tax violations have been erroneously referred to as victimless crimes, but it's the honest law-abiding citizen who is harmed when someone tries to manipulate our nation's tax system,” said Karl Stiften, IRS Criminal Investigation Special Agent in Charge.
This case was investigated by IRS Criminal Investigations.
Oklahoma Man Pleads Guilty to Armed Robbery of Columbia HotelRead the Press Release
JEFFERSON CITY, Mo. – An Oklahoma man pleaded guilty in federal court today to the armed robbery of a hotel in Columbia, Mo., on May 31, 2017.
Darrell Eugene Black, 25, pleaded guilty before U.S. Magistrate Judge Willie J. Epps, Jr., to one count of robbery, one count of brandishing a firearm during a crime of violence, one count of being a felon in possession of a firearm, and one count of possessing a stolen firearm.
By pleading guilty today, Black admitted that he brandished a Springfield 9mm handgun when he robbed the Staybridge Suites Hotel, 805 Keene Street, Columbia, Mo., on May 31, 2017. Black entered the hotel at approximately 1:50 a.m., pointed his pistol at the clerk, jumped over the counter and demanded money. The clerk opened the desk drawer and Black took approximately $200. Black told the clerk that if she did not open the hotel safe, he would shoot her. The clerk told him that only the manager had the key to open the safe. Black got upset and told the clerk to put her hands behind her back. He disconnected the phone cord and unsuccessfully tried to tie the clerk’s hands behind her back. Then he told the clerk to lie on the ground. When Black finished searching the hotel front desk area for items to steal, he told the clerk to face the wall and not move. Black left and the clerk faced the wall for approximately 10 to 15 minutes until her feet became numb, and then called the police. The clerk’s cellphone and purse were missing.
Black was spotted by a Jefferson City, Mo., police officer later the same day. Black fled on foot but was apprehended by the officer. At the time of his arrest, Black was carrying a black bag that contained the handgun, marijuana, an ecstasy pill, and a magazine with five rounds of 9mm ammunition. As the officer was handcuffing Black, a woman ran up, grabbed the black bag and ran away. Officers were able to apprehend the woman and retrieve the bag.
Under federal statutes, Black is subject to a mandatory minimum sentence of seven years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Columbia, Mo., Police Department and the Jefferson City, Mo., Police Department.
Nomura Agrees to Pay $480 Million in Civil Penalties for Misleading Investors in Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
The United States has reached an agreement with Nomura Holding America Inc. and several of its affiliates (“Nomura”), which will pay a $480 million penalty to resolve federal civil claims that Nomura misled investors in connection with the marketing, sale and issuance of residential mortgage-backed securities (“RMBS”) between 2006 and 2007. Nomura’s investors, which included university endowments, retirement funds and federally insured financial institutions, suffered significant losses due to Nomura’s misconduct.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Jennifer Byrne, Associate Inspector General, Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG), announced the settlement.
“This settlement holds Nomura accountable for its fraudulent conduct in connection with its Residential Mortgage-Backed Securities offerings, which caused substantial harm to investors and contributed to the financial crisis of 2008,” stated United States Attorney Donoghue. “The Department of Justice, this Office and our partners will continue to aggressively pursue wrongdoing in our financial markets, including, as appropriate, financial crisis-era misconduct.”
“The actions of Nomura resulted in significant losses to investors, including Fannie Mae and Freddie Mac, which purchased Nomura Residential Mortgage-Backed Securities backed by defective loans,” stated FHFA-OIG Associate Inspector General Byrne. “We are proud to have partnered with the U.S. Attorney’s Office for the Eastern District of New York on this matter.”
The settlement stems from allegations that Nomura knowingly securitized defective mortgage loans in its RMBS and misled investors regarding the quality and characteristics of those loans. For example, the United States alleged that:
- In presentations regarding its RMBS program, Nomura claimed that its due diligence process was “extensive,” “disciplined” and “carefully developed.” Nomura also told investors that it only worked with “hand-picked industry leading” due diligence vendors, and that, as a result of its superior standards and due diligence processes, “Nomura’s loan performance should surpass industry standards.” These claims were false. Nomura knew, based on its due diligence, that thousands of loans that it securitized in its RMBS did not comply with applicable underwriting guidelines or were supported by inflated and potentially fraudulent appraisals. Nomura concealed these deficiencies from investors, securitizing many of these defective loans as “favors” to loan originators—including, for example, loans that one originator openly described to Nomura as “dogsh[*]t.” As stated by a member of Nomura’s RMBS due diligence group: “There is no such thing as a bad loan . . . just a bad price.”
- Nomura also knew that a significant number of loans that it securitized in its RMBS had not gone through Nomura’s stated due diligence process, and, more broadly, that its process had been compromised. Nomura’s head of RMBS due diligence (in the context of proposed changes to Nomura’s loan-by-loan buying program) stated that Nomura was “turning into the lemming of the mortgage business,” “following the herd” and compromising its standards “to comply with the masses in p[u]rsuit of volume.” Additionally, a member of Nomura’s RMBS group’s origination sales team, in an email to the entire RMBS group, remarked that “advertising will be a great career when all these loans finally blow up . . . . (I will be selling vacuum cleaners door to door when the market goes by the way).”
- Despite this knowledge, Nomura failed to address the weaknesses in its due diligence processes, and continued to do business with originators that, according to its own due diligence personnel, were “extremely dysfunctional,” had “systemic” underwriting issues and employed “questionable” origination practices. Indeed, Nomura’s securitization of defective loans in the subject deals—in spite of numerous red flags—reflected a conscious decision by senior Nomura personnel to compete for market share in a highly competitive RMBS market. As stated by one member of Nomura’s RMBS team, Nomura could not just “buck the entire marketplace when [it was] hammered to grow.”
- Likewise, despite knowing that its due diligence was ineffective and did not remove large numbers of defective loans from its RMBS, in mid-2006, Nomura announced new, “more liberal” underwriting guidelines for its loan-by-loan purchase program. Although Nomura’s head of RMBS due diligence warned that Nomura had already “loosened guidelines in so many areas” and that it was “at risk of giving away the proverbial store,” the prevailing view, as characterized by Nomura’s RMBS trading desk, was that Nomura’s “box [was] too restrictive.” Nomura’s new guidelines allowed for the purchase of loans that Nomura’s due diligence personnel previously described as “sheer lunacy.”
These are allegations only, which Nomura disputes, and there has been no trial or adjudication or judicial finding of any issue of fact or law.
The settlement was the result of a multi-year investigation by the Civil Division of the U.S. Attorney’s Office for the Eastern District of New York, pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Assistant U.S. Attorney Clayton P. Solomon and former Assistant U.S. Attorney Morgan J. Brennan led the government’s investigation.
New York Man Posed as Teen Girl Online, Tricked Children into Sending Him Nude PhotosRead the Press Release
JEFFERSON CITY, Mo. – A Binghamton, N.Y., man who posed online as a teenage girl pleaded guilty in federal court today to attempting to produce child pornography by tricking children – including three victims in Sedalia, Mo. – into sending him nude images of themselves.
Brandon David Cuddihe, 31, pleaded guilty before U.S. Magistrate Judge Willie J. Epps, Jr., to two counts of attempting to produce child pornography.
By pleading guilty today, Cuddihe admitted that he posed on Facebook as a 14-year-old girl named “Hannah Richards.” Using that false identity, he conversed with more than 150 people, many of whom were between 11 and 15 years of age. Three minors, including two 10-year-olds and a teenager, are from the Sedalia, Mo., area. The mother of one of those victims contacted the Sedalia Police Department when she learned that her 10-year-old daughter had sent nude photos and videos via Facebook Messenger.
Using the “Hannah Richards” Facebook account, Cuddihe told investigators, he would pick a random individual to befriend. Cuddihe would go through all of their friends and add a bunch of their friends to his friends list. If an individual accepted his friend request, then he would begin chatting with them through Facebook Messenger.
Under federal statutes, Cuddihe is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Ashley S. Turner. It was investigated by the FBI, the Sedalia, Mo., Police Department, the Binghamton, N.Y., Police Department, and the Broome County, N.Y., Sheriff’s Department.
Project Safe Childhood
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."
New York Man Pleads Guilty to Heroin, Fentanyl and Crack Trafficking ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Jamie Betances, a/k/a “Booger,” “Booga,” Buga,” “Ice,” 30, of Rochester, New York, pled guilty today in U.S. District Court to conspiracy to distribute heroin, fentanyl and cocaine base, commonly known as “crack.”
According to court records, between June 2015 and March 2017, Betances conspired with others to acquire heroin, fentanyl and crack in Rochester and to distribute it in Central Maine. The defendant was sent to Central Maine to distribute the drugs while residing with several Central Maine residents who were paid in heroin and crack for their participation.
The defendant faces up to 20 years in prison, a $1,000,000 fine, and between three years and life on supervised release.
The case was investigated by the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency, and the Kennebec County Sheriff’s Department, with assistance provided by the Augusta Police Department and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
New Haven Man Sentenced to 10 Years in Federal Prison for Trafficking HeroinRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ANTONIO GONZALEZ, 47, of New Haven, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 120 months of imprisonment, followed by five years of supervised release, for trafficking heroin.
According to court documents and statements made in court, the DEA’s New Haven Tactical Diversion Squad targeted a New Haven-based heroin trafficking organization led by Gonzalez and his brother, Bienvenido Gonzalez. The investigation, which included court-authorized wiretaps, controlled purchases of narcotics and physical and video surveillance, revealed that the Gonzalez brothers regularly purchased bulk quantities of heroin from suppliers located in the Bronx, New York, and sold the heroin through a network of redistributors in New Haven and elsewhere. The investigation resulted in federal charges against 23 individuals, including four other brothers of Antonio and Bienvenido Gonzalez.
