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4 April 2018
Federal Prosecutors Charge Shelby County Woman for Stealing from EmployerRead the Press Release
BIRMINGHAM – Federal prosecutors have charged a Shelby County woman on multiple counts of wire fraud for stealing from the Bessemer company where she had worked as a bookkeeper, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp Jr.
The U.S. Attorney’s Office filed a four-count information last week in U.S. District Court charging LUCY WOODS, 52, of Pelham, with stealing more than $150,000 from her former employer, Robert Warnock Co. Inc. The company is a manufacturer’s representative that sells capital equipment for the oil and gas industry. In conjunction with the charges, the government also filed a plea agreement with Woods. She must appear before a judge to enter a guilty plea.
“This is another example of a case where an employee had access to financial information as part of her job duties and took great advantage of and violated her employer’s trust,” said Assistant U.S. Attorney Robin Beardsley Mark. “Businesses should be able to trust their employees with confidential business information and when that trust is broken, the employee should be held accountable.”
While employed by Robert Warnock, Woods fraudulently charged personal expenses totaling more than $30,000 on a corporate credit card account. She also forged, and made payable to herself, more than $120,000 in unauthorized checks from the corporate bank account, according to the charges and plea agreement.
The maximum penalty for each count of wire fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case in conjunction with the Bessemer Police Department. Mark is prosecuting the case.
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Federal Jury Convicts St. Charles Parish Resident with Narcotics Distribution OffensesRead the Press Release
U.S. Attorney Duane A. Evans announced today that a federal jury convicted RONALD THOMPSON, a St. Charles Parish resident, for violations of the Federal Controlled Substances Act. Following a two-day trial, the jury found THOMPSON guilty of possessing with the intent to distribute quantities of cocaine, crack cocaine, and heroin.
According to the evidence presented at trial, on July 27, 2017, St. Charles Parish Sheriff’s Office detectives witnessed what appeared to be a hand-to-hand drug transaction in a gas station parking lot. They effected a traffic stop on the vehicle involved, which ultimately led to the discovery of a bag containing powder cocaine, crack cocaine, heroin, and ecstasy in the back of a police car where THOMPSON had been placed pending the search of his car. Testimony and other evidence confirmed that Thompson had pulled the bag from inside his pants and shoved it into the seat behind him.
THOMPSON, who has two prior federal felony drug convictions, faces up to 30 years in prison for each count. Sentencing will take place before Judge Susie Morgan.
U.S. Attorney Evans praised the work of the St. Charles Parish Sheriff’s Office and the Drug Enforcement Administration. Assistant United States Attorneys Jeff Sandman and Nicholas D. Moses were responsible for the prosecution.
Federal Jury Convicts Fort Worth Man on Drug and Firearm ChargesRead the Press Release
FORT WORTH, Texas — Following a one-day trial, a federal jury has convicted Lamone Ivory, 46, of Fort Worth, Texas, of multiple drug and firearm offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, on Monday a federal jury convicted Ivory on one count of felon in possession of a firearm, one count of conspiracy to possess with intent to distribute a controlled substance, two counts of possession with intent to distribute a controlled substance and one count of possession of a firearm in relation to a drug trafficking crime. Ivory is scheduled to be sentenced on August 31, 2018, by U.S. District Judge John McBryde.
According to evidence presented at trial, on March 30, 2017, law enforcement executed a search warrant at a Fort Worth residence. As officers approached the rear of the residence, they saw a black object being thrown from a rear window, into the backyard. The black object was seized and determined to be a stolen firearm.
When officers entered the residence they encountered Ivory and Michael Demon Nixon. A search of the home revealed a variety of illegal drugs, including, heroin, marijuana, cocaine, and crack cocaine. Officers also found and seized four firearms.
Ivory has at least two felony convictions, one of which is a 1994 Tarrant County conviction for murder, for which Ivory received eighteen years in prison.
The defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
The Fort Worth Police Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated. Assistant U.S. Attorneys Megan Fahey and Shawn Smith are prosecuting the case.
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Federal Inmate Admits Possessing Images of Child Sexual Abuse While in PrisonRead the Press Release
CAMDEN, N.J. – An Orange, Virginia, man today admitted possessing videos of child sexual abuse while imprisoned at Federal Correctional Institution Fort Dix for previous offenses involving the possession and distribution of child pornography, U.S. Attorney Craig Carpenito announced.
Anthony C. Jeffries, 32, pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of possession of child pornography.
According to documents filed in this case and statements made in court:
Jeffries admitted that he possessed a micro SD Card containing 40 videos of children being sexually abused, including videos of sadistic and masochistic sexual conduct involving infants and toddlers. In connection with his plea, Jeffries also admitted that he was an organizer of criminal activity in the case and that he distributed child pornography to another inmate which had been obtained from the internet.
Jeffries and seven other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that Jeffries and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. Jeffries organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for obtaining child pornography.
At sentencing, Jeffries faces a mandatory minimum term of 10 years in prison and a lifetime of supervised release. Sentencing is scheduled for July 10, 2018.
Charges remain pending against Brian J. McKay, 47, of Brookhaven, Pennsylvania; Christopher D. Roffler, 30, of Virginia Beach, Virginia; Jordan T. Allen, 31, of Plain City, Ohio; Jacob S. Good, 26, of Fredericksburg, Virginia; William H. Noble, 52, of Lowell, Massachusetts; and Charles Wesley Bush, 38, of Knoxville, Tennessee, all of whom were serving sentences for prior child pornography offenses while committing the alleged crimes in this case. The pending charges and allegations are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
An eighth inmate, Erik M. Smith, 36, of Iron Mountain, Michigan, has since pleaded guilty to possession of child pornography. His sentencing is scheduled for May 7, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the investigation. He also thanked officials of the Bureau of Prisons at Federal Correctional Institution Fort Dix for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni and Alyson M. Oswald of the U.S. Attorney’s Office’s Criminal Division in Camden.
Defense counsel: Christopher O’Malley Esq., Camden
District Woman Indicted on Murder and Other Charges in Death of 16-Month-Old DaughterRead the Press Release
WASHINGTON – Faneshia Scott, 28, of Washington, D.C., has been indicted on charges stemming from the death of her 16-month-old daughter and the beatings of her two other minor children, U.S. Attorney Jessie K. Liu announced today.
Scott was arrested on April 3, 2018, following her indictment on March 20, 2018, by a grand jury in the Superior Court of the District of Columbia on two counts of first-degree felony murder, with aggravating circumstances, and seven counts of first-degree cruelty to children. The aggravating circumstances allege that the crime was especially heinous, atrocious or cruel and that the victim was especially vulnerable. The charges carry a potential sentence of life in prison with no possibility of release. Scott is to be arraigned on the charges later today.
According to the government’s evidence, on Tuesday, March 21, 2017 at approximately 3 p.m., the Metropolitan Police Department (MPD) and the District of Columbia Department of Fire and Emergency Medical Services responded to an apartment in the 5400 block of C Street SE after a report that a 16-month-old child at that location was unconscious and not breathing.
When first responders arrived, the child, Rhythm Fields, was lying on the living room floor and citizens who had come to her aid were administering cardiopulmonary resuscitation. The child was cold and had been dead for at least three hours.
According to the District of Columbia Office of the Chief Medical Examiner, Rhythm died of blunt force trauma. Her injuries included 23 old and new rib fractures, contusions and abrasions of the head, neck, torso, and extremities, and a subdural hemorrhage. There also was a detection of dextromethorphan substance found in the child.
According to the government’s evidence, during the investigation of Rhythm’s death, Scott told an MPD detective that she gave her daughter adult cold syrup (dextromethorphan), which was not age appropriate. Instructions on a cough medicine bottle similar to the one administered to the child state, “Do Not Give to Children under Age 12.” A sippy cup/bottle that was found on the scene was forensically examined by the U.S. Drug Enforcement Administration (DEA) and was found to contain dextromethorphan.
In addition to the murder charges, Scott was indicted on five counts of first-degree cruelty to children involving Rhythm, covering the time period between Jan. 1, 2017, and the child’s death. These involve acts that caused various injuries, as well as the administration of cough syrup and the alleged failure to obtain medical treatment for the child.
The other two counts of first-degree cruelty to children allege that Scott beat her two other children, also within the time period of Jan. 1 through March 21, 2017.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by the Metropolitan Police Department. Assistance has been provided by the U.S. Drug Enforcement Administration (DEA), the District of Columbia Office of the Chief Medical Examiner, the District of Columbia Department of Forensic Sciences, and the District of Columbia Child and Family Services Agency. The case is being investigated and prosecuted by Assistant U.S. Attorney Cynthia G. Wright.
District Man Pleads Guilty to Armed RobberyRead the Press Release
WASHINGTON - Anthony Robinson, 25, of Washington, D.C., has pled guilty to a charge of armed robbery stemming from an incident in which he conspired to rob an acquaintance after a party, announced U.S. Attorney Jessie K. Liu.
Robinson pled guilty on April 3, 2018, in the Superior Court of the District of Columbia. The Honorable Judith Bartnoff scheduled a sentencing for June 1, 2018. Robinson faces a statutory maximum of 30 years in prison and a statutory minimum of five years.
