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Tuesday 26 June 2018
Three Men Arrested and Charged with Trading on Inside Information Misappropriated from A Credit Rating AgencyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrests of SEBASTIAN PINTO-THOMAZ, ABELL OUJADDOU, and JEREMY MILLUL for their participation in a scheme to trade on material, nonpublic information (the “Inside Information”) misappropriated by PINTO-THOMAZ from his employer, a credit rating agency based in New York (the “Firm”). The scheme yielded almost $300,000 in illegal profits.
PINTO-THOMAZ, OUJADDOU, and MILLUL were arrested this morning in New York, New York, and will be presented today before United States Magistrate Judge Nathaniel Kevin Fox. In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against PINTO-THOMAZ, OUJADDOU and MILLUL.
U.S. Attorney Geoffrey Berman said: “As alleged, Sebastian Pinto-Thomaz used his position with a credit rating agency, where he was privy to business acquisition plans before they were publicly announced, to provide inside information to two friends who traded on the information and reaped thousands in profits. Then, when asked about this illicit trading, Pinto-Thomaz painted himself into a corner, falsely denying any relationship with his two co-conspirators. Our Office has always been – and remains – committed to ensuring that the nation’s securities markets remain fair for everyone, not just those who have friends in the know.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Aiming to fill their pockets, the defendants allegedly conspired to use Inside Information to advance their greedy agendas. This alleged fraud triangle produced nearly $300,000 in profit among the three defendants. As alleged, Pinto-Thomaz abandoned his duties of loyalty and confidentiality by passing material nonpublic information to his co-conspirators who then made illegal trades. We hope that today’s arrests will show all like-minded schemers that this alleged behavior ultimately does get you to the inside – of a federal prison.”
According to the allegations contained in the Complaint unsealed today in Manhattan federal court[1]:
Rating Evaluation Services and the Insider
When a company announces an acquisition, the acquiring company’s credit rating agency often evaluates, and ultimately issues a press release relating to, the impact that the acquisition could have on the acquiring company’s credit rating. Therefore, companies often contact rating agencies before an acquisition is publicly announced in order to secure the rating agency’s views on how a possible acquisition could affect a company’s credit rating. All the major rating agencies offer a product – sometimes known as a Rating Evaluation Service (“RES”) – that provides the company with a rating committee decision with respect to a proposed acquisition.
In March 2016, a credit rating agency in Manhattan (the “Firm”) assigned PINTO-THOMAZ, a credit ratings analyst, to work on an RES for the Sherwin-Williams Company (“Sherwin-Williams”) in advance of its contemplated but unannounced acquisition of the Valspar Corporation (“Valspar”). In connection with this assignment, PINTO-THOMAZ had access to Inside Information about Sherwin-Williams’s acquisition of Valspar prior to the public announcement of the acquisition. The Firm’s written policies prohibited the unauthorized disclosure of confidential information, which included the Inside Information. During his tenure at the Firm, PINTO-THOMAZ reviewed and certified his duties of loyalty and confidentiality to the Firm and its clients.
The Insider Trading Scheme
In March 2016, PINTO-THOMAZ misappropriated the Inside Information about the Sherwin-Williams acquisition of Valspar and passed it to OUJADDOU and MILLUL so they could use it to make profitable trades. On March 21, 2016, the first trading day after the public announcement of the acquisition, the price of Valspar stock increased approximately 23 percent over the prior day’s close.
OUJADDOU is a Manhattan hairstylist and salon owner who has a close relationship with PINTO-THOMAZ, as well as with a member of PINTO-THOMAZ’s immediate family (the “Relative”). PINTO-THOMAZ repeatedly provided OUJADDOU with Inside Information about the Valspar acquisition, oftentimes shortly after PINTO-THOMAZ became aware of the Inside Information through his work at the Firm. From March 10, 2016, through March 18, 2016, OUJADDOU, who had never previously purchased Valspar or Sherwin-Williams securities, used the Inside Information he had received from PINTO-THOMAZ to purchase 8,630 shares of Valspar stock. After the acquisition was publicly announced, OUJADDOU sold his Valspar shares for approximately $192,080 in profits.
MILLUL is a Manhattan jeweler who has a close personal friendship with PINTO-THOMAZ and the Relative. PINTO-THOMAZ also provided MILLUL with Inside Information about the Valspar acquisition. Although MILLUL had never owned a brokerage account in the United States and had never traded in U.S. securities prior to March 2016, he opened a brokerage account on March 13, 2016, and shortly thereafter purchased 480 shares of Valspar common stock. On March 18, 2016, the last trading day before the acquisition was publicly announced, MILLUL also purchased 75 Valspar out-of-the-money call options. After the acquisition was publicly announced, MILLUL sold his Valspar stock and options for approximately $106,806 in profits. In December 2016, MILLUL gave PINTO-THOMAZ $3,500 in cash.
PINTO-THOMAZ Makes False Statements About
OUJADDOU and MILLUL in Connection with a FINRA Inquiry
In June 2016, the Financial Industry Regulatory Authority (“FINRA”) sent the Firm a list of individuals and entities who had traded in Valspar in advance of the public announcement of the acquisition (the “List”). The Firm forwarded the List to its employees who had worked on the Sherwin-Williams RES, including PINTO-THOMAZ, asking the employees to respond by stating whether they had a past or present relationship with any individual or entity on the List. Although both OUJADDOU and MILLUL were on the List, PINTO-THOMAZ denied having a relationship with anyone on the List.
* * *
PINTO-THOMAZ, 32, ABELL OUJADDOU, 55, and JEREMY MILLUL, 31, all of New York, New York, are each charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense, and one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the Court.
In addition, the Government, pursuant to Court authorized seizure warrants, has seized $100,000 from a bank account belonging to MILLUL, and over 25,000 shares of BlackBerry stock from brokerage accounts belonging to OUJADDOU, as these assets constitute, or are traceable to, proceeds of the illegal conduct alleged in the Complaint.
Mr. Berman praised the work of the FBI, and thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.
Three Individuals Charged in Florida-Based Investment Fraud SchemeRead the Press Release
On June 21, 2018, a grand jury in Miami indicted three individuals for their alleged participation in an investment fraud scheme that targeted investors throughout the Nation, defrauding them out of approximately $2 million. The main office operated out of Broward County, Florida.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Florida Office of Financial Regulation (OFR), West Palm Division, made the announcement.
Thomas Michael White, 59, of Parkland, Florida, John Kevin Reech, 56, of Delray Beach, Florida, and Joseph Mario Genzone, 53, of Boca Raton, Florida, were all charged with conspiracy to commit mail fraud and wire fraud, as well as substantive mail fraud charges. In addition to those charges, White was also charged with wire fraud. The defendants had their initial appearances in U.S. Magistrate Court today.
The indictment charges the defendants with participating in an alleged conspiracy involving the sale of stock and debt equity in First Call Ventures, LLC and its subsidiaries, all of which were owned and operated by Thomas Michael White. According to the Indictment, from January 2012 to November 2014, the defendants solicited investors located throughout the United States to buy shares or ownership units in First Call Ventures, LLC and its subsidiaries, which included, First Call Auto Transport, Frist Call Freight and First Call List.
The indictment alleges that the defendants made materially false statements which included, but were not limited to, that First Call Ventures would provide a “safe and profitable investment” where “you won’t lose your money,” that investors would receive a guaranteed return on investments, that no fees would be charged to investors unless First Call Ventures turned a profit, that the value of the investment would increase significantly, that First Call Ventures was successful and profitable, and that investor funds would be used for sales and marketing, working capital and general corporate purposes.
In fact, over 80% of all First Call Ventures’ investor funds went to White for salaries, fees and other monetary distributions to himself, Reech, Genzone, and others.
Mr. Greenberg commended the investigative efforts of the FBI and the Florida Office of Financial Regulation, West Palm Division. This case is being prosecuted by Assistant U.S. Attorney Roger Cruz.
Individuals who believe that they may be a victim in this case should contact the FBI at www.fbi.gov for more information.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Texas Man Sentenced to over 10 Years in Federal Prison for Methamphetamine ConspiracyRead the Press Release
Gulfport, MS – Deandrae Damonn Washington, 33, of Dallas, Texas, was sentenced today by U.S. District Judge Sul Ozerden to125 months in federal prison, followed by 5 years of supervised release, for conspiring to possess with intent to distribute 500 grams or more of methamphetamine, announced U.S. Attorney Mike Hurst and Special Agent in Charge Christopher Freeze with the Federal Bureau of Investigation (FBI). Washington was also ordered to pay a $3,000 fine.
On August 20, 2017, Washington’s vehicle was stopped at a checkpoint in Magee, Mississippi. During the stop, officers smelled marijuana emitting from the vehicle, and Washington admitted to smoking marijuana an hour before he was stopped. Upon consent to search the vehicle, officers located several packages of methamphetamine concealed in a backpack. Washington admitted to knowing the methamphetamine was in the vehicle and conspiring to transport it from Texas to Jackson County, Mississippi. He further admitted that he had previously transported methamphetamine on seven separate occasions to the Mississippi Gulf Coast. A laboratory analyzed the methamphetamine and determined it had a purity level of 100% and weighed almost 2 kilograms. Washington pled guilty on February 21, 2018.
The case was investigated by the Magee Police Department, South Mississippi Metropolitan Enforcement Team (SMMET), Mississippi Bureau of Narcotics (MBN), and FBI Safe Streets Task Force. The case was prosecuted by Assistant U.S. Attorney Kathlyn R. Van Buskirk.
Statement from Attorney General Jeff Sessions on Today's Supreme Court Decision in Favor of the Trump Administration in Trump v. HawaiiRead the Press Release
Today Attorney General Jeff Sessions issued the following statement on the Supreme Court's decision in Trump v. Hawaii:
“Today is a great victory for the safety and security of all Americans. The Constitution and Acts of Congress confer on the President broad discretion to protect the interests of the United States. Today’s decision is critical to ensuring the continued authority of President Trump – and all future presidents – to protect the American people. We will continue to take and defend all lawful steps necessary to protect this great nation.”Statement from Attorney General Jeff Sessions on Today's Free Speech Supreme Court Decision in Favor of Pro-Life Pregnancy Centers (NIFLA v. Becerra)Read the Press Release
Today Attorney General Jeff Sessions issued the following statement on the Supreme Court's ruling in NIFLA v. Becerra:
“We are pleased that today’s decision protects Americans’ freedom of speech. Speakers should not be forced by their government to promote a message with which they disagree, and pro-life pregnancy centers in California should not be forced to advertise abortion and undermine the very reason they exist. This Department will continue to vigorously defend the freedom of all Americans to speak peacefully in accord with their deeply held beliefs and conscience."Six Members of a Venezuelan-sourced Maritime Cocaine Smuggling Operation Convicted by a St. Croix, Virgin Islands JuryRead the Press Release
St. Croix, USVI – Following an eight-week re-trial, a St. Croix federal jury convicted six defendants on cocaine conspiracy and drug distribution charges, United States Attorney Gretchen C.F. Shappert announced today. Defendants Sergio Quinones-Davila, 43, of Orlando, Fla., Jose Hodge, 38, of St. Croix, and Omi Guitierrez-Calderon, 38, Anibal Vega-Arizmendi, 28, Jean Carlos Vega-Arizmendi, 26, Jesus Burgos-Montanez, 31, all from Puerto Rico, were convicted on all counts.
According to trial testimony, the defendants were members of an international cocaine trafficking from 2014 through 2016. Members of the conspiracy routinely retrieved cocaine shipments transported from Venezuela to mid-sea locations just south of St. Croix, Virgin Islands, where the cocaine was transferred to local vessels for transport into St. Croix. The cocaine was subsequently shipped to Puerto Rico for distribution.
Evidence at trial revealed that the organization planned for the retrieval of over 300 kilograms of cocaine during the period of the conspiracy. Approximately 223 kilograms of cocaine were actually distributed. Law enforcement efforts to interdict the drug shipments were successful, beginning in 2015. On November 14, 2015, law enforcement agents apprehended four members of the organization, including Hodge and Burgos, on a beach at Knight’s Bay on St. Croix and seized 87 kilograms of cocaine packed in four suitcases.
"This is one of the most significant transnational cocaine conspiracy investigations in recent memory, where large quantities of cocaine from Venezuela were shipped through the Virgin Islands and on to Puerto Rico. Apprehension and conviction of these defendants makes clear that federal agents and prosecutors will aggressively pursue the drug traffickers that threaten our islands," said U.S. Attorney Shappert. She also praised the agents and prosecution team who worked to bring these defendants to justice.
Fourteen individuals were originally charged as part of the drug trafficking organization. Prior to trial six defendants entered guilty pleas and were sentenced.
Defendant Gutierrez-Calderon faces a sentence of imprisonment of 20 years to life and a fine of up to $20,000,000. The remaining defendants face sentences of imprisonment of ten years to life and fines of up to $10,000,000. Sentencings hearings for the defendants convicted at trial have been scheduled for October.
The case was investigated by the U.S. Drug Enforcement Administration and was prosecuted by Assistant U.S. Attorneys Alphonso G. Andrews, Jr. and Everard E. Potter.
Six Individuals Charged in a Cross Border Human Smuggling EventRead the Press Release
The United States Attorney’s Office and the Swanton Sector of the United States Border Patrol announce that, during late evening hours of June 22, 2018, Border Patrol agents arrested five adult Mexican citizens that had illegally entered the United States. Agents also arrested another man, also a citizen of Mexico, after he picked up the individuals who had crossed illegally. Four of the individuals who crossed the border illegally, Marlene Hernandez-Cruz, Alejandro Gomez-Diaz, Jose Armando Carrillo-Carrillo, and Oscar Gomez-Montejo, were charged with illegally entering the country. The fifth individual who crossed illegally, Luis Enrique Gonzalez-Jimenez, is charged with entering illegally having been previously removed from the country. The final individual, who picked up the other five, Evelio Balcazar-Correa, is charged with alien smuggling. All six defendants made their initial appearances in federal court in Burlington before The Honorable John M. Conroy, United States Magistrate Judge for the District of Vermont.
According to the criminal complaint, in the late evening of June 22, Border Patrol Agents received a report of possibly illegal activity east of Holland, Vermont. Agents responded to the area and observed suspicious activity in the area of a pickup truck. After stopping the truck, agents identified Balcazar as one of its passengers. They also located the remaining charged individuals in the back of the truck, with their clothes and shoes covered in dirt and mud. Balcazar and the five individuals in the back of the truck were confirmed to be aliens without documentation allowing them to be in the United States. Post-arrest statements revealed that Balcazar had coordinated with individuals in Canada to pick up the Mexican citizens and bring them to the United States. Balcazar stated that he had repeatedly engaged in alien smuggling.
United States Attorney Christina E. Nolan commended Border Patrol for its efficient and effective handling of this matter, and for its diligence in protecting the integrity of Vermont’s northern border.
“This arrest is another great example of the vigilance our Border Patrol agents display on a daily basis,” said Newport Station Patrol Agent in Charge Richard Ross. “These agents prevented a smuggler from bringing aliens into the interior of the United States.”
The United States Attorney emphasizes that the charges are merely accusations, and that the defendants are presumed innocent unless and until they are proven guilty.
The Swanton Sector Border Patrol is responsible for securing the land border between ports of entry in Vermont as well as New Hampshire and northeastern New York. The assistance of citizens is invaluable in helping the U.S. Border Patrol accomplish their border security mission and they welcome community members to help them keep our nation’s borders safe by reporting suspicious activity at 1-800-689-3362.
For more on CBP’s mission at our nation’s ports of entry with CBP officers and along U.S. borders with Border Patrol agents, please visit the Border Security section of the CBP website.
The prosecutor in this case is Assistant U.S. Attorney Wendy Fuller. Marlene Hernandez-Cruz, Alejandro Gomez-Diaz, Jose Armando Carrillo-Carrillo and Oscar Gomez-Montejo are represented by John-Claude Charbonneau. Luis Enrique Gonzalez-Jimenez is represented by Mark D. Oettinger. Evelio Balcazar-Correa is represented by Elizabeth Quinn.
