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16 April 2018
Ohio physician admits to fraudulently distributing controlled substancesRead the Press Release
WHEELING, WEST VIRGINIA – Dr. Tod Hagins, of Wintersville, Ohio, has admitted to writing fraudulent prescriptions to be sold on the streets from his Weirton, West Virginia practice, United States Attorney Bill Powell announced.
Hagins, age 52, pled guilty to one count of “Conspiracy to Distribute Controlled Substances Outside the Bounds of Professional Medical Practice,” one count of “Healthcare Fraud,” and one count of “Money Laundering.”
Hagins operated a general medical practice, as well as the Weirton Suboxone Clinic, on Washington Street in Weirton, West Virginia. Hagins admitted to prescribing oxycodone to several individuals without a legitimate medical purpose to be sold on the streets for a share in the profits. Hagins also admitted to writing the prescriptions for oxycodone in a manner that would allow the individual filling said prescriptions to be paid for by West Virginia Medicaid. As a part of the conspiracy, Hagins deposited $4,000 into a business equity line of credit to be used in the scheme, with the intention of concealing the criminal activity.
Hagins faces up to 20 years incarceration and a fine of up to $250,000 for the first count, up to 10 years incarceration and a fine of up to $250,000 for the second count, and up to 20 years incarceration and a fine of up to $500,000 for the third 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 case on behalf of the government. The Drug Enforcement Administration; the Federal Bureau of Investigation; the Office of the Inspector General at the U.S. Department of Health and Human Services; the West Virginia Offices of the Insurance Commissioner Fraud Division; the West Virginia Medicaid Fraud Control Unit; the Office of Ohio Attorney General Health Care Fraud Unit; the Hancock-Brooke-Weirton Drug & Violent Crimes Task Force, a HIDTA-funded initiative; the Jefferson County, Ohio Drug & Violent Crimes Task Force; and the West Virginia State Police investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr., presided.
Navajo Man from Arizona Pleads Guilty to Federal Involuntary Manslaughter Charge in New MexicoRead the Press Release
ALBUQUERQUE – Jerome Dayzie, 44, an enrolled member of the Navajo Nation who resides in Roundrock, Ariz., pled guilty today in federal court in Albuquerque, N.M., to an involuntary manslaughter charge.
Dayzie was arrested in Dec. 2017, on a criminal complaint charging him with killing a man on Dec. 9, 2017, on the Navajo Indian Reservation in San Juan County, N.M. According to the complaint, Dayzie killed the victim when he hit a trailer parked on the side of the road and flipped the vehicle he was driving and in which the victim was a passenger. At the time of the crash, Dayzie was driving under the influence of alcohol.
During today’s proceedings, Dayzie pled guilty to a felony information charging him with involuntary manslaughter. In entering the guilty plea, Dayzie admitted killing the victim when he crashed the vehicle he was driving into a trailer parked on the side of the road, flipping the vehicle and causing the victim, who was a passenger, to be ejected. Dayzie admitted killing the victim while driving recklessly and under the influence of alcohol, and that the alcohol rendered him incapable of exercising clear judgment and a steady hand in operating the vehicle.
At sentencing, Dayzie faces a maximum statutory penalty of eight years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Navajo Nation Department of Public Safety. Assistant U.S. Attorney Raquel Ruiz-Velez is prosecuting the case.
Nashville Man Sentenced to 105 Years in Prison for Child Pornography CrimesRead the Press Release
Crimes involved Infant and Toddler
Defendant Dressed as Spider-Man Window Washer at Children’s HospitalNASHVILLE, Tenn. – April 16, 2018 – Jarratt A. Turner, 36, of Nashville, Tennessee was sentenced today in U.S. District Court to 105 years in prison for multiple instances of production of child pornography and transportation of child pornography, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
“The sentence imposed by the Court should insure that this defendant will never have another opportunity to inflict his perverted sexual desires upon another innocent child,” said U.S. Attorney Cochran.
According to court records, Turner befriended two different families who had very young children, including a toddler boy and an infant girl, and he offered to babysit these children. Between October 2014 and May 2015, Turner took sexually explicit images and videos of the toddler girl on 10 different occasions and of the infant boy on six different occasions, while in his basement apartment in Nashville. The sexually explicit material included depictions of himself sexually molesting the two very young children, who were between the ages of 12 and 31 months during this period. After making these recordings, Turner distributed these images via the internet to other like-minded individuals and in an attempt to avoid detection of law enforcement, he only used publicly available Wi-Fi networks to collect and distribute child pornography. With the help of a manager of a business where Turner frequently accessed the internet, law enforcement officers were able to identify the defendant more quickly.
Court records also reference Turner’s characteristic behavior in attempting to access other vulnerable children by dressing as Spiderman when washing windows at a local children’s hospital, during the time he was raping these children.
“Children of this community are a little safer today with this sexual predator behind bars,” said Assistant Special Agent in Charge Robert Hammer, who oversees Homeland Security Investigation’s operations in Tennessee. “The fact he would film, and then upload to the internet, videos of himself molesting an infant and toddler, then take elaborate steps to conceal his activities, represents the extreme danger he posed to the community.”
Turner was charged on June 1, 2015, with 16 counts of Production of Child Pornography and Transportation of Child Pornography. He pleaded guilty to all counts of the indictment on March 20, 3017. He was sentenced today by visiting U.S. District Court Judge Marvin E. Aspen.
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 - 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, please visit www.justice.gov/psc.
This matter was investigated by Homeland Security Investigations, and the United States is represented by Assistant U.S. Attorney S. Carran Daughtrey.
NKC Woman Sentenced for Embezzling $290,000 from Her EmployerRead the Press Release
KANSAS CITY, Mo. – A North Kansas City, Mo., woman was sentenced in federal court today for embezzling more than $290,000 from her former employer.
Tonya A. Topel, 40, of North Kansas City, Mo., was sentenced by U.S. District Judge Gary A. Fenner to eight years in federal prison without parole. The court also ordered Topel to pay $293,193 in restitution, which includes losses from the four fraud schemes to which Topel admitted in her plea agreement as well as additional loss, discovered after her guilty plea, which resulted from another scheme in which Topel fraudulently received tuition reimbursements for non-existent college courses.
On Sept. 18, 2017, Topel pleaded guilty to one count of wire fraud and one count of aggravated identity theft.
Topel was a senior auditor at Construction Benefits Audit Corporation (CBAC), a Kansas City, Mo., non-profit corporation that conducts employer audits of union contracts for employers making payments into fringe benefit plans, and ensures fringe benefit payments are made correctly. Topel, who earned approximately $68,000 a year, managed audits and staff and presented ongoing audits. She handled expense payments and had sole access to CBAC’s QuickBooks.
Topel admitted that she conducted four fraudulent embezzlement schemes while employed at CBAC. She began her first scheme, in which she created false invoices for toner cartridges, on Oct. 18, 2012, just a few months after she started working at CBAC. She then added three more fraud schemes, which continued until CBAC discovered her embezzlement and she resigned in May 2016.
According to court documents, Topel stole from employers before and after she worked for CBAC. Topel had an unrelated criminal case pending in Johnson County, Kan., for stealing from her previous employer and was on pretrial supervision at the time she was hired by CBAC. Topel pleaded guilty to forgery and theft in that case, and paid her criminal defense lawyer using CBAC’s credit card. She was sentenced to probation and paid restitution with money she stole from CBAC. According to court records, Topel reportedly stole $26,000 from yet another employer after leaving CBAC.
Through her four admitted fraud schemes, Topel embezzled a total of at least $277,681 from CBAC. Topel spent the embezzled funds on a lavish lifestyle that included travel to Hawaii, Dallas, Boston, and the Bahamas; restaurants; entertainment, including golf, spas, tickets for the Kansas City Royals and Chiefs and Worlds of Fun; a 2014 Ford Mustang; and personal spending such as cash, clothing, dance classes, utility bills, jewelry, transfers to relatives, bank fees/NSF fees, iPads, groceries, and other living expenses.
In Topel’s first scheme to defraud CBAC, she created false invoices for toner cartridges and correspondingly altered CBAC American Express monthly statements to make it appear the toner invoices were being charged to CBAC’s American Express account. Topel submitted the invoices and altered American Express bills to CBAC. CBAC then paid for the false toner invoices to American Express. In reality, Topel made personal charges to the CBAC American Express card, which CBAC paid. Topel submitted her first false toner invoice on Oct. 18, 2012, and continued this scheme through May 2015, during which time she embezzled approximately $45,809.
In her second scheme to defraud CBAC, Topel falsely inflated her payroll checks and made payments to a false IRA plan (which was actually her own bank account). Topel began this scheme in March 2013 and continued it into 2016, during which time she embezzled approximately $24,777.
In her third scheme to defraud CBAC, Topel used a former vendor’s name to create a false email address, false street address, 72 false invoices, and false IRS forms. Topel created the false invoices in amounts ranging from $1,080 to $4,680, made payable to bank accounts controlled by her. Through this scheme, Topel embezzled approximately $188,599.
In her fourth scheme to defraud CBAC, Topel misused a company credit card by charging personal expenses, such as a vacation to the Bahamas, to the card beginning in 2016. Topel then paid the CBAC’s company credit card bill using CBAC’s bank account. Topel created at least five false paystubs in which she showed deductions from her paycheck in order to reimburse CBAC, however, she made no reimbursements for her use of the company credit card. Through this scheme, Topel embezzled approximately $19,780.
This case was prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the FBI.
Morristown Resident Sentenced to Eleven Years in Prison for Possession with Intent to Distribute Crack Cocaine and Violation of Her Supervised Release ConditionsRead the Press Release
GREENEVILLE, Tenn. - On April 16, 2018, April Lee West, 35, of Morristown, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 108 months in federal prison for possession with intent to distribute crack cocaine, a Schedule II controlled substance. West was sentenced to serve an additional 24 months in prison as a result of violation of conditions associated with her supervised release from a previous sentence. These sentences will run consecutively for a total of 132 months.
West pleaded guilty to a one-count federal indictment in December 2017. According to the plea agreement on file with U.S. District Court, in August 2016, while under surveillance by law enforcement, West drove from Morristown to Knoxville to purchase 19.2 grams of crack cocaine. Upon returning to Morristown, a law enforcement officer attempted to initiate a traffic stop of West. She did not stop and a slow speed pursuit ensured. West was eventually stopped with the assistance of another officer. Before exiting the vehicle, she hid the recently purchased crack cocaine, as well as 1.2 grams of methamphetamine and various other unlawfully obtained substances including 25 pills of morphine, six pills of hydrocodone, 13 pills of Opana, two pills of oxymorphone and 20 miscellaneous depressants on her person. A search of her vehicle, after a drug canine made a positive hit on the vehicle, produced no controlled substances. However, West ultimately admitted to the officers that she had purchased the crack cocaine and was in possession of it as well as the other substances referenced above.
The Morristown Police Department Narcotics and Vice Unit investigated this case. Assistant U.S. Attorney TJ Harker represented the United States in court proceedings.
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Missouri Man Sentenced to Prison for Methamphetamine OffenseRead the Press Release
DES MOINES, IA – On April 13, 2018, United States District Court Judge Rebecca Goodgame Ebinger sentenced Seth James Stockwell, age 35, of Princeton, Missouri, to 242 months in prison for possession with intent to distribute methamphetamine, announced United States Attorney Marc Krickbaum. Stockwell was ordered to serve seven years of supervised release following his term of imprisonment and pay $100 to the Crime Victims’ Fund.
On December 13, 2017, Stockwell pleaded guilty to the charge that arose from an investigation by the Des Moines Police Department. On July 18, 2017, Stockwell was in possession of more than 500 grams of methamphetamine, which he intended to distribute to other individuals.
This matter was investigated by the Des Moines Police Department and Iowa Department of Public Safety, DCI Criminalistics Laboratory. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Mexican National Pleads Guilty to Illegally Reentering the United StatesRead the Press Release
Defendant had a felony child abuse conviction in Florida and a prior removal
HUNTINGTON, W.Va. – Alan Lopez-Salazar pled guilty to the felony offense of Reentry of a Removed Alien, announced United States Attorney Mike Stuart. Mr. Lopez-Salazar, 29, of Mexico, faces up to 10 years of incarceration, a 250,000 dollar fine, supervised release for three years, and a special assessment when he is sentenced on May 21, 2018 by United States District Judge Robert C. Chambers. He also faces removal proceedings at the conclusion of any sentence of incarceration. United States Attorney Mike Stuart praised the work of the Cabell County Sheriff’s Department and Immigration and Customs Enforcement (ICE).
