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18 July 2018
Pittsburgh Man Pleads Guilty to Distribution of Dangerous OpioidRead the Press Release
PITTSBURGH, PA – A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to charges of conspiracy to distribute and possession with intent to distribute an analogue of fentanyl, United States Attorney Scott W. Brady announced today.
Calvin Armstrong, 31, pleaded guilty to two counts before Senior United States District Court Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from May 2017 to August 2017, Calvin Armstrong conspired with others to distribute and possess with intent to distribute cyclopropyl fentanyl, an analogue of fentanyl. Armstrong’s co-conspirator, Lynell Guyton purchased large quantities of fentanyl analogues from overseas purveyors, which he distributed in Western Pennsylvania.
From late August 8, 2017 through the early morning of August 9, 2017, Armstrong packaged large amounts of cyclopropyl fentanyl with other individuals. On August 9, 2017, law enforcement executed a search warrant. Guyton was found on the first floor along with Armstrong and two other individuals. Large amounts of narcotics and packaging paraphernalia were present in the house. A table with powder narcotics was overturned during the initial SWAT entry into the home, causing large amounts of opioids to become airborne. SWAT officers exposed to the airborne narcotics were sent to the hospital for evaluation–everyone was medically cleared and no one was harmed. Law enforcement also executed another search warrant and found another individual and opioids at that residence. A total of 235 grams of cyclopropyl fentanyl was recovered from both residences. Armstrong admitted to packaging narcotics.
Judge Cercone scheduled sentencing for December 7, 2018. The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Pending sentencing, the court ordered Armstrong to remain detained.
Assistant United States Attorneys Rachael L. Dizard and Shanicka L. Kennedy are prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement’s (ICE)/Homeland Security Investigations (HSI), assisted by the United States Postal Inspection Service, the Pennsylvania State Police and the Pittsburgh Bureau of Police, including the Pittsburgh Police SWAT Team, conducted the investigation leading to the Indictment in this case.
Pinellas Park Babysitter Sentenced for Producing Child Pornography of InfantRead the Press Release
Tampa, Florida – U.S. District Judge Charlene E. Honeywell today sentenced Robert Joseph Ware (27, Pinellas Park) to 23 years in federal prison for producing child pornography. Ware had pleaded guilty on December 20, 2017.
According to court documents, on December 10, 2011, Ware produced three images of child pornography depicting him sexually abusing an infant that he had been babysitting. He sent the images via text message to an individual in New York. The investigation and prosecution of the individual in New York revealed the child pornography produced by Ware. When federal agents arrested Ware on May 9, 2017, he had 90 images of child pornography on his cellphone.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
“Only the worst depraved criminal would produce child pornography with an infant left in his care,” said HSI Tampa Special Agent in Charge James C. Spero. “This egregious crime reminds us all to remain vigilant in the protection of our children.”
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Pine Ridge Man Found Guilty in Death of ChildRead the Press Release
United States Attorney Ron Parsons announced that Zachariah Michael Poor Bear, 24, of Pine Ridge, South Dakota, was convicted of First Degree Murder and Assault Resulting in Serious Bodily Injury following a four-day federal jury trial held in U.S. District Court in Rapid City. The guilty verdict was returned on July 13, 2018.
The penalty is mandatory lifetime imprisonment, a $250,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
The conviction stemmed from Poor Bear killing a 19 month-old baby by inflicting blunt force trauma to her head and abdomen, in May 2015 at Pine Ridge.
The investigation was conducted by the Federal Bureau of Investigation, the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorneys Sarah Collins and Eric Kelderman prosecuted the case.
A presentence investigation was ordered and a sentencing date will be set. The defendant was remanded to the custody of the U.S. Marshals Service.
Penn Hills Felon Charged with Illegally Possessing Pistols and AmmunitionRead the Press Release
PITTSBURGH, PA – An Allegheny County man has been indicted by a federal grand jury in Pittsburgh on a charge of being a felon in possession of firearms and ammunition, United States Attorney Scott W. Brady announced today.
The one-count indictment named Jaamiyl Dean, age 42, of Penn Hills, Pa.
According to the indictment, on or about June 20, 2018, Dean possessed an Intratec 9mm Luger pistol, a Smith & Wesson 9mm pistol, and multiple rounds of ammunition. Dean was prohibited from possessing the firearms and ammunition because of his prior convictions for aggravated assault, robbery, and a felony drug offense.
The law provides for a maximum total sentence of not less than 15 years and up to life in prison, a fine not to exceed $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorneys Tonya Sulia Goodman, Rachael L. Dizard, and Rebecca L. Silinski are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Drug Enforcement Administration jointly led the multi-agency investigation of this case, which also included the Pittsburgh Bureau of Police, Allegheny County Sheriff’s Office, Pennsylvania State Police, Robinson Township Police Department, Stowe Township Police Department, Pennsylvania Attorney General’s Office, Wilkinsburg Borough Police Department, and the McKees Rocks Police Department. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Owner of Canton company that manufactures American flags indicted for failing to pay $162,000 in payroll taxesRead the Press Release
The owner of a Canton company that manufactures American flags was indicted for failing to pay more than $162,000 in payroll taxes.
Richard Spencer, 51, was indicted in federal court on 15 counts of failure to account for, collect and pay over employment taxes.
U.S. Attorney Justin Herdman said: “This defendant is accused of not paying over taxes he collected from his employees, and intentionally misclassifying others to avoid taxes. This defendant benefitted from being able to say that his flags were made in America, but he failed to meet his obligations to his employees and the American taxpayer.”
“In an attempt to avoid his employment tax responsibilities as owner of RS Sewing, Richard Spencer misclassified a portion of his employees as independent contractors. He also withheld employment taxes from his appropriately classified employees, but never paid them to the IRS,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Spencer controlls RS Sewing, which manufactures American flags. Spencer oversaw production, source materials, paperwork and the company’s financial operations, according to the indictment.
Spencer, beginning around 2008, reclassified some of his workers from employees to independent contractors. Following an audit in 2011, Spencer was informed he improperly classified the workers as independent contractors, and a penalty was assessed against Spencer. He continued to misclassify some employees and failed to pay employment taxes, according to the indictment.
Spencer classified some workers as independent contractors and others as employees, although all RS Sewing workers were required to clock in and out, were paid wages by the hour, were provided materials to make the flags by RS Sewing and were otherwise treated the same by managers, according to the indictment.
Spencer from 2012 through 2015, Spencer failed to withhold taxes from workers he knowingly and willfully misclassified as independent contractors. For workers classified as W-2 employees, Spencer withheld federal income, Social Security and Medicare taxes from employees but never paid the money to the IRS, according to the indictment.
Overall, he failed to collect, account for and pay over approximately $162,728 of federal employment taxes, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
This case was investigated by the Internal Revenue Service – Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney Carmen Henderson.
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.
Orlando Man Sentenced to More Than 19 Years for Enticement of A Minor and Federal Income Tax FraudRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced Andy William Bosch (43, Orlando) to 16 years and 8 months in federal prison for enticement of a minor to engage in sexual activity and for federal income tax fraud. Bosch pleaded guilty to both charges on March 29, 2018.
According to court documents, between March 10 and March 16, 2016, Bosch enticed a minor to travel from the Philippines to the United States to engage in sexual activity. Then, from October 20, 2016, to February 15, 2017, he used a cell phone to coerce the same minor to engage in sexual activity.
Furthermore, both independently and as part of his federal tax preparation business (BBG Tax Services), Bosch helped to prepare and file fraudulent federal income tax returns from 2012 to 2017. The losses for the false tax returns charged in the indictment totaled $135,801.
The enticement case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Border Patrol, U.S. Citizenship and Immigration Services, with assistance from the U.S. Marshals Service, and the Osceola County Sheriff’s Office. The tax fraud case was investigated by the Internal Revenue Service – Criminal Investigation.
“HSI’s extensive international reach helped stop this criminal in his tracks,” said HSI Special Agent in Charge James C. Spero. “This sentencing underscores the combined efforts of federal, state, and local law enforcement in working to stop predators from harming children.”
Both cases were prosecuted by Special Assistant United States Attorneys Christina R. Downes and Brandon Bayliss, on assignment from the Office of Principal Legal Advisor, ICE, in the Middle District of Florida.
Oregon Prosecutor Receives DEA Administrator's AwardRead the Press Release
WASHINGTON – Scott M. Kerin, Assistant U.S. Attorney for the District of Oregon, was one of several prosecutors and investigators recognized today by Acting Drug Enforcement Administration (DEA) Administrator Uttam Dhillon for their work investigating a transnational opiate trafficking organization.
Kerin and his colleagues were given the prestigious Administrator’s Award for Outstanding Group Achievement in a ceremony today in Washington.
This case came to the attention of law enforcement as part of “Operational Denial,” an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation into the international trafficking of fentanyl and other legal drugs, and was significantly aided by the national and international coordination of agencies led by DEA’s Special Operations Division (SOD). The operation started in North Dakota in January 2015 as an overdose investigation. To date, 32 defendants have been charged as a result of the investigation.
This case jointly investigated by DEA; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI); U.S. Postal Inspection Service; IRS Criminal Investigations; Grand Forks Narcotics Task Force; Royal Canadian Mounted Police (RCMP); Portland Police Bureau (PPB), Drugs and Vice Division; Portland HIDTA Interdiction Task Force; Oregon State Police (OSP); and the Grand Forks, North Dakota Police Department.
Christopher C. Myers, U.S. Attorney for the District of North Dakota; Assistant U.S. Attorney Kerin; and Trial Attorney Adrienne Rose of the Criminal Division’s Narcotics and Dangerous Drugs Section are prosecuting the case.
This case was brought as part of the Justice Department’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the department’s strategy for reducing the availability of drugs in the U.S. OCDETF was established in 1982 to mount a comprehensive attack on drug trafficking by disrupting and dismantling major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in coordination with state and local law enforcement.
Orange County Real Estate Investor Sentenced to More Than Six Years in Federal PrisonRead the Press Release
SANTA ANA, California – A former Orange County real estate investor was sentenced yesterday by United States District Judge David O. Carter to 78 months in prison for defrauding 70 investors out of more than $12 million.
Francisco Plascencia Esparza, 46, formerly of Coto De Caza now residing in Cumming, Georgia, solicited millions of dollars from investors in Southern California, promising to use the money to acquire real estate and pay a fixed rate of return on their investments.
Esparza pleaded guilty in September to wire fraud, admitting that he had lured investors over a seven-year period by falsely claiming that he had run successful businesses and investment ventures when, in fact, his prior business ventures failed. Esparza engaged in a Ponzi scheme, using funds from new victims to pay off prior investors. Esparza also admitted using investor money for personal purposes, including purchasing a home, luxury cars, a wedding, and vacations.
Judge Carter found that dozens of victims suffered substantial financial harm from the fraud, including for some, the loss of their 401k retirement accounts and the inability to retire as planned, if at all.
Judge Carter ordered Esparza to pay $12.6 million in restitution.
The investigation was conducted by the Federal Bureau of Investigation.
This case was prosecuted by Assistant United States Attorneys Daniel S. Lim and Joseph T. McNally of the Santa Ana Branch Office.
Orange County Man Sentenced to 108 Months in Federal Prison in $21 Million ‘Builder Bailout’ Fraud SchemeRead the Press Release
SANTA ANA, California – An Orange County man was sentenced to federal prison for his leadership role in a “builder bailout” mortgage fraud scheme.
Momoud Aref Abaji, 37, of Huntington Beach, was sentenced to 108 months in prison by United States District Judge Andrew Guilford and ordered to pay more than $10 million in restitution to the financial institutions that were victims of the fraud. The scheme Abaji operated resulted in the fraudulent purchase of more than 100 condominium units around the country, causing more than $10 million in losses when the properties went into foreclosure.
