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9 October 2018
Man Receives 106 Year Sentence After String of Violent Convenience Store Robberies in the TriangleRead the Press Release
GREENVILLE – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, Senior United States District Judge Malcolm J. Howard sentenced JOHN DEVERE BATTLE, 25, of Durham, to 1,272 months imprisonment followed by 5 years of supervised release. He was also ordered to pay $35,791.00 in restitution. BATTLE was convicted on May 17, 2018, after a four-day jury trial, of 12 counts including Conspiracy to commit Hobbs Act Robbery, Interference with commerce by robbery and aiding and abetting, four-counts of Brandishing a firearm in furtherance of a crime of violence and aiding and abetting, Interference with commerce by robbery and aiding and abetting, Taking motor vehicle by force, violence and intimidation with intent to cause serious bodily injury, and aiding and abetting, Bank robbery and aiding and abetting, two-counts of Possession of a firearm and ammunition by a convicted felon.
The evidence at trial showed that on May 14, 2016, BATTLE and others robbed the Kangaroo gas station located at 1807 North Harrison Avenue in Cary at gunpoint. On June 15, 2016, BATTLE and others robbed the Quality Mart gas station located at 7411 Chapel Hill Road in Cary at gunpoint. On June 16, 2016, BATTLE and others committed a home invasion in Cary. During the home invasion, BATTLE and others robbed the victims at gunpoint, tied up the victims and threatened to kill them. One of the victims was pistol-whipped. BATTLE and others took one of the victims at gunpoint to a bank in Cary and forced the victim to withdraw money. The evidence also established that BATTLE was arrested on June 17, 2016 after the execution of a search warrant at a home in Wendell, NC. During the execution of the search warrant, a handgun was recovered along with numerous stolen items taken from the home invasion.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
In support of PSN, the United States Attorney’s Office for the Eastern District of North Carolina has implemented the Take Back North Carolina Initiative. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
The investigation of this case was conducted by the Cary Police Department, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Durham Police Department, Federal Bureau of Investigation, Wake County Sheriff’s Office, Wendell Police Department, City County Bureau of Identification and the North Carolina State Bureau of Investigation. Assistant United States Attorneys Peggah B. Wilson and Ethan A. Ontjes represented the government in this case.
MS-13 Leader Sentenced for RICO ConspiracyRead the Press Release
BOSTON – The leader of MS-13’s Eastside Loco Salvatrucha (ESLS) clique was sentenced today in federal court in Boston for RICO conspiracy.
Herzzon Sandoval, a/k/a “Casper,” 36, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 20 years in prison and two years of supervised release. In February 2018, Sandoval and two other MS-13 members, Edwin Guzman, a/k/a “Playa,” 32, and Erick Argueta Larios, a/k/a “Lobo,” 33, both Salvadoran nationals residing in the U.S. illegally, were convicted by a federal jury of conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. A fourth MS-13 member, Cesar Martinez, a/k/a “Cheche,” 37, also a Salvadoran national illegally residing in the U.S., was convicted at the same trial of conspiracy to possess with intent to distribute 500 grams or more of cocaine.
According to court documents, MS-13 was identified as a violent transnational criminal organization whose branches, or “cliques,” operate throughout the United States, including in Massachusetts. MS-13 members are required to commit acts of violence, specifically against rival gang members, to gain membership in and be promoted within the gang. Sandoval and Guzman were the leaders, also known as the “first word,” and “second word,” of the ESLS clique in Massachusetts.
On Sept. 20, 2015, Joel Martinez, a/k/a “Animal,” murdered a 15-year-old boy in East Boston. On Jan. 8, 2016, as a reward for the 2015 murder, Joel Martinez was promoted by the gang to “homeboy” status with a 13-second beat-in by other MS-13 members at an ESLS meeting that Sandoval, Guzman, Martinez and Argueta Larios attended.
In May 2018, Joel Martinez was sentenced to 40 years in prison and two years of supervised release after pleading guilty to RICO conspiracy involving murder. Cesar Martinez, Guzman, and Argueta Larios are scheduled to be sentenced on Nov. 6, Nov. 15, and Nov. 19, 2018, respectively.
Sandoval was one of 49 defendants convicted as part of this case. All nine defendants who went to trial were convicted and 40 others pleaded guilty. In all, 16 defendants, including Joel Martinez, were found to have committed or knowingly participated in murders.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney John P. Pappas; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Gross; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; and Somerville Police Chief David Fallon made the announcement today. The U.S. Marshals Service has provided crucial assistance with the case.
Loudon Man Pleads Guilty to Methamphetamine TraffickingRead the Press Release
CONCORD - Randy Barton, 49, of Loudon, New Hampshire, pleaded guilty in federal court to possession of methamphetamine with intent to distribute, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on April 11, 2018, a New Hampshire State Trooper was patrolling I-93 in Canterbury. After observing a Chevrolet Cobalt commit a traffic infraction, the Trooper stopped the car and approached it. A woman, Katie-Jo Waters, was driving the car, and defendant Randy Barton was in the front seat. After making numerous observations of Waters and Barton and detecting inconsistencies in their stories, Trooper Owens asked Barton to step out of the vehicle, and conducted a pat-down search. The Trooper detected a bulge in Barton's pants pocket, and recovered two plastic baggies containing 15.5 grams of highly pure methamphetamine.
Barton is scheduled to be sentenced on January 15, 2019.
Katie-Jo Waters previously pleaded guilty in federal court to conspiracy to distribute methamphetamine on July 24, 2018. She will be sentenced on January 15, 2019.
“Methamphetamine is a dangerous drug that is causing increasing damage in the Granite State,” said U.S. Attorney Murray. “Even as our state addresses the opioid crisis, we continue to work with our law enforcement partners to combat the threats posed by other illicit drugs. The presence of highly pure methamphetamine in New Hampshire is a grave concern and we will aggressively prosecute those who choose to distribute it.”
"The U.S. Postal Inspection Service and our law enforcement partners will continue to work diligently to keep methamphetamine and other highly addictive drugs out of our communities," said Inspector in Charge, Joseph W. Cornin, Boston Division.
This matter was investigated by the New Hampshire State Police, DEA, and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys John S. Davis and Shane B. Kelbley.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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Leader of International Cyber Fraud Ring Returned to United States to Face Federal Racketeering ChargesRead the Press Release
A Romanian national was returned to the United States Friday to face federal charges that accuse him of being the leader of an international cyber fraud ring that used malware to steal in excess of four million dollars after taking people’s passwords, personal identifying information, and bank account information.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Justin E. Herdman of the Northern District of Ohio, Peter Elliot of the U.S. Marshals Service, Stephen D. Anthony of the FBI and Chief Kevin Bielozer of the Westlake Police Department made the announcement.
Romeo Vasile Chita, 38, was charged in a four-count indictment unsealed in U.S. District Court in Cleveland, Ohio. The charges include racketeering, wire fraud conspiracy, conspiracy to launder money and conspiracy to traffic in counterfeit services.
Eight other defendants were named in the indictment unsealed today. Two defendants—Daniel Mihai Radu, 39; and Manuel Tudor, 37, —have already been extradited from Romania and are awaiting trial in Cleveland. The other five defendants remain at large.
“Romeo Vasile Chita allegedly led a multinational criminal enterprise that stole sensitive personal data through deceptive phishing emails and organized fraudulent online auctions, causing millions of dollars in losses to innocent victims,” said Assistant Attorney General Benczkowski. “The Criminal Division will continue to work with our law enforcement partners, both domestic and international, to aggressively disrupt and dismantle international cyber criminal organizations that victimize our citizens and businesses.”
“This defendant led an international operation that used fraudulent emails and the internet to scam hard-working people out of their savings,” said U.S. Attorney Herdman. “It is gratifying that this defendant will be forced to answer the charges filed against him.”
According to the indictment, Chita was based in Romania and led a racketeering enterprise that operated in the United States, Romania, Canada, Croatia, Latvia, Hungary, Bosnia, China, Jordan, Malaysia and elsewhere. The goal of the enterprise was to generate money through various criminal acts, including wire fraud, trafficking in counterfeit services, and money laundering. It began operating as early as 2007.
Among other things, Chita’s group sent “phishing” emails purporting to be from the Better Business Bureau, the IRS, U.S. Tax Court, the National Payroll Records Center, and others. When a victim clicked on a link in a fraudulent email, specialized malware incorporating a “keylogger” was installed onto the victims’ computers, allowing members of the criminal enterprise to capture sensitive and confidential information, including the victims’ bank account information.
The conspirators, including Chita, then transmitted the sensitive information to each other and others for the purpose of fraudulently withdrawing funds from the victims’ bank accounts. The stolen funds were then transferred to specific accounts in the United States, where the money was withdrawn and transferred to other members of the conspiracy. The conspirators used their own network of accounts and “money mules” to transfer hundreds of thousands of dollars at a time to conceal the origin of the money.
The defendants also are alleged to have engaged in an extensive campaign of online auction fraud, placing ads for non-existent cars and other expensive items on eBay, Craigslist, Autotrader.com, and other websites. According to the indictment, victims were tricked into wiring thousands of dollars to money mules to purchase these vehicles. The money mules then transferred and laundered the proceeds for the benefit of the enterprise.
Chita managed and facilitated the various schemes, as well as directing other conspirators to launder fraudulently obtained money.
This case was investigated by the U.S. Marshals Service, the FBI, the Westlake Police Department and the U.S. Secret Service. The case is being prosecuted by Senior Counsel Brian L. Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Duncan Brown of the Northern District of Ohio. Valuable assistance is being provided by the Justice Department’s Office of International Affairs. The Justice Department thanks the government of Romania for its assistance in this matter.
The prosecution of Chita is timely, as it occurs during National Cyber Security Awareness Month (NCSAM). NCSAM – observed every October – was created as a collaborative effort between government and industry to ensure all Americans have the resources they need to stay safer and more secure online. The Department of Justice encourages citizens to take advantage of cybersecurity tips and information provided by law enforcement to ensure their personal information is secured.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Landover Man Sentenced to over 13 Years in Federal Prison for a Series of Armed RobberiesRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Kodi Lamont Johnson, age 36, of Landover, Maryland, to 162 months in prison, followed by three years of supervised release, for two armed robberies, an armed bank robbery, using and brandishing a gun in relation to a crime of violence, and possession of stolen firearms.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Henry P. Stawinski III of the Prince George’s County Police Department.
According to his plea agreement and information presented at today’s sentencing hearing, sometime after 11:15 a.m. on November 3, 2017, Johnson broke into a residence in Accokeek, Maryland, and stole a 45-caliber revolver, two 20-gauge shotguns, and a black baseball hat. He then set the house on fire before fleeing in the homeowner’s red pick-up truck. Between approximately 2:19 p.m. and 2:36 p.m. Johnson robbed, at gun point, a market, a tavern and a credit union, all in Accokeek, Maryland. In each instance, Johnson left the scene in the pick-up truck he’d stolen earlier in the day.
Specifically, Johnson displayed a handgun and demanded money and cigarettes from two victims at the market, stealing $500 from the store register and 15 packs of cigarettes. At 2:22 p.m., Johnson robbed the tavern, displaying a gun and demanding money from the seven victims in the tavern and from the cash register. The victims relinquished $80 in cash and Johnson stole approximately $200 from the cash register. At 2:36 p.m. Johnson robbed a credit union, displaying a handgun and demanding money from a customer and a teller. The customer relinquished approximately $2,800 and Johnson stole another $2,970 from the teller.
Later that afternoon, Johnson was arrested in the parking lot of a convenience store. At the time of the arrest, Johnson was in possession of $5,317 in a cash bag marked with the name of the credit union and the stolen 45-caliber revolver. A later search of the stolen pick-up truck recovered a number of items stolen from the Accokeek residence, including two 20-gauge shotgun and the black baseball hat.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
United States Attorney Robert K. Hur commended the FBI and the Prince George’s County Police Department for their work in the investigation. Mr. Hur thanked Special Assistant U.S. Attorney Elizabeth S. Boison and Assistant U.S. Attorney Kristi N. O’Malley, who prosecuted the case.
Justice Department Settles Immigration-Related Discrimination Claim Against Georgia Poultry Processing CompanyRead the Press Release
The Justice Department today announced that it has reached a settlement with Mar-Jac Poultry, Inc., a poultry processing company in Gainesville, Georgia. The settlement resolves a long-standing lawsuit filed by the Justice Department alleging that Mar-Jac Poultry violated the Immigration and Nationality Act (INA) by discriminating against work-authorized non-U.S. citizens when verifying their work authorization.
The Department filed its complaint on July 14, 2011, after investigating a charge that a worker filed. The complaint alleged that from at least July 1, 2009 to at least January 27, 2011, Mar-Jac Poultry routinely required work-authorized non-U.S. citizens to present a document issued by the Department of Homeland Security, such as a Permanent Resident Card or Employment Authorization Document, to prove their work authorization, but did not require specific documents from U.S. citizens. On March 3, 2017, the court found that Mar-Jac was liable for a pattern or practice of this type of discrimination against non-U.S. citizens Respondent hired between June 16, 2010 and February 9, 2011, leaving monetary and other remedies for future resolution. All work-authorized individuals, whether U.S. citizens or non-U.S. citizens, have the right to choose which valid documentation to present to prove they are authorized to work. The INA’s antidiscrimination provision prohibits employers from subjecting employees to unnecessary documentary demands based on employees’ citizenship status or national origin.
“Even an employer that hires many non-U.S. citizens can violate the INA if it treats employees differently based on citizenship status or national origin when verifying their identity and work authorization,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “This case demonstrates the Department’s commitment to ensuring that all employers implement the employment eligibility verification process in a non-discriminatory manner.”
Under the settlement agreement, Mar-Jac will pay a civil penalty of $190,000; pay $1020 to a refugee the company fired when he did not produce a DHS-issued document to reverify his work authority; pay up to $23,980 in back pay to compensate other affected employees and applicants; train its employees on the INA’s anti-discrimination provision; and be subject to departmental monitoring for two years.
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact IER’s worker hotline for assistance.
Jersey City Police Officer Sentenced to One Year in Prison for Conspiracy to Commit FraudRead the Press Release
NEWARK, N.J. – A Jersey City police officer was sentenced today to one year and one day in prison for participating in a conspiracy to defraud Jersey City by obtaining compensation for off-duty work that they did not perform, U.S. Attorney Craig Carpenito announced.
James Cardinali, 38, of Jersey City, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit fraud. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Cardinali’s duties included serving as the “pick coordinator” for Jersey City’s South District, responsible for assigning police officers to off-duty details. On multiple occasions, Cardinali asked representatives of certain vendors who were performing work in the South District to sign Jersey City off-duty vouchers indicating that a police officer had completed an off-duty assignment for that vendor, even though no officer had in fact completed any assignment. Cardinali then falsely represented on these vouchers that a particular police officer had completed an off-duty assignment. These officers were paid for work they did not perform. Cardinali personally obtained from the officers some of the money that they were paid as a result of the fraudulent conduct.
In addition to the prison term, Judge Vazquez sentenced Cardinali to three years of supervised release and ordered restitution of $166,255 and forfeiture of $39,587.
