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27 September 2018
Redby Man Sentenced to 30 Years in Prison for the Violent Beating Death of 23-Month-Old SonRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of GARY WAYNE JACKSON, JR., 26, to 30 years in prison for second-degree murder in the beating death of his 23-month-old son. JACKSON, who pleaded guilty on June 20, 2018, was sentenced today before U.S. District Judge Ann D. Montgomery in U.S. District Court in Bemidji, Minnesota.
According to his guilty plea and documents filed in court, on January 2, 2018, JACKSON, in a fit of rage, repeatedly punched his 23-month-old son, resulting in the child’s death. Following the assault, JACKSON failed to seek appropriate medical care for his son. The final autopsy report revealed the cause of death as blunt force trauma to the head and torso.
This case is the result of an investigation conducted by the FBI Headwaters Safe Trails Task Force, and the Red Lake Police Department.
This case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information:
GARY WAYNE JACKSON, JR., 26
Redby, Minn.
Convicted:
- Murder in the Second Degree, 1 count
Sentenced:
- 30 years in prison
- Five years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
President of Park Avenue Art Gallery Sentenced to 18 Months in Prison for Defrauding Art Dealers and Collectors of Millions of Dollars of ArtworkRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that EZRA CHOWAIKI was sentenced to 18 months in prison for his role in an elaborate scheme to defraud art dealers and collectors of millions of dollars. CHOWAIKI fleeced his victims by entering into fraudulent agreements with dealers and collectors to buy or sell artwork through a private art gallery located on Park Avenue in New York, New York (the “Gallery”), and by using these dealers’ and collectors’ funds and artwork for unauthorized purposes, such as to repay other dealers to whom CHOWAIKI had outstanding debts. CHOWAIKI pled guilty on May 3, 2018, before United States District Judge Jed S. Rakoff, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Ezra Chowaiki ran a multimillion-dollar fraud on art dealers and collectors around the country. He sold clients’ artwork without authorization, and he took clients’ money for the purchase of artwork he never purchased. Chowaiki has now been sentenced to prison, and ordered to forfeit the spoils of his scheme and make restitution to his victims.”
According to the allegations contained in the Information and other documents filed in court, as well as statements made in public court proceedings:
Until November 2017, EZRA CHOWAIKI was the president and the minority owner of the Gallery. CHOWAIKI founded the Gallery in 2004 and thereafter used the Gallery to facilitate the purchase, sale, and consignment of works of fine art, as well as for hosting various art exhibitions featuring works of art and sculptures by well-known artists such as Pablo Picasso, Alexander Calder, Marc Chagall, Edgar Degas, and others. CHOWAIKI lost control of the Gallery in November 2017 when the Gallery filed for bankruptcy and was taken over by a trustee to oversee its liquidation.
Between 2015 and 2017, through the Gallery, CHOWAIKI engaged in a scheme to deceive other dealers and collectors of fine artwork into sending him money or valuable artwork under the false pretenses that CHOWAIKI would engage in legitimate transactions such as the purchase, sale, or consignment of these and other artworks. In truth, however, CHOWAIKI did not, and often could not, conduct the transactions as promised, and instead kept funds and artwork for himself and the Gallery, or sold or consigned them to others both in and outside the United States, without authorization. Through these fraudulent transactions, CHOWAIKI fraudulently transferred millions of dollars’ worth of artwork.
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In addition to the prison term, CHOWAIKI, 49, of New York, New York, was sentenced to three years of supervised release and ordered to forfeit his interest in more than 20 works of art that had been fraudulently transferred, including works by Picasso, Degas, and Calder. Restitution amount was deferred to a later date.
Mr. Berman praised the outstanding work of the Federal Bureau of Investigation. To date, the FBI has seized millions of dollars of artwork that was fraudulently transferred through CHOWAIKI’s scheme. Any person who believes he/she is a victim of this crime is encouraged to send an email to [email protected]. Mr. Berman also thanked the Chapter 7 trustee and his attorneys at Togut, Segal & Segal LLP for their assistance.
The case is being prosecuted by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Daniel M. Tracer is in charge of the prosecution.
Petróleo Brasileiro S.A. – Petrobras Agrees to Pay More Than $850 Million for FCPA ViolationsRead the Press Release
Petróleo Brasileiro S.A. – Petrobras (Petrobras), a Brazilian state-owned and state-controlled energy company, entered into agreements with U.S. and Brazilian authorities and agreed to pay a combined total of $853.2 million in penalties to resolve the U.S. government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Petrobras’s role in facilitating payments to politicians and political parties in Brazil, as well as a related Brazilian investigation.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia and Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division made the announcement.
“Executives at the highest levels of Petrobras—including members of its Executive Board and Board of Directors—facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators,” said Assistant Attorney General Benczkowski. “The Criminal Division’s Fraud Section—together with our partners in the Eastern District of Virginia, the SEC, and the FBI—are grateful for the assistance provided by our Brazilian law enforcement counterparts. This case is just the most recent example of our ability to work with our foreign counterparts to investigate companies and other criminal actors whose conduct spans multiple international jurisdictions.”
“Protecting the integrity of U.S. financial markets is one of the highest priorities of this Administration,” said U.S. Attorney Terwilliger. “Those who choose to access our capital markets while failing to disclose the corrupt activities of company executives will be held accountable. I want to thank our law enforcement partners for their diligence and dedication in pursing this important case.”
“Today’s global resolution demonstrates the FBI’s commitment to thoroughly investigating and holding accountable those international companies who seek to take advantage of our financial system while also facilitating bribes and fraud in other countries,” said FBI Assistant Director Johnson. “The hefty $853.2 million criminal penalty should act as a deterrent to anyone seeking to perpetrate this kind of fraud in the future. This case proves that no company is above the law and that corruption that spans borders will not be tolerated by the United States. I want to thank the agents, analysts, and prosecutors who investigated this case in parallel with Brazilian authorities. We will continue to pursue any and all companies and individuals throughout the world who disregard the rule of law and threaten our fair and competitive marketplace for their personal gain.”
“Today’s substantial resolution demonstrates the FBI’s continued commitment to working with U.S. and international partners to investigate corruption no matter where it occurs,” said Special Agent in Charge Matthew J. DeSarno of the FBI Washington Field Office’s Criminal Division. “We remain committed to holding companies and executives who violate the Foreign Corrupt Practices Act accountable for their activity, and we will continue to work diligently to uphold the integrity of an increasingly global marketplace."
According to Petrobras’s admissions, while the company’s American Depository Shares traded on the New York Stock Exchange, members of the Petrobras Executive Board were involved in facilitating and directing millions of dollars in corrupt payments to politicians and political parties in Brazil, and members of Petrobras’s Board of Directors were also involved in facilitating bribes that a major Petrobras contractor was paying to Brazilian politicians. During this period, for example, a Petrobras executive directed the payment of illicit funds to stop a parliamentary inquiry into Petrobras contracts, and the executive also directed payments received from Petrobras contractors to be corruptly used to pay millions of dollars to the campaign of a Brazilian politician who had oversight over the location where one of Petrobras’s refineries was being built.
Petrobras admitted that it failed to make and keep books, records and accounts that accurately and fairly reflected the company’s capitalization of property, plant and equipment as a result of the bribes being generated by the company’s contractors with the cooperation of certain Petrobras executives, and that certain Petrobras executives signed false Sarbanes-Oxley (SOX) 302 sub-certifications while they were involved in, and were aware that other executives at Petrobras were involved in, obtaining and facilitating the payment of millions of dollars in bribes to Brazilian politicians, to Brazilian political parties and to themselves. Petrobras also admitted that certain executives failed to implement internal financial and accounting controls in order to continue to facilitate bribe payments to Brazilian politicians and Brazilian political parties.
Petrobras entered into a non-prosecution agreement and agreed to pay a criminal penalty of $853.2 million to resolve the matter. This reflects a 25 percent discount off the low end of the applicable U.S. Sentencing Guidelines fine range for the company’s full cooperation and remediation. In related proceedings, Petrobras reached a settlement with the U.S. Securities and Exchange Commission (SEC) and Petrobras entered into an agreement to reach a settlement with the Ministerio Publico Federal in Brazil. Under the non-prosecution agreement, the United States will credit the amount that Petrobras pays to the SEC and Brazil under their respective agreements, with the Department of Justice and the SEC receiving 10 percent ($85,320,000) each and Brazil receiving the remaining 80 percent ($682,560,000). As part of the agreement, Petrobras has agreed to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the conduct, including of individuals, to enhance its compliance program and to report to the Department on the implementation of its enhanced compliance program.
The Department reached this resolution based on a number of unique factors presented by this case, including that Petrobras is a Brazilian-owned company that entered into a resolution with Brazilian authorities and is subject to oversight by Brazilian authorities, and that, in addition to the significant misconduct engaged in by Petrobras, a number of executives of the company engaged in an embezzlement scheme that victimized the company and its shareholders. In addition, the company did not voluntarily disclose the conduct, but did notify the government of its intent to fully cooperate after learning of the allegations of misconduct; Petrobras fully cooperated in the investigation and fully remediated. Petrobras’s cooperation included conducting a thorough internal investigation, proactively sharing in real time facts discovered during the internal investigation and sharing information that would not have been otherwise available to the Department, making regular factual presentations to the Department, facilitating interviews of and information from foreign witnesses, and voluntarily collecting, analyzing and organizing voluminous evidence and information for the Department in response to requests, including translating key documents. Petrobras also took extensive remedial measures, including replacing the Board of Directors and the Executive Board (the company’s high-level managers) and implementing governance reforms, as well as disciplining employees and ensuring that the company no longer employs or is affiliated with any of the individuals known to the company to be implicated in the conduct at issue in the case.
In the related SEC matter, Petrobras also agreed to pay to the SEC disgorgement and prejudgment interest totaling $933,473,797, which shall be reduced by the amount of any payment Petrobras makes to the class action Settlement Fund in the matter of In re Petrobras Securities Litigation, No. 14-cv-9662 (S.D.N.Y.).
The FBI’s International Corruption Squad in Washington, D.C. investigated the case. Assistant Chiefs Christopher Cestaro and Lorinda Laryea and Trial Attorney Derek Ettinger of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Grace Hill of the Eastern District of Virginia prosecuted the case.
The Department appreciates the significant cooperation provided by the SEC and the Criminal Division’s Office of International Affairs in this case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Owner of Medical Technology Company Pleads Guilty to Evading over $6.3 Million in Income TaxesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that LEWIS STAHL, the owner of a Manhattan medical technology company, pled guilty to tax evasion based on his failure to report over $21 million in business income to the IRS, and his evasion of over $6.3 million in income taxes. STAHL pled guilty before U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Lewis Stahl, the owner of a successful medical technology company, earned over $21 million in profit. However, despite amassing personal wealth in the tens of millions, Stahl grossly underreported his income to the IRS, reporting income as low as less than $10,000 for the 2011 tax year. Stahl has now pled guilty to tax evasion and faces serious time in federal prison. This case is a prime example that attempting to conceal earned income is far costlier than paying your fare share like honest taxpayers.”
According to the Information to which STAHL pled guilty, and statements made during the proceedings today:
Since at least in or about 2010, STAHL has owned and operated a medical technology company located in New York, New York (the “Medical Technology Company”), a limited liability company that develops and sells medical software applications. The Medical Technology Company holds itself out as a provider of “computer ready” and “fully mobile” applications, which allow physicians to prescribe medications and to order and view diagnostic information, lab results, and cardiology/radiology images.
Between in or about 2010 and in or about 2014, the Medical Technology Company earned over $32 million in gross income. These earnings resulted in over $21 million in business income to STAHL, which he accessed by using business bank accounts and business credit cards. STAHL used this money to fund the purchase of personal items for himself such as clothing, jewelry, watches, real estate rentals, country club benefits, and a firearms collection. Prior to 2015, despite earning this business income from the Medical Technology Company, STAHL failed to file individual tax returns reporting any of the income to the IRS. The Medical Technology Company, likewise, failed to file partnership or corporate tax returns reporting any of the income to the IRS.
In or around March of 2015, an IRS revenue agent (the “IRS Revenue Agent”) contacted STAHL regarding his failure to file for the tax years 2010 through 2014, and asked STAHL to address the situation by filing delinquent Form 1040s for those years (the “Delinquent Returns”). Shortly thereafter, STAHL retained a certified public accountant (the “Accountant”) to file the Delinquent Returns for STAHL. STAHL, however, falsely stated to his Accountant, in sum and substance, and in part, that he was a “W-2” employee only of the Medical Technology Company, that his W-2 income was his only income, and that he had no ownership interest in the Medical Technology Company. In truth and in fact, STAHL had an ownership interest in the Medical Technology Company, and had earned over $21 million in business income from the company, well beyond the income reported on his W-2s.
The Accountant subsequently filed the Delinquent Returns for STAHL, which, as a result of the lies that STAHL told the Accountant, were false and fraudulent. Specifically, the Delinquent Returns falsely claimed that STAHL’s total income was $38,652 in 2010; $7,115 in 2011; $84,615 in 2012; $100,000 in 2013; and $100,000 in 2014. The Delinquent Returns further falsely reported that STAHL did not receive any business income in any of these years, and failed to include a Schedule C detailing the significant amount of business income that STAHL earned from the Medical Technology Company. STAHL’s failure to report over $21 million in business income to the IRS – first by failing to file returns, and then by causing the false Delinquent Returns to be filed by the Accountant – resulted in a loss to the IRS of over $6.3 million in taxes due and owing.
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STAHL, 62, of Florida, pled guilty to one count of attempt to evade or defeat tax, which carries a maximum sentence of five years in prison. STAHL has agreed to pay restitution to the IRS, representing the additional tax due and owing as a result of STAHL’s conduct, in the amount of at least $6,349,689. Sentencing before Judge Abrams is scheduled for January 25, 2019, at 2:30.
The statutory maximum sentence is prescribed by Congress and is provided here for information purposes only, as any sentence imposed on the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of IRS-CI in this case.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Sarah E. Paul and Jennifer L. Beidel are in charge of the prosecution.
Operator of Fall River Glass Company Charged with Failing to Pay Required Employee TaxesRead the Press Release
BOSTON – The owner of a Fall River-based glass company was charged in an indictment in connection with failing to pay the IRS taxes he withheld from his company’s employees.
Moses Rapoza, 83, of Lakeville, was charged in an indictment unsealed today with one count of filing a false tax return and eleven counts of failing to pay over to the IRS the taxes he withheld from employee wages. Rapoza’s whereabouts are currently unknown.
