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Tuesday 5 June 2018
Orono Business Man Pleads Guilty to Multi-Million Dollar Tax Fraud SchemeRead the Press Release
United States Attorney Gregory G. Brooker announced the guilty plea of SCOTT PHILLIP FLYNN, 55, to one count of conspiracy to defraud the United States and one count of filing a false tax return. FLYNN, who was initially charged on December 21, 2016, pleaded guilty yesterday before Senior U.S. District Judge Ann D. Montgomery in Minneapolis, Minnesota.
“Scott Flynn devised a complex fraud scheme by creating a labyrinth of business entities and layers of obfuscation to hide tens of millions of dollars from the IRS,” said Assistant U.S. Attorney David Maclaughlin. “Flynn generated his income using an alias name while hiding behind randomly-named Nevada-based companies titled in the name of his father. Flynn then sent the income he earned in this way to Australia to be held by nominees, and then repatriated the money indirectly, sometimes through Costa Rica. Flynn acknowledged at his plea hearing that he took these steps to defraud the Internal Revenue Service. Flynn’s scheme was animated by his desire to live a luxurious lifestyle unencumbered by income tax liabilities, a desire fulfilled by his purchase of a $2.7 million mansion in Orono with untaxed income repatriated through Costa Rica.”
“Conspiring with others to defraud the government with an elaborate stock scheme to underreport taxable income is unlawful and is also unfair to every taxpayer who obeys the law and pays their fair share,” stated Acting Special Agent in Charge Gabriel Grchan, St. Paul Field Office IRS Criminal Investigation. “Mr. Flynn's plea today serves as an important reminder that IRS-CI is committed to bringing to justice those who evade their income tax responsibilities.”
According to the defendant’s guilty plea and documents filed in court, between 2005 and 2015, FLYNN evaded the assessment of millions of dollars in income taxes by fraudulently hiding millions of shares of stock that he obtained for himself, his father, and entities they controlled (collectively, the “Flynn Group”). In 2006 and 2008, FLYNN assisted two privately-held Wisconsin-based companies, Tower Tech Systems, Inc. and Advanced Fiberglass Technologies, in becoming publicly traded through stock-for-stock “reverse merger” transactions. As compensation for FLYNN’S work, millions of shares of publicly-traded stock in the resulting public companies were transferred to “Integritas, Inc.” and “Diversified Equities Partners,” both of which were part of the Flynn Group. FLYNN, who exercised control over the stock, which had considerable value, was required to, but did not, report the receipt of the shares of stock as income on his individual income tax returns, or on the tax returns of members of the Flynn Group.
According to the defendant’s guilty plea and documents filed in court, in order to conceal his control and ownership of the stock, and to evade paying income taxes, FLYNN caused a portion of the stock to be put in the names of Australian nominees recruited by FLYNN’S co-conspirator, Steven Miotti. The Australian nominees, who never actually owned or controlled the stock, were directed to open brokerage accounts in the United States to receive the shares, but FLYNN possessed their login and password data so he could maintain control of the accounts and the shares of stock.
According to the defendant’s guilty plea and documents filed in court, during the course of the conspiracy, when FLYNN needed money, he caused the Australian nominees to sell shares of stock and transfer the proceeds to entities in the United States controlled by FLYNN, which in turn made payments to FLYNN or on his behalf. These sales generated millions of dollars in capital gains income, which FLYNN purposely failed to report to the IRS. For example, in 2007, FLYNN received approximately $2.7 million of the proceeds from the Australian nominees to buy a house in Orono, Minnesota, which was considered income to FLYNN. That year, in a tax return FLYNN acknowledged was materially false at his guilty plea hearing, FLYNN reported only $26,136 of total income. Throughout the course of the scheme, FLYNN concealed tens of millions of dollars in income and capital gains from the IRS and intentionally evaded the assessment of at least $3.5 million in income taxes.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS.
Assistant United States Attorneys David J. Maclaughlin and Benjamin F. Langner are prosecuting this case.
Defendant Information:
SCOTT PHILLIP FLYNN, 55
Orono, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
- False tax return, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600Opioid Prescription Conspiracy Leader Pleads GuiltyRead the Press Release
PROVIDENCE, RI – A Providence man who led a conspiracy to create fraudulent prescriptions for opioid pills using stolen medical practitioner identification numbers and identities, and, at times, unlawfully paying for the prescriptions with the use of medical insurance, has pleaded guilty in U.S. District Court in Providence to conspiracy to distribute and possess with the intent to distribute Oxycodone, and aggravated identity theft.
Robert Rose, 52, the acknowledged leader of the conspiracy, is the fourth person to plead guilty for their role in the conspiracy, announced United States Attorney Stephen G. Dambruch and Jeffrey Ebersole Resident Agent in Charge of the United States Food and Drug Administration Office of Criminal Investigations.
A fifth defendant charged in this matter is awaiting trial in U.S. District Court.
According to court documents, it was the intent of the conspiracy to manufacture fraudulent prescriptions utilizing the identities and Drug Enforcement Administration (DEA) identification numbers and signatures of medical practitioners without their consent. Prescriptions for varying amounts of Oxycodone pills were written and presented to pharmacies by some members of the conspiracy and others working at the direction of the conspirators. The scheme often times included the fraudulent use of medical insurance to pay pharmacies for the illicit prescriptions. Most of the Oxycodone pills gained with the use of fraudulent prescriptions were sold to others for distribution.
At the time of his guilty plea, Robert Rose admitted to the Court that as the leader of the conspiracy, he paid for individuals’ identities, health care insurance information, and for various prescribing medical practitioners’ names and DEA numbers. Rose provided that information to others who participated in the conspiracy, along with special paper necessary to produce the fraudulent prescriptions.
Rose admitted to running the conspiracy for several months while incarcerated at the Adult Correctional Institution on an unrelated matter.
Robert Rose is scheduled to be sentenced by United States District Court Chief Judge William E. Smith on October 5, 2018. Conspiracy to distribute and possess with the intent to distribute oxycodone is punishable by statutory penalties of up to 20 years imprisonment, 3 years supervised release and a fine of up to $1,000,000. Aggravated identity theft is punishable by a statutory penalty of a mandatory sentence of 2 years imprisonment consecutive to any other sentence imposed in this matter.
Three other members of the conspiracy previously pleaded guilty in this matter and are awaiting sentencing:
- Michael Slonski, 48, of Johnston, pleaded guilty on April 2, 2018, to conspiracy to distribute and possess with the intent to distribute Oxycodone. He is scheduled to be sentenced on August 3, 2018.
- David Rose, 59, of Providence, pleaded guilty on March 7, 2018, to possession with intent to distribute Oxycodone. He is scheduled to be sentenced on August 10, 2018.
- Victoria Rose-Coccia, 29, of Pawtucket, pleaded guilty on February 28, 2018, to conspiracy to distribute and possess with the intent to distribute Oxycodone. She is scheduled to be sentenced on June 22, 2018.
A fifth individual charged in this matter, Tammy Bonham, 53, of Providence, is awaiting trial on a charge of conspiracy to acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, or subterfuge; misbranding drugs.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by the United States Food and Drug Administration Office of Criminal Investigations.
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Opinion: The Sessions assault on the opioid epidemicRead the Press Release
In less than 18 months on the job, U.S. Attorney General Jeff Sessions has made significant progress in reducing crime and improving morale among federal, state and local law enforcement.
The attorney general faced enormous challenges from his first day in office. According to the Centers for Disease Control and Prevention (CDC), in 2016, more than 64,000 Americans died from drug overdoses.
This is roughly equal to the total number of U.S. troops killed during the Vietnam War. Of these fatal overdose deaths in 2016, approximately 42,000, or two-thirds, were caused by opiates, including heroin, and synthetic opioids, mainly OxyContin and fentanyl.
Violent crime also rose dramatically between 2014 and 2016. According to FBI statistics, the national violent crime rate increased by nearly 7 percent. The national murder rate went up by 20 percent, which was the largest increase in almost 50 years. This same time period also saw substantial increases in the rates of assault and rape.Correctly recognizing that these were unacceptable national trends, the new attorney general took immediate steps to equip the prosecutors and agents of the U.S. Department of Justice (DOJ), including the 94 U.S. Attorney’s Offices.
He quickly rescinded the so-called “Holder Memorandum,” the governing policy of the previous attorney general, which, among other things, had limited federal prosecutors’ ability to seek lengthy mandatory-minimum prison sentences for drug dealers and violent offenders.
In addition to demoralizing many dedicated career federal prosecutors and agents engaged in narcotics and gang work, the Holder Memorandum and its restrictions on charging serious offenses and mandatory minimums had taken away one of the most effective tools to encourage offenders to cooperate and, in turn, help dismantle major drug-trafficking organizations and violent gangs.
Under the new “Sessions Memorandum,” federal prosecutors are empowered to bring the most serious charges warranted by the crime.
The attorney general also announced new prosecution priorities, shifting DOJ’s focus to (1) combatting the opioid epidemic; (2) reducing violent crime; (3) aggressively addressing illegal immigration; and (4) protecting national security.
Literally putting his money where his mouth is, the attorney general then successfully secured $72 million in additional funding for 311 new assistant U.S. attorney positions across the country. This is the largest and most significant DOJ hiring initiative in a generation.
The attorney general also revamped and relaunched Project Safe Neighborhoods (PSN), a gang and gun violence-reduction program focused on collaboration between federal, state and local law enforcement. Although data for 2017 will not be available until later this year, it is likely we will see a reduction in violent crime for the first time in several years.
As the newly appointed U.S. attorney for the Western District of Virginia, I embrace the attorney general’s new priorities and his back-to-basics approach to fighting crime. The opioid epidemic is raging across our district.
As the Roanoke Times recently reported, the Roanoke Valley suffered more than 80 fatal opioid overdose deaths in 2017. The greater-Winchester area saw 40 fatal opioid overdoses. According to CDC data, in 2016, Martinsville led the nation in the number of opiate prescriptions per person.
Violent crime also increased dramatically in our district between 2014 and 2016. The homicide rate in Roanoke increased 500 percent, and Danville saw a 400 percent increase. These increases, and the increases in drug trafficking and other violent crimes, is partially attributable to organized gang activity in these communities.
We are taking a number of steps to address the opioid epidemic and violent crime in the Western District. On the opioid front, my office is committed to investigating and prosecuting health-care professionals who push these dangerous drugs for profit.
We are also working with our state and local partners to investigate overdose deaths as potential homicides, and hold dealers accountable under severe mandatory minimum periods of incarceration. Our drug prosecutors are committed to interdicting and disrupting the supply of these deadly drugs, including fentanyl and heroin, into our district.
In 2017, a federally-funded drug task force based in the Western District seized over two kilograms of fentanyl, or the equivalent of approximately a million doses of heroin. This was likely the largest fentanyl seizure in Virginia last year.
With respect to violent crime, the U.S. Attorney’s Office is collaborating with our state and local partners to identify the drivers of violent crime and target them for prosecution. Working with our FBI-led violent crime task forces, we are focusing on gang activity in our urban areas and hope to reverse the cycle of violence that has plagued these communities for far too long.
The U.S. Attorney’s Office is also prosecuting more cases involving the illegal possession and use of firearms and sending offenders to federal prison.
As U.S. attorney, I spend a significant portion of my time traveling around our large district to meet with local sheriffs, chiefs of police, state law-enforcement officials and commonwealth attorneys. Without exception, the message I have heard from my local counterparts is that they are grateful for and excited to have an attorney general who understands the scourge of the opioid epidemic and gun-related violence, and who is fully committed to addressing these problems.
We have a long and difficult path ahead, but, together — and with the unwavering support of an attorney general who is committed to the rule of law — we are well-positioned to make an impact.
• Thomas T. Cullen is U.S. Attorney, Western District of Virginia.
On 500th Day of Trump Administration, Attorney General Sessions Announces 311 New Assistant United States Attorney PositionsRead the Press Release
Largest Increase in Decades Allocates Prosecutors to Focus on Violent Crime,
Civil Enforcement and Immigration Crimes.
West Michigan receives four positions--
an increase of over 10% from its current staffing level.GRAND RAPIDS, MICHIGAN – On the 500th day of the Trump Administration, Attorney General Jeff Sessions and U.S. Attorney for the Western District of Michigan Andrew Birge announced that the Department of Justice is taking a dramatic step to increase resources to combat violent crime, enforce our immigration laws, and help roll back the devastating opioid crisis.
In the largest increase in decades, the Department of Justice is allocating 311 new Assistant U.S. Attorneys (AUSAs) to assist in priority areas. Those allocations are as follows: 190 violent crime prosecutors, 86 civil enforcement prosecutors, and 35 additional immigration prosecutors. Many of the civil enforcement AUSAs will support the newly created Prescription Interdiction & Litigation Task Force which targets the opioid crisis at every level of the distribution system.
"Under President Trump's strong leadership, the Department of Justice is going on offense against violent crime, illegal immigration, and the opioid crisis—and today we are sending in reinforcements," said Attorney General Jeff Sessions. "We have a saying in my office that a new federal prosecutor is 'the coin of the realm.' When we can eliminate wasteful spending, one of my first questions to my staff is if we can deploy more prosecutors to where they are needed. I have personally worked to re-purpose existing funds to support this critical mission, and as a former federal prosecutor myself, my expectations could not be higher. These exceptional and talented prosecutors are key leaders in our crime fighting partnership. This addition of new Assistant U.S. Attorney positions represents the largest increase in decades."
