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2 August 2018
Colombian Narco Trafficker Sentenced to 21 YearsRead the Press Release
Tampa, FL – U.S. District Judge Virginia Hernandez Covington today sentenced Jorge Eliecer Cifuentes-Cuero (54, Colombia, South America) to 21 years in federal prison for conspiring to possess with the intent to distribute five kilograms or more of cocaine while aboard a vessel subject to the jurisdiction of the United States.
According to court documents, Cifuentes-Cuero was a principal member of his Colombian and Ecuadorean-based drug trafficking organization. He initially worked as a mechanic and mariner onboard vessels in the Eastern Pacific Ocean, and later, as he accumulated wealth, became an organizer of multi-ton cocaine loads transported by vessel from Colombia and Ecuador to locations in Central and Latin America. Cifuentes-Cuero is responsible for several maritime smuggling ventures in the international waters of the Eastern Pacific Ocean. In January 2013 and July 2014, the U.S. Coast Guard interdicted loads of cocaine, totaling over 1,000 kilograms that were being smuggled aboard vessels (commonly referred to as “go-fast boats”).
This case was investigated by the Panama Express Strike Force, an Organized Crime Drug Enforcement Task Force (OCDETF) comprised of agents and analysts from the United States Coast Guard Investigative Service, the Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service, and U.S. Southern Command’s Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case was prosecuted by Assistant United States Attorney Thomas Palermo.
Clifton Park Man Sentenced to 10 Years for Distributing Child PornographyRead the Press Release
SYRACUSE, NEW YORK – William C. Ruff, age 43, of Clifton Park, New York, was sentenced on Tuesday to 10 years in prison for distributing child pornography.
The announcement was made by United States Attorney Grant C. Jaquith and Charles Margiotta, Acting Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
The sentence was issued by Senior United States District Judge Norman A. Mordue, and followed Ruff’s guilty plea, on April 16, 2018, to distributing child pornography on eight occasions between October 10, 2016 and December 17, 2016. As Ruff admitted, the pornographic videos and images depicted the sexual abuse of children as young as 3 years old.
Judge Mordue also imposed a 20-year term of supervised release to start after Ruff is released from prison. As a result of his conviction, Ruff will be required to register as a sex offender after leaving prison.
This case was investigated by the FBI, with assistance from the Saratoga County Sheriff’s Office, and was prosecuted by Assistant U.S. Attorneys Joseph A. Giovannetti and Emmet O’Hanlon.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Citizen of El Salvador Sentenced to 6.5 Years for Travel in Interstate Commerce to Engage in Illicit Sexual Conduct with Two MinorsRead the Press Release
ASHEVILLE, N.C. – On Thursday, August 2, 2018, Jose Hector Alvarado, 44, a citizen of El Salvador who was residing in Cherokee County, N.C., was sentenced to 78 months in prison and 15 years of supervised release, for traveling in interstate commerce to engage in illicit sexual conduct with two minors, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. also ordered Alvarado to register as a sex offender after he is released from prison.
According to filed court documents and court proceedings, on March 19, 2016, Alvarado drove a 13-year-old girl and a 14-year-old girl from Cherokee County, N.C., to Anderson, S.C. for the purpose of engaging in sex with the minors there. Upon arriving in Anderson, Alvarado bought gifts for the minors and then rented a motel room. Court records show that the minors contacted their parents and informed them of their whereabouts. The parents alerted local law enforcement and the minors were rescued.
Alvarado pleaded guilty on October 26, 2017, to traveling in interstate commerce to engage in illicit sexual conduct. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole. Alvarado will also be subject to deportation proceedings upon the completion of his federal sentence.
In making today’s announcement, U.S. Attorney Murray thanked ICE/Homeland Security Investigations and the Cherokee County Sheriff’s Office for their investigation of this case.
The U.S. Attorney’s Office in Asheville prosecuted the case.
Charlestown Man Charged with Bank RobberyRead the Press Release
BOSTON - A Charlestown man was charged today in federal court in Boston with bank robbery.
Robert H. Brady, 40, was indicted on one count of bank robbery. Brady is currently in state custody.
According to court documents, on June 28, 2018, Brady robbed a branch of the Cambridge Savings Bank in Charlestown, stealing approximately $912.00.
Brady faces a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000, and restitution in the amount of $912.00. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Charleston Felon Sentenced to 30 Months Imprisonment for Firearms and Marijuana Distribution ChargesRead the Press Release
Charleston, South Carolina---- United States Attorney Sherri A. Lydon stated that Charles Baldwin Wilson, age 36, of Charleston, was sentenced in federal court in Charleston for Possession of Firearms by a Convicted Felon, and Possession with Intent to Distribute Marijuana, in violation of Title 18 U.S.C. § 922(g) and Title 21 U.S.C. § 841(b)(1)(D). United States District Judge Richard M. Gergel, of Charleston, sentenced Wilson to 30 months imprisonment, 2 years supervised release to include 12 months of home confinement, a fine of $25,000, a special assessment of $200, and forfeiture of firearms and $21,473.38.
Evidence presented at the change of plea and sentencing hearing established that on November 16, 2015, Charleston County Sheriff’s Office executed a search warrant at Wilson’s residence. Law enforcement found multiple rooms in the home dedicated to a sophisticated marijuana growing operation, along with seven firearms. Wilson had a prior conviction for Possession with Intent to Distribute Marijuana from 2006, and was prohibited from possessing a firearm. Further investigation revealed that Wilson made multiple trips to Colorado to further his multi-year drug trafficking operation.
The case was investigated by U.S. Postal Inspection Service and Charleston County Sheriff’s Office. Assistant United States Attorneys Jamie Lea Schoen was assigned to the case.
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Cedar Rapids Man Charged with Sexual Exploitation of a Child, Possession of Child Pornography, and ExtortionRead the Press Release
John Hunt, age 34, of Cedar Rapids, Iowa, has been charged with sexual exploitation of a child, possession of child pornography, and extortion. The charges are contained in an Indictment filed on July 26, 2018, in United States District Court in Cedar Rapids.
The Indictment alleges that, between 2015 and 2017, Hunt produced sexual depictions of a child, possessed child pornography on four different devices, and sent communications containing threats to distribute sexually explicit depictions.
If convicted, Hunt faces a mandatory minimum sentence of 15 years’ imprisonment and a possible maximum sentence of 112 years’ imprisonment, a $1,500,000 fine, $25,600 in special assessments, and at least five years and up to life on supervised release following any imprisonment.
Hunt appeared on August 1, 2018 in federal court in Cedar Rapids for a detention hearing and was held without bond. Hunt’s next appearance for trial is set for October 1, 2018.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and is being investigated by the Cedar Rapids Police Department.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 18-69.
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Brockport Man Pleads Guilty to Aiding and Abetting Credit Crad Fraud and ID TheftRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Paul Kozlyuk, 32, of Brockport, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to aiding and abetting the unlawful transfer, possession, and use of identification documents, authentication features, and information. The charge carries a maximum penalty of 15 years in prison, and a fine of $250,000.
Assistant U.S. Attorneys Kyle Rossi and Melissa Marangola, who are handling the case, stated that the defendant conspired with co-defendant Kyle Bertrand and others, to steal goods from various businesses. As part of the scheme, defendant Bertrand stole the identification of individuals residing in multiple states, including their names, Social Security Numbers, dates of birth, and credit card information. During the scheme, using the stolen identifications, Bertrand, at the request of Kozlyuk, made unlawful purchases of items for the defendant. Kozlyuk then paid Kyle Bertrand with Walmart money grams. Kozlyuk paid Bertrand a fraction of the actual market price of the stolen goods, and either kept the goods or sold them for a profit, through his former business, the Marketview Heights Garage.
Kozlyuk unlawfully obtained vehicle parts from various out-of-state venders, which he later sold to vendors. Kozlyuk also stole inventory from vendors in the Western District of New York. All told, Kozlyuk stole or attempted to steal a total of $144,688.35 in goods.
Kozlyuk was charged along with co-defendants Kyle Bertrand, Herbert Street, Michael Gerone, and Richard Lipke. All defendants have been convicted.
The plea is the result of an investigation by the New York State Police, under the direction of Major Eric Laughton; the Rochester Police Department, under the direction of Chief Michael Ciminelli, and Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.Sentencing is scheduled for October 25, 2018, before Judge Wolford.
Brazilian National Charged with Illegal Reentry After DeportationRead the Press Release
BOSTON - A Brazilian national was charged today in federal court in Boston with illegally reentering the United States after being deported.
Antonio Ferreira, 56, was indicted on one count of illegal reentry of a deported alien.
According to court documents, law enforcement officers in Framingham encountered Ferreira on June 26, 2018, and determined him to be illegally present in the United States. Ferreira was previously deported on April 5, 2007.
Ferreira faces a sentence of no greater than two years in prison, one year of supervised release, a fine of $250,000, and will be subject to deportation upon completion of his sentence. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Rebecca Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Boulder Woman Sentenced to 10 Years in Federal Prison for Distribution of Heroin Resulting in DeathRead the Press Release
DENVER – Kirsten Lippold, age 48, of Boulder, Colorado, was sentenced today to serve 10 years in federal prison for distributing heroin resulting in death, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. The sentence was handed down by U.S. District Court Judge Raymond P. Moore. Following the prison sentence, Judge Moore ordered the defendant to serve 5 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Lippold was indicted by a federal grand jury in Denver on July 13, 2017. She pled guilty on May 9, 2018 to distribution of heroin resulting in death.
According to court documents, Kirsten Lippold distributed heroin, a Schedule I controlled substance, the use of which resulted in an overdose death on or about August 17, 2015. Within the factual basis of her plea agreement, Lippold admitted to selling less than a gram of heroin to the decedent. Nonetheless, that heroin resulted in a fatal overdose, which occurred in Boulder, Colorado. Sentencing proceedings further revealed that the defendant also had prior felony drug convictions. No information about the victim is available for release.
“If you are selling even small amounts of heroin in Colorado, know this: any one of your sales could kill someone. If you don’t care about that, maybe you’ll care about this: you will face mandatory minimum sentences in federal prison, out of state, no parole,” said U.S. Attorney Bob Troyer.
“Ms. Lippold’s sentence represents the FBI’s dedication to pursuing those intent on harming the citizens of our communities, through direct action and general criminal activity,” said FBI Denver Division Special Agent in Charge Calvin Shivers. “The FBI will continue to work through our strong law enforcement partnerships to protect our community from those engaged in crimes of this nature."
The investigation was conducted by the Boulder County Drug Task Force, the City of Boulder Police Department and the Fort Collins Resident Agency of the Federal Bureau of Investigation. The prosecution was handled by Bradley W. Giles, Assistant U.S. Attorney, District of Colorado, Denver.
Albuquerque Felon Sentenced to Eight Years for Unlawful Possession of Firearm and AmmunitionRead the Press Release
ALBUQUERQUE – Daniel Penrod, 29, of Albuquerque, N.M., was sentenced today in federal court to 96 months (eight years) of imprisonment followed by three years of supervised release for violating the federal firearms laws by being a felon in possession of a firearm and ammunition.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested Penrod in Jan. 2018, on a criminal complaint that charged Penrod with being a felon in possession of a firearm and ammunition on Jan. 16, 2018, in Bernalillo County, N.M. According to the criminal complaint, while Deputy U.S. Marshals were executing an arrest warrant on Penrod for a probation violation, Penrod attempted to flee. During the pursuit that ensued, Penrod turned towards a Deputy U.S. Marshal and drew a loaded firearm out of his waistband, whereupon the Deputy U.S. Marshal disarmed and arrested Penrod.