Shawnee Man Sentenced for Armed Bank Robbery in Overland ParkRead the Press Release
KANSAS CITY, KAN. – A Shawnee man was sentenced today to 85 months in federal prison for robbing an Overland Park bank at gunpoint, U.S. Attorney Stephen McAllister said.
Mamoudou U. Kaba, 22, Shawnee, Kan., pleaded guilty to one count of bank robbery and one count of brandishing a firearm during the robbery. In his plea, he admitted he brandished a handgun on Sept 22, 2015, when he robbed U.S. Bank at 9900 West 87th in Overland Park, Kan.
He pointed a gun a 9 mm Ruger at a clerk and customers before fleeing the bank with stolen cash.
McAllister commended the Overland Park Police Department, the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
Seventh Individual Pleads Guilty in Opa Locka Municipal Corruption InvestigationRead the Press Release
Dante Starks, a close associate of former City of Opa Locka Commissioner Luis Santiago, pled guilty yesterday, before United States District Judge Jose E. Martinez, to charges arising from his participation in the long-running Opa Locka municipal corruption conspiracy and his failure to file federal income tax returns.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Starks pled guilty to a two-count Superseding Information. Specifically, Starks pled guilty to conspiring to commit extortion under color of official right and federal programs bribery, in violation of Title 18, United States Code, Sections 371, 666(a)(1)(B), and 1951(a), and to failing to file his 2015 federal income tax return, in violation of Title 26, United states Code, Section 7203. Starks is scheduled to be sentenced on August 31, 2018, at 2:00 p.m. before Judge Martinez.
According to the court record, including the stipulated factual basis for the plea, Starks conspired with former Opa Locka City Commissioner Luis Santiago, former Opa Locka City Manager David Chiverton, and former Opa Locka Assistant Public Works Director Gregory Harris, to use the official positions and authority that Santiago, Chiverton, and Harris had with the City of Opa Locka to solicit, demand, and obtain personal payments from businesses and individuals in exchange for taking official actions to assist and benefit those businesses and individuals in their official dealings with the City of Opa Locka.
Although Starks was not an official or employee of the City of Opa Locka, he was closely associated with and had great influence over Santiago. Starks also had, and exercised significant influence over, numerous other city officials and employees, including Chiverton and Harris, and he regularly used that significant influence to pressure and advise city officials and employees to take official actions on matters relating to occupational licenses, code enforcement citations and fines, liens, water service and billing, zoning, and city contracting. Working together, Santiago and Starks solicited and obtained illegal payments from businesses and individuals in Opa Locka, and in exchange, Santiago would take official actions on their behalf, and Starks and Santiago would pressure and advise Chiverton, Harris, and other City of Opa Locka employees to take official actions on behalf of those businesses and individuals.
In addition, Starks participated in a conspiracy with Santiago and others to receive bribes in exchange for ensuring that a particular company received a city contract. In April 2015, Santiago and Starks met with Raul Sosa Sr. (“Sosa Sr.”), who agreed to pay them a $10,000 bribe to ensure that the company Sosa Sr. was associated with, referred to as the “Towing Company,” was selected as one of the companies receiving a city towing contract. Over the next two months, Starks collected $10,000 in cash payments from Raul Sosa Jr. (“Sosa Jr.”), the Towing Company’s manager, and in exchange, Starks arranged for Opa Locka’s Purchasing Director to assemble and prepare the Towing Company’s bid package. After this bid was submitted, Starks violated the city’s purchasing Cone of Silence by contacting a member of the city’s committee evaluating the towing bids and directing that individual to rank the Towing Company as the number one company. To complete the illegal arrangement, at the June 24, 2015, City Commission meeting authorizing the award of the towing contracts, Santiago used his position as a City Commissioner to bring forward and vote in favor of the resolution authorizing the City Manager to enter into a city contract with the Towing Company.
Starks also willfully failed to file federal income tax returns for the tax years 2014, 2015 and 2016.
Related cases arising from the Opa Locka corruption investigation are the following:
Santiago previously pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right (Case No. 16-20971-CR). Santiago was sentenced to 51 months in prison.
Chiverton previously pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right (Case No. 16-20596-CR). Chiverton was sentenced to 38 months in prison.
Harris previously pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right (Case No. 16-20589-CR-BLOOM). Harris was the first defendant to plead guilty to charges arising from this investigation, and received a sentence of probation.
Sosa Sr. and Sosa Jr. previously pled guilty to conspiracy to commit Federal programs bribery (Case No. 18-20256-CR). They are pending sentencing in August 2018 before Judge Martinez.
Mr. Greenberg commended the investigative efforts of the FBI Miami Area Corruption Task Force and IRS-CI in this matter. Mr. Greenberg thanked the Miami-Dade Police Department and Hialeah Police Department for their assistance. This case is being prosecuted by Assistant U.S. Attorneys Edward N. Stamm and Maurice Johnson.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Serial Bank Robber Pleads Guilty in Brooklyn Federal CourtRead the Press Release
Earlier today, in federal court in Brooklyn, Sergey Demidenko pleaded guilty to six counts of bank robbery before United States District Court Judge Pamela K. Chen. When he is sentenced, Demidenko faces a statutory maximum sentence of 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“Sergey Demidenko committed a string of robberies across Brooklyn, Long Island and New Jersey and then brazenly gambled away the stolen cash in Atlantic City,” stated U.S. Attorney Donoghue. “Thanks to the efforts of the FBI and our state and local partners, Demidenko had no luck in getting away with these crimes, for which he has now pleaded guilty and will be held responsible.”
“After their month-long robbery spree, the defendants will now be brought to justice. Demidenko and his co-defendant strategically planned these robberies, just to gamble with their illegal proceeds in the end,” stated FBI Assistant Director-in-Charge Sweeney. “As shown by their guilty plea, they will now face the consequences of their self-driven actions.”
According to court filings and statements made during the guilty plea proceedings, between January 16, 2018 and January 26, 2018, Demidenko and his co-defendant James Boccanfusco robbed four banks, and attempted to rob two others in Brooklyn, Long Island and New Jersey. In each instance, Demidenko presented a note demanding money from the tellers. Demidenko’s co-defendant, Boccanfusco, waited outside the banks in a getaway car. After the robberies, the two drove to Atlantic City, New Jersey, where they used the robbery proceeds to gamble at various casinos.
The indictment charged Demidenko and Boccanfusco with the following robberies:
- Capital One Savings Bank branch in Brooklyn, New York, on January 16, 2018;
- Chase Bank branch in Manahawkin, New Jersey, on January 18, 2018;
- Wells Fargo Bank branch in Galloway Township, New Jersey, on January 24, 2018;
- Roslyn Savings Bank branch in Massapequa, New York, on January 25, 2018;
- Chase Bank branch in Brooklyn, New York, on January 25, 2018 (attempted), and
- Wells Fargo Bank branch in Manahawkin, New Jersey, on January 26, 2018 (attempted).
Demidenko’s co-defendant, Boccanfusco, previously pleaded guilty before Judge Chen on May 24, 2018 to four counts of bank robbery and two counts of attempted bank robbery.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney David Lizmi is in charge of the prosecution.
The Defendants:
SERGEY DEMIDENKO
Age: 39JAMES BOCCANFUSCO
Age: 41E.D.N.Y. Docket No. 18-CR-104
Schenectady Man Pleads Guilty to Heroin ConspiracyRead the Press Release
ALBANY, NEW YORK – Corey J. White, aka “Stacks,” age 35, of Schenectady, New York, pled guilty today to conspiring to distribute heroin.
The announcement was made by United States Attorney Grant C. Jaquith and Janelle M. Miller, Acting Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation.
White admitted that between August 1, 2016 and May 10, 2017, he worked with another person to distribute heroin in Schenectady. He also admitted that on May 11, 2017, he possessed, in his Schenectady residence, about 100 green-colored envelopes, each of which contained heroin packaged for sale, as well as 2 digital scales, drug packaging materials, and $4,462 in cash.
Sentencing is scheduled for October 25, 2018 before United States District Judge Mae A. D’Agostino. White faces up to 30 years in prison, and a term of post-imprisonment supervised release of at least 6 years and up to life. 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 FBI and is being prosecuted by Assistant U.S. Attorney Michael Barnett.
Roanoke Attorney Pleads Guilty to Lying to Federal AgentsRead the Press Release
Roanoke, VIRGINIA – A Roanoke defense attorney, who engaged in sexual activities with his clients, exchanged legal services for sexual acts from his clients, possessed and used controlled substances, and lied to federal agents about his conduct, pleaded guilty today in U.S. District Court in Roanoke, United States Attorney Thomas T. Cullen announced.
Scott A. Webber, 38, of Roanoke, waived his right to be indicted and pleaded guilty today to a one count Information charging him with making materially false, fictitious and fraudulent statements in a matter within the jurisdiction of the Executive, Legislative, or Judicial branch of the Government of the United States. At sentencing, Webber faces a maximum statutory penalty of up to five years imprisonment and/or a fine of up to $250,000.
According to a statement of facts agreed to by Webber and read into the court record today by Assistant United States Attorney Zachary T. Lee, Webber was a licensed attorney and a member of the Virginia State bar whose practice included the representation of parties in both state and federal courts, and in both criminal and civil matters.
Beginning in 2014, Webber represented Client #1 in matters related to driving under the influence and petty larceny. On two occasions, Client #1 had sexual intercourse with Webber in exchange for reduced legal fees.
From approximately 2012-2015, Webber represented Client #2 in multiple criminal matters. On one occasion, Client #2 told Webber she did not have money to pay him for his representation, to which Webber told Client #2 that if she performed oral sex on him he would submit a letter to the court that he was representing Client #2 and promised her she would not go to jail. Client #2 did perform oral sex on Webber and he continued to represent her.
Between January 25 and January 27, 2016, Webber had conversations via text message with Client #3 in which they discussed meeting at his house and engaging in sexual activity in exchange for legal services.
Between August 2016 and December 2016, Webber and Client #4 engaged in sexual activity. On December 10, 2016, Webber discussed wanting Client #4 to engage in sexual acts with him before he would provide her representation in a custody matter.
In addition, the statement of facts addresses instances in which Webber was in contact with at least three clients with which he was receiving and or distributing small amounts of marijuana, Adderall and/or other prescription medications.
On January 26, 2017, Webber was asked by special agents with the Federal Bureau of Investigation if he ever had sexual relations with a client, to which he responded, “Yea. No, no, I’ve not had sex with clients. I’ve certainly not had sex with clients, I’ve not had sex for pay ah in lieu of legal fees…”
During the same interview, agents asked Webber if he ever received or distributed drugs. Webber answered “No,” “I haven’t distributed drugs,” “I haven’t used drugs period…”
The investigation of the case was conducted by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Virginia State Police and the Roanoke City Police Department. Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.
Recent Incidents Involving AK-47 Style Weapons Result in Federal Firearms Charges Against Two Mid-State MenRead the Press Release
Two mid-state men are facing federal firearms charges after recent incidents involving the use of assault rifles, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
“Some people just aren’t getting the message when it comes to violent gun crime,” said U.S. Attorney Cochran. “The U.S. Attorney’s Office and our local, state and federal law enforcement partners have mounted an all-out assault on violent crime. As evidenced here, when we bring federal charges for firearms offenses, we intend to seek justice swiftly - and that includes long prison sentences with no parole.”
Robert Johnson, 18, of Nashville, was charged yesterday in a criminal complaint with carjacking and using, carrying and brandishing a firearm during a crime of violence.
According to the complaint, on the evening of June 22, 2018, officers with the Metropolitan Nashville Police Department (MNPD) located a stolen Hyundai vehicle in the James Cayce Public Housing Development. When the officers attempted to stop the vehicle, the driver fled in the car and subsequently crashed near the Shell gas station, located at 1331 Briarville Road. The complaint alleges that the driver then used a rifle and carjacked a Ford Fusion from the vehicle’s occupant at the Shell station and fled to the Charter Village Apartments in Madison, where he entered an occupied apartment. The occupants of the apartment immediately fled and called police.
The MNPD SWAT Team subsequently arrived and took Johnson into custody. Officers also recovered an AK-47 style assault rifle at the scene.
If convicted, Johnson faces up to fifteen years in prison and an additional mandatory seven years, consecutive to any other sentence imposed.
In another prior incident on June 11, 2018, Raphael Mandez Utley, 32, of Springfield, Tennessee, was charged with being a convicted felon in possession of a firearm after Springfield police officers responded to a fight and shots being fired call on May 27, 2018. Responding officers saw Utley standing next to a vehicle and holding a rifle over the roof of the car. Officers also heard Utley exclaim, “Yeah, we gonna shoot the police, b—ch.” When the officers turned around to approach Utley, he fled on foot and was apprehended a short distance away. Springfield police officers recovered a loaded AK-47 style assault rifle in the bushes near the place they had initially observed him.
Utley was found to have previously been convicted of voluntary manslaughter, aggravated assault and reckless endangerment in Robertson County, Tennessee.
Utley faces up to at least 10 years in prison, if convicted.
U.S. Attorney Cochran commended the response and investigation of these cases by the ATF; the Metropolitan Nashville Police Department; the Springfield Police Department; and Assistant U.S. Attorney Robert McGuire, who is prosecuting the cases.
Charges in these cases are merely accusations. The defendants are presumed innocent until proven guilty in a court of law.
Raleigh Man Pleads Guilty to Falsely Pretending to be a General Officer in the U.S. ArmyRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that CHRISTIAN GERALD DESGROUX, age 57, of Raleigh, pled guilty today to pretending to be a United States Army Lieutenant General engaged in transporting a person for a classified briefing and under such guise having asserted authority to land a helicopter at Statistical Analysis Systems (SAS) headquarters, located in Cary, North Carolina – all in violation of Title 18, United States Code, Section 912.
At sentencing, set for the July 23, 2018 term of court, DESGROUX faces maximum penalties of 3 years imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The case is being investigated by the Department of Homeland Security and the Defense Criminal Investigative Service. Assistant United States Attorneys Jason Kellhofer and Eleanor Morales are prosecuting the case for the government.
Prince George’s County Man Sentenced to over 23 Years in Federal Prison for Production of Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Jayron Khalil Foster, age 21, of Riverdale, Maryland, today to 282 months in prison, followed by lifetime supervised release, for production of child pornography. Judge Hazel also ordered that, upon his release from prison, Foster must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Chief Henry P. Stawinski III of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
According to Foster’s plea agreement, from at least August 2016 through January 2017, Foster engaged in sexually explicit conduct with a 7-year-old female, in order to produce images and videos documenting the abuse. In April 2017, Maryland State Police (MSP) began investigating tips that were sent to the MSP Internet Crimes Against Children (ICAC) task force from the National Center for Missing and Exploited Children in reference to possible child pornography. On April 25, 2017, investigators executed a search warrant at Foster’s residence and seized a hard drive. The hard drive contained numerous images and videos depicting Foster engaged in sexually explicit conduct with the minor victim, sometimes while the victim was sleeping, as well as other images of child pornography.
As part of his plea agreement on the federal charges, Foster pleaded guilty to one count of sex abuse of a minor in Prince George’s County Circuit Court and is scheduled to be sentenced on August 3, 2018. Foster’s federal and state prison sentences will be served concurrently.
Foster remains detained.
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 Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Robert K. Hur commended HSI, the Maryland State Police, the Prince George’s County Police Department, and the Prince George’s County State’s Attorney’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Kelly O’Connell Hayes, who prosecuted the case.
Possession of Ricin Results in 37 Months in PrisonRead the Press Release
OKLAHOMA CITY – DANIELLE DANA LAYMAN, 38, of Ponca City, Oklahoma, has been sentenced to 37 months in prison for possessing the toxin ricin, announced Robert J. Troester, Acting U.S. Attorney for the Western District of Oklahoma.
According to a complaint filed on July 1, 2017, Layman used craigslist to locate someone interested in a "10 day gig overseas." On May 9, 2017, she met in Ponca City with a person who responded to the craigslist post. According to the affidavit, Layman gave that person written instructions on traveling to Tel Aviv, Israel, and using ricin to poison a specific taxi driver in exchange for $4,000 plus expenses. The affidavit states that Layman also gave the person a baggie that she claimed contained the ricin to be used in the murder. Ricin is an extremely hazardous substance derived from castor beans.