Attorney General Sessions allocated four new AUSA positions to the Western District of Michigan, which marks an increase of over ten percent of its current allocation of attorney positions. Two of the positions will focus on violent crime, specifically the Project Safe Neighborhoods initiative. Under that initiative, the office partners with federal, state and local law enforcement to bring down violent crime rates, principally by prosecuting the individuals and groups who drive those rates. The third position will be dedicated to affirmative civil enforcement, which includes actions to address health care fraud and other forms of federal program fraud as well as the diversion of drugs from the regulatory stream by health care professionals. The fourth position will focus on prosecuting immigration crimes, including fraudulent identification document production and worksite enforcement.
U.S. Attorney Birge commented that he is pleased his office received positions to address each of the Department’s three priorities for this roll out. "I look forward to getting these individuals in place to make a positive impact on West Michigan."
END
Oklahoma man admits to sex offender registry violationRead the Press Release
CLARKSBURG, WEST VIRGINIA –Marvin Gene McLaughlin, of Enid, Oklahoma, has admitted to a sex offender registry violation, United States Attorney Bill Powell announced.
McLaughlin, age 58, pled guilty to one count of “Failure to Update Sex Offender Registration.” McLaughlin, a person required to register under the Sex Offender Registration and Notification Act, admitted to traveling from Oklahoma to Marion County, West Virginia without updating his sex offender registration in January 2018.
McLaughlin faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah E. Wagner is prosecuting the case on behalf of the government. The United States Marshals Service investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Ohio County Magistrate indicted on wire fraud, bribery, and tax fraud chargesRead the Press Release
WHEELING, WEST VIRGINIA – Ohio County Magistrate Harry A. Radcliffe, III, was indicted today by a federal grand jury on charges involving wire fraud, bribery, and tax fraud, United States Attorney Bill Powell announced.
Radcliffe, age 60, was indicted on one count of “Conspiracy to Commit Wire Fraud, Federal Program Bribery, and Travel Act Bribery,” three counts of “Wire Fraud,” one count of “Federal Program Bribery,” one count of “Travel Act Bribery,” and three counts of “Filing a False Income Tax Return.”
Radcliffe is accused of soliciting and accepting bribes from W&S Bail Bonding, doing business as A Bail Bonding (ABC) of Wheeling, West Virginia, concealing said bribes from the State of West Virginia and the IRS, directing defendants and their families to ABC without offering other options as required, altering bonds to require a bonding company, and collecting said bribes via credit card and interstate travel He is also accused of failing to report $11,000 in income on both his 2013 and 2014 federal income taxes, and failing to report $4,500 in income on his 2015 federal income taxes. The crimes are alleged to have occurred from January 2012 to April 2016 in the Northern District of West Virginia and elsewhere.
The United States is also seeking a money judgement in the amount of $26,500.
Radcliffe faces up to five years incarceration and a fine of up to $250,000 for the conspiracy count, up to 20 years incarceration and a fine of up to $250,000 for each of the wire fraud counts, up to 10 years incarceration and a fine of up to $250,000 for federal bribery count, up to five years incarceration and a fine of up to $250,000 for the travel act count, and up to three years incarceration and fine of up to $250,000 for each of the false income tax return counts. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
In addition, William W. Seelbach, owner of ABC, of North Fort Meyers, Florida, was charged in a two-count information today. Seelbach, age 68, is facing one count of “Conspiracy to Defraud the United States—Impede the Internal Revenue Service,” and one count of “Failure to File Individual Income Tax Return for Tax Year 2012.” Seelbach is accused of impeding the IRS in its collection of taxes, and failing to file a federal income tax return for 2012 to report $144,030 in income to the IRS.
Jolynn Gilchrist, former employee of ABC, of Wheeling, West Virginia, was charged in an information today with one count of “False Tax Return.” Gilchrist, age 49, is accused of filing an inaccurate federal tax return for the 2015 tax year.
Assistant U.S. Attorneys Jarod J. Douglas and Shawn M. Adkins are prosecuting the cases on behalf of the government. The Federal Bureau of Investigation, the Internal Revenue Service, the West Virginia Commission on Special Investigations, and the West Virginia State Police investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.###
New Jersey Man Sentenced on Federal Conspiracy Charges for Trafficking in Contraband CigarettesRead the Press Release
St. Louis, MO – Mohammed Kayed, aka Mohammed Fayez, was sentenced to 30 months in prison for conspiring to traffic in contraband cigarettes.
According to court documents, Kayed and others conspired for more than two years to buy contraband cigarettes in St. Louis, Missouri, a low tax market, and transport and distribute them in New Jersey, a high tax market. St. Louis residents and co-defendants Mohammed Almuttan, Rami Almuttan, Hisham Mutan, and Daddam Mutan used several convenience stores which they owned or operated to create the appearance of legitimate cigarette purchases. Illegal profits from the contraband cigarette sales were laundered through accounts associated with the convenience stores. Kayed was a courier who, after obtaining the cigarettes in St. Louis, delivered them to New Jersey.
Kayed, 22, of Clifton, NJ, pled guilty on March 6, 2018 to one felony count of conspiracy to traffic contraband cigarettes. He appeared today for sentencing in front of U.S. District Judge Ronnie White.
This case was investigated by the Homeland Security Investigations, Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Federal Bureau of Investigation, Illinois State Police, Illinois Department of Revenue and Alcohol and Tobacco Tax and Trade Bureau.
New Federal Indictment Charges Former Buncombe County Manager with Wire Fraud, Federal Program Fraud, and Money LaunderingRead the Press Release
ASHEVILLE, N.C. – A 23-count criminal indictment was returned by a federal grand jury sitting in Asheville late Tuesday, charging former Buncombe County Manager Wanda Skillington Greene, 66, of Arden, N.C., with wire fraud, federal program fraud, and money laundering, in connection with a $2.3 million scheme involving the purchase of whole life insurance policies for herself and other county employees using misappropriated County funds, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Director Robert Schurmeier of the North Carolina State Bureau of Investigation (SBI); and Matthew D. Line, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), join U.S. Attorney Murray in making today’s announcement.
According to the indictment, Wanda Greene was appointed as County Manager for Buncombe County (the County) in 1997, and remained in that position until her retirement in June 2017. As County Manager, Wanda Greene was responsible for the administration of all departments of the County’s government under the control of the Board of Commissioners (the Board). In that role, Wanda Greene had the power to appoint, suspend, and remove all county officers, employees, and agents, and was responsible for directing and supervising the administration of all county offices, departments, boards, commissions and agencies controlled by the Board. As part of her duties, Wanda Greene was also required to prepare and submit the County’s annual budget and capital program to the Board, and to submit annually to the Board, and make available to the public, a complete report of the finances and administrative activities of the county at the end of the fiscal year.
According to allegations contained in the indictment, beginning in or about April 2015, and continuing until in or about July 2017, Greene defrauded Buncombe County by misappropriating approximately $2.3 million of Buncombe County funds to purchase whole life insurance policies for herself, her son Michael Greene, and eight other County employees, and to purchase an annuity for another county employee who did not qualify for a whole life insurance policy. During the time period relevant to the indictment, Buncombe County received benefits in excess of $10,000 per year under a federal program involving a grant, contract, subsidy, loan, and other forms of federal assistance.
The indictment alleges that in April 2015, Greene began communicating with a Charlotte-based insurance agent about her intent to procure insurance policies for herself and certain other Buncombe County employees at County expense. Shortly after meeting with the insurance agent, Greene falsely began telling selected County employees that she had been working with the Board on a new benefit program for certain employees involving the County’s purchase of life insurance policies for them, at no expense to the employee. Greene allegedly stressed that only certain employees would be receiving this benefit, and told the employees with whom she spoke to keep this program and their participation strictly confidential.
According to the indictment, the policies that Greene was procuring were whole life insurance policies, with a resulting cash value and the ability to borrow against such policies. Furthermore, the indictment alleges that, at Greene’s direction, the County prepaid the initial payment and several years’ worth of annual premiums for each policy agreement, which meant that, upon termination of the policy, a policy owner could receive whatever cash value the policy had, as well as the remaining prepaid premiums. The indictment alleges that in this manner, in the first month after Greene retired from her County employment, she was able to obtain cash out of two such policies, thereby personally obtaining approximately $396,000 of fraudulently-acquired money funded by Buncombe County.
According to allegations in the indictment, Greene selected the employees that would receive the life insurance policies and selected the amounts the County would prepay for each policy. To fund the scheme, Greene did not seek the Board’s authorization to purchase these policies with County funds. Rather, in order to gain access to the County money necessary to fund her scheme, the indictment alleges that Greene inflated the settlement amounts for two federal civil rights lawsuits against the County that the Board agreed to pay. She later fraudulently claimed to the life insurance company, the insurance agent, and to the various County employees that the Board had also approved and enacted funding for the life insurance program she had created when it enacted a budget amendment to settle those lawsuits, when, in fact, the Board never approved, and never even knew about the existence of, Greene’s life insurance scheme.
The indictment further alleges that after the Board approved the requisite budget amendment to fund the settlement of the civil lawsuits, Greene caused a series of interstate wire transactions to make initial lump-sum prepayments, and later quarterly payments, toward the premiums of the various insurance policies. According to the indictment, shortly before she announced her intention to retire, Greene attempted to quadruple the quarterly payments from $40,000 to $160,000. When the County’s Finance Director expressed concern about the increased amount, Greene destroyed the handwritten note she had provided requesting the increase, and told the Finance Director to forget about any more payments.
On May 30, 2017, Greene publicly announced her retirement, which took effect on June 30, 2017. The indictment alleges that, almost immediately upon her retirement, Greene liquidated her two life insurance policies. As a result, on or about July 13, 2017, the insurance company sent Greene two checks totaling $395,859.60, which Greene deposited into her State Employee Credit Union account. Less than a month later, on or about August 7, 2017, Greene used a portion of the proceeds from the insurance checks to wire $155,000 from her State Employees Credit Union account to the account of a law firm in Nashville, Tennessee.
Wanda Greene has been ordered to appear on a summons on the charges. She is charged with 12 counts of wire fraud, each of which carries a maximum penalty of 20 years in prison and a $250,000 fine; eight counts of federal program fraud, each carrying a maximum prison term of 10 years per count and a $250,000 fine; and three counts of money laundering, which carry a maximum penalty of 10 years in prison per count and a $250,000 fine.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
A separate federal indictment was filed in April 2018, against Wanda Greene and her son, Michael Greene, for misusing their government credit cards to make approximately $200,000 worth of improper purchases. Those charges are still pending.
In making today’s announcement U.S. Attorney Murray thanked the FBI, IRS-CI and the SBI for their investigation of this case, and noted that the investigation into allegations of criminal activities within the Buncombe County Government is ongoing.
Assistant United States Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville is in charge of the prosecution.
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NEPA Doctor Found Guilty of Drug Distribution Resulting in Death, Money Laundering and Tax ChargesRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania, announced that Dr. Fuhai Li, age 53, of Milford, was found guilty of unlawfully prescribing oxycodone and other opioids to 23 former patients, including a Honesdale woman who died as a result of using the pills. Dr. Li faces a mandatory 20-year prison sentence for causing the woman’s death.
According to United States Attorney David J. Freed, the jury also convicted Dr. Li of unlawfully prescribing oxycodone to a pregnant woman outside the usual course of medical practice and not for a legitimate medical purpose. That woman gave birth to an opioid-dependent baby 11 days after Dr Li prescribed her 120 oxycodone 30 milligram tablets. A neo-natal specialist testified that the baby spent ten days in intensive care withdrawing from the oxycodone prescribed to his mother by Dr Li.
During the five-week trial before Senior U.S. District Court Judge A. Richard Caputo, prosecutors from the U.S. Attorney’s Office presented the testimony of 19 former patients and three former employees of Dr. Li, eight pharmacists, three other physicians, an expert on pain management, the medical records for 39 former patients of Dr Li, and the testimony of federal law enforcement agents and investigators from the Drug Enforcement Administration (DEA) and its Diversion Division, and Internal Revenue Service (IRS) special agents.
Li owned and operated the Neurology and Pain Management Center in Milford, Pike County, Pennsylvania. Li was a physician licensed by the Commonwealth of Pennsylvania and authorized to prescribe Schedule II controlled substances for legitimate medical purposes and in the usual course of professional practice.
The jury found that Dr Li repeatedly prescribed oxycodone and other opioids outside the usual course of medical practice and not for a legitimate medical purpose.
Former patients testified that Dr Li repeatedly prescribed them high doses of oxycodone and other opioids every month over several years without performing medical examinations and without verifying their prior medical treatment.
Evidence was presented that Dr Li repeatedly falsified patient medical records and made material omissions in those records in an effort to legitimize the unlawful prescriptions.
Prosecutors presented evidence that between August 2011 and January 2015, Dr. Li wrote 26,985 prescriptions for Schedule II controlled substances, 99.37% of which were written for opioids. This included 18,115 prescriptions for oxycodone, of which 12,129 were written for oxycodone 30 milligrams, the highest dosage available in short acting oxycodone. Other opioids frequently prescribed by Dr. Li included methadone, OxyContin, hydrocodone and hydromorphone.
Former patients testified that they became dependent and addicted to opioids as a result of Dr. Li’s prescriptions. Evidence also established that Dr. Li prescribed high dose opioids to patients who he knew had recently completed drug rehabilitation and detoxification programs, resulting in those patients becoming addicted again to opioid pain medication.
