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Wednesday 25 July 2018
Serial Bank Robber Indicted for Robbing and Attempting to Rob Nine Banks in Brooklyn, Queens and ManhattanRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Richard Wardell Johnson with nine counts of bank robbery. Johnson, who was arrested on May 29, 2018 on a criminal complaint, is in federal custody and will be arraigned on a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, Richard Wardell Johnson robbed and attempted to rob nine banks across three New York City boroughs in less than a month,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will ensure that criminals who endanger bank employees and members of our communities will be held responsible.”
“Over the course of nearly 30 days, Johnson allegedly carried out a string of robberies, accompanied with threats of violence,” stated FBI Assistant Director-in-Charge Sweeney. “Focusing merely on a quick and easy profit, Johnson put innocent lives around him in danger. Now that his chain of robberies has come to an end, Johnson will rightfully be brought to justice.”
“Shortly after Mr. Johnson’s last attempt to get some quick cash, our patrol cops got him – and he’s no longer a menace running around our neighborhoods,” stated NYPD Commissioner O’Neill. “By working closely with our federal partners at the FBI and the Eastern District of New York, the NYPD will continue to aggressively investigate and pursue all bank robbery cases to minimize the threat criminals like Mr. Johnson pose in our community.”As detailed in publicly filed documents, between April and May of 2018, Johnson robbed six banks, and attempted to rob three others in Brooklyn, Queens and Manhattan. During the May 18, 2018 robbery he entered an M&T Bank branch, on Atlantic Avenue in Brooklyn and presented a note to the teller, stating “DON’T TOUCH THAT ALARM! $2000.00 NO DUMMY PACK. IF I SHOOT SOMEONE ITS ON YOU!” The teller notified a security guard at the bank and pointed out the defendant. The security guard exited the bank, followed Johnson on foot while he called 9-1-1 and reported the crime. The NYPD apprehended Johnson nearby a short time later.
The indictment charges Johnson with the following robberies and attempted robberies:
- Chase Bank branch in Queens, New York, on April 23, 2018 (attempted);
- Chase Bank branch in Brooklyn, New York, on April 23, 2018;
- Chase Bank branch in Queens, New York, on April 30, 2018;
- Chase Bank branch in Brooklyn, New York, on May 2, 2018;
- Chase Bank branch in Manhattan, New York, on May 7, 2018;
- Citibank branch in Brooklyn, New York, on May 12, 2018;
- Chase Bank branch in Brooklyn, New York, on May 15, 2018 (attempted);
- HSBC Bank branch in Manhattan, New York, on May 17, 2018; and
- M&T Bank branch in Brooklyn, New York on May 18, 2018 (attempted).
The government’s case is being handled by the Office’s General Crimes Section. Special Assistant United States Attorney Andrew D. Grubin is in charge of the prosecution.
The Defendant:
RICHARD WARDELL JOHNSON
Age: 63EDNY Docket No.: 18-CR-386 (DLI)
Sam Kane Agrees to Repay Nearly $38 Million to Local RanchersRead the Press Release
CORPUS CHRISTI, Texas – Sam Kane Beef Processors LLC has entered into an agreement with the United States to comply with the Packers and Stockyards (P&S) Act and to begin to repay nearly $38 million currently owed to local livestock sellers, announced U.S. Attorney Ryan K. Patrick.
Following a hearing in Corpus Christi federal court today, Sam Kane has agreed to promptly pay for livestock purchases by the next business day after purchases are completed as the P&S Act requires. They have also agreed to a repayment plan which would result in full payment to local ranchers the nearly $38 million currently owed to them within the next 18 months. They must also preserve and administer the statutory trust and have agreed to the appointment of an independent chief restructuring officer to ensure compliance with all aspects of the agreement.
If Sam Kane fails to make any of the payments as agreed or abide by any terms of the agreement, the court will appoint a receiver to manage Sam Kane financial affairs.
On June 14, 2018, two complaints were filed against Sam Kane Beef Processors LLC for alleged violations of the Packers and Stockyards (P&S) Act. The complaints allege Sam Kane is failing to timely pay for livestock. Sam Kane is a fed steer and heifer slaughtering plant located in Corpus Christi and operates subject to the P&S Act.
Both complaints allege that as of June 8, 2018, Sam Kane owed approximately $34.96 million to unpaid livestock sellers at an average 38 days late with some instances up to 60 days late. The complaints allege Sam Kane’s failure to timely pay resulted in livestock sellers filing claims under the packer statutory trust totaling more than $142 million.
The U.S. Department of Agriculture (USDA) filed an administrative complaint alleging Sam Kane failed to pay the full purchase price for livestock within the time period required by the P&S Act on numerous occasions from on or about Jan. 27, 2017, through the date of the complaint. The P&S Act authorizes civil penalties of up to $11,000 per violation.
The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries. As it relates to livestock sales, the P&S Act requires packers to pay the full purchase price of livestock the next business day following completion of the transaction. The P&S Act authorizes the USDA to file administrative complaints to enforce violations. Concurrently, the Act also authorizes the Department of Justice to seek injunctive relief while administrative enforcement actions are pending before the USDA.
The U.S. Attorney’s Office for the Southern District of Texas subsequently filed a federal complaint seeking a preliminary injunction ordering Sam Kane to comply with the P&S Act while the administrative complaint is pending before the USDA.
Both complaints follow a prior Secretary of Agriculture order issued Jan. 17, 2017, requiring Sam Kane cease and desist from failing to pay when due the full purchase price of livestock. They also allege Sam Kane violated this order.
Assistant U.S. Attorney Chad W. Cowan is handling the matter.
Salvadoran Man Sentenced for Immigration OffenseRead the Press Release
United States Attorney Duane A. Evans announced that MILTON OMAR SANCHEZ, age 43, a native of El Salvador, was sentenced today after pleading guilty to a one-count indictment for illegal reentry of a removed alien.
United States District Court Judge Ivan L.R. Lemelle sentenced SANCHEZ to time served (10 months), followed by one year of supervised release. The defendant will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on September 13, 2017, SANCHEZ was found in the United States after having been previously deported from the United States on July 13, 2004.
U.S. Attorney Evans praised the work of Immigration and Customs Enforcement agents in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Richland County man indicted for sexually exploiting a childRead the Press Release
A Richland County man was indicted in federal court for sexual exploitation of a child.
Joseph R. Hurley, 31, of Lucas, was initially arrested on charges of sexually abusing an 11-year-old. During a subsequent review of Hurley’s computer, law enforcement discovered approximately 261 images and 102 videos containing child pornography.
The forensic review also revealed a folder that contained images of a nude female later determined to be 16 years old when the images were taken. The female was completely nude and her eyes were closed, according to the affidavit.
Investigators made contact with the girl in the images. She stated that she had a one-month relationship with Hurley in 2013, when he was 26 and she was 16.
The last time they had contact, the girl said Hurley mixed her an alcoholic drink, although she did not see him prepare it. She said the drink made her “feel sleepy” and that she did not remember the rest of the night. She said she woke up in the morning without any clothes and felt sore, according to the affidavit.
The girl stated she had no knowledge of Hurley taking the photos of her, according to the affidavit.
This case was investigated by the Federal Bureau of Investigation, the Mansfield Police Department and the Richland County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Michael A. Sullivan.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Repeat Offender Pleads Guilty to Defrauding A Church and Other VictimsRead the Press Release
Tampa, Florida –Victor Thomas Clavizzao (56, St. Petersburg) has pleaded guilty to wire fraud. He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Clavizzao, going by the name of “Victor Thomas,” opened a series of companies, and represented to others, including a local church, that he had the ability to help them conduct real estate transactions. Clavizzao convinced the church, which was seeking to construct a new building, to give him money. The church members believed that the money they gave to Clavizzao would be used to secure financing and to handle issues related to their construction project. Instead of aiding the church, Clavizzao used $16,350 of the church’s funds for his personal benefit.
When Clavizzao began his scheme, he was on federal supervised release for another real-estate-related fraud conviction.
This case was investigated by the FBI. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
Renewal Escapee will Remain Detained Pending December Sentencing HearingRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of escape from an institution, United States Attorney Scott W. Brady announced today.
Derek Webb, age 54, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that on June 26, 2017, the defendant escaped from the Renewal, Inc. Residential Reentry Center, where he had been confined pursuant to a judgment and commitment order of the United States District Court for the Western District of Pennsylvania.
Judge Fischer scheduled sentencing for December 7, 2018 at 9 a.m. The law provides for a total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The United States Marshals Service conducted the investigation that led to the prosecution of Webb.
Raleigh Man Indicted on Mail and Wire Fraud ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., the United States Attorney for the Eastern District of North Carolina, announces that a Federal grand jury in Raleigh has returned a twelve-count indictment charging BILL BAEZ, JR., age 28, of Raleigh, North Carolina, with six counts of Mail Fraud and six counts of Wire Fraud.
The indictment alleges that beginning in or around October 2017, and continuing until in or around January 2018, BAEZ engaged in a scheme to defraud his employer by stealing over $40,000 worth of its medical equipment and selling the items on eBay for his own profit. BAEZ mailed the stolen medical equipment to his buyers via the United States Postal Service. When law enforcement arrested BAEZ on January 30, 2018, they recovered several pieces of stolen medical equipment. Some of those items had been packaged for mailing.
If convicted of all counts, BAEZ could face a maximum penalty of twenty years imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the United States Postal Inspection Service and local law enforcement.
President of Pinnacle Workforce Solutions Sentenced to PrisonRead the Press Release
SAN JOSE – John McEwan was sentenced yesterday to over five years in prison, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett.
McEwan pleaded guilty on March 20, 2018 to one count of wire fraud. According to the plea agreement McEwan admitted to owning and operating a payroll processing company called Pinnacle Workforce Solutions (Pinnacle). Pinnacle provided various payroll services to its customers, including distributing wages to employees, preparing employee paycheck withholdings, and paying income taxes. In order to provide these services for its customers, Pinnacle withdrew funds from its customers’ bank accounts, and had access and authorization to initiate wire transfers from its customers’ bank accounts.
In his plea agreement, McEwan further admitted that, in as early as 2009, Pinnacle was operating at a financial loss. During this period of time, McEwan wired funds out of his clients’ bank accounts and used them in unauthorized ways. Specifically, McEwan paid one client’s payroll with funds he took from another client. Pinnacle’s customers assumed that McEwan was continuing to handle their payroll and withhold and pay taxes on their behalf. Instead, through his guilty plea, McEwan admitted that this was not the case. In total, McEwan took and misspent approximately $6,916,256/48 from his customers.
McEwan, 69, of Seaside, California, waived indictment and was arraigned on an information on November 15, 2017. He was charged with a single count of wire fraud for electronically transferring funds out of one of Pinnacle’s customer’s bank accounts without authorization.
The sixty-three month sentence was handed down by The Honorable Beth L. Freeman, U.S. District Court Judge, following a guilty plea to one count of wire fraud in violation of Title 18, United States Code, Section 1343. Judge Freeman also sentenced the defendant to a three-year period of supervised release. Judge Freeman scheduled a hearing for October 2, 2018 to determine the amount of restitution McEwan will be ordered to pay. The defendant will begin serving the sentence on October 5, 2018.
Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the FBI, the Monterey County District Attorney’s Office, and the Monterey County White Collar Crime Task Force.
Pittsburgh Man Took More than $100,000 in Armed Robbery of PNC BankRead the Press Release
PITTSBURGH – A resident of Pittsburgh, Pennsylvania, pleaded guilty on Monday in federal court to a charge of armed bank robbery, United States Attorney Scott W. Brady announced today.
Gary William White, age 21, pleaded guilty to one count before Chief United States District Court Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that on September 20, 2017, White robbed the PNC Bank on Saw Mill Run Blvd with a knife. White instructed one of the two tellers to open the glass partition separating the tellers from the public. When the teller could not remove the glass, White removed the window. He then climbed through the window and ordered the tellers to open several safes located behind the teller counter. He also advised the tellers that he had a gun while motioning towards his hip. The tellers backed away and White removed piles of cash from each safe and placed them into a red drawstring bag that he was carrying. He took $111,409 before fleeing the bank in his vehicle. Authorities were able to identify White from surveillance video as well as his vehicle’s registration. Law enforcement executed search warrants on his apartment and car. The search warrant on the car revealed the red Under Armour bag, containing $103,309, as well as the clothing worn during the robbery and the knife. White turned himself in a few days later and confessed to the robbery.
Judge Conti scheduled sentencing for November 16, 2018. The law provides for a maximum total sentence of 25 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, along with the Allegheny County Police and Brentwood Police Departments, conducted the investigation leading to the Indictment in this case.
Philadelphia Man Sentenced to One Year and One Day in Prison for Role in Scheme to Steal and Cash Postal Money OrdersRead the Press Release
CAMDEN, N.J. – A Philadelphia, Pennsylvania, man was sentenced today to 12 months and one day in prison for his role in fraudulently cashing stolen U.S. Postal Service money orders, resulting in more than $22,000 in losses, U.S. Attorney Craig Carpenito announced.
