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13 September 2018
Sioux Center Man Sentenced to Prison for Exploitation of MinorsRead the Press Release
The coach of a boys’ basketball team who secretly made videos of boys on the team showering, was sentenced on September 12, 2018, to 15 years in federal prison.
Curtis Van Dam, age 36, from Sioux Center, Iowa, received the prison term after a June 11, 2018, guilty plea to one count of sexual exploitation of a child.
In a plea agreement, Van Dam admitted that between November of 2013 and October of 2017, in the Northern District of Iowa, he used minors under the age of 18 to engage in sexually explicit conduct for the purpose of producing visual depictions of such conduct, using cameras, cell phones, SD cards, and an Apple MacBook A1181 Laptop personal computer.
Van Dam was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Van Dam was sentenced to 15 years’ imprisonment. He must also serve a 7-year term of supervised release after the prison term. Van Dam was ordered to pay two special assessments of $100 and $5000. There is no parole in the federal system.
United States Attorney Peter E. Deegan stated, “This case demonstrates our office’s continuing resolve to keep our children safe from sexual exploitation. We commend the fine work of the Sioux Center Police Department in this matter, and reiterate our commitment to working with our state and local partners to fight child exploitation in our communities.”
Van Dam is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Timothy T. Duax and investigated by the Sioux Center Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 18-CR-04005.
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Sex Trafficker Sentenced to 25 Years in Federal Prison for Engaging in Prostitution with MinorsRead the Press Release
CHICAGO — A Chicago man was sentenced today to 25 years in federal prison for engaging in numerous paid sexual acts with underage girls, along with restitution of approximately $240,000 to be paid into a trust fund for the victims and a $100,000 fine.
WILLIAM WHITLEY paid four minors to engage in sex acts with him on multiple occasions from 2012 to 2016. Three of the victims were runaways at the time they encountered Whitley. Two of his victims were 14 years old when Whitley first took advantage of them. At the time of the criminal conduct, Whitley was employed as an officer with the Chicago Police Department.
Whitley, 62, pleaded guilty earlier this year to one count of sex trafficking of a minor. U.S. District Judge Virginia M. Kendall imposed the sentence in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. Substantial assistance was provided by the Carol Stream Police Department, Chicago Police Department and the Cook County State’s Attorney’s Office.
“Defendant engaged in the sexual exploitation of children, which is one of the most heinous crimes one can commit,” Assistant U.S. Attorneys Sarah Streicker, Elizabeth Pozolo and Michelle Petersen argued in the government’s sentencing memorandum. “Defendant victimized young runaways and caused his victims irreparable harm and trauma by causing them to engage in commercial sex on numerous occasions.”
The investigation revealed that Whitley took nude photographs of some of his victims, and he provided some of them with marijuana to smoke. Whitley also openly displayed his status as a Chicago police officer during his sex trafficking conduct. He was in a police car and wearing his police uniform when he first met one of his victims. Two of his victims reported that Whitley often kept a loaded handgun under the pillow of his bed, where the sex acts took place.
If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678. The hotline is available 24 hours a day, 7 days a week.
Sacramento Woman Sentenced to over 3 Years in Prison for Tax Refund Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Denna Chambers, aka Denna Rice, 36, of Sacramento, formerly of Fairfield, was sentenced today by U.S. District Judge Morrison C. England Jr. to three years and one month in prison for a stolen identity tax refund fraud scheme, U.S. Attorney McGregor W. Scott announced.
According to court documents, between approximately January 2011 and June 2013, Chambers and co-defendant Starsheka Mixon, 35, of Pinole, conspired together and with others to fraudulently obtain tax refunds by filing false tax returns in the names of other people with the Internal Revenue Service. The tax returns included false statements about the taxpayers’ income, dependents, and occupations in order to obtain refunds and tax credits to which the taxpayers were not entitled, including the Earned Income Credit and the Additional Child Tax Credit. Some of the fraudulent tax returns used the name and personal information of individuals without their knowledge or consent.
The fraudulently obtained refunds were typically placed on prepaid debit cards controlled by Chambers, Mixon, or their associates. In their respective plea agreements in February 2018, Chambers and Mixon both admitted that in all, approximately 174 false federal income tax returns were filed seeking over $880,000 in tax refunds, of which approximately $477,348 was paid out by the IRS.
Judge England also ordered Chambers to serve two years of supervised release. She was ordered to self-surrender on November 29, 2018, to begin serving her sentence. Co-defendant Mixon was previously sentenced on August 9, 2018, to three years and one month in prison.
This case was the product of an investigation by IRS Criminal Investigation. Assistant U.S. Attorney Shelley D. Weger prosecuted the case.
For 2018, the IRS, the states, and the private-sector tax industry are working together to identify and apply safeguards to better protect taxpayers and fight identity theft. You can find identity theft prevention and detection tips as well as victim assistance at: https://www.irs.gov/identity-theft-fraud-scams/identity-protection.
Sacramento Man Sentenced to over 17 Years in Prison for Advertising Child PornographyRead the Press Release
SACRAMENTO, Calif. — Mark A. Richards, 49, of Sacramento, was sentenced today by U.S. District Judge Morrison C. England Jr. to 17 years and six months in prison to be followed by 10 years of supervised release for advertising child pornography, U.S. Attorney McGregor W. Scott announced.
According to court documents, in January 2018, Richards made child pornography available over a peer-to-peer file sharing network and provided passwords to undercover officers who asked him for access to his files. On two occasions, January 7, 2018, and January 11, 2018, those undercover officers in locations outside California obtained child pornography from Richards.
This case was the product of an investigation by the Federal Bureau of Investigation. 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.
Rumford Man Pleads Guilty to Social Security Fraud and Theft of Public MoneyRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Raymond J. Brenneis, 59, of Rumford, Maine, pled guilty today in U.S. District Court to Social Security fraud and theft of public money.
According to court records, since 1995, Brenneis has received Supplemental Security Income (“SSI”) benefits which are paid to people with limited income who are blind, disabled, or elderly. Between 2015 and 2017, Brenneis also received Supplemental Nutritional Assistance Program (“SNAP”) and Maine State SSI Supplement benefits. Brenneis told the federal and state programs administering the benefit programs that he was living alone and not receiving help or money from any other person. In fact, from 2011 to 2017, Brenneis lived with his wife whose receipt of Social Security Disability Insurance benefits rendered him ineligible for benefits he received. Brenneis told investigators that he concealed his actual living arrangements because he knew his wife’s benefits would make him ineligible to receive the benefits.
Brenneis faces up to five years in prison and a $250,000 fine for Social Security fraud, and up to ten years in prison and a $250,000 fine for theft of public money. He also faces up to three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Social Security Administration’s Office of the Inspector General and the Maine Department of Health & Human Service’s Fraud Investigation and Recovery Unit.
Roger Dale Williams Sentenced to 63 Months in Prison for Phony Investment SchemeRead the Press Release
KNOXVILLE, Tenn.- On September 13, 2018, the Honorable Pamela L. Reeves, U.S. District Judge, sentenced Roger Dale Williams, 52, of Shelbyville, Kentucky, to serve 63 months in prison for conducting a scheme to defraud investors and obstructing the administration of federal tax laws. Williams was also ordered to pay $1,373,361.96 in restitution to victims that lost money as a result of the scheme.
Williams pleaded guilty in May 2018 to federal mail fraud and tax charges stemming from his scheme to defraud victims who believed that they were investing money in an “investment club” and, later, in church bonds. He began offering bogus investment opportunities in 2001 as part of membership in an “investment club,” which included opportunities to invest in stock purchases, business start-ups, and bonds. Many of his victims were elderly. In order to perpetuate the scheme, he also provided victims with false IRS forms pertaining to their purported investments.
More recently, Williams extended his fraud scheme to members of the King Branch Road Church of Christ in Pigeon Forge, Tennessee, where he had become a pastor. He solicited funds for the purchase of purported church bonds and claimed the funds would be used for the benefit of the church, particularly to pay off the church’s debt. However, Williams diverted the funds raised for the fake church bonds to his own personal use and benefit, as well as used the funds to make payments to investment club members to make it appear that their “investments” were generating income. Williams also convinced several victims to transfer their Individual Retirement Accounts into bogus investments under his control, and then siphoned off the funds for his own use and benefit, including paying household bills, vehicle payments and taking trips.
“Protecting seniors is a top priority of the U.S. Attorney’s Office for the Eastern District of Tennessee. Victimization of our elderly citizens, by either abuse or financial exploitation, will not be tolerated and we will continue to prosecute vigorously anyone who commits these crimes,” said U.S. Attorney J. Douglas Overbey.
“For nearly 15 years, Roger Williams used every opportunity, including his position as a pastor, to victimize others for his personal gain. He preyed on the elderly and vulnerable, and obstructed the IRS in order to further his scheme. Justice was served today, as Williams has been held accountable for his actions,” said IRS, Criminal Investigation Special Agent in Charge Matthew D. Line. “We will continue to pursue those who defraud American taxpayers.”
“Unfortunately, these Ponzi schemes, driven by greed, are commonplace,” said David McGinnis, Inspector in Charge for the Charlotte Division. “Investors must not simply rely upon a reputation or relationship when entrusting their funds to others. They should verify the qualifications of those to whom they consider entrusting their funds, especially if there are claims of guaranteed returns or that the investments will outperform the market.”
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
This investigation was conducted by the Internal Revenue Service - Criminal Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorney Matthew Morris represented the United States.
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Rochester Man Convicted Following A Jury Trial of Possessing A Shotgun and AmmunitionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER MAN CONVICTED FOLLOWING A JURY TRIAL
OF POSSESSING A SHOTGUN AND AMMUNITIONROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal jury has convicted Quincey Frye, 27, of Rochester, NY, of being a felon in possession of a shotgun and ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Charles E. Moynihan, who handled the prosecution of the case, stated that on March 26, 2016, members from the New York State Department of Corrections and Community Supervision apprehended Frye at 270 Weyl Street in Rochester, after he absconded from parole supervision in early February. While looking for the defendant inside the residence, officers found a shotgun with an ammunition carrying case attached. The ammunition carrier contained four live shotgun shells. Officers found Frye hiding in the attic and arrested him. Evidence presented during the trial showed that after officers took Frye to booking at the Monroe County Jail, he placed a telephone call to his girlfriend. During that telephone call, which was recorded, the defendant accused his girlfriend of telling law enforcement officers about the shotgun and then said he wanted it returned.
At the time, Frye was under the supervision of the New York State Department of Corrections and Community Supervision following a 2012 conviction and serving a prison sentence for Attempted Burglary in the Second Degree.
The trial verdict is the result of an investigation by New York State Department of Corrections and Community Supervision, the Rochester Police Department, under the direction of Chief Michael Ciminelli, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
Sentencing is scheduled for December 14, 2018, at 11:00 a.m. before Chief U.S. District Judge Frank P. Geraci, Jr. who presided over the trial of the case.
# # # #Retired Prison Guard and School Bus Driver Sentenced to 12 Years for Attempting to Travel to Canada to Engage in Sex with MinorsRead the Press Release
MARQUETTE, MICHIGAN - Michael Keith Feighner, 64, of Rudyard, Michigan, was sentenced to 144 months in federal prison for attempted travel to engage in illicit sexual conduct, U.S. Attorney Andrew Birge announced today. In addition to the prison term, U.S. District Judge Paul L. Maloney ordered Feighner to serve eight years of supervised release upon the completion of his sentence. He will also be required to register as a sexual offender.
On June 28, 2018, Feighner pled guilty to a charge of attempting to travel to a foreign country for the purpose of having sexual relations with a minor. This investigation began when an undercover Homeland Security Investigations (HSI) agent, operating from a list of customers who were frequenting child pornography websites and trading child pornography, contacted Feighner. Believing that he was communicating with the father of three underage children, Feighner arranged for a meeting in Sault Ste. Marie, Canada for the purpose of engaging in sexual acts with the children. On the agreed date, Feighner traveled from Rudyard and was intercepted and arrested at the International Bridge in Sault Ste. Marie, Michigan.