Antonio Gonzalez, Bienvenido Gonzalez and several co-defendants were arrested on March 15, 2017. On that date, investigators seized a kilogram of heroin from a vehicle that a co-defendant had driven to a stash house used by Bienvenido Gonzalez, and more than 400 grams of heroin and $10,000 in cash from the stash house itself. Investigators also seized $1,500 from Antonio Gonzalez, and approximately $119,000 from a bank account in Puerto Rico connected to Antonio Gonzalez.
The investigation revealed that Bienvenido Gonzalez used the proceeds from the heroin trafficking enterprise to purchase a New Haven barbershop, fund a drag racing team, purchase roosters for cockfighting, gamble, and travel.
Antonio Gonzalez has been detained since his arrest. On January 18, 2018, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and distribution of, one kilogram or more of heroin
Bienvenido Gonzalez pleaded guilty to the same charge and, on March 28, 2018, he was sentenced to 144 months of imprisonment.
The DEA’s New Haven Tactical Diversion Squad includes officers from the Bristol, Hamden, Milford, Monroe, New Haven, Shelton, Wallingford and Wilton Police Departments. The New Haven, East Haven and West Haven Police Departments, together with the U.S. Coast Guard, provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys Natasha M. Freismuth and Patrick F. Caruso.
Middle Georgia's U.S. Attorney Will Accompany Vice President Pence During Visit to Hurricane Damaged CommunitiesRead the Press Release
Albany, GA— The U.S. Attorney for the Middle District of Georgia, Charles Peeler, will join Vice President Michael Pence during his visit to Southwest Georgia on Tuesday, October 16. The Vice President is traveling to Georgia following Hurricane Michael, a historic storm that swept across the region on October 10-11. This comes a day after President Donald Trump visited the Middle District after declaring a federal State of Emergency in Georgia on October 11, opening up direct federal aid for communities. Both Macon and Albany, home to several key United States Department of Justice offices and courthouses serving the Middle District of Georgia, sustained varying levels of storm damage. There remains power outages and water boil alerts in the Middle District, hundreds of homes and businesses have structural damage, and state agricultural leaders are reporting extensive crop loss.
“My thoughts and prayers are with those people affected by Hurricane Michael,” said Charles Peeler, the U.S. Attorney for the Middle District of Georgia. “Southwest Georgia endured significant natural disasters in 2017, and it is another challenging road for us as we rebuild again. I am grateful to President Trump and Vice President Pence for supporting our recovery efforts quickly and decisively.”
“I want to applaud the efforts of our region’s first responders during this unprecedented hurricane. I also want to thank the line workers from various electric companies near and far that are restoring power, and a sense of normalcy, to our citizens. We are grateful,” said Peeler.
The United States Attorney’s Office for the Middle District of Georgia has staffed offices in Macon, Columbus and Albany. Following Hurricane Michael, all three offices were shut down for storm damage assessments and employee safety. The Macon and Columbus offices reopened Friday, October 12. The Albany office reopened Monday, October 15.
Questions regarding the U.S. Attorney’s Office can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362. All questions regarding Vice President Pence should be directed to the White House Press Office.
Mexican Woman Pleads Guilty to Immigration Document FraudRead the Press Release
Gulfport, Miss. – Beatriz Martinez-Villasana, 29, a citizen of Mexico and a Legal Permanent Resident living in Georgia, pled guilty yesterday before U.S. District Judge Sul Ozerden to the crime of Fraud Regarding Visas, Permits, or Other Immigration Document, announced U.S. Attorney Mike Hurst and Gregory A. Bovino, Chief Patrol Agent of the U.S. Border Patrol’s New Orleans Sector.
Martinez-Villasana is scheduled to be sentenced by Judge Ozerden on January 11, 2019 at 9:00 a.m. She faces a maximum penalty of 10 years in federal prison followed by 3 years of supervised release and a maximum $250,000 fine. She also will face Department of Homeland Security removal proceedings.
On July 12, 2018, a Border Patrol agent was observing Interstate 10 as part of the South Mississippi Metro Enforcement Team, an interagency task force in Jackson County. Around 11:10 p.m., a Toyota Corolla that had been identified in Border Patrol intelligence data passed his position on I-10 eastbound. As he neared the vehicle, the agent noticed two occupants slumping down, and he thereafter conducted a traffic stop.
The driver, Martinez-Villasana, was arrested for transporting illegal aliens, and both passengers were arrested for being in the United States illegally. Both passengers pled guilty earlier this month of the felony offense of Illegal Return of an Alien after Removal. Both are awaiting sentencing in U.S. District Court in January 2019.
Also found in Martinez-Villasana’s possession was a fraudulent Legally Admitted Permanent Resident Alien Identification Card and a fraudulent Social Security Card. Both cards were in the name of an illegal alien to the United States who was incarcerated in the State of Georgia on state offenses. Both cards included identification numbers that had been stolen from two victims for whom the numbers had been lawfully assigned by the United States Government. Ms. Martinez-Villasana admitted that she knew the documents were false and that she had been helping the illegal alien named on the cards, who was her friend. She also admitted to unlawfully transporting her two illegal alien passengers and all of her relevant conduct may be used in determining her sentence in federal court.
U.S. Attorney Hurst commended the work of the United States Border Patrol and the South Mississippi Metro Enforcement Team Interagency Task Force. Assistant United States Attorney Stan Harris is the prosecutor for the case.
Methamphetamine Trafficking Ring Allegedly Shipped Drugs to Hawaii Disguised as Aztec Calendars and StatuesRead the Press Release
SANTA ANA, California – Federal authorities this morning arrested eight defendants named in a grand jury indictment that alleges a scheme to send methamphetamine to Hawaii, including nearly 12 kilograms of narcotics made to look like decorative Aztec calendars and statues.
Today’s arrests follow the filing of a seven-count indictment on October 10. A ninth defendant charged in the indictment was already in federal custody on an unrelated case.
The indictment alleges a conspiracy to distribute methamphetamine, including an attempted shipment on July 17 of 11.7 kilograms of pure methamphetamine from a post office in Garden Grove. Those drugs were part of a nearly 90-pound shipment that appeared to be colorful, decorative Mexican items, including replicas of the 500-year-old Aztec calendar stone.
The indictment also alleges that members of the conspiracy, over the past year, sent to Hawaii a package containing about two pounds of methamphetamine and another with nearly five pounds of the drug.
All three of the narcotic shipments alleged in the indictment were intercepted by law enforcement.
The nine defendants named in the indictment are:
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Felix Salgado, 28, of Perris, who allegedly obtained wholesale quantities of methamphetamine on behalf of the conspiracy;
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Vaimanino Lee Pomele, 49, of Garden Grove, who allegedly orchestrated the drug shipments to Hawaii;
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German Bastidas Nunez, also known as “Cheque,” 46, of Moreno Valley, who allegedly supplied narcotics to Salgado and who was already in custody;
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Fernando Caballero Rascon, 42, of Garden Grove, who allegedly purchased methamphetamine from Pomele;
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James Arnold Borbon, also known as “Dino,” 58, of Garden Grove, an alleged customer of the drug ring;
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Moises Rey Avina, 39, of Santa Ana, who allegedly purchased methamphetamine from Pomele;
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Gary Wayne Minter, 55, of Victorville, who allegedly used his residence as a stash house;
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Alejandra Pomele, who is Vaimanino’s wife; 44, also of Garden Grove, who allegedly delivered narcotics to a customer on at least one occasion; and
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Stephen Dgewell Martin, 30, of Anaheim, who allegedly dropped off the shipment containing the methamphetamine disguised as Aztec calendars and statues at the post office.
The eight defendants taken into custody this morning are expected to be arraigned on the indictment this afternoon in United States District Court in Santa Ana.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of the charges in the indictment, each defendant would face a mandatory minimum sentence of at least five years in federal prison, and each potentially could be sentenced to decades in prison.
The matter is being is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Drug Enforcement Administration and the Cypress Police Department.
This case is being prosecuted by Assistant United States Attorney Rosalind Wang of the Santa Ana Branch Office.
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Meriden Man Sentenced to More Than 15 Years in Federal Prison for Sex Trafficking of 3 TeensRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that CARLEN DAVIS, 37, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 188 months of imprisonment, followed by 15 years of supervised release, for sex trafficking three teenage girls, and for violating the conditions of his supervised release from a prior federal conviction.
According to court documents and statements made in court, in 2015 and 2016, Davis recruited harbored and transported three females, who at the time were 14, 15 and 16 years old, to engage in commercial sex acts. Davis used the website Backpage to advertise the minor victims’ services, and he transported the girls to various Connecticut hotels, including hotels in Meriden, Milford and Hamden, where they worked in prostitution for Davis.
On December 9, 2016, Davis was arrested on related state charges. He has been detained since his arrest and the state charges are pending.
On August 17, 2017, Davis pleaded guilty in federal court to one count of sex trafficking of a minor.
In September 2006, Davis was sentenced in New Haven federal court to 150 months of imprisonment, followed by five years of supervised release, for distributing crack cocaine. Due to changes in the federal crack cocaine sentencing guidelines, Davis had his sentence reduced in December 2013 to 130 months of imprisonment. He was released from federal prison in June 2014.
Judge Shea sentenced Davis to a concurrent 60-month prison term for violating the conditions of his supervised release.
This matter was investigated by the Connecticut Human Trafficking Task Force, Federal Bureau of Investigation and Meriden Police Department. The case was prosecuted by Assistant U.S. Attorneys Anastasia E. King and Sarala V. Nagala.
Medical Director for Bridgeville Suboxone Clinic Pleads Guilty to Unlawfully Distributing Controlled SubstancesRead the Press Release
PITTSBURGH, PA - A resident of Wexford, Pa. pleaded guilty in federal court to charges of unlawfully distributing controlled substances, United States Attorney Scott W. Brady announced today.