According to the government evidence, on Oct. 15, 2016, at approximately 3:30 a.m., Robinson and another man, having conspired to rob the victim, came to the front of the Baron Hotel in the 1500 block of 22nd Street NW, where a party was being held, to execute their plan. The victim was standing on the sidewalk, talking to occupants of a car parked on the street.
When Robinson and his accomplice arrived, the accomplice immediately pointed a gun to the victim’s head and demanded the man’s backpack. Robinson stood a few feet away. The victim handed his backpack to the accomplice, and Robinson urged him to “come on.”
At this point, one of the passengers in the car stepped out and Robinson’s accomplice fired two shots at him; one of these bullets hit the man below his right ear and exited through his neck. The man survived the gunshot wound. Robinson ran down the block to wait for his accomplice. Robinson took the backpack from the accomplice and both men fled the scene. Robinson was arrested on Nov. 7, 2016. No one else has been charged to date.
In announcing the plea, U.S. Attorney Liu commended the work of detectives from the Metropolitan Police Department’s Second District, who investigated the case. She also acknowledged the efforts of Assistant U.S. Attorney Nurudeen Elias, who investigated and indicted the case with assistance from Assistant U.S. Attorney John Giovannelli.
Con Ed Contractor Sentenced to 48 Months’ Imprisonment for Bribery and Tax Evasion ChargesRead the Press Release
Yesterday, in federal court in Brooklyn, Rodolfo Quiambao, the former President and Chief Executive Officer of the engineering and electrical design firm Rudell & Associates, Inc. (Rudell), was sentenced to 48 months’ imprisonment for federal programs bribery and tax evasion in connection with his scheme to pay bribes and kickbacks to supervisors at Consolidated Edison of New York (Con Ed) in exchange for receiving lucrative contracts and other benefits from the public utility services provider. Quiambao was also sentenced to pay a $125,000 fine and more than $4.5 million in restitution to the IRS. At the time of his guilty plea in March 2016, Quiambao agreed to forfeit $1 million in criminal proceeds. Yesterday’s sentencing took place before United States District Judge Allyne R. Ross.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York; Michael Nestor, Inspector General, The Port Authority of New York and New Jersey, Office of the Inspector General; and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Custom Enforcement (ICE), Homeland Security Investigations (HSI), in New York, announced the sentence.
According to court filings and facts presented during court proceedings, starting in approximately 2000, Quiambao surreptitiously and regularly gave Con Ed supervisors hundreds of thousands of dollars in cash and checks in exchange for securing work, including lucrative “sole source” contracts, for his company. Quiambao also engaged in tax evasion by first concealing and then deducting the bribe payments he paid to the Con Ed supervisors as business deductions on his companies’ tax returns.
Quiambao’s sentencing was the latest step in the government’s investigation of bribery and kickback schemes involving employees and contractors of Con Ed. Since 2008, 13 Con Ed supervisors and employees and three Con Ed contractors have been convicted.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Paul Tuchmann and Claire S. Kedeshian are in charge of the prosecution.
The Defendant: RODOLFO QUIAMBAO
Age: 73
Residence: Queens, New YorkE.D.N.Y. Docket No. 15-CR-0515
Colorado Man Pleads Guilty to Robbing Bank in Manhattan, Kan.Read the Press Release
TOPEKA, KAN. – A Colorado man pleaded guilty Monday to robbing a bank in Manhattan, Kan., U.S. Attorney Stephen McAllister said.
Kenneth Wayne Fisher, Jr., 42, formerly of Colorado Springs, Colo., pleaded guilty to one count of bank robbery. Fisher admitted that on Aug. 26, 2015, he robbed Sunflower State Bank at 2710 Anderson Ave. in Manhattan. He gave a teller a note saying, “Give me the money and no tricks.”
A few months after the Manhattan robbery, Fisher was arrested in California. He was extradited to Arkansas to face charges of robbing a bank in Bentonville, Ark., on Aug. 28, 2015. He pleaded guilty and was sentenced to more than eight years for the Arkansas robbery.
Sentencing in this case is set for July 9. He faces up to 20 years in federal prison. McAllister commended the Riley County Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Chinese Scientist Sentenced to Prison in Theft of Engineered RiceRead the Press Release
A Chinese scientist was sentenced to 121 months in a federal prison for conspiring to steal samples of a variety of rice seeds from a Kansas biopharmaceutical research facility.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Assistant Attorney General John C. Demers of the Justice Department’s National Security Division and U.S. Attorney Stephen R. McAllister of the District of Kansas made the announcement.
Weiqiang Zhang, 51, a Chinese national, and U.S. legal permanent resident residing in Manhattan, Kansas, was sentenced by U.S. District Court Judge Carlos Murguia in the District of Kansas. Zhang was convicted on Feb. 15, 2017 of one count of conspiracy to steal trade secrets, one count of conspiracy to commit interstate transportation of stolen property and one count of interstate transportation of stolen property.
Evidence at trial established that Zhang worked as a rice breeder for Ventria Bioscience in Junction City, Kansas. Ventria develops genetically programmed rice to express recombinant human proteins, which are then extracted for use in the therapeutic and medical fields. Zhang has a master’s degree in agriculture from Shengyang Agricultural University in China and a doctorate from Louisiana State University.
According to trial evidence, Zhang acquired without authorization hundreds of rice seeds produced by Ventria and stored them at his residence in Manhattan. The rice seeds have a wide variety of health research applications and were developed to produce either human serum albumin, contained in blood, or lactoferrin, an iron-binding protein found, for example, in human milk. Ventria spent millions of dollars and years of research developing its seeds and cost-effective methods to extract the proteins, which are used to develop lifesaving products for global markets. Ventria used locked doors with magnetic card readers to restrict access to the temperature-controlled environment where the seeds were stored and processed.
Trial evidence demonstrated that in the summer of 2013, personnel from a crop research institute in China visited Zhang at his home in Manhattan. Zhang drove the visitors to tour facilities in Iowa, Missouri and Ohio. On Aug. 7, 2013, U.S. Customs and Border Protection officers found seeds belonging to Ventria in the luggage of Zhang’s visitors as they prepared to leave the United States for China.
“Weiqiang Zhang betrayed his employer by unlawfully providing its proprietary rice seeds to representatives of a Chinese crop institute,” said Acting Assistant Attorney General Cronan. “Today’s sentence demonstrates the significant consequences awaiting those who would steal trade secrets from American companies. The Criminal Division and its law enforcement partners will continue to work closely with companies like Ventria to protect American intellectual property—which is essential to our economy and way of life—against all threats both foreign and domestic.”
“Cross-border intellectual property theft not only hurts victim companies, it also threatens our national security,” said Assistant Attorney General Demers. “FBI’s vigilance stopped Ventria’s intellectual property from leaving our country in the nick of time, but it was Ventria’s cooperation that allowed us to hold Zhang accountable for his crimes.”
“Ventria invested years of research and tens of millions of dollars to create a new and beneficial product,” said U.S. Attorney McAllister. “It is vital that we protect such intellectual property from theft and exploitation by foreign interests. We all benefit when American companies continue to drive socially valuable advancements in food, medicine and technology.”
The FBI’s Little Rock, Arkansas, Field Office and Kansas City, Missouri, Field Office, U.S. Customs and Border Protection and the U.S. Attorney’s Office for the Eastern District of Arkansas investigated the case. Trial Attorney Matt Walczewski of the National Security Division, Trial Attorneys Brian Resler and Evan Williams of the Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Scott Rask of the District of Kansas prosecuted the case.
Chinese Scientist Sentenced to Prison in Theft of Engineered RiceRead the Press Release
KANSAS CITY, KAN. – A Chinese scientist was sentenced today to 121 months in a federal prison for conspiring to steal samples of a variety of rice seeds from a Kansas biopharmaceutical research facility.
U.S. Attorney Stephen R. McAllister of the District of Kansas, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Assistant Attorney General John C. Demers of the Justice Department’s National Security Division made the announcement.
“Ventria invested years of research and tens of millions of dollars to create a new and beneficial product,” said U.S. Attorney McAllister. “It is vital that we protect such intellectual property from theft and exploitation by foreign interests. We all benefit when American companies continue to drive socially valuable advancements in food, medicine and technology.”
Weiqiang Zhang, 51, a Chinese national, and U.S. legal permanent resident residing in Manhattan, Kan., was sentenced by U.S. District Court Judge Carlos Murguia in the District of Kansas. Zhang was convicted on Feb. 15, 2017, of one count of conspiracy to steal trade secrets, one count of conspiracy to commit interstate transportation of stolen property and one count of interstate transportation of stolen property.
Evidence at trial established that Zhang worked as a rice breeder for Ventria Bioscience in Junction City, Kansas. Ventria develops genetically programmed rice to express recombinant human proteins, which are then extracted for use in the therapeutic and medical fields. Zhang has a master’s degree in agriculture from Shengyang Agricultural University in China and a doctorate from Louisiana State University.
According to trial evidence, Zhang acquired without authorization hundreds of rice seeds produced by Ventria and stored them at his residence in Manhattan. The rice seeds have a wide variety of health research applications and were developed to produce either human serum albumin, contained in blood, or lactoferrin, an iron-binding protein found, for example, in human milk. Ventria spent millions of dollars and years of research developing its seeds and cost-effective methods to extract the proteins, which are used to develop lifesaving products for global markets. Ventria used locked doors with magnetic card readers to restrict access to the temperature-controlled environment where the seeds were stored and processed.