Feighner is a retired state corrections officer who was employed at the MDOC prison in Kincheloe, Michigan. He later worked as a school bus driver for the Rudyard Area Schools from 2013 through 2017.
The investigation was conducted by special agents of HSI. The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.
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Recent Prosecutions of Firearm Offenses in Sacramento AreaRead the Press Release
SACRAMENTO, Calif. — As part of the U.S. Attorney’s Office for the Eastern District of California’s strategy to reduce violent crime by focusing on firearms prosecutions, U.S. Attorney McGregor W. Scott announced the following cases involving illegal firearms offenses.
Kenneth Bryant, 27, of Sacramento, pleaded guilty today to dealing firearms without a license and illegally possessing a machine gun. According to court documents, Bryant met with an undercover agent and two confidential sources on 17 occasions between September 12, 2017, and December 8, 2017, and sold them a variety of firearms, including a fully automatic machine gun, several AR-15-type rifles and pistol, and handguns. In all, Bryant sold investigators 46 firearms, many of which lacked a serial number or other identifying markings. He is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on January 3, 2019.
Christopher Alexander Kemp, 29, of Sacramento, was sentenced today by U.S. District Judge Morrison C. England Jr., to seven years in prison for possessing a firearm as a felon. In April 2018, Kemp pleaded guilty to two counts of possessing a firearm as a felon.
These two cases are the product of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, with special assistance from the Sacramento Police Department and the Sacramento County District Attorney’s Office’s Gangs, Hate Crimes, and Narcotics unit.
John Allan Trotter, 36, of Sacramento, pleaded guilty today to possession of a firearm in furtherance of a drug trafficking offense. According to court documents, Trotter was arrested after leading Sacramento County Sheriff’s detectives on a high speed chase. Trotter crashed his car and ran from law enforcement officers before being apprehended. Trotter had a loaded gun, methamphetamine, and a scale in his car at the time of the crash. Trotter is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on January 10, 2019. This case is the product of an investigation by the Sacramento County Sheriff’s Department, the Sacramento County District Attorney’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Quinn Hochhalter is prosecuting the case.
Christopher Dyer, 34, of Rancho Cordova, pleaded guilty today to being a felon in possession of a gun. According to court documents, on May 3, 2018, sheriff’s deputies pulled alongside a pickup truck in which Christopher Dyer was the passenger. As soon as Dyer saw the deputies, he took a handgun from his lap and placed it in the back seat. The deputies recovered a Glock 23 handgun with seven live rounds in the magazine during a subsequent search. A records check revealed that the gun was stolen. Dyer is a previously convicted felon and is prohibited from possessing a firearm. Dyer is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on December 13, 2018. This case is the product of an investigation by Bureau of Alcohol, Tobacco, Firearms and Explosives, the Sacramento County District Attorney’s Office, the Sacramento County Sheriff’s Office, and the Rancho Cordova Police Department. Assistant U.S. Attorney David Spencer is prosecuting the case.
A federal grand jury returned a one-count indictment today against Dustin Joseph Albini, 35, of West Sacramento, charging him with being a felon in possession of a firearm. In May of this year, Albini was charged in a separate indictment (2:18-cr-101 JAM) with assaulting a Bureau of Land Management law enforcement officer who was in the course of performing his official duties on July 8, 2015, in Modoc County. That case is pending. The current indictment charges Albini with possessing two firearms, a loaded .45-caliber Colt MK IV handgun and a loaded .40-caliber Glock 27 handgun. This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento County Sheriff’s Office. Assistant U.S. Attorneys Philip Ferrari and Matthew Thuesen are prosecuting the case.
The charges against Albini are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The maximum statutory penalty for being a felon in possession of a firearm or for illegal possession of a machine gun is 10 years in prison and a $250,000 fine. The maximum statutory penalty for dealing firearms without a license is five years in prison and a $250,000 fine. The statutory penalty for possession of a firearm in furtherance of a drug trafficking offense is a mandatory minimum of five years in prison and a maximum of up to life in prison and a fine of up to $250,000.
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
Real Estate Broker Sentenced to Prison for Role in Defrauding Banks in $3.5 Million ‘Shotgun’ Loan SchemeRead the Press Release
NEWARK, N.J. – A New York real estate broker and a Bergen County, New Jersey, homeowner were sentenced today for their respective roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” U.S. Attorney Craig Carpenito announced.
Michael Arroyo, 60, of Bronx, New York, was sentenced to 21 months in prison. He previously pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit bank fraud.
Rafael Popoteur, 67, of Ridgefield Park, New Jersey, was sentenced to three years of supervised release, including one year of house arrest. He previously pleaded guilty before Judge Vazquez to an information charging him with conspiracy to commit bank fraud.
According to documents filed in the case and statements made in court:
From 2012 through January 2014, Arroyo and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Arroyo and others transferred ownership of the property to an individual living at the property and his family friend.
Arroyo and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans that Arroyo and others applied for.
The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Arroyo and others. Eventually, the family friend defaulted on the two HELOC loans.
Popoteur was a client of Arroyo and another broker. From 2012 through January 2014, Popoteur and the two real estate brokers, and others, conspired to fraudulently obtain multiple HELOCs from banks on a residential property in New Jersey. To get the banks to extend lines of credit they would not have otherwise approved, Popoteur and the real estate brokers executed a quitclaim deed to transfer ownership of a Ridgefield Park, New Jersey property to Popoteur, who also lived at the property.
Popoteur and the real estate brokers then applied for three HELOCs from multiple banks using the Ridgefield Park, New Jersey property as collateral. As the conspirators had done previously, they hid from the lenders the fact that the properties offered as collateral were either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Popoteur’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the Ridgefield Park, New Jersey property that was unencumbered by a mortgage was far less than the amount of the HELOC loans Popoteur and the others applied for.
The victim banks eventually issued loans to Popoteur in excess of $495,000. After the victim banks funded the HELOCs and deposited money into Popoteur’s bank accounts, Popoteur disbursed portions of it to the real estate brokers and others. In 2014, Popoteur defaulted on all three HELOC loans.
The overall scheme resulted in $3.5 million in losses to the victim banks.
In addition to the prison term, Judge Vazquez sentenced Arroyo five years of supervised release.
U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.
Previously Deported Illegal Alien Who Went on a Philadelphia Crime Spree Sentenced Today for Illegal Re-entry after DeportationRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Franklin Renan Euceda, 29, a Honduran citizen, was sentenced today to 21 months’ imprisonment after pleading guilty to illegal re-entry after deportation.
Euceda was originally deported from the United States in 2009. Euceda re-entered the country illegally very soon afterward, according to an aunt who testified at his sentencing hearing.
Beginning in May 2016, Euceda went on a crime spree that culminated in charges of attempted murder and conspiracy to commit murder. First, on May 10, 2016, Philadelphia police arrested Euceda on charges of selling and delivering cocaine; he was released on bail. Later that same month, on May 27, 2016, Philadelphia police arrested him again, this time for possessing crack cocaine with intent to deliver. Again, Euceda was released on bail. Then, on October 29, 2016, he was arrested a third time, this time on charges of attempted murder and conspiracy to commit murder. According to the police report, Euceda and another man got into a heated argument with a security guard at a night club. After the argument, Euceda and his co-conspirator got into a car, and as Euceda drove toward the club, his co-conspirator rolled down the window and opened fire at the security guard.
Euceda eventually pleaded guilty in both drug cases and to the attempted murder and conspiracy to commit murder charges. Additionally, he was charged by federal indictment in May 2017 with one count of illegal reentry after deportation. He is currently serving a state sentence of 11½ - 23 months’ imprisonment.
“The chronology of events that took place in this case tells an all too familiar story,” explained U.S. Attorney McSwain. “Euceda, a previously deported illegal alien, returned to the United States illegally and engaged in a slew of serious crimes, enabled by an arrest-and-release cycle that occurred at the local level. His pattern of lawlessness speaks for itself: he flouted the immigration laws; he sold cocaine; he possessed crack cocaine with an intent to sell it; and he conspired to commit murder and attempted to commit murder. These crimes never should have occurred because Euceda had no right to be in the country in the first place. The sentence today ensures that Euceda is punished to the fullest extent of the laws he chose to ignore.”
U.S. Attorney McSwain continued, “The sentence also confirms that this Office will continue to hold every person accountable who violates federal law – no matter who you are or where you come from. That is the essence of the rule of law. Any other approach simply encourages a culture of lawlessness that jeopardizes the safety of our community and makes a mockery of the law.”
“ICE is focused on smart, effective immigration enforcement that prioritizes the removal of criminal aliens like Mr. Euceda,” said Simona L. Flores, field office director for the Philadelphia Field Office. “ERO Philadelphia will continue safeguarding the security of our nation by diligently pursuing criminal prosecution and the removal of criminal aliens.”
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ICE”), and is being prosecuted by Assistant United States Attorney Mark Dubnoff.
Panama Woman Sentenced to 168 Months for Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Deana Marie Oakes, age 35, of Panama, Oklahoma, was sentenced to 168 months imprisonment and 5 years supervised release for Possession With Intent To Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A) and Title 18, United States Code, Section 2. The charge arose from an investigation by the Panama City Police Department and the Drug Enforcement Administration.
The Indictment alleged that on or about August 8, 2017, within the Eastern District of Oklahoma, the defendant knowingly and intentionally possessed with intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
“Small towns and large cities all across the country experience the tragic consequences of methamphetamine addiction on people, families, and communities. Drug dealers profit from the tragedy while the rest of society pays the price,” United States Attorney Brian J. Kuester said. “This joint investigation has stopped a major drug “outlet” in rural communities in Eastern Oklahoma and has likely prevented the delivery of thousands of dosage units.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Dean Burris represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Oklahoma Man Charged with Large-Scale Drug TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Manuel Escarcega, age 30, of Oklahoma, was indicted on September 11, 2018, by a federal grand jury on drug trafficking and conspiracy charges.
According to United States Attorney David J. Freed, the indictment charges Escarcega with conspiracy to distribute in excess of five kilograms of cocaine between November 2016 and February 2017, and possession with intent to distribute in excess of five kilograms of cocaine between on February 8, 2017, in Monroe County, Pennsylvania.
The investigation was conducted by the Drug Enforcement Administration and the Pocono Mountain Regional Police Department. Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The charge carries a mandatory minimum sentence of ten years in prison. The maximum penalty under federal law is up to life in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Officer Illegally Arrested Citizen After the Citizen Attempted to File Complaints Against HimRead the Press Release
WASHINGTON – William Dukes, Jr., a former sergeant with the Providence, Kentucky, Police Department, was sentenced today to 42 months in federal prison abd three years' supervised release for willfully depriving a Kentucky citizen of his constitutional rights under color of law, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division and U.S. Attorney Russell Coleman for the Western District of Kentucky.
The jury found that Dukes willfully violated the Constitution by arresting the victim, while knowing that he did not have probable cause to believe that the victim had committed any crime. The evidence presented at trial established that after the victim called the authorities seeking to file a complaint about an earlier interaction with Dukes, he wrongfully arrested the victim.
The jury heard evidence presented in court that when the victim called the Providence Police Department to complain about Dukes, Dukes responded by threatening to arrest him if he called back again. Still determined to file a complaint, the victim then called the local sheriff’s office and the Kentucky State Police. When Dukes became aware of these additional calls, he drove to the victim’s home in the middle of the night, without a warrant, to arrest him.