On June 30, 2017, the FBI executed a search warrant at Layman’s residence in Ponca City and found castor beans in the kitchen. The complaint alleges agents also found a mortar and pestle with residue that could be remnants of ground castor beans, along with instructions on how to make ricin. Layman was arrested later that day.
On August 1, 2017, a grand jury indicted Layman on one count of using interstate communications with the intent to hire someone to commit murder. On October 3, a grand jury returned a superseding indictment that added one count of possessing ricin without the required registration.
On February 8, 2018, Layman pleaded guilty to possessing ricin illegally. The government agreed to dismiss the murder-for-hire count at sentencing.
At today’s sentencing, United States District Court Judge Robin J. Cauthron ordered Layman to serve 37 months in prison, the top of the advisory range under the U.S. Sentencing Guidelines. The court noted that because she prepared ricin in her home, she put her own children at risk. After release from prison, Layman will be under supervision for three years.
"Keeping citizens safe is a top priority for federal law enforcement. I appreciate the FBI’s diligence in its thorough investigation of cases involving ricin and other substances that can be used as weapons," said Acting U.S. Attorney Troester.
This sentence is the result of an investigation by the FBI. FBI Special Agent-in-Charge Kate Peterson said: "Through the careful and methodical investigation conducted by agents of the FBI Oklahoma City Division, we were able to show the true callous and malicious nature to Ms. Layman’s crimes."
This case was prosecuted by Assistant U.S. Attorneys Ashley L. Altshuler and David P. Petermann, with assistance from the National Security Division’s Counterterrorism Section.
Reference is made to court records for further information.
Pennsylvania Man Admits Three Armed Robberies in South JerseyRead the Press Release
CAMDEN, N.J. – A Ridley Park, Pennsylvania, man today admitted committing three armed robberies in Salem, Ocean, and Cumberland counties in November 2017, U.S. Attorney Craig Carpenito announced.
Jeffrey Edmonds, 45, pleaded guilty before Senior U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of Hobbs Act robbery, two counts of bank robbery, and one count of possession of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
On Nov. 1, 2017, Edmonds and Terrance Robinson, 31, of Havertown, Pennsylvania, drove together to a convenience store in Upper Pittsgrove Township, stopping along the way to pick up a handgun and remove the license plates from the car that Edmonds was driving. After arriving at the convenience store, Edmonds remained in the getaway car while Robinson entered the store with the handgun and stole approximately $179.
Edmonds and Robinson later robbed an Ocean First Bank in Upper Deerfield Township on Nov. 6, 2017 and a Fulton Savings Bank in Alloway Township on Nov. 14, 2017. Prior to robbing the banks, Edmonds and Robinson removed the license plates from the getaway car. Robinson stayed in the getaway car while Edmonds entered the banks and robbed them with a handgun.
Each of the three robbery offenses carries a maximum potential penalty of 20 years in prison. The possession of a firearm in furtherance of a crime of violence charge carries a consecutive minimum term of five years in prison and a maximum potential penalty of life imprisonment. Each offense also carries a potential $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 5, 2018.
Robinson remains charged by complaint for his alleged roles in the robberies. The charges and allegations against him are merely accusations, and he is presumed innocent unless and until proven guilty.
U.S. Attorney Carpenito credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Gregory W. Ehrie, and officers of the N.J. State Police, under the direction of Superintendent Col. Patrick J. Callahan, with the investigation.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.
Defense Counsel: Wayne Powell Esq., Cherry Hill, New Jersey
Passaic County, New Jersey, Man Sentenced to 92 Months in Prison for String of Bank RobberiesRead the Press Release
TRENTON, N.J. – A Passaic, New Jersey, man was sentenced today to 92 months in prison for robbing six banks in Hudson, Union, and Passaic counties in June and July of 2016, U.S. Attorney Craig Carpenito announced.
Quentin Morales, a/k/a “Quinton Morales,” 27, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with three counts of bank robbery. He also admitted to robbing two additional banks and attempting to rob another. Judge Sheridan imposed the sentence today in Trenton federal court.
Prior to his arrest in August 2016, Morales was one of Newark FBI’s most wanted bank robbers.
According to documents filed in this case and statements made in court:
Morales robbed, or attempted to rob, the following New Jersey banks:
Bank
Location
Date
Wells Fargo Bank
Kearny, New Jersey
June 24, 2016
Capital One Bank (attempted)
Elizabeth, New Jersey
June 27, 2016
Wells Fargo Bank
Kenilworth, New Jersey
June 30, 2016
Wells Fargo Bank
Linden, New Jersey
July 6, 2016
Wells Fargo Bank
Clifton, New Jersey
July 13, 2016
Wells Fargo Bank
Union, New Jersey
July 25, 2016
At each bank, Morales presented a note demanding cash from bank tellers. For example, during the June 24, 2016, robbery, Morales handed the teller a note stating “You are being robbed. Give me all the large bills you have, no alarms, no noise.” On at least two occasions, Morales said he had a gun and urged bank tellers to hurry. He was apprehended on Aug. 2, 2016, by officers of the N.J. State Parole Board.
In addition to the prison term, Judge Sheridan sentenced Morales to three years of supervised release and ordered to pay restitution of $9,217.
U.S. Attorney Carpenito credited special agents of the FBI’s Violent Crimes/Interstate Theft Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the N.J. State Parole Board and the Kearny, Elizabeth, Kenilworth, Linden, Clifton, Union Township and Newark police departments, as well as the Essex County Prosecutor’s Office for their efforts in the investigation and apprehension of Morales.
The government is represented by Assistant U.S. Attorney Elisa Wiygul of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Linda D. Foster Esq., Assistant Federal Public Defender (Newark)
Pascagoula Man Sentenced to over 24 Years in Federal Prison for His Involvement in Methamphetamine ConspiracyRead the Press Release
Gulfport, Miss. – Tharon Jamell Taylor, 27, of Pascagoula, was sentenced today by United States District Judge Sul Ozerden, to serve 295 months in federal prison, followed by 5 years of supervised release, for conspiring to possess with intent to distribute more than 500 grams of methamphetamine. Taylor was also ordered to pay a $3,000 fine.
On August 20, 2017, the FBI Safe Streets Task Force arrested Taylor as he attempted to obtain approximately 2 kilograms of methamphetamine shipped from Texas. During the investigation, agents learned that Taylor received methamphetamine on at least six different occasions. Upon arresting Taylor, law enforcement searched his apartment and found money, a scale, methamphetamine, cutting agents, and a gun. Taylor pled guilty on February 20, 2018.
The case was investigated by FBI Safe Streets Task Force in Pascagoula, Mississippi and prosecuted by Assistant U.S. Attorney Kathlyn R. Van Buskirk.
Parma men among those charged as part of crackdown on Darknet vendorsRead the Press Release
Today, the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Secret Service (USSS), the U.S. Postal Inspection Service (USPIS) and the U.S. Drug Enforcement Administration (DEA), announced the results of a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the Darknet. Special Agents of the HSI New York Field Division, in coordination with the U.S. Attorney’s Office for the Southern District of New York, posed as a money launderer on Darknet market sites, exchanging U.S. currency for virtual currency. Through this operation, HSI New York was able to identify numerous vendors of illicit goods, leading to the opening of more than 90 active cases around the country. The Money Laundering and Asset Recovery Section (MLARS) of the Department of Justice’s Criminal Division, working with more than 40 U.S. Attorney’s Offices throughout the country, coordinated the nationwide investigation of over 65 targets, that lead to the arrest and impending prosecution of more than 35 Darknet vendors.
These results were announced by Deputy Attorney General Rod J. Rosenstein, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Executive Associate Director Derek Benner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Special Agent-in-Charge Angel M. Melendez of HSI New York Field Office, Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service (USPIS) New York Division, Assistant Director Kenneth Jenkins of the U.S. Secret Service (USSS) Office of Investigations, and Special Agent in Charge James J. Hunt of the U.S. Drug Enforcement Administration (DEA) New York Division.
“Criminals who think that they are safe on the Darknet are wrong,” said Deputy Attorney General Rosenstein. “We can expose their networks, and we are determined to bring them to justice. Today, we arrested more than 35 alleged Darknet vendors. We seized their weapons, their drugs, and $23.6 million of their ill-gotten gains. This nationwide enforcement effort will reduce the supply of deadly drugs like fentanyl that are killing an unprecedented number of Americans. I want to thank our federal prosecutors, and the dedicated federal agents with DEA, Homeland Security Investigations, the Postal Inspection Service, and the Secret Service for their outstanding work.”
“The Darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” said HSI Executive Associate Director Benner. “The veil has been lifted. HSI has infiltrated the Darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.”
“Postal Inspectors and their law enforcement partners will spare no resource or expense to shine a light on the sale and distribution of illicit and dangerous items on the Darknet, that serve to destroy the lives of many through addiction and despair,” said Inspector in Charge Rendina. “Today’s announcement of our law enforcement partnership and operation sends a strong message to those who choose this illegal path, we are watching and will bring you to justice for your crimes against the American public.”
“The Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency,” said U.S. Secret Service Assistant Director Jenkins. “The Secret Service continues to adapt along with these cyber criminals to maintain our level of success in stopping them.”
“At this crucial time of unprecedented drug related deaths, one of the greatest threats we face is cyber drug trafficking,” said DEA Special Agent in Charge Hunt. “Because the Darknet invites criminals into our homes, and provides unlimited access to illegal commerce, law enforcement is taking steps to identify and arrest those involved. I applaud all the agencies who participated in this groundbreaking investigation.”
The extensive operation, which culminated in four weeks of more than 100 enforcement actions around the country, resulted in the following:
- Federal arrests of more than 35 Darknet vendors who engaged in tens of thousands of sales of illicit goods;
- Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
- Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
- Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
- Seizure of more than $3.6 million in U.S. currency and gold bars;
- Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million;
- Confiscation of 15 pill presses, which are used to create illegal synthetic opioids; and
- Seizure of Bitcoin mining devices, computer equipment, and vacuum sealers.
Amongst those charged federally, include:
- Antonio Tirado, 26, and Jeffrey Morales, 32, of the Bronx, New York, were arrested on June 18, and separately charged by the U.S. Attorney’s Office for the Southern District of New York with distribution and possession with intent to distribute narcotics, including cocaine, LSD (also known as “acid”), marijuana, and hashish oil. Additionally, Tirado was charged with possession of a firearm in furtherance of his drug trafficking offenses. Following an investigation into a Darknet marketplace vendor using the moniker “Trapgod,” investigators executed search warrants at homes in two residential neighborhoods in the Bronx leading to Tirado and Morales. As alleged in the complaints, during the execution of the search warrants at the Tirado and Morales residences, agents seized controlled substances including powder cocaine, marijuana, and LSD, as well as various precursor powders, liquids, and reagents, and other narcotics-related paraphernalia including marijuana growing equipment, a home chemistry lab, scales, and heat sealing packaging materials. In Tirado’s home, agents recovered a fully loaded shotgun alongside a narcotics stash. Investigators in Tirado’s apartment recovered additional evidence of Darknet narcotics distribution, such as numerous U.S. Postal Service shipping boxes, already addressed to customers around the United States, which boxes contained hairbrushes some of which had already been packed with powder cocaine for distribution.
- Jian Qu, 30; Raymond Weng, 24; and Kai Wu, 22, all of Queens, New York, along with Dimitri Tseperkas, 22, and Cihad Akkaya, 22, of Middle Island and Port Jefferson, New York, respectively, were each arrested on June 18, and charged by the U.S. Attorney’s Office for the Southern District of New York with participation in a conspiracy to distribute more than 1,000 kilograms of marijuana. Tseperkas and Akkaya were also charged with firearms offenses relating to the drug conspiracy. Investigators monitoring Darknet marketplaces found accounts used by some of the conspirators, leading agents to execute search warrants at three addresses in residential communities in Flushing and Mt. Sinai, New York. From the residences, agents recovered approximately $400,000 in U.S. currency, 140 kilograms of suspected marijuana and an additional 10 kilograms of suspected marijuana vape cartridges, 12 kilograms of suspected Xanax pills, over half a kilogram of suspected ecstasy, four pill presses, mixers, and pill press parts, over a dozen kilograms of various powders, packaging materials, and paraphernalia. While searching the residence where Akkaya and Tseperkas were found, investigators recovered three loaded shotguns, including a tactical double-barreled shotgun loaded with 14 shells, and over 50 shotgun shells, as well as significant quantities of narcotics, packaging materials, and paraphernalia including a money-counting machine. Review of electronic evidence recovered from the residences proved the conspirators’ connections to Darknet marketplaces, use of cryptocurrency, and narcotics distribution schemes.
- Ryan Farace, 34, of Reisterstown, Maryland, and Robert Swain, 34, of Freeland, Maryland, were charged by the U.S Attorney’s Office for the District of Maryland related to a scheme to manufacture and distribute alprazolam tablets, which are typically sold under the brand name “Xanax.” The indictment alleges that Farace distributed the drugs through sales on the dark web in exchange for Bitcoin, and that Farace and Swain laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds. To date, law enforcement has seized various crypto currency, to include bitcoin, valued at over $22 million at the time of the seizures, and over $1.5 million in cash, which was seized from Farace’s residence upon the execution of a search warrant on Jan. 18. As part of the indictment, the government seeks the forfeiture of no less than $5.665 million, plus the value of 4,000 Bitcoin believed to be the proceeds of the illegal drug sales, two residences, and a vehicle used to facilitate the drug distribution.
- Nicholas J. Powell, 32, and Michael Gonzalez, 27, former and current residents of Parma, Ohio, respectively, were charged by the U.S. Attorney’s Office for the Northern District of Ohio with conspiracy to distribute controlled substances and laundering money using the dark web. The complaint alleges that Powell used various monikers on Darknet marketplaces as part of his criminal scheme, including “TheSource,” “BonnienClyde,” BnC,” “BCPHARMA,” and “Money TS.” The conspiracy operated on multiple Darknet marketplaces, including Silk Road 2, AlphaBay, and HANSA. The conspiracy involved distributing Xanax, steroids, marijuana and other drugs across the country using these and other Darknet monikers. Powell and Gonzalez would then launder the funds as cryptocurrencies such as Bitcoin, Etherium, and Komodo through individuals specializing in money laundering on Darknet marketplaces. At the time of arrest, law enforcement had already seized approximately $437,000 in cryptocurrencies from Powell.
- Jose Robert Porras III, 21, and Pasia Vue, 23, both of Sacramento, were charged with drug distribution, money laundering, and illegally possessing firearms, in a 16-count indictment returned by a grand jury in the Eastern District of California. According to the indictment, Porras and Vue were using the online monikers “Cannabars” and “TheFastPlug,” to distribute marijuana, Xanax, and methamphetamine on various dark web marketplaces, including Trade Route, Wall Street Market, and Dream Marketplace. Porras and Vue then laundered the Bitcoin proceeds of their drug distribution through the HSI undercover agent located in New York. After receiving the Bitcoin from Porras and Vue, the undercover agent mailed parcels of cash to them in Sacramento. HSI and USPIS agents seized nine weapons including an AK-47 magazine and ammunition, 30 pounds of marijuana, $10,000 in U.S. currency, a vehicle, and over 100 bars of Xanax.
- Sam Bent, 32, of St. Johnsbury, Vermont (and formerly of East Burke, Vermont), and his cousin, Djeneba Bent, 26, also of St. Johnsbury (and formerly East Burke) were charged with conspiracy to distribute LSD, MDMA (also known as “ecstasy”), cocaine, and marijuana in an indictment returned by a federal grand jury in the District of Vermont. The indictment alleges that the conspiracy involved setting up accounts on dark web marketplaces, establishing online identities, accepting Bitcoin in exchange for sales over the dark web, and mailing controlled substances from several different post offices in Northeastern Vermont and Northwestern New Hampshire in an effort to avoid detection. The indictment also charges Sam Bent with four counts of money laundering involving three different exchanges of bitcoin drug distribution proceeds for U.S. currency.
- In Fresno, California, a federal grand jury returned an 11-count indictment on May 17, against Daniel Boyd McMonegal, 35, of San Luis Obispo and Mariposa, California, charging him with drug distribution and money laundering in the Eastern District of California. According to the indictment, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market. McMonegal was also the owner of a marijuana delivery service in San Luis Obispo called West Coast Organix, which claimed to be a non-profit medical marijuana cooperative. McMonegal then laundered the Bitcoin proceeds of his drug distribution through an undercover agent located in New York. After receiving the Bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa.
