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16 May 2018
Miranda Gilbert Pleads Guilty to Unlawfully Possessing Firearm and Ammunition, and Assaulting a Federal OfficerRead the Press Release
ALBUQUERQUE – Miranda Gilbert, 31, of Albuquerque, N.M., pled guilty today in federal court to violating the federal firearms laws by unlawfully possessing a firearm and ammunition and assaulting a federal officer. The guilty plea was announced U.S. Attorney John C. Anderson, Special Agent in Charge John J. Durastanti of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Michael Geier of the Albuquerque Police Department (APD).
U.S. Attorney John C. Anderson said that Gilbert, whose criminal history includes ten prior felony convictions, is being prosecuted as part of a federal anti-violence initiative that targets violent, repeat offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target for federal prosecution violent or repeat offenders with the goal of making communities in New Mexico safer places for people to live and work.
“Today’s proceedings are a reminder that we will never stop working to obtain justice. ATF is committed to aggressively investigating and charging armed, violent criminals in the community. The actions, every day, by the U.S. Marshals and our other law enforcement partners to apprehend wanted, violent fugitives is as necessary as it is dangerous,” said Special Agent in Charge John J. Durastanti of the ATF Phoenix Field Division. “When our law enforcement partners come up against these violent criminals and are assaulted, they can rest assured that ATF will fully investigate the firearms violations surrounding the incident.”
“It is imperative that we use the full weight of the law to prosecute dangerous, career criminals who are willing to violate federal firearm laws and assault law enforcement officers,” APD Chief Michael Geier said. “Offenders who have no regard for law enforcement are more of a threat to civilians and a risk to public safety.”
Gilbert was charged in Oct. 2017, in a criminal complaint with being a felon in possession of a firearm and ammunition on Aug. 20, 2017. According to the criminal complaint, APD officers responded to a call reporting shots fired at a residence in northeast Albuquerque. APD officers learned that when the homeowners arrived at their home, they observed Gilbert parked in a vehicle in their driveway and attempted to block her in the driveway. The homeowners reported that Gilbert responded by pulling a handgun out of her purse, threatening them, and then firing shots close to where one of the homeowners was standing before leaving the area. Gilbert was arrested the next day after attempting to flee from police and ultimately causing an accident.
Gilbert was indicted on Nov. 1, 2017. The three-count indictment charged Gilbert with being a felon in possession of a firearm and ammunition in in Bernalillo County, N.M., on Aug. 20, 2017, and in Guadalupe County, N.M., on Aug. 21, 2017, and with assaulting a federal officer in Guadalupe County on Aug. 21, 2017. According to the indictment, Gilbert was prohibited from possessing firearms or ammunition because she has been convicted of at least ten felony offenses.
During today’s change of plea hearing, Gilbert pled guilty to the indictment without the benefit of a plea agreement.
During its presentation at today’s hearing, the United States proffered a summary of the evidence that it would have been introduced had the case proceeded to trial. That evidence would have included the firearm, a 9 mm caliber pistol, Gilbert possessed, brandished, and discharged in Bernalillo County on Aug. 20, 2017, and also possessed in Guadalupe County on Aug. 21, 2017. The evidence also would have established that on Aug. 21, 2017, in Guadalupe County, Gilbert forcibly assaulted a Supervisory Deputy U.S. Marshal, whom she knew to be engaged in the performance of his official duty based upon her own post-arrest statements made to law enforcement authorities. As Gilbert fled from law enforcement authorities, in an attempt to avoid apprehension, Gilbert used a vehicle as a dangerous weapon and struck the Supervisory Deputy U.S. Marshal, who was inside his vehicle and was required to take evasive action.
The United States’ proffer of evidence also included Gilbert’s ten prior felony convictions:
- residential burglary;
- conspiracy to commit residential burglary;
- trafficking controlled substances (possession with intent to distribute) (heroin);
- receiving or transferring a stolen motor vehicle (possession);
- conspiracy to commit receiving or transferring a stolen motor vehicle (possession);
- receiving or transferring stolen property (over $500 but not more than $2,500);
- escape from a community custody release program;
- possession of a controlled substance (methamphetamine);
- conspiracy to commit possession of a controlled substance (methamphetamine); and
- felon in possession of a firearm.
At sentencing, Gilbert faces a maximum statutory penalty of ten years of imprisonment on each of the two felon in possession of firearms charges. However, if the court determines that Gilbert is an armed career criminal, she faces an enhanced sentence of a mandatory minimum 15 years to a maximum of life imprisonment on the firearms charges. Gilbert also faces a statutory maximum penalty of 20 years of imprisonment on the assault on a federal officer charge.
Gilbert remains in custody pending a sentencing hearing, which has yet to be scheduled.
The Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the APD investigated the case with assistance from the U.S. Marshals Service, New Mexico State Police, and the New Mexico Adult Probation and Parole Division of the New Mexico Corrections Department. Assistant U.S. Attorney Niki Tapia-Brito is prosecuting the case.
Mid-State Trucking Company Agrees to Settle Contract and Common Law AllegationsRead the Press Release
Tracie McCormick, Inc., d/b/a McCormick Trucking (“McCormick”), based in Murfreesboro, Tenn., has agreed to pay $750,000 to settle contract and common law allegations of double billing the United States Postal Service (“USPS”) under its contracts for hauling mail, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
“This Office remains committed to protecting the public fisc through affirmative civil enforcement investigations and litigation,” said U.S. Attorney Don Cochran. “Be it healthcare fraud or government contracting disputes, we will diligently pursue any violations of federal law that result in a loss of taxpayer funds.”
The settlement agreement addresses conduct that occurred from approximately January 2011 through November 2013. During that time, the United States alleged that McCormick used credit cards issued by the USPS on certain fuel index routes, the governing contracts of which already provided itemized payment to McCormick for fuel purchased for use on those routes. This double billing resulted in USPS paying twice for fuel used on the specified routes.
"We are gratified to have contributed to this investigation and applaud the exceptional work by the investigative team and the U.S. Attorney’s Office,” said Scott Pierce, Special Agent in Charge, U.S. Postal Service Office of Inspector General. “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate issues that have a detrimental financial impact on the Postal Service.”
This matter was investigated by the USPS Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States is represented by Assistant U.S. Attorney Christopher C. Sabis.
Massachusetts Man Sentenced to 25 Years for Buying Explosives and Firearms with Intent to Murder Federal Judge, Former AG, and Ex-Wife's HusbandRead the Press Release
CONCORD – United States Attorney Scott W. Murray announced today that Edward McLarnon, 69, of Malden, Massachusetts, was sentenced to serve 25 years in federal prison for receiving firearms with intent to commit murder and other related charges.
After a six-day trial, McLarnon was convicted on January 30, 2018, of: (1) receiving an unregistered silencer; (2) receiving firearms with the intent to commit murder; (3) receiving explosive materials; and (4) receiving an explosive with the intent to harm persons or property.
Evidence presented at trial showed that in October 2015, defendant McLarnon made contact with a person he believed to be an arms dealer (who was actually an undercover FBI agent) for the purpose of buying illegal weapons. After negotiating with the agent at a store in Chichester and paying a total of $700 cash, on November 6, 2015, the defendant took possession of a .22 caliber pistol with silencer, an AK-47 style semi-automatic rifle, and explosives, along with ammunition for the firearms. He then was arrested at a rest stop in Seabrook, NH. The evidence further showed that McLarnon intended to use the weapons to kill his ex-wife's husband, as well as a Boston federal judge and a former Massachusetts Attorney General.
In imposing the 25-year sentence, U.S. District Court Judge Steven J. McAuliffe said “But for some exceptional law enforcement work, you may have caused serious harm to the Commonwealth of Massachusetts, the Federal Judiciary and Mr. Douglas."
“This lengthy sentence is an appropriate punishment for this defendant, whose conduct was truly frightening and dangerous,” said U.S. Attorney Murray. “Because the defendant was frustrated with the legal system, he planned to engage in disturbing acts of violence. We should all be grateful that our law enforcement partners were able to prevent this defendant from putting his violent plan into action. The substantial prison sentence imposed by the court should act as a deterrent to others who might plan to commit violent crimes”.
"Mr. McLarnon went to great lengths and concocted a frightening plan to kill his ex-wife's husband, a sitting federal judge, and a former Massachusetts Attorney General, as a way to express his displeasure with the judicial system. Through the exceptional work and diligence of our Joint Terrorism Task Forces in New Hampshire and Massachusetts, we were able to uncover and disrupt his nefarious plot,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division. "Today's sentence ensures that he will no longer be in a position to endanger innocent lives for a very long time.”
This matter was investigated by the FBI, U.S. Secret Service, Homeland Security Investigations, Boston, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney John S. Davis and Special Assistant U.S. Attorney Matthew T. Hunter.
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Maryland man facing counterfeit chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA –Barry Eugene Dragovich, of Cumberland, Maryland, appeared before a federal magistrate judge today after being indicted by a federal grand jury sitting in Clarksburg on May 1, 2018, on counterfeit charges, United States Attorney Bill Powell announced.
Dragovich, age 40, was indicted on five counts of “Uttering Counterfeit Obligations and Securities.” Dragovich is accused of passing counterfeit bills from May to August 2017 in Harrison County.
Dragovich faces up to 20 years incarceration and a fine of up to $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah E. Wagner is prosecuting the cases on behalf of the government. The United States Secret Service and the Clarksburg Police Department investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Man Pleads Guilty to Producing and Distributing Child PornographyRead the Press Release
ALEXANDRIA, Va. – A Manassas Park man pleaded guilty today to producing and distributing child pornography.
According to court documents, Michael Gerald Moody, 44, admitted that, between 2017 and February 2018, he used a child to engage in sexually explicit conduct and he captured numerous images of that conduct with his cell phone. In addition, Moody engaged in text chats with other individuals through the online messaging application Kik Messenger. These chats principally focused on the exchange of images of child sexual abuse and discussions of the sexual abuse of children. In the course of these chats, Moody distributed child pornography, including images that he himself produced, as well as other images, to at least eight other individuals.
Moody pleaded guilty to two counts of producing child pornography and one count of distributing child pornography and faces a mandatory minimum penalty of 15 years in prison when sentenced on September 14. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Liam O’Grady accepted the plea. Assistant U.S. Attorney Jay V. Prabhu and Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-170.
MS-13 Leader Pleads Guilty to RICO ConspiracyRead the Press Release
BOSTON – An MS-13 member pleaded guilty today in federal court in Boston to racketeering conspiracy.
Jose Vasquez, a/k/a “Little Crazy,” 24, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO or racketeering conspiracy. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for Aug. 30, 2018.
Vasquez was a member and local leader of the Trece Locos Salvatrucha or TLS clique of MS-13. Vasquez personally participated in racketeering activity on behalf of MS-13. Among other things, on Sept. 8, 2014, Vasquez and another MS-13 member, Angel Pineda a/k/a “Bravo,” were involved in an attempted murder of a suspected gang rival in which the victim was stabbed multiple times.