Upon arriving at the victim’s home after 1 a.m., Dukes attempted to arrest the victim based solely on the phone calls he had made complaining about Dukes. When the victim insisted he had done nothing wrong and retreated into his home, Dukes entered the victim’s home without a warrant. Dukes then tased the victim, sprayed him in the face with pepper spray, struck him repeatedly with a police baton, and punched him in the face, breaking the victim’s nose. Next, Dukes handcuffed the victim and charged him with four crimes, including a charge of property damage because blood from the victim’s broken nose got onto Dukes’s police uniform.
The jury convicted Dukes of willfully violating the victim’s constitutional rights, and found that the offense involved the use of a dangerous weapon or resulted in bodily injury.
“Police officers have a duty to protect the rights of members of their communities and safeguard them from harm or injury,” said Acting Assistant Attorney General John Gore. “Dukes abused his authority as a law enforcement officer by illegally arresting his victim and also by inflicting unwarranted physical harm, and the Justice Department held him responsible.”
“Kentucky lawmen and women are among the finest in the nation,” said U.S. Attorney Russell Coleman “But when they cross a clear line, as did Mr. Dukes, they will be held accountable like any other citizen of our Commonwealth.”
This case was investigated by the Louisville Division of the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Seth Hancock of the Western District of Kentucky and Trial Attorney Zachary Dembo of the Criminal Section of the Civil Rights Division.
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North Dartmouth Woman and Weymouth Man Indicted on Drug Trafficking ChargesRead the Press Release
BOSTON – A North Dartmouth woman and a Weymouth man were indicted yesterday and charged in connection with drug trafficking activities involving shipments of multiple kilograms of cocaine sent through the mail.
Cristina Lopez, 43, of North Dartmouth, and John Tavares, 31, of Weymouth, were indicted on charges of conspiring to distribute and possess with the intent to distribute five kilograms or more of cocaine and of possessing with intent to distribute 500 grams or more of cocaine. Lopez and Tavares were arrested on Aug. 18, 2018, and have been detained since that time.
According to court records, more than 40 suspicious parcels were identified that had been sent via the United States mail from Puerto Rico to various addresses in Massachusetts, including residences in Quincy, North Dartmouth, Weymouth, and New Bedford. The suspicious parcels were often sent on the same day from Puerto Rico to two or more different addresses in Massachusetts. Agents executed search warrants on two of the parcels and allegedly seized approximately two kilograms of cocaine hidden in sealed coffee cans. Through surveillance, agents allegedly determined that Lopez and Tavares were receiving the majority of the parcels. It is further alleged that Lopez and Tavares had regularly been flying from Massachusetts to Puerto Rico for trips lasting only 30 to 72 hours, and that the parcels suspected of containing cocaine were then typically sent to Massachusetts within one to three days after their return.
At an earlier court hearing, an agent testified that multiple search warrants were executed on Aug. 18, 2018, including at three different residences in Weymouth, North Dartmouth, and Boston. During those searches, agents seized more than three kilograms of cocaine, more than $100,000, two firearms, and various drug paraphernalia.
The charge of conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine provides for a minimum sentence of 10 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of up to $10 million. The charges of possession with intent to distribute 500 grams or more of cocaine provides for a minimum sentence of five years and up to 40 years in prison, a minimum of four years and up to a lifetime of supervised release, and a fine of up to $5 million. 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; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; Raymond D. Moss, Acting Inspector in Charge of the U.S. Postal Inspection Service in Boston; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Norfolk County District Attorney Michael W. Morrissey; and Bristol County District Attorney Thomas M. Quinn III made the announcement today. Investigative assistance was provided by the Quincy, Weymouth, Braintree, North Dartmouth and Boston Police Departments. Assistant U.S. Attorneys James E. Arnold and Nadine Pellegrini of Lelling’s Narcotics and Money Laundering Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
North Carolina Tax Return Preparer Sentenced to Prison for Preparing Fraudulent Tax ReturnsRead the Press Release
A Winston-Salem, North Carolina resident, who is also licensed as an attorney in Georgia, was sentenced today to 13 months in prison for aiding and assisting in the preparation of fraudulent tax return, announced Principal Deputy Assistant Attorney Richard Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
According to documents and information provided to the court, between January and May 2015, Shannon DeWayne Patterson co-owned and operated tax preparation businesses named “Fast Tax” in the cities of Winston-Salem, Salisbury and Kannapolis, North Carolina. Patterson instructed his employees to fabricate information on the tax returns they prepared, in an effort to increase the refunds paid to their clients. Because of his actions, more than $60,000 in fraudulent tax refunds were sought from the Internal Revenue Service (IRS). Patterson also filed false personal tax returns for 2014 and 2015, on which he underreported his income.
In addition to the term of imprisonment, Patterson was sentenced to one year of supervised release, and was also ordered to pay restitution in the amount of $60,800 to the IRS.
Two of Patterson’s Winston-Salem employees, Kristyn Dion Daney and Rakeem Scales, pleaded guilty in April to preparing a false tax return for an IRS undercover agent and are awaiting sentencing. Patterson’s co-owner in Fast Tax, Claudia Shivers, has also pleaded guilty to conspiring with Patterson and is awaiting sentencing.
Principal Deputy Assistant Attorney Zuckerman and U.S. Attorney Martin thanked special agents of IRS Criminal Investigation, who conducted the investigation, and former Tax Division Trial Attorney Robert J. Boudreau and Criminal Division Chief Clifton T. Barrett of the Middle District of North Carolina, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
North Carolina Tax Return Preparer Sentenced to Prison for Preparing Fraudulent Tax ReturnsRead the Press Release
WASHINGTON - A Winston-Salem, North Carolina resident, who is also licensed as an attorney in Georgia, was sentenced today to 13 months in prison for aiding and assisting in the preparation of fraudulent tax return, announced Principal Deputy Assistant Attorney Richard Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
According to documents and information provided to the court, between January and May 2015, Shannon DeWayne Patterson co-owned and operated tax preparation businesses named “Fast Tax” in the cities of Winston-Salem, Salisbury and Kannapolis, North Carolina. Patterson instructed his employees to fabricate information on the tax returns they prepared, in an effort to increase the refunds paid to their clients. Because of his actions, more than $60,000 in fraudulent tax refunds were sought from the Internal Revenue Service (IRS). Patterson also filed false personal tax returns for 2014 and 2015, on which he underreported his income.
In addition to the term of imprisonment, Patterson was sentenced to one year of supervised release, and was also ordered to pay restitution in the amount of $60,800 to the IRS.
Two of Patterson’s Winston-Salem employees, Kristyn Dion Daney and Rakeem Scales, pleaded guilty in April to preparing a false tax return for an IRS undercover agent and are awaiting sentencing. Patterson’s co-owner in Fast Tax, Claudia Shivers, has also pleaded guilty to conspiring with Patterson and is awaiting sentencing.
Principal Deputy Assistant Attorney Zuckerman and U.S. Attorney Martin thanked special agents of IRS Criminal Investigation, who conducted the investigation, and former Tax Division Trial Attorney Robert J. Boudreau and Criminal Division Chief Clifton T. Barrett of the Middle District of North Carolina, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
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Nigerian National Sentenced to 32 Months in Prison for Phishing Scheme That Victimized School EmployeesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that DANIEL ADEKUNLE OJO, 34, a citizen of Nigeria last residing in Durham, N.C., was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 32 months of imprisonment, followed by three years of supervised release, for his participation in a scheme to obtain the personal identifying information of school employees in Connecticut and elsewhere, and to file false tax returns in the names of those identity theft victims.
According to court documents and statements made in court, in February 2017, an employee of the Glastonbury Public Schools received an email that appeared to be sent by another Glastonbury school system employee. The email contained a request to send W-2 tax information for all employees of the school system. The recipient of the email responded by sending copies of the W-2 information for approximately 1,600 Glastonbury Public Schools employees. After the W-2 information was emailed, approximately 122 suspicious Forms 1040 were filed electronically with the IRS in the names of victims of the Glastonbury phishing scheme. The 122 tax returns claimed tax refunds totaling $596,897. Approximately six of the returns were processed, and $36,926 in fraudulently-obtained funds were electronically deposited into various bank accounts.
OJO controlled or used an aol.com email account and a gmail.com email account involved in this phishing scheme. A search of OJO’s gmail account revealed emails implicating him in the scheme. One email contained six W-2 forms of employees of Glastonbury Public Schools, and the employees’ personal identifying information.
This ongoing investigation by special agents from the FBI’s cybercrime squad in New Haven and the IRS includes phishing incidents that victimized the Groton Public Schools, and the Bloomington Independent School District in Bloomington, Minnesota.
OJO has been detained since his arrest on August 3, 2017. OJO had entered the U.S. on a visitor’s visa in May 23, 2016, and failed to depart on his scheduled departure date of June 8, 2016.
On June 21, 2018, OJO pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
Judge Meyer ordered OJO to pay $36,926 in restitution to the IRS.
This matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division, with the assistance of the Durham (N.C.) Police Department. The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
Navajo Man from Mexican Springs, N.M., Pleads Guilty to Federal Voluntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Daniel Jimmy Morgan, 29, an enrolled member of the Navajo Nation who resides in Mexican Springs, N.M., pled guilty today in federal court in Albuquerque, N.M., to a voluntary manslaughter charge.
The FBI arrested Morgan on Aug. 3, 2016, on a criminal complaint charging him with killing a Navajo man on the Navajo Indian Reservation in McKinley County, N.M., on July 29, 2016. According to the criminal complaint, Morgan killed the victim by kicking the victim in the head and hitting him in the back and knees with a sledgehammer.
Morgan was indicted on Aug. 23, 2016, and was charged with second-degree murder. According to the indictment, Morgan committed the offense on July 29, 2016, in McKinley County.
During today’s proceedings, Morgan pled guilty to a felony information charging him with voluntary manslaughter. In entering the guilty plea, Morgan admitted that on July 29, 2016, he killed the victim by striking the victim in the head and chest with the intent to cause serious bodily injury.
The Navajo Nation Division of Public Safety arrested Morgan on tribal charges on July 30, 2016. Morgan was transferred into federal custody when he was arrested by the FBI on Aug. 3, 2016. Morgan has been in federal custody since that time and will remain detained until his sentencing hearing, which has yet to be scheduled. At sentencing, Morgan faces a maximum penalty of 15 years in federal prison.
The case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Sarah Mease.
Nashville Man Sentenced to 30 Years in Federal Prison for Hobbs Act RobberyRead the Press Release
NASHVILLE, Tenn. – September 13, 2018 – Dominique Cordell Wallace, aka Deuce Face, 24, of Nashville, Tennessee, was sentenced yesterday to 30 years in federal prison, for Hobbs Act robbery and firearms violations, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. There is no parole in the federal criminal justice system.
“I am grateful that the victim survived this horrific, violent crime and was able to be heard at the sentencing hearing,” said U.S. Attorney Cochran. “I commend our law enforcement partners for their investigative expertise and our prosecutors for structuring an outcome that will ensure Dominique Wallace has many, many years to ponder the consequences of his actions. We will continue to deal with violent criminals swiftly and with the certainty that they will be held accountable.”
According to court records, on June 3, 2015, Wallace, Demontay Thomas, Robert Brooks, and Michael Bright, all of Nashville, planned and agreed to rob the Express Market located on Antioch Pike in Nashville. Bright served as the driver, while Wallace, Thomas and Brooks entered the store as it was closing, armed with handguns. During the robbery, Wallace grabbed the store clerk by the neck with one hand while waiving a pistol in his other hand and forced the clerk toward the cash register. Thomas crawled under the counter to the register area, while Brooks went over the counter and fired his pistol. The bullet struck and killed Demontay Thomas. Wallace then shot the store clerk in the head and fled the scene with Brooks, leaving Thomas dead at the store and the clerk severely wounded.
The store clerk was later transported to a local hospital where he underwent life-saving surgeries. He testified at the sentencing hearing that he sustained permanent, severe injuries; will have to undergo additional surgeries and will eventually lose his eyesight.