Trial evidence demonstrated that in the summer of 2013, personnel from a crop research institute in China visited Zhang at his home in Manhattan. Zhang drove the visitors to tour facilities in Iowa, Missouri and Ohio. On Aug. 7, 2013, U.S. Customs and Border Protection officers found seeds belonging to Ventria in the luggage of Zhang’s visitors as they prepared to leave the United States for China.
“Weiqiang Zhang betrayed his employer by unlawfully providing its proprietary rice seeds to representatives of a Chinese crop institute,” said Acting Assistant Attorney General Cronan. “Today’s sentence demonstrates the significant consequences awaiting those who would steal trade secrets from American companies. The Criminal Division and its law enforcement partners will continue to work closely with companies like Ventria to protect American intellectual property—which is essential to our economy and way of life—against all threats both foreign and domestic.”
“Cross-border intellectual property theft not only hurts victim companies, it also threatens our national security,” said Assistant Attorney General Demers. “FBI’s vigilance stopped Ventria’s intellectual property from leaving our country in the nick of time, but it was Ventria’s cooperation that allowed us to hold Zhang accountable for his crimes.”
The FBI’s Little Rock, Arkansas, Field Office and Kansas City, Missouri, Field Office, U.S. Customs and Border Protection and the U.S. Attorney’s Office for the Eastern District of Arkansas investigated the case. Trial Attorney Matt Walczewski of the National Security Division, Trial Attorneys Brian Resler and Evan Williams of the Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Scott Rask of the District of Kansas prosecuted the case.
Chinese Citizen Pleads Guilty to Mail Fraud and Smuggling Related to Dietary Supplement SchemeRead the Press Release
DALLAS – Gao Mei Fang (a.k.a. Amy Gao), of Shanghai, China, pleaded guilty in Dallas to mail fraud and smuggling charges in connection with a scheme to sell mislabeled dietary supplements, Erin Nealy Cox, U.S. Attorney for the Northern District of Texas made the announcement today.
Gao was the supply chain manager for Genabolix USA, Inc. and Shanghai Yongyi Biotechnology Co., Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. In pleading guilty, Gao admitted that she agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Gao and two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Gao admitted that she knew major American dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA.
Gao also admitted to making false statements to FDA’s import division regarding a shipment of synthetic stimulants entering the United States.
“Protecting Americans from fraud and ensuring the safety of the products they consume are top priorities of the Department of Justice,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will pursue those who attempt to import dangerous and illegal commodities into the United States.”
Gao pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. She faces a statutory maximum sentence of 20 years of imprisonment on both the mail fraud and smuggling counts. The Court set sentencing for October 1, 2018.
“As evidenced by the global scope of this investigation and this plea of guilty, my office is fully committed to protecting our citizens,” said U.S. Attorney Nealy Cox. “We will continue to vigorously investigate and prosecute those who fraudulently mislead and endanger the American public.”
“U.S. consumers trust that their dietary supplements are safe and contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”
Gao was arrested in September 2017 along with a co-defendant, Zhang Xiao Dong, while attending a dietary supplement trade show in Las Vegas. A third defendant named in the case, Hu Chang Chun, is not believed to be in the United States.
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; and David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.
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Carrolton Man Pleads Guilty for His Role in a “Foreclosure Rescue Scheme” That Exploited Vulnerable Homeowners Facing ForeclosureRead the Press Release
DALLAS — Mark Demetri Stein, 38, of Carrollton, Texas, appeared in federal court this morning before U.S. Magistrate Judge Rebecca Rutherford and pleaded guilty to one count of mail fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Stein faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Restitution could also be ordered. Stein will remain on bond pending sentencing which will be set at a later date.
A federal grand jury in Dallas returned an indictment in December 2016 charging Stein and three others with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013. Bruce Kevin Hawkins, 52, of Desoto, Texas, Richard Bruce Stevens, 51, of San Antonio, Texas, and Christina Renee Caveny, 37, of Dallas, have pleaded guilty to their roles in the scheme. Hawkins and Caveny have been sentenced to 41 months and 15 months in federal prison, respectively. Stevens is scheduled to be sentenced before U.S. District Judge David C. Godbey on May 7, 2018.
According to documents filed in the case, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment. Hawkins and other conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.
Furthermore, Hawkins and other conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.
As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”
Further, according to plea documents, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.
The defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.
This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative, United States Attorney’s Office, Northern District of Texas. These bankruptcy prosecutions were a part of a larger number of criminal referrals regularly made to this office by the United States Trustee’s Office, Dallas, Texas. Since 2013, these focused prosecutions have resulted in 25 convictions of individuals engaged in various types of fraudulent conduct within the United States Bankruptcy Courts.
The Dallas FBI investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Carlos Efren Reyes-Rosado, aka Farruko, Arrested for Bulk Cash SmugglingRead the Press Release
SAN JUAN, P.R. – Yesterday, Carlos Efren Reyes-Rosado, aka Farruko, was arrested for failure to declare transportation of monetary instruments in excess of $10,000 and bulk cash smuggling into the United States, announced United States Attorney Rosa Emilia Rodríguez-Vélez. The case is being investigated by Homeland Security Investigations (HSI) and the Airport Investigations and Tactical Team (AirTAT).
On April 2, 2018, Reyes-Rosado traveled by helicopter from the Dominican Republic to Puerto Rico. When Reyes-Rosado filled out the CBP 6059B form, he indicated that he was not carrying more than $10,0000. He was initially detained at the Isla Grande airport, after a search of his bags revealed that he was carrying approximately $51,802 in US currency in his luggage and in the soles of his shoes in his bags.
On April 3, 2018, US Magistrate Judge Bruce McGiverin authorized a complaint and the arrest warrant was issued. The preliminary hearing is scheduled for 1:00 pm today.
Assistant U.S. Attorney María L. Montañez is in charge of the prosecution of the case. If convicted, the defendant faces a fine of no more than $250,000, imprisonment of up to 5 years, or both; and forfeiture of the property involved in the offense. The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty in a court of law.
Cape Cod Man who Disguised Money as Gift-Wrapped Books Ordered to Forfeit Funds by Federal JudgeRead the Press Release
BOSTON – A Cape Cod man who attempted to carry $100,000, gift-wrapped to look like books, in his carry-on luggage at Boston Logan International Airport, was ordered to forfeit the money by a federal court judge, who held that the money was substantially connected to drug trafficking.
Daniel R. Ormond, 32, having booked a one-way flight from Boston to California on May 26, 2016, attempted to pass through a Transportation Security Administration (TSA) checkpoint with a bag that contained two gift-wrapped packages, which appeared to be books. Further inspection revealed, however, that the gift-wrapped “books” were actually two separate bundles of currency sandwiched between cardboard and then wrapped in carbon-paper.
Ormond initially denied having any knowledge of the currency in his bag and claimed that his mother packed the two gifts, which he said were intended for a relative graduating high school in northern California. When contacted, Ormond’s mother denied providing her son with gifts or currency, and denied the existence of a relative graduating high school in California. While Ormond was talking to law enforcement, he received a call from a friend, who asked whether Ormond was able to get through security without any issues. In addition, a police K-9 alerted officers to the currency.
In October 2016, the United States filed a complaint for forfeiture of the $100,000, which alleged that the money was proceeds of drug trafficking, or money intended to be used for drug trafficking. Recently, U.S. District Court Judge Douglas P. Woodlock entered judgment in favor of the United States and ordered the forfeiture of the money. The Court found that the substantial amount of money seized from Ormond, the packaging of the money, Ormond’s last minute travel to a known narcotics source area, Ormond’s inconsistent statements to investigators, the K-9 alert, Ormond’s past criminal history, and testimony from other witnesses established that the currency was substantially connected to drug trafficking. The Court also found that Ormond failed to provide any explanation for the source of the funds in his challenge to the forfeiture proceeding.
United States Attorney Andrew E. Lelling; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police Force; and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement. The case was handled by Assistant United States Attorney Doreen M. Rachal of Lelling’s Civil Division.
Canadian Pharmacist Sentenced for Distributing Counterfeit and Adulterated Botox to Local DoctorsRead the Press Release
St. Louis, MO – Nikhil Buhecha, a resident of Vancouver, British Columbia, Canada, pled guilty today and was sentenced to 36 months’ imprisonment for conspiring to distribute counterfeit, misbranded, and adulterated Botox® into the United States, including multiple shipments to two doctors located in St. Louis County, Missouri.
According to defendant’s plea agreement, defendant owned and operated a sophisticated wholesale drug distribution business involving multiple persons in Canada, Panama, and Turkey. Defendant sourced Botox® from Turkey and shipped it to multiple U.S. doctors in Missouri and other states. According to the label for Botox® Cosmetic that was approved by the U.S. Food and Drug Administration (FDA), unopened vials of Botox® Cosmetic should be stored in a refrigerator at temperatures between 2° to 8° Celsius before dispensing to patients. Defendant’s drugs were adulterated because defendant’s business did not keep the Botox® at constant cold temperatures, and sometimes shipped and stored these drugs with no refrigeration or insulation. Further, some of the Botox® sold by defendant had counterfeit exterior packaging, and the manufacturing lot numbers on the exterior of the drugs’ cartons did not match the lot numbers on the drug vials inside the cartons.