On May 3, 2018, Penrod pled guilty to a felony information charging him with being a felon in possession of a firearm and ammunition. In entering the guilty plea, Penrod admitted that he possessed a firearm, which he pulled from his waistband as he turned toward the Deputy U.S. Marshal who was pursuing him on Jan. 16, 2018. Penrod acknowledged that at the time, he was prohibited from possessing firearms or ammunition because of his prior felony convictions for receiving or transferring a stolen motor vehicle, 2nd degree murder, and battery upon a police officer.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service. Assistant U.S. Attorney Kimberly A. Brawley prosecuted the case as part of a federal anti-violence initiative that targets violent, repeat offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution offenders with the goal of making communities in New Mexico safer places for people to live and work.
Accountant sentenced to prison for embezzling over one million dollars from employerRead the Press Release
ATLANTA – Stantisha D. Kemp, an accounting manager who embezzled over $1.2 million dollars from her employer over a six-year period has been sentenced.
“Kemp’s egregious misconduct threatened the financial soundness of her company when she stole over one million dollars,” said U.S. Attorney Byung J. “BJay” Pak. “Businesses should build in checks and balances in their accounting procedures that safeguard their assets from fraud.”
“Hopefully this sentencing makes a statement that the FBI is committed to making cases like this a strong deterrent to the temptation of greed,” said Ricardo Grave de Peralta, Acting Special Agent in Charge of FBI Atlanta. “Kemp not only defrauded the company she worked for, she also violated the trust they put in her.”
According to U.S. Attorney Pak, the charges and other information presented in court: From 2007 to 2013, Kemp served as a payroll and accounting manager of an Atlanta-based company that developed medical technology. During that time, Kemp embezzled over $1.2 million dollars by falsifying payroll records sent to a third-party payroll processing company and instructing the payroll processor to direct deposit funds into her personal bank accounts on a monthly basis.
Kemp falsely instructed the payroll processing company that a doctor with the initials Y.H.J. was a company employee, and she further instructed the payroll processing company to direct deposit Y.H.J.’s salary payments into her personal bank accounts. She concealed her scheme by preparing a set of fabricated internal payroll records that made no mention of Y.H.J., who had not been employed by the company since early April 2010. Nonetheless, Y.H.J.’s unauthorized salary payments were deposited into Kemp’s personal bank accounts, month after month, until February 2013.
Kemp was sentenced to two years in prison to be followed by three years of supervised release on August 1, 2018. She was also ordered to pay restitution in the amount of $1,253,287.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S Attorney Kamal Ghali, Deputy Chief of the Cyber and Intellectual Property Crime Section, prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
19-Year-Old Charged with Importation of 11,490 Fentanyl Pills,61 Pounds of Methamphetamine, and 14 Pounds of Heroin at San Ysidro Port of EntryRead the Press Release
NEWS RELEASE SUMMARY – August 2, 2018
SAN DIEGO – Today, Cristian Araujo Aguirre, 19, was arraigned by Magistrate Judge Barbara Major, on charges of importing 11,490 fentanyl pills, 61 pounds of methamphetamine and 14 pounds of heroin. Aguirre was arrested at the San Ysidro Port of Entry on August 1, 2018.
According to court records, Aguirre, a United States citizen living in Tijuana, was the driver and sole occupant of a vehicle. U.S. Custom Border & Protection (“CBP”) officers found anomalies in the driver’s side and passenger side rear door panels and spare tire of his vehicle. CBP removed 8 packages of heroin in the vehicle’s firewall, two packages of methamphetamine from the rear driver’s side door; 2 packages of methamphetamine from the rear driver’s side door; 5 packages of methamphetamine from the right rear quarter panel; 11 packages of methamphetamine from the right passenger rear door; 9 packages of methamphetamine in the spare tire, 2 bags and one box of pills (totaling 11,490 pills) in the left rear quarter panel of the vehicle. The pills tested positive for fentanyl but were designed to resemble M30s, or oxycodone.
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At defendant’s initial appearance, the United States requested detention based on risk of flight. The detention hearing is scheduled for August 7, 2018 at 9:30 before Judge Major. His preliminary hearing is scheduled for August 16, 2018 at 9:30 before Judge Major.
DEFENDANT Case Number 18MJ4249
Cristian Araujo Aguirre Age: 19 Tijuana, Mexico
SUMMARY OF CHARGES
Importation of Controlled Substances
Maximum penalty: 10 years minimum to life; $1,000,000 fine; supervised release; $100 special assessment)
INVESTIGATING AGENCIES
Homeland Security Investigations
U.S. Customs & Border Protection (CBP)
The public is reminded that a complaint is a charging document. A defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
1 August 2018
Yankton Man Sentenced to 10 Years for Possession of Child PornographyRead the Press Release
United States Attorney Ron Parsons announced that U.S. District Judge Karen E. Schreier sentenced a Yankton, South Dakota, man convicted of Possession of Child Pornography.
Richard Leon Engbretson, age 36, was sentenced on July 30, 2018, to 10 years in federal prison, followed by 10 years of supervised release, ordered to pay $100 to the Federal Crime Victims Fund, and forfeit his computer and cell phone.
Engbretson was indicted for possession of child pornography by a federal grand jury on August 8, 2017. He pled guilty on May 10, 2018.
On February 4, 2017, Yankton Police responded to a 911 call from the residence of Richard Engbretson. In the call, Engbretson explained that he cut his own wrists because he was depressed and lonely. He also stated that he was a sex offender and had looked at child pornography. When officers arrived, Engbretson opened the door holding his left wrist in a towel. A forensic examination led to the discovery of child pornography on Engbretson's computer and cell phone.
This case was investigated by the Yankton Police Department, the Federal Bureau of Investigation, and prosecuted by Assistant U.S. Attorney Jeff Clapper.
Engbretson was returned to state custody to complete a sentence for a 2015 conviction for possessing child pornography.
Winter Harbor Man Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Timothy Daniel Davis, 61, of Winter Harbor, Maine, pleaded guilty yesterday in U.S. District Court to being a felon in possession of a firearm.
Court records reveal that in about June 2016, Davis possessed a shotgun while threatening another man. On May 15, 2017, Davis possessed a 12 gauge, double-barreled shotgun at his Winter Harbor apartment. Davis was prohibited from possessing firearms as a result of a 2010 armed assault with intent to murder conviction in Massachusetts.
Davis faces up to ten years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives as well as the Winter Harbor and Gouldsboro Police Departments.
West Columbia Man Sentenced to 14 Years on Federal Firearm and Drug ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated that Jwain Dennis Francis, a/k/a “Love,” age 28, of West Columbia, was sentenced in federal court to a total of 168 months imprisonment with 3 years of supervised release to follow. Earlier this year, Francis plead guilty to being a felon in possession of a firearm and ammunition and to possession with intent to crack cocaine and cocaine, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2), and 924(e) and Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C). Chief United States District Judge Terry L. Wooten, of Columbia, imposed the sentence, which consisted of the maximum 120 months (10 years) imprisonment on the firearm charge and 168 months (14 years) imprisonment on the drug charge, both to run concurrently.
Evidence presented in court established that in late 2016, the West Columbia Police Department received information that an individual nicknamed “Love” was selling crack cocaine in the area of Gentle Pine Apartments. A confidential informant was able to purchase crack cocaine from “Love” on two separate occasions in November 2016, and law enforcement determined through photo line-ups that “Love” was Francis. On December 1, 2016, officers arrested Francis on state drug charges and executed a search warrant at his residence. Inside the residence, officers recovered baggies of cocaine and crack cocaine, along with scales and $3,305. Officers also recovered a 9mm handgun and 9mm ammunition. Francis admitted that he bought and sold crack cocaine and cocaine.
Francis is prohibited under federal law from possessing firearms and ammunition based upon his prior separate South Carolina state convictions for strong arm robbery (2007), indecent exposure (two counts)(2014), and strong arm robbery (2014). Francis was determined to be a career offender for purposes of sentencing based upon his extensive prior record.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the West Columbia Police Department and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Project CeaseFire is part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
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Wells Fargo Agrees to Pay $2.09 Billion Penalty for Allegedly Misrepresenting Quality of Loans Used in Residential Mortgage-Backed SecuritiesRead the Press Release
The Justice Department announced today that Wells Fargo Bank, N.A. and several of its affiliates (Wells Fargo) will pay a civil penalty of $2.09 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on the bank’s alleged origination and sale of residential mortgage loans that it knew contained misstated income information and did not meet the quality that Wells Fargo represented. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities (RMBS) containing loans originated by Wells Fargo.
“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio. “It sends a strong message that the Department is committed to protecting the nation’s economy and financial markets against fraud.”
“Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans,” said Acting U.S. Attorney for the Northern District of California, Alex G. Tse. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted. Our office is steadfast in pursuing those who engage in wrongful conduct that hurts the public.”
FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate criminal offenses, including wire and mail fraud. The United States alleged that, in 2005, Wells Fargo began an initiative to double its production of subprime and Alt-A loans. As part of that initative, Wells Fargo loosened its requirements for originating stated income loans – loans where a borrower simply states his or her income without providing any supporting income documentation.
To evaluate the integrity of its increasing volume of stated income loans, Wells Fargo subjected a sample of these loans to “4506-T testing.” A 4506-T form is a government document signed by the borrower during the loan approval process that allows the lender to obtain the borrower’s tax transcripts from the Internal Revenue Service (IRS). 4506-T testing involves comparing the tax transcripts of the borrower with the income stated on the loan application. Wells Fargo implemented 4506-T testing on two of its programs. This testing revealed that more than 70% of the loans that Wells Fargo sampled had an “unacceptable” variance (greater than 20% discrepancy between the borrower’s stated income and the income information reflected in the borrower’s most recent tax returns filed with the IRS), and the average variance was approximately 65%. After receiving these results, Wells Fargo conducted further internal testing. This additional testing, performed by quality assurance analysts, was designed to determine if “plausible” explanations existed for the “unacceptable” variances over 20%. This additional step revealed that nearly half of the stated income loans that Wells Fargo tested had both an unacceptable variance and the absence of a plausible explanation for that variance.
The results of Wells Fargo’s 4506-T testing were disclosed in internal monthly reports, which were widely distributed among Wells Fargo employees. One Wells Fargo employee in risk management observed that the “4506-T results are astounding” yet “instead of reacting in a way consistent with what is being reported WF [Wells Fargo] is expanding stated [income loan] programs in all business lines.”
The United States alleged that, despite its knowledge that a substantial portion of its stated income loans contained misstated income, Wells Fargo failed to disclose this information, and instead reported to investors false debt-to-income ratios in connection with the loans it sold. Wells Fargo also allegedly heralded its fraud controls while failing to disclose the income discrepancies its controls had identified. The United States further alleged that Wells Fargo took steps to insulate itself from the risks of its stated income loans, by screening out many of these loans from its own loan portfolio held for investment and by limiting its liability to third parties for the accuracy of its stated income loans. Wells Fargo sold at least 73,539 stated income loans that were included in RMBS between 2005 to 2007, and nearly half of those loans have defaulted, resulting in billions of dollars in losses to investors.
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of California, with investigative support from the Federal Housing Finance Agency, Office of Inspector General.
The claims resolved by this settlement are allegations only, and there has been no admission of liability.
Wells Fargo Agrees to Pay $2.09 Billion Penalty for Allegedly Misrepresenting Quality of Loans Used in Residential Mortgage-Backed SecuritiesRead the Press Release
SAN FRANCISCO-The Justice Department announced today that Wells Fargo Bank, N.A. and several of its affiliates (Wells Fargo) will pay a civil penalty of $2.09 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on the bank’s alleged origination and sale of residential mortgage loans that it knew contained misstated income information and did not meet the quality that Wells Fargo represented. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities (RMBS) containing loans originated by Wells Fargo.
“Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans,” said Acting U.S. Attorney for the Northern District of California, Alex G. Tse. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted. Our office is steadfast in pursuing those who engage in wrongful conduct that hurts the public.”
“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio. “It sends a strong message that the Department is committed to protecting the nation’s economy and financial markets against fraud.”
FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate criminal offenses, including wire and mail fraud. The United States alleged that, in 2005, Wells Fargo began an initiative to double its production of subprime and Alt-A loans. As part of that initative, Wells Fargo loosened its requirements for originating stated income loans – loans where a borrower simply states his or her income without providing any supporting income documentation.
To evaluate the integrity of its increasing volume of stated income loans, Wells Fargo subjected a sample of these loans to “4506-T testing.” A 4506-T form is a government document signed by the borrower during the loan approval process that allows the lender to obtain the borrower’s tax transcripts from the Internal Revenue Service (IRS). 4506-T testing involves comparing the tax transcripts of the borrower with the income stated on the loan application. Wells Fargo implemented 4506-T testing on two of its programs. This testing revealed that more than 70% of the loans that Wells Fargo sampled had an “unacceptable” variance (greater than 20% discrepancy between the borrower’s stated income and the income information reflected in the borrower’s most recent tax returns filed with the IRS), and the average variance was approximately 65%. After receiving these results, Wells Fargo conducted further internal testing. This additional testing, performed by quality assurance analysts, was designed to determine if “plausible” explanations existed for the “unacceptable” variances over 20%. This additional step revealed that nearly half of the stated income loans that Wells Fargo tested had both an unacceptable variance and the absence of a plausible explanation for that variance.
The results of Wells Fargo’s 4506-T testing were disclosed in internal monthly reports, which were widely distributed among Wells Fargo employees. One Wells Fargo employee in risk management observed that the “4506-T results are astounding” yet “instead of reacting in a way consistent with what is being reported WF [Wells Fargo] is expanding stated [income loan] programs in all business lines.”
The United States alleged that, despite its knowledge that a substantial portion of its stated income loans contained misstated income, Wells Fargo failed to disclose this information, and instead reported to investors false debt-to-income ratios in connection with the loans it sold. Wells Fargo also allegedly heralded its fraud controls while failing to disclose the income discrepancies its controls had identified. The United States further alleged that Wells Fargo took steps to insulate itself from the risks of its stated income loans, by screening out many of these loans from its own loan portfolio held for investment and by limiting its liability to third parties for the accuracy of its stated income loans. Wells Fargo sold at least 73,539 stated income loans that were included in RMBS between 2005 to 2007, and nearly half of those loans have defaulted, resulting in billions of dollars in losses to investors.
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of California, with investigative support from the Federal Housing Finance Agency, Office of Inspector General. Assistant U.S. Attorneys Douglas Chang and Kimberly Friday are handling the matter on behalf of the U.S. Attorney’s Office for the Northern District of California with the assistance of Tina Louie. The matter was handled in conjunction with Department of Justice Commercial Litigation Branch Trial Attorneys Derek Adams, Denise Barnes, and David Tyler.
The claims resolved by this settlement are allegations only, and there has been no admission of liability.
Washington, Pa. Woman Charged with Defrauding Social SecurityRead the Press Release
PITTSBURGH, PA - A Washington County resident has been indicted by a federal grand jury in Pittsburgh on a charge of theft of government property and supplemental security income fraud, United States Attorney Scott W. Brady announced today.
The two-count indictment, returned on July 31, named Crystal Bell, 42, of Washington, Pennsylvania, as the sole defendant.
The indictment alleges that, from January 31, 2013 through November 31, 2014, Bell acted as a representative payee for a beneficiary and converted $15,031 in Title XVI Social Security benefits deposited to the bank account for the beneficiary. She also falsified a document sent to Social Security Administration by indicating that the beneficiary was residing at her home when the beneficiary was not then residing at her home and was not entitled to receive benefits.
The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Social Security Administration-Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Vietnamese National Sentenced for Wire Fraud, Identity Theft and Money Laundering SchemeRead the Press Release
BOSTON – A Vietnamese national was sentenced today in federal court in Boston for his role in an international scheme to use stolen payment card data and personally identifiable information to purchase and re-sell hundreds of thousands of dollars’ worth of consumer goods.
Tuan Dinh Nguyen, 30, a Vietnamese national previously living in Melbourne, Australia, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to 42 months in prison and ordered to pay forfeiture of $500,000. In May 2018, Nguyen pleaded guilty to one count of wire fraud conspiracy, one count of money laundering conspiracy, 13 counts of money laundering - aiding and abetting, and one count of aggravated identity theft. Nguyen was indicted in federal court in Boston in August 2015, arrested in Australia in June 2017, and extradited to the United States on Oct. 5, 2017.
Between December 2007 and December 2013, Nguyen and at least three others conspired to use stolen payment card data and personally identifiable information to purchase consumer goods online and to re-sell those items on auction websites, including Amazon, eBay, and Buy.com; they then wired the proceeds overseas.
Nguyen and his co-conspirators created fraudulent accounts on multiple auction websites, or used stolen usernames and passwords to take over subscribers’ legitimate accounts. They then posted popular goods for sale at a discounted price, including Apple merchandise, electronics, personal care items and books. However, Nguyen and his co-conspirators did not own or otherwise have these goods to sell. Instead, when customers of the auction websites purchased and paid for these items, Nguyen and his co-conspirators used stolen payment card and personally identifiable information to buy the items from Walmart.com or other e-commerce websites, and then shipped the items to the auction website customers, who never knew that the items they received had been purchased with stolen credit cards and re-sold to them at discounted prices.
To obtain the proceeds of the scheme, Nguyen and his co-conspirators recruited U.S. residents to withdraw and wire overseas the money that the unwitting customers had paid through the auction websites. In total, Nguyen and his co-conspirators stole and re-sold approximately $500,000 in consumer goods.
United States Attorney Andrew E. Lelling; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and U.S. Marshal John Gibbons for the District of Massachusetts made the announcement today. Australia’s Attorney-General’s Department, the Australian Federal Police, and the U.S. Department of Justice’s Office of International Affairs provided assistance in securing Nguyen’s extradition to the United States. Assistant U.S. Attorney Seth Kosto of Lelling’s Cybercrime Unit prosecuted the case.
United States Attorney's Office Secures 10 Year Statutory Maximum Sentence for Felon in Possession of a Firearm, While in the Presence of an Infant Child and CocaineRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces that United States District Court Senior Judge Callie V. S. Granade sentenced Harlan Bradley, Jr. on August 1, 2018 to the maximum sentence allowed, 10 years in prison, for his possession of 4 firearms.
According to the evidence at trial, On May 17, 2017, members of the Mobile County Street Enforcement Narcotics Team executed a search warrant on the residence of Bradley. Officers found Bradley in the living room on the sofa with an infant child. Also on the sofa was a bag of cocaine. During the interview, Bradley admitted that he occasionally sold drugs to “…make some extra money to buy weed and chill.”
Throughout the house, officers recovered four firearms- two hand guns and two rifles- one being an AK-47 assault weapon. Bradley, a prior convicted felon, was prohibited by law from possessing firearms and admitted to the officers that he had the weapons for his protection.
A jury found Bradley guilty on April 11, 2018. Harlan Bradley had a criminal history that included felony convictions of Assault, Discharging a Firearm into a Dwelling or Vehicle and being a Prohibited Person in Possession of a Firearm.
ATF Special Agent in Charge Marcus Watson remarked, “The efforts of ATF’s Crime Gun Intelligence leveraged investigative resources and community partnerships that resulted in this sentencing.”The Mobile County Street Enforcement Narcotics Team, Prichard Police Department, Mobile Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives, Mobile Field office investigated this case. Assistant United States Attorney Christopher Baugh prosecuted the case for the United States Attorney’s Office for the Southern District of Alabama.
U.S. Attorney’s Office Supports Local Non-Profit Organization through Reentry OutreachRead the Press Release
Memphis, TN – As part of the reentry efforts of the U.S. Attorney’s Office, it is important for us to partner with and support agencies and initiatives that provide services to released felons in order to promote successful reintegration into society, employment opportunities, and the ability to lead productive, law-abiding lives. One of those organizations in the Memphis community is Lifeline to Success, led by Executive Director DeAndre D. Brown, Sr. The U.S. Attorney’s Office partners with Lifeline to Success and Pastor Brown in several different reentry initiatives. For more information about the organization, please visit https://www.lifeline2success.org.
For the fourth year, Lifeline to Success is teaming up with Men’s Wearhouse to sponsor and promote a suit donation drive, in order to provide suits for persons who may be in need of appropriate attire for job interviews, reintegration into social settings, and other opportunities after release from custody.
The U.S. Attorney’s Office wants to encourage support for this program, and the attorneys and staff in our office are participating by donating several suits to the drive. We have also encouraged our partners in the Federal Reentry Council, made up of representatives from the Federal Public Defender’s Office, the Federal Bureau of Prisons, U.S. Probation Office, and U.S. Pre-trial Services Office to participate and donate to the suit drive.
U.S. Attorney D. Michael Dunavant said: "The mission of the Department of Justice is to reduce crime by using all available strategies and resources. One of the best ways to reduce recidivism is to provide meaningful support and resources to offenders upon release so that they will have the best chance of successful reentry into the community. The U.S. Attorney’s Office for the Western District of Tennessee is committed to reentry programs that impact public safety in a positive way, and we hope that these suits will facilitate success for the reentrants."
Today, we invited Pastor DeAndre Brown and his Lifeline to Success team members to the U.S. Attorney’s Office to collect the donated suits, to publicly highlight the program, and to challenge other professional offices across Memphis and Shelby County to support and donate to this worthy cause.
U.S. Attorney Announces the Creation of Affirmative Civil Enforcement Strike ForceRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that he has established an Affirmative Civil Enforcement (“ACE”) Strike Force within the Office’s Civil Division.
The ACE Strike Force will investigate and, when necessary, file lawsuits to prosecute fraud and abuse against government programs, including healthcare and procurement fraud, enforce federal civil rights statutes, and combat the opioid crisis. It will work closely with criminal prosecutors to coordinate civil and criminal investigations where appropriate. The ACE Strike Force will investigate cases arising from a number of sources, including those brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.
“We have a deep bench of talented Civil attorneys who all contribute to the successful prosecution of affirmative civil enforcement and will continue to do so,” said U.S. Attorney William M. McSwain. “But with the ACE Strike Force, we will now have additional firepower to focus on these critical matters.”
“The ACE Strike Force will continue the Civil Division’s long history of successfully combating fraud and enforcing important federal laws through civil investigations and actions,” said Civil Division Chief Gregory B. David.
Five Civil Assistant U.S. Attorneys comprise the initial ACE Strike Force. Assistant U.S. Attorney John T. Crutchlow will serve as the team leader. The ACE Strike Force will be supervised by Deputy Civil Chief Charlene Keller Fullmer and Civil Chief Gregory B. David.
Two Clarksburg men sentenced for their roles in a drug distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Two Clarksburg men were sentenced today for their roles in a drug distribution operation, United States Attorney Bill Powell announced.