U.S. Attorney Cardinali credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. The Jersey City Police Department is cooperating with the investigation.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Matthew E. Beck Esq., West Orange, New Jersey
Jefferson Dispatcher Charged with Wire FraudRead the Press Release
U.S. Attorney Peter G. Strasser announced that NICOLE SERUNTINE, age 35, an employee of Company A.M.M., was charged Friday, October 5, 2018 with wire fraud.
According to the Bill of Information, from around June 2010 through February 2017, NICOLE SERUNTINE worked as a secretary and dispatcher at Company A.M.M., located in Jefferson, Louisiana. Around October 2014 through February 17, 2017, SERUNTINE devised a scheme to defraud Company A.M.M. out of more than $500,000 by using her role as administrative assistant to order a fuel card that she was not entitled to use, and unlawfully used it for her own personal expenses, including food, gas, and cash advances.
If found guilty, NICOLE SERUNTINE could face up to 20 years imprisonment, a fine of up to $250,000 or twice the gross gain or loss, 5 years of supervised release, and a special assessment of $100.
U.S. Attorney Peter G. Strasser stated that a Bill of Information is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is being investigated by the United States Secret Service. Assistant U.S. Attorney Sharan E. Lieberman is in charge of the prosecution.
Independence Business Owner Sentenced for Distributing K2, Accepting Food StampsRead the Press Release
KANSAS CITY, Mo. – The owner of two Independence, Mo., stores was sentenced in federal court today for distributing synthetic cannabinoids, also known as K2, and for accepting food stamps as payment for K2.
Haq Nawaz Choudhry, 53, of Kansas City, Mo., was sentenced by U.S. Chief District Judge Greg Kays to three years and six months in federal prison without parole. The court also ordered Choudhry to pay $3,275 in restitution to the USDA and a money judgment and forfeiture to the government of $27,443.
Choudhry is the president of H Habib Enterprises, Inc., which owned the Short Stop convenience store and Kerns Liquor, located next door to each other at 9013 E. U.S. 40 Highway in Independence and operated by Choudhry. On Feb. 6, 2018, Choudhry pleaded guilty to participating in a conspiracy to distribute a controlled substance and controlled substance analogue, and to participating in a money-laundering conspiracy.
An undercover Jackson County Drug Task Force detective and three people conducting undercover transactions on behalf of the U.S. Department of Agriculture made a series of purchases from both Short Stop and Kerns from Feb. 14 to Oct. 22, 2013. The undercover purchases used cash on some occasions, and EBT cards (used to redeem Supplemental Nutrition Assistance Program – SNAP – benefits, also known as food stamps) on other occasions, to purchase synthetic cannabinoids.
During the course of the investigation Choudhry concealed the sale of synthetic cannabinoids by conducting financial transactions through the point-of-sale terminal, using EBT cards. The purchases would routinely be processed as “food purchases” with funds electronically deposited into the company’s bank account, thus concealing the proceeds of the synthetic cannabinoids sales. Choudhry specifically admitted, for example, that he fraudulently processed a $46.50 purchase of synthetic cannabinoids using SNAP benefits on May 30, 2013.
Law enforcement officers executed a search warrant at Kern’s and Short Stop on Oct. 22, 2013. Officers recovered synthetic cannabinoids and drug paraphernalia from both businesses. Officers also seized $21,135 from Short Stop and $308 from Kerns. Choudhry was not present during the execution of the warrant. On Feb. 11, 2014, officers returned to Kerns and Short Stop based on a complaint that the business was selling K2 again. Choudhry was contacted and denied that any such sales were occurring, and gave written permission for the detectives and officers on scene to search both of his stores for illegal items. Officers recovered additional synthetic cannabinoids and drug paraphernalia from Kerns. Officers also seized $6,000 from Kerns.
This case is being prosecuted by Assistant U.S. Attorney Adam Caine. It was investigated by the U.S. Department of Agriculture, Office of Inspector General and the Independence, Mo., Police Department.
Illegal Alien Pleads Guilty to U.S. Passport FraudRead the Press Release
PROVIDENCE - A Colombian national living in Central Falls, RI, pleaded guilty in U.S. District Court in Providence today to false statements in a passport application.
Appearing before U.S. District Court Chief Judge William E. Smith, Carlos Tabares, 55, admitted to the Court that he knowingly and willingly made false statements on a U.S. passport application in February 2009.
Tabares admitted to the Court that he fraudulently used the name of Freddie Adams Pena and his place of birth as being Yauco, Puerto Rico.
After the issuance of a passport, a subsequent investigation by the U.S. Department of State – Diplomatic Security Service determined Tabares’ true identity and place of birth, Antioquia, Columbia.
Prior to his arrest on August 16, 2018, Tabares used the passport to travel to and from Columbia.
Tabares, who is detained in federal custody, is scheduled to be sentenced on January 4, 2019.
False statement in a passport application is punishable by statutory penalties of up to 10 years in federal prison followed by up to 3 years supervised release.
Tabares’ guilty plea is announced by United States Attorney Stephen G. Dambruch and William B. Gannon, Special Agent in Charge of U.S. Department of State – Diplomatic Security Service.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
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HSBC Agrees to Pay $765 Million in Connection with Its Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
DENVER – U.S. Attorney Bob Troyer announced today that HSBC will pay $765 million to settle claims related to its packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities (RMBS) between 2005 and 2007. During this period, federally-insured financial institutions and others suffered major losses from investing in RMBS issued and underwritten by HSBC. Under the settlement, HSBC will pay the $765 million as a civil penalty pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
“HSBC made choices that hurt people and abused their trust,” said Bob Troyer, United States Attorney for the District of Colorado. “HSBC chose to use a due diligence process it knew from the start didn’t work. It chose to put lots of defective mortgages into its deals. When HSBC saw problems, it chose to rush those deals out the door. When deals went south, investors who trusted HSBC suffered. And when the mortgages failed, communities across the country were blighted by foreclosure. If you make choices like this, beware. You will pay.”
“The actions of HSBC resulted in significant losses to investors, which purchased the HSBC Residential Mortgage-Backed Securities backed by defective loans,” said Associate Inspector General Jennifer Byrne of the Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG). “We are proud to have partnered with the U.S Attorney’s Office for the District of Colorado on this matter.”
FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The United States alleged that HSBC violated FIRREA by misrepresenting to investors the quality of its RMBS and the due diligence procedures it claimed it would use to ensure that quality. The United States’ allegations are described in the settlement agreement at paragraph 3.
The United States alleged that HSBC had a due diligence process for reviewing the loans HSBC planned to securitize as RMBS, but as early as 2005, an HSBC credit risk manager expressed concerns with HSBC’s due diligence process. HSBC nevertheless touted its due diligence process to potential investors. It told investors that when it purchased pools of subprime loans, HSBC would review at least 25% of the loans in the pool for credit and compliance. It told investors that it selected 20% of the loan pool as an “adverse sample” based on “a proprietary model, which will risk-rank the mortgage loans in the pool.” But on some loan pools, HSBC’s RMBS trading desk influenced how the risk management group selected loans for the adverse portion of the sample, and as a result, the sample was not based on its model. HSBC also told investors that it selected another 5% of the loan pool as a “random sample.” But in some instances, HSBC used a random sample that was less than 5% of the pool, or used a sample that was not random at all.
To review the loans HSBC did select for review, HSBC used due diligence vendors, and HSBC saw the results of the vendors’ reviews of the loans before the deals were issued. Over a one-and-a-half year period, between January 2006 and June 2007, HSBC’s primary due diligence vendor flagged over 7,400 loans as having low grades—more than one out of every four loans the vendor reviewed for HSBC during that time. When HSBC employees saw loans with low grades, they sometimes “waived” those loans through or recategorized the grades to make the due diligence “percentages look better.” They also expressed views about the deals they were issuing. For example, in 2007, an HSBC trader said, in reference to an RMBS that HSBC was about to issue, “it will suck.”
For a loan pool HSBC purchased in 2006, HSBC learned of what employees referred to as an “abnormally large” and “alarmingly” high number of payment defaults. HSBC had purchased the loan pool but had not securitized it yet. Early payment defaults (EPDs)—when a borrower fails to make one of the first few payments on a mortgage—could be, in the words of HSBC’s co-head of RMBS, “an indicator of higher expected loss on the pool.” In an internal email, HSBC’s head of risk management for RMBS wrote that the high EPD rate could be a sign of systemic problems with the pool. Others within HSBC’s risk management group expressed concern that the pool “may be contaminated” and asked whether “they should hold back on the securitization launch until there is further clarity on all the issues….” The next day, the head of HSBC’s whole loan trading risk management group stated that he was “comfortable that we need not make any further disclosures to investors….” HSBC issued the securitization a few days later. A later post-close quality control review indicated that loans that “appear to have fraud or misrep” went into the securitization. HSBC went on to buy and securitize more loans from the same originator, even after the head of HSBC’s due diligence team concluded that the originator had offered “bad collateral.”
After purchasing certain loan pools, HSBC ordered a quality control review but did not wait for the final results before issuing the securitization. On two pools, HSBC received preliminary quality control results before the issuance of the securitization that, according to the quality control vendor, showed indications of fraud in the origination of particular loans, but included those loans in the RMBS anyway. On a loan pool in 2007, HSBC performed post-close due diligence on a sample of loans from that pool. HSBC’s due diligence vendor graded approximately 30% of the loans in the post-close due diligence sample as having the lowest grade. HSBC went on to securitize loans from that same pool without any further credit or compliance review before securitization.
These are allegations only, which HSBC disputes and does not admit.
Assistant U.S. Attorneys Kevin Traskos, Jasand Mock, Ian J. Kellogg, Hetal J. Doshi, and Lila M. Bateman of the District of Colorado investigated this matter, with the support of the Federal Housing Finance Agency’s Office of the Inspector General (FHFA-OIG).
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.
Grape Street Crip Gang Member Sentenced to 25 Years in Federal Prison for Possession of Firearm during RobberiesRead the Press Release
Memphis, TN - A Memphis man has been sentenced to 25 years in federal prison for possession of a firearm during robberies. D. Michael Dunavant, United States Attorney for the Western District of Tennessee announced the sentence today.
According to information presented in court, on December 9, 2016, three men armed with handguns and a shotgun entered Village Mart located at 1169 S. Bellevue. The employees were held at gunpoint after being ordered to the ground by one of the males. The males smashed display cases and took merchandise and cash from the register. One of the suspects jumped on a glass counter causing a cut to his right hand, leaving his DNA. The DNA belonged to James Moss, a member of the Grape Street Crip gang. The robbers fled the scene in a Nissan Maxima that was stolen by Moss and the robbery crew earlier in the day.
On December 30, 2016, two men armed with handguns entered Dollar General located at 3433 Jackson, in Memphis. The men forced the clerk to open the cash register and the safe. The suspects took the cash drawers from the store. A tracking device attached to the stolen cash led law enforcement to Moss’ residence.
U.S. Attorney D. Michael Dunavant said, "As part of our violent crime reduction strategy, we are taking the fight to the gangs to dismantle their organizations and remove them from our communities. Violent crimes committed by and in furtherance of gangs will be met with severe consequences, and this sentence shows our resolve."
On October 3, 2018, U.S. District Court Judge Samuel H. Mays sentenced Moss to 25 years in federal prison followed by 3 years supervised release.
Lavunte Evans, a co-defendant to the Village Mart robbery was previously sentenced to 125 months.
This case was investigated by the FBI Safe Streets Task Force and theMulti Agency Gang Unit.
Assistant U.S. Attorney Marques Young prosecuted this case on the government’s behalf.
Former Upstate New York Democratic Party Chair Pleads Guilty to Conspiracy to Cause Foreign Campaign DonationRead the Press Release
A former Erie County, New York Democratic party chair pleaded guilty today to conspiring to illegally cause a $25,000 campaign donation from a foreign source to a New York state official running for reelection.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney James P. Kennedy Jr. for the Western District of New York made the announcement.
G. Steven Pigeon, 58, of Buffalo, New York, pleaded guilty before U.S. District Judge Richard J. Arcara to an information charging him with conspiracy to cause a foreign donation in a state election in violation of federal law. Sentencing is set for Jan. 25, 2019.
As part of his plea, Pigeon admitted that while working as a political consultant and lobbyist in Buffalo, New York, he represented a foreign client, Company A. At the time, the CEO of Company A was Person A, a Canadian citizen. In early 2014, despite knowing that it was illegal to make a foreign donation to a state political campaign, Pigeon solicited Person A to make a $25,000 donation to the reelection campaign of a New York state elected official, Public Official A. The campaign rejected the donation from Person A because Person A was not a citizen or permanent legal resident of the United States. Pigeon and Person A then agreed to cause the donation from Person A to be made through Person B, a permanent legal resident of the United States and an employee of Company A. On or about Feb. 24, 2014, as directed by Person A, Person B made a $25,000 donation to Public Official A’s campaign. Pigeon and Person A knew that Person A would pay for, or reimburse, the donation. As a result of the $25,000 donation, Pigeon and Person A were granted entry to a fundraising event for Public Official A in New York City on Feb. 26, 2014.
“Steven Pigeon undermined the transparency and integrity of the electoral process by funneling foreign money into a campaign,” said Assistant Attorney General Benczkowski. “The Criminal Division and our law enforcement partners are committed to protecting our electoral process and we will aggressively pursue those who seek to circumvent our campaign finance laws.”
“Transparency in political activity, including the disclosure of the sources of political contributions, is a necessary check on the power of money and a necessary ingredient for a healthy democracy,” said U.S. Attorney Kennedy. “Schemes such as this, which introduce obfuscation and secrecy into the political process, threaten our very democracy by endeavoring to use anonymity as a means of eliminating accountability.”
The plea is the result of an investigation by the FBI Buffalo Field Office, under the direction of Special Agent in Charge Gary Loeffert; the New York State Attorney General’s Office, under the direction of Barbara Underwood; and the New York State Police, under the direction of Major Edward Kennedy. The case is being prosecuted by Deputy Chief John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul E. Bonanno of the Western District of New York.
Former State Trooper Sentenced for Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A former Missouri state trooper was sentenced in federal court today for transmitting sexually explicit photos of a teenage victim.
Justin Watson, 47, of Mountain View, Mo., was sentenced by U.S. District Judge M. Douglas Harpool to seven years in federal prison without parole. The court also sentenced Watson to 10 years of supervised release following incarceration.
Watson was employed as a trooper with the Missouri State Highway Patrol from July 1996 until he was dismissed in October 2017. He also worked as a high school baseball umpire in the Mountain View-Birch Tree School District.
On May 29, 2018, Watson pleaded guilty to receiving and distributing child pornography. Watson admitted he took several sexually explicit photos of a 17-year-old juvenile. The photographs were taken using the victim’s iPhone; Watson then transmitted the images of child pornography to his own cell phone.
Watson also has been charged in Howell County Circuit Court with four counts of sexual exploitation of a minor and one count of sexual contact with a student.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Missouri State Highway Patrol.
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."
Former State DOT Employee Indicted for Federal Program TheftRead the Press Release
ALBANY, NEW YORK – Jerome Lauzon, age 44, of Gansevoort, New York, was arraigned today on a charge of misappropriating at least $5,000 from a federally funded program.