FDA issued several public safety alerts about these events. This ongoing investigation has led to a number of other related prosecutions in the District, including Dr. Erick Falconer, Greg Martin, Ozkan Semizoglu, and Sabahaddin Akman. Two other Canadian nationals were convicted and sentenced under similar charges in August 2015. Kamaldeep Sandhu received a sentence of 24 months of imprisonment, while Navdeep Sandhu received a sentence of 3 months.
“Americans must have confidence that the FDA-regulated products they use are authentic, safe and properly labeled,” said Spencer E. Morrison, Special Agent in Charge, FDA OCI’s Kansas City Field Office. “We remain fully committed to aggressively pursuing those who place unsuspecting U.S. consumers at risk by distributing illegal drugs.”
This case was investigated by FDA’s Office of Criminal Investigations, with assistance from the College of Pharmacists of British Columbia and the Royal Canadian Mounted Police, as well as INTERPOL Washington and the U.S. Marshals Service.
Canadian Man Sentenced to Time Served for Illegal Entry into the United StatesRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Joey Antoine Maillet, 36, of Dieppe, New Brunswick, pleaded guilty and was sentenced yesterday in U.S. District Court by Magistrate Judge John C. Nivison to time served (49 days) for entering the United States at a point other than a designated Customs station.
According to court records, on November 16, 2017 Maillet entered the United States from Canada on foot across a train trestle in Calais, Maine. He was apprehended by the U.S. Border Patrol the next day and admitted to illegally entering the country. Maillet, who has dual U.S. and Canadian citizenship, provided an address in Leominster, Massachusetts. He was released and issued a summons for the offense. When he failed to appear in court on February 7, 2018, a warrant issued for his arrest. On February 16, 2018, Maillet was arrested in Miami, Florida.
The investigation was conducted by the U.S. Border Patrol which is the mobile, uniformed law enforcement arm of U.S. Customs and Border Protection within the Department of Homeland Security responsible for securing U.S. borders between ports of entry. The U.S. Border Patrol relies on cooperation and assistance from members of the community that live along the border. If you observe suspicious activity in the border area, please do not hesitate to contact the U.S. Border Patrol at (800) 851-USBP; if this activity is in Canada, please call (800) 222-TIPS.
California Man Sentenced for Money Laundering Conspiracy in Connection with Trafficking MarijuanaRead the Press Release
United States Attorney R. Trent Shores announced that United States District Judge Claire V. Eagan sentenced Phong Do, 36, of Westminster, California, to serve 30 months in federal prison for Conspiracy to Launder Money.
Over the course of approximately three years, Do supplied a local marijuana distributor with high-grade marijuana. Do shipped marijuana to the local distributor and caused the distributor to deposit payments for the marijuana into several accounts held at Chase and Bank of America banks. Subsequently, Do withdrew the drug proceeds from the accounts at the banks’ Westminster, California branches. Throughout the scheme, Do laundered almost $1,000,000.
“This prosecution was the result of a concerted and relentless campaign to target sources of supply responsible for bringing bulk quantities of marijuana into the Northern District of Oklahoma,” said U.S. Attorney Trent Shores.
This prosecution was part of Operation “That’s Not Mine,” an Organized Crime and Drug Enforcement Task Force (OCDTEF) investigation. The prosecution resulted from a joint investigation conducted by the Federal Bureau of Investigation, Internal Revenue Service, United States Postal Inspector, and Broken Arrow Police Department. Assistant United States Attorney Joel-lyn A. McCormick handled the prosecution of this case.
Bookkeeper at Two West Loop Restaurants Arrested on Federal Fraud Charge for Allegedly Misappropriating More Than $600,000Read the Press Release
CHICAGO — A former bookkeeper for two restaurants in the West Loop neighborhood of Chicago was arrested today on a federal fraud charge for allegedly misappropriating more than $600,000 from the eateries.
RENEE M. JOHNSON worked as a bookkeeper for One Off Hospitality LLC, which owns several bars and restaurants in Chicago, including the West Loop eateries Blackbird and Avec. Johnson was a signatory on One Off’s bank accounts, and her duties included processing checks to vendors who provided food, labor and utilities to the restaurants. According to a federal criminal complaint, Johnson wrote hundreds of unauthorized checks from One Off’s accounts to pay for her personal expenses, including credit card debt and mortgages on real estate holdings in Chicago. From 2011 to 2017, the scheme caused a loss of approximately $604,113, mostly sustained by Blackbird and Avec, the complaint states.
Johnson, 60, of Chicago, was charged with one count of mail fraud. She was taken into custody this morning and is scheduled to make an initial court appearance at 3:00 p.m. today before U.S. Magistrate Judge Sheila M. Finnegan.
The complaint was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
According to the complaint, Johnson made fraudulent entries in One Off’s accounting system to hide the theft. She often made a check payable to one of her own personal creditors, but deleted the entry in One Off’s system, the complaint states. In some instances Johnson cut a check to pay personal expenses, and then quickly cut a new check with the same check number to pay for a legitimate corporate expenditure, according to the complaint.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Mail fraud is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Sunil R. Harjani.
Birmingham Doctors and Co-Conspirators Indicted for $7.8 Million Health Care Fraud, Unlawful Drug Distribution, Money LaunderingRead the Press Release
BIRMINGHAM – A March indictment unsealed today charges four people in connection to a $7.8 million health care fraud conspiracy at a Birmingham clinic, and charges that the husband and wife physicians who operated the clinic used it, in part, as a “pill mill.”
U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp Jr., and Drug Enforcement Administration Assistant Special Agent in Charge Bret Hamilton announced the charges.
The 44-count indictment returned March 30 charges Dr. PATRICK EMEKA IFEDIBA, 59, his wife, Dr. UCHENNA GRACE IFEDIBA, 53, both of Shelby County, Patrick Ifediba’s sister, NGOZI JUSTINA OZULIGBO, 48, of Trussville, and CLEMENT ESSIEN EBIO, 60, of Hoover, with the health care fraud conspiracy. It brings other charges against the various defendants, including unlawful drug distribution conspiracy and money laundering conspiracy. A federal judge unsealed the 44-count indictment following Patrick Ifediba’s arrest.
“The opioid crisis in the United States accounts for the deaths of tens of thousands of Americans every year,” Town said. “Physicians who pocket millions while taking advantage of patients, many of whom are addicted to opioids, and unnecessarily drive up health care costs for both patients and insurance providers, knowingly sacrifice the efficacy of care for greed,” Town said. “Physicians who engage in this illicit practice will soon be trading their white coats for prison stripes.”
“The FBI and our partners will continue to pursue and bring to justice those who violate their Hippocratic Oath for greed and needlessly destroy lives, families and communities,” Sharp said.
“DEA has dedicated an entire enforcement group to investigating drug dealers who hide behind medical degrees in the state of Alabama, and as long as we have doctors in this state who base their decisions on profits versus best medical care, we will continue to do so,” Hamilton said. “DEA agents and task force officers have been investigating the Ifedibas and their coconspirators for three years. This is a testament to the dedication and patience of these investigators and should be a warning to any medical providers who would resort to fraud and illegal prescribing.”
“As alleged, the indictment describes schemes motivated by unbridled greed in which the doctors allegedly used their prescribing authority to force unwilling, but ultimately opioid-dependent, patients to submit to unnecessary allergy testing and treatment in exchange for narcotics prescriptions,” said Assistant U.S. Attorney Mohammad Khatib. “Such conduct is not only anti-medicine; it is a crime for which justice demands a serious response.”
The charges all stem from the defendants’ association with Care Complete Medical Clinic, a private clinic at 1300 Bessemer Road in Birmingham that provided allergy and pain management services. The indictment charges that the four defendants stole millions of dollars from health care programs by fraudulently billing for allergy treatments and services. Apart from the health care fraud conspiracy and scheme, Uchenna Ifediba is further charged with one count of false statements in connection with health care matters.
Drs. Patrick and Uchenna Ifediba also are charged as part of an unlawful drug distribution conspiracy. The husband and wife team churned out prescriptions for schedule II controlled substances – opioid painkillers – for no legitimate medical purpose in order to maximize personal financial gain, according to the indictment. The pair also face one count of maintaining drug-involved premises for allegedly operating CCMC, in part, as a pill mill. Patrick Ifediba also faces 14 counts, and Uchena Ifediba, five counts, of unlawful distribution of controlled substances.
Patrick Ifediba and Ozuligbo are further charged as part of a money laundering conspiracy. Among other violations, the siblings moved the proceeds of CCMC’s unlawful health care fraud and pill mill scheme in order to hide the illicit nature of the funds, according to the indictment. Dr. Patrick Ifediba faces an additional three counts of concealment money laundering, and four counts of engaging in monetary transactions in criminally derived property valued at more than $10,000. The indictment charges Uchenna Ifediba and Ozuligbo with three counts and one count, respectively, of concealment money laundering.
The charges of conspiracy to commit health care fraud and health care fraud both carry maximum penalties of 10 years in prison and a $250,000 fine. Making false statements related to health care matters carries a maximum penalty of five years in prison and a $250,000 fine.