Anthony J. Bell, 39, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of transmitting and presenting unlawfully issued U.S. Postal Service money orders with intent to defraud the United States. Judge Rodriguez imposed the sentence today in Camden federal court.9
According to the documents filed in this case, other cases, and statements made in court:
Bell admitted that a former U.S. Postal Service employee, Marc. E Saunders, 39, of Sicklerville, New Jersey, provided Bell with stolen money orders and told him to recruit others to cash them. Bell admitted that he recruited individuals to cash the money orders and paid them a small fee, while keeping the rest of the money from the fraudulently cashed money orders for Saunders and himself. Bell also admitted he recruited an individual in York, Pennsylvania, to cash the money orders and paid the individual a small fee, keeping the rest of the money from the fraudulently cashed money orders for himself.
In addition to the prison term, Judge Rodriguez sentenced Bell to three years of supervised release.
U.S. Attorney Carpenito credited special agents of the USPS, Office of the Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Alyson M. Oswald of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, CamdenOwner of Durable Medical Equipment Company Pleads Guilty to Defrauding Medicaid of More Than $9 MillionRead the Press Release
The owner of a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.
The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Philadelphia Regional Office and District of Columbia Inspector General Daniel W. Lucas.
Waveney Blackman, 72, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia. Her sentencing is scheduled on Oct. 18 before the Honorable Thomas F. Hogan.
Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC. The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others. It became a Medicaid provider in 2008.
According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries. From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid. All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid. Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.
According to the plea documents, Blackman used the fraudulent proceeds to obtain properties, including three in Florida and four in Maryland, as well as a Mercedes Benz.
Blackman was charged in a criminal information filed on June 26. The charges were filed as part of the nation’s largest ever health care fraud enforcement action. On June 28, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced results of the nationwide effort. The various enforcement actions involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
This case is being investigated by the FBI’s Washington Field Office, HHS-OIG and the Medicaid Fraud Control Unit of the District of Columbia Office of the Inspector General. Assistance has been provided by the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney Amy Markopoulos of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Emily A. Miller and Special Assistant U.S. Attorney Parker Tobin of the U.S. Attorney’s Office for the District of Columbia.
Assistance with forfeiture issues was provided by Assistant U.S. Attorney Kyle Bateman, and former Special Assistant U.S. Attorneys Marina Stevenson and Sean Welsh. Assistance also has been provided by Assistant U.S. Attorney Denise A. Simmonds, Paralegal Specialists Aisha Keys and Robert Fishman, and Victim/Witness Services Coordinator Tonya Jones. Former Assistant U.S. Attorneys Teresa A. Howie, Lionel André, and Angela Saffoe also assisted with the investigation of the case.
Owner of Durable Medical Equipment Company Pleads Guilty to Defrauding Medicaid of More Than $9 MillionRead the Press Release
WASHINGTON – The owner of a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.
The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Philadelphia Regional Office and District of Columbia Inspector General Daniel W. Lucas.
Waveney Blackman, 72, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia. Her sentencing is scheduled on October 18, 2018, before the Honorable Thomas F. Hogan.
Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC. The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others. It became a Medicaid provider in 2008.
According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries. From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid. All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid. Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.
According to the plea documents, Blackman used the fraudulent proceeds to obtain properties, including three in Florida and four in Maryland, as well as a Mercedes Benz.
Blackman was charged in a criminal information filed on June 26. The charges were filed as part of the nation’s largest ever health care fraud enforcement action. On June 28, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced results of the nationwide effort. The various enforcement actions involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
This case is being investigated by the FBI’s Washington Field Office, HHS-OIG and the Medicaid Fraud Control Unit of the District of Columbia Office of the Inspector General. Assistance has been provided by the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney Amy Markopoulos of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Emily A. Miller and Special Assistant U.S. Attorney Parker Tobin of the U.S. Attorney’s Office for the District of Columbia.
Assistance with forfeiture issues was provided by Assistant U.S. Attorney Kyle Bateman, and former Special Assistant U.S. Attorneys Marina Stevenson and Sean Welsh. Assistance also has been provided by Assistant U.S. Attorney Denise A. Simmonds, Paralegal Specialists Aisha Keys and Robert Fishman, and Victim/Witness Services Coordinator Tonya Jones. Former Assistant U.S. Attorneys Teresa A. Howie, Lionel André, and Angela Saffoe also assisted with the investigation of the case.
Owner of Russian Import/Export Company Charged with Evading U.S. Export Controls by Smuggling Sensitive Electronics to Russian Military and Intelligence AgenciesRead the Press Release
NEWARK, N.J. – A resident and citizen of Russia was indicted by a federal grand jury today for his alleged role in an international procurement network that smuggled over $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Craig Carpenito announced.
Alexander Brazhnikov Sr., 72, of Moscow, is charged by indictment with one count each of conspiracy to commit money laundering, conspiracy to smuggle goods from the United States, and conspiracy to violate the International Emergency Economic Powers Act (IEEPA). Brazhnikov Sr. is currently at large.
According to documents filed in this case and statements made in court:
Brazhnikov Sr. was the owner, chief executive officer, and principal operator of ABN Universal, a privately held Russian microelectronics import/export company in Moscow. His son, Alexander Brazhnikov Jr., 39, of Mountainside, owned and operated four New Jersey-based microelectronics export companies in Carteret, Mountainside, Union, and Manalapan.
Brazhnikov Sr. and Brazhnikov Jr. participated in a sophisticated procurement network that secretly acquired large quantities of electronic components from U.S. manufacturers and vendors and exported those parts to Russia on behalf of Russian business entities authorized to supply those parts to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (FSB) and Russian entities involved in the design of nuclear warheads and other weapons.
As part of the scheme, Brazhnikov Sr., through his Moscow business, obtained initial requests for quotes for the U.S.-based electronics components from various Russian entities and sent these requests directly to U.S.-based vendors electronically or to his son for implementation. Brazhnikov Sr., Brazhnikov Jr., and others then used Brazhnikov Jr.’s New Jersey export companies to purchase the electronic components from the U.S.-based distributors and re-package them for shipment to Moscow.
In order to obscure the extent of the network’s procurement activities and avoid filing the necessary export control forms, Brazhnikov Sr., Brazhnikov Jr., and others routinely falsified the true end-users and value of the components they exported. Each shipment from the United States was sent to one of 12 false addresses or shell locations in Moscow established at Brazhnikov Sr.’s direction, re-directed to a central warehouse he and others controlled, and ultimately shipped to the end-users in Russia, including the Russian defense contracting firms.
The funds for these illicit transactions were obtained from various Russian purchasers and initially deposited into one of Brazhnikov Sr.’s primary accounts in Russia. In order to further conceal the actual customers and the source of the funds, disbursements for purchases were then made through one or more foreign accounts held by shell corporations in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates, and Belize, and ultimately into one of Brazhnikov Jr.’s U.S.-based accounts.
The money laundering conspiracy charge carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The conspiracy to violate the IEEPA carries a maximum potential penalty of 20 years in prison. The charge of conspiracy to smuggle goods carries a potential penalty of five years in prison and a $250,000 fine.
Brazhnikov Jr. previously pleaded guilty to his role in the scheme and was sentenced June 30, 2016, to 70 months in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, under the direction of Special Agent in Charge Jonathan Carson in New York; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney David Recker of the Department of Justice National Security Division’s Counterintelligence and Export Control Section.
The charges and allegations contained in the indictment are merely accusations, and Brazhnikov Sr. is considered innocent unless and until proven guilty.
Ninth Circuit Upholds Validity of Cost-Sharing RegulationRead the Press Release
The Court of Appeals for the Ninth Circuit yesterday upheld the validity of amendments to the cost-sharing regulation under I.R.C. § 482 (Treas. Reg. § 1.482-7), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and Deputy Assistant Attorney General Travis A. Greaves of the Justice Department’s Tax Division. The regulatory amendments clarified that (1) the term “costs” under § 1.482-7 includes stock-based compensation costs, and (2) a cost-sharing arrangement produces results that are consistent with an arm’s-length result if, and only if, each controlled participant’s share of the costs of intangible development equals its share of reasonably anticipated benefits attributable to such development.
In the consolidated cases, Altera Corporation & Subsidiaries v. Commissioner of Internal Revenue, Case Nos. 16-70496 & 16-70497, the Ninth Circuit reversed a decision of the U.S. Tax Court, and held that the regulatory amendments were both procedurally valid under the Administrative Procedure Act (APA) and substantively valid under the test set forth in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 461 U.S. 837 (1984). The court held that the amendments satisfied the APA because Treasury’s rationale could be “reasonably discerned” from the preambles to the proposed and final amendments, each of which referred extensively to the legislative history of the 1986 amendment of § 482. The court further held that the amendments were substantively valid under Chevron’s two-step analysis because (1) § 482 does not speak directly to the matters covered by the regulatory amendments, and (2) the regulatory amendments represent a permissible construction of § 482 since they are “entirely consistent with Congress’s rationale for amending § 482 [in 1986] in the first place.”
Principal Deputy Assistant Attorney General Zuckerman thanked Tax Division attorneys Richard Farber and Arthur Catterall, who handled the case on appeal for the government.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New York Man Sentenced in ID Theft, Fraud InvestigationsRead the Press Release
PROVIDENCE, RI – A third person charged in federal court in Rhode Island in a series of on-going investigations into individuals who are stealing personal identifying information of others and using that information to apply for bank loans and retail store credit cards or lines of credit, has been sentenced to 39 months in federal prison, announced United States Attorney Stephen G. Dambruch, Stephen Marks, Special Agent in Charge of the United States Secret Service, Scott E. Antolik, Special Agent in Charge of the Boston Field Office of the Social Security Administration, Office of the Inspector General/Office of Investigations, and Delaney Deleon-Colon, Acting Inspector in Charge of the United States Postal Inspection Service.
Jason McDonald, 37, of Great Neck, N.Y., admitted to using a stolen identity and stolen Social Security number, and a Rhode Island address he had no association with, to open a membership account at a local credit union and then attempt to fraudulently obtain a loan from the credit union. He also admitted to helping another person create a false credit profile using stolen personal identifying information in order for that person to fraudulently obtain a vehicle valued at $29,825.
At sentencing, U.S. District Court Judge John J. McConnell, Jr, also ordered McDonald to serve 4 years supervised release upon completion of his term of incarceration, and to pay restitution totaling $29,825.
McDonald pleaded guilty on March 29, 2018, to conspiracy to commit bank fraud, attempted bank fraud, fraudulent use of a Social Security number and aggravated identity theft.
The U.S. Sentencing Guidelines range of imprisonment in this matter is 39 – 45 months. The government recommended the court impose a sentence of 45 months in prison.
At the time of his guilty plea, McDonald admitted to the Court that in December 2016, he began obtaining the personal identification of individuals without their knowledge, including Social Security numbers, for the purpose of committing fraud. McDonald admitted that with the assistance of others he obtained counterfeit identification cards bearing his photo and displaying the stolen personal identifiable information of others.
McDonald admitted that on April 10, 2017, he used a fraudulently obtained identity and a New Jersey driver's license to gain membership with the Digital Federal Credit Union. Five days later, he filed an online loan application for an automobile loan in the amount of $23,500.
McDonald first came to the attention of law enforcement during an unrelated investigation of a Central Falls man, Reynaldo Martinez, 25, for his participation in a scheme to use the stolen identity of numerous individuals to open retail store credit cards and lines of credits. Martinez used the credit to purchase tens of thousands of dollars worth of goods. Martinez pleaded guilty in November 2017 to four counts of aggravated identity theft, two counts of access fraud, and one count each of bank fraud, conspiracy to commit fraud, attempted access fraud, and interstate transportation of stolen goods. He was sentenced in January to 48 months in federal prison.
The investigations also led to the arrest and conviction in federal court of Donald Wicklund, 33, of Pawtucket. Wicklund pleaded guilty on April 12, 2018, to a 15-count indictment charging him with bank and wire fraud, fraudulent use of a Social Security number, aggravated identity theft and conspiracy. He admitted to using stolen personal identifying information of others, including social security numbers fraudulent documents and addresses, to secure funding for the purchase or lease of new vehicles in Rhode Island and Massachusetts. The investigation determined that Jason McDonald provided Wicklund with a stolen social Security number and an accompanying bogus credit profile to obtain a new vehicle valued at $29,825.
Wicklund is scheduled to be sentenced on September 13, 2018.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland.
The on-going investigations are being conducted by agents from the U.S. Secret Service, U.S. Social Security Office of Inspector General and the U.S. Postal Inspection Service.
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New Cumberland Man Charged with Receiving Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Earl T. Cook, Jr., age 54, of New Cumberland, Pennsylvania, was charged in a criminal information on July 24, 2018, with receipt of child pornography.