“We are committed to prosecuting every single individual who enters the United States illegally,” said United States Attorney Mike Stuart. “Legally entering the United States is not complicated. Get in line and follow the rules, and if you don’t, we’re sending you back home.”
On January 31, 2018, Mr. Lopez-Salazar was arrested by the Cabell County Sheriff’s department for disturbing the peace and destruction of property. After giving a Mexican identification document, ICE agents were contacted and responded to the scene. Immigration and Customs Enforcement agents confirmed that Mr. Lopez-Salazar was not in the United States legally and he was taken into federal custody. Fingerprints taken from the defendant matched him to a felony conviction and a prior removal in 2011. The felony conviction occurred on August 23, 2011 in Collier County, Florida where, defendant was convicted of felony child abuse. After this conviction Mr. Lopez-Salazar was removed from the United States on October 11, 2011 Mr. Lopez-Salazar then reentered the United States without legal permission from the Secretary of Homeland Security. Mr. Lopez-Salazar is a citizen of Mexico.
Assistant United States Attorneys Erik S. Goes and Stephanie Taylor are handling the prosecution.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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MedFast Pharmacist Sentenced to Prison for Misbranded Drug SchemeRead the Press Release
PITTSBURGH, PA - A resident of Butler County, Pennsylvania, has been sentenced in federal court to one year and one day incarceration on his conviction of conspiracy, United States Attorney Scott W. Brady announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Gino Cordisco, 48, of Mars, Pennsylvania.
According to information presented to the court, the Pennsylvania Board of Pharmacy prohibits pharmacists from restocking medications that have left the pharmacy’s control. These medications must be destroyed. According to the FDCA, if a prescription or a container of stock drugs falsely describes the lot numbers, expiration dates or manufacturers, then the drugs are rendered/deemed misbranded. For example, when pills that left the pharmacy are returned and comingled with stock drugs instead of being destroyed, and the required labeling on stock containers does not accurately state the actual manufacturer, date of expiration and lot number, then the drugs in the stock container or prescription package are misbranded. Misbranded drugs are illegal contraband and cannot be sold.
Cordisco, a pharmacist, was the supervisor over a chain of several pharmacies known as MedFast Pharmacies. He reported directly to its owner, Doug Kaleugher, not a defendant herein. Most of the conduct that supports the charges occurred at MedFast Institutional Pharmacy, 2003 Sheffield Road, in Aliquippa, Pennsylvania.
MedFast Institutional Pharmacy supplied nursing home chains with individualized medication packages for the patients/residents. If the nursing home had unused pills from prescriptions filled by MedFast or other pharmacies from, for example, a resident passing or a change in medications, MedFast delivery drivers were instructed to collect the unused medications and return them to MedFast. Once these drugs were returned to MedFast, the drugs would be removed from their packaging and returned to stock. As a result, pills with different lot numbers, different expiration dates and different manufacturers were comingled. These comingled pills were thereafter used to fill new prescriptions. The defendant was the leader and organizer of this criminal conduct. The immediate supervisor of the MedFast Institutional Pharmacy, Correna Pfeiffer, who reported directly to the defendant, was responsible for carrying out this policy on a day-to-day basis. She was previously sentenced to a term of probation.
The Court was also made aware that in October 2011 the defendant arranged for a surveillance technician to focus a hidden camera on an employee suspected of stealing drugs. Upon reviewing the video and doing an inventory, the defendant realized that Jade Gagianas had stolen 100 Opana ER 40 mg. The defendant took Gagianas to a back room and questioned her about the theft. She eventually admitted to this theft as well as additional thefts that had taken place in the past. She told the defendant that she gave the Opana to her boyfriend, David Best. The defendant told Gagianas that he wanted the drugs back and told her to call Best to ask him to return them. Gagianas made the call, but Best would not bring them back for fear of getting arrested. The defendant told Best he would contact the police if Best did not agree to return the stolen Opana. After about two hours, Best showed up at the pharmacy but did not have the drugs in his possession. Best told Gagianas where he had hidden the drugs down the street. The defendant took Gagianas and drove to the location where Best said he had hidden the drugs. The drugs were recovered by Gagianas from a bush in front of a convent. The defendant took the Opana pill vial from Gagianas and observed that the seal had been broken on the prescription vial. He returned to the pharmacy with it. The drugs had been out of the possession of the pharmacy from between 2 and 6 hours. Knowing that the drugs had been stolen, had been in the hands of a drug dealer, that they were recovered from a bush after being gone from the pharmacy from between 2 and 6 hours, the defendant thereafter ordered another pharmacist to restock the Opana. The Schedule II log of the pharmacy reflected that 79 Opana pills were restocked. Jade Gagianas was fired that day by the defendant for stealing Opana.
The defendant was interviewed by DEA Special Agent Vijay Nemani on May 29, 2013. SA Nemani asked the defendant if there had ever been any diversion of pharmaceutical or disciplinary problems of any current or former employees. The defendant stated there were "none that he knew of." This statement was not true.
SA Nemani then asked the defendant about any former employees and he stated Jade Gagianas worked there as a Pharmacy Technician for a while and that her boyfriend had drug issues. The defendant stated Gagianas quit awhile back claiming she was "stressed out." The defendant stated Gagianas quit her job but was not fired or let go. This statement was not true.
SA Nemani asked the defendant pointedly if there were any instances of any current or former employees, at the Baden pharmacy, where the employee had stolen controlled substances and then was asked to return the controlled substances to the pharmacy. The defendant stated that he was not aware of any instances. This statement was not true.
SA Nemani also asked if there were any current or former employees that had been fired or asked to resign as a result of the diversion of controlled substances and the defendant stated, "no." This statement was not true.
The government had no evidence that any patient was harmed in any way as a result of any of the conduct described herein.
Assistant United States Attorney Nelson P. Cohen prosecuted this case on behalf of the government.
The United States Attorney commended the U.S. Food and Drug Administration-OCI, the Drug Enforcement Administration-Diversion Investigators and the U.S. Health and Human Services-OIG for the investigation that led to a successful prosecution of Gino Cordisco.
Maryland man sentenced for bank fraudRead the Press Release
MARTINSBURG, WEST VIRGINIA – Steven Allen Baldwin, Jr., of Baltimore, Maryland was ordered to pay back nearly $10,000 for committing bank fraud, United States Attorney Bill Powell announced.
Baldwin, age 34, was sentenced today to time served and four years supervised release after pleading guilty to one count of “Conspiracy to Commit Bank Fraud” in January 2018. Baldwin admitted to conspiring with others to steal checks from mailboxes, create counterfeit checks, and cashing those counterfeit checks, profiting $9,945. The crime took place in April 2016 in Berkeley and Jefferson Counties, West Virginia.
Assistant U.S. Attorneys Danae DeMasi-Lemon and Lara Omps-Botteicher prosecuted the case on behalf of the government. The United States Postal Inspection Service investigated.
Chief U.S. District Judge Gina M. Groh presided.
Manager of Mystic Enchantments Arrested, Charged in Ongoing Investigation of Spice, K2 Distribution in Central IllinoisRead the Press Release
SPRINGFIELD, Ill. – The manager of a Springfield, Ill., establishment known as Mystic Enchantments has been arrested and charged by complaint in an ongoing investigation of distribution of synthetic cannabinoids, known as Spice or K2. Letha Dean, 71, of Salisbury, Ill., was arrested on April 13, and was ordered detained in the custody of the U.S. Marshals Service. Dean appeared this afternoon before U.S. District Judge Sue E. Myerscough and waived preliminary hearing. The complaint charges Dean with possession with intent to distribute a controlled substance.
Dean is the eighth defendant charged in a continuing task force investigation of the distribution of synthetic cannabinoids in Central Illinois. This task force, part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, is led by the DEA with the Illinois Attorney General Investigations; Illinois State Police; FBI; Decatur Police Department; Springfield Police Department; Illinois Department of Revenue; and IRS-Criminal Investigation. OCDETF is a Department of Justice program that supports multi-jurisdictional task forces of federal, state and local law enforcement agencies to conduct long-term and complex investigations and prosecutions of drug-related crimes. Assistant U.S. Attorney Timothy A. Bass is prosecuting the cases on behalf of the U.S. Attorney’s Office for the Central District of Illinois.
According to publicly disseminated DEA drug fact information, K2 and Spice are two of the many trade names or brands for synthetic cannabinoids which are human-made, mind-altering chemicals developed to mimic the effects of THC, the main active ingredient of marijuana. They are often marketed under the guise of “herbal incense” or “potpourri.” The synthetic cannabinoids are typically marketed in rectangular, heat-sealed packets with brightly colored wording and street names to appeal to a youthful crowd, such as “Scooby Snax,” “Mr. Happy,” California Dream,” “Hayz,” “AK47,” “OMG,” “Down2Earth,” etc.
Dean was arrested on April 13, at Mystic Enchantments’ current location, 1020 W. Lawrence Ave. in Springfield. Mystic Enchantments previously operated at 2828 E. Clear Lake Ave., Springfield, in the same building with The Crossing II, a liquor store. According to the affidavit filed in support of the criminal complaint, Dean was employed by the manager of The Crossing II to manage the distribution of synthetic cannabinoids from Mystic Enchantments.
As alleged in the complaint affidavit, on April 13, an undercover law enforcement officer met with Dean at Mystic Enchantments, and purchased 520 packets of suspected synthetic cannabinoids for $5,000. As the undercover officer exited the store carrying the packets in a black plastic garbage bag, agents entered the store and arrested Dean. Immediately after her arrest, agents searched the location and recovered approximately 1,445 additional packets from the back room. As a result of the undercover purchase and search of the store, agents recovered a total of approximately 1,967 packets, containing approximately 11,800 grams or 11.8 kilograms of suspected synthetic cannabinoids.
In February 2018, four men were charged by indictment with conspiracy to possess with intent to distribute and to distribute a controlled substance, namely synthetic cannabinoids or K-2. Trial is currently pending for Mohanad Al-Matarneh, of Chicago; Walid Alanasawi and Jamal Nasir, both of Decatur, Ill.; and Abdulrhamn Saleh of Hamtramck, Mich.
The indictment alleges that Alanasawi, Nasir, Saleh, and others, agreed to distribute and did distribute K-2 containing controlled substances and controlled substance analogues, from retail stores in Decatur, including JB’s, United Discount, Gold Star, Handy Pantry, Cigar Outlet, Tobacco Express, and BJ’s Mini-Mart. As part of the alleged conspiracy, Alanasawi, Nasir and Saleh agreed to obtain synthetic cannabinoids from Al-Matarneh in St. Louis, where he and others allegedly operated a clandestine laboratory. As alleged in the indictment, on Nov. 13, 2015, after departing the St. Louis laboratory, Al-Matarneh possessed with intent to distribute and attempted to distribute to the three co-defendants more than 100 kilograms of synthetic cannabinoids.
Trial is scheduled in June 2018, for Abdu Saleh Mohamed, of Decatur. The indictment, returned by the grand jury on Jan. 3, 2018, alleges that Mohamed agreed to distribute and did regularly distribute synthetic cannabinoids or K-2 from his retail store, BJ’s Mini-Mart, in Decatur. As part of the conspiracy, the defendant agreed with other store owners / operators to obtain synthetic cannabinoids from a source in St. Louis. On or about July 16, 2014, the indictment alleges Mohamed possessed with intent to distribute more than nine kilograms of synthetic cannabinoids at his storage facility in Decatur.
Two additional men have pleaded guilty and are awaiting sentencing related to the ongoing investigation. Noman Hizam, of Decatur, pleaded guilty on March 2, 2018, to attempted possession with intent to distribute and possession with intent to distribute synthetic cannabinoids.
According to court documents, Hizam owns multiple stores in the Decatur area, including Handy Pantry, 3715 N. Woodford; the Cigar Outlet at 1247 E. Mound; and Tobacco Xpress 1101 N. Route 48. Sentencing for Hizam is scheduled on July 6, 2018.
Mohamed Ali Saleh, of Hamtramck, Mich., pleaded guilty in May 2017, to conspiracy to distribute synthetic cannabinoids or K-2 from January 2015 to May 2016. Saleh is scheduled to be sentenced on May 10, 2018.
Each defendant, if convicted, faces the same statutory penalty of up to 20 years in prison.
Members of the public are reminded that complaints and indictments are merely accusations; the defendants are presumed innocent unless proven guilty.
MS-13 Member Admits Trafficking Drugs to New Jersey from Inside California PrisonRead the Press Release
NEWARK, N.J. – A member of MS-13 today admitted trafficking methamphetamine, heroin, and cocaine to New Jersey from inside a California state prison, U.S. Attorney Craig Carpenito announced.