Mark R. Foster, 71, pleaded guilty to three counts before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that co-defendant Terry Brown owned and operated Cherry Way, a Suboxone clinic, located in Bridgeville, PA, and Foster was a medical director at Cherry Way. Brown and Foster conspired together to create and submit unlawful prescriptions for Suboxone, Adderall and Percocet, and then unlawfully dispensed those controlled substances to Brown and others.
Judge Fischer scheduled sentencing for March 14, 2019 at 11 a.m. The law provides for a total sentence of 50 years in prison, a fine of $2,500,000, 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.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
This investigation was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General -Medicaid Fraud Control Unit, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations and the Pennsylvania Bureau of Licensing.
Media Advisory: Press Conference to Announce Sentences in Cases Involving Opioid Related DeathsRead the Press Release
CEDAR RAPIDS, IA – Opioids kill hundreds of Iowans every year. Opioid abuse remains at an all-time high and these dangerous drugs wreak havoc on lives and communities. Unfortunately, all too often, the use of an opioid ends with death because people do not know what they have or how dangerous it is.
On October 18, 2018, at 10:00 a.m., United States Attorney Peter Deegan will hold a press conference to announce sentences in recent cases where the distribution of opioids ended in the tragic loss of life. He will also highlight the danger these drugs pose to our communities, whether purchased on the street, online, or by some other means. DEA Resident Agent-in-Charge Russ Coulter, FBI Supervisory Senior Resident Agent Tom Reinwart, Assistant Chief of Police Jeremy Jensen with the Dubuque Police Department, and Chief Deputy Dave Riniker of the Dubuque County Sheriff’s Office will join US Attorney Deegan.
Event DetailsWhen: October 18, 2018
Where: Cedar Rapids Federal Courthouse (United States Attorney’s Office), 111 7th Ave. SE
Time: 10:00 a.m.
A press release will be provided and interview opportunities will be available. Please RSVP to Tony Morfitt at [email protected] if you plan to attend.
Follow us on Twitter @USAO_NDIA.
Massachusetts Man Sentenced to Two Years for Conspiracy to Steal Mail and Cash Counterfeit ChecksRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Nicholas Veelenturf, 31, of Dorchester, Massachusetts, was sentenced today in U.S. District Court by Senior Judge George Z. Singal to two years in prison and three years of supervised release for conspiring with others to steal checks from the mail in Maine and to cash counterfeit versions of those checks at banks in Massachusetts. He was also ordered to pay $15,710.33 in restitution. Veelenturf pled guilty on June 19, 2018.
According to court records, in September 2016, two business checks were stolen from the mail in Scarborough, Maine. The intended recipients of these checks were businesses located in an industrial park in Scarborough. About two weeks later, the defendant and another person cashed or attempted to cash counterfeit versions of the two checks at several TD Bank branch locations in Massachusetts. The routing and account numbers for each business had been printed on different check stock, the check amounts had been significantly increased, and the names of the payees had been altered to either the defendant’s or the other person’s name.
This case was investigated by the U.S. Postal Inspection Service.
Massachusetts Man Sentenced to over 10 Years for Fentanyl Trafficking ConspiracyRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Wender Santos, a/k/a “Carlos,” 24, of Lawrence, Massachusetts, was sentenced today in U.S. District Court by Judge Jon D. Levy to 130 months in prison and three years of supervised release for conspiracy to distribute, and possess with intent to distribute, fentanyl, and aiding and abetting the possession with intent to distribute fentanyl. The defendant pled guilty on April 3.
Court records reveal that in 2016, Santos conspired with Rafael Buli and others to distribute fentanyl in the Lawrence area. Maine drug customers contacted Santos, who they knew only as “Carlos,” to place orders for distributable quantities of fentanyl. Santos then directed his drug couriers, including Buli, to meet with his Maine customers to consummate the drug transactions. On September 1, 2016, federal and state agents stopped a Maine customer after Santos and Buli sold the customer about 400 grams of fentanyl. The agents located the fentanyl inside a “trap” compartment of a vehicle that Santos furnished to the customer. Agents identified Santos, learned that he had an apartment in Tewksbury, Massachusetts, searched the apartment on December 12, 2016 pursuant to a warrant, and seized about $14,000, cell phones and a money counter.
The investigation was conducted by the U.S. Drug Enforcement Administration and the Maine State Police and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
Macon Man Sentenced for Possession of Child PornographyRead the Press Release
MACON-- United States Attorney for the Middle District of Georgia, Charles E. Peeler, announced Tuesday that 26-year-old Robert Murphy of Macon was sentenced by United States District Judge Marc T. Treadwell on October 15, 2018, to 36 months imprisonment, followed by 25 years of supervised release and $3,000 restitution to three separate victims for possession of child pornography.
Law enforcement found 109 images of minors engaged in sexually explicit conduct on Mr. Murphy’s computer, according to facts listed in the plea agreement. In April 2016, a federal law enforcement agent discovered child pornography files available for sharing through an internet connection associated with Mr. Murphy’s residence. Following a federal search warrant, Mr. Murphy was found at the residence and admitted to searching for and downloading child pornography using peer-to-peer programs. He also admitted to looking for child pornography, downloading, watching, and later deleting the files.
“Possession of child pornography is not a victimless crime. When people download or view these horrific images of real children being subjected to unspeakable acts, those children are once again made victims and suffer real harm,” said Charles Peeler, the U.S. Attorney for the Middle District of Georgia. “My office will continue to vigorously prosecute these cases.”
“We are grateful for the work of Homeland Security, the Georgia Bureau of Investigation and the Jones County Sheriff’s Office for their assistance with this case,” said Mr. Peeler.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Robert D. McCullers prosecuted the case for the Government.
Questions concerning this case can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
LaSalle County Physician Sentenced to 12 Years in Prison for Illegally Dispensing Prescription OpioidsRead the Press Release
CHICAGO — A LaSalle County physician was sentenced today to 12 years in federal prison for illegally dispensing prescription medications, including opioids, in exchange for cash or sex.
CONSTANTINO PERALES, M.D., illegally prescribed Oxycodone and Xanax to a patient, ANDREW STRANDELL, knowing that Strandell would sell the pills on the black market and then kick back some of the profits to Dr. Perales. Dr. Perales also admitted in a plea agreement that from 2011 to 2013 he illegally dispensed opioids and other controlled substances to three opioid-dependent patients in exchange for sex. Dr. Perales required the individuals to have sex with him in order to continue receiving the medications, the plea agreement states. Dr. Perales knew the patients were addicted to the pills, yet he dispensed them without performing a medical examination or ordering any diagnostic tests to manage their conditions, the plea agreement states.
Perales, 67, of Peru, Ill., pleaded guilty last year to conspiracy to possess a controlled substance with the intent to distribute. U.S. District Judge Amy J. St. Eve imposed the 12-year sentence in federal court in Chicago.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration. Substantial assistance was provided by the Peru, Ill., Police Department, and the LaSalle County State’s Attorney’s Office.
“Few cases provide such a troubling example of a brazen and pathological abuse of power, influence, and trust in order to manipulate the pain and suffering of others to one’s personal advantage,” Assistant U.S. Attorneys Katherine A. Sawyer and Kathryn E. Malizia argued in the government’s sentencing memorandum. “The evidence in this case demonstrates that Constantino Perales is a predator who abused his power and cloaked himself in the authority conferred by his white coat to manipulate vulnerable patients for his own gratification and profit.”
“This case exposes a doctor behaving in direct contradiction to his Hippocratic Oath, placing his greed and personal desires above the well-being of his patients," said FBI SAC Sallet. "This sentence sends a clear message that such behavior is unacceptable and will be prosecuted to the fullest extent of the law. I commend the efforts of our state, local, and federal partners in bringing both of these individuals to justice.”
“This announcement sends a clear message that medical professionals who exploit their power, prey on the vulnerable, and violate controlled substance laws will be investigated and held accountable to the fullest extent,” said DEA SAC McKnight. “It also highlights the significance of federal law enforcement and prosecutors working together.”
Dr. Perales’ Illinois medical license was suspended and he surrendered his DEA Registration Certificate after law enforcement executed a search warrant at his office in Peru, Ill., in August 2013.
Strandell, of Sandwich, Ill., pleaded guilty to the same conspiracy charge as Perales. Judge St. Eve in August sentenced Strandell to 30 months in prison.
Kayenta Man Sentenced to 6 Years in Prison for Sexual Abuse of a MinorRead the Press Release
PHOENIX – This week, Ronnie Haycock, 42, of Kayenta, Ariz., was sentenced by U.S. District Judge Douglas L. Rayes to six years’ imprisonment, to be followed by fifteen years of supervised release. Haycock, an enrolled member of the Navajo Nation, had previously pleaded guilty to sexual abuse of a minor.
During the summer of 2017, Haycock worked as a tour guide in the Monument Valley area of the Navajo Nation. On the night of July 5, 2017, Haycock led an overnight camping tour in the area. While camped out that night, Haycock sexually abused a juvenile female who was on the tour.
The investigation in this case was conducted by the Federal Bureau of Investigation and Navajo Nation Department of Public Safety. The prosecution was handled by Assistant U.S. Attorney Alexander Samuels, District of Arizona, Phoenix.
CASE NUMBER: CR-17-08238-PCT-DLR
RELEASE NUMBER: 2018-131_Haycock
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Kankakee Man Sentenced to 15 Years in Prison for Role in Armed Robbery of Champaign BusinessRead the Press Release
URBANA, Ill. – U.S. District Judge Sara Darrow has sentenced Randy Williams, 29, of the 300 block of North Rosewood, Kankakee, Ill., to 15 years in federal prison for his role in the armed robbery of a Champaign, Ill., Sprint store. Williams was sentenced on Oct. 15, 2018. In addition, Williams was ordered to pay restitution in the amount of $32, 121.81, to the Sprint Store on North Prospect in Champaign, the victim of the offense. Williams has remained in the custody of the U.S. Marshals Service since September 2017, when he was indicted by a federal grand jury. Williams will be transferred to the federal Bureau of Prisons to serve his sentence.