Several former patients testified that they earned money by selling drugs prescribed for them by Dr. Li and used part of the money to buy heroin to support their own addiction. Some of those former patients also subsequently sold heroin on the streets of Pennsylvania and New Jersey.
One former female patient testified that she had sex with Dr Li on almost every visit to his office during a four-year time period. Dr Li prescribed that patient high doses of various opioids for approximately four years. Two additional former female patients testified to inappropriate sexual conduct by Dr Li during office visits.
The jury also convicted Dr. Li of using two medical offices for the purpose of unlawfully prescribing opioids. Dr. Li’s first medical office was located at 104 Bennett Avenue in Milford, and the second office was located at 200 3rd Street in Milford.
DEA agents and investigators executed search warrants at Dr Li’s Milford office and his residences in Milford and East Stroudsburg on January 29, 2015. Agents seized electronic medical records from Dr Li’s office, and seized more than $1 million in cash, which was hidden under beds and in closets in his residences. Evidence at trial showed that many of Dr Li’s patients paid cash for visits, drug screens, office tests, and injections.
The money laundering convictions related to Dr Li’s use of criminal proceeds to pay off the mortgage on his East Stroudsburg residence on November 19, 2012, and to purchase his 200 3rd Street, Milford office on August 29, 2013. Dr Li had $385,572.05 wired from a bank account funded in part by criminal proceeds to pay off the mortgage on the East Stroudsburg residence. He subsequently withdrew $158,699.30 from a bank account funded in part by criminal proceeds to purchase the Milford office.
Dr Li was also convicted of tax evasion for the tax years 2011, 2012, and 2013. An IRS agent testified that Dr Li underreported his taxable income for those years by more than $800,000.
After the jury’s verdict, prosecutors asked that Dr. Li be immediately detained pending sentencing. Judge Caputo released Dr. Li under conditions, which include electronic monitoring by the U.S. Probation Office. U.S. Attorney Freed intends to appeal the release order.
The jury’s verdict also included the forfeiture to the United States of $1,030,960 in cash that was seized from Dr Li’s two residences; $1,036,079.36 seized from various bank accounts; real property located at 200 3rd Street, Milford (Dr Li’s medical office); and real property located at 4005 Milford Landing Drive, Milford.
“Dr. Li’s criminal conduct and actions were reprehensible, as shown by the jury’s verdict on all of the charges,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “My office will continue to work vigorously with all of our law enforcement partners and the U.S. Attorney’s Office to address the opioid epidemic that is gripping our region and nation at large. The investigation and arrest of rogue registrants who choose to betray their oath and professional obligation is a key part of the DEA’s mission to address this crisis.”
"Fuhai Li’s attempt to evade taxes by hiding income and filing false returns was a theft from the American public,” said IRS-CI Special Agent in Charge Guy Ficco. “Today Fuhai Li has been held accountable for his actions.”
The four-year long investigation in this case was conducted by the Drug Enforcement Administration (DEA) and its Diversion Division, the Internal Revenue Service’s Criminal Investigation Division, and the Pike County District Attorney’s Office. Assistant U.S. Attorneys Michelle Olshefski, Francis P. Sempa, and Evan Gotlob prosecuted the case.
This case was prosecuted as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin and other opioids. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin and opioid traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit opioid trafficking offenses.
This case is also part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime, including violent crime caused by drug trafficking, and to make neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The maximum penalty under federal law is life in prison, a term of supervised release following imprisonment, and a fine. The drug distribution resulting in death charge also carries a mandatory minimum penalty of 20 years’ imprisonment. 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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Mother and Son Charged in Conspiracy Involving Distribution of Fentanyl, Heroin, Cocaine, and MarijuanaRead the Press Release
CAMDEN, N.J. – A mother who was arrested and charged along with her son for their alleged roles in a drug trafficking conspiracy appeared in Camden federal court today for a detention hearing, U.S. Attorney Craig Carpenito announced.
Candace Gottlieb, 59, of Cherry Hill, New Jersey, is charged by complaint with conspiracy to distribute and possess with intent to distribute fentanyl, heroin, cocaine, and marijuana. Following her appearance, she was detained without bail. Her son, Tyler Gottlieb, 27, was arrested in California and is charged by complaint with conspiracy to distribute and possess with intent to distribute fentanyl, heroin, cocaine, and marijuana.
According to documents filed in this case and statements made in court:
Candace Gottlieb and her son were arrested following a federal investigation into trafficking counterfeit prescription opioid pills containing fentanyl and heroin, as well as cocaine and marijuana. In March 2018, federal law enforcement officers seized $67,760 from Tyler Gottlieb as he was about to board a flight to California from Philadelphia International Airport. In the months that followed, the FBI obtained 802 counterfeit prescription pills from Tyler and Candace Gottlieb, 200 of which have been confirmed to contain fentanyl and heroin. The remaining pills are believed to also contain fentanyl and heroin. The FBI also allegedly purchased cocaine in a transaction orchestrated by Tyler Gottlieb, seized approximately 40 pounds of marijuana sent by Tyler Gottlieb to New Jersey through the mail, and obtained samples of cocaine and marijuana from Candace Gottlieb.
On June 1, 2018, federal and local law enforcement executed a search warrant at Tyler and Candace Gottlieb’s New Jersey residence and seized approximately 6,600 additional counterfeit prescription pills suspected of containing fentanyl and heroin, along with cocaine and marijuana packaged for distribution. Investigators also located and seized two handguns from inside the home and approximately $2,000 in cash.
In the early morning hours of June 2, 2018, federal and local law enforcement executed a second search warrant at another residence connected to Tyler Gottlieb. During that search, investigators seized six more firearms, including an AK-47 assault rifle, a shotgun, 1,000 rounds of ammunition, high-capacity ammunition magazines, and two handguns. Investigators also seized marijuana and packaging materials.
Candace Gottlieb was arrested on June 1, 2018, in conjunction with the search of her home and was detained following her arrest. Federal and local law enforcement arrested Tyler Gottlieb in California on June 1, 2018. Tyler Gottlieb is awaiting an appearance in federal court in California with an anticipated appearance to follow in New Jersey on a date yet to be determined.
The drug trafficking conspiracy charges carry a maximum potential penalty of 20 years in prison and a $5 million fine.
U.S. Attorney Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge John Devito; postal inspectors with the U.S. Postal Inspection Service, under the direction of Daniel Brubaker, Philadelphia Division; the Camden County Sherriff’s Department, under the direction of Gilbert Wilson; the Camden County Police Department, under the direction of Chief J. Scott Thomson; and the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo.
He also thanked the Cherry Hill Police Department, under the direction of William Monaghan, the Pennsauken Police Department, under the direction of John Coffey, and special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Brian Michael.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Candace Gottlieb: Christopher O’Malley Esq., Camden
Tyler Gottlieb: Evan Hughes Esq., PhiladelphiaMonongalia County woman sentenced for her role in an oxycodone distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Marjorie Sue Webster, of Maidsville, West Virginia, was sentenced today to 18 months incarceration for her role in distributing oxycodone, United States Attorney Bill Powell announced.
Webster, age 24, pled guilty to “Unlawful Use of Communication Facility” in January 2018. Webster admitted to using a phone to assist others in distributing oxycodone in March 2017 in Monongalia County.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the cases on behalf of the government. The Mon Metro Drug and Violent Crime Drug Task Force, a HIDTA-funded initiative, led the investigation. The Task Force consists of the U.S. Drug Enforcement Administration. the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, Monongalia County Sheriff’s Office, Morgantown Police Department, the Star City Police Department, the West Virginia State Police, the West Virginia University Police Department, the Granville Police Department, and the Monongalia County Prosecuting Attorney’s Office.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Senior U.S. District Judge Irene M. Keeley presided.
Michigan Man Sentenced to Prison for Federal Drug ConvictionRead the Press Release
HUNTINGTON, W.Va. – A Michigan man who was caught with drugs in Huntington in 2017 was sentenced yesterday to 87 months in federal prison, announced United States Attorney Mike Stuart. William Henry Stephens, Jr., 45, of Inkster, previously pled guilty to possession with intent to distribute 100 grams or more of heroin in federal court in Huntington. Stuart commended the work of the Huntington FBI Drug Task Force.
“Stephens was a gun-toting drug dealer peddling a wide variety of dangerous drugs,” said United States Attorney Mike Stuart. “Putting him behind bars is yet another big win for law enforcement and our citizens.”
On June 29, 2017, members of the Huntington FBI Drug Task Force executed a search warrant at 702 Washington Avenue in Huntington. Prior to the search, investigators conducting surveillance observed Stephens coming and going from the residence and conducting what appeared to be drug transactions. During the search, investigators seized approximately 140 grams of heroin, 44 grams of crack, and a firearm. Stephens admitted that he possessed the heroin and crack for distribution. Stephens also admitted that he possessed additional drugs, including heroin and cocaine, along with multiple firearms which seized by investigators during a separate search warrant previously executed on December 15, 2016. As part of his plea agreement, Stephens admitted to all the drug trafficking and firearms activity charged in the indictment.
Assistant United States Attorney Joseph F. Adams handled the prosecution. The sentence was imposed by United States District Judge Robert C. Chambers.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Mexican National Pleads Guilty to Immigration CrimeRead the Press Release
Defendant has two prior felony convictions and three prior deportations
HUNTINGTON, W.Va. – A Mexican national man pled guilty yesterday to the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Eduardo Martinez-Campeano, 47, faces up to ten years of incarceration, a $250,000 fine, three years of supervised release, and a $100 special assessment when he is sentenced on September 4, 2018. Martinez-Campeano is also subject to deportation proceedings at the conclusion of any sentence imposed. U.S. Attorney Stuart commended the investigative efforts of the U.S. Immigration and Customs Enforcement.
“Two prior felony convictions. Three prior deportations.” said United States Attorney Mike Stuart. “This is exactly why we need the wall – to stop repeat violators and those refusing to comply with our immigration system.”
On April 10, 2018, Martinez-Campeano was traced to a hotel in Huntington, West Virginia by members of ICE after receiving a tip that defendant was in the country illegally and working at a restaurant in Barboursville, West Virginia. ICE agents approached Martinez-Campeano and he surrendered to them. Agents promptly confirmed that Martinez-Campeano was not in the United States legally, and took him into federal custody.
Martinez-Campeano fingerprints matched him to a 2007 Missouri felony Forgery conviction. After his felony sentence in Missouri was discharged, Martinez-Campeano was deported from the United States. Martinez-Campeano reentered the United States and was removed from the United States for a second time in 2010. Sometime afterword, Martinez-Campeano reentered the United States and was captured in Texas. He was convicted of the federal criminal offense of Reentry of a Removed Alien in 2012. Once again, defendant Martinez-Campeano was deported from the United States. Martinez-Campeano illegally reentered the United States for a fourth time prior to his capture in 2018. Martinez-Campeano admitted to ICE agents that he was a Mexican citizen subject to deportation proceedings.
Assistant United States Attorney Erik S. Goes is responsible for the prosecution. United States District Judge Robert C. Chambers presided over the plea hearing.
Follow us on Twitter: SDWVNews and USAttyStuart
###Mexican National Indicted for Immigration Document Fraud, Aggravated Identity TheftRead the Press Release
PROVIDENCE, RI – A federal grand jury in Providence today returned a five-count indictment charging a Mexican national with immigration document fraud and aggravated identity theft.
The indictment charges Eufemio Aguilar, 50, of Providence with four counts of knowingly forging, counterfeiting, altering and falsely making and possessing a Lawful Permanent Residence Card and social security card, and one count of aggravated identity theft.
The return of the grand jury indictment is announced by United States Attorney Stephen G. Dambruch, Homeland Security Investigations Special Agent in Charge Peter C. Fitzhugh, Providence Police Chief Colonel Hugh T. Clements, Jr., Central Falls Police Chief Colonel James J. Mendonca and Warwick Police Chief Colonel Stephen M. McCartney.
According to court documents and information presented to the Court at the time of Aguilar’s arrest and detention on May 22, 2018, it is alleged that since at least August 2017, Aguilar has been creating and selling fraudulent federal government documents, such as fraudulent lawful resident cards and social security cards. It is alleged that he created and sold the documents from his Providence residence.
On at least three occasions Homeland Security Investigations agents and Providence Police detectives arranged for the creation and delivery of fraudulent immigration documents and/or social security cards from Aguilar for $100 dollars each.
On May 22, 2018, Homeland Security Investigations agents and Providence Police, with the assistance of Central Falls and Warwick Police, executed a federal court-authorized search warrant at Aguilar’s residence and seized, among other items, five laptop computers, two document producing machines and supplies used in the manufacture of government documents, several fraudulent government documents and $27,000 in cash.
The case is being prosecuted by Assistant U.S. Attorneys Richard W. Rose and John P. McAdams.
An arraignment date has not yet been scheduled. An indictment is merely an allegation 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.
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Media Advisory: Press Conference to Announce SAFE Initiative in WaterlooRead the Press Release
CEDAR RAPIDS, IA – There will be a press conference held on Thursday, June 7, 2018, at 12:00 p.m. in the Harold E. Getty Council Chambers located at 715 Mulberry St., in Waterloo, Iowa. United States Attorney Peter E. Deegan, Jr., Waterloo Police Chief Daniel Trelka, representatives from federal and local law enforcement, and community members will be present at the press conference. The purpose of the press conference is to announce the Safer Areas For Everyone (SAFE) initiative, a new initiative involving law enforcement and the Waterloo community to enhance efforts to combat violent crime.