Separately, Vasquez assisted other MS-13 members in burying evidence relating to a murder in East Boston in January 2016. On Jan. 10, 2016, Edwin Diaz, a/k/a “Demente,” Rigoberto Mejia, a/k/a “Ninja,” and other MS-13 members murdered a 16-year-old boy who MS-13 members believed to belong to the rival 18th Street gang. The victim was shot and stabbed multiple times. A few days after the murder, Vasquez—who did not personally commit the murder—helped another MS-13 member hide evidence related to the murder. Specifically, Vasquez helped bury the knife and machete used in the murder, as well as bloody clothes worn by those who committed the crime. This evidence was later recovered by law enforcement.
After a multi-year investigation, Vasquez was one of dozens of alleged 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. Vasquez is the 46th defendant to be convicted as part of that ongoing prosecution.
Pineda previously pleaded guilty and was sentenced to 93 months in prison. Diaz and Mejia previously pleaded guilty to racketeering conspiracy involving murder and are awaiting sentencing.
At today’s hearing, the Court accepted Vasquez’s guilty plea but deferred acceptance of the proposed plea agreement until the sentencing hearing. Under the terms of the proposed plea agreement, Vasquez will be sentenced to between 15 and 18 years in prison.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter 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; and Somerville Police Chief David Fallon made the announcement.
The remaining defendants charged in this case are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Local Man Admits to Distributing Child Pornography ChargesRead the Press Release
CORPUS CHRISTI, Texas - A 36-year-old Corpus Christi man has admitted he distributed child pornography on at least two occasions, announced U.S. Attorney Ryan K. Patrick.
In September 2016, the FBI Child Exploitation Task Force conducted an investigation on a file sharing network looking for potential offenders sharing child pornography. An officer was eventually able to download many images of child pornography from a computer and a specific IP address linked to David Medina in Corpus Christi. Agents obtained a search warrant for Medina’s residence, after which agents seized several digital devices that led to the discovery of more than 3,500 images and 28 videos of child pornography.
Another investigation in 2017 led authorities to a different computer sharing child pornography which was traced to a second residence in Corpus Christi linked to Medina. He cellular phone was seized and allegedly found to contain more than 1,000 images and 95 videos of child pornography.
In Feb. 21, 2018, authorities received information that someone was downloading child pornography at a hotel in Corpus Christi. Medina was found to be renting a room at that location and seized his laptop as part of the investigation. At that time, Medina again admitting to distributing child pornography.
Senior U.S. District Judge John D. Rainey accepted the guilty plea today and set sentencing for Aug. 21, 2018. At that time, Medina faces a minimum of 5 years and up to 20 years in federal prison and a $250,000 maximum fine. Upon completion of any prison term imposed, Medina also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet.
The FBI conducted the investigation with the assistance of the Corpus Christi Police Department - Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Leesburg Man Sentenced to 14 Years in Federal Prison for CarjackingRead the Press Release
Ocala, Florida – U.S. District Judge Roy B. Dalton, Jr. today sentenced Avery Tumer (24, Leesburg) to 14 years and 2 months in federal prison for carjacking, conspiracy to commit carjacking, brandishing a firearm in furtherance of a crime of violence, and possessing a firearm as a convicted felon.
According to court records, on December 23, 2016, Tumer, along with his co-conspirators Timotheus Reed, Jonathan Lanier, and Amy Scott conspired to rob an individual of his money, other personal items, and his car by arranging a meeting at a gas station in Leesburg between the victim and Scott. The victim believed that he was going to meet the woman only. However, shortly after the victim arrived, Tumer, Reed, and Lanier pulled the victim from his car and stole his wallet and other personal property. During the robbery, the three men wore masks and pointed firearms at the victim. Tumer later pistol-whipped the victim and took his car. All four individuals were arrested a short time later by officers from the Lake County Sheriff’s Office and the Leesburg Police Department.
On November 30, 2017, a federal jury found Tumer and Reed guilty for their roles in the crimes. Reed was previously sentenced to 12 years in federal prison. On November 15, 2017, a separate jury found Lanier guilty for his role and he was sentenced to 13 years in federal prison. Scott pleaded guilty for her involvement and was sentenced to 46 months’ imprisonment.
This case was investigated by the FBI (Daytona Resident Agency), the Lake County Sheriff’s Office, and the Leesburg Police Department. It was prosecuted by Assistant United States Attorney Dale Campion.
Lee County Man Sentenced for Narcotics and Firearms Offenses Under Project Safe NeighborhoodsRead the Press Release
ALBANY: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that on May 16, 2018, United States District Court Judge Leslie J. Abrams sentenced Chad Curry, age 51, of Leesburg, GA, to 130 months imprisonment for the offenses of Possession with Intent to Distribute Methamphetamine (70 months) and Possession of a Firearm in Furtherance of a Drug Trafficking Crime (60 months). The sentences will run consecutively.
There is no parole in the federal system.
At his guilty plea hearing earlier this year, Mr. Curry admitted that on July 1, 2016, he possessed with intent to distribute about one ounce of crystal methamphetamine, two bags of marijuana, a .25 caliber handgun and items consistent with the manufacture of methamphetamine, which were found in the execution of a search warrant at his residence in Leesburg, Georgia. Mr. Curry further admitted that he had been acquiring methamphetamine from sources in Atlanta, Georgia, and Phoenix City, Alabama, for redistribution, as well as manufacturing some quantities of methamphetamine himself.
“Mr. Curry not only sold highly addictive drugs but was willing to protect his illegal activity through violence if necessary, as evidenced by his possession of a handgun while doing so. Because of that weapon, he received a consecutive five year sentence in addition to what he received for selling drugs. Gun crime means extra time in the federal system,” said United States Attorney Peeler.
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.
The case was investigated by the Lee County Sheriff’s Office and the Drug Enforcement Administration. Assistant United States Attorney Leah E. McEwen prosecuted the case for the United States.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Lawrence Man Sentenced for Federal Cocaine ChargeRead the Press Release
BOSTON – A Lawrence man pleaded guilty today in federal court in Boston to a federal drug charge.
Hector Gomez, 38, was sentenced by U.S. District Court Judge Richard G. Stearns to time served and three years of supervised release. In November 2017, Gomez pleaded guilty to one count of attempting to possess with intent to distribute cocaine. In December 2016, Gomez was arrested and charged along with five co-defendants: Juan Ulfany Mateo Soto; Angel Torres Leon; Maximo Rodriguez; Angel Figueras; and Wallington Garcia.
On Oct. 27, 2016, officers observed a cocaine transaction between Mateo Soto and Torres Leon. The officers followed the car in which Mateo Soto was transporting the cocaine after the transaction, stopped him, and towed the car because Mateo Soto did not have a valid driver’s license. The officers then found and seized six kilograms of cocaine from a backpack in the car.
Each of the defendants, including Gomez, attempted to retrieve the cocaine that the officers seized. Specifically, Gomez conducted surveillance on the tow truck to identify law enforcement vehicles that might be in the vicinity and reported back to Mateo Soto. Gomez and another defendant then went to the tow yard in an attempt to retrieve the car and the drugs contained in a backpack to return to Mateo Soto.
Maximo Rodriguez was scheduled for jury trial on Feb. 20, 2018, but failed to appear. He is currently a fugitive. Angel Torres Leon and Angel Figueras were sentenced in December 2017 to 40 months in prison and time-served, respectively. Mateo-Soto was sentenced in March 2018 to six years in prison; and Wallington Garcia’s case was dismissed.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Peter Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Susan Winkler of Lelling’s Narcotics and Money Laundering Unit prosecuted the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Latrobe Man, 22, Sentenced to More than 11 Years in Prison for Distributing Child PornographyRead the Press Release
PITTSBURGH, PA - A former resident of Westmoreland County, Pennsylvania, has been sentenced in federal court to 140 months’ imprisonment, followed by 20 years supervised release, on a charge of distribution of material depicting the sexual exploitation of a minor, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak imposed the sentence on Timothy David Piper, age 22, of Latrobe, Pennsylvania.
According to information presented to the court, on or about January 29, 2016, Piper knowingly distributed images containing material depicting the sexual exploitation of a minor. Specifically, Piper, groomed and sexually assaulted a minor male child, admitted to taking sexually explicit images and videos of the child using his cellular phone, and shared the images and videos over the Internet.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Scott W. Brady commended the Federal Bureau of Investigation and Greensburg Police Department for conducting the investigation leading to the successful prosecution of Piper.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Las Vegas Man Arranged for Marijuana to be Distributed on Western PA College Campuses, Including IUPRead the Press Release
PITTSBURGH - A resident of Las Vegas, Nevada, pleaded guilty in federal court to charges of conspiracy to distribute 100 kilograms or more of marijuana and conspiracy to launder proceeds of marijuana trafficking, United States Attorney Scott W. Brady announced today.
Ryan Schanck, age 30, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that the Drug Enforcement Administration and other agencies conducted a multi-year investigation of the marijuana trafficking conspiracy of Schanck and his co-conspirators. From 2012 through 2017, Schanck and his co-conspirators arranged for marijuana to be supplied from the West Coast and mailed to the Pittsburgh area through the United States Postal Service. Schanck and his co-conspirators would then distribute the marijuana in the Western District of Pennsylvania, primarily on college campuses, such as Indiana University of Pennsylvania. During the operation of the conspiracy, Schanck conspired to distribute from 700 to 1000 kilograms of marijuana. He also conspired to launder approximately $258,404 in proceeds from marijuana trafficking.
Judge Cercone scheduled sentencing for October 4, 2018. The law provides for a total sentence of not less than five years to 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation, the Pittsburgh Bureau of Police, and the Indiana Borough Police conducted the investigation that led to the prosecution of Schanck. 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.
Jury Convicts Cyber-Criminal of Operating Counter Antivirus ServiceRead the Press Release
ALEXANDRIA, Va. – A federal jury convicted a Latvian “non-citizen,” meaning a citizen of the former USSR who had been residing in Riga, Latvia, of three counts related to his operation of “Scan4you,” an online counter antivirus service that helped computer hackers to determine whether the computer viruses and other malicious software they created would be detected by antivirus software.
Ruslan Bondars, 37, was convicted after a five-day jury trial of one count of conspiracy to violate the Computer Fraud and Abuse Act, one count of conspiracy to commit wire fraud, and one count of computer intrusion with intent to cause damage.
“Ruslan Bondars designed and operated a service that provided essential aid to some of the world’s most destructive hackers,” said Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia. “This verdict demonstrates our commitment to holding such actors accountable. I commend the work of the agents and prosecutors, both in the United States and in Latvia, who worked together to bring him to justice.”
According to court records and evidence presented at trial, from at least 2009 until 2016, Ruslans Bondars, 37, operated Scan4you, which for a fee provided computer hackers with information they used to determine whether their malware would be detected by antivirus software, including and especially by antivirus software used to protect major U.S. retailers, financial institutions and government agencies from computer intrusions.
“Ruslans Bondars helped hackers test and improve the malware they then used to inflict hundreds of millions of dollars in losses on American companies and consumers,” said John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “Today’s verdict should serve as a warning to those who aid and abet criminal hackers: the Criminal Division and our law enforcement partners consider you to be just as culpable as the hackers whose crimes you enable—and we will work tirelessly to identify you, prosecute you, and seek stiff sentences that reflect the seriousness of your crimes.”