The announcement was made by United States Attorney Grant C. Jaquith; Douglas Shoemaker, Special Agent in Charge of the Northeast Regional Office of the United States Department of Transportation, Office of Inspector General (USDOT-OIG); New York State Inspector General Catherine Leahy Scott; and Robert L. Keihm, Chief Investigator for the New York State Department of Transportation (NYSDOT) Investigations Bureau.
Lauzon, formerly a NYSDOT employee, was the Engineer in Charge of a $10.5 million road reconstruction project in Washington County, New York, from 2012 to 2017. The Federal Highway Administration, a USDOT agency, provided 80 percent of the funding for the contract.
According to the indictment, the contractor for the project purchased goods and services for Lauzon’s personal use, and Lauzon unlawfully reimbursed the company for these purchases using project funds. The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
Lauzon was arraigned today before United States Magistrate Judge Christian F. Hummel, and was released with conditions pending trial. If convicted, he faces up to 10 years in prison, a maximum $250,000 fine, and up to 3 years of post-imprisonment supervised release. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by USDOT-OIG, NYSDOT’s Investigations Bureau, and the Office of the New York State Inspector General, and is being prosecuted by Assistant U.S. Attorney Michael Barnett.
Former Managing Partner of Manhattan Accounting Firm Arrested for FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Philip Bartlett, Inspector-In-Charge for the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced today that STEVEN L. HENNING, a certified public accountant who was a Managing Partner at a Manhattan accounting firm, was charged with wire fraud in connection with a scheme in which he falsely claimed to have entered into multimillion-dollar intellectual property deals and defrauded investors out of $2 million. HENNING was arrested in St. Johns, Florida, yesterday afternoon and presented before a U.S. Magistrate judge in federal court in Jacksonville, Florida, this afternoon.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Steven Henning, a CPA at a Manhattan accounting firm, established his own firm called OpportunIP, which he allegedly told victims was a company specializing in assisting other entities in taking intellectual property to the market. Henning allegedly induced victims to invest in OpportunIP by providing them with false documents showing OpportunIP’s involvement in multi-million dollar transactions that would reap millions of dollars in future profits. Ultimately, the victims learned that the deals did not exist and they were victims of an alleged scheme to defraud them out of millions of dollars.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Henning’s claims were nothing more than a bag of lies. Law enforcement reminds investors to research all investment opportunities thoroughly to avoid being scammed.”
According to the allegations contained in the Complaint unsealed today[1]:
HENNING, a certified public accountant, was a managing partner at an accounting firm in Manhattan (the “Accounting Firm”). He was the Partner-in-Charge of Advisory Services and served on the firm’s Executive Committee. Previously, HENNING was employed as a Professor of accounting at a Texas university (the “University”) and he served as an Academic Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission.
In June 2008, while employed at the Accounting Firm, HENNING formed what would later become known as OpportunIP, LLC (“OpportunIP”), a business that, at different times, had offices in Purchase and Tarrytown, New York. HENNING was the Chief Executive Officer and owned an interest in OpportunIP through an entity known as the Henning Family Partnership (“HFP”). Members of the Accounting Firm also owned interests in OpportunIP.
In May 2012, HENNING told one of his prior students from the University (“Victim-1”) about an endeavor he was involved in, OpportunIP. HENNING described OpportunIP as a business venture through which HENNING established partnerships with owners or developers of intellectual property (“IP”) and assisted them in taking the IP to market in exchange for a substantial percentage share of future profits. Over the next few years, HENNING provided Victim-1 with information about OpportunIP, including a series of IP opportunities that were in various stages of implementation. For example, he claimed that OpportunIP had signed an escrow agreement with two multi-national corporations (“MNC-1” and “MNC-2”) relating to the “license-out” of certain IP that was being represented by OpportunIP (the “Escrow Agreement”).
In fall 2014, HENNING presented Victim-1 with an opportunity to invest in OpportunIP and asked Victim-1 to help secure bridge financing for an IP owner (“IP Owner-1”) who was in financial distress and needed temporary financing while he brought his IP to market. HENNING represented that the IP owner needed a $500,000 loan to get him past certain financial hurdles and would repay the loan in six months.
Thereafter, there were ongoing communications relating to Victim-1’s purchase of an interest in OpportunIP and, at around the same time, HENNING disclosed another multi-million dollar OpportunIP License-Out deal involving an agreement between an IP owner represented by OpportunIP and a global automobile manufacturer (“AM-1”). HENNING provided Victim-1 with a copy of the License-Out Agreement (“AM-1 License Agreement) and an AM-1 corporate guarantee (the “AM-1 Guarantee”). In addition, he provided an agreement in which a second global automobile manufacturer (“AM-2”) agreed to license the same technology (“AM-2 License Agreement”).
On October 31, 2014, HENNING listed IP deals for which he had “signed deals and minimum guarantees” and proposed that Victim-1 acquire 5 percent of OpportunIP for $2 million. On November 2, 2014, Victim-1 indicated his willingness to proceed and on November 7, 2014, HENNING sent Victim-1 the purported License-in Agreement between OpportunIP and MNC-1 (“MNC-1 License Agreement”) and the “License-out Agreement” between OpportunIP and MNC-2 (“MNC-2 License Agreement”). Three days later, on November 10, 2014, HENNING emailed Victim-1 the Escrow Agreement, in which MNC-1, MNC-2, and OpportunIP purportedly agreed that, pursuant to the license agreements, $35 million would be held in escrow and OpportunIP would receive $2 million no later than December 31, 2014.
The AM-1 Guarantee, AM-1 Licensing Agreement, and the Escrow Agreement were all fraudulent documents and the deals never existed. However, based on the information and documentation provided by HENNING, on November 21, 2014, Victim-1 sent HENNING $500,000, which was the beginning of the funding for HENNING’s proposal for Victim-1 to purchase an interest in OpportunIP and was a loan to HENNING. On November 26, 2014, Victim-1 had another $500,000 wired to a bank account controlled by IP Owner-1, in order to fund the purported loan to IP Owner-1.
HENNING and Victim-1 continued to communicate about HENNING’s proposal to have Victim-1 purchase an interest in OpportunIP. HENNING proposed forming a new company with the same goals and business model as OpportunIP. Victim-1 brought in his relative (“Victim-2”) and Victim-2’s family. In spring 2015, Victim-1, Victim-2, another investor (“Victim-3”), and a corporate attorney working on the transaction on their behalf (“Attorney-1”), were communicating with HENNING about the creation of a new corporate entity through which HENNING would transfer control of the company from his Accounting Firm partners to HENNING and Victim-1.
Thereafter, the Victims’ families agreed that they, through their joint and separate investment entities, would fund an additional loan to the new HENNING venture, based largely upon confidence in the purported MNC-1 and AM-1 agreements and HENNING’s additional representations of future business opportunities.
After discussions relating to the structure of the company and requests for information from the Victims’ corporate attorney, on June 3, 2015, HENNING sent purported electronic bank records for the months of April and May for a bank account in the name of OpportunIP (the “OpportunIP Account”). He represented that “the April statement shows the amount coming in from [MNC-1] ($2 million plus remaining interest from the escrow account).” The bank statements were also fraudulent and there was no deposit of over $2 million during those months.
On October 9, 2015, Victim-1 and Victim-2 had $1 million transferred to an account in the name of an entity that was set up to be the holding branch of the new OpportunIP. Thereafter, nearly all of the $1 million was transferred to accounts controlled by HENNING.
Meanwhile, HENNING continued to make false representations about the supposed progress he was making in securing deals for OpportunIP and he indicated that he was ready to have Victim-1 become more involved in OpportunIP’s operations. Consequently, in Summer/Fall 2016, Victim-1 left his job at an investment bank to become Chief Operating Officer of OpportunIP. But, despite HENNING’s representations that business was going well, he insulated his alleged business contacts from direct interaction with Victim-1 or Victim-2 and provided them with excuses for why deals were delayed. In addition, in at least one instance in November 2016, HENNING made it appear that he had scheduled a meeting between HENNING, Victim-1 and an MNC-1 Executive (the “MNC-1 Executive”) when he actually had not. Victim-1 traveled to New York and came to the Purchase office of OpportunIP to subsequently meet with HENNING and the MNC-1 Executive. But, that meeting was never actually scheduled. To make it appear that it had been, on November 18, 2016, HENNING forwarded a fabricated email to Victim-1, which was purportedly sent from the MNC-1 Executive to HENNING, and canceled the meeting.
In August 2017, during a search of HENNING’s office at the Accounting Firm, the Escrow Agreement, the AM-1 Guarantee, and the AM-1 License-out agreement were all recovered and contained taped-on signatures of executives on their signature pages.
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HENNING, 57, is charged with wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the USPIS and the SEC Office of Inspector General.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Margery B. Feinzig is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Manager for a Colorado Resort Sentenced to Prison for Tax FraudRead the Press Release
A Scottsdale, Arizona man, who formerly resided in Pagosa Springs, Colorado, was sentenced today in the U.S. District Court for the District of Colorado to eighteen months in prison for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, William Whittington, 68, filed a false 2010 individual income tax return, on which he underreported income received from his offshore accounts and through the payment of his personal expenses by an entity over which he exercised managerial control. From 2010 to 2012, Whittington directed that the Springs Resort & Spa, in Pagosa Springs, Colorado, a business managed by Whittington and family members at the time, pay over $1 million of his personal expenses. The total additional tax due for those three years, 2010 through 2012, based on Whittington’s failure to report the payment of the personal expenses as income is $364,994.00.
From 2003 to 2010, Whittington failed to report $9.7 million in investment income generated through two offshore bank accounts in Liechtenstein. Combined with the tax loss from the resort payment of his personal expenses, Whittington’s fraudulent conduct created a $1.8 million tax loss.
Whittington is a competitive racecar driver, whose team won the 1979 24 Hours of Le Mans. Whittington was previously sentenced to prison in 1987 for evading income tax and importing multiple tons of marijuana. See United States v. Whittington, 918 F.2d 149 (11th Cir. 1990).
In addition to the term of imprisonment imposed, U.S. District Court Judge Robert E. Blackburn ordered Whittington to serve one year of supervised release. Whittington paid approximately $1.8 million in restitution to the Internal Revenue Service as a condition of his plea agreement.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Kathleen M. Barry, Lori A. Hendrickson, and Sarah A. Kiewlicz, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Former Las Vegas Valley Water District Employee Pleads Guilty to $6.7 Million Ink/Toner Cartridge Scheme and Tax EvasionRead the Press Release
LAS VEGAS, Nev. – A former employee of the Las Vegas Valley Water District pleaded guilty today to mail fraud and tax evasion as part of a scheme to defraud the public utilities company of over $6.7 million, announced U.S. Attorney Dayle Elieson of the District of Nevada.
Jennifer J. McCain-Bray, aka JJ McCain, 43, of Las Vegas, pleaded guilty before U.S. District Judge Kent J. Dawson to one count of mail fraud and one count of subscribing to a false tax return. Sentencing is set for January 29, 2019. The maximum penalty for mail fraud is 20 years in prison and a $250,000 fine, and the maximum penalty for subscribing to a false tax return is three years in prison and a $250,000 fine. She also faces a $6,715,531 criminal forfeiture money judgment.
Between October 2001 and October 2007, McCain worked as a purchasing analyst for the Las Vegas Valley Water District (LVVWD) and she was responsible for transmitting orders and payments to vendors when particular products were requested from LVVWD departments and employees. McCain-Bray admitted that between January 1, 2007 to about December 7, 2015, she devised the scheme to defraud the LVVWD by falsely representing that her purchases of ink and toner cartridges were for the LVVWD, when she knew that the products were actually purchased for a New Jersey company which received and then resold the cartridges for its own profit. McCain-Bray instructed the vendor to ship the ink and toner cartridges from California and other locations to her at her LVVWD office in Las Vegas. She then relabeled the packages and shipped them to the New Jersey company. In exchange, the New Jersey company transferred money to McCain-Bray’s personal PayPal account. Financial records indicate that McCain-Bray used the fraud proceeds for personal expenses and purchases, including extensive home remodeling and improvements, trips, gifts to family members and friends, and other lifestyle expenses. Between 2007 and 2015, McCain-Bray fraudulently purchased approximately $6.7 million in ink and toner cartridges with LVVWD funds.
McCain-Bray also failed to report her profits from the scheme on her personal tax returns for tax years 2011 to 2015. For those years, she failed to report a total of $2,339,156.12 in taxable income to the Internal Revenue Service.
The case is being investigated by the FBI and the IRS-Criminal Investigation. Assistant U.S. Attorney Patrick Burns is prosecuting the case.
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Former KC Physician Sentenced for Distributing Child PornographyRead the Press Release
KANSAS CITY, Mo. – A former Kansas City, Mo., physician was sentenced in federal court today for distributing child pornography over the internet.
Jeffrey A. Hassenflug, 42, was sentenced by U.S. District Judge Gary A. Fenner to seven years and six months in federal prison without parole. The court also sentenced Hassenflug to 10 years of supervised release following incarceration. The court ordered Hassenflug to pay $15,000 in restitution to his victims, which has been paid in full.
Hassenflug, who pleaded guilty on April 25, 2018, was a resident physician in Kansas City, Mo., before moving to Texas in 2016, where he was employed as an emergency room physician.
Hassenflug admitted that he used peer-to-peer file-sharing software to download child pornography and to share child pornography over the internet. Investigators found 3,047 images of child pornography and 131 videos of child pornography (some as long as 48 minutes in length) on Hassenflug’s laptop computer and other electronic devices.
Hassenflug was identified during an online investigation by the FBI Kansas City Child Exploitation Task Force. A task force officer downloaded numerous files of child pornography from Hassenflug’s computer, including images and videos that depicted babies and toddlers being sexually abused.
This case was prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the FBI.
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."
Former Forest City Investment Adviser Sentenced to Nearly Fifteen Years in Federal Prison for Fraud and Identity TheftRead the Press Release
A North Iowa former investment adviser who stole over $2.4 million from his clients was sentenced on October 5, 2018, to 175 months in federal prison.
Darrell Smith, age 62, from Forest City, Iowa, received the prison term after a July 2017 guilty plea to one count of wire fraud and one count of aggravated identity theft. Smith’s nearly fifteen-year prison term follows a thirteen-month prison sentence that he received in 2016 for payroll tax fraud.
Smith’s admissions at the plea hearing, as well as evidence presented in other court proceedings, established that Smith was a broker and adviser for several investment firms. From 2010 to 2013, Smith caused withdrawals of over $2.4 million in funds from ten of his investment clients’ accounts without those clients’ knowledge or authorization. The funds were transferred to Energae, LP, a partnership Smith previously had formed with another individual to invest in different bio-energy companies. Smith then used those stolen funds to pay expenses related to the operation of Permeate Refining, LLC, which operated a now-defunct ethanol plant in Hopkinton, Iowa. In order to transfer funds from client accounts, Smith used authorizations purportedly signed by the client authorizing the withdrawal of funds from the investment account. He either forged his clients’ signatures on the authorizations or used pre-signed, blank authorization forms without the clients’ approval.
Smith was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Smith was sentenced to 175 months’ imprisonment. He was ordered to make $1,056,909.68 in restitution to ten victims and ordered to pay costs of prosecution in the amount of $2,947.35. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Smith is being held in the United States Marshal’s custody until he can be transported to a federal prison.