Luis Calderon, 32, a/k/a “Lagrima,” of Los Angeles, pleaded guilty before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court to an indictment charging him with conspiracy to distribute, and to possess with intent to distribute, methamphetamine, heroin, and cocaine.
According to the documents filed in this case and statements made in court:
Between August 2015 and November 2015, Calderon was incarcerated at the Calipatria State Prison in California. However, Calderon had access to multiple contraband cellular telephones, which he used to communicate with conspirators outside the prison.
Law enforcement officers lawfully-recorded numerous telephone conversations between Calderon and an MS-13 member based in New Jersey, identified in the indictment as “Individual-1.” Among other topics, Calderon and Individual-1 discussed plans to distribute crystal methamphetamine, heroin, and cocaine in the New Jersey area. Calderon and Individual-1 ultimately settled on that plan that involved Calderon and others outside the prison sending a package containing controlled substances to a business center in Edison, New Jersey.
Shortly before the package arrived, Calderon informed Individual-1 by telephone that he was sending Individual-1 a package containing four ounces each of heroin and cocaine. Calderon stated that the package would also likely contain two ounces or more of crystal methamphetamine. Calderon told Individual-1 that the total cost for the heroin, cocaine, and crystal methamphetamine was $9,000, and stated that Individual-1 could keep the proceeds made from selling the drugs once Individual-1 paid Calderon for the shipment. Calderon subsequently gave Individual-1 the names that would appear on the package and the tracking number.
On Nov. 4, 2015, federal agents lawfully intercepted and searched the package. The search revealed approximately 95.5 grams of heroin, 54.7 grams of cocaine, and 52.4 grams of methamphetamine hidden inside a box of Little Debbie Swiss Rolls.
Calderon faces a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a $10 million fine. Sentencing is scheduled for June 25, 2018.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security (DHS), Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Brian Michael, with the investigation. He also thanked Immigration and Customs Enforcement (ICE) Enforcement Removal Operations (ERO), the Calipatria State Prison, the Plainfield Police Department, the Union County Prosecutor’s Office, and the U.S. Attorney’s Office for the Central District of California for their assistance.
The government is represented by Assistant U.S. Attorneys Jamari Buxton of the U.S. Attorney’s Office Criminal Division and James Donnelly, Chief of the U.S. Attorney’s Office Violent Crimes Unit.Defense counsel: Stacy Ann Biancamano Esq., Chatham, New Jersey
London Cardiologist Convicted of Health Care Fraud for Medically Unnecessary PacemakersRead the Press Release
LONDON, Ky. – On April 11, 2018, a federal jury convicted London physician Dr. Anis Chalhoub of health care fraud. The jury returned its guilty verdict after twelve days of trial, during which it heard evidence that Dr. Chalhoub defrauded Medicare, Medicaid, and other insurers by implanting medically unnecessary pacemakers in his patients and causing the unnecessary procedures and follow-up care to be billed to health insurance programs.
Between 2007 and 2011, Dr. Chalhoub implanted approximately 234 pacemakers in patients at St. Joseph London hospital. The evidence at trial showed that dozens of those patients’ pacemakers were medically unnecessary, under well-established national guidelines and Medicare coverage rules. A number of patients testified at trial that Dr. Chalhoub pressured them into getting the procedures and told them misleading information about their health conditions. For instance, several patients recalled Dr. Chalhoub telling them that they might die without a pacemaker. Sinus node dysfunction, the diagnosis Dr. Chalhoub gave the patients, is a non-fatal condition. The jury also heard evidence that Medicare, Medicaid, and other insurers suffered hundreds of thousands of dollars in losses from Dr. Chalhoub’s unnecessary procedures.
United States Attorney Robert M. Duncan, Jr., Derrik L. Jackson, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Division; and Amy Hess, Special Agent in Charge for the Federal Bureau of Investigation, Louisville Field Division, jointly announced the verdict.
The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; and the U.S. Attorney’s Office for the Eastern District of Kentucky. Assistant United States Attorneys Andrew E. Smith and Paul C. McCaffrey represented the United States in the case.
Chalhoub is currently scheduled to be sentenced on August 14, 2018 in London, Kentucky, by U.S. District Court Judge Gregory F. Van Tatenhove. He faces a maximum of 10 years imprisonment.
Lexington Couple Plead Guilty to Federal Charges of Trafficking in Fentanyl and Cocaine and Illegal Use and Possession of FirearmsRead the Press Release
LEXINGTON, Ky. – Michael D. Jackson, 37, and Brandi Stamper, 27, both of Lexington, pleaded guilty today, to conspiracy to distribute fentanyl, cocaine, and crack cocaine; to being a convicted felons in possession of firearms; and to possession of firearms in furtherance of drug trafficking.
In their guilty pleas, Jackson and Stamper both admitted that they maintained a residence, on Norway Street in Lexington, in January 2017. At that time, the Lexington Police Department executed a search warrant at the residence, locating more than 140 grams of fentanyl, more than 500 grams of powder cocaine, and more than an ounce of crack cocaine. Lexington Police also located three pistols, scales for weighing drugs, more than $80,000, and a vehicle purchased with drug proceeds. The firearms were found in close proximity to the drugs. Norway Street is three blocks from Lafayette High School.
“The drugs seized in this case represented an enormous risk to our community,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Fentanyl can be lethal in the 2 milligram range, which means the fentanyl seized in this case constituted tens of thousands of potentially lethal doses. The great work of our law enforcement partners led to these convictions; made our community safer; and saved lives – perhaps many, many lives. We will continue to focus our efforts on combatting the opioid crisis and prosecuting this disgraceful conduct that endangers us all.”
United States Attorney Duncan; Stuart Lowrey, Special Agent in Charge, ATF; and Chief Lawrence Weathers, Lexington Police Department, jointly announced the guilty pleas.
The investigation was conducted by ATF and the Lexington Police Department. Assistant United States Attorney Roger W. West represented the United States.
Both Jackson and Stamper are currently scheduled to appear for sentencing, before Chief United States District Judge Karen K. Caldwell, in Lexington, on July 26, 2018. Jackson faces a minimum sentence of 20 years and Stamper faces a minimum sentence of 15 years. Any sentence, however, will be imposed by the Court, after consideration of the United States Sentencing Guidelines and the applicable federal statutes governing imposition of sentences.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
LaPorte Man ChargedRead the Press Release
SOUTH BEND – Eric R. Weiler, 45, of LaPorte, Indiana, was charged in a six Count Indictment before a South Bend District Grand Jury, announced U.S. Attorney Kirsch.
Weiler was charged with 2 counts of production of child pornography, 1 count of receipt of child pornography, 1 count of possession of child pornography, 1 count of making a destructive device in violation of the National Firearms Act, and 1 count of possession of unregistered destructive devices.
U.S. Attorney Kirsch said, “Crimes committed against children are particularly heinous. Children are among the most innocent victims. This case exemplifies how local and federal law enforcement agencies and state and federal prosecutor’s offices work together to investigate and prosecute cases involving children. Additionally, this investigation was conducted very quickly, within two days of learning of Mr. Weiler’s conduct, he was taken into custody by the LaPorte City Police. That is very quick work by both the LaPorte Police and LaPorte County Prosecutor’s Office. Explosives, like those allegedly manufactured and possessed by Mr. Weiler, are extremely dangerous and meant to do considerable harm. My Office will continue to aggressively prosecute those who violate the nation’s destructive device and firearms laws.”
Prosecuting Attorney Espar said, “The case is a shining example of the collaborative approach contemplated by the Internet Crimes Against Children Program, for the investigation and prosecution of crimes of violence against children, bringing local and federal law enforcement together in a collective effort to identify and apprehend violent criminals whose crimes neither respect the dignity of the individual or jurisdictional lines.”
According to documents in this case, on August 23, 2017, a person who lived near Weiler discovered that someone had run wires into the gas tank of that person’s car. On September18, 2017, investigators learned that Weiler allegedly had been accessing a vacant house next to the house of the person whose car had been wired to explode. On the same date in September, investigators gained access to the vacant house and discovered writings on the walls inside documenting the writer’s attempts to acquire a girl under the age of twelve, ideally a newborn baby, for sexual contact. On September 20, 2017, two incendiary devices were located inside Weiler’s house, one of which is commonly referred to as an improvised explosive device (IED), and the other of which is commonly referred to as a CO2 “cricket” bomb. On September 21, 2017, multiple electronic devices and electronic storage devices were located inside Weiler’s house, some of which contained over 24,000 images and over 80 videos of child pornography. The videos included Weiler allegedly engaging in sexual acts with a child under the age of twelve. Weiler’s electronic devices also contained videos of Weiler allegedly explaining the explosive device that he put in the gas tank of the car.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with the assistance of the LaPorte County Prosecutor’s Office, LaPorte Police Department, Michigan City Police Department and the Porter County Sheriff’s Department. The case is being handled by Assistant U.S. Attorneys Molly E. Donnelly and John M. Maciejczyk.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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Justice Department Honors Muscogee (Creek) Nation Victim AdvocateRead the Press Release
On Friday, during the annual National Crime victims’ Service Awards ceremony in Washington, D.C., Attorney General Sessions recognized Shawn Partridge, director of the Family Violence Prevention Program (FVPP) for the Muscogee (Creek) Nation, with the National Crime Victim Service Award. The Department of Justice bestows this honor to individuals or programs for exceptional service to victims of crime.
“Survivors in American Indian and Alaska native communities have unique needs, and Shawn Partridge has dedicated her career to serving them, “ Attorney General Sessions said. “Her innovative approach to supportive services has expanded access to specialized populations, including teens and children impacted by dating and sexual violence. I am grateful for her passion and applaud her courage.”
United States Attorney Trent Shores also commended Shawn Partridge, “I am proud that an Oklahoman has been celebrated nationally by the Department of Justice. I know that Ms. Partridge’s programs at the Muscogee (Creek) Nation offer comfort and security for domestic violence victims facing difficult life-changing decisions. Victims in the Northern District of Oklahoma are safer because of Ms. Partridge’s dedication.”
FVPP provides support services to victims and survivors of domestic violence, sexual assault, stalking, human trafficking and other violent crimes in the Muscogee (Creek) community. Under Partridge’s leadership, the FVPP has expanded services, including the creation of the Muscogee (Creek) Nation’s first Sexual Assault Nurse Examiner program.
Partridge’s work also includes the development of Warriors Honor Women, a movement led by Muscogee men to end violence against women and children. Her efforts promoting the reauthorization of the 2013 Violence Against Women Act helped to restore tribes’ authority to hold accountable non-American Indian/Alaska and Native individuals who commit domestic violence on tribal lands.
President Ronald Reagan proclaimed the first National Crime Victims’ Rights Week in 1981 to bring greater sensitivity to the needs and rights of victims of crime. More information about Crime Victims’ Rights Week can be found at https://ovc.ncjrs.gov/ncvrw/.
Haworth Man Sentenced to 24 Months for Possession of Firearm and AmmunitionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Christopher Blake Gilbert, age 33, of Haworth, Oklahoma, was sentenced to 24 months imprisonment, and 3 years supervised release for Felon In Possession Of Firearm & Ammunition, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). The charges arose from an investigation by the McCurtain County Sheriff’s Office, the Choctaw Nation Tribal Police, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Indictment alleged that on or about September 7, 2017, in the Eastern District of Oklahoma, the defendant, Christopher Blake Gilbert, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce a firearm and ammunition which have been shipped and transported in interstate commerce.
“Federal law prohibits convicted felons from possessing firearms. Enforcing that law is one way that this office, in conjunction with the work of our federal, state, local, and tribal law enforcement partners, can protect the public,” United States Attorney Brian J. Kuester said. “I am thankful for the team effort by the McCurtain County Sheriff’s Office, Choctaw Tribal Police and the ATF that lead to this successful prosecution.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Kristin Harrington represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Haitian National Sentenced for ID Theft and Tax FraudRead the Press Release
RICHMOND, Va. – A Haitian national was sentenced today to seven years in prison for filing fraudulent tax returns using stolen personal identifying information from hundreds of individuals around the United States.