Less than one month before this incident, Wallace had been placed on probation for 10 years, following a guilty plea in Davidson County, Tennessee, to attempted second-degree murder, as a result of an incident in which he and another person shot an individual multiple times while attempting to rob him at the Cumberland View public housing development in Nashville.
At sentencing, United States District Judge Aleta Trauger remarked that this was a “horrendous” crime which ruined the victim’s life, and that this was one of the worst violent crime cases she had seen.
Michael Bright previously pleaded guilty and was sentenced to 276 months in prison. Robert Brooks also pleaded guilty and will be sentenced on November 1, 2018.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Metropolitan Nashville Police Department. The case was prosecuted by Assistant United States Attorneys Philip H. Wehby and Sunny A.M. Koshy.
Montgomery County Man Convicted by Federal Jury of Producing Child PornographyRead the Press Release
Greenbelt, Maryland – A federal jury today convicted Kyle Stephen Thompson, age 33, of Burtonsville, Maryland, on 18 counts of production of child pornography. The jury deliberated less than 30 minutes before reaching its guilty verdict.
The conviction was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy.
According to the evidence presented at his three day trial, from May 9, 2015, to January 28, 2017, Thompson engaged in sexually explicit conduct with three minor females, in order to produce visual depictions documenting the abuse. Witnesses testified that on March 17, 2017, law enforcement executed a search warrant at Thompson’s residence and recovered a Secure Digital (SD) memory card hidden in the laundry room. During a preliminary on-scene forensic preview of the SD card, law enforcement saw a video depicting child pornography. According to trial testimony, subsequent forensic analysis of the SD card revealed 18 videos of Thompson sexually abusing three young girls, each of whom were between two and four years of age at the time of the abuse.
Thompson faces a mandatory minimum of 15 years in prison and up to 30 years in prison for each of the 18 counts of production of child pornography. U.S. District Judge Theodore D. Chuang has scheduled Thompson’s sentencing for January 28, 2019, at 2:30 p.m. in U.S. District Court in Greenbelt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Robert K. Hur commended the FBI, Montgomery County Police Department, and Montgomery County State’s Attorney’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley, Kelly O. Hayes, and Joseph Baldwin, who are prosecuting the federal case.
Mexican national indicted for having nearly half a kilo of deadly opioidsRead the Press Release
A Mexican national was indicted for having nearly half a kilogram of deadly opioids.
Jesus Usbaldo Ballardo Garcia, 22, was indicted on one count each of possession with the intent to distribute heroin, possession with the intent to distribute fentanyl, and possession of 4-ANPP knowing and having reasonable cause to believe it would be used to manufacture fentanyl.
Garcia on Aug. 1 possessed approximately 571 grams of heroin, 224 grams of fentanyl and 187 grams of 4-ANPP, an immediate precursor to fentanyl, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases, it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation. Assistant U.S. Attorneys Alissa M. Sterling and Tracey Ballard Tangeman are handling the case.
An indictment is only a charge and is not evidence of guilt. Defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Mexican National Sentenced with Illegal ReentryRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that MADRIGAL-SANCHEZ age 20, a citizen of Mexico, was sentenced after previously pleading guilty to a one-count Bill of Information for illegally re-entering the United States in violation of Title 8, United States Code, Section 1326(a).
According to the Bill of Information, MADRIGAL-SANCHEZ was found in the United States on or about March 8, 2018, after having been previously removed there from on or about December 8, 2015.
MADRIGAL-SANCHEZ was sentenced to time served, 1 year supervised release after imprisonment, and a $100.00 special assessment.
U.S. Attorney Strasser praised the work of the United States Department of Homeland Security, Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Irene González is in charge of the prosecution.
Mexican National Sentenced for Using Fraudulent Document and Lying to A Border OfficerRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Juan Luis Jimenez Cortez, a/k/a Fernando Castillo, 45, a native of Mexico living in Chicago, Illinois, who was convicted of use of an entry document obtained by fraud and making false statements to a Federal official, was sentenced to serve four months in prison and three years supervised release by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorneys Stephanie O. Lamarque and Elizabeth R. Moellering, who handled the case, stated that on August 13, 2017, a Customs and Border Protection Officer at the Lewiston Queenston Bridge encountered the defendant. Cortez presented an Illinois Drivers’ License and Social Security card listing the name Fernando Castillo and claimed to be a Puerto Rican born United States citizen. However, the defendant is a Mexican citizen with no legal status in the United States, and purchased the fraudulent Social Security card.
The sentencing is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy.
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Man Sentenced to Prison for Fort Lee AssaultRead the Press Release
RICHMOND, Va. – A Fort Lee man was sentenced today to one year in prison for physically assaulting a woman on Fort Lee in April.
According to court documents, Daniel L. Jefferson, Jr., 32, was convicted of assault by striking, beating, or wounding. On April 27, following an argument that escalated between Jefferson and the victim, Jefferson pushed the victim against the car, grabbed her by her jawbone under her chin, and threatened to kill her. This is Jefferson’s second conviction for assaulting the same dating partner. The first conviction came in November 2016, when Jefferson was sentenced to two months in prison following an assault where he struck her in the right eye with his fist, choked her with a shower curtain, and pushed her to the floor.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Lieutenant Colonel William Ward, Fort Lee Provost Marshal, made the announcement after sentencing by U.S. Magistrate Judge David J. Novak. Assistant U.S. Attorney Gabrielle Michalak prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:18-cr-64.
Man Convicted at Trial of ATM Skimming SchemeRead the Press Release
United States Attorney Matthew D. Krueger has announced that on September 11, 2018, a jury in the Eastern District of Wisconsin convicted Ionel Muresanu, 18, of multiple offenses involving the possession and use of counterfeit debit cards. Muresanu was convicted of Possession of 15 or More Counterfeit Access Devices, in violation of 18 U.S.C. Section 1029 (a)(3), and three counts of Aggravated Identity Theft, in violation 18 U.S.C. Section 1028A (1). He faces a possible sentence of up to ten years in prison and a fine of up to $250,000 for the possession count and an additional two years in prison for each of the identity theft counts.
According to the trial testimony, Muresanu, along with a juvenile companion, was involved in an ATM skimming scheme, wherein they placed “skimmers” and pinhole cameras at ATM machines to capture account and personal identification numbers of unknowing customers. The information was transferred to the magnetic stripes of generic gift cards, which the two then used to steal money from the customer accounts.
Muresanu was arrested on May 16, 2018, in Oshkosh, Wisconsin by detectives from the Oshkosh Police Department. They investigated based on a tip from Tennessee law enforcement. At the time of his arrest, Muresanu was in possession of 80 counterfeit cards. An additional 14 cards were recovered from the juvenile and six more cards were recovered at an Oshkosh store where the two were observed using the cards at an ATM.
In statements to the police that were presented at trial, Muresanu admitted that he had placed skimming devices and pinhole cameras on ATM machines in Nashville, Tennessee, Atlanta, Georgia, and Kansas City, Missouri. After the devices had captured account holder data, he removed them and gave them to another individual who loaded the customer information onto the magnetic stripes of the generic gift cards. Muresanu and others then used the cards to steal money from unknowing customer accounts in various states. Muresanu said that with one batch of cards he was able to steal as much as $30,000. He told authorities that after leaving Oshkosh, he planned to travel to Louisville, Kentucky.
United States Attorney Krueger commended the law enforcement agencies for excellent work in the investigation of these offenses. “ATM skimming is a serious offense. These identify theft crimes have serious consequences for both unknowing account holders and the financial institutions that maintain their accounts,” Krueger said.
Judge J.P. Stadtmueller, who presided over the case, has set sentencing for December 13, 2018 at 8:30 a.m. In addition to the Oshkosh Police Department, the case was investigated by the United States Secret Service and the Wauwatosa Police Department. The case was prosecuted by Assistant United States Attorneys Karine Moreno-Taxman and Carol L. Kraft.
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For additional information contact:
Public Information Officer Dean Puschnig, 414-297-1700
Leader of West Baltimore’s Violent Pedestal Gardens Gang Sentenced to 25 Years in Federal PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Deandre Smith, age 28, and Karron Wheeler, age 35, both of Baltimore, to 12 years and 25 years in prison, respectively, for conspiring to sell heroin and fentanyl. Smith was sentenced today and Wheeler was sentenced on September 12, 2018.
The sentences were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Interim Police Commissioner Gary Tuggle of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn Mosby.
“Our city is plagued by the deaths caused by drug-trafficking gangs: They kill their customers with heroin and fentanyl, and they kill each other (and innocent bystanders) with guns and bullets. These gangs are terrorizing the neighborhoods that they occupy,” said U.S. Attorney Robert K. Hur. “Police, federal agents, and prosecutors are working together to identify, disrupt, and hold accountable drug dealers who bring violence to Baltimore City and remove entire groups of them from our neighborhoods.”
According to Smith’s plea agreement, from at least July 2015 through April 28, 2016, Smith managed a large drug-trafficking organization that supplied heroin and fentanyl to distributors in Baltimore, including Wheeler. Smith also managed a drug trafficking operation that operated in and around Pedestal Gardens, an apartment complex located in the 300 block of McMechan Street in West Baltimore.
Smith maintained a “stash” house in Catonsville, Maryland, to store drugs and drug proceeds, and to process, and package drugs for distribution. Once packaged for distribution, Smith supplied large quantities of heroin and/or fentanyl to several drug shops in Baltimore, including shops operated by Wheeler. At Pedestal Gardens, Smith’s operation distributed “packs” of heroin and/or fentanyl. Each “pack” typically contained between 25 and 50 gel capsules of the drugs, totaling approximately 2.5 to 5 grams.
As detailed in Smith’s plea agreement, a co-conspirator killed two individuals on October 7, 2015 and August 10, 2016 respectively, to further the Pedestal Gardens drug organization’s drug trafficking activities. The organization believed that one of the individuals was distributing drugs in their territory, and that the other was robbing drug dealers in the area and disrupting the organization’s drug trafficking.
On April 28, 2016, law enforcement officers executed a search warrant at the stash house in Catonsville. At the time of the search warrant, officers located Smith and other conspirators inside the residence. During the search, officers discovered over a kilogram of fentanyl, 575 grams of heroin, and nine grams of cocaine, all of which was being packaged for distribution. Officers also discovered approximately two kilograms of Phenacetin, a substance commonly used to “cut” drugs, as well as drug paraphernalia and approximately $15,465 in cash. Smith also had approximately $2,000 cash in his pocket.
According to Wheeler’s plea agreement, between at least March 2015 and August 26, 2016, Wheeler managed a drug organization that operated in several locations in Baltimore, including Pennsylvania Avenue and Laurens Street in West Baltimore. During the course of the conspiracy, Wheeler employed or directed more than five individuals. Wheeler admitted that, at his direction, the organization kept a firearm in close proximity to the drug shop for protection and to facilitate the drug operation.
Smith and Wheeler admitted that during their participation in the conspiracy they and their co-conspirators distributed between one and three kilograms of heroin.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
United States Attorney Robert K. Hur commended the FBI, the Baltimore Police Department, and the Office of the State’s Attorney for Baltimore City for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Daniel C. Gardner and Christopher J. Romano, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Lawrence Woman Sentenced for Making False Statements on Naturalization ApplicationRead the Press Release
BOSTON – A Lawrence woman was sentenced today in federal court in Boston for making false statements on her naturalization application.
Francisca De La Cruz, 50, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to one year of probation, during which she must complete 200 hours of community service. In May 2018, De La Cruz pleaded guilty to one count of making false statements in an immigration document.
On Nov. 25, 2013, De La Cruz submitted an Application for Naturalization in which she omitted the fact that she had been arrested and criminally charged in 2006, and that when she was arrested, she identified herself to police as “Mercedes Abrue,” which was a false name.