“This sentence brought to justice a shameless con artist who preyed on the elderly and others,” said U.S. Attorney Deegan. “Our office commends and thanks all of the outstanding investigators who worked on this very important case.”
“Postal Inspectors are committed to protecting the U.S. Mail and postal customers from these types of fraudulent schemes,” said Kevin Rho, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service, which includes Iowa. “The recent sentencing demonstrates the potential penalties for using the mail to further criminal activity, and it reflects the successful teamwork between the Postal Inspection Service and its federal law enforcement partners who worked together to bring justice to the victims in this case,” said Rho.
In sentencing Smith, Judge Reade noted that Smith was a skilled “con man” who used diversionary techniques, appeared to have an answer for everything, and “picked on” vulnerable investors, including the elderly. Judge Reade stressed that Smith’s sentence “brought on himself” Judge Reade increased Smith’s sentence on account of the fact that he obstructed justice while the case was pending. For example, Smith obstructed justice by enlisting the help of a relative in an attempt to dissuade one of his victims from seeking restitution and cooperating with the government in the case. While in jail awaiting sentencing, Smith also convinced a Dubuque man to loan him $25,000.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Federal Bureau of Investigation, the United States Postal Service Inspection Service, Internal Revenue Service-Criminal Investigation, and the United States Department of Agriculture, Office of Inspector General.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-CR-2030. Follow us on Twitter @USAO_NDIA.
Former Erie County Democratic Party Chair Pleads Guilty to Conspiracy to Cause Foreign Campaign DonationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. – A former Erie County, New York Democratic party chair pleaded guilty today to conspiring to illegally cause a $25,000 campaign donation from a foreign source to a New York state official running for reelection.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney James P. Kennedy Jr. for the Western District of New York made the announcement.
G. Steven Pigeon, 58, of Buffalo, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to an information charging him with conspiracy to cause a foreign donation in a state election in violation of federal law. Sentencing was set for January 25, 2019, at 1:00 p.m.
As part of his plea, Pigeon admitted that while working as a political consultant and lobbyist in Buffalo, he represented a foreign client, Company A. At the time, the CEO of Company A was Person A, a Canadian citizen. In early 2014, despite knowing that it was illegal to make a foreign donation to a state political campaign, Pigeon solicited Person A to make a $25,000 donation to the reelection campaign of a New York state elected official, Public Official A. The campaign rejected the donation from Person A because Person A was not a citizen or permanent legal resident of the United States. Pigeon and Person A then agreed to cause the donation from Person A to be made through Person B, a permanent legal resident of the United States and an employee of Company A. On or about February 24, 2014, as directed by Person A, Person B made a $25,000 donation to Public Official A’s campaign. Pigeon and Person A knew that Person A would pay for, or reimburse, the donation. As a result of the $25,000 donation, Pigeon and Person A were granted entry to a fundraising event for Public Official A in New York City on February 26, 2014.
“Steven Pigeon undermined the transparency and integrity of the electoral process by funneling foreign money into a campaign,” said Assistant Attorney General Benczkowski. “The Criminal Division and our law enforcement partners are committed to protecting our electoral process and we will aggressively pursue those who seek to circumvent our campaign finance laws.”
“Transparency in political activity, including the disclosure of the sources of political contributions, is a necessary check on the power of money and a necessary ingredient for a healthy democracy,” said U.S. Attorney Kennedy. “Schemes such as this, which introduce obfuscation and secrecy into the political process, threaten our very democracy by endeavoring to use anonymity as a means of eliminating accountability.”
The plea is the result of an investigation by the FBI Buffalo Field Office, under the direction of Special Agent in Charge Gary Loeffert; the New York State Attorney General’s Office, under the direction of Barbara Underwood; and the New York State Police, under the direction of Major Edward Kennedy. The case is being prosecuted by Deputy Chief John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul E. Bonanno of the Western District of New York.
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Former Bank Employee Sentenced to 6 Months’ Probation for EmbezzlementRead the Press Release
PITTSBURGH, PA - A resident of Beaver Falls, Pennsylvania, has been sentenced in federal court to six months’ probation on her conviction of embezzlement by a bank employee, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Robin Chiappetta, age 63, of Beaver Falls, Pennsylvania.
According to the indictment, from approximately February 2014, until approximately December 2016, Chiappetta, who was employed as an Assistant Branch Manager at First National Bank, embezzled funds belonging to and entrusted to the custody and care of the bank, resulting in a loss of $20,513.80.
Assistant United States Attorney Lee J. Karl prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Chiappetta.
Florence Man Pleads Guilty to Federal Firearm ChargeRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated that Trevor Winfield Evins, age 35, of Florence, entered a guilty plea in federal court in Florence to felon in possession of a firearm and ammunition in violation of Title 18, United States Code, Section 922(g)(1). United States District Judge Donald C. Coggins, Jr., of Spartanburg, accepted the plea and will impose sentence after a pre-sentence report is prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that October 18, 2017, an officer with the Florence County Sheriff’s Office was patrolling near Saluda Drive and Madison Avenue and attempted to stop Evins for a traffic violation. Evins fled leading police on a vehicle chase before eventually stopping his car and fleeing on foot. FCSO officers located Evins after a search of the area. A search of the car driven by Evins uncovered quantity amounts of marijuana and cocaine. A loaded 9mm pistol was found hidden in the engine compartment.
Evins is prohibited under federal law from possessing a firearm or ammunition based upon prior convictions. Evins has a prior federal court conviction for felon in possession of a firearm and a state court conviction for possession with intent to distribute a controlled substance. Evins faces a maximum sentence of 20 years imprisonment, a fine of $250,000, and 3 years of supervised release.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Florence County Sheriff’s Office and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Project CeaseFire is 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 United States Attorney Christopher D. Taylor of the Florence office handled the case.
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Federal Corrections Officer Indicted and Arrested for Accepting BribesRead the Press Release
Jackson, Miss. – Anthony Robinson, 39, of Yazoo City, was arrested by FBI Agents this morning based on a one-count indictment returned by a federal grand jury charging him with accepting bribes, announced United States Attorney Mike Hurst, Christopher Freeze, Special Agent in Charge, Federal Bureau of Investigation in Mississippi, and Robert A. Bourbon, Special Agent in Charge, U.S. Department of Justice Office of the Inspector General (DOJ-OIG), Miami Field Office.
According to the indictment, Robinson accepted bribes from inmates at the Yazoo City Federal Correctional Complex in exchange for bringing contraband into the prison for inmates.
Robinson will have his initial court appearance before United States Magistrate Judge Linda R. Anderson in Jackson tomorrow at 1:30 p.m. If convicted, Robinson faces up to 15 years in federal prison and up to a $250,000 fine.
The case was investigated by the FBI Jackson Division and the DOJ-OIG. The Federal Bureau of Prisons also assisted with the investigation. The case is being prosecuted by Assistant United States Attorney and Deputy Criminal Chief Patrick Lemon.
These charges are merely an accusation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Eddy County Woman Sentenced to Prison for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Stephanie Murray, 30, of Loving, N.M., was sentenced today in federal court in Las Cruces, N.M., to 41 months in prison for her conviction on narcotics trafficking charges arising out of the sale of methamphetamine to an undercover law enforcement agent. Murray will be on supervised release for three years after completing her prison sentence.
Murray and her co-defendants, Jimmy Myers, 24, of Lockhart, Texas, and Jesus Sanchez, 31, of Carlsbad, N.M., were charged with methamphetamine trafficking offenses in an indictment filed on Dec. 13, 2017. The three-count indictment charged Murray, Myers and Sanchez with participating in a methamphetamine trafficking conspiracy and distributing methamphetamine on April 28, 2017. It also charged Myers with distributing methamphetamine on May 18, 2017. According to the indictment, the defendants committed the crimes in Eddy County, N.M.
On June 7, 2018, Murray pled guilty to conspiracy and distributing methamphetamine. In entering the guilty plea, Murray admitted that on April 28, 2017, she provided methamphetamine to an individual who then distributed the methamphetamine to an undercover law enforcement agent.
Myers previously entered a guilty plea on May 8, 2018, and faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison at sentencing. Myers is scheduled to be sentenced on Oct. 10, 2018. Sanchez entered a guilty plea on June 12, 2018, and faces a maximum of 30 years in federal prison at sentencing. Sanchez remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by Homeland Security Investigations and the New Mexico State Police. Special Assistant U.S. Attorney Joni Autrey of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Duquesne Man Pleads Guilty to Stealing Mail, Packages from Pittsburgh Apartment BuildingsRead the Press Release
PITTSBURGH, PA - A resident of Duquesne, PA, pleaded guilty in federal court to charges of conspiracy and mail theft, United States Attorney Scott W. Brady announced today.
Ron Matthew Sharp, 42, pleaded guilty to four counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that from February through May of 2018, Sharp, along with a co-defendant, entered multiple apartment buildings in the Shadyside and North Oakland areas of Pittsburgh, and opened United States Postal Service packages or other mail items that were not addressed to them, stole packages, and stole items from within packages that had been left at authorized mail depositories. Defendants then provided items they had stolen from the mail, including gift cards, to others, who redeemed the gift cards at various locations, including Giant Eagle and GETGO. Defendants also re-sold, and instructed others to attempt to re-sell, items defendants had stolen from the mail.
Judge Bissoon scheduled sentencing for February 13, 2019. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Sharp remains incarcerated pending the sentencing hearing.
Assistant United States Attorney Christy C. Wiegand is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the United States Department of Homeland Security conducted the investigation leading to the prosecution of Ron Matthew Sharp.
Deltoine Scott Pleads Guilty to Felony Murder Related to May 2017 Loomis Armored Car Robbery, a Separate Robbery of a Brinks Armored Car in October 2015, and Lying to Federal Agents During 2017 InvestigationRead the Press Release
NEW ORLEANS –U.S. Attorney Peter G. Strasser announced that DELTOINE SCOTT, age 25, of New Orleans, pleaded guilty today before United States District Judge Ivan L.R. Lemelle to charges of conspiracy to commit bank robbery, armed bank robbery, use of a firearm in furtherance of a crime of violence, murder, and making false statements to federal law enforcement officers.
According to paperwork filed with the Court, SCOTT admitted to conspiring with JEROME KIEFFER and ARMSTEAD KIEFFER, who are father and son, to commit two armored car robberies, a 2015 robbery at the Chase Bank on N. Board and a 2017 attempted robbery at the Campus Federal Credit Union on Tulane. SCOTT admitted that he and JEROME KIEFFER spent several days planning the 2015 robbery and their getaway. The two men waited behind a hole they had cut in a wooden fence and jumped out with guns when they saw the guard move away from the armored car. The two then fled back through the hole and down an alley to where they had previously parked a getaway vehicle. SCOTT admitted that he and JEROME KIEFFER got the guns they used in the robbery from ARMSTEAD KIEFFER and that they returned to ARMSTEAD KIEFFER’s house immediately after the robbery to count the proceeds.
SCOTT also admitted his participation in the 2017 attempted robbery that resulted in the death of Loomis guard James McBride. SCOTT admitted that JEROME KIEFFER had rented an apartment that overlooked the scene of the attempted robbery and had approached SCOTT about committing another robbery after having seen an armored car servicing the ATMs that his apartment overlooked. SCOTT acknowledged that he and JEROME KIEFFER borrowed a distinctive black, white, and black truck from SCOTT’s grandfather on the day of the attempted robbery. He also admitted meeting with JEROME KIEFFER and ARMSTEAD KIEFFER to plan the robbery and that ARMSTEAD KIEFFER was the lookout. SCOTT acknowledged that he and Jerome KIEFFER ran down on the armored car while armed with handguns after ARMSTEAD KIEFFER, who was on the phone with JEROME KIEFFER, told them it was time to begin the robbery. Finally, SCOTT admitted that during an interview about a week after the robbery he lied to federal agents about having lost his phone and about his whereabouts on the day of the robbery.
For his role in the 2017 attempted robbery, SCOTT faces a penalty of any term of years up to life in prison. On the charges related to the 2015 robbery, SCOTT faces up to twenty-five years in prison, plus a mandatory consecutive sentence of at least seven years up to life. The conspiracy charge carries a maximum penalty of five years. SCOTT faces up to five years in prison on each of the false statement counts. Sentencing is set before United States District Judge Ivan L.R. Lemelle on January 30, 2019 at 2:00 p.m.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation and the New Orleans Police Department in investigating this matter. Assistant United States Attorneys David Haller and Michael McMahon are in charge of the prosecution.
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Defense Contractor Agrees to Pay United States up to $7.8 Million to Settle False Claims Act InvestigationRead the Press Release
SAVANNAH, GA: Arena Event Services, Inc., which does business as Arena Americas, has agreed to a settlement with the United States to resolve allegations that it wrongfully obtained small business set-aside contracts with the Department of Defense.
According to the settlement agreement, the United States contends that Arena Americas worked with Military Training Solutions, LLC (“MTS”) to obtain small business defense contracts that were supposed to be performed by MTS, but in reality were performed by Arena Americas. As a result of this scheme, which was perpetuated at Fort Stewart, Ga., and at other military installations across the United States, millions of dollars in defense contracts wrongfully were awarded to Arena Americas instead of legitimate small businesses.
“This settlement represents a dedicated effort to protect the taxpayers so we can be sure that those who do business with government agencies, particularly the military, do so entirely above board,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “The U.S. Attorney’s Office will not tolerate any attempts to illegally exploit the system for a company’s personal advantage.”
Congress mandates that a certain amount of government contracts go to small businesses as a way to encourage small business growth. These contracts prohibit the small business from being affiliated with a non-small business, while also limiting the amount of work that can be subcontracted to a non-small business.
Through its investigation under the False Claims Act, the United States determined that Arena Americas paid MTS to bid on and obtain small business contracts that ultimately would be performed by Arena Americas. MTS previously entered into a settlement agreement with the United States to resolve its liability under the False Claims Act, and MTS owner Robert Obradovich pled guilty to one felony count of receiving unlawful kickbacks in a similar scheme.
“This issue was run to ground by the diligent efforts of our special agents along with our federal law enforcement partners," said Frank Robey, director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “We are very pleased with this civil settlement agreement pertaining to AES. This should be a clear indicator to others who might try to manipulate government contracts and requirements: No matter how deep one tries to bury the evidence, we will find it.”
“This settlement is the result of the Defense Criminal Investigative Service’s (DCIS) commitment to ensuring that American tax dollars spent in support of Department of Defense programs and missions are protected from fraud throughout the procurement process,” said Special Agent in Charge John F. Khin of the DCIS Southeast Field Office. “DCIS and our partnering investigative agencies continue to work tirelessly to investigate the misuse and abuse of contracting methods that ultimately undermines the mission of our warfighters.”
“This settlement sends a strong message that lying to gain access to the Small Business Administration’s preferential contracting programs will be met with justice,” said SBA Office of Inspector General Eastern Region Special Agent-in-Charge Kevin Kupperbusch. “SBA’s preferential contracting programs are intended to promote the economy and grow and develop small businesses across the nation. I want to thank the U.S. Attorney's Office and our law enforcement partners for their dedication and hard work throughout this investigation.”