According to United States Attorney David J. Freed, the information alleges that Cook received child pornography over the internet between October 2014 and March 2015.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney James T. Clancy is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the receipt of child pornography charge is 20 years in prison and a $250,000 fine. That charge carries a mandatory minimum term of imprisonment of 5 years. 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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Moss Point Man Arrested After Bringing Gun to Police Station Pleads Guilty to Illegal Possession of Firearm by a Drug UserRead the Press Release
Gulfport, Miss – Kevin Lamarcus Mitchell, 20, of Moss Point, pled guilty yesterday, before U.S. District Judge Louis Guirola, Jr., to being an unlawful user of controlled substances in possession of a firearm, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Mitchell faces a maximum penalty of 10 years in prison, a fine of $250,000 and 3 years of supervised release. He will be sentenced by Judge Guirola on October 16, 2018, at 10:00 a.m.The case arose on April 6, 2018, when Mitchell went to the Pascagoula Police Department with his twin brother Tevin Mitchell and Joseph Smith to retrieve firearms seized by the police on March 31, 2018. Pascagoula Police officers and agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives arrested Tevin Mitchell and Smith for being unlawful users of controlled substances with guns from the prior incident. While doing an inventory search of Smith’s car, police found a gun stolen from St. Tammany Parish Louisiana under Kevin Mitchell’s seat. Kevin Mitchell admitted in an interview that he smoked marijuana regularly. Kevin Mitchell admitted to a friend in a recorded jail call that he brought the gun to the police station.
The Pascagoula Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant United States Attorney Annette Williams is prosecuting the case.
Middletown Man Sentenced to 30 Months in Federal Prison for Role in Drug Trafficking RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that TURON DAVIS, also known as “Slim,” 40, of Middletown, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for trafficking narcotics.
This matter stems from a joint investigation headed by the DEA New Haven Task Force into a central Connecticut cocaine and crack cocaine trafficking ring. The investigation, which included the use of court-authorized wiretaps, controlled purchases of crack cocaine and seizures of cocaine and cash proceeds, revealed that Westley Northrup, also known as “Piff,” operated a cocaine and crack cocaine trafficking ring while he was incarcerated in state custody at the Cheshire Correctional Institution. Carlos Roman, also known as “Frizz,” of Middletown, served as a primary distributor of narcotics for the organization. Northrup conspired with Roman and others to purchase cocaine from suppliers, convert some of the cocaine to crack cocaine, and then distribute crack and cocaine through a network of dealers in central Connecticut, including DAVIS.
DAVIS has been detained since his arrest on July 26, 2017. On March 22, 2018, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine and cocaine base (“crack”).
Northrup and Roman also pleaded guilty to related charges. On April 12, 2018, Roman was sentenced to 120 months of imprisonment. Northrup awaits sentencing.
This matter is being investigated by the DEA New Haven Task Force, U.S. Postal Inspection Service and the Middletown and New Britain Police Departments. The DEA New Haven Task Force includes participants from the New Haven, Hamden, West Haven, North Haven, East Haven, Branford, Ansonia, Meriden and Derby Police Departments, and the U.S. Marshals Service.
The case is being prosecuted by Assistant U.S. Attorney H. Gordon Hall.
Michigan Man Arrested for Climbing Mount RushmoreRead the Press Release
United States Attorney Ron Parsons announced that a South Rockwood, Michigan, man was arrested for climbing Mount Rushmore.
Zachary Schossau, 19, was arrested on July 22, 2018, by U.S. Park Rangers. Schossau appeared before U.S. Magistrate Judge Daneta Wollman on July 23, 2018, and was ordered to pay a $1,000 fine and a $30 court processing fee.
The U.S. Attorney’s Office and the National Park Service remind and caution the public that climbing Mount Rushmore National Memorial is a violation of the law, and offenders will be prosecuted.
“Please be respectful and stay off the Rushmore Memorial,” said U.S. Attorney Parsons. “The terrain is hazardous, and it ends in federal court.”
Assistant U.S. Attorney Kathryn Rich prosecuted the case.
Massachusetts Man Pleads Guilty to Sex Trafficking Women by Exploiting their Opioid AddictionRead the Press Release
Rashad Sabree, 37, of Boston, Massachusetts, pleaded guilty today in federal court in District of Maine to two counts of sex trafficking by force, fraud, or coercion, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Halsey B. Frank of the District of Maine, Harold H. Shaw, Special Agent in Charge, FBI Boston Division, and Peter C. Fitzhugh, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Boston.
According to court documents, the defendant coerced two young women to engage in commercial sex acts in Maine between December 2015 and Jan. 5, 2016, by exploiting their heroin addictions, verbally abusing them, and threatening them with violence. The defendant controlled the victims by supplying them with just enough heroin to avoid opiate withdrawal, which involves severe pain and physical sickness, and then threatening to cut off their supply and cause them to suffer withdrawal if they refused to engage in commercial sex. On Jan. 5, 2016, a motorist called 911 after observing the defendant striking one of the victims while driving on I-95 towards Massachusetts, resulting in the defendant’s arrest.
“This defendant committed sex trafficking by exploiting the opioid addictions of these women, using their vulnerability to coerce them into commercial sex for his gain,” said Acting Assistant Attorney General John Gore. “The Department of Justice will continue to work tirelessly to seek justice on behalf of victims and survivors of human trafficking.”
“This case demonstrates the important role that the public can play in helping to protect those who are vulnerable,” said U.S. Attorney Frank. “We encourage the public to say something if they see something. Here, thankfully, a good citizen did just that.”
“This defendant preyed on the addictions of his victims and brutally exploited them in a scheme driven by cruelty and greed,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division. “With today's plea, Sabree is accepting responsibility for his crimes, while his victims continue to recover from the abuse suffered at his hands. This case demonstrates the FBI's unwavering commitment to work with our law enforcement partners to hold sex traffickers like him accountable.”
“Homeland Security Investigations is proud to have assisted in this investigation, a case which clearly exposes the false claim that commercial sex trafficking is a so-called “victimless crime,” said Peter C. Fitzhugh, Special Agent in Charge, U.S Immigration and Customs Enforcement’s HSI Boston. “Close law enforcement coordination in this case has allowed justice to be done to the perpetrators of these vicious crimes and to, hopefully, provide some measure of compensation for the victims.”
In accordance with the plea agreement, the defendant faces a sentence of 15 to 17 years in prison. He is further subject to a maximum fine of $250,000 and mandatory restitution to the victims. Sentencing will be scheduled on a later date after the U.S. Probation Office completes its presentence investigation report.
The District of Maine is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
The case was investigated by the FBI, U.S. Immigration and Customs Enforcement’s HSI, and the Biddeford Police Department, with assistance from the Maine State Police and the Sanford, Kittery, and Portland Police Departments. It is being prosecuted by Assistant U.S. Attorney Julia Lipez and Trial Attorney William E. Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Maryland Man Sentenced to Four Years in Prison for Role in Scam Targeting Companies in U.S. and AbroadRead the Press Release
WASHINGTON - Emeka Ndukwu, 46, of Upper Marlboro, Md., was sentenced today to four years in prison for conspiring to launder the proceeds of scams that tricked seven companies in the United States and abroad into wiring more than $900,000 into accounts controlled by various co-conspirators.
The announcement was made by U.S. Attorney Jessie K. Liu and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office.
Ndukwu, a dual citizen of the United States and Nigeria, pled guilty in April 2018 in the U.S. District Court for the District of Columbia to one count of money laundering conspiracy. He was sentenced by the Honorable Timothy J. Kelly. Following his prison term, he will be placed on three years of supervised release. The judge also ordered Ndukwu to pay $791,870 in restitution to the companies. Additionally, Judge Kelly ordered Ndukwu to forfeit a 2014 Mercedes-Benz GL450 and to pay a forfeiture money judgment in the amount of $429,848, representing the share of the criminal proceeds that Ndukwu personally obtained.
According to documents filed at the time of the plea, Ndukwu participated in an ongoing conspiracy from 2013 through 2017 to receive and launder the proceeds of various cyber frauds, primarily arising from business e-mail (“BEC”) compromise schemes. In a typical BEC scheme, a co-conspirator tricks a company into transferring large sums of money into accounts controlled by others participating in the scheme. Using fake e-mails, often containing forged sender addresses, co-conspirators impersonate someone connected to the victim company and deceive an employee of that company into wiring funds. Soon after the wire transfers are completed, the co-conspirators drain the bank accounts and launder the criminal proceeds.
This particular conspiracy targeted at least seven companies in the United States and overseas, including victims in Texas, Illinois, the United Arab Emirates, the United Kingdom, India, Japan, and China. The victims were fraudulently induced into sending $916,056 in wire transfers to accounts controlled by Ndukwu and other co-conspirators. The funds were then laundered through transactions conducted in Washington, D.C. and other jurisdictions, including layering through shell company accounts and accounts controlled by co-conspirators.
According to the court documents, Ndukwu used false aliases and forged Nigerian passports to facilitate these schemes, and he used encrypted messaging to communicate with co-conspirators. Ndukwu was indicted in December 2017 and has been in custody since his arrest that month. A co-defendant, Chuka Mbonu, 33, of Nigeria, remains at large.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the U.S. Marshals Service for the U.S. District Court for the District of Columbia. Assistant U.S. Attorneys Christopher B. Brown and Michael J. Marando are prosecuting the case, with assistance from Paralegal Specialist C. Rosalind Pressley. Former Assistant U.S. Attorney Natalia Medina participated in investigating the case.
Man Sentenced to Federal Prison for Traveling to Kentucky to Engage in Sexual Conduct with MinorRead the Press Release
LOUISVILLE, Ky. –United States District Court Judge Rebecca Grady Jennings sentenced Michael M. Natterer, a German national, to 87 months in prison yesterday for traveling from Germany to Kentucky to engage in sexual conduct with a 15-year-old boy, announced United States Attorney Russell M. Coleman.
“Protecting our kids is the most basic function of government,” stated U.S. Attorney Russell Coleman. “The outcome of this case – over seven years in federal prison and removal from our country – is Kentucky law enforcement doing just that.”
Natterer, 23, was charged in an indictment and pleaded guilty to traveling for the purpose of engaging in illicit sexual conduct with a minor. Judge Jennings also ordered Natterer to serve a five-year period of supervised release. There is no parole in the federal system.
According to the plea agreement, Natterer began exchanging messages with the minor in January 2017. On May 30, 2017, when Natterer was 22 years old, and the victim was 15 years old, he traveled from Germany to Shepherdsville, Kentucky, to engage in sexual conduct with the victim who he knew was 15 years old. As part of the plea agreement, Natterer agreed to his removal from the United States after the completion of his sentence.
Assistant United States Attorney Amanda Gregory prosecuted the case. The Federal Bureau of Investigation (FBI) and the Shepherdsville Police Department conducted the investigation.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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Luxury Watch Dealer Sentenced to 24 Months in Prison for Laundering Narcotics Proceeds for International Drug OrganizationsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOSEPH STERN was sentenced to 24 months in prison for his role laundering money related to his concealment of narcotics proceeds generated in the United States through the purchase and sale of luxury watches by the company at which STERN was employed. A jury convicted STERN on May 26, 2017, following a 10-day trial before U.S. District Judge John G. Koeltl, who imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Joseph Stern ran his own shadow banking system to turn dirty drug money into new luxury watches, allowing millions of drug dollars to be laundered through the U.S. and back to Mexican drug cartels. Thanks to the dedicated work of the DEA, the time has come for Stern to pay for his money laundering crimes.”
According to the charging documents filed in the case, as well as the evidence developed at STERN’s trial and statements made during the sentencing proceedings and earlier court appearances:
For years prior to his arrest in May 2016, STERN fostered and profited from a cycle of crime and money designed to facilitate the secretive movement of funds from the U.S. to Mexico under the cover of a seemingly legitimate business. As part of that cycle, narcotics organizations based in, or with contacts in, Mexico, sold narcotics, including heroin and marijuana, for cash in the U.S., including in the Bronx, Manhattan, Brooklyn, and Baltimore. Money couriers then transported the cash from those sales to the defendant, who would accept bulk cash in amounts as large as $200,000 in clandestine hand-offs taking place on the street or in isolated areas within his workplace.
STERN disposed of that drug money in various ways, principally by using the cash to extinguish debts owed to his employer by Mexico-based customers who, in turn, had incurred debts to Mexico-based narcotics operations. STERN’s Mexico-based customers would sell watches, sourced from STERN, to narcotics organizations, which used those items and purchases as a substitute for the narcotics proceeds earned by their organizations in the United States.
Through this cycle of drugs and money, STERN facilitated a shadow banking system for international drug organizations, while taking a percentage of the cash that he moved on behalf of this criminal network.
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In addition to the prison term, STERN, 62, of Brooklyn, New York, was sentenced to three years of supervised release, including six months of home confinement, and was ordered to forfeit $1,899,700.
Mr. Berman praised the outstanding work of the Drug Enforcement Administration in the investigation of this case.
This case is being handled by this Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Noah Falk, Benet Kearney, and Andrew C. Adams are in charge of the prosecution.
Long Island Man Indicted in Multi-Million Dollar Ponzi SchemeRead the Press Release
A nine-count indictment was unsealed today in federal court in Central Islip, charging Steven Pagartanis, a formerly licensed financial advisor and affiliate of a registered broker-dealer, with securities fraud, mail and wire fraud conspiracies, as well as money laundering, for orchestrating a Ponzi scheme over the course of more than 18 years. Pagartanis was arrested today, and will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.