More than 50 Darknet vendor accounts were identified and attributed to the real individuals selling illicit goods on Darknet market sites such as Silk Road, AlphaBay, Hansa, Dream, and others. HSI-New York Field Division and MLARS coordinated with law enforcement and federal prosecutors to investigate 65 targets identified by the undercover operation in more than 50 Federal districts, including: the District of Arizona, the Eastern District of Arkansas, the Western District of Arkansas, the Central District of California, the Eastern District of California, the Northern District of California, the Southern District of California, the District of Colorado, the District of Connecticut, the Middle District of Florida, the Northern District of Florida, the Southern District of Florida, the Northern District of Iowa, the District of Kansas, the District of Maryland, the Eastern District of Michigan, the District of Minnesota, the Eastern District of North Carolina, the Western District of North Carolina, the District of New Hampshire, the Northern District of New York, the Southern District of New York, the Western District of New York, the District of North Dakota, the Northern District of Ohio, the Southern District of Ohio, the District of Oregon, the Eastern District of Pennsylvania, the Middle District of Pennsylvania, the District of South Carolina, the District of South Dakota, the Eastern District of Texas, the Northern District of Texas, the Southern District of Texas, the Western District of Texas, the District of Utah, the Eastern District of Virginia, the District of Vermont, the Eastern District of Washington, and the Western District of Washington. FBI was part of the investigative team in the Northern District of California.
The investigation is ongoing.
Ohio University Professor Indicted for Traveling to Missouri for Sex with a MinorRead the Press Release
KANSAS CITY, Mo. – An Ohio university professor was indicted by a federal grand jury today for traveling to Kansas City, Mo., to engage in sexual activity with a person whom he believed to be a 14-year-old girl.
Kevin Connor Armitage, 52, was charged with traveling across state lines to engage in illicit sexual conduct in an indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against Armitage on May 31, 2018.
Armitage is a professor of American Studies at Miami University in Oxford, Ohio.
According to the affidavit filed in support of the original criminal complaint, an FBI online covert employee was monitoring public message threads on a website that hosts a discussion forum and private messaging services for men and women to communicate regarding prostitution. Armitage indicated that he would be visiting the Kansas City area and was interested in a recommendation.
Armitage, whom the affidavit describes as a senior member of the website, has 576 postings that detail his prior experiences with prostitutes in Ohio, Arizona, Tijuana, Kansas and Colorado.
Armitage was provided a phone number for a different FBI online covert employee, who was posing as a 14-year-old female. After several conversations, the affidavit says, Armitage agreed to meet the 14-year-old’s cousin at a restaurant on the Country Club Plaza in Kansas City. An FBI undercover employee, posing as the cousin, met Armitage at the restaurant and he was arrested.
The charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Teresa Moore. It was investigated by the Department of Health and Human Services, Office of Inspector General and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
North Versailles Man Sentenced to Prison for Conspiring to Distribute Fentanyl and CocaineRead the Press Release
PITTSBURGH, PA. - A resident of North Versailles, Pennsylvania, has been sentenced in federal court to 51 months’ imprisonment, followed by six years’ supervised release, on his conviction of conspiring to distribute narcotics, United States Attorney Scott W. Brady announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Dawndre Bivins, age 30.
According to information presented to the court at the time he entered a guilty plea, Bivins, as frequently as twice per month, purchased four to five grams of fentanyl, commonly known as "bricks", and two ounces of cocaine from his codefendant, Skyler Carter, for further distribution in the Clairton, Pennsylvania, area. The court found Bivens to be responsible for the total distribution of 1.9 kilograms of cocaine and 40 grams of fentanyl. He is the third of 21 defendants charged in the conspiracy to be sentenced. Bivins had a previous conviction for a felony drug trafficking offense, and as such, was subject to enhanced penalties.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
The Federal Bureau of Investigation led the multi-agency investigation of this case, which also included the Allegheny County Sheriff’s Office, the Allegheny County Police Department, and the Pittsburgh Bureau of Police. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Maryland Men Indicted on Charges Relating to Dark Web Drug Distribution and Money Laudering; Government Seized more than $22 Million in AssetsRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted Ryan Farace, age 34, of Reisterstown, Maryland, and Robert Swain, age 34, of Freeland, Maryland, on charges related to a scheme to manufacture and distribute alprazolam tablets, which are typically sold under the brand name “Xanax.” The indictment alleges that Farace distributed the drugs through sales on the dark web in exchange for Bitcoin, and that Farace and Swain laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds. The superseding indictment was returned on February 22, 2018, and unsealed on June 22, 2018.
faraceryan.swainrobertssindictment.pdfThe indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Don Hibbert of the Drug Enforcement Administration-Washington; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service – Washington Division; Acting Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service (IRS) – Criminal Investigation; Maryland U.S. Marshal Johnny Hughes; and Chief Terrence B. Sheridan of the Baltimore County Police Department.
According to the six-count indictment, from no later than November 2013 through June 2017, Farace purchased narcotics manufacturing equipment, including pill presses and counterfeit “Xanax” pill molds, which he used to press loose alprazolam powder into tablet or pill form, and which he intended to resemble legitimate Xanax pills. The indictment alleges that Farace solicited orders for the alprazolam pills on dark web marketplaces and sold alprazolam pills directly to buyers in exchange for Bitcoin. Farace allegedly communicated with his customers through encrypted electronic messages and shipped the completed pill orders through the U.S. Postal Service. According to the indictment, postage for these packages was often paid using pre-paid debit cards that Farace obtained in the names of, and with the personal identifying information of, other people. The indictment alleges that between May 10, 2016 and January 31, 2017, Farace distributed and possessed with the intent to distribute more than 6,900 alprazolam pills.
Further, the indictment alleges that Farace and Swain laundered the proceeds of the illegal drug sales by conducting financial transactions designed to conceal and disguise the nature, source, ownership and control of the illegal drug proceeds. To date, law enforcement has seized assets from the defendants and their co-conspirators valued at over $22 million at the time of the seizures, including approximately $17 million in Bitcoin and other cryptocurrencies, $2.5 million in computer equipment, and more than $1.5 million in cash.
As part of the indictment, the government seeks the forfeiture of no less than $5,665,000, plus the value of 4,000 Bitcoin believed to be the proceeds of the illegal drug sales, two residences, and two vehicles used to facilitate the drug distribution.
Farace faces a maximum sentence of five years in prison for conspiracy to manufacture, distribute, and possess with the intent to distribute alprazolam; five years in prison for each of three counts of distributing and possessing with intent to distribute alprazolam; and 20 years in prison for maintaining drug-involved premises. Farace and Swain face a maximum of 20 years in prison for money laundering conspiracy. An arraignment on the superseding indictment has been scheduled for July 13, 2018, in U.S. District Court in Baltimore. Farace is currently detained and Swain is released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case was part of a year-long, coordinated national operation involving the collective participation of the Department of Homeland Security, the Money Laundering and Asset Recovery Section of the Department of Justice’s Criminal Division, the United States Secret Service, the United States Postal Inspection Service, the Drug Enforcement Administration, and 51 United States Attorney’s Offices, which used the first nationwide undercover action to target vendors of illicit goods on the darknet. Since its inception more than one year ago, the operation has led to the opening of more than 90 active cases around the country. Numerous individuals have been arrested and charged, and the operation has resulted in the seizure of weapons, drugs, virtual currency proceeds, United States currency, and computer equipment. https://www.justice.gov/opa/pr/first-nationwide-undercover-operation-targeting-darknet-vendors-results-arrests-more-35
United States Attorney Robert K. Hur commended the DEA, HSI, the U.S. Postal Inspection Service, the IRS-Criminal Investigation; the U.S. Marshals Service, and the Baltimore County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Dana J. Brusca, Zachary B. Stendig, and Seema Mittal, who are prosecuting the case.
Marion County man admits to taking mail, ordered to pay back victimRead the Press Release
CLARKSBURG, WEST VIRGINIA – Mitchell Jay Haught, of Fairmont, West Virginia, has admitted to obstructing mail, United States Attorney Bill Powell announced.
Haught, age 30, pled guilty to one count of “Obstruction of Mails.” Haught admitted to taking a $500 Visa gift card after it was deposited for mail and before it was delivered to its intended recipient. The crime occurred January 27, 2017 in Marion County.
Haught was sentenced to 12 months probation and ordered to pay $500 in restitution.
Assistant U.S. Attorney Sarah E. Wagner prosecuted the case on behalf of the government. The United States Postal Service Office of Inspector General investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Manhattan U.S. Attorney Announces Settlements with Two Native American Tribes Involved in Scott Tucker’s Payday Lending Scheme; Also Announces That More Than $500 Million in Forfeited Funds Will Be Returned to Victims of the SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced non-prosecution agreements (the “Agreements”) with tribal corporations controlled by two Native American tribes: the Modoc Tribe of Oklahoma and the Santee Sioux Tribe of Nebraska. As part of the Agreements, the tribal corporations agreed to forfeit, collectively, $3 million in proceeds from the illegal payday lending enterprise owned and operated by Scott Tucker. As part of the Agreements, the tribal corporations acknowledged, among other things, that Tucker used his agreements with the tribal corporations to evade state usury laws and that representatives of the tribes filed affidavits containing false statements in state enforcement actions against parts of Tucker’s payday lending enterprise.
Mr. Berman also announced that monies forfeited to the Office in connection with its investigation of Tucker’s scheme, including monies recovered as part of the Agreements, will be remitted to the Federal Trade Commission (“FTC”) for distribution to victims of the payday lending scheme. In total, the U.S. Attorney’s Office expects to remit in excess of $500 million to the FTC for victims.
U.S. Attorney Geoffrey S. Berman stated: “To hide their criminal payday lending scheme, Scott Tucker and Timothy Muir tried to claim their business was owned and operated by Native American tribes. Today’s settlements with two of those tribes will add $3 million to the hundreds of millions already recovered – from Tucker, from U.S. Bancorp, and from a non-prosecution agreement with a third native American tribe – to compensate Tucker’s millions of victims.”
Tucker’s Payday Lending Scheme
On January 5, 2018, Tucker was sentenced to 200 months in prison for operating a nationwide internet payday lending enterprise that systematically evaded state laws for more than 15 years in order to charge illegal interest rates as high as 1,000 percent on loans. Tucker’s co-defendant, Timothy Muir, an attorney, was sentenced to 84 months in prison for his participation in the scheme. In addition to their willful violation of state usury laws across the country, Tucker and Muir lied to millions of customers regarding the true cost of their loans to defraud them out of hundreds, and in some cases, thousands of dollars. In furtherance of their multi-year effort to evade law enforcement, Tucker and Muir formed sham relationships with Native American tribes and laundered billions of dollars obtained from customers through bank accounts nominally held by the tribes in order to hide Tucker’s ownership and control of the business. Tucker and Muir were sentenced following their convictions on all 14 counts against them after a five-week jury trial that concluded on October 13, 2017.
The Sham Tribal Ownership of Tucker’s Businesses
In response to complaints that Tucker’s payday lending enterprise was extending abusive loans in violation of their usury laws, several states filed actions to enjoin the enterprise from operating in their states. To thwart these state actions, Tucker devised a scheme to claim that his lending businesses were protected by sovereign immunity, a legal doctrine that, among other things, generally prevents states from enforcing their laws against Native American tribes. Beginning in 2003, Tucker entered into agreements with several Native American tribes (the “Tribes”), including the Modoc Tribe of Oklahoma, the Santee Sioux Tribe of Nebraska, and the Miami Tribe of Oklahoma. The purpose of these agreements was to make it appear that the Tribes owned and operated parts of Tucker’s payday lending enterprise so that when states sought to enforce laws prohibiting usurious loans, Tucker’s lending businesses could claim to be protected by sovereign immunity. In return, the Tribes received payments from Tucker, typically one percent of the revenues from the portion of Tucker’s payday lending business that the Tribes purported to own.
Recovery and Distribution of Money for Victims of Tucker’s Payday Lending Scheme
Through various actions, the U.S. Attorney’s Office has recovered hundreds of millions of dollars that will be remitted to victims of Tucker’s scheme. In addition to the recoveries from the Modoc and Santee Sioux Tribes announced today, the Office has also recovered $48 million pursuant to a non-prosecution agreement with the Miami Tribe of Oklahoma and tens of millions of dollars in cash and properties from Tucker. In addition, as announced on February 15, 2018, the Office intends to remit money recovered by the Government from U.S. Bancorp for Bank Secrecy Act (“BSA”) violations to victims of the scheme. In total, the Office has recovered in excess of $500 million for victims.
To facilitate distributions to victims, the Office is transferring the recovered funds to the FTC, which successfully brought a related civil action against Tucker and various entities involved in the illegal payday lending scheme. Monies recovered by this Office will be pooled with monies recovered by the FTC and distributed to victims by the FTC according to terms and in a manner to be announced later this year. Victims seeking restitution are encouraged to visit www.ftc.gov/amg for updated information regarding the FTC’s redress program and to sign up to receive email updates. www.ftc.gov/news-events/press-releases/2018/06/statement-ftc-chairman-simons-dojs-remitting-more-500-million-ftc
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html
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Mr. Berman praised the outstanding investigative work of the St. Louis Field Office of the Internal Revenue Service-Criminal Investigation. Mr. Berman also thanked the Criminal Investigators at the United States Attorney’s Office, the Federal Bureau of Investigation, and the Federal Trade Commission for their assistance with the case.
The prosecution is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Niketh Velamoor, Hagan Scotten, and Sagar Ravi are in charge of the prosecution.
Manhattan Man Arrested for Child Pornography, Enticing A Minor to Have SexRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of JOEL DAVIS on charges of enticement of a minor to engage in sexual activity, attempted sexual exploitation of a minor, and possession, receipt, and distribution of child pornography. DAVIS was arrested today and will be presented today in Manhattan federal court before the Honorable Kevin N. Fox.
U.S. Attorney Geoffrey S. Berman said: “Joel Davis started an organization devoted to stopping sexual violence, while allegedly engaged in the duplicitous behavior of sharing explicit images of infants engaged in sexual activity. Davis also allegedly solicited an undercover officer – whom he thought to be a willing participant – to send sexually explicit videos of his nine-year-old daughter, and even to set up a sexual encounter between himself and a two-year-old. The conduct alleged against Joel Davis is as unfathomable as it is sickening, and as this case demonstrates, law enforcement will keep its watchful eye on the darkest corners of the internet to bring predators to justice.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Having started an organization that pushed for the end of sexual violence, Davis displayed the highest degree of hypocrisy by his alleged attempts to sexually exploit multiple minors. As if this wasn’t repulsive enough, Davis allegedly possessed and distributed utterly explicit images of innocent infants and toddlers being sexually abused by adults. Crimes against children such as those alleged are taken very seriously by the FBI, and we continue to work tirelessly to investigate those who place the most helpless members of the American public at risk.”
According to the allegations in the Complaint sworn out today in Manhattan federal court and statements made during court proceedings:[1]
Over the course of several weeks in June 2018, DAVIS, who started an organization devoted to ending sexual violence, exchanged text messages with law enforcement officers operating in an undercover capacity. During the course of these conversations, DAVIS told the undercover officers that he was sexually interested in children of all ages. DAVIS sent the undercover officers sexually explicit photographs of infants and toddlers, including photographs in which the infants and toddlers were engaged in sexual activity with adults. During the course of text conversations with one of the undercover officers, DAVIS described explicit sexual activity that he intended to engage in with the purported nine-year-old daughter of the undercover officer and with the purported two-year-old daughter of the undercover officer’s girlfriend. DAVIS also repeatedly asked that undercover officer to take naked and sexually explicit pictures and videos of his purported daughter and his purported girlfriend’s toddler daughter and to send the pictures and videos to DAVIS.