According to the indictment, Rapoza was the owner and operator of Global Specialty Glass Contractors, Inc., a glass installation business located in Fall River. From 2011 through 2014, Rapoza allegedly withheld income taxes and Federal Insurance Contributions Act (FICA) taxes from wages he paid to his employees, but failed to pay the taxes to the IRS on behalf of the employees. Rapoza allegedly filed a false Form 941 tax return with the IRS, knowing that it understated the amount of wages paid to employees, and that – although he had withheld more than $170,000 in taxes from employee wages – he failed to pay those taxes over to the IRS.
The charge of filing a false tax return provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. The charge of failure to pay over taxes provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Victor A. Wild of Lelling’s Economic Crimes Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Ogleva Charles Mowell Sentenced to 70 Months for Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn. - On September 27, 2018, Ogleva Charles Mowell, of LaFollette, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 70 months in federal prison for distributing and possessing child pornography. Following his release from prison, Mowell will be supervised by the U.S. Probation Office for five years and required to register with the sex offender registry in any state in which he resides, works, or attends school.
In April 2018, Mowell pleaded guilty to federal charges stemming from an undercover investigation into the distribution of child pornography over the Internet. A search warrant was issued for Mowell’s residence and his computer was seized. A forensic examination of his computer revealed that Mowell had searched for child pornography on the Internet and saved images of child pornography on his computer. Mowell made his collection of child pornography available to others to download through the use of peer-to-peer software.
“The distribution of child pornography is a serious crime that perpetuates the victimization of children and fuels the demand for the production of more child pornography,” said J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee. “Our office will continue to work with investigative agencies to build cases for successful prosecution of the offenders.”
This investigation was conducted by the Knoxville Police Department’s Internet Crimes Against Children Unit and the U.S. Department of Homeland Security, Homeland Security Investigations. Assistant U.S. Attorney Matthew Morris represented the United States in court proceedings.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about PSC, please visit www.projectsafechildhood.gov.
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Officials from U.S. and European Commission Participate in Bilateral Meetings in Washington D.C. to Discuss Antitrust EnforcementRead the Press Release
Antitrust agency heads from the United States and the European Union met today at the Department of Justice in Washington D.C., to discuss current competition policy issues and increased cooperation in enforcement and policy matters.
The meeting included Assistant Attorney General Makan Delrahim of the U.S Department of Justice’s Antitrust Division, Chairman Joseph Simons of the U.S. Federal Trade Commission, and Commissioner Margrethe Vestager of the European Commission.
The discussions covered a wide range of topics, including digital markets, the proposed Multilateral Framework on Procedures, two-sided markets and platforms, data protection rules and cooperation, vertical mergers, and merger cooperation issues.
“Robust cooperation, convergence around sound economic principles, and leadership regarding the use of fair procedures in enforcement are key international priorities for the Antitrust Division,” said Assistant Attorney General Makan Delrahim. “We are always pleased to meet with our counterparts from Brussels, and to have an opportunity to discuss these important issues. Our working relationship with the European Commission’s DG Competition is essential to ensuring competitive markets in the increasingly interconnected global economy.”
“Our high-level engagement with our European colleagues enables us to deepen mutual understanding of our enforcement policies, facilitating greater convergence and efficiency in the review of trans-Atlantic transactions and conduct,” said Chairman Simons. “Our discussions also contribute to the FTC’s consideration of our approaches to key competition issues that we are evaluating through our current hearings on Competition and Consumer Protection in the 21st Century.”
The U.S. and EU competition agencies have met regularly at the most senior level to promote cooperation and convergence and enhance their close relationship enshrined in the 1991 U.S.-EU agreement on the application of their competition laws.
Notice of Court Proceedings - United States v. Daniel Edward Johnson & Nicole Halliett HollandRead the Press Release
COLUMBIA, SOUTH CAROLINA -- United States Attorney Sherri A. Lydon stated today that an arraignment has been scheduled in the case of United States v. Daniel Edward Johnson and Nicole Halliett Holland, Case No. 3:18-863. Magistrate Judge Shiva V. Hodges will preside.
WHEN: Tuesday, October 2, 2018, 10 a.m.
WHERE: Matthew J. Perry Courthouse
901 Richland Street, Courtroom # 8, Columbia, SC
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Nicaraguan Man Charged with Illegal ReentryRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Peter G. Strasser announced that CARLOS PAIZ-CARDENAS, age 28, a native of Nicaragua, was charged today in a one-count indictment with illegal reentry of a removed alien, in violation of Title 18, United States Code, Section 1326(a).
According to the indictment, PAIZ-CARDENAS was previously removed from the United States on June 14, 2013. He was later found in the Eastern District of Louisiana on August 21, 2018 and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
If convicted, PAIZ-CARDENAS faces a maximum term of imprisonment of 2 years, a fine of $250,000, one year of supervised release, and a $100 special assessment fee.
U.S. Attorney Strasser reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Strasser praised the work of the United States Immigration and Customs Enforcement agency in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
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New York Heroin Supplier Sentenced to 12 Years in Federal PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paula Xinis sentenced Luis Miguel Mendez-Rivera, a/k/a El Flaco, age 34, of the Bronx, New York, today to 12 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Henry P. Stawinski III of the Prince George’s County Police Department.
According to his plea agreement, from December 2017 through March 6, 2018, Mendez-Rivera conspired with others to distribute between three and 10 kilograms of heroin. In December 2017, a man residing in the Dominican Republic directed Mendez-Rivera to contact a confidential source who was working with law enforcement to provide the source with narcotics. Mendez-Rivera had numerous telephone conversations with the source and agreed to provide the source with a kilogram of heroin on consignment. During the calls, Mendez-Rivera advised the source that his co-conspirator, Milciades D. Pena-Zapata, would deliver the heroin to the source and complete the transaction.
On February 22, 2018, Mendez-Rivera sent his co-conspirator and drug courier, Pena-Zapata, from New York to Maryland to deliver heroin to the source. Pena-Zapata met the source at a previously agreed upon location and they completed the drug transaction in the source’s car. The source and Mendez-Rivera arranged a second transaction for three kilograms of heroin in exchange for $100,000 and three handguns. On March 6, 2018, Pena-Zapata again traveled from New York to Maryland to meet the source. Pena-Zapata got into the source’s car and they drove to a more secluded location where Pena-Zapata removed a large quantity of heroin from his backpack and placed it in the trunk of the source’s car. Pena-Zapata inspected the contents of the suitcase containing three handguns and approximately $100,000. Pena-Zapata was arrested a short time later.
Laboratory analysis confirmed that a total of 3,998.54 grams of heroin was delivered to Maryland by Pena-Zapata on behalf of Mendez-Rivera.
Pena-Zapata, age 35, of Lawrence, Alabama, pleaded guilty to his role in the conspiracy and was sentenced to five years in prison.
United States Attorney Robert K. Hur praised HSI Baltimore, the Montgomery County Police Department and the Prince George’s County Police Department for their work in the investigation, and thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Baltimore Field Division for its assistance. Mr. Hur thanked Assistant U.S. Attorneys Erin B. Pulice and Ray D. McKenzie, who prosecuted the case.
New Orleans Man Sentenced for Possession of a Firearm by a Prohibited PersonRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that KEITH A. JAMES, age 28, of New Orleans, was sentenced yesterday to 188 months imprisonment to be followed by a 5 year term of supervised release, by U.S. District Judge Martin L.C. Feldman after being convicted of possession of a firearm by a felon.
According to court documents, JAMES pleaded guilty to being in possession of a firearm on July 11, 2017, having previously been convicted in 2008 for three counts of armed robbery and three counts of purse snatching in the Criminal District Court for the Parish of Orleans.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime-reduction strategy that incorporates the lessons learned since PSN launched in 2001.
U.S. Attorney Strasser praised the work of the Bureau of Alcohol, Tobacco and Firearms and Louisiana Probation & Parole. Assistant United States Attorney Michael McMahon is in charge of the prosecution.
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New Jersey Man Pleads Guilty to Participation in Ticket Investment SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MICHAEL WRIGHT pled guilty in Manhattan federal court to his participation in a scheme to defraud investors who invested millions of dollars based on false representations that their funds would be used to purchase tickets to various live events for re-sale at a profit on the secondary market. WRIGHT pled guilty before U.S. Magistrate Judge Stewart D. Aaron.
U.S. Attorney Geoffrey S. Berman said: “Michael Wright admitted today that he and his partners in crime conducted an elaborate ticket-buying scheme to defraud investors of millions of dollars. From creating phony contracts to outright lies, Wright and his cohorts ensured that the money his backers thought they were investing actually went directly into his and his co-defendant’s pockets. Now, Wright has pled guilty to his audacious crimes and faces time in prison for his misdeeds.”
According to allegations in an Indictment filed in Manhattan federal court, previous court filings, and statements made in public court proceedings:
WRIGHT participated in a scheme along with Craig Carton and Joseph Meli to induce investors to provide them with millions of dollars, based on representations that the investor funds would be used to purchase blocks of tickets to concerts and other live events, which would then be re-sold on the secondary market. Carton and Meli purportedly had access to those blocks of tickets based on agreements that Meli had with a company that promotes live music and entertainment events (the “Concert Promotion Company”) and that Carton had with a company that operates two arenas in the New York metropolitan area (the “Sports and Entertainment Company”). In fact, neither the Concert Promotion Company nor the Sports and Entertainment Company had any such agreement with Carton, Wright, or Meli, or any entity associated with them. After receiving the investor funds, Carton, Wright, and Meli misappropriated those funds, using them to, among other things, pay personal debts and repay prior investors as part of a Ponzi-like scheme.
For example, on December 8, 2016, a New York-based hedge fund (the “Hedge Fund”) and Carton executed a revolving loan agreement (the “Revolving Loan Agreement”), under which the Hedge Fund agreed to provide Carton with up to $10 million, for the purpose of funding investments in the purchase of tickets of events. The Revolving Loan Agreement provided, in sum and substance, that the proceeds of the loan would be used only to purchase tickets pursuant to agreements for the acquisition of tickets and for limited business expenses. The Hedge Fund would receive a share of the profits from the resale of the tickets.
The Hedge Fund then sent $700,000 to an entity controlled by Meli (the “Meli Entity”) to finance the purchase of tickets. Meli, however, then sent this money to a bank account controlled by WRIGHT, who then, on December 12, 2016, sent $200,000 to Carton’s personal bank account (the “Carton Bank Account”), which Carton then wired to a casino. Also on December 12, WRIGHT sent another $500,000 to an individual who had previously lent Carton $500,000, which was due to be repaid that day.
Later in December 2016, Carton induced the Hedge Fund to wire $2 million to the Sports and Entertainment Company, based purportedly on an agreement he had with the Sports and Entertainment Company (the “Sports and Entertainment Company Agreement”). The Sports and Entertainment Company Agreement gave an entity controlled by Carton (the “Carton Entity”) the right to purchase $2 million of tickets to concerts at one of the venues operated by the Sports and Entertainment Company. Carton, among other things, sent the Hedge Fund a copy of the Sports and Entertainment Company Agreement that purportedly had been signed by the chief executive officer of the Sports and Entertainment Company. However, this agreement was fraudulent and had never been entered into by the Sports and Entertainment Company or signed by the chief executive officer.
On December 20, 2016, when the Hedge Fund wired the $2 million to the Sports and Entertainment Company, Carton contacted the Sports and Entertainment Company and told them, in sum and substance, that the wire had been sent in error and should be sent to the bank account for an entity operated by Carton and WRIGHT, for which WRIGHT is the signatory. After the money was rewired to that account, WRIGHT wired $966,000 to WRIGHT’s personal bank account and $700,000 to the Carton Bank Account. Carton then wired approximately $188,000 from the Carton Bank Account, including at least $133,000 in wires to several casinos.
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WRIGHT, 42, of Upper Saddle River, New Jersey, pled guilty to one count of 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.
Carton is scheduled for trial on October 29, 2018, before the U.S. District Court Judge Colleen McMahon. The pending charges against Carton are merely accusations, and he is presumed innocent unless and until proven guilty.
Meli pled guilty to securities fraud in October 2017 and is currently serving a 78-month sentence imposed by U.S. District Court Judge Kimba M. Wood in April 2018.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the Boston Regional Office of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brendan F. Quigley and Elisha J. Kobre are in charge of the prosecution.
Nearly 100 Arrested on Federal and States Charges -- Multi-State Poly-Drug Network Operating from South Carolina to New Jersey DismantledRead the Press Release
MAJOR TAKEDOWN BY OVER 100 LAW ENFORCEMENT OFFICERS
Over 600 Grams of Heroin, Fentanyl and Nearly a Kilo of Meth Seized
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced a major takedown today of drug traffickers resulting in the dismantling of a multi-state Drug Trafficking Organization (DTO) responsible for distributing over 600 grams of heroin, fentanyl and almost a kilogram of methamphetamine, cocaine and oxycodone. Joining United States Attorney Stuart in the announcement were Drug Enforcement Administration (DEA) Assistant Special Agent in Charge (ASAC) David Gourley, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Resident Agent in Charge (RAC) Adam Black, West Virginia State Police Captain Jason Davis, West Virginia National Guard Lieutenant Colonel William Annie, Fayette County Prosecuting Attorney Larry Harrah, Fayette County Sheriff Mike Fridley, Oak Hill Police Chief Michael Whisman, Fayetteville Police Chief David Kinzer, Nicholas County Sheriff William Nunley, Summersville Police Chief John Nowak, National Park Service Chief Ranger Duane Michael, United States Marshal Michael Baylous, as well as representatives from the Beckley Police Department, Beckley/Raleigh County Drug and Violent Crime Task Force, and the Southern Regional Drug and Violent Crime Task Force. The DEA and ATF offices in Newark, New Jersey also provided valuable assistance in this investigation.
"Today we are taking further steps to tackle the drug crisis which is especially hurting the people of West Virginia," Attorney General Jeff Sessions said. "President Trump has made ending this crisis a top priority for this administration and under his leadership the Department of Justice has taken historic new steps to put drug traffickers in jail. Today we announce the dismantling of a drug trafficking organization that spread addiction and death from West Virginia to New Jersey. As part of this operation, law enforcement has charged around 40 defendants, seized multiple pounds of addictive drugs – including heroin, fentanyl, and oxycodone -- and hundreds of thousands of dollars of allegedly ill-gotten gains. And so I want to thank U.S. Attorney Mike Stuart, DEA, ATF, the Marshals Service, and especially our fabulous state and local partners. By taking drug traffickers off of our streets, they are helping to keep the American people safe."
