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25 July 2018
Warren County Man Charged with Producing Child PornographyRead the Press Release
ERIE, Pa. - A former resident of Sheffield, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
The twelve-count indictment named Jeffrey Colin Rogers, 55, as the sole defendant.
According to the indictment presented to the court, Rogers took sexually explicit photos of two victims who were under the age of eighteen.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The law provides for a maximum total sentence of 340 years in prison, a fine of $3,000,000, 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 Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Waldorf Man Sentenced to over 16 Years in Federal Prison for Illegal Possession of Unregistered Machine Guns, Unregistered Short-Barreled Rifles and Destructive Devices, and for Possession of Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm today sentenced Caleb Andrew Bailey, age 31, of Waldorf, Maryland, to 200 months in prison, followed by lifetime supervised release, for illegal possession of unregistered machine guns, unregistered short-barreled rifles, and unregistered destructive devices, and for possession of child pornography. Judge Grimm also ordered that Bailey must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service - Washington Division; and Charles County Sheriff Troy Berry.
According to Bailey’s plea agreement, on May 5, 2016, law enforcement executed federal search warrants at adjoining properties in Waldorf, Maryland associated with Bailey. At Bailey’s residence, law enforcement located, among other items, an underground bunker containing machine guns, machine gun manufacturing parts and devices, other firearms, explosives, unregistered short-barreled rifles and destructive devices; covert recording devices; and child pornography on electronic devices seized inside and outside the residence. One electronic device was located within the underground bunker. Other electronic media were removed from Bailey’s bedroom at his residence, and from the woods where they had been hidden by a minor victim at the direction of Bailey. At his parents’ residence, in Bailey’s bedroom, law enforcement recovered an electronic device that contained Internet searches indicative of child pornography.
During the execution of the search warrant at Bailey’s residence on May 5, 2016, a 17-year-old minor was present. The minor admitted that Bailey had instructed the minor to remove a laptop, a camera, and an external hard drive from Bailey’s residence and cover them with leaves by a footbridge in the woods behind the residence. Law enforcement recovered these items.
On May 17, 2016, the Department of Homeland Security, Homeland Security Investigations conducted a forensic analysis of Bailey’s electronic devices. The forensic analysis revealed that Bailey used hidden cameras to surreptitiously record videos of minor males. In total, Bailey recorded over 100 videos of the victims between March 2014 and January 2016. The forensic analysis revealed that, in addition to the child pornography that Bailey produced, Bailey possessed other images and videos of child pornography on various electronic devices, including a hard drive located within his bunker, that do not appear to have been produced by him. These images and videos included depictions of prepubescent minors and depictions of sadistic or masochistic conduct involving minors (bondage). Bailey’s collection of child pornography included more than 280 images and 54 videos depicting children engaged in sexually explicit conduct.
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 also brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the “Resources” tab on the left of the page.
United States Attorney Robert K. Hur commended ATF Baltimore, HSI Baltimore, the U.S. Postal Inspection Service - Washington Division, and the Charles County Sheriff’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Jennifer R. Sykes, Kristi N. O’Malley, and Thomas P. Windom, who prosecuted the case.
Virginia Man Sentenced for Role in Odometer and Title Fraud SchemeRead the Press Release
A Norfolk, Virginia man was sentenced today for operating an odometer and title fraud scheme that involved more than 50 vehicles and spanned six years, the Department of Justice announced.
Lawson Basnight, 48, was sentenced to serve 18 months in prison, followed by three years of supervised release. U.S. District Judge Mark S. Davis also ordered Basnight to pay $403,720.17 in restitution, reflecting the consumer loss caused by Basnight’s scheme.
Basnight pleaded guilty on January 25 in the Eastern District of Virginia to one count of conspiracy to commit odometer tamping and securities fraud. As part of his plea agreement, Basnight admitted that he purchased high-mileage vehicles from individuals advertising them for sale online and arranged to alter those vehicles’ odometers to reflect false, lower mileage readings. Basnight then secured fraudulent motor vehicle titles reflecting the lower mileage readings and used the false odometer readings and titles to sell the vehicles with inflated prices to unsuspecting purchasers.
“The Department of Justice is committed to prosecuting those who prey on unsuspecting consumers,” said Acting Assistant Attorney Chad A. Readler of the Justice Department’s Civil Division. “Tampering with automobile odometers causes victims to pay more for used cars, raises safety and maintenance concerns, and builds distrust in the used car market."
Basnight’s odometer and title fraud scheme began in 2010 and continued until 2016. The scheme affected more than 50 vehicles and resulted in consumer loss of approximately $400,000. At times, the false mileage readings on the altered odometers and fraudulent titles were 110,000 miles less than the vehicles’ actual mileage.
This case was prosecuted by Trial Attorneys Jacqueline Blaesi-Freed and John W. Burke of the Civil Division’s Consumer Protection Branch with assistance from Assistant U.S. Attorney Elizabeth Yusi of the U.S. Attorney’s Office for the Eastern District of Virginia. The Virginia Department of Motor Vehicles and the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA) investigated the case.
NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually and has established a special hotline to handle odometer fraud complaints. Individuals with information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.
More information on odometer fraud is available on the NHTSA website https://one.nhtsa.gov/Vehicle-Safety/Odometer-Fraud and tips on detecting and avoiding odometer fraud are available at this page: www.nhtsa.gov/staticfiles/nvs/pdf/811284.pdf.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch.
For more information about the U.S. Attorney’s Office for the Eastern District of Virginia, visit www.justice.gov/usao-edva.
U.S. Attorney’s Office Announces Recovery of Full Restitution from Former Skiatook School SuperintendentRead the Press Release
U.S. Attorney Trent Shores announced today that the United States Attorney’s Office and the Tulsa County District Attorney’s Office collected full restitution of $207,590.01 owed by former Skiatook School Superintendent Gary Johnson. U.S. Attorney Shores stated, “the restitution collected from Gary Johnson was owed for the losses his corruption inflicted on the Skiatook Public Schools.” Johnson was convicted of conspiring to defraud the United States by hiding income he received from bribes and kickbacks.
U.S. Attorney Shores further remarked, “From 2004 to 2010, at a time when public schools were forced to count every dollar, Gary Johnson failed to perform the fiduciary duties he owed the citizens and patrons of the Skiatook Schools. For his personal benefit, he approved grossly inflated invoices for the procurement of basic supplies, equipment and services.”
Evidence and documents submitted during the prosecution show Johnson approved the payments of invoices at prices that were as much as 400% inflated above the fair market value. In exchange, Johnson corruptly accepted things of value, including cash, tickets to college football games, and the costs for travel, food, lodging, and entertainment.
U.S. Attorney Trent Shores and Assistant U.S. Attorney Joe Wilson prosecuted the case. U. S. Attorney Shores thanked Assistant U.S. Attorney Catherine Depew and the dedicated federal law enforcement agents of the Department of Justice Asset Recovery program who recover assets for the benefit of the people harmed by acts of corruption and abuse of office.
Two people indicted for reentering the U.S. after multiple deportationsRead the Press Release
Two people were indicted in federal court for illegally reentering the United States.
Fermin Cabrera-Flores, 46, a citizen of Mexico, was found in Painesville on July 13 after having been previously deported seven times following convictions for domestic violence, evading arrest, illegal reentry, criminal trespass and other crimes, according to court documents.
Lazaro Oscar Romero-Colindres, 40, a citizen of Honduras, was found in Amherst on July 10, after having been deported three times, according to court documents.
Assistant U.S. Attorney Brad J. Beeson is prosecuting the case following an investigation by Immigration and Customs Enforcement, Department of Homeland Security.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is 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
Two Men Arrested for Firearms OffensesRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announces the arrest of KENDRICK MARCEL CAMPBELL, 25 of Lillington, North Carolina and DEMETRIUS SAMUEL KING, 31 of Raleigh, North Carolina on firearms-related charges.
CAMPBELL and KING are charged in a two-count indictment with possession of a firearm by a convicted felon. If convicted, CAMPBELL and KING face not more than 10 years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
The investigation of this case was conducted by the Harnett County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Two Members of Billion-Dollar Venezuelan Money Laundering Scheme ArrestedRead the Press Release
Two alleged participants in a billion-dollar international scheme to launder funds embezzled from Venezuelan state-owned oil company PDVSA using Miami, Florida real estate and sophisticated false-investment schemes were arrested yesterday and today.
U.S. Attorney Benjamin Greenberg of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) Miami Field Office made the announcement.
Matthias Krull, 44, a German national and Panamanian resident, and Gustavo Adolfo Hernandez Frieri, 45, a Colombian national and naturalized U.S. citizen, were charged in a criminal complaint with conspiracy to commit money laundering. The complaint also charged Francisco Convit Guruceaga, 40; Jose Vincente Amparan Croquer, aka, “Chente,” 44; Carmelo Urdaneta Aqui, 44; and Abraham Eduardo Ortega, 51, all Venezuelan nationals; and Hugo Andre Ramalho Gois, 39, a Portuguese national, and Marcelo Federico Gutierrez Acosta y Lara, 40, a Uruguayan national, for their alleged participation in the scheme. These defendants remain at large. Krull was arrested last night in Miami and had his initial court appearance earlier today before U.S. Magistrate Judge Alicia M. Otazo-Reyes in Miami. Krull is scheduled to have a pre-trial detention hearing on July 30, and a preliminary hearing on Aug. 8. Frieri was arrested today in Sicily, Italy and faces extradition proceedings.
According to the criminal complaint, the conspiracy in this case allegedly began in December 2014 with a currency exchange scheme that was designed to embezzle around $600 million from PDVSA, obtained through bribery and fraud, and the defendants’ efforts to launder a portion of the proceeds of that scheme. By May 2015, the conspiracy had allegedly doubled in amount to $1.2 billion embezzled from PDVSA. PDVSA is Venezuela’s primary source of income and foreign currency (namely, U.S. Dollars and Euros).
The complaint alleges that surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the United States and elsewhere, operating as a network of professional money launderers.
The alleged conspirators include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as “boliburgués.”
The charges contained in the complaint are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) “Operation Money Flight,” a partnership between and among federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Greenberg and Mr. Benczkowski commended the investigative efforts of HSI Miami, HSI London, HSI Rome and HSI Madrid in this matter. The case is being prosecuted by Assistant U.S. Attorney Francisco R. Maderal of the Southern District of Florida’s International Narcotics and Money Laundering Section and Assistant Chief David Johnson of the Criminal Division’s Fraud Section.