According to the indictment and other court documents, from January 2000 to March 2018, Pagartanis solicited elderly victims to invest in real estate-related investments, including those affiliated with a publicly traded Canadian company. Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually. At Pagartanis's direction, the victims wrote checks payable to an entity that was secretly controlled by Pagartanis. Pagartanis utilized a network of bank accounts to launder the stolen funds, which he then used to pay personal expenses, buy luxury items and make the guaranteed “interest” or “dividend” payments to other victims. Pagartanis created fictitious account statements reflecting ownership interests in the purported investments to induce investment and conceal the scheme. In all, the victims invested over $13 million and sustained actual losses of over $8 million. Many lost substantial portions of their life savings as a result of the scheme.
“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings,” stated United States Attorney Donoghue. “Protecting the elderly and the community at large from predators like the defendant is a priority of this Office and the Department of Justice and with our law enforcement partners we will continue to pursue that mission.” Mr. Donoghue also thanked the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority for their assistance in the investigation.
“The elderly are among the most vulnerable members of society, as they are common targets of fraudulent schemes,” stated FBI Assistant Director-in-Charge Sweeney. “As alleged, Pagartanis preyed on the elderly with his own interests in mind. While causing significant financial loss to his victims, Pagartanis experienced significant financial gain – allegedly paying personal expenses and making extravagant purchases. As we persistently investigate bogus Ponzi schemes, we aim to protect all targeted citizens from the threat of financial loss.”
“The agents of IRS-CI along with our law enforcement partners will vigorously pursue fraudsters who allegedly victimize the elderly,” stated IRS-CI Special Agent-in-Charge Robnett. “We will gladly dedicate our specialized skillset to such investigations to ensure those responsible are brought to justice.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Pagartanis faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 58
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (DRH)
Little Rock Trio Pleads Guilty to Wire Fraud; Exploited Program Assisting Distressed BusinessesRead the Press Release
LITTLE ROCK—Three Little Rock men pleaded guilty to participating in a fraudulent scheme that generated over $1 million in illicit profits by exploiting a government program designed to help distressed businesses. Mark Gregory Jackson, Sr., 61, Jimmy Don Winemiller, Jr., 53, and Don “Terrell” Stephens, Jr., 39, each of Little Rock, all pleaded guilty to conspiracy to commit wire fraud today before Chief United States District Judge Brian S. Miller.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the FBI, T.J. Gaylor, Special Agent in Charge for the Central Region of the Office of the Inspector General for the U.S. Small Business Association (SBA-OIG), and Paul W. Walton, Special Agent in Charge for the Southwest Region of the Office of the Inspector General for the U.S. General Services Administration (GSA-OIG), announced today’s guilty pleas.
“This case is a great example of how the FBI works with fellow law enforcement agencies to target those who criminally engage in fraud for personal gain,” Michael T. Gavin, Special Agent in Charge, FBI-Memphis Field Office said. “The FBI will diligently continue our efforts to pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and we will continue working together to bring them to justice, so that they may be held accountable for their actions.”
The fraudulent scheme grew out of the Federal Surplus Property Donation Program, through which qualifying non-profits, veterans organizations, municipal agencies, and disadvantaged business can acquire government surplus at below-market rates unavailable to the general public. Recipients submit requests explaining how they will use the surplus property and further promise not to sell, lease, or rent it out. The trio exploited the program by acquiring surplus under false pretenses only to sell it in the open market at a steep markup.
Jackson (doing business as Kingridge Enterprises) gained access to the surplus donation program by submitting forms featuring forged signatures that falsely claimed his disadvantaged nephew owned and operated Kingridge. In truth, the nephew did no work for Kingridge, collected no salary, and exercised zero control—he lived over 100 miles away from its Little Rock office and was employed elsewhere fulltime.
Once in the surplus donation program, Jackson proceeded to fraudulently acquire surplus (usually heavy-duty construction equipment) for sale. Much of it was sold to Winemiller (doing business as Cow Lake Construction), an equipment dealer who proceeded to sell it (again) at a still greater markup to peer equipment dealers or construction outfits. At various times, Winemiller enlisted the aid of Stephens to find buyers and paid him a fee for brokering deals.
Over the course of the scheme, Jackson acquired hundreds of pieces of surplus for $1.5 million, which he sold for over $2.5 million. Under the terms of his plea agreement, Jackson faces up to 20 years’ imprisonment and will forfeit $1,028,142.40. For their part, Winemiller and Stephens each face up to five years’ imprisonment and will forfeit $250,000.00 and $125,697.05, respectively.
“The privilege afforded to SBA 8(a) Program participants to access low-cost equipment through the Federal Surplus Property Program gives these small businesses a unique opportunity to compete and grow,” said T.J. Gaylor, Special Agent in Charge, SBA-OIG. “When a company exploits such a program for personal enrichment and does so at the expense of other small businesses, they must be held accountable to protect the integrity of the program. OIG appreciates the commitment of our federal law enforcement partners and the U.S. Attorney’s Office in combating fraud against small business programs.”
“In this case, a federal program was compromised by defendants who were motivated by personal, financial gain,” said Paul W. Walton, Special Agent in Charge, GSA-OIG. “Working with our law enforcement partners, the General Services Administration Office of Inspector General will continue to investigate fraudulent activity to protect the integrity of this important GSA program.”
Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States following a multi-year investigation by FBI-Memphis, SBA-OIG, and GSA-OIG.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter: @EDARNEWS
Las Vegas Doctor Pleads Guilty to Conspiracy to Distribute Prescription Medications Hydrocodone and Oxycodone Without Medical PurposeRead the Press Release
LAS VEGAS, Nev. – A Las Vegas doctor pleaded guilty today for his role in a conspiracy to distribute prescription medications, specifically Hydrocodone and Oxycodone, by allowing his co-conspirators to write illegal opioid prescriptions using his prescription pad.
United States Attorney Dayle Elieson for the District of Nevada, Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Office, and Special Agent in Charge Christian J. Schrank for the Office of Inspector General of the U.S. Department of Health and Human Services, Los Angeles Region made the announcement.
Dr. Horace Paul Guerra IV, a former managing partner of Incera LLC, pleaded guilty to one count of conspiracy to distribute controlled substances before U.S. District Judge James C. Mahan who scheduled a sentencing hearing for October 25, 2018. He was charged in a criminal information on June 25, 2018.
According to admissions made in his plea agreement, from January 1, 2018 to about May 3, 2018, Guerra conspired with his Incera LLC partners, Robert D. Harvey and Alejandro Incera. As part of the conspiracy, he allowed them to use Incera LLC prescription pads to write illegal opioid prescriptions, specifically for Hydrocodone and Oxycodone, for patients he did not see and without a legitimate medical purpose. The pre-signed prescription pads included Guerra’s name, signature, and DEA number.
At time of sentencing, Guerra will face the statutory maximum penalty of 20 years in prison, up to three years supervised release, and a $1,000,000 fine. As part of the plea agreement, Guerra agreed to surrender his Nevada medical license by the time of sentencing.
The case was investigated by the FBI, the Office of Inspector General of the U.S. Department of Health and Human Services, and the Nevada Attorney General’s Office Medicaid Fraud Control Unit. Assistant U.S. Attorney Kilby Macfadden is prosecuting the case.
The Opioid Fraud and Abuse Detection Unit is a program that utilizes data to help combat the devastating opioid crisis. The District of Nevada was selected as one of 12 districts nationally to participate in the pilot program. The District of Nevada has assigned an experienced prosecutor that focuses solely on investigating and prosecuting health care fraud related to medical professionals who prescribe opioids, that unlawfully divert of dispense prescription opioids for illegitimate purposes.
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Las Cruces Man Arraigned on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Steven Vaillancourt, II, 45, of Las Cruces, N.M., was arraigned this morning in federal court on an indictment charging him with child pornography offenses. Vaillancourt entered a not guilty plea to the charges during this morning’s arraignment hearing, and was ordered detained pending trial based on judicial findings that he poses a risk of flight and a danger to the community.
The indictment on which Vaillancourt was arraigned during today’s proceedings was filed on July 18, 2018. It charges Vaillancourt with two counts of distributing child pornography and three counts of possessing child pornography. According to the indictment, Vaillancourt committed the offenses in March 2018 in Dona Ana County, N.M.
Vaillancourt was arrested on child pornography offenses in March 2018. According to the criminal complaint in which he was charged, Homeland Security Investigations executed a search warrant on an email account, which revealed that Vaillancourt allegedly had been communicating with another individual about sharing and producing child pornography of that individual’s minor children. Vaillancourt also allegedly sent three child pornography images to the individual’s cellular phone through text messaging.
The statutory penalty for a conviction on a distribution of child pornography charge is a mandatory minimum of five years and maximum of 20 years of imprisonment. The statutory penalty for a conviction on a possession of child pornography charge is a maximum of 20 years in prison. Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Las Cruces office of Homeland Security Investigations and the Las Cruces Police Department with assistance from the National Recognizance Office, Office of Inspector General. Assistant U.S. Attorney Marisa A. Ong of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, 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 information about Project Safe Childhood, please visit http://www.justice.gov/psc/. Individuals with information relating to suspected child predators and suspected child abuse are encouraged to contact the Children’s Advocacy Center at (575) 526-3437, or to contact Homeland Security Investigations at 1-866-DHS-2-ICE.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Jury Finds Man Guilty of Kidnapping and Firearm CrimesRead the Press Release
U.S. Attorney Trent Shores announced today that a jury found Randy Alan Hamett, 61, of Choctaw, guilty of Kidnapping, Possessing and Receiving Stolen Firearm and Ammunition, and Possession of Firearms and Ammunition While Subject to a Domestic Violence Protective Order. The jury determined that, on April 25, 2017, Hamett parked his truck at a nearby Wal-Mart and walked to the victim’s house in Broken Arrow. He cut a hole in an outside wall of the victim’s house to avoid her home alarm system. When the victim arrived home from work, Hamett tased her and pointed a revolver at her. After zip-tying her wrists and duct taping her ankles, Hamett threatened to kill himself, the victim, and anyone who tried to help her. Hamett forced the victim into a car, stole from her a pistol she had purchased after obtaining a protective order against him, then kidnapped her. Hamett also sexually assaulted her.
Convinced that Hamett was going to kill her, the victim made every effort to prolong the trip and endear herself to Hamett. As part of her attempt to accomplish that, the victim convinced Hamett they should get back together and remarry in Arkansas, where they were originally married. Hamett eventually allowed the victim to text her parents and her boyfriend so they would not become suspicious concerning her whereabouts. Based on the nature of the text, the victim’s parents became worried that she was in danger and contacted the Broken Arrow Police Department. Through a concerted investigation by the Broken Arrow and Siloam Springs Police Departments, officers were able to locate Hamett and the victim at a hotel in Siloam Springs, Arkansas, where they determined Hamett was holding the victim against her will and arrested Hamett for violation of a protective order. Hamett was in possession of a firearm and ammunition, along with Taser cartridges, at the time of his arrest.
U.S. Attorney Shores stated, “Mr. Hamett’s violent actions were reprehensible. This United States Attorney’s Office is focused on prosecuting violent criminals. And that’s what we will continue to do. I am proud of the Assistant United States Attorneys, as well as the state and federal investigators, who worked tirelessly to prepare and try the case.”
District Judge Claire V. Eagan of the United States District Court for the Northern District of Oklahoma presided over the trial and will sentence Hamett on October 26, 2018. Hamett faces a maximum penalty life in prison, a $250,000 fine, and five years supervised release for the kidnapping conviction. Hammett also faces a maximum penalty of 10 years in prison, a $250,000 fine, and three years supervised release on the convictions for possessing and receiving a stolen firearm and ammunition, and for possessing firearms and ammunition while subject to a domestic violence protective order.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Broken Arrow Police Department, the Siloam Springs Police Department, and the Rogers State University Police. This case was prosecuted by Assistant United States Attorneys Jeffrey A. Gallant and Ryan M. Roberts.
Jury Convicts Dayton Man of Meth ChargesRead the Press Release
DAYTON – A jury has convicted Jason Rosales, 44, of Dayton, with two crimes related to methamphetamine. Rosales was found guilty of conspiracy to possess and attempt to possess with intent to distribute more than 500 grams of the drug on Valentine’s Day of last year.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), and Clark County Prosecutor Andrew D. Wilson announced the verdict reached today at the conclusion of an eight-day trial before U.S. District Judge Walter H. Rice.
According to court documents and testimony, Rosales conspired to and attempted to possess at least 4,427 grams of 100 percent pure “crystal meth” or “ice.”
The MOWIN Task Force in Kansas City had interdicted a courier at a Greyhound Bus Station on February 13, 2017 with 10 bundles of crystal meth hidden in a duffle bag.
The courier had been en route to deliver the drugs in Springfield, Ohio, and ultimately the DEA orchestrated a controlled delivery to Rosales in Dayton.
Rosales was charged by an indictment in February 2017. He was arrested on February 16, 2017 and has remained in custody since.
U.S. Attorney Glassman commended the cooperative investigation by the DEA and Kansas City law enforcement, as well as Assistant United States Attorneys Amy M. Smith and Sheila G. Lafferty and Special Assistant United States Attorney Ryan Saunders from the Clark County Prosecutor’s Office, who are representing the United States in this case.
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Judge Sentences Pittsburgh Woman for Social Security Fraud and Theft of Government FundsRead the Press Release
PITTSBURGH, PA – A resident of Pittsburgh has been sentenced in federal court to four years of probation, including 90 days of home detention, on her conviction of Social Security fraud and theft of government funds, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak imposed the sentence on Jennifer Neal, age 39.