Other participants in SAFE are the Bureau of Alcohol, Tobacco, and Firearms, the Federal Bureau of Investigation, the Iowa Department of Corrections, the Black Hawk County Attorney’s Office, and members of the community. SAFE is an initiative in furtherance of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone.
Event Details
When: June 7, 2018
Where: Harold E. Getty Council Chambers, 715 Mulberry St., Waterloo
Time: 12:00 p.m.
A press release will be provided and interview opportunities will be available. Follow us on Twitter @USAO_NDIA.
McKeesport Man Illegally Possessed Heroin and a PistolRead the Press Release
PITTSBURGH, PA – A resident of McKeesport, Pennsylvania, pleaded guilty in federal court to charges of violating federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today.
Isaiah Pridgen, age 20, pleaded guilty yesterday to two counts before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that Pridgen possessed with the intent to distribute a quantity of heroin, a Schedule I controlled substance. Further, on that same date, Pridgen possessed a Taurus Millennium, .45 caliber pistol, in furtherance of said drug trafficking crime.
Judge Fischer scheduled sentencing for November 2, 2018, at 11 a.m. The law provides for a total sentence of not less than 5 years and up to life in prison, a fine not to exceed $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Heidi M. Grogan is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania Office of Attorney General, and the McKeesport Police Department conducted the investigation that led to the prosecution of Pridgen.
This case is being prosecuted as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime, including violent crime caused by drug trafficking, and to make 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.
Massachusetts Man Sentenced to 210 Months in Prison for Child Pornography OffensesRead the Press Release
Concord - United States Attorney Scott W. Murray announced that Eric Treantos, 38, of Lynn, Massachusetts was sentenced today to serve 210 months in prison for child pornography offenses.
According to court documents and statements made in court, in August of 2015, a police officer in Australia was conducting an undercover investigation into possible possession and distribution of child pornography through the internet. The officer identified a suspect who had posted suspicious images, including a number of images depicting a girl who appeared to be under the age of 10. The undercover police officer and the suspect later exchanged emails and the suspect sent the officer additional images of the same young girl.
An investigation into the email account showed that the suspect was in New Hampshire when he sent emails to the undercover police officer in Australia. Investigators later identified the suspect as Treantos. Treantos was arrested on September 23, 2015, and has been in custody since that date.
Treantos pleaded guilty on July 31, 2017, to possession of child pornography and distribution of child pornography. After his prison sentence, Treantos will be on supervised release for the rest of his life.
“The distribution of child pornography is a particularly horrific crime that can gravely damage its innocent victims,” said U.S. Attorney Murray. “The U.S. Attorney’s Office works closely with its law enforcement partners to identify and prosecute those who exploit children by distributing these terrible images. This case is yet another example of that great teamwork.”
“Today’s significant sentence is a clear demonstration of the consequences awaiting, and should serve as a sobering reminder to, those who engage in the possession and distribution of child pornography” said Peter C. Fitzhugh, Special Agent In Charge, U.S. Immigrations and Customs and Enforcement’s Homeland Security Investigations (HSI), Boston “We strongly applaud the close coordination among our Australian partners, the U.S. Attorney’s Office and the New Hampshire Internet Crimes Against Children Task Force (ICAC) with our team of dedicated HSI agents that brought about this sentencing. This case highlights the critical importance of local, state, federal and international law enforcement cooperation in fighting the growth of these very disturbing crimes that can reach from local communities out across the world and back again.”
This case was investigated by U.S. Immigrations and Customs and Enforcement’s Homeland Security Investigations, Boston, with assistance from Queensland Police Service in Australia, and was prosecuted by Assistant United States Attorney Arnold H. Huftalen.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Mass. Man Indicted for Attempted Enticement of a Minor, Travel to Engage in Illicit Sex, Attempting to Transfer Obscene Material to a MinorRead the Press Release
PROVIDENCE, RI – A federal grand jury in Providence today returned a three-count indictment charging Cody J. Hansen, 34, of Orange, MA, with attempted enticement of a minor, attempted transfer of obscene material to a minor, and travel with the intent to engage in illicit sexual conduct, announced by United States Attorney Stephen G. Dambruch, Rhode Island State Police Superintendent Colonel Ann C. Assumpico, and Homeland Security Investigations Special Agent in Charge Peter C. Fitzhugh.
Hansen was arrested on May 22, 2018, by members of the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force when he arrived at a designated location where it is alleged he believed he would meet with a person who would assist him in meeting with and have sexual contact with a 12-year-old and an 8-year-old girl.
He was ordered detained by U.S. District Court Magistrate Judge Patricia A. Sullivan.
According to court documents, it is alleged that on April 20, 2018, a Rhode Island State Police trooper assigned to the ICAC Task Force responded to an online classified advertisement of an individual seeking to engage in illicit sexual activity. The trooper responded in an undercover capacity, first posing as the boyfriend of a woman with two minor children, age 8 and 12, then as the 12-year-old girl. It is alleged that the conversation turned sexually explicit, and, during one of many email exchanges over the next month, Hansen allegedly sent a sexually explicit picture to the person he thought to be the 12-year-old girl. During the communications, the trooper and Hansen arranged to meet in Rhode Island.
According to court documents, on May 22, Hanson arrived at a designated location, entered the state police trooper’s undercover vehicle, and discussed with the trooper his intent to have sexual contact with the 12 and 8-year-old girls. On the trooper’s signal, members of the ICAC Task Force surrounded the vehicle and took Hansen into custody.
An arraignment date on the indictment has not yet been scheduled. An indictment is merely an allegation 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.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
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Martinsburg man indicted on a drug chargesRead the Press Release
WHEELING, WEST VIRGINIA – A Martinsburg, West Virginia man was indicted today by a federal grand jury on cocaine and heroin distribution charges, United States Attorney Bill Powell announced.
Jarod Arthur Blakney, also known as “Papi,” age 28, is charged with one count of “Distribution of Heroin,” one count of “Aiding and Abetting Distribution of Cocaine Base,” and three counts of “Distribution of Cocaine Base.” Blakney is accused of selling heroin and cocaine in Berkeley County in May and June of 2017.
Blakney faces up to 20 years incarceration and a fine of up to $1,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Martin Man Sentenced for Accessory After the Fact and Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Ron Parsons announced that a Martin, South Dakota, man convicted of Accessory After the Fact (Murder) and Conspiracy to Distribute a Controlled Substance, was sentenced on May 24, 2018, by Chief Judge, Jeffrey L. Viken, U.S. District Court.
Scott Edison Benson, age 31, was sentenced to 10 years in federal custody, to run consecutive with a second federal sentence of 8 1/3 years, followed by 4 years of supervised release, and ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
Benson previously pleaded guilty to Accessory After the Fact, on January 19, 2018. On the same day, in an unrelated matter, Benson also pleaded guilty to Conspiracy to Distribute a Controlled Substance.
On May 27, 2017, Benson and two other males drove to meet Christopher E. Janis near Sharps Corner. While Benson was arranging a purchase of prescription pills with Janis, one of the other males with Benson appeared at the driver-door window by Janis. Benson witnessed the male shoot Janis, and saw the second male take the handgun and shoot him several additional times. Christopher E. Janis died from the multiple gunshot wounds. Benson ran back to his vehicle and drove away with the two males. The firearm used by the men in the shooting belonged to Benson. At no time after Benson witnessed the men shoot Janis did he make any attempt to render aid or contact law enforcement. The two men with Benson have been indicted and their cases are currently pending.
Benson was also part of a conspiracy to distribute methamphetamine from January 2016 through approximately May 30, 2017, around the Pine Ridge Reservation, particularly in the Martin, Allen, and Kyle areas. He distributed to others for consumption at least 350, but less than 500 grams, of methamphetamine.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
These two cases were investigated by the Federal Bureau of Investigation, Northern Plains Safe Trails Task Force, Bureau of Indian Affairs Office of Justice Services, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigations, and the Rapid City Police Department. Assistant U.S. Attorney Kathryn N. Rich prosecuted both cases.
Benson was immediately turned over to the custody of the U.S. Marshals Service.
Man Pleads Guilty to Drug Trafficking and Firearms ChargesRead the Press Release
ALEXANDRIA, Va. – A Fredericksburg man pleaded guilty yesterday to running a drug trafficking conspiracy and illegally dealing over 200 firearms.
According to court documents, beginning in August 2015 and continuing through his arrest in March 2018, Bobby Perkins, Jr., 29, supervised a conspiracy to distribute marijuana, ecstasy, cocaine, crack cocaine, and heroin in Fredericksburg and Stafford County. During the course of the conspiracy, Perkins routinely carried on his person semi-automatic pistols to avoid being robbed of his drugs and the proceeds of his drug-distribution activities. Additionally, Perkins supplied his co-conspirators with firearms, which they used in furtherance of the conspiracy.
Separately, during an approximately five-month period in 2015, in Stafford County, Hanover County, and Henrico County, Perkins engaged in the business of dealing in firearms without a license. Perkins acquired and re-sold over 200 semi-automatic pistols, at least 106 of which have been recovered by law enforcement. Most of the firearms were recovered in Washington, D.C., with others found in Maryland, Virginia, New York, New Jersey, and Pennsylvania. Perkins knew that several of the individuals to whom he sold the firearms were convicted felons.
Perkins pleaded guilty to conspiracy to distribute controlled substances, using and carrying a firearm during and in relation to a drug-trafficking crime, and dealing in firearms without a license. He faces a mandatory minimum of ten years and a maximum of life in prison when sentenced on August 31. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Thomas L. Chittum, III, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after Senior U.S. District Judge T.S. Ellis, III accepted the plea. Assistant U.S. Attorneys Alexander E. Blanchard and Carina A. Cuellar are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-214.
MS-13 Member Pleads Guilty to Conspiring to Participate in a Violent Racketeering EnterpriseRead the Press Release
A Maryland gang member pleaded guilty yesterday to his participation in a racketeering enterprise in furtherance of the activities of the gang known as La Mara Salvatrucha, or MS-13, including his participation in a drug robbery intended to support the gang.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Robert K. Hur of the District of Maryland; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore Field Office; Assistant Director in Charge Nancy McNamara of the FBI Washington Field Office; Acting Special Agent in Charge Scott W. Hoernke of the U.S. Drug Enforcement Administration (DEA) Washington Field Office; Chief Henry P. Stawinski III of the Prince George’s County, Maryland, Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief Douglas Holland of the Hyattsville Police Department; Chief J. Thomas Manger of the Montgomery County Police Department and Montgomery County State’s Attorney John McCarthy made the announcement.
Jeffry Rodriguez aka “Hyper,” 22, a citizen of El Salvador who was residing in Capitol Heights, Maryland, pleaded guilty before the Honorable Judge Paula Xinis in the District of Maryland to conspiracy to participate in a racketeering enterprise.
“The Department of Justice is focused on dismantling transnational criminal organizations like MS-13, which is one of the most dangerous gangs in America,” said Acting Assistant Attorney General Cronan. “I want to thank our dedicated federal prosecutors and federal law enforcement officers with Homeland Security Investigations, the DEA, and the FBI, as well as our state and local partners in Prince George’s County and Montgomery County for all of their hard work on this case. Yesterday’s guilty plea is our next step toward taking the despicable MS-13 off our streets for good.”
“MS-13 is one of the most violent and ruthless gangs on the streets today,” said U.S. Attorney Hur. “Using the tools of our Organized Crime Drug Enforcement Task Forces, we are determined to dismantle this organization to make our communities in Maryland safer.”
According to the plea agreement, MS-13 is a national and international gang composed primarily of immigrants or descendants of immigrants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County and Montgomery County, Maryland. MS-13 members are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Pursuant to his plea agreement, Rodriguez admitted that from at least August 2016, he was a member and associate of the Sailors clique of MS-13. Rodriguez admitted that on Aug. 9, 2016, he and other MS-13 members conspired to rob two individuals of a pound of marijuana, the sale of which would be used to benefit the Sailors clique.
Specifically, on Aug. 9, 2016, Rodriguez and an MS-13 co-conspirator entered a vehicle occupied by the two victims under the guise that they were going to purchase a pound of marijuana from the victims. Rodriguez and his co-conspirator were armed with a firearm and a knife. Upon attempting to rob the victims, and displaying the firearm, Rodriguez and his co-conspirator became engaged in a violent struggle with the victims. During the struggle, the victims sustained serious bodily injuries including gunshot and stab wounds. In addition, both Rodriguez and his co-conspirator sustained gunshot wounds. After being shot, Rodriguez and his co-conspirator ran from the victims’ vehicle, got into another vehicle in which another MS-13 member was waiting and drove to a local hospital, where Rodriguez was admitted for treatment.
Eleven of Rodriguez’s co-defendants remain charged in the sixth superseding indictment with various racketeering violations, drug trafficking conspiracy, and extortion conspiracy. The trial of the 11 remaining defendants is scheduled to commence on March 12, 2019.
Rodriguez is scheduled to be sentenced on Aug. 29.
An indictment is merely an allegation. Those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
HSI Baltimore, FBI Washington Field Office, DEA Washington Field Office, the Prince George’s County Police Department, the Montgomery County Police Department, the Prince George’s County State’s Attorney’s Office, the Hyattsville Police Department and the Montgomery County State’s Attorney’s Office investigated the case. Trial Attorney Catherine K. Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Daniel C. Gardner are prosecuting the case.