According to court documents and evidence presented in court, Jimmy Lord Calixte, 37, participated in a Miami-based stolen identity refund fraud scheme. He and three co-conspirators traveled repeatedly to Richmond in the early part of 2012 and used stolen personal identifying information to file hundreds of fraudulent tax returns, utilizing online tax preparation programs and seeking over $2 million in fraudulent refunds. Calixte and his accomplices claimed significant refunds on those fraudulent returns, and requested that those refunds be placed on pre-paid debit cards, which were later mailed to Richmond addresses selected by the conspirators. The other co-conspirators also took steps to obstruct the investigation by providing them with false information and refusing to testify before a grand jury. The other co-conspirators have been sentenced as follows:
Name, Age
Hometown
Convictions
Sentence
Ramoth Jean, 37
Miami, Florida
Conspiracy to Commit Mail and Wire Fraud; Aggravated Identity Theft; Contempt of Court
122 months
Junior Jean Merilia, 36
Miami, Florida
Conspiracy to Commit Mail and Wire Fraud; Aggravated Identity Theft; Obstruction of Official Proceedings
133 months
Eddie Blanchard, 40
Miami, Florida
Conspiracy to Commit Mail and Wire Fraud; Mail Fraud, Wire Fraud, Aggravated Identity Theft; Obstruction of Official Proceedings
204 months
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), and Robert B. Wemyss, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Henry E. Hudson. Assistant U.S. Attorneys Michael C. Moore and Thomas A. Garnett prosecuted 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 Nos. 3:13-cr-136; 3:14-cr-73; 3:14-cr-139; and 3:15-cr-39.
Green Bay Man Receives 20 Year Sentence for Methamphetamine DistributionRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on April 13, 2018, Ryan L. Pieper (age: 33) of Green Bay, Wisconsin, appeared in federal court in Green Bay and was sentenced to 240 months in federal prison for his role in a methamphetamine distribution ring in Northeast Wisconsin.
In the spring of 2017, Pieper was involved in a conspiracy that resulted in pounds of methamphetamine, acquired from a source in Phoenix, Arizona, being distributed in Brown County and elsewhere in Northeast Wisconsin.
In pronouncing sentence, Chief United States District Court Judge William C. Griesbach noted the serious nature of Pieper’s crime and the negative effect that methamphetamine has had on the community. The judge told Pieper that his crime called for a strong sentence, especially in light of his extensive prior record of criminal convictions. Following his release from prison, Pieper will serve 10 years on federal supervised release.
The United States Drug Enforcement Administration and the Brown County Drug Task Force investigated the case. Assistant United States Attorney Daniel R. Humble prosecuted the case.
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Four Men Face Additional Fraud Charges in $1 Million Advance Fee SchemeRead the Press Release
NEWARK, N.J. –Three men from New Jersey and another from Nevada were indicted today on additional charges stemming from their alleged advance-fee scheme that defrauded four victims of over $1 million, U.S. Attorney Craig Carpenito announced.
James Adkins, 65, of Hillside, New Jersey, Jerrid Douglas, 44, of Freehold, New Jersey, Roy Gillar, 45, of Las Vegas, Nevada, and Harold Mignott, 55, of Voorhees, New Jersey, were originally charged by indictment in December 2017 with one count of conspiracy to commit wire fraud and four counts of wire fraud, with Douglas and Gillar also being charged with one count of transacting in criminal proceeds. Today’s superseding indictment adds three counts of wire fraud against Adkins, two counts of wire fraud against Douglas, and one count of wire fraud against Mignott.
All four defendants are currently out on bail and will be arraigned at a later date before U.S. District Court Judge John Michael Vazquez in Newark federal court.
According to the superseding indictment:
From March 2016 through June 2016, Mignott, Adkins, Douglas, and Gillar allegedly agreed to defraud an entity identified in the superseding indictment as “Victim Company A” out of approximately $1 million.
As part of the scheme, the defendants convinced two individuals who ran Victim Company A to enter a joint-venture agreement with the defendants’ New Jersey-based shell company. The defendants falsely represented that their company could acquire and provide Victim Company A with a “standby letter of credit” backed by Mexican gold bonds. A standby letter of credit is a guarantee of payment issued by a bank on behalf of a client that is used should the client fail to fulfill a contractual commitment with a third party.
Victim Company A wanted access to the standby letter of credit so it could purchase raw gold overseas and sell it to gold refineries. As part of the joint-venture agreement, Victim Company A agreed to pay the defendants $1 million for the bank fee associated with the standby letter of credit.
In order to cover up the scheme and acquire Victim Company A’s funds, the defendants made numerous verbal and written misrepresentations, including providing a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion standby letter of credit to the defendants’ shell company.
However, after Victim Company A transmitted $800,000 to the defendants, they failed to provide Victim Company A with a standby letter of credit or anything of value. Instead, the defendants misappropriated Victim Company A’s money for their personal use on items like luxury cars, expensive watches, mortgage payments on their personal residences, and large cash withdrawals.
In addition, Adkins and Mignott allegedly defrauded a farmer from Iowa – identified in the superseding indictment as “Individual Victim 3” — out of $90,000 in 2013. As part of the scheme, Adkins and Mignott induced Individual Victim 3 to enter into a joint-venture agreement with their shell company and told the victim that if he provided them $90,000, they would provide him with a standby letter of credit so he could access financing for his pork business.
In order to persuade Individual Victim 3 to transfer the money, Adkins and Mignott told him that their company was going to complete lucrative oil and gas transactions that would yield significant revenues. However, after Individual Victim 3 transmitted $90,000, Adkins and Mignott did not provide him with money, a standby letter of credit, or anything of value.
Lastly, Adkins and Douglas allegedly defrauded an entity identified in the superseding indictment as “Victim Company B” out of approximately $250,000 in 2015. Adkins and Douglas induced the founder and owner of Victim Company B to enter a joint-venture agreement with their shell company. Adkins and Douglas falsely represented that their company could acquire and provide Victim Company B with a standby letter of credit, which would provide financing for Victim Company B’s biotech business operations.
Victim Company B wanted to obtain the standby letter of credit so it could fund business operations for cancer research as part of its biotech business. As part of the joint-venture agreement, Victim Company B agreed to pay Adkins and Douglas $1 million for the bank fee associated with the standby letter of credit.
However, after Victim Company B transmitted $250,000 of the $1 million to Adkins and Douglas’s shell company, Adkins and Douglas failed to provide Victim Company B with a standby letter of credit or anything of value. Instead, Adkins, Douglas, and others misappropriated the money for their personal use.
The conspiracy to commit wire fraud charge and the wire fraud charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering charges each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Defense counsel:
Adkins: Kevin Buchan Esq., Holmdel, New Jersey
Douglas: Joseph Corazza Esq., Sparta, New Jersey
Gillar: Thomas Ashley Esq., Newark
Mignott: Eric Breslin Esq., Newark
Former President & CEO and Former Vault Manager of now Bankrupt Precious Metals Firm Indicted for Fraud SchemeRead the Press Release
The former President & CEO and the former vault manager of Northwest Territorial Mint, a now-bankrupt company dealing in precious metals, were indicted last week for 20 federal felonies resulting from a Ponzi-like scheme that defrauded customers of millions of dollars, announced U.S. Attorney Annette L. Hayes. BERNARD ROSS HANSEN, 57, aka Ross B. Hansen and DIANE RENEE ERDMANN, 45, aka Diane Renee, both of Auburn, Washington will make their initial appearances on the indictment at 2:00 Monday, April 16, 2018.
Northwest Territorial Mint (NWTM) operated both a custom business that involved the manufacturing of medallions, coins, and other awards, and a bullion business that involved the selling, buying, exchanging, storing, and leasing of gold, silver, and other precious metals. The company had offices in Federal Way and Auburn, Washington, but declared bankruptcy on April 1, 2016.
The indictment alleges that between 2009 and 2017, HANSEN and ERDMANN defrauded NWTM customers in a variety of ways. HANSEN and ERDMANN lied about shipping times for bullion, improperly used customer money to expand the business to other states, and used customer money to pay their own personal expenses. By at least 2012, the company lacked enough assets to fulfill customer orders and used new customer money to pay off older customers in a Ponzi-like scheme. In total, over 3000 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded. The total loss to these customers was more than $25,000,000.
In addition to the customer fraud, in April 2016, more than fifty people who stored their bullion with NWTM found all of part of their bullion worth $4.9 million was missing; twenty customers involved in a bullion leasing program were also defrauded of more than $5 million; and a Canadian silver bullion producer was defrauded of more than $1 million in silver bullion.
Between 2012 and 2016, HANSEN and ERDMANN took more than $1 million dollars out of the company accounts for their own use. In addition, during this time frame, they transferred some $120,000 in cash from the company to ERDMANN’s checking account and used $400,000 in company funds to pay their personal credit card bills. Finally, between March 2016 and June 2017, ERDMANN sold more than $700,000 worth of precious metals, including gold and silver bullion, and used the proceeds for the benefit of herself and HANSEN.
The indictment charges the pair with ten counts of mail fraud and ten counts of wire fraud. Each of the charges are punishable by up to 20 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Brian Werner.
Former Oregon City School District Teaching Aid Sentenced to 28 Years in Prison for Production of Child PornographyRead the Press Release
PORTLAND, Ore. – James Ian McGlothlin, 41, of Portland, was sentenced today to 28 years in federal prison followed by a life term of supervised release for the production of child pornography involving two very young children.
McGlothlin’s federal sentence will run concurrently with a sentence imposed in Clackamas County Circuit Court on March 2, 2018. McGlothlin was sentenced in Clackamas County to 225 months in prison after pleading guilty to three counts of first-degree sexual abuse stemming from his work with disabled children as an instructional assistant for the Oregon City School District.
“Producing child pornography is an appalling crime,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “It is unthinkable that someone would prey upon infants, toddlers, and disabled children, yet that is exactly what James McGlothlin did. He was supposed to be safeguarding his victims, but he took advantage of them instead for his own sexual gratification.” Williams added, “Hopefully, this sentence will help ensure that McGlothlin will not be in a position to sexually abuse children again.”
“Those who exploit their access to children to gratify their own perverse sexual desires are on notice that there will be serious consequences for those actions,” said Brad Bench, Special Agent in Charge for Homeland Security Investigations (HSI) Seattle. “When individuals who are entrusted to serve as role models for our children violate that trust, there will be zero tolerance. HSI will continue to work closely with its local law enforcement partners to target those involved in the sexual exploitation of children to ensure they are held accountable for their crimes.”
According to court documents, investigators first learned of McGlothlin’s actions while investigating an online bulletin board service used to advertise and distribute child pornography. On February 16, 2016, federal agents and members of the Interagency Child Exploitation Prevention Team (INTERCEPT) executed a search warrant at McGlothlin’s residence, where they seized computer equipment, phones, and other digital devices. Forensic examinations of the seized computers revealed thousands of files containing child pornography, including videos and images McGlothlin created himself. One of the victims was an infant. Another was a very young child.
Investigators found evidence that McGlothlin sexually abused a number of disabled children he worked with as an instructional assistant in Oregon City. Investigators also found documents McGlothlin wrote which describe, in graphic detail, how he planned to, rehearsed, and sexually abused children.
This case was investigated by the INTERCEPT Task Force, a partnership between the Clackamas and Multnomah County Sheriff’s Offices, U.S. Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the FBI, the U.S. Marshals Service, and the U.S. Attorney’s Office. It was prosecuted by Assistant U.S. Attorney Gary Sussman, Project Safe Childhood Coordinator for the District of Oregon.
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 U.S. 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.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. From outside the U.S. and Canada, callers should dial 802-872-6199. Hearing impaired users can call TTY 802-872-6196.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
Former Los Alamos County Man Pleads Guilty to Endangering Human Life While Manufacturing Controlled SubstanceRead the Press Release
ALBUQUERQUE – Joseph Gonzales, 28, a former resident of Los Alamos County, N.M., who now resides in Albuquerque, N.M., pled guilty today in federal court to endangering human life while illegally manufacturing a controlled substance. Gonzales committed the crime by causing an explosion at an apartment complex while attempting to create hashish oil and wax.
Gonzales was arrested in July 2017, on a three-count indictment charging him with endangering human life while illegally manufacturing a controlled substance, manufacturing a controlled substance, and maintaining a residence for the purpose of manufacturing marijuana and hashish oil. According to the indictment, Gonzales committed the crimes on May 9, 2016, in Los Alamos County, N.M.
During today’s proceedings, Gonzales pled guilty to Count 1 of the indictment charging him with endangering human life while illegally manufacturing a controlled substance. In entering the guilty plea, Gonzales admitted that on May 9, 2016, he was illegally attempting to manufacture hashish oil or wax in an apartment in Los Alamos County by using butane gas to extract THC from marijuana to produce hashish oil or wax. Gonzales also admitted that during the manufacturing process, a build-up of butane gas ignited, causing an explosion which severely burned Gonzales’ body and damaged the apartment complex.
According to his plea agreement, Gonzales possessed a medical marijuana card due to a medical condition. Gonzales admitted that his medical marijuana card did not give him authorization to manufacture hashish oil or wax.