Abaji, along with several co-conspirators, operated the scheme through Excel Investments and related companies based in Santa Ana and Irvine. The scheme involved kickbacks from condominium builders during the 2008 financial crisis, that Abaji and his co-conspirators hid from lenders to convince them to fund loans in excess of the actual purchase price.
During the course of the scheme, co-conspirators identified condominium developments around the country where the builders were struggling to sell units and arranged to purchase multiple units at a discount. The builders benefitted by making it appear that their condos were selling and maintaining their value, while members of the conspiracy obtained the kickbacks.
The co-conspirators negotiated with condominium builders in California, Florida and Arizona for discount units. The defendants bought units for themselves, their relatives, and on behalf of “straw buyers” whom they brought into the scheme. They identified straw buyers by looking for individuals with good credit scores and then recruited them into the scheme by giving them an upfront payment for their participation and by presenting the scheme as an investment opportunity that required no down payment and would generate income through rental payments.
To obtain mortgages for the properties, Abaji and other co-conspirators prepared loan applications with false information about the straw buyers – including fake employment, income and assets, as well as fabricated W2s, pay stubs and bank statements. The mortgage applications also included false information about the terms of the transactions, such as concealing the large kickbacks from builders through false and misleading HUD-1 forms. As a result of the false statements in the fraudulent loan applications, mortgage lenders provided over $21 million in financing to purchase more than 100 properties.
Many of these loans went into default, and mortgage lenders lost more than $10 million after foreclosing on the properties. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) purchased dozens of these loans on the secondary mortgage market and suffered losses of at least $1.3 million as a result of defaults and foreclosures on the properties.
Several other defendants were charged in connection with the same scheme.
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Abaji’s brother, Maher Obagi, 32, of Huntington Beach, who was sentenced in June 2018 to 78 months in prison and ordered to pay just over $10 million in restitution.
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Mohamed Salah, 43, of Mission Viejo, who was sentenced in June 2018 to 57 months in prison and ordered to pay just over $7 million in restitution.
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Ali Khatib, 53, of Newport Coast, pleaded guilty in a related case and is scheduled to be sentenced on September 10th;
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Jacqueline Burchell, 57, of Orange, pleaded guilty in June 2013 and is scheduled to be sentenced on October 1st;
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Wajieh Tbakhi, 53, who is currently a fugitive; and
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Mohamed El Tahir, now deceased.
This matter was investigated by the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of the Inspector General; and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.
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Ohio Police Officer Indicted for Assaulting an Arrestee and Obstructing JusticeRead the Press Release
A federal grand jury today unsealed an indictment charging El’Shawn Williams, an officer in the Put-in-Bay Police Department, with using excessive force against a man in custody, and then making false statements and writing false reports to cover it up. The indictment alleges that Williams, 28, punched and struck the victim multiple times in the head and body, causing him bodily injury.
The indictment was announced by Acting Assistant Attorney General for the Civil Rights Division John Gore, United States Attorney Justin Herdman of the Northern District of Ohio, and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division.
The indictment alleges that after the incident, Williams wrote a report that falsely minimized the force he used and failed to disclose that he struck the victim after the victim was restrained by another officer. It also alleges that Williams gave a false statement to an Ottawa County detective denying that he punched the victim, denying that he struck him in the face, and denying that he struck him after the victim was restrained by another officer.
If convicted, Williams faces a maximum punishment of 10 years imprisonment for the excessive force charge and up to 20 years imprisonment for each obstruction charge. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case was investigated jointly by the Cleveland Division of the Federal Bureau Investigation and the Ottawa County Sheriff’s Department. It is being prosecuted by Assistant United States Attorney Michael Freeman of the Northern District of Ohio and Trial Attorney Dana Mulhauser of the Civil Rights Division of the Department of Justice.
Ohio Man Sentenced for Dealing Drugs in Greenbrier CountyRead the Press Release
BECKLEY, W.Va. – United States Attorney Mike Stuart announced today that a Toledo, Ohio drug dealer was sentenced in federal court in Beckley. William James Springer, 33, was sentenced to 96 months in prison for distribution of oxymorphone. Stuart praised the work of the Greenbrier Valley Drug and Violent Crime Task Force.
“An Ohio drug dealer getting pills from Detroit to distribute in Greenbrier County,” said United States Attorney Mike Stuart. “These out-of-state drug dealers have found every corner of our great state and are bringing devastation and misery to our communities. And we’re going to do our best to protect our citizens by locking them all up.”
Springer pled guilty in April, admitting that on October 5, 2016, he distributed oxymorphone pills to a confidential informant in Ronceverte. He further admitted that between September 2016 and December 2016 he was involved in distributing a total of about 300 40 mg oxymorphone pills in Greenbrier County, including pills which he distributed as charged in the indictment.
The investigation previously resulted in lengthy prison sentences for three other people who were involved with Springer in his scheme of bringing oxymorphone from Detroit to sell in Greenbrier County. Joshua Adam Smith, 36, of Lewisburg, pled guilty to distribution of oxymorphone and was sentenced to 96 months. Tremaine Dean Pool Jr., 23, of Romulus, Michigan, pled guilty to possession with intent to distribute oxymorphone and was sentenced to 40 months. Jessica Nicole Honaker, 26, of White Sulphur Springs, pled guilty to aiding and abetting the distribution of oxymorphone and received a sentence of 24 months.
Assistant United States Attorney John File handled the prosecution. United States District Court Judge Irene C. Berger imposed the sentence on Springer.
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North Dakota Investigation Receives DEA Administrator’s AwardRead the Press Release
FARGO - U.S. Attorney Christopher C. Myers announced that on July 18, 2018, Acting DEA Administrator Uttam Dhillon recognized a team of investigators and prosecutors with the "Administrator’s Award for Outstanding Group Achievement" at a ceremony in Washington, D.C. today for their teamwork in investigating a trans-national opiate trafficking organization. This is the first time an investigation in North Dakota has received this prestigious honor.
This case came to the attention of law enforcement as part of "Operation Denial," an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation into the international trafficking of fentanyl and other lethal drugs, and was significantly aided by the national and international coordination led by the multi-agency Special Operations Division (S.O.D.) near Washington D.C. as part of "Operation Deadly Merchant." The investigation started in North Dakota on January 3, 2015, with the overdose death in
Grand Forks of 18-year-old Bailey Henke. To date, thirty-two (32) defendants have been charged as a result of the investigation.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; U.S. Drug Enforcement Administration; U.S. Postal Inspection Service; Grand Forks Narcotics Task Force; Royal Canadian Mounted Police; Portland, Oregon, Police Bureau – Drugs and Vice Division; IRS-Criminal Investigations Division; Portland HIDTA Interdiction Task Force; Oregon State Police and the Grand Forks Police Department. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking organizations and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Christopher C. Myers, Assistant U.S. Attorney Scott Kerin for the District of Oregon, and Trial Attorney Adrienne Rose of the Criminal Division’s Narcotic & Dangerous Drug Section are prosecuting the cases.
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New Orleans Pair Charged with Stealing Money from Deceased Elderly WomanRead the Press Release
U.S. Attorney Duane A. Evans announced that TRINA ROBAIR, age 44, and MICHAEL REED, age 62, both of New Orleans, Louisiana were charged yesterday with a one count Bill of Information charging them with Bank Larceny in relation to stealing at least $149,500 from an elderly deceased woman for whom ROBAIR was a caretaker, in violation of Title 18, United States Code, Section 2113(b).
According to the Bill of Information, REED was a handyman who performed work on the elderly woman’s home.
The charging document, filed in court, states that ROBAIR had access to the elderly woman’s accounts because she was incapacitated. ROBAIR did not have permission to steal the money. The Bill of Information further states that ROBAIR stole $149,500 and REED stole $20,000.
The statutory penalty for Bank Larceny is ten (10) years imprisonment, $250,000 fine, three (3) years supervised release, restitution and a $100 special assessment.
The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney, Carter K. D. Guice, Jr.
New Orleans Man Pleads Guilty in Methamphetamine-Trafficking ConspiracyRead the Press Release
U.S. Attorney Duane A. Evans announced that GLENN MELANCON, age 50, of New Orleans pled guilty today to one count of conspiring to traffic methamphetamine in the Eastern District of Louisiana. MELANCON faces a maximum sentence of 20 years’ incarceration, a fine of up to $1,000,000 and at least 3 years of supervised release.
U.S. District Judge Susie Morgan set sentencing for MELANCON on October 24, 2018.
U.S. Attorney Evans praised the work of the United States Postal Inspection Service, Louisiana State Police, Jefferson Parish Sheriff’s Office, Texas Department of Public Safety, Texas Highway Patrol, Montgomery County (Texas) Sheriff’s Office, Immigration and Customs Enforcement, AMTRAK Police, and the Orleans Parish District Attorney’s Office. Assistant United States Attorney Brandon S. Long is in charge of the prosecution.
Michigan Resident Pleads Guilty to Structuring A Financial TransactionRead the Press Release
A Bloomfield Hills, Michigan resident, pleaded guilty today in Flint, Michigan to one count of structuring a financial transaction to avoid bank reporting requirements, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to court documents, Scott Zack, who entered his plea today, and David Katz, who pleaded guilty on June 12, owned and operated several medical management companies and a chiropractic facility in Michigan, including Health Systems Medical Management, LLC and Medical Management Partners, LLC. In July 2013, Scott Zack and David Katz withdrew cash in amounts of less than $10,000 from multiple bank branch locations in order to avoid the requirement that domestic banks file a currency transaction report for transactions in amounts exceeding $10,000. As part of their pleas, Zack and Katz acknowledged that during the period of their scheme their unlawful conduct involved more than $250,000.
In a related case, John Anthony Capella of Lantana, Florida pleaded guilty on May 29 to conspiracy to defraud the United States. According to court documents filed in that case, Capella did so by causing, for example, businesses he controlled to file false documents with the IRS, including a tax return that underreported substantial cash receipts.
Honorable Lisa V. Parker scheduled sentencing for February 19, 2019. Katz and Zack each face a maximum sentence of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Capella faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release for conspiring to defraud the United States.
Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Mark McDonald and William Guappone, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the United States Attorney’s Office for the Eastern District of Michigan for its substantial assistance during the investigation.
More information about the Tax Division’s enforcement efforts is available on the Division’s website.
Metro Denver Man Charged with Wire Fraud After Implementing A Ponzi SchemeRead the Press Release
DENVER – Daniel B. Rudden, age 71, of Denver, Colorado, was charged by criminal complaint with one count of Wire Fraud after implementing a multi-million dollar Ponzi scheme, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Rudden appeared yesterday at the hearing pursuant to an arrest warrant and was released on a personal recognizance bond.
According to court records, including the affidavit in support of the Criminal Complaint, on July 9, 2018, a California resident contacted the FBI to report she was defrauded of approximately $300,000 by Rudden. On one occasion, in January 2017, the victim wired $100,000 to Rudden and/or Rudden’s company Financial Visions (FV) at Colorado State Bank and Trust. Rudden told the victim her money would be used to “factor” funeral expenses. According to the victim, Rudden said he loaned people money to pay for funeral expenses until insurance payments were received or other payment arrangements could be made.
The affidavit alleges that Rudden ran his business as a Ponzi scheme and that he received about $55 million from approximately 150 investors located in Colorado and other states.
The matter is being investigated by the FBI, and the defendant is being prosecuted by Assistant U.S. Attorney Martha A. Paluch, Chief of the Economic Crime Section.
A criminal complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a constitutional right to be indicted by a grand jury. The charges in the complaint are allegations and the defendant is presumed innocent unless and until proven guilty.
Medical Doctor Convicted in Brooklyn Federal Court of Causing Overdose Death of a PatientRead the Press Release
A federal jury in Brooklyn today, following two weeks of trial, convicted Dr. Martin Tesher of 10 counts of unlawful distribution of oxycodone without legitimate medical purpose to five patients, one of whom died as a result two days after his last visit with the defendant. When sentenced by United States District Judge Raymond J. Dearie, Dr. Tesher faces a mandatory minimum sentence of 20 years’ imprisonment and a maximum of life in prison.