Conspiracy to distribute controlled substances and distribution of controlled substances both carry a maximum penalty of 20 years in prison and a $1 million fine. Maintaining drug-involved premises carries a maximum penalty of 20 years in prison and a $500,000 fine.
Money laundering conspiracy and laundering of monetary instruments both carry a maximum penalty of 20 years in prison and a $250,000 fine. Engaging in monetary transactions in criminally derived property worth more than $10,000 carries a maximum penalty of 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property involved.
The FBI and DEA investigated the case, which Assistant U.S. Attorneys Khatib and Jim Weil are prosecuting.
An indictment carries only charges. Defendants are presumed innocent unless and until proven guilty.
ifediba indictment###
Atlantic County, New Jersey, Pharmaceutical Representative Admits Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – A Linwood, New Jersey, woman today admitted using phony claims for medically unnecessary prescriptions to defraud New Jersey state health benefits programs, U.S. Attorney Craig Carpenito and New Jersey Attorney General Gurbir S. Grewal announced.
Tara Lamonaca, 43, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
From January 2015 through April 2016, Lamonaca recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” Certain compound medications – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators knew that these medications were covered by an entity referred to in the informations as the “Pharmacy Benefits Administrator.” The Pharmacy Benefits Administrator provided benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents.
Lamonaca and others recruited individuals covered by the Pharmacy Benefits Administrator, including public employees, to fraudulently obtain unnecessary compounded medications from the Compounding Pharmacy. Lamonaca obtained insurance information from those individuals and gave it to another conspirator, who completed the prescriptions and had a doctor sign them without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
The pharmacy then paid one of their conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Lamonaca and other members of the conspiracy.
According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey, including $530,527.01 for prescriptions submitted by Lamonaca and her cohorts. Lamonaca received approximately $89,855.13 for her role in the scheme.
Lamonaca faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Lamonaca must forfeit her criminal proceeds and pay restitution in an amount to be determined at sentencing. Sentencing is scheduled for July 19, 2018.
Eighteen other conspirators have pleaded guilty from August through March 2018 and await sentencing.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, with the investigation leading to the guilty pleas. He also thanked the Pensions and Financial Transactions Section of the Division of Law, within the Attorney General’s Office, under the direction of Attorney General Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and R. David Walk, Jr. of the U.S. Attorney’s Office in Camden.
Defense counsel: Barry Gross Esq., Philadelphia
Atlanta man pleads guilty to distributing LSD and DMT in Gainesville, GeorgiaRead the Press Release
GAINESVILLE, Ga. - Brandon Eugene Williams has pleaded guilty to distributing the hallucinogenic drugs LSD and dimethyltryptamine (“DMT”) to an FBI informant on two occasions.
“This defendant willingly distributed almost 200 hits of LSD and quantities of DMT to an FBI informant,” said U.S. Attorney Byung J. “BJay” Pak. “These drugs are very dangerous if ingested. We will continue to vigorously investigate and prosecute individuals who distribute these drugs.”
“Every time we put a drug dealer in prison, it makes our communities a bit safer,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “Hopefully, Williams sentence will give him time to think about changing his direction in life.”
According to U.S. Attorney Pak, the charges and other information presented in court: Brandon Eugene Williams and another individual met with an FBI informant on April 13, 2017, to discuss distributing DMT and other drugs. It was at that meeting that he gave the informant a sample of DMT.
On June 4, Williams advised the informant that he had a sheet of LSD hits to sell. Later, on June 6, he sold the informant a sheet containing 97 hits of LSD and another quantity of DMT. Then in early July, Williams and the informant discussed a second deal for LSD and DMT. Later that month, on July 19, Williams delivered to the informant another 100 hits of LSD and more DMT. After the informant advised surveillance agents that the drugs had been received, the agents arrested Williams.
Sentencing for Brandon Eugene Williams, 31, of Atlanta, Georgia, has not yet been scheduled. Williams pleaded guilty March 29, 2018.
This case is being investigated by the FBI and members of the North Georgia Major Offenders Task Force (NGMOTF). The NGMOTF is a FBI led, Safe Streets Task Force, with members from the Cherokee County Sheriff’s Office, Gainesville Police Department, Georgia Bureau of Investigation, Hall County Sheriff’s Office, and Lumpkin County Sheriff’s Office.
Assistant U.S. Attorney William L. McKinnon, Jr. is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
3 April 2018
Wrong Turn Leads to Drug Arrest of Two Men for Possession with Intent to Distribute CocaineRead 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 Jose Miguel Cedeno-Olivencia, 44, and Pablo Diaz-Pena, 28, with ties to both New Jersey and Puerto Rico, were arrested and charged by criminal complaint with conspiracy to possess with intent to distribute cocaine and possession with intent to distribute cocaine. The charges carry a minimum penalty of five years, a maximum penalty of life, and a $5 million fine.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that on April 1, 2018, at approximately 3:45 a.m., the defendants took a wrong turn on the Peace Bridge and were directed back to the United States by Canadian border officials. Upon return, U.S. Customs and Border Protection officers referred the vehicle to secondary inspection, where officers found a plastic Tupperware container between the rear seat and a subwoofer containing over a kilogram of cocaine powder, as well as $5,112.00 cash. The defendants claimed to be driving from New Jersey on vacation. Cedeno-Olivencia has a prior federal felony conviction for controlled substance distribution.
The defendants made an initial appearance on April 2, before U.S. Magistrate Judge Jeremiah J. McCarthy. The defendants are being held pending a detention hearing.
The criminal complaint is the result of an investigation by the United States Department of Homeland Security, including Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Kevin Kelly, Special Agent-in-Charge; and Customs and Border Protection, under the direction of Rose Brophy, Director of Field Operations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Woman from American Samoa Sentenced for Filing Approximately 200 Fraudulent Tax Returns on Behalf of Other IndividualsRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that an American Samoan woman has been sentenced in federal court for filing approximately 200 fraudulent tax returns on behalf of other individuals living in American Samoa seeking over $1 million in fraudulent returns.
Corina F. Ifopo, 54, of American Samoa, was sentenced today by Chief U.S. District Judge Timothy M. Burgess, to serve two years in prison, followed by a three-year term of supervised release. Ifopo previously pleaded guilty on Dec. 12, 2017, to 28 counts of false claims to a government agency.
According to court documents, Ifopo became the subject of a federal investigation when the IRS fraud detection center identified approximately 200 tax returns claiming over $1 million in refunds that were fraudulently claimed by residents in American Samoa. These claims were linked with commonalities including a fictional post office box used by Ifopo, with some or all of the related funds being funneled through accounts linked to Ifopo.
The investigation revealed that, beginning in May 2014 and continuing to February 2016, Ifopo falsely claimed that the individuals lived in the United States, including Alaska, and falsely claimed that they were owed refunds when they were not. The false claims included listing false dependents, false withholdings, and claiming earned income credits when they were not applicable.
IRS Criminal Investigation (“IRS-CI”) conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Aunnie Steward.
Wholesale Jewelry Distributor Sentenced in Multi-Million Dollar Fraud SchemeRead the Press Release
PROVIDENCE – A Rhode Island jewelry distributor who admitted to orchestrating a long-running fraud scheme that defrauded a debtor finance company of more than $3.6 million dollars was sentenced on Monday to 48 months in federal prison.
Gerald Kent, 52, of Groton, CT, owner and operator of Kent Jewelry, formerly located in Johnston, RI, admitted that he executed a fraud scheme while selling his company’s jewelry on the Internet, primarily using websites such as Groupon.com and Zulily.com.
Kent was also ordered to serve 3 years supervised release upon completion of his term of incarceration and to pay restitution in the amount of $3,609,228.13. Kent pled guilty on December 20, 2017, to one count each of wire fraud and aggravated identity theft.
The U.S. Sentencing Guidelines imprisonment range in this matter is 63-78 months, with an additional sentence of 24 months as to the charge of aggravated identity theft. Pursuant to a Plea Agreement filed in this matter, the government recommended the court impose a sentence of 60 months in incarceration.
The sentence, imposed by U.S. District Court Chief Judge William E. Smith, is announced by United States Attorney Stephen G. Dambruch, Resident Agent in Charge of the Providence Office of the U.S. Secret Service Brian Deck, and Special Agent in Charge of the Federal Bureau of Investigation Boston Division Harold H. Shaw.
At the time of his guilty plea, Kent admitted to the Court that he submitted fraudulent invoices to a factoring (debtor finance) company based in Chicago, Ill., mostly from Groupon and Zulily, which resulted in payments to him of nearly $5 million dollars. Kent admitted that he created hundreds of fraudulent invoices which were submitted to the factoring company for which he received payment; created and used a fraudulent clone of Groupon, Inc.’s website; enlisted coconspirators to pose as Groupon employees; and opened bank accounts in the names of Groupon and Zulily, Inc., in order to deceive the debtor finance company into believing it was receiving payments from these companies.
Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. Factoring companies work with businesses to provide working capital in order to grow their businesses without having to wait for outstanding accounts receivables to be paid.
The case was prosecuted by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams.
The matter was investigated by the United States Secret Service and the Federal Bureau of Investigation.