Christopher Pilkerton, General Counsel for the SBA, added, “The outcome in this case is the product of the enhanced enforcement efforts by federal agencies, such as the Small Business Administration, working with the U.S. Attorney’s Office and its Joint Procurement Fraud Strike Force, as well as other Federal law enforcement agencies to detect procurement fraud and prosecute those individuals and companies that engage in such activity. These efforts will continue to ensure appropriate use of taxpayer dollars.”
The Arena Americas settlement resulted from work of the Southern District of Georgia’s Procurement Fraud Task Force, which investigates fraud at military bases in the Southern District of Georgia. The Procurement Fraud Task Force previously has been responsible for numerous criminal prosecutions and civil settlements from fraud arising out of Fort Stewart, Fort Gordon, Hunter Army Air Field, and the Kings Bay Naval Submarine Base. If you have information about any individual or entity that you believe may be engaging in fraud at a military base, please contact Assistant United States Attorney J. Thomas Clarkson at 912-652-4422.
The claims resolved by the settlement agreement are allegations only, and there has been no determination of liability.
U.S. Attorney Bobby L. Christine commended the hard work and dedication of the United States’ investigatory team, which was led by Special Agent Bryan Cofer of the Small Business Administration Office of Inspector General, Special Agent Randall Temples of the Defense Criminal Investigative Service, and Special Agent Daniel Chase of the Department of the Army Criminal Investigation Command.
Assistant United States Attorneys J. Thomas Clarkson and Jonathan A. Porter represented the United States in this investigation and settlement.
For any questions, please contact Barry Paschal at the United States Attorney’s Office at (912) 652-4422.
Dark Web Administrator Sentenced to 20 Years in Prison for Narcotics Trafficking and Money LaunderingRead the Press Release
A French national who was serving at times as an administrator and senior moderator on one of the largest dark web criminal marketplaces was sentenced to 20 years in prison today, after previously pleading guilty to conspiracy to possess with the intent to distribute controlled substances and conspiracy to launder money.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA) Miami Field Office, Special Agent in Charge Robert F. Lasky of FBI Miami Field Office, and Special Agent in Charge Michael J. De Palma of IRS Criminal Investigation (IRS-CI), made the announcement.
Gal Vallerius, aka “Oxymonster,” 36, pleaded guilty before U.S. District Court Judge Robert N. Scola Jr. in the Southern District of Florida on Aug. 28. Judge Scola sentenced Vallerius to serve 240 months in prison. Vallierius forfeited 99.98947177 bitcoin and 121.94805811 bitcoin cash.
According to the court record, including the agreed upon factual proffer, beginning in or around November 2013 a criminal online marketplace known as Dream Market began operating on the Tor “dark web” network. Dream Market was designed to promote and facilitate the anonymous sale of illegal items. In time, the Dream Market website became one of the largest dark web criminal marketplaces. All of the items and services on Dream Market were offered for sale in exchange for Bitcoin and other peer-to-peer crypto-currencies.
According to the agreed upon factual proffer, Vallerius first participated in the conspiracy by becoming a vendor on Dream Market. As a vendor, he sold Oxycodone and Ritalin under the moniker “Oxymonster.” Shortly thereafter, Dream Market employed the defendant who acted at times as an administrator and senior moderator. In these positions, he played a role supporting the daily illicit transactions between buyers and vendors on Dream Market, such as trafficking in narcotics, and the laundering of illicit proceeds using virtual currencies, Dream Market’s tumblers and the dark web.
This investigation and prosecution was carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state and local law enforcement agencies that, cooperatively, target the region’s drug trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy which sponsors a variety of initiatives focused on combatting the nation’s illicit drug trafficking threats.
The prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state, and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state, and local law enforcement.
The investigation was conducted by DEA Miami Field Office and Paris Country Office, FBI Miami’s Cyber Task Force, IRS-CI Miami Field Office, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Miami and Atlanta Field Offices, U.S. Customs and Border Protection’s Field Operations Atlanta, U.S. Postal Inspection Service’s Miami Field Office, the Department of Justice’s Office of International Affairs, Europol, Special Operations Division (SOD), Finnish National Police, Finnish International Judicial Administration of the Ministry of Justice, Dutch National Police, French Ministry of Justice and the Direction Interregionale de la Police Judiciaire as well as the U.S. Attorney’s Office for the Northern District of Georgia. The case was prosecuted by Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Juan A. Gonzalez and former Assistant U.S. Attorney Frank R. Maderal of the Southern District of Florida.
Dark Web Administrator Sentenced to 20 Years in Prison for Narcotics Trafficking and Money LaunderingRead the Press Release
A French national who was serving at times as an administrator and senior moderator on one of the largest dark web criminal marketplaces was sentenced to 20 years in prison today, after previously pleading guilty to conspiracy to possess with the intent to distribute controlled substances and conspiracy to launder money.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA) Miami Field Office, Special Agent in Charge Robert F. Lasky of FBI Miami Field Office, and Special Agent in Charge Michael J. De Palma of IRS Criminal Investigation (IRS-CI), made the announcement.
Gal Vallerius, aka “Oxymonster,” 36, pleaded guilty before U.S. District Court Judge Robert N. Scola Jr. in the Southern District of Florida on Aug. 28. Judge Scola sentenced Vallerius to serve 240 months in prison. Vallierius forfeited 99.98947177 bitcoin and 121.94805811 bitcoin cash.
According to the court record, including the agreed upon factual proffer, beginning in or around November 2013 a criminal online marketplace known as Dream Market began operating on the Tor “dark web” network. Dream Market was designed to promote and facilitate the anonymous sale of illegal items. In time, the Dream Market website became one of the largest dark web criminal marketplaces. All of the items and services on Dream Market were offered for sale in exchange for Bitcoin and other peer-to-peer crypto-currencies.
According to the agreed upon factual proffer, Vallerius first participated in the conspiracy by becoming a vendor on Dream Market. As a vendor, he sold Oxycodone and Ritalin under the moniker “Oxymonster.” Shortly thereafter, Dream Market employed the defendant who acted at times as an administrator and senior moderator. In these positions, he played a role supporting the daily illicit transactions between buyers and vendors on Dream Market, such as trafficking in narcotics, and the laundering of illicit proceeds using virtual currencies, Dream Market’s tumblers and the dark web.
This investigation and prosecution was carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state and local law enforcement agencies that, cooperatively, target the region’s drug trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy which sponsors a variety of initiatives focused on combatting the nation’s illicit drug trafficking threats.
The prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state, and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state, and local law enforcement.
The investigation was conducted by DEA Miami Field Office and Paris Country Office, FBI Miami’s Cyber Task Force, IRS-CI Miami Field Office, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Miami and Atlanta Field Offices, U.S. Customs and Border Protection’s Field Operations Atlanta, U.S. Postal Inspection Service’s Miami Field Office, the Department of Justice’s Office of International Affairs, Europol, Special Operations Division (SOD), Finnish National Police, Finnish International Judicial Administration of the Ministry of Justice, Dutch National Police, French Ministry of Justice and the Direction Interregionale de la Police Judiciaire as well as the U.S. Attorney’s Office for the Northern District of Georgia. The case was prosecuted by Assistant U.S. Attorney Juan A. Gonzalez of the Southern District of Florida, former Assistant U.S. Attorney Frank R. Maderal of the Southern District of Florida, and Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS).
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Cottonwood Man Sentenced to over 145 Years for Shooting at Federal OfficersRead the Press Release
TUCSON, Ariz. – Today, Jack Witt Voris, 47, of Cottonwood, Ariz., was sentenced by U.S. District Judge Jennifer G. Zipps to 1,750 months’ imprisonment. Voris was found guilty of six counts of assault on a federal officer and weapons offenses by a federal jury in Tucson on Feb. 15, 2018.
“As a society governed by laws, we cannot tolerate assaults on our law enforcement officers,” stated First Assistant U.S. Attorney Elizabeth A. Strange. “Our office is committed to prosecuting these cases, and we thank all of the agencies that assisted in this important investigation.”
The evidence at trial showed that on Oct. 28, 2016, law enforcement agents arrived at a Tucson hotel to serve an arrest warrant on Voris, who was armed with a handgun. Voris shot at the officers, but missed. After a five-hour standoff with the Pima County Sheriff’s Department, Voris eventually surrendered to law enforcement.
The investigation in this case was conducted by the Federal Bureau of Investigation and Pima County Sheriff’s Department, with assistance provided by the Tucson Police Department and the Arizona Department of Public Safety. The prosecution was handled by Matthew C. Cassell, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR-16-2267-TUC-JGZ-DTF
RELEASE NUMBER: 2018-130_ Voris
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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.
Convicted Felon Sentenced for Possessing Four FirearmsRead the Press Release
WICHITA, KAN. - A convicted felon was sentenced Tuesday to 77 months in federal prison for illegally possessing four firearms, U.S. Attorney Stephen McAllister said.
Matthew Lee Fleming, 28, Wichita, Kan., pleaded guilty to one count of unlawful possession of firearms following felony convictions. He was on parole in a state district court case when law enforcement officers searched his home in Wichita. They found a 12-gauge shotgun, a .22 caliber rifle, a .40 caliber handgun and a .38 caliber pistol.
McAllister commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Matt Treaster for their work on the case.
Clark County Man Sentenced to 37 Months in Prison for Fraud Scheme Involving False Clean Energy CompanyRead the Press Release
PORTLAND, Ore. – Isaac Benjamin Voss, 41, of Clark County, Washington, was sentenced today to 37 months in prison and three years’ supervised release for defrauding domestic and foreign investors who believed they were investing in a viable clean energy company.
According to court documents, in 2007, Voss made a deal with a Canadian scientist and entrepreneur to raise funds to support the development of a technology that would derive electricity and petroleum-equivalent fuels from any carbon bearing material. Over a four-year period beginning in 2011, Voss used his company, XFuels, as a vehicle for soliciting investments from individuals abroad and in Oregon, California, and Washington state.
Voss defrauded investors using elaborate marketing materials, including flyers, brochures and a website, containing false information about his company, the technology and the investment opportunity. He claimed that XFuels owned a commercial refinery in Canada and that another was being constructed in Washington state. The plants were said to be using the technology to produce "clean fuel, clean chemicals, [and] clean power from garbage, biomass, and plastic."
To reduce the perceived risk of the venture, Voss told investors that more than 90 percent of the project’s funding would come from other institutional and private lenders and that he had commissioned an independent, third-party feasibility study that guaranteed the project’s commercial viability. In reality, XFuels had not constructed any facilities and the only capital raised was from other individual investors in the U.S. and abroad. Moreover, the feasibility study relied solely on information provided by Voss himself and did not employ any commercially accepted methods to validate the technology.
On numerous occasions, Voss hosted foreign investment seminars during which he told investors that supporting XFuels, with a minimum $500,000 investment, would qualify them for American Employment-Based Fifth Category "EB-5" visas. Voss also falsely claimed he would hold foreign investment funds in escrow until the U.S. government had approved investors’ visa applications. The XFuels project did not qualify for the EB-5 program and all investors’ visa applications were denied, as a result.
Voss previously pleaded guilty to one count of wire fraud on March 8, 2018.
The U.S. Postal Inspection Service, IRS and the Department of Homeland Security investigated this case. It is being prosecuted by Michelle H. Kerin and Gavin W. Bruce, Assistant U.S. Attorneys for the District of Oregon.
City of Fort Lauderdale Department of Parks and Recreation Employee Arrested on Fraud ChargesRead the Press Release
Two individuals, including a City of Fort Lauderdale Parks and Recreation Department employee, are charged with participating in a fraud conspiracy.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Rick Maglione, Chief, Fort Lauderdale Police Department (FLPD), made the announcement.
Phillip Richard Peterson, 42, of Coral Springs, Florida, was charged in a 50-count indictment with theft concerning programs receiving federal funds, wire fraud and conspiracy, in violation of Title 18, United States Code, Sections 666, 1343 and 1349. Peterson. Gino Joseph Ferraro, age 49, of Fort Lauderdale, Florida, was also charged in four counts in the indictment, with participating in the conspiracy and substantive counts of wire fraud. An arraignment hearing is scheduled for Peterson on October 12, 2018 at 1:00 p.m. and Ferraro on October 17, 2018 at 11:00 a.m., before the U.S. Magistrate Judge in Fort Lauderdale.
The indictment alleges that between 2013 and 2017, Peterson, as a City of Fort Lauderdale Parks and Recreation Department employee used a credit card issued by the City of Fort Lauderdale to purchase various items from different merchants. Peterson had been issued the card in connection with his employment to allow him to make job related purchases, on behalf of the Department of Parks and Recreation. Peterson would purchase items using his City of Fort Lauderdale credit card, and then sell the items to a local pawn store. Each year between 2013 and 2017, Peterson allegedly stole more than $5,000 worth of merchandise in this manner.
The indictment further alleges that Peterson conspired with Ferraro to unjustly enrich themselves by charging the City of Fort Lauderdale Parks and Recreation Department for volleyball court repairs and other items that were not completed or provided.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and FLPD in this matter. This case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
California Resident Sentenced to 25 Years for Producing Child PornographyRead the Press Release
CONCORD - United States Attorney Scott W. Murray announced today that Michael Gutierrez, 35, of Pomona, California, was sentenced to 25 years in federal prison for producing child pornography.
According to documents filed in the case, Gutierrez contacted minor females in New Hampshire through social media and initiating conversations with the minor females through social media platforms. Gutierrez represented himself to be a 14-year-old female and used the usernames of “Chloe_is_Awesum,” “spamaccount.c” and “Doogteg.” Gutierrez persuaded the minor females to send him sexually explicit images. Gutierrez then demanded additional sexually explicit images from the minor females and threatened to distribute the images already provided if the minor females did not comply. Gutierrez collected the images in 2015 and 2016. In late 2016, a mother to one of the victims discovered the demands made by Gutierrez and reported them to the Federal Bureau of Investigation. The FBI’s investigation led to the identification of Gutierrez.
Gutierrez pleaded guilty to five counts of producing child pornography on June 12, 2018. After serving his prison sentence, Gutierrez will be on supervised release for 15 years.
“Safeguarding our state’s children is among the most important priorities of the U.S. Attorney’s Office,” said U.S. Attorney Murray. “As this case shows, there are dangers that lurk on social media, where criminals use the anonymity of the internet to abuse the unwary. We will continue to work closely with our law enforcement partners to target predators whose horrific actions rob children of their innocence.”
“As a predator of children, Mr. Gutierrez deserves every single day of the sentence the court has imposed on him. He shamelessly coerced children into engaging in sexual activity and forced them to send him photos of that activity,” said Harold H. Shaw, Special Agent in Charge of the FBI Boston Division. “The FBI will continue to work with our law enforcement partners to identify and apprehend individuals like him who choose to exploit and prey upon our children.”
“Homeland Security Investigations is encouraged by today’s sentencing,” said Peter C. Fitzhugh, Homeland Security Investigations (HSI), Boston, Special Agent in Charge. “HSI Special Agents worked diligently to ensure that this individual, who exploited his victims through a series of disturbing and threatening methods, will not harm again. We abhor these actions and hope that this collaborative investigation and resulting sentence will help the victims in this case begin the healing process.”