On June 14, 2018, Williams was convicted by a jury for his role as the getaway driver in the armed robbery of a Sprint Store, at 2706 N. Prospect Ave., in Champaign. At trial, the government presented evidence that a group of five robbers traveled to Champaign on July 28, 2016, held two customers and two employees at gun point while robbing the North Prospect Sprint store of its cellphones. The victims were bound by their wrists and ankles with zip-ties. According to trial testimony, Williams waited in the getaway vehicle while his two co-conspirators, Thomas James, and Andre Nunn went into the store.
On Dec. 28, 2017, U.S. District Judge Colin S. Bruce sentenced James to 19 years in prison for his role in the Champaign robbery and the robbery of a Circle K at 581 S. Indiana Ave., in Kankakee on Aug. 6, 2016. Another co-defendant, Jaevontae Williams, was sentenced to seven years (86 months) on July 28, 2018. Nunn is scheduled to be sentenced on Nov. 30, 2018.
Assistant U.S. Attorneys Elly Peirson and Ryan Finlen prosecuted the case against Williams. The charges were investigated by the Federal Bureau of Investigation, the Champaign Police Department, Kankakee Police Department, and Illinois State Police.
KC Man Sentenced to 23 Years for Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man was sentenced in federal court today for his role in a meth-trafficking conspiracy that resulted in a fatal shooting.
James P. Roberts, 27, was sentenced by U.S. Chief District judge Greg Kays to 23 years and six months in federal prison without parole.
Roberts pleaded guilty on Feb. 1, 2018, to conspiracy to distribute methamphetamine. Co-defendant Marcell Shavers, 28, of Kansas City, was sentenced on Aug. 15, 2018, to 40 years in federal prison without parole. Shavers was convicted at trial of participating in a conspiracy to possess methamphetamine with the intent to distribute.
On Jan. 1, 2014, Kansas City, Mo., police officers responded to a reported shooting. Upon arrival, they discovered the body of Jose Medellin, who had been fatally shot. They also found several shell casings at the scene as well as two plastic bags containing more than 55 grams of methamphetamine in Medellin’s possession. Roberts admitted that, while he possessed a handgun during the drug transaction, he never fired at Medellin. There was forensic evidence that Roberts never fired his gun that night.
The person who reported the shooting had gone to Discount Smokes on Independence Avenue to obtain some cigarettes. While at the store, he was approached by Roberts, who asked about obtaining methamphetamine. He replied that he knew a source and would set up a meeting.
The witness contacted Medellin, then picked up Roberts at Discount Smokes and they drove to Medellin’s apartment building. He told Medellin that Roberts wanted to buy $1,000 of methamphetamine, and Medellin told him to bring Roberts inside the apartment building. The three men met in the laundry room on the ground floor, but when a car alarm went off, the witness went out to shut it off. He could not re-enter the laundry because it locked automatically and could only be opened from the inside.
Although he could not reenter the building, the witness could see through the windows and saw Roberts with an unknown man, later identified as Shavers. He witnessed Medellin being shot. Medellin tried to run from the shooter but was unable to escape. Medellin was shot in the abdomen, turned to run, was shot in the right buttock, fell to the ground and was shot in the back while on the ground. After Medellin fell, the witness ran to a nearby Quik Trip and called the police.
This case was prosecuted by Assistant U.S. Attorneys Jeffrey Valenti and Joseph M. Marquez. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Justice, Treasury, and State Departments Announce Coordinated Enforcement Efforts Against Cartel Jalisco Nueva GeneracionRead the Press Release
The United States of America, through its Departments of Justice, Treasury, and State announced today a series of measures to target and dismantle the Cartel Jalisco Nueva Generacion (CJNG) – one of the largest, most dangerous drug cartels currently operating in Mexico. These measures include the unsealing of 15 indictments, the State Department’s approval of large rewards, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designations, and the establishment of a citizen tip-line.
CJNG is one of the most powerful cartels in Mexico and the Department of Justice considers it to be one of the five most dangerous transnational criminal organizations in the world, responsible for trafficking many tons of cocaine, methamphetamine and fentanyl-laced heroin into the United States, as well as for violence and significant loss of life in Mexico.
Attorney General Jeff Sessions of the U.S. Department of Justice, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Acting Administrator Uttam Dhillon of the U.S. Drug Enforcement Administration (DEA), FBI Deputy Director David L. Bowdich, Director Andrea Gacki of OFAC, Assistant Secretary for International Narcotics and Law Enforcement Affairs Kirsten D. Madison of the U.S. Department of State, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Executive Associate Director Derek Benner and Chief Don Fort of IRS Criminal Investigation (IRS-CI), made the announcement.
Background
Founded in 2011, CJNG has grown in size and strength rapidly since its inception. Today, the DEA estimates the CJNG exerts influence in 23 of 31 (75 percent) of Mexican states, including key drug production and transportation corridors. CJNG is a powerful drug cartel in Mexico as a result of the organization’s disciplined command and control, sophisticated money laundering techniques, efficient drug transportation routes, and extreme violence. The cartel has also expanded globally, with significant presence and illicit business not only throughout the United States and Mexico, but also Europe, Asia, and Australia.
“We will continue to hammer transnational criminal organizations like the Cartel de San Jalisco Nueva Generacion, or CJNG,” said Attorney General Sessions. “The DEA has said for three years in a row that Mexican drug cartels are the single gravest drug threat that this country faces. President Trump recognizes this, and the day I was sworn in as Attorney General, he ordered me to dismantle transnational criminal organizations, including the cartels. We have been faithful to that order. Today, I am announcing 15 indictments returned against the leaders of CJNG. These indictments are our next steps—but not our last. We will continue following President Trump’s order.”
“DEA has a strong partnership with the Government of Mexico that is demonstrated in the relentless pursuit of the violent leadership of the CJNG cartel,” said Acting Administrator Dhillon. “We will continue to work closely with our international partners to bring Nemiso Cervantes aka El Mencho to justice and dismantle drug cartels like CJNG.”
Unsealing of Indictments
Today, the Department of Justice Criminal Division’s Narcotic and Dangerous Drug Section, U.S. Attorney’s Office in the Southern District of California, the Northern District of Illinois, the Southern District of Mississippi, and the Eastern District of Virginia are announcing 15 indictments, some recently unsealed, against the following CJNG leaders, financiers, transporters, and sources of drug supply:
Nemesio Oseguera Cervantes, aka “Mencho”: Oseguera Cervantes, 52, is the lead defendant in a three-count superseding indictment returned in the District of Columbia in 2017 alleging that he is the leader of a Continuing Criminal Enterprise, conspired to distribute significant quantities of narcotics for illegal importation into the United States, and has used a firearm during and in relation to these drug trafficking crimes. In addition to the indictment in the District of Columbia, Oseguera Cervantes has also been charged with drug trafficking offenses in the Southern District of Mississippi (SDMS). He is currently a fugitive and was designated as a “Kingpin” under the Foreign Narcotics Kingpin Designation Act by the Department of the Treasury in April 2015.
Ruben Oseguera Gonzalez, aka, “Menchito”: Oseguera Gonzalez, 28, Oseguera Cervantes’ son, served as the CJNG’s second in command until the time of his arrest by Mexican authorities in June 2015. Oseguera Gonzalez is charged in a two-count indictment returned in the District of Columbia in 2017 alleging that between 2007 and February 2017, Oseguera Gonzalez engaged a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States and that Oseguera Gonzalez engaged in the use of a firearm during and in relation to one or more drug trafficking crimes. Oseguera Gonzalez remains in Mexican custody and is currently pending extradition to the United States.
Abigael Gonzalez Valencia: Gonzalez Valencia, 45, the head of the “Cuinis” organization, is charged in a three-count indictment returned in the District of Columbia in 2014 alleging that he was a leader in a Continuing Criminal Enterprise, conspired to distribute significant quantities of narcotics for illegal importation into the United States, and used a firearm during and in relation to one or more drug trafficking crimes. The CJNG has flourished in significant part because of its close affiliation with the Cuinis organization, which is the primary financial support network of the CJNG drug trafficking efforts. The Cuinis organization is composed of multiple members of the Gonzalez Valencia family. The relationship between the Cuinis organization and the CJNG is cemented through both intertwined drug trafficking and money laundering dealings as well as familial relationships, including the marriage of one member of the Gonzalez Valencia family to CJNG leader Nemesio Oseguera Cervantes. Gonzalez Valencia was designated as a “Kingpin” under the Foreign Narcotics Kingpin Designation Act by the Department of the Treasury in April 2015. Gonzalez Valencia was arrested by Mexican authorities in February 2015 pursuant to his charges in the United States and is awaiting extradition.
Jesus Contreras Arceo, aka “Canasto”: Contreras Arceo, 41, is charged in a two-count indictment returned in the Eastern District of Virginia in 2017 alleging that between 2011 until March 2017, Contreras Arceo engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States and that Contreras Arceo engaged in a conspiracy to commit money laundering. Contreras Arceo was arrested by Mexican authorities in July 2018 pursuant to his charges in the United States and is awaiting extradition.
Erick Valencia Salazar, aka “El 85”: Valencia Salazar, 41, is charged in a one-count indictment returned in the District of Columbia in 2018 alleging that between 2003 until August 2018, Valencia Salazar engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States. Valencia Salazar is currently a fugitive and is believed to be in Mexico.
Juan Perez-Vargas, aka, “Piolin”: Perez-Vargas, 37, is charged in a two-count indictment returned in the Southern District of California in 2017 alleging that Perez-Vargas engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States. Perez-Vargas was arrested by Mexican authorities in September 2017 pursuant to his charges in the United States and is awaiting extradition.