For example, one Scan4you customer used the service to test malware that was subsequently used to steal approximately 40 million credit and debit card numbers, as well as approximately 70 million addresses, phone numbers and other pieces of personal identifying information, from retail store locations throughout the United States, causing one retailer approximately $292 million in expenses resulting from the intrusion.
Another Scan4you customer used the service to assist the development of “Citadel,” a widely used malware strain that was used to infect over 11 million computers worldwide, including in the United States, and resulted in over $500 million in fraud-related losses. The Citadel developer took advantage of a special feature of Scan4you that allowed its integration directly into the Citadel malware toolkit through an Application Programming Interface, or API. The API tool allowed Scan4you users the flexibility to scan malware without the need to directly submit the malware to Scan4you’s website.
At its height, Scan4you was the largest service of its kind and had at least thousands of users. Malware developed with the assistance of Scan4you included some of the most prolific malware known to the FBI and was used in major computer intrusions committed against American businesses.
Scan4you differed from legitimate antivirus scanning services in multiple ways. For example, while legitimate scanning services share data about uploaded files with the antivirus community and notify their users that they will do so, Scan4you instead informed its users that they could upload files anonymously and promised not to share information about the uploaded files with the antivirus community.
Bondars faces a maximum penalty of 35 years in prison when sentenced on September 21. 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.
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Matthew J. DeSarno, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division, made the announcement after U.S. District Judge Liam O’Grady accepted the verdict. Assistant U.S. Attorneys Kellen S. Dwyer and Laura Fong, along with Trial Attorneys C. Alden Pelker and Ryan Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), prosecuted the case.
The Government of Latvia, including the Latvia State Police International Cooperation Department, the Latvia State Police Cybercrime Unit, and the General Prosecutor’s Office of the Republic of Latvia – International Cooperation Division, provided assistance and support during the investigation. Additional assistance was provided by the Criminal Division’s Office of International Affairs, the FBI’s Atlanta Field Office and the Operational Technology Division, and the U.S. Attorney’s Offices for the District of Minnesota and the Northern District of Georgia.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-228.
Jacksonville Felon Pleads Guilty to Firearms OffenseRead the Press Release
Jacksonville, Florida – Daryl D. Shack (28, Jacksonville) yesterday pleaded guilty to possessing a firearm as a convicted felon. He faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, on July 17, 2017, officers from the Jacksonville Sheriff’s Office conducted a traffic stop on a car in which Shack was a passenger. At the time, Shack possessed a loaded Beretta pistol, which had previously been reported stolen, between his feet. He also had a baggie of cocaine in his pocket. Officers later recovered a baggie of marijuana, a knife, and an axe from the vehicle. Shack has a previous felony conviction for armed robbery and, therefore, is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Jacksonville Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts.
Investment Advisor Sentenced to More Than 5 Years in Prison for Misappropriating $6.5 Million in Client FundsRead the Press Release
CHICAGO — An investment advisor was sentenced today to more than five years in federal prison for stealing $6.5 million from several clients, including family members in the Chicago area.
HENRY MEYER, who owned HCM Asset Management LLC in Coral Gables, Fla., misappropriated the money from 2009 to 2016. Most of Meyer’s clients were his family members and friends, some of whom were elderly and had invested their retirement savings. Meyer used some of the stolen funds to pay personal expenses, including rent, utilities and car payments. His credit card statements reflect expensive purchases at restaurants, including lavish tips in the hundreds of dollars.
U.S. District Judge Charles R. Norgle imposed the 69-month prison sentence and ordered Meyer to pay $6.5 million in restitution to the victims. Meyer, 47, of Coral Gables, Fla., pleaded guilty last year to one count of mail fraud.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
“This case is about a bold and brash con man who has little concern for anybody but himself,” Assistant U.S. Attorney Sunil R. Harjani argued in the government’s sentencing memorandum. “The harm he has caused the victims is hard to overstate.”
According to his plea agreement, Meyer told investors that their funds would be placed in a “European Derivative Investment Program,” whose performance was purportedly premised on the failures of several European economies. In soliciting investors, Meyer claimed the program had partnerships with several European firms, and that he was part of a group of highly successful investment firms operating in the European derivatives markets. Meyer represented that his firm produced investment returns as high as 600%.
In reality, the European Derivative Investment Program did not exist. There was no support from other European companies, and Meyer’s firm never produced any successful returns.
In 2016, Meyer was arrested and a search warrant was executed at his apartment. Among other things, the FBI found a document on Meyer’s desk entitled “Battle Plan.” Part of the document discussed Meyer’s attempt to obtain more funding from new investors in order to make Ponzi-type payments to older investors. Another part of the document discussed how to expedite Meyer’s passport application as part of a plan to evade law enforcement. Meyer’s “Battle Plan” set forth a strategy to travel initially to a location in the southern United States, followed by an “international escape” to such locations as the Bahamas, Thailand, Singapore, Korea, Australia or New Zealand.
Inmate Sentenced to More Than 12 Years in Federal Prison for Attacking Corrections OfficerRead the Press Release
Ocala, Florida – U.S. District Judge Roy B. Dalton, Jr. today sentenced Miguel Angel Rodriguez-Lopez (47) to more than 12 years and 7 months in federal prison for forcibly assaulting a federal officer resulting in bodily injury. He pleaded guilty to the offense on December 13, 2017.
According to court documents and evidence presented at sentencing, Rodriguez-Lopez was an inmate at the Coleman Federal Correctional Complex, United States Penitentiary 2, in Sumter County, Florida. On June 23, 2013, while serving a sentence for assaulting another inmate, Rodriguez-Lopez attacked a federal corrections officer who was making rounds at the prison. He repeatedly punched and kicked the officer until subdued by other staff members. Rodriguez-Lopez, an illegal alien from Mexico, will be deported from the United States upon completion of this latest prison sentence.
This case was investigated by the FBI and the Bureau of Prisons. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Importer of Crystal Methamphetamine Sentenced to Federal PrisonRead the Press Release
LAREDO, Texas – A 20-year-old man has been ordered to prison following his conviction of conspiring to import nearly four kilograms of crystal methamphetamine, announced U.S. Attorney Ryan K. Patrick. Mark Gurrola, of Dallas, pleaded guilty Jan. 9, 2018.
Today, U.S. District Judge Marina Garcia Marmolejo ordered him to serve a total of 78 months in prison. In handing down the sentence, the court noted the serious problems methamphetamine causes for users and the surrounding communities.
On Oct. 14, 2017, Gurrola applied for entry into the United States from Mexico as a passenger on a commercial bus. Agents observed him acting suspicious and searched the area around him. Authorities located four bundles containing crystal methamphetamine.
Gurrola has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
Customs and Border Protection and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Giselle S. Guerra prosecuted the case.
Illegal Alien from Guatemala, Deported Five Times, Charged with Illegal Reentry into U.S.Read the Press Release
PITTSBURGH, PA - An illegal alien found in Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of illegal re-entry after deportation, United States Attorney Scott W. Brady announced today.
The one-count indictment named Joban Rodriguez-Nava, aka Joban Roderiguez, aka Jovan Rodriguez, age 31, of Guatemala, as the sole defendant.
According to the indictment presented to the court, Joban Rodriguez-Nava, an illegal alien, was formally removed from the United States by United States Immigration and Customs Enforcement on March 14, 2011, March 28, 2011, May 24, 2011, June 7, 2011 and June 15, 2012. Joban Rodriguez-Nava was found to be illegally present in Pittsburgh, Pennsylvania, on April 30, 2018.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.
The U.S. Department of Homeland Security, Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Houston Man Pleads Guilty to Smuggling 15 Aliens in Tractor TrailerRead the Press Release
CORPUS CHRISTI, Texas – A Houston man has entered a guilty plea to attempting to smuggle illegal aliens behind a load of produce, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned the indictment against Joshua Abraham Andrus, 30, April 11, 2018. Today, he pleaded guilty as charged.
Andrus admitted he attempted to transport illegal aliens hidden behind a load of produce in the trailer portion of the 18-wheeler he was driving. On Mar. 22, 2017, Andrus drove a tractor-trailer and approached the primary inspection lane at the U.S. Border Patrol Checkpoint near Falfurrias. During a routine immigration inspection, a service canine alerted to the trailer.
During a subsequent search of the vehicle, authorities discovered 15 illegal aliens locked inside. The temperature inside the refrigerated trailer was 56 degrees.
He was permitted to remain on bond pending his sentencing hearing, which will be set at a later date. At that time, he faces up to five years in federal prison and a possible $250,000 fine.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the U.S. Border Patrol. Assistant U.S. Attorney Jeffrey S. Miller is prosecuting the case.
Honolulu Man Indicted for Soliciting A Commercial Sex Act from A MinorRead the Press Release
HONOLULU – Dustin Trey Miyakawa, 32, a resident of Oahu, was indicted by a federal grand jury today with attempted enticement and coercion of a minor, solicitation of a minor for a commercial sex act, and attempted production of child pornography. Miyakawa was previously arrested on May 3, 2018, and ordered detained pending further proceedings.
Kenji M. Price, U.S. Attorney for the District of Hawaii, announced that the indictment charges Miyakawa with using social media and a cell phone to entice a 15-year-old female to engage in sexual conduct prohibited by Hawaii State law. The indictment also charges Miyakawa with soliciting a commercial sex act from the minor, in violation of the federal statute that prohibits child sex trafficking, and attempting to produce sexually explicit photos of her, i.e., child pornography. The charges arise out of allegations that Miyakawa, who advertises on social media as a photographer, used Instagram to set up a meeting with the minor victim at his apartment where he took nude photographs of her, offered her money for sex, and then tried to extort her with the nude photographs when she refused his offer to accept money for sex.
The FBI is asking members of the public who may be victims in this case, or have information about additional victims in this case, to contact the FBI at [email protected] or 1-800-CALL FBI (1-800-225-5324).
FBI Special Agent in Charge (SAC) Sean Kaul stated, “This type of crime represents a malicious threat to the most vulnerable among us, it specifically targets our children. The FBI is deeply committed to working with the U.S. Attorney's Office and our Law Enforcement Partners to investigate these crimes to the fullest extent.”
“The predators who are brazenly stalking our children online need to know that HSI, together with its law enforcement partners, is working tirelessly to track you down and hold you accountable for your crimes,” said Frank Cabaddu, acting Special Agent in Charge for Homeland Security Investigations (HSI) Honolulu. “We need the public’s assistance in this effort. We urge anyone in the community who has information about this case, or any other incident involving possible child sex trafficking, to come forward so we can prosecute the perpetrators and provide assistance to their victims.”
Miyakawa will appear in court on May 17, 2018, for an arraignment and plea on the charges, at which time a trial date will be scheduled. An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted of the charges, Miyakawa faces a mandatory minimum sentence of 15 years in prison and up to a $250,000 fine for the sex trafficking and child pornography charges, and a mandatory minimum sentence of 10 years in prison and up to a $250,000 fine for enticement of a minor. The statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case was jointly investigated by Homeland Security Investigations, the FBI, and the Honolulu Police Department, and is being prosecuted by Assistant U.S. Attorney Morgan Early.