The takedown today was the result of a long-term investigation led by DEA and the Central West Virginia Drug Task Force (CWVDTF), dubbed “Operation Mountaineer Highway.” A total of 38 individuals have been charged in federal and state court. The long-term investigation which stretched from West Virginia to New Jersey resulted in the seizure of large quantities of controlled substances, over 65 illegally possessed firearms, and over $360,000 in United States currency, which represents proceeds of the DTO’s drug trafficking operations.
The first strike occurred in October 2017 when members of the DEA Charleston Heroin Enforcement Group and Tactical Diversion Squad, and investigators with the CWVDTF arrested a Fayette County drug dealer for selling heroin and methamphetamine. During a post arrest debrief, a drug dealer identified two of his primary drug suppliers. The identified drug suppliers were known to law enforcement in Fayette County, West Virginia, but had eluded investigators. Through their investigation, law enforcement officers were led to a DTO in Newark, New Jersey. Over the course of nine months, investigators conducted an exhaustive investigation linking the local DTO to sources in South Carolina and ultimately to sources in New Jersey.
While this investigation is ongoing, investigators have been able to dismantle a DTO operating across multiple states and responsible for distributing large quantities of methamphetamine, heroin, oxycodone pills, and cocaine. The heroin examined by the DEA lab has been found to contain heroin and fentanyl. The distribution of these drugs occurred in a rural region of West Virginia with a population of less than 10,000 that has been plagued by record high levels of overdose deaths for the past several years. It is believed that the dismantling of this DTO will significantly curtail the opioid scourge in Fayette County and the surrounding area.
The arrests and seizures relating to Operation Mountaineer Highway break down as follows:
- 12 individuals have been charged in four federal indictments in the Southern District of West Virginia with conspiracy to distribute, possession with intent to distribute, and the distribution of heroin and fentanyl, methamphetamine, cocaine, and oxycodone;
- Two defendants have been charged with being a felon in possession of a firearm;
- 26 individuals are facing state charges filed by the Fayette County Prosecuting Attorney;
- Over 1000 oxycodone pills were seized;
- Over 600 grams of Heroin/Fentanyl were seized;
- Almost a kilo of methamphetamine was seized;
- Over $360,000 in United States Currency was seized; and
- Several vehicles were seized that were used to transport controlled substances.
As part of today’s law enforcement actions, nearly 100 individuals are being arrested. In addition to the 38 individuals facing federal and state charges in connection with Operation Mountaineer Highway, an additional 54 individuals are being arrested on state charges in unrelated cases. Over 100 federal, state and local law enforcement officers took part in today’s takedown effort. The West Virginia National Guard also provided a number of personnel in a support function to the operation.
“Today was a major takedown of a major drug trafficking organization but, more important, today was a major takeback – of our streets, towns, and communities,” said United States Mike Stuart. “This is an important day for the people of southern West Virginia. As a result of the remarkable work of multiple law enforcement agencies, a significant drug trafficking organization has been shut down. We have been incredibly aggressive in our efforts to hold drug traffickers accountable, and we will continue our aggressive efforts until the poison peddlers and drug dealers are out of business. This case is a testament to what can be accomplished when federal, state and local law enforcement work so well together towards a common goal.”
Today’s actions would not have been possible without the seamless collaboration of federal, state, and local law enforcement agencies. The investigation was led by the DEA and the Central West Virginia Drug Task Force, with assistance and support from the West Virginia State Police, ATF, the Fayette County Sheriff’s Department, the Nicholas County Sheriff’s Department, the Summersville Police Department, the Oak Hill Police Department, the Beckley Police Department, the Beckley/Raleigh County Drug and Violent Crime Task Force, the Southern Regional Drug and Violent Crime Task Force, and the West Virginia National Guard. The U.S. Attorney’s Office for the Southern District of West Virginia and the Fayette County Prosecuting Attorney’s Office, are working together hand-in-hand to remove these dangerous drug traffickers from our streets.
“These arrests today should send a clear message to anyone wanting to distribute illicit drugs in this community,” said D. Christopher Evans, Special Agent In Charge of DEA’s Louisville Field Division, which oversees operations in West Virginia. “We will find you and we will shut down your operation, wherever you are,” Evans added.
“Today is a monumental day for Fayette County and the State of West Virginia,” said Fayette County Prosecuting Attorney Larry Harrah. “Today was made possible by many hours of great work by all of the law enforcement agencies involved in this historic investigation. I am so proud of the teamwork demonstrated by our dedicated officers. Because of their efforts the drug trade in Fayette County has taken a significant hit and the work continues.”
“When federal, state and local agencies come together to work joint investigations, the cases have substantial impact on communities,” said Captain Jason E. Davis, West Virginia State Police, Bureau of Criminal Investigations. “This case illustrates the benefits of multi-agency collaboration.”
"A project of this scale will have a measurable impact on this area," said Fayette County Sheriff Mike Fridley. "These operations are not just targeting simple street level dealers, the project's goal is to ultimately cut the heads off of many snakes as possible."
"Today we see the results of a long term, multi-agency investigation into the illegal drug trafficking of multiple suspects in and around the City of Oak Hill,” said Oak Hill Police Chief Michael Whisman. “I hope this sends a clear message to others who are involved in this type of illegal activity."
The investigation is ongoing and could result in additional federal and state charges in the future.
Please Note: An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
SDWVNews and USAttyStuart
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NGL Crude Logistics LLC Agrees to Pay $25 Million Civil Penalty and to Retire $10 Million in Renewable Fuel Production Credits Under Settlement with United StatesRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with NGL Crude Logistics, LLC that requires the company to retire 36 million renewable fuel credits and pay a $25 million civil penalty under the settlement to resolve violations of the Renewable Fuel Standard (RFS) program. The cost of the RIN retirement is approximately $10 million.
The Department of Justice and EPA alleged that NGL entered into a series of transactions with Western Dubuque Biodiesel, LLC in 2011 that resulted in the generation of an extra set of renewable fuel credits for approximately 24 million gallons of biodiesel. NGL’s scheme generated approximately 36 million additional credits, known as Renewable Identification Numbers or RINs. RINs are created when a company produces qualifying renewable fuel and can be traded or sold to refineries and importers to use for compliance with renewable fuel production requirements. On July 3, 2018, the United States District Court for the Northern District of Iowa found NGL liable for: (1) failing to retire RINs when it designated and sold biodiesel to Western Dubuque as “feedstock” for the production of biodiesel, (2) causing Western Dubuque to generate invalid RINs and commit other prohibited acts under the RFS program, and (3) transferring approximately 36 million invalid RINs to other entities.
“Enforcement actions such as the one we announce today are essential to ensuring the integrity of government programs,” said Principal Deputy Associate Attorney General Jesse Panuccio. “Fraud in the RFS market will not be tolerated. I applaud the work of the EPA and DOJ enforcement team who achieved today’s excellent result for the taxpayers.”
“A strong enforcement program is essential to maintaining the integrity of the RIN market,” said Assistant Administrator of the Office of Enforcement and Compliance Assurance (OECA) Susan Bodine. “Through this settlement EPA and DOJ are holding NGL accountable for its violations of the RFS program.”
“The Renewable Fuel Standards program is important to Iowa’s agricultural community,” said U.S. Attorney for the Northern District of Iowa Peter Deegan. “Our office is committed to protecting the integrity of the Renewable Fuel Standards program and ensuring a level playing field for Iowa businesses.”
The United States’ complaint alleged that in 2011, NGL purchased millions of gallons of biodiesel on the open market, and that approximately 36 million RINs had been assigned to the biodiesel. NGL sold most of the RINs to other entities. NGL then sold the biodiesel to Western Dubuque, but designated it as a “feedstock.” Western Dubuque reprocessed the biodiesel provided by NGL and generated a second set of RINs for the same fuel. Western Dubuque sold the reprocessed biodiesel and the second set of RINs back to NGL. NGL then sold most of these RINs to other entities. Western Dubuque resolved its alleged violations of the RFS program in a 2016 settlement with the United States.
EPA discovered the violations through a tip from RFS program participants, an inspection, and extensive investigation into the NGL transactions.
EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The RFS program was created under the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act of 2007.
NGL is a midstream energy provider headquartered in Tulsa, Oklahoma that transports crude oil, and markets and supplies refined products, natural gas liquids, and other products. NGL was known as Gavilon, LLC at the time of the violations.
The proposed settlement, lodged today in the U.S. District Court for the Northern District of Iowa, is subject to a 30-day public comment period and final court approval. To view the consent decree or to submit a comment, visit the department’s website at: www.justice.gov/enrd/Consent_Decrees.html.
For more information on the settlement and for information on how to submit a comment, visit www.epa.gov/enforcement/ngl-crude-logistics-llc-clean-air-act-settlement.
Mississippi Nurse Practitioner and Clinic Owner Sentenced to Prison for Role in Compounding Pharmacy Scheme to Defraud TricareRead the Press Release
A Mississippi-based nurse practitioner and former owner of a family health clinic was sentenced to 42 months in prison today for her role in a scheme to defraud health care benefit programs including TRICARE, the health care benefit program serving U.S. military, veterans and their respective family members.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney D. Michael Hurst Jr. of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Acting Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) New Orleans Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.
Susan K. Perry, 58, of Grand Bay, Alabama, was sentenced by U.S. District Judge Keith Starrett of the Southern District of Mississippi, who also ordered Perry to serve three years of supervised release following her prison sentence and pay $1,375,692 in restitution. Perry pleaded guilty on June 15 to one count of conspiracy to commit health care fraud. She was charged in October 2017 in a 13-count indictment.
As part of her plea, Perry admitted her role in a scheme to defraud health care benefit programs by prescribing medically unnecessary compounded medications to individuals who did not need the medications, sometimes without first examining those individuals. Perry admitted that she knew that Advantage Pharmacy, based in Hattiesburg, Mississippi, would submit claims for reimbursement to health care benefit programs, including TRICARE, for compounded medications based on the prescriptions she signed, and she further expected that the health care benefit programs would pay the claims. From approximately January 2014 through April 2015, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy approximately $1,375,692 based on the claims submitted by Advantage Pharmacy in connection with the compounded medications that Perry prescribed.
The FBI, IRS-CI, DCIS, the Mississippi Bureau of Narcotics and other government agencies investigated the case. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.
Mississippi Nurse Practitioner and Clinic Owner Sentenced to Prison for Role in Compounding Pharmacy Scheme to Defraud TricareRead the Press Release
A Mississippi-based nurse practitioner and former owner of a family health clinic was sentenced to 42 months in prison today for her role in a scheme to defraud health care benefit programs including TRICARE, the health care benefit program serving U.S. military, veterans and their respective family members.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney D. Michael Hurst Jr. of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Acting Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) New Orleans Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.
Susan K. Perry, 58, of Grand Bay, Alabama, was sentenced by U.S. District Judge Keith Starrett of the Southern District of Mississippi, who also ordered Perry to serve three years of supervised release following her prison sentence and pay $1,375,692 in restitution. Perry pleaded guilty on June 15 to one count of conspiracy to commit health care fraud. She was charged in October 2017 in a 13-count indictment.
As part of her plea, Perry admitted her role in a scheme to defraud health care benefit programs by prescribing medically unnecessary compounded medications to individuals who did not need the medications, sometimes without first examining those individuals. Perry admitted that she knew that Advantage Pharmacy, based in Hattiesburg, Mississippi, would submit claims for reimbursement to health care benefit programs, including TRICARE, for compounded medications based on the prescriptions she signed, and she further expected that the health care benefit programs would pay the claims. From approximately January 2014 through April 2015, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy approximately $1,375,692 based on the claims submitted by Advantage Pharmacy in connection with the compounded medications that Perry prescribed.
The FBI, IRS-CI, DCIS, the Mississippi Bureau of Narcotics and other government agencies investigated the case. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.
Mexican National Indicted for Growing Marijuana in Shasta Trinity National ForestRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Gilberto Garcia-Garcia, 26, of Mexico, charging him with conspiring to manufacture and manufacturing at least 1,000 marijuana plants and depredation of public lands and resources, U.S. Attorney McGregor W. Scott announced.
According to court documents, law enforcement officers who were conducting aerial surveillance spotted two large marijuana cultivation sites near the Big French Creek Road in the Shasta-Trinity National Forest, in Trinity County. Law enforcement hiked into the area and observed Garcia-Garcia and another man for approximately 50 minutes as they tended marijuana plants and harvested marijuana. The two men fled when they saw the officers; only Garcia-Garcia was apprehended. Officers counted 11,223 marijuana plants at the cultivation site. The plants were covered in a white powder that appeared to be carbofuran, an insecticide that is highly toxic to both humans and wildlife.
This case is the product of an investigation by the Bureau of Land Management, California Department of Fish and Wildlife, and Trinity County Sheriff’s Department. Assistant U.S. Attorney David W. Spencer is prosecuting the case.
If convicted, Garcia-Garcia faces a mandatory minimum of 10 years in prison and a maximum statutory penalty of life in prison and a $10 million fine for each of the marijuana cultivation counts. He faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for the depredation of public lands and resources count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
McKeesport Woman Charged with Misusing Social Security Benefit FundsRead the Press Release
PITTSBURGH - A resident of McKeesport, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of Social Security representative payee misuse, United States Attorney Scott W. Brady announced today.
The one-count indictment, returned on September 26, named Season Fuehrer, 43, as the sole defendant.
According to the indictment, from in and around January 2017, and continuing thereafter to in and around December 2017, Fuehrer, having filed an application for Social Security disability insurance benefits on behalf of a minor child, received and converted $16,094.00 in benefits to her own use.
The law provides for a maximum total sentence of not more than 5 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Social Security Administration – Office of Inspector General conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Massachusetts Contractor Charged with Payroll Tax CrimesRead the Press Release
BOSTON – An Ipswich man, who is the owner and operator of numerous Massachusetts businesses, was arrested today on charges that he manipulated his payroll to avoid paying taxes.
George Vasiliades, 54, was charged in an indictment unsealed today with 17 counts of failure to collect, account for and pay over federal employment taxes; 17 counts of aiding and assisting the filing of false tax returns; one count of making a false statement to the Social Security Administration; and one count of aggravated identity theft. Vasiliades was arrested this morning and will appear before U.S. Magistrate Judge Marianne Bowler this afternoon.