MS-13 Member Pleads Guilty to Conspiring to Participate in A Violent Racketeering EnterpriseRead the Press Release
June 5, 2018
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885Greenbelt, Maryland - Jeffry Rodriguez, a/k/a “Hyper,” age 22, of Capitol Heights, Maryland pleaded guilty today to his participation in a racketeering enterprise in furtherance of the activities of the gang known as La Mara Salvatrucha, or MS-13, including his participation in a drug robbery intended to support the gang.
United States Attorney Robert K. Hur for the District of Maryland; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore Field Office; Assistant Director in Charge Nancy McNamara of the FBI Washington Field Office; Acting Special Agent in Charge Scott W. Hoernke of the U.S. Drug Enforcement Administration (DEA) Washington Field Office; Chief Henry P. Stawinski III of the Prince George’s County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief Douglas Holland of the Hyattsville Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy made the announcement.
Rodriguez pleaded guilty before the Honorable Paula Xinis, U.S. District Court for the District of Maryland, to conspiracy to participate in a racketeering enterprise.
“The Department of Justice is focused on dismantling transnational criminal organizations like MS-13, which is one of the most dangerous gangs in America,” said Acting Assistant Attorney General Cronan. “I want to thank our dedicated federal prosecutors and federal law enforcement officers with Homeland Security Investigations, the DEA, and the FBI, as well as our state and local partners in Prince George’s County and Montgomery County for all of their hard work on this case. Today’s guilty plea is our next step toward taking the despicable MS-13 off our streets for good.”
United States Attorney for the District of Maryland Robert K. Hur noted “MS-13 is one of the most violent and ruthless gangs on the streets today. Using the tools of our Organized Crime Drug Enforcement Task Forces, we are determined to dismantle this organization to make our communities in Maryland safer.”
According to the plea agreement, MS-13 is a national and international gang composed primarily of immigrants or descendants of immigrants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County and Montgomery County, Maryland. MS-13 members are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Pursuant to his plea agreement, Rodriguez admitted that from at least August 2016, he was a member and associate of the Sailors clique of MS-13. Rodriguez admitted that on August 9, 2016, he and other MS-13 members conspired to rob two individuals of a pound of marijuana, the sale of which would be used to benefit the Sailors clique.
Specifically, on Aug. 9, 2016, Rodriguez and an MS-13 co-conspirator entered a vehicle occupied by the two victims under the guise that they were going to purchase a pound of marijuana from the victims. Rodriguez and his co-conspirator were armed with a firearm and a knife. Upon attempting to rob the victims and displaying the firearm, Rodriguez and his co-conspirator became engaged in a violent struggle with the victims. During the struggle, the victims sustained serious bodily injuries, including gunshot and stab wounds. In addition, both Rodriguez and his co-conspirator sustained gunshot wounds. After being shot, Rodriguez and his co-conspirator ran from the victims’ vehicle, entered another vehicle in which another MS-13 member was waiting, and traveled to a local hospital, where Rodriguez was admitted for treatment.
Eleven of Rodriguez’s co-defendants remain charged in the sixth superseding indictment with various racketeering violations, drug trafficking conspiracy, and extortion conspiracy. The trial of the 11 remaining defendants is scheduled to commence on March 12, 2019.
Judge Paula Xinis has scheduled sentencing on August 29, 2018.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the HSI Baltimore Office; the FBI; the DEA, and the Prince George’s County, the Hyattsville, and the Montgomery County Police Departments for their work in the investigation. Hur thanked Assistant U.S. Attorneys William D. Moomau and Daniel C. Gardner and Trial Attorney Catherine K. Dick of the Criminal Division’s Organized Crime and Gang Section, who are prosecuting this Organized Crime Drug Enforcement Task Force Case.
Lummi Tribal Member Sentenced to Six Years in Prison for Sexual Abuse of a MinorRead the Press Release
A 20-year-old member of the Lummi Tribe was sentenced Monday June 4, 2018 to six years in prison and 20 years of supervised release for sexual abuse of a minor, announced U.S. Attorney Annette L. Hayes. JASON LITTLE SKY JAMES JR, of Bellingham, Washington, was indicted in November 2017, and pleaded guilty in March 2018. U.S. District Judge James L. Robart noted the need to protect the public from JAMES JR., who will be required to register as a sex offender following his release from prison.
According to records filed in the case, between December 2016 and September 2017, JAMES, JR engaged in sexual acts with a minor female who was 13 or 14 years old. At the time of the sex acts, JAMES JR was a registered sex offender, having been convicted in Whatcom County Superior Court of indecent liberties in 2015. In the 2015 case, JAMES JR was convicted of engaging in sexual acts with a minor female who was then 13-years-old.
The cases came to light when the minor female reported the sex acts to a trusted adult, and the investigation revealed that JAMES JR. was aware of the victims’ young age at the time he engaged in sexual acts.
The case was investigated by the Lummi Police Department and the FBI. The case is being prosecuted by Assistant United States Attorneys J. Tate London and Chantelle D. Dial. Mr. London is a Tribal Liaison for the U.S. Attorney’s Office. Ms. Dial is an Indian Country Fellow, part of the Attorney General’s Honors Program.
Las Cruces Man Sentenced to Prison for Federal Drug Trafficking ConvictionRead the Press Release
ALBUQUERQUE – John Houghtaling, 58, of Las Cruces, N.M., was sentenced today in federal court to 30 months in prison for his conviction on heroin and methamphetamine trafficking charges. Houghtaling will be on supervised release for four years after completing his prison sentence.
Houghtaling was arrested on July 25, 2017, on a criminal complaint charging him with heroin and methamphetamine trafficking offenses. According to the complaint, Homeland Security Investigations (HSI) agents found approximately three ounces of heroin and three ounces of methamphetamine in Houghtaling’s vehicle during a consensual search of the vehicle on Interstate 10 in Grant County, N.M.
Houghtaling was indicted on Nov. 1, 2017, and was charged with conspiracy to distribute heroin and methamphetamine from Sept. 18, 2016 through Sept. 20, 2016, and possession of heroin and methamphetamine with intent to distribute on Sept. 20, 2016. According to the indictment, Houghtaling committed the offenses in Grant County. Houghtaling entered a guilty plea to the indictment on Dec. 5, 2017, without the benefit of a plea agreement.
This case was investigated by the Deming office of HSI and the HIDTA Region VII Drug Task Force, a multi-agency task force that conducts long term investigations targeting regional, national and international drug trafficking organizations that operate in Luna, Hidalgo and Grant counties and follow-up on cases resulting from U.S. Border Patrol and New Mexico State Police interdiction efforts.
The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Las Cruces Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Bryan C. Lawson, 22, of Las Cruces, N.M., pled guilty today in federal court to a cocaine trafficking charge under a plea agreement with the U.S. Attorney’s Office.
The Las Cruces Police Department (LCPD) arrested Lawson in March 2018, after finding approximately 274 grams of methamphetamine in Lawson’s vehicle during a routine traffic stop. According to the complaint, Lawson was on supervised release for a prior methamphetamine trafficking felony conviction at the time of his arrest.
During today’s proceedings, Lawson pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In entering the guilty plea, Lawson admitted that on March 18, 2018, in Dona Ana County, N.M., he possessed approximately 223.6 grams of methamphetamine inside the vehicle he was driving when he was stopped by LCPD officers. Lawson also admitted that it was his intention to distribute the drugs to others.
At sentencing, Lawson faces an enhanced penalty of a statutory mandatory minimum term of imprisonment of ten years and a maximum of life, instead of the otherwise applicable five to 40 years of imprisonment, because of his prior felony drug trafficking conviction. Lawson remains in federal custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA, the Las Cruces Police Department and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force, and is being prosecuted by Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
KC Man Sentenced to 15 Years for Meth, Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man was sentenced in federal court today for his role in a conspiracy to distribute methamphetamine and for illegally possessing a firearm.
Russell S. Lawson, 45, of Kansas City, was sentenced by U.S. District Judge Beth Phillips to 15 years and eight months in federal prison without parole.
On Nov. 20, 2017, Lawson pleaded guilty to participating in a conspiracy to distribute methamphetamine and to possessing a firearm in furtherance of a drug-trafficking crime. Lawson admitted that he distributed at least 408.61 grams of pure methamphetamine during the conspiracy.
Undercover law enforcement officers and a confidential source made numerous purchases of methamphetamine from several members of the conspiracy, including Lawson. In his plea agreement, Lawson specifically admitted to a series of drug transactions that occurred at his residence from Nov. 10, 2015, to June 16, 2016.
On Nov. 17, 2016, law enforcement officers executed a search warrant at Lawson’s residence and seized a Browning .22-caliber semi-automatic handgun from Lawson as well as three rifles from his residence. Lawson admitted that he had been in possession of the handgun on Jan. 11, 2016, when he told an undercover officer that he expected to be robbed and hoped that they would come to the house so he could “headshot” them. Officers also discovered additional methamphetamine in the residence.
Lawson is the fifth defendant to be sentenced, among six defendants who have been convicted in this case. William L. Dunkin, 47, of Kansas City, Mo., was sentenced on May 24, 2018, to 10 years and nine months in federal prison without parole. Derek A.F. Fields, 33, of Kansas City, Mo., was sentenced on Feb. 22, 2018, to four years in federal prison without parole. Tiffani L. Campbell, 40, of Kansas City, Mo., was sentenced on Jan. 31, 2018, to 10 years in federal prison without parole. Barbara L. Daniels, 54, of Kansas City, Mo., was sentenced on Jan. 11, 2018, to three years in federal prison without parole. Paul V. Chavez, 29, of Kansas City, Mo., pleaded guilty and is scheduled to be sentenced on July 26, 2018.
This case is being prosecuted by Assistant U.S. Attorney Trey Alford. It was investigated by the Drug Enforcement Administration and the Jackson County Drug Task Force.
Jury Convicts Former Sheriff’s Deputy of Child Pornography PossessionRead the Press Release
SYRACUSE, NEW YORK – A jury today voted to convict Peter W. Farnum, age 41, of Clifton Park, New York, of possessing child pornography, following a 2-week trial.
The announcement was made by United States Attorney Grant C. Jaquith and Janelle M. Miller, Acting Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
The evidence at trial established that Farnum, a former sergeant with the Saratoga County Sheriff’s Office, possessed more than 1,000 image and video files on his family computer that contained child pornography. These included, among many others, image files that Farnum imported through the computer’s RealPlayer application while he conducted online research related to his position with the Sheriff’s Office and while his wife was in the hospital.
Following the verdict, Senior United States District Judge Norman A. Mordue remanded Farnum to custody pending sentencing on a date to be determined. Farnum faces up to 10 years in prison, a maximum fine of $250,000, and a term of post-imprisonment supervised release of at least 5 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. Farnum will also have to register as a sex offender.
This case was investigated by the FBI, with assistance from the Saratoga County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Joseph A. Giovannetti.
This case is being prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Jury Convicts Another Sacramento Man of Fraud in Connection with Arson Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — On Monday, after a seven-day trial, a federal jury found Saber A. Shehadeh, 75, of Sacramento, guilty of three counts of mail fraud related to an arson fraud scheme, U.S. Attorney McGregor W. Scott announced. Shehadeh was remanded into custody following the verdict.
According to evidence presented at trial, Saber Shehadeh made a series of false statements to State Farm Insurance Company to get insurance money after two fires destroyed buildings he owned at the corner of 10th and E Streets in Sacramento’s Alkali Flat neighborhood. The fires occurred on December 27, 2009, and August 15, 2010, and ultimately destroyed a historical building where Saber Shehadeh ran a business called Tru Value Market. Prior to the fires, the financial condition of Shehadeh’s Tru Value Market had declined. He experienced suspension from USDA’s food stamp program, bounced mortgage checks, and frequent overdrafts on his business bank account, and his alcohol license was placed in jeopardy due to a conviction for food stamp fraud and receiving stolen property.
After the second fire, Saber Shehadeh became a silent partner in a supposed construction company that was then used to submit inflated invoices for post-fire cleanup to State Farm. During State Farm’s investigation of the insurance claims, Saber Shehadeh made a series of false statements about the status of his market prior to the fires, and submitted fraudulent documents and made false statements about the debris removal performed after the second fire. Saber Shehadeh received over $1.4 million in insurance proceeds after the fires, enabling him to pay off his mortgage and still have several hundred thousand dollars left over to invest in new businesses and to share with family members, including his co-defendant Jamal Shehadeh.
This case is the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Sacramento Fire Department; the Sacramento Metropolitan Fire Department; and the Sacramento Sheriff’s Department. Assistant U.S. Attorneys Michael D. Anderson and Christopher S. Hales prosecuted the case.
On February 10, 2018, Jamal Shehadeh pleaded guilty to two counts of arson to commit a felony and was sentenced to 30 years in prison. According to his plea agreement, Jamal Shehadeh set or caused to be set the first fire at Saber Shehadeh’s 10th and E Street property. On April 17, 2018, another co-defendant, Brian Stone, was convicted of 13 counts of mail and wire fraud after a separate jury trial and is currently scheduled to be sentenced on July 12, 2018.
Saber Shehadeh is scheduled to be sentenced on September 6, 2018, by U.S. District Judge Morrison C. England Jr. Shehadeh faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Jemez Pueblo Man Sentenced to Prison for Federal Voluntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Raymond Gachupin, 24, an enrolled member and resident of Jemez Pueblo, N.M., was sentenced today in federal court in Albuquerque, N.M., to 78 months in prison for his conviction on a voluntary manslaughter charge. Gachupin will be on supervised release for three years after completing his prison sentence.