Hattiesburg Man Pleads Guilty to Illegally Possessing a Stolen FirearmRead the Press Release
Hattiesburg, Miss. – Ulric S. Crossland, 27, of Hattiesburg, pled guilty Monday before U.S. District Judge Keith Starrett to being a convicted felon in possession of a stolen firearm, announced U.S. Attorney Mike Hurst and Special Agent in Charge Christopher Freeze with the Federal Bureau of Investigation.
On July 17, 2017, in Lamar County, Crossland was arrested for being a convicted felon in possession of firearms. He was arrested at an apartment he was using during a search conducted by the Mississippi Bureau of Narcotics, City of Hattiesburg Police and the Probation Division of the Mississippi Department of Corrections. Crossland was found in possession of the following three firearms: a Romarm/Cugir 7.62x39 mm caliber rifle (with a high capacity magazine); a Taurus 9mm pistol, and a Glock .40 caliber pistol. Crossland knew that both the Taurus and Glock pistols were stolen. The Glock had been stolen from a Mississippi Department of Corrections Probation Officer. Crossland was under active supervision by Mississippi State Probation at the time of his arrest. Additionally, methamphetamine belonging to Crossland was found.
On November 2, 2017, in Forrest County, Crossland was arrested again for being a felon in possession of a firearm. During a multi-agency city-wide detail in Hattiesburg, regarding on-going gang activity in the local area, agents of the Mississippi Bureau of Narcotics, the Metro Narcotics Team, and a Mississippi Department of Corrections Probation Officer were conducting a security check of the Executive Inn Motel. Agents encountered Crossland (who was on probation) standing in the parking lot outside a vehicle with two other men in the car. Agents smelled burnt marijuana, and arrested Crossland for being a convicted felon in possession of a Smith & Wesson semi-automatic pistol. Previously, Crossland had been convicted of felony "possession of a controlled substance (cocaine) while in possession of a firearm."
Crossland will be sentenced by Judge Starrett on September 6, 2018, and faces a maximum penalty of 10 years in federal prison and a $250,000 fine.
The case was investigated by the FBI’s Southeast Mississippi Safe Streets Task Force in Hattiesburg, which is made up of special agents from the FBI and law enforcement officers from the Office of the Mississippi State Auditor, Mississippi Bureau of Narcotics and Hattiesburg Police Department with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Stan Harris.
Fugitive Caught After 20 Years Pleads Guilty to Failing to Appear in CourtRead the Press Release
BOSTON – A Dominican national pleaded guilty today in federal court in Boston in connection with failing to appear in court for a sentencing hearing in 1997.
Luis Alberto Solano-Pimentel, 51, pleaded guilty to one count of failure to appear. U.S. District Court Judge Mark Wolf scheduled sentencing for Aug. 8, 2018. Solano- Pimentel was arrested on March 6, 2018, in Rhode Island after eluding law enforcement for 20 years. He has been detained since his arrest.
In 1997, Solano- Pimentel pleaded guilty to passport fraud in federal court in Boston, but failed to appear on his scheduled sentencing date. Solano- Pimentel remained a fugitive until he was arrested in Warwick, R.I.
The charge of failure to appear provides for a sentence of no greater than five years in prison, three years of supervised released, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; William B. Gannon, Special Agent in Charge of the U.S. Department of State, Diplomatic Security Service, Boston Field Office; John Gibbons, United States Marshal for the District of Massachusetts; and Jamie A. Hainsworth, United State Marshal for the District of Rhode Island, made the announcement today. Assistant U.S. Attorney Christine Wichers of Lelling’s Major Crimes Unit is prosecuting the case.
Four Southwestern Pennsylvania Residents Charged with Filing False Federal Income Tax Returns for OthersRead the Press Release
PITTSBURGH, PA – Four people have been charged in separate, but related, indictments with aiding or assisting in the preparation or filing of false federal income tax returns, United States Attorney Scott W. Brady announced today.
According to a five-count indictment, Martha B. Vasser of Pittsburgh filed false federal income tax returns for other persons that included false Schedule C information, and which requested a false refund for the tax filer.
Another five-count indictment charges Earlene L. Clancy of Pittsburgh with filing false federal income tax returns for other persons that included false Schedule C information, and which requested a false refund for the tax filer.
A third five-count indictment alleges Quincy K. Denson of Clairton filed false federal income tax returns for other persons that included false Schedule C information, and which requested a false refund for the tax filer.
A fourth five-count indictment charges Daniel K. Hamilton of Arnold, Pennsylvania, with filing false federal income tax returns for other persons that included false Schedule C information, and which requested a false refund for the tax filer.
At each count, the law provides for a total sentence of three years imprisonment, a fine of $250,000.00 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting these cases on behalf of the government.
The Internal Revenue Service-Criminal Investigation conducted the investigation leading to the indictments in these cases.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Owners of Paterson Restaurant Admit Tax EvasionRead the Press Release
NEWARK, N.J. – The former owners of a restaurant in Paterson, New Jersey, today admitted failing to pay over $240,000 in taxes by concealing income from their cash-only business, U.S. Attorney Craig Carpenito announced.
Elio Federico, 71, of Totowa, New Jersey, and his brother, Ralph Federico, 68, of Saddle Brook, New Jersey, each pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to one count of tax evasion.
According to documents filed in this case and statements made in court:
Elio and Ralph Federico co-owned an Italian restaurant in Paterson that had been in business since 1967. The brothers operated the restaurant on a cash-only basis, paid a substantial portion of the employee payroll in cash, and paid virtually all of their suppliers in cash.
Elio and Ralph Federico admitted that they concealed a portion of their income from the IRS by among other things, taking a cash “skim” from the restaurant’s gross receipts, which they did not report as income; reprogramming the cash register so it would not maintain a gross receipt balance for more than a few days; and deliberately failing to provide the restaurant’s accountant with invoices that reflected the true cost of goods sold and the actual amount of gross income that the business generated.
Elio and Ralph Federico admitted that they failed to pay the necessary income and employment taxes that they owed from 2011 through 2014, resulting in a tax loss to the United States of $241,219.
The tax evasion charge to which they pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 4, 2018.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Defense counsel: Elio Federico: Frank Agostino Esq. and Jeffrey Dirmann Esq., Hackensack
Ralph Federico: Richard J. Sapinski Esq. and Joseph B. Shumofsky Esq. NewarkFormer City Attorney and City Manager of Crystal City, TX, Sentenced to Federal Prison for Bribery and Kickback SchemeRead the Press Release
In Del Rio today, a federal judge sentenced the former City Attorney and City Manager of Crystal City, TX, to 420 months in federal prison for his role in a bribery and kickback scheme which decimated city coffers announced United States Attorney John F. Bash and FBI Special Agent in Charge Christopher Combs, San Antonio.
In addition to the prison term, United States District Judge Alia Moses ordered that 56-year-old William James Jonas, III, pay $1,047,814.05 restitution to Crystal City and forfeit to the Government $17,291.73. Judge Moses also ordered that Jonas be placed on supervised release for a period of three years after completing his prison term.
“Today Judge Moses imposed a just sentence for Mr. Jonas’s staggering betrayal of the public trust—a betrayal that left Crystal City nearly insolvent. But this was surely not an isolated incident. My office is committed to rooting out public corruption throughout Central and West Texas,” stated United States Attorney John F. Bash.
On June 26, 2017, a federal jury convicted Jonas of one count of conspiracy to commit bribery involving federal programs, three substantive counts of bribery involving federal programs, one count of conspiracy to commit wire fraud and theft of honest services, five substantive counts of wire fraud and theft of honest services, and four counts of wire fraud. Jurors also convicted former Crystal City Mayor Ricardo Lopez of one count of conspiracy to commit bribery involving federal programs, one substantive count of bribery involving federal programs, one count of conspiracy to commit wire fraud and theft of honest services and four substantive counts of wire fraud and theft of honest services. Both Jonas and Lopez were remanded to the custody of the U.S. Marshals Service following the guilty verdict.
Testimony provided during trial revealed that between May 2012 and February 2016, Jonas, Lopez, and other city officials used their official positions to enrich themselves by soliciting and accepting bribes from persons seeking to do business in Crystal City. Jonas and Lopez also used emails, texts and phone calls to carry out their scheme to defraud Crystal City and its citizens through bribery and the concealment of information.
Testimony further revealed that Jonas was involved in a wire fraud scheme in connection with a multi-million-dollar debt offering in December 2014, which was intended to pay for various improvements to the City’s infrastructure, including replacing the City’s water meters, certain heating and air conditioning equipment, and lighting. Under various documents relating to the debt offering, Crystal City agreed to place the $2.25 million generated by the sale of the certificates of obligation into separate accounts and to use those funds only for specified purposes. Instead, Jonas caused those monies to be deposited into the City’s General Fund in December 2014, where the funds were used to pay for Jonas’ salary and other unauthorized expenditures.
According to the indictment, the balance in the City’s General Fund after the deposit of the raised funds was $2,207,050.62. The balance in the City’s General Fund on or about October 31, 2015, was $2,199.95. On November 6, 2015 Crystal City still owed approximately $735,048.79 in payments to the company that performed the infrastructure improvements.
“We would like to thank the San Antonio Police Department who were full partners in this investigation. We also would like to thank the Texas Department of Public Safety and the Texas Rangers for their assistance. This case reflects our commitment to the citizens of Crystal City to aggressively and relentlessly root out criminal corruption in our community,” said Christopher Combs, Special Agent in Charge of the FBI’s San Antonio Office. “Citizens deserve honest and faithful service from their public officials. Greed and self-interest have no place in public service. Officials who betray the public and violate their oath of office will be thoroughly investigated and exposed. In this effort one of our most important partners is the public, and we encourage honest citizens to report suspicious activity to the FBI at 210-225-6741.”
Today, Judge Moses also sentenced businessman Ngoc Tri Nguyen to 17 months incarceration (time served) for his role in the fraudulent scheme. Judge Moses also ordered that Nguyen be placed on supervised release for a period of three years and that he forfeit to the Government $4,803. Judge Moses also ordered Nguyen to pay $6,000 restitution as well as a $40,000 money judgment. In May 2016, Nguyen pleaded guilty to a federal programs bribery charge admitting that he paid $6,000 in bribes in exchange for various official acts from his co-defendants. Nguyen has remained in custody since January 2017.
Lopez faces up to five years in federal prison for the conspiracy to commit bribery charge, up to ten years in federal prison for each bribery related charge, and up to 20 years in federal prison for each wire fraud related charge. Three other individuals—former Mayor Pro-Tem Rogelio Mata, former City Councilman Roel Mata and former City Councilman Gilbert Urrabazo—have pleaded guilty to a federal programs bribery charge and face up to ten years in federal prison and up to a $250,000 fine. Sentencing for all four former city officials is scheduled for June 11, 2018, in Del Rio before Judge Moses.
The FBI conducted this investigation with the assistance of the Texas Department of Public Safety Criminal Investigative Division, the Texas Rangers and the San Antonio Police Department. Assistant United States Attorney William R. Harris is prosecuting this case on behalf of the Government.