Attorney General Jeff Sessions, Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, announced the verdict.
“It is incredible but true that some medical professionals have chosen to violate their oaths and exploit our nation's drug epidemic for profit, even at the cost of human lives,” stated Attorney General Sessions. “This doctor knowingly took advantage of drug addicts and even contributed to the death of a young man. The Department of Justice is relentlessly pursuing criminals like him: we have charged more than 200 doctors with opioid-related crimes since the beginning of last year. We are going to keep pursuing these cases because they help cut off the supply of drugs and stop fraudsters from exploiting vulnerable people. I want to thank the DEA, our partners at IRS, four local police departments and especially our fabulous prosecutors Jennifer Sasso and Penelope Brady for their hard work in this case. I believe that they have helped prevent many more New Yorkers from falling into addiction and death.”
“Dr. Tesher dispensed opioids to patients whom he knew were abusing illegal drugs and the tragic result was an overdose death,” stated United States Attorney Donoghue. “Today, the jury held Dr. Tesher responsible for the part he played in fueling the opioid epidemic by abandoning his responsibilities as a medical professional and for acting as a drug dealer with a prescription pad. This Office and our law enforcement partners will continue to work tirelessly to combat the opioid epidemic on all fronts, including prosecuting corrupt doctors who disregard the well-being of their patients by prescribing highly addictive drugs without legitimate medical purpose.”
“DEA doesn’t tell doctors how to practice medicine, DEA is a watchdog to ensure doctors’ prescriptions are written for the right reason and betterment of their patient’s health,” stated DEA Special Agent-in-Charge Hunt. “This trial brings to light how opioid traffickers can hide in plain sight, like Dr. Tesher; and how heartbreaking drug addiction is to families and friends of substance abusers. I commend the U.S. Attorney’s Office for the Eastern District of New York and the DEA’s Long Island District Office Tactical Diversion Squad on their diligent work throughout this investigation. DEA will continue to work with our federal, state and local law enforcement partners to battle opioid traffickers and suppliers at all levels.”
The evidence at trial established that between June 2013 and January 2017, Dr. Tesher, a medical doctor specializing in general family care, prescribed oxycodone and fentanyl on a continuing basis without a legitimate medical purpose to patients after he learned, or had reason to believe, that these patients were addicted to drugs. The five patients either told Dr. Tesher that they had a drug addiction, had previously been treated for drug addiction, or tested positive for illegal drugs such as cocaine or heroin during the course of their treatment by the defendant. While under Dr. Tesher’s care, Nicholas Benedetto, 27, tested positive for cocaine, heroin and methadone in addition to oxycodone and fentanyl. Dr. Tesher continued to prescribe oxycodone and fentanyl to Benedetto despite indicators that he was abusing those drugs. Benedetto was found dead of a fatal combination of oxycodone and fentanyl on March 5, 2016, two days after he had been prescribed oxycodone and fentanyl patches by Dr. Tesher. According to a government expert witness, none of the patients for whom Tesher is charged in the superseding indictment had verified medical conditions that would require the prescription of Schedule II opioids.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, which is comprised of agents and officers of the DEA, Internal Revenue Service, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the New York City Police Department, Criminal Enterprise Investigations, the Department of Health & Human Services, Office of Inspector General, the New York City Department of Investigation and NCPD’s Asset Forfeiture and Intelligence Bureau.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department and the New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Jennifer M. Sasso and Penelope Brady are in charge of the prosecution.
The Defendant:
DR. MARTIN TESHER
Age: 82
Manhattan, New YorkE.D.N.Y. Docket No. 17-CR-523 (RJD)
Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act AllegationsRead the Press Release
SYRACUSE, NEW YORK - Latham, New York-based medical device manufacturer AngioDynamics, Inc. has agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK), the Justice Department announced today.
“The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Chad R. Readler, Acting Assistant Attorney General for the Justice Department’s Civil Division. “When manufacturers make misleading statements concerning the use of their products in ways that have not been cleared by the FDA, it undermines patient care. Taxpayers and patients deserve better.”
AngioDynamics will pay $11.5 million to resolve allegations that the company caused false claims to be submitted to government healthcare programs for procedures involving an unapproved drug-delivery device that was marketed with false and misleading promotional claims.. The government alleged that, from May 2006 through December 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, the manufacturer of LC Bead, and marketed LC Bead for use as a drug-delivery device in combination with chemotherapy drugs. Moreover, AngioDynamics personnel routinely claimed that this particular use of LC Bead, which FDA had twice declined to approve, was “better”, “superior”, “safer” and “less toxic” than alternative treatments, even though there was insufficient clinical evidence to support the truthfulness of these claims. The government also alleged that AngioDynamics was aware that many insurers declined to provide coverage for certain LC Bead procedures and, as a result, instructed healthcare providers to use inaccurate billing codes when submitting claims for such uses. The federal share of the civil settlement is approximately $10.9 million, and the state Medicaid share of the civil settlement is approximately $600,000. The government previously resolved related criminal and civil claims against Biocompatibles in November 2016.
“The basic legal rule in this area could be mastered by a third-grader: Don’t lie,” said U.S. Attorney John F. Bash for the Western District of Texas. “If you do, you will be held accountable. This settlement reflects that.”
AngioDynamics will separately pay $1 million to resolve allegations that the company caused false claims to be submitted to federal healthcare programs in connection with the use of the PVAK, later renamed the 400 micron kit. In 2008, AngioDynamics acquired the PVAK as part of a product suite that utilizes a laser to close or collapse malfunctioning veins. The PVAK was FDA-cleared only for use in treating superficial veins, and, in 2011, AngioDynamics requested that the FDA clearance include the treatment of perforator veins. However, FDA informed the company that the treatment of perforator veins constitutes a new indication for which safety and efficacy were unknown. As a result, AngioDynamics voluntarily recalled the PVAK and re-issued the product under a new name, the 400 micron kit that did not refer to the unapproved use of treating perforator veins. Notwithstanding the recall and rebranding, certain AngioDynamics personnel, as part of a continued campaign to market the device to treat perforator veins, falsely represented to providers that Medicare would cover this use despite Medicare coverage restrictions to the contrary.
“This settlement reflects the expectation that medical device manufacturers will give doctors accurate information about devices they manufacture and underscores the vital role of the False Claims Act in protecting the public fisc,” said United States Attorney Grant C. Jaquith for the Northern District of New York. “We will continue to use all available tools to help secure patient safety and ensure the integrity of healthcare services claims submitted to the government.”
“Medical device makers have an obligation to provide truthful information to protect both patients and the integrity of government health programs,” said Special Agent in Charge Scott J. Lampert of the U.S. Health and Human Services Department Office of Inspector General. “We will continue to thoroughly investigate health care fraud allegations.”
The civil settlement relating to LC Bead resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Mr. Ryan Bliss, who formerly worked in the marketing departments of both AngioDynamics and Biocompatibles. The Act permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al., Case No. SA-13-CA-0667-XR. As part of today’s resolution, Mr. Bliss will receive approximately $2.3 million from the settlement relating to LC Bead.
The settlements with AngioDynamics were the result of a coordinated effort among the U.S. Attorney’s Offices for the Western District of Texas and the Northern District of New York and the Civil Division’s Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel, HHS’ Office of Counsel to the Inspector General, and the Department of Defense’s Defense Criminal Investigative Service. The investigations were conducted by the FDA’s Office of Criminal Investigations; the HHS Office of Inspector General investigated allegations in the settlement involving PVAK.
The claims resolved by the civil settlements are allegations only, and there have been no determinations of liability.
Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Latham, New York-based medical device manufacturer AngioDynamics, Inc. has agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK), the Justice Department announced today.
“The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “When manufacturers make misleading statements concerning the use of their products in ways that have not been cleared by the FDA, it undermines patient care. Taxpayers and patients deserve better.”
AngioDynamics will pay $11.5 million to resolve allegations that the company caused false claims to be submitted to government healthcare programs for procedures involving an unapproved drug-delivery device that was marketed with false and misleading promotional claims.. The government alleged that, from May 2006 through December 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, the manufacturer of LC Bead, and marketed LC Bead for use as a drug-delivery device in combination with chemotherapy drugs. Moreover, AngioDynamics personnel routinely claimed that this particular use of LC Bead, which FDA had twice declined to approve, was “better”, “superior”, “safer” and “less toxic” than alternative treatments, even though there was insufficient clinical evidence to support the truthfulness of these claims. The government also alleged that AngioDynamics was aware that many insurers declined to provide coverage for certain LC Bead procedures and, as a result, instructed healthcare providers to use inaccurate billing codes when submitting claims for such uses. The federal share of the civil settlement is approximately $10.9 million, and the state Medicaid share of the civil settlement is approximately $600,000. The government previously resolved related criminal and civil claims against Biocompatibles in November 2016.
“The basic legal rule in this area could be mastered by a third-grader: Don’t lie,” said U.S. Attorney John F. Bash for the Western District of Texas. “If you do, you will be held accountable. This settlement reflects that.”
AngioDynamics will separately pay $1 million to resolve allegations that the company caused false claims to be submitted to federal healthcare programs in connection with the use of the PVAK, later renamed the 400 micron kit. In 2008, AngioDynamics acquired the PVAK as part of a product suite that utilizes a laser to close or collapse malfunctioning veins. The PVAK was FDA-cleared only for use in treating superficial veins, and, in 2011, AngioDynamics requested that the FDA clearance include the treatment of perforator veins. However, FDA informed the company that the treatment of perforator veins constitutes a new indication for which safety and efficacy were unknown. As a result, AngioDynamics voluntarily recalled the PVAK and re-issued the product under a new name, the 400 micron kit that did not refer to the unapproved use of treating perforator veins. Notwithstanding the recall and rebranding, certain AngioDynamics personnel, as part of a continued campaign to market the device to treat perforator veins, falsely represented to providers that Medicare would cover this use despite Medicare coverage restrictions to the contrary.
“This settlement reflects the expectation that medical device manufacturers will give doctors accurate information about devices they manufacture and underscores the vital role of the False Claims Act in protecting the public fisc,” said United States Attorney Grant C. Jaquith for the Northern District of New York. “We will continue to use all available tools to help secure patient safety and ensure the integrity of healthcare services claims submitted to the government.”
“Medical device makers have an obligation to provide truthful information to protect both patients and the integrity of government health programs,” said Special Agent in Charge Scott J. Lampert of the U.S. Health and Human Services Department Office of Inspector General. “We will continue to thoroughly investigate health care fraud allegations.”
The civil settlement relating to LC Bead resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Mr. Ryan Bliss, who formerly worked in the marketing departments of both AngioDynamics and Biocompatibles. The Act permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al., Case No. SA-13-CA-0667-XR. As part of today’s resolution, Mr. Bliss will receive approximately $2.3 million from the settlement relating to LC Bead.
The settlements with AngioDynamics were the result of a coordinated effort among the U.S. Attorney’s Offices for the Western District of Texas and the Northern District of New York and the Civil Division’s Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel, HHS’ Office of Counsel to the Inspector General, and the Department of Defense’s Defense Criminal Investigative Service. The investigations were conducted by the FDA’s Office of Criminal Investigations; the HHS Office of Inspector General investigated allegations in the settlement involving PVAK.
The claims resolved by the civil settlements are allegations only, and there have been no determinations of liability.