Ernest Russell Claypool, Jr., age 54, was sentenced to 70 months incarceration. Claypool pled guilty to one count of “Aiding and Abetting the Possession of Firearm in Furtherance of Drug Trafficking Crime” and one count of “Maintaining Drug-Involved Premises-Aiding and Abetting” in March 2018. Claypool admitted to having 20 different firearms, including pistols, shotguns, rifles, and revolvers, during and in relation to a drug trafficking crime. He also admitted to maintaining a property in Clarksburg for distributing heroin and storing and distributing marijuana. The crimes occurred from an unknown date until September 2017 in Harrison County.
Chadley Russell Claypool, age 32, was sentenced to 24 months incarceration. Claypool pled guilty to one count of “Conspiracy to Distribute Heroin” and one count of “Distribution of Fentanyl” in March 2018. He admitted to distributing heroin in Harrison County from an unknown date to September 2017. He also admitted to selling fentanyl in August 2017 in Harrison County.
Assistant U.S. Attorney Traci M. Cook prosecuted the cases on behalf of the government. The case was investigated by the Greater Harrison Drug and Violent Crimes Task Force and the West Virginia State Police Bureau of Criminal Investigation.
Senior U.S. District Judge Irene M. Keeley presided.Tortola Man Apprehended at the Cyril E. King Airport Pleads Guilty to Conspiracy and Possession with the Intent to Distribute 10 Kilograms of CocaineRead the Press Release
St. Thomas, USVI – Ashley Warner, 54, of Tortola, pleaded guilty today in District Court before District Court Judge Curtis V. Gomez, to conspiracy and possession of cocaine with the intent to distribute, United States Attorney Gretchen C.F. Shappert announced. Sentencing is set for December 6, 2018.
According to court documents, Warner was stopped by U.S. Customs and Border Protection (CBP) officers at the Cyril E. King Airport after it was discovered that Warner was attempting to smuggle 10 kilograms of cocaine through the airport to the U.S. mainland in coolers. The white powdery substance discovered inside the coolers, tested positive for cocaine and weighed approximately 10 kilograms.
Warner faces a sentence of not less than 10 years or more than life and a fine of $10,000,000.00.
The case was investigated by the Homeland Security Investigations (HSI) and U.S. Customs and Border Protection (CBP) and prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Three Members of Notorious International Cybercrime Group “Fin7” in Custody for Role in Attacking over 100 U.S. CompaniesRead the Press Release
SEATTLE – Three high-ranking members of a sophisticated international cybercrime group operating out of Eastern Europe have been arrested and are currently in custody facing charges filed in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Jay S. Tabb Jr. of the FBI’s Seattle Field Office.
According to three federal indictments unsealed today, Ukrainian nationals Dmytro Fedorov, 44, Fedir Hladyr, 33, and Andrii Kolpakov, 30, are members of a prolific hacking group widely known as FIN7 (also referred to as the Carbanak Group and the Navigator Group, among other names). Since at least 2015, FIN7 members engaged in a highly sophisticated malware campaign to attack more than 100 U.S. companies, predominantly in the restaurant, gaming, and hospitality industries. As set forth in the indictments, FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers which were used or sold for profit.
In the United States alone, FIN7 successfully breached the computer networks of businesses in 47 states and the District of Columbia, stealing more than 15 million customer card records from over 6,500 individual point-of-sale terminals at more than 3,600 separate business locations. Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France. Companies that have publicly disclosed hacks attributable to FIN7 include such familiar chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin and Jason’s Deli. Additionally here in Western Washington FIN7 targeted the Emerald Queen Casino (EQC) and other local businesses. The Emerald Queen Casino was able to stop the intrusion and no customer data was stolen.
“Protecting consumers and companies who use the internet to conduct business – both large chains and small ‘mom and pop’ stores -- is a top priority for all of us in the Department of Justice,” said U.S. Attorney Annette L. Hayes. “Cyber criminals who believe that they can hide in faraway countries and operate from behind keyboards without getting caught are just plain wrong. We will continue our longstanding work with partners around the world to ensure cyber criminals are identified and held to account for the harm that they do – both to our pocketbooks and our ability to rely on the cyber networks we use.”
“The three Ukrainian nationals indicted today allegedly were part of a prolific hacking group that targeted American companies and citizens by stealing valuable consumer data, including personal credit card information, that they then sold on the Darknet,” said Assistant Attorney General Benczkowski. “Because hackers are committed to finding new ways to harm the American public and our economy, the Department of Justice remains steadfast in its commitment to working with our law enforcement partners to identify, interdict, and prosecute those responsible for these threats.”
“The naming of these FIN7 leaders marks a major step towards dismantling this sophisticated criminal enterprise," said Special Agent in Charge Jay S. Tabb Jr., of the FBI's Seattle Field Office. “As the lead federal agency for cyber-attack investigations, the FBI will continue to work with its law enforcement partners worldwide to pursue the members of this devious group, and hold them accountable for stealing from American businesses and individuals.”
Each of the three FIN7 conspirators is charged with 26 felony counts alleging conspiracy, wire fraud, computer hacking, access device fraud, and aggravated identity theft.
In January 2018, at the request of U.S. officials, foreign authorities separately arrested Ukrainian Fedir Hladyr and a second FIN7 member, Dmytro Fedorov. Hladyr was arrested in Dresden, Germany, and is currently detained in Seattle pending trial. Hladyr allegedly served as FIN7’s systems administrator who, among other things, maintained servers and communication channels used by the organization and held a managerial role by delegating tasks and by providing instruction to other members of the scheme. Hladyr’s trial is currently scheduled for October 22, 2018.
Fedorov, a high-level hacker and manager who allegedly supervised other hackers tasked with breaching the security of victims’ computer systems, was arrested in Bielsko-Biala, Poland. Fedorov remains detained in Poland pending his extradition to the United States.
In late June 2018, foreign authorities arrested a third FIN7 member, Ukrainian Andrii Kolpakov in Lepe, Spain. Kolpakov, also is alleged to be a supervisor of a group of hackers, remains detained in Spain pending the United States’ request for extradition.
According to the indictments, FIN7, through its dozens of members, launched numerous waves of malicious cyberattacks on numerous businesses operating in the United States and abroad. FIN7 carefully crafted email messages that would appear legitimate to a business’ employee, and accompanied emails with telephone calls intended to further legitimize the email. Once an attached file was opened and activated, FIN7 would use an adapted version of the notorious Carbanak malware in addition to an arsenal of other tools to ultimately access and steal payment card data for the business’ customers. Since 2015, many of the stolen payment card numbers have been offered for sale through online underground marketplaces. (Supplemental document “How FIN7 Attacked and Stole Data” explains the scheme in greater detail.)
FIN7 used a front company, Combi Security, purportedly headquartered in Russia and Israel, to provide a guise of legitimacy and to recruit hackers to join the criminal enterprise. Combi Security’s website indicated that it provided a number of security services such as penetration testing. Ironically, the sham company’s website listed multiple U.S. victims among its purported clients.
The charges in the indictments are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The indictments are the result of an investigation conducted by the Seattle Cyber Task Force of the FBI and the U.S. Attorney’s Office for the Western District of Washington, with the assistance of the Justice Department’s Computer Crime and Intellectual Property Section and Office of International Affairs, the National Cyber-Forensics and Training Alliance, numerous computer security firms and financial institutions, FBI offices across the nation and globe, as well as numerous international agencies. Arrests overseas were executed in Poland by the "Shadow Hunters" from CBŚP (Polish Central Bureau of Investigation); in Germany by LKA Sachsen - Dezernat 33, (German State Criminal Police Office) and the Polizeidirektion Dresden (Dresden Police); and in Spain by the Grupo de Seguridad Logica within the Unidad de Investigación Technologica of the Cuerpo Nacional de Policía (Spanish National Police).
This case is being prosecuted by Assistant U.S. Attorneys Francis Franze-Nakamura and Steven Masada of the Western District of Washington, and Trial Attorney Anthony Teelucksingh of the Justice Department’s Computer Crime and Intellectual Property Section.
how_fin7_attacked_and_stole_data.pdfThree Members of Notorious International Cybercrime Group “Fin7” in Custody for Role in Attacking over 100 U.S. companiesRead the Press Release
Three high-ranking members of a sophisticated international cybercrime group operating out of Eastern Europe have been arrested and are currently in custody facing charges filed in U.S. District Court in Seattle, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Annette L. Hayes for the Western District of Washington and Special Agent in Charge Jay S. Tabb Jr. of the FBI Seattle Field Office.
According to three federal indictments unsealed today, Ukrainian nationals Dmytro Fedorov, 44, Fedir Hladyr, 33, and Andrii Kolpakov, 30, are members of a prolific hacking group widely known as FIN7 (also referred to as the Carbanak Group and the Navigator Group, among other names). Since at least 2015, FIN7 members engaged in a highly sophisticated malware campaign targeting more than 100 U.S. companies, predominantly in the restaurant, gaming, and hospitality industries. As set forth in indictments, FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers, which the group used or sold for profit.
In the United States alone, FIN7 successfully breached the computer networks of companies in 47 states and the District of Columbia, stealing more than 15 million customer card records from over 6,500 individual point-of-sale terminals at more than 3,600 separate business locations. Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France. Companies that have publicly disclosed hacks attributable to FIN7 include such familiar chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin and Jason’s Deli. Additionally in Western Washington, FIN7 targeted other local businesses.
“The three Ukrainian nationals indicted today allegedly were part of a prolific hacking group that targeted American companies and citizens by stealing valuable consumer data, including personal credit card information, that they then sold on the Darknet,” said Assistant Attorney General Benczkowski. “Because hackers are committed to finding new ways to harm the American public and our economy, the Department of Justice remains steadfast in its commitment to working with our law enforcement partners to identify, interdict, and prosecute those responsible for these threats.”
“Protecting consumers and companies who use the internet to conduct business – both large chains and small ‘mom and pop’ stores -- is a top priority for all of us in the Department of Justice,” said U.S. Attorney Hayes. “Cyber criminals who believe that they can hide in faraway countries and operate from behind keyboards without getting caught are just plain wrong. We will continue our longstanding work with partners around the world to ensure cyber criminals are identified and held to account for the harm that they do – both to our pocketbooks and our ability to rely on the cyber networks we use.”
“The naming of these FIN7 leaders marks a major step towards dismantling this sophisticated criminal enterprise,” said Special Agent in Charge Tabb. “As the lead federal agency for cyber-attack investigations, the FBI will continue to work with its law enforcement partners worldwide to pursue the members of this devious group, and hold them accountable for stealing from American businesses and individuals.”
Each of the three FIN7 conspirators is charged with 26 felony counts alleging conspiracy, wire fraud, computer hacking, access device fraud, and aggravated identity theft.
In January 2018, at the request of U.S. officials, foreign authorities separately arrested Ukrainian Fedir Hladyr and a second FIN7 member, Dmytro Fedorov. Hladyr was arrested in Dresden, Germany, and is currently detained in Seattle pending trial. Hladyr allegedly served as FIN7’s systems administrator who, among other things, maintained servers and communication channels used by the organization and held a managerial role by delegating tasks and by providing instruction to other members of the scheme. Hladyr’s trial is currently scheduled for Oct. 22.
Fedorov, a high-level hacker and manager who allegedly supervised other hackers tasked with breaching the security of victims’ computer systems, was arrested in Bielsko-Biala, Poland. Fedorov remains detained in Poland pending his extradition to the United States.
In late June 2018, foreign authorities arrested a third FIN7 member, Ukrainian Andrii Kolpakov in Lepe, Spain. Kolpakov, also alleged to be a supervisor of a group of hackers, remains detained in Spain pending the United States’ request for extradition.