Former Ceo of Two Investment Advisers Pleads Guilty to Defrauding A Native American Tribe and Various InvestorsRead the Press Release
Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that MICHELLE MORTON pled guilty today to defrauding a Native American tribal entity and various investment advisory clients of tens of millions of dollars in connection with the issuance of bonds by the tribal entity and the subsequent sale of those bonds through fraudulent and deceptive means. MORTON pled guilty to conspiracy to commit securities fraud and a substantive count of investment adviser fraud before U.S. District Judge Ronnie Abrams.
Mr. Khuzami said: “Michelle Morton, CEO of Atlantic Asset Management, purchased tribal bonds for the accounts of her clients knowing they were issued under false pretenses and of little or no value to clients. Today, Morton admitted to shirking her fiduciary responsibility to her financial clients for her own personal gain, and she now faces a serious term of imprisonment.”
According to the allegations contained in the Superseding Indictment filed against MORTON and her co-conspirators and statements made in related court filings and proceedings[1]:
From March 2014 through April 2016, MORTON, along with her co-conspirators Jason Galanis, John Galanis, a/k/a “Yanni,” Hugh Dunkerley, Gary Hirst, Devon Archer, and Bevan Cooney, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by MORTON and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.
The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by John Galanis. Once the Tribal Bonds were issued, MORTON and Hirst used funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”), and Atlantic Asset Management, LLC (“Atlantic”) – where MORTON served as chief executive officer – to purchase the Tribal Bonds, even though MORTON was well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased. In addition, MORTON and her co-defendants failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.
Hughes and Atlantic clients were provided no prior notice that MORTON caused them to purchase the Tribal Bonds. When these clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts.
Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, significant portions of the proceeds were misappropriated by the defendants for their personal and professional use.
Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”), an entity controlled by Hirst and Dunkerley. Dunkerley transferred more than $38 million from the WAPCC account to an account controlled by Jason Galanis, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals.
In addition, a portion of the misappropriated proceeds were recycled and provided by Jason Galanis to entities affiliated with Archer and Cooney in order to enable Archer and Cooney to purchase subsequent Tribal Bonds issued by the WLCC. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.
* * *
MICHELLE MORTON, 57, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which also which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense. Sentencing before Judge Abrams has been scheduled for November 30, 2018, at 11:00 a.m.
Jason Galanis, 47, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; and one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. On August 11, 2017, Galanis was sentenced principally to a term of 173 months in prison.
Hugh Dunkerley, 44, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of bankruptcy fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of falsification of records with the intent to obstruct a Government investigation, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense.
Gary Hirst, 65, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which also which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Trial against the remaining defendants is scheduled to begin on May 22, 2018, before Judge Abrams.
Mr. Khuzami praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein, Brendan F. Quigley, and Negar Tekeei are in charge of the prosecution.
[1] As for the defendants who have not pled guilty (John Galanis, Devon Archer, and Bevan Cooney) the description of the charges set forth herein constitute only allegations.
Former CEO, CFO and Director of Health Care Services Company Charged in Elaborate $300 Million Investment Fraud SchemeRead the Press Release
The former CEO, CFO and an executive director of a publicly traded health care services company were charged today with allegedly orchestrating a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Craig Carpenito announced today.
Parmjit “Paul” Parmar, 48, of Colts Neck, New Jersey; Sotirios “Sam” Zaharis, 51, of Weehawken, New Jersey; and Ravi Chivukula, 44, of Freehold, New Jersey, are charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. FBI special agents arrested Parmar earlier today near his home. He is scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark, New Jersey federal court. Chivukula and Zaharis remain at large.
According to the complaint unsealed today, from May 2015 through September 2017, the defendants orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market. To fund the transaction, the private investment firm put up approximately $82 million in equity, and a consortium of financial institutions provided another approximately $130 million in debt. The scheme allegedly utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.
The complaint alleges that to present a positive picture of the company’s financial wealth, the defendants allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund Company A’s acquisitions of various operating subsidiaries. In reality, a number of those entities either did not exist or had only a fraction of the operating income attributed to them. The conspirators allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets. The money was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering. The defendants allegedly went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers.
The conspirators allegedly:
- Created fictitious operating companies that Company A purportedly acquired in sham acquisitions;
- Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams;
- Generated fake income streams and phony customers of Company A and its subsidiaries; and
- Made material misrepresentations and omissions to the private investment firm and others.
The defendants’ alleged actions caused the private investment firm and others to value Company A at more than $300 million for purposes of financing the transaction to take the company private.
The alleged scheme was uncovered around September 2017, when the defendants resigned from their positions with Company A or were terminated. On March 16, 2018, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the alleged fraud scheme.
Separately, the United States filed a separate civil complaint today seeking forfeiture of four properties that Parmar owns or controls, including a house on Colt’s Neck and three apartments in New York City. The U.S. Securities and Exchange Commission filed a civil complaint today against Parmar, Zaharis and Chivukula.
The investigation was conducted by the FBI Newark Field office with the assistance of the U.S. Securities and Exchange Commission’s New York Regional Office.
The government is represented by Trial Attorney Leslie Lehnert of the Criminal Division’s Money Laundering and Asset Recovery Section, Chief Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the U.S. Attorney’s Office for the District of New Jersey’s Asset Recovery Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former CEO, CFO and Director of Healthcare Services Company Charged in Elaborate $300 Million Investment Fraud SchemeRead the Press Release
Defendants Allegedly Inflated Company’s Value and Revenue to Defraud Investors
NEWARK, N.J. – The former CEO, CFO and an executive director of a publicly traded health care services company were charged today with allegedly orchestrating a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division announced.
Parmjit “Paul” Parmar, 48, of Colts Neck, New Jersey; Sotirios “Sam” Zaharis, 51, of Weehawken, New Jersey; and Ravi Chivukula, 44, of Freehold, New Jersey, are charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. FBI agents arrested Parmar earlier today near his home. He is scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. Chivukula and Zaharis remain at large.
According to the complaint unsealed today:
From May 2015 through September 2017, the defendants orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a healthcare services company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market. To fund the transaction, the private investment firm put up $82 million and a consortium of financial institutions put up another $130 million. The scheme utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.
The complaint alleges that to present a positive picture of the company’s financial wealth, the defendants allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund Company A’s acquisitions of various operating subsidiaries. In reality, a number of those entities either did not exist or had only a fraction of the operating income attributed to them. The conspirators allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets. The money from one of the offerings was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering. The defendants went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers.
The conspirators allegedly:
• Created fictitious operating companies that Company A purportedly acquired in sham acquisitions.
• Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams.
• Generated fake income streams and phony customers of Company A and its subsidiaries.
• Made material misrepresentations and omissions to the private investment firm and others.The defendants’ alleged actions caused the private investment firm and others to value Company A at more than $300 million for purposes of financing the transaction to take the company private.
The alleged scheme was uncovered around September 2017, when the defendants resigned from their positions with Company A or were terminated. On March 16, 2018, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme.
The United States is expected to file a separate civil complaint today seeking forfeiture of four properties that Parmar owns or controls, including a house in Colt’s Neck and three apartments in New York City. Separately, the U.S. Securities and Exchange Commission also filed a civil complaint today against Parmar, Zaharis and Chivukula.
The conspiracy count with which the defendants are charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine.
U.S. Attorney Carpenito and Acting Assistant Attorney General Cronan credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s charges. They also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Associate Regional Director Lara S. Mehraban, for its assistance.
The government is represented by Paul A. Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, Trial Attorney Leslie Lehnert of the Justice Department Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Sarah Devlin of the U.S. Attorney’s Office’s Asset Recovery Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Bank Branch Manager Charged in $5 Million Fraud Involving Two New York Area BanksRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of a criminal Complaint charging MOSHE BENENFELD, a/k/a “Michael Benenfeld,” with bank fraud, in connection with hundreds of unauthorized transactions BENENFELD conducted in bank customer accounts when employed by two different New York-area banks. BENENFELD is expected to be presented before U.S. Magistrate Judge Barbara C. Moses today.
Manhattan U.S. Attorney Geoffrey Berman said: “As alleged, Moshe Benenfeld betrayed his position of trust as a bank branch manager to steal account holders’ money. Thanks to the Postal Inspection Service, Benenfeld is in custody and facing prosecution for his alleged crime.”
Inspector in Charge Bartlett said: “Mr. Benenfeld exploited the position of trust granted to him by his employer. He stole from family and friends to enrich himself and others. Postal Inspectors encourage customers to keep a watchful eye on their money, no matter who it is entrusted to.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
Between 2000 and 2016, BENENFELD was the branch manager at a branch of a New York-area bank (“Bank-1”). Beginning in or about 2004 and continuing into 2016, while employed at Bank-1, BENENFELD conducted hundreds of unauthorized transactions involving the accounts of over 20 bank customers, including the accounts of BENENFELD’s relatives. Among other things, BENENFELD made unauthorized draws on, and payments to, customers’ lines of credit; made unauthorized withdrawals from, and deposits to, customers’ deposit accounts; and used customers’ deposit accounts as collateral for other customers’ lines of credit, without authorization. To effect the unauthorized transactions, BENENFELD would, among other things, forge the signatures of bank customers and use a document previously signed by a bank customer to create paperwork that falsely purported to authorize a different transaction. In or about April 2016, after having discovered BENENFELD’s conduct, Bank-1 terminated BENENFELD’s employment. In or about June 2016, BENENFELD was hired by another bank (“Bank-2”). At Bank-2, BENENFELD continued to conduct unauthorized transactions involving customer accounts. As a result of the unauthorized transactions conducted by BENENFELD, Bank-1 sustained losses of over $5 million.
* * *
BENENFELD, 49, of Brooklyn, New York, is charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the investigative work of the U.S. Postal Inspection Service’s New York Division.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Dina McLeod is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Felon Convicted in Connection with Firearms SalesRead the Press Release
Tampa, Florida – A federal jury has found Johnnie Charles Grimsley, Jr. (28, Clearwater) guilty of possessing firearms and ammunition as a convicted felon. He faces a minimum mandatory penalty of 15 years, and up to life, in federal prison. A sentencing hearing has been set for August 14, 2018. Grimsley was indicted on May 18, 2017.
According to evidence presented at trial, on two separate occasions in November 2016, Grimsley and an accomplice sold firearms and ammunition to an undercover detective in Pinellas County. Grimsley did not physically handle the firearms and ammunition during the deals; he had his accomplice handle them. However, during both transactions, Grimsley stated that he had obtained the firearms and ammunition, and he personally accepted the payment from the undercover detective during the second sale. At the time, Grimsley was a convicted felon and, therefore, is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Petersburg Police Department. It is being prosecuted by Assistant United States Attorney Taylor G. Stout.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Federal grand jury indicts Shreveport doctor for stealing disability benefitsRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced today that a federal grand jury indicted a Shreveport surgeon for stealing disability benefits.