According to information presented to the court, on or about July 29, 2013, Neal knowingly and willfully made two false statements material to her right to receive Supplemental Security Income benefits, by falsely stating that two minor children had lived with her from July 1, 2012 to June 30, 2013. Additionally, between March 2012 and February 2017, Neal received and converted approximately $66,804.85 in Supplemental Security Income benefits to which she knew she was not entitled..
Prior to imposing sentence, Judge Hornak stated that the sentence imposed was justified due to the seriousness of the offense conduct, as well as the defendant’s employment history, lack of any criminal record, and acceptance of responsibility.
Assistant United States Attorney Adam N. Hallowell prosecuted this case on behalf of the government.
United States Attorney Brady commended the Social Security Administration – Office of Inspector General for the investigation leading to the successful prosecution of Jennifer Neal.
Indiana, Pa., Man Admits Distributing Heroin and Fentanyl that Caused an Overdose DeathRead the Press Release
PITTSBURGH, Pa - A resident of Indiana, Pennsylvania, pleaded guilty yesterday in federal court to a charge of possession with intent to distribute and distribution of controlled substances, United States Attorney Scott W. Brady announced today.
Justin Kromer, age 30, pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on March 30, 2016, Kromer possessed and distributed stamp bags marked with "Block Party" and containing a mixture of heroin and fentanyl to an individual with the initials J.W. On March 30, 2016, J.W. overdosed and died from using the controlled substances. As part of his guilty plea, Kromer accepted responsibility for causing J.W.’s death..
Judge Hornak scheduled sentencing for November 28, 2018 at 9:30 am. The law provides for a total sentence of up to 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the Judge continued Kromer’s detention.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, along with the Pennsylvania State Police, the Offices of the District Attorneys of Allegheny and Indiana Counties, the Indiana County Drug Task Force, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Kromer.
Hartford Heroin Trafficker Sentenced to 37 Months in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that LUIS REYES-GUTIERREZ, 38, formerly of Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 37 months of imprisonment for trafficking heroin.
According to court documents and statements made in court, in 2014, the Drug Enforcement Administration’s Hartford Task Force received information that David Alvarado, also known as “Flaco,” was distributing heroin to street-level dealers and drug customers in the area of his residence on Wethersfield Avenue in Hartford. Between August 2014 and May 2015, investigators made eight controlled purchases of heroin from Alvarado. A wiretap investigation and other evidence revealed that REYES-GUTIERREZ regularly supplied Alvarado and others with raw heroin from his store, the D-Town Supermarket, located at 467 Wethersfield Avenue.
REYES-GUTIERREZ has been detained since his arrest on November 10, 2016. On January 25, 2018, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin.
REYES-GUTIERREZ is a citizen of the Dominican Republic and a lawful permanent resident of the U.S. He faces immigration proceedings when he completes his sentence.
Alvarado has pleaded guilty and awaits sentencing.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Gulfport Woman Sentenced to 10 Years in Federal Prison for Illegally Possessing FirearmRead the Press Release
Gulfport, Miss – Erin Woods a/k/a Erin Graham, 34 of Gulfport, was sentenced today by U.S. District Judge Louis Guirola, Jr. to the maximum 10 years in federal prison followed by 3 years of supervised release for being a user of controlled substances in possession of a firearms, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Woods was also ordered to pay a $5,000 fine.
The case began with the Bureau of ATF getting reports of a felon selling firearms and possessing hand grenades. The report led to the October 5, 2017, search of the Gulfport home of Erin Woods and two other individuals, one of whom was Woods’ boyfriend and a convicted felon. Twenty-one firearms stolen from Woods’ father and methamphetamine were seized in the search. Woods, who had no prior felony convictions, admitted she had regularly consumed crack cocaine and methamphetamine.
U.S. Attorney Hurst commended the incredible work conducted by ATF agents to track down and recover the numerous stolen firearms. The case was prosecuted by Assistant United States Attorney Annette Williams.
Georgia Woman Pleads Guilty to Role in Interstate Prostitution RingRead the Press Release
BOSTON – A Georgia woman pleaded guilty today in connection with her role in a long-running interstate prostitution ring.
Susan Bashir, a/k/a “Susan Redmon,” a/k/a “Susan Redmond,” 41, of Stone Mountain, Ga., pleaded guilty to one count of conspiracy to persuade, induce, entice, or coerce individuals to travel in interstate commerce to engage in prostitution and one count of conspiracy to engage in money laundering. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for Nov. 8, 2018. On March 15, 2018, Bashir was charged and arrested along with Jineok Kim, 38, of Watertown, Mass; Yoon I. Kim, 36, of Haymarket, Va.; Taehee Kim, a/k/a “Hyunsook Kim,” 46, of Haymarket, Va.; and Kyung Song, 52, of Lexington, Mass.
According to court documents, Bashir worked for the prostitution network from at least 2013 until March 2018. The prostitution network had multiple brothels in high-end apartments in Cambridge, Mass.; Atlanta, Ga.; and eastern Virginia. They advertised appointments with Asian women primarily on three websites: www.bostonasiandolls.com, www.exoticasiansatlanta.com, and www.redhotflowers69.com. The women advertised on the websites were moved from city to city within the network, working as prostitutes for the organization.
Bashir’s role in the scheme involved screening potential clients that called to book an appointment and then arranging logistics for the client to meet with one the advertised women. Bashir also updated the prostitution websites and calculated the payments for each prostitute based on the number of clients she had met with. In addition, Bashir collected the cash earnings from the women working at the Georgia brothels and made bulk deposits at ATMs, funneling the money into accounts allegedly controlled by Taehee Kim and Yoon Kim.
The charge of conspiracy to persuade, induce, entice, or coerce women to travel in interstate commerce to engage in prostitution provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain/loss, whichever is greater. The charge of conspiracy to engage in money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the value of the laundered funds. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Andrew E. Lelling; Peter C. Fitzhugh Special Agent in Charge of Homeland Security Investigations in Boston; Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service; and Cambridge Police Commissioner Branville G. Bard Jr. made the announcement today. Assistant U.S. Attorneys David J. D’Addio and Amy Harman Burkart of Lelling’s Civil Rights Enforcement Team are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Manager of Colony Arms Apartment Complex Pleads Guilty to Bribery for Seeking Bribes from the PoorRead the Press Release
Lucresha Frank, 41, of Pontiac, a former manager of the Colony Arms apartments in Detroit, pleaded guilty to bribery, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Brad Geary, Special Agent in Charge, Housing and Urban Development’s Office of Inspector General and Timothy R. Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
In 2013, Frank worked as a manager of the Colony Arms apartments, a U.S. Department of Housing and Urban Development funded Section 8 housing facility. Frank admitted during her guilty plea that she solicited and accepted cash bribes from prospective tenants in exchange for improperly moving them up on a lengthy waiting list for an apartment. One of the cash bribes she took was from a woman who was then homeless and living in a shelter with her two small children.
“Bribery by those entrusted to provide federally-funded housing to the economically disadvantaged is an atrocity that cannot stand. It is not only a breach of the public trust, it takes advantage of those who are at their financial low point and who are desperate for shelter for themselves and their families,” said U.S. Attorney Matthew Schneider. “As such, this criminal conduct will be uncovered and prosecuted to the fullest extent allowed by federal law.”
“Lucresha Frank’s illegal actions, motivated by her own greed, devastated families experiencing financial distress and prevented those in desperate need from being able to access low cost housing,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “The FBI and our law enforcement partners remain fully committed to investigating and prosecuting anyone who seeks to take advantage of those in our communities through such devious criminal schemes.”
Frank is scheduled to be sentenced on December 6, 2018 before U.S. District Judge Terrence G. Berg. She faces up to 10 years imprisonment and a fine of $250,000.
The investigation of this case was conducted by the U.S. Department of Housing and Urban Development and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney R. Michael Bullotta.
Former Allegheny County Drug Lab Employee Admits Stealing Drug EvidenceRead the Press Release
PITTSBURGH, Pa. – A resident of Pittsburgh, Pennsylvania has pleaded guilty in federal court in Pittsburgh to stealing federal drug evidence from the Allegheny County Office of the Medical Examiner (ACOME), United States Attorney Scott W. Brady announced today.
Matthew Ieraci, 29, was charged by criminal Information on June 20 with one count of theft concerning a program receiving federal benefits. He pleaded guilty today before United States District Judge Mark R. Hornak.
"When government employees tamper with and steal federal evidence, they not only abuse their position of trust, but they also undermine the ability of law enforcement to investigate and prosecute criminal conduct," said U.S. Attorney Brady. "This office will prosecute individuals who criminally undermine the integrity of the investigative process and the public’s confidence in our government institutions."
According to information presented at the guilty plea, on multiple occasions between on or about February 8, 2017, and on or about February 27, 2017, Ieraci stole a total of approximately 52.45 grams of powder alprazolam, a Schedule IV controlled substance, from ACOME, where he was employed as a laboratory scientist. Ieraci stole the evidence from a larger quantity of alprazolam that the United States Postal Inspection Service had submitted to ACOME for chemical analysis in connection with an ongoing multi-jurisdiction, multi-agency federal drug-trafficking investigation. Ieraci, the scientist assigned to analyze the evidence on behalf of ACOME, had received training in proper evidence-handling techniques and was aware of the consequences of evidence tampering, including the possibility that such evidence would not be admissible at trial.
Judge Hornak scheduled sentencing for November 28, 2018. The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Eric G. Olshan and Rachael L. Dizard are prosecuting this case on behalf of the government. This prosecution is part of the U.S. Attorney’s public corruption initiative.
The Federal Bureau of Investigation conducted the investigation of Ieraci.
Former Alaska Airlines Pilot Who Flew Passenger Aircraft while Drunk Sentenced to Serve over One Year in Federal PrisonRead the Press Release
SANTA ANA, California – A former captain with Alaska Airlines who admitted piloting a plane carrying more than 80 passengers while under the influence of alcohol was sentenced today to one year and one day in federal prison.
David Hans Arntson, 63, of Newport Beach, was sentenced by United States District Judge Cormac J. Carney, who also ordered Arntson to pay a $10,000 fine.
Judge Carney said Arntson engaged in “a very dangerous offense.”
Arntson pleaded guilty in February to one felony count of operating a common carrier while under the influence.
When he pleaded guilty, Arntson admitted that he piloted two Alaska Airlines flights on June 20, 2014. The first flight was from San Diego International Airport to Portland, Oregon. He then flew a plane from Portland to John Wayne Airport in Orange County.
After landing at John Wayne Airport, Arntson was selected for random drug and alcohol testing by Alaska Airlines. A technician for Alaska Airlines performed two breathalyzer tests that showed the pilot had a blood alcohol concentration of 0.134 percent and 0.142 percent – both of which were well above the federal limit of 0.04.
After the technician informed Alaska Airlines of the test results showing alcohol in his system, the airline removed Arntson from all safety-sensitive duties. Following the June 20, 2014, incident, Arntson retired from the Alaska Airlines, and the Federal Aviation Administration revoked his ability to pilot a plane.
“This defendant was at the controls during hundreds of flights carrying innumerable passengers – undoubtedly under the influence of alcohol during many of those trips,” said United States Attorney Nicola T. Hanna. “Fortunately, he was finally caught, and the risk to passengers was stopped. This case sends a message to everyone in the aviation industry that passenger safety is paramount, and we will aggressively investigate and prosecute any threat to that safety.”
In a sentencing memorandum filed with the court, prosecutors said that “during at least a substantial portion” of his more than 20 years as a captain for Alaska Airlines, Arntson was an alcoholic who concealed his drinking from the airline and the Federal Aviation Administration.
The investigation into Arntson was conducted by the United States Department of Transportation, Office of Inspector General.
“The sentencing in this U.S. Department of Transportation, Office of Inspector General (DOT-OIG) investigation demonstrates our commitment to safeguarding the Nation’s air transportation system for the traveling public,” said Lisa Glazzy, Acting DOT-OIG Regional Special Agent-in-Charge. “Working with our prosecutorial partners, we will continue our efforts to prevent and pursue those who seek to compromise the safety of our National Airspace System.”
This case was prosecuted by Assistant United States Attorneys Dennis Mitchell and Mark A. Williams of the Environmental and Community Safety Crimes Section.
Fifth Massachusetts State Trooper Arrested in Overtime Abuse InvestigationRead the Press Release
BOSTON – A retired Massachusetts State Police Trooper was arrested and charged today in connection with the ongoing investigation of overtime abuse at the Massachusetts State Police (MSP).
Daren DeJong, 57, of Uxbridge, was charged with embezzlement from an agency receiving federal funds. DeJong will appear in U.S. District Court in Boston at 3:15 p.m. today.
“Mr. DeJong, who was sworn to uphold the law, betrayed the public trust by embezzling funds from the Massachusetts State Police,” said Andrew E. Lelling, United State Attorney for the District of Massachusetts. “Today’s arrest is another step in our ongoing effort to root out fraud and ensure that public funds are appropriately used.”