The Criminal Division’s Office of International Affairs provided substantial assistance in this matter and U.S. Customs and Border Protection, the National Crime Agency of the United Kingdom and Italian, Spanish and Maltese law enforcement authorities provided assistance. The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Members of Billion-Dollar Venezuelan Money Laundering Scheme ArrestedRead the Press Release
Two alleged participants in a billion-dollar international scheme to launder funds embezzled from Venezuelan state-owned oil company PDVSA using Miami, Florida real estate and sophisticated false-investment schemes were arrested yesterday and today.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) Miami Field Office made the announcement.
Matthias Krull, 44, a German national and Panamanian resident, and Gustavo Adolfo Hernandez Frieri, 45, a Colombian national and naturalized U.S. citizen, were charged in a criminal complaint with conspiracy to commit money laundering. The complaint also charged Francisco Convit Guruceaga, 40; Jose Vincente Amparan Croquer, aka, “Chente,” 44; Carmelo Urdaneta Aqui, 44; and Abraham Eduardo Ortega, 51, all Venezuelan nationals; and Hugo Andre Ramalho Gois, 39, a Portuguese national, and Marcelo Federico Gutierrez Acosta y Lara, 40, a Uruguayan national, for their alleged participation in the scheme. These defendants remain at large. Krull was arrested last night in Miami and had his initial court appearance earlier today before U.S. Magistrate Judge Alicia M. Otazo-Reyes in Miami. Krull is scheduled to have a pre-trial detention hearing on July 30, and a preliminary hearing on Aug. 8. Frieri was arrested today in Sicily, Italy and faces extradition proceedings.
According to the criminal complaint, the conspiracy in this case allegedly began in December 2014 with a currency exchange scheme that was designed to embezzle around $600 million from PDVSA, obtained through bribery and fraud, and the defendants’ efforts to launder a portion of the proceeds of that scheme. By May 2015, the conspiracy had allegedly doubled in amount to $1.2 billion embezzled from PDVSA. PDVSA is Venezuela’s primary source of income and foreign currency (namely, U.S. Dollars and Euros).
The complaint alleges that surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the United States and elsewhere, operating as a network of professional money launderers.
The alleged conspirators include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as “boliburgués.”
The charges contained in the complaint are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) “Operation Money Flight,” a partnership between and among federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
HSI Miami, HSI London, HSI Rome and HSI Madrid investigated this case. The case is being prosecuted by Assistant Chief David Johnson of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Francisco R. Maderal of the Southern District of Florida’s International Narcotics and Money Laundering Section.
The Criminal Division’s Office of International Affairs provided substantial assistance in this matter and U.S. Customs and Border Protection, the National Crime Agency of the United Kingdom and Italian, Spanish and Maltese law enforcement authorities provided assistance. The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Two Jefferson County Men Indicted for Three June Bank RobberiesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted two Jefferson County men for three bank robberies in the county in June, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp Jr.
A three-count indictment filed in U.S. District Court charges TERRY LYNN FOREHAND, 54, of Birmingham, and DERRICK TERRELL BIVENS, 52, of Mulga, with the June 7 robbery of a BB&T Bank on Meadow Brook Road in Birmingham and the June 27 robberies of that same BB&T branch and a Regions Bank on 2nd Avenue SW in Graysville.
Each bank robbery charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
The FBI investigated the case, in conjunction with the Hoover Police Department and the Jefferson County Sheriff’s Office. Assistant U.S. Attorney John J. Geer III is prosecuting the case.
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Two Former Deutsche Bank Traders Charged with Deceptive and Manipulative Trading Practices in U.S. Commodities MarketsRead the Press Release
Two former employees of Deutsche Bank AG, a global financial institution, were charged in an indictment returned by a Chicago federal grand jury yesterday with engaging in fraudulent and manipulative trading involving precious metals futures contracts, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William Sweeney of the FBI’s New York Field Office.
James Vorley, 38, of the United Kingdom, and Cedric Chanu, 39, of France and the United Arab Emirates, were each charged in the Northern District of Illinois with one count of conspiracy to commit wire fraud affecting a financial institution and one count of wire fraud affecting a financial institution.
The indictment alleges that Vorley and Chanu, who were employed as traders at Deutsche Bank AG—Vorley based in London; Chanu based in London and Singapore—engaged in a years-long conspiracy to defraud other traders on the Commodity Exchange Inc., which was an exchange run by the Chicago Mercantile Exchange Group. The defendants and their co-conspirators, including former Deutsche Bank AG trader David Liew, are alleged to have defrauded other traders by placing fraudulent orders that they did not intend to execute in order to create the appearance of false supply and demand and to induce other traders to trade at prices, quantities and times that they otherwise would not have traded. The indictment further alleges that Vorley, Chanu, Liew and others placed such fraudulent and manipulative orders by themselves and in coordination with other traders at Deutsche Bank AG, including each other.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI’s New York Field Office. Assistant Deputy Chief Carol Sipperly and Trial Attorneys Michael T. O’Neill and Cory E. Jacobs of the Criminal Division’s Fraud Section are prosecuting the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Two Felons Plead Guilty to Federal Gun CrimesRead the Press Release
BLUEFIELD, W.Va. – Two felons pled guilty to federal gun crimes, announced United States Attorney Mike Stuart.
“My Office is using all available resources to address violent crime in the District,” said United States Attorney Mike Stuart. “In fact, as I recently announced, we will soon have additional prosecutors working to make our communities even safer by prosecuting more cases like that of Phillips and Quick.”
Scott Phillips, 33, of Parkersburg, entered his guilty plea to being a prohibited person in possession of a firearm. U.S. Attorney Stuart commended the investigative efforts of the Parkersburg Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Phillips admitted that on February 3, 2017, he possessed two 9mm pistols in Parkersburg. On that date, when Parkersburg police stopped a vehicle Phillips was riding in, he fled on foot and unsuccessfully attempted to hide the weapons. Phillips is prohibited from possessing any firearms due to a 2006 Wood County felony burglary conviction.
Reed Ryan Quick, 47, of White Sulphur Springs, also entered a guilty plea to being a prohibited person in possession of a firearm. U.S. Attorney Stuart praised the investigation conducted by the Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Quick admitted that on January 20, 2018, he possessed Ruger 9mm pistol while attempting to purchase drugs in Charleston. Quick is prohibited from possessing any firearms due to a 2015 Greenbrier County felony conviction for operating a clandestine methamphetamine lab.
Both Phillips and Quick face up to 10 years in federal prison when sentenced on December 4, 2018.
Assistant United States Attorney Matt Davis is handling the prosecutions. The plea hearings were held before Senior United States District Judge David A. Faber.
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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###Three Defendants Charged in White Plains Federal Court with “Forced Posting” FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging three defendants with allegedly engaging in conspiracy to commit wire fraud and wire fraud in a scheme known as “forced posting.” Two defendants, LATOYA ROBINSON and DASHAWN JOHNSON, were arrested and presented yesterday before United States Magistrate Lisa Margaret Smith. Defendant TANYA HATWOOD remains at large.
U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants took advantage of a security feature of the debit card processing system, which allowed for nearly $1 million in fraudulent merchandise charges. Thanks to our federal and local law enforcement partners, the scam is over and the defendants face significant criminal charges.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As technology continues to evolve, the complexity of fabricated schemes evolves almost faster than humans can keep up. Nevertheless, the FBI remains committed to investigating fraud in its many facets. By allegedly using fictitious codes in the attempt to take more than $900,000 in merchandise, the defendants believed their scheme would go undetected. However, now that the two defendants are facing federal charges today, it is clear that their misguided criminal behavior was wrong.”
As alleged in the Complaint unsealed in White Plains federal court[1]:
When a customer presents a debit card to purchase merchandise at a store and the card is swiped at an electronic card reader maintained by the merchant, electronic signals are routed from the merchant to the brand of the customer’s debit card, and then routed to the underlying bank that issued the debit card. The bank then verifies whether the customer has sufficient funds in the account to cover the requested transaction, which is then relayed back to the merchant. When there are insufficient funds on the debit card presented by the customer, the card reader will display a message that the transaction request was denied.
Many card readers have a functionality, though, that allows someone to input a code that serves to take the card reader offline, overriding the denial message and verifying the transaction. Malign actors can take advantage of this functionality by inputting a fictitious code not provided by the issuing bank under the guise of entering a pin code or other authorization code, which could cause the card reader to show that the transaction was authorized. The merchant may then let the customer leave with any merchandise the customer attempted to purchase; the merchant would not learn that the code was fictitious and the transaction invalid until days or even months later. The process by which a customer could take advantage of the functionality is called “forced posting” or “forcing the off.”
Bank records, corroborated by interviews with more than 30 merchants, show that from 2013 up to May 2018, LATOYA ROBINSON, DASHAWN JOHNSON, and TANYA HATWOOD, together and separately, performed forced posting on dozens of occasions, and schemed to take or attempt to take more than $900,000 in merchandise in total.
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ROBINSON, 29, of the Bronx, JOHNSON, 25, of Manhattan, and HATWOOD, 27, of the Bronx, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud. Each count carries a maximum sentence of 20 years. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI, the Yonkers Police Department, the New York City Police Department, and the Nassau County Police Department.
These case is being handled by the Office’s White Plains Division. Assistant United States Attorney Samuel L. Raymond is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Three Aliens Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned indictments charging YOSIMAR GONZALEZ-LEAL, age 23, of Mexico, FERNANDO REBOLLAR-ECHEVERRIA, age 35, of Mexico, and ROBERTO HERNANDEZ-ALDAMA, age 38, of Mexico, with Illegal Reentry of a Deported Alien.
If convicted of Illegal Reentry of a Deported Alien, REBOLLAR-ECHEVERRIA, found in Wake County after having been previously deported three times, faces a maximum imprisonment term of two years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
GONZALEZ-LEAL, found in Wake County after having been previously deported and convicted of felonious possession of marijuana, and HERNANDEZ-ALDAMA, found in Sampson County after having been previously deported eleven times and convicted of illegal reentry, would each face a maximum imprisonment term of ten years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The cases are being investigated by Immigration and Custom Enforcement's (ICE) Enforcement and Removal Operations.
Third Defendant Enters Guilty Plea in Case Involving the Shooting of a U.S. Mail CarrierRead the Press Release
In San Antonio today, 41-year-old Piper Lee of San Antonio, pleaded guilty to federal charges in connection with the shooting of a U.S. Mail carrier last year in Spring Branch, TX, announced United States Attorney John F. Bash; Inspector in Charge Adrian Gonzalez, U.S. Postal Inspection Service, Houston Division; and, San Antonio Police Chief William McManus.
Appearing before United States Magistrate Judge Richard B. Farrer, Lee pleaded guilty to two counts of aiding and abetting the assault of a federal officer and one count of possession of stolen mail. Lee, who remains in federal custody, faces up to 20 years in federal prison. Sentencing is scheduled for November 1, 2018, before Chief United States District Judge Orlando Garcia.