The FBI and Jemez Pueblo Tribal Police Department arrested Gachupin in July 2016, on a criminal complaint charging him with killing a Jemez Pueblo man by suffocating him on July 1, 2016, in Jemez Pueblo in Sandoval County, N.M. Gachupin subsequently was indicted on July 28, 2016, and was charged with second-degree murder.
On Jan. 19, 2018, Gachupin pled guilty to a felony information charging him with voluntary manslaughter. In entering the guilty plea, Gachupin admitted that on July 1, 2016, he strangled the victim during a physical altercation. Gachupin further admitted that the victim became unconscious, suffered a cardiac event, and died as the result of Gachupin’s actions.
This case was investigated by the Albuquerque office of the FBI and the Jemez Pueblo Tribal Police Department. Assistant U.S. Attorneys Joseph M. Spindle and Elisa Dimas prosecuted the case.
Jefferson Man Charged with Receipt of Child PornographyRead the Press Release
United States Attorney Duane A. Evans announced today that DONALD TROSCLAIR, age 56, of Jefferson, Louisiana, was charged on Friday, June 1, 2018, in a one-count Indictment with receipt of images and videos depicting the sexual exploitation of children, including children as young as approximately two years old. Trosclair was taken into custody on June 4, 2018.
If convicted, TROSCLAIR faces a mandatory minimum term of imprisonment of five (5) years and a maximum term of imprisonment of twenty (20) years, followed by up to a lifetime of supervised release, and a $250,000 fine. He can also be required to register as a sex offender.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
United States Attorney Evans reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigation and its Violent Crimes Against Children Task Force, including representatives from the Kenner Police Department, Jefferson Parish Sheriff’s Office, and Louisiana State Police. The case is being prosecuted by Assistant United States Attorney Jordan Ginsberg.
Indictments: Five Massage Parlor Operators Were Engaged in ProstitutionRead the Press Release
TOPEKA, KAN. – Three indictments were unsealed today alleging massage parlors in Topeka and Lawrence were fronts for prostitution, U.S. Attorney Stephen McAllister said.
Five people were charged in federal grand jury indictments alleging prostitution businesses generated millions of dollars in revenue. Charges included conspiracy, interstate racketeering, bank fraud and money laundering.
Defendants charged include:
Ma Li Vanskike, 67, operator of ABC Massage (formerly Naima Therapy) in Lawrence is charged with one count of interstate racketeering and five counts of money laundering. An indictment alleges she laundered more than $1 million in revenues over a period of five years at Harrah’s Casino in North Kansas City, Mo.
Weiling Nielsen, 53, and Erik Nielsen, operators of Jasmine Massage in Topeka, Naima Asian Massage in Lawrence and Serenity Health Spa in Lawrence, are charged with two counts of conspiracy, two counts of bank fraud, five counts of money laundering, and one count of racketeering. An indictment alleges they bought and sold California real estate worth millions of dollars while falsely representing themselves to lenders as restaurant managers in Lawrence.
Lian Hua Li, 55, and Michael Mills, 61, are charged with two counts of conspiracy, two counts of interstate racketeering and four counts of money laundering. An indictment alleges Li operated Sunflower Massage (formerly Jasmine Massage) in Topeka and S-Therapy in Salina, and that Mills worked with her. The indictment alleges Mills transported female sex workers from the airport to massage parlors and assisted Li in laundering cash proceeds of prostitution. The indictment alleges some of the money was laundered through casinos in Kansas.
Upon conviction, the alleged crimes carry the following penalties:
Conspiracy: Up to 5 years in federal prison and a fine up to $250,000.
Racketeering: Up to five years and a fine up to $250,000.
Money laundering and money launder conspiracy: Up to 20 years and a fine up to $500,000.
Bank fraud: Up to 30 years and a fine up to $1 million.
The FBI investigated with the assistance of the Douglas County Sherriff’s Office, the Topeka Police Department and the Salina Police Department. Assistant U.S. Attorney Christine Kenney is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Illegal alien indicted for misuse of a social security numberRead the Press Release
WHEELING, WEST VIRGINIA – A citizen of Mexico was indicted today by a federal grand jury on a fraud charge, United States Attorney Bill Powell announced.
Irineo Aroldo Matias-Gomez, age 30, is charged with one count of “Misuse of a Social Security Number.” Matias-Gomez is accused of using a social security number that isn’t his to open a bank account in Berkeley County in October 2017.
Matias-Gomez faces up to five years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The United States Immigration and Customs Enforcement investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Hudson County Man Sentenced to 40 Years in Prison for Production and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Bayonne, New Jersey, man was sentenced today to 480 months in prison for producing and possessing images and videos of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Gregory John Schaffer, 39, was previously found guilty on all three counts of an indictment charging him with two counts of production of child pornography and one count of possession of child pornography. He was convicted following a three-day trial before U.S. District Judge Jose L. Linares, who imposed the sentence today in Newark federal court.
According to documents filed in the case and the evidence at trial:
In 2010, Schaffer sexually abused a 12-year-old girl in a tow-truck office in Union City, New Jersey, and video recorded the abuse without her knowledge. He later stored the video recording on a laptop computer found by law enforcement in his office in Jersey City, New Jersey. Schaffer also backed-up the video recording to another electronic storage device found in his office.
Around the same time, Schaffer also sexually abused a 14-year-old girl in a hotel room and video recorded the abuse without her knowledge. Schaffer again stored the video recording on the same laptop computer and electronic storage device that law enforcement found in his office.
Law enforcement also found additional sexually explicit videos and images of minors on Schaffer’s laptop computer and electronic storage device.
In addition to the prison term, Judge Linares sentenced Schaffer to lifetime supervised release.
U.S. Attorney Carpenito credited special agents of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New York Field Office under the direction of Special Agent in Charge Angel M. Melendez; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David E. Beach, New York Field Office; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Jason S. Gould and Meredith Williams of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Thomas Ambrosio Esq., of Lyndhurst, New Jersey
Holly Springs Man Sentenced for Drug and Firearms OffensesRead the Press Release
NEW BERN – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, United States District Judge, Louise W. Flanagan sentenced TONY RAY HOLDER, 34, of Holly Springs, North Carolina, to 84 months imprisonment followed by 5 years of supervised release.
HOLDER was named in a three count Indictment on December 20, 2017. On March 14, 2018, HOLDER pled guilty to possession with the intent to distribute a quantity of cocaine base (crack) and possession of a firearm in furtherance of a drug trafficking crime.
On June 10, 2017, investigators with the Johnston County Sheriff’s Office conducted a traffic stop on a vehicle being driven by HOLDER’s girlfriend. HOLDER was the front seat passenger. During the traffic stop, officers recovered cocaine base, a digital scale, a loaded 9mm handgun from underneath HOLDER’s seat, a ski mask and gloves from the glove box. HOLDER had been released from state prison for a second degree murder conviction less than two months prior to this traffic stop.
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.
The investigation of this case was conducted by the Johnston County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). Assistant United States Attorney Peggah Wilson handled the prosecution of this case for the government.
Henderson Man Sentenced to 78 Months in Federal Prison in Heroin Distribution and Firearms CaseRead the Press Release
NEW BERN - United States Attorney Robert J. Higdon, Jr. announced that today, QUA’MORIA RONDE’ DAVIS, 20, of Henderson was sentenced by United States District Judge Louise W. Flanagan to 78 months imprisonment followed by 3 years’ supervised release.
DAVIS was named in an eight-count Superseding Indictment on November 29, 2017. On January 16, 2018, DAVIS pled guilty to Receipt of a Firearm and Ammunition by a Person under Indictment and Possession with Intent to Distribute a Quantity of Heroin.
The investigation was conducted by the Henderson Police Department (HPD) in conjunction with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). From January of 2016 to approximately July of 2017, DAVIS was arrested multiple times for drug and firearms offenses.
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.
In support of PSN, the United States Attorney’s Office for the Eastern District of North Carolina has implemented the Take Back North Carolina Initiative. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
Investigation of this case was conducted by the Henderson Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Vance County Sheriff’s Office. Assistant United States Attorney S. Katherine Burnette prosecuted this case.
Hagerstown Man Sentence to 16 Years for Sex Trafficking of A ChildRead the Press Release
June 5, 2018
FOR IMMEDIATE RELEASE Contact Bailey Drumm
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Richard Dane Small, a/k/a “Maserati,” age 32, of Hagerstown, to 16 years in prison, followed by 10 years of supervised release, for sex trafficking of a minor.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Sheriff Charles A. Jenkins of the Frederick County Sheriff’s Office; and J. Charles Smith, III, Frederick County State’s Attorney.
According to his plea agreement, in June 2015, Small transported a 15-year-old girl and a 17-year-old girl from Pennsylvania to Maryland with the intent that each minor victim engage in prostitution, and Small recruited each minor for that purpose. Small caused each minor victim to engage in commercial sex acts at hotels and other locations in Maryland, and received money each minor victim made. Small was aware or recklessly disregarded the fact that each minor victim had not attained the age of 18 years.
Small directed the 15-year-old victim to use an account registered by Small with a classified ad website to post ads for commercial sex, which included the number to a phone in the girl’s possession. He also directed the 15-year-old girl to answer calls from sex clients responding to these ads and to schedule appointments with them. Small also had sex with the 15-year-old victim.
On June 16, 2015, Maryland State Police (“MSP”) received a call from the 15-year-old victim’s father, who reported that the girl was being held against her will by a pimp at a hotel in Hagerstown. MSP officers responded to the hotel, and one officer approached Small and inquired about the missing girl. The officer showed Small a photo of the girl, provided her age, and informed Small that she had run away from a group home in Pennsylvania. After this encounter with MSP, Small continued to direct the girl to engage in prostitution and continued to receive the proceeds.
On June 23, 2015, Small was arrested by members of the Frederick County Sheriff’s Office while driving both victims to a hotel in Frederick, Maryland. While detained at the Frederick County Detention Center, Small had phone conversations with B.S., an adult female prostitute who worked for him. During these calls, Small instructed B.S. to have all information wiped from his cell phone. Small and B.S. also discussed B.S. traveling to Pennsylvania to pick up the 17-year-old victim and renting a hotel room for the purpose of prostituting the girl in order to raise money for Small’s benefit. With Small’s agreement, B.S. transported the 17-year-old victim to hotels in Pennsylvania and Maryland and collected proceeds from her commercial sex acts, which she used to rent hotel rooms, purchase heroin, and deposit funds into commissary accounts for Small’s benefit.
This case was investigated by the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state, and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
Please report suspected instances of human trafficking to HSI’s tip line at 866-DHS-2ICE (1- 866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
United States Attorney Robert K. Hur commended the Frederick County Sheriff’s Office, HSI Frederick, the Maryland State Police, and the Frederick County State’s Attorney’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Matthew J. Maddox and Seema Mittal, who prosecuted the case.
Hacker Known as “Vigilance” Arrested and Charged for Series of Cyber-Attacks on Minnesota State Government DatabasesRead the Press Release
United States Attorney Gregory G. Brooker today announced a five-count indictment charging CAMERON THOMAS CROWLEY, a/k/a “Vigilance,” 19, with intentional access to a protected computer, intentional damage to a protected computer, and aggravated identity theft. CROWLEY made his initial appearance earlier this afternoon before United States Magistrate Judge Becky R. Thorson in Saint Paul, Minnesota. CROWLEY will remain in federal custody pending his detention hearing.
According to the indictment, between May 28, 2017 and June 17, 2017, CROWLEY intentionally gained unauthorized access to protected computer servers owned by the State of Minnesota and other entities. CROWLEY also caused the transmission of programs, code, and commands to the protected computer servers, causing damages and a loss to the State of Minnesota of more than $5,000. The indictment also charges CROWLEY with one count of aggravated identity theft.
This case is the result of an investigation conducted by the FBI and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney Katharine T. Buzicky is prosecuting the case.
Defendant Information:
CAMERON THOMAS CROWLEY, a/k/a “Vigilance,” 19
Lino Lakes, Minn.
Charges:
- Intentional access to a protected computer, 3 counts
- Intentional damage to a protected computer, 1 count
- Aggravated identity theft, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Guatemalan National Sentenced for Illegal Reentry After DeportationRead the Press Release
BOSTON – A Guatemalan national was sentenced yesterday in federal court in Worcester for illegally reentering the United States after deportation.
Enri Nemias Vega, 31, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year in prison and two years of supervised release. Vega will be subject to deportation proceedings upon completion of his sentence. In February 2018, Vega pleaded guilty to one count of unlawful reentry of a deported alien.
Vega was previously deported in 2012. On May 20, 2017, Vega was encountered by law enforcement in Sutton and determined to be illegally present in the United States.
United States Attorney Andrew E. Lelling and Todd M. Lyons, Deputy Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement. Assistant U.S. Attorney Greg A. Friedholm of Lelling’s Worcester Branch Office prosecuted the case.
Former head of Sandusky business charged with defrauding investors out of $10 millionRead the Press Release
The leader of an international binary options scheme was arrested and a 19-count federal indictment unsealed, charging him with defrauding investors out of at least $10 million.
Jared J. Davis previously lived in the Columbus area but currently resides in Kalispell, Montana. He was indicted on multiple charges including conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering and obstruction of justice.