According to the indictments, FIN7, through its dozens of members, launched numerous waves of malicious cyberattacks on numerous businesses operating in the United States and abroad. FIN7 carefully crafted email messages that would appear legitimate to a business’ employee, and accompanied emails with telephone calls intended to further legitimize the email. Once an attached file was opened and activated, FIN7 would use an adapted version of the notorious Carbanak malware in addition to an arsenal of other tools to ultimately access and steal payment card data for the business’ customers. Since 2015, FIN7 sold the data in online underground marketplaces. (Supplemental document “How FIN7 Attacked and Stole Data” explains the scheme in greater detail.)
FIN7 used a front company, Combi Security, purportedly headquartered in Russia and Israel, to provide a guise of legitimacy and to recruit hackers to join the criminal enterprise. Combi Security’s website indicated that it provided a number of security services such as penetration testing. Ironically, the sham company’s website listed multiple U.S. victims among its purported clients.
The charges in the indictments are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The indictments are the result of an investigation conducted by the Seattle Cyber Task Force of the FBI and the U.S. Attorney’s Office for the Western District of Washington, with the assistance of the Justice Department’s Computer Crime and Intellectual Property Section and Office of International Affairs, the National Cyber-Forensics and Training Alliance, numerous computer security firms and financial institutions, FBI offices across the nation and globe, as well as numerous international agencies. Arrests overseas were executed in Poland by the “Shadow Hunters” from CBŚP (Polish Central Bureau of Investigation); in Germany by the LKA Sachsen - Dezernat 33, (German State Criminal Police Office) and the Polizeidirektion Dresden (Dresden Police); and in Spain the Grupo de Seguridad Logica within the Unidad de Investigación Technologica of the Cuerpo Nacional de Policía (Spanish National Police)..
This case is being prosecuted by Assistant U.S. Attorneys Francis Franze-Nakamura and Steven Masada of the Western District of Washington with assistance from Trial Attorney Anthony Teelucksingh of the Justice Department’s Computer Crime and Intellectual Property Section.
Three Indicted for Their Role in A Tax Fraud SchemeRead the Press Release
HAMMOND – The United States Attorney for the Northern District of Indiana Thomas L. Kirsch II announced a ten-count indictment against Yvonna Lee, age 32, of Merrillville; Latonya Foxx, age 31, of Indianapolis; and Tanisha Bledsoe, age 44, of Chicago, Illinois for engaging in a scheme to defraud the Internal Revenue Service.
U.S. Attorney Kirsch said, “We work with the Internal Revenue Service to aggressively investigate and prosecute people who commit tax fraud. Cheating the IRS -- stealing from the United States Treasury -- is stealing from all of us.”
Documents in this case allege the defendants engaged in a tax fraud scheme. They filed hundreds of fraudulent federal tax returns, which returned inflated tax refunds for their clients. In exchange, the defendants received kickbacks from the clients for the inflated refunds. Lee was the recruiter who found clients and obtained personal identifying information that they needed to file tax returns. Lee gave the information to Foxx and Bledsoe who then filed the tax returns with the IRS. To hide their involvement, Foxx and Bledsoe filed the returns without identifying themselves as the preparers. Lee, Foxx, and Bledsoe are charged with wire fraud. Foxx and Lee are also charged with aggravated identify theft for filing some tax returns without the knowledge and consent of the taxpayers.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorney Maria N. Lerner is prosecuting this case.
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Thief River Falls Chiropractor Indicted on Multiple Counts of Wire Fraud and Identity TheftRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging STEVEN RICHARD WISETH, 35, a Thief River Falls chiropractor, with six counts of wire fraud and two counts of aggravated identity theft. WISETH made his initial appearance earlier today before Magistrate Judge Hildy Bowbeer in U.S. District Court in Saint Paul, Minnesota.
As alleged in the indictment, from approximately March 2013 through April 2015, WISETH, a Doctor of Chiropractic and owner of Health Quest Family Chiropractic (“Health Quest”) in Thief River Falls, Minnesota, orchestrated a scheme to defraud health insurers by submitting and causing the submission of false and fraudulent claims for chiropractic services.
As alleged in the indictment, WISETH’S scheme was dependent on maximizing patient volume at Health Quest, and he held promotional events where he gave away free food and drink, prizes, and gift certificates to induce current and prospective patients to visit Health Quest. After the promotional events, WISETH billed insurance companies for the provision of chiropractic services to substantial numbers of individuals who attended the events, including billing for services that were not provided. In some cases, WISETH used the personal and insurance information of attendees to bill the individuals’ insurance companies for services that were not provided, unbeknownst to the attendee. For example, on February 13, 2014, WISETH held a promotional event at Health Quest that he referred to as “ValenSpine’s Day.” WISETH submitted bills to insurance companies representing that he had treated approximately 219 patients on that day, purporting to have provided approximately 641 services.
As alleged in the indictment, WISETH also submitted false bills for services by misrepresenting the services that were actually provided to patients. For example, WISETH routinely submitted false bills for treatment with a “wobble chair,” which is a device intended to develop core strength. WISETH falsely represented to insurers that the services were performed for at least eight minutes under the direct supervision of a healthcare professional when, in fact, WISETH merely stocked his clinics’ waiting rooms with wobble chairs so that patients would sit in them while waiting for their appointments.
As alleged in the indictment, over the course of the two-year scheme, WISETH billed the insurance companies more than $3.1 million dollars, including bills for hundreds of treatments that were not provided or were overbilled, and the insurance companies paid WISETH and Health Quest more than $1.1 million.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the United States Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.
Defendant Information:
STEVEN RICHARD WISETH, 35
Thief River Falls, Minn.
Charges:
- Wire fraud, 6 counts
- Aggravated identity theft, 2 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Tammy Wilder Sentenced to 15 Years in Prison in Fatal Arson CaseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Tammy Wilder, age 47, formerly of Barre, Vermont was sentenced on July 30, 2018, on a charge of conspiracy to commit robbery stemming from the fatal arson that occurred in Northfield, Vermont in December 2015. She was also sentenced for her role in making a place available for storing, distributing, and using controlled substances in 2014. United States District Judge Christina Reiss sentenced Wilder to a 15-year term of incarceration, followed by three years of supervised release. Wilder was also ordered to pay restitution to the victims of her offenses in the amount of $620,025.92.
As described in court records, in the fall of 2015, Howard Hoisington, Jonathan Zampieri, Tammy Wilder, Kevin Atwood, and Kim Hoisington committed a series of robberies of drug dealers in the Washington County area of Vermont. Some of these robberies involved a scheme of dousing a person selling drugs with gasoline and threatening them with a lighter to rob them of their drugs. The last of these robberies resulted in a fire that destroyed a building in Northfield and killed innocent bystander Brittany Burt.
On December 14, 2015, Howard Hoisington, Zampieri, Tammy Wilder, Kim Hoisington, and Amanda Wilder drove in Zampieri’s vehicle to pick up Atwood in Montpelier. They all drove to the Cumberland Farms in Northfield where Zampieri filled two mason jars with gasoline. From there, the group drove to the apartment of Efren Serrano on Union Street in Northfield, Vermont, from whom they had arranged to purchase crack cocaine. Zampieri, Howard Hoisington, and Atwood went to Serrano’s apartment and kicked in the front door. They found Serrano and Serrano’s girlfriend, Brittany Burt, in the bedroom. Serrano and Burt were doused with gasoline and the men demanded Serrano’s drugs. When Serrano did not respond, Zampieri pulled out a lighter. The lighter went off, igniting the gasoline vapors and causing the room to burst into flames. Zampieri, Howard Hoisington, and Atwood fled the building. At some point, Serrano was able to run from the building on fire. Serrano sustained life threatening injuries, but he survived. Brittany Burt could not escape the building. She died on the bedroom floor.
Tammy Wilder’s co-defendants, Howard Hoisington, Jonathan Zampieri, Kim Hoisington, and Richard Hoisington, have all pleaded guilty to various charges. Howard Hoisington was sentenced to 24 years in prison for his role in the fatal arson. Richard Hoisington was sentenced to 13 months of imprisonment for conspiring to distribute controlled substances. The other co-defendants await sentencing.
This case provides an example of the United States Attorney’s Office Violent Crime Initiative, aimed at pursuing federal prosecutions involving the intersection of drug trafficking and violence. United States Attorney Christina Nolan commended the efforts of Vermont State Police, Vermont Drug Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, as well as the Northfield Police Department, Barre City Police Department, and Berlin Police Department. The United States Attorney’s Office worked in partnership with the Washington County State’s Attorney’s Office to investigate and resolve this important matter.
United States Attorney Nolan added, “To describe this crime as senseless and abhorrent would be an understatement. It is a stark example of the horrific violence that too often arises from the trafficking of crack cocaine and other dangerous drugs. Federal prosecutors will work tirelessly with our federal, state, and local law enforcement partners to demonstrate zero tolerance for crimes of such depravity. Resolution and justice for the victims and their families was achieved through the collaborative efforts of our federal, state, and local investigators, and through the teamwork of state and federal prosecutors. We will continue to come together to achieve justice for victims, and peace and security for Vermonters. There is no place for such horrific violence in our state and our charging priorities will so reflect.”
ATF Assistant Special Agent in Charge Lawrence Panetta said, “Arson is a crime of extreme violence that puts the lives of the public and first responders in grave danger. ATF is committed with our local, state, and federal public safety partners to ensure our communities remain free from the dangerous acts arsonists commit and utilize all the necessary resources to bring these individuals to justice.”
“Tammy Wilder’s sentencing brings this case one step closer to resolution for the Burt family and the other victims of these crimes,” added Lieutenant Todd Baxter of the Vermont State Police. “VSP remains committed to preventing and investigating violent crime throughout the State of Vermont, and bringing those who commit violent crimes to justice.”
Tammy Wilder is represented by Ian Carleton and Kevin Lumpkin of Sheehy, Furlong & Behm P.C. The United States is represented by AUSAs Paul Van de Graaf and John Boscia.
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.
Summerville Man Sentenced to Prison for Wire Fraud and Identity TheftRead the Press Release
Columbia, South Carolina---- United States Attorney Sherri Lydon stated today that John Scott Jarrett, age 46, of Summerville, was sentenced in federal court in Charleston, South Carolina, for Wire Fraud and Identity Theft. United States District Judge Richard M. Gergel, of Charleston, sentenced Jarrett to 60 months imprisonment and 3 years Supervised Release.
Evidence in this case established that from 2012 through 2017, Jarrett embezzled more than $810,000 from his employer. Jarrett was the financial comptroller of an audio and video consulting firm in Charleston. To execute the scheme, Jarrett wrote $512,129 in checks from his employer’s company that were made payable to his wife’s maiden name. Jarrett made these checks appear as payments to a vendor of his company, and he used the signature stamp of his employer to forge the checks.
Jarrett also embezzled approximately $300,000 from his company to pay his personal American Express bills. He paid these American Express bills via interstate wires.
In addition to the wire fraud, Jarrett stole the identifying information of his employer and forged his signature to obtain fraudulent loans from various Internet lenders.
Agents from the Federal Bureau of Investigation (FBI) investigated the case. Assistant United States Attorney Rhett DeHart of the Charleston office prosecuted the case.
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Stratford Man Sentenced to 30 Months in Prison for Illegally Possessing Firearms and AmmunitionRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MATTHEW PETROVITCH, 38, of Stratford, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 30 months of imprisonment, followed by three years of supervised release, for illegally possessing firearms and ammunition
According to court documents and statements made in court, on September 26, 2017, Stratford Police responded to PETROVITCH’s residence after a female victim reported that PETROVITCH had physically assaulted her and threatened her with a firearm while she was holding a young child. After PETROVITCH was taken into custody, officers searched the residence and seized an AK-74 semiautomatic rifle, a short-barreled shotgun, and more than 350 rounds of assorted ammunition.