The indictment alleges that Vasiliades’s operated several businesses: Alpine Property Services, Boston Central Management, Delta Labor Company, Olympic Painting and Roofing, and Turnpike General Contracting. Between 2008 and 2013, Vasiliades allegedly concealed the true size of his companies’ payroll from the Internal Revenue Service (IRS) to reduce the cost of doing business and to increase profits. Among other things, Vasiliades characterized a portion of an employee’s wages as nontaxable and false expense reimbursements; and directed certain employees to create shell corporations and then paid employees through these corporations as if they were independent contractors. He also allegedly paid some employees, including those who were not U.S. citizens and not authorized to work in the United States, from bank accounts that were not connected to his corporate payroll reporting software and, as a result, would not be reported as wages to the IRS.
From April 2013 through September 2013, Vasiliades allegedly paid approximately $23,553 in wages to an employee who was not a citizen and not authorized to work in the United States using the name and Social Security number of a U.S. citizen employee. Each week during that period, Vasiliades allegedly issued two payroll checks in the citizen’s name and Social Security number: one check for the wages of the citizen and one check for the wages of the unauthorized worker. Vasiliades then allegedly reported all of the wages paid in the citizen’s name to the Social Security Administration, as if the citizen had earned them, which was false.
The charges of failure to collect, account for and pay over federal employment taxes and making a false statement to the Social Security Administration provide for a sentence of no greater than five years in prison and three years of supervised release. The charges of aiding and assisting the filing of false tax returns provide for a sentence of no greater than three years in prison and one year of supervised release. The aggravated identity theft charge carries a mandatory two-year prison term which must be served consecutively to any sentence imposed on the other counts. Each count also is punishable by a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties.
United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts; and Michael C. Mikulka, Special Agent in Charge of the New York Region of the U.S. Department of Labor’s Office of Inspector General, Office of Criminal Investigations – Labor Racketeering and Fraud, made the announcement today. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Criminal Division is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Man Sentenced to 10 Years for 2016 Encinitas Arson SpreeRead the Press Release
Assistant U. S. Attorney Shital Thakkar (619) 546-8785 and Shane Harrigan (619) 546-6981
NEWS RELEASE SUMMARY – September 27, 2018
SAN DIEGO – Tyler Carender was sentenced in federal court today to 10 years in prison for damaging and destroying buildings at St. Andrew’s Episcopal Church and Oak Crest Middle School in Encinitas on three separate occasions in the fall of 2016, by means of fire and an explosive device.
Carender was arrested in July 2017 at his home on Island View Lane in Encinitas, which is adjacent to Oak Crest Middle School and about 400 yards from the church. He pleaded guilty on March 9, 2018 to all three arson-related charges in the indictment.
In his plea agreement, Carender admitted that he began his 21-day arson spree on Saturday, October 22, 2016, when he set fire to the “Friendship House” Counseling and Youth Center building at the Saint Andrew’s Episcopal Church complex on Balour Drive in Encinitas. The rapid response of the Encinitas Fire Department prevented the fire from spreading to other church buildings and nearby residences. However, the Youth Center was destroyed, resulting in an estimated monetary loss of at least $200,000. St. Andrew’s uses the Youth Center building to house its youth group functions and to provide food, meals and shelter to the needy in the community.
Carender also admitted that a week later, on Saturday, October 29, he set fire to the Administrative Building at the Oak Street Middle School by breaking into the building and using gasoline to set fire to books and files within the building. Encinitas firefighters who arrived at the scene initially entered the building to fight the fire. However, due to the extent and intensity of the fire and the possible collapse of the roof, they were forced to retreat from the building and battle the blaze from the exterior. Carender admitted that his criminal conduct created substantial risk of injury to firefighters responding to the blaze. The damage caused by Carender’s arson not only rendered the administrative hub of the school unusable, but destroyed student records and displaced staff -- significantly disrupting the daily functions and operations of the school. The estimated monetary loss to the San Dieguito Union High School District is at least $1.5 million.
Carender also admitted that two weeks later he returned to the St. Andrew’s campus, and threw a Molotov Cocktail into the office of the church’s Preschool Building, causing another fire. The resulting damage to the building is estimated to be at least $25,000. The Preschool services approximately 80 students, and includes non-members of the parish.
According to court filings, San Diego Sheriff’s detectives received an anonymous tip from Crime Stoppers, which identified Carender as the arsonist. Thereafter, Carender confided in a classmate about committing the three arsons, and that classmate informed investigators and provided a recording of a conversation with the defendant admitted his involvement in setting the fires. After the Carender was arrested, he initially lied to agents, claiming innocence. However, after being confronted with evidence, he admitted starting all three fires.
At today’s hearing, the Reverend Brenda Sol, rector at St. Andrews Episcopal Church, addressed Carender and the Court stating that Carender’s actions cost the church a lot more than just money and time – it affected the lives of their church community and nearby neighbors in other more damaging ways. Members of the church and local residents experienced great emotional distress. The fires caused them to fear for their safety, placing them on constant alert. Families also pulled their children out of the Preschool, fearing further attacks. The fires also caused the church to divert resources from programs to feed the hungry in order to buy a security system. However, Rev. Sol expressed that although the church congregation is sad, they are not angry with Carender. In addressing Carender directly, Rev. Sol stated,
“We pray that you understand the depth and breadth of the lives you touched in such horrible and negative ways, so that you understand you can touch just as many lives doing helpful and beneficial things . . . We want you to know that when you committed these crimes on our property, you became one of us, so you will always have a home at St. Andrew’s.”
In imposing the ten year sentence, Judge Janis L. Sammartino noted that Carender’s crimes were “horrific” and the damage from his arson spree went “far and wide – far beyond property damage.” The Court deferred the determination of court ordered restitution until December 7, 2018, but is estimated that the restitution will exceed $1.5 million.
“It is very clear that all of the victims are still recovering from the emotional, psychological and physical damage caused by the defendant,” said U.S. Attorney Adam Braverman. “While the victims have graciously offered forgiveness, this sentence is an appropriate outcome for serious crimes that put people and property at great risk.”
“Arson is an act we take very seriously,” said Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Los Angeles Field Division Special Agent in Charge Bill McMullan. “ATF uses its certified fire investigators to build these complex cases when arsonists commit these violent crimes. Damaging and attempting to destroy our community schools and places of worship will not be tolerated.”
DEFENDANT Case Number 17cr1588
Tyler Carender Age: 22 Encinitas, CA
SUMMARY OF CHARGES
Counts 1 and 3:
Malicious Damage to Buildings or Real Property Affecting Interstate Commerce by Means of Fire or an Explosive, in violation of Title 18, United States Code, Section 844 (i)
Count 2:
Malicious Damage to Buildings and Real Property Receiving Federal Financial Assistance by Means of Fire or an Explosive, in violation of Title 18, United States Code, Sec. 844(f )(1) and (f )(2)
AGENCY
U.S. Bureau of Alcohol, Tobacco Firearms and Explosives
San Diego County Sheriff’s Department
Lumpkin Resident Pleads Guilty to at Least 15 Years in Federal Prison Without Parole Just Before Trial Is Set to BeginRead the Press Release
COLUMBUS: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that Marcus Crocker, age 44, of Lumpkin, Georgia, pled guilty on September 27, 2018 to Possession of Cocaine Base with Intent to Distribute and Possession of a Firearm in Furtherance of a Drug Trafficking Crime before Chief U.S. District Court Judge Clay D. Land in Columbus, Georgia. A trial in the case was set to begin today.
In entering his plea, Mr. Crocker admitted that officers with the Taylor County Sheriff’s Office, assisted by members of the Lumpkin and Richland Police Departments, used a confidential reliable source to make two recorded, controlled purchases of cocaine base, aka crack cocaine, from him at his residence in Lumpkin on March 2, 2017 and March 3, 2017. At the time, Mr. Crocker was on probation for a previous drug offense. A subsequent search of Mr. Crocker’s home produced three firearms, ammunition, crack cocaine, powder cocaine, marijuana, and various items commonly associated with drug trafficking, such as baggies, vials, scales, and cash.
Mr. Crocker was prohibited from possessing a firearm due to seven prior felony convictions for various offenses.
On the narcotics charge, Mr. Crocker faces a mandatory minimum sentence of ten (10) years’ imprisonment, up to a maximum sentence of Life in Prison, and a maximum $8 million fine. On the firearms charge, Mr. Crocker faces a mandatory minimum five (5) years’ imprisonment, to be served consecutively, up to Life in Prison, and a maximum $250,000 fine.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by the Taylor County Sheriff’s Office, Lumpkin Police Department, Richland Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Crawford Seals is prosecuting the case for the United States.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Luling Man Sentenced to 27 Months for ViolatingRead the Press Release
NEW ORLEANS, LOUISIANA – United States District Judge Susie Morgan sentenced JONATHAN WHIPPLE, age 33, a resident of Luling, to 27 months in the Bureau of Prisons for being a felon in possession of a firearm, in violation of the Federal Gun Control Act announced U.S. Attorney Peter G. Strasser.
WHIPPLE was indicted by a Federal Grand Jury on November 3, 2017 in a one count indictment for possessing a Smith & Wesson, Model 22LR semi-automatic rifle after having been convicted of two different felony drug offenses. WHIPPLE will serve 27 months in prison to be followed by 3 years of supervised release.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
U. S. Attorney Peter G. Strasser praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was being handled by Assistant United States Attorney David Haller.
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Last defendant in a series of inmate escape cases sentenced to additional prison timeRead the Press Release
ATLANTA – Jaye L. Thomas, an inmate at the U.S. Penitentiary in Atlanta (USP Atlanta), has been sentenced to additional prison time for escaping on three separate occasions. Thomas is the last defendant to be sentenced in an operation aimed at combating the rash of inmate escapes from the prison camp in 2016 and 2017.
“Prisoners who escape from custody pose a threat to the community and subvert the authority of the criminal justice system,” said U.S. Attorney Byung J. “BJay” Pak. “These prosecutions make it clear that serious consequences exist for inmates who escape from custody, especially for those who are caught smuggling illegal contraband.”
“This sentencing hopefully marks the end of an investigation that exposed a serious breach of security and safety, both inside and outside of a federal prison,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The safety of our communities was breached when these inmates escaped, and the security of the prison was breached when they returned with contraband that allowed them to continue criminal conduct inside the prisons walls. This type of carefree behavior will not go unpunished.”
“This operation highlights the team effort that exists among our agencies,” said Atlanta Police Chief Erika Shields. “Together, we made sure these prisoners continue to pay their debt to society for previous crimes and face the serious consequences for escaping custody and putting the community at risk.”
According to U.S. Attorney Pak, the charges, and other information presented in court: USP Atlanta is a medium-security federal prison for male inmates operated by the Federal Bureau of Prisons. USP Atlanta also operates a satellite prison camp for minimum-security male inmates.
Since 2016, the Federal Bureau of Investigation and the Atlanta Police Department have jointly investigated instances of USP Atlanta inmates temporarily escaping from the prison camp to obtain contraband to smuggle back into the prison or to visit nearby restaurants, hotels, and residences.
In January 2015, Thomas was sentenced to 11 years, three months in prison after being convicted of possession with the intent to distribute cocaine. In 2016, Thomas was assigned to the USP Atlanta’s prison camp.
Law enforcement officers began investigating Thomas when surveillance images showed him escaping from USP Atlanta on March 22, 2016 and April 4, 2016. Eyewitness testimony, cellular telephone records, and other evidence confirmed that Thomas had escaped from USP Atlanta’s prison camp on three occasions to have sex with two different girlfriends.
Jaye L. Thomas, 37, of Dalton, Georgia, was sentenced to an additional one year, nine months in prison, to be served following his current 11 year, three month prison term.
In addition to Thomas, the following individuals were convicted and sentenced for their involvement in inmate escapes from the USP Atlanta prison camp:
●On June 6, 2017, federal inmate Justin B. Stinson, 37, of Panama City, Florida, was sentenced to an additional one year, three months in prison (to be served after his current four year, three month prison term). Stinson pleaded guilty to escaping from federal custody after he was caught outside of USP Atlanta with a duffel bag containing a cellular telephone, scissors, tequila, and cigarettes.
●On September 20, 2017, federal inmate Fernando A. Settles, 37, of Augusta, Georgia, was sentenced to an additional one year, three months in prison (to be served after his current 20-year prison term). Settles pleaded guilty to escaping from prison so that he could celebrate his birthday.
●On February 22, 2018, federal inmate Deldrick D. Jackson, 42, of Atlanta, Georgia, was sentenced to an additional one year, six months in prison (to be served after his current 10 year, eight month prison term). Jackson’s fiancée, Kelly M. Bass, 39, of Stone Mountain, Georgia, was sentenced on September 13, 2017, to six months in prison to be followed by eight months of home confinement. Jackson and Bass were sentenced for running an inmate taxi service. In total, they provided escaped inmates with transportation from USP Atlanta and/or smuggled contraband into the prison on approximately 15 occasions. On the day of their arrests, Jackson and Bass were caught with two cell phones, 83 packs of cigarettes, and eight bottles of whiskey.
●On June 1, 2018, federal inmate Latigree D. James, 36, of Miami, Florida, was sentenced to an additional six months in prison (to be served after his current five-year prison term). James escaped from the prison camp to meet with Claudia Moline, who drove him from USP Atlanta and provided him with cellular phones and approximately $200’s worth of cigarettes. For her role, Moline, 36, of Hiram, Georgia, was sentenced on April 20, 2018, to three years of probation.
The Federal Bureau of Investigation and the Atlanta Police Department investigated these cases.
Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section; and Assistant U.S. Attorney Timothy H. Lee prosecuted the cases.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
KC Man Sentenced for Bank RobberyRead the Press Release
KANSAS CITY, Mo. – A Drexel, Mo., man was sentenced in federal court today for robbing the U.S. Bank inside Truman Medical Center.
Jimmy Lee Bozeman II, 57, was sentenced by U.S. District Judge Howard F. Sachs to 12 years and seven months in federal prison without parole.
On June 6, 2018, Bozeman pleaded guilty to one count of bank robbery. Bozeman stole $1,450 from U.S. Bank on March 14, 2018.
According to court documents, Bozeman demanded a bank teller give him all of her $50 and $100 bills. The teller briefly hesitated because she thought he was joking; he told her it was not a joke and he possessed a handgun. After the teller handed him money from her top drawer, he demanded the money from the second drawer. As she was attempting to open the second drawer, a hospital cafeteria employee approached the bank to make change for the register in the cafeteria. When Bozeman turned to look at him, the teller activated the hold-up alarm. Bozeman then fled from the hospital, got into a vehicle parked nearby and left the area.
Bank surveillance photos were released to the media. Several social workers at Truman Medical Center recognized Bozeman as a former client. Bozeman’s ex-wife also identified him from the surveillance photos.