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DAVIS, 22, of Manhattan, New York, is charged with one count of enticement of a minor under the age of 18 to engage in sexual activity, which carries a mandatory minimum term of 10 years in prison and a maximum of life in prison; one count of attempted sexual exploitation of a minor, which carries a mandatory minimum term of 15 years in prison and a maximum of 30 years in prison; one count of possession of child pornography, which carries a mandatory minimum term of 5 years in prison and a maximum of 20 years in prison; and one count of receipt and distribution of child pornography, which carries a maximum term of imprisonment of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Juliana N. Murray is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Lexington Methamphetamine ConspiracyRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated today that a total of fifteen defendants have been indicted as part of a drug conspiracy. In December 2017, four defendants, John Phillip Drawdy, age 39, Leigh Antley McCamy, age 36, Blake Allen Smith, age 28, and Kimberly Hartley, age 29, were indicted in a Superseding Indictment for Conspiracy to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846. These four defendants pleaded guilty to the Conspiracy charge in May 2017, each admitting to dealing 50 grams or more of methamphetamine. Each defendant is awaiting sentencing and faces a statutory mandatory minimum term of imprisonment of ten years and a maximum term of life.
Last week, a grand jury indicted an additional eleven Lexington County defendants in a related methamphetamine conspiracy, also in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846. The eleven defendants, or co-conspirators, are:
Jennifer Logan, age 41
Terri Moore, age 40
Brian Lorick, age 45
Andrew Michael Chamberlain, age 31
James Lloyd, age 28
Willie Ricardo Gordon, a/k/a “Rico,” age 33
Jeremy Davis, age 31
Robert Pendleton, a/k/a “Bobby,” age 39
Marcus Young, a/k/a “Lay Low,” age 29
Kyndal Hancock, age 25
David Peeples, age 35
The Indictment also charges various firearm and drug-related offenses, in violation of Title 18, United States Code, Sections 922(g) and 924(c), and Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), 841(b)(1)(B), and 841(b)(1)(C). If convicted, these eleven defendants face the same possible penalties as the previous four defendants: a statutory mandatory minimum term of imprisonment of ten years and a maximum term of life.
Additionally, one more Lexington County defendant, Jeffery Shane Tager, age 32, has been charged with possession with intent to distribute methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1), and 841(b)(1)(A). Tager faces a statutory mandatory minimum term of imprisonment of ten years and a maximum term of life.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Lexington County Sheriff’s Department. ATF Resident Agent-In-Charge Eddie Eubanks had this to say, “From December 2016 to now, our office with the assistance of our state and local law enforcement partners conducted an investigation that resulted in the prosecution of over twenty-five defendants from Lexington and Aiken County. ATF is very proud of the investigation results and will continue to work with our law enforcement partners to reduce violent crime in our communities.”
United States Attorney Sherri A. Lydon had this to say, “We are committed to using our resources to address violent crime and drug distribution in our neighborhoods. Our partnerships with local law enforcement agencies are crucial to our efforts.” This case is being prosecuted as a part of Project Safe Neighborhoods, a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
The United States Attorney also stated that all charges in indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty. This case is being handled by Assistant United States Attorney Alyssa Leigh Richardson of the Columbia office.
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Lexington Man Sentenced to 120 Months for Illegal Possession of a FirearmRead the Press Release
LEXINGTON, Ky. – A Lexington man, who previously admitted to being a felon in possession of a firearm, was sentenced today to 120 months in prison. This term has also been ordered to run consecutively to pending state court sentences.
Chief U.S. District Judge Karen K. Caldwell sentenced Antoine Lamar Burns, 36 years old, for unlawful possession of a firearm by a person convicted of a felony.
Burns previously admitted that, beginning in June 2015 and continuing through October 2015, he possessed a Bersa .380 semiautomatic pistol, after having been convicted of a felony offense. According to the plea agreement, Burns fired several shots at someone he suspected was cooperating with law enforcement, threatened and pointed the firearm at a former girlfriend, attempted to have his girlfriend make a false statement about ownership of the firearm, and attempted to hide the firearm in his girlfriend’s vehicle. Burns pleaded guilty in February.
Under federal law, Burns must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the U.S. Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge, ATF; and Lawrence Weathers, Chief of the Lexington Division of Police, jointly announced the sentence.
The investigation was conducted by ATF and Lexington Police. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Ron L. Walker, Jr.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Lehigh Acres Man Sentenced to Twelve Years on Drug and Firearm ChargesRead the Press Release
Fort Myers, Florida – U.S. District Judge Sherri Polster Chappell has sentenced Alejo Guerrero (36, Lehigh Acres) to 12 years in federal prison for multiple firearms and controlled substance offenses.
According to court documents, federal and state authorities conducted multiple operations in 2016 and 2017 during which Guerrero sold cocaine and firearms, including an AK-47-type pistol with high capacity magazines, to an informant. Guerrero also armed himself during the transactions, once flashing a gun tucked into his waistband to explain why he wasn’t worried about bystanders witnessing a deal. In October 2017, law enforcement officers executed a search warrant on his Lehigh Acres home and found Guerrero, his girlfriend and an infant child, a stash of cocaine, thousands of dollars in cash, a bullet proof vest, and a .357 revolver inside the home. The Court ordered Guerrero to forfeit the cash to the United States as proceeds of his criminal activity.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Michael V. Leeman.
Lancaster Residents Plead to Federal Firearm Charges Relating to Firearms Stolen from National Guard ArmoryRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated that Austin Lee Ritter, age 32, and Kimberly Denise Cannon, age 40, both of Lancaster, each plead guilty in federal court to being a felon in possession of firearms, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2), and 924(e), and to possession of machineguns and destructive device not registered to them in the National Firearms Registration and Transfer Record, in violation of Title 26, United States Code, Sections 5841, 5861(d), and 5871. United States District Judge Michelle Childs, of Columbia, accepted the guilty plea and will impose sentence after she has reviewed the presentence report, which will be prepared by the United States Probation Office.
Evidence presented in court established that on the early morning hours of November 26, 2017, an officer with the Lancaster Police Department conducted a traffic stop of a vehicle driven by Cannon after observing her littering. Further investigation during the traffic stop, revealed the following inside the vehicle: a FNH, model M249, 5.56mm machinegun, two (2) Colt, model M-16, 5.56mm machineguns, two (2) Beretta, model M9, 9mm pistols, a Colt, model M203, 40mm grenade launcher (“destructive device”), night vision goggles, and various military items stolen from the Lancaster National Guard Armory. Officers also recovered various items from WalMart, including an employee identification badge. After the traffic stop, Ritter and a co-defendant were located at the Carriage Inn Motel and found in possession of a small quantity of methamphetamine. A review of surveillance video from the motel showed Ritter, Cannon, and the co-defendant bringing the bags containing the firearms back and forth between the vehicle and the motel room. Additionally, searches of Ritter and Cannon’s cell phones revealed various photos and text messages relating to the firearms. Ritter and Cannon’s co-defendant’s case is still pending in federal court and he remains innocent unless and until he is proven guilty.
Both Ritter and Cannon are prohibited under federal law from possessing firearms and ammunition based upon their prior state convictions. Ritter has prior convictions for accessory after the fact of a felony, possession of a controlled substance, breach of trust, receiving stolen goods, and theft of a controlled substance. Cannon, who was on state probation at the time of this incident, has prior convictions for shoplifting, assault and battery, and obtaining property by false pretenses.
Ritter and Cannon each face a maximum of 10 years imprisonment, a fine of $250,000, and 3 years of supervised release on each of the firearm charges.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Lancaster Police Department, and the South Carolina State Law Enforcement Division (SLED) and was prosecuted as part of Project CeaseFire, a joint federal, state and local initiative focused upon aggressively prosecuting firearm cases in an effort to reduce violent crime and make our neighborhoods safer. Project CeaseFire is South Carolina’s implementation of Project Safe Neighborhoods (PSN), a crime reduction strategy originally launched in 2001. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority and reinstituted PSN nationwide. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
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Justice Department Settles Claims Against Landscaping Company for Discriminating Against U.S. WorkersRead the Press Release
The Justice Department today reached a settlement agreement with Triple H Services LLC, (Triple H), a landscaping company based in Newland, North Carolina, that conducts business in Virginia and four other states. The agreement resolves the Department’s investigation into whether Triple H discriminated against qualified and available U.S. workers based on their citizenship status by preferring to hire temporary workers with H-2B visas, in violation of the Immigration and Nationality Act (INA).
The Department’s investigation found that although Triple H went through the motions of advertising over 450 landscape laborer vacancies in five states, it did so in a manner that misled U.S. workers about the available positions and prevented or deterred some from applying. The Department found that Triple H did not consider several qualified U.S. workers who applied for positions in Virginia during the recruitment period, and instead hired H-2B visa workers. In several states where jobs were available, the Department found that Triple H prematurely closed the online job application process for U.S. worker applicants, filled positions with H-2B visa workers without first advertising the jobs to U.S. workers in the relevant locations, or advertised vacancies in a manner that did not make the postings visible to job seekers using state workforce agency online services.
The Department concluded that in taking these actions, Triple H effectively denied U.S. workers access to jobs based on its preference for hiring temporary H-2B visa workers to fill the positions. Refusing to consider or hire qualified and available U.S. workers based on their citizenship status violates the INA’s anti-discrimination provision, regardless of whether an employer has complied with other rules governing the use of temporary employment-based visa programs.
Under the settlement, Triple H must establish a back pay fund, with a cap of $85,000, to compensate certain individuals who were harmed by its practices. The agreement also requires Triple H to pay $15,600 in civil penalties, engage in enhanced recruitment activities to attract U.S. workers, and be subject to Departmental monitoring for a three-year period.
“Federal law prohibits employers from discriminating against U.S. workers in hiring because of their citizenship status,” said Acting Assistant Attorney General John Gore. “The Department will continue to fight to ensure that U.S. workers are not disadvantaged because of their citizenship status. I commend Triple H for its cooperation with the Department and its willingness to undertake efforts to recruit U.S. workers that go well beyond the minimum requirements for participation in the H-2B visa worker program.”
Today’s settlement is part of the Civil Rights Division’s Protecting U.S. Workers Initiative, which is aimed at targeting, investigating, and taking enforcement actions against companies that discriminate against U.S. workers in favor of temporary visa workers. Under this Initiative, the Civil Rights Division has opened dozens of investigations, filed one lawsuit, and reached settlement agreements with three employers. Since the Initiative’s inception, employers have agreed to pay or have distributed over $285,000 in back pay to affected U.S. workers. The Division has also increased its collaboration with other federal agencies to combat discrimination and abuse by employers using foreign visa workers.
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites.
Applicants or employees who believe they were subjected to: discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee; discrimination in the employment eligibility verification process (Form I-9 and E-Verify) based on their citizenship, immigration status or national origin; or retaliation should contact IER’s worker hotline for assistance.
Irwin Man Sentenced to 5 Years in Prison for Collecting and Trading Child Porn VideosRead the Press Release
PITTSBURGH, PA. – A resident of Westmoreland County, Pennsylvania, has been sentenced in federal court to a term of imprisonment of 60 months to be followed by five years of supervised release on his conviction of receipt of material depicting the sexual exploitation of a minor, United States Attorney Scott W. Brady announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence yesterday on Jeffrey John Valenta, age 57, formerly of Irwin, Pennsylvania.
According to the information presented to the court, in November 2010, the Pennsylvania State Police were conducting an undercover investigation into the internet sharing of child pornography. In connection with the investigation, the state police obtained evidence that led to Valenta’s home. Troopers executed a search warrant at the residence of Valenta on January 6, 2011. He admitted to collecting and trading child pornography. A forensic review of Valenta’s computer revealed 33 video files depicting child pornography.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the Indictment in this case.
Idaho Man Sentenced to Prison for Hostage TakingRead the Press Release
COEUR D’ALENE, IDAHO - On June 26, 2018, Chad Lee Vonk, a 22-year-old resident of Lenore, Idaho, was sentenced to a term of incarceration of 10 years followed by 5 years of supervised release by U.S. District Court Judge Edward J. Lodge on felony charges of Hostage Taking and Strangulation. Mr. Vonk pled guilty to both crimes on November 30, 2017. Vonk’s guilty pleas were related to two different indictments for a pair of consolidated cases in Northern Idaho.
On March 14, 2017, following a 17-hour standoff with law enforcement, a heavily armed suspect was taken into custody. Chad Lee Vonk, an enrolled member of an Alaska tribe, was extracted from his residence through a joint operation that included officers from the Nez Perce Tribal Police, the Nez Perce County Sheriff’s Office, the Lewis County Sheriff’s Office, the Idaho State Police, and the Federal Bureau of Investigation.
Nez Perce Tribal Police initially responded to reports of battery and domestic violence involving several victims at a residence in Lenore, ID. Upon arrival, they determined that Vonk had taken members of the residence hostage. After negotiations with law enforcement, the hostages were released and received medical treatment. Mr. Vonk, however, remained barricaded in the residence. An FBI S.W.A.T team from Montana and Idaho continued negotiations with Vonk in an attempt to have him leave the residence peacefully.
At 10:00 a.m. on the morning of March 14, the S.W.A.T. team forcibly removed Vonk from the residence. No shots were fired. According to a family friend, Vonk was transported to St. Joseph Regional Medical Center for injuries.
Mr. Vonk was then taken into the custody of the Nez Perce Tribe and was charged with domestic battery, resisting arrest, kidnapping, and a weapons offense. Vonk was later federally indicted for hostage-taking and kidnapping.
The Nez Perce County Sheriff, the Idaho State Police, Nez Perce Tribal Police, the Lewis County Sheriff and the FBI were able to peacefully resolve this highly volatile situation, according to Mary Jane Miles, Chairman of the Nez Perce Tribal Executive Committee. “All of the officers involved should be commended for the professional nature of their work in ensuring the safe release of the hostage and capture of the suspect.”
In a second, unrelated matter, Vonk also pled guilty to charges of strangulation in a case involving his domestic partner. In November 29th, 2016, Vonk strangled his then wife in Lenore, Idaho. The victim in that case survived the assault.
The United States Attorney for Montana Kurt G. Alme stated, “We are grateful to the Idaho US Attorney’s Office, the Idaho FBI, the members of the S.W.A.T. team, local and tribal law enforcement and the FBI Victim Witness Coordinators in the Coeur d’Alene Office for their cooperation in this case and support for the victims of these crimes.” This case was prosecuted by AUSA Adam Duerk from the District of Montana who was appointed by the United States Attorney General’s Office as a special prosecutor.
Honduran Man Charged with Transporting Local Minor for SexRead the Press Release
PENSACOLA, FLORIDA – Elvin Castron-Murcia, 19, a Honduran native residing between Louisiana and Tennessee, was arraigned today in the U.S. District Court in Pensacola after a federal grand jury returned an indictment charging him with traveling for illicit sexual conduct, transportation of a minor for criminal sexual activity, and false claim of U.S. citizenship. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The indictment alleges that, in May 2018, Castron-Murcia traveled for the purpose of engaging in illicit sexual conduct and also transported a minor under age 18 for sexual activity. The indictment further alleges that, on May 25, 2018, Castron-Murcia falsely represented himself to be a U.S. citizen.
The defendant was detained pending trial. The trial date is scheduled for August 7, 2018, at 8:00 a.m. at the U.S. Courthouse in Pensacola.
If convicted, Castron-Murcia faces a maximum of 30 years in prison for the sex traveling charge, a minimum of 10 years and a maximum of life in prison for the sex transportation charge, and a maximum of 3 years in prison for the false claim of U.S. citizenship.
The case is being investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, the Santa Rosa County Sheriff’s Office, the Alabama Law Enforcement Agency, and the United States Immigration and Customs Enforcement Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney David Goldberg.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Hazleton Man Sentenced to 262 Months’ Imprisonment for Shooting and Killing Another Man During A Drug DealRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on June 21, 2018, United States District Court Judge James M. Munley sentenced Christian Rosado to 262 months’ imprisonment on the federal charge of unlawfully possessing and discharging a firearm in furtherance of drug trafficking.
According to United States Attorney David J. Freed, on July 9, 2016, Rosado, age 28, was selling marijuana in Hazelton and a shootout with a customer ensued. Rosado fired his .40 caliber Glock handgun multiple times and killed the drug customer. Rosado was arrested the following day at the hospital where he was being treated for a gunshot wound. Under federal law, Rosado’s possession of the firearm in furtherance of drug trafficking is a federal offense.