The short-barreled shotgun was not registered to him in the National Firearms Registration and Transfer Record, as required.
In March 2000, PETROVITCH was convicted in state court of conspiracy to commit assault in the first degree, and robbery in the third degree. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On May 8, 2018, PETROVITCH pleaded guilty to one count of possession of a firearm by a previously convicted felon.
PETROVITCH previously pleaded guilty in Bridgeport Superior Court to state charges related to this incident.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Stratford Police Department. The case was prosecuted by Assistant U.S. Attorney Alina P. Reynolds, in coordination with the State’s Attorney for the Fairfield Judicial District.
In 1994, Congress passed the Violence Against Women Act (VAWA) in recognition of the severity of crimes associated with domestic violence, sexual assault, and stalking. To learn more about VAWA and resources that are available, contact the Justice Department’s Office on Violence Against Women.
In an emergency, victims of domestic violence should call 911 or contact state or local law enforcement officials, who can respond to these crimes. Individuals in need of non-emergency assistance can also call the National Domestic Violence Hotline at 1-800-799-SAFE or visit www.TheHotline.org.
Stow woman charged with illegally purchasing firearm while addicted to drugsRead the Press Release
A Stow woman was charged with possession of a firearm by a prohibited person.
Kristen Vilk, 32, was arrested on suspicion of making a straw purchase of a Glock 9 mm pistol in March from a store in North Canton. Further investigation revealed that Vilk overdosed on April 17, and was given two doses of Narcan, according to court documents.
Based on statements made by Vilk’s relatives, it is believed she was addicted to drugs at the time of the purchase of the firearm, according to court documents.
The investigation is ongoing.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The matter is being prosecuted by Assistant U.S. Attorney Teresa Riley following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Social Security Administration Employee Charged in Scheme to Steal Disability Benefits PaymentsRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man employed with the Social Security Administration (SSA) was arrested today for unlawfully accessing the Social Security accounts of individuals and falsifying their records in order to steal government funds for his own use, U.S. Attorney Craig Carpenito announced.
Nicholas Pao, 37, of Egg Harbor Township, New Jersey, was charged by criminal complaint with one count of theft of government funds and five counts of aggravated identity theft. He is scheduled to appear today before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
According to documents filed in this case and statements made in court:
Pao was a 10-year employee of the SSA who worked as a claims technical expert in the Egg Harbor Township office, responsible for determining eligibility and payment amounts, processing difficult cases, assisting in case reviews, and making special payment approvals. From December 2014 to July 2018, Pao allegedly used his SSA credentials to access the confidential records of several individuals without their knowledge or authority. Pao would alter their records and make fraudulent changes that caused the SSA to issue Social Security benefits to these individuals. He then allegedly intercepted these benefits, which were issued by way of a Direct Express account and credit card and used the money without the knowledge or consent of the individuals. Pao has allegedly stolen $99,967 in Social Security funds.
The count of theft of government funds is punishable by a maximum potential penalty of 10 years in prison. The counts of aggravated identity theft are each punishable by a statutory mandatory prison sentence of two years that must be served consecutively to any term of imprisonment imposed for the violation of theft of government funds. All the counts are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.
Anyone who believes they might have been the victim of this scheme is asked to call the SSA Office of the Inspector General at (888) 487-9917.
U.S. Attorney Carpenito credited special agents of the SSA, Office of the Inspector General, under the direction of John F. Grasso, with the investigation leading to today’s charges.
The government is represented by Special Assistant U.S. Attorney Meriah Russell of the Criminal Division, Trenton.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Sioux Falls Meth Dealers Sentenced to Federal Prison in Multi-State Drug ConspiracyRead the Press Release
United States Attorney Ron Parsons announced that Alvin Felicianosoto, age 34, of Sioux Falls, South Dakota, who was convicted of conspiracy to distribute 500 grams or more of methamphetamine and possession with intent to distribute a controlled substance, was sentenced to 210 months in federal prison on July 9, 2018, by U.S. District Court Judge Karen E. Schreier. Co-conspirator Orlando Dones-Vargas, age 32, of Sioux Falls, who was convicted of conspiracy to distribute 500 grams or more of methamphetamine and possession with intent to distribute methamphetamine, was sentenced by Judge Schreier to 235 months in federal prison on July 16, 2018.
“These convictions and substantial prison sentences are the result of phenomenal detective work by our law enforcement partners on the Sioux Falls Area Drug Task Force,” said U.S. Attorney Parsons. “We are united in our efforts to eliminate this destructive poison from our communities and to hold those who bring it here accountable for their criminal acts.”
Both sentences will be followed by five years of supervised release. The men were also ordered to each pay $200 to the Federal Crime Victim’s Fund. Dones-Vargas was indicted by a federal grand jury on September 6, 2017. He was found guilty after a jury trial on January 31, 2018. Felicianosoto was indicted by a federal grand jury on September 6, 2017, and was found guilty after a jury trial on February 14, 2018.
The investigation of Felicianosoto and Dones-Vargas revealed their joint involvement in a multi-state drug ring that was responsible for transporting more than 50 pounds of meth to South Dakota. Each pound of meth provides over 1,000 doses (illegal uses) for typical users.
A search warrant was executed at Felicianosoto’s home in Sioux Falls, where law enforcement found about 100 grams of meth in his garage, in addition to the more than 100 grams of meth that he was carrying in his pocket when he was arrested. Law enforcement found an additional four pounds of meth, along with four cocked and loaded handguns, hidden under a bed in what appeared to be a children’s bedroom in an apartment used by Dones-Vargas.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
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.
This case was investigated by the Sioux Falls Area Drug Task Force, South Dakota Division of Criminal Investigation, and the Drug Enforcement Administration. Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Sioux Falls Man Sentenced to 72 Months for Bank RobberyRead the Press Release
United States Attorney Ron Parsons announced that U.S. District Judge Karen E. Schreier sentenced a Sioux Falls, South Dakota, man convicted of Bank Robbery.
Cody Maynard, age 27, was sentenced on July 31, 2018, to 72 months in federal prison, followed by 3 years of supervised release. Maynard was also ordered to pay $4,215.36 in restitution, and $100 to the Federal Crime Victims Fund.
According to documents filed in court, on April 27, 2017, Maynard robbed Voyage Federal Credit Union by the use of force, violence, and intimidation. Maynard robbed the bank of $3,600.00. The money belonged to and was in the care, custody, control, management and possession of the Voyage Federal Credit Union, a bank whose deposits were then federally insured by the National Credit Union Administration. During the bank robbery, Maynard wore brass knuckles and threatened to use a gun and a knife.
This case was investigated by the Federal Bureau of Investigation and the Sioux Falls Police Department. The case was prosecuted by Assistant U.S. Attorney Jeremy R. Jehangiri.
Maynard was immediately remanded to the custody of the U.S. Marshals Service.
Sioux City Area Drug Distributors Sentenced to Federal PrisonRead the Press Release
Five men and three women who conspired to distribute methamphetamine in the Sioux City area were sentenced to prison terms ranging from 84 to 204 months following guilty pleas entered over the past year.
Justin Wilde, age 39, of Sioux City, received his prison term after an August 1, 2017, guilty plea; Eduardo Ledesma, age 24, of South Sioux City, Nebraska, received his prison term after an August 23, 2017, guilty plea; Ruben Rios, age 22, of South Sioux City, received his prison term after a September 8, 2017, guilty plea; Adam Doty, age 29, of Sioux City, received his prison term after a September 15, 2017, guilty plea; Stormie Blank, age 33, of South Sioux City, received her prison term after an October 25, 2017, guilty plea; Joanna Gotschall, age 40, of South Sioux City, received her prison term after a November 16, 2017, guilty plea; Melanie Thiebault age 46, and Matthew Ruhland, age 36, both of Sioux City, each received their prison term after their January 19, 2018, guilty pleas. Wilde, Ledesma, Rios, Doty, Blank, Gotschall, Thiebault and Ruhland each pled guilty to conspiracy to distribute methamphetamine.
Information provided by the United States at the sentencings and change of plea hearings showed Rios and Ledesma were multiple pound sources of supply of methamphetamine, cocaine, and marijuana in the area of Sioux City, Iowa and South Sioux City, Nebraska, as well as South Dakota. Ledesma and Rios resided together in the Rios family home in South Sioux City, Nebraska. Ledesma and Rios were leaders of their drug dealing operation, which began in 2014. Many of the drug transactions were initiated from the Rios residence. Evidence gathered by law enforcement and described in the sentencing hearings showed that Rios and Ledesma were also trafficking weapons. During a search of the Rios home, officers discovered a loaded assault rifle, marijuana, methamphetamine, nearly a pound of cocaine, and approximately $150,000 in two different safes. $50,000 of this money was to purchase more drugs, while the remaining money was profit from the drug conspiracy. Ledesma was selling over $25,000 worth of methamphetamine and cocaine each month for more than a year. Wilde was an ounce dealer of methamphetamine and Rios was his primary drug source. Wilde purchased half ounce, one ounce, and two ounce quantities of methamphetamine at a time from Rios at least once per week . At the time of her arrest Thibeault identified Ledesma as her drug source. Thibeault purchased one ounce quantities of methamphetamine from Ledesma at least 10 times. Gotschall was receiving one ounce to one-half pound of methamphetamine daily from Rios and reselling the methamphetamine for $1,000 to $1,300 per ounce. Ruhland and Doty were methamphetamine dealers in the Sioux City, Iowa and were supplied by Ledesma and Rios. Ruhland and Doty were receiving and re-selling multiple ounce quantities of methamphetamine. Blank received ounce quantities of methamphetamine and broke it down to re-sell to others. Rios was Blanks’ methamphetamine supplier.
Wilde was sentenced on January 31, 2018, to 120 months imprisonment; Doty was sentenced on April 27, 2018, to 91 months imprisonment; Blank was sentenced on May 3, 2018, to 90 months imprisonment; Gotschall was sentenced on June 14, 2018, to 120 months imprisonment; Ruhland was sentenced on June 22, 2018, to 84 months imprisonment; Rios and Thibeault were sentenced on June 25, 2018, Rios to 204 months imprisonment and Thibeault to 96 months imprisonment; and Ledesma was sentenced on July 23, 2018, to 180 months imprisonment. Each were sentenced in Sioux City by Chief United States District Court Judge Leonard T. Strand. Wilde, Gotschall, Rios and Ledesma must also each serve a 5-year term of supervised release after the prison term and Doty, Blank, Ruhland and Thibeault must also each serve a 4-year term of supervised release after the prison term. There is no parole in the federal system. Wilde, Ledesma, Rios, Doty, Blank, Gotschall, Thibeault, and Ruhland, were each ordered to pay a $100 special assessment.
Wilde, Ledesma, Rios, Doty, Blank, Goschall, Thibeault and Ruhland are each being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-4031.
Follow us on Twitter @USAO_NDIA.
Second Postal Carrier Sentenced Prison for Delivering Marijuana Packages to Drug DealersRead the Press Release
PHILADELPHIA — United States Attorney William M. McSwain announced that a second U.S. Postal carrier was sentenced to prison today for taking bribes in exchange for delivering packages containing marijuana to drug dealers. Steven C. Williams, 43, of Philadelphia, was sentenced today to 15 months’ imprisonment.
One of Williams’ co-conspirators, U.S. Postal carrier Felicia Charleston, 36, of Philadelphia, was sentenced in May 2018 to 10 months’ imprisonment.
Williams delivered and attempted to distribute 5,468 kilograms of marijuana. Williams diverted packages to co-conspirators at a variety of locations in West Philadelphia. He pleaded guilty in April 2018.