According to court records, on February 11, 2017, Lee’s co-defendant, 24-year-old Bradley Ahearn, shot a shot a female U.S. Mail carrier as she was delivering mail to a cluster of mailboxes in Spring Branch, TX. The victim is still recovering from the gunshot that pierced both of her legs. Ahearn and another co-defendant, 27-year-old Sarah Richford, fled the scene. Lee was not charged with participating in that shooting.
On February 14, 2017, employees of a local motel notified investigators of the presence of a large amount of U.S. Mail and a handgun case in one of the motel rooms. Much of the discovered mail, originating from locations across the country, was destined for addresses in the Spring Branch, TX area. Motel surveillance footage showed Lee picking up Ahearn and Richford and leaving the motel in Lee’s yellow Volkswagen. Investigators requested San Antonio police to initiate a stop of the vehicle. While failing to yield to SAPD officers, Ahearn began shooting at the police officers and another high-speed pursuit ensued. Ultimately, the defendants abandoned their vehicle inside a parking garage of a local mall and managed to elude capture by law enforcement.
On February 15, 2017, San Antonio police officers, acting on information provided to investigators, arrested Ahearn, Richford and Lee without incident in a parking lot of a different local motel.
Richford, who remains in federal custody, is scheduled to be sentenced on September 6, 2018. She faces 20 years in federal prison after pleading guilty on February 23, 2018, to five charges--aiding and abetting carjacking; aiding and abetting use of a firearm during a crime of violence; aiding and abetting robbery of U.S. Mail; and, two counts of aiding and abetting assault on a federal officer.
On July 12, 2018, Ahearn was sentenced to 20 years in federal prison after pleading guilty to seven charges including aiding and abetting carjacking; aiding and abetting use of a firearm during a crime of violence; aiding and abetting robbery of U.S. Mail; and, four counts of aiding and abetting assault on a federal officer.
The U.S. Postal Inspection Service together with the San Antonio Police Department, Texas Department of Public Safety, Texas Rangers, Comal County Sheriff’s Office, Bulverde Police Department, Federal Bureau of Investigation, U.S. Marshals Service and Homeland Security Investigations (HSI) investigated this case. Assistant United States Attorneys Bettina Richardson and Christina Playton are prosecuting this case on behalf of the Government.
Staten Island Resident Pleads Guilty to Disaster Relief FraudRead the Press Release
Earlier today, Nagwa Elsilimy pleaded guilty at the federal courthouse in Brooklyn to disaster relief fraud in connection with obtaining more than $750,000 in disaster relief from New York City’s Build It Back program and the Federal Emergency Management Agency in the aftermath of Hurricane Sandy. Today’s proceeding took place before United States District Judge Raymond J. Dearie.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Christina Scaringi, Special Agent-in-Charge, United States Department of Housing and Urban Development, Office of Inspector General (HUD OIG); Mark Tasky, Special Agent-in-Charge, Department of Homeland Security, Office of Inspector General, Washington Field Office (DHS OIG); and Mark G. Peters, Commissioner, New York City Department of Investigation, announced the guilty plea.
According to court filings and facts presented during the guilty plea proceeding, in the days and months following Hurricane Sandy, which struck New York and New Jersey on October 29, 2012, Elsilimy obtained and attempted to obtain federal funds appropriated for Sandy disaster relief by submitting material misrepresentations in her applications for relief. Specifically, Elsilimy misrepresented that a home in Staten Island, which her family had abandoned months before the storm, was her primary residence at the time the hurricane devastated parts of New York and New Jersey. In fact, she had been residing at a different address since at least March 2012. Evidence obtained in the investigation established that Elsilimy fraudulently obtained federal and city aid totaling more than $750,000.
When sentenced, Elsilimy faces up to 30 years in prison, as well as a fine of up to $1,500,000.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Elizabeth Losey Macchiaverna is in charge of the prosecution.
The Defendant:
NAGWA ELSILIMY
Age: 60
Staten Island, NYE.D.N.Y. Docket No. 17-CR-563
South Florida Resident and Colombian National Charged with Violating the Kingpin ActRead the Press Release
A Miami-Dade County resident and a Colombian national have been charged with narcotics trafficking and money laundering offenses, in violation of the federal Kingpin Act.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Robert F. Lasky, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
According to the Indictment, from at least as early as April 2018, and continuing through May 2018, Jose Piedrahita Castillo, Jr., 29, of Medellin, Colombia, and Sandra Milena Ruiz Arango, 34, of Miami-Dade County, Florida conspired to commit violations of the Kingpin Act, in connection with attempts to transfer, use, and deal in property in which defendant Castillo Jr. and Jose Bayron Piedrahita Ceballos, have an interest. According to the Indictment, on June 26, 2014, the President of the United States designated La Oficina De Envigado as a “significant foreign narcotics trafficker” subject to economic sanctions. Furthermore, on May 3, 2016, the President of the United States designated defendant Jose Piedrahita Castillo, Jr., Jose Bayron Piedrahita Ceballos, and Andres Piedrahita Castillo, as “significant foreign narcotics traffickers” under the Kingpin Act. According to the Indictment, Jose Piedrahita Castillo, Jr., Jose Bayron Piedrahita Ceballos, and Andres Piedrahita Castillo are affiliates of La Oficina De Envigado.
The Kingpin Act declared a national emergency with respect to the activities of international narcotics traffickers and their organizations, which threatened the national security, foreign policy, and economy of the United States of America. Any property and interests in property within the United States, which were owned or controlled by any “significant foreign narcotics trafficker” designated by the President of the United States, pursuant to the Kingpin Act, is blocked as of the date of such designation and identification. Furthermore, any transaction within the United States by a United States person, in property or interests of any “significant foreign narcotics trafficker” identified by the President of the United States, is prohibited.
The Indictment further alleges that Jose Piedrahita Castillo, Jr. and Sandra Milena Ruiz Arango committed money laundering, and that Jose Piedrahita Castillo, Jr. committed multiple violations of U.S. narcotics laws, involving the importation and distribution of the powerful opioid oxycodone.
If convicted of the charges of conspiracy or attempt to violate the Kingpin Act, the defendants face a statutory maximum term of 10 years in prison. If convicted of the money laundering or narcotics offenses charged in the indictment, the defendants face a statutory maximum of 20 years in prison.
This investigation and prosecution was carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state and local law enforcement agencies who, cooperatively, target the region’s drug-trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy, which sponsors a variety of initiatives focused on the nation’s illicit drug trafficking threats.
This prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Greenberg commends the investigative efforts of the FBI and United States Treasury Department, Office of Foreign Assets Control (OFAC). This case is being prosecuted by Assistant United States Attorney Jonathan K. Osborne.
Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Euclid man indicted for using a firearm while trafficking fentanyl, heroin and pillsRead the Press Release
A South Euclid man was indicted in federal court for using a firearm while trafficking fentanyl, heroin and pills.
Christopher Bowen, 25, was charged in a 10-count indictment with distribution of drugs, possession with intent to distribute drugs, using a firearm in furtherance of drug trafficking and being a felon in possession of a firearm.
Bowen on several occasions in May and June sold fentanyl and heroin, according to the indictment.
On June 28, Bowen had approximately 14 grams of a heroin/fentanyl mixture, 31 grams of heroin, 64 Alprazolam pills, a Jimenez Arms 9 mm handgun, a Bryco Arms 9 mm handgun, an Anderson MFG long rifle and ammunition. Bowen was prohibited from having a firearm or ammunition because of a prior conviction for drug trafficking, according to the indictment.
This case was investigated by the Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorneys Marisa T. Darden and Elliot Morrison.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
South Carolina Man Admits Distribution of Child PornographyRead the Press Release
CAMDEN, N.J. – A South Carolina man today admitted his role in distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Rashad Russell, 28, of Bennettsville, South Carolina, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an indictment charging him with one count of distribution of child pornography. Russell was previously arrested and charged by complaint on March 13, 2018, and was indicted on April 6, 2018.
According to documents filed in this case and statements made in court:
Between December 2017 and March 2018, Russell contacted a law enforcement officer working in an undercover capacity through Facebook messenger. The undercover officer’s Facebook profile purported to be a young mother living in New Jersey with an 8-year-old child. On Jan. 8, 2018, Russell sent two images and one video of child pornography to the undercover officer, including images of prepubescent children being sexually abused.
The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2018.U.S. Attorney Carpenito credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Leah Gould of the U.S. Attorney’s Office Public Protection Unit in Newark.
Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender (Camden)
Serial Bank Robber Indicted for Robbing and Attempting to Rob Nine Banks in Brooklyn, Queens and ManhattanRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Richard Wardell Johnson with nine counts of bank robbery. Johnson, who was arrested on May 29, 2018 on a criminal complaint, is in federal custody and will be arraigned on a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, Richard Wardell Johnson robbed and attempted to rob nine banks across three New York City boroughs in less than a month,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will ensure that criminals who endanger bank employees and members of our communities will be held responsible.”
“Over the course of nearly 30 days, Johnson allegedly carried out a string of robberies, accompanied with threats of violence,” stated FBI Assistant Director-in-Charge Sweeney. “Focusing merely on a quick and easy profit, Johnson put innocent lives around him in danger. Now that his chain of robberies has come to an end, Johnson will rightfully be brought to justice.”
“Shortly after Mr. Johnson’s last attempt to get some quick cash, our patrol cops got him – and he’s no longer a menace running around our neighborhoods,” stated NYPD Commissioner O’Neill. “By working closely with our federal partners at the FBI and the Eastern District of New York, the NYPD will continue to aggressively investigate and pursue all bank robbery cases to minimize the threat criminals like Mr. Johnson pose in our community.”As detailed in publicly filed documents, between April and May of 2018, Johnson robbed six banks, and attempted to rob three others in Brooklyn, Queens and Manhattan. During the May 18, 2018 robbery he entered an M&T Bank branch, on Atlantic Avenue in Brooklyn and presented a note to the teller, stating “DON’T TOUCH THAT ALARM! $2000.00 NO DUMMY PACK. IF I SHOOT SOMEONE ITS ON YOU!” The teller notified a security guard at the bank and pointed out the defendant. The security guard exited the bank, followed Johnson on foot while he called 9-1-1 and reported the crime. The NYPD apprehended Johnson nearby a short time later.
The indictment charges Johnson with the following robberies and attempted robberies:
- Chase Bank branch in Queens, New York, on April 23, 2018 (attempted);
- Chase Bank branch in Brooklyn, New York, on April 23, 2018;
- Chase Bank branch in Queens, New York, on April 30, 2018;
- Chase Bank branch in Brooklyn, New York, on May 2, 2018;
- Chase Bank branch in Manhattan, New York, on May 7, 2018;
- Citibank branch in Brooklyn, New York, on May 12, 2018;
- Chase Bank branch in Brooklyn, New York, on May 15, 2018 (attempted);
- HSBC Bank branch in Manhattan, New York, on May 17, 2018; and
- M&T Bank branch in Brooklyn, New York on May 18, 2018 (attempted).