The FBI, the Los Angeles County Sheriff’s Department, the Department of Homeland Security - Homeland Security Investigations, the Goffstown Police Department, the Milford Police Department, the New Boston Police Department, the Mont Vernon Police Department, and the Manchester Police Department all participated in the investigation of this case. Staff from the Hillsborough County Child Advocacy Center also assisted in the case. United States Attorneys Donald A. Feith and Helen White Fitzgibbon prosecuted the case.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Buffalo Man Sentenced for Running A Fraudulent Debt Collection SchemeRead 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 Shawn Sylvia, 35, of Buffalo, NY, who was convicted of conspiracy to commit wire fraud, was sentenced to serve 62 months in prison by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay $283,851.53 in restitution to victims.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that the defendant organized a scheme fraudulently to collect on non-existent debts and over-collect on debts that had been paid-in-full. Sylvia, or other individuals he managed, contacted eight victims via telephone purporting to be from organizations which included: American Mutual Holdings (AMH); Check Systems, LLC; Interstate Recovery Solutions; Apex Resolution Group; Interstate Check Registry; Miller and Flemming and Associates (MFA); Pasquale and Associates LLC; Checking Solutions; or Aries Resolution Group.
The defendant and others used strong-arm tactics including threats of arrest, jail, and lawsuits to convince victims to make payments toward what they were told were outstanding debts. Victims were directed to transfer money via MoneyGram and Western Union and to wire funds into bank accounts controlled by the defendant or his associates. Merchant accounts were established with two merchant processing companies in order to process credit card payments made by victims. In creating those merchant accounts, Sylvia and others made false representations to the payment processing companies claiming that the business entities they operated were engaging in legal services, investment services, and software sales. The payment processing companies suffered losses as a result of chargebacks of payments as a result of unauthorized and fraudulent charges.
Between May 2013 and August 2017, Sylvia and his associates fraudulently obtained a total of $342,303.
Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.
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Bolivar Man Indicted for Meth TraffickingRead the Press Release
SPRINGFIELD, Mo. – A Bolivar, Mo., man has been indicted by a federal grand jury for possessing methamphetamine to distribute.
Jerod K. Eley, 36, was charged in an indictment returned under seal by a federal grand jury in Springfield, Mo., on Sept. 18, 2018. That indictment was unsealed and made public following Eley’s arrest by the U.S. Marshal’s Service and his initial court appearance on Friday, Oct. 5, 2018.
The federal indictment alleges that Eley possessed 50 grams or more of methamphetamine with the intent to distribute on Aug. 16, 2018.
The charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Josephine L. Stockard. It was investigated by the St. Clair County, Mo., Sheriff’s Department and the Drug Enforcement Administration.
Atlantic County, New Jersey, Man Admits Three Bank RobberiesRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted his role in robbing the PNC Bank branch in Marlton, New Jersey, on Dec. 8, 2017, as well as two other bank robberies, U.S. Attorney Craig Carpenito announced.
Matthew Burney, 44, of Brigantine, New Jersey, pleaded guilty before U.S. District Judge Joseph Rodriguez in Camden federal court to an information charging him with one count of bank robbery. During the plea hearing, Burney also admitted committing two additional bank robberies.
According to documents filed in this case and statements made in court:
Burney entered the PNC Bank branch in Marlton while wearing a mask that covered the lower part of his face. He threatened to shoot the occupants if the alarm was activated. He pointed what appeared to be semi-automatic handgun at one of the tellers, threatened to shoot her, and demanded all the money from her cash drawer. After she gave him cash, he approached a second teller and demanded money from her. She complied, and Burney then fled the bank.
Burney also admitted robbing the Chase Bank in North Brunswick, New Jersey, on Feb. 28, 2017, and the Bank of America in Fairless Hills, Pennsylvania, on December 9, 2017.
The bank robbery charge carries a maximum potential penalty of 20 years in prison and a fine of either $250,000 or twice the gross gain or loss from the offense, whichever is greater.
U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; the Evesham Police Department, under the direction of Chief Christopher Chew; the Bristol Township, Pennsylvania, Police Department, under the direction of Robert Coulton, and the Burlington County Prosecutor’s Office, under the direction of Burlington County Prosecutor Scott A. Coffina, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Norman Gross of the U.S. Attorney’s Office Camden Branch.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Ashland Woman Sentenced to 18 Months in Prison for Drug TraffickingRead the Press Release
CONCORD - United States Attorney Scott W. Murray announced today that Stephanie Allard, 39, formerly of Ashland, was sentenced to 18 months in federal prison for drug trafficking.
According to court documents and statements made in court, an individual who was cooperating with the FBI purchased highly pure “ice” methamphetamine from Ms. Allard on three occasions in April and May of 2017. On May 19, 2017, the individual arranged a fentanyl purchase with Ms. Allard. The individual then travelled to her residence in Ashland and bought fentanyl from Ms. Allard’s husband, John Allard.
Allard previously pleaded guilty to three counts of distributing methamphetamine and one count of conspiracy to distribute and possess with intent to distribute fentanyl on June 4, 2018.
John Allard previously pleaded guilty to drug trafficking charges and was sentenced to ten years in federal prison on September 8, 2018.
“Fentanyl and methamphetamine are dangerous drugs that are both causing significant damage to the health and safety of our communities,” said U.S. Attorney Murray. “In order to protect the public, we will continue to coordinate with our law enforcement partners to identify, prosecute and incarcerate those who are responsible for selling illegal drugs in the Granite State.”
“We are not going to stand idly by and let more friends, family members and neighbors get addicted or die of drug overdoses,” said Harold H. Shaw, Special Agent in Charge of the FBI Boston Division. “This case is a great example of the work being done by the FBI’s Safe Streets Gang Task Force to get dangerous substances off of our streets. Together, with our law enforcement partners, we will continue to use every tool at our disposal to tackle the opioid crisis head on.”
This matter was investigated by the FBI New Hampshire Safe Streets Gang Task Force. The Task Force is comprised of the FBI, the New Hampshire State Police, New Hampshire Probation and Parole, and the police departments of Hudson, Manchester, and Nashua. The case was prosecuted by Assistant U.S. Attorney Shane B. Kelbley.
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Additional Federal Prosecutor Added to Paducah Office to Combat Drug Trafficking and Violent CrimeRead the Press Release
PADUCAH, Ky. – During a formal investiture and community event in Paducah, United States Attorney Russell M. Coleman announced today the full-time addition of Leigh Ann Dycus as an Assistant United States Attorney in the Paducah field office and reaffirmed his commitment to the Purchase and Pennyrile Regions through the Project Safe Neighborhoods Initiative.
““The Feds” are committed to being better partners to Purchase & Pennyrile area law enforcement in protecting Kentucky families,” stated U.S. Attorney Russell Coleman. “The president has emphasized that there are no fly-over areas of our country, and this dedication of federal resources to Paducah demonstrates that every region of our Commonwealth matters.”
The addition of a third full-time prosecutor in Paducah is part of a continued pledge to support federal, state, and local law enforcement partners in reducing criminal activity in all 53 counties of the Western District of Kentucky. The U.S. Attorney’s Office in Paducah has never had sustained prosecutor staffing at this level. This allocation of resources is closely-tied to robust activity by the Bureau of Alcohol, Tobacco, and Firearms (ATF) in the area and the recent announcement by the Drug Enforcement Administration (DEA) of the first-time ever opening of an office in Paducah.
Dycus joins Assistant United States Attorney Seth Hancock, Branch Manager of the Paducah office, and Assistant United States Attorney Madison Sewell in prosecuting cases before U.S. District Judges, in United States District Courts, located in Paducah, Owensboro and Bowling Green.
As an Assistant Commonwealth’s Attorney in McCracken County, Dycus specialized in violent sexual crimes, crimes against children and drug prosecutions. She was named Assistant Commonwealth’s Attorney of the year in 2018. Dycus has served in the United States Attorney’s Office as a Special Assistant United States Attorney since May, 2018, prosecuting federal drug and gun offenders.
“Leigh Ann joined our office as an intern and later became a full-time prosecutor in 2014, during her time with us she became one of the top prosecutors in the office, and could always be counted on to do the right thing - no matter how difficult that might be,” McCracken County Commonwealth Attorney Dan Boaz said. “While she is moving to the United States Attorney’s Office I don’t feel like we’re losing her, because we have a strong partnership with our local U.S. Attorney’s Office; we work together to fight against violent crime and the massive influx of methamphetamine and other dangerous drugs coming into the community.”
“Way down here in the Purchase we are often paranoid, thinking that the rest of the state forgets we exist because of the distance involved,” said Justice Bill Cunningham, a former prosecutor who represents the Purchase region in the Kentucky Supreme Court. “It is reassuring to have U.S. Attorney Russell Coleman to provide the extra prosecutor for us. And, we are also grateful he picked a dandy in Leigh Ann Dycus.”
One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy. PSN is a commitment to aggressively reduce violent crime across the country, including all 53 counties in the Western District through true partnerships with all levels of law enforcement. Recently a number of indictments were announced in Mayfield, Kentucky as part of the PSN program in an effort to crack down against violent criminal activity in Graves County.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”
255 Arrested as a Part of Combined Law Enforcement Operation in North MississippiRead the Press Release
A month long joint federal, state, and local law enforcement initiative has resulted in the arrests of 255 individuals in North Mississippi on a variety of criminal charges, including homicide, assault, robbery, arson, drug distribution, illegal gun crimes and failure to register as a sex offender. “Operation Triple Beam,” a US Marshals led initiative brought together federal, state, and local law enforcement partners in an effort to reduce crime in North Mississippi by identifying and arresting violent fugitives, targeting violent gang activity and collecting intelligence to allow for the systematic removal of individuals who have committed and are committing crimes in North Mississippi.
In addition to the arrests, Operation Triple Beam resulted in the seizure of approximately $52,773 worth of narcotics, $50,565 cash, and 76 firearms as well as the recovery of 11 stolen vehicles. The announcement was made on Tuesday in Tupelo by Danny McKittrick, U.S. Marshal for the Northern District of Mississippi, and William C. Lamar, U.S. Attorney for the Northern District of Mississippi, together with federal, state and local law enforcement partners.
Operation Triple Beam commenced on August 13, 2018, in Northeast Mississippi and concluded on September 14, 2018. As a part of the initiative, approximately 150 gang members were arrested or validated by law enforcement. In addition, almost 200 registered sex offenders living in areas of North-East Mississippi were checked for compliance with sex offender registration requirements. Compliance checks were also conducted on another 150 moderate and high-risk federal and state probationers.
The arrests, seizures and compliance checks occurring as part of the Operation Triple Beam initiative resulted from the combined efforts of more than 30 local law enforcement agencies across 13 counties in North Mississippi, along with State and Federal law enforcement partners.
U.S. Attorney General Jeff Sessions praised the collaboration and combined efforts of law enforcement that led to the success of this operation. “When law enforcement officers work together, we get results,” Attorney General Jeff Sessions said. “Again and again, law enforcement in North Mississippi has given the rest of this nation an example of what we can accomplish when we bring together the resources and expertise of our federal officers with the street level intelligence of our state and local partners. The arrest of more than 250 defendants—including multiple sex offenders—as part of Operation Triple Beam builds on the hundreds of arrests that our Deputy Marshals in North Mississippi have helped make over the last year in operations like this one. I want to thank U.S. Attorney Lamar, our outstanding Deputy Marshals, ATF, CBP, six state-level law enforcement agencies, 13 sheriffs, and eight Northeast Mississippi police departments for the roles that they played in these arrests.”
During the initiative, law enforcement agencies were able to utilize a mobile NIBIN (National Integrated Ballistic Information Network Unit) lab provided by ATF to check seized firearms and shell casings. As a result of these checks and the abilities of the NIBIN system to match spent shell casings to particular firearms, ATF generated 17 leads on unsolved gun crimes in Northeast Mississippi and beyond. Those leads will be utilized by law enforcement agencies in Mississippi and across the nation to help investigate unsolved gun crimes.
The use and sharing of investigative resources such as NIBIN and the multi-agency partnerships that were crucial to the success of Operation Triple Beam as a whole are key components of the Project Safe Neighborhoods (PSN) Program, the Department of Justice’s violence reduction initiative. PSN began in 2002 under President George W. Bush, continued under President Obama and was reinvigorated during President Trump’s administration. As with Operation Triple Beam, PSN focuses on reducing violent crime and making communities safer through partnerships and collaborative efforts between federal, state and local law enforcement and community partners. The PSN program in the Northern District of Mississippi, named MPACT (Mississippi Partners Alleviating Crime Together), has long been a priority for the US Attorney’s Office and a primary means of combatting violent gun crime. Although it originally focused in the areas of Clarksdale and Greenville, Mississippi, the program has been expanded in recent years to reach other areas of the District.
Operation Triple Beam was accomplished in partnership with the following agencies:
U.S. Marshal’s Service
U.S. Attorney’s Office
U.S. Probation
U.S. Customs and Border Protection Air and Marine Division
Bureau of Alcohol Tobacco and Firearms
Mississippi Bureau of Investigations
Mississippi Highway Patrol
Mississippi Bureau of Narcotics
Mississippi Attorney General’s Office
Mississippi Department of Corrections
Mississippi Department of Wildlife and Fisheries
Lee County Sheriff’s Department
Tupelo Police Department
Pontotoc Police Department
Pontotoc Sheriff’s Department
Union County Sheriff’s Department
Monroe County Sheriff’s Department
Chickasaw County Sheriff’s Department
Alcorn County Sheriff’s Department
Corinth Police Department
Booneville Police Department
Prentiss County Sheriff’s Department
Tate County Sheriff’s Department
Lowndes County Sheriff’s Department
Starkville Police Department
Marshall County Sheriff’s Department
Oktibbeha County Sheriff’s Department
Panola County Sheriff’s Department
Itawamba County Sheriff’s Department
Fulton Police Department
Okolona Police Department
New Albany Police Department
8 October 2018
Media Advisory -- United States Attorney Mike Stuart and Law Enforcement Partners to Hold Press Conference on Tuesday, October 9thRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart will hold a press conference on Tuesday, October 9, 2018, at 10:30am, to discuss collaborative efforts to address violent crime in Charleston.
WHO: United States Attorney Mike Stuart, Southern District of West Virginia
Mayor Danny Jones, City of Charleston
Kanawha County Prosecuting Attorney Chuck Miller
Assistant Special Agent in Charge Nicholas Boshears, FBI
Assistant Special Agent in Charge David Gourley, DEA
Resident Agent in Charge Adam Black, ATF
Other Law Enforcement Officials
WHAT: Press Conference
WHEN: Tuesday, October 9, 2018 @ 10:30am
WHERE: Robert C. Byrd United States Courthouse (front plaza)
300 Virginia Street, East
Charleston, WV
Follow us on Twitter: @SDWVNews and @USAttyStuart
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6 October 2018
Man Convicted of First-Degree Murder for Joint Kidnapping, Torture, and Execution of Gender-Fluid Teen Kedarie JohnsonRead the Press Release
Jaron N. Purham was convicted yesterday of first-degree murder for his role in the kidnapping, torture, and execution of gender-fluid high school student Kedarie Johnson, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division and Des Moines County Attorney Amy K. Beavers. Purham’s co-defendant, Jorge Sanders-Galvez, was previously convicted of first-degree murder last year for his role in the killing, and his been sentenced to life imprisonment without the possibility of parole. The killing rocked the small town of Burlington, Iowa, where Kedarie was a popular and well-loved member of the community.