At sentencing, Gonzales faces a maximum penalty of ten years in federal prison and a fine up to $250,000. A sentencing hearing has yet to be scheduled.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Los Alamos Police Department. Assistant U.S. Attorney Letitia C. Simms is prosecuting the case.
Former Employee of Southern California Ambulance Company Sentenced to Prison for Role in Medicare Fraud SchemeRead the Press Release
A former employee of a Southern California ambulance company was sentenced today to 36 months in prison for his role in a scheme that resulted in more than $1.1 million in fraudulent claims to Medicare.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Region, and Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division made the announcement.
Aharon Aron Krkasharyan, 54, of Los Angeles, California, was sentenced by U.S. District Judge George H. Wu of the Central District of California, who also ordered Krkasharyan to pay $484,556 in restitution to Medicare, jointly and severally with his co-conspirators, who await sentencing. On Nov. 27, 2017, Krkasharyan pleaded guilty to one count of conspiracy to commit health care fraud.
Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc. (Mauran) of San Fernando, California, an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients. As part of his plea, Krkasharyan admitted that between June 2011 and April 2012, he conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services. Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.
Krkasharyan was charged along with Toros Onik Yeranosian, 55, the former owner of Mauran; Oxana Loutseiko, 57, the former general manager of Mauran; and Maria Espinoza, 47, a former employee of a Los Angeles dialysis treatment center. Yeranosian, Loutseiko and Espinoza each pleaded guilty and are pending sentencing. The former dispatch supervisor at Mauran, Christian Hernandez, 37, who was previously charged in the case, has also pleaded guilty and awaits sentencing.
According to court documents, during the course of the conspiracy, Mauran submitted over $28 million in claims to Medicare. Krkasharyan’s co-defendants admitted that at least $6.6 million of those claims were false and fraudulent claims for medically unnecessary transportation services. Medicare paid at least $3.1 million on those false and fraudulent claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. Trial Attorneys Alexis D. Gregorian and Jeremy R. Sanders of the Fraud Section prosecuted the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Former Employee Pleads Guilty to Wire FraudRead the Press Release
HOUSTON – A 28-year-old former employee of BP America Inc. has admitted he attempted to extort money from the company, announced U.S. Attorney Ryan K. Patrick. George Koutsostamatis pleaded guilty to one count of wire fraud.
Koutsostamatis, of Chicago, was a BP employee. While employed there, he admitted he sent an email to BP falsely claiming to possess personal information of company employees and their families. He also claimed he had infiltrated BP’s computers and computer network system. He threatened to release the information if he was not paid 125 bitcoins.
U.S. District Judge Sim Lake accepted the plea today and has set sentencing for July 13, 2018. At that time, Koutsostamatis faces up to 20 years in federal prison and a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
The FBI Houston Cyber Task Force investigated this case. The FBI Houston Cyber Task Force is a multi-agency task force responsible for investigating, pursuing and defeating cyber criminals who seek to exploit our nation’s most significant computer systems, networks and critical infrastructure. The Houston field office of the FBI led the investigation with assistance from U.S. Attorney’s Offices in Houston and Chicago, FBI – Chicago field office and the National Crime Agency in the United Kingdom. Assistant U.S. Attorney Rodolfo Ramirez is prosecuting the case.
Florida Man Arrested on Federal Criminal ComplaintRead the Press Release
Abingdon, VIRGINIA – A Florida man was arrested and charged with a pair of federal crimes following a traffic stop in Lee County, Virginia, United States Attorney Thomas T. Cullen announced today.
The United States Attorney’s Office charged Sergio Barrios Ambriz, 32, of Ft. Meade, Florida, in a criminal complaint with one count of possession of a firearm by a previously convicted felon and one count of possession with the intent to distribute crystal methamphetamine.
According to a criminal complaint and affidavit filed in U.S. District Court in Abingdon, on April 6, 2018, a deputy with the Lee County Sheriff’s Office conducted a traffic stop on the vehicle Ambriz was driving. At the time of the traffic stop, Ambriz informed deputies that he had an outstanding warrant in Polk County, Fl., at which time deputies arrested Ambriz.
A search of his vehicle subsequently revealed a Tupperware container under the driver’s seat that contained approximately 34 ounces of a white, crystal-like substance, believed to be crystal methamphetamine, a loaded, .380-caliber pistol, $3,237 in U.S. currency, a cellular phone and smoking devices.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lee County Sherriff’s Office. Special Assistant United States and Virginia Assistant Attorney General Suzanne Kerney-Quillen will prosecute the case for the United States.
A criminal complaint is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Federal Tax Prosecutions Serve as Reminder to Comply with Tax Obligations as the April 17 Filing Deadline ApproachesRead the Press Release
As Tax Day approaches, the U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Tuesday, April 17. To underscore federal law enforcement’s commitment to pursue those who fail to pay their taxes or otherwise defraud the tax system, below are several tax and related fraud prosecutions in the District of Minnesota. In addition to potential criminal penalties, including incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil monetary penalties.
“Tax fraud unfairly shifts the tax burden to honest American taxpayers,” said U.S. Attorney Greg Brooker. “The U.S. Attorney’s Office for the District of Minnesota and the St. Paul Field Office of the Internal Revenue Service’s Criminal Investigation vigorously investigate and prosecute tax fraud and other financial crimes.”
“Year-round efforts of IRS Criminal Investigation are directed at those Americans who willfully and intentionally violate their legal duty to voluntarily file lawful and accurate tax returns and those individuals who commit other related financial crimes,” said Hubbard Burgess, Acting Special Agent in Charge of the St Paul Field Office. “Prosecutions of individuals committing tax fraud are a vital element in fostering confidence in our tax system and compliance with the law.”
JOSEPH ARNOLD MCGLYNN, of Burnsville, was sentenced to 30 months in prison for failing to pay over his employees’ withheld employment taxes to the IRS. Between 2009 and 2016, MCGLYNN was the owner, CEO and President of United Credit Consulting (UCC), a credit repair service company located in Burnsville. MCGLYNN withheld the employment taxes from his employees’ wages, but failed to pay over the taxes to the IRS for many quarters. Instead, MCGLYNN used the money to fund a lavish lifestyle, including luxury vacations, rentals of luxury vehicles, visits to strip clubs and purchases of luxury items such as jewelry, handbags and a boat. In total, MCGLYNN failed to pay to the IRS at least $159,157 in employment taxes.
ROYLEE BELFREY and THURLEE BELFREY, of St. Paul, and LANORE BELFREY, of Minnetonka, operated multiple home health care businesses and over several years committed a multi-million dollar heath care fraud, conspired to defraud the U.S., and failed to pay over almost $4 million in employee withheld taxes. Instead of paying over their employees’ withheld taxes to the IRS, they directed and permitted the money to be spent for other purposes, including for their own personal use. ROYLEE BELFREY was sentenced to 60 months in prison and ordered to pay $4,592,593.74 in restitution. THURLEE BELFREY was sentenced to 96 months in prison and ordered to pay $8,944,036.82 in restitution. LANORE BELFREY was sentenced to 15 months in prison and ordered to pay $402,158.00 in restitution. Related to the BELFREY investigation, the former mayor of Stillwater, KENNETH HARYCKI pleaded guilty to one count of conspiracy. HARYCKI was sentenced to 12 months and one day in prison and ordered to pay more than $2 million in restitution.
DIANE L. KROUPA, a former Federal Tax Court judge, of Minnetonka, was sentenced to 34 months in prison, and her husband, ROBERT E. FACKLER was sentenced to 24 months in prison for tax offenses. Between 2002 and 2012, KROUPA and FACKLER conspired to obstruct the IRS by falsifying and reporting personal expenses as business expenses on their joint tax return. For several years, they fraudulently deducted at least $500,000 of personal expenses as business expenses. FACKLER also failed to report approximately $450,000 of income earned from his business, Grassroots Consulting. KROUPA and FACKLER fraudulently understated their income by approximately $1,000,000 and fraudulently understated the amount of tax they owed by at least $450,000.
JOHN BURWOOD ROBINSON, of Crystal, was sentenced to 33 months in prison and ordered to pay $624,132 in restitution for stealing more than $1.1 million from his employer. ROBINSON pleaded guilty to mail fraud and filing a false tax return. ROBINSON was employed as the controller for North Central Stamping & Manufacturing, Inc. (“NCSMI”) from 1991 through 2016. In that role, ROBINSON devised a fraud scheme to steal money from NCSMI by opening a bank account in the name of NCSMI without the company’s knowledge or authorization, depositing customers’ payments into the fraudulent bank account, and using the deposits for his personal expenses.
MICHAEL TOBAK of Wayzata was sentenced to 24 months in prison for filing a false tax return. During an eight-year period, TOBAK failed to report more than $3.3 million in income from his non-profit home health care company, International Health Care Services. As a result, TOBAK failed to pay an additional $1,851,640 in taxes.
HASSAN OSMAN, of Minneapolis, was sentenced to 108 months in prison on charges of conspiracy, aiding and assisting in the preparation of a false tax return, and unlawful flight from prosecution. OSMAN and two co-conspirators filed more than 80 fraudulent tax returns for years 2008-2010 attempting to obtain close to $1 million in tax refunds.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Federal Jury Finds Orlando Woman Guilty of Investment FraudRead the Press Release
Orlando, Florida – A federal jury has found Viktoriya Johnson (36, Orlando) guilty of wire fraud and conspiracy to commit wire fraud. She faces a maximum penalty of 20 years in federal prison on each count. Her sentencing hearing is set for August 18, 2018.
Johnson was indicted in May 2017, along with her co-defendant Leone Alfano La Cava (59, Orlando), who pleaded guilty to wire fraud on March 30, 2018.
According to evidence presented at trial, La Cava and Johnson orchestrated an international real estate investment scheme that defrauded at least 80 investors out of over $4 million. La Cava solicited individuals in Italy to purchase real estate in Orange County, Florida that he claimed would generate guaranteed rental income. Johnson and La Cava then used falsified deeds and loan documents to convince investors that they were purchasing property owned by La Cava or Golden Investment, Inc., a real estate investment company incorporated by Johnson in 2010. In reality, those properties either did not exist, were never owned by La Cava, Johnson, or Golden Investment, or had already been sold to another investor. Instead of using the funds to purchase the real estate promised to investors, La Cava and Johnson used portions of the money for their own personal use. Johnson received over $1.3 million in investor funds that she used to purchase four properties and two luxury vehicles for herself.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nathan W. Hill and Chauncey A. Bratt.
Federal Jury Finds Jacksonville Man Guilty of Distributing Child Sex Abuse VideosRead the Press Release
Jacksonville, Florida – Following a five-day trial, a federal jury has found Jason James Neiheisel (28, Jacksonville) guilty of sharing child sex abuse videos and making them available for online for distribution. He faces a minimum mandatory penalty of 5 years, up to 40 years, in federal prison and a potential life term of supervised release. A sentencing date has not yet been set. FBI agents arrested Neiheisel on May 4, 2017.
According to evidence and testimony presented at trial, an FBI task force officer conducted an online investigation of individuals using the internet to trade child pornography. He identified a host computer that was offering child pornography for distribution using a file-sharing network and downloaded approximately 48 videos, several of which depicted young children being sexually abused. The host computer was later traced to Neiheisel’s home. On April 11, 2017, agents made contact with Neiheisel at his apartment, where he told them that he had downloaded child pornography for “a while,” and that he enjoyed the “thrill of the hunt” to see what kind of child pornography files he could find. A subsequent forensic examination of Neiheisel’s tablet revealed no child pornography but confirmed that Neiheisel had used the tablet to access the file-sharing network. Neiheisel admitted that he knew that he had made the child pornography videos available to others on the file-sharing network.
This case was investigated by the Columbia County Sheriff’s Office and the FBI. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Federal Court Bars Florida Tax Return Preparers from Preparing Tax Returns and Orders Them to Disgorge Ill-Gotten GainsRead the Press Release
On April 16, a federal court in Orlando, Florida, ordered that Patrick Clarke disgorge $500,000, and Ruby Rodriguez disgorge $100,000, of the proceeds they received for the preparation of tax returns, the Justice Department announced today. Clarke and Rodriguez agreed to the orders. On Nov. 13, 2017, the Court permanently barred Clarke, Rodriguez, Tax MD Inc., and V.I.P Tax Services Inc. from preparing federal tax returns for others. The civil injunction order, to which the defendants also agreed, was signed by Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida.