He was arrested early Tuesday morning at Cleveland Hopkins International Airport.
According to the indictment:
Davis and others ran a fraudulent binary options investment scheme between 2012 and 2016 through Erie Marketing LLC, headquartered in Sandusky, where Davis was involved in various real estate ventures and businesses. The options business used various trade names, including OptionMint, OptionKing and OptionQueen.
A binary option is a concept in which an investor seeks a future payout based on the future price of a given security or commodity. Binary options are sometimes traded on regulated exchanges that match two investors, one who believes the price of the asset will go up and the other who believes it will go down. The option exchange makes a commission but otherwise has no interest in the outcome of a trade.
Davis’ binary options businesses were not registered with the Securities and Exchange Commission nor the Commodity Futures Trading Commission, which have regulatory oversight, including registration and licensing.
Davis, acting as a broker, did not connect investors to a legitimate binary options exchange that would match investors who chose different options outcomes. Instead, Davis took the opposing position on each trade, similar to a casino or sports book.
Thus, Davis only made money when investors lost money, providing a built-in incentive to employ manipulative and deceptive practices, including failing to disclose to victims that they were not matched with individual investors, failing to disclose to them that he could and did manipulate trading conditions, falsely telling investors their money was held in an account when Davis actually spent victim deposits as he received them, falsely portraying his employees as “brokers” or “analysts” when in fact they had no relevant experience or qualifications, falsely representing to victims they could withdraw their money at any time when Davis actually required unnecessary and burdensome documentation to closing an account, falsely representing to victims they could make “risk free,” “insured,” or “guaranteed” binary options trades if they deposited more money, and other deceptive practices.
Davis solicited victims through Internet marketing campaigns and call centers that he operated out of Sandusky, Costa Rica and St. Maarten. He enlisted foreign nationals who, under Davis’ direction, created an elaborate web of foreign corporations in the United Kingdom, Belize, Anguilla, Costa Rica, St. Vincent and the Grenadines and St. Maarten to receive and launder the victims’ deposits.
“This defendant portrayed himself as a legitimate investment broker when he was really no better than a simple con man,” said First Assistant U.S. Attorney David Sierleja. “He fleeced his victims out of $10 million by manipulating trading conditions, falsely telling investors his salespeople were financial analysts and using offshore companies to spend money as fast as it came in.”
“Crime knows no borders, and neither does the financial investigative reach of IRS-Criminal Investigation,” said IRS-Criminal Investigations Special Agent in Charge Ryan Korner. “IRS-CI will follow the money wherever it may be to ensure those who prey upon the finances of others are held accountable for their actions.”
FBI Special Agent in Charge Stephen D. Anthony said: “Davis defrauded investors out of their hard-earned money and used their money for his personal real estate interests. The FBI, along with our law enforcement partners, will continue to identify, investigate and bring financial fraudsters to justice.”
This case was investigated by the Internal Revenue Service – Criminal Investigations and Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Gene Crawford.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Teacher and Police Officer Pled Guilty to Sex Trafficking of a MinorRead the Press Release
Brunswick, GA: Tracy Wayne Crosby, 42 of Waycross, entered a guilty plea on Friday, before the Honorable Lisa Godbey Wood to one count of sex trafficking of a minor.
Evidence presented at the guilty plea revealed that up until his arrest in this case, Crosby was the criminal justice teacher at Ware County High School and a part-time police officer with Pierce County. Evidence further revealed that Crosby used his cell phone to communicate with a sixteen-year-old boy online. Crosby agreed to meet with the boy to have sex in exchange for $10.00. Camden County law enforcement immediately responded and arrested Crosby when he was with the boy. Crosby admitted to federal agents that he had sex with the boy more than once and that he arranged to have sex with the boy online.
Crosby plead guilty to Sex Trafficking of a Minor, a federal crime and now faces not less than ten years imprisonment and up to life imprisonment. If released from federal custody, Crosby will be required to register as a sex offender and will be under the Court’s supervised release for not less than five years up to life. There is no parole in the federal system. Crosby is incarcerated awaiting a sentencing hearing.
The indictment of Crosby arises out of an investigation led by Homeland Security Investigations (“HSI”) in connection with the Camden County Sheriff Office and the Ware County Sheriff’s Office.
United States Attorney Bobby L. Christine said, “Anyone who pays to have sex with children will be brought to justice and will face substantial time in federal prison. The United States continues its relentless work to protect our most precious and vulnerable citizens. We will continue to work with our law enforcement partners to rescue children and put traffickers and customers behind bars.”
“The breach of trust committed by a former teacher and law enforcement officer in this case is beyond troubling and shows that HSI will investigate and hold accountable all persons who violate our nation’s laws,” said Nick S. Annan, Special Agent in Charge of Homeland Security Investigations Atlanta. “Sparing children the unspeakable harm of sexual exploitation continues to be one of HSI’s highest priorities and we will continue to aggressively investigate leads to identity and arrest anyone seeking to harm children in violation of federal law.”
Camden County Sheriff Jim Proctor said, “It is justice well served. These individuals that prey upon the young and innocent should pay for their deeds. It is always a great privilege for the Camden County Sheriff’s Office to join forces with the Federal agencies to decrease human trafficking.”
Anyone who suspects instances of child sexual exploitation is encouraged to call 1-800-843-5678, which is operated by the National Center for Missing and Exploited Children in partnership with HSI, the FBI, and other law enforcement agencies.
Assistant United States Attorney Tania D. Groover is prosecuting the case on behalf of the United States. For additional information, please contact the United States Attorney’s Office at (912) 652-4422.
Former South Florida Resident Sentenced to 17 Years in Prison for Distributing Child PornographyRead the Press Release
On June 1, 2018, Neil Timothy Aho, 45, of Menlo Park, California, was sentenced to 17 years in prison and a lifetime of supervised release for distributing child pornography.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI); Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO) and Rick Maglione, Chief, Fort Lauderdale Police Department, made the announcement.
United States District Judge Kenneth A. Marra sentenced Aho to 204 months in prison and a lifetime of supervised release. Aho must also register as a sex offender. Aho previously pled guilty to one count of distribution of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2).
According to court documents, between 2012 and 2014, while Aho was living in South Florida, he amassed a large collection of child pornography which he attempted to hide from law enforcement detection using highly sophisticated software encryption techniques. In June of 2015, after Aho had relocated to California, law enforcement was able to establish a connection to the defendant's computer and thereafter downloaded child pornography files from him. Each of the files, that was downloaded from Aho’s computer, contained videos of minor children engaging in sexually explicit conduct with adult males. In 2015, the defendant was arrested in relation to this investigation. The investigation revealed that Aho possessed over 3,000 videos and 6,000 images depicting child pornography, including children under the age of 6 engaged in sexually explicit conduct with adults.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mr. Greenberg commended the investigatory efforts of the ICE-HSI, BSO and Fort Lauderdale Police Department in this matter. This case was prosecuted by Assistant United States Attorneys Corey Steinberg and Gregory Schiller.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former President and CEO of Coastal Bank & Trust Sentenced for Bank Fraud Conspiracy and ObstructionRead the Press Release
NEW BERN –The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, United States District Judge Louise W. Flanagan sentenced ROBERT LEVIE NORRIS, JR., age 50, of New Bern, North Carolina to 48 months in prison for conspiracy to commit bank fraud and obstruction of a federal bank examination. The Court ordered the term of imprisonment to be followed by 3 years of supervised release. NORRIS was also ordered to pay $2,397,475 in restitution.
NORRIS was named in a Criminal Information on April 18, 2017 alleging the above offenses. NORRIS pled guilty to the charges on May 17, 2017.
According to court records, statements made in court, and other public information, NORRIS was the first President and Chief Executive Officer of Coastal Bank and Trust (CB&T), which opened its doors to customers in 2009. NORRIS served in this capacity from April 2009 to June 2013. As CB&T’s highest ranking executive, NORRIS was entrusted to oversee all aspects of CB&T’s business and to ensure that CB&T operated in accordance with applicable federal and state laws, rules, and regulations. In June 2013, it was discovered that NORRIS had engaged in a scheme to defraud CB&T by engineering fraudulent loan transactions with straw borrowers where the true beneficiaries of the loans were co-conspirators of NORRIS, business entities controlled by NORRIS, or NORRIS himself. The offending loans included unsecured lines of credit, small business loans, and mortgages for commercial and residential properties. NORRIS used his position of trust and authority at CB&T to circumvent the bank’s internal controls and normal loan underwriting procedures. To conceal his scheme, NORRIS withheld relevant information about the fraudulent loans from CB&T’s board of directors and examiners from the Board of Governors of the Federal Reserve System. CB&T suffered losses of approximately $2.4 million as a result of NORRIS’ conduct.
“When a bank official uses their position for their own personal profit they do more than commit a federal crime, they abuse their power and violate the public’s trust. Mr. Norris’ sentence today is proof of the commitment of the FBI to work with other law enforcement agencies to find these offenders and hold them accountable,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
United States Attorney Robert J. Higdon, Jr. said, “Mr. Norris used his position of trust to unlawfully line his pockets with money to which he was not entitled. The USAO-EDNC will always work with federal, state, and local law enforcement to vigorously investigate and prosecute this type of criminal conduct. Mr. Norris’ sentence sends a strong message that this type of conduct will not be tolerated and will be punished accordingly.”
“Mr. Norris’ fraud scheme and deception of bank examiners is the type of criminal conduct that impedes federal regulators from effectively supervising banking institutions,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection. “Today’s sentencing is one more step in a joint effort with our federal partners to hold accountable those who undermine the integrity of those institutions.”
“This sentencing holds the defendant accountable for misusing his position as the bank President and CEO to fabricate fraudulent loans with straw borrowers, evade internal controls, and withhold information from the bank’s Board. The underlying conspiracy cost the bank millions of dollars. This case demonstrates the importance of cooperation among law enforcement partners to combat such criminal conduct and maintain the integrity of financial institutions,” said FDIC Inspector General Jay N. Lerner.
Investigation of this case was conducted by the Federal Bureau of Investigation, the Board of Governors of the Federal Reserve System - Office of Inspector General, and the Federal Deposit Insurance Corporation - Office of Inspector General. Assistant United States Attorney Adam Hulbig prosecuted the case for the government.
Former Merrillville Town Councilman Sentenced to 15 Months in Prison for BriberyRead the Press Release
HAMMOND –Thomas Goralczyk, age 51, of Merrillville, Indiana was sentenced before U.S. District Court Judge Joseph S. Van Bokkelen on his plea of guilty to a federal bribery charge, announced U.S. Attorney Kirsch.
Goralczyk was sentenced to 15 months in prison with the court acknowledging that he had already forfeited $7500 to the United States.
“Public corruption will not be tolerated at any level,” said U.S. Attorney Kirsch. “Public officials, like Mr. Goralczyk, elected and entrusted to do the public’s work, are required to do that work free from self-dealing and graft. Today’s sentence sends a strong message of deterrence to others that want to engage in these activities. My office, together with our law enforcement partners, will continue to pursue matters involving corrupt public officials. I encourage anyone with information concerning corrupt public officials to contact my office or the FBI.”
According to documents in this case, from February 2013 to February 2014 Goralczyk, while a Merrillville Town Councilman, did knowingly and corruptly solicit, demand, accept and agree to accept bribes from Individual A in exchange for a towing contract between the Town of Merrillville and Individual A’s company. Goralczyk accepted the following: a 2000 Jeep Grand Cherokee, a 2008 Ford Focus, 4 camper tires and free storage for his personal motorcycle, from Individual A, intending to be influenced and rewarded in connection with a transactions or series of transactions of the Town of Merrillville.
Goralczyk was first elected as a Merrillville Town Councilman in 2007 and took office in January 2008. He was re-elected in 2011 and began his 2nd term as 4th ward councilman in January of 2012. He served as President of the Town Council in 2011 and 2015. Goralczyk also held various other positions on the Merrillville Redevelopment Commission, Lake County Solid Waste Management Board and the governing board of NIRPC (Northwest Indiana Regional Planning Commission). Goralczyk admitted that he accepted bribe payments from a Federal Bureau of Investigation “cooperating individual” in the form of two vehicles. He obtained a Jeep Grand Cherokee for $400 when he knew the value was in excess of $2500. In an attempt to cover up the bribe, he presented a false bill of sale to the Indiana Bureau of Motor Vehicles representing that he paid $1000 for the vehicle. In addition, Goralczyk accepted a 2008 Ford Focus with a value in excess of $5000. He paid nothing for this vehicle, but presented a false bill of sale to the Indiana Bureau of Motor Vehicles indicating that he paid $2750 for the vehicle. Goralczyk acknowledged that he accepted both the vehicles for his own personal gain, in exchange for his promise to engage in official conduct by using his influence and power as a Merrillville Town Councilman to obtain a Town of Merrillville towing contract for the FBI “cooperating individual’s” towing company.
This case results from an investigation by Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. This case is being handled by Assistant United States Attorney Philip C. Benson.
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Former Medical Assistant Pleads Guilty to Oxycodone ConspiracyRead the Press Release
ALEXANDRIA, Va. – A Maryland woman pleaded guilty today for her role in leading a conspiracy to distribute oxycodone.