Media Advisory: United States Attorney’s Office for the Northern District of Iowa to Host Roundtable Discussion with More Than 20 Community Organizations on Combatting Sexual Harassment in HousingRead the Press Release
SIOUX CITY, IA – The United States Attorney’s Office for the Northern District of Iowa and the Department of Justice’s Civil Rights Division will host a roundtable for community organizations to discuss the problem of sexual harassment in housing. The roundtable is designed to build collaboration among key partners in an effort to identify barriers to reporting sexual harassment in housing and increase awareness of the DOJ’s enforcement efforts. The U.S. Attorney’s Office anticipates the involvement of more than 20 different community organizations.
United States Attorney Peter Deegan will be present and joined by Nancy Langworthy, a Senior Attorney for the DOJ’s Civil Rights Division in Washington, D.C.
Event Details
When: 10:00AM-12:00PM, Friday, July 20, 2018
Where: Sioux City Public Museum, 607 4th Street, Sioux City, IA 51101
This is a “pen and pad” opportunity for the press. Photography permitted. A press release will be provided and interview opportunities will be available.
Follow us on Twitter @USAO_NDIA.
Maryland Man Sentenced to Jail Term for Fraudulent Billing Scheme Targeting D.C. Public SchoolsRead the Press Release
WASHINGTON – Charles E. Scott, Jr., a vendor who claimed to be providing tutoring and mentoring services for students with special needs, was sentenced today to 26 weekends in jail, to be followed by 180 days of home confinement, for a scheme in which he collected more than $75,000 from the District of Columbia Public Schools for work that never was performed.
The announcement was made by U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and District of Columbia Inspector General Daniel W. Lucas.
Scott, 38, of Baltimore, Md., pled guilty in April 2018 in the U.S. District Court for the District of Columbia to mail fraud and identity theft. He was sentenced by the Honorable Rudolph Contreras. The judge sentenced him to five years of probation, during which he must serve the jail term and complete the home confinement, as well as perform 100 hours of community service. He also is required to pay $75,398 in restitution to the District of Columbia Public Schools and an identical amount in a forfeiture money judgment.
According to a statement of offense filed as part of the plea, the scheme took place from approximately February 2013 through December 2013. During that time, Scott submitted invoices, timesheets and other documents to the Office of Special Education, a component of the District of Columbia Public Schools (DCPS). The Office of Special Education manages the school system’s Compensatory Education Program.
The Compensatory Education Program awards services to eligible students to assist with their educational needs and development. Students awarded compensatory education services have learning, mental, and/or behavioral disabilities that create an educational barrier that prevents them from reaping the full benefits of education. Services consist of tutoring, individualized education, monitoring, speech therapy, occupational therapy, and behavioral and psychological analysis. Once DCPS approves specific services, parents or guardians receive letters specifying the services that can be provided and it is up to the parent or guardian to identify an independent provider to perform the authorized services.
Scott’s invoices included the names and dates of birth for 10 minor children for whom he claimed to have performed services. The accompanying timesheets included what purported to be the signatures of the parents or guardians whose children had purportedly received the services as well as the signatures of the tutors who supposedly did the work. Nearly all of what purported to be signatures of the parents and guardians were forged. Tutors’ signatures also were forged.
Scott did not have permission to use the names and dates of the children listed on his invoices and did not have approval from parents or guardians to sign their names.
All told, Scott obtained a total of $75,398 for services that were never performed. In addition, the District of Columbia disputed and never paid him for $20,314 worth of invoices and timesheets that he submitted for services that never were performed.
In announcing the sentence, U.S. Attorney Liu, Assistant Director in Charge McNamara, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia Office of the Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Diane Lucas, who is handling forfeiture issues, former Assistant U.S. Attorney Adrienne Dedjinou, and Paralegal Specialists Joshua Fein, Aisha Keys, and Kristy Penny. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Peter C. Lallas, who is prosecuting the case.
Marion County, Illinois Man to Serve 14 Years in Prison on Bath Salts Related ChargesRead the Press Release
On July 17, 2018, a Marion Illinois man was sentenced to prison on charges related to Alpha-Pyrrolidinopentiophenone (Alpha-PVP) (also known as "bath salts), United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today.
Dennis R. Thacker, Jr., 49, of Alma, Illinois, was sentenced to 168 months in prison followed by three years of supervised release. Thacker, Jr., previously plead guilty to three counts in a federal Indictment. Count 1 charged that from 2016, until on or about December 2017, in Clay County and Marion County, and elsewhere, Thacker, Jr., conspired to distribute, and possess with intent to distribute, Alpha-PVP, a Schedule I controlled substance, in violation of federal law. Count 2 charged that on June 2, 2017, in Clay County, Thacker, Jr., distributed a mixture or substance containing Alpha-PVP and Count 3 charged that on June 2, 2017, in Marion County, Thacker, Jr., possessed with the intent to distribute a mixture or substance containing Alpha-PVP.
The investigation was conducted by the Flora Police Department, the Southeastern Illinois Drug Task Force, and the Clay County Sheriff’s Office.
Man Pleads Guilty to Spice Conspiracy and Distribution CrimesRead the Press Release
NORFOLK, Va. – A California man pleaded guilty today to conspiracy to traffic in synthetic cannabinoids, commonly known as “spice,” containing the active ingredient 5-fluoro-ADB. 5-fluoro-ADB has been a schedule I controlled substance since April 10, 2017.
According to court documents, from late September 2016 to August 2017, Robert L. Hoeflein, II, 24, of Long Beach, participated in a conspiracy to sell spice from Odds and Ends II and Happy Daze, establishments located in Chesapeake. In August 2014, Hoeflein was arrested by Chesapeake Police following an investigation that revealed that he was selling spice from Happy Daze. Following his 2014 arrest and conviction for spice possession in Chesapeake General District Court, Hoeflein continued to sell spice from Happy Daze. By early 2016, Hoeflein moved to Long Beach, where he opened up a shop very similar in appearance to Happy Daze, which he named Cali Daze.
In September 2016, Hoeflein entered into an agreement with co-conspirator William Barnes that allowed Barnes to use the space at Odds and Ends II to open up a shop to sell spice. Barnes placed his spice orders with Hoeflein, who had the connection to the ultimate source of supply. At Hoeflein’s request, the source would ship the spice directly to Barnes, who received 25 parcels of spice at between $7,000 and $9,000 per parcel. Hoeflein and Barnes split the profits from the spice sales at Odds and Ends II.
Hoeflein pleaded guilty to conspiracy to distribute and possess with intent to distribute 5-fluoro-ADB, and faces a maximum penalty of 20 years in prison when sentenced on November 5. 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, Thomas L. Chittum, III, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, Eric Shen, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after U.S. District Judge Raymond A. Jackson accepted the plea. Assistant U.S. Attorney Kevin Hudson is 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. 2:18-cr-31.
Maine Man Sentenced for Opioid Trafficking ConspiracyRead the Press Release
BOSTON – A Maine man was sentenced yesterday in federal court in Boston for his role in an opioid trafficking conspiracy involving the distribution of oxycodone from Florida to Massachusetts and Maine.
Gorky Gonzalez, 26, of Biddeford, Maine, was sentenced by U.S. District Court Judge Denise J. Casper to 54 months in prison and three years of supervised release. In April 2018, Gonzalez pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute oxycodone.
Gonzalez was arrested in March 2017 along with numerous co-defendants for their roles in a widespread conspiracy involving opioid trafficking and money laundering offenses in Massachusetts and Florida. Their arrests were the result of a three-year federal investigation into opioid-trafficking in New England.
Between September 2016 and November 2016, Gonzalez obtained sizeable quantities of oxycodone intended for distribution that were shipped from Miami, Fla., to Massachusetts and then transported to Maine. Payment for the oxycodone pills was then delivered to co-conspirators in Massachusetts, who then forwarded the money to the source of supply in Florida.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service; John Gibbons, U.S. Marshal for the District of Massachusetts; and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. Valuable assistance was provided by the Massachusetts State Police and the Biddeford (Maine), Framingham, Haverhill, Lawrence, Manchester (N.H.), Methuen, Millis, Natick, Stoughton, and Waltham Police Departments. Assistant U.S. Attorneys Nadine Pellegrini and Craig Estes of Lelling’s Narcotics and Money Laundering Unit are prosecuting the cases.
Luzerne County Man Indicted for Drug Trafficking and Firearms OffensesRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brandon Diggs, age 28, of Kingston, Pennsylvania, was indicted on July 10, 2018, by a federal grand jury for drug trafficking and firearms offenses. The indictment was unsealed today following Diggs’ arraignment before United States District Court Judge Malachy E. Mannion. Diggs was detained pending trial.
According to United States Attorney David J. Freed, the indictment alleges that Diggs possessed with the intent to distribute heroin, and possessed a 9mm Springfield Arms handgun as a convicted felon on June 9, 2018, in Luzerne County.
The matter was investigated by the Bureau of alcohol, Tobacco, Firearms, and Explosives (ATF) and the Kingston Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin 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 heroin related offenses.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine for the gun offense. That charge also carries a mandatory minimum sentence of 15 years’ imprisonment. The maximum penalty for the drug offense is 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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Leader of MS-13 East Coast Program Sentenced to over 19 Years in Prison for RICO ConspiracyRead the Press Release
BOSTON – The leader of the MS-13 East Coast Program was sentenced today in federal court in Boston for racketeering conspiracy.
Jose Adan Martinez Castro, a/k/a “Chucky,” 29, a Salvadoran national formerly residing in Richmond, Va., was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 235 months in prison, the top of the sentencing range recommended by the U.S. Sentencing Guidelines. Castro will be subject to deportation upon completion of his sentence. In November 2017, Castro pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO or racketeering conspiracy.
After a multi-year investigation, Castro was one of dozens of leaders, members, and associates of MS-13 named in a superseding indictment unsealed in January 2016 that targeted MS-13’s criminal activities in Massachusetts. According to court documents, MS-13 members engaged in a variety of racketeering acts and crimes of violence, including six different murders committed by MS-13 members in Massachusetts between October 2014 and January 2016.
Castro was one of 49 defendants to be convicted as part of this case. All nine defendants who went to trial were convicted and 40 others pleaded guilty.
MS-13 is a transnational criminal organization run by leaders in El Salvador, with thousands of members across the United States. In Massachusetts, as in other states, MS-13 is organized in the form of “cliques” or local branches. Groups of cliques are organized into “programs” that act under the larger mantle of MS-13. This creates a hierarchy that expedites communication and orders passed down from the leadership in El Salvador to the gang members on streets in the United States.
During the investigation, Castro was identified as the leader of MS-13’s East Coast Program. Most of the cliques in Massachusetts fall under the East Coast Program, which also has cliques in Maryland, Virginia, New York, New Jersey, North Carolina, Texas, and Ohio.
On Dec. 13, 2015, using a cooperating witness, law enforcement recorded a meeting of the East Coast Program leadership at Castro’s home in Richmond. The recorded meeting provided evidence about the organizational structure, leadership structure, and recruitment system of MS-13 as well as the means, methods, objectives, and operating principles of the gang. Leaders of the East Coast Program cliques from Massachusetts, Ohio, Texas, and Virginia attended the meeting.
During the meeting, Castro and others discussed how there was enough space in the East Coast Program for the all of the assembled MS-13 cliques to work cooperatively. Castro and others also discussed the need for the cliques to be better at planning and coordinating hits (i.e., murders) and Castro confirmed that murders generally had to be approved by MS-13 leaders before the local members could carry them out. The group also discussed sending money to El Salvador to support MS-13, the need to work together to increase the gang’s strength and control, and the need to kill anyone who provided information against the gang. An El Salvadoran-based leader of MS-13 also participated in the meeting via the phone and provided direction to the assembled leaders.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; Somerville Police Chief David Fallon; and Wes Adams, State’s Attorney, Anne Arundel County (Maryland), Anne Arundel County State’s Attorney’s Office, made the announcement today.