Diego Pineda Sanchez, aka “Botas” and Carlos Parra-Pedroza: Pineda Sanchez, 33, and Parra-Pedroza, 35, are charged with 28 others in a 63-count indictment returned in the Northern District of Illinois in 2015, alleging that between 2011 and September 2014, Pineda Sanchez and Parra-Pedroza led a Mexico-based conspiracy to launder more than $100 million in narcotics proceeds belonging to Mexico-based drug traffickers, through the purchase and resale of gold. The evidence in the case established that Pineda Sanchez and Parra-Pedroza laundered most of these narcotics proceeds on behalf of CJNG and its leader, Nemesio Oseguera Cervantes aka “Mencho.” Pineda Sanchez and Parra-Pedroza have pleaded guilty to the money laundering conspiracy charges, and are facing a statutory maximum sentence of 20 years in prison. On Oct. 5, Pineda Sanchez was sentenced to serve 15 years in prison by the U.S. District Court in Chicago. The Court will set a sentencing date for Parra-Pedroza at a status hearing on Nov. 1. All other charged and arrested members of the conspiracy have pleaded guilty and have either been sentenced or are awaiting sentencing.
The following individuals linked to the CJNG have also been indicted as a result of the coordinated efforts against the cartel:
- Oswaldo de Jesus Miramontes-Diaz, 44, was charged in the Central District of California in 2015. Miramontes-Diaz is currently serving a sentence pursuant to the charges in the United States;
- Gerardo Gonzalez Valencia, aka, “Lalo,” 41, was charged in the District of Columbia in 2016. He was arrested by Uruguayan authorities in April 2016 on these charges, and is awaiting extradition;
- Jose Gonzalez Valencia, aka, “Chepa,” 42, was charged in the District of Columbia in 2016. He was arrested by Brazilian authorities in December 2017 on these charges, and is awaiting extradition;
- Ulises Yovany Mora-Tapia, aka, “Yiyo,” 33, was charged in the District of Columbia in 2016. Mora-Tapia is currently a fugitive and is believed to be in Mexico;
- Jorge Manuel Cobian-Gonzalez, 43, was charged in the Eastern District of Virginia in 2017. Cobian-Gonzalez is currently awaiting trial;
- Juan Manuel Abouzaid El Bayeh aka, “El Escorpion,” 45, was charged in the District of Columbia in 2017. Abouzaid El Bayeh is currently a fugitive and is believed to be in Mexico; and
- Alfredo Galindo-Salazar aka, “Tucan,” 47, was charged in the District of Columbia in 2018. Galindo-Salazar is currently a fugitive and is believed to be in Mexico.
Treasury OFAC Designations
Since April 2015, OFAC has announced nine designation actions totaling 63 separate individuals and entities in Mexico tied to the CJNG and the Cuinis organization. In the initial 2015 designation action, both Nemesio Oseguera Cervantes and Abigael Gonzalez Valencia were designated by OFAC as Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act. These Kingpin Act designation actions targeting the CJNG and the Cuinis organization are among the most aggressive and targeted in OFAC’s history against Mexican drug trafficking organizations. Based upon this series of OFAC designations, Mexican authorities were able to seize the Hotelito Desconocido, an exclusive boutique hotel on the Pacific coast of Mexico, which was controlled by members of Los Cuinis organization. OFAC designations have allowed U.S. and Mexican government officials to follow the money of the CJNG and the Cuinis organization in an effort to disrupt their money laundering activities.
“Treasury has strategically targeted leaders of CJNG and the Cuinis organizations, as well as complicit family members, criminal operatives, and businesses under their control,” said OFAC Director Gacki. “Our goal is to disrupt the cartels’ finances, which are overwhelmingly generated from drug sales that occur in the United States, and deny them access to the U.S. financial system. OFAC is committed to working with the Department of Justice and Mexican counterparts in order to apply economic pressure on CJNG and the Cuinis organizations until they are effectively dismantled.”
State Department Award and DEA Tip-Line
As part of continuing efforts to cripple the operations of the CJNG, the U.S. Department of State has previously issued a number of rewards through the Narcotics Rewards Program for information leading to the arrest of critical CJNG operatives. Previously, the Department of State issued rewards through the Narcotics Rewards Program for up to the amount of $5 million for information leading to the arrests of Nemesio Oseguera Cervantes, Abigael Gonzalez Valencia, and Jose Gonzalez Valencia. Effective immediately, the Department of State is announcing an increase to the Narcotics Rewards Program reward for information leading to the arrest of the leader of the CJNG, Nemesio Oseguera Cervantes aka, “El Mencho.” Now $10 million, the reward is one of the largest ever approved for the Narcotics Rewards Program. Additionally, the Department of State is announding a Narcotics Rewards Program reward for information leading to the arrest of high ranking CJNG member Erick Valencia Salazar, aka, “El 85,” in the amount of $5 million. Individuals with information about this organization should contact law enforcement authorities by calling 1-213-237-9990, via email at [email protected], or via Twitter by contacting the handle, @DEALosAngeles.
“The $10 million reward for information leading to the arrest of “El Mencho” is among the highest the Narcotics Rewards Program currently offers,” said Assistant Secretary for International Narcotics and Law Enforcement Affairs Madison. “This reflects the U.S. government’s strong commitment to bringing Oseguera Cervantes to justice.”
Acknowledgments
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Forces (OCDETF), and were significantly aided by coordination and support from the multi-agency Special Operations Division (SOD) near Washington, D.C. OCDETF is a partnership that brings together the combined expertise and unique abilities of federal, state, and local enforcement agencies. 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.
These cases are being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section in conjunction with DEA Los Angeles Field Division, DEA Mexico City, DEA Guadalajara, DEA Chicago, FBI New York, FBI’s Legal Attaché Office in Mexico City, Homeland Security Investigations (HSI) Chicago and HSI Riverside; the Southern District of California in conjunction with DEA San Diego, DEA Guadalajara and HSI San Ysidro; the Northern District of Illinois in conjunction with the IRS-CI Chicago; the Bureau of Alcohol, Tobacco, Firearms, and Explosives Chicago and HSI Chicago; the SDMS in conjunction with DEA Gulfport and the Eastern District of Virginia in conjunction with the DEA Bilateral Investigations Unit.
The United States would like to acknowledge the significant contributions of the Government of Mexico in their bilateral efforts to target and dismantle the CJNG. The daily coordination between the Government of Mexico with the U.S. Department of Justice, Treasury and State to target this violent drug cartel has a direct impact on the lives and livelihood of millions of citizens in the United States and Mexico.
Relevant Court documents and visuals can be found at: https://www.justice.gov/opa/documents-and-resources-october-16-2018-press-conference?utm_medium=email&utm_source=govdelivery.
Johnstown Man Charged with Possessing Crack CocaineRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., was indicted by a federal grand jury in Johnstown on a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
The indictment named Anthony E. Gray, 22, as the sole defendant.
According to the indictment presented to the court, on July 10, 2018, Gray possessed with the intent to distribute more than 28 grams of cocaine base, commonly known as "crack."
The law provides for a maximum sentence of 40 years in prison and a fine of $5,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Special Assistant United States Attorney Arnold P. Bernard, Jr is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Cambria County Drug Task Force and the Johnstown Police Department conducted the investigation that led to the prosecution of Gray.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Johnstown Man Charged with Distributing Crack CocaineRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., was indicted by a federal grand jury in Johnstown on charges of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
The indictment named Bobby Washington, Jr., 34, as the sole defendant.
According to the indictment presented to the court, on March 17, 2018, Washington distributed less than 28 grams of cocaine base, commonly known as "crack," and on April 24, 2018, he possessed with intent to distribute 28 grams or more of cocaine base, commonly known as "crack."
The law provides for a maximum sentence of 60 years in prison and a fine of $6,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Washington.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Investment Advisor Pleads Guilty to $6.1 Million Ponzi SchemeRead the Press Release
NORFOLK, Va. – A Chesterfield man who owned and operated an investment firm in Virginia Beach pleaded guilty today to mail fraud and engaging in monetary transactions in criminally derived property.
According to court documents, Edward Lee Moody, Jr., 47, was a registered investment adviser and the sole owner and operator of CM Capital Management LLC, an investment firm with its principal office located in Virginia Beach. Moody solicited investors on the basis of his representation that he would profitably invest their assets in securities on their behalf and manage those investments on an ongoing basis. In reality, he ran a Ponzi scheme over a 13-year period, during which he solicited and collected approximately $6.1 million from 53 investors, at least 13 of whom were elderly persons who liquidated assets from their existing, legitimate retirement accounts in order to provide funds to him that they expected he would invest on their behalf. In most instances, Moody did not manage the accounts of the investors or buy or sell securities on their behalf, and did not even open individual brokerage accounts for them. Instead, Moody diverted investor monies for his own personal benefit and to enrich himself, using at least $1.4 million for business expenses, to purchase a home, make car loan payments, shop, travel to Las Vegas and other destinations. He also used approximately $885,000 of investor monies to buy and sell securities on his own behalf. Moody perpetuated the scheme by using approximately $1.5 million that he received from new investors to make periodic lulling payments to earlier investors, and he provided investors with fraudulent monthly account statements that falsely indicated that the investors’ funds had been invested in securities and had earned returns.
Moody faces 20 years in prison on the mail fraud charge and 10 years for engaging in monetary transactions in criminally derived property when sentenced on Feb. 5, 2019. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, and Kelly R. Jackson, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after Senior U.S. District Judge Robert G. Doumar accepted the plea. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-154.
Husband and Wife Sentenced for Roles in Conspiracy to Import and Traffic Counterfeit Electronic ProductsRead the Press Release
NEWARK, N.J. – A husband and wife were sentenced today for their roles in a scheme to smuggle counterfeit electronics, including Apple iPhones, iPads and iPods, from China for sale in the United States, U.S. Attorney Craig Carpenito announced.
Roberto Volpe, 36, an Italian national, was sentenced to 22 months in prison, and his wife, Andreina Becerra, 33, a Venezuelan national, was sentenced to three years of probation, including six months of house arrest. A third co-defendant, Rosario La Marca, 55, an Italian national and resident of Naples, Italy, was sentenced July 21, 2017, to 37 months in prison.