Last year, Attorney General Jeff Sessions and Acting Assistant Attorney General John Gore authorized a federal hate-crimes prosecutor from the Civil Rights Division, Christopher J. Perras, to be cross-designated as a Special Assistant County Attorney to assist with the prosecutions of both defendants in this case. Prosecuting hate crimes and bringing perpetrators of these egregious crimes to justice is a top priority for this Justice Department.
“I am proud of the collaboration and hard work conducted in this case to bring two men to justice for their abhorrent actions,” said Acting Assistant Attorney General John Gore. “The Justice Department will continue to work diligently to ensure that individuals are able to live free from acts of violence, no matter their gender identity, what they believe, or how they worship.”
“I am privileged to have fought for justice for Kedarie and those with alternate lifestyles,” said Des Moines County Attorney Amy K. Beavers. “Alongside my partners in the Iowa Attorney Generals Office Laura Roan and the U.S. Department of Justice Chris Perras with Sgt. Short and DCI Agent Matt George I am grateful that justice was served.”
The evidence at trial established that on the night of the murder, the defendants were pulling out of a grocery store parking lot when they noticed Kedarie Johnson walking down the street all by himself. Kedarie (who used male pronouns to refer to himself) sometimes dressed as a boy and went by his given name, and sometimes dressed as a girl and went by the name Kandiece. On the night of the murder, he was dressed in women’s clothing and presenting as female, and the defendants began to follow slowly behind him. Eventually, the defendants pulled up alongside Kedarie and flirted with him. They convinced Kedarie to get inside, and they drove him to a location where they often took young women to have sex with them. The physical evidence showed that, at the house, the defendants knocked Kedarie unconscious, stuffed a plastic bag down his throat, wrapped a makeshift gag around his mouth, and wrapped another plastic bag around his head. They then drove Kedarie to an alleyway. Forensic evidence established that at some point, Kedarie regained consciousness and began struggling violently to breathe. The defendants got out in the alleyway, threw Kedarie onto the ground, and shot him twice in the chest, one bullet embedding in his spine and the other piercing his heart. The defendants then doused Kedarie’s body in bleach to destroy any DNA evidence.
There were no eyewitnesses to the kidnapping or the murder, so Purham and Sanders-Galvez were convicted largely on the physical, electronic, and forensic evidence they left behind. Police found Kedarie’s backpack and sneakers at the defendants’ place, as well as a ripped bedsheet that matched fibers found on Kedarie’s body. When police located Purham, he was driving the car that had been seen on surveillance video following Kedarie shortly before his abduction and murder. When police searched the car, they found a .357 revolver, which a ballistics expert determined to be the murder weapon. Records from the Defendants’ cellphone and social media accounts established that Sanders-Galvez had purchased the murder weapon over Facebook a few months before the murder. Records also showed that the Defendants’ phones both went dead during the two-hour period in which they committed the crime; that the Defendants posted on Facebook, approximately one hour after the murder, that they were skipping town; and that the Defendants both searched the internet in the days following the murder for updates on the status of the homicide investigation.
The investigation was conducted by law enforcement officers from the Burlington (Iowa) Police Department and the Iowa Department of Criminal Investigation, with assistance from the FBI. Des Moines County Attorney Amy K. Beavers invited Iowa Assistant Attorney General Laura M. Roan, an experienced state murder prosecutor, and Trial Attorney Christopher J. Perras, a federal hate-crimes prosecutor from the Civil Rights Division of the Department of Justice, to assist with the prosecution.
Purham will be sentenced on Nov. 19. The mandatory sentence for first-degree murder in Iowa is life imprisonment without the possibility of parole.
5 October 2018
Worcester Man Pleads Guilty to Methamphetamine ChargesRead the Press Release
BOSTON – A Worcester man pleaded guilty today in federal court in Worcester for his role in a methamphetamine conspiracy.
Adam Germano, 37, pleaded guilty to conspiring to distribute and to distributing methamphetamine from Las Vegas to Worcester. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Jan. 4, 2019. Germano was arrested in March 2017, and has been in custody since that time.
Germano admitted to shipping large quantities of methamphetamine into Massachusetts, New Hampshire, and Florida, and to distributing methamphetamine to dealers and others in Massachusetts and New Hampshire in exchange for cash. In January 2017, Germano arranged for a package to be shipped via U.S. mail from Las Vegas to Worcester. The package was intercepted and found to contain more than two kilograms of approximately 97% pure methamphetamine. In March 2017, during a traffic stop in Concord, N.H., police located methamphetamine and a handgun hidden in the engine of the car that Germano was driving.
Germano faces a sentence of between 10 years and life in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of $10 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Valuable assistance was provided by the Police Departments in Merrimack and Concord, N.H. Assistant U.S. Attorney Bill Abely of Lelling’s Worcester Branch Office is prosecuting the case.
Virginia Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
WASHINGTON - An Alexandria, Virginia man pleaded guilty to one count of receipt of child pornography today in federal court in Alexandria, Virginia.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, made the announcement today.
Kerry Sipult, 51, pleaded guilty to one count of receipt of child pornography before Senior Judge Claude M. Hilton of the Eastern District of Virginia. According to the Information to which Sipult pleaded guilty and to other facts he admitted to in his plea agreement, between Aug. 1, 2014 and Oct. 22, 2014, Sipult used a peer-to-peer program to download, and share, child pornography. As part of the investigation, the FBI seized Sipult’s computer and other electronic storage devices and recovered over 4,000 child pornography images and/or videos. Sipult was released from custody subject to electronic monitoring. Sipult is scheduled for sentencing on Jan. 11.
The investigation was conducted by the Washington Field Office’s Child Exploitation and Human Trafficking Task Force, which is composed of FBI agents, deputy U.S. Marshals, detectives from Arlington County Police, Fairfax County Police, Loudoun County Sheriff’s Office, Prince William County Police, Fauquier County Sheriff’s Office, Leesburg Police Department, Alexandria City Police, Virginia State Police and agents of various federal Office of Inspector Generals. Trial Attorney Ralph Paradiso of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Whitney Russell of the Eastern District of Virginia are prosecuting the case.
United States Secures Judgment Forfeiting $396,589 Associated with Iranian Money Laundering EffortsRead the Press Release
WASHINGTON –The United States has secured a judgment in a civil action seeking the forfeiture of $396,589 associated with a United Arab Emirates-based company, Royal Pearls General Trading, that allegedly engaged in illegal business dealings involving a company in Iran, announced U.S. Attorney Jessie K. Liu and Sean M. Cox, Special Agent in Charge of the FBI’s Springfield, Illinois Field Office.
The judgment was entered on Oct. 4, 2018 by Judge Reggie B. Walton in a lawsuit filed in March 2017 by the U.S. Attorney’s Office for the District of Columbia. In its complaint, the United States alleged that Royal Pearls General Trading (Royal Pearls) and its co-conspirators engaged in a scheme to illegally export specialized petroleum parts to end users in Iran, in violation of U.S. laws.
According to the complaint and pleadings in the case, the Chief Executive Officer of Royal Pearls is Iranian national Kambiz Rostamian, who is also the CEO of the Iranian company MKS International Group. The pleadings alleged that the products Royal Pearls attempted to procure with the forfeited funds -- highly specialized pieces of equipment used by large-scale petroleum operations -- were intended for an Iranian subsidiary of MKS International.
These transactions would have required a license from the Department of Treasury’s Office of Foreign Assets Control (OFAC). The international wiring of U.S. dollars into the United States to promote this sale violated U.S. money laundering laws. OFAC designated Royal Pearls in February 2017 for acting on behalf of MKS International. According to the designation, MKS has procured components for Iran’s ballistic missile program.
The complaint alleged that Royal Pearls laundered $396,589 in 2014 and 2015 to a U.S. company, through an intermediary company that was acting on behalf of Royal Pearls, in an attempt to procure the specialized equipment. The pleadings highlight multiple indications that Royal Pearls was a shell company operating on behalf of MKS International. For example, the complaint notes that the registration information of one of the Royal Pearls websites indicates that its address was “4th Floor, N014 Tehran, Tehran, IR 19937, Dubai, AE 1116,” which appears to be an Iranian address falsely made to look like an address in the United Arab Emirates. The pleadings also state that a MKS International subsidiary in Iran indicated that it was selling items similar to those Royal Pearls attempted to illegally procure with the forfeited funds.
“The judgment in this case shows there will be consequences for those who scheme to violate our nation’s export laws,” said U.S. Attorney Liu. “Working with our law enforcement partners, we will use every tool at our disposal to enforce these laws and protect our nation’s security.”
“This case is an outstanding example of how law enforcement works throughout the United States to bring justice against a foreign business operation that violates our nation’s export laws,” said Special Agent in Charge Cox.
The lawsuit, filed in the U.S. District Court for the District of Columbia, is captioned United States of America v. $396,589 In U.S. Funds Associated With Royal Pearls General Trading.
This case has been investigated by the FBI’s Springfield, Ill. Field Office. Assistance has been provided by the U.S. Department of Commerce, Bureau of Industry and Security. Assistant U.S. Attorneys Zia M. Faruqui, Brian P. Hudak, and Ari B. Redbord, former Special Assistant U.S. Attorney Kyle Bateman, and Paralegal Specialist Toni Anne Donato, all from the U.S. Attorney’s Office for the District of Columbia, represented the government.
United States Attorney’s Office Participates in ADA Workshop for the Deaf and Hard of Hearing CommunityRead the Press Release
North Charleston, South Carolina---- United States Attorney Sherri A. Lydon stated today that the United States Attorney’s Office continued its firm commitment to upholding the Americans with Disabilities Act (ADA). Assistant U.S. Attorney Rob Sneed served as a presenter during an ADA Workshop for the Deaf and Hard of Hearing Community.
The event was sponsored by the South Carolina Association of the Deaf, Inc. (SCAD). SCAD is the statewide non-profit organization that focuses on promoting equal treatment toward deaf and hard of hearing citizens in education, employment, legislation, healthcare, and other fields pertaining to the Deaf and Hard of Hearing citizens of South Carolina. Mrs. Anita M. Steichen-McDaniel, SCAD’s Executive Director, was the lead organizer of the event. This event was held at the Whitfield Center at Charleston Southern University on Saturday, September 29, 2018. AUSA Sneed provided an overview of federal disability laws and focused on those aspects of the ADA of greatest interest to members of the deaf and hard of hearing community.
The ADA requires that covered entities (state and local governments; businesses and nonprofit organizations that serve the public) communicate effectively with people who have communication disabilities. The goal is to ensure that communication with people with these disabilities is equally effective as communication with people without disabilities.
U.S. Attorney Lydon stated that community outreach efforts such as this continue the U.S. Attorney’s and DOJ’s long standing commitment to Project Civic Access, which is a wide-ranging effort to ensure that counties, cities, towns, and villages comply with the ADA by eliminating physical and communication barriers that prevent people with disabilities from participating fully in community life. The training also demonstrates the U.S. Attorney’s ongoing support of DOJ’s Barrier-Free Health Care Initiative, which is an initiative that includes effective communication for people who are deaf or have hearing loss, physical access to medical care for people with mobility disabilities, and equal access to treatment for people who have HIV/AIDS.
In addition to the ADA, the DOJ and U.S. Attorney’s Office for the District of South Carolina enforces federal civil rights laws, including the Fair Housing Act, Equal Credit Opportunity Act, Religious Land Use and Institutionalized Persons Act, Servicemembers Civil Relief Act, Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and the Uniformed Services Employment and Reemployment Rights Act. Civil remedies under these statutes include monetary penalties, injunctions, civil judgments and more.
To learn more about the ADA and other laws protecting the rights of people with disabilities, log on to the DOJ’s ADA website https://www.ada.gov/ or call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD). The U.S. Attorney’s Office Civil Rights Program webpages are located at https://www.justice.gov/usao-sc/civil-rights.
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United States Attorney William M. McSwain Announces Progress in Making Our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain joins the Department of Justice and other United States Attorneys across the country in commemorating the one year anniversary of the reinvigoration and enhancement of Project Safe Neighborhoods (PSN) – the centerpiece of the Department of Justice’s violent crime reduction strategy. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority, directing all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsible to community needs.”
Over the past year, the Eastern District has successfully prosecuted many instances of violent crime and has partnered with all levels of law enforcement, local organizations, and members of the community to share information and make neighborhoods safer places to live and work.
Enforcement Action through Prosecution of Violent Offenders
A central focus of the PSN strategy is to work with local law enforcement in the nine counties we serve to ensure federal efforts are focused on prosecuting the most violent offenders. Our collaboration has yielded the desired results, and the following three cases serve as excellent examples of our enforcement efforts:
- On October 2, 2018, Kareem Murphy, of Darby, Delaware County, Pennsylvania, was convicted after a jury trial of being a felon in possession of a firearm and one count of possessing a firearm in a school zone. Murphy fired a gun into a home located less than 1,000 feet away from Delaplaine McDaniel Elementary School – the school Murphy attended as a student. As U.S. Attorney McSwain observed when the jury returned its verdict, “The defendant endangered the lives of everyone in the vicinity, even though he should have never had a gun in the first place because of his felony conviction. We are very lucky no one was hurt.”
- On August 6, 2018, Koren Jones, of Philadelphia, Pennsylvania, was sentenced to 35 years’ imprisonment after pleading guilty to two armed robberies, one attempted robbery, and related firearms offenses – all over the course of a two-day violent crime spree in November 2016. Jones’ two armed robberies were committed at local grocery stores, and the attempted armed robbery occurred at a deli in the same neighborhood. As U.S. Attorney McSwain explained after the sentencing, “By seeking and obtaining a significant prison sentence in this case, we made the neighborhoods Jones terrorized safer today than yesterday.”
- On January 26, 2018, Herick Jaramillo, of Bethlehem, Lehigh County, Pennsylvania, was charged with six counts of armed robbery. In May 2018, he pleaded guilty to robbing the same gas station six times over a two-month period. He remains incarcerated and awaits sentencing.
Law Enforcement Partnerships with Pennsylvania State and Local Agencies
In the six months since U.S. Attorney McSwain took office, he has prioritized strengthening the Office’s partnerships with local and state law enforcement partners. During his first few months in office, U.S. Attorney McSwain traveled to each of the nine counties that make up the Eastern District of Pennsylvania – many of them several times – meeting with the district attorneys as well as several local police chiefs and other law enforcement agencies to share information and ideas about how to serve the community.
Additionally, the Eastern District has participated in multiple targeted working groups to address specific areas of particular concern in the community. For example, in February 2018, the Office formed the Opioid Law Enforcement Task Force. Since 2017, the Office has also participated in Pennsylvania Office of the Attorney General’s Gun Violence Task Force to provide assistance with investigating cases involving firearms charges, many of which end up being prosecuted at the state level.
"The Project Safe Neighborhoods program is a prime example of a productive partnership between local, state, and federal governments, all working in the interest of public safety,” said Philadelphia Mayor Jim Kenney. “I applaud all of our partners on this one-year anniversary of the PSN re-launch. Collaborative efforts by our law enforcement partners such as this are key to keeping our communities safe."