United States Attorney Andrew E. Lelling and Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Christine Wichers of Lelling’s Major Crimes Unit prosecuted the case.
Laconia Man Sentenced to over Five Years in Prison for Firearm CrimeRead the Press Release
CONCORD – United States Attorney Scott W. Murray announced today that Tyler Twombly, 33, of Laconia, was sentenced to 63 months in federal prison for being a felon in possession of a firearm.
According to court documents and statements in court, on May 30, 2017, a Manchester police officer arrested Twombly on an outstanding state arrest warrant. During the arrest, the officer observed a firearm sticking out of Twombly’s pants. Twombly is prohibited from possessing a firearm because he is a convicted felon.
Twombly previously pleaded guilty on April 26, 2018.
“Project Safe Neighborhoods is an important effort to improve the safety of our community,” said U.S. Attorney Murray. “Through this program, we work closely with our law enforcement partners to get guns out of the hands of criminals so we can reduce violent crime and protect the citizens of the Granite State.”
The matter was investigated by the Manchester Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Debra M. Walsh prosecuted the case.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Keene Man Pleads Guilty to Sexually Exploiting a ChildRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Benjamin Gagnon, 35, of Keene, New Hampshire, pled guilty today in U.S. District Court in Concord, New Hampshire to sexually exploiting a minor.
According to court records, in January 2017, Gagnon, who was in New Hampshire, persuaded a minor female in Texas to create still images and videos depicting the minor engaging in sexually explicit conduct. The minor transmitted the images and videos to Gagnon over the internet. Gagnon later uploaded the images to an online account, where they were found by investigators in August 2017.
Gagnon faces between 15 and 30 years in prison, a $250,000 fine and between five years and life on supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Derry, Hinsdale and Keene, New Hampshire Police Departments; the North Carolina Bureau of Investigation; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Justice Department Files Statement of Interest in New Asbestos Trust ProposalRead the Press Release
The Department of Justice today filed a Statement of Interest in In re Kaiser Gypsum Co. in the United States Bankruptcy Court for the Western District of North Carolina. In the case, Kaiser Gypsum Company and Hanson Permanente Cement Inc. propose the establishment of a new asbestos trust under 11 U.S.C. § 524(g), a section of the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability.
“In recent years, alarming evidence has emerged of fraud and mismanagement inside asbestos trusts,” said Principal Deputy Associate Attorney General Jesse Panuccio. “Asbestos victims should feel certain that they will receive compensation when they are promised it, but fraudulent claims and mismanagement call that promise into question. In addition, the United States and all who depend on Medicare are harmed when Medicare is not reimbursed for treatment costs that have been paid by trust funds. With today’s Statement of Interest, the Department sends a clear message that we will not tolerate fraudulent conduct that cheats asbestos victims and the United States. This is just one action the Department will take to increase the transparency and accountability of asbestos trusts, and we are grateful for the many partners we have in that mission, including the many state attorneys general who have brought attention to this issue. We encourage anyone with information about fraud or mismanagement of asbestos trusts to report it to the Department of Justice.”
Congress enacted 11 U.S.C. § 524(g) to create a comprehensive mechanism for addressing injuries caused by asbestos. Under section 524(g) plans, asbestos-related claims may be channeled to a special trust created under the bankruptcy plan of reorganization, which then assumes responsibility for both the defense and payment of those claims. The trusts are managed by trustees, who often must secure support for major decisions from a “trust advisory committee” (TAC), whose members are often the same attorneys who represented asbestos claimants during the bankruptcy. Since 1994, more than 60 such trusts have been established by chapter 11 debtors with asbestos-related liabilities. According to the Government Accountability Office, asbestos bankruptcy trusts paid $17.5 billion from 1988 through 2011, and more recent studies estimate higher amounts.
In recent years, both courts and researchers have expressed growing concern that the trusts, enabled by a lack of oversight or accountability, may be paying fraudulent claims and mismanaging funds. In 2014, the same bankruptcy court in which the United States today filed its statement of interest found a substantial pattern of fraud in another case, In re Garlock Sealing Technologies, LLC, 504 B.R. 71 (Bankr. W.D.N.C. 2014). The court found that, in a sample of 15 civil asbestos cases, in each and every case key evidence about asbestos exposure had been improperly misrepresented or withheld. In three instances, plaintiffs made claims against defendants to whose products they had previously represented they had never been exposed. Similarly, several studies have demonstrated problems caused by the lack of oversight. One study found that, in the study period, people without malignant asbestos injury accounted for 86 percent of all claims made to the trusts and 37 percent of all trust payments. Another found that many of the claim forms submitted by the same claimants and law firms to different trusts contradicted each other. The secrecy with which many trust claims are submitted, allowed, and paid has made it nearly impossible to detect when plaintiffs are seeking a recovery based on misrepresentations.
The United States’ Statement of Interest argues that the plans currently on file in this case do not have sufficient safeguards in place to prevent fraud and abuse. The Statement also indicates that the United States will object to any plan that lacks critical provisions to ensure transparency and accountability and to prevent fraudulent claims and mismanagement of the trust funds, including provisions: that require compliance with the Medicare Secondary Payer Statute; that notify claimants of their potential obligation to reimburse Medicare; that prevent excessive administrative costs and attorney contingency fees; that avoid conflicts of interest among members of the TAC; and that prevent payments to those who cannot demonstrate exposure to the defendants’ products or who have made inconsistent claims in other asbestos proceedings. The United States is filing this Statement of Interest now to allow the parties sufficient time to address the concerns it raises.
Finally, in addition to filing the Statement of Interest, the Department also responded today to letters from 19 state attorneys general regarding concerns over asbestos trusts.
The Department will continue to look for opportunities to increase the transparency of asbestos trusts and protect the interests of legitimate claimants and the United States. The Department will also investigate conduct related to asbestos trusts that is illegal under federal law. If anyone has information on asbestos trust fraud or mismanagement, the Department welcomes the reporting of that information so that it may pursue all appropriate means under federal law to ensure that asbestos trusts operate lawfully and responsibly.
This matter has been handled by the Department’s Civil Division with assistance from the U.S. Trustee Program and the U.S. Attorney’s Office for the Western District of North Carolina.
Indiana Man Indicted for Conspiracy to Receive and Distribute Child PornographyRead the Press Release
A federal grand jury in Alexandria, Virginia returned an indictment today charging an Evansville, Indiana man with one count of conspiracy to receive and distribute child pornography, one count of distribution of child pornography, and one count of receipt of child pornography.
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, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office and Chief Michael L. Brown of the Alexandria Police Department, made the announcement.
Bradley Robert Segert, 30, is charged with one count of conspiracy to receive and distribute child pornography, one count of distribution of child pornography, and one count of receipt of child pornography. According to the indictment, between January 2015 and August 2015, Segert allegedly administered a private chat group on Kik Messenger, a mobile messaging application, dedicated to sharing and trading images and videos of child pornography. During this period, Segert and another administrator living within the Eastern District of Virginia allegedly required Kik users interested in becoming members of the group to send them images and videos of child pornography in order to gain admission. Additionally, the indictment alleges that Segert knowingly distributed and received child pornography in interstate commerce, including to and from the Eastern District of Virginia.
FBI Washington Field Office’s Child Exploitation and Human Trafficking Task Force, specifically the Alexandria Police Department, is investigating the case. The Task Force is comprised of agents of the FBI, U.S. Marshals, and detectives from the Prince William County Police, Fairfax County Police, Loudoun County Sheriff’s Office, Metropolitan Police, Alexandria City Police, Arlington County Police, Leesburg Police, Virginia State Police and the Offices of Inspector General of several federal agencies. Trial Attorneys James E. Burke IV, Gwendelynn Bills and William Clayman of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Honduran National Sentenced for Violations of the Federal Gun Control ActRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that ELMER JAVIER ACOSTA-MEJIA, age 27, a citizen of Honduras, was sentenced today after previously pleading guilty to a two-count indictment for violations of the Federal Gun Control Act.
United States District Court Judge Eldon E. Fallon sentenced ELMER JAVIER ACOSTA-MEJIA to ten months imprisonment, followed by 1 year supervised release, and a $100 special assessment fee. The defendant will be surrendered to the custody of Immigration and Customs Enforcement for removal proceedings.
According to court documents, ELMER JAVIER ACOSTA-MEJIA, an alien illegally present in the United States, sold two revolvers to a confidential informant that was working for Special Agents of the Department of Homeland Security.
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 United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Harrisonburg Man Pleads Guilty to Distributing Fatal Mixture of Heroin and FentanylRead the Press Release
Harrisonburg, VIRGINIA – A Harrisonburg man, who sold a fatal mix of heroin and fentanyl, pleaded guilty yesterday in U.S. District Court in Harrisonburg to federal drug distribution charges, United States Attorney Thomas T. Cullen announced.
Richard William Mansfield, 38, waived his rights to be indicted and pleaded guilty yesterday to a one-count Information charging him with distribution of a mixture and substance containing heroin and fentanyl. A sentencing hearing has been scheduled for January 28, 2019. At sentencing, Mansfield faces a maximum statutory penalty of up to 30 years in prison and/or a fine of up to $2 million.
“As this heartbreaking case illustrates, the opioid epidemic is destroying the fabric of our society,” U.S. Attorney Cullen stated today. “While there is no simple solution to this multi-faceted problem, the United States Attorney’s Office will continue to work with our state and local law-enforcement partners to prosecute those who deal these deadly drugs and seek stiff federal penalties, particularly in cases where the unlawful distribution results in the loss of life. At the same time, we will continue to treat victims with compassion, while supporting treatment for those struggling with addiction.”
According to evidence presented to the court by Assistant United States Attorney Jeb Terrien, on December 12, 2017, Mansfield sold a mixture of heroin and fentanyl to Matthew Jason Murphy. The following day, December 13, 2017, Murphy was found deceased following a drug overdose. A medical examination and toxicology analysis determined that Murphy died from fentanyl and heroin intoxication.
The investigation of the case was conducted by the Drug Enforcement Administration, Virginia State Police, and Harrisonburg Police Department, with the assistance of Rockingham County Commonwealth’s Attorney Marsha L. Garst. Assistant United States Attorney Jeb Terrien is prosecuting the case for the United States.
Greenville, Georgia Resident Sentenced Under Project Safe NeighborhoodsRead the Press Release
ALBANY: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that Kevin Alford, age 41, of Greenville, Georgia, was sentenced to 144 months in Federal prison for Possession with Intent to Distribute Methamphetamine before the U.S. District Court Judge Leslie J. Abrams in Albany, Georgia on September 13, 2018.
According to court records, a cooperating witness whom Mr. Alford had previously given methamphetamine set up a meeting with Mr. Alford at the FairFax Motel in Leesburg, Georgia to take delivery of more methamphetamine. DEA agents contacted Lee County Sheriff’s Office personnel to advise them of Mr. Alford’s anticipated arrival. The Lee County Deputies set up surveillance to await Mr. Alford’s arrival at the motel. Mr. Alford subsequently arrived in a rental vehicle accompanied by Donna Parks. A search of the vehicle uncovered methamphetamine, marijuana, cell phones, and a loaded .38 caliber Smith and Wesson revolver.
Both Mr. Alford and Ms. Parks are convicted felons. After waiving his Miranda rights, Mr. Alford acknowledged his multiple prior felony convictions and provided limited details into his drug distribution operation. Ms. Parks admitted that she was in joint possession of the firearm along with Mr. Alford. Court-authorized analysis of the cell phones seized in the car revealed numerous text messages between Mr. Alford and unknown persons regarding the acquisition and distribution of quantities of drugs. The methamphetamine was submitted for laboratory analysis and found to weigh 330 grams and be 95% pure d-methamphetamine hydrochloride.
On May 31, 2018, Donna Parks, age 37, also of Greenville, Georgia, also entered a guilty plea to Possession of a Firearm by a Convicted Felon. She will be sentenced in December.