“We can’t have postal workers moonlighting by conspiring with drug dealers,” said U.S. Attorney McSwain. “Drug dealers do enough damage to our communities without the helping hands of government employees. The vast majority of postal carriers in this district perform their jobs with honesty and integrity. But in this case, the defendant was corrupted by the lure of an easy buck. Prison is a just result and a deterrent to such behavior.”
Williams and Charleston were postal carriers at the West Market Post Office in Philadelphia, and Williams recruited Charleston to assist in the illegal scheme. They both delivered packages to members of a drug organization at 48 N. Hobart Street and other locations in West Philadelphia. The drug dealers then distributed the marijuana to their customers.
“The Postal Service employs 600,000 nationwide, the majority of whom are dedicated, hard-working individuals worthy of America’s trust," said Monica Weyler, U.S. Postal Service Office of Inspector General Special Agent in Charge, Philadelphia. “However, a very small number of them choose to violate that trust by engaging in misconduct or criminal activity. Special agents with the U.S. Postal Service Office of Inspector General work with other law enforcement agencies to find those employees, investigate them, and seek their criminal prosecution and removal from the Postal Service, as we did in this case. To report criminal activity or serious misconduct by postal employees, contact USPS OIG special agents at 888-USPS-OIG or www.uspsoig.gov.”
The case was investigated by the United States Postal Service, Office of Inspector General (USPS-OIG), Homeland Security Investigations (HSI) Border Enforcement Security Taskforce (BEST), and the Pennsylvania Office of Attorney General, Bureau of Narcotics Investigations (BNI) and is being prosecuted by Assistant United States Attorneys Anita Eve and Tomika N.S. Patterson.
Salem Woman Pleads Guilty to Illegally Purchasing Firearms for Massachusetts ResidentRead the Press Release
CONCORD - Angelina Keenan, 24, formerly of Salem, New Hampshire, pleaded guilty in federal court to illegally purchasing firearms for a Massachusetts resident, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on two occasions in December 2016, Keenan purchased guns from federally licensed firearms dealers in Hooksett and Pelham. During each purchase, Keenan filled out an ATF Form 4473, a form that all federally licensed firearms dealers are legally required to complete for over-the-counter firearms sales. In filling out the form, Keenan falsely stated that she was purchasing the firearms for herself, when in fact, she was purchasing the guns for a Massachusetts man who could not legally purchase them for himself in New Hampshire. In addition, Keenan represented on the purchase forms that she was not an unlawful drug user, when in fact she was addicted to heroin.
Keenan pleaded guilty to two counts of making a material false statement in connection with the acquisition of a firearm. Her sentencing hearing is scheduled for November 15th, 2018.
“Those who purchase guns for others illegally can endanger the public because the guns often are used to commit violent crimes,” said U.S. Attorney Murray. “Through Project Safe Neighborhoods, the law enforcement community in New Hampshire works each day to keep guns out of the hands of criminals in order to safeguard our community.”
“Firearms trafficking continues to be a top priority for ATF and our law enforcement partners. ATF is committed to identifying and disrupting the sources of illegal firearms which jeopardize the safety of our communities,” said Mickey Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant U.S. Attorney Shane B. Kelbley.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Rapid City Man Found Guilty of Possession of a Firearm by a Prohibited PersonRead the Press Release
United States Attorney Ron Parsons announced that William Andrews, age 32, was found guilty of Possession of a Firearm by a Prohibited Person following a federal jury trial in Rapid City, South Dakota.
The charge carries a maximum sentence of 10 years in federal prison, and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Evidence at trial established that on January 24, 2018, law enforcement officers with the Black Hills Fugitive Task Force found Andrews by himself inside a shed he had built behind a home in Rapid City. Andrews had locked himself inside the shed, which was being used as a bedroom, and was found to be in possession of a Kel-Tec, model PF-9, 9mm pistol. Andrews is prohibited from possessing firearms due to a previous conviction for first degree robbery.
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.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s Office, U.S. Marshals Service, and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson prosecuted and tried the case.
A sentencing date was set for October 9, 2018. Andrews was remanded to the custody of the U.S. Marshals Service pending sentencing.
Rapid City Man Charged with Drug and Firearm CrimesRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man was charged in federal district court with Conspiracy to Distribute a Controlled Substance, Possession with Intent to Distribute a Controlled Substance, and Possession of a Firearm by a Prohibited Person.
Dustin Eck, age 34, was charged on May 22, 2018. He appeared before U.S. Magistrate Judge Daneta Wollmann on July 25, 2018, and pleaded not guilty to the charge. The penalty upon conviction is 5-40 years in federal prison and/or a $5,000,000 fine, up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Eck possessing methamphetamine with the intent to distribute it, and also knowingly being in possession of two rifles. The charges are merely an accusation and Eck is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Eck was detained pending trial. A trial date has not been set.
Project Huntington: Defendant Netted in Operation Saigon Sunset Pleads Guilty to Federal Drug ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Huntington man that was indicted for his role in a major, multi-state heroin and fentanyl network pled guilty today to a federal drug conspiracy charge, announced United States Attorney Mike Stuart. Terrell Redd, 43, entered his guilty plea to an indictment charging him with conspiracy to distribute heroin. The federal indictment also charged 14 other individuals involved in the Peterson Drug Trafficking Organization (DTO) with conspiracy to distribute heroin and fentanyl. Additional Peterson DTO defendants were arrested and charged in Detroit.
“No revolving door. Both Project Huntington and Operation Saigon Sunset are critical to our efforts to dismantle heroin and fentanyl distribution networks and reduce violent crime in and around the City of Huntington,” said United States Attorney Mike Stuart. “I am dead serious about my commitment to drive out criminal elements from Huntington. While the takedown on April 17th of this year was a monumental success, our work is not done until all defendants charged are held accountable for their crimes.”
Redd admitted that in January and February 2018 he conspired with Manget Peterson and Charles Graves, Jr. to sell heroin in the Huntington, WV area. As part of the plea agreement, Redd admitted to distributing heroin to a confidential informant in February 2018.
Redd faces up to 20 years in federal prison when he is sentenced on November 19, 2018.
This investigation was the result of a joint effort by the Drug Enforcement Administration and the Violent Crime and Drug Task Force West.
The plea hearing was held before United States District Judge Robert C. Chambers. Assistant United States Attorney Stephanie S. Taylor handled the prosecution.
The drug prosecution is part of Project Huntington, an effort announced by United States Attorney Mike Stuart in March 2018 in response to the opiate epidemic and violent crime in southern West Virginia.
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Project Huntington Defendant Pleads Guilty to Federal Gun and Drug ChargesRead the Press Release
HUNTINGTON, W.Va. – A Huntington man who was arrested as part of Project Huntington pled guilty today in federal court to drug and gun charges, announced United States Attorney Mike Stuart. James Christopher Brady, 47, entered guilty pleas to distribution of crack cocaine and possession of an unregistered sawed-off shotgun before United States District Judge Robert C. Chambers. Stuart commended the investigative effort of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Brady was selling drugs AND guns in Huntington,” said United States Attorney Mike Stuart. “There is no doubt that Huntington is a safer city today as a result of the people we took off the streets as part of Project Huntington’s major takedown earlier this year. Still, there is much work left to do. We will not lessen our efforts or reduce our sense of urgency until the criminal elements are driven out of West Virginia.”
On September 22, 2016, a confidential informant met with Brady at Brady’s residence located at 419 9th Street West in Huntington. After negotiating with the informant, Brady left the residence to acquire crack cocaine which Brady agreed to sell to the informant. Brady subsequently returned and distributed approximately 3 grams of crack cocaine to the informant in exchange for $250 in United States currency.
On January 12, 2017, the informant again met with Brady and Brady’s 9th Street West residence and negotiated the purchase of a firearm. Brady and the informant then traveled to a residence on Cook School Road where Brady retrieved the firearm. Brady subsequently sold the firearm to the informant in exchange for $160 in United States currency. After examination, the firearm was determined to be a Savage/Springfield, model 944, 12 gauge weapon made from a shotgun which had a barrel measuring 13 and 7/16 inches and an overall length measuring 22 and 7/8 inches. The firearm had been altered from its manufactured state and, based on the measurements, was required to be registered in the National Firearms Registration and Transfer Record. A review of records revealed that the firearm was not registered.
As part of his plea, Brady also admitted to selling firearms to the informant in Huntington on three additional occasions. Brady admitted that he sold two additional sawed-off shotguns which were not properly registered and an additional .380 caliber pistol. Brady further admitted that he was previously convicted in federal court in Huntington of the felony offense of possession of an unregistered destructive device and thus, he was prohibited from possessing any firearms.
Brady faces up to 30 years in federal prison when he is sentenced on November 19, 2018.
Assistant United States Attorney Joseph F. Adams is handling the prosecution.
This prosecution is part of Project Huntington, an effort announced by United States Attorney Mike Stuart in March 2018 in response to the opiate epidemic and violent crime in southern West Virginia.
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.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Poplar Bluff Man Pleads Guilty to Gun and Drug ChargesRead the Press Release
The United States Attorney's Office announced that Antwoine Carnell Johnson, Age 23, of Poplar Bluff, Missouri, pled guilty to charges of Possession of Heroin with Intent to Distribute, Possession of Methamphetamine with Intent to Distribute, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime. Johnson appeared before United States District Stephen N. Limbaugh, Jr. on July 31, 2018.
Johnson was arrested after a Missouri State Highway Patrol Officer stopped Johnson for speeding and discovered that his license was revoked. Officers located drug scales, heroin, methamphetamine, a loaded revolver and $6,574.00 in suspected drug proceeds in Johnson’s vehicle. His sentencing is set for November 6th, 2018.
Johnson faces a maximum punishment of 20 years of imprisonment and a fine up to $1,000,000 on the drug charges and not less than five years, nor more than life on the firearm charge.
This case was investigated by the Missouri State Highway Patrol and the Drug Enforcement Administration. Special Assistant United States Attorney Timothy J. Willis handled the prosecution for the Government.
Pitcairn Woman Sentenced to Time Served for Attempted Robbery of Post OfficeRead the Press Release
PITTSBURGH, Pa. – A resident of Pitcairn, Pennsylvania, has been sentenced in federal court to a term of imprisonment of time served after having served 8 months in jail, to be followed by three years of supervised release, on her conviction of Attempted Post Office Robbery, United States Attorney Scott W. Brady announced today.
Senior United States District Judge David S. Cercone imposed the sentence on Kristen Risko, age 24.
According to the information presented to the court, on July 21, 2016, the defendant, wearing a gray hooded sweatshirt with the hood over her head, large dark sunglasses covering her face and holding a metallic object in her right hand, walked into the United States Post Office in Pitcairn, PA. She raised her right hand, pointed it at the clerk, and demanded money. The defendant moved closer to the clerk, demanded money and told him to give her everything that he had. As she got closer, he believed that she was holding a knife. The clerk told her that the police just drove by and that she had better leave because they were coming back any second. He then moved behind a doorframe and out of her view. At that point, the defendant fled the Post Office. Risko was identified the next day. She confessed, but denied using a knife. She claimed that she used a remote control for a space heater. No weapon was recovered.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The United States Postal Inspection Service and the Pitcairn Borough Police Department conducted the investigation leading to the prosecution of Risko.