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Wetzel County man indicted on firearms chargesRead the Press Release
WHEELING, WEST VIRGINIA – Joseph Harrison, of Pine Grove, West Virginia, was indicted today by a federal grand jury on firearms charges, United States Attorney Bill Powell announced.
Harrison, age 48, was indicted on two counts of “Felon in Possession of a Firearm and Ammunition.” Harrison, having previously been convicted of a felony, is accused of having two .22 caliber revolvers, a .380-caliber pistol, and rounds of ammunition for the firearms in October 2017 and January 2018 in Wetzel County.
Harrison faces up to 10 years incarceration and a fine of up to $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney David J. Perri is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wetzel County Sheriff’s Office investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
United States Attorney’s Office and McKinney School of Law co-sponsor Indianapolis job fairRead the Press Release
Office to work with Indiana University McKinney School of Law and PACE to bring job opportunities for formerly incarcerated individuals
PRESS RELEASE
Indianapolis – United States Attorney Josh J. Minkler, Indiana University Robert H. McKinney School of Law, Dean Andrew Klein and PACE Executive Director, Rhiannon T. Edwards today announced a partnership to help bring community-wide resources and a job fair to individuals returning to Central Indiana after having been incarcerated.
When: Friday, April 6, 2018, from 10:00am – 2:00pm
Where: Light of the World Christian Church, 4646 North Michigan Road, Indianapolis, Indiana, 46228.
“Helping citizens return to a normal life after prison is a responsibility we all shoulder,” said Minkler. “Getting someone on their feet with a job, transportation, a place to live and a support system gives them purpose as well as reduces crime and recidivism.”
"The Federal District Court fully recognizes the importance of helping previously incarcerated individuals become re-integrated into society. There is always a delicate balance between holding people accountable and helping to give them a second chance through viable jobs,” said U.S. District Judge Tanya Walton Pratt. “I applaud the employers who are willing to take a chance on people who are striving to become more productive. Work is often more than a job but a great source of pride.”
“At McKinney, the law school has a demonstrated commitment to helping individuals re-enter into society,” said Dean Klein. “Professors, staff, and law students work with community agencies throughout the year to provide a supportive network to those newly released persons seeking independence and stability outside of the prison walls. The fair hopes to bring critical resources and opportunities together in one central location.”
“PACE has been dedicated to serving those returning to our community for more than 50 years,” said PACE Executive Director Rhiannon T. Edwards. “We are committed to ensuring that everyone receives a second chance and are thrilled to be partnering with the United States Attorney’s Office on this job fair. Obtaining self-sufficiency is key to the reduction of criminal activity and increased public safety. Criminal justice and community partnerships are essential to lowering recidivism in Marion County.”
"The Reentry Fair will assist the U.S. Probation Office in targeting key barriers to successful reentry,” said Chief U.S. Probation Officer Dwight Wharton. “Securing employment, finding affordable housing, navigating complex child support issues and obtaining proper identification are obstacles many of our returning citizens face. By specifically targeting these areas, the Reentry Fair can address several important barriers in one setting. The U.S. Probation Office is grateful for the hard work of those involved in making this special event a reality. Their efforts pay dividends individually and within the communities we both live and serve."
Some of the employers participating in the job fair include City of Indianapolis-Marion County Human Resource Division, IndyGo, Goodwill, Fed Ex, Comcast, UPS, Jiffy Lube, Penske Logistics, Home Depot, the Indiana Bureau of Motor Vehicles and so many more, all of which are hoping to fill a range of positions. The goal of the job fair is to give formerly incarcerated individuals the opportunity to meet with many local employers from a wide range of industries.
Job fair participants will also be able to meet with a range of community service providers including Indiana Department of Workforce Development, PACE and Independence Job Corps. All of these community service providers have valuable resources to share with this population.
Members of the McKinney Law School community will be managing the resource fair with the assistance from Indiana Legal Services, the Marion County Bar Association, and local law firms including Faegre Baker Daniels, Bingham, Greenebaum and Doll, Ice Miller and Barnes & Thornburg. The resource fair will focus on providing free brief service and advice in the areas of record expungement, child support, license reinstatement and specialized driving privileges. In addition, the fair will provide assistance with resume drafting, SNAP/HIP2 questions and applications, as well as Section 8 and low income housing information.
Formerly incarcerated individuals face many barriers upon their release. The purpose of the Community-Wide Job Fair and Resource Fair is to provide returning citizens with the opportunity to connect with useful re-entry and community agencies that will help provide referrals and resources to enhance their employment opportunities.
U.S. Attorney Minkler thanks all of our partners and the community for their continued support of this re-entry initiative.
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U.S. Attorney’s Office Commemorates National Crime Victims’ Rights Week, April 8-14Read the Press Release
HONOLULU – The United States Attorney’s Office in Hawaii, in commemoration of National Crime Victims’ Rights Week (NCVRW), April 8-14, 2018, is participating with the Department of Commerce and Consumer Affairs in a Financial Literacy Fair on April 4 from 10:00 a.m. to 1:00 p.m. at Tamarind Park at Bishop Square in Honolulu, to raise awareness about crime victims’ issues and rights and introduce the community to the important resources and services available. According to the most recent Bureau of Justice Statistics survey, victims experience more than five million violent crimes and nearly 15 million property victimizations a year.
The Office for Victims of Crime (OVC) of the U.S. Department of Justice leads communities throughout the country in their annual observances of National Crime Victims’ Rights Week, April 8-14, by promoting victims’ rights and honoring crime victims and those who advocate on their behalf. This year’s theme—Expand the Circle: Reach All Victims—highlights how the investment of communities in crime victims expands the opportunity for victims to disclose their victimization, connect with services, and receive the support they need. The theme also acknowledges the many barriers facing victims of crime especially those with disabilities, LGBTQ victims, older adults, speakers with limited English proficiency, American Indians and Alaska Natives, and others from historically marginalized communities.
The U.S. Attorney’s Office and OVC encourage widespread participation in the week’s events and in other victim-related observances throughout the year. The U.S. Department of Justice will host OVC’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C., to honor outstanding individuals and programs that serve victims of crime. Please call 855-4-VICTIM (842846) or visit www.VictimConnect.org for additional information about victims’ rights and options – confidentially. You may also contact the U.S. Attorney’s Office, District of Hawaii, Victim Witness Program at 808-541-2850 or visit the OVC website, www.ovc.gov.
Two men indicted on drug charges for transporting more than 150 kilograms of cocaine to GeorgiaRead the Press Release
NEWNAN, Ga. - Abubakar Sakapala and Alick Banda have been charged by a federal grand jury with drug conspiracy and possession charges for transporting cocaine from Texas to Georgia in a tractor-trailer. Their scheme was uncovered during a general motor carrier compliance inspection on Interstate 20 in Haralson County, Georgia.
“Sakapala and Banda allegedly transported cocaine to Georgia with a street value of approximately $5.8 million,” said U.S. Attorney Byung J. “BJay” Pak. “However, thanks to the efforts of our law enforcement partners, these defendants were stopped before they had a chance to deliver this poison to our streets.”
“This cocaine posed a clear and present danger to the citizens of this country, however, because of great police work these drugs will never reach the intended consumer,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “The successful prosecution of this case illustrates that fruitful results can be achieved through the cooperative efforts of federal, state and local law enforcement.”
According to U.S. Attorney Pak, the indictment, and other information presented in court: On March 13, 2018, Georgia State Patrol (“GSP”) stopped a tractor-trailer traveling along Interstate 20 in Haralson County, Georgia for a general motor carrier compliance inspection. Sakapala was driving the tractor-trailer at the time. GSP found Banda allegedly attempting to hide in the sleeper compartment of the tractor by laying under some covers.
GSP questioned Sakapala, who gave them inconsistent statements about how he had acquired the tractor-trailer. GSP examined Sakapala’s driver’s log and noticed he falsely reported that he was off duty at the time of the stop. GSP also questioned Banda, who told them he had driven the tractor-trailer during parts of the trip.
Upon obtaining consent to search the tractor and trailer, GSP opened the trailer and immediately observed that the back wall of the trailer was made out of plywood. GSP removed the plywood and found a concealed compartment, or “trap,” with a sheet metal door. From the trap, GSP removed seven bags, which contained approximately 152 individually wrapped kilogram-sized bundles of cocaine. The approximate street value of this cocaine is $5.8 million. DEA agents were called to the scene to seize the drugs, taking Sakapala and Banda into custody.
Abubakar Sakapala, 40, of Calverton, Maryland, and Alick Banda, 27, of Richardson, Texas have been charged by a federal grand jury with drug conspiracy and drug possession charges for transporting cocaine from Texas to Georgia in a tractor-trailer. Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the Drug Enforcement Administration.