The investigation was conducted by the Federal Bureau of Investigation and the Luzerne County District Attorney’s Office. Assistant United States Attorney Evan Gotlob prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
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Former State Street Executive Convicted in Scheme to Defraud Clients Through Secret Trading Commissions on Billions of Dollars of Securities TradesRead the Press Release
A former executive vice president of State Street Bank & Trust was convicted today by a federal jury in Boston in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Division made the announcement.
After a three-week trial, Ross McLellan, 47, of Hingham, Massachusetts, was convicted of one count of conspiracy to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud. U.S. District Court Judge Leo T. Sorokin of the District of Massachusetts, who presided over the trial, scheduled sentencing for Oct. 10.
“State Street’s clients, including institutional investors managing pensions for retirees, entrusted McLellan and his subordinates to transition billions of dollars in assets,” said Acting Assistant Attorney General John Cronan. “Rather than living up to the responsibility to act in their clients’ best interests, McLellan and his coconspirators stole from these victims by charging hidden commissions and then lying about the scheme to cover their tracks. This conviction is a testament to the dedication of the FBI and prosecutors in the Criminal Division and U.S. Attorney’s Office to protecting innocent investors by investigating and prosecuting complex financial crimes.”
“Mr. McLellan defrauded State Street clients, violating his fiduciary duties and abusing his clients’ trust along the way,” said U.S. Attorney Lelling. “With systematic precision, Mr. McLellan and his conspirators added secret commissions to securities trades and took steps to conceal the scheme. In doing so, beyond directly defrauding institutional investors, Mr. McLellan chipped away at the savings of thousands of retirees whose pensions he was supposed to safeguard. After only five hours of deliberations, a jury found Mr. McLellan guilty of five of six counts in the indictment.”
“Motivated by sheer greed, Mr. McLellan devised an elaborate bait and switch scheme to defraud State Street’s clients out of millions of dollars, and now he’s finally being held accountable for his actions,” said FBI Special Agent in Charge Shaw. “This case should serve as a warning to others, the FBI and our law enforcement partners will aggressively pursue and bring to justice those who undermine our financial markets.”
In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer, was indicted with Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa.
As established by the evidence at trial, between February 2010 and September 2011, McLellan, Pennings and Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports.
For example,
- In a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
- In June 2010, McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention.
- In March 2011, McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01 percent) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later – at McLellan’s direction – Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities, the evidence showed.
In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on July 18. Boomgaardt was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt is scheduled to be sentenced on July 31.
The case was investigated by the FBI. Trial Attorney William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney/Economic Crimes Chief Stephen E. Frank of the District of Massachusetts are prosecuting the case. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs.
Former State Street Executive Convicted in Scheme to Defraud Clients Through Secret Trading CommissionsRead the Press Release
BOSTON – A former executive vice president of State Street Corporation was convicted today by a federal jury in Boston in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Ross McLellan, 47, of Hingham, Mass., was convicted of one count of conspiring to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 10, 2018.
“Mr. McLellan defrauded State Street clients, violating his fiduciary duties and abusing his clients’ trust along the way,” said Andrew E. Lelling, United States Attorney for the District of Massachusetts. “With systematic precision, Mr. McLellan and his conspirators added secret commissions to securities trades and took steps to conceal the scheme. In doing so, beyond directly defrauding institutional investors, Mr. McLellan chipped away at the savings of thousands of retirees whose pensions he was supposed to safeguard. After only five hours of deliberations, a jury found Mr. McLellan guilty of five of six counts in the indictment.”
“State Street’s clients, including institutional investors managing pensions for retirees, entrusted McLellan and his subordinates to transition billions of dollars in assets,” said Acting Assistant Attorney General John Cronan. “Rather than living up to the responsibility to act in their clients’ best interests, McLellan and his coconspirators stole from these victims by charging hidden commissions and then lying about the scheme to cover their tracks. This conviction is a testament to the dedication of the FBI and prosecutors in the Criminal Division and U.S. Attorney’s Office to protecting innocent investors by investigating and prosecuting complex financial crimes.”
“Motivated by sheer greed, Mr. McLellan devised an elaborate bait and switch scheme to defraud State Street’s clients out of millions of dollars, and now he’s finally being held accountable for his actions,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office. “This case should serve as a warning to others, the FBI and our law enforcement partners will aggressively pursue and bring to justice those who undermine our financial markets.”
In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer unit, was indicted with Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa. In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on July 18, 2018. Also in June 2017, Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt is scheduled to be sentenced on July 31, 2018.
Between February 2010 and September 2011, McLellan, Pennings, and Boomgaardt conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings, and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports.
For example,
- In a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
- In June 2010, McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention.
- In March 2011, McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01%) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later, at McLellan’s direction, Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
The charge of conspiracy 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 or loss. The charge of wire provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss. The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $ 5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Lelling, Acting Assistant Attorney General Cronan, and FBI SAC Shaw made the announcement today. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit and Trial Attorney William Johnston of the Criminal Division’s Fraud Section are prosecuting the case.
Former State Senator Carlos Uresti Sentenced to 12 Years in Federal PrisonRead the Press Release
In San Antonio today, a federal judge sentenced San Antonio attorney and former District 19 Texas State Senator Carlos I. Uresti to 12 years in federal prison, announced U.S. Attorney John F. Bash, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and Internal Revenue Service-Criminal Investigation Special Agent in Charge D. Richard Goss, San Antonio Field Office.
In addition to the prison term, Senior U.S. District Judge David A. Ezra ordered that Uresti pay $6,345,441 restitution and be placed on supervised release for a period of three years after completing his prison term.
“As Judge Ezra said, this is a sad day for the community. The judge imposed a just sentence of 12 years in prison that accounts for the fact that former Senator Uresti used his position of trust in the community to lure his victims to the fraudulent scheme at the heart of the case. I hope that this sentence sends the message to others that this office will not tolerate such outrageous abuses of power,” stated U.S. Attorney Bash.
“Today's sentence sends a strong message to those who would defraud and harm others for their own personal gain,” said FBI Special Agent in Charge Combs. “As an elected official, this individual took advantage of his position and power to personally enrich himself at the expense of those who trusted him. It is imperative that all individuals, but especially those who hold elected office, do so with honesty and integrity. The public can have confidence that the defendant is being held accountable for the crimes of which he has been convicted.”
“Today's sentencing of former Texas Senator Carlos Uresti exemplifies IRS Criminal Investigation’s intense focus on rooting out corruption.” said IRS-CI Acting Special Agent in Charge Goss. “No matter what your profession, it is unacceptable to help yourself to other people’s money and violate their trust. Honest taxpayers have been reassured today that no one is above the law.”
In February, a jury found Uresti and FourWinds Logistics, Inc., (FourWinds) consultant Gary L. Cain, guilty on all charges for their roles in a Ponzi scheme that defrauded investors out of millions of dollars. Charges against Uresti included one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, five substantive counts of wire fraud, two counts of securities fraud, one count of engaging in monetary transactions with property derived from specified unlawful activity, and one count of being an unregistered securities broker. Charges against Cain included one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and seven counts of engaging in monetary transactions with property derived from specified unlawful activity. Prior to jury selection, former FourWinds Chief Executive Officer Stanley P. Bates pleaded guilty to eight separate federal charges including securities fraud and money laundering.
Evidence presented during trial revealed that from February 2014 to December 2015, the defendants developed an investment Ponzi scheme to buy and sell hydraulic fracturing (fracking) sand for oil production. Evidence showed that the defendants made false statements and representations while soliciting investors in FourWinds. Collected funds were then used to pay earlier investors and for personal expenses including gifts, travel, luxury automobiles, controlled substances, and to hire prostitutes.
Evidence also showed that Uresti recruited investors under false pretenses by lying about investing his own money in FourWinds as well as failing to disclose his receipt of a commission and a percentage of the profits resulting from investments in FourWinds. Evidence also revealed that Uresti was not registered as a broker with the Securities and Exchange Commission (SEC).
Evidence and testimony also revealed that Uresti, Cain and Bates engaged in money laundering with the proceeds of wire fraud.
Cain and Bates remain on bond pending sentencing. Cain is scheduled to be sentenced tomorrow at 1:30pm in front of Judge Ezra. Bates is scheduled to be sentenced at 1:30pm on August 6, 2018, in front of Judge Ezra. For each fraud related charge, the defendants face up to 20 years in federal prison upon conviction. For each money laundering charge, the defendants face up to ten years in federal prison upon conviction.
Uresti remains on bond awaiting a second federal trial on unrelated charges. Uresti and Vernon C. Farthing, III, of Lubbock, TX, are charged by a federal grand jury indictment with one count of conspiracy to commit bribery and one count of conspiracy to commit money laundering. The indictment alleges that from January 2006 to September 2016, the defendants conspired with others to pay and accept bribes in order to secure a Reeves County Correctional Center medical services contract for Farthing’s company. The indictment specifically alleges that Farthing paid Uresti $10,000 a month as a marketing consultant and that approximately half of that sum was then given to a Reeves County official for his support and vote to award the contract to Farthing’s company. Upon conviction of the charges contained in this indictment, Uresti and Farthing face up to five years in federal prison for conspiracy to commit bribery and up to 20 years in federal prison for conspiracy to commit money laundering. Jury selection is scheduled for October 22, 2018, in San Antonio before Judge Ezra.
The FBI’s Public Corruption Task Force is conducting this investigation. The Task Force is comprised of investigators from the FBI, IRS-CI, Texas Department of Public Safety (DPS) and the Peace Corps-Office of Inspector General. Assistant U.S. Joseph E. Blackwell, William R. Harris, Mark Roomberg, Erica Giese and Sean O’Connell are prosecuting this case on behalf of the Government.
Former Shelton Resident Admits Embezzling $326K from EmployerRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MIRIAM DUBAY, 65, of Purcellville, Virginia, waived her right to be indicted and pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to one count of wire fraud related to her embezzlement of over $326,000 from her employer.
According to court documents and statements made in court, DUBAY, who formerly resided in Shelton, was the bookkeeper for a small, family-owned business in Shelton. DUBAY was the only accounting person for the business, and she had access to the company’s bank accounts, check stock, accounting books and records, and petty cash. She also was responsible for depositing business checks and cash payments from customers into the company’s bank account.
From at least as early as April 2010 and continuing through October 2016, DUBAY engaged in a scheme to defraud her employer by writing checks on company check stock made out to “cash” and either forging the signature on the checks by hand or by using a fraudulently obtained signature stamp. DUBAY either deposited the checks into her personal bank account or cashed the checks at the bank where her employer maintained its business account. DUBAY forged 168 separate checks totaling $239,851.68.
As part of this embezzlement scheme, DUBAY also stole 108 customer cash payments totaling $86,279 instead of depositing the cash into the business’s bank account.
DUBAY is scheduled to be sentenced on September 17, 2018, at which time she faces a maximum term of imprisonment of 20 years.
DUBAY was released on a $20,000 bond pending sentencing.
This matter is being investigated by the Shelton Police Department, the U.S. Secret Service and the Connecticut Financial Crimes Task Force. The case is being prosecuted by Assistant U.S. Attorney Susan L. Wines.
Former Roslindale Postal Service Employee Charged with Theft of MailRead the Press Release
BOSTON – A former Roslindale Post Office employee was arrested today and charged in federal court in Boston in connection with embezzling mail.
Megan Hawes, 28, of Roslindale, was indicted on one count of theft of mail matter by a Postal Service employee. She appeared in federal court in Boston this afternoon and was released on conditions.
According to the indictment, which was unsealed today, the offenses occurred from approximately March 2017 to May 10, 2018, while Hawes was an employee of the Postal Service in Roslindale.
The charge provides for a sentence of no greater than five years in prison, up to three years of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Weymouth Police Chief Richard C. Grimes made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Federal Prison Official Pleads Guilty to Sex OffensesRead the Press Release
BECKLEY, WV—United States Attorney Mike Stuart announced today that a former Federal Bureau of Prisons official pled guilty to unlawfully engaging in sexual activity with female inmates at the Federal Prison Camp at Alderson. Stuart commended the investigation conducted by the Federal Bureau of Prisons (BOP), the Department of Justice Office of Inspector General and the Federal Bureau of Investigation (FBI).
“The Federal Bureau of Prisons is charged with protecting public safety by ensuring federal offenders serve sentences of imprisonment in safe, secure and humane facilities,” said United States Attorney Mike Stuart. “Grimes’ criminal conduct undermines the very mission of the organization and is not representative of the professionalism BOP expects from employees. Prosecution of cases like this helps to ensure the protection of federal inmates and the integrity of the criminal justice system.”
Jarred Grimes, 39, of Inverness, Florida, pled guilty to four counts of sexual abuse of a ward and two counts of abusive sexual contact involving a ward. Grimes admitted to having sexual intercourse with four inmates and other sexual activity with two other inmates between about November 2016 and December 2017. Grimes was a captain when the crimes occurred, and was in charge of all correctional and security functions at the prison. Under federal law, the inmates were not capable of giving consent to engage in any sexual activity with Grimes. Grimes resigned from the Bureau of Prisons in December 2017. Under the terms of his plea agreement, he faces up to ten years in prison when he is sentenced on October 17, 2018.
Assistant United States Attorney John File is handling the prosecution. United States District Judge Irene C. Berger presided over the plea hearing.
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Former Army Contractor Pleads Guilty for "No Show" Job Involving Contract at Aberdeen Proving GroundRead the Press Release
Baltimore, Maryland – Eric D. Price, age 58, of Fayetteville, North Carolina pleaded guilty today to a charge of conspiracy to defraud the United States and commit wire fraud, related to payments to him for a "no show" job on a sub-contract under contracts awarded by the U.S. Army Communications-Electronics Command headquartered at Aberdeen Proving Ground (APG), in Harford County, Maryland.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Special Agent in Charge L. Scott Moreland, Mid-Atlantic Fraud Field Office, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, in March 2006, the U.S. Army Contracting Command at APG awarded a 10-year, $19.2 billion contract to seven prime contractors to provide technology services to support the integrated engineering, business operations, and logistics needs for the Army. Task Orders 11, 77, and 115 were placed against this contract. John Kays had a leadership position as a civilian employee of the Army related to these task orders.
Matthew Barrow was the president and owner of MJ-6, LLC, a company which he and his wife formed in Ohio in 2008 to obtain military subcontracts. John Kays steered business on Task Orders 77, 11, and 115 to MJ-6.
According to Price’s plea agreement, Kays and Barrow agreed that Price would be added to the MJ-6 payroll. Price's job was purportedly to directly support Kays. Price purportedly worked remotely at Fayetteville, North Carolina while Kays worked at APG. From February 2010 through February 2012, Price fraudulently received more than $100,000 in salary payments for a "no show" job at MJ-6 for which MJ-6 billed over $400,000 to the prime contractor, which was passed through to the United States Army. Kays certified and approved MJ-6's work, including Price's "no show" job. To facilitate the “no show” job, Price submitted false and fictitious status reports and invoices through MJ-6 to the prime contractor.
In all, MJ-6 paid Price $105,556.17 for his “no show” job during the period from May 2010 through February 2012. Barrow, through MJ-6, billed the prime contractor, who in turn billed the Army, $422,704 for Price's purported work, which was certified by Kays. Price was unaware of the amount of mark-up to his salary by MJ-6.
As part of his plea agreement, Price will be required to pay restitution to the government of $105,556.17.
Price faces a maximum sentence of five years in prison for the conspiracy. U.S. District Judge George L. Russell, III has scheduled sentencing for September 28, 2018 at 2:30 p.m.
In connection with a larger bribery scheme involving John Kays, age 44, his wife Danielle Kays, age 43, both of Bel Air, Maryland, and Matthew Barrow, age 44, of Toledo, Ohio, Barrow pleaded guilty to paying bribes of approximately $800,000, including $500,000 in cash, to John Kays and Danielle Kays, who was also a government official. John Kays pleaded guilty to receiving bribes of approximately $800,000 from Barrow and was sentenced to six years in prison. Danielle Kays is presently serving an 18-month sentence for conspiracy to defraud the United States and bribery. Matthew Barrow is awaiting sentencing. John Kays, Danielle Kays, and Matthew Barrow all graduated from West Point where they were classmates.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Task Force includes the United States Attorney’s Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Robert K. Hur commended the DCIS, the Army Criminal Investigation Command, and the FBI for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Harry M. Gruber, who are prosecuting the case.