The three defendants previously pleaded guilty before U.S. District Court Judge Kevin McNulty to Count One of an indictment, charging conspiracy to traffic in counterfeit goods, to smuggle goods into the United States, and to structure financial transactions, and Count Two, charging trafficking in counterfeit goods. Judge McNulty imposed the sentences on Volpe and Becerra today in Newark federal court.
The three defendants were originally charged in an eight-count indictment returned in April 2015 with importing and trafficking fake iPhones, iPads and iPods bearing counterfeit Apple trademarks, and fake camcorders bearing counterfeit Sony trademarks, as well as smuggling, structuring and international money laundering.
According to the documents filed in this case and statements made in court:
From July 2009 through February 2014, the defendants conspired to smuggle into the United States from China more than 40,000 electronic devices and accessories. The estimated manufacturer’s suggested retail prices for an equivalent number of genuine items would have exceeded $15 million. The devices were shipped separately from the labels bearing counterfeit trademarks in order to avoid detection by U.S. Customs and Border Protection. The devices were then labeled and packaged after they passed through customs.
The defendants then re-shipped the devices to conspirators all over the United States. Proceeds from the sales of the devices were funneled back to the defendants’ accounts in Florida and New Jersey via structured cash deposits – broken into multiple deposits of less than $10,000 each to avoid bank reporting requirements – and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.
The defendants made more than 100 illegal wire transfers totaling more than $1.1 million to Hong Kong to facilitate their criminal activity.
In addition to the prison terms, Judge McNulty sentenced the defendants to Volpe to two years of supervised release and fined him $25,000. Becerra was fined $20,000. As part of their plea agreements, Volpe and Becerra agreed to forfeit their interest in 10 bank accounts, three Florida condominiums, and approximately $167,000 in cash.
Jianhua Li, a Chinese national currently residing in California, pleaded guilty in Feb. 2, 2018, and is awaiting sentencing.
U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Newark Seaport Investigations Group, under the direction of Special Agent in Charge Brian Michael; and the Bergen County Prosecutor’s Office, under the direction of Acting Bergen County Prosecutor Dennis Calo, with the investigation leading to today’s sentencings. He also thanked Europol and Italy’s Guardia di Finanza for their assistance.
The government is represented by Senior Trial Counsel Leslie Schwartz and Assistant U.S. Attorney Sarah Devlin of the District of New Jersey, and Trial Attorney Kebharu Smith of the Criminal Division’s Computer Crime and Intellectual Property Section.
Hartford Man Guilty of Sex Trafficking Minors, Child Pornography OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut announced that a federal jury in Bridgeport has found CHRISTOPHER HAMLETT, also known as “Cadi” and “Cadillac Black,” 25, of Hartford, with multiple federal offenses related to the sex trafficking of minors.
A trial before U.S. District Judge Victor A. Bolden began on October 9 and the jury returned guilty verdicts on all counts of a nine-count indictment this morning.
When he is sentenced, HAMLETT faces a mandatory minimum term of imprisonment of 15 years and a maximum term of imprisonment of life. A sentencing date is not scheduled.
According to the evidence at trial, between August and November 2017, HAMLETT recruited and enticed two minor female victims to engage in prostitution at hotels in Hartford and Wethersfield. In order to solicit clients for the minors, HAMLETT took sexually explicit photographs of each minor and submitted them to the website Backpage.
HAMLETT began to recruit a 17-year-old minor into prostitution during their first meeting. HAMLETT agreed that the minor victim could keep 60 percent of the money she made from prostitution customers, and he would take 40 percent. The minor victim saw customers for approximately three months. The evidence at trial included text messages between HAMLETT and prostitution clients, and text messages from HAMLETT to the minor victim. In the text messages to the minor victim, HAMLETT told the victim how much to charge, and threatened the victim when he thought she had not given him his full share of the money.
The trial evidence also showed that HAMLETT facilitated the prostitution of a second minor victim who was then 16 years old, using Facebook Messenger to send her clients and explain particular sexual acts.
HAMLETT also posted Backpage advertisements for an adult woman who worked for him in prostitution.
The jury found HAMLETT guilty of two counts of sex trafficking of a minor, five counts of using a facility of interstate commerce to promote commercial sex, and two counts of production of child pornography.
HAMLETT has been detained since his arrest on February 8, 2018.
This matter was investigated by the Hartford Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Nancy V. Gifford and Sarala V. Nagala.
Hampton Man Indicted for Armed Bank Robbery and Multiple Bomb HoaxesRead the Press Release
NEWPORT NEWS, Va. – A federal grand jury returned an indictment today charging a Hampton man with making multiple bomb threats in Hampton and Newport News in an effort to divert authorities away from his armed robbery of the Virginia Educators Credit Union (VECU).
According to allegations in the indictment, Oscar Von Alston II, 31, made a series of bomb threats to public facilities in both Hampton and Newport News including two courthouses, two hotels, and a YMCA. During the evacuations of the threatened locations where both local police and firemen were dispatched, Alston robbed the VECU at gunpoint. Alston was apprehended less than 20 minutes after the robbery with over $22,000 from the VECU.
Alston is charged with five counts of making a threat with explosives, five counts of false information and hoax, bank robbery, and brandishing a firearm in furtherance of a crime of violence. If convicted, he faces a mandatory minimum of seven years and maximum of life in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, Terry L. Sult, Chief of Hampton Police Division, and Steve R. Drew, Chief of Newport News Police, made the announcement. Assistant U.S. Attorney Peter Osyf is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:18-cr-79.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Grape Street Crips Member Indicted for Murder of Bystander at 2010 Summer CookoutRead the Press Release
NEWARK, N.J. – A member of the Grape Street Crips gang was indicted today on additional charges in connection with the murder of a bystander at a summer cookout in 2010, U.S. Attorney Craig Carpenito announced today.
Khalil Stafford, a/k/a “Stod,” 34, of Newark, was indicted today on additional charges in a seventh superseding indictment, including RICO conspiracy, murder in aid of racketeering, and using a firearm during a crime of violence, in connection with a June 19, 2010, shooting that left a woman dead and two other people wounded. Stafford was previously acquitted of the murder following a trial in Essex County Superior Court.
Stafford – along with Hanee Cureton, a/k/a “City,” a/k/a “Fat Boy,” 33, of Newark, and 12 other defendants – was previously charged with RICO conspiracy, conspiracy to distribute one kilogram or more of heroin, and possession with intent to distribute one kilogram of more of heroin. Twelve of the 14 defendants charged in the indictment have been convicted. Stafford and Cureton are awaiting trial.
Another 66 members and associates of the Grape Street Crips who were arrested along in a coordinated takedown in May 2015 were separately charged with drug-trafficking, physical assaults, and witness intimidation, and all have been convicted.
According to the indictment and statements made in court:
On June 19, 2010, during a family cookout on Garside Street in Newark, Stafford confronted an individual about money he claimed the individual owed him. Stafford and several other gang-members left the cookout to retrieve firearms and later returned. They fired numerous shots at the person Stafford had originally confronted. Three people were struck – including a woman who was not involved in the confrontation, but was merely standing on a nearby porch, and was killed – and two other people who were wounded and survived.
Stafford and Cureton were involved in the distribution of heroin from 2003 through 2015. Cureton was a major supplier of heroin to members of the Grape Street Crips at the James Baxter Terrace housing complex from 2003 until Baxter Terrace was demolished in 2009. Stafford distributed both heroin and cocaine at Baxter Terrace.
After Baxter Terrace was torn down, Cureton and Stafford continued to distribute heroin. On Nov. 12, 2013, agents with the DEA searched one of Cureton’s heroin mills, seizing more than a kilogram of heroin, cutting agents, and packaging material. In 2014, Cureton and Stafford sold to DEA confidential informants nearly $20,000 worth of heroin in separate transactions.
Stafford faces a mandatory life sentence in connection with the murder in aid of racketeering and conspiracy to distribute one kilogram of more of heroin. For using a firearm during a crime of violence, he faces a mandatory minimum term of 10 years in prison and a maximum sentence of life in prison. For the RICO conspiracy, Stafford faces a maximum term of life in prison.
Cureton faces a mandatory minimum term of 20 years and a maximum sentence of life in prison for the charge of conspiracy to distribute one kilogram or more of heroin. For the RICO conspiracy, Cureton faces a maximum sentence of life in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, and investigators from the U.S. Attorney’s Office with the investigation leading to today’s indictment. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sherriff’s Office, under the direction of Armando B. Fontoura, for their assistance with the investigation.
The government is represented by Osmar J. Benvenuto, Chief of the Organized Crime and Gangs Unit, and Assistant U.S. Attorney Richard J. Ramsay of the Appeals Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Former State Street Executive Sentenced for Scheme to Defraud Clients through Secret Trading CommissionsRead the Press Release
A former executive vice president of State Street Corporation was sentenced today in federal court in Boston, Massachusetts, in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling for the District of Massachusetts, and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Office, made the announcement.
Ross McLellan, 47, of Hingham, Massachusetts, was sentenced by U.S. District Court Judge Leo T. Sorokin to 18 months in prison and two years of supervised release. In June 2018, McLellan was convicted by a federal jury of one count of conspiring to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud.
In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer unit, and Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa, were indicted. In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on Nov. 6. Also in June 2017, Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt was sentenced in July 2018 to one year of probation.
According to the evidence presented at trial, between February 2010 and September 2011, McLellan, Pennings, and Boomgaardt conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees that the clients had agreed to pay to the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings, and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports. For example, in a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
The evidence at trial demonstrated that in June 2010 McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities that the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention. In March 2011 McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01 percent) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
The evidence at trial further showed that, in June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later, at McLellan’s direction, Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
The case was investigated by the FBI. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs.