The government’s case is being handled by the Office’s General Crimes Section. Special Assistant United States Attorney Andrew D. Grubin is in charge of the prosecution.
The Defendant:
RICHARD WARDELL JOHNSON
Age: 63EDNY Docket No.: 18-CR-386 (DLI)
Sam Kane Agrees to Repay Nearly $38 Million to Local RanchersRead the Press Release
CORPUS CHRISTI, Texas – Sam Kane Beef Processors LLC has entered into an agreement with the United States to comply with the Packers and Stockyards (P&S) Act and to begin to repay nearly $38 million currently owed to local livestock sellers, announced U.S. Attorney Ryan K. Patrick.
Following a hearing in Corpus Christi federal court today, Sam Kane has agreed to promptly pay for livestock purchases by the next business day after purchases are completed as the P&S Act requires. They have also agreed to a repayment plan which would result in full payment to local ranchers the nearly $38 million currently owed to them within the next 18 months. They must also preserve and administer the statutory trust and have agreed to the appointment of an independent chief restructuring officer to ensure compliance with all aspects of the agreement.
If Sam Kane fails to make any of the payments as agreed or abide by any terms of the agreement, the court will appoint a receiver to manage Sam Kane financial affairs.
On June 14, 2018, two complaints were filed against Sam Kane Beef Processors LLC for alleged violations of the Packers and Stockyards (P&S) Act. The complaints allege Sam Kane is failing to timely pay for livestock. Sam Kane is a fed steer and heifer slaughtering plant located in Corpus Christi and operates subject to the P&S Act.
Both complaints allege that as of June 8, 2018, Sam Kane owed approximately $34.96 million to unpaid livestock sellers at an average 38 days late with some instances up to 60 days late. The complaints allege Sam Kane’s failure to timely pay resulted in livestock sellers filing claims under the packer statutory trust totaling more than $142 million.
The U.S. Department of Agriculture (USDA) filed an administrative complaint alleging Sam Kane failed to pay the full purchase price for livestock within the time period required by the P&S Act on numerous occasions from on or about Jan. 27, 2017, through the date of the complaint. The P&S Act authorizes civil penalties of up to $11,000 per violation.
The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries. As it relates to livestock sales, the P&S Act requires packers to pay the full purchase price of livestock the next business day following completion of the transaction. The P&S Act authorizes the USDA to file administrative complaints to enforce violations. Concurrently, the Act also authorizes the Department of Justice to seek injunctive relief while administrative enforcement actions are pending before the USDA.
The U.S. Attorney’s Office for the Southern District of Texas subsequently filed a federal complaint seeking a preliminary injunction ordering Sam Kane to comply with the P&S Act while the administrative complaint is pending before the USDA.
Both complaints follow a prior Secretary of Agriculture order issued Jan. 17, 2017, requiring Sam Kane cease and desist from failing to pay when due the full purchase price of livestock. They also allege Sam Kane violated this order.
Assistant U.S. Attorney Chad W. Cowan is handling the matter.
Salvadoran Man Sentenced for Immigration OffenseRead the Press Release
United States Attorney Duane A. Evans announced that MILTON OMAR SANCHEZ, age 43, a native of El Salvador, was sentenced today after pleading guilty to a one-count indictment for illegal reentry of a removed alien.
United States District Court Judge Ivan L.R. Lemelle sentenced SANCHEZ to time served (10 months), followed by one year of supervised release. The defendant will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on September 13, 2017, SANCHEZ was found in the United States after having been previously deported from the United States on July 13, 2004.
U.S. Attorney Evans praised the work of Immigration and Customs Enforcement agents in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Richland County man indicted for sexually exploiting a childRead the Press Release
A Richland County man was indicted in federal court for sexual exploitation of a child.
Joseph R. Hurley, 31, of Lucas, was initially arrested on charges of sexually abusing an 11-year-old. During a subsequent review of Hurley’s computer, law enforcement discovered approximately 261 images and 102 videos containing child pornography.
The forensic review also revealed a folder that contained images of a nude female later determined to be 16 years old when the images were taken. The female was completely nude and her eyes were closed, according to the affidavit.
Investigators made contact with the girl in the images. She stated that she had a one-month relationship with Hurley in 2013, when he was 26 and she was 16.
The last time they had contact, the girl said Hurley mixed her an alcoholic drink, although she did not see him prepare it. She said the drink made her “feel sleepy” and that she did not remember the rest of the night. She said she woke up in the morning without any clothes and felt sore, according to the affidavit.
The girl stated she had no knowledge of Hurley taking the photos of her, according to the affidavit.
This case was investigated by the Federal Bureau of Investigation, the Mansfield Police Department and the Richland County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Michael A. Sullivan.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Repeat Offender Pleads Guilty to Defrauding A Church and Other VictimsRead the Press Release
Tampa, Florida –Victor Thomas Clavizzao (56, St. Petersburg) has pleaded guilty to wire fraud. He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Clavizzao, going by the name of “Victor Thomas,” opened a series of companies, and represented to others, including a local church, that he had the ability to help them conduct real estate transactions. Clavizzao convinced the church, which was seeking to construct a new building, to give him money. The church members believed that the money they gave to Clavizzao would be used to secure financing and to handle issues related to their construction project. Instead of aiding the church, Clavizzao used $16,350 of the church’s funds for his personal benefit.
When Clavizzao began his scheme, he was on federal supervised release for another real-estate-related fraud conviction.
This case was investigated by the FBI. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
Renewal Escapee will Remain Detained Pending December Sentencing HearingRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of escape from an institution, United States Attorney Scott W. Brady announced today.
Derek Webb, age 54, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that on June 26, 2017, the defendant escaped from the Renewal, Inc. Residential Reentry Center, where he had been confined pursuant to a judgment and commitment order of the United States District Court for the Western District of Pennsylvania.
Judge Fischer scheduled sentencing for December 7, 2018 at 9 a.m. The law provides for a total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The United States Marshals Service conducted the investigation that led to the prosecution of Webb.
Raleigh Man Indicted on Mail and Wire Fraud ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., the United States Attorney for the Eastern District of North Carolina, announces that a Federal grand jury in Raleigh has returned a twelve-count indictment charging BILL BAEZ, JR., age 28, of Raleigh, North Carolina, with six counts of Mail Fraud and six counts of Wire Fraud.
The indictment alleges that beginning in or around October 2017, and continuing until in or around January 2018, BAEZ engaged in a scheme to defraud his employer by stealing over $40,000 worth of its medical equipment and selling the items on eBay for his own profit. BAEZ mailed the stolen medical equipment to his buyers via the United States Postal Service. When law enforcement arrested BAEZ on January 30, 2018, they recovered several pieces of stolen medical equipment. Some of those items had been packaged for mailing.
If convicted of all counts, BAEZ could face a maximum penalty of twenty years imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the United States Postal Inspection Service and local law enforcement.
President of Pinnacle Workforce Solutions Sentenced to PrisonRead the Press Release
SAN JOSE – John McEwan was sentenced yesterday to over five years in prison, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett.
McEwan pleaded guilty on March 20, 2018 to one count of wire fraud. According to the plea agreement McEwan admitted to owning and operating a payroll processing company called Pinnacle Workforce Solutions (Pinnacle). Pinnacle provided various payroll services to its customers, including distributing wages to employees, preparing employee paycheck withholdings, and paying income taxes. In order to provide these services for its customers, Pinnacle withdrew funds from its customers’ bank accounts, and had access and authorization to initiate wire transfers from its customers’ bank accounts.
In his plea agreement, McEwan further admitted that, in as early as 2009, Pinnacle was operating at a financial loss. During this period of time, McEwan wired funds out of his clients’ bank accounts and used them in unauthorized ways. Specifically, McEwan paid one client’s payroll with funds he took from another client. Pinnacle’s customers assumed that McEwan was continuing to handle their payroll and withhold and pay taxes on their behalf. Instead, through his guilty plea, McEwan admitted that this was not the case. In total, McEwan took and misspent approximately $6,916,256/48 from his customers.
McEwan, 69, of Seaside, California, waived indictment and was arraigned on an information on November 15, 2017. He was charged with a single count of wire fraud for electronically transferring funds out of one of Pinnacle’s customer’s bank accounts without authorization.
The sixty-three month sentence was handed down by The Honorable Beth L. Freeman, U.S. District Court Judge, following a guilty plea to one count of wire fraud in violation of Title 18, United States Code, Section 1343. Judge Freeman also sentenced the defendant to a three-year period of supervised release. Judge Freeman scheduled a hearing for October 2, 2018 to determine the amount of restitution McEwan will be ordered to pay. The defendant will begin serving the sentence on October 5, 2018.
Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the FBI, the Monterey County District Attorney’s Office, and the Monterey County White Collar Crime Task Force.
Pittsburgh Man Took More than $100,000 in Armed Robbery of PNC BankRead the Press Release
PITTSBURGH – A resident of Pittsburgh, Pennsylvania, pleaded guilty on Monday in federal court to a charge of armed bank robbery, United States Attorney Scott W. Brady announced today.
Gary William White, age 21, pleaded guilty to one count before Chief United States District Court Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that on September 20, 2017, White robbed the PNC Bank on Saw Mill Run Blvd with a knife. White instructed one of the two tellers to open the glass partition separating the tellers from the public. When the teller could not remove the glass, White removed the window. He then climbed through the window and ordered the tellers to open several safes located behind the teller counter. He also advised the tellers that he had a gun while motioning towards his hip. The tellers backed away and White removed piles of cash from each safe and placed them into a red drawstring bag that he was carrying. He took $111,409 before fleeing the bank in his vehicle. Authorities were able to identify White from surveillance video as well as his vehicle’s registration. Law enforcement executed search warrants on his apartment and car. The search warrant on the car revealed the red Under Armour bag, containing $103,309, as well as the clothing worn during the robbery and the knife. White turned himself in a few days later and confessed to the robbery.
Judge Conti scheduled sentencing for November 16, 2018. The law provides for a maximum total sentence of 25 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, along with the Allegheny County Police and Brentwood Police Departments, conducted the investigation leading to the Indictment in this case.
Philadelphia Man Sentenced to One Year and One Day in Prison for Role in Scheme to Steal and Cash Postal Money OrdersRead the Press Release
CAMDEN, N.J. – A Philadelphia, Pennsylvania, man was sentenced today to 12 months and one day in prison for his role in fraudulently cashing stolen U.S. Postal Service money orders, resulting in more than $22,000 in losses, U.S. Attorney Craig Carpenito announced.