“As alleged, Mr. DeJong abused his position and betrayed the public's trust by stealing thousands of dollars from overtime shifts he did not work. Instead of enforcing the rules of the road and cracking down on aggressive drivers, he selfishly lined his pockets with paychecks from bogus shifts at the expense of hard-working taxpayers. The FBI would like to thank the Massachusetts State Police for their cooperation, support, and professionalism during the course of this investigation,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division.
According to court documents, DeJong, who is currently retired, was a MSP Trooper assigned to Troop E, which is responsible for enforcing criminal and traffic regulations along the Massachusetts Turnpike, Interstate I-90. DeJong allegedly received overtime pay for hours that he either did not actually work at all, or shifts in which he departed one to seven hours early.
The alleged conduct involves overtime pay for selective enforcement initiatives, including the Accident and Injury Reduction Effort program (AIRE) and the “X-Team” initiative. Both initiatives are intended to reduce accidents, crashes, and injuries on I-90 through an enhanced presence of MSP Troopers and targeting vehicles traveling at excessive speeds. DeJong was required to work the entire duration of the shifts – either four or eight hours – and truthfully report the date, time and sector of deployment on the citations issued during the shift. As alleged, DeJong concealed the fraud by submitting citations that were issued prior to the overtime shift, altered the citations to create the appearance that citations were issued during the overtime shift, and/or submitted citations that were never issued and never took place.
Trooper DeJong earned $179,000 in 2016, which included approximately $63,000 in overtime, of which $14,062 was attributable to AIRE and X-Team shifts that DeJong either left early or did not show up for.
In 2015 and 2016, MSP received annual benefits from the U.S. Department of Transportation in excess of $10,000, which were funded pursuant to numerous federal grants.
On June 27, 2018, former Lieutenant David Wilson, 57, of Charlton; Trooper Gary Herman, 45, of Chester; and former Trooper Paul Cesan, 50, of Southwick, were arrested and charged with the same crime. On July 2, 2018, former Trooper Gregory Raftery, 47, of Westwood pleaded guilty.
The charge of theft of government funds provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Lelling; FBI SAC Shaw; and Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation’s Office of Inspector General made the announcement today. Assistant U.S. Attorneys Dustin Chao and Mark Grady of Lelling’s Public Corruption Unit and Neil Gallagher of Lelling’s Economic Crimes Unit are prosecuting the case.
Federal inmate sentenced to additional prison time for escaping from Atlanta’s federal penitentiary prison campRead the Press Release
ATLANTA - Dennis Kitchens has been sentenced to an additional two years in prison for escaping from the minimum-security camp at the U.S. Penitentiary in Atlanta (USP Atlanta) over 10 years ago.
“Kitchens evaded law enforcement for years after his escape in 2006, but he was ultimately caught and returned to prison,” said U.S. Attorney Byung J. “BJay” Pak. “Inmates who escape from prison threaten the safety of our communities. Eventually, the road will run out for them and they will be found and prosecuted, as in this case.”
According to U.S. Attorney Pak, the charges and other information presented in court: In 2004, Kitchens was sentenced to serve time in prison after a conviction for possession with intent to distribute crack cocaine. From January 2006 through June 2006, Kitchens was assigned to serve his time at USP Atlanta. USP Atlanta is a medium-security federal prison for male inmates operated by the Federal Bureau of Prisons. USP Atlanta also has a detention center for pre-trial inmates and a satellite prison camp for minimum-security male inmates. On June 11, 2006, Kitchens escaped from the prison camp.
After his escape, U.S Marshals worked to locate Kitchens, but he evaded detection by law enforcement for over 10 years. On January 27, 2017, a Cobb County Georgia Police Officer pulled Kitchens over after he cut across lanes of traffic without warning. Kitchens gave the officer a false name, but the officer fingerprinted him at the scene and discovered his true identity. At the time, Kitchens possessed approximately 10.5 grams of cocaine and 29 OxyContin pills.
On March 6, 2018, Kitchens pleaded guilty to possession of cocaine with the intent to distribute in the Superior Court of Cobb County, Georgia and was sentenced to 10 years in prison on that charge.
Dennis Kitchens, 57, of Atlanta, Georgia, was sentenced to two years in prison to be followed by three years of supervised release for escaping from prison. This term of imprisonment will run consecutive to his prior federal term of imprisonment resulting from his 2004 conviction. Kitchens was convicted of the escape on April 24, 2018, after he pleaded guilty.
This case was investigated by the U.S. Marshals Service.
Assistant U.S. Attorney Jolee Porter prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Federal Inmates Appear in Court in Connection with Weapon ChargesRead the Press Release
BECKLEY, W.Va. – United States Attorney Mike Stuart announced today two federal inmates appeared in court in connection with possession of weapons.
“My team works closely with Bureau of Prisons staff to prosecute these cases,” said United States Attorney Mike Stuart. “If these inmates want to add more federal prison time to their current sentences, then so be it.”
Coleman Ferrell, 31, an inmate at the Federal Correctional Institution at Beckley, was sentenced to 12 months in prison to run consecutively with the sentence he is currently serving. Ferrell pled guilty in April, admitting that on December 22, 2017, he possessed a piece of metal sharpened to a point on one end, a handcrafted weapon often called a “shank.” A staff member found the weapon in Ferrell’s shoe during a search.
The case was investigated by the Federal Bureau of Prisons and was prosecuted by Assistant United States Attorney John File. United States District Judge Irene C. Berger imposed the sentence.
BLUEFIELD, W.Va. – Tyler Romine, 27, an inmate at the Federal Correctional Institution at McDowell, pled guilty to possession of a weapon, admitting that on April 18, 2018, he had a weapon consisting of two combination locks attached to a belt. Romine used the weapon to strike another inmate. A staff member recovered the weapon after Romine obeyed an order to put it on the ground. Romine faces up to five years for this offense, and the sentence will run consecutively to the sentence he is now serving. His sentencing hearing is scheduled for November 27, 2018.
The case was investigated by the Federal Bureau of Prisons and is being prosecuted by Assistant United States Attorney John File. Senior United States District Judge David A. Faber presided at the plea hearing.
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Elyria man indicted for trafficking fentanyl, heroin and cocaineRead the Press Release
An Elyria man was indicted in federal court for trafficking fentanyl, heroin and cocaine.
Kenneth Ward, 44, was indicted on one count of possession with intent to distribute fentanyl, possession with intent to distribute cocaine and multiple counts of distribution of heroin, fentanyl and cocaine.
The indictment details multiple sales of drugs by Ward in March and April. Ward on April 28 possessed nearly 22 grams of crack cocaine and four grams of fentanyl, according to the indictment.
This case was investigated by the Federal Bureau of Investigation and Elyria Police Department. It is being prosecuted by Assistant U.S. Attorney Vasile Katsaros.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Ecuadorian Man Pleads Guilty to Transporting an AlienRead the Press Release
UTICA, NEW YORK – Marco Avila, age 34, and an Ecuadorian citizen living in Newark, New Jersey, pled guilty yesterday to transporting an alien.
The announcement was made by United States Attorney Grant C. Jaquith and Robert N. Garcia, Acting Chief Patrol Agent, United States Border Patrol, Swanton Sector.
As part of his plea, Avila admitted that on August 27, 2017, he and Julio Morales-Flor drove from New Jersey to the Akwesasne Mohawk Indian Reservation to pick up a friend whom they knew was illegally entering the United States from Canada that morning and bring him to New Jersey. After picking up the friend, Avila was stopped by Border Patrol. None of the three occupants had legal status in the United States.
Morales-Flor pled guilty to conspiracy to transport an alien and was sentenced on November 16, 2017, to time served (102 days in jail).
Avila is scheduled to be sentenced on August 22, 2018, and faces up to 5 years in prison and a maximum $250,000 fine. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the United States Border Patrol and is being prosecuted by Assistant U.S. Attorney Douglas Collyer.
Dominican Man Pleads Guilty to Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD - Raul Vantroi Arias Ruiz, of the Dominican Republic, pleaded guilty in federal court to participating in a fentanyl trafficking conspiracy, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, from at least December 6, 2016, through May 2, 2017, the defendant arranged for the sale of fentanyl to customers in New Hampshire, using his co-defendant, Yossi Rafael Rincon-Ramirez, to make drug deliveries. Four of the fentanyl sales he arranged during that time period were made to an undercover DEA agent in Nashua, New Hampshire.
Based on these drug buys, law enforcement officers arrested the defendant at his residence in Methuen, Massachusetts, on May 2, 2017. After obtaining a search warrant for the residence, which included two adjacent apartments on the second floor of the building, law enforcement officers found approximately $941,994 in U.S. currency and two firearms, as well as approximately 90 grams of fentanyl, 20 grams of heroin, and 30 pounds of marijuana.
The $941,994 was forfeited to the United States in a civil forfeiture proceeding. As part of his plea agreement, Arias Ruiz also will forfeit the firearms.
Arias Ruiz pleaded guilty to conspiracy to possess with intent to distribute and to distribute 40 grams or more of fentanyl. A sentencing hearing is scheduled for October 30, 2018.
State charges remain pending against him in Massachusetts related to the drugs and firearms seized from the Methuen residence.
Rincon-Ramirez previously pleaded guilty and is scheduled to be sentenced on August 22, 2018.
“The U.S. Attorney’s Office is committed to stopping the transportation and distribution of fentanyl and other deadly drugs into New Hampshire,” said U.S. Attorney Murray. “We will continue to coordinate with our law enforcement partners to identify and prosecute those who are responsible for introducing these lethal substances into the Granite State. We also will use federal forfeiture laws to ensure that drug dealers and their suppliers are not able to profit from their criminal activities.”
“The state of New Hampshire is faced with a fentanyl crisis unlike ever before,” said DEA Special Agent in Charge Brian D. Boyle. “Those responsible for distributing lethal drugs like fentanyl to the citizens of New Hampshire need to be held accountable for their actions. DEA will aggressively pursue Drug Trafficking Organizations and individuals who are coming from out of state to distribute this poison in order to profit and destroy people’s lives. This investigation demonstrates the strength and continued commitment of our local, state and federal law enforcement partners.”
This matter was investigated by the DEA, with the assistance of the Massachusetts State Police, the Massachusetts Attorney General’s Office, and the police departments of Hudson, NH, Nashua, NH, and Methuen, MA. The case is being prosecuted by Assistant U.S. Attorney Shane B. Kelbley. Assistant U.S. Attorney Robert Rabuck handled the asset forfeiture matter.
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District Men Indicted on Murder and Other Charges in August 10, 2017 Slaying of Jamahri SydnorRead the Press Release
WASHINGTON – Robert Moses, 19, and James Mayfield, 18, both of Washington, D.C., were indicted today on murder and other charges stemming from the Aug. 10, 2017, slaying of 17-year-old Jamahri Sydnor, U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD) announced. Moses and Mayfield also were indicted on charges involving the wounding of three other innocent bystanders.
Moses and Mayfield were indicted by a grand jury in the Superior Court of the District of Columbia on charges of first-degree murder while armed (premeditated), with aggravating circumstances; assault with intent to kill while armed, and aggravated assault while armed. Moses was also charged with obstructing justice and committing offenses while on release in another criminal matter.
Both men are to be arraigned on July 27, 2018, at a hearing before the Honorable Craig Iscoe. They each face a maximum of life in prison if convicted of the charges.
According to the government’s evidence, on Aug. 10, 2017, at about 3:30 p.m., Moses and Mayfield, each armed with firearms, approached on foot the intersection of Montana and Saratoga Avenues NE. Numerous people were outside at the time, in and around the busy neighborhood intersection. Both Moses and Mayfield are accused of opening fire across Montana Avenue towards the people on Saratoga Avenue, collectively firing over ten rounds. As they did, Jamahri Sydnor, 17 years-old, was driving through the intersection of Montana and Saratoga Avenues with a 12 year-old passenger. Ms. Sydnor, who was days away from beginning her college education, was struck in the head by a bullet. Incapacitated, she lost control of the car, and it crashed into another parked car. The 12-year-old, who was in the front passenger seat, was injured by the impact of the collision, as well as the shattering glass when the bullet traveled through the front passenger window before striking Ms. Sydnor. A third victim was shot as he stood on the corner speaking with friends, while yet another innocent bystander shattered his leg attempting to take cover from the hail of gunfire.
Following the attacks, Moses and Mayfield fled the scene. Moses was arrested on Oct. 26, 2017, and Mayfield was arrested on Dec. 27, 2017. Both have been in custody since their respective arrests.
At the time of the alleged offenses, Moses was on release in a pending gun case in the Superior Court of the District of Columbia.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the charges, U.S. Attorney Liu and Chief Newsham commended the work of those investigating the case from the Metropolitan Police Department (MPD). They also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences. They acknowledged the efforts of those who are working on the case from the U.S. Attorney’s Office, including Investigative Analyst Zachary McMenamin; Victim/Witness Advocate Marcia Rinker; Victim/Witness Security Specialist Wanda M. Queen; Paralegal Specialists Alesha Matthews-Yette, Meridith McGarrity, Stephanie Gilbert, and Lashone Samuels. Finally, they commended the work of former Assistant U.S. Attorneys Deborah Sines and Glenn Kirschner, along with Assistant U.S. Attorneys Sarah Santiago and Kimberley Nielsen, who are investigating and prosecuting the case.