Owner of Long Island Commercial Check Cashing Companies Indicted for Financial FraudRead the Press Release
An eight-count indictment was unsealed today in federal court in Central Islip charging John Drago, the owner and compliance officer of the Kayla Companies, with multiple criminal violations of the Bank Secrecy Act, including failure to file required Currency Transaction Reports (“CTRs”) for customers receiving in excess of $10,000. Drago is also charged in the indictment with failure to collect and pay taxes. Drago was arrested today, and arraigned this afternoon before United States Magistrate Judge A. Kathleen Tomlinson. Drago was released on a $500,000 bond.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Justin Campbell, Assistant Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the indictment.
“As alleged in the indictment, Drago flagrantly violated his obligations as the owner of check cashing businesses to follow federal regulations designed to prevent such businesses from being used to facilitate money laundering; he also failed to fulfill his responsibility as an employer to pay the proper taxes,” stated United States Attorney Donoghue. “This Office and our law enforcement partners are committed to ensuring the integrity of financial institutions, including check cashing businesses.”
“Check cashers provide a valuable service to our community,” stated IRS-CI Assistant Special Agent-in-Charge Campbell. “However, when they commit tax fraud, IRS-CI will aggressively investigate and seek prosecution of those involved.”
According to the indictment, Drago owned and operated check cashing businesses on Long Island, including Kayla Check Cashing Corp., North Island Check Cashing Corp., South Island Check Cashing Corp., East Island Check Cashing Corp., Bay Shore Check Cashing Corp. and Brentwood Check Cashing Corp. (collectively, the “Kayla Companies”). The operation was administered from the offices of Kayla Check Cashing Corp. in Farmingdale, New York. Hogwarts, Inc., was a management company owned by Drago through which employees of the Kayla Companies were paid.
Financial institutions are required to file a CTR for each transaction in cash in excess of $10,000. In addition, a CTR is required to be filed by the financial institution when multiple checks, the total value of which exceeds $10,000, are cashed in a single day.
As alleged in the indictment, from January 2010 to October 31, 2013, Drago instructed employees to cash multiple checks in excess of $10,000 in a single day for certain customers without filing required CTRs. Between August 1, 2010 and October 31, 2013, Drago directed employees to deposit and cash, over the course of several days, checks that had been submitted together on a single day in amounts in excess of $10,000. Drago also instructed employees to tell certain customers who presented individual checks in amounts exceeding $10,000 to return with multiple checks in amounts that were less than $10,000 to avoid the reporting requirement for such financial transactions. As a result of these practices, Drago is also charged with failing to file CTRs and failing to develop, implement and maintain an effective anti-money laundering program for the Kayla Companies.
In addition, between April 1, 2012 and July 31, 2013, Drago paid overtime wages and commissions to employee of the Kayla Companies in cash and failed to inform the IRS of the payment of these cash wages. Drago falsely underreported to the IRS the gross wages paid to his employees in order to avoid paying the full amount of Federal Insurance Contribution Act taxes that the Kayla Companies owed.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Drago faces a maximum sentence of 10 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Burton T. Ryan, Jr., is in charge of the prosecution.
The Defendant:
JOHN DRAGO
Age: 54
St. James, New YorkE.D.N.Y. Docket No. 18-CR-394 (SJF)
Odessa Tax Return Preparer Sentenced to Two Years in Federal PrisonRead the Press Release
In Midland today, a federal judge sentenced Markinson Auguste, owner of YeYe Tax and Multi Services in Odessa, to two years in federal prison for a scheme to defraud the Internal Revenue Service (IRS), announced United States Attorney John F. Bash and IRS-Criminal Investigation Special Agent in Charge Richard D. Goss, Houston Field Office.
In addition to the prison term, United States District Judge David Counts ordered Auguste to pay a $10,000 fine and restitution in the amount of $251,942 to the IRS.
On April 23, 2018, Auguste pleaded guilty to one count of aiding or assisting in the preparation of a fraudulent federal income tax return. By pleading guilty, Auguste admitted to preparing hundreds of fraudulent tax returns from 2012 and 2016. According to court records, Auguste’s scheme involved adding just enough false income to the lower income tax returns he prepared for his clients, so that those clients would qualify for higher amounts of earned income tax credit. Auguste benefited through both the tax preparation fees as well as receiving a portion of the fraudulent refunds as a kickback. Auguste also claimed unauthorized dependents on other fraudulent tax returns in order to increase tax refunds, and then directed those tax refunds into bank accounts that he controlled.
IRS-Criminal Investigation agents investigated this case. Assistant United States Attorney Glenn Harwood prosecuted this case on behalf of the Government.
Niskayuna Man Charged with Theft of Trade SecretsRead the Press Release
WASHINGTON – Xiaoqing Zheng, 56, of Niskayuna, New York, was arrested today in connection with a criminal complaint charging him with stealing trade secrets belonging to General Electric (GE).
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Grant C. Jaquith for the Northern District of New York, and, Acting Special Agent in Charge Charles Margiotta of the FBI’s Albany Division.
The criminal complaint alleges that on or about July 5, Zheng, an engineer employed by General Electric, used an elaborate and sophisticated means to remove electronic files containing GE’s trade secrets involving its turbine technologies. Specifically, Zheng is alleged to have used steganography to hide data files belonging to GE into an innocuous looking digital picture of a sunset, and then to have e-mailed the digital picture, which contained the stolen GE data files, to Zheng’s e-mail account.
The defendant appeared today in federal court in Albany, New York, before U.S. Magistrate Judge Christian F. Hummel and was ordered detained without bail pending a hearing scheduled for August 2, at 1:30 p.m.
The charge filed against Zheng carries a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The charge in the complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, and is being prosecuted by Assistant U.S. Attorney Rick Belliss of the Northern District of New York, and Trial Attorneys Jason McCullough and Matt Chang of the National Security Division’s Counterintelligence and Export Control Section.
New York Man Sentenced to Prison for Trafficking in Endangered Lion and Tiger PartsRead the Press Release
Arongkron “Paul” Malasukum, 42, a resident of Woodside, New York, was sentenced today by U.S. District Judge Amos L. Mazzant, III, in Sherman, Texas, to nine months in prison to be followed by one year of supervised release for illegally trafficking parts from endangered African lions and tigers.
Malasukum previously pleaded guilty before U.S. Magistrate Judge Kimberly C. Priest Johnson to a one count information charging him with wildlife trafficking in violation of the Lacey Act.
In papers filed in federal court, Malasukum admitted to meeting with undercover agents who were working for the U.S. Fish and Wildlife Service, and purchasing a tiger skull from the agents. Malasukum also admitted to purchasing lion skulls from an auction house in Texas through the undercover agents, who were acting as “straw buyers” for Malasukum. Malasukum provided the undercover agents with cash and directed them on which items to bid and ultimately win. After the purchases, Malasukum shipped the tiger and lion skulls from Texas to his home in Woodside, New York. From New York, Malasukum shipped the skulls to Thailand for sale to a wholesale buyer.
As part of his plea, Malasukum admitted that between April 9, 2015 and June 29, 2016, he purchased and exported from the United States to Thailand approximately 68 packages containing skulls, claws, and parts from endangered and protected species, with a total fair market value in excess of $150,000.
The sentence was announced by Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Joseph D. Brown for the Eastern District of Texas, and Acting Assistant Director of the Office of Law Enforcement for the U.S. Fish and Wildlife Service Edward Grace.
“Today’s sentencing is another positive result from the Justice Department’s continued partnership with the U.S. Fish and Wildlife Service in fighting the menace of illegal trade in protected wildlife,” said Acting Assistant Attorney General Wood. “Those who scheme and plot to criminally profit from the exploitation of these creatures will be brought to justice, as the defendant in this case has now learned”
“The defendant in this case profited from the endangered status of African lions and tigers by illegally buying and selling their parts on the black market,” said U.S. Attorney Joseph D. Brown for the Eastern District of Texas. “We will continue to enforce our endangered species laws to protect our beautiful animal resources.”
“We are committed to bringing to justice those who would profit from the illegal international and interstate trafficking of wildlife,” said Acting Assistant Director of the Office of Law Enforcement for the U.S. Fish and Wildlife Service, Edward Grace. “We thank our state and federal partners for their help in investigating and prosecuting cases on behalf of imperiled species."
There are two sub-species of lions that are listed as threatened and/or endangered under the Endangered Species Act (ESA). Panthera leo melanachaita, found in eastern and southern Africa, is listed as threatened, and Panthera leo leo, found in India and western and central Africa, is listed as endangered. There are only about 1,400 members of the Panthera leo leo species remaining; 900 in 14 African populations and 523 in India. The size and distribution of these populations, population trends, and the severity of the threats to those populations are factors leading to Panthera leo leo being listed as endangered under the ESA. The sub-species Panthera leo melanachaita is believed to number between 17,000 -19,000 and is found across southern and eastern Africa. Although Panthera leo melanachaita populations are increasing overall, research has indicated there are population groups that are in decline due to ongoing threats; as a result, the sub-species Panthera leo melanachaita is listed as threatened under the ESA.
The investigation was handled by the U.S. Fish and Wildlife Service’s Office of Law Enforcement with assistance from the New York State Department of Environmental Conservation, the U. S. Attorney’s Office for the Eastern District of Texas, and the Justice Department’s Environmental Crimes Section. The government is represented by Assistant U.S. Attorney James Noble and Trial Attorney Gary N. Donner of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
New York Man Charged with Theft of Trade SecretsRead the Press Release
Xiaoqing Zheng, 55, of Niskayuna, New York, was arrested today in connection with a criminal complaint charging him with stealing trade secrets belonging to General Electric (GE).
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Grant C. Jaquith for the Northern District of New York, and, Acting Special Agent in Charge Charles Margiotta of the FBI’s Albany Division.
The criminal complaint alleges that on or about July 5, Zheng, an engineer employed by General Electric, used an elaborate and sophisticated means to remove electronic files containing GE’s trade secrets involving its turbine technologies. Specifically, Zheng is alleged to have used steganography to hide data files belonging to GE into an innocuous looking digital picture of a sunset, and then to have e-mailed the digital picture, which contained the stolen GE data files, to Zheng’s e-mail account.
The defendant appeared today in federal court in Albany, New York, before U.S. Magistrate Judge Christian F. Hummel and was ordered detained without bail pending a hearing scheduled for August 2, at 1:30 p.m.
The charge filed against Zheng carries a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The charge in the complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, and is being prosecuted by Assistant U.S. Attorney Rick Belliss of the Northern District of New York, and Trial Attorneys Jason McCullough and Matt Chang of the National Security Division’s Counterintelligence and Export Control Section.
New London Drug Dealer Pleads GuiltyRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that ANTHONY WHITLEY, 35, of Hartford and New London, pleaded guilty yesterday before U.S. District Judge Jeffrey A. Meyer in New Haven to count of conspiracy to possess with intent to distribute heroin, cocaine and 28 grams or more of cocaine base (“crack”).
According to court documents and statements made in court, on March 3, 2017, a court-authorized search of a New London apartment connected to WHITLEY and his nephew, Bashon Whitley, revealed approximately 14.5 grams of heroin, approximately 27 grams of cocaine, approximately 177 grams of crack cocaine, items used to process and package narcotics for street sale, a .380 caliber semiautomatic handgun, ammunition and $9,180 in cash. Anthony and Bashon Whitley were arrested on state charges at that time.
Judge Meyer scheduled sentencing for October 23, 2018, at which time Anthony Whitley faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years. Whitley has been detained since his arrest on March 3, 2017.
On May 30, 2018, Bashon Whitley pleaded guilty to the same charge. He is detained while awaiting sentencing.
This matter is being investigated by the Drug Enforcement Administration, Connecticut State Police Statewide Narcotics Task Force East and New London Police Department. The case is being prosecuted by Assistant U.S. Attorney Natasha M. Freismuth.