Anthony J. Bell, 39, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of transmitting and presenting unlawfully issued U.S. Postal Service money orders with intent to defraud the United States. Judge Rodriguez imposed the sentence today in Camden federal court.9
According to the documents filed in this case, other cases, and statements made in court:
Bell admitted that a former U.S. Postal Service employee, Marc. E Saunders, 39, of Sicklerville, New Jersey, provided Bell with stolen money orders and told him to recruit others to cash them. Bell admitted that he recruited individuals to cash the money orders and paid them a small fee, while keeping the rest of the money from the fraudulently cashed money orders for Saunders and himself. Bell also admitted he recruited an individual in York, Pennsylvania, to cash the money orders and paid the individual a small fee, keeping the rest of the money from the fraudulently cashed money orders for himself.
In addition to the prison term, Judge Rodriguez sentenced Bell to three years of supervised release.
U.S. Attorney Carpenito credited special agents of the USPS, Office of the Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Alyson M. Oswald of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, CamdenOwner of Durable Medical Equipment Company Pleads Guilty to Defrauding Medicaid of More Than $9 MillionRead the Press Release
The owner of a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.
The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Philadelphia Regional Office and District of Columbia Inspector General Daniel W. Lucas.
Waveney Blackman, 72, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia. Her sentencing is scheduled on Oct. 18 before the Honorable Thomas F. Hogan.
Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC. The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others. It became a Medicaid provider in 2008.
According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries. From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid. All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid. Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.
According to the plea documents, Blackman used the fraudulent proceeds to obtain properties, including three in Florida and four in Maryland, as well as a Mercedes Benz.
Blackman was charged in a criminal information filed on June 26. The charges were filed as part of the nation’s largest ever health care fraud enforcement action. On June 28, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced results of the nationwide effort. The various enforcement actions involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
This case is being investigated by the FBI’s Washington Field Office, HHS-OIG and the Medicaid Fraud Control Unit of the District of Columbia Office of the Inspector General. Assistance has been provided by the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney Amy Markopoulos of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Emily A. Miller and Special Assistant U.S. Attorney Parker Tobin of the U.S. Attorney’s Office for the District of Columbia.
Assistance with forfeiture issues was provided by Assistant U.S. Attorney Kyle Bateman, and former Special Assistant U.S. Attorneys Marina Stevenson and Sean Welsh. Assistance also has been provided by Assistant U.S. Attorney Denise A. Simmonds, Paralegal Specialists Aisha Keys and Robert Fishman, and Victim/Witness Services Coordinator Tonya Jones. Former Assistant U.S. Attorneys Teresa A. Howie, Lionel André, and Angela Saffoe also assisted with the investigation of the case.
Owner of Durable Medical Equipment Company Pleads Guilty to Defrauding Medicaid of More Than $9 MillionRead the Press Release
WASHINGTON – The owner of a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.
The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Philadelphia Regional Office and District of Columbia Inspector General Daniel W. Lucas.
Waveney Blackman, 72, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia. Her sentencing is scheduled on October 18, 2018, before the Honorable Thomas F. Hogan.
Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC. The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others. It became a Medicaid provider in 2008.
According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries. From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid. All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid. Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.
According to the plea documents, Blackman used the fraudulent proceeds to obtain properties, including three in Florida and four in Maryland, as well as a Mercedes Benz.
Blackman was charged in a criminal information filed on June 26. The charges were filed as part of the nation’s largest ever health care fraud enforcement action. On June 28, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced results of the nationwide effort. The various enforcement actions involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
This case is being investigated by the FBI’s Washington Field Office, HHS-OIG and the Medicaid Fraud Control Unit of the District of Columbia Office of the Inspector General. Assistance has been provided by the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney Amy Markopoulos of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Emily A. Miller and Special Assistant U.S. Attorney Parker Tobin of the U.S. Attorney’s Office for the District of Columbia.
Assistance with forfeiture issues was provided by Assistant U.S. Attorney Kyle Bateman, and former Special Assistant U.S. Attorneys Marina Stevenson and Sean Welsh. Assistance also has been provided by Assistant U.S. Attorney Denise A. Simmonds, Paralegal Specialists Aisha Keys and Robert Fishman, and Victim/Witness Services Coordinator Tonya Jones. Former Assistant U.S. Attorneys Teresa A. Howie, Lionel André, and Angela Saffoe also assisted with the investigation of the case.
Owner of Russian Import/Export Company Charged with Evading U.S. Export Controls by Smuggling Sensitive Electronics to Russian Military and Intelligence AgenciesRead the Press Release
NEWARK, N.J. – A resident and citizen of Russia was indicted by a federal grand jury today for his alleged role in an international procurement network that smuggled over $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Craig Carpenito announced.
Alexander Brazhnikov Sr., 72, of Moscow, is charged by indictment with one count each of conspiracy to commit money laundering, conspiracy to smuggle goods from the United States, and conspiracy to violate the International Emergency Economic Powers Act (IEEPA). Brazhnikov Sr. is currently at large.
According to documents filed in this case and statements made in court:
Brazhnikov Sr. was the owner, chief executive officer, and principal operator of ABN Universal, a privately held Russian microelectronics import/export company in Moscow. His son, Alexander Brazhnikov Jr., 39, of Mountainside, owned and operated four New Jersey-based microelectronics export companies in Carteret, Mountainside, Union, and Manalapan.
Brazhnikov Sr. and Brazhnikov Jr. participated in a sophisticated procurement network that secretly acquired large quantities of electronic components from U.S. manufacturers and vendors and exported those parts to Russia on behalf of Russian business entities authorized to supply those parts to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (FSB) and Russian entities involved in the design of nuclear warheads and other weapons.
As part of the scheme, Brazhnikov Sr., through his Moscow business, obtained initial requests for quotes for the U.S.-based electronics components from various Russian entities and sent these requests directly to U.S.-based vendors electronically or to his son for implementation. Brazhnikov Sr., Brazhnikov Jr., and others then used Brazhnikov Jr.’s New Jersey export companies to purchase the electronic components from the U.S.-based distributors and re-package them for shipment to Moscow.
In order to obscure the extent of the network’s procurement activities and avoid filing the necessary export control forms, Brazhnikov Sr., Brazhnikov Jr., and others routinely falsified the true end-users and value of the components they exported. Each shipment from the United States was sent to one of 12 false addresses or shell locations in Moscow established at Brazhnikov Sr.’s direction, re-directed to a central warehouse he and others controlled, and ultimately shipped to the end-users in Russia, including the Russian defense contracting firms.
The funds for these illicit transactions were obtained from various Russian purchasers and initially deposited into one of Brazhnikov Sr.’s primary accounts in Russia. In order to further conceal the actual customers and the source of the funds, disbursements for purchases were then made through one or more foreign accounts held by shell corporations in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates, and Belize, and ultimately into one of Brazhnikov Jr.’s U.S.-based accounts.
The money laundering conspiracy charge carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The conspiracy to violate the IEEPA carries a maximum potential penalty of 20 years in prison. The charge of conspiracy to smuggle goods carries a potential penalty of five years in prison and a $250,000 fine.
Brazhnikov Jr. previously pleaded guilty to his role in the scheme and was sentenced June 30, 2016, to 70 months in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, under the direction of Special Agent in Charge Jonathan Carson in New York; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney David Recker of the Department of Justice National Security Division’s Counterintelligence and Export Control Section.
The charges and allegations contained in the indictment are merely accusations, and Brazhnikov Sr. is considered innocent unless and until proven guilty.
Ninth Circuit Upholds Validity of Cost-Sharing RegulationRead the Press Release
The Court of Appeals for the Ninth Circuit yesterday upheld the validity of amendments to the cost-sharing regulation under I.R.C. § 482 (Treas. Reg. § 1.482-7), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and Deputy Assistant Attorney General Travis A. Greaves of the Justice Department’s Tax Division. The regulatory amendments clarified that (1) the term “costs” under § 1.482-7 includes stock-based compensation costs, and (2) a cost-sharing arrangement produces results that are consistent with an arm’s-length result if, and only if, each controlled participant’s share of the costs of intangible development equals its share of reasonably anticipated benefits attributable to such development.
In the consolidated cases, Altera Corporation & Subsidiaries v. Commissioner of Internal Revenue, Case Nos. 16-70496 & 16-70497, the Ninth Circuit reversed a decision of the U.S. Tax Court, and held that the regulatory amendments were both procedurally valid under the Administrative Procedure Act (APA) and substantively valid under the test set forth in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 461 U.S. 837 (1984). The court held that the amendments satisfied the APA because Treasury’s rationale could be “reasonably discerned” from the preambles to the proposed and final amendments, each of which referred extensively to the legislative history of the 1986 amendment of § 482. The court further held that the amendments were substantively valid under Chevron’s two-step analysis because (1) § 482 does not speak directly to the matters covered by the regulatory amendments, and (2) the regulatory amendments represent a permissible construction of § 482 since they are “entirely consistent with Congress’s rationale for amending § 482 [in 1986] in the first place.”
Principal Deputy Assistant Attorney General Zuckerman thanked Tax Division attorneys Richard Farber and Arthur Catterall, who handled the case on appeal for the government.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New York Man Sentenced in ID Theft, Fraud InvestigationsRead the Press Release
PROVIDENCE, RI – A third person charged in federal court in Rhode Island in a series of on-going investigations into individuals who are stealing personal identifying information of others and using that information to apply for bank loans and retail store credit cards or lines of credit, has been sentenced to 39 months in federal prison, announced United States Attorney Stephen G. Dambruch, Stephen Marks, Special Agent in Charge of the United States Secret Service, Scott E. Antolik, Special Agent in Charge of the Boston Field Office of the Social Security Administration, Office of the Inspector General/Office of Investigations, and Delaney Deleon-Colon, Acting Inspector in Charge of the United States Postal Inspection Service.
Jason McDonald, 37, of Great Neck, N.Y., admitted to using a stolen identity and stolen Social Security number, and a Rhode Island address he had no association with, to open a membership account at a local credit union and then attempt to fraudulently obtain a loan from the credit union. He also admitted to helping another person create a false credit profile using stolen personal identifying information in order for that person to fraudulently obtain a vehicle valued at $29,825.
At sentencing, U.S. District Court Judge John J. McConnell, Jr, also ordered McDonald to serve 4 years supervised release upon completion of his term of incarceration, and to pay restitution totaling $29,825.
McDonald pleaded guilty on March 29, 2018, to conspiracy to commit bank fraud, attempted bank fraud, fraudulent use of a Social Security number and aggravated identity theft.
The U.S. Sentencing Guidelines range of imprisonment in this matter is 39 – 45 months. The government recommended the court impose a sentence of 45 months in prison.