In April 2016, the United States filed its civil complaint against Clarke and Rodriguez seeking an injunction prohibiting them from acting as federal tax return preparers and seeking disgorgement of their gross receipts for the preparation of federal tax returns that reported false or fraudulent claims. According to the complaint, Clarke owned Tax MD Inc. and through it owned and operated tax return preparation franchises in Orlando, Tampa, West Palm Beach, and Hallandale, Florida. Also according to the complaint, Rodriguez managed one of Clarke’s stores in Orlando and owned V.I.P Tax Services Inc. As alleged, Clarke’s tax return preparers, including Rodriguez, fabricated business income and expenses to make fraudulent claims for the earned income tax credit and fabricated itemized deductions to generate larger refunds. The injunction entered in November stopped Clarke and Rodriguez from preparing tax returns for others, and today’s disgorgement order allows the government to collect proceeds they received from their tax preparation.
Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some information on their website about selecting a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Former Employee of Southern California Ambulance Company Sentenced to Prison for Role in Medicare Fraud SchemeRead the Press Release
LOS ANGELES – A former employee of a Southern California ambulance company was sentenced today to 36 months in prison for his role in a scheme that resulted in more than $1.1 million in fraudulent claims to Medicare.
Aharon Aron Krkasharyan, 54, of Los Angeles, was sentenced by U.S. District Judge George H. Wu, who also ordered Krkasharyan to pay $484,556 in restitution to Medicare, jointly and severally with his co-conspirators, who await sentencing. On Nov. 27, 2017, Krkasharyan pleaded guilty to one count of conspiracy to commit health care fraud.
Today’s sentencing was announced by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, United States Attorney Nicola T. Hanna, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Region, and Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division.
Krkasharyan was employed as the Quality Improvement Coordinator for Mauran Ambulance Inc. (Mauran) of San Fernando, an ambulance transportation company operating in the greater Los Angeles area that provided non-emergency services to Medicare beneficiaries, many of whom were dialysis patients. As part of his plea, Krkasharyan admitted that between June 2011 and April 2012, he conspired with other Mauran employees to submit claims to Medicare for ambulance transportation services for individuals who did not need such services. Krkasharyan also admitted that he and his co-conspirators instructed Mauran emergency medical technicians to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent reasons to justify the ambulance services.
Krkasharyan was charged along with Toros Onik Yeranosian, 55, the former owner of Mauran; Oxana Loutseiko, 57, the former general manager of Mauran; and Maria Espinoza, 47, a former employee of a Los Angeles dialysis treatment center. Yeranosian, Loutseiko and Espinoza each pleaded guilty and are pending sentencing. The former dispatch supervisor at Mauran, Christian Hernandez, 37, who was previously charged in the case, has also pleaded guilty and awaits sentencing.
According to court documents, during the course of the conspiracy, Mauran submitted over $28 million in claims to Medicare. Krkasharyan’s co-defendants admitted that at least $6.6 million of those claims were false and fraudulent claims for medically unnecessary transportation services. Medicare paid at least $3.1 million on those false and fraudulent claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the United States Attorney’s Office for the Central District of California. The case was investigated by the FBI and HHS-OIG. Trial Attorneys Alexis D. Gregorian and Jeremy R. Sanders of the Fraud Section prosecuted the case.
Ellisville Man Indicted on Wire Fraud ChargesRead the Press Release
William Glaser, 60 of Ellisville, Missouri surrendered this morning in federal court to an Indictment charging him with three counts of wire fraud in connection with his solicitation of more than $1,000,000 in investments from three former clients. The investments went to Paul Creager of Everett Builders whose St Louis County construction company was liquidated by creditors last summer.
The indictment alleges that, between 2015 and 2016, Glaser was working as a financial advisor and misled his clients by falsely representing he had put his own money into Creager’s company and by failing to disclose that he was receiving large commissions out of his client’s funds. In order to liquidate his clients’ investments so that they could go to Creager, Glaser facilitated the establishment of self-directed IRAs on his clients’ behalf. Soon after the establishment of these accounts, Creager placed large portions of his clients’ retirement portfolios into high-yield unsecured promissory notes with Creager’s company. No payments were made on any of the notes.
Creager himself has pleaded guilty to one case charging him with wire fraud in connection with the solicitation of investments for his company and faces a second case alleging similar misconduct in the solicitation of another investor and an additional fraud scheme related to the closing on one of his properties. Glaser is not alleged to have participated in either of the fraud schemes with which Creager has been charged.
If convicted, Creager faces up to 20 years’ imprisonment, a fine of more than $250,000 or both per count. Restitution to the victims is also mandatory and the government is seeking a money judgment by way of a forfeiture allegation to further facilitate the recovery of any funds available for restitution.
This case was investigated by the St. Louis division of the FBI. Tom Albus is handling the case for the U.S. Attorney’s office.
Eastern Panhandle man sentenced to nearly nine years for heroin and cocaine distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – Gerald Gibbs, of Kearneysville, West Virginia, was sentenced today to 105 months incarceration for his role in a drug distribution operation, United States Attorney Bill Powell announced.
Gibbs, age 30, pled guilty to one count of “Conspiracy to Distribute a Controlled Substance” in December 2017. Gibbs admitted to conspiring to distribute 100 grams or more of heroin and 28 grams or more of cocaine. The crime took place from June 2016 to March 2017 in Jefferson County, West Virginia.
Gibbs was also ordered to forfeit $16,774, a .380-caliber pistol, a .410-caliber shotgun, a 2006 Jaguar SJR-S, a 2006 BMW 750LI, and a 2006 Lexus RX400.
Assistant United States Attorneys Lara K. Omps-Botteicher and Anna Z. Krasinski prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Judge Gina M. Groh presided.
East Point Man Pleads Guilty in Methamphetamine ConspiracyRead the Press Release
Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that Bobby Martinez, age 28, of East Point, GA entered a plea of guilty April 16, 2018 to Conspiracy to Possess with Intent to Distribute Methamphetamine. Mr. Martinez entered his plea in Macon before District Court Judge Marc T. Treadwell.
Facts stipulated in the plea agreement show that on October 20, 2016, intercepted communication revealed co-defendants Ruben Angel Perez a/k/a “El Rey” and Walter Williams a/k/a “Bubba” discussed Mr. Williams obtaining methamphetamine for further distribution within the Middle District of Georgia. Mr. Williams then contacted Shana Walker to have her serve as the courier to meet with Mr. Perez’s courier, who was identified as Mr. Martinez. Agents conducted surveillance and observed Ms. Walker meet with Mr. Martinez at a shopping center in Ellenwood, Georgia. The agents observed Mr. Martinez retrieve a blue Nautica shopping bag from his vehicle and place it in Ms. Walker’s vehicle. They then saw Mr. Martinez retrieve a black bag from Ms. Walker’s vehicle and place it in his vehicle before they both left.
Later, a trooper with the Georgia State Patrol conducted a traffic stop on Mr. Martinez for speeding. After seeking permission to search the vehicle, the trooper located $31,500 inside a black bag. Following the traffic stop, a phone call was intercepted between Mr. Perez and Mr. Williams wherein they discussed that the police had seized the money from Mr. Perez’s courier. Mr. Perez asked Mr. Williams how much money he sent with the courier and Mr. Williams told him it was $31,500.
Agents surveilled Ms. Walker as she returned to Mr. Williams’ residence after meeting with Mr. Martinez. Agents executed a search warrant and located Ms. Walker in a bedroom with a blue Nautica bag and five saran wrapped Tupperware containers with what was later confirmed to be 2,969.2 grams of d-Methamphetamine Hydrochloride with a purity of 99%.
Mr. Martinez admits that from May to October, 2016, he knowingly conspired with others to possess with the intent to distribute methamphetamine in the Middle District of Georgia. The amount of drugs attributable to Mr. Martinez is more than 4.5 kilograms of Ice.
Mr. Martinez faces up to 20 years imprisonment, a maximum fine of $1 million, or both, and a term of supervised release of three years.
Mr. Williams, Mr. Perez, and Ms. Walker, along with several other co-defendants in the case, have previously entered guilty pleas for their roles in the conspiracy.
The case was investigated by the Drug Enforcement Administration, the Georgia Bureau of Investigation, and the Peach County Sheriff’s Office. Assistant United States Attorneys Beth Howard and Jim Crane are prosecuting 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.
Dubuque Drug Dealer to Serve over 15 Years in Federal PrisonRead the Press Release
A man who sold crack cocaine out of his Dubuque residence was sentenced today to more than 15 years in federal prison.
Desmond Williams, age 30, from Dubuque, Iowa, received the prison term after an October 25, 2017, guilty plea to distribution of a controlled substance near a protected location.
In a plea agreement, Williams admitted selling crack cocaine from February 2016 through September 2016. Some of the sales took place inside his home, which was located near multiple playgrounds. At the sentencing hearing, the Court noted that Williams resided in the home with his then-girlfriend and a three-month old infant, during the time that he was selling drugs out of the home. Williams has two prior felony drug convictions.
Williams was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. He was sentenced to 188 months’ imprisonment. He must also serve a 6-year term of supervised release after the prison term. There is no parole in the federal system.
Williams is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Justin Lightfoot and investigated by the Dubuque Drug Task Force, the Dubuque Police Department, and the Dubuque County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-1046.
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Drugs, Gun Equal 10 Years in Federal PrisonRead the Press Release
TOPEKA, KAN. – A Salina man who was arrested with drugs in his possession and a gun under his pillow was sentenced today to 10 years in federal prison, U.S. Attorney Stephen McAllister said.
Michael Allen Carter, 29, Salina, Kan., pleaded guilty to one count of possession with intent to distribute methamphetamine. In his plea, he admitted that on May 30, 2017, investigators who searched his residence found 80 grams of 99 percent pure methamphetamine and a pistol under the pillow on his bed. The pistol was a Taurus 9 mm.
McAllister commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Greg Hough for their work on the case.
District Heights Man Sentenced to 10 Years in Prison for Drug and Gun ChargesRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – United States District Judge Paul W. Grimm sentenced Erron Deon Robinson, age 32, of District Heights, Maryland today to ten years in prison, followed by five years of supervised release, for possession with intent to distribute 100 grams or more of a substance containing a detectable amount of fentanyl and being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Daniel L. Board Jr. of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Baltimore Field Division; Chief Henry P. Stawinksi III of the Prince George’s County Police Department; and Chief Peter Newsham of the Metropolitan Police Department, Washington D.C.
According to his plea agreement, in August 2017, law enforcement officers attempted to execute an arrest warrant for Robinson, which had been issued by the Superior Court for the District of Columbia. After apprehending Robinson, officers searched his residence and found a loaded Sig Sauer 9mm handgun, a loaded Glock 10mm handgun, a box of ammunition, approximately 175 grams of a substance containing a detectable amount of several substances, including furanyl fentanyl, fentanyl, and heroin, digital scales, a large bag of Mannitol powder, and $6,825.00 United States currency.
Prior to August 23, 2017, Robinson had been convicted of a felony, which prohibited him from legally possessing firearms or ammunition.
United States Attorney Robert K. Hur praised the ATF, the Prince George Police Department, and the D.C. Metropolitan Police for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael Packard, who prosecuted the case.
Detroit Man Sentenced for Federal Heroin CrimeRead the Press Release
HUNTINGTON, W.Va. – A Detroit man who was caught with heroin in Huntington in 2015 was sentenced to 49 months in federal prison today, announced United States Attorney Mike Stuart. JaJuan Thrasher, 30, previously pled guilty in January to possession with intent to distribute heroin. Stuart commended the work of the Huntington FBI Drug Task Force.
“Detroit drug dealers are soon to be a mere footnote in Huntington’s history,” said United States Attorney Stuart. “Thrasher is just the latest to be going to federal prison as a result of our efforts.”
On September 14, 2015, members of the Huntington FBI Drug Task Force executed a search warrant at 2317 Lincoln Avenue, Apartment A in Huntington. When investigators executed the warrant, they located Thrasher and two additional individuals inside the residence. Investigators subsequently seized approximately 18 grams of heroin, which was packaged for distribution, from Thrasher’s pocket. Thrasher admitted to investigators that he had been engaged in distributing heroin in the Huntington area. As part of his plea, Thrasher also admitted that he and others used the Lincoln Avenue apartment to distribute heroin between the summer of 2015 and September 14, 2015.
Assistant United States Attorney Joseph F. Adams handled the prosecution. United States District Court Judge Robert C. Chambers imposed the sentence.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Defendant Indicted for Swindling Investors in Binary Options and Cryptocurrency SchemeRead the Press Release
A three-count indictment was unsealed today in federal court in Central Islip, New York, charging Blake Kantor, also known as “Bill Gordon,” with conspiracy to commit wire fraud, obstruction of an official proceeding and making false statements to Special Agents of the Federal Bureau of Investigation. Kantor was arrested by federal authorities today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the charges.