First Nationwide Undercover Operation Targeting Darknet Vendors Results in Arrests of More Than 35 Individuals Selling Illicit Goods and the Seizure of Weapons, Drugs and More Than $23.6 MillionRead the Press Release
Today, the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Secret Service (USSS), the U.S. Postal Inspection Service (USPIS) and the U.S. Drug Enforcement Administration (DEA), announced the results of a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the Darknet. Special Agents of the HSI New York Field Division, in coordination with the U.S. Attorney’s Office for the Southern District of New York, posed as a money launderer on Darknet market sites, exchanging U.S. currency for virtual currency. Through this operation, HSI New York was able to identify numerous vendors of illicit goods, leading to the opening of more than 90 active cases around the country. The Money Laundering and Asset Recovery Section (MLARS) of the Department of Justice’s Criminal Division, working with more than 40 U.S. Attorney’s Offices throughout the country, coordinated the nationwide investigation of over 65 targets, that lead to the arrest and impending prosecution of more than 35 Darknet vendors.
These results were announced by Deputy Attorney General Rod J. Rosenstein, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting Executive Associate Director Derek Benner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Special Agent-in-Charge Angel M. Melendez of HSI New York Field Office, Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service (USPIS) New York Division, Assistant Director Kenneth Jenkins of the U.S. Secret Service (USSS) Office of Investigations, and Special Agent in Charge James J. Hunt of the U.S. Drug Enforcement Administration (DEA) New York Division.
“Criminals who think that they are safe on the Darknet are wrong,” said Deputy Attorney General Rosenstein. “We can expose their networks, and we are determined to bring them to justice. Today, we arrested more than 35 alleged Darknet vendors. We seized their weapons, their drugs, and $23.6 million of their ill-gotten gains. This nationwide enforcement effort will reduce the supply of deadly drugs like fentanyl that are killing an unprecedented number of Americans. I want to thank our federal prosecutors, and the dedicated federal agents with DEA, Homeland Security Investigations, the Postal Inspection Service, and the Secret Service for their outstanding work.”
“The Darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” said HSI Acting Executive Associate Director Benner. “The veil has been lifted. HSI has infiltrated the Darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.”
“Postal Inspectors and their law enforcement partners will spare no resource or expense to shine a light on the sale and distribution of illicit and dangerous items on the Darknet, that serve to destroy the lives of many through addiction and despair,” said Inspector in Charge Rendina. “Today’s announcement of our law enforcement partnership and operation sends a strong message to those who choose this illegal path, we are watching and will bring you to justice for your crimes against the American public.”
“The Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency,” said U.S. Secret Service Assistant Director Jenkins. “The Secret Service continues to adapt along with these cyber criminals to maintain our level of success in stopping them.”
“At this crucial time of unprecedented drug related deaths, one of the greatest threats we face is cyber drug trafficking,” said DEA Special Agent in Charge Hunt. “Because the Darknet invites criminals into our homes, and provides unlimited access to illegal commerce, law enforcement is taking steps to identify and arrest those involved. I applaud all the agencies who participated in this groundbreaking investigation.”
The extensive operation, which culminated in four weeks of more than 100 enforcement actions around the country, resulted in the following:- Federal arrests of more than 35 Darknet vendors who engaged in tens of thousands of sales of illicit goods;
- Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
- Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
- Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
- Seizure of more than $3.6 million in U.S. currency and gold bars;
- Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million;
- Confiscation of 15 pill presses, which are used to create illegal synthetic opioids; and
- Seizure of Bitcoin mining devices, computer equipment, and vacuum sealers.
Amongst those charged federally, include:
- Antonio Tirado, 26, and Jeffrey Morales, 32, of the Bronx, New York, were arrested on June 18, and separately charged by the U.S. Attorney’s Office for the Southern District of New York with distribution and possession with intent to distribute narcotics, including cocaine, LSD (also known as “acid”), marijuana, and hashish oil. Additionally, Tirado was charged with possession of a firearm in furtherance of his drug trafficking offenses. Following an investigation into a Darknet marketplace vendor using the moniker “Trapgod,” investigators executed search warrants at homes in two residential neighborhoods in the Bronx leading to Tirado and Morales. As alleged in the complaints, during the execution of the search warrants at the Tirado and Morales residences, agents seized controlled substances including powder cocaine, marijuana, and LSD, as well as various precursor powders, liquids, and reagents, and other narcotics-related paraphernalia including marijuana growing equipment, a home chemistry lab, scales, and heat sealing packaging materials. In Tirado’s home, agents recovered a fully loaded shotgun alongside a narcotics stash. Investigators in Tirado’s apartment recovered additional evidence of Darknet narcotics distribution, such as numerous U.S. Postal Service shipping boxes, already addressed to customers around the United States, which boxes contained hairbrushes some of which had already been packed with powder cocaine for distribution.
- Jian Qu, 30; Raymond Weng, 24; and Kai Wu, 22, all of Queens, New York, along with Dimitri Tseperkas, 22, and Cihad Akkaya, 22, of Middle Island and Port Jefferson, New York, respectively, were each arrested on June 18, and charged by the U.S. Attorney’s Office for the Southern District of New York with participation in a conspiracy to distribute more than 1,000 kilograms of marijuana. Tseperkas and Akkaya were also charged with firearms offenses relating to the drug conspiracy. Investigators monitoring Darknet marketplaces found accounts used by some of the conspirators, leading agents to execute search warrants at three addresses in residential communities in Flushing and Mt. Sinai, New York. From the residences, agents recovered approximately $400,000 in U.S. currency, 140 kilograms of suspected marijuana and an additional 10 kilograms of suspected marijuana vape cartridges, 12 kilograms of suspected Xanax pills, over half a kilogram of suspected ecstasy, four pill presses, mixers, and pill press parts, over a dozen kilograms of various powders, packaging materials, and paraphernalia. While searching the residence where Akkaya and Tseperkas were found, investigators recovered three loaded shotguns, including a tactical double-barreled shotgun loaded with 14 shells, and over 50 shotgun shells, as well as significant quantities of narcotics, packaging materials, and paraphernalia including a money-counting machine. Review of electronic evidence recovered from the residences proved the conspirators’ connections to Darknet marketplaces, use of cryptocurrency, and narcotics distribution schemes.
- Ryan Farace, 34, of Reisterstown, Maryland, and Robert Swain, 34, of Freeland, Maryland, were charged by the U.S Attorney’s Office for the District of Maryland related to a scheme to manufacture and distribute alprazolam tablets, which are typically sold under the brand name “Xanax.” The indictment alleges that Farace distributed the drugs through sales on the dark web in exchange for Bitcoin, and that Farace and Swain laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds. To date, law enforcement has seized various crypto currency, to include bitcoin, valued at over $22 million at the time of the seizures, and over $1.5 million in cash, which was seized from Farace’s residence upon the execution of a search warrant on Jan. 18. As part of the indictment, the government seeks the forfeiture of no less than $5.665 million, plus the value of 4,000 Bitcoin believed to be the proceeds of the illegal drug sales, two residences, and a vehicle used to facilitate the drug distribution.
- Nicholas J. Powell, 32, and Michael Gonzalez, 27, former and current residents of Parma, Ohio, respectively, were charged by the U.S. Attorney’s Office for the Northern District of Ohio with conspiracy to distribute controlled substances and laundering money using the dark web. The complaint alleges that Powell used various monikers on Darknet marketplaces as part of his criminal scheme, including “TheSource,” “BonnienClyde,” BnC,” “BCPHARMA,” and “Money TS.” The conspiracy operated on multiple Darknet marketplaces, including Silk Road 2, AlphaBay, and HANSA. The conspiracy involved distributing Xanax, steroids, marijuana and other drugs across the country using these and other Darknet monikers. Powell and Gonzalez would then launder the funds as cryptocurrencies such as Bitcoin, Etherium, and Komodo through individuals specializing in money laundering on Darknet marketplaces. At the time of arrest, law enforcement had already seized approximately $437,000 in cryptocurrencies from Powell.
- Jose Robert Porras III, 21, and Pasia Vue, 23, both of Sacramento, were charged with drug distribution, money laundering, and illegally possessing firearms, in a 16-count indictment returned by a grand jury in the Eastern District of California. According to the indictment, Porras and Vue were using the online monikers “Cannabars” and “TheFastPlug,” to distribute marijuana, Xanax, and methamphetamine on various dark web marketplaces, including Trade Route, Wall Street Market, and Dream Marketplace. Porras and Vue then laundered the Bitcoin proceeds of their drug distribution through the HSI undercover agent located in New York. After receiving the Bitcoin from Porras and Vue, the undercover agent mailed parcels of cash to them in Sacramento. HSI and USPIS agents seized nine weapons including an AK-47 magazine and ammunition, 30 pounds of marijuana, $10,000 in U.S. currency, a vehicle, and over 100 bars of Xanax.
- Sam Bent, 32, of St. Johnsbury, Vermont (and formerly of East Burke, Vermont), and his cousin, Djeneba Bent, 26, also of St. Johnsbury (and formerly East Burke) were charged with conspiracy to distribute LSD, MDMA (also known as “ecstasy”), cocaine, and marijuana in an indictment returned by a federal grand jury in the District of Vermont. The indictment alleges that the conspiracy involved setting up accounts on dark web marketplaces, establishing online identities, accepting Bitcoin in exchange for sales over the dark web, and mailing controlled substances from several different post offices in Northeastern Vermont and Northwestern New Hampshire in an effort to avoid detection. The indictment also charges Sam Bent with four counts of money laundering involving three different exchanges of bitcoin drug distribution proceeds for U.S. currency.
- In Fresno, California, a federal grand jury returned an 11-count indictment on May 17, against Daniel Boyd McMonegal, 35, of San Luis Obispo and Mariposa, California, charging him with drug distribution and money laundering in the Eastern District of California. According to the indictment, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market. McMonegal was also the owner of a marijuana delivery service in San Luis Obispo called West Coast Organix, which claimed to be a non-profit medical marijuana cooperative. McMonegal then laundered the Bitcoin proceeds of his drug distribution through an undercover agent located in New York. After receiving the Bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa.
More than 50 Darknet vendor accounts were identified and attributed to the real individuals selling illicit goods on Darknet market sites such as Silk Road, AlphaBay, Hansa, Dream, and others. HSI-New York Field Division and MLARS coordinated with law enforcement and federal prosecutors to investigate 65 targets identified by the undercover operation in more than 50 Federal districts, including: the District of Arizona, the Eastern District of Arkansas, the Western District of Arkansas, the Central District of California, the Eastern District of California, the Northern District of California, the Southern District of California, the District of Colorado, the District of Connecticut, the Middle District of Florida, the Northern District of Florida, the Southern District of Florida, the Northern District of Iowa, the District of Kansas, the District of Maryland, the Eastern District of Michigan, the District of Minnesota, the Eastern District of North Carolina, the Western District of North Carolina, the District of New Hampshire, the Northern District of New York, the Southern District of New York, the Western District of New York, the District of North Dakota, the Northern District of Ohio, the Southern District of Ohio, the District of Oregon, the Eastern District of Pennsylvania, the Middle District of Pennsylvania, the District of South Carolina, the District of South Dakota, the Eastern District of Texas, the Northern District of Texas, the Southern District of Texas, the Western District of Texas, the Eastern District of Virginia, the District of Vermont, the Eastern District of Washington, and the Western District of Washington. FBI was part of the investigative team in the Northern District of California.
The investigation is ongoing.Fifteen Alleged Members of Peoria Street Gang Charged in Federal RICO Indictment for Gang Violence, Murder, Attempted MurderRead the Press Release
PEORIA, Ill. – A federal indictment unsealed today charges 15 alleged members of the Peoria street gang Bomb Squad with organized violent gang activity including murder and attempted murder. The indictment alleges that those charged are participants in a racketeering conspiracy that has committed numerous shootings and acts of violence, including the April 8, 2018, murder of a rival gang member and a bystander, a Bradley University student.
U.S. Attorney John E. Childress; ATF Resident Agent in Charge Tom Dart, Springfield Field Office; Peoria Interim Chief of Police Loren Marion III; DEA Assistant Special Agent in Charge Glenn Haas, Chicago Field Division; Peoria County State’s Attorney Jerry Brady; and Peoria Mayor Jim Ardis made the announcement.
The indictment charges the defendants with federal racketeering conspiracy under the Racketeer Influenced and Corrupt Organizations Act (RICO). Under the RICO statute, the indictment alleges that from 2013 to the present, the defendants functioned as a criminal enterprise to achieve its objectives, including activities that affect interstate commerce. Members and associates of Bomb Squad allegedly engaged in acts of violence, including murder, attempted murder, assault with a dangerous weapon, arson, and drug trafficking. The enterprise used violence to protect itself, its members and associates from rival gangs and to protect the standing and reputation of Bomb Squad.
All of the 15 defendants named in the indictment are charged with one count of RICO conspiracy, an offense which carries a statutory penalty of up to life in prison, if convicted. Those charged include: Eugene Haywood, aka “Nunu,” 24; Raevaughn Rogers, aka “Lil Poppi,” 18; Kenwan Crowe, 19; Terry Moss, aka “Lil Man,” 23; Ezra Johnson, aka “Lil Wody,” 22; Jovan McCree, aka “Vano,” 36; Jahlin Wilson, aka “BD,” 21; Andre Neal-Ford, aka “Monkey Man,” 20; Lance Washington, 22; Torieuanno White, aka “T.A.,” 24; Sherman Williams, aka “Shady,” 26; Lloyd Dotson, 27; Keith Gregory, aka “Kilo,” 19; Mytrez Flora, aka “Trez,” 24; and Kentrevion Watkins, aka “Tutu,” 19.
Twelve of the defendants are also charged with one or more counts of Violent Crimes in Aid of Racketeering (VICAR) that include assault with a dangerous weapon and attempted murder, and with using firearms during the commission of a violent crime. In addition, the indictment includes charges of drug trafficking in marijuana, crack cocaine, and heroin, and possession of firearms by felons.
To further the conspiracy and achieve its objectives, the indictment alleges 46 overt acts in which gang members and associates engaged in murder, drug trafficking, witness tampering, arson, and robbery. Included among the overt acts alleged are the following:
- June 23, 2013, Haywood murdered Eric “Greedy” Brown, who he believed to be a rival gang member;
- July 15, 2013, Haywood, Flora, Dotson and deceased Bomb Squad leader Raheem Wilson, aka “Boosie,” conspired to shoot and murder Tyrann Chester, whom they believed to be supplying drugs to a dealer operating independently of Bomb Squad in Bomb Squad territory;
- May 12, 2016, Wilson robbed and shot unnamed victim during a dice game because he believed the victim was dealing drugs in Bomb Squad territory and not sharing the proceeds;
- June 13, 2016, McCree shot a .308 caliber rifle at a car he believed was occupied by rival gang members driving on Arago Street, in Bomb Squad territory. One of the bullets passed through the wall of a residence and struck an 11-year-old girl in the leg as she slept on a couch;
- Feb. 12, 2017, Moss attempted to set fire to the home of an individual he believed to be a rival gang member, in retaliation for the murder of deceased Bomb Squad leader Raheem Wilson, aka “Boosie;”
- Aug. 9, 2017, Williams, Crowe and other Bomb Squad members burglarized a house and stole a safe containing 12 guns which were then distributed to other Bomb Squad members;
- April 4, 2018, Johnson attempted to persuade a witness from testifying in a trial wherein Haywood is charged with shooting an individual with a firearm. When the witness refused to accept a bribe, Johnson threatened the witness;
- April 8, 2018, Watkins provided a juvenile Bomb Squad member with Crowe’s handgun which the juvenile then allegedly used to shoot and kill Anthony Polnitz and Nasjay Murry.
The indictment was returned by the grand jury on June 20, and sealed pending today’s arrests. ATF agents were assisted by the U.S. Marshals Service to make the arrests. Those arrested this morning are expected to make their respective initial appearances in federal court this afternoon. Five of the defendants already in state custody, in Peoria county for state cases or serving a sentence at the Illinois Department of Corrections, are expected to appear in federal court for their initial appearances later this week and early next week.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.