At the time of his guilty plea, McDonald admitted to the Court that in December 2016, he began obtaining the personal identification of individuals without their knowledge, including Social Security numbers, for the purpose of committing fraud. McDonald admitted that with the assistance of others he obtained counterfeit identification cards bearing his photo and displaying the stolen personal identifiable information of others.
McDonald admitted that on April 10, 2017, he used a fraudulently obtained identity and a New Jersey driver's license to gain membership with the Digital Federal Credit Union. Five days later, he filed an online loan application for an automobile loan in the amount of $23,500.
McDonald first came to the attention of law enforcement during an unrelated investigation of a Central Falls man, Reynaldo Martinez, 25, for his participation in a scheme to use the stolen identity of numerous individuals to open retail store credit cards and lines of credits. Martinez used the credit to purchase tens of thousands of dollars worth of goods. Martinez pleaded guilty in November 2017 to four counts of aggravated identity theft, two counts of access fraud, and one count each of bank fraud, conspiracy to commit fraud, attempted access fraud, and interstate transportation of stolen goods. He was sentenced in January to 48 months in federal prison.
The investigations also led to the arrest and conviction in federal court of Donald Wicklund, 33, of Pawtucket. Wicklund pleaded guilty on April 12, 2018, to a 15-count indictment charging him with bank and wire fraud, fraudulent use of a Social Security number, aggravated identity theft and conspiracy. He admitted to using stolen personal identifying information of others, including social security numbers fraudulent documents and addresses, to secure funding for the purchase or lease of new vehicles in Rhode Island and Massachusetts. The investigation determined that Jason McDonald provided Wicklund with a stolen social Security number and an accompanying bogus credit profile to obtain a new vehicle valued at $29,825.
Wicklund is scheduled to be sentenced on September 13, 2018.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland.
The on-going investigations are being conducted by agents from the U.S. Secret Service, U.S. Social Security Office of Inspector General and the U.S. Postal Inspection Service.
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New Cumberland Man Charged with Receiving Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Earl T. Cook, Jr., age 54, of New Cumberland, Pennsylvania, was charged in a criminal information on July 24, 2018, with receipt of child pornography.
According to United States Attorney David J. Freed, the information alleges that Cook received child pornography over the internet between October 2014 and March 2015.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney James T. Clancy is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the receipt of child pornography charge is 20 years in prison and a $250,000 fine. That charge carries a mandatory minimum term of imprisonment of 5 years. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Moss Point Man Arrested After Bringing Gun to Police Station Pleads Guilty to Illegal Possession of Firearm by a Drug UserRead the Press Release
Gulfport, Miss – Kevin Lamarcus Mitchell, 20, of Moss Point, pled guilty yesterday, before U.S. District Judge Louis Guirola, Jr., to being an unlawful user of controlled substances in possession of a firearm, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Mitchell faces a maximum penalty of 10 years in prison, a fine of $250,000 and 3 years of supervised release. He will be sentenced by Judge Guirola on October 16, 2018, at 10:00 a.m.The case arose on April 6, 2018, when Mitchell went to the Pascagoula Police Department with his twin brother Tevin Mitchell and Joseph Smith to retrieve firearms seized by the police on March 31, 2018. Pascagoula Police officers and agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives arrested Tevin Mitchell and Smith for being unlawful users of controlled substances with guns from the prior incident. While doing an inventory search of Smith’s car, police found a gun stolen from St. Tammany Parish Louisiana under Kevin Mitchell’s seat. Kevin Mitchell admitted in an interview that he smoked marijuana regularly. Kevin Mitchell admitted to a friend in a recorded jail call that he brought the gun to the police station.
The Pascagoula Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant United States Attorney Annette Williams is prosecuting the case.
Middletown Man Sentenced to 30 Months in Federal Prison for Role in Drug Trafficking RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that TURON DAVIS, also known as “Slim,” 40, of Middletown, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for trafficking narcotics.
This matter stems from a joint investigation headed by the DEA New Haven Task Force into a central Connecticut cocaine and crack cocaine trafficking ring. The investigation, which included the use of court-authorized wiretaps, controlled purchases of crack cocaine and seizures of cocaine and cash proceeds, revealed that Westley Northrup, also known as “Piff,” operated a cocaine and crack cocaine trafficking ring while he was incarcerated in state custody at the Cheshire Correctional Institution. Carlos Roman, also known as “Frizz,” of Middletown, served as a primary distributor of narcotics for the organization. Northrup conspired with Roman and others to purchase cocaine from suppliers, convert some of the cocaine to crack cocaine, and then distribute crack and cocaine through a network of dealers in central Connecticut, including DAVIS.
DAVIS has been detained since his arrest on July 26, 2017. On March 22, 2018, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine and cocaine base (“crack”).
Northrup and Roman also pleaded guilty to related charges. On April 12, 2018, Roman was sentenced to 120 months of imprisonment. Northrup awaits sentencing.
This matter is being investigated by the DEA New Haven Task Force, U.S. Postal Inspection Service and the Middletown and New Britain Police Departments. The DEA New Haven Task Force includes participants from the New Haven, Hamden, West Haven, North Haven, East Haven, Branford, Ansonia, Meriden and Derby Police Departments, and the U.S. Marshals Service.
The case is being prosecuted by Assistant U.S. Attorney H. Gordon Hall.
Michigan Man Arrested for Climbing Mount RushmoreRead the Press Release
United States Attorney Ron Parsons announced that a South Rockwood, Michigan, man was arrested for climbing Mount Rushmore.
Zachary Schossau, 19, was arrested on July 22, 2018, by U.S. Park Rangers. Schossau appeared before U.S. Magistrate Judge Daneta Wollman on July 23, 2018, and was ordered to pay a $1,000 fine and a $30 court processing fee.
The U.S. Attorney’s Office and the National Park Service remind and caution the public that climbing Mount Rushmore National Memorial is a violation of the law, and offenders will be prosecuted.
“Please be respectful and stay off the Rushmore Memorial,” said U.S. Attorney Parsons. “The terrain is hazardous, and it ends in federal court.”
Assistant U.S. Attorney Kathryn Rich prosecuted the case.
Massachusetts Man Pleads Guilty to Sex Trafficking Women by Exploiting their Opioid AddictionRead the Press Release
Rashad Sabree, 37, of Boston, Massachusetts, pleaded guilty today in federal court in District of Maine to two counts of sex trafficking by force, fraud, or coercion, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Halsey B. Frank of the District of Maine, Harold H. Shaw, Special Agent in Charge, FBI Boston Division, and Peter C. Fitzhugh, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Boston.
According to court documents, the defendant coerced two young women to engage in commercial sex acts in Maine between December 2015 and Jan. 5, 2016, by exploiting their heroin addictions, verbally abusing them, and threatening them with violence. The defendant controlled the victims by supplying them with just enough heroin to avoid opiate withdrawal, which involves severe pain and physical sickness, and then threatening to cut off their supply and cause them to suffer withdrawal if they refused to engage in commercial sex. On Jan. 5, 2016, a motorist called 911 after observing the defendant striking one of the victims while driving on I-95 towards Massachusetts, resulting in the defendant’s arrest.
“This defendant committed sex trafficking by exploiting the opioid addictions of these women, using their vulnerability to coerce them into commercial sex for his gain,” said Acting Assistant Attorney General John Gore. “The Department of Justice will continue to work tirelessly to seek justice on behalf of victims and survivors of human trafficking.”
“This case demonstrates the important role that the public can play in helping to protect those who are vulnerable,” said U.S. Attorney Frank. “We encourage the public to say something if they see something. Here, thankfully, a good citizen did just that.”
“This defendant preyed on the addictions of his victims and brutally exploited them in a scheme driven by cruelty and greed,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division. “With today's plea, Sabree is accepting responsibility for his crimes, while his victims continue to recover from the abuse suffered at his hands. This case demonstrates the FBI's unwavering commitment to work with our law enforcement partners to hold sex traffickers like him accountable.”
“Homeland Security Investigations is proud to have assisted in this investigation, a case which clearly exposes the false claim that commercial sex trafficking is a so-called “victimless crime,” said Peter C. Fitzhugh, Special Agent in Charge, U.S Immigration and Customs Enforcement’s HSI Boston. “Close law enforcement coordination in this case has allowed justice to be done to the perpetrators of these vicious crimes and to, hopefully, provide some measure of compensation for the victims.”
In accordance with the plea agreement, the defendant faces a sentence of 15 to 17 years in prison. He is further subject to a maximum fine of $250,000 and mandatory restitution to the victims. Sentencing will be scheduled on a later date after the U.S. Probation Office completes its presentence investigation report.
The District of Maine is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
The case was investigated by the FBI, U.S. Immigration and Customs Enforcement’s HSI, and the Biddeford Police Department, with assistance from the Maine State Police and the Sanford, Kittery, and Portland Police Departments. It is being prosecuted by Assistant U.S. Attorney Julia Lipez and Trial Attorney William E. Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Maryland Man Sentenced to Four Years in Prison for Role in Scam Targeting Companies in U.S. and AbroadRead the Press Release
WASHINGTON - Emeka Ndukwu, 46, of Upper Marlboro, Md., was sentenced today to four years in prison for conspiring to launder the proceeds of scams that tricked seven companies in the United States and abroad into wiring more than $900,000 into accounts controlled by various co-conspirators.
The announcement was made by U.S. Attorney Jessie K. Liu and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office.
Ndukwu, a dual citizen of the United States and Nigeria, pled guilty in April 2018 in the U.S. District Court for the District of Columbia to one count of money laundering conspiracy. He was sentenced by the Honorable Timothy J. Kelly. Following his prison term, he will be placed on three years of supervised release. The judge also ordered Ndukwu to pay $791,870 in restitution to the companies. Additionally, Judge Kelly ordered Ndukwu to forfeit a 2014 Mercedes-Benz GL450 and to pay a forfeiture money judgment in the amount of $429,848, representing the share of the criminal proceeds that Ndukwu personally obtained.
According to documents filed at the time of the plea, Ndukwu participated in an ongoing conspiracy from 2013 through 2017 to receive and launder the proceeds of various cyber frauds, primarily arising from business e-mail (“BEC”) compromise schemes. In a typical BEC scheme, a co-conspirator tricks a company into transferring large sums of money into accounts controlled by others participating in the scheme. Using fake e-mails, often containing forged sender addresses, co-conspirators impersonate someone connected to the victim company and deceive an employee of that company into wiring funds. Soon after the wire transfers are completed, the co-conspirators drain the bank accounts and launder the criminal proceeds.