Bozeman was previously convicted of bank robbery in the Western District of Missouri in 2009. He also has prior felony convictions for robbery and armed criminal action.
This case was prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the Kansas City, Mo., Police Department and the FBI.
Justice Department Reaches Settlement with Northwest Trustee Services, Inc. of Bellevue, Washington for Illegally Foreclosing on Servicemembers’ HomesRead the Press Release
The U.S. Department of Justice and a Bellevue, Washington foreclosure services company today settled allegations that Northwest Trustee Services, Inc. (“Northwest”) violated the Servicemembers Civil Relief Act (“SCRA”), announced U.S. Attorney Annette L. Hayes. The complaint filed in November 2017, alleged that Northwest completed foreclosures on homes owned by servicemembers without obtaining the required court orders. Under the terms of the settlement, servicemembers who had their homes illegally foreclosed on may receive compensation for the unlawful foreclosures of up to $125,000, with a total payout to servicemembers of up to $750,000. Northwest ceased operations in December 2017 and is now being liquidated in state court receivership proceedings. This is the Department’s first SCRA lawsuit against a foreclosure trustee company.
The SCRA protects the rights of servicemembers on active duty by suspending or modifying certain civil obligations. The law prohibits foreclosing on the home of a servicemember during active military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of active military service.
“The Civil Rights Division will never waver in our commitment to vindicating the rights of those who devote themselves to the service of our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We hope this case sends a strong message to foreclosure trustee companies and others that all foreclosures must comply with the Servicemembers Civil Relief Act.”
“Those who serve in our military deserve zealous representation of their rights,” said U.S. Attorney Annette L. Hayes. “We are working to ensure that servicemembers whose homes were illegally foreclosed on by Northwest Trustee receive up to $125,000 in compensation. Northwest Trustee may have shuttered its foreclosure business, but that does not end its obligation to do right by servicemembers.”
The Department of Justice launched an investigation into Northwest’s practices after United States Marine Corps veteran Jacob McGreevey of Vancouver, Washington submitted a complaint to the Department’s Servicemembers and Veterans Initiative in May 2016. Northwest had foreclosed on McGreevey’s home in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom. McGreevey sued both PHH Mortgage (his mortgage servicer) and Northwest in 2016, but a U.S. District Court Judge accepted PHH and Northwest’s argument that McGreevy had waited too long to file his case, and dismissed the case on that basis. The Department’s investigation revealed that, in addition to McGreevey, Northwest had unlawfully foreclosed on other homes of SCRA-protected servicemembers since 2010.
Before entering into receivership, Northwest described itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western United States. On March 28, Northwest was placed into a General Receivership under Washington State law. The company no longer provides foreclosure services. If it were to reenter the business of providing foreclosure services, the settlement requires the company to implement Department-approved policies, procedures, and training to prevent further SCRA violations.
This case was jointly handled by Assistant U.S. Attorneys Christina Fogg and Kyle Forsyth of the United States Attorney’s Office for the Western District of Washington and Trial Attorneys Alan Martinson and Nicole Siegel of the Civil Rights Division for the U.S. Department of Justice.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices. Since 2011, the Department has obtained over $467 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Justice Department Reaches Settlement with Northwest Trustee Services of Bellevue, Washington, for Illegally Foreclosing on Servicemembers’ HomesRead the Press Release
The Department of Justice today announced a settlement with Northwest Trustee Services Inc. (Northwest) of Bellevue, Washington, to resolve a lawsuit alleging that the foreclosure services company violated the Servicemembers Civil Relief Act (SCRA). The complaint, filed in November 2017, alleges that Northwest foreclosed on homes owned by servicemembers without obtaining the required court orders. Under the terms of the settlement, servicemembers who had their homes illegally foreclosed on may each receive compensation of up to $125,000, with a total payout to servicemembers of up to $750,000. Northwest ceased operations in December 2017 and is now being liquidated in state court receivership proceedings. This is the Department’s first SCRA lawsuit against a foreclosure trustee company.
The SCRA protects the rights of servicemembers in military service by suspending or modifying certain civil obligations. The law prohibits foreclosing on the home of a servicemember during military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of military service.
“The Civil Rights Division will never waver in our commitment to vindicating the rights of those who devote themselves to the service of our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We hope this case sends a strong message to foreclosure trustee companies and others that all foreclosures must comply with the Servicemembers Civil Relief Act.”
“Those who serve in our military deserve zealous representation of their rights,” said U.S. Attorney Annette L. Hayes. “We are working to ensure that servicemembers whose homes were illegally foreclosed on by Northwest Trustee receive up to $125,000 in compensation. Northwest Trustee may have shuttered its foreclosure business, but that does not end its obligation to do right by servicemembers.”
The Department of Justice launched an investigation into Northwest’s practices after United States Marine Corps veteran Jacob McGreevey of Vancouver, Washington submitted a complaint to the Department’s Servicemembers and Veterans Initiative in May 2016. Northwest had foreclosed on Mr. McGreevey’s home in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom. McGreevey sued both PHH Mortgage (his mortgage servicer) and Northwest in 2016, but a U.S. District Court Judge accepted PHH and Northwest’s argument that McGreevy had waited too long to file his complaint and dismissed the case. The Department’s investigation revealed that, in addition to McGreevey, Northwest had unlawfully foreclosed on other SCRA-protected servicemembers since 2010.
Before entering into receivership, Northwest described itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western United States. On March 28, Northwest was placed into a General Receivership under Washington State law. The company no longer provides foreclosure services. If it were to reenter the business of providing foreclosure services, the settlement requires the company to implement Department-approved policies, procedures, and training to prevent further SCRA violations.
This case was jointly handled by the Civil Rights Division of the Department of Justice and the United States Attorney’s Office for the Western District of Washington.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Justice Department Reaches Settlement with New Jersey Military Housing Provider for Charging Unlawful Lease Termination Fees to U.S. ServicemembersRead the Press Release
The Justice Department today announced that United Communities, LLC, a private company that manages military housing at Joint Base McGuire-Dix-Lakehurst (JB-MDL), has agreed to pay $62,501.78 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing early termination charges on 13 servicemembers who had exercised their right to terminate their residential leases upon receipt of qualifying military orders. The early termination charges ranged from $138 to $3,100. This case and the settlement with another company in United States v. Twin Creek, announced on Sept. 11, are the first two SCRA cases the Department has brought involving lease incentives.
The Department launched an investigation into United Communities’ leasing practices after receiving a referral from Air Force Community Legal Services. Army Captain Gregory Funk had sought to terminate his lease with United Communities after he received military orders to deploy to Qatar for up to 365 days as a part of Operation Inherent Resolve. United Communities agreed to release Captain Funk from the remainder of his lease term, but required him to pay back the $899.20 lease incentive that he had received when he signed the lease because he had not completed the 24-month term of the lease. The investigation revealed 12 other instances where SCRA-protected servicemembers were required to pay back their lease incentives.
Under the terms of the settlement, United Communities must pay a total of $45,001.78 in damages to 13 servicemembers. United Communities will also pay a civil penalty of $17,500 to the United States. In addition, United Communities must develop policies to ensure it complies with the SCRA, train its employees on the protections afforded by the SCRA, and report future SCRA-related complaints to the government.
“Members of the Army, Navy, and Air Force at Joint Base McGuire-Dix-Lakehurst, and servicemembers nationwide, have the right to terminate their leases without penalty when their military orders send them elsewhere,” said Acting Assistant Attorney General John Gore. “We appreciate United Communities’ cooperation with the Department to compensate affected servicemembers. We are resolute in our commitment to vigorously enforce the SCRA on behalf of our men and women in uniform.”
“When the brave men and women of our armed services answer the call of duty, they should be confident that they and their families will receive every protection the SCRA offers,” said U.S. Attorney Craig Carpenito. “With this settlement agreement, I am proud to continue our robust enforcement of the SCRA in New Jersey.”
The SCRA extends various protections to servicemembers to allow them to devote their entire energy to the national defense. The SCRA provides protections for servicemembers in areas such as evictions, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. The SCRA also allows servicemembers to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment, or retirement. Landlords are prohibited from imposing an early termination charge on servicemembers who terminate their leases under the SCRA.
The agreement resolves a suit filed by the United States in the United States District Court for the District of New Jersey.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated in the District of New Jersey may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
Justice Department Reaches Settlement with New Jersey Military Housing Provider for Charging Unlawful Lease Termination Fees to U.S. ServicemembersRead the Press Release
NEWARK, N.J. – The Justice Department today announced that United Communities, LLC, a private company that manages military housing at Joint Base McGuire-Dix-Lakehurst (JB-MDL), has agreed to pay $62,501.78 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing early termination charges on 13 servicemembers who had exercised their right to terminate their residential leases upon receipt of qualifying military orders. The early termination charges ranged from $138 to $3,100. This case and the settlement with another company in United States v. Twin Creek, announced on Sept. 11, 2018, are the first two SCRA cases the Department has brought involving lease incentives.
The Department launched an investigation into United Communities’ leasing practices after receiving a referral from Air Force Community Legal Services. U.S. Army Capt. Gregory Funk had sought to terminate his lease with United Communities after he received military orders to deploy to Qatar for up to 365 days as a part of Operation Inherent Resolve. United Communities agreed to release Captain Funk from the remainder of his lease term, but required him to pay back the $899.20 lease incentive that he had received when he signed the lease because he had not completed the 24-month term of the lease. The investigation revealed 12 other instances where SCRA-protected servicemembers were required to pay back their lease incentives.
Under the terms of the settlement, United Communities must pay a total of $45,001.78 in damages to 13 servicemembers. United Communities will also pay a civil penalty of $17,500 to the United States. In addition, United Communities must develop policies to ensure it complies with the SCRA, train its employees on the protections afforded by the SCRA, and report future SCRA-related complaints to the government.
“Members of the Army, Navy, and Air Force at Joint Base McGuire-Dix-Lakehurst, and servicemembers nationwide, have the right to terminate their leases without penalty when their military orders send them elsewhere,” Acting Assistant Attorney General John Gore said. “We appreciate United Communities’ cooperation with the Department to compensate affected servicemembers. We are resolute in our commitment to vigorously enforce the SCRA on behalf of our men and women in uniform.”
“When the brave men and women of our armed services answer the call of duty, they should be confident that they and their families will receive every protection the SCRA offers,” U.S. Attorney Craig Carpenito said. “With this settlement agreement, I am proud to continue our robust enforcement of the SCRA in New Jersey.”
The SCRA extends various protections to servicemembers to allow them to devote their entire energy to the national defense. The SCRA provides protections for servicemembers in areas such as evictions, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. The SCRA also allows servicemembers to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment, or retirement. Landlords are prohibited from imposing an early termination charge on servicemembers who terminate their leases under the SCRA.
The agreement resolves a suit filed by the United States in the United States District Court for the District of New Jersey.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated in the District of New Jersey may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division; Assistant U.S. Attorney David V. Simunovich, Civil Division; and Trial Attorney Alan Martinson, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
Justice Department Files Sexual Harassment Lawsuit Against Owners of Oklahoma City Rental PropertiesRead the Press Release
The Justice Department today announced that it has filed a lawsuit alleging that female tenants and applicants in residential rental properties in or around Oklahoma City were subjected to sexual harassment, coercion, intimidation, and threats in violation of the federal Fair Housing Act. The complaint names four defendants: the Executor of the Estate of Walter Ray Pelfrey; Rosemarie Pelfrey, as Trustee of the W. Ray Pelfrey Revocable Trust and the Rosemarie Pelfrey Revocable Trust; Omega Enterprises, LLC; and Pelfrey Investment Company, LLC.
Today’s lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, alleges that Walter Ray Pelfrey sexually harassed female tenants and applicants of rental properties from at least 2001 through 2017. According to the complaint, he engaged in harassment that included, among other things, making unwelcome sexual advances and comments, engaging in unwanted sexual touching, demanding or pressuring female applicants to engage in sexual acts to obtain rental housing, offering to reduce rent and overlooking or excusing late or unpaid rent in exchange for sex, evicting or threatening to evict female tenants who objected to or refused sexual advances, and entering the homes of female tenants without their consent. The lawsuit further alleges that, upon the death of Walter Ray Pelfrey on July 15, the Estate of Walter Ray Pelfrey assumed liability for discriminatory housing practices. In addition, the lawsuit alleges that Rosemarie Pelfrey in her role as trustee, Omega Enterprises, LLC, and Pelfrey Investment Company, LLC are liable under the Fair Housing Act because Walter Ray Pelfrey managed the rental properties on their behalf when he engaged in the harassment, coercion, intimidation, and threats.
“Female tenants should not be subjected to illegal harassment and demands for sex,” said Acting Assistant Attorney General John Gore. “The Justice Department will continue to enforce the Fair Housing Act against landlords who engage in this misconduct and cause women to feel unsafe in their own homes.”
“Tenants have the right to be free from unwanted sexual harassment and intimidation by their landlord under the federal Fair Housing Act,” said Robert J. Troester of the U.S. Attorney’s Office for the Western District of Oklahoma. “Today’s civil complaint represents a significant step toward achieving justice and compensation for vulnerable victims of civil rights violations.”
In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing. In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.
Since launching the initiative, the Justice Department has filed six lawsuits alleging a pattern or practice of sexual harassment in housing – more than it has filed in any previous fiscal year. The Justice Department has filed or settled 11 sexual harassment cases since January 2017, and has recovered over $1.6 million for victims of sexual harassment in housing.
Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination. The complaint contains allegations of unlawful conduct. The allegations must be proven in federal court.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings previously owned or operated by Walter Pelfrey, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line:
- English language: Call 1-800-896-7743, then press 1 to continue in English and select mailbox 991 to leave a message; or
- Spanish language: Call 1-800-896-7743, then press 2 to continue in Spanish and select mailbox 9 to leave a message.
Individuals can also report sexual harassment and other forms of housing discrimination by e-mailing the Justice Department at [email protected].
Justice Department Files Sexual Harassment Lawsuit Against Owners of Oklahoma City Rental PropertiesRead the Press Release
OKLAHOMA CITY – The Justice Department today announced that it has filed a lawsuit alleging that female tenants and applicants in residential rental properties in or around Oklahoma City were subjected to sexual harassment, coercion, intimidation, and threats in violation of the federal Fair Housing Act. The complaint names four defendants: the Executor of the Estate of Walter Ray Pelfrey; Rosemarie Pelfrey, as Trustee of the W. Ray Pelfrey Revocable Trust and the Rosemarie Pelfrey Revocable Trust; Omega Enterprises, LLC; and Pelfrey Investment Company, LLC.