Assistant U.S. Attorney DeLana Jones is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Two More Pensacola Residents Charged in Multi-State ConspiracyRead the Press Release
PENSACOLA, FLORIDA – Joseph F. Booker Jr., 28, and Kaishawndra Lyons, 25, both of Pensacola, along with the previously charged defendants Uy Nguyen, 34, of Vallejo, California, and Aaron M. Booker, 26, of Pensacola, were arraigned today in the U.S. District Court in Pensacola after a federal grand jury returned a superseding indictment. Nguyen and the Booker brothers are charged with conspiracy to distribute and possess with intent to distribute a controlled substance. All defendants are charged with conspiracy to commit money laundering. In addition to the money laundering conspiracy, Lyons is also charged with making false statements. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The indictment alleges that, between February 2015 and December 2017, Nguyen and the Booker brothers conspired to distribute and possess with intent to distribute 5 kilograms or more of cocaine and 100 kilograms or more of marijuana. The indictment also alleges that during the same time period, they, along with Lyons, conspired to launder money by transferring cash proceeds and purchasing precious metals and stones from funds of the drug trafficking conspiracy. The indictment also alleges that, in November 2016, Lyons knowingly made false statements that the currency she had deposited in out-of-state bank accounts was money she earned from doing hair and sewing.
The indictment also seeks forfeiture of approximately $338,641 in U.S. currency; a firearm and ammunition; a cellular telephone; more than a dozen pieces of jewelry; and approximately 35 pieces of designer clothing and accessories.
The trial is scheduled for May 14, 2018, at 8:00 a.m. at the U.S. Courthouse in Pensacola.
If convicted, the defendants face 10 years to life in prison for the drug trafficking conspiracy and a maximum of 20 years in prison for the money laundering conspiracy. If convicted of the false statements charge, Lyons faces a maximum of 5 years in prison.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
This case resulted from an investigation by the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, the United States Postal Inspection Service, the Pensacola Police Department, the State Attorney’s Office – First Judicial Circuit, the U.S. Marshals, and the Gulf Coast High Intensity Drug Trafficking Area (HIDTA) program. Assistant United States Attorney David L. Goldberg is prosecuting the case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Two Co-Founders of Cryptocurrency Company Charged in Manhattan Federal Court with Scheme to Defraud InvestorsRead the Press Release
Robert Khuzami, the Deputy United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrests of, and unsealing of a criminal complaint charging, SOHRAB SHARMA, a/k/a “Sam Sharma,” and ROBERT FARKAS, a/k/a “Bob,” two co-founders of a startup company called Centra Tech, Inc. (“Centra Tech”), with conspiring to commit, and the commission of, securities and wire fraud in connection with a scheme to induce victims to invest more than $25 million in investments through material misrepresentations and omissions.
SHARMA and FARKAS were arrested Sunday evening in the Southern District of Florida and were presented yesterday in that District.
Manhattan Deputy U.S. Attorney Robert Khuzami said: “As alleged, Sohrab Sharma and Robert Farkas took advantage of widespread investor interest in the rapidly growing cryptocurrrency market to raise millions of dollars in investments in a startup company based on a false sales pitch. While the cryptocurrency industry may be a new frontier, it is subject to the same laws against investor fraud as any other type of company.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Sharma and Farkas created a false sense of security for investors of Centra Tech ICO by misrepresenting their product and lying about relationships they had with credible financial institutions. While they’re not backed by physical commodities, trading in virtual currencies is perfectly legal. But, as today’s charges prove, investors must exercise the same degree of due diligence when making an investment in an ICO as they would with any traditional security.”
According to the allegations in the criminal complaint unsealed in Manhattan federal court[1]:
From July 2017 through March 2018, SHARMA and FARKAS, two co-founders of Centra Tech, began soliciting investors to purchase Centra Tech tokens, a bespoke cryptocurrency that functions as an unregistered security in Centra Tech, through a so-called “initial coin offering” or “ICO.” As part of this effort, SHARMA and FARKAS, in oral and written offering materials that were disseminated via the internet, represented that Centra Tech had developed a debit card, the “Centra Card,” that allowed users to load the Centra Card with the cryptocurrency of their choice and then use the Centra Card to make purchases at any establishment that accepts Visa or Mastercard. As part of their sales pitch, SHARMA and FARKAS represented that Centra Tech had formed a partnership with Bancorp to have Bancorp issue Centra Cards licensed by Visa or Mastercard, and that Centra Tech held the requisite financial servicing licenses in 38 states, among other claims. Based in part on these claims, victims provided more than $25 million in investments for the purchase of Centra Tech tokens.
The claims that SHARMA and FARKAS made to help secure these investments, however, were false. In fact, Centra Tech had no relationships with Bancorp, Visa, or Mastercard, and at least seven of those 38 states have no record of any such licenses being issued to Centra Tech.
In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against SHARMA and FARKAS.
* * *
SHARMA, 26, and FARKAS, 31, are residents of Florida. SHARMA and FARKAS are each charged in a four-count criminal complaint with one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison; one count of securities fraud, which carries a maximum potential sentence of 20 years in prison; and one count of wire fraud, which carries a maximum potential sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Khuzami praised the work of the FBI and thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Negar Tekeei and Samson Enzer is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Arrested on Federal Fraud Charges that Allege $2 Million Scheme that Improperly Billed Medi-Cal for Substance Abuse CounselingRead the Press Release
LOS ANGELES – Two executives at a South Los Angeles company that offered alcohol and drug abuse treatment services were arrested this morning on federal charges that allege they defrauded the Medi-Cal program by submitting bills seeking more than $2 million for services that did not qualify for reimbursement or simply were never provided.
Mesbel Mohamoud, 45, of Inglewood, and her mother-in-law, Erlinda Abella, 63, also of Inglewood, were taken into custody without incident.
Mohamoud and Abella were named in a 23-count indictment returned by a federal grand jury on March 29. The indictment charges both defendants with 21 counts of health care fraud and two counts of aggravated identity theft in relation to the scheme that allegedly ran from 2009 through 2015.
Mohamoud is the owner and executive director of The New You Center (TNYC). Abella, who co-founded TNYC with Mohamoud in 2005, is the program director at the company. TNYC had contracts to provide medically necessary substance abuse treatment services through the Drug Medi-Cal program to adults and teenagers in Los Angeles County.
The indictment alleges that TNYC submitted false and fraudulent bills for counseling sessions that were not conducted at all, were not conducted at authorized locations, or did not comply with Drug Medi-Cal regulations regarding the length of sessions or the number of patients. Furthermore, Mohamoud and Abella allegedly caused TNYC to bill for clients who did not have a substance abuse problem, to falsify documents related to services supposedly provided to clients, and to forge client signatures on documents such as sign-in sheets.
The charges in the indictment primarily relate to services provided to girls residing at Dimondale Adolescent Care Facility group homes in Lancaster, Long Beach and Carson, facilities where TNYC was not authorized to provide counseling.
The indictment alleges that TNYC submitted over $2 million in false and fraudulent claims for group and individual substance abuse counseling services and was paid more than $1.8 million based on these bills.
Both defendants are expected to be arraigned on the indictment this afternoon in United States District Court.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If they were to be convicted of the charges in the indictment, Mohamoud and Abella each would face a statutory maximum sentence of 10 years in federal prison for each of the 21 health care fraud charges. Additionally, there is a two-year mandatory sentence associated with each of the aggravated identity theft counts.
This case is being investigated by the Federal Bureau of Investigation and the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.
The case is being prosecuted by Assistant United States Attorney Cathy J. Ostiller of the Major Frauds Section.
Three Men Convicted for Roles in Trafficking of Multiple Underage GirlsRead the Press Release
FORT WORTH, Texas — Following a four-day trial before U.S. District Judge Reed C. O’Connor, a federal jury convicted three men, last week, for their roles in a conspiracy to commit sex trafficking of underage girls. U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement.
The jury convicted Pierre Lagrone, aka “P” or “Pedro,” 33, on one count of conspiracy to engage in sex trafficking of children, four counts of sex trafficking of children and one count of possession of child pornography. Lagrone faces a minimum of 10 years and up to life in federal prison and a $1 million fine.
Herman Sanders, aka “Pooh,” 29, was convicted on one count of conspiracy to engage in sex trafficking of children, one count of production of child pornography and one count of possession of child pornography. Sanders faces a minimum of 15 years and up to 35 years in federal prison and a $1 million fine.
Demarcus Davis, aka “Zigg,” 25, was convicted on one count of sex trafficking of children. He faces a minimum of 10 years and up to 35 years in federal prison and a $1 million fine.
Lagrone and Davis are scheduled to be sentenced by Judge O’Connor on July 23, 2018. A sentencing date for Sanders has not been set.
According to evidence presented at trial, Lagrone and Davis were violent pimps who recruited, controlled, and profited off underage female victims through commercial sex acts. Lagrone and Davis recruited and advertised underage female victims for commercial sex acts. The defendants communicated with potential clients, collected proceeds, and paid for motels rooms and supplies. Lagrone and Davis kept almost all, if not all, of the proceeds of the commercial sex acts, providing only food, shelter, and occasional clothing to the underage female victims. Sanders conspired with and assisted Lagrone in this sex trafficking.
The U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Federal Bureau of Investigation and the Fort Worth, Tyler and Arlington Police Departments are investigating. Assistant U.S. Attorneys P.J. Meitl and Nicole Dana are in charge of the prosecution.
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Texas man sentenced to 43 months for conspiring to steal more than $230,000 using false credit cardsRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that a Houston man was sentenced Monday to three years and seven months in prison for conspiring with other Texas residents to steal more than $230,000 at Louisiana casinos using unauthorized credit cards.