This particular conspiracy targeted at least seven companies in the United States and overseas, including victims in Texas, Illinois, the United Arab Emirates, the United Kingdom, India, Japan, and China. The victims were fraudulently induced into sending $916,056 in wire transfers to accounts controlled by Ndukwu and other co-conspirators. The funds were then laundered through transactions conducted in Washington, D.C. and other jurisdictions, including layering through shell company accounts and accounts controlled by co-conspirators.
According to the court documents, Ndukwu used false aliases and forged Nigerian passports to facilitate these schemes, and he used encrypted messaging to communicate with co-conspirators. Ndukwu was indicted in December 2017 and has been in custody since his arrest that month. A co-defendant, Chuka Mbonu, 33, of Nigeria, remains at large.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the U.S. Marshals Service for the U.S. District Court for the District of Columbia. Assistant U.S. Attorneys Christopher B. Brown and Michael J. Marando are prosecuting the case, with assistance from Paralegal Specialist C. Rosalind Pressley. Former Assistant U.S. Attorney Natalia Medina participated in investigating the case.
Man Sentenced to Federal Prison for Traveling to Kentucky to Engage in Sexual Conduct with MinorRead the Press Release
LOUISVILLE, Ky. –United States District Court Judge Rebecca Grady Jennings sentenced Michael M. Natterer, a German national, to 87 months in prison yesterday for traveling from Germany to Kentucky to engage in sexual conduct with a 15-year-old boy, announced United States Attorney Russell M. Coleman.
“Protecting our kids is the most basic function of government,” stated U.S. Attorney Russell Coleman. “The outcome of this case – over seven years in federal prison and removal from our country – is Kentucky law enforcement doing just that.”
Natterer, 23, was charged in an indictment and pleaded guilty to traveling for the purpose of engaging in illicit sexual conduct with a minor. Judge Jennings also ordered Natterer to serve a five-year period of supervised release. There is no parole in the federal system.
According to the plea agreement, Natterer began exchanging messages with the minor in January 2017. On May 30, 2017, when Natterer was 22 years old, and the victim was 15 years old, he traveled from Germany to Shepherdsville, Kentucky, to engage in sexual conduct with the victim who he knew was 15 years old. As part of the plea agreement, Natterer agreed to his removal from the United States after the completion of his sentence.
Assistant United States Attorney Amanda Gregory prosecuted the case. The Federal Bureau of Investigation (FBI) and the Shepherdsville Police Department conducted the investigation.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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Luxury Watch Dealer Sentenced to 24 Months in Prison for Laundering Narcotics Proceeds for International Drug OrganizationsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOSEPH STERN was sentenced to 24 months in prison for his role laundering money related to his concealment of narcotics proceeds generated in the United States through the purchase and sale of luxury watches by the company at which STERN was employed. A jury convicted STERN on May 26, 2017, following a 10-day trial before U.S. District Judge John G. Koeltl, who imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Joseph Stern ran his own shadow banking system to turn dirty drug money into new luxury watches, allowing millions of drug dollars to be laundered through the U.S. and back to Mexican drug cartels. Thanks to the dedicated work of the DEA, the time has come for Stern to pay for his money laundering crimes.”
According to the charging documents filed in the case, as well as the evidence developed at STERN’s trial and statements made during the sentencing proceedings and earlier court appearances:
For years prior to his arrest in May 2016, STERN fostered and profited from a cycle of crime and money designed to facilitate the secretive movement of funds from the U.S. to Mexico under the cover of a seemingly legitimate business. As part of that cycle, narcotics organizations based in, or with contacts in, Mexico, sold narcotics, including heroin and marijuana, for cash in the U.S., including in the Bronx, Manhattan, Brooklyn, and Baltimore. Money couriers then transported the cash from those sales to the defendant, who would accept bulk cash in amounts as large as $200,000 in clandestine hand-offs taking place on the street or in isolated areas within his workplace.
STERN disposed of that drug money in various ways, principally by using the cash to extinguish debts owed to his employer by Mexico-based customers who, in turn, had incurred debts to Mexico-based narcotics operations. STERN’s Mexico-based customers would sell watches, sourced from STERN, to narcotics organizations, which used those items and purchases as a substitute for the narcotics proceeds earned by their organizations in the United States.
Through this cycle of drugs and money, STERN facilitated a shadow banking system for international drug organizations, while taking a percentage of the cash that he moved on behalf of this criminal network.
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In addition to the prison term, STERN, 62, of Brooklyn, New York, was sentenced to three years of supervised release, including six months of home confinement, and was ordered to forfeit $1,899,700.
Mr. Berman praised the outstanding work of the Drug Enforcement Administration in the investigation of this case.
This case is being handled by this Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Noah Falk, Benet Kearney, and Andrew C. Adams are in charge of the prosecution.
Long Island Man Indicted in Multi-Million Dollar Ponzi SchemeRead the Press Release
A nine-count indictment was unsealed today in federal court in Central Islip, charging Steven Pagartanis, a formerly licensed financial advisor and affiliate of a registered broker-dealer, with securities fraud, mail and wire fraud conspiracies, as well as money laundering, for orchestrating a Ponzi scheme over the course of more than 18 years. Pagartanis was arrested today, and will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.
According to the indictment and other court documents, from January 2000 to March 2018, Pagartanis solicited elderly victims to invest in real estate-related investments, including those affiliated with a publicly traded Canadian company. Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually. At Pagartanis's direction, the victims wrote checks payable to an entity that was secretly controlled by Pagartanis. Pagartanis utilized a network of bank accounts to launder the stolen funds, which he then used to pay personal expenses, buy luxury items and make the guaranteed “interest” or “dividend” payments to other victims. Pagartanis created fictitious account statements reflecting ownership interests in the purported investments to induce investment and conceal the scheme. In all, the victims invested over $13 million and sustained actual losses of over $8 million. Many lost substantial portions of their life savings as a result of the scheme.
“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings,” stated United States Attorney Donoghue. “Protecting the elderly and the community at large from predators like the defendant is a priority of this Office and the Department of Justice and with our law enforcement partners we will continue to pursue that mission.” Mr. Donoghue also thanked the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority for their assistance in the investigation.
“The elderly are among the most vulnerable members of society, as they are common targets of fraudulent schemes,” stated FBI Assistant Director-in-Charge Sweeney. “As alleged, Pagartanis preyed on the elderly with his own interests in mind. While causing significant financial loss to his victims, Pagartanis experienced significant financial gain – allegedly paying personal expenses and making extravagant purchases. As we persistently investigate bogus Ponzi schemes, we aim to protect all targeted citizens from the threat of financial loss.”
“The agents of IRS-CI along with our law enforcement partners will vigorously pursue fraudsters who allegedly victimize the elderly,” stated IRS-CI Special Agent-in-Charge Robnett. “We will gladly dedicate our specialized skillset to such investigations to ensure those responsible are brought to justice.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Pagartanis faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 58
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (DRH)
Little Rock Trio Pleads Guilty to Wire Fraud; Exploited Program Assisting Distressed BusinessesRead the Press Release
LITTLE ROCK—Three Little Rock men pleaded guilty to participating in a fraudulent scheme that generated over $1 million in illicit profits by exploiting a government program designed to help distressed businesses. Mark Gregory Jackson, Sr., 61, Jimmy Don Winemiller, Jr., 53, and Don “Terrell” Stephens, Jr., 39, each of Little Rock, all pleaded guilty to conspiracy to commit wire fraud today before Chief United States District Judge Brian S. Miller.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the FBI, T.J. Gaylor, Special Agent in Charge for the Central Region of the Office of the Inspector General for the U.S. Small Business Association (SBA-OIG), and Paul W. Walton, Special Agent in Charge for the Southwest Region of the Office of the Inspector General for the U.S. General Services Administration (GSA-OIG), announced today’s guilty pleas.
“This case is a great example of how the FBI works with fellow law enforcement agencies to target those who criminally engage in fraud for personal gain,” Michael T. Gavin, Special Agent in Charge, FBI-Memphis Field Office said. “The FBI will diligently continue our efforts to pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and we will continue working together to bring them to justice, so that they may be held accountable for their actions.”
The fraudulent scheme grew out of the Federal Surplus Property Donation Program, through which qualifying non-profits, veterans organizations, municipal agencies, and disadvantaged business can acquire government surplus at below-market rates unavailable to the general public. Recipients submit requests explaining how they will use the surplus property and further promise not to sell, lease, or rent it out. The trio exploited the program by acquiring surplus under false pretenses only to sell it in the open market at a steep markup.
Jackson (doing business as Kingridge Enterprises) gained access to the surplus donation program by submitting forms featuring forged signatures that falsely claimed his disadvantaged nephew owned and operated Kingridge. In truth, the nephew did no work for Kingridge, collected no salary, and exercised zero control—he lived over 100 miles away from its Little Rock office and was employed elsewhere fulltime.
Once in the surplus donation program, Jackson proceeded to fraudulently acquire surplus (usually heavy-duty construction equipment) for sale. Much of it was sold to Winemiller (doing business as Cow Lake Construction), an equipment dealer who proceeded to sell it (again) at a still greater markup to peer equipment dealers or construction outfits. At various times, Winemiller enlisted the aid of Stephens to find buyers and paid him a fee for brokering deals.
Over the course of the scheme, Jackson acquired hundreds of pieces of surplus for $1.5 million, which he sold for over $2.5 million. Under the terms of his plea agreement, Jackson faces up to 20 years’ imprisonment and will forfeit $1,028,142.40. For their part, Winemiller and Stephens each face up to five years’ imprisonment and will forfeit $250,000.00 and $125,697.05, respectively.
“The privilege afforded to SBA 8(a) Program participants to access low-cost equipment through the Federal Surplus Property Program gives these small businesses a unique opportunity to compete and grow,” said T.J. Gaylor, Special Agent in Charge, SBA-OIG. “When a company exploits such a program for personal enrichment and does so at the expense of other small businesses, they must be held accountable to protect the integrity of the program. OIG appreciates the commitment of our federal law enforcement partners and the U.S. Attorney’s Office in combating fraud against small business programs.”
“In this case, a federal program was compromised by defendants who were motivated by personal, financial gain,” said Paul W. Walton, Special Agent in Charge, GSA-OIG. “Working with our law enforcement partners, the General Services Administration Office of Inspector General will continue to investigate fraudulent activity to protect the integrity of this important GSA program.”
Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States following a multi-year investigation by FBI-Memphis, SBA-OIG, and GSA-OIG.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at http://www.justice.gov/edar
Twitter: @EDARNEWS
Las Vegas Doctor Pleads Guilty to Conspiracy to Distribute Prescription Medications Hydrocodone and Oxycodone Without Medical PurposeRead the Press Release
LAS VEGAS, Nev. – A Las Vegas doctor pleaded guilty today for his role in a conspiracy to distribute prescription medications, specifically Hydrocodone and Oxycodone, by allowing his co-conspirators to write illegal opioid prescriptions using his prescription pad.