As alleged in the indictment, in March 2014, Kantor established a company known as Blue Bit Banc or Blue Bit Analytics, Ltd. (“BBB”) that sold binary options, a type of investment in which investors are promised an opportunity to be paid predetermined amounts based upon the particular price of securities, commodities or other investments at particular points in time. To establish Blue Bit Banc, Kantor used approximately $10,000 drawn from a bank account established at a TD Bank branch located in Suffolk County within the Eastern District of New York. From approximately 2014 to 2017, Kantor and others solicited and took in approximately $2.1 million from approximately 713 investors in BBB’s binary options. Kantor did not inform those investors, however, that a computer software used by BBB allowed BBB to fraudulently alter data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors. To further the scheme, Kantor directed the opening of bank accounts—including one in the island nation of St. Kitts and Nevis—using aliases and the identifying information of other people. Kantor further converted monies that investors invested into ATM Coin, a worthless cryptocurrency that Kantor misleadingly told investors was worth substantial sums of money.
As also alleged in the Indictment, in October 2017, Kantor directed a co-conspirator to alter lists of BBB customers after FBI agents informed Kantor that they were investigating his involvement in binary options. Thereafter, Kantor met with FBI agents and falsely stated in substance that he had not been involved in binary options since August 2013 when, in reality, he had established BBB around March 2014 and was employed there until around October 2017.
“As alleged, Kantor used a computer program to generate manipulated data to cheat hundreds of investors out of their hard-earned savings,” stated United States Attorney Donoghue. “To cover-up his fraudulent scheme, Kantor then lied to the FBI and ordered the alteration of documents that would assist agents in identifying his victims. We will continue to work closely with our law enforcement partners to vigorously prosecute individuals who defraud the investing public and obstruct law enforcement’s ability to detect and prosecute financial crimes.”
“The all-or-nothing option Kantor’s victims were offered at the onset of their investment had a predetermined ending, one in which they stood to face significant financial losses, as alleged,” stated FBI Assistant Director-in-Charge Sweeney. “The odds were stacked against them from the beginning, while Kantor had everything to gain. The FBI will continue to be a major force in confronting those who think they can evade the law and make an easy profit off the misfortune of others.”
“In addition to enforcing the nation’s tax laws, the Special Agents of IRS-Criminal Investigation take particular interest in cases where our expertise is warranted to uncover allegations of financial fraud,” stated IRS-CI Special Agent-in-Charge Robnett. “The allegations outlined in this indictment detail acts of deceit and offshore money movement in the evolving world of cryptocurrency, which impacts the trust investors have with our financial system.”
“The CFTC is committed to working in parallel with our law enforcement partners to ensure that fraudsters in our markets are brought to justice and customers are protected,” stated CFTC Division of Enforcement Director McDonald. “This type of coordination is particularly important in cases like this one, where the alleged scheme stretched across multiple markets, including the market for virtual currencies.”
If convicted, Kantor faces a maximum term of imprisonment of 20 years on each of the conspiracy to commit wire fraud and obstruction of an official proceeding charges and five years on the false statements charge.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline M. O’Connor are in charge of the prosecution.
The Defendant:
BLAKE KANTOR (also known as “Bill Gordon”)
Age: 42
Residence: Manhattan, New YorkE.D.N.Y. Docket No. 18-CR-177 (SJF)
Dallas Man Sentenced to Life in Federal Prison for Drug OffenseRead the Press Release
FORT WORTH, Texas — Arnoldo Morfin-Arias, aka “Efrain Arias” and “Pollo,” 44, of Dallas, Texas, was sentenced today by U.S. District Judge John McBryde to Life in federal prison following his guilty plea in November 2017 to one count of conspiring to traffic in methamphetamine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Morfin-Arias was charged in a superseding indictment in October 2017 along with six others for their roles in a methamphetamine conspiracy. Twenty-two others have also been charged in different indictments and informations in connection with Morfin-Arias for trafficking in methamphetamine, cocaine, heroin, and for money laundering. Morfin-Arias operated in the Dallas/Fort Worth area, and elsewhere in the United States. He has been in custody since the time of his arrest in California in August 2017.
Documents filed in the cases reveal that since at least early 2015, Morfin-Arias received large amounts of methamphetamine directly from a Mexico-based source of supply. In turn, Arias distributed multi-kilogram quantities of methamphetamine through multiple Dallas based distributors who have all pled guilty to the conspiracy.
The Federal Bureau of Investigation conducted the investigation with assistance from DEA, ATF, U.S. Marshals Service, Arlington Police Department, Fort Worth Police Department, Dallas Police Department, Dallas County Sherriff’s Clean Air Task Force, Grand Prairie Police Department, Denton County Sherriff’s Office, Texas Department of Criminal Justice Office of Inspector General, the Texas Department of Public Safety, ICE ERO, and Tarrant County Combined Narcotics Enforcement Team.
Assistant U.S. Attorney Shawn Smith prosecuted.
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Convicted Felon Sentenced to 110 Months Imprisonment for Illegally Possessing a FirearmRead the Press Release
Memphis, TN – Damenion Richmond, 36, was sentenced to 110 months in federal prison for being a convicted felon in possession of a firearm. U.S. Attorney D. Michael Dunavant of the Western Division of Tennessee announced the sentence today.
According to information presented in court, on February 19, 2017, Mrs. Sheris Richmond called 911 to report her husband, Dameion A. Richmond, fired shots at her on the expressway after a verbal altercation at her home. Mrs. Richmond said she and her husband argued at the residence when he drew a handgun and pointed it at her face. He then fled the scene in his vehicle; Mrs. Richmond pursued him in her vehicle until he stuck a gun out of the window and fired shots at her along the way. Mrs. Richmond called 911 for police assistance and pulled into the parking lot of Click’s Pool Hall at 3705 Malco Way, in Memphis, Tenn.
U.S. Attorney D. Michael Dunavant said: "Reducing violent crimes committed with firearms is the top priority of this office and the Department of Justice. Prohibited persons in possession of firearms, such as convicted felons, persons with histories of domestic violence, and unlawful users of illegal narcotics present a known and immediate risk of violence to their families and the community at large. This is exactly the type of dangerous offender that the PSN Task Force is designed to target, and I commend their work in holding Richmond responsible and removing him from our streets."
When law enforcement arrived on the scene, Mr. Richmond was questioned and asked to step out of the vehicle. While searching the vehicle, Memphis Police Department officers discovered a Mauser .32 pistol where the defendant had been sitting. The magazine was empty, but the chamber still held one live round. Mr. Richmond admitted to possessing the gun but stated he only fired shots in the air. He also confessed to being a convicted felon. A further search of the vehicle yielded another weapon, a Smith and Wesson .22 caliber pistol with three magazines. Two of the magazines had 12 live rounds each and the third magazine had six live rounds.
Several small bags of drugs containing crack cocaine, marijuana, ecstasy and other pills were located in the vehicle. The defendant admitted to law enforcement that the guns and drugs were his property and did not belong to the passengers in the car.
The case was investigated by Project Safe Neighborhoods (PSN) Task Force, which includes the U.S. Attorney’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Memphis Police Department; and the Shelby County Sheriff’s Office, who have all joined together to address gun-related crimes through aggressive investigation and prosecution. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
Assistant U.S. Attorney Raney Irwin prosecuted this case on the government’s behalf.
Coast Woman Sentenced to Almost 8 Years in Prison for Prescription Forgery ConspiracyRead the Press Release
Gulfport, MS – Nakita Marie Piernas, 29, of Pass Christian, was sentenced today by U.S. District Judge Sul Ozerden to 92 months in federal prison, followed by three years of supervised release, for conspiring to possess with intent to distribute a controlled substance, announced U.S. Attorney Mike Hurst and Drug Enforcement Administration (DEA) Assistant Special Agent in Charge Derryle Smith. Piernas was also ordered to pay an $8,000.00 fine.
On October 24, 2017, Piernas pled guilty to count one of a 42-count indictment. Piernas admitted to conspiring with others to distribute Oxycodone, Hydrocodone, Amphetamine, Alprazolam and Klonopin from 2014 until June 21, 2017. Piernas was an employee of Gulf Oaks Mental Health Clinic starting in October 2014. Shortly after starting her employment, Andrea Opoku, a co-worker, taught her how to write fraudulent prescriptions. Tyrone Thomas, another employee of the clinic, would recruit individuals who wanted prescriptions and were willing to pay between $100 and $200. Once Thomas found someone wanting a fraudulent prescription, that person would provide a name and date of birth to put on the fraudulent prescription. Piernas or Opoku would then write the prescription and someone would come to the clinic to get it.
During the investigation, DEA uncovered over 100 fraudulent prescriptions written by Opoku and Piernas. The prescriptions were in over 50 different individuals’ names. DEA further learned that the individuals who obtained the fraudulent prescriptions would either self-medicate with the narcotics or sell them on the street. Opoku and Piernas would also write prescriptions for one another, and at times, they would verify the fraudulent prescriptions if a pharmacist called the clinic questioning its validity. During the sentencing hearing, the Court found that Piernas was a leader or organizer of the conspiracy ring.
Opoku was sentenced by Judge Ozerden on March 5, 2018, to 92 months in prison, followed by three years of supervised release, and ordered to pay an $8,000 fine. Thomas was sentenced by Judge Ozerden on March 2, 2018, to 103 months in prison, followed by three years of supervised release, and ordered to pay a $5,000 fine.
The case was investigated by the DEA Tactical Diversion Squad and the Mississippi Bureau of Narcotics. It was prosecuted by Assistant U.S. Attorney Kathlyn R. Van Buskirk.
Clifton Park Man Pleads Guilty to Child Pornography ChargesRead the Press Release
ALBANY, NEW YORK – William C. Ruff, age 43, of Clifton Park, New York, pled guilty today to distributing child pornography.
The announcement was made by United States Attorney Grant C. Jaquith and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his guilty plea, Ruff admitted that on eight occasions between October 10, 2016 and December 17, 2016, he used file-sharing software to distribute child pornography over the Internet. The pornographic videos and images depicted children as young as 3 years old.
Ruff, who has been in custody since his arrest on December 21, 2016, is scheduled to be sentenced on August 15, 2018 by Senior United States District Judge Norman A. Mordue. He faces at least 5 years and up to 20 years in prison, at least 5 years and up to lifetime post-imprisonment supervised release, and a maximum $250,000 fine. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. Ruff will also have to register as a sex offender when he is released from prison.
This case was investigated by the FBI, with assistance from the Saratoga County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Joseph A. Giovannetti.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Cleveland man sentenced to nearly 16 years in prison for firing shotgun during carjackingRead the Press Release
A Cleveland man was sentenced to nearly 16 years in federal prison for firing a shotgun during a carjacking in Euclid.
Cody M. Coats, 25, was found guilty of carjacking and discharging a firearm during a crime of violence. U.S. District Judge Solomon Oliver sentenced Coats to 191 months in prison.
Coats used an Itahca short-barreled shotgun when he carjacked someone and stole their 2005 Chrysler Crossfire outside a Euclid bar on Aug. 14, 2017. He crashed the car on East 222nd Street near Lakeshore Boulevard following a police chase and was arrested, according to court documents.
“The defendant earned this sentence when he fired a shotgun while carjacking the victim,” U.S. Attorney Justin E. Herdman said. “Those who use firearms to commit crimes put us all at risk. The Euclid Police Department and ATF did a tremendous job bringing this person to justice.”
“ATF is committed to combating gun violence in our communities,” said Trevor Velinor, ATF Special Agent in Charge for the Columbus Field Division. “We will continue to work with our law enforcement partners, including the Euclid Police Department, to arrest violent criminals and make our communities safer.”
“We are pleased that the U.S. Attorney’s Office adopted this case,” Euclid Police Chief Scott Meyer said. “The officers and detectives of the Euclid Police Department did an outstanding job with the apprehension and investigation. We must all work together to send the message that violent crime will not be tolerated in our communities.”
This case was investigated by the ATF and Euclid Police Department. It is being prosecuted by Assistant U.S. Robert J. Patton.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Clarence Investment Advisor Pleads Guilty to Bilking Clients Out of Hundreds of Thousands of DollarsRead 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 Michael Giokas, 58, of Clarence, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to wire fraud for defrauding numerous clients of his investment advisory firm out of hundreds of thousands of dollars. The charge carries a maximum penalty of 20 years in prison.