John T. Owings, 58, of Shreveport, was charged with one count of theft of government property and one count of concealing that he was ineligible for Social Security benefits. According to the indictment, Owings applied for Social Security disability benefits in March of 2007. After being awarded the benefits, he was required to report if he began working again. He began working in 2012 as a surgeon for the University of California-Davis where was paid $22,000 a month. He was hired in 2013 as the chief of trauma and the medical director of University Health System in Shreveport where he is being paid $41,400 a month. Based on his employment, Owings was ineligible to receive disability benefits. However, he concealed the employment changes from the Social Security Administration, and as a result, he received more than $200,000 in government money that he was not entitled to.
Owings faces up to 10 years in prison for the theft count and five years in prison for the concealing event count. He also faces up to five years of supervised release and a $250,000 fine for each count.
The Social Security Administration investigated the case. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Federal firearms dealer and her employee sentenced for selling guns to felonsRead the Press Release
ATLANTA - Dawn Anderson, a/k/a “Prestige,” a federally licensed firearms dealer in Atlanta, doing business as Distincvision, LLC, a/k/a “Liquidation Outlet Center,” was sentenced today for making false entries in the records required to be kept by federal firearms dealers. Shawn Lewis, an employee at LOC and co-defendant, was previously sentenced for his role in the offense.
“This firearms dealer and her company made it possible for criminals to obtain dangerous weapons by allowing felons to buy firearms through straw purchasers,” said U.S. Attorney Byung J. “BJay” Pak. “Federal firearms dealers who violate the law and endanger our communities by enabling straw purchasers to unlawfully obtain guns for criminals will be prosecuted, lose their federal firearms licenses, and businesses.”
“Many gun dealers are law abiding business owners and members of our community. They work hard to build success, promote commerce and support our rights. However, when a gun dealer chooses to ignore our laws and regulations and decides to provide guns to prohibited individuals it places our entire community in harm’s way,” said Special Agent in Charge Arthur Peralta. “This sentence should serve as notice to those individuals who choose to circumvent federal and local laws for personal gain.”
According to U.S. Attorney Pak, the charges and other information presented in court: Dawn Anderson, a/k/a “Prestige,” obtained a federal firearms dealer license on August 14, 2013, under the name Distincvision, LLC, d/b/a Liquidation Outlet Center (“LOC”). LOC was located in the Greenbriar Discount Mall in Atlanta. As the holder of a federal firearms license, Anderson was required to maintain a record, in the form of a completed ATF Form 4473, that included the actual buyer’s name, home address and date of birth. The instructions on the Form 4473 warn that “any person who transfers a firearm to any person he/she knows or has reasonable cause to believe is prohibited from receiving or possessing a firearm violates the law, even if the transferor/seller has complied with the federal background check requirements.” The instructions also warned that the “seller of a firearm must determine the lawfulness of the transaction and maintain proper records of the transactions.”
ATF agents began investigating LOC after receiving information that felons were able to obtain firearms from LOC after informing Anderson or store employees, including co-defendant Shawn Lewis, that they were convicted felons. LOC employees circumvented the federal requirements for gun sales by illegally allowing straw purchasers to buy the firearms.
During the course of the investigation, ATF agents learned that on June 30, 2016, a convicted felon purchased a .40 caliber firearm from LOC after the felon told store clerks about his criminal history. The LOC clerks allowed the felon’s female companion to purchase the firearm as a straw purchaser. On August 4, 2016, a convicted felon failed a background check, but a LOC store clerk allowed him to purchase a 9mm pistol using his female companion as the straw purchaser. On December 2, 2016, Dawn Anderson sold a 9mm pistol to a convicted felon. After the felon failed a background check, Anderson allowed the felon’s female companion to purchase the firearm for him.
On May 15, 2017, ATF agents executed a search warrant at LOC. The agents seized 280 firearms and more than 69,000 rounds of ammunition during the search. Anderson forfeited all of the seized firearms and ammunition and LOC was forced to close.
From November 25, 2014 through February 11, 2018, investigators recovered more than 180 firearms purchased from LOC from crime scenes in multiple states, including Georgia, New York, New Jersey, Massachusetts, Washington, DC, Alabama, Arizona, Florida, California, Tennessee, Ohio, Illinois, North Carolina and South Carolina.
Dawn Anderson, a/k/a “Prestige,” 51, of Atlanta, Georgia has been sentenced to one year of probation and 40 hours of community service. Anderson pleaded guilty knowingly making false entries in the records required to be kept by a federal firearms dealer on February 14, 2018.
Shawn Lewis, 46, of Atlanta, Georgia was previously sentenced to six months of probation and 40 hours of community service on April 19, 2018. Lewis pleaded guilty to knowingly making false entries in the records required to be kept by a federal firearms dealer on January 29, 2018.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorneys Katherine M. Hoffer and Jolee Porter prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Dubuque Clinic Agrees to Pay $40,000 in False Claims Penalties to Resolve Allegations Related to 8 Controlled Substance RefillsRead the Press Release
Crescent Community Health Center, a non-profit health center in Dubuque, Iowa, agreed to pay $40,000 in penalties to resolve False Claims Act allegations that, during a five month period in 2013, Crescent employees who lacked the requisite credentials or authority issued 8 controlled substance refills that were paid for by Medicare or Medicaid. The Center also agreed to pay $7,503.80 to resolve allegations that, during this same period, Crescent employees improperly issued 71 prescriptions or prescription refills for non-controlled substances that were eventually paid for by Medicare or Medicaid.
The Center did not concede liability as part of the agreement but did admit that the 8 controlled substance refills were not supported by documentation that the prescriptions were authorized by qualified practitioners.
“Health care providers should be on notice that our office will use every appropriate enforcement tool to curb the availability of unauthorized or misused prescription drugs,” said United States Attorney Peter E. Deegan, Jr. “This office takes seriously its obligation to enforce the nation’s laws aimed at protecting public health and taxpayer dollars.”
The allegations resolved by the settlement arose from an investigation jointly conducted by the Department of Health and Human Services Office of Inspector General and the State of Iowa’s Medicaid Fraud Control Unit. False Claims Act cases also arise under the qui tam or whistleblower provisions of the Act, which permit a private party with knowledge of false claims to bring suit on behalf of the United States and then share in any recovery.
Follow us on Twitter @USAO_NDIA.
District Man Pleads Guilty to Federal Firearms Offense Following Discovery of Guns and Drugs in His ApartmentRead the Press Release
WASHINGTON – Leroy Jones, 32, of Washington, D.C., pled guilty today to one count of possessing firearms, including a short-barreled rifle, in furtherance of a drug trafficking offense, announced U.S. Attorney Jessie K. Liu, Michael Hughes, U.S. Marshal for the Superior Court of the District of Columbia, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Jones pled guilty in the U.S. District Court for the District of Columbia. The charge carries a mandatory-minimum sentence of 10 years in prison and a statutory maximum of life. The plea, which is subject to the Court’s approval, calls for an agreed-upon sentence of 10 years in prison, to be followed by five years of supervised release. The Honorable Senior Judge Reggie B. Walton scheduled sentencing for Aug. 10, 2018.
According to a statement of offense submitted at the time of the plea, on June 28, 2017, Deputy U.S. Marshals came to an apartment building in the 1300 block of Kenyon Street NW to conduct an eviction. Building management provided them with the keys to the apartment. The deputy marshals announced their arrival for an eviction and entered the unit. No one was inside. The deputy marshals observed suspected narcotics, ammunition, and a firearm in plain view and reported the discovery to the Metropolitan Police Department.
Officers from the Metropolitan Police Department secured the apartment while a search warrant was sought. The officers who secured the apartment locked the front door and waited inside the apartment. While they waited, Jones returned to the apartment and unlocked the front door. Officers came to the front of the unit and detained Mr. Jones in the hallway.
Officers then searched the apartment pursuant to a search warrant. They found, among other things a duffel-style bag containing a Wyndham Weaponry .223-caliber short-barreled rifle, a rifle-pistol, two handguns, several high-capacity magazines and various types of ammunition. They also discovered in the apartment a ballistic vest, loose ammunition, a loaded magazine, suspected narcotics, and $3,409 in cash.
The suspected narcotics were submitted to the U.S. Drug Enforcement Administration (DEA) and a lab analysis determined them to be mixtures of substances containing cocaine.
In announcing the plea, U.S. Attorney Liu, Marshal Hughes, and Chief Newsham commended the work of those who investigated the case from the U.S. Marshals Service and Metropolitan Police Department. They also expressed appreciation for the assistance provided by the DEA. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Catherine O’Neil, Legal Assistant Peter Gaboton, and Criminal Investigator Derek Starliper. Finally, they commended the work of Assistant U.S. Attorneys C.B. Buente, Steven B. Wasserman, Emory V. Cole, and Vincent W. Caputy, who investigated and prosecuted the case.
Detroit Man Pleads Guilty to Federal Firearm ChargeRead the Press Release
HUNTINGTON, W.Va. – A Detroit man who was caught with a firearm after a bar fight in Huntington in April of 2013 pled guilty today to a federal gun charge, announced United States Attorney Mike Stuart. James Anthony Mitchell, 25, entered his guilty plea to prohibited possession of a firearm by a felon. U.S. Attorney Stuart commended the investigative efforts of the Huntington Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives.
“Unfortunately, there’s nothing unusual about a felon from Detroit involved in violence in Huntington,” said United States Attorney Mike Stuart. “But make no mistake, we will continue to aggressively prosecute these cases until it is unusual.”
At approximately 3:00 a.m. on April 7, 2013, officers with the Huntington Police Department were dispatched to the Rehab bar located in the 1200 block of 4th Avenue in Huntington to respond to a large fight in the bar’s parking lot. The caller also reported that an individual was injured at the scene. When an officer arrived at Rehab, a bystander provided a description of a male who had just left the area of the fight in possession of a gun. The officer radioed the description to other officers in the area and a separate officer observed Mitchell, who matched the suspect description, walking in front of the Greyhound bus station away from Rehab. The officer conducted a frisk of Mitchell and located a loaded Taurus .38 caliber pistol that Mitchell had concealed in his waistband. Officers also discovered that Mitchell had previously been convicted of multiple felony offenses, including the offense of assault during the commission of a felony in Cabell County Circuit Court, and was prohibited from possessing a firearm.
Mitchell faces up to 10 years in federal prison when he is sentenced on August 27, 2018.
Assistant United States Attorneys Joseph F. Adams and Clint Carte are responsible for the prosecution. The plea hearing was held before United States District Judge Robert C. Chambers.
This case is being prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking with existing local programs targeting gun crime.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Dayton Man Sentenced to Six Years in Prison for Receipt of Child PornographyRead the Press Release
RENO, Nev. – A Dayton, Nevada, man was sentenced today to 78 months in federal prison for receiving approximately 850 photos and videos of child pornography, announced U.S. Attorney Dayle Elieson for the District of Nevada.
Monte Chaix, 48, pleaded guilty on February 20, to one count of receipt of child pornography. In addition to the prison term, U.S. District Judge Howard D. McKibben sentenced him to lifetime supervised release. Chaix is also required to register as a sex offender under the Sex Offender Registration and Notification Act (SORNA).