The charges are the result of an ongoing investigation by an Organized Crime Drug Enforcement Task Force (OCDETF), a partnership of federal, state and local law enforcement agencies working together to identify, disrupt and dismantle drug trafficking organizations and violent street gangs.
Law enforcement agencies conducting the investigation include ATF, the Peoria Police Department, and DEA, in coordination with the Office of Peoria County State’s Attorney Jerry Brady. Assistant U.S. Attorney Ron Hanna is coordinating the investigation and prosecuting the case on behalf of the government in the Peoria Division, Central District of Illinois.
In addition, 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. The program was reinvigorated in 2017 as part of the Department of Justice’s renewed focus on targeting each community’s most violent criminals.
Felon Sentenced to over 6 Years in Federal Prison for Illegal Possession of a FirearmRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Zeb Zachariah Wilson, age 29, of Mount Jackson, Virginia, on June 25, 2018 to 76 months in prison, followed by three years of supervised release, for being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department, and Colonel William H. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, on June 7, 2016, a Montgomery County Police officer saw Wilson driving a Volkswagen Jetta with an expired registration. The officer attempted to conduct a traffic stop. Wilson refused to stop the vehicle, leading to a pursuit that ended with Wilson crashing through the gate at Asbury Methodist Village and into a tree. Wilson and a passenger then ran away into a wooded area. With the assistance of a K-9 officer and a Maryland State Police helicopter, Wilson was located in a stream under a log. A search of Wilson after his arrest revealed that he possessed packets of the drug Suboxone.
Montgomery County Police Department officers also saw a handgun in the car Wilson was driving, next to the driver’s seat beside the center console. The handgun, a .380-caliber semi-automatic pistol with an obliterated serial number, was recovered. The Montgomery County Firearms Examination Unit was able to partially restore the serial number, which revealed that the handgun was stolen. The Jetta was also found to have been stolen in Harrisonburg, Virginia on June 2, 2016, and the license plates on the vehicle did not belong to the Jetta. A search of the vehicle recovered multiple stolen items related to ongoing cases in Shenandoah, Virginia, including a 12-gauge shotgun. Law enforcement also recovered 50 rounds of ammunition and a receipt from a Germantown, Maryland retailer indicating that the ammunition had been purchased after the vehicle was stolen.
At the time of the crime, Wilson was on probation in Virginia for a previous felony conviction, and was prohibited from possessing firearms or ammunition due to that and other felony convictions.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
United States Attorney Robert K. Hur commended the ATF, the Montgomery County Police Department, and the Maryland State Police for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Ray D. McKenzie, who prosecuted the case.
Federal Jury Finds Brooklyn Park Man Guilty of Methamphetamine TraffickingRead the Press Release
United States Attorney Erica H. MacDonald announced the conviction of JOSE ANDRES VERA-GUTIERREZ, a/k/a “Bullet,” 36, for methamphetamine trafficking. After a six-day trial before U.S. District Judge Wilhelmina M. Wright in Saint Paul, Minnesota, the jury found VERA-GUTIERREZ guilty of one count of conspiracy to possess with intent to distribute methamphetamine. The jury was unable to reach a unanimous verdict on VERA-GUTIERREZ’S co-defendant, MARIBEL TORRES, who was also charged with one count of conspiracy.
“Jose Andres Vera-Gutierrez and his co-conspirators were responsible for trafficking significant amounts of methamphetamine across the country into Minnesota,” said Assistant United States Attorney LeeAnn K. Bell. “This guilty verdict demonstrates yet again law enforcement’s commitment to stopping methamphetamine traffickers from bringing this devastating drug into our communities.”
According to the evidence presented at trial, in December 2016, law enforcement commenced a wiretap investigation that led to a 25-pound methamphetamine seizure on January 18, 2017. VERA-GUTIERREZ and three co-conspirators arranged for the methamphetamine to be transported from California to Minnesota inside hidden compartments in an SUV. On January 18, 2017, the SUV and a trailing passenger car were traveling together on Interstate 35 when a Minnesota State Trooper stopped the SUV for speeding. During the traffic stop, the accompanying passenger car continued driving. Law enforcement found nine packages of methamphetamine hidden behind the panel above the SUV’s rear driver-side wheel and an additional 16 packages hidden behind the panel over the passenger-side wheel. The next morning, law enforcement determined that the passenger car had traveled to VERA-GUTIERREZ’S residence in Brooklyn Park, Minnesota.
This case is the result of an investigation by the Drug Enforcement Administration, the United States Postal Inspection Service, Homeland Security Investigations, the Minnesota State Patrol, the Dakota County Drug Task Force, Ramsey County Sheriff’s Office, Hennepin County Sheriff’s Office, Minneapolis/St. Paul Airport Police, Bloomington Police Department and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney LeeAnn K. Bell is prosecuting the case.
Defendant Information:
JOSE ANDRES VERA-GUTIERREZ, a/k/a “Bullet,” 36
Brooklyn Park, Minn.
Convicted:
- Conspiracy to possess with intent to distribute methamphetamine, 1 count
###
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Federal Jury Convicts Former Oil Company President for Orchestrating $30 Million Stock Manipulation SchemeRead the Press Release
United States Attorney Erica H. MacDonald announced the conviction of RYAN RANDALL GILBERTSON, 42, founder of Dakota Plains Holdings, Inc., and DOUGLAS VAUGHN HOSKINS, 50, for orchestrating a complex stock manipulation scheme that triggered more than $30 million dollars in fraudulent bonus payments. Following a 10-day trial before U.S. District Judge Patrick J. Schiltz in Minneapolis, Minnesota, the jury found the defendants guilty of multiple counts of wire fraud, conspiracy to commit securities fraud, and securities fraud.
“Ryan Gilbertson masterminded and carried out a complex scheme to manipulate the price of Dakota Plains stock. Although his scheme was complicated, Gilbertson's goal was simple—to line his own pockets at the expense of the company and its investors,” said U.S. Attorney Erica MacDonald. “Gilbertson, a former derivatives trader who co-founded a billion-dollar publicly-traded oil company, was a wealthy man. But like all too many white collar criminals, these defendants were motivated by nothing more than naked greed. The FBI, U.S. Postal Inspection Service, and IRS worked for years to understand, investigate, and prosecute Gilbertson's complex stock manipulation scheme. Thanks to their efforts, these defendants will not escape justice.”
“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail. Today’s verdict reaffirms how critical a role the US Postal Inspection Service plays in protecting the American consumer from these types of fraudulent schemes.”
“A free market depends on honesty and integrity of those involved in publicly traded companies,” said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. “In this case, Gilbertson, the founder of Dakota Plains, along with his associate, conspired to manipulate the market for their own financial gain. We are grateful that the jury saw what we saw in this case – a scheme that looked complex, but was really about market rigging and self-dealing.”
According to the evidence presented at trial, in November 2008, GILBERTSON and his business partner founded Dakota Plains, Inc. (“Dakota Plains”), a privately held company based in Wayzata, Minnesota that owned and operated a transloading facility in New Town, North Dakota. From the outset, GILBERTSON and his partner concealed their involvement in the company by installing their fathers as the company’s executives and two-person board of directors. Rather than capitalize the company at the outset, GILBERTSON caused the company to issue $9 million in promissory notes to himself and other corporate insiders. The notes paid 12% annual interest and included a provision that paid GILBERTSON and the other noteholders a bonus payment based on the average trading price of Dakota Plains stock during the first 20 days of public trading. The bonus payment provision operated as an “embedded derivative” in which the value of the bonus payment would be based on the average price of Dakota Plains stock during the first 20 days of public trading.
GILBERTSON then caused the company to go public via a reverse merger with a company called Malibu Club Tan, which was a publicly traded shell company that operated a single defunct tanning salon in suburban Salt Lake City, Utah. GILBERTSON made it a secret condition of the reverse merger that DOUG HOSKINS, his friend and polo coach, be able to purchase the majority of the freely trading shares, the only shares that could trade publicly following the reverse merger. GILBERTSON then gave $30,000 to HOSKINS, who was deeply in debt and owed money to the IRS and other creditors, in order to purchase 50,000 shares of Dakota Plains stock at a price of $0.50 per share on March 23, 2012, the morning of the reverse merger. That same day, again at the direction of GILBERTSON, HOSKINS began selling his shares at the falsely inflated price of $12 per share.
According to the evidence presented at trial, on the first day of public trading, HOSKINS began selling his newly acquired shares for an inflated price of $12 per share at GILBERTSON’S direction, and continued to do so throughout the first 20 days of public trading following the reverse merger. At the same time, GILBERTSON directed a local stockbroker at a Minneapolis-based securities brokerage firm, to purchase shares of Dakota Plains stock on behalf of both himself and his clients at inflated prices. GILBERTSON also instructed a Salt Lake City-based business consultant to manipulate the price of the stock by ensuring that none of the shell company shareholders sold their stock for less than the $12 per share price offered by his friend and polo coach, HOSKINS. Indeed, on April 4, 2012, GILBERTSON sent a text message to the consultant in Utah bragging that the shell company shareholders “would be participating on sales at 7 bucks [a share] not 12 were it not for my involvement.”
Throughout the 20-day period following the reverse merger, GILBERTSON, with the help of HOSKINS and others, manipulated the price of Dakota Plains stock to increase the average trading price to $11.30 per share. This triggered a $32.8 million bonus payment to GILBERTSON and the other noteholders. GILBERTSON made millions as a result of his stock manipulation scheme. HOSKINS made less money, but still pocketed more than $125,000 from his stock sales, much of which he used to purchase an Argentine polo pony.
In the wake of the fraud scheme, HOSKINS was interviewed by the Securities and Exchange Commission about his involvement in these stock sales. HOSKINS repeatedly lied under oath during the deposition, covering up both his and GILBERTSON’S involvement in the stock manipulation scheme. Among other things, HOSKINS claimed that he did not discuss the stock trades with any other individuals. At trial, GILBERTSON falsely denied his role in the stock manipulation scheme, but conceded that he had arranged for HOSKINS to purchase Dakota Plains stock prior to the reverse merger and had provided HOSKINS with the money with which he purchased the stock.
This case is the result of an investigation conducted by the FBI, Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.
This case is being prosecuted by Assistant United States Attorneys Joseph H. Thompson, Kimberly A. Svendsen, and Melinda A. Williams.
Defendant Information:
RYAN RANDALL GILBERTSON, 42
Delano, Minn.
Convicted:
- Wire fraud, 14 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 6 counts
DOUGLAS VAUGHN HOSKINS, 50
Wayzata, Minn.
Convicted:- Wire fraud, 2 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 3 counts
Federal Indictments Unsealed in Cheatham County Taser IncidentRead the Press Release
Federal indictments were unsealed today charging current and former supervisory corrections officers at the Cheatham County Jail in Ashland City, Tennessee, with federal civil rights and obstruction offenses, announced U.S. Attorney Don Cochran of the Middle District of Tennessee and Acting Assistant Attorney General John Gore of the Civil Rights Division. Former Corporal Mark Bryant is charged with two counts of deprivation of rights under color of law and two counts of obstruction of justice. Sergeant Gary Ola is charged with two counts of making false statements to federal investigators. Both were arrested earlier today and will make initial appearances before a U.S. Magistrate Judge later this afternoon.
Bryant’s indictment alleges that, on November 5, 2016, he twice used unlawful force on a restrained 18-year-old detainee inside the jail. In the first incident, Bryant used a Taser to stun the detainee four times for a total of approximately 50 seconds while the detainee was in a restraint chair. In a second incident that occurred on the same night, Bryant Tased the detainee for approximately 11 seconds without legitimate justification after the detainee was placed in handcuffs and surrounded by multiple officers. As a result of these unjustified uses of force, the detainee sustained bodily injury. The indictment further charges that Bryant obstructed justice by submitting false reports about both incidents.
Ola’s indictment alleges that he made materially false statements to investigators in two separate interviews during the investigation of Bryant’s Taser usage. In August 2017, Ola falsely told agents with the FBI and Tennessee Bureau of Investigation that he walked away from Bryant and did not see one or more of the Taser cycles that Bryant used on the restrained detainee. In a second interview with the FBI in May 2018, Ola stated falsely that he did not see Bryant Tase the detainee after officers placed the detainee in handcuffs.
If convicted, Bryant faces a maximum sentence of 10 years in prison for the color of law charges and 20 years in prison for the obstruction charges, three years of supervised release, and a fine of up to $250,000. Ola faces a maximum sentence of five years in prison, three years of supervised release, and a fine of up to $250,000.
These cases were investigated by the Federal Bureau of Investigation, and are being prosecuted by Assistant U.S. Attorney Sara Beth Myers of the Middle District of Tennessee and Civil Rights Division Trial Attorney Michael J. Songer.
An indictment is merely an accusation and not evidence of guilt. The defendants are presumed innocent until proven guilty.
Duval County Man Sentenced to 57 Months in Federal Prison on Firearms ChargeRead the Press Release
Jacksonville, Florida – U.S. District Judge Brian J. Davis today sentenced Derrick Burney (40, Jacksonville) to 57 months in federal prison for possessing a firearm as a convicted felon. Burney pleaded guilty on March 20, 2018.
According to court documents, on October 24 and 25, 2017, a confidential source acting at the direction of law enforcement made purchases of marijuana from Burney at a residence in Jacksonville. On October 27, 2017, as federal agents executed a search warrant at that residence, agents encountered Burney and others in the house. In the living room area, agents located a .38 revolver loaded with six bullets and a SKS Norinco rifle with a large capacity magazine that contained 30 bullets. Federal agents also located marijuana and drug paraphernalia used in the sale of narcotics, along with additional ammunition, throughout the residence. Additional investigation by law enforcement revealed that Burney was a multi-time convicted felon and therefore was prohibited under federal law from possessing a firearm or ammunition.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case was investigated by the Federal Bureau of Investigation Violent Crime Task Force and the Bureau of Alcohol, Tobacco, Firearms and Explosives Jacksonville Office. It was prosecuted by Assistant United States Attorney Kevin C. Frein.
District Man Sentenced to Two Years in Prison for Felony Assault on Deputy U.S. MarshalRead the Press Release
WASHINGTON – Anthony Nowlin, 23, of Washington, D.C., was sentenced today to two years in prison on a federal charge stemming from a courthouse incident last year in which he assaulted a Deputy United States Marshal, announced U.S. Attorney Jessie K. Liu and Michael Hughes, U.S. Marshal for the Superior Court of the District of Columbia.
Nowlin pled guilty in February 2018, in the U.S. District Court for the District of Columbia, to a charge of assaulting, resisting or impeding a federal law enforcement officer. He was sentenced by the Honorable Tanya S. Chutkan. Following his prison term, he will be placed on three years of supervised release.
According to the government’s evidence, on Sept. 6, 2017, Nowlin was appearing before the Honorable Maribeth Raffinan in the Superior Court of the District of Columbia for violating terms of his probation in an earlier assault case. Two deputy U.S. marshals were assigned to the courtroom. Judge Raffinan revoked Nowlin’s probation and ordered that he be remanded to the custody of the deputy marshals. Nowlin became loud and belligerent while in the courtroom, and started to walk towards the cellblock before Judge Raffinan finished her ruling.
One of the deputy marshals instructed Nowlin to wait until Judge Raffinan concluded her ruling before leaving the courtroom and going to the cell block. Then, once Judge Raffinan concluded the hearing, the two deputy marshals escorted Nowlin to the cellblock behind the courtroom. Nowlin continued to be belligerent while in the cellblock and resisted efforts by the deputy marshals to search him for weapons or contraband.
As he continued to resist, Nowlin spun around and threw a punch at one of the deputy marshals. A struggle ensued, with Nowlin continuing to punch the deputy marshal in the face and head area. Other deputy marshals responded and Nowlin was subdued. The deputy marshal who was struck by Nowlin was taken to a hospital for medical treatment.
In announcing the sentence, U.S. Attorney Liu and Marshal Hughes commended the work of those who handled the matter from the U.S. Marshals Service. They expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Jeannette Litz and Teesha Tobias. Finally, they commended the work of Assistant U.S. Attorney Emory V. Cole, who prosecuted the case.