“Felons with a gun and methamphetamine pose a significant danger to our community,” said U.S. Attorney Charles E. Peeler. “I commend the Drug Enforcement Administration and the Lee County Sheriff’s Office for their investigation and efforts in this case.”
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.
This case was investigated by the Drug Enforcement Administration and the Lee County Sheriff’s Office. Assistant United States Attorney Leah E. McEwen prosecuted 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.
Four Defendants Sentenced Following Convictions at Trial for Stealing Confidential Government Information and Using It to Engage in Illegal TradingRead the Press Release
Robert Khuzami, the Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced today that DAVID BLASZCZAK, a political intelligence consultant, was sentenced to 12 months and one day in prison; CHRISTOPHER WORRALL, a government employee at the Centers for Medicare and Medicaid Services (“CMS”), was sentenced to 20 months in prison; and THEODORE HUBER and ROBERT OLAN, two partners and analysts at Deerfield Management Company, L.P., a healthcare-focused hedge fund in New York, New York (“Deerfield”), were each sentenced to 36 months in prison, respectively, in connection with their convictions following a four-week jury trial.
BLASZCZAK, WORRALL, HUBER, and OLAN each participated in a scheme to obtain confidential information from CMS, which was then used execute profitable trades at Deerfield. Specifically, as part of the scheme, BLASZCZAK obtained confidential and nonpublic information from CMS employees, including his friend, CHRISTOPHER WORRALL, who worked at CMS, and who breached his duties as a CMS employee by providing confidential information to BLASZCZAK. BLASZCZAK then provided this material nonpublic information in advance of market-moving CMS announcements to employees at Deefield, including HUBER, OLAN, and Jordan Fogel, who recommended trades on the basis of the information. Fogel, a former partner and analyst at Deerfield, previously pled guilty and is cooperating with the Government. As a result of these trades, Deerfield reaped more than $7 million in profits.
In a separate scheme, BLASZCZAK also obtained confidential and nonpublic CMS information about cuts in CMS’s reimbursement rates for home health providers, and provided that information to Christopher Plaford, a portfolio manager at Visium Asset Management, L.P., another healthcare-focused hedge fund in New York, New York (“Visium”). Plaford then used BLASZCZAK’s information to execute trades, resulting in approximately $330,000 in profits. Plaford has previously pled guilty to this conduct and is also cooperating with the Government.
Deputy U.S. Attorney Robert Khuzami said: “Blaszczak, Worrall, Huber, and Olan conspired to steal highly sensitive and confidential government information and profit from that theft. This scheme was carried out through Blaszczak’s purported ‘political intelligence’ firm, but nothing about this scheme was intelligent. When you steal confidential information from the Government and use it to make illicit millions in the stock market, you will get caught.”
According to the allegations in the charging documents, the evidence and testimony at trial, and statements made in court proceedings:
CMS
CMS, a component of the United States Department of Health and Human Services (“HHS”), administers Medicare and Medicaid, among other things. CMS is also responsible for setting Medicare reimbursement rates for healthcare providers. CMS spends more than $1 trillion annually and pays approximately one-third of the country’s health expenditures. Accordingly, CMS rulemaking decisions, including decisions that affect how much the federal government will pay to reimburse medical providers for services rendered, have a substantial, market-moving impact on publicly traded companies that depend on government healthcare spending.
WORRALL began working at CMS in or about 1999. Beginning in January 2012, WORRALL worked in the Director’s Office for the Center for Medicare (“CM”), which gave WORRALL broad access to CMS’s confidential deliberations about upcoming reimbursement decisions. WORRALL also served as a project manager for a confidential CMS database that contained CMS’s most up-to-date claims data that CMS used to inform its decision-making.
David Blaszczak
At all relevant times, BLASZCZAK served as a consultant at a number of Washington, D.C.-based firms that, in exchange for a fee, provided so-called “political intelligence,” which included analysis about how changes in Government reimbursement rates would impact publicly traded healthcare-related companies. Before becoming a political intelligence consultant, BLASZCZAK worked at CMS, eventually serving as a special assistant to the CMS Administrator. BLASZCZAK met WORRALL while the two worked at CMS.
As a former CMS employee, BLASZCZAK was well aware of CMS’s rules governing the dissemination of nonpublic information.
Deerfield Management Company, L.P.
At all relevant times, Deerfield managed multiple hedge funds specializing in healthcare-related investments. As of 2017, Deerfield had more than $7 billion in assets under management. HUBER, OLAN, and Fogel were partners and analysts at Deerfield, where their job was to analyze investment decisions and recommend potentially profitable trades for Deerfield. Deerfield’s compliance manual prohibited its employees from committing insider trading.
The Scheme to Convert and Use Confidential CMS Information
The Scheme
From at least in or about 2009 through in or about 2014, BLASZCZAK, WORRALL, HUBER, OLAN, Fogel, and others participated in a scheme to convert to their own use confidential and material nonpublic information from CMS concerning, among other things, CMS’s internal deliberations regarding coverage and reimbursement decisions.
During this time period, Deerfield retained BLASZCZAK as a consultant who provided political intelligence related to, among other things, the content, likelihood, and timing of CMS reimbursement decisions. As part of the scheme, HUBER, OLAN, and Fogel encouraged BLASZCZAK to obtain confidential and material nonpublic information from CMS insiders. As HUBER, OLAN, and Fogel knew, these CMS insiders included BLASZCZAK’s former colleagues with whom he had close personal relationships, who were prohibited from disclosing such information to CMS outsiders.
BLASZCZAK obtained material nonpublic information from his close friend and former CMS colleague WORRALL. BLASZCZAK and WORRALL were friends since their time working together at CMS. BLASZCZAK also frequently offered to help WORRALL find lucrative private sector employment opportunities, in exchange for WORRALL giving BLASZCZAK confidential government information.
BLASZCZAK conveyed the information obtained from WORRALL to HUBER, OLAN, and Fogel, who – knowing that BLASZCZAK had obtained the information improperly from a CMS insider – used the information to trade. In exchange for being provided with this inside information, HUBER, OLAN, and Fogel caused Deerfield to pay BLASZCZAK more than $800,000 in consulting fees.
The Verdict
The jury found BLASZCZAK guilty of 10 counts, HUBER and OLAN guilty of five counts each, and WORRALL guilty of two counts. Specifically, with respect to Count One (conspiracy to convert government property, to commit securities fraud, and to defraud the United States relating to Deerfield) and Count Two (conspiracy to commit wire fraud and securities fraud relating to Deerfield), the jury found BLASZCZAK, HUBER, and OLAN guilty. With respect to Count Three (conversion of government property) and Count Nine (wire fraud), the jury found all four defendants guilty. With respect to Count Ten (securities fraud), the jury found BLASZCZAK, HUBER, and OLAN guilty. With respect to Count Thirteen (conversion of government property), Count Fifteen (wire fraud), Count Sixteen (securities fraud), Count Seventeen (conspiracy to convert government property and to defraud the United States relating to Visium), and Count Eighteen (conversion of government property), the jury found BLASZCZAK guilty on each count.
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In addition to his prison sentence, BLASZCZAK, 42, of Isle of Palms, South Carolina, was sentenced to two years of supervised release, including one year of home confinement, and ordered to forfeit $727,500 and pay restitution to CMS in the amount of $1,644.26.
WORRALL, 40, of Linthicum Heights, Maryland, was sentenced to one year of supervised release, and ordered to pay restitution to CMS in the amount of $1,644.26.
HUBER, 56, of Westport, Connecticut, was sentenced to two years of supervised release, and ordered to forfeit $87,078, pay restitution to CMS in the amount of $1,644.26, and pay a fine of $1.25 million.
OLAN, 47, of Rumson, New Jersey, was sentenced to two years of supervised release, and ordered to forfeit $98,244, pay restitution to CMS in the amount of $1,644.26, and pay a fine of $1.25 million.
Mr. Khuzami praised the work of the Federal Bureau of Investigation and U.S. Department of Health and Human Services, Office of the Inspector General, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Ian McGinley and Joshua A. Naftalis are in charge of the prosecution.
Fort Wayne Man Charged with Bank RobberyRead the Press Release
FORT WAYNE – Larry Ratliff, 46 years old, of Fort Wayne, Indiana, was charged on September 10, 2018 by criminal complaint with one count of bank robbery, announced United States Attorney Thomas L. Kirsch II.
According to documents in the case, on August 18, 2018, a lone male entered a Credit Union in Fort Wayne, Indiana threatened the employees inside, then took approximately $10,000 in cash before fleeing in a white pickup truck. That pickup truck was found still running several hours later in the rear of a nearby apartment complex. The pickup truck was owned by an Indianapolis, Indiana construction company and had been stolen from Indianapolis a few days prior to the robbery. Fingerprints belonging to Ratliff were recovered from inside the pickup truck and an employee of the credit union identified Ratliff as the robber.
The United States Attorney's Office emphasized that a Complaint is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case was investigated by the FBI, the Organized Crime and Corruption Unit of Indiana State Police, the Fort Wayne Police Department, and the Allen County Sheriff’s Department. It is being prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
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Fort Lauderdale Resident Sentenced to 92 Years in Prison for Armed Robberies and CarjackingRead the Press Release
Today, a Fort Lauderdale resident was sentenced to over 92 years in prison by United States District Senior Judge James I. Cohn, after having been convicted at trial of three armed robberies, a carjacking, and brandishing a firearm during the commission of each violent act.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Rick Maglione, Chief, Fort Lauderdale Police Department (FLPD), and Keith Dunn, Chief, Davie Police Department, made the announcement.
De Andre Smith, 23, of Fort Lauderdale, Florida, was convicted by a trial jury on July 2, 2018, on all eight federal charges. Smith was sentenced to a total of 1,105 months in prison, to be followed by 5 years of supervised release.
According to the court record, on December 12, 2017, Smith brandished a firearm at an IT Tech in Fort Lauderdale, demanding software be placed on his computer. When the tech refused, Smith proceeded to beat the tech in the face with the firearm and then steal computer software. As a result of this beating, the tech eventually had to have one eye amputated.
On December 20, 2017, Smith carjacked a victim at gunpoint in Fort Lauderdale. Smith then immediately went to a Dunkin Donuts in Davie, jumped the counter and held the clerk at gunpoint, while demanding money. After obtaining money, Smith then left and went to a third location in South Florida, a Subway restaurant in Davie. There, at gunpoint, Smith again jumped the counter, demanded and stole money from the employees.
This case stems from Project Safe Neighborhoods (PSN), a program that brings 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.
Mr. Greenberg commended the investigative efforts of the ATF, FLPD and Davie Police Department in this matter. The case was prosecuted by Assistant U.S. Attorneys Jodi L. Anton and Francis Viamontes.
Related court documents and information can 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 Virtual Currency CEO Involved in $9 Million Fraud Scheme Sentenced to PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that HOMERO JOSHUA GARZA, 33, of Texas, formerly of Somers, Connecticut, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 21 months of imprisonment, followed by three years of supervised release, the first six months of which GARZA must spend in home confinement, for his role in his companies’ purported generation and sale of virtual currency.
According to court documents and statements made in court, “virtual currency” is a digital representation of a value that can be traded and functions as a medium of exchange. Virtual currency generally is not issued or guaranteed by any jurisdiction or government, and its value is decided by consensus within the community of users of the virtual currency. A virtual currency generally self-generates units of currency through a process called “mining.” A virtual currency “miner” is computer hardware that runs special computer software to solve complex algorithms that validate groups of transactions in that virtual currency. Once a complex algorithm is solved, a unit of currency, such as a bitcoin, is awarded to the individual operating the miner. This process is known as “mining.”