According to information contained in the plea agreement and other court documents, the National Center for Missing and Exploited Children (NCMEC) received a tip from Twitter about a user posting possible child pornography. Task Force Officers from the Northern Nevada Online Child Exploitation Task Force identified the user as Chaix and executed a search warrant at his residence. A forensic examination of the seized electronic devices revealed approximately 700 images and 150 videos of children being sexually abused by adults and engaged in explicit sexual conduct. During a consensual interview, Chaix admitted to searching for and downloading child pornography from the internet.
The case was investigated by the Northern Nevada Online Child Exploitation Task Force which is comprised of members of the FBI, the Reno Police Department, the Washoe County Sheriff’s Office, and the Nevada Attorney General’s Office. Assistant U.S. Attorney Sue Fahami prosecuted the case.
If you have information regarding possible child sexual exploitation, make a report to NCMEC’s CyberTipline at www.cybertipline.org.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood and for information about internet safety education, please visit www.justice.gov/psc.
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Cyber-Criminal Residing in Latvia Convicted for Role in Operation of Counter Antivirus Service “Scan4you”Read the Press Release
A federal jury today convicted a Latvian “non-citizen,” meaning a citizen of the former USSR who had been residing in Riga, Latvia, of three counts related to his operation of “Scan4you,” an online counter antivirus service that helped computer hackers to determine whether the computer viruses and other malicious software they created would be detected by antivirus software, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Tracey Doherty-McCormick of the Eastern District of Virginia and Special Agent in Charge Matthew J. DeSarno of the FBI Washington Field Office’s Criminal Division.
Ruslans Bondars, 37, was convicted after a five-day jury trial of one count of conspiracy to violate the Computer Fraud and Abuse Act, one count of conspiracy to commit wire fraud, and one count of computer intrusion with intent to cause damage and aiding and abetting. Sentencing is scheduled for Sept. 21.
“Ruslans Bondars helped hackers test and improve the malware they then used to inflict hundreds of millions of dollars in losses on American companies and consumers,” said Acting Assistant Attorney General Cronan. “Today’s verdict should serve as a warning to those who aid and abet criminal hackers: the Criminal Division and our law enforcement partners consider you to be just as culpable as the hackers whose crimes you enable—and we will work tirelessly to identify you, prosecute you, and seek stiff sentences that reflect the seriousness of your crimes.”
“Ruslan Bondars designed and operated a service that provided essential aid to some of the world’s most destructive hackers,” said Acting U.S. Attorney Doherty-McCormick. “This verdict demonstrates our commitment to holding such actors accountable. I commend the work of the agents and prosecutors, both in the United States and in Latvia, who worked together to bring him to justice.”
According to testimony at trial and court documents, from at least 2009 until 2016, Bondars operated Scan4you, which for a fee provided computer hackers with information they used to determine whether their malware would be detected by antivirus software, including and especially by antivirus software used to protect major U.S. retailers, financial institutions and government agencies from computer intrusions.
For example, one Scan4you customer used the service to test malware that was subsequently used to steal approximately 40 million credit and debit card numbers, as well as approximately 70 million addresses, phone numbers and other pieces of personal identifying information, from retail store locations throughout the United States, causing one retailer approximately $292 million in expenses resulting from the intrusion.
Another Scan4you customer used the service to assist the development of “Citadel,” a widely used malware strain that was used to infect over 11 million computers worldwide, including in the United States, and resulted in over $500 million in fraud-related losses. The Citadel developer took advantage of a special feature of Scan4you that allowed its integration directly into the Citadel malware toolkit through an Application Programming Interface, or API. The API tool allowed Scan4you users the flexibility to scan malware without the need to directly submit the malware to Scan4you’s website.
At its height, Scan4you was one of the largest services of its kind and had at least thousands of users. Malware developed with the assistance of Scan4you included some of the most prolific malware known to the FBI and was used in major computer intrusions committed against American businesses.
Scan4you differed from legitimate antivirus scanning services in multiple ways. For example, while legitimate scanning services share data about uploaded files with the antivirus community and notify their users that they will do so, Scan4you instead informed its users that they could upload files anonymously and promised not to share information about the uploaded files with the antivirus community.
The FBI Washington Field Office investigated the case. Trial Attorneys C. Alden Pelker and Ryan Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Kellen Dwyer and Laura Fong of the Eastern District of Virginia are prosecuting the case. The Government of Latvia, including the Latvia State Police International Cooperation Department, the Latvia State Police Cybercrime Unit, and the General Prosecutor’s Office of the Republic of Latvia – International Cooperation Division, provided assistance and support during the investigation. Additional assistance was provided by the Criminal Division’s Office of International Affairs, the FBI’s Atlanta and Minneapolis Field Offices and the Operational Technology Division, and the U.S. Attorney’s Offices for the District of Minnesota and the Northern District of Georgia.
Corpus Man Convicted of Downloading Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 46-year-old Corpus Christi resident has admitted he possessed child pornography, announced U.S. Attorney Ryan K. Patrick. Joe Perez admitted he downloaded sexually explicit content involving prepubescent minors
In February 2016, an undercover FBI agent from the Dallas Child Exploitation Task Force was conducting an online investigation into file sharing program looking for potential offenders sharing child pornography. The agent was eventually able to download multiple files of potential child pornography from a device later associated with Perez in Corpus Christi.
A search warrant was executed at his residence, at which time authorities advised Perez he had downloaded a video approximately two hours in length. One of the screenshots of the video was entitled “PEDOPHILIA Volume 1.” He admitted he was familiar with the video and that he believed that he had recently downloaded it, claiming he had accidentally downloaded the images of child pornography as well.
Law enforcement also seized various electronic devices during the search and a forensic analysis on those devices revealed that the his smartphone contained 15 images and nine videos of child pornography. The titles of some of those images and videos clearly indicate sexually-explicit content. One of the videos depicts a prepubescent minor engaged in sexually explicit conduct.
U.S. District Court Judge John D. Rainey accepted the guilty plea today and set sentencing for Aug. 21, 2018. At that time, Perez faces up to 20 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Perez also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet.
The FBI Task Child Exploitation Task Force conducted the investigation with the assistance of the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Elsa Salinas is prosecuting the case which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Connecticut Man Sentenced to 25 Years for Drug Conspiracy and Illegal Possession of FirearmsRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Erick Adams, also known as “X,” 40, of Taftville, Connecticut, was sentenced today in U.S. District Court by Judge George Z. Singal to 25 years in prison and 5 years of supervised release for a conspiracy to distribute, and possess with intent to distribute, 280 grams or more of cocaine base, commonly known as crack, cocaine, and heroin, and being an armed career criminal in possession of firearms.
Adams pled guilty to the two offenses on June 2, 2017.
Court records reveal that between about December 2014 and January 2016, Adams and his co-conspirators distributed crack, cocaine and heroin from “trap houses” in Biddeford, Maine, and used a storage unit to store drugs and firearms. On January 6, 2016, law enforcement agents arrested Adams and an armed co-conspirator at a hotel room in Saco, Maine, and seized about 103 grams of crack, 33 grams of cocaine, 6 grams of heroin, and $26,000 in U.S. currency. The following day, agents seized about 685 grams of crack, 69 grams of cocaine, 50 grams of heroin, and four handguns from the storage unit. Adams had multiple prior felony convictions and was prohibited from possessing firearms.
The investigation was conducted by the Maine Drug Enforcement Agency, the U.S. Drug Enforcement Administration, the FBI, the Biddeford Police Department, and the U.S. Marshals Service, and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
Collierville Man Sentenced to 80 Months’ Imprisonment for Possession of Child PornographyRead the Press Release
Memphis, TN – A Collierville man was sentenced to 80 months in federal prison for possession of child pornography. U.S. Attorney D. Michael Dunavant for the Western District of Tennessee announced the sentence today.
According to information presented in court, on November 21, 2014, Detective Robert Erdely of the Western Pennsylvania Crimes Against Children Task Force was working in an undercover capacity, using specialized software to identify individuals possessing and sharing known images of child pornography using peer-to-peer file-sharing software. Erdely’s program identified a computer utilizing an I.P. address, which was later identified as being assigned to Patrick Harris of Collierville, Tennessee. A search of Harris’ residence yielded numerous electronic devices containing thousands of images of child pornography. Harris pleaded guilty to possession of child pornography in December 2017. On May 14, 2018, U.S. District Judge Sheryl H. Lipman sentenced Harris to 80 months in federal prison.
U.S. Attorney D. Michael Dunavant said: “With new and ever-changing technology, criminals are finding new and increasingly disturbing ways to victimize and exploit child victims. This case demonstrates that no matter where offenders are located, our Project Safe Childhood initiative and FBI partners will find them and hold them accountable for internet crimes against children.”
This case was investigated by the FBI and the Western Pennsylvania Crimes Against Children Task Force as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit http://www.justice.gov/psc. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.
Assistant U.S. Attorney Kasey A. Weiland prosecuted this case on the government’s behalf.
Cleveland man with multiple violent felonies convicted of stealing handgun from gun show in BereaRead the Press Release
A jury convicted a Cleveland man of stealing a firearm from a gun show in Berea.
Anthony Lett, 40, was convicted on one count of being a felon in possession of a firearm and one count of being in possession of a stolen firearm following a two-day trial in U.S. District Court.
"This is a person with a long history of violence who has no business having a firearm," U.S. Attorney Justin Herdman said. "Our community is safer with him behind bars."
Lett is scheduled to be sentenced on Aug. 29.
Lett stole a Kahr Arms .45-caliber pistol from a gun show in Berea on April 30, 2016. Lett has prior convictions that make it illegal for him to have a firearm, including convictions for kidnapping, felonious assault, carrying a concealed weapon, drug trafficking and other crimes, according to court documents.
Lett is currently serving 20 years in state prison for unrelated convictions including rape, attempted murder, aggravated robbery and other crimes, according to court documents.
This case was prosecuted by Assistant U.S. Attorneys Kelly Galvin and Elliot Morrison following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Berea Police Department, with assistance from the Cleveland Division of Police.
Cleveland man pleads guilty to stealing $77,000 in federal grants designed to help Native AmericansRead the Press Release
A Cleveland man pleaded guilty to stealing more than $77,000 in federal grants designed to help Native Americans.
Robert Roche, 71, pleaded guilty two counts of theft from programs receiving federal funds. He is scheduled to be sentenced Aug. 29.
“This defendant stole from taxpayers and betrayed the Native American families he purported to help,” U.S. Attorney Justin E. Herdman said. “He took tens of thousands of dollars designated for mental health and wellness programs and put the money in his own pockets.”
“Mr. Roche stole federal grant funds that were intended to assist tribal and urban American Indian communities with the tools and resources needed to plan and design coordinated systems of care to support mental health and wellness for children, youth and families,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General - Chicago Region. “Mr. Roche's actions deprived needy families of precious resources and squandered vital taxpayer dollars. The OIG will continue to work with our law enforcement partners to identify, investigate and seek prosecution of individuals who seek to defraud HHS programs.”
Roche served as executive director of the American Indian Education Center (AIEC), a Parma-based nonprofit established in 1995 to support Native American causes in Northeast Ohio, according to court documents.