Laurel Man Sentenced to over 15 Years in Federal Prison for MethamphetamineRead the Press Release
Hattiesburg, Miss. – Jamie Wheat, 42, of Laurel, was sentenced yesterday by U.S. District Judge Keith Starrett to 188 months in federal prison, followed by seven years of supervised release, for possession with intent to distribute methamphetamine, announced U.S. Attorney Mike Hurst and Drug Enforcement Administration (DEA) Assistant Special Agent in Charge J. Derryle Smith. Wheat was also ordered to pay a $5,000 fine.
During a traffic stop on May 1, 2017, Wheat was found to be in possession of 446.24 grams of methamphetamine. As part of an ongoing investigation by the DEA, agents learned that Wheat was traveling to deliver the methamphetamine to his co-defendants, Dexter Jones and Mitchell Jones. Wheat pled guilty to the federal charge on March 29, 2018.
Mitchell Jones pled guilty before Judge Starrett on March 29, 2018, and will be sentenced on August 21, 2018. Dexter Jones pled guilty before Judge Starrett on April 5, 2018, and will be sentenced on September 6, 2018.
The case was investigated by the Drug Enforcement Administration, the Mississippi Bureau of Narcotics, the Lamar County Sheriff’s Department, and the Jones County Sheriff’s Department. It was prosecuted by Assistant United States Attorney Shundral H. Cole.
Laconia Man Sentenced to Four Years in Prison for Seven Bank Robberies in New Hampshire and MassachusettsRead the Press Release
CONCORD, N.H. - Chaka Meredith, 43, previously of Laconia, New Hampshire was sentenced to 48 months in federal prison for committing seven unarmed bank robberies in late 2016 and early 2017, United States Attorney Scott W. Murray announced today.
On January 18, 2018, Meredith pleaded guilty to the following crimes: (1) the December 29, 2016, robbery of a Bank of America branch location in Boston, Massachusetts; (2) the January 3, 2017, robbery of an East Boston Savings Bank branch location in Jamaica Plain, Massachusetts; (3) the January 11, 2017, robbery of a Meredith Village Savings Bank branch location in Laconia, New Hampshire; (4) the January 17, 2017, robbery of a Santander Bank branch location in Lawrence, Massachusetts; (5) the January 24, 2017, robbery of a TD Bank branch location in Lawrence, Massachusetts; (6) the January 25, 2017, robbery of a Lowell Five Cent Savings Bank branch location in Pepperell, Massachusetts; and (7) the January 30, 2017, robbery of a Santander Bank branch location in Plaistow, New Hampshire. The bank robberies proceeded in much the same fashion with Meredith presenting a demand note, receiving a sum of cash, and proceeding to flee on foot. Meredith has been in custody since his arrest by the Lawrence, Massachusetts Police on February 1, 2017.
Meredith was originally indicted by a federal grand jury sitting in Concord, New Hampshire, with the Plaistow robbery. He waived venue and agreed to plead guilty to the Massachusetts robberies in order to resolve all of his pending charges in both Massachusetts and New Hampshire resulting from the month-long bank robbery spree.
Following his release from prison, Meredith will serve 3 years on supervised release. He was also ordered to pay $10,438 in restitution to the seven banks he robbed.
“Bank robberies jeopardize the safety of bank employees, as well as members of the public,” said U.S. Attorney Murray. “In our efforts to reduce crime and protect our citizens, the law enforcement community works together to identify and prosecute those who commit bank robberies and other crimes that undermine public safety.”
“As a result of the close and efficient collaboration with our law enforcement partners, Chaka Meredith will now spend the next several years behind bars paying for his multi-state crime spree. The FBI is extremely grateful that nobody was injured by this serial bank robber, and we’ll continue to do everything we can to identify and disrupt others like him who commit violent crimes,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division.
This matter was investigated by the Federal Bureau of Investigations, the Laconia Police Department, the Plaistow Police Department, the Belknap County Sheriff’s Department, the Brookline, MA Police Department, the Lawrence, MA Police Department, the Pepperell, MA Police Department and the Massachusetts State Police. The Middlesex, Essex, and Suffolk District Attorneys’ Offices in Massachusetts as well as the New Hampshire Attorney General’s Office also provided invaluable assistance to investigators. The case was prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
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Kansas Man Convicted of Producing Child PornographyRead the Press Release
A Lindsborg, Kansas man who traveled to the Philippines and had sex with minor females there pleaded guilty to three counts of production of child pornography.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Stephen R. McAllister of the District of Kansas made the announcement.
Anthony Shultz, 55, helicopter pilot, was charged by complaint in July 2016 and pleaded guilty before U.S. District Judge Eric F. Melgren of the District of Kansas. Sentencing is scheduled for December 6, 2018.
According to admissions made in conjunction with the guilty plea, Shultz engaged in sex acts with minor females in the Philippines. He videotaped his sexual encounters with two minors and transported the videos to his home in Kansas. One of the girls was only 12 years old at the time; the other was 15 years old. In one of the videos, Shultz is seen giving the 15-year-old money after having sex with her. Shultz also produced child pornography of an 8-year-old girl in the Philippines by communicating on Skype with the child’s mother and directing the mother to expose the child’s genitals and live-stream it on web camera.
The FBI investigated the case. Trial Attorney Lauren E. Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jason Hart of the District of Kansas prosecuted the case.
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 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.justice.gov/psc.
Justice Department Reaches Settlement Agreement with Wifi Alliance Resolving the USERRA Claims of United States Army Reserve OfficerRead the Press Release
Acting Assistant Attorney General John Gore of the Civil Rights Division and John F. Bash, United States Attorney for the Western District of Texas, today announced that the Department of Justice has reached a settlement agreement with WiFi Alliance, a non-profit organization headquartered in Austin, Texas. The settlement agreement resolves allegations that WiFi Alliance violated the employment rights of Lieutenant Colonel (LTC) Charles O’Donnell, an Army Reservist, under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). USERRA safeguards the rights of uniformed servicemembers, including Reservists, to all benefits of employment following periods of absence due to military service obligations.
According to the complaint, LTC O’Donnell’s military service was a motivating factor in WiFi Alliance’s decision to terminate his employment in 2016 as part of a reduction in force. The layoff was concurrent with his military duty, which supported West Point Admissions at the United States Military Academy.
LTC O’Donnell has served more than 22 years in the Armed Forces. He was a program manager with WiFi Alliance for three years.
Under the terms of the settlement, WiFi Alliance has agreed to pay $62,500 in back pay to LTC O’Donnell. In addition, WiFi Alliance has conducted a company-wide training on servicemember rights, and agreed to review and revise, if necessary, its anti-discrimination policies and procedures to ensure that current and future employees are aware of, and protected by, their USERRA rights.
“The men and women of our Armed Forces expect and are entitled to the peace of mind of knowing that their civilian employment will not be jeopardized because they serve our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Through this lawsuit, the Department of Justice reaffirms its commitment to protecting the employment rights of the members of our Armed Forces.”
“We are pleased that our office was able to work alongside Acting Assistant Attorney General Gore and the dedicated career attorneys in the Civil Rights Division to obtain an agreement that will ensure that LTC O’Donnell will be compensated and that WiFi Alliance will train its supervisors in order to guarantee continued compliance with USERRA,” said United States Attorney John F. Bash of the Western District of Texas.
LTC O’Donnell initially filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service (VETS), which investigated this matter and attempted to reach a resolution between the parties. After resolution efforts failed, VETS referred the complaint to the Justice Department’s Civil Rights Division, Employment Litigation Section. The lawsuit, filed on March 1, was a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office for the Western District of Texas.
Civil Rights Division Trial Attorney Torie Atkinson and Assistant United States Attorney James Dingivan represented LTC O’Donnell in this matter.
The Justice Department’s Civil Rights Division has given high priority to the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at http://www.justice.gov/crt/employment- litigation-section and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Announces Resolution with NPB Neue Privat Bank AGRead the Press Release
The Department of Justice announced today that NPB Neue Privat Bank (NPB) reached a resolution with the Tax Division. NPB will pay a penalty of $5 million.
“The Department of Justice is committed to ending the practice of using foreign bank accounts to evade taxes,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “Taxpayers and financial institutions should take notice that the Department is continuing to aggressively pursue these cases.”
According to the terms of the non-prosecution agreement signed today, NPB agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the Department’s agreement not to prosecute this bank for tax-related criminal offenses.
NPB is a Swiss private bank based in Zurich, Switzerland. Until 2012, NPB conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. NPB offered a variety of traditional Swiss banking services that it knew could assist, and did in fact assist, U.S. clients in the concealment of assets and income from the IRS, including the use of numbered accounts and hold mail services.
NPB signed agreements with individual external asset managers or external asset management firms, whereby clients of the external asset manager could open and maintain accounts at NPB, with account management services being provided by the external asset manager. Almost all of NPB’s U.S. accounts were managed by external asset managers, for whom it provided custodial and limited banking services. In such cases, NPB generally did not contact the clients directly once they had opened their account. The Bank required an external asset manager mandate, so that communication about asset management and investment decisions were done between the U.S. customer and their external asset manager(s). In a few circumstances, NPB managed U.S. customers directly without an external asset manager. In those cases, the Bank required the U.S. customer to sign a direct asset management mandate, allowing the Bank to make investment decisions for the account.
In 2001, NPB entered into a Qualified Intermediary Agreement (QI Agreement) with the Internal Revenue Service (IRS). The Qualified Intermediary regime provided a comprehensive framework for U.S. information reporting and tax withholding by a non-U.S. financial institution with respect to U.S. securities. The QI Agreement required NPB to obtain IRS Forms W-9 and to undertake IRS Form 1099 reporting for new and existing U.S. clients engaged in U.S. securities transactions. Notwithstanding this requirement, NPB chose to continue to service U.S. clients without disclosing their identity to the IRS. NPB’s view was that it could continue to accept and service U.S. account holders, even if it knew or had reason to believe they were engaged in tax evasion, so long as it complied with the QI Agreement, which in NPB’s view did not apply to account holders who were not trading in U.S.-based securities or to accounts that were nominally structured in the name of a non-U.S.-based entity. NPB formed this view without consulting legal counsel.
Between August 1, 2008 and December 31, 2015, NPB held a total of 353 U.S.-related accounts, which included both declared and undeclared accounts, with an aggregate peak year-end value of approximately $400 million in assets under management.
In approximately early 2009, NPB was approached by certain external asset managers who managed accounts on behalf of U.S. taxpayers and were seeking a replacement custodian bank for accounts for U.S. taxpayers that were being closed by other Swiss banks, including UBS AG. Some of these external asset managers and NPB discussed the long-term trend towards tax compliance in Switzerland and that eventually the external asset managers would only be able to manage accounts that were declared to the U.S. government. Those external asset managers told NPB that they were telling their clients to become tax compliant. However, the external asset managers also made clear to NPB that many of their clients who wished to onboard accounts at the Bank had not yet declared their accounts to the U.S. government. The external asset managers did not promise, and NPB did not require, that all accounts onboarded to NPB would become compliant within a specific period of time. In one instance, however, an external asset manager onboarded accounts from other Swiss banks that the Bank knew were undeclared with no discussion of tax compliance until 2011.
NPB viewed the taking of clients from other banks that were exiting U.S. taxpayers as a business opportunity. During a board of directors meeting held on March 9, 2009, the board unanimously resolved that it would allow U.S. taxpayers to open accounts at NPB, including customers who were forced to exit other banks. Prior to 2009, NPB had few U.S. clients. At the close of 2008, U.S. Related Accounts held approximately 8 million Swiss francs in assets. By the end of 2009, NPB had approximately 450 million Swiss francs under management in accounts owned or beneficially owned by U.S. taxpayers, an influx of approximately 442 million Swiss Francs. Approximately 69% of the U.S.-related assets held by the Bank at the end of 2009 were reported to the U.S. government by the account holder in or before the 2009 tax year.
NPB’s executives hoped that their U.S. customers would eventually fully declare their accounts and keep their money at the Bank after becoming compliant. However, NPB created no written or formal policies to encourage or mandate tax compliance and, in fact, continued to acquire and service non-compliant U.S. taxpayers.