Today’s lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, alleges that Walter Ray Pelfrey sexually harassed female tenants and applicants of rental properties from at least 2001 through 2017. According to the complaint, he engaged in harassment that included, among other things, making unwelcome sexual advances and comments, engaging in unwanted sexual touching, demanding or pressuring female applicants to engage in sexual acts to obtain rental housing, offering to reduce rent and overlooking or excusing late or unpaid rent in exchange for sex, evicting or threatening to evict female tenants who objected to or refused sexual advances, and entering the homes of female tenants without their consent. The lawsuit further alleges that, upon the death of Walter Ray Pelfrey on July 15, the Estate of Walter Ray Pelfrey assumed liability for discriminatory housing practices. In addition, the lawsuit alleges that Rosemarie Pelfrey in her role as trustee, Omega Enterprises, LLC, and Pelfrey Investment Company, LLC are liable under the Fair Housing Act because Walter Ray Pelfrey managed the rental properties on their behalf when he engaged in the harassment, coercion, intimidation, and threats.
"Female tenants should not be subjected to illegal harassment and demands for sex," said Acting Assistant Attorney General John Gore. "The Justice Department will continue to enforce the Fair Housing Act against landlords who engage in this misconduct and cause women to feel unsafe in their own homes."
"Tenants have the right to be free from unwanted sexual harassment and intimidation by their landlord under the federal Fair Housing Act," said Robert J. Troester of the U.S. Attorney’s Office for the Western District of Oklahoma. "Today’s civil complaint represents a significant step toward achieving justice and compensation for vulnerable victims of civil rights violations."
In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing. In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.
Since launching the initiative, the Justice Department has filed six lawsuits alleging a pattern or practice of sexual harassment in housing – more than it has filed in any previous fiscal year. The Justice Department has filed or settled 11 sexual harassment cases since January 2017, and has recovered over $1.6 million for victims of sexual harassment in housing.
Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination. The complaint contains allegations of unlawful conduct. The allegations must be proven in federal court.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings previously owned or operated by Walter Pelfrey, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line:
- English language: Call 1-800-896-7743, then press 1 to continue in English and select mailbox 991 to leave a message; or
- Spanish language: Call 1-800-896-7743, then press 2 to continue in Spanish and select mailbox 9 to leave a message.
Individuals can also report sexual harassment and other forms of housing discrimination by e-mailing the Justice Department at [email protected].
Jury Convicts Federal Inmate Who Filed Bogus Involuntary Bankruptcy Petitions Against Warden, Prison OfficerRead the Press Release
A federal inmate housed within the Communications Management Unit (CMU) at the U.S. Penitentiary in Marion, Illinois has been found guilty of filing fictitious involuntary bankruptcy petitions against federal prison officials. Kurt F. Johnson, 55, was convicted by a jury after a three-day trial in Benton, Illinois. The charges against Johnson were originally brought in a four-count federal indictment returned in July 2018.
The evidence at trial established that, on January 8, 2018, with the assistance of persons outside the prison, Johnson succeeded in filing false involuntary bankruptcy petitions against the prison warden and an officer at the prison. The bogus petitions alleged that each victim was indebted to Johnson in the amount of $20 billion, owing to a judgment Johnson claimed to have obtained from the International Court of Justice (also known as the World Court). As part of the scheme, Johnson purportedly canceled $1 billion of the supposed debt and then filed forms with the Internal Revenue Service showing the canceled debt as unreported income for his victims.
The mere filing of the fictitious claims resulted in both victims receiving solicitation letters from credit counseling services and loan companies based upon their supposed bankruptcy. Once the fraud was discovered, the United States quickly moved to seal the proceedings to prevent further damage to the victims’ reputations.
At trial, the United States presented evidence that Johnson has a history and pattern of harassing judges, court personnel, and Bureau of Prisons employees through the filing of fictitious claims. Johnson eschewed appointed counsel and represented himself at the trial, testifying in his own defense that he genuinely believed the World Court had awarded him a default judgment for $20 billion on account of his placement in the CMU. The jury deliberated for approximately 40 minutes before returning guilty verdicts on all four counts.
Johnson is currently serving out the last decade of a 300-month sentence for an unrelated fraud conviction in the Northern District of California. His underlying crime involved a nationwide debt elimination scheme that raked in over $6 million.
Sentencing is set for January 3, 2019, at 10:00 a.m. at the federal courthouse in Benton. By statute, Johnson could receive as much as 20 additional years in prison, which may be imposed to run consecutively to the time he is already serving.
"I am grateful to U.S. Attorney Weinhoeft and our law enforcement partners who serve on the Southern District of Illinois Bankruptcy Fraud Working Group for their strong commitment to combating fraud and abuse in bankruptcy cases, as evidenced by this prosecution," stated Nancy J. Gargula, U.S. Trustee for Southern and Central Illinois and Indiana (Region 10). The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Indiana, and Peoria, Illinois.
The case was investigated by the Federal Bureau of Investigation, with substantial assistance from the Federal Bureau of Prisons. Assistant United States Attorney Michael J. Quinley is prosecuting the case.
Independence Man Sentenced for KidnappingRead the Press Release
KANSAS CITY, Mo. – An Independence, Mo., man was sentenced in federal court today for his role in a kidnapping conspiracy.
Justin D. Watson, 23, was sentenced by U.S. District Judge Howard F. Sachs to eight years in federal prison without parole.
On Nov. 17, 2017, Watson pleaded guilty to one count of conspiracy to commit kidnapping and one count of brandishing a firearm during a crime of violence. Watson admitted that he and his co-conspirators kidnapped a victim identified as “N.J.” in March 2017.
Watson was arrested on March 14, 2017, after being stopped by Kansas City, Mo., police officers while driving the kidnapping victim’s Ford Fusion. Watson admitted that he had also driven the vehicle, with the victim in the front passenger seat and two co-conspirators in the back seat, from Kansas City to Colorado on March 11, 2017.
Watson drove west on I-70 toward Colorado, during which time conspirators used the victim’s credit card to withdraw $1,200 from an ATM in a Kansas truck stop. They also stopped at a sporting goods store in Hays, Kan., and purchased high-end athletic shoes using the victim’s credit card.
During the drive westward, conspirators discussed killing the victim. They stopped the vehicle near Russell, Kan., pulled off in a field and told the victim to get out of the car. While Watson held the gun, a co-conspirator tied the victim up and gagged him. The conspirators returned to the car and drove away, leaving the victim in the field. After the kidnappers left, he was able to remove his bindings and made his way to the Russell Police Department.
The conspirators got a room at a motel. Watson was asked to get some items from the local Walmart, but instead drove back to Kansas City.
According to court documents, when Watson originally arrived at a Kansas City, Mo., residence on the morning of March 11, 2017, there were two victims (a man and a woman) seated in chairs in the living room. Both victims had been tied to a pole in the basement with zip ties, rope and electrical wire for several hours. Duct tape was placed over the female victim’s mouth, and the two victims were punched, slapped, kicked and threatened with death. At one point they were forced into the trunk of a car for several hours, then led back into the house.
The female victim begged to go to the hospital, according to court documents, and two co-conspirators dropped her off at Truman Medical Center later the same day.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the FBI and the Independence, Mo., Police Department.
Honduran National Pleads Guilty to Illegal ReentryRead the Press Release
U.S. Attorney Peter G. Strasser announced that JOSE ANGEL ESPINOZA-FUENTES, age 42, a native of Honduras, pleaded guilty yesterday to a one-count indictment charging him with illegal entry of a removed alien.
According to the court documents, ESPINOZA-FUENTES was previously removed from the United States on July 22, 2011. He was later found in the Eastern District of Louisiana on July 1, 2018, and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
ESPINOZA-FUENTES faces a maximum term of imprisonment of 2 years, a fine of $250,000, one year of supervised release, and a $100 special assessment fee. U.S. District Judge Martin L.C. Feldman set sentencing for December 19, 2018.
U.S. Attorney Strasser praised the work of Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Hanahan Man Sentenced to Federal Prison for Gun CrimeRead the Press Release
Columbia, South Carolina---- United States Attorney Sherri A. Lydon stated today that Justin Michael Hannah, age 39, of Hanahan, South Carolina, was sentenced in federal court in Charleston, South Carolina, for being a felon in possession of a firearm, a violation of 18 U.S.C. § 922(g). United States District Judge Richard M. Gergel, of Charleston, sentenced Hannah to forty-one months imprisonment, to be followed by three years of supervised release with 24 months of electronic monitoring and home confinement.
Evidence presented at the change of plea hearing established that on August 21, 2017, police officers responding to a 911 call regarding suspicious behavior at a North Charleston gas station, discovered two firearms in a vehicle operated by Hannah. Hannah had prior felony convictions, and North Charleston Police believe that they may have foiled a robbery.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and officers of the North Charleston Police Department 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 Chris Schoen of the Charleston office prosecuted the case.
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Hampshire County man admits to failing to report for sentencingRead the Press Release
MARTINSBURG, WEST VIRGINIA – James Albert Slonaker, of Augusta, West Virginia, admitted today to failing to report to serve his federal sentence, United States Attorney Bill Powell announced.
Slonaker, age 49, was sentenced in January 2018 to 46 months incarceration for a firearms charge. He was to self-report to begin serving the sentence on February 21, 2018, but failed to surrender.
Slonaker pled guilty to one count of “Unlawful Possession of Firearms” in September 2017. Slonaker, having previously been convicted in the Circuit Court of Frederick County, Virginia, admitted to having a .22 caliber revolver, a .357 magnum revolver, two .22 caliber rifles, a .30-06 caliber rifle, and a Rossi firearm frame/receiver. The crime occurred in January 2017 in Hampshire County.
Assistant U.S. Attorney Lara K. Omps-Botteicher is prosecuting the case on behalf of the government. The United States Probation Office and the United States Marshal Service investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Great Falls Man Sentenced for Heroin and Methamphetamine DistributionRead the Press Release
GREAT FALLS - The United States Attorney’s Office announced today that 42-year old Brian Weber of Great Falls was sentenced to 180 months in prison, 10 years of supervised release, and a $100 special assessment. U.S. District Judge Brian M. Morris presided over the hearing.
Brian Weber distributed heroin and methamphetamine in Great Falls for over three years, spanning from 2014 through early 2017. During part of this time, Weber resided at the pre-release center and distributed heroin and methamphetamine around Great Falls, as well as to residents at the center. The FBI investigated Weber and identified numerous individuals in Great Falls who received their narcotics from Weber.
Weber has an extensive criminal history of prior felony violent crimes and a federal drug conviction, including violence against family members, girlfriends and members within his drug network.
The case was prosecuted by Assistant U.S. Attorney Jessica Betley and investigated by the Federal Bureau of Investigation.
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.
“Brian Weber is a dangerous criminal with a substantial criminal history. Because of that, we asked for an enhanced sentence provided by statute to make sure Weber is removed from our communities for a long time,” said U.S. Attorney Kurt Alme. “I want to thank Assistant U.S. Attorney Jessica Betley and the FBI’s Regional Violent Crime Task Force, in western Montana, including officers from Montana Probation and Parole and the sheriff’s offices in Lewis and Clark and Missoula counties and the Missoula Police Department, for helping to get this case successfully prosecuted,” Alme said.
“The substantial sentence Brian Weber received today is the result of the unwavering commitment and cooperation by the partner agencies of the Montana Regional Violent Crime Task Force (MRVCTF),” said Special Agent in Charge Eric Barnhart. “The crimes he has been found guilty of undermine the security of our society, and the communities Mr. Weber threatened are safer today with him behind bars. The FBI is grateful to the MRVCTF – including the Missoula County Sheriff’s Office, the Lewis and Clark County Sheriff’s office, the Missoula Police Department and the Montana Probation and Parole Bureau – as well as the Department of Justice’s Project Safe Neighborhood for their dedication to this case.”
“Through our cooperative agreement to join FBI’s Regional Violent Crime Task Force, we are making Lewis and Clark County a safer place to live. This task force is an effective way to deal with crime at the county, state and national level,” said Sheriff Leo C. Dutton.
“This is another example of the successes of our partnership with the FBI Regional Violent Crime Task Force,” Missoula County Sheriff TJ McDermott said. “We are fortunate to have an incredibly hard-working group of people who genuinely care about keeping our community a safer place to live.”
Gladwyne Businessman and Co-Conspirator of Chaka Fattah, Jr. Is Sentenced for Embezzlement and Tax ChargesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that David T. Shulick, 48, of Gladwyne, was sentenced today to a term 60 months’ imprisonment for embezzling funds from the School District of Philadelphia and for his part in a scheme to defraud PNC Bank and for filing false tax returns. Shulick was convicted in May 2018 after a jury trial.
At the sentencing hearing, Hon. Harvey Bartle III, found that Shulick embezzled a total of $759,735 from the School District of Philadelphia, and in the process, abused the trust placed in him by the School District.
Between 2010 and 2012, Shulick, and co-conspirator Chaka Fattah, Jr., embezzled funds from the School District of Philadelphia, in part by misrepresenting the educational services that would be provided to students pursuant to a contract between the School District and Shulick’s company, Unique Educational Experiences, Inc. (“UEE”). Shulick secured funding from the School District by promising to provide at-risk students with a level of guidance counseling appropriate for their needs, psychological support services, and school security. Shulick and Fattah Jr. hid the true costs of services provided by UEE by submitting false budgets to the School District of Philadelphia. The budgets contained false entries for benefit costs, inflated staff salaries, and salaries for staff positions that were never filled at the school operated by UEE. As a result of this scheme, defendant Shulick fraudulently obtained funds from the School District of Philadelphia that were supposed to be used to educate students.
“The Court imposed a stiff sentence for good reason in this case,” said U.S. Attorney McSwain. “Shulick promised to provide at-risk school students with counseling, security, and support services. He also promised to pay teachers a decent wage. He broke all of those promises and lined his pockets with funds that he had no business taking, all the while spending hundreds of thousands of dollars renovating his Gladwyne home and his vacation home in New Jersey. Shulick’s actions were an appalling abuse of trust, which the sentence makes clear.”
Shulick and Fattah Jr. also devised a scheme to defraud PNC Bank. Fattah Jr. had defaulted on a loan made by PNC. As part of the scheme, Shulick acted as Fattah Jr.’s lawyer and threatened PNC Bank with the possibility that Fattah Jr. might file bankruptcy if he were unable to resolve his outstanding debts, which would result in the bank receiving little or no repayment on the loan. Defendant Shulick sent a letter to PNC Bank, offering to settle PNC Bank’s claim for $2,500. The letter included a form which represented that Fattah Jr.’s monthly income was $2,500. Shulick’s companies were paying Fattah, Jr. a salary of $75,000 per year, and Shulick and Fattah Jr. had entered into an agreement to increase Fattah Jr.’s compensation.