United States Attorney Dayle Elieson for the District of Nevada, Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Office, and Special Agent in Charge Christian J. Schrank for the Office of Inspector General of the U.S. Department of Health and Human Services, Los Angeles Region made the announcement.
Dr. Horace Paul Guerra IV, a former managing partner of Incera LLC, pleaded guilty to one count of conspiracy to distribute controlled substances before U.S. District Judge James C. Mahan who scheduled a sentencing hearing for October 25, 2018. He was charged in a criminal information on June 25, 2018.
According to admissions made in his plea agreement, from January 1, 2018 to about May 3, 2018, Guerra conspired with his Incera LLC partners, Robert D. Harvey and Alejandro Incera. As part of the conspiracy, he allowed them to use Incera LLC prescription pads to write illegal opioid prescriptions, specifically for Hydrocodone and Oxycodone, for patients he did not see and without a legitimate medical purpose. The pre-signed prescription pads included Guerra’s name, signature, and DEA number.
At time of sentencing, Guerra will face the statutory maximum penalty of 20 years in prison, up to three years supervised release, and a $1,000,000 fine. As part of the plea agreement, Guerra agreed to surrender his Nevada medical license by the time of sentencing.
The case was investigated by the FBI, the Office of Inspector General of the U.S. Department of Health and Human Services, and the Nevada Attorney General’s Office Medicaid Fraud Control Unit. Assistant U.S. Attorney Kilby Macfadden is prosecuting the case.
The Opioid Fraud and Abuse Detection Unit is a program that utilizes data to help combat the devastating opioid crisis. The District of Nevada was selected as one of 12 districts nationally to participate in the pilot program. The District of Nevada has assigned an experienced prosecutor that focuses solely on investigating and prosecuting health care fraud related to medical professionals who prescribe opioids, that unlawfully divert of dispense prescription opioids for illegitimate purposes.
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Las Cruces Man Arraigned on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Steven Vaillancourt, II, 45, of Las Cruces, N.M., was arraigned this morning in federal court on an indictment charging him with child pornography offenses. Vaillancourt entered a not guilty plea to the charges during this morning’s arraignment hearing, and was ordered detained pending trial based on judicial findings that he poses a risk of flight and a danger to the community.
The indictment on which Vaillancourt was arraigned during today’s proceedings was filed on July 18, 2018. It charges Vaillancourt with two counts of distributing child pornography and three counts of possessing child pornography. According to the indictment, Vaillancourt committed the offenses in March 2018 in Dona Ana County, N.M.
Vaillancourt was arrested on child pornography offenses in March 2018. According to the criminal complaint in which he was charged, Homeland Security Investigations executed a search warrant on an email account, which revealed that Vaillancourt allegedly had been communicating with another individual about sharing and producing child pornography of that individual’s minor children. Vaillancourt also allegedly sent three child pornography images to the individual’s cellular phone through text messaging.
The statutory penalty for a conviction on a distribution of child pornography charge is a mandatory minimum of five years and maximum of 20 years of imprisonment. The statutory penalty for a conviction on a possession of child pornography charge is a maximum of 20 years in prison. Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Las Cruces office of Homeland Security Investigations and the Las Cruces Police Department with assistance from the National Recognizance Office, Office of Inspector General. Assistant U.S. Attorney Marisa A. Ong of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For information about Project Safe Childhood, please visit http://www.justice.gov/psc/. Individuals with information relating to suspected child predators and suspected child abuse are encouraged to contact the Children’s Advocacy Center at (575) 526-3437, or to contact Homeland Security Investigations at 1-866-DHS-2-ICE.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Jury Finds Man Guilty of Kidnapping and Firearm CrimesRead the Press Release
U.S. Attorney Trent Shores announced today that a jury found Randy Alan Hamett, 61, of Choctaw, guilty of Kidnapping, Possessing and Receiving Stolen Firearm and Ammunition, and Possession of Firearms and Ammunition While Subject to a Domestic Violence Protective Order. The jury determined that, on April 25, 2017, Hamett parked his truck at a nearby Wal-Mart and walked to the victim’s house in Broken Arrow. He cut a hole in an outside wall of the victim’s house to avoid her home alarm system. When the victim arrived home from work, Hamett tased her and pointed a revolver at her. After zip-tying her wrists and duct taping her ankles, Hamett threatened to kill himself, the victim, and anyone who tried to help her. Hamett forced the victim into a car, stole from her a pistol she had purchased after obtaining a protective order against him, then kidnapped her. Hamett also sexually assaulted her.
Convinced that Hamett was going to kill her, the victim made every effort to prolong the trip and endear herself to Hamett. As part of her attempt to accomplish that, the victim convinced Hamett they should get back together and remarry in Arkansas, where they were originally married. Hamett eventually allowed the victim to text her parents and her boyfriend so they would not become suspicious concerning her whereabouts. Based on the nature of the text, the victim’s parents became worried that she was in danger and contacted the Broken Arrow Police Department. Through a concerted investigation by the Broken Arrow and Siloam Springs Police Departments, officers were able to locate Hamett and the victim at a hotel in Siloam Springs, Arkansas, where they determined Hamett was holding the victim against her will and arrested Hamett for violation of a protective order. Hamett was in possession of a firearm and ammunition, along with Taser cartridges, at the time of his arrest.
U.S. Attorney Shores stated, “Mr. Hamett’s violent actions were reprehensible. This United States Attorney’s Office is focused on prosecuting violent criminals. And that’s what we will continue to do. I am proud of the Assistant United States Attorneys, as well as the state and federal investigators, who worked tirelessly to prepare and try the case.”
District Judge Claire V. Eagan of the United States District Court for the Northern District of Oklahoma presided over the trial and will sentence Hamett on October 26, 2018. Hamett faces a maximum penalty life in prison, a $250,000 fine, and five years supervised release for the kidnapping conviction. Hammett also faces a maximum penalty of 10 years in prison, a $250,000 fine, and three years supervised release on the convictions for possessing and receiving a stolen firearm and ammunition, and for possessing firearms and ammunition while subject to a domestic violence protective order.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Broken Arrow Police Department, the Siloam Springs Police Department, and the Rogers State University Police. This case was prosecuted by Assistant United States Attorneys Jeffrey A. Gallant and Ryan M. Roberts.
Jury Convicts Dayton Man of Meth ChargesRead the Press Release
DAYTON – A jury has convicted Jason Rosales, 44, of Dayton, with two crimes related to methamphetamine. Rosales was found guilty of conspiracy to possess and attempt to possess with intent to distribute more than 500 grams of the drug on Valentine’s Day of last year.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), and Clark County Prosecutor Andrew D. Wilson announced the verdict reached today at the conclusion of an eight-day trial before U.S. District Judge Walter H. Rice.
According to court documents and testimony, Rosales conspired to and attempted to possess at least 4,427 grams of 100 percent pure “crystal meth” or “ice.”
The MOWIN Task Force in Kansas City had interdicted a courier at a Greyhound Bus Station on February 13, 2017 with 10 bundles of crystal meth hidden in a duffle bag.
The courier had been en route to deliver the drugs in Springfield, Ohio, and ultimately the DEA orchestrated a controlled delivery to Rosales in Dayton.
Rosales was charged by an indictment in February 2017. He was arrested on February 16, 2017 and has remained in custody since.
U.S. Attorney Glassman commended the cooperative investigation by the DEA and Kansas City law enforcement, as well as Assistant United States Attorneys Amy M. Smith and Sheila G. Lafferty and Special Assistant United States Attorney Ryan Saunders from the Clark County Prosecutor’s Office, who are representing the United States in this case.
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Judge Sentences Pittsburgh Woman for Social Security Fraud and Theft of Government FundsRead the Press Release
PITTSBURGH, PA – A resident of Pittsburgh has been sentenced in federal court to four years of probation, including 90 days of home detention, on her conviction of Social Security fraud and theft of government funds, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak imposed the sentence on Jennifer Neal, age 39.
According to information presented to the court, on or about July 29, 2013, Neal knowingly and willfully made two false statements material to her right to receive Supplemental Security Income benefits, by falsely stating that two minor children had lived with her from July 1, 2012 to June 30, 2013. Additionally, between March 2012 and February 2017, Neal received and converted approximately $66,804.85 in Supplemental Security Income benefits to which she knew she was not entitled..
Prior to imposing sentence, Judge Hornak stated that the sentence imposed was justified due to the seriousness of the offense conduct, as well as the defendant’s employment history, lack of any criminal record, and acceptance of responsibility.
Assistant United States Attorney Adam N. Hallowell prosecuted this case on behalf of the government.
United States Attorney Brady commended the Social Security Administration – Office of Inspector General for the investigation leading to the successful prosecution of Jennifer Neal.
Indiana, Pa., Man Admits Distributing Heroin and Fentanyl that Caused an Overdose DeathRead the Press Release
PITTSBURGH, Pa - A resident of Indiana, Pennsylvania, pleaded guilty yesterday in federal court to a charge of possession with intent to distribute and distribution of controlled substances, United States Attorney Scott W. Brady announced today.
Justin Kromer, age 30, pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on March 30, 2016, Kromer possessed and distributed stamp bags marked with "Block Party" and containing a mixture of heroin and fentanyl to an individual with the initials J.W. On March 30, 2016, J.W. overdosed and died from using the controlled substances. As part of his guilty plea, Kromer accepted responsibility for causing J.W.’s death..
Judge Hornak scheduled sentencing for November 28, 2018 at 9:30 am. The law provides for a total sentence of up to 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the Judge continued Kromer’s detention.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, along with the Pennsylvania State Police, the Offices of the District Attorneys of Allegheny and Indiana Counties, the Indiana County Drug Task Force, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Kromer.
Hartford Heroin Trafficker Sentenced to 37 Months in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that LUIS REYES-GUTIERREZ, 38, formerly of Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 37 months of imprisonment for trafficking heroin.
According to court documents and statements made in court, in 2014, the Drug Enforcement Administration’s Hartford Task Force received information that David Alvarado, also known as “Flaco,” was distributing heroin to street-level dealers and drug customers in the area of his residence on Wethersfield Avenue in Hartford. Between August 2014 and May 2015, investigators made eight controlled purchases of heroin from Alvarado. A wiretap investigation and other evidence revealed that REYES-GUTIERREZ regularly supplied Alvarado and others with raw heroin from his store, the D-Town Supermarket, located at 467 Wethersfield Avenue.
REYES-GUTIERREZ has been detained since his arrest on November 10, 2016. On January 25, 2018, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin.
REYES-GUTIERREZ is a citizen of the Dominican Republic and a lawful permanent resident of the U.S. He faces immigration proceedings when he completes his sentence.
Alvarado has pleaded guilty and awaits sentencing.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.