Trial Attorney William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen E. Frank of the District of Massachusetts prosecuted the case.
Former State Street Executive Sentenced for Scheme to Defraud Clients Through Secret Trading CommissionsRead the Press Release
BOSTON – A former executive vice president of State Street Corporation was sentenced today in federal court in Boston in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Ross McLellan, 47, of Hingham, was sentenced by U.S. District Court Judge Leo T. Sorokin to 18 months in prison and two years of supervised release. In June 2018, McLellan was convicted by a federal jury of one count of conspiring to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud.
In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer unit, and Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa, were indicted. In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on Nov. 6, 2018. Also in June 2017, Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt was sentenced in July 2018 to one year of probation.
Between February 2010 and September 2011, McLellan, Pennings, and Boomgaardt conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees that the clients had agreed to pay to the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings, and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports.
For example,
- In a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
- In June 2010, McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities that the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention.
- In March 2011, McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01%) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later, at McLellan’s direction, Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
United States Attorney Andrew E. Lelling; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office, made the announcement today. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Securities and Financial Fraud Unit, and Trial Attorney William Johnston of the Criminal Division’s Fraud Section prosecuted the case.
Former PCAOB Inspections Leader and KPMG Executive Director Pleads Guilty to Scheme to Steal Confidential PCAOB Information in Order to Fraudulently Improve KPMG’s PCAOB Inspection ResultsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CYNTHIA HOLDER, a former Public Company Accounting Oversight Board (“PCAOB”) Inspections Leader and KPMG Executive Director, pled guilty today to participating in a scheme to defraud the Securities and Exchange Commission (the “SEC”) and the PCAOB by obtaining, disseminating, and using confidential lists of which KPMG audits the PCAOB would be reviewing so that KPMG could improve its performance in PCAOB inspections, the results of which were shared with, and utilized by, the SEC in carrying out its governmental functions. HOLDER pled guilty before the U.S. District Court Judge J. Paul Oetken.
Manhattan U.S. Attorney Geoffrey S. Berman said: “In the wake of the accounting fraud scandals of the early 2000s, Congress passed important laws to ensure the quality and accuracy of auditing work performed on publicly traded companies so that investors could have confidence in the reported financial results of those companies. The SEC was vested with the responsibility and authority of executing these laws and the PCAOB was created to play a key role: To audit the auditors. HOLDER undermined the work of the SEC and the PCAOB by stealing confidential inspection information from her former employer, the PCAOB, and helping insiders at her new employer, KPMG, to cheat the regulatory system put in place to protect the investing public. This was a revolving door tainted by fraud and today we hold the defendant accountable for her conduct.”
According to the allegations contained in the Indictment filed against HOLDER, along with her co-conspirators, David Middendorf, David Britt, Thomas Whittle, and Jeffrey Wada, and statements made in related court filings and proceedings:[1]
The PCAOB is a nonprofit corporation overseen by the SEC that inspects the audit work performed by registered accounting firms (“Auditors”) with respect to the financial statements of publicly traded companies (“Issuers”). The PCAOB inspects the largest U.S. accounting firms on an annual basis. As part of the inspection process, the PCAOB chooses a selection of audits performed by the accounting firm for a closer review. Until shortly before an inspection occurs, the PCAOB does not disclose which audits are being inspected, or the focus areas for those inspections, because it wants to ensure that an Auditor does not perform additional work or modify its work papers in anticipation of an inspection. Following the completion of an inspection, the PCAOB issues an Inspection Report containing any negative findings or “comments” with respect to both the specific audits reviewed and the accounting firm more generally. The PCAOB transmits these Inspection Reports to the SEC, which utilizes them in carrying out its agency functions.
KPMG is one of the largest accounting firms in the world. In recent years, KPMG fared poorly in PCAOB inspections and in 2014 received approximately twice as many comments as its competitor firms. By 2015, KPMG was engaged in efforts to improve its performance in PCAOB inspections, including but not limited to recruiting and hiring former PCAOB personnel such as HOLDER and HOLDER’s co-conspirator, Brian Sweet.
KPMG’s efforts to improve inspection results, however, were not limited to legitimate means. Instead, between 2015 and 2017, HOLDER, Middendorf, Whittle, Britt, Wada, and Sweet worked to illicitly acquire valuable confidential PCAOB information concerning which KPMG audits would be inspected, in an effort to game the system and improve inspection results. For example, after Sweet began employment at KPMG, but while HOLDER was still employed by the PCAOB, HOLDER fed Sweet confidential PCAOB information about certain pending inspections. HOLDER did so while simultaneously seeking employment at KPMG. During the pendency of her efforts to obtain employment at KPMG, HOLDER – in violation of PCAOB rules – continued to work on KPMG inspections at the PCAOB. Once she secured a job at KPMG, HOLDER stole valuable confidential information on her way out of the PCAOB and then passed it on to Sweet, her new boss at KPMG.
In March 2016, HOLDER obtained the PCAOB’s confidential 2016 inspection selections for KPMG from Wada, who was still working at the PCAOB but who had recently been passed over for a promotion. Wada – who was not responsible for KPMG inspections at the PCAOB – accessed and stole valuable confidential information from the PCAOB and passed it on to HOLDER. HOLDER, in turn, provided the 2016 inspection selections to Sweet, who passed them to Middendorf, Whittle, and Britt. Middendorf, Whittle, Britt, and Sweet then agreed to launch a stealth program to “re-review” the audits that had been selected. In order to cover up their illicit conduct, Britt gave other KPMG engagement partners a false explanation for the re-reviews. The stealth re-review program allowed KPMG to double-check its audit work, strengthen its work papers, and, in some cases, identify deficiencies or perform new audit work that had not been done during the live audit.
In January 2017, Wada, who had again been passed over for promotion at the PCAOB, again stole valuable confidential PCAOB information, misappropriating a preliminary list of confidential 2017 inspection selections for KPMG audits and passing it on to HOLDER. At the same time, Wada provided Holder with his resume and sought her assistance in helping him to acquire employment at KPMG. Sweet shared the preliminary inspection selections provided by Wada with Whittle and Britt, while noting that the information was only preliminary. Whittle’s response was to ask Sweet to confirm that they would get the final list as well.
In February 2017, Wada texted HOLDER saying, “I have the grocery list. . . . All the things you’ll need for this year.” Wada then spoke to HOLDER and provided her with the full confidential 2017 final inspection selections. HOLDER again shared the stolen information with Sweet, who shared it with Middendorf, Whittle, and Britt. Middendorf, Whittle, Britt and Sweet agreed to inform engagement partners on the list so that extra attention could be paid to these audits in light of the forthcoming PCAOB inspections.
In 2017, a KPMG partner who received early notice that his/her engagement was on the confidential 2017 inspection list reported the matter, as a result of which KPMG’s Office of General Counsel launched an internal investigation. Thereafter, HOLDER and Sweet took a number of steps to destroy or fabricate evidence relevant to the investigation. For example, HOLDER deleted a number of relevant text messages, emails, and documents, and said she was going to purchase a “burner phone” so her conversations could not be monitored. Similarly, Sweet burned evidence of the 2017 inspection list and provided a falsified version of the list to KPMG counsel.
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HOLDER, 52, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and two counts of wire fraud, which each carry a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for April 5, 2019 at 10:30 a.m.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Trial against the remaining defendants is scheduled to begin on February 11, 2019, before the Honorable J. Paul Oetken.
Mr. Berman praised the investigative work of the United States Postal Inspection Service and also thanked the Securities and Exchange Commission, which has brought an administrative proceeding against the defendants.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein, Amanda Kramer, and Jessica Greenwood are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Mayes County Deputy Sheriff Surrenders to Authorities for Stealing Drug EvidenceRead the Press Release
Former Mayes County Deputy Sheriff Brett Mull, 47, of Pryor, surrendered to the Mayes County Sheriff’s Office on Monday in response to a Criminal Complaint filed in U.S. District Court alleging he misused his position to obtain methamphetamine that had been collected as evidence during drug investigations.
Mull was charged with tampering or obstruction of an official investigation or proceeding. According to the complaint, investigators discovered Oklahoma State Bureau of Investigation evidence submittal envelopes during a search of his residence, on July 3, 2018. The envelopes appeared to have previously contained methamphetamine seized during Mayes County law enforcement operations. The complaint alleges that Mull admitted to officers that he had removed the evidence from the Criminal Investigations Unit, which he supervised, for his own personal use.
“This case demonstrates the destructive lure of methamphetamine,” said U.S. Attorney Trent Shores. “More importantly, Mr. Mull has allegedly violated the public’s trust and abused his position as a deputy sheriff. Those serving in law enforcement must maintain a justice system that fosters trust among the people of this nation who count on these men and women. The U.S. Attorney’s Office will seek to hold Mr. Mull accountable in a court of law.”
This matter will proceed in United States District Court in Tulsa, where the Criminal Complaint is currently pending. A Criminal Complaint is a temporary charge alleging a violation of law. For the case to proceed to trial, the United States must present the charge to a federal Grand Jury within 30 days. Once a Grand Jury returns an Indictment, a defendant has a right to a jury trial at which the United States would have the burden of proving the defendant’s guilt beyond a reasonable doubt. All defendants are presumed innocent until proven guilty in a court of law.
Former Equifax manager sentenced for insider tradingRead the Press Release
ATLANTA - Sudhakar Reddy Bonthu, a former manager at Equifax, was sentenced today after pleading guilty to insider trading. Bonthu bought and sold Equifax stock options before Equifax’s data breach was publicly announced, while working as a member of the team assembled to respond to the company’s massive data breach in 2017.
“Bonthu intentionally took advantage of information entrusted to him in order to make a quick profit,” said U.S. Attorney Byung J. “BJay” Pak. “The integrity of the stock markets and the confidence of investors are impaired by those who use nonpublic information for personal gain.”