Shulick also filed false federal income tax returns for tax years 2009, 2010, and 2011, failed to report all of his taxable income in these years, and improperly claimed itemized deductions. Shulick claimed money he had spent renovating his residence and New Jersey shore home as business expenses of his company.
“Not only did Shulick steal from a school district that can use every dollar it gets, he did so under the pretense of helping some of its most vulnerable students,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Instead, he turned around and used that money to support his own life of luxury. David Shulick acted contemptibly and criminally. The FBI is gratified to see this fraudster brought to justice, and will continue to pursue anyone embezzling money from the United States government.”
“Not only did David Shulick use deceit and fraud to line his pockets with funds that were supposed to be used to educate students, he also skirted his tax obligations,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Mr. Shulick’s sentence should serve as a reminder that no one is above the law, especially when the integrity of tax administration is at stake.”
The case was investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Education, with the cooperation of the Philadelphia School District’s Office of Inspector General. It is being prosecuted by Assistant United States Attorneys Michael T. Donovan and Christopher Mannion.
Georgia Man Sentenced to Prison for Failure to Register as a Sex Offender and Possession of a Firearm by a Convicted FelonRead the Press Release
Columbia, South Carolina---- United States Attorney Sherri Lydon stated today that Marial Watson, age 29, of Columbus, Georgia, was sentenced in federal court in Charleston, South Carolina, for Failure to Register as a Sex Offender and Possession of a Firearm by a Convicted Felon. United States District Judge Richard M. Gergel, of Charleston, sentenced Watson to 78 months imprisonment and 5 years Supervised Release.
Evidence in this case established that in 2013, Watson was convicted in Georgia of Aggravated Assault with Intent to Rape. Due to this sex offense, Watson was required under state and federal law to register as sex offender, and to keep the registration current, in any state where he lived or worked.
In January 2017, Watson moved to South Carolina, but he failed to notify the authorities in Georgia or to register as a sex offender in South Carolina. In addition to his failure to register as a sex offender, Watson was arrested in April 2017 on unrelated charges. During this arrest, police found a loaded 9 mm handgun and 101 rounds of ammunition in Watson’s possession.
The case was investigated by agents from the U.S. Marshals Service and the Bureau of Alcohol, Tobacco, and Firearms 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 Rhett DeHart of the office prosecuted the case.
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Four Dallas County Men Plead Guilty in Unrelated Cases to Illegal Possession of FirearmsRead the Press Release
The United States Attorney, Richard W. Moore, announces that the following men entered guilty pleas to federal gun crimes:
On September 14, 2018, George Armstead, a 29 year old resident of Selma, Alabama pled guilty to possession of a firearm after being convicted of a felony. At the change of plea hearing, Armstead agreed that on May 22, 2018, a Selma, AL police officer initiated a traffic stop on a green Honda being driven by Armstead for speeding. During a routine records check using Armstead’s driver’s license information, the officer learned that Armstead had an outstanding warrant. The officer told Armstead he was going to be arrested based on the warrant and asked Armstead if he has weapons or contraband in the vehicle because it would be towed. Armstead told the officer that “his brother’s firearm” was inside the vehicle underneath the passenger seat. The firearm was seized. It is described as a Smith & Wesson, .40 caliber pistol. The firearm had been reported stolen sometime prior to May 22, 2018. Later that day, Armstead was Mirandized and agreed to talk to police. The interview was recorded. Armstead said that the firearm was his and that he placed it underneath the passenger seat. Armstead said that he bought the firearm off the streets for $100 because he thought it was being sold for a good price. Armstead also said that he bought the pistol for protection. He further said that he was a felon and was on state probation for Robbery 1st Degree. Armstead said that he was not a bad guy. At that time, Armstead had been convicted of a felony, Robbery 1st, on April 6, 2015 in the Circuit Court of Dallas County, Alabama, case number CC-2013-000146. Armstead’s sentencing is set for December 14, 2018. Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and officers of the Selma, Alabama police department investigated the case. The prosecutor assigned to the case is Assistant U. S. Attorney, Gina S. Vann.
On September 19, 2018, Clarence Brenson, a 25 year old resident of Selma, Alabama pled guilty to possession of a firearm after being convicted of a felony. At the change of plea hearing, Brenson agreed that on June 2, 2018, Selma, AL police officers initiated a traffic stop on a vehicle being driven by a female for failing to yield for an emergency vehicle. Brenson was in the front passenger seat and two small children were in the back seat. The officers smelled the strong odor of marijuana and asked the female to exit the vehicle. When she did, she told the officers she had been smoking marijuana. Officers asked her if they would find marijuana if they searched the vehicle and she said, “No” because she smoked it all. She gave permission to search the vehicle. As Brenson exited the front passenger seat officers, observed a Romarm/Cugir, model WSAR-10, 7.62X39 caliber rifle on the floor board. The firearm was loaded. While Brenson was seated, the firearm was between his feet. Brenson told the officers he did not have identification and gave the officers his social security number. Brenson also told the officers he was a registered sex offender. Brenson agreed that he was in constructive possession of the firearm that was between his feet at the time of the traffic stop. A search of the vehicle yielded a small amount of marijuana and spent shell casings. At that time, Brenson had been convicted of a felony, Rape 2nd, on June 13, 2016 in the Circuit Court of Dallas County, Alabama, case number CC-2013-000238. Brenson’s sentencing is set for December 19, 2018. Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and officers of the Selma, Alabama police department investigated the case. The prosecutor assigned to the case is Assistant U. S. Attorney, Gina S. Vann.
On September 25, 2018, Jermaine Butler, a 27 year old resident of Selma, Alabama, pled guilty to possession of a firearm after being convicted of a felony. At the change of plea hearing, Butler agreed that on May 25, 2018, Dallas County, AL deputies set up a random driver’s license checkpoint in Selma, Alabama. A Chevrolet Impala driven by Butler stopped several yards short of the checkpoint. Deputies motioned for Butler to continue to the checkpoint. Butler then drove past the checkpoint then stopped. As deputies approached the driver’s side of the vehicle, they smelled marijuana and saw one passenger in the vehicle with Butler. Both were asked to exit the vehicle. When Butler opened the front driver’s side door, deputies saw a small amount of marijuana. Butler was immediately detained. Deputies then saw a rifle on the floorboard of the backseat of the vehicle. The rifle was loaded. The rifle is described as a Zastava, model N-PAP DF, 7.62X39 caliber rifle. A probable cause search of the vehicle was conducted. The search discovered another quantity of marijuana stuffed between the front seats. Butler then stated that the rifle and the marijuana were his and the passenger also stated that the rifle and marijuana belonged to Butler. Butler was previously convicted of Assault 1st Degree on March 3, 2015, in the Circuit Court of Dallas County, Alabama, case number CC-2012-000045. Butler’s sentencing is set for January 18, 2018. Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and deputies of the Dallas County Sheriff’s Office investigated the case. The prosecutor assigned to the case is Assistant U. S. Attorney, Gina S. Vann.
On September 25, 2018, Chadwick Blake, a 31 year old resident of Selma, Alabama pled guilty to possession of a firearm after being convicted of a felony. At the change of plea hearing Blake agreed on October 24, 2017, Daryl Bradford, an Alabama Parole Officer conducted a home visit of Blake at his residence. Bradford found one round of 9mm ammunition in Blake’s pocket. Bradford arrested Blake for violating his probation. Bradford then searched Blake’s residence. Bradford found a Taurus, model Millennium, G2, 9mm pistol. Blake was previously convicted of Assault 2nd, on August 12, 2015, in the Circuit Court of Dallas County, Alabama, case number CC-2015-000123. Blake’s sentencing is set for January 8, 2018. Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, investigators of the Alabama Attorney General’s Office and officers of the Selma, Alabama police department investigated the case. The prosecutor assigned to the case is Assistant U. S. Attorney, Gina S. Vann.
Four Charged with Southern Illinois Meth ConspiracyRead the Press Release
Four people have been charged with conspiring to distribute methamphetamine in southern Illinois, United States Attorney for the Southern District of Illinois Steven D. Weinhoeft announced today. Scott A. Carnell, 36, of Pacific, Missouri, Jarrett C. Hood, 36, of Walsh, Illinois, Kayla S. Kempfer, 30, of Marissa, Illinois, and Jordan D. Vuichard, 32, of Sparta, Illinois, are named defendants in a one-count indictment charging conspiracy to distribute more than 50 grams of methamphetamine. The indictment, which was returned by a federal grand jury earlier this month, alleges that the offense occurred between 2017 and August 2018, in Jackson, Randolph, and St. Clair Counties.
Kempfer and Hood made their initial appearances in federal court on September 19 and September 26, respectively. They are both being held without bond pending a November 26 jury trial. Carnell and Vuichard have their initial appearances scheduled for October 4 at the federal courthouse in Benton, Illinois.
By law, if convicted, the defendants face a minimum of five years in prison and could receive as much as 40 years imprisonment and fines of up to $5 million.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Sparta Police Department, New Athens Police Department, Marissa Police Department, St. Louis County Police Department and the Federal Bureau of Investigation. The Randolph County State’s Attorney’s Office also assisted in the investigation.
Former State Legislator Sentenced to 33 Months in Prison for Accepting BribesRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former Alabama legislator to nearly three years in prison for accepting bribes from a Birmingham lawyer and an Alabama coal company executive to advocate their employers’ opposition to EPA actions in north Birmingham. U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp Jr. and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Thomas J. Holloman announced the plea.
U.S. District Judge Abdul K. Kallon sentenced former state representative OLIVER L. ROBINSON JR., 58, of Birmingham, to two years and nine months in prison for conspiracy, bribery, honest services wire fraud and tax evasion. Robinson pleaded guilty to the charges late last year. The judge also ordered Robinson to pay $169,151 in restitution to the Internal Revenue Service and to forfeit $390,783 as proceeds of illegal activity. Robinson will be on supervised release for three years following completion of his prison term.
The government filed a motion asking the judge to depart downward from the guidelines sentencing recommendation of 51 to 63 months in prison because of Robinson’s substantial assistance, including trial testimony, in the government’s prosecution of his co-defendants. Prosecutors recommended the 33-month sentence.
A federal jury in July convicted Balch & Bingham partner Joel Gilbert and Drummond Company executive David Roberson in the bribery scheme. They are scheduled for sentencing Oct. 23.
“Robinson betrayed his constituents and neighbors in north Birmingham and Tarrant, selling his elected office to special interests for personal profit. An elected official can scarcely commit a more egregious crime,” Town said. “This former state legislator will never again hold elected office and he will spend the next three years of his life in federal prison.”
“Individuals in a position of public trust must be held accountable when that trust is violated,” Sharp said. “Today, the court is holding Mr. Robinson accountable. Citizens can rest assured knowing that the FBI and our partners will continue to be there to bring those who violate that trust to the bar of justice.”
“Elected government officials should be held to a higher ethical standard and it was obvious that Robinson chose greed over doing the honest thing,” Holloman said. “IRS-CI will continue to put resources on these public corruption investigations in an effort to clean up dirty politics.”
Robinson represented Alabama’s House District 58 from 1998 until he resigned Nov. 30, 2016. He sold his influence as a state legislator to Gilbert and Roberson to aid Balch & Bingham and its client, Drummond, in opposing the Environmental Protection Agency’s efforts to prioritize and expand a Superfund site near Robinson’s legislative district.
EPA had designated an area of north Birmingham, including the neighborhoods of Harriman Park, Fairmont and Collegeville, as the 35th Avenue Superfund Site after finding elevated levels of arsenic, lead and benzo(a)pyrene during soil sampling. In September 2013, EPA notified five companies, including Drummond-owned ABC Coke, that they could potentially be responsible for the pollution. Such a finding could have cost the company tens of millions of dollars in cleanup costs and fines.
According to evidence at trial, Gilbert and Roberson were intent on protecting ABC Coke and Drummond from the tremendous potential costs associated with being held responsible for pollution at the site. They began working to prevent the site’s placement on EPA’s National Priorities List or its expansion into Tarrant or Inglenook. Their plan included advising public officials and residents of north Birmingham to oppose EPA’s actions.
Gilbert and Roberson bribed Robinson with a $375,000 contract paid to him through his non-profit Oliver Robinson Foundation over two years. In return, Robinson made a variety of official acts to support their agenda for Balch and Drummond, according to the government’s sentencing memorandum. Those acts included advocating the Balch and Drummond position in a meeting with the EPA, using talking points drafted by Gilbert and secretly recording the meeting. Robinson also made comments to the Alabama Environmental Management Commission, which oversees the Alabama Department of Environmental Management, urging the commission and the ADEM director to help narrow the list of parties potentially responsible for the Superfund site cleanup. Robinson also voted in the Alabama House of Representatives Rules Committee on a resolution, drafted by Gilbert, opposing the EPA’s efforts in north Birmingham. Robinson always concealed his financial relationship with Balch and Drummond, as required in his contract with Gilbert and Roberson.
The FBI and IRS investigated the case, which Assistant U.S. Attorneys George Martin, Robin Beardsley Mark and John B. Ward prosecuted.
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Former Sacramento Area Youth Gymnastics Coach Sentenced to over 8 Years in Prison for Possessing Child PornographyRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Morrison C. England Jr. sentenced Derek Swede Godfrey, 49, formerly of Rocklin, to eight years and one month in prison for possession of child pornography, U.S. Attorney McGregor W. Scott announced.
According to court documents, in October 5, 2006, law enforcement agents executed a search warrant at Godfrey’s home in Rocklin. On his computer, agents located more than 400 videos and 5,000 still images depicting the sexual abuse and exploitation of minors. The day after, Godfrey, a youth gymnastics coach, left the United States for the Netherlands where he had dual-citizenship. On January 25, 2007, a grand jury in Sacramento indicted Godfrey, charging him with one count of possession of child pornography.
In 2012, Godfrey was located in Perth, Australia, where he was once again found to be coaching children’s gymnastics. At that time, Australian authorities arrested Godfrey on charges unrelated to the charges in the United States. In April 2016, Australian authorities agreed to extradite Godfrey to the United States to face the charges pending in Sacramento.
In sentencing Godfrey, Judge England observed that he was particularly troubled by the fact that Godfrey had fled the United States after his crime was detected in 2007, and that Godfrey had been caught with child pornography in Australia in 2012 while his charges in the United States were pending.