"The Philadelphia Police Department recognizes that a successful violent crime prevention strategy must be comprehensive, evidence based, measurable, and include partnerships among law enforcement agencies and other stakeholders,” said Philadelphia Police Commissioner Richard J. Ross, Jr. “The Project Safe Neighborhoods (PSN) program captures each of these necessary ingredients for success. We are fortunate to have been part of the 2017 program re-launch, and join our partners in celebrating its one year anniversary."
“Every resident in the Eastern District of Pennsylvania deserves to live in a safe community,” said U.S. Attorney McSwain. “And under my leadership, my Office will continue to aggressively pursue that goal. We will work together, fight harder, and use every tool we can to hold violent criminals accountable to the fullest extent of the law. That is what PSN is all about.”
Law Enforcement Partnerships with Federal Agencies
Fostering relationships with our federal law enforcement partners has been a related area of focus. In particular, the Office’s work with FBI and ATF has contributed to our success in prosecuting violent crime.
“We are proud be a part of the Project Safe Neighborhoods initiative alongside all of our many local, state and federal partners,” said ATF Special Agent in Charge Don Robinson. “The public deserves to live peacefully in their communities without the threat of violence.
"Combating violent crime is one of the FBI's highest priorities," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "We're committed to this initiative and our productive partnership with the U.S. Attorney's Office and our law enforcement colleagues. Together, we’ll keep working to make everybody's neighborhood safer—corner by corner, block by block."
Community Outreach
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The PSN Call-In Program consists of regular, face-to-face call-ins of individuals who were recently released from state custody. The Call-In program ensures connections to critical assistance and support to the returning offenders.
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The STAR Re-entry Court program, which started over a decade ago under the Bush Administration, has continuously been viewed as the leading prisoner re-entry program in the federal system. STAR is a partnership between U.S. Probation, U.S. District Court, the Federal Community Defender Office, and our Office. Together, our team provides intensive supervision and resources to individuals who are returning home to Philadelphia from federal prison and are at high risk of recidivism for violent crime.
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The Eastern District’s Mental Health Court was selected this past year as a pilot program for Congress’ 21st Century Cures Act. Just last month, our Office participated in a two-day training session with other federal judicial districts with similar programs, to share ideas and learn about best practices for successfully implementing the program.
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Later this month, Relapse Prevention Court will launch in the Eastern District, and the Office will be a key contributor in identifying participants for this program. The goal of Relapse Prevention Court is to maximize opportunities for long-term recovery from substance use and to facilitate successful completion of the participant’s term of supervised release.
Improvements to Community Safety
The FBI’s official crime data for 2017 reflects that, after two consecutive years of increases in violent crime, the nationwide violent crime rate is now trending in the right direction and began to decline in the first year of the Trump Administration – decreasing by approximately one percent in 2017. The nationwide homicide rate showed a similar decrease, by nearly one and a half percent in 2017. The preliminary information we have for 2018 gives us reason for optimism that our renewed efforts are continuing to pay off.
- On October 2, 2018, Kareem Murphy, of Darby, Delaware County, Pennsylvania, was convicted after a jury trial of being a felon in possession of a firearm and one count of possessing a firearm in a school zone. Murphy fired a gun into a home located less than 1,000 feet away from Delaplaine McDaniel Elementary School – the school Murphy attended as a student. As U.S. Attorney McSwain observed when the jury returned its verdict, “The defendant endangered the lives of everyone in the vicinity, even though he should have never had a gun in the first place because of his felony conviction. We are very lucky no one was hurt.”
United States Attorney Richard P. Donoghue Announces Project Safe Neighborhoods Achievements on the One-Year Anniversary of the Revitalization of the ProgramRead the Press Release
One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Jeff Sessions has made the centerpiece of the Department’s nationwide violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in communities and to develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally-based prevention and reentry programs for lasting reductions in crime.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Sessions said in marking the anniversary. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives and restore safety to our communities.”
“Over the past year, the Eastern District of New York has arrested and prosecuted dozens of gang members, gun traffickers and other violent offenders who have committed hundreds of serious crimes in our District. The charged crimes include racketeering, murders, aggravated assaults, armed robberies, drug trafficking, firearms trafficking, and the possession of firearms by convicted felons and illegal aliens. These prosecutions are a testament to the Project Safe Neighborhoods targeted enforcement strategies, which we have pursued with our federal and local law enforcement partners,” stated United States Attorney Donoghue. “We and our partners remain completely committed to identifying those who are most responsible for violence in our District and prosecuting them to the fullest extent of the law, while continuing to support vital outreach programs for young people at risk.”
The PSN efforts of the U.S. Attorney’s Office for the Eastern District of New York over the last year include:
MS-13 Enforcement
Over the last year, this Office has continued its decade-long enforcement efforts against the MS-13 street gang. For example, in 2018, more than two dozen Long Island MS-13 gang members were charged in a single superseding indictment with racketeering offenses, including 16 murders and numerous attempted murders. Additional racketeering charges were brought against other Long Island MS-13 defendants in additional indictments throughout the year. Numerous defendants, including juvenile defendants, have already pleaded guilty to serious charges, including several murders. The investigations that led to those indictments were conducted with the Federal Bureau of Investigation’s (FBI) Long Island Gang Task Force, which includes the FBI, the Suffolk County Police Department (SCPD), the Nassau County Police Department (NCPD), the Nassau County Sheriff’s Department (NCSD), the Suffolk County Sheriff’s Department (SCSD) and other partners.Also, in August of 2018, four MS-13 gang members were charged with murder conspiracy and attempted murder in Queens. Those MS-13 defendants are charged with aiding and abetting co-conspirators who shot and paralyzed a 16-year-old suspected rival gang member. The investigation was conducted with the FBI’s Safe Streets Gang Task Forces in Queens and on Long Island, which includes the FBI, the New York City Police Department (NYPD) and other partners.
Coney Island Gang Enforcement
The Office’s Organized Crime and Gangs Section has increased its enforcement efforts in the Coney Island area. The number of shooting victims in the NYPD’s 60th Precinct is down 70 percent year-to-date, and the number of shooting incidents is down 66 percent year-to-date, according to the NYPD.
In June 2018, a Brooklyn gang member was convicted of racketeering and two murders. The defendant, a member of the Coney Island-based Rival Impact gang, gunned down the victims in a gang war with the Thirty-O gang. The investigation was conducted with the FBI and the NYPD.
In November 2017, five members of a Coney Island street gang were indicted for murder, racketeering conspiracy and unlawful use of firearms. Three of the defendants are charged with a fatal shooting outside the Mermaid Houses in Brooklyn. The investigation was conducted with the FBI, the New York City Department of Investigation and the NYPD.
Other Street Gang Enforcement
In April 2018, four 18th Street gang members and associates were indicted for murder conspiracy and the murder of an MS-13 gang rival in Queens. The investigation was conducted with the Queens County District Attorney’s Office and the FBI’s New York Metro Safe Streets Task Force, including the NYPD.
Also in April 2018, a Long Island Bloods gang member was indicted for murder and racketeering. The defendant is charged with fatally shooting a victim at the Illusions Gentlemen’s Club in Deer Park. The investigation was conducted with the Suffolk County District Attorney’s Office and the FBI’s Long Island Gang Task Force, which includes the FBI, the Suffolk County Police Department (SCPD), the Nassau County Police Department (NCPD), the Nassau County Sheriff’s Department (NCSD), the Suffolk County Sheriff’s Department (SCSD) and other partners.
In March 2018, three members and associates of the 18th Street gang were indicted for the murder of a fellow gang member they suspected of being an informant. The defendants video recorded the murder and mutilation of the victim before burying the corpse in Turkey Point State Forest in Saugerties, New York. A fourth defendant is charged with helping a co-defendant evade capture by law enforcement authorities after the murder. The investigation was conducted with the Ulster County District Attorney’s Office and the FBI.
Since October of 2017, the Office has prosecuted over more than two dozen felon in possession of a weapon cases and more than 30 Hobbs Act robbery cases.
Firearms Trafficking Enforcement
In September 2018, two defendants were arrested for trafficking firearms from Virginia to Queens and Long Island. The defendants are charged with selling an assault rifle, high-caliber handguns and several other firearms. The investigation was conducted with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the FBI and the NCPD.
In June 2018, three defendants were arrested for trafficking firearms from Virginia to New York. The defendants allegedly used Facebook to market and sell firearms illegally obtained by straw purchasers. The investigation was conducted with the ATF and the NYPD.
Additional Federal Prosecutors Assigned
In June 2018, Attorney General Sessions announced 311 new Assistant United States Attorney (AUSA) positions throughout the country. This was the largest increase in AUSAs in decades and, as part of that increase, the Attorney General allocated nine new prosecutors to the EDNY to focus on violent crime, civil enforcement and immigration crimes.
In addition, in January 2018, Attorney General Sessions selected the EDNY to receive two new AUSA positions to combat violent crime on Long Island. The two additional federal prosecutors enhanced the Office’s ability to prosecute violent crimes committed by members and associates of MS-13 and other violent gangs such as the Crips, Bloods, Latin Kings, 18th Street gang and Outlaw motorcycle gangs, all of which have a significant presence in the district.
Community Partnerships and Grants
PSN funding has also been made available to provide direct support to local law enforcement agencies as well as prevention, education and awareness programs for at-risk young people and parents. Presentations regarding gang awareness, internet safety and monitoring your child’s electronic devices all provide students and parents with necessary tools to more effectively avoid the dangers of violent crime.
In September 2018, a federal award of $1,036,044 was granted to Suffolk County to oversee and implement various violent crime reduction strategies in Suffolk County, Nassau County and throughout the district. Resources will be dedicated to enforcement and prevention efforts including, but not limited to, funding for prosecutors and police, providing technical training, promoting community outreach efforts and supporting existing gun and gang violence reduction programs.
In addition, in October 2017, the Justice Department awarded a $500,000 grant to the Suffolk County Police Department for a violent gang and gun crime reduction program. The grant supported enforcement strategies targeting individuals responsible for a disproportionate amount of violent crime and expanded community outreach programs for at-risk youth.
Charges in complaints and indictments are allegations, and defendants are presumed innocent unless and until proven guilty.
United States Attorney Grant C. Jaquith Announces Progress in Making our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
SYRACUSE, NEW YORK - One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Throughout the past year, we have partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”
Northern District of New York United States Attorney Grant C. Jaquith said, “Every neighborhood should be a safe place. We are completely committed to the continued implementation of the revitalized Project Safe Neighborhoods to achieve that goal. It takes effective collaboration with federal, state, local, and tribal law enforcement and other community agencies to curtail violent crime, and the drug, gun, and gang crimes that beget violence. Working together, we offer help for those who want a better life and a safer community, and the full breadth and force of federal and state law, including applicable mandatory minimum sentences, for those who persist with violence.”
As we celebrate the one-year anniversary of the revitalized PSN program, here are some of the highlights of our PSN actions over the past year:
Enforcement Actions
In the Northern District of New York, the U.S. Attorney’s Office works with federal law enforcement agencies, including the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Bureau of Investigation (FBI), the U.S. Drug Enforcement Administration (DEA), and Homeland Security Investigations (HSI); the New York State Police; and sheriff’s offices, municipal and tribal police departments, and state prosecutors throughout our 32 county area, collaborating to curtail crimes of violence and associated drug, gang, and gun activity, and to prosecute those who commit such crimes in the most effective forum. Among others, these have included:
- United States v. Charles Tan: On June 22, 2018, the defendant pled guilty to the federal crime of receiving a firearm in interstate commerce intending to use it in the commission of a felony. The defendant admitted: that he paid another person to purchase a shotgun for him; that he knew the “straw purchaser” would have to lie to do so; and that he intended to use the shotgun to shoot his father. The defendant’s father was shot and killed in Rochester, New York, in June of 2015 and state murder charges against the defendant were dismissed following a mistrial. ATF and the Monroe County Sheriff’s Department conducted the investigation. The defendant will be sentenced on November 19, 2018.
- United States v. Emmanuel Philippe, ATF and the Saratoga Springs (New York) Police Department investigated the defendant’s possession of 35 bags of cocaine base (crack), packaging material, and equipment for drug distribution, a loaded assault rifle and over 200 rounds of ammunition when his car was stopped. The defendant was convicted following a jury trial, and he will be sentenced on December 6, 2018.
- United States v. Jose Fontanez, Onic Martinez, Omar Dejesus, Dalmary Morales and Juan Suarez, ATF investigated the October 22, 2017 theft of more than 50 firearms from a federally licensed dealer in Glenville, New York. Five persons were charged with committing the burglary and transporting and/or storing the stolen firearms. The defendants have all pled guilty to charges related to the theft or possession of stolen firearms. Omar DeJesus, Dalmary Morales, Jose Fontanez and Juan Suarez will be sentenced on December 17, 2018. Onic Martinez will be sentenced on December 13, 2018.
- United States v. Alfred Laquann “Merc” Thomas, after state court charges were dismissed due to uncooperative witnesses, Thomas pled guilty to the federal charge of possessing ammunition as a convicted felon and was sentenced to 115 months in prison. The sentence was an upward departure based on the fact that Thomas possessed the ammunition while taking part in a drive-by shooting of an occupied house in Syracuse. During his sentencing hearing, the court also heard evidence that Thomas had admitted to agents that he had committed an unrelated murder for which he had been tried and acquitted in state court. The sentence was affirmed on appeal in May 2018. The investigation was conducted by the FBI and the Syracuse Police Department.
Community Partnerships
The United States Attorney’s Office for the Northern District of New York participates in local partnerships with community organizations and law enforcement agencies to combat violence, drug abuse, and promote offenders’ successful reentry into society following their release from federal prison. These include:
- Anti-gang violence/focused deterrence “call-in’ meetings with at risk youth as part of “Syracuse Truce,” “Utica Save Our Streets,” “Albany Violence Eradication,” and “Schenectady Strong.” Since 2012, U.S. Department of Justice Project Safe Neighborhood grants have provided $1.2 million dollars for anti-violence law enforcement actions and community engagement activities in Syracuse.
- Intensive Reentry Court, through which selected offenders, including former gang members, returning from prison participate in a highly structured federal court-based program to reintroduce them into society with the skills, habits, training, and support to avoid a return to the criminal justice system. The U.S. Attorney’s Office participates with Federal Judges, U.S. Probation Officers, and the Federal Public Defender’s Office in this rigorous program that has continued over the past decade in Syracuse and Albany.
- Anti-drug abuse efforts: The United States Attorney’s Office has partnered with community coalitions, school districts, civic and religious organizations, colleges and universities, local, county and state agencies to present over 70 community outreach programs to promote prevention and education in the midst of the opioids epidemic. Many of the programs have featured screenings of “Chasing the Dragon: The Life of an Opiate Addict,” coupled with guest speakers, panels comprised of health professionals, first responders, law enforcement, addicts in recovery, and parents of overdose victims, and information about community resources. These activities complement our continuing work in conjunction with federal, state, and local law enforcement agencies in the investigation, interdiction, and prosecution of drug traffickers that are among the core missions of the United States Attorney’s Office and the United States Department of Justice.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.