Between approximately May 2014 and January 2015, GARZA, through GAW, GAW Miners, ZenMiner, and ZenCloud, companies he founded and operated, defrauded victims out of money in connection with the procurement of virtual currency on their behalf. The companies sold miners, access to miners, and the right to purchase a virtual currency called PayCoin, as well as “hashlets.” A hashlet entitled an investor to a share of the profits that GAW Miners or ZenMiner would purportedly earn by mining virtual currencies using the computers that were maintained in their data centers. In other words, hashlet customers, or investors, were buying the rights to profit from a slice of the computing power owned by GAW Miners and ZenMiner.
To generate business and attract customers and investors, GARZA made multiple false statements related to the scheme, including stating that GAW Miners’ parent company purchased a controlling stake in ZenMiner for $8 million and that ZenMiner became a division of GAW Miners. In fact, there was no such transaction. GARZA also stated that the hashlets GARZA’s companies sold engaged in the mining of virtual currency. In fact, GARZA’s companies sold more hashlets than was supported by the computing power maintained in their data centers. Stated differently, GARZA’s companies sold the customers the right to more virtual currency than the companies’ computing power could generate. GARZA also stated that the market value of a single PayCoin would not fall below $20 per unit because GARZA’s companies had a reserve of $100 million that the companies would use to purchase Paycoins to drive up its price. In fact, no such reserve existed.
During the scheme, GARZA, through his companies, used money his companies had made from new hashlet investors to pay older hashlet investors. The payments were money that the companies owed the older investors based on the purported mining GAW Miners and ZenMiner had done on the investors’ behalf.
Through this scheme, GARZA defrauded hundreds of individuals around the world of a total of $9,182,000. Judge Chatigny ordered GARZA to pay restitution in that amount.
On July 20, 2017, GARZA pleaded guilty to one count of wire fraud.
GARZA, who is released on bond, was ordered to report to prison on January 4, 2019.
This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Jonathan Francis.
Former Margate Mortgage Consultant Admits Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – A former Atlantic County resident now living in Florida admitted defrauding New Jersey state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and N.J. Attorney General Gurbir S. Grewal announced.
Robert Madonna, 36, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
Madonna was one of the owners of a company formed to market prescription compounded medications, referred to as Company 1. From May 2015 through February 2016, Madonna and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications.
The conspirators learned that certain compound medication prescriptions – including pain, scar, and antifungal creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. The conspirators also learned that the N.J. State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, would cover compound medication prescriptions.
Madonna and his conspirators entered into an agreement under which Company 1 would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Madonna and his conspirators. Madonna and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional that the medications were medically necessary. Madonna would obtain insurance and personal information from the public employees and give that information to conspirators. A doctor then would call the public employees and complete the prescription without personally examining the employees or having a prior doctor/patient relationship with them. Company 1 would receive a percentage of the amounts paid on these fraudulent prescriptions, which Madonna and others would divide.
According to the information, Madonna and his conspirators caused New Jersey to pay more than $2 million in fraudulent claims for compounded medications for public employees.
Madonna received $179,370 in gross proceeds for his role in the scheme. As part of his plea agreement, Madonna must forfeit these criminal proceeds and pay restitution of at least $2,092,791.
Madonna faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 5, 2019.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge John Tafur in Newark: and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys R. David Walk, Jr. and Jacqueline M. Carle of the U.S. Attorney’s Office in Camden.
Former Mafia Boss and Associate Sentenced to Life in Prison for 1993 MurderRead the Press Release
BOSTON – Francis “Cadillac” Salemme, a former boss of the New England Family of La Cosa Nostra (NELCN), and former NELCN associate Paul Weadick were sentenced today in federal court in Boston in connection with the 1993 murder of Steven A. DiSarro.
Francis P. Salemme, 85, and Paul M. Weadick, 63, were sentenced by U.S. District Court Judge Allison D. Burroughs to life in prison. On June 22, 2018, Salemme and Weadick were convicted by a federal jury of one count of murder of a federal witness.
In the early 1990s, Salemme was the boss of the NELCN. At the time, DiSarro managed a South Boston night club, known as “The Channel,” in which Salemme and his son, Francis P. Salemme Jr. had a financial interest. As a federal investigation was narrowing in on the Salemmes, DiSarro’s connection to the mafia boss was discovered and he was approached by federal investigators to cooperate. Knowing this, Salemme had DiSarro murdered on May 10, 1993, in Salemme’s Sharon residence. Salemme, who had ordered the murder to prevent DiSarro from cooperating with law enforcement, watched as Salemme Jr. and Weadick fatally strangled DiSarro. Salemme then ordered DiSarro’s body transported to Providence, R.I., and buried. In March 2016, DiSarro’s remains were recovered by federal authorities behind a mill in Providence, R.I.
In 1995 Salemme was indicted on federal racketeering charges and convicted in 1999. He was subsequently convicted of obstruction of justice in 2008 for lying to federal authorities about the murder of DiSarro. Salemme Jr. died in 1995.
United States Attorney Andrew E. Lelling for the District of Massachusetts; United States Attorney Stephen G. Dambruch for the District of Rhode Island; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Ann C. Assumpico, Superintendent of the Rhode Island State Police, made the announcement today.
Assistance was also provided by the Norfolk County District Attorney’s Office and the Providence, R.I., Police Department.
Assistant U.S. Attorneys Fred M. Wyshak Jr., Chief of Lelling’s Public Corruption Unit, and William J. Ferland, Chief of the Criminal Division in U.S. Attorney Dambruch’s Office, prosecuted the case.
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Former Mafia Boss and Associate Sentenced to Life in Prison for 1993 MurderRead the Press Release
BOSTON – Francis “Cadillac” Salemme, a former boss of the New England Family of La Cosa Nostra (NELCN), and former NELCN associate Paul Weadick were sentenced today in federal court in Boston in connection with the 1993 murder of Steven A. DiSarro.
Francis P. Salemme, 85, and Paul M. Weadick, 63, were sentenced by U.S. District Court Judge Allison D. Burroughs to life in prison. On June 22, 2018, Salemme and Weadick were convicted by a federal jury of one count of murder of a federal witness.
In the early 1990s, Salemme was the boss of the NELCN. At the time, DiSarro managed a South Boston night club, known as “The Channel,” in which Salemme and his son, Francis P. Salemme Jr. had a financial interest. As a federal investigation was narrowing in on the Salemmes, DiSarro’s connection to the mafia boss was discovered and he was approached by federal investigators to cooperate. Knowing this, Salemme had DiSarro murdered on May 10, 1993, in Salemme’s Sharon residence. Salemme, who had ordered the murder to prevent DiSarro from cooperating with law enforcement, watched as Salemme Jr. and Weadick fatally strangled DiSarro. Salemme then ordered DiSarro’s body transported to Providence, R.I., and buried. In March 2016, DiSarro’s remains were recovered by federal authorities behind a mill in Providence, R.I.
In 1995 Salemme was indicted on federal racketeering charges and convicted in 1999. He was subsequently convicted of obstruction of justice in 2008 for lying to federal authorities about the murder of DiSarro. Salemme Jr. died in 1995.
United States Attorney Andrew E. Lelling; United States Attorney Stephen G. Dambruch for the District of Rhode Island; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Ann C. Assumpico, Superintendent of the Rhode Island State Police, made the announcement today. Assistance was also provided by the Norfolk County District Attorney’s Office and the Providence, R.I., Police Department. Assistant U.S. Attorneys Fred M. Wyshak Jr., Chief of Lelling’s Public Corruption Unit, and William J. Ferland of Dambruch’s Office prosecuted the case.
Former Kentucky Police Officer Sentenced for Wrongful ArrestRead the Press Release
William Dukes, Jr., a former sergeant with the Providence, Kentucky, Police Department, was sentenced today to 42 months in federal prison and three years’ supervised release for willfully depriving a Kentucky citizen of his constitutional rights under color of law, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division and U.S. Attorney Russell Coleman for the Western District of Kentucky.
The jury found that Dukes willfully violated the Constitution by arresting the victim, while knowing that he did not have probable cause to believe that the victim had committed any crime. The evidence presented at trial established that after the victim called the authorities seeking to file a complaint about an earlier interaction with Dukes, he wrongfully arrested the victim.
The jury heard evidence presented in court that when the victim called the Providence Police Department to complain about Dukes, Dukes responded by threatening to arrest him if he called back again. Still determined to file a complaint, the victim then called the local sheriff’s office and the Kentucky State Police. When Dukes became aware of these additional calls, he drove to the victim’s home in the middle of the night, without a warrant, to arrest him.
Upon arriving at the victim’s home after 1 a.m., Dukes attempted to arrest the victim based solely on the phone calls he had made complaining about Dukes. When the victim insisted he had done nothing wrong and retreated into his home, Dukes entered the victim’s home without a warrant. Dukes then tased the victim, sprayed him in the face with pepper spray, struck him repeatedly with a police baton, and punched him in the face, breaking the victim’s nose. Next, Dukes handcuffed the victim and charged him with four crimes, including a charge of property damage because blood from the victim’s broken nose got onto Dukes’s police uniform.
The jury convicted Dukes of willfully violating the victim’s constitutional rights, and found that the offense involved the use of a dangerous weapon or resulted in bodily injury.
“Police officers have a duty to protect the rights of members of their communities and safeguard them from harm or injury,” said Acting Assistant Attorney General John Gore. “Dukes abused his authority as a law enforcement officer by illegally arresting his victim and also by inflicting unwarranted physical harm, and the Justice Department held him responsible.”
“Kentucky lawmen and women are among the finest in the nation,” said U.S. Attorney Russell Coleman “But when they cross a clear line, as did Mr. Dukes, they will be held accountable like any other citizen of our Commonwealth.”
This case was investigated by the Louisville Division of the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Seth Hancock of the Western District of Kentucky and Trial Attorney Zachary Dembo of the Criminal Section of the Civil Rights Division.
Former Arkansas State Representative, President of College and Consultant Sentenced for Bribery SchemeRead the Press Release
A consultant along with his co-conspirators, the President of an Arkansas college and a former Arkansas State Representative, were sentenced in the past week for their roles in a bribery scheme in which state funds were directed to non-profit entities in exchange for kickbacks, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Duane “DAK” Kees for the Western District of Arkansas.
Randell G. Shelton Jr., 39, of Kemp, Texas, a consultant, was sentenced on Sept. 6 by U.S. District Judge Timothy L. Brooks to serve 72 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $660,698 and to forfeit $664,000. Shelton was convicted by a federal jury on May 3 of 12 counts, including conspiracy and honest services wire and mail fraud. Also convicted in the scheme was former Arkansas State Senator Jonathan E. Woods, 41, of Springdale, Arkansas, of 15 counts, including conspiracy, honest services wire and mail fraud, and money laundering.
Oren Paris III, 50, of Springdale, Arkansas, President of Ecclesia College, was sentenced yesterday to serve 36 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $621,500. Paris pleaded guilty before Judge Brooks to one count of honest services wire fraud on April 5.
Micah Neal, 43, of Springdale, Arkansas, a former Arkansas State Representative was sentenced today to three years probation including the first year to be served as home confinement and the second and third years to include 300 hours of community service. Neal was also ordered to pay restitution in the amount of $200,000 to the State of Arkansas and the Northwest Arkansas Economic Development District (NWAEDD). Neal previously pleaded guilty before Judge Brooks to one count of conspiracy to commit honest services fraud.
According to admissions made in his plea agreement, Neal served as an Arkansas State Representative from 2013 to 2017. Neal admitted, and evidence presented at trial for Woods and Shelton revealed, that between sometime in 2013 and January 2015, Neal conspired with Woods to use their official positions to appropriate and direct government money, known as General Improvement Funds (GIF), to two non-profit entities in exchange for bribes. Specifically, Neal and Woods authorized and directed the NWAEDD, which was responsible for disbursing the GIF, to award a total of approximately $600,000 in GIF money to the two non-profit entities. Pursuant to his plea agreement, Neal admitted that of the $600,000, he personally authorized and directed a total of $175,000 to the entities. In return for his official actions, Neal received approximately $38,000 in bribes from the two non-profit entities.