“If we don’t hold company insiders to the same rules that govern regular investors, the public’s confidence in the stock market erodes,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will do everything in its power to hold accountable those who choose to take advantage of their inside knowledge.”
According to U.S. Attorney Pak, the charges and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million consumers. Sudhakar Reddy Bonthu was a software product development manager for Equifax’s Global Consumer Services team in August 2017. He was asked to assist in developing data breach remediation applications for an unnamed company and was further told that the project was a high priority with a short deadline because the company intended to announce the breach publicly on September 6, 2017. Among other tasks, his primary role was to help develop an online user interface that would allow consumers to determine whether they were impacted by the breach. Although he was never directly told it was actually Equifax that had been breached, he was entrusted with information that led him to that conclusion. For example, he knew that around 100 million individuals’ information was exposed as part of the breach and that the available information included names and Social Security numbers.
On September 1, 2017, Bonthu bought 86 “put” options in Equifax stock that expired on September 15, 2017. Those options allowed him to profit if the value of Equifax stock dropped within that two-week period. These trades also violated company policy, which did not allow employees to purchase option contracts in Equifax common stock. Equifax publicly disclosed the data breach on September 7, 2017, and its stock fell the next day. Bonthu then exercised his put options, making a profit of more than $75,000.
Sudhakar Reddy Bonthu, 44, of Atlanta, Georgia, was sentenced to eight months of home confinement by U.S. District Court Judge Amy Totenberg. He was fined $50,000 and he was also ordered to forfeit $75,979.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Christopher J. Huber, Deputy Chief of the Complex Frauds Section, and Lynsey M. Barron prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Energy Company Executive Sentenced in Connection with the Bribery Scheme of Former Executive Deputy Secretary to the Governor of New YorkRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that PETER GALBRAITH KELLY JR., a former executive at Competitive Power Ventures (“CPV”), was sentenced to 14 months in prison for defrauding CPV by misrepresenting that the former Executive Deputy Secretary to the Governor, Joseph Percoco, had obtained state ethics approval for his wife to work at CPV. Co-defendants Percoco and Steven Aiello were convicted of charges relating to bribery on March 13, 2018, after an eight-week jury trial. The jury was deadlocked on the charges against KELLY. Joseph Gerardi, who was acquitted of all charges at the trial with Percoco, was convicted of all charges in a related trial earlier this year. KELLY pled guilty on May 11, 2018, to one count of conspiracy to commit wire fraud before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.
U.S. Attorney Geoffrey Berman said: “Braith Kelly admitted to giving the spouse of one of the most powerful men in Albany, Joseph Percoco, a low-show job at his company in order to ingratiate himself and his company with Percoco. Many consider this type of behavior to be ‘the way things are done’ in government. But our Office does not, and neither does the court.”
In imposing today’s sentence, Judge Caproni stated: “I hope the sentence will be heard in government affairs offices everywhere…you have to play by the rules.”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
KELLY hired Percoco’s wife to a low-show job at CPV, and ran monthly payments to Percoco and his wife through a consultant who worked for CPV in order to disguise the source of the payments. KELLY also made sure that Percoco’s wife’s photograph and full name were not included in promotional materials for CPV, and he falsely told his superiors at CPV – on two separate occasions – that Percoco had obtained an ethics opinion from the Governor’s Office approving of Percoco’s wife’s employment with CPV, when in fact no such opinion existed.
* * *
In addition to the prison term, KELLY, 55, of Canterbury, Connecticut, was sentenced to three years of supervised release. He was also ordered to pay $247,000 in restitution to CPV.
On September 20, 2018, Judge Caproni sentenced Percoco to six years in prison. Aiello is scheduled to be sentenced on November 29, 2018. Gerardi is scheduled to be sentenced on December 6, 2018.
U.S. Attorney Berman praised the work of the Buffalo Field Office of the Federal Bureau of Investigation and New York Office of the Internal Revenue Service-Criminal Investigation, which jointly conducted this investigation with special agents from the U.S. Attorney’s Office.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Janis Echenberg, Robert Boone, David Zhou, and Matthew Podolsky are in charge of the prosecution.
Former Anne Arundel County Sheriff’s Office Employee Pleads Guilty to Providing Information to the Target of a Drug Trafficking InvestigationRead the Press Release
Baltimore, Maryland – Chanel Holland, age 36, of Glen Burnie, Maryland, pleaded guilty today to obstructing an official proceeding arising from Holland providing information regarding law enforcement activity, including sealed indictments and investigative information, to the target of a drug trafficking investigation. At the time, Holland was employed as the Human Resource Administrator in the Anne Arundel County Sheriff’s Department.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore; Anne Arundel County Police Chief Tim Altomare; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Anne Arundel County State’s Attorney Wes Adams; and Maryland State Prosecutor Emmet C. Davitt.
“Law enforcement officers fight every day to keep our streets safe from drug dealers and other criminals who endanger our communities. Chanel Holland betrayed the trust of those officers and the citizens of Maryland,” said United States Attorney Robert K. Hur. “In doing so, she not only broke the law, but also put lives at risk. This prosecution holds her accountable for those actions.”
According to Holland’s plea agreement, as a result of an investigation into a violent drug trafficking organization, on June 8, 2018, sealed indictments were returned for 10 individuals, including Traymont Wiley (a/k/a “Whamp”), who was believed to be the leader of the organization. The organization operated in Anne Arundel County and elsewhere, and was believed to be associated with several murders in Anne Arundel County. Sealed arrest warrants and search warrants for several locations were also authorized.
On Monday, June 11, 2018, a conversation between Traymont Wiley and another individual was intercepted on the wiretap that was authorized as part of the investigation. Wiley stated that he had been told that he was going to be arrested on drug and gang-related charges. Wiley’s call led to a flurry of conversations monitored on the intercepted lines between targets of the investigation. During the conversations, it was revealed that the person who provided Wiley the information about the sealed criminal charges was a female named “Chanel.” During the conversations, the targets were reading portions of the sealed indictment out loud, including the names of other co-defendants named in the sealed indictment. Wiley also read his charges, using the exact legal wording of the crimes as stated in the sealed indictment. Further, on June 12, 2018, an attorney hired by one of the co-defendants made a motion to the court citing the specific court case number on the sealed indictment and requesting the court to unseal and quash a pending sealed arrest warrant. All of this occurred before the indictment and arrest warrants were unsealed, and prior to the execution of the sealed search warrants.
A subsequent audit of Maryland Judiciary Secure Case Search revealed that Holland’s Secure Case Search account was the only account to conduct a search of all four names heard during the interception of the target lines. Secure Case Search is not available to the public and is restricted to law enforcement and other related entities. Holland’s duties as Human Resource Administrator did not include running searches for individuals through Secure Case Search. Holland’s cell phone records revealed that she had 96 contacts (message and voice) with Wiley on June 11, 2018. Surveillance video at the Anne Arundel County Circuit Court showed that on Monday, June 11, 2018, Holland had entered and exited the administration offices where her Secure Case Search account was accessed from her assigned computer.
On June 20, 2018, a search warrant was executed at Holland’s residence and her phone was recovered. A search of the phone messages revealed that Holland had been providing information to Wiley and others for several months, beginning as early as April 2018. On June 11, 2018, Holland sent a photograph of the sealed indictment to Wiley’s phone and stated, “Here’s a list of your charges.” Holland then had a series of phone calls with Wiley’s phone in which she provided additional information about the sealed warrants and the nature of the charges. Holland attempted to find out if a cooperating source had provided information to law enforcement which led to the charges against Wiley and the other co-conspirators, and she conveyed information about suspected cooperating sources to Wiley and others, including photos of those individuals and information about the status of their court cases.
Holland admitted that she did not want Wiley and his co-conspirators to get any additional charges, so she alerted them about the outstanding warrants and indictment. Holland further admitted that she knew her actions were likely to affect the federal grand jury proceeding.
Holland faces a maximum sentence of 20 years in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for March 26, 2019 at 3:00 p.m.
United States Attorney Robert K. Hur commended HSI Baltimore, the Anne Arundel County Police Department, the Maryland State Police, and the FBI for their work in the investigation, and thanked the Anne Arundel County State’s Attorney’s Office and the Office of the State Prosecutor for their assistance in the investigation and prosecution. Mr. Hur thanked Assistant U.S. Attorney Derek E. Hines, who is prosecuting the case.
Final Defendants Convicted in Large-Scale Wilmington Drug ConspiracyRead the Press Release
WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware, announced that Robert Shepherd III, 42, of Philadelphia, PA, pled guilty to conspiracy to distribute cocaine. Shepherd was the final defendant to be convicted in “Operation French Connection,” an FBI investigation that led to the prosecution of seven defendants in federal court. Just four weeks ago, Defendants Brian Wilson, a/k/a “Fudayl Wakim” and Mark Bower, a/k/a Kenneth Flowers, were convicted of similar charges after a week-long jury trial. Shepherd, Wilson, and Flowers are expected to be sentenced in early 2019.
The convictions are the result of a long-term New Castle County High Intensity Drug Trafficking Area (“HIDTA”) investigation spearheaded by the FBI Delaware Violent Crime Safe Streets Taskforce. Investigators seized four firearms, over five kilograms of cocaine, and roughly 150 grams of heroin as part of the case.
U.S. Attorney Weiss stated, “A significant drug distribution network has been removed from the streets of Wilmington. The conviction of these three defendants is a result of the tremendous cooperation between the FBI, the Wilmington Police Department, and our HIDTA partners.
The FBI Delaware Violent Crime Safe Streets Taskforce is a part of the New Castle County HIDTA, comprised of the Delaware State Police, Delaware Department of Probation and Parole, New Castle County Police Department, University of Delaware Police Department, and Wilmington Police Department. The Delaware Department of Justice also assisted in this case. The case is being prosecuted by Special Assistant U.S. Attorney Christopher L. de Barrena-Sarobe and Assistant U.S. Attorney Alexander S. Mackler.