This case was the product of an investigation by Homeland Security Investigations. Assistant U.S. Attorney Matthew G. Morris prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Former Professor Pleads Guilty to Stealing $236K from WKURead the Press Release
LOUISVILLE, Ky. – A Bowling Green, Kentucky professor has pleaded guilty to defrauding Western Kentucky University, announced United States Attorney Russell M. Coleman.
According to a plea agreement, between 2006 and October 2017, Dettman devised a scheme to defraud Western Kentucky University by diverting concrete and soil test payments from WKU’s Engineering Department for his own personal use. The diverted payments, furthered by interstate wire transfers, resulted in a loss of $236,000 to WKU.
Dettman, 52, pleaded guilty before United States District Court Judge Greg N. Stivers. The former professor faces a maximum 20 years of imprisonment, a combined maximum fine of $250,000, and 3 years of supervised release. As part of the plea agreement, Dettman will be required to pay restitution in the amount of $236,000 to Western Kentucky University.
The case was prosecuted by Assistant United States Attorneys David Weiser and Joshua Judd, and investigated by the Federal Bureau of Investigations (FBI).
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Former Morgan Hill Real Estate Broker Convicted of Bankruptcy FraudRead the Press Release
SAN JOSE- Goyko Gustav Kuburovich, also known as “Batzi” Kuburovich and “Gus” Kuburovich, and his daughter, Kristel Kuburovich were convicted of bankruptcy fraud-related crimes by a federal jury announced United States Attorney Alex G. Tse and Special Agent in FBI Special Agent in Charge John F. Bennett. The verdicts were handed down yesterday following a jury trial before the Honorable Edward J. Davila, U.S. District Judge.
The jury found Goyko Kuburovich, 58, formerly of Morgan Hill and currently a resident of Auburn, guilty of one count of bankruptcy fraud, one count of concealment of assets during a bankruptcy proceeding, and one count of making false statements during a bankruptcy proceeding. Kristel Kuburovich, 29, also of Auburn, was found guilty of one count of concealment of assets during a bankruptcy proceeding. Ms. Kuburovich was acquitted of one count of bankruptcy fraud.
Evidence at trial showed that Goyko Kuburovich enlisted his daughter, Kristel Kuburovich, in a scheme to defraud the bankruptcy court for the purpose of concealing Goyko Kuburovich’s real property and cash assets. To implement this scheme, Goyko Kuburovich executed multiple financial transactions, including by and through Kristel Kuburovich. The trial evidence proved that when Goyko Kuburovich filed a bankruptcy petition in 2010, he fraudulently omitted his interest in certain real and personal property, the same assets that were the subject of his financial transactions with his daughter. In reaching its verdict, the jury found that through this scheme to defraud, Goyko Kuburovich knowingly and intentionally concealed approximately $870,000 of his assets from the bankruptcy court, while having over $2.5 million of debt discharged by the bankruptcy court.
On August 25, 2016, a federal grand jury indicted the defendants, charging them with one count of bankruptcy fraud, in violation of 18 U.S.C. § 157(1), and one count of concealment of assets during a bankruptcy proceeding, in violation of 18 U.S.C. § 152(1). Goyko Kuburovich also was charged with one additional count of making false statements during a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3).
The defendants are currently released from custody on separate bonds. The next court appearance is set before Judge Davila on October 9, 2018, at 1:30 p.m. for a hearing on the defendants’ motion for a judgment of acquittal. No date has been set yet for a sentencing hearing.
The maximum statutory penalty for each count is five years imprisonment and a $250,000 fine plus restitution, if appropriate. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Scott Simeon and Jeff Schenk are prosecuting the case with the assistance of Laurie Worthen and Lakisha Holliman. The prosecution is the result of a five-year investigation by the Federal Bureau of Investigation.
Former Miami-Dade County Resident Sentenced to More than 8 Years in Prison for Bank Fraud and Money Laundering SchemesRead the Press Release
A former Miami-Dade County resident was sentenced by U.S. District Court Judge Cecilia M. Altonaga to 97 months in prison, to be followed by five years of supervised release, and was ordered to pay $722,000 in restitution for his roles in bank fraud and money laundering schemes.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Katherine Fernandez Rundle, Miami-Dade State Attorney, Miami-Dade State Attorney’s Office, Juan J. Perez, Director, Miami-Dade Police Department (MDPD), and Adolphus P. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division made the announcement.
Jose Orlando Sanchez Cristancho, a/k/a Orlando Sanchez, 57, a citizen of Colombia who formerly resided in Miami-Dade County, previously pled guilty to one count of conspiracy to commit wire and bank fraud, in violation of Title 18, United States Code, Section 1349, and one count of conspiracy to launder money, in violation of Title 18, United States Code, Section 1956(h).
According to court documents, from 2003 through 2011, Sanchez agreed with other co-defendants to purchase condominium apartments and other real estate in South Florida. Their intention was to obtain mortgage loans on the properties through schemes that would enable them to profit from the loans, or the sales of the property, without having to re-pay the loans.
One of the schemes included recruiting a straw buyer to purchase property (at an inflated price) that Sanchez already owned. Sanchez arranged for the straw buyer to submit a loan application to a bank which he knew was entirely false. Sanchez knew the bank, insured by the FDIC, would rely on it in extending the loan. Sanchez went forward with the sale, and signed a HUD-I form used at the closing which he knew contained false statements about the finances of the purchase. When the purchase closed, Sanchez netted more than $400,000 from the transaction, which he obtained from the loan proceeds the buyer had obtained through the fraudulent application. The straw buyer defaulted on the loan obtained at Sanchez's direction, but Sanchez was able to keep the money the straw buyer had paid him from the loan proceeds. When the property was eventually sold in a short sale, the bank had a loss of $404,000.
In a different scheme, Sanchez applied for a mortgage loan from an FDIC-insured financial institution for the purpose of buying an apartment in Aventura, Florida. He submitted a loan application and then a HUD-I closing form with false statements. Approximately 1 ½ years after the purchase, Sanchez stopped making payments on the loan and the bank began foreclosure proceedings. The property was subsequently sold in a short sale for a loss to the bank of approximately $106,000.
The frauds perpetrated by Sanchez and his co-conspirators resulted in Sanchez receiving in in excess of $1 million from FDIC-insured financial institutions. Losses to those institutions totaled approximately $722,000.
During a prior time period, Sanchez had acquired substantial real estate and money in Colombia from the trafficking of cocaine. Sanchez transferred approximately $1.3 million in drug-derived assets to the United States that he used for numerous real estate purchases and for living expenses. Sanchez laundered his drug proceeds by moving them through numerous bank accounts belonging to co-conspirators and accomplices, and by buying property through shell corporations, in order to disguise the nature and source of his money.
Co-defendants Andrea Marroquin and Luis Fernando Reyes were arrested in Colombia and are in the process of being extradited to the United States. Co-defendant Sergio Hernan Perdomo Lievano remains a fugitive. An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Mrs. Fajardo Orshan commended the investigative efforts of IRS-CI, the Miami-Dade State Attorney’s Office, MDPD, and DEA. This case was prosecuted by Assistant U.S. Attorney Frank H. Tamen.
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.
Former Medical Assistant Sentenced for Oxycodone ConspiracyRead the Press Release
ALEXANDRIA, Va. – A former medical assistant from Woodbridge was sentenced today to four years in prison for her role in leading a conspiracy to distribute oxycodone, which involved supplying thousands of dangerous opioids for distribution.
According to court documents, Tatiana Bailey, 32, was employed as a medical assistant with INOVA Bariatric Surgery in Woodbridge. From at least February 2015 to October 2015, Bailey abused the trust of the doctors who employed her by stealing blank oxycodone prescriptions, to which she had access by virtue of her position as an employee, and forged a number of those prescriptions using an INOVA physician’s name and registration number. She then sold blank and forged prescriptions to others, none of whom were patients of the medical practice, who would fill the prescriptions and use or distribute the oxycodone. During the course of the conspiracy, Bailey facilitated the fraudulent filling of over 90 prescriptions, totaling approximately 6,520 oxycodone pills.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, and Colonel Gary T. Settle, Superintendent of Virginia State Police, made the announcement after sentencing by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Raj Parekh prosecuted the matter and handled the sentencing hearing. Former Special Assistant U.S. Attorneys Allison Garnett and Troy Edwards provided assistance investigating the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-222.
Former Hedge Fund Manager Sentenced to 96 Months in Prison in Ponzi Scheme CaseRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL SCRONIC, the former manager of the Scronic Macro Fund (the “Fund”), was sentenced to 96 months in prison today in connection with his scheme to defraud the Fund’s 45 investors of more than $22 million.
U.S. Attorney Berman said: “For years, Scronic lied to his investors about his Fund’s return, but he has now been brought to justice. We will continue to pursue aggressively frauds like this one, which caused millions of dollars in losses, in order to preserve investor confidence in our capital markets.”
According to the allegations contained in the Indictment and the defendant’s plea hearing:
SCRONIC raised more than $22 million from 45 investors in the Scronic Macro Fund (the “Fund”) from April 2010 to the October 2017. SCRONIC told investors that the Fund had positive returns in all but one of the 22 quarters from January 2012 through June 2017, with the highest reported quarterly return being 13.4 percent in the fourth quarter of 2014. In reality, the Fund lost money in 28 out of 29 quarters of its operation, with a total net loss of about $15.7 million before commissions. The Fund’s only positive quarter was its first quarter of operation in 2010.
As a result of these trading losses, the total assets SCRONIC claimed the Fund had in each quarter far exceeded its actual assets. For example, SCRONIC sent account statements to investors that together showed total fund assets of $21.7 million as of June 30, 2017. In actuality, on that date, the combined balance of SCRONIC’s brokerage and bank accounts was just $102,376.
In addition to losing money on trades, SCRONIC used investor money for personal expenses. His personal expenditures averaged more than $500,000 annually, including monthly rent of $12,275 for his primary residence in Westchester, New York, mortgage payments on a vacation home in Stratton, Vermont, fees for multiple beach and country clubs, including a $30,000 payment to the Stratton Mountain Club in July 2017, and miscellaneous items charged to credit cards in amounts averaging more than $15,000 a month.
As of the summer of 2017, SCRONIC was unable to pay redemptions requested by Fund investors because he did not have sufficient funds on hand. He told investors seeking redemptions that he would pay redemptions only at quarter-end, that he was too busy and preoccupied with a relative’s medical condition to pay redemptions, and that he was unavailable to pay redemptions because he was on vacation. In some cases, SCRONIC ignored redemption requests.
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In addition to the prison term, SCRONIC, 46, of New York, New York, was sentenced to
3 years of supervised release, and ordered to pay $22,026,427 in restitution to his victims.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and also thanked the Securities & Exchange Commission for its assistance in the investigation.
The criminal case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys James McMahon and Daniel Loss are in charge of the prosecution.
Former Financial Officer of Non-Profit Charged with Embezzling over $1.3 MillionRead the Press Release
BOSTON – The former financial officer of a Boston-based non-profit was arrested today and charged in connection with a fraud and embezzlement scheme that that netted over $1.3 million dollars.
Nicole Lescarbeau, 51, of Canton, was charged in an indictment unsealed today with three counts of wire fraud, five counts of bank fraud, and one count of aggravated identity theft. Lescarbeau was arrested this morning and will appear before U.S. Magistrate Judge Judith Dein this afternoon.
As alleged in the indictment, Lescarbeau served as the financial officer of a small, Boston-based non-profit organization. Her duties included managing incoming invoices, paying bills by check and wire transfer, using and paying credit cards, financial account maintenance, and bookkeeping. As a result, Lescarbeau had access to the non-profit’s checkbook, bookkeeping and accounting software, and online bank accounts.
From August 2013 until her termination in January 2018, Lescarbeau stole funds from the non-profit for her personal use. Specifically, Lescarbeau wrote unauthorized checks to herself using the non-profit’s accounting software and affixed the signatures of the authorized signers on the account. It is also alleged that Lescarbeau repeatedly logged on to the non-profit’s online bank accounts and directed unauthorized payments and transfers for her personal benefit, and that she made unauthorized personal charges using the non-profit’s business credit cards. In total, Lescarbeau embezzled approximately $1,389,317 from the non-profit organization.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of bank fraud provides for a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million. The charge of aggravated identity theft carries a mandatory two-year sentence that must run consecutively to any other sentence imposed, one year of supervised release, a fine of $250,000, restitution, and forfeiture. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorney Justin D. O’Connell of Lelling’s Economic Crimes Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Colombian Councilman Sentenced to Fourteen Years in Prison for Conspiring to Traffic More Than A Thousand Kilograms of CocaineRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday has sentenced Aureliano Cuero-Cuero (38, Mosquera, Nariño, Colombia), a/k/a “Chavo,” to 14 years in federal prison for conspiring to distribute cocaine on board vessels subject to the jurisdiction of the United States. Cuero-Cuero pleaded guilty on May 23, 2018.
According to court records, Cuero-Cuero was an elected city council member in Mosquera, Nariño, Colombia at the time of his indictment in 2016. Between February and July 17, 2015, Cuero-Cuero was involved in the organizing and dispatching of three go-fast vessels that departed Colombia carrying over 1,300 kilograms of cocaine, but were later interdicted in international waters. The crew members aboard these vessels were arrested and prosecuted in the Middle District of Florida. Cuero-Cuero was arrested in May 2017, in Colombia, and extradited to the United States. Two other co-defendants in this case are awaiting sentencing.
This case was investigated by the Panama Express Strike Force, a standing Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Coast Guard Investigative Service, the Naval Criminal Investigative Service, and the U.S. Southern Command’s Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted by Assistant United States Attorney Dan Baeza.
Former Allen County Accountant Sentenced for Wire Fraud, Filing Fraudulent Federal Tax ReturnsRead the Press Release
BOWLING GREEN, Ky. – A former Allen County, Kentucky, accountant was sentenced by United States District Judge Greg N. Stivers to 24 months in prison followed by 3 years of supervised release, and ordered to pay restitution of $766,349.59, announced United States Attorney Russell M. Coleman.
Stephen C. Jones, 51, of Scottsville, Kentucky, committed wire fraud between January 2010 and August of 2015, when he devised and executed a scheme to defraud his employer, by diverting $766,349.59 from the company’s bank account to his personal bank account, according to the plea agreement. Additionally, Jones failed to report the embezzled funds as income on his tax returns for tax years 2010 through 2014.
In total, Jones plead guilty to six counts against him, including: wire fraud and five counts of presentation of a false tax return.
Assistant United States Attorney Amanda Gregory prosecuted the case. The Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), and the Allen County Sheriff’s Office investigated the case.