Deputy Assistant Attorney General Matthew S. Miner Remarks at the American Conference Institute 9th Global Forum on Anti-Corruption Compliance in High Risk MarketsRead the Press Release
Good morning and thank you Marc Nichols for that gracious introduction, and thanks to both you and Jeannine D’Amico Lemker for co-hosting this important event.
It is truly a pleasure to be here with all of you as part of the ACI’s 9th Global Forum on Anti-Corruption Compliance in High Risk Markets.
I’ve always admired ACI’s mission and programs. Just last year, while still in private practice, I participated in the ACI’s 34th International Conference on the Foreign Corrupt Practices Act (FCPA). While I wear a different hat today, it is wonderful to be back.
In fact, today is particularly meaningful for me, as this marks my first time at an event like this since joining the Department of Justice as a Deputy Assistant Attorney General in the Criminal Division.
In my current role, I am tasked with overseeing both the Fraud Section, which houses the FCPA Unit, as well as the Appellate Section.
And, of course, we recently marked a particularly important milestone for the Criminal Division, as our newest Assistant Attorney General (AAG), Brian Benczkowski, was confirmed and took the reins of our Division just a few short days ago.
Under Brian’s leadership, we will continue the Division’s commitment to the rule of law, along with our efforts to ensure fairness and consistency in our investigations and resolutions, particularly as it relates to corporate enforcement and compliance.
Before I move on to my substantive remarks, let me say a word about Principal Deputy Assistant Attorney General John Cronan, who did an amazing job managing the Division as our Acting AAG since last year, overseeing many key developments, including the largest healthcare fraud takedown in the Department’s long history.
Today, I plan to focus on our efforts to investigate and stamp out global corruption, with a particular focus on implications for mergers and acquisitions.
As I think we can all agree, corruption is a virus that saps scarce resources and undermines public trust.
Corruption also harms law-abiding companies by tilting the playing field in favor of companies who are willing to break the rules to get ahead.
As our Attorney General and Deputy Attorney General have both made abundantly clear, fighting corruption and ensuring a level playing field for law-abiding companies remains a significant priority for the Department.
At the same time, we are striving to make sure that our robust approach to fighting corruption, and corporate enforcement generally, is done in a way that is also fair and just.
We at the Department fully recognize that even within otherwise good companies, ones with robust compliance programs and strong cultures of compliance, there can exist one or a few bad apples. Similarly, we understand that through acquisitions, otherwise law-abiding companies can sometimes inherit problems that are not of their own making.
These are some of the reasons why we continue to hold individual wrongdoers responsible for corporate criminal conduct, demonstrating our continued focus on individual accountability.
In this regard, we’ve announced guilty pleas by 10 individuals in foreign bribery cases so far this year.
In the sprawling and ever-growing investigation and prosecution of corruption at Venezuela’s state-owned oil company, PDVSA, we have announced charges against five additional former foreign officials this year, and we announced the 12th guilty plea in the case just two weeks ago.
Moreover, criminal prosecutions of corporations continue where misconduct was particularly serious or pervasive, but at the same time, we are working to avoid imposing excessive corporate penalties that harm innocent shareholders, employees, and other stakeholders.
On the FCPA corporate front, we’ve resolved five corporate FCPA cases this year, resulting in $512 million in corporate U.S. criminal fines, penalties, and forfeiture.
Among these resolutions was the matter involving Societe Generale, the first ever coordinated resolution with French authorities. This case marks a continuation of our efforts to work more closely with our foreign counterparts, both in terms of investigations and as it relates to our resolutions.
And we are striving to give credit where credit is due.
For example, in the FCPA resolution with TLI, the U.S. nuclear transportation company, the company received more lenient treatment due to its significant cooperation and remediation.
On the individual prosecutions front, the Department has secured guilty pleas by the company’s former co-President and the foreign official who received the bribes, and has indicted the other co-President.
While resolutions like these are important, we have also been making great strides in the way we are approaching FCPA and other corporate enforcement matters.
As you all know, last year we revised the Department’s guidelines with regard to FCPA enforcement by making what was previously the FCPA self-disclosure pilot program permanent.
This change enshrines our approach to FCPA enforcement in the U.S. Attorneys Manual as the FCPA Corporate Enforcement Policy.
Since its roll out, Department leadership has spoken extensively on the Policy, so I’m not going to spend much time on it, except to point out how the Policy furthers our commitment to rewarding companies that try to do the right thing.
This means companies that promptly report misconduct, fully cooperate with the Department, and enact effective remedial measures after misconduct is detected will be presumed eligible for a declination of prosecution, subject to disgorgement of ill-gotten gains.
The Policy also includes incentives for companies that fail to promptly self-disclose, but otherwise meet the Policy’s cooperation and remediation terms.
While it is still early to gauge the full effectiveness of the Policy, we were pleased to reach the first corporate declination under the FCPA Policy earlier this year in declining prosecution against Dunn & Bradstreet.
In that case, the company engaged in responsible corporate conduct after discovering misconduct in connection with hiring practices by its acquired subsidiaries in China. Because the company satisfied the rigorous requirements of the Policy, the company received a declination and the Department gave the company credit for its disgorgement as part of a $9 million payment in a related SEC administrative proceeding.
Credit for disgorgement to the SEC points to another recent policy change under this Administration – this one involving a perceived practice of “piling on” by the various enforcement agencies in corporate settlements by imposing duplicative fines and other financial penalties.
Importantly, this new policy for greater coordination and to avoid “piling on” is now enshrined in the U.S. Attorneys Manual, and applies across the Department.
A perfect example of putting the anti-piling on policy into practice is the resolution I mentioned involving Societe Generale.
In that case, the Department credited 50 percent of the fine to French authorities in connection with the FCPA portion of the resolution.
Moreover, to better inform the public, companies and compliance professionals, we are making declination letters public for cases that are resolved under the FCPA Corporate Enforcement Policy, as we did in connection with the pilot program.
In the case of Dunn & Bradstreet, some of the factors that led to the declination include:
- the fact that the company identified the misconduct and promptly and voluntary self-disclosed the conduct to the Department;
- the thorough internal investigation undertaken by the company;
- its full cooperation in the matter, including identifying all individuals involved in or responsible for the misconduct, providing the Department all facts relating to that misconduct, making current and former employees available for interviews, and translating foreign language documents to English;
- enhancements to its compliance program and its internal accounting controls;
- full remediation, including terminating the employment of 11 individuals involved in the misconduct in China, including an officer of the China subsidiary and other senior employees of one subsidiary, and disciplining other employees by reducing bonuses, reducing salaries, lowering performance reviews, and formally reprimanding them;
- and disgorgement to the SEC.
As a result, the company avoided criminal sanctions.
From my experience as a defense attorney, I think it is fair to say this is a just resolution for the company.
I know firsthand the difficult decisions that management must make when they uncover misconduct.
Senior management and boards of directors have to weigh many factors when deciding how to respond to misconduct, and whether to self-report.
In the past, many of these decisions were made in a relative vacuum in the sense that no one could predict in any concrete way how the Department would respond. While the facts of every case will be different, and will be the primary drivers as to the outcome, we are doing what we can to give clarity in terms of how companies will be treated.
Because companies are rational actors, driven by market and financial factors, it was often an impediment to decision-making not to know what consequences a company might face if it chose to self-report and cooperate with the government.
The Department’s new policies and revised approach to FCPA and corporate enforcement are purposely designed to speak to well-functioning, good corporate actors and inspire rationale decision-making in favor of greater reporting and cooperation. We hope to incentivize companies to invest in effective compliance programs and robust control systems to prevent misconduct and, in the event of a detected violation, to take full advantage of our enforcement approach.
By fostering a climate in which companies are fairly and predictably treated when they report misconduct, we hope to increase self-reporting and individual accountability — an outcome that is beneficial both for companies and the Department.
While we have made great strides in the past year and a half relating to the Department’s approach to corporate enforcement, and the FCPA in particular, one area where we would like to do better is with regard to mergers and acquisitions, particularly when such activity relates to high-risk industries and market.
Currently, the DoJ/SEC Resource Guide to the FCPA, which was released in 2012, provides some guidance on this. In particular, the Guide recognizes that in the past the Department and SEC have declined to take action where companies voluntarily disclosed and remediated, and cooperated with the government.
The Guide also notes that “a successor company’s voluntary disclosure, appropriate due diligence, and implementation of an effective compliance program may also decrease the likelihood of an enforcement action regarding an acquired company’s post-acquisition conduct when pre-acquisition due diligence is not possible.”
Furthermore, after laying out several M&A best practices, the Guide states that the “DOJ . . . will give meaningful credit to companies who undertake these actions, and, in appropriate circumstances, DOJ . . . may consequently decline to bring enforcement actions.”
While these policies are sound, I know from experience that “may” decline is a significant sticking point for corporate management when deciding whether and how to proceed with a potential merger or acquisition. There is a big difference between a theoretical outcome and one that is concrete and presumptively available.
At the Department, we know that there are many benefits when law-abiding companies with robust compliance programs are the ones to enter high-risk markets or, in appropriate cases, take over otherwise problematic companies.
Not only can the acquiring company help to uncover wrongdoing, but more importantly the acquiring company is in a position to right the ship by applying strong compliance practices to the acquired company.
We want to encourage this sort of activity. We certainly don’t want the specter of enforcement to be a risk factor that impedes such activity by good actors, and instead cedes the field to non-compliant companies. At bottom, it makes good economic sense and helps stamp out corruption when the Department adopts policies that foster greater corporate compliance.
When an acquiring company conducts robust due diligence that unearths wrongdoing, reports that conduct to the Department, and engages in remedial measures, including extending already robust compliance to the acquired company, it frees up resources for the Department that may have otherwise been expended investigating the acquired company.
These resources can then be directed to other cases, not only in the FCPA context, but also to other areas such as opioid enforcement, human trafficking, and crimes impacting vulnerable victims, like children and the elderly.
For these reasons, I want to make clear that we intend to apply the principles contained in the FCPA Corporate Enforcement Policy to successor companies that uncover wrongdoing in connection with mergers and acquisitions and thereafter disclose that wrongdoing and provide cooperation, consistent with the terms of the Policy.
We believe this approach provides companies and their advisors greater certainty when deciding whether to go forward with a foreign acquisition or merger, as well as in determining how to approach wrongdoing discovered subsequent to a deal.
We are fully cognizant that in some instances an acquiring company has limited access to a target company’s data and records, perhaps even more so when the target company is in a high risk jurisdiction.
In those instances, if an acquiring company unearths wrongdoing subsequent to the acquisition, we want to encourage its leadership to take the steps outlined in the FCPA Policy, and when they do, we want to reward them, accordingly for stepping up, being transparent, and reporting and remediating the problems they inherited.
Similarly, when an acquiring company encounters corruption issues during the due diligence process, we would encourage it to come to the Department for guidance through our FCPA Opinion Procedures before moving forward with an acquisition. Although it may take a little more time – and we can, to a degree, expedite our analysis based on timing needs – it sometimes makes sense to slow down to assess risks. In particular with high risk mergers and acquisitions, let me repeat the famous line from the English playwright, William Congreve: “Married in haste, we can repent at leisure.”
On the Fraud Section’s FCPA website, we currently post Opinion Procedure Releases going back to 1993. But not enough companies are taking advantage of this process. I’ve recently reviewed the list, and the most recent incident of use is from 2014. That shouldn’t be the case. But for purposes of today, that release is illustrative of the value of engaging in the opinion process.
In that case, a multinational company headquartered in the U.S. sought an opinion on whether the Department would bring an enforcement action against it if it acquired a foreign consumer products company. The acquiring company conducted pre-acquisition due diligence on the target and uncovered evidence of apparent improper payments. The acquirer took pre-closing steps to remediate the target’s anti-corruption issues, and anticipated fully integrating the target into its compliance and reporting structure within one year of closing.
While the opinion recognized that there was no U.S. nexus to the conduct, which would have precluded prosecution, in any event, the opinion also pointed to the fact that no contracts or assets acquired through bribery would remain in operation post-acquisition, and that no financial benefit would be derived from such contracts. Based on these facts, the opinion concluded that the Department would not take any action against the acquiring company.
In our view, the opinion process is a tremendous resource and we want to encourage greater use of it going forward.
Moreover, when a company relies on this procedure on the front end, but later uncovers wrongdoing post-acquisition, we want management and the company’s advisors to feel comfortable disclosing it to the Department, knowing that they will be treated fairly under the principles of the FCPA Corporate Enforcement Policy.
This is not to say that wrongdoers will be getting a pass for corrupt behavior that occurred in the past in an acquired entity. Far from it. The Department continues to focus on individual accountability, and those responsible for past wrongdoing or the concealment of wrongdoing will continue to be investigated and prosecuted.
As advisors and compliance professionals, you are on the front lines of detecting and preventing corruption and other misconduct.
You are at tasked with advising your companies and your clients to ensure that businesses operate in compliance with the law. As such, you are often put in the position of evaluating risk in time-sensitive transactions.
In that role, one thing I hope you will take away from my comments and those of my colleagues is that the Department of Justice should be viewed as a partner, not just an adversary.
When business and industry work with the Department, rather than against it, our public institutions and our country are stronger for it.
With that, I am happy to take a few questions, as time allows.