According to NPB executives, beginning in August 2010, NPB decided not to open any new accounts for U.S. customers who were not tax-compliant. NPB did not memorialize this decision in any written policy nor in any executive board or management board meeting minutes. NPB knew in August 2010 that some of its existing U.S. customers were not tax-compliant, but continued to service those accounts.
Until at least August 2010, NPB did not require a Form W-9 from U.S. clients to open an account. NPB did not require the completion of Forms W-9 for existing U.S. customers until approximately summer of 2011.
NPB serviced some U.S. customers who structured their accounts so that they appeared as if they were held by a non-U.S. legal structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. At least 89 of NPB’s U.S. Related Accounts, both declared and undeclared, were held in the name of offshore structures, including trusts or corporations purportedly domiciled in Panama, Liechtenstein, the British Virgin Islands, Hong Kong, and Belize. NPB never assisted customers in setting up such offshore structures. For accounts held in non-U.S. legal structures opened in 2009 and prior to Summer 2010, NPB did not require the signing of either a Form W-9 or Form W-8BEN.
NPB increased its efforts to obtain tax compliance from its U.S. customers in 2010 and 2011, but continued to service undeclared accounts. NPB first requested tax compliance evidence from its external asset managers for U.S. clients in August 2011. NPB serviced the declared and undeclared clients of two external asset managers after their respective indictments in the United States.
NPB has cooperated with the Department of Justice in this investigation, including by producing information relating to the U.S. taxpayer clients who maintained assets overseas, including the identities of the account holders and/or beneficial owners of more than 88% of assets, and by making multiple executives available for interview by the Department of Justice.
While U.S. accountholders at NPB who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased. Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at NPB must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program. The IRS recently announced that the Offshore Voluntary Disclosure Program will close on September 28, 2018.
“The non-prosecution agreement with NPB should signal that IRS CI continues its fight against offshore tax evasion,” said Don Fort, Chief IRS-Criminal Investigation. “The IRS devotes considerable resources in the U.S. and abroad to hold accountable those individuals and institutions that seek to cheat the U.S. tax system. I urge anyone not compliant with their tax obligations to consider the offshore voluntary disclosure program before it closes on September 28, 2018.”
Principal Assistant Attorney General Zuckerman of the Justice Department’s Tax Division thanked Senior Litigation Counsel Nanette Davis of the Tax Division and Assistant United States Attorneys Michelle Petersen and Patrick King of the U.S. Attorney’s Office for the Northern District of Illinois and IRS-Criminal Investigation, in particular IRS Special Agent Michael Leach, for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Insurance Salesman Who Embezzled His Client’s Inheritance Money Sentenced to Three Years in PrisonRead the Press Release
TRENTON, N.J. – An insurance salesman who was entrusted with managing his client’s inheritance was sentenced today to 36 months in prison for fraudulently using the funds for his own benefit, U.S. Attorney Craig Carpenito announced.
Patrick McCullagh, 70, of Georgetown, Kentucky, was previously convicted of an indictment charging him with one count of wire fraud. He was convicted following an eight-day trial before U.S. District Judge Mary L. Cooper, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
McCullagh was the principle of MidAtlantic Regional Services Inc., a purported insurance company located in Bordentown, New Jersey. In 2001, the victim entrusted McCullagh with money that the victim had inherited from his mother after her death. McCullagh falsely told the victim that he would use the funds to invest in a manner that would preserve the principle while paying the victim back in interest.
Instead, McCullagh pocketed some of the funds directly and forged withdrawal requests so he could loot money from the victim’s investment accounts. In order to deceive the victim, McCullagh also had the victim’s account statements diverted from the victim’s address.
In addition, the “interest” payments that McCullagh paid the victim on a monthly basis were actually funds McCullagh had siphoned from the investment accounts’ principle balance. McCullagh even fraudulently told the victim that some of the investments were tied-up in legal disputes surrounding a Kentucky property and that he needed money for legal fees, which the victim later provided. Altogether, McCullagh defrauded the victim out of more than $100,000.
In addition to the prison term, Judge Cooper ordered McCullagh to serve one year of supervised release and pay restitution of $98,067.82.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Molly Lorber and Senior Litigation Counsel Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: James Patton Esq., Livingston, New Jersey
Indian Springs Man Pleads Guilty to Violation of Endangered Species Act and Destruction of Property at Death Valley's Devils HoleRead the Press Release
LAS VEGAS, Nev. – An Indian Springs, Nevada, man who rammed his ATV into a gate securing the Devils Hole area, destroyed a surveillance camera and equipment, then harmed pupfish, an endangered species, pleaded guilty today in federal court, announced U.S. Attorney Dayle Elieson for the District of Nevada and Superintendent Mike Reynolds for Death Valley National Park.
Trenton Sargent, 28, pleaded guilty before U.S. District Judge Andrew P. Gordon to one count of violation of the Endangered Species Act, one count of destruction of United States property, and one count of felon in possession of a firearm. Sentencing is scheduled for October 25, 2018. The maximum penalty for Endangered Species Act, a criminal misdemeanor, is up to one year in prison and up to a $50,000 fine. The maximum penalty for destroying United States property and being a felon in possession of a firearm, both felonies, is up to ten years in prison and up to a $250,000 fine per count.
Devils Hole, a detached unit of Death Valley National Park, is located in Amargosa Valley, Nevada, within a 40-acre parcel of National Park Service land surrounded by the Ash Meadows National Wildlife Refuge. Devils Hole is the only location in the world where Devils Hole pupfish exist in the wild. They are the descendants of fish that inhabit an ancient lake that once covered Death Valley. The pupfish is a Nevada state and federally listed endangered species. The Endangered Species Act was enacted to provide a program for the conservation of endangered and threatened species. In the spring of 2016, Devils Hole contained just 115 observable pupfish.
According to court documents, Sargent admitted, that on April 30, 2016, he and two co-defendants rammed the fence surrounding Devils Hole with their ATV, severely damaging the gate. Then, Sargent, a felon prohibited from possessing firearms, fired a Mossbert 500 shotgun at the padlock on the gate, attempting to gain access. After their attempts were unsuccessful, the men scaled the fence. Once in the enclosed area, they destroyed a sensor center for cameras and equipment for the area, and destroyed a video surveillance camera belonging to the National Park Service.
Then, Sargent went into the water. By stepping onto the Devils Hole shallow shelf, he smashed pupfish eggs and larvae pupfish during the peak spawning season for pupfish, who lay their eggs on the shallow shelf.
Two other men, Edgar Reyes, 37, of North Las Vegas, and Steven Schwinkendorf, 31, of Pahrump, who were with Sargent at Devils Hole during the time of the crimes, previously pleaded guilty to destruction of government property and violation of the Endangered Species Act. They were each sentenced to one year probation.
The investigation was conducted by the National Park Service, the U.S. Fish and Wildlife Service, and the Nye County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Tony Lopez.
To report a suspicious or criminal activity in a national park site, call the National Park Service tip line at 1-888-653-0009 or visit https://www.nps.gov. For more information on the Department of Justice’s wildlife protection efforts, visit https://www.justice.gov/enrd.
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ISIS Supporter Pleads Guilty to Attempting to Provide Material Support to Foreign Terrorist Organization and Identity TheftRead the Press Release
SAN FRANCISCO –Amer Sinan Alhaggagi pleaded guilty today to attempting to provide material support to a designated foreign terrorist organization and identity theft charges, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The plea was accepted by the Honorable Charles R. Breyer. In pleading guilty today, Alhaggagi admitted, without a written agreement, he was guilty of all the charges pending against him.
During the hearing today, Alhaggagi, 23, of Oakland, Calif., admitted he knowingly attempted to provide services and personnel to the Islamic State of Iraq and Syria, or ISIS, in violation of 18 U.S.C. § 2339B. Specifically, Alhaggagi admitted that in October and November of 2016, he created Twitter accounts and Facebook accounts along with the Gmail accounts that were necessary to authenticate them for individuals he believed were ISIS supporters. ISIS was designated a foreign terrorist organization by the United States Secretary of State in 2014.
In addition, Alhaggagi admitted that in the Fall of 2016 he communicated with two individuals who asked him to set up social media accounts. Alhaggagi communicated with the individuals from his computer while he was in Oakland, Calif., and admitted opening several Twitter, Facebook, and Gmail accounts at their request. Alhaggagi admitted knowing that both of the individuals were ISIS sympathizers and that by opening the social media accounts he was providing a service to ISIS. According to government lawyers at the hearing, at least one of the individuals Alhaggagi opened accounts for was an actual member of ISIS.
Additionally, Alhaggagi admitted that on November 29, 2016, the day of his arrest, he possessed a device used to make counterfeit credit cards and that between July and August 2016, he used a credit card with someone else’s name to buy more than $1,000 worth of clothes for himself online.
A federal grand jury indicted Alhaggagi on July 21, 2017, with one count of knowingly attempting to provide services and personnel to the Islamic State of Iraq and Syria, or ISIS, in violation of 18 U.S.C. § 2339B; one count of possessing an identity theft device, in violation of 18 U.S.C. § 1029(a)(4); one count of unauthorized identity theft, in violation of 18 U.S.C. § 1029(a)(2); and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A.
Judge Breyer scheduled Alhaggagi’s sentencing hearing for November 20, 2018. Alhaggagi faces the following maximum statutory penalties:
Charge
Maximum Prison Term
Maximum Term of Supervised Release (following release from prison)
Maximum Fine
Attempting to provide material support to a terrorist organization
20 Years
Life time of supervised release
$250,000
Possession of device-making equipment
15 years
3 years
$250,000
Using an unauthorized
access device
10 years
3 years
$250,000
Aggravated identity theft
2 years (consecutive to prison term
3 years
$250,000
In addition, the court may order that the defendant pay additional fines and restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Special Prosecutions and National Security Unit of the United States Attorney’s Office for the Northern District of California, the United States Department of Justice National Security Division, the Berkeley Police Department, and members of the Joint Terrorism Task Force including, the Oakland Police Department.
Homestead Resident Arrested for Surreptitiously Producing and Distributing Pornographic Audio and Video Recordings of Himself Engaged in Sexual Activity with OthersRead the Press Release
A Homestead, Florida, man was arrested on an indictment yesterday, stemming from charges that he surreptitiously produced pornographic audio and video recordings of himself engaging in sexual activity with multiple men and then caused the videos to be posted on one or more subscription-based pornography websites without their knowledge or consent.
Bryan Deneumostier, 32, also known by the screen name “susanleon33326,” was charged in a five-count indictment in the Southern District of Florida with two counts of illegal interception of oral communications and three counts of record keeping violations.
U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office, made the announcement today.
The indictment, which was unsealed July 18, references three victims whose identities are being withheld to protect their privacy. Without two of the referenced victims’ knowledge or consent, Deneumostier allegedly recorded his sexual encounters with them, and then caused these videos to be posted on one or more websites. These two allegedly nonconsensual recordings form the basis of the surreptitious-recording charges. The indictment further alleges that Deneumostier was a producer of pornography, used performers portrayed in a visual depiction of sexually explicit conduct, and did not ascertain the performers’ identification or age, as required by federal law.
Any individuals who believe they might be a victim are encouraged to contact HSI at (866) 347-2423.
The investigation is being conducted by HSI. Assistant U.S. Attorney Cary Aronovitz of the Southern District of Florida and Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hawaii Woman Sentenced to Prison for Stealing over $1 Million from A Molokai Credit UnionRead the Press Release
HONOLULU – Janell Purdy, 40, a resident of Wailuku, Hawaii, was sentenced today to 50 months’ imprisonment for her role in conspiring to embezzle from the First Hawaiian Homes Federal Credit Union on Molokai. As part of her sentence, Purdy must also pay $949,736.36 in restitution and serve 3 years of supervised release. Purdy’s co-conspirator, Allennie Naeole, 55, of Kaunakakai, Hawaii, previously pled guilty to conspiracy and aggravated identity theft, and was sentenced on June 13, 2018 to 7 years’ imprisonment, 3 years of supervised release, and payment of $1,055,188.12 in restitution.