Assistant U.S. Attorney Paul E. Bonanno, who is handling the case, stated that the defendant was a financial advisor and president of Giokas Wealth Advisors, located in Clarence. In that role, Giokas provided financial advisory services to more than 40 individual clients.
Between May 2017 and October 2017, the defendant persuaded certain clients to withdraw money from their investment accounts at Nationwide Mutual Insurance Company and invest the money in a company called Trinity Council, LLC. Giokas claimed that Trinity Council was a fund that invested in private corporations; that investments were guaranteed to earn interest between eight and nine percent per year; and that investment principal was guaranteed. The defendant also provided a fraudulent promissory note to one of his clients to convince the client that his investment in Trinity Council was legitimate.
Trinity Council was actually a shell company that engaged in no investment or business activity. Giokas was the sole member and only owner of Trinity Council, and the only person with signature authority on its bank accounts, which the defendant opened for the purpose of executing this scheme to defraud.
In a separate scheme, between 2015 and October 2017, Giokas prompted Nationwide to transfer money from his clients’ Nationwide accounts to the defendant under the guise of “fee requests.” Giokas claimed that he was entitled to the requested money as investment advisory fees, despite the fact that the requested amounts greatly exceeded what the defendant was entitled to pursuant to his fee agreements with his clients.As a result of the two schemes, Giokas defrauded clients out of $1,473,396.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Kevin P. Lyons.
Sentencing is scheduled for July 20, 2018, at 1:00 p.m. before Judge Arcara.
Chicago Man Sentenced to 57 Months for Defrauding Plattsburgh CompanyRead the Press Release
SYRACUSE, NEW YORK – Debashis Ghosh, age 54, of Chicago, Illinois, was sentenced today to 57 months in prison, to be followed by 3 years of supervised release, for conspiring to defraud a Plattsburgh, New York, company of $2.5 million.
The announcement was made by United States Attorney Grant C. Jaquith and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation.
Ghosh and Keith Eric Jergensen, age 58, of Salt Lake City, Utah, were convicted in October 2017 of wire fraud conspiracy following a 7-day trial presided over by United States District Judge Brenda K. Sannes. In imposing sentence, Judge Sannes also ordered Ghosh to pay $2.5 million in restitution to his victims.
On March 2, 2018, Judge Sannes sentenced Jergensen to 59 months in prison, to be followed by 3 years of supervised release, and also ordered him to pay $2.5 million in restitution to his victims.
The evidence at trial demonstrated that Jergensen and Ghosh were Co-Chief Executive Officers of Verdant Capital Group, LLC (“Verdant”), based in Chicago.
Plattsburgh-based Laurentian Aerospace Corporation (“Laurentian”) retained Verdant to raise funds for the construction of an airplane maintenance, repair and overhaul facility to be built at the former United States Air Force base in Plattsburgh.
Jergensen and Ghosh asked Laurentian to invest $2.5 million as seed money for the project. They and Laurentian agreed that this money would remain in a Wells Fargo account and could not be moved without the authorization of Laurentian.
Laurentian, drawing on funds contributed by its board members and one outside investor, wired $2.5 million into the Wells Fargo account on December 3, 2010. Five days later, Jergensen and Ghosh began transferring the money out of the account without Laurentian’s authorization, and by March 18, 2011 they had transferred all of the $2.5 million out of the account.
Jergensen and Ghosh used Laurentian’s $2.5 million to pay Verdant’s expenses including employees and contractors, and to pay others, including payments totaling $1.75 million to a now-defunct wind turbine company that Ghosh was a minority owner of; transfers of $96,500 to Jergensen’s company Contour Composites, Inc. of Utah; a $55,000 “loan” to a friend that the friend never repaid; and payments totaling $14,500 to an Arizona man who was promising them access to union pension funds.
Having spent the money, and as part of their conspiracy, Jergensen and Ghosh then spent several years falsely assuring Laurentian and its investors that their money was safe and secure, with Jergensen going so far as to forge a memorandum of understanding that purported to show that Laurentian’s money was in a secured bank account at Wells Fargo. The victim investors included a retired United States Air Force Colonel, a former New York City Deputy Mayor, a retired law firm partner, and several retired executives from the financial and airline industries. To date, Laurentian has been unable to build the airplane facility in Plattsburgh.
The evidence at trial also demonstrated that Jergensen and Ghosh misappropriated an additional $2.4 million in funds that other businesses had entrusted to them.
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Michael Barnett.
Cedar Rapids Bicyclist Sentenced to Federal Prison for Possessing Meth to Distribute to OthersRead the Press Release
A man who police stopped when he was riding his bicycle while in possession of more than 5 grams of methamphetamine that he intended to share with others was sentenced today to almost 6 years in federal prison.
Kenneth John Pena from Cedar Rapids, Iowa, received the prison term after a November 20, 2017, guilty plea to possession with intent to distribute methamphetamine.
In previous hearings, evidence showed that Pena was riding his bicycle in Cedar Rapids at 4:50 am without the proper lighting equipment. Police officers stopped him and discovered Pena had an outstanding warrant for his arrest. While officers were arresting him, they found methamphetamine, marijuana, pipes, and a scale in his possession. Pena has a lengthy criminal history, including multiple prior convictions for assault or battery, a prior drug trafficking conviction in 1994, and a prior federal conviction for being a felon in possession of a firearm.
Pena was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Pena was sentenced to 71 months’ imprisonment. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Pena is being held in the United States Marshal’s custody until he can be transported to a federal prison. The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Cedar Rapids Police Department. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 17-CR-30.
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Caryville Resident Enters Guilty Plea for Role in Methamphetamine Distribution ConspiracyRead the Press Release
KNOXVILLE, Tenn. – On April 16, 2018, Linda S. Ward, 55, of Caryville, Tennessee, pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine. Her sentencing hearing is set for 10:00 a.m., August 6, 2018, in U.S. District Court. She faces a 10-year mandatory minimum sentence.
In February 2018, a federal grand jury returned a seven-count indictment against Ward and ten others alleging various narcotic, firearms, and money laundering offenses. Those charged in the indictment include:
- Nathan S. Marlow, 22, of Duff, Tennessee;
- Nicholas B. Williams, 27, of Winder, Georgia;
- Justin P. Morris, 26, of Auburn, Georgia;
- Coty E. Malicoat, 21, of Duff, Tennessee;
- Michael Chantz Sturdivant, 22, of Jefferson, Georgia;
- Samuel A. Rose, 21, of Clairfield, Tennessee;
- Andrea W. Robbins, 44, of LaFollette, Tennessee;
- Earl J. Jones, 49, of LaFollette, Tennessee;
- Kristin R. Damons, 24, of Winder, Georgia;
- Paige L. Russell, 24, of LaFollette, Tennessee;
In her plea agreement on file with the U.S. District Court, Ward agreed that she distributed between 50 and 150 grams of actual methamphetamine. According to the plea agreement, between July 2017 and February 2018, Ward obtained methamphetamine from Marlow, which she then sold. During the investigation, conversations between Ward and Marlow, in which they discussed obtaining and paying for methamphetamine provided by Marlow, were intercepted by law enforcement.
Russell pleaded guilty in April 2018 to a lesser-included offense and her sentencing is set for August 1, 2018. Jones has also filed plea agreement with the U.S. District Court. Trial for the remaining co-defendants is set for October 30, 2018.
This investigation began in 2016 and initially resulted in the conviction and sentencing of several others, discussed below, for their involvement in the drug conspiracy and money laundering.
James R. Lawson, 32, of Dayton, Tennessee, pleaded guilty in April 2017 to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in August 2017 to serve 120 months in federal prison, followed by five years of supervised release.
Teri L. Evans, 28, of Jacksboro, Tennessee, pleaded guilty in April 2017 to the lesser-included offense of conspiracy to distribute five grams or more of methamphetamine and was sentenced in April 2017 to serve 60 months in federal prison, followed by four years of supervised release.
Lee Ann Winstead, 57, of Caryville, Tennessee, pleaded guilty in May 2017 to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in August 2017 to serve 120 months in federal prison, followed by five years of supervised release.
Derrick Avery Cook, 36, of Jacksboro, Tennessee, pleaded guilty in May 2017 to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in August 2017 to serve 172 months in federal prison, followed by 10 years supervised release.
Larry Gerauld Hatfield, a/k/a Jerry Hatfield, 54, of Jacksboro, Tennessee, pleaded guilty in May 2017 to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in September 2017 to serve 121 months in federal prison followed by five years of supervised release.
Jeffrey M. Townsend, 57, of Fairmount Georgia, pleaded guilty on June 14, 2017, to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in October 2017 to serve 168 months in federal prison, followed by 10 years of supervised release.
Terry A. King, 40, of Jacksboro, Tennessee, pleaded guilty in May 2017 to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in October 2017, to serve 140 months in federal prison, followed by 10 years of supervised release.
Roger L. Young, 49, of Clinton, Tennessee, pleaded guilty in November 2016, to possession with the intent to distribute 50 grams or more of methamphetamine and was sentenced in October 2017 to serve 100 months in federal prison, followed by five years of supervised release.
Josh L. Lawson, 32, of Caryville, Tennessee, pleaded guilty in July 2017 to conspiracy to distribute 50 grams or more of methamphetamine and conspiracy to launder money. He was sentenced in November 2017 to serve 160 months in prison, followed by five years of supervised release.
Jesse M. Pinkerton, 37, of Sharps Chapel, Tennessee, pleaded guilty in June 2017, to conspiracy to distribute 50 grams or more of methamphetamine and was sentenced in November 2017 to serve 197 months in federal prison, followed by 10 years of supervised release.
James W. Lawson, 56, of Caryville, Tennessee, pleaded guilty in June 2017 to conspiracy to distribute 50 grams or more of methamphetamine and conspiracy to launder money. He was sentenced in December 2017 to serve 300 months in federal prison, followed by five years of supervised release.
Law enforcement agencies participating in this joint investigation include the Eighth Judicial Drug Task Force; Seventh Judicial Crime Task Force; Ninth Judicial Drug Task Force; Tenth Judicial Drug Task Force; Anderson County Sheriff’s Office; Campbell County Sheriff’s Office; Knox County Sheriff’s Office; Oak Ridge Police Department; LaFollette Police Department; Tennessee Highway Patrol; Tennessee Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms, and Explosives; U.S. Postal Inspection Service; U.S. Marshal Service; and Drug Enforcement Administration. Assistant U.S. Attorney Caryn L. Hebets represents the United States in court proceedings.
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Berkeley County man sentenced for filing a false tax returnRead the Press Release
MARTINSBURG, WEST VIRGINIA – Gary Johnson, of Martinsburg, West Virginia was ordered to pay $70,000 in restitution and sentenced today to two years probation for filing a false tax return, First Assistant United States Attorney Randolph J. Bernard announced.
Johnson, age 76, pled guilty to one count of “Filing a False Tax Return” in December 2017. Johnson admitted to filing an Income Tax Return for him and his wife in 2013, willfully understating his income from 9 West Hair Studio by approximately $187,176.02.
Assistant U.S. Attorney Jarod J. Douglas prosecuted the case on behalf of the government. The Internal Revenue Service investigated.
Chief U.S. District Judge Gina M. Groh presided.
Baltimore woman sentenced for money launderingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Stephanie Edmonds, of Baltimore, Maryland, was sentenced today to two years probation for money laundering, United States Attorney Bill Powell announced.
Edmonds, age 31, pled guilty to one count of “Conspiracy to Launder Monetary Instruments” in January 2018. Edmonds admitted to conspiring with others to conduct unlawful financial transactions in Berkeley and Jefferson Counties and elsewhere from August 2015 to December 2016.
Assistant United States Attorney Anna Z. Krasinski and Special Assistant U.S. Attorney Elizabeth D. Grant, also with the West Virginia Attorney General’s Office, prosecuted the case on behalf of the government. The Federal Bureau of Investigation and the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Judge Gina M. Groh presided.Baltimore man sentenced for his role in a heroin distribution operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Steven Robinson, of Baltimore, Maryland was sentenced today to 144 months incarceration for distributing heroin, United States Attorney Bill Powell announced.
Robinson, also known as “H,” age 32, pled guilty to one count of “Conspiracy to Distribute Heroin” in January 2018. Robinson admitted to conspiring with others to distribute more than one kilogram of heroin with an illegal street value of more than $300,000 in Berkeley and Jefferson Counties and elsewhere from August 2015 to December 2016.
Assistant United States Attorney Anna Z. Krasinski and Special Assistant U.S. Attorney Elizabeth D. Grant, also with the West Virginia Attorney General’s Office, prosecuted the case on behalf of the government. The Federal Bureau of Investigation and the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Judge Gina M. Groh presided.