Craig McGuire operated McGuire & Associates LLC, a company that wrote grant applications and provided evaluation services. Roche entered into an agreement with McGuire & Associates in April 2011 to draft grant proposals on behalf of the AIEC. Later that year, McGuire submitted an application on behalf of the AIEC to receive a Circle of Care grant, offered through the Substance Abuse and Mental Health Services Administration (SAMHSA). The grant was designed to provide Native American communities with the tools and resources to design programs to support mental health and wellness for children and families, according to court documents.
The AIEC’s application contained numerous false statements including: misrepresenting the date the AIEC was established; falsely claiming the AIEC had a wellness department and a “Positive Paths” afterschool program serving 500 children when no such department or program existed; fraudulently listing people the AIEC allegedly employed and mischaracterizing the description of the AIEC’s building and alleged physical amenities, according to court documents.
SAMHSA awarded the AIEC a Circle of Care grant on Sept. 1, 2012 of approximately $302,340 for FY 2012. On June 26, 2012, SAMHSA awarded the second year of a Circle of Care grant in the amount of $308,040 for FY 2013, according to court documents.
The AIEC received approximately $482,766 from SAMHSA from 2011 through 2013. The AIEC did not receive full funding because SAMHSA placed it in “high risk” status, according to court documents.
Roche paid himself through AIEC on several occasions as a project coordinator for the Circle of Care project. Roche was not identified as the project coordinator on the grant application and such payments were precluded by regulation, according to court documents.
Roche converted approximately $77,097 of that money for his own personal use, according to court documents.
McGuire pleaded guilty to theft and is awaiting sentencing.
This case is being prosecuted by Assistant United States Attorneys Robert J. Patton and Alejandro A. Abreu following an investigation by the Department of Health and Human Services – Office of Inspector General.
Clairton Man Sentenced to 41 Months in Prison for Conspiring to Distribute Heroin and CocaineRead the Press Release
PITTSBURGH, PA – A former resident of Clairton, Pennsylvania, has been sentenced in federal court to 41 months of imprisonment on his conviction of conspiracy to distribute narcotics, United States Attorney Scott W. Brady announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Malcolm Howard, 26.
According to information presented to the court at the time he entered a guilty plea, Howard, from March through June 2017, purchased 10 "bricks" of heroin and three ounces of cocaine twice per month from his codefendant, Skylar Carter, and was personally responsible for the distribution of more than 60 grams of heroin and more than 500 grams of cocaine in the Clairton area. He was the first of the 21 defendants charged in the conspiracy to be sentenced. In imposing sentence, Judge Schwab highlighted Howard’s prior criminal history, which included a felony drug trafficking conviction, and his repeated disregard for the law.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation led the multi-agency investigation of this case, which also included the Allegheny County Sheriff’s Office, the Allegheny County Police Department, and the Pittsburgh Bureau of Police. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Career Criminal Sentenced to Federal Prison for Firearms and DrugsRead the Press Release
CORPUS CHRISTI, Texas – A 24-year-old Robstown resident has been ordered to federal prison following his conviction for possessing a firearm during a drug trafficking offense and being a felon in possession of a firearm, announced U.S. Attorney Ryan K. Patrick. Isaiah Ryan Cantu pleaded guilty Feb. 14, 2018.
Today, U.S. District Judge Nelva Gonzalez Ramos sentenced Cantu to a total of 168 months imprisonment – 80 and 88 months, respectively, for the possessing a firearm during a drug trafficking crime and being a felon in possession. He was further ordered to serve five years of supervised release. Cantu had previously been convicted in state court for numerous felonies and was determined to be career offender by the court.
In October 2016, narcotics officers with the Robstown Police Department executed a search warrant at Cantu’s residence. During the search, the officers recovered a backpack that contained multiple small baggies of cocaine, 25 packages of synthetic cannabinoids, several packages of crack cocaine and a loaded .45 caliber semi-automatic handgun. As a previously convicted felon, Cantu is prohibited from possessing firearms and ammunition per federal law.
Cantu will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
The Robstown Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Carbondale Woman Sentenced on Healthcare Fraud ChargesRead the Press Release
On May 16, 2018, Stephanie L. Patterson, of Carbondale, Illinois, was sentenced in the U.S. District Court in Benton, Illinois on the charge that she engaged in a scheme to steal from a health care program. The district court sentenced Patterson to five years of probation with the first four months to be served in home detention. She was also ordered to pay $81,131.20 in restitution to the Home Services Program and a $100.00 special assessment.
Court records indicate that Patterson defrauded the State of Illinois Medicaid Home Services Program by falsely claiming and taking payments for personal assistant services not actually performed. The Home Services Program is a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Patterson falsely billed the program between January 2011 to June 2016, when she falsely claimed that a relative purportedly rendered personal assistant services to a customer when, in fact, the relative was incarcerated at the time services were claimed to be performed. As a result, Patterson improperly billed hundreds of hours of services and obtained $81,131.20 in payments for services not performed.
The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General, and the Illinois State Police, Medicaid Fraud Control Bureau. The case was prosecuted by Assistant United States Attorney Michael J. Quinley.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.
Bumble Bee CEO Indicted for Price FixingRead the Press Release
A federal grand jury returned an indictment against Christopher Lischewski, the President and Chief Executive Officer of Bumble Bee Foods LLC, for participating in a conspiracy to fix prices for packaged seafood sold in the United States, the Department of Justice announced today.
The indictment, filed in the U.S. District Court for the Northern District of California in San Francisco, charges Lischewski with participating in a conspiracy to fix prices of packaged seafood beginning in or about November 2010 until December 2013.
“The Antitrust Division is committed to prosecuting senior executives who unjustly profit at the expense of their customers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “American consumers deserve free enterprise, not fixed prices, so the Department will not tolerate crimes like the one charged in today’s indictment.”
“This indictment demonstrates the personal accountability of senior leadership at corporations,” said Special Agent in Charge John F. Bennett. “The FBI and the Department of Justice will hold corporate leaders accountable for criminal actions that defraud American families.”
The one-count felony indictment charges that Lischewski carried out the conspiracy by agreeing to fix the prices of packaged seafood during meetings and other communications. The co-conspirators issued price announcements and pricing guidance in accordance with these agreements. Bumble Bee has already pleaded guilty and been sentenced to pay a criminal fine of at least $25 million as a result of the government’s ongoing investigation.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Lischewski is the fourth individual to be charged as a result of the ongoing federal antitrust investigation into the packaged seafood industry, which is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information on price fixing, bid rigging, or other anticompetitive conduct related to the packaged-seafood industry should contact the Antitrust Division’s San Francisco Office at (415) 934-5300, visit www.justice.gov/atr/contact/newcase.html, or call the FBI tip line at (415) 553-7400.
Buffalo Man Pleads Sentenced for Distributing FentanylRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jeremy Jorge, 21, of Buffalo, NY, who was convicted of distribution of fentanyl, was sentenced to 24 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorneys Scott S. Allen, Jr., and Wei Xiang, who handled the case, stated that on at least seven occasions, between December 2016 and September 2017, the defendant sold what he marketed as heroin in exchange for sums of money between $300 and $1,300. A forensic analysis later determined that the substances contained a mixture of various controlled substances including heroin, fentanyl, butyryl fentanyl, furanyl fentanyl, and U-47700. In total, Jorge distributed over 24 grams of fentanyl in the community.
Today’s sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Bronx Man Convicted of 2010 MurderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOSE SANTIAGO-ORTIZ was found guilty of murder, participating in a narcotics conspiracy, and firearms offenses yesterday after a one-week jury trial before the Honorable Lewis A. Kaplan.
U.S. Attorney Geoffrey S. Berman said: “A unanimous jury convicted Jose Santiago-Ortiz of killing Jerry Tide in cold blood. In addition, Santiago-Ortiz was convicted of narcotics conspiracy and firearms offenses. We hope today’s verdict will bring some solace to the victim’s family, while also taking a violent offender off the street.”
According to the allegations contained in the Complaint and the Indictment and the evidence presented in court during the trial:
On September 11, 2010, SANTIAGO-ORTIZ shot and killed Jerry Tide in the vicinity of Jerome Avenue and 182nd Street in the Bronx. Between 2010 and November 2015, SANTIAGO-ORTIZ was the leader of a violent heroin trafficking enterprise that trafficked kilogram quantities of heroin, stamped “Flow,” in the Bronx and to Rutland, Vermont. SANTIAGO-ORTIZ killed Jerry Tide in part to increase SANTIAGO-ORTIZ’s position within the Flow Heroin Enterprise. In addition, in 2015, members of the Flow Heroin Enterprise engaged in several shootings with rival drug dealers in the Bronx.
* * *
SANTIAGO-ORTIZ, 27, of the Bronx, New York, was found guilty of one count of murder in aid of racketeering, which carries a mandatory sentence of life in prison; one count of murder while engaged in a narcotics conspiracy, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison; one count of conspiring to distribute one kilogram and more of heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and one count of using firearms in furtherance of a narcotics conspiracy, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of a defendant will be determined by the judge.
SANTIAGO-ORTIZ is scheduled to be sentenced on September 18, 2018.
Mr. Berman thanked the FBI’s New York Field Division for their work on the investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Shawn Crowley, Lauren Schorr, and George Turner are in charge of the prosecution.
Broken Arrow Man Sentenced to 30 Years in Prison for Sexual Exploitation of a ChildRead the Press Release
Chief District Judge Gregory K. Frizzell sentenced Noel McFadden, 71, of Broken Arrow, to 30 years in prison followed by a lifetime of supervised release for sexual exploitation of a child. McFadden must also pay restitution in the amount of $18,365.94.
On February 16, 2018, McFadden pleaded guilty to one count of sexual exploitation of a child. In April 2017, McFadden knowingly coerced a minor under the age of 12 to take pictures of her genitals with a cellphone he had given her.
United States Attorney Shores stated, “I applaud the hard work of the FBI and the Broken Arrow police department in bringing this child predator to justice. But most importantly, it was due to the courageous efforts of two small children and their family who made sure Noel McFadden will never harm another child. They stood up to their abuser and ended it.”
Assistant United States Attorney Jeffrey A. Gallant said, “At sentencing, several relatives of the victim spoke about the harm inflicted by McFadden. One of his victims, only 9 years old, made a powerful statement in open court where she emphasized she was not a victim, but a strong survivor. She stood up to McFadden and ensured no other children would ever be harmed again by him.”
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.
The charges are the result of an investigation by the Federal Bureau of Investigation and the Broken Arrow Police Department. Assistant United States Attorney Jeffrey A. Gallant handled the prosecution of this case.
Berkeley County man facing firearms chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – Shawn D. Schell, of Hedgesville, West Virginia, appeared before a federal magistrate judge today after being indicted by a federal grand jury sitting in Martinsburg on May 15, 2018, on a firearms charge, United States Attorney Bill Powell announced.
Schell, also known as “Shaun D. Schell,” age 36, was indicted on one count of “Unlawful Possession of a Firearm.” Schell, having previously been convicted of three felonies, is accused of having a .22 caliber rifle in November 2017 in Berkeley County.
Schell faces up to 10 years incarceration and a fine of up to $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the cases on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.