According to court documents and information presented in court, from June 2008 through December 2015, Naeole and Purdy agreed to embezzle more than $1 million from the First Hawaiian Homes Federal Credit Union (the “Credit Union”). Throughout the conspiracy, Purdy and Naeole were the only two permanent employees of the Credit Union and were responsible for all the daily banking activities, including maintaining the Credit Union’s books and records. Naeole ran the Credit Union while Purdy was the teller and customer service representative. Purdy and Naeole overdrafted accounts in violation of bank policies and issued unauthorized checks from the Credit Union’s financial accounts. They spent the money on personal expenses, including credit card payments, trips, car payments, mortgage payments, vacation property payments, and various bills. They concealed the embezzlement by creating fictitious deposit and loan entries in the Credit Union’s books and records.
To further conceal their conduct, Naeole created a fake email account to communicate with the National Credit Union Administration (NCUA). She also submitted a fictitious letter to an NCUA regulator forging a Bank of Hawaii branch manager’s signature and listing Credit Union investment assets at the Molokai branch of the Bank of Hawaii, even though she knew those assets did not exist. In December 2015, the scheme was uncovered by a regulator from the NCUA. As a result of the embezzlement, the Credit Union had become insolvent and was shut down. At the time of its dissolution, it had served the local community for over 75 years and had approximately 1,400 members. The loss and liquidation expenses related to Naeole and Purdy’s conduct exceeded $2 million.
At Purdy’s sentencing, U.S. District Court Judge Derrick K. Watson stated that the results of the conspiracy were “catastrophic.” He stated that Purdy did not seem to understand the root cause of her conduct in continuing “to march along in her spendthrift ways,” even after she knew she was under investigation and would be responsible for hundreds of thousands of dollars in losses. He also agreed with the government that Purdy’s motivation to steal appeared to be “greed.”
The case was investigated by the Federal Bureau of Investigation and the Treasury Department – Office of Investigations, and prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
Harrison County man admits to firearms chargeRead the Press Release
ELKINS, WEST VIRGINIA – Michael A. Spino, of Bridgeport, West Virginia, has admitted to a firearms charge, United States Attorney Bill Powell announced.
Spino, age 30, pled guilty to one count of “Unlawful Possession of a Firearm.” Spino, having been previously convicted of two felonies, admitted to having an unregistered 12-gauge sawed-off shotgun in January 2018 in Harrison County.
Spino 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.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Assistant U.S. Attorney Zelda E. Wesley is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia Probation Office investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Guatemalan National Charged with Transporting More Than A Kilogram of HeroinRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Cesar Moscoso-Sagastume, age 37, of Guatemala, was indicted on July 10, 2018, by a federal grand jury for conspiring with others to distribute and possess with intent to distribute more than a kilogram of heroin between November 2017 and the present in Luzerne County. The indictment was unsealed today following Moscoso-Sagastume’s arraignment before United States Magistrate Judge Karoline Mehalchick. Moscos-Sagastume was detained pending trial.
According to United States Attorney David J. Freed, the indictment alleges that Moscoso-Sagastume and his co-conspirators obtained heroin from suppliers in Mexico and transported the heroin from Chicago to New York City. The defendant is also charged with possessing more than a kilogram of heroin with the intent to distribute it on February 13, 2018, in Luzerne County.
The charges stem from an investigation by special agents of the Drug Enforcement Administration and the Pennsylvania State Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin 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 heroin related offenses.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine for each offense. Each charge also carries a mandatory minimum sentence of 10 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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Government Contractor Found Guilty of Theft of Government PropertyRead the Press Release
PHOENIX – A former government contractor was found guilty today for his role in a scheme to unlawfully convert U.S. government property from the U.S military base at Kandahar Airfield, Afghanistan, shipping items to his home in Arizona for resale.
First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Inspector General Steve A. Linick of the U.S. Department of State, and Special Inspector General for Afghanistan Reconstruction John F. Sopko made the announcement.
After a three day trial, Michael Dale Gilbert, 38, of Young, Ariz., was convicted of three counts of theft and unauthorized sale of government property and one count of interstate transportation of stolen property. Gilbert’s sentencing is scheduled for Oct. 9, 2018 before U.S. District Judge G. Murray Snow of the District of Arizona, who presided over the trial.
According to the evidence admitted at trial, Gilbert worked at PAE Government Services, a government contractor that provides logistics and other support to the U.S. Department of State (DOS) and the U.S. Department of Defense around the globe, including Afghanistan. From 2012 to 2015, Gilbert was deployed to Kandahar Airfield (KAF), where he assisted DOS with the Foreign Excess Personal Property (FEPP) program. Once equipment, including computer equipment, heavy construction items and work tools, was requested through the FEPP program at KAF, Gilbert was assigned to arrange for its transfer for use or for its destruction, to prevent the items from falling into the hands of insurgents. While in that role, in or around April and December of 2014, instead of facilitating the transportation or destruction of U.S government property, Gilbert shipped FEPP to the United States and transported the items to his residence in Arizona. Gilbert stole FEP items worth at least $48,900, including items recovered from his residence in Arizona valued at approximately $16,700, approximately $3,700 in sales through eBay, and goods valued at approximately $28,500 that Gilbert sold through other means, the evidence showed.
This case was investigated by the DOS of the Inspector General and the Special Inspector General for Afghanistan Reconstruction. This case was prosecuted by Assistant United States Attorney Gary Restaino of the District of Arizona and Trial Attorney Jessee Alexander-Hoeppner of the Criminal Division’s Fraud Section.
CASE NUMBER: CR-17-670-PHX-GMS
RELEASE NUMBER: 2018-090_Gilbert
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Government Contractor Found Guilty of Theft of Government PropertyRead the Press Release
A former government contractor was found guilty today for his role in a scheme to unlawfully convert U.S. government property from the U.S military base at Kandahar Airfield, Afghanistan, shipping items to his home in Arizona for resale.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Inspector General Steve A. Linick of the U.S. Department of State, and Special Inspector General for Afghanistan Reconstruction John F. Sopko made the announcement.
After a three day trial, Michael Dale Gilbert, 38, of Young, Arizona, was convicted of three counts of theft and unauthorized sale of government property and one count of interstate transportation of stolen property. Gilbert’s sentencing is scheduled for Oct. 9 before U.S. District Judge G. Murray Snow of the District of Arizona, who presided over the trial.
According to the evidence admitted at trial, Gilbert worked at PAE Government Services, a government contractor that provides logistics and other support to the U.S. Department of State (DOS) and the U.S. Department of Defense around the globe, including Afghanistan. From 2012 to 2015, Gilbert was deployed to Kandahar Airfield (KAF), where he assisted DOS with the Foreign Excess Personal Property (FEPP) program. Once equipment, including computer equipment, heavy construction items and work tools, was requested through the FEPP program at KAF, Gilbert was assigned to arrange for its transfer for use or for its destruction, to prevent the items from falling into the hands of insurgents. While in that role, in or around April and December of 2014, instead of facilitating the transportation or destruction of U.S government property, Gilbert shipped FEPP to the United States and transported the items to his residence in Arizona. Gilbert stole FEP items worth at least $48,900, including items recovered from his residence in Arizona valued at approximately $16,700, approximately $3,700 in sales through eBay, and goods valued at approximately $28,500 that Gilbert sold through other means, the evidence showed.
This case was investigated by the DOS Office of the Inspector General and the Special Inspector General for Afghanistan Reconstruction. This case was prosecuted by Trial Attorney Jessee Alexander-Hoeppner of the Criminal Division’s Fraud Section and Assistant United States Attorney Gary Restaino of the District of Arizona.
Franklinton Resident Sentenced in Drug CaseRead the Press Release
U.S. Attorney Duane A. Evans announced that DOMINIQUE WISE, age 32, of Franklinton, Louisiana, was sentenced today after having pled guilty to misprision of a felony, stemming from a September 27, 2015, traffic stop, during which police seized one-half kilogram of powder cocaine from the floorboard of her car.
U.S. District Judge Martin L.C. Feldman sentenced WISE to 3 years probation.
U.S. Attorney Evans praised the work of the Drug Enforcement Administration, Plaquemines Parish Sheriff’s Office, and Kenner Police Department in investigating this matter. Assistant United States Attorney Brandon Long is in charge of the prosecution.
Fourth Circuit Court of Appeals Affirms Goodall's Life Sentence in Kidnapping Case of Wake Forest ManRead the Press Release
RALEIGH - First Assistant United States Attorney G. Norman Acker, III announced that the United States Court of Appeals for the Fourth Circuit affirmed the conviction and sentence of SHAMEIKA GOODALL, a/k/a Donna Diva, 32, of Covington, Georgia, who was sentenced by Chief United States District Judge James C. Dever III in June 2017 to life imprisonment for kidnapping and conspiracy to commit kidnapping.
This case involved a conspiracy to kidnap relatives of attorneys that Kelvin Melton, a founding leader of the United Blood Nation, blamed for his conviction and life sentence on two charges pertaining to a 2011 gang-related shooting in Raleigh, North Carolina. In March and April 2014, from the maximum security unit at Polk Correctional Institution in Butner, North Carolina, Melton dispatched three kidnapping teams whose intended targets were family members of the state prosecutor who worked on his case and his state defense counsel. He intended to use the attorneys’ relatives as hostages to extort the dismissal of his life sentence.
On April 5, 2014, one of the kidnapping teams violently abducted Frank Janssen, the state prosecutor’s father, from his home in Wake Forest, North Carolina, and transported him to an apartment in Southeast Atlanta. There, Mr. Janssen remained bound to a chair and held in a small closet until the FBI’s Hostage Rescue Team rescued him at 11:55 p.m. on April 9, 2014. Just hours before the rescue, Melton called and instructed the kidnapping team (including the member recruited by GOODALL) to find a location, dig a hole, kill Mr. Janssen, and then bury him.
GOODALL appealed her conviction and sentence to the United States Court of Appeals for the Fourth Circuit, arguing that the district court erred when it admitted at trial evidence of other bad acts, when it applied certain enhancements at her sentencing, and when it sentenced her to life imprisonment. The Fourth Circuit rejected each of GOODALL’s arguments. With respect to GOODALL’s lifetime term of imprisonment, the Fourth Circuit noted that “numerous conspirators involved in this case each received a lengthy sentence for their individual role in the conspiracy, thus Goodall’s life sentence was not unusually disproportionate.” The Court further recognized that Goodall elected to go to trial and maintains her innocence, unlike some of her coconspirators who “assisted the FBI in rescuing the victim, decided to plead guilty, cooperated in the investigation, and testified against Melton and Goodall at their trials.”
First Assistant United States Attorney, G. Norman Acker, III, commented: “This crime was monstrously cruel to the victim and his family and a clear attack on our criminal justice system. Those who strike at the peace and security of our community will be held accountable. The affirmance of Goodall’s sentence and conviction reflects this reality. We will continue our efforts to ensure that convicted prisoners cannot reach out from their cells to threaten others and conduct criminal enterprises.”
This case was investigated by the FBI Charlotte, FBI Atlanta, the Wake Forest Police Department, the North Carolina State Bureau of Investigation with assistance by the Durham County Sheriff’s Office, Raleigh Police Department, Durham Police Department, North Carolina Alcohol Law Enforcement, Garner Police Department, North Carolina Highway Patrol, RDU Police, City County Bureau of Investigation, the Cobb County Police Department, Alpharetta Police Department, Atlanta Police Department, and the Georgia Bureau of Investigation. The United States Attorney’s Office for the Eastern District of North Carolina handled the prosecution and appeal of this case.