Neal was the fourth defendant involved in this bribery scheme to be sentenced within the past week. On Sept. 5, Woods was sentenced by Judge Brooks to serve 220 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $1,621,500 and to forfeit $1,097,005.
The FBI and IRS-Criminal Investigation investigated the case. Trial Attorney Sean F. Mulryne of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Kenneth Elser and Assistant U.S. Attorneys Kyra Jenner and Aaron Jennen of the Western District of Arkansas prosecuted the case.
Former Arkansas State Representative Sentenced to Three Years Probation for Wire FraudRead the Press Release
Fayetteville, Arkansas – Duane (DAK) Kees, United States Attorney for the Western District of Arkansas announced today that Micah Neal, age 43, of Springdale, Arkansas, was sentenced today to three years probation including the first year to be served as home confinement and the second and third years to include 300 hours of community service, he was also ordered to pay restitution in the amount of $200,000.00. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
“Public corruption cases are among the most serious crimes that are investigated and prosecuted in our District,” said U.S. Attorney Kees. “These cases represent the very worst in deception and fraud because they involve a betrayal of the public trust. Jon Woods and Micah Neal were elected to offices in the State of Arkansas and swore an oath to protect and uphold the Arkansas Constitution. They failed that oath by betraying those who voted for them and scheming to steal money that rightfully belonged to the tax-payers and voters in the State of Arkansas. The sentences last week and this week in the public corruption scheme involving G.I.F. funds and bribery are the result of years of hard work by the assigned Assistant United States Attorneys working in partnership with the FBI and the IRS Criminal Investigation. It is my sincere hope that these sentences will serve as a deterrence for any individuals who would attempt to corrupt the legislative process in our State in the future. My office will continue to aggressively pursue public corruption cases and work with our partners in bringing those individuals to justice.”
According to the evidence presented at trial, Jonathan Woods served as an Arkansas State Senator from 2013 to 2017. Between approximately 2013 and approximately 2015, Woods used his official position as a senator to appropriate and direct government money, known as General Improvement Funds (GIF), to two non-profit entities by, among other things, directly authorizing GIF disbursements and advising other Arkansas legislators – including former State Representative Neal, to contribute GIF to the non-profits. Specifically, Woods and Neal authorized and directed the Northwest Arkansas Economic Development District, which was responsible for disbursing the GIF, to award a total of approximately $600,000 in GIF money to the two non-profit entities. The evidence further showed that Woods and Neal received bribes from officials at both non-profits, including Paris, who was the president of a college. Woods initially facilitated $200,000 of GIF money to the college and later, together with Neal, directed another $200,000 to the college, all in exchange for kickbacks. To pay and conceal the kickbacks to Woods and Neal, Paris paid a portion of the GIF to Shelton’s consulting company. Shelton then kept a portion of the money and paid the other portion to Woods and Neal. Paris also bribed Woods by hiring Woods’s friend to an administrative position at the college.
For his part in the scheme, Neal pleaded guilty on Jan. 4, 2017, before U.S. District Judge Timothy L. Brooks of the Western District of Arkansas to one count of conspiracy to commit honest services fraud. Paris pleaded guilty on April 5, 2018, before Judge Brooks to one count of honest services wire fraud. Woods was sentenced September 5, 2018 to 220 months in federal prison, Shelton was sentenced September 6, 2018 to 72 months in federal prison and Paris was sentenced September 12, 2018 to 36 months in federal prison.
The FBI and IRS investigated the case. First Assistant U.S. Attorney Kenneth Elser, Assistant U.S. Attorneys Kyra Jenner and Aaron Jennen of the Western District of Arkansas and Trial Attorney Sean F. Mulryne of the Criminal Division’s Public Integrity Section of the U.S. Department of Justice prosecuted the case.
Flushing, NY Man Sentenced for Conspiracy Related to Interstate Prostitution BusinessRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Cheng Qi Li, 29, of Flushing, NY, who was convicted of conspiracy to use interstate facilities to promote prostitution and to transport individuals in interstate commerce with intent that such individuals would engage in prostitution, was sentenced to serve 21 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated that the defendant was part of a multi-state prostitution business that sent female victims to cities and states across the Eastern United States to engage in commercial sex acts. As part of that business, Li and others posted advertisements on Backpage.com to set up meetings between clients and prostitutes in Tonawanda, NY and other cities and states. Co-defendant LiangLiang Guo acted as a driver for the prostitution business, driving the females to hotels where they would engage in commercial sex acts. Guo also collected the proceeds of the illicit prostitution business. Li assisted in the running of the business by posting the advertisements, arranging for the travel of the females, and receiving the money that represented was the profits of commercial sex acts.
The head of the organization was co-defendant Feng Yang Chen, who recruited the female victims and brought them over from China to serve as prostitutes in the United States. Chen’s organization spanned numerous states across the Eastern coastline and mid-west. Chen organized the operation, posted the advertisements online on Backpage.com, and collected the proceeds of the illegal sex acts. The female victims felt trapped and feared for their safety. Feng Yang Chen and LiangLiang Guo were previously convicted and are awaiting sentencing.
Today’s sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Tonawanda Police Department, under the direction of Chief Jerome C. Uschold III; the New York Police Department, under the direction of Chief James P. O’Neill; the South Portland, Maine Police Department, under the direction of Chief Edward Googins; and the Fairview Township Police Department, under the direction of Chief Jason C. Loper.
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Five Arrested and Charged as “Straw Purchasers” of 30 FirearmsRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that on September 13, 2018, Tyson Wells, Dara Bessette, Sierra Lacoste, Laci Baker, and Megan West, all of St. Albans, were arrested and charged with knowingly providing false information to firearms dealers in connection with the purchase of a firearm. In total, the defendants are responsible for the purchase of approximately thirty firearms that are believed to have been smuggled into Boston, Massachusetts, in connection with criminal gang activity.
The defendants appeared today in federal court in Burlington before United States Magistrate Judge John M. Conroy and entered pleas of not guilty to the federal complaint charging them with false statements in connection with the purchase of firearms. The defendants were ordered temporarily detained pending a detention hearing on September 17, 2018.
According to the criminal complaint, the defendants provided or helped to provide false information to gun shops; namely, information representing that they were purchasing the firearms for themselves and not for another person. In fact, these defendants conducted “straw-purchases” of firearms in exchange for either cocaine or heroin from drug dealers operating in Saint Albans and Swanton, Vermont. The defendants completed firearm transaction forms when purchasing the firearms in which they falsely stated that they were the actual buyers of the firearms and were not unlawful users of any controlled substances. The gun shops that these individuals patronized in Vermont are currently licensed by the Bureau of Alcohol, Tobacco, Firearms, and Explosives as federal firearms licensees and were not aware of the falsehoods involved in the straw-purchases.
U.S. Attorney Christina Nolan commended the collaborative investigation of ATF and the St. Albans Police Department leading to these important arrests. She noted, “This case highlights the commitment of the U.S. Attorney’s Office to prioritize firearms offenses. Those who violate gun laws by diverting weapons to the black market endanger innocent citizens and empower dangerous criminals. Federal, state, and local law enforcement will work as a team to bring consequences for such conduct, and will target such individuals for federal prosecution.”
U.S. Attorney Nolan also noted that this prosecution is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
“The straw purchasing and illegal trafficking of firearms is a serious criminal activity and often puts firearms in the hands of individuals who can’t legally purchase or possess them,” said Lawrence Panetta, Assistant Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division. “ATF remains dedicated to identifying, investigating and arresting these individuals and making our streets and communities safer from violent firearm related acts.”
St. Albans Chief of Police Gary Taylor added, “This case is an excellent example of municipal law enforcement working with our federal law enforcement partners to make our community and our neighbors’ community in Boston safer.”
If convicted, Wells, Bessette, Lacoste, Baker, and West each faces up to ten years of imprisonment. The actual sentence, however, would be determined by the Court with guidance from the advisory Federal Sentencing Guidelines. The United States Attorney emphasizes that the charges in the complaint are merely accusations and that the defendants are presumed innocent unless and until they are proven guilty.
The United States is represented in this matter by Assistant U.S. Attorney Abigail Averbach. Tyson Wells is represented by the Office of the Public Defender. Dara Bessette is represented by Richard Goldsborough. Sierra Lacoste is represented by Richard Bothfeld. Laci Baker is represented by Ernest Allen III. Megan West is represented by Thomas Sherrer. The case is currently under investigation by ATF agents in Vermont and Massachusetts and the St. Albans Police Department.
First INTERPOL Washington Chief VisitsRead the Press Release
Current USNCB Director Wayne H. Salzgaber presents a token of appreciation to the first USNCB Chief, Kenneth S. Giannoules.On Monday, September 10th, Kenneth S. Giannoules, the first Chief of INTERPOL Washington, the U.S. National Central Bureau (USNCB), visited the agency. He led the USNCB from 1969 to 1974 when the organization was an office in the Department of the Treasury. Giannoules met with current Director Wayne H. Salzgaber, toured the facilities, and addressed INTERPOL Washington staff. A career Secret Service agent, Giannoules helped to protect U.S. Presidents Truman, Eisenhower, Kennedy, and Johnson.
Fentanyl Trafficker who Illegally Possessed a Loaded Firearm Sentenced to 60 MonthsRead the Press Release
PITTSBURGH, Pa – A former resident of Pittsburgh, PA has been sentenced in federal court to 60 months in prison, to be followed by three years of supervised release, on his convictions on federal narcotics and firearms charges, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on Devon Robinson, age 30. Robinson was detained after his initial appearance and will remain detained as he begins to serve his sentence.
According to information presented to the court Robinson possessed with the intent to distribute and distributed fentanyl to his co-defendant James Kadish on December 3, 2017. On December 4, 2017, members of the FBI Western Pennsylvania Opioid Task Force executed a search warrant at Robinson’s house in the city of Pittsburgh. Inside Robinson’s house, FBI investigators recovered a quantity of fentanyl from Robinson’s bedroom and a loaded firearm from his basement couch. Robinson had been previously convicted of a felony offense and was prohibited from possessing firearms. Robinson admitted to possessing the firearm and fentanyl to FBI investigators.
Assistant United States Attorney Timothy M. Lanni is prosecuted this case on behalf of the government.
The Federal Bureau of Investigation – Western District of Pennsylvania Opioid Task Force conducted the investigation leading to the guilty plea in this case. This Task Force is comprised of FBI Special Agents and state and local Task Force Officers, including officers from the Pittsburgh Bureau of Police, Allegheny County Sherriff’s Department, Allegheny County Police, Port Authority Police, Munhall Police Department, West Mifflin Police Department, and Pennsylvania Attorney General’s Office conducted the investigation that led to the guilty plea and sentence in this case.
Federal Jury Convicts Charleston Man of Gun CrimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man was convicted of a federal gun crime following jury trial before Senior United States District Judge David A. Faber, announced United States Attorney Mike Stuart. Michael Matthew Phillips, age 31, was convicted of possessing a firearm by a prohibited person.
“It’s simple – convicted felons are prohibited from possessing firearms,” said United States Attorney Mike Stuart. “Violations of our federal gun laws are serious matters that put public safety at risk. I applaud the excellent work of ATF, the Kanawha County Sheriff’s Department and Assistant United States Attorney Greg McVey.”
On January 24, 2017, Phillips was supposed to sell heroin and a firearm to a confidential informant. Phillips didn't bring heroin to the meeting because he was concerned that there were police officers in the area. However, Phillips took the confidential informant to an area where a 9mm handgun was hidden and sold the gun for $140. Phillips is a convicted felon and prohibited from possessing firearms.
Phillips faces up to 10 years in prison and up to a $250,000 fine when he is sentenced in January 2019.
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