Antoine Ladon Williams, 35, of Houston, Texas, was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of conspiracy, using or trafficking in unauthorized access devices. He was also sentenced to three years of supervised release and ordered to pay $188,089 restitution.
According to the guilty pleas, Williams and other defendants conspired from October 2014 to October 2015 to use or traffic in unauthorized access devices. Williams provided members of the conspiracy with false temporary Texas identification cards and credit cards. Members of the conspiracy would then travel to casinos throughout the Western District of Louisiana and use the access devices to illegally receive cash advances.
The other members of the conspiracy charged in the Western District of Louisiana are: Miocha Michelle Walker, 35, Houston; Ernest Joseph Duhon III, 44, Pearland, Texas; Leanna Marie Hanchett, 46, Port Fresno, Texas; Donald Wayne Brown, 59, Houston, Texas; and Sharlene Yvette Lott, 44, Houston. These defendants previously pleaded guilty to conspiracy and were also ordered to pay $188,089 in restitution.
See the table below for more information:
Defendants
Date of plea
Sentencing date
Prison time
Walker
March 27, 2017
Sept. 21, 2017
12 months
Duhon
Feb. 28, 2017
June 8, 2017
37 months
Hanchett
Jan. 24, 2017
July 26, 2017
40 months
Brown
March 13, 2017
Aug. 16, 2017
24 months
Lott
March 6, 2017
July 26, 2017
24 months
The FBI and Louisiana State Police conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy prosecuted the case.
Tennessee Man SentencedRead the Press Release
SOUTH BEND – John A. Baldwin, Jr., 38, of Clarksville, Tennessee, was sentenced before South Bend District Court Judge Robert L. Miller, Jr for being a felon in possession of a firearm and possession of a firearm in relation to a drug trafficking crime, announced U.S. Attorney Kirsch.
Baldwin was sentenced to a total of 117 months imprisonment followed by 2 years of supervised release.
According to documents in this case, on May 23, 2017, Baldwin was selling methamphetamine out of a hotel in South Bend, Indiana. Baldwin possessed over 25 grams of methamphetamine along with two handguns, a 9mm and a .45 caliber, at the time of his arrest. Baldwin had a prior felony conviction from Montgomery County, Tennessee in September 2011.
This case was investigated by the ATF with the assistance of the St. Joseph County Drug Investigation Unit and the South Bend Police Department and was handled by Assistant U.S. Attorney Molly E. Donnelly.
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Taunton Woman Sentenced for Distributing Heroin and FentanylRead the Press Release
BOSTON – A Taunton woman was sentenced today in federal court in Boston for her role in a heroin and fentanyl trafficking organization that operated in Taunton and Boston.
Stephanie O’Sullivan, 31, was sentenced by U.S. District Court Judge Leo T. Sorokin to time served (two and a half months) and three years of supervised release. In October 2017, O’Sullivan pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute heroin and fentanyl. In February 2017, O’Sullivan was arrested and charged with approximately 20 co-defendants.
From mid-2016 through February 2017, federal law enforcement investigated two heroin and fentanyl trafficking organizations allegedly operating in Boston, led by Jose Antonio Lugo-Guerrero, and in Taunton, led by Fernando Hernandez. Hernandez’ organization sold heroin and fentanyl to customers, including O’Sullivan, who re-distributed a portion of the drugs she obtained. It is alleged that Hernandez obtained drugs from a network of suppliers that included Lugo-Guerrero.
Hernandez pleaded guilty and on Feb. 26, 2018, was sentenced to 188 months in prison. Lugo-Guerrero pleaded not guilty and is awaiting trial.
United States Attorney Andrew E. Lelling; Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Fall River Police Chief Daniel S. Racine; New Bedford Police Chief Joseph C. Cordeiro; Taunton Police Chief Edward James Walsh; Boston Police Commissioner William B. Evans; and Bristol Country District Attorney Thomas M. Quinn made the announcement today. Assistant U.S. Attorney Theodore B. Heinrich of Lelling’s Narcotics and Money Laundering Unit prosecuted the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
St. Louis Doctor and Nurse Practitioner Indicted for Conspiracy and Submitting False ClaimsRead the Press Release
St. Louis, MO – Dr. Brij R. Vaid, 56, and Donna A. Waldo, 57, both of St. Louis County, Missouri, were charged by Indictment with conspiracy to submit false and fraudulent claims to Medicare and Medicaid regarding “face to face” office visits submitted under Dr. Vaid’s personal billing number while he was actually out of town. Dr. Vaid was also charged with six counts of making and presenting false claims to the United States.
According to the Indictment, Dr. Vaid often prescribed powerful opiate and opioid pain relief drugs to his patients, including Opana, Hydrocodone, and Oxycontin. Dr. Vaid also employed physician assistants in his medical office, but these physician assistants could not prescribe these opiate and opioid pain relief drugs to patients. Dr. Vaid traveled frequently during the timeframes discussed in the Indictment. When Dr. Vaid left town, his physician assistants handed out prescriptions for these controlled substance pain relief drugs that Dr. Vaid had “pre-signed” before leaving town without first examining the patients. Dr. Vaid then presented claims for payment to Medicaid and Medicare in which he represented that he was the person providing the “face to face” office visits with the patients that occurred while he was actually out of town.
The conspiracy charge and the charge of making and presenting false claims to the United States both carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Offices of Inspector General for the U.S. Department of Health and Human Services, the Drug Enforcement Administration, the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office, and the U.S. Department of Defense, Defense Criminal Investigative Service.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
St. Charles County Man Sentenced on Identity Theft ChargesRead the Press Release
St. Louis, MO – Christopher Evans was sentenced to 42 months in prison and ordered to pay restitution in the amount of $30,233.76 to fifteen victims.
According to court documents, from January 1, 2015 through February 1, 2017, Evans participated in a scheme which involved identity theft, access device fraud, social security fraud, wire fraud, and bank fraud.
Evans and two co-defendants stole customers’ personal identification information from a West County car dealership and used that information to produce Missouri Department of Revenue documents and obtain lines of credit and purchase merchandise at local businesses. Evans and his co-defendants also used stolen personal identification information to access bank accounts and make unauthorized withdrawals and to create and cash counterfeit payroll checks.
Evans, 42, of St. Charles, Missouri, pled guilty in November to one felony count of conspiracy to defraud and one felony count of aggravated identity theft. He appeared today for sentencing in front of U.S. District Judge John Ross.
The case was investigated by the: U.S. Postal Inspection Service, St. Charles County Police Department, St. Charles City Police Department, Creve Coeur Police Department, Wentzville Police Department, O’Fallon Police Department, Florissant Police Department, and the Chesterfield Police Department. Assistant United States Attorney Jennifer Roy is prosecuting the case for the U.S. Attorney’s Office.
Springfield Property Manager Given Five Years Probation for Welfare Fraud SchemeRead the Press Release
EUGENE, Ore. – Parthava Behesht Nejad, 82, of Springfield, Oregon, was sentenced today to five years probation for concealing income in order to qualify for welfare benefits. Nejad was also ordered to pay more than $309,000 in restitution and forfeiture and must complete 300 hours of community service.
According to court documents and trial testimony, federal agents began investigating Nejad in 2013 after social workers discovered he was the landlord for numerous people receiving disability benefits. Investigators determined that Nejad owned eight rental properties in north Springfield worth more than $600,000. Nejad acquired the properties and transferred them to his foundation, Parthava Behesht Nejad International Foundation, prior to applying for welfare benefits in 2003.
For more than a decade, Nejad claimed he had no income or assets and had only one bank account containing a few hundred dollars. In reality, Nejad’s properties generated substantial income and he had a bank account that at times contained more than $30,000. He told the IRS and others that his foundation, incorporated in Oregon in 1986, was a church and provided temporary housing for victims of religious persecution.
In total, Nejad collected more than $154,000 in Supplement Security Income (SSI), food stamps, and Medicaid benefits between November 2003 and July 2014.
A federal jury convicted Nejad on one count of wire fraud and three counts of theft of government money on March 9, 2017.
This case was investigated by the Social Security Administration (SSA) Office of the Inspector General in partnership with the U.S. Department of Health and Human Services (HHS) Office of Investigation and the Oregon Department of Human Services. It was prosecuted by Helen Cooper and Amy Potter, Assistant U.S. Attorneys for the District of Oregon.
Red Lake Man Sentenced to 82 Months in Federal Prison for Violent AssaultRead the Press Release
United States Attorney Gregory G. Brooker today announced the sentencing of RICHARD JAMES SMITH, 27, to 82 months in prison for violent assaulting an individual on the Red Lake Indian Reservation. SMITH, who pleaded guilty to one count of assault resulting in serious bodily injury, was sentenced earlier today before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota. In reaching the final sentence of 82 months, Judge Tunheim levied an upward departure from the federal sentencing guidelines to address the extreme physical and psychological injury SMITH inflicted on the victim.
According to the defendant’s guilty plea and documents filed in court, during the afternoon hours of June 29, 2017, SMITH was at his mother's residence located within the exterior boundaries of the Red Lake Indian Reservation. The victim, an employee with the Red Lake Forestry Department, was at the residence on a work-related matter when SMITH came up behind the victim and struck him in the head with an aluminum baseball bat. As a result of the assault, the victim sustained a severe traumatic brain injury with intracranial hemorrhage