The United States Court of Appeals for the Fourth Circuit hears appeals from the nine federal district courts located in North Carolina, South Carolina, Virginia, Maryland, and West Virginia, as well as from federal administrative agencies. More information about the Court can be found on its website, http://www.ca4.uscourts.gov. The Court’s opinion in this case can be found at: http://www.ca4.uscourts.gov/opinions/174383.U.pdf, and the United States Attorney’s previous press releases regarding this case can be found at https://www.justice.gov/usao-ednc/pr/goodall-found-guilty-kidnapping-case-wake-forest-man and https://www.justice.gov/usao-ednc/pr/goodall-sentenced-life-prison-kidnapping-case-wake-forest-man.
Fort Lauderdale Resident Sentenced to 5 Years in Prison for Being a Felon in Possession of a FirearmRead the Press Release
On July 17, 2018, Roosevelt Leon Cooper, 43, of Fort Lauderdale was sentenced to 5 years in prison after previously pleading guilty to being a felon in possession of a firearm.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and Rick Maglione, Chief, Fort Lauderdale Police Department, made the announcement.
According to the court record, on November 10, 2017, Cooper sold a Colt .45 caliber revolver to a pawn shop in Fort Lauderdale for $300. The revolver had been stolen on March 2, 2017, during a residential burglary in Port St. Lucie. Cooper, a convicted felon, was prohibited from possessing the firearm.
U.S. District Judge Federico A. Moreno sentenced Cooper to 60 months in prison, to be followed by 3 years of supervised release.
This case stems from Project Safe Neighborhoods (PSN), a program that brings 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.
Mr. Greenberg commended the investigative efforts of the ATF and Fort Lauderdale Police Department. This case was prosecuted by Assistant United States Attorney William T. Shockley.
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 Pharmacy Buyer Charged with Making False StatementsRead the Press Release
BOSTON – A former pharmacy buyer at a Boston hospital was charged today in federal court in Boston for making false statements to federal agents in connection with receiving $355,000 from the now defunct New England Compounding Center (NECC) and Ameridose.
Claudio T. Pontoriero, 40, of Everett, was charged in an information with one count of making false statements.
As alleged in court documents, from at least December 2006 to October 2012, Pontoriero was a pharmacy technician at a Boston hospital and was responsible for purchasing drugs from suppliers for use on hospital patients. During that period, Pontoriero received $5,000 per month from NECC and Ameridose, a drug repackager formerly located in Westboro. In October 2015, during an interview with federal agents, Pontoriero falsely claimed that the $5,000 monthly payments were for consulting services, and not in exchange for Pontoriero’s influence in selecting NECC and Ameridose drugs for purchase by the hospital.
The charge of making false statements provides for a sentence of no greater than five years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Derek Roy, Resident Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Sean J. Smith, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Leigh-Alistair Barzey, Special Agent in Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, made the announcement today. Assistant U.S. Attorneys Amanda P.M. Strachan and George P. Varghese of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Owner of Medford Pizza Shop Sentenced for Federal Tax ChargesRead the Press Release
BOSTON – The former owner of Pinky’s Famous Pizza in Medford was sentenced today in federal court in Boston in connection with filing tax returns which failed to disclose the cash payroll payments he paid to employees.
Nikita Yanakopulos, 40, of Medford, was sentenced by U.S. District Court Judge Richard G. Stearns to one year and one day in prison, one year of supervised release and a fine of $5,500. In February 2018, Yanakopulos pleaded guilty to two counts of aiding and assisting in filing false Forms 941, Employer’s Quarterly Federal Tax Return, which are used to report income taxes, Social Security taxes, and Medicare taxes withheld from employees’ paychecks.
Yanakopulos owned and operated Pinky’s from approximately 2000 to 2017. During that period, Yanakopulos paid several employees by check and cash and other employees entirely in cash. Yanakopulos caused his payroll service to file Forms 941 that only included the payroll paid by check. During those years, Yanakopulos made cash payroll payments to his employees totaling approximately $675,000, but failed to report those payments to his payroll service or pay the required withholding amounts to the IRS. He thereby avoided paying FICA, Medicare, and withholding taxes totaling approximately $172,000.
United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit prosecuted the case.
Former Law Firm Office Manager Pleads Guilty to Filing False Tax ReturnsRead the Press Release
Memphis, TN – Misty West, 41, of Olive Branch, Mississippi, appeared before U.S. District Judge Thomas L. Parker and entered a guilty plea to filing false tax returns. D. Michael Dunavant, U.S. Attorney for the Western District of Tennessee announced the guilty plea today.
According to a superseding indictment returned by the federal grand jury in February of this year, West, the former office manager, bookkeeper and paralegal at the Fowler Law Firm, engaged in a scheme to defraud the firm and its owner, Charles Wesley Fowler, of more than $400,000 between August 2011 and July 2016.
U.S. Attorney D. Michael Dunavant said: "This defendant victimized her employer and defrauded the United States by using her position of trust to commit crimes of dishonesty. Financial fraud does not pay, and this office will aggressively prosecute these cases to hold offenders accountable and provide restitution to the victims and the government."
The superseding indictment also alleged that West filed false tax returns for calendar years 2013-2015 by substantially underreporting her total income for those years. West entered her guilty plea to those charges.
As part of a written plea agreement filed with the court, West agreed to pay restitution to Fowler’s estate and to the Internal Revenue Service.
West faces a maximum penalty of three years imprisonment, $100,000 fine and one year supervised release on each of the three counts of filing false tax returns. Sentencing is scheduled on October 25, 2018, before U.S. District Judge Thomas L. Parker.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations Division.
Assistant U.S. Attorneys Carroll L. Andre´ III and Lorraine Craig are prosecuting this case on the government’s behalf.
Former IRS Employee in Fresno Charged with Aiding and Assisting in the Preparation of False and Fraudulent Tax ReturnsRead the Press Release
FRESNO, Calif. — On April 12, 2018, a federal grand jury returned a seven-count indictment against Angela Milton, 35, of Fresno, charging her with aiding and assisting in the preparation and presentation of false and fraudulent tax returns, U.S. Attorney McGregor W. Scott announced.
The case was sealed until Milton’s arrest on Tuesday. According to court documents, between 2007 and 2014, Milton worked as a tax examining technician at the IRS in Fresno. Between 2010 and 2013, Milton allegedly prepared and filed false and fraudulent federal income tax returns for others and for herself. She added false information that she knew would increase the amount of the refund. For some tax returns, and without the authorization of the taxpayer, Milton claimed a split refund with part of the refund amount going to the taxpayer and the remaining refund directly deposited into accounts to which Milton had access. For other taxpayers, Milton filed a tax return without their knowledge or consent and caused the entire refund amount to be deposited into accounts to which Milton had access. As a result of her conduct, Milton is alleged to have defrauded the IRS of over $170,000.
This case is the product of an investigation by the U.S. Department of the Treasury, Office of Inspector General and IRS Criminal Investigation. Assistant U.S. Attorney Laura D. Withers is prosecuting the case.
If convicted, Milton faces a maximum statutory penalty of three years in prison and a $250,000 fine. Any sentence, however, would 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Border Patrol Agent Sentenced to 20 Months in PrisonRead the Press Release
Tucson, Ariz. – Yesterday, former Border Patrol Agent Alex Pena was sentenced to 20 months in prison by U.S. District Judge Cindy K. Jorgenson. Pena had previously pleaded guilty to conspiracy to import between 60 and 80 kilograms of marijuana, and had resigned from the Border Patrol following his indictment.
Pena admitted that while assigned to the Nogales Border Patrol Station, he entered into an agreement with other individuals to smuggle marijuana into the United States from Mexico. In the early morning hours of Aug. 2, 2016, Pena drove from his residence in Tucson to the Border Patrol Station while dressed in his Border Patrol uniform. He took a marked Border Patrol vehicle from the parking lot without permission as cover to retrieve marijuana bundles to be brought into the United States by smugglers on foot in a remote area south of Patagonia. Pena drove to that location, arriving there at about 2:30 a.m. Although no marijuana was recovered, the subsequent investigation indicated that several individuals met Pena at that location. His guilty plea confirmed his agreement to participate in the smuggling plan.
First Assistant U.S. Attorney Elizabeth A. Strange stated: “It is a sad day when a sworn law enforcement officer violates his oath. But no one is above the law, and our office will vigorously pursue corruption cases to ensure that those responsible for enforcing the law do not flout it.”
The investigation in this case was conducted by the Department of Homeland Security, Office of the Inspector General. The prosecution was handled by Wallace H. Kleindienst, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR-17-490-TUC-CKJ
RELEASE NUMBER: 2018-089_Pena
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Florida Man Sentenced for Green Bay Area Gas Pump Skimming ScamRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on July 17, 2018, Alain Ceballos-Rodriguez (age: 37), a Cuban citizen living in Tampa, Florida, was sentenced to 48 months in federal prison for his violation of Title 18, United States Code, Sections 1028A and 1029(a)(1), involving credit card fraud and aggravated identity theft.
In March of 2017, the Brown County Sheriff’s Office began investigating reports of skimming devices found attached to credit card readers at Green Bay area gas station pumps. The investigation revealed that information from the skimming devices would be transmitted via Bluetooth technology to a laptop which would then be used by the perpetrators to create “clone” cards. Those clone cards were then given to individuals, including Mr. Ceballos-Rodriguez, who would purchase Wal-Mart gift cards valued at up to $1,000 per card. Ceballos-Rodriguez and his co-conspirators utilized the self-checkout kiosks to purchase hundreds of gift cards at Wal-Mart and Sam’s Club locations throughout the Eastern District of Wisconsin. Those Wal-Mart gift cards were then taken back to Florida where they were used or sold online at discounted prices.
Chief Judge William C. Griesbach in pronouncing sentence noted the serious problem nationwide with credit card skimmers being attached to ATM machines and gas pump credit card readers. He further noted that while Ceballos-Rodriguez was a lower-level participant, his participation was part of a much larger and well-organized fraud ring based in Florida largely comprised of Cuban nationals. The judge noted the overwhelming number of individuals whose financial information had been compromised by the scheme and believed a strong prison sentence was necessary to deter Ceballos-Rodriguez and others from engaging in similar behavior. In addition to the 48 months term of imprisonment, Ceballos-Rodriguez will spend three years on supervised release.
This case was investigated by the Brown County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Megan J. Paulson and Daniel R. Humble.
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For additional information contact:
Public Information Officer Dean Puschnig, 414-297-1700
Florida Man Arrested for Surreptitiously Producing and Distributing Pornographic Audio and Video Recordings of Himself Engaged in Sexual Activity with OthersRead the Press Release
A Homestead, Florida, man was arrested on an indictment yesterday, stemming from charges that he surreptitiously produced pornographic audio and video recordings of himself engaging in sexual activity with multiple men and then caused the videos to be posted on one or more subscription-based pornography websites without their knowledge or consent.
Bryan Deneumostier, 32, also known by the screen name “susanleon33326,” was charged in a five-count indictment in the Southern District of Florida with two counts of illegal interception of oral communications and three counts of record keeping violations.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office, made the announcement today.
The indictment, which was unsealed July 18, references three victims whose identities are being withheld to protect their privacy. Without two of the referenced victims’ knowledge or consent, Deneumostier allegedly recorded his sexual encounters with them, and then caused these videos to be posted on one or more websites. These two allegedly nonconsensual recordings form the basis of the surreptitious-recording charges. The indictment further alleges that Deneumostier was a producer of pornography, used performers portrayed in a visual depiction of sexually explicit conduct, and did not ascertain the performers’ identification or age, as required by federal law.
Any individuals who believe they might be a victim are encouraged to contact HSI at (866) 347-2423.
The investigation is being conducted by HSI. Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Cary Aronovitz of the Southern District of Florida are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.