According to court documents, Louise S. Edwards, 38, was previously employed as a medical assistant at doctor’s offices in Arlington and Alexandria. From 2011 through December 2017, Edwards stole blank prescription pads and electronically-generated fraudulent prescriptions using a medical recordkeeping system to which she had access by virtue of her position as an employee. Edwards had others write or fill the fraudulent prescriptions and return the full bottles to her. Edwards then sold the full bottles for further distribution. During the conspiracy, Edwards facilitated the fraudulent filling of at least 353 prescriptions, totaling 42,360 pills of 30 milligram oxycodone.
Edwards pleaded guilty to conspiracy to distribute oxycodone, and faces a maximum penalty of 20 years in prison when sentenced on September 7. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Leonie M. Brinkema accepted the plea. Special Assistant U.S. Attorney Matthew A. Anzaldi and Assistant U.S. Attorney Alexander E. Blanchard are prosecuting the case, and former Special Assistant U.S. Attorney Matthew Evans provided assistance investigating the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-155.
Former Fugitive Gang Member Sentenced to 20 Years in Federal Prison for Racially-Motivated MurderRead the Press Release
An Avenues gang member who was captured last year after more than a decade on the run was sentenced Monday to 20 years in prison on federal hate crime and firearms charges that were filed against him in 2004, announced Acting Assistant Attorney General John Gore of the Civil Rights Division, United States Attorney Nicola T. Hanna of the Central District of California, and FBI Special Agent in Charge Paul D. Delacourt for the Los Angeles Field Office.
Merced Cambero Jr., 39, who used the gang moniker “Shadow,” pleaded guilty in February to participating, along with other gang members, in a conspiracy to use violence against African-Americans to interfere with their right to live in the Highland Park neighborhood of Los Angeles. Cambero also admitted to participating in the 1999 racially-motivated murder of Kenneth Wilson, an African-American man who was shot and killed in furtherance of that conspiracy. The defendant was sentenced by United States District Judge Percy Anderson, who in 2006 presided over the trial of four co-defendants who were charged along with Cambero in the initial 2004 indictment and a superseding indictment that followed in 2005.
The superseding indictment alleged that Cambero and three of the four co-defendants – Gilbert “Lucky” Saldana, Alejandro “Bird” Martinez, and Fernando “Sneaky” Cazares – shot and killed Mr. Wilson because of his race and because he was using the public streets in Los Angeles, and that they used firearms during and in furtherance of that crime. These defendants were also charged, along with a fourth co-defendant, Porfirio “Dreamer” Avila, with conspiring to use violence to interfere with the federal housing rights of African Americans in Highland Park, including another African-American man, Christopher Bowser, who was shot and killed in 2000. Saldana, Martinez, Cazares, and Avila stood trial in 2006, were convicted on all charges, and were sentenced to life in prison. Although Cambero was charged in the same indictment, he was never arrested or arraigned until he was captured in Mexico last year. He was then returned to the United States to face the charges against him.
At the 2006 trial of the co-defendants, a jury heard testimony from two Avenues gang members who participated in the murder of Kenneth Wilson and implicated Cambero and three co-defendants. The gang-member witnesses also testified about an agreement among Avenues gang members to try to preserve the primarily-Latino make-up of Highland Park by engaging in violence against African Americans. Their testimony was corroborated by numerous African-American residents of the Highland Park neighborhood who described acts of racially-motivated violence directed at them by the defendants and their fellow gang members.
In court filings connected with Cambero’s guilty plea and sentencing, Cambero confirmed the evidence from the earlier trial, admitted that he and his fellow gang members were in a stolen van when they saw Wilson, whom they did not know, and decided to kill him because of his race. Cambero admitted that he and two other gang members then got out of the van and fired guns at Wilson, who was killed by a single gunshot through the neck.
“This Justice Department will not tolerate any act of violence motivated because of another’s race,” said Acting Assistant Attorney General John Gore. “The defendant’s egregious actions were unlawful, and as this sentencing demonstrates, will not go without punishment. The Civil Rights Division will continue to vigorously prosecute those who commit violent acts of hate.”
“This defendant was part of a reprehensible scheme that targeted an entire class of people simply because of skin color,” said U.S. Attorney Nick Hanna. “The Justice Department is committed to preserving and protecting everyone’s civil rights – particularly when violent acts are used to violate those rights. Mr. Cambero attempted to avoid prosecution for many years, but we persisted to bring him to justice and send a message to the entire community that this type of conduct will not be tolerated and will be punished.”
After hearing from the mothers of two African-American men killed by the gang, Judge Anderson on Monday accepted the guilty plea and sentenced Cambero to 20 years in prison. Among the considerations Judge Anderson cited as influencing his sentence were the defendant’s acceptance of responsibility and the desire of the victims and witnesses to be spared the trauma of another trial.
This case was investigated by the FBI’s Los Angeles Field Office and was prosecuted by Deputy Chief Bobbi Bernstein of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorneys Jennifer Chou and Daniel O’Brien of the Central District of California.
Former Fugitive Gang Member Sentenced to 20 Years in Federal Prison for Racially Motivated MurderRead the Press Release
LOS ANGELES – An Avenues gang member who was captured last year after more than a decade on the run was sentenced Monday to 20 years in prison on federal hate crime and firearms charges that were filed against him in 2004.
Merced Cambero Jr., 39, who used the gang moniker “Shadow,” pleaded guilty in February to participating, along with other gang members, in a conspiracy to use violence against African Americans to interfere with their right to live in Highland Park. Cambero also admitted that he participated in the 1999 racially motivated murder of Kenneth Wilson, an African-American man who was shot and killed in furtherance of that conspiracy.
Cambero was sentenced by United States District Judge Percy Anderson, who in 2006 presided over the trial of four co-defendants who were convicted by a federal jury. Cambero and three of the four co-defendants – Gilbert “Lucky” Saldana, Alejandro “Bird” Martinez and Fernando “Sneaky” Cazares – shot and killed Mr. Wilson because of his race and because he was using the public streets in Los Angeles. These defendants were also found guilty – along with a fourth co-defendant, Porfirio “Dreamer” Avila – of conspiring to use violence to interfere with the federal housing rights of African Americans in Highland Park, including another African-American man, Christopher Bowser, who was shot and killed in 2000. Saldana, Martinez, Cazares and Avila each were sentenced to life in prison. Although Cambero was charged in the same indictment, he was not arraigned in the case until after he was captured in Mexico last year.
At the 2006 trial of the four co-defendants, the jury heard testimony from two Avenues gang members who participated in the murder of Kenneth Wilson and implicated Cambero and three co-defendants. The gang members also testified about an agreement among Avenues gang members to try to preserve the primarily Latino make-up of Highland Park by engaging in violence against African Americans. Their testimony was corroborated by numerous African-American residents of the Highland Park neighborhood who described acts of racially motivated violence directed at them by the defendants and their fellow gang members.
In court filings connected with Cambero’s guilty plea and sentencing, Cambero admitted that he and his fellow gang members were in a stolen van when they saw Wilson, whom they did not know, and decided to kill him because of his race. Cambero admitted that he and two other gang members then got out of the van and fired guns at Wilson, who was killed by a single gunshot through the neck.
“This defendant was part of a reprehensible scheme that targeted an entire class of people simply because of skin color,” said United States Attorney Nick Hanna. “The Justice Department is committed to preserving and protecting everyone’s civil rights – particularly when violent acts are used to violate those rights. Mr. Cambero attempted to avoid prosecution for many years, but we persisted to bring him to justice and send a message to the entire community that this type of conduct will not be tolerated and will be punished.”
“This Justice Department will not tolerate any act of violence motivated because of another’s race,” said Acting Assistant Attorney General John Gore. “The defendant’s egregious actions were unlawful, and as this sentencing demonstrates, will not go without punishment. The Civil Rights Division will continue to vigorously prosecute those who commit violent acts of hate.”
After hearing from the mothers of two African-American men killed by the gang during Monday’s sentencing hearing, Judge Anderson accepted the guilty plea and sentenced Cambero to 20 years in prison. Among the considerations Judge Anderson cited as influencing his sentence were the defendant’s acceptance of responsibility and the desire of the victims and witnesses to be spared the trauma of another trial.
This case was investigated by the FBI’s Los Angeles Field Office and the Los Angeles Police Department.
The case was prosecuted by Deputy Chief Bobbi Bernstein of the Civil Rights Division’s Criminal Section, Assistant United States Attorney Jennifer Chou of the Violent and Organized Crime Section, and Assistant United States Attorney Daniel O’Brien of the Public Corruption and Civil Rights Section.
Floridian Charged in Complex Fraud Scheme Related to the Processing of Credit Card PaymentsRead the Press Release
PITTSBURGH, Pa. – A resident of Boca Raton, Florida, has been indicted by a federal grand jury in Pittsburgh on a charge of conspiracy to commit mail, wire and bank fraud, United States Attorney Scott W. Brady announced today.
The one-count indictment, returned on May 1, 2018, named Gennady Nudelman, 42, as the sole defendant. Nudelman was arrested today and the indictment unsealed.
According to the indictment, Nudelman was involved in a complex conspiracy related to the fraudulent processing of credit card payments. The credit card companies will not allow their products and services to be used to pay for certain precluded activities, including the on-line sales of pharmaceutical drugs and of products violating trademark infringement laws. The defendant participated in the conspiracy designed to conceal from the credit card companies the fact they used their products and services to pay for precluded activities and to subvert the internal controls the credit card companies had in place to detect and prevent this type of activity. The fraud involved establishing shell corporations and web sites associated with the shell companies that falsely claimed that they sold products other than pharmaceutical drugs or products that violated trademark infringement laws. The conspirators then applied for merchant accounts from the credit card companies in the names of the shell corporations and the fake web sites. Once the merchant accounts were established, they were used to process payments for pharmaceutical drugs or products that violated trademark infringement laws. Additionally, the conspirators arranged for the credit card statements sent to the consumers to have the names of the shell corporations and telephone numbers. The conspirators set up a telephone bank to receive calls from customers questioning billings on their credit card statements, and the conspirators explained to the customers the true nature of the transactions in hopes of avoiding charge-backs that could cause the credit card companies to question the legitimacy of the transactions.
The law provides for a maximum total sentence of not more than 30 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Food and Drug Administration – Office of Criminal Investigations, Homeland Security Investigations, Pennsylvania State Police and United States Postal Inspection Service 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.
Five People Indicted for Compromising Target’s Gift Card System and Defrauding Victims Out of Nearly $800,000Read the Press Release
Five members of a fraud ring charged with compromising the internal gift card system of major national retailer, Target Corporation, and defrauding the retailer and its legitimate customers of almost $800,000 have been indicted on wire fraud charges by a federal grand jury in Seattle, announced U.S. Attorney Annette L. Hayes. JEFFERY DOUGLAS MANN, 29, of Marysville, Washington, and JOSHUA NEWMAN, 33, of Kirkland, Washington will appear in U.S. District Court in Seattle at 2:00 today.
A third defendant, COREY MOSEY, 30, of Lynnwood, Washington is in Washington state custody on unrelated charges. The two remaining defendants KENNADY WESTON, 22, and DERRICK QUINTANA, 26, both of Everett, Washington, are being sought by law enforcement.
According to the indictment unsealed today, between May 2017 and December 2017, the ring allegedly stole gift card balances worth more than $785,000, and often sold illegally purchased goods or store gift cards for bitcoin on an internet marketplace. The co-conspirators allegedly used a special algorithm to reverse-engineer and identify unique bar code numbers of thousands of authentic gift cards sold by Target to legitimate customers. Members of the scheme then used the retailer’s automated customer service telephone system to verify balances linked to the various stolen gift card numbers. They then loaded active gift card numbers onto a mobile or electronic wallet app on their phones, which the co-conspirators used to purchase merchandise and legitimate gift cards at various Target store locations across at least five states: Washington, Oregon, California, Nevada and Colorado. For example, on one occasion in November 2017, JEFFERY DOUGLAS MANN, KENNADY WESTON, DERRICK QUINTANA, and others used roughly 180 compromised gift card numbers to make $6,900 in purchases at the Southcenter Mall Target store in Tukwila, Washington.
When the actual cardholders later tried to use their gift cards, they discovered that they had zero balance. In December 2017, Target modified its gift card system in response to the fraud, putting an end to the scheme.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Wire fraud is punishable by up to 20 years in prison.
The case is being investigated by the U.S. Secret Service, with assistance from the Kirkland, Lynnwood, and West Linn (OR) Police Departments, and is being prosecuted by Assistant United States Attorney Steven Masada and Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Federal Inmate Sentenced for Possessing a Weapon in PrisonRead the Press Release
Jackson, Miss. – Joseph Shaw, 35, was sentenced yesterday by United States District Judge Henry T. Wingate for possession of a weapon within a federal prison, announced U.S. Attorney Mike Hurst.
In 2004, Shaw was sentenced to a term of 295 months by the United States District Court for the Middle District of Florida after being convicted of carjacking with intent to cause death or serious bodily harm and using a firearm in relation to a crime of violence. He was assigned to serve his sentence at the United States Penitentiary in Yazoo City, Mississippi.
On June 21, 2017, during a routine search, federal correctional officers found Shaw in possession of a 5.5 inch shank that had been made by sharpening a piece of plastic. Shaw pleaded guilty on January 25, 2018. Today, Shaw was sentenced to serve 26 months in federal prison, to be followed by a three-year term of supervised release. Shaw will serve this new sentence after he completes his earlier sentence.
The case was investigated by the Federal Bureau of Prisons, Special Investigative Section. It is being prosecuted by Special Assistant United States Attorney Woelke Leithart.