Danville Man Charged with Six Armed Robberies as Part of Project Safe Neighborhoods Initiative to Reduce Violent Crime in the Western District of VirginiaRead the Press Release
Danville, VIRGINIA – A federal grand jury has charged a Danville man with committing numerous armed robberies of businesses in Danville, Bedford, and Rocky Mount. The 14-count indictment is part of the Western District of Virginia’s ongoing Project Safe Neighborhoods initiative to reduce violent crime. United States Attorney Thomas T. Cullen and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division made the announcement.
Justin Lee Stallings, 33, is charged with six counts of Hobbs Act robbery, six counts of using a firearm in commission of a Hobbs Act robbery, one count of conspiracy to commit Hobbs Act robbery, and one count of being a previously convicted felon illegally in possession of a firearm.
“This indictment demonstrates our renewed commitment to working with our state and local partners to target individuals who commit violent acts in our communities,” U.S. Attorney Cullen stated today. “We will continue to work closely with our partners at the FBI, the Danville Police Department and the Commonwealth’s Attorney’s Office, to make Danville a safer community.”
“The message should be clear by now; the Commonwealth of Virginia and its law enforcement network is fully committed to eliminating violent crime in our communities. If you try it here, we will find you and we will stop you,” Special Agent in Charge of the FBI’s Richmond Division, Adam S. Lee said today. “I want to thank United States Attorney Thomas Cullen and his team for their continued outstanding work and our partners in Danville who are working to restore their great community.”
The superseding indictment alleges that Stallings committed six armed, Hobbs Act robberies between December of 2016 and February of 2017. Specifically, the superseding indictment charges Stallings with using a firearm to commit Hobbs Act robberies at each of the following businesses while engaged in interstate commerce: Dollar General located on South Main Street in Danville, Va., on December 8, 2016; Dollar General located on Westover Drive in Danville, Va. on January 8, 2017; KFC located on Memorial Drive in Danville, Va., on January 11, 2017; Charles’s Stop N Shop located on Westover Drive in Danville, Va., on January 20, 2017; Dollar General located on Blue Ridge Avenue in Bedford, Va., on February 5, 2017; Dollar General located on Pell Avenue in Rocky Mount, Va., on February 6, 2017.
During each robbery, Stallings is accused of brandishing a firearm, pointing it at the employees of the various businesses, and demanding cash and/or other goods from the cash register or store safe.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Danville Police Department, the Pittsylvania County Sheriff’s Office, the Caswell County (N.C.) Sheriff’s Office, the Bedford Police Department, and the Rocky Mount Police Department. Assistant United States Attorneys Ronald M. Huber and Christopher Kavanaugh and Special Assistant United States Attorney Rachel Swartz will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a federal program designed to bring 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 each community’s most violent criminals. Attorney General Sessions directed all U.S. Attorney’s Offices to work in partnership with federal, state, and local law enforcement, as well as the local civilian community, to develop effective, targeted strategies to reduce violent crime. This case is a product of that collaborative effort.
DEA Arrests Eight Defendants Linked to Coachella Valley-Based Drug Ring that Trafficked in Large Quantities of MethamphetamineRead the Press Release
RIVERSIDE, California – Federal authorities this morning concluded a 2½-year wiretap investigation into a drug trafficking organization based in the Coachella Valley by arresting eight defendants linked to the distribution of wholesale quantities of methamphetamine.
The eight people arrested today by special agents with the Drug Enforcement Administration are among 16 defendants named in two indictments returned by a federal grand jury on June 14. In addition to today’s arrests, three defendants already were in custody, and five defendants are fugitives, with three of those believed to be in Mexico.
The investigation – which was dubbed Operation “Narco Navigator” – targeted a significant methamphetamine distribution network overseen by a Coachella man that was responsible for sending narcotics to local sellers, as well as to customers in other states. During the course of this investigation, the DEA and its law enforcement partners seized over 50 pounds of methamphetamine and four firearms.
The main indictment charges 15 defendants, 11 of whom were arrested today or were already in custody. The charged defendants are:
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Raul Lopez-Valenzuela, 42, of Coachella, an illegal alien and the alleged leader of the drug trafficking organization;
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Balbino Valenzuela-Verdugo, also known as “Manuel,” 42, of Coachella, an illegal alien who is currently a fugitive and who allegedly was the primary distributor for the drug ring;
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Antonio Zamora, also known as “Foca,” 30, of Coachella, who currently is a fugitive and allegedly was a supplier of narcotics for the drug organization – including approximately 16 pounds of methamphetamine seized in 2015 and 2016;
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Jesus Garcia, also known as “Chuy,” 37, of Coachella, who allegedly was another supplier of narcotics to the Lopez-Valenzuela organization;
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Ernesto Alonzo Flores, also known as “Negro,” 36, of Coachella, another person who allegedly supplied narcotics to the drug ring – including approximately 24 pounds of methamphetamine seized from Valenzuela-Verdugo in 2016;
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Jesus Ramirez Granados, also known as “Chuy2,” 35, of Coachella, an illegal alien who allegedly distributed narcotics on behalf of the Lopez-Valenzuela drug trafficking organization;
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Daniel Kenneth Dalpezzo, 48, of Yucca Valley, who allegedly was a significant customer of the drug ring, purchasing large quantities of methamphetamine for further distribution;
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Charmaine Raygina Florio, 53, of Cathedral City, who is Dalpezzo’s former wife and allegedly purchased methamphetamine from the drug ring along with Dalpezzo;
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Tracy Cross, 45, of Palm Desert, who was already in custody;
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Alejandro Jose Rojas, 36, of Palm Springs, who was already in custody;
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Anthony Osteen, 38, of La Mesa, who allegedly worked with Rojas to coordinate obtaining narcotics;
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Roland Roe, 46, of Palm Springs, who was already in custody and who allegedly arranged for the supply of narcotics for at least one other defendant;
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Warren Barry, 54, of La Quinta, currently a fugitive, who allegedly was a courier for Lopez-Valenzuela, who was carrying a load of more than 10 pounds of methamphetamine that was seized by law enforcement authorities in late 2015 in Nebraska;
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Jason Sills, 37, of Palm Springs, an alleged distributor of narcotics in the Coachella Valley; and
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Ruben Arredondo-Diaz, 53, of Lexington, Nebraska, who is currently a fugitive and who allegedly arranged the distribution of drugs in Nebraska.
All 15 defendants named in this indictment are accused of participating in a conspiracy to distribute methamphetamine and to possess with the intent to distribute methamphetamine. If they were to be convicted, each defendant would face a potential sentence of life in federal prison.
Those arrested today are expected to be arraigned on the indictment this afternoon in United States District Court in Riverside (with the exception of Osteen, who is expected to appear tomorrow in federal court in San Diego).
The second indictment unsealed today charges Sills and Salvador Lemus Ramos, also known as “Eddie,” 39, of Palm Springs, who is also a fugitive, with distributing methamphetamine. The indictment describes a transaction in late 2015 in Cathedral City involving two pounds of methamphetamine where the buyer was an undercover DEA agent.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The investigation in this matter was conducted by the DEA, which received assistance from the United States Border Patrol; the Palm Springs Police Department; the Palm Springs Fire Department; the Coachella Valley Narcotics Task Force; the Riverside County Sheriff’s Department; U.S. Customs and Border Protection; the San Bernardino County Sheriff’s Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Federal Bureau of Investigation, the United States Marshal’s Service; the California Department of Corrections and Rehabilitation; the California Highway Patrol; the Riverside County District Attorney’s Gang Impact Team; and the Nebraska State Patrol.
The two indictments are being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force.
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Convicted Felons, Illegal Alien Indicted for Illegal Firearms PossessionRead the Press Release
BIRMINGHAM – A federal jury today indicted three men for illegally possessing firearms because of previous felony convictions, announced U.S. Attorney Jay E. Town, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson, and U.S. Marshal Martin Keely.
In separate and unrelated indictments, the grand jury charged JACOB ANDREW HAMMETT, STEPHEN CHANNING PRUITT and ALPHONSO O’NEAL BESS as convicted felons in possession of firearms.
“Felons who continue to violate our laws remain prime targets for federal law enforcement to take off the streets with federal charges on their way to federal prison,” Town said. “Our office is committed to having federal, state and local law enforcement working together to identify repeat offenders who threaten our communities with guns and violence and prove to everyone that there is no parole to cut short a federal prison sentence.”
Hammett, 28, of Munford, possessed a Taurus .38-caliber revolver on Nov. 8, 2017, in Calhoun County, after three prior felony convictions in Calhoun County Circuit Court, according to his indictment. His prior convictions were for first-degree property theft in April 2015, second-degree unlawful manufacturing of a controlled substance in February 2013, and second-degree escape in January 2012, according to the indictment.
Pruitt, 27, of Ohatchee, possessed a Stevens Arms .22-caliber rifle on Aug. 15, 2017, in Calhoun County following two felony convictions in Calhoun County Circuit Court, according to his indictment. Pruitt’s convictions were for first-degree receiving stolen property and unlawful possession of controlled substances, both in February 2017, according to his indictment.
Bess, 29, of Birmingham, possessed a Glock .357-caliber pistol on July 10, 2018, in Jefferson County after a September 2012 first-degree robbery conviction in Jefferson County Circuit Court, according to his indictment.
The grand jury also indicted a Mexican national for illegally possessing a firearm while an alien unlawfully in the United States. JOSE HERNANDEZ HERNANDEZ, 32, possessed a Rossi 38-caliber pistol on June 6, 2018, in Madison County, according to the indictment.
The maximum penalty for possessing a firearm as a convicted felon and for possessing a firearm as an illegal alien in the United States is 10 years in prison and a $250,000 fine.
ATF investigated the Hammett and Pruitt cases. Assistant U.S. Attorney L. James Weil Jr. is prosecuting the Hammett case and Assistant U.S. Attorney Mohammad Khatib is prosecuting the Pruitt case. The U.S. Marshals Service Gulf Coast Regional Fugitive Task Force investigated the Bess case, which Assistant U.S. Attorney Michael A. Royster is prosecuting.
Immigration and Customs Enforcement investigated the Hernandez case, which Assistant U.S. Attorney Weil is prosecuting.
An indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
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Cleveland man suspected of causing overdoses indicted for having a firearm while trafficking fentanyl and crack cocaineRead the Press Release
A Cleveland man was indicted for having a firearm while trafficking fentanyl and crack cocaine.
Tyler Hall, 28, was indicted on two counts of possession with intent to distribute narcotics and one count of being a felon in possession of a firearm.
Hall had 1.46 grams of fentanyl, 22 grams of crack cocaine and a Walther 9 mm semiautomatic pistol during a July 3 search of his home and business on the west side of Cleveland, according to court documents.
Hall was a person of interest in relation to three non-fatal opioid overdoses. Two of the victims had information that their supplier’s name was Tyler and that he worked, resided and sold drugs in the area of West 104th Street and Lorain Avenue, according to court documents.
Law enforcement on July 3 searched Hall’s residence at 10400 Lorain Ave. and business, at auto body shop at 3179 West 104th Street. Hall was detained and found to be carrying two cellular phones, $1,152 in cash and a set of keys to both his residence and business, according to court documents.
Inside his residence was a desk where it appeared drugs were prepared and packaged for sale. Also nearby were 1.46 grams of fentanyl, 22 grams of crack cocaine, a Walther 9 mm semiautomatic pistol and approximately $6,000 in cash, according to court documents.
Hall was prohibited from having a firearm because of previous felony convictions, including for aggravated robbery, robbery, intimidation of a crime victim or witness and multiple drug trafficking and possession convictions, according to court documents.
“This defendant was identified by law enforcement as a serious threat who has caused pain and destruction in and around his neighborhood,” U.S. Attorney Justin E. Herdman said. “Police officers, federal agents and prosecutors will continue to work together to prosecute those who illegally have firearms and deal drugs.”
DEA Special Agent in Charge Timothy Plancon said: “Through the swift and intense investigative efforts of the Cleveland Division of Police Opioid Overdose Investigations Group, the Cleveland DEA Heroin Response Group and Cleveland HIDTA, Hall was arrested before additional destruction to our community could occur. The DEA and our partners will continue to make drug trafficking and any associated violence a priority. Drug traffickers in the Cleveland area take heed, the DEA and our partners will continue to hold those who deliver causing overdose accountable.”
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.
This case was investigated by the Cleveland Division of Police, Drug Enforcement Administration and Ohio High Intensity Drug Trafficking Area (HIDTA). It is being prosecuted by Assistant U.S. Attorney Elliot Morrison.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Clarksburg man sentenced for his role in a drug distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA –Jordan Michael Conaway, of Clarksburg, West Virginia, was sentenced today to 21 months incarceration for his role in a drug distribution operation, United States Attorney Bill Powell announced.
Conaway, age 24, pled guilty to one count of “Distribution of Fentanyl in Proximity of a Protected Location” in March 2018. Conaway admitted to selling fentanyl on April 17, 2017 near Clarksburg City Park in Harrison County.
Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The case was investigated by the Greater Harrison Drug and Violent Crimes Task Force and the West Virginia State Police Bureau of Criminal Investigation.
Senior U.S. District Judge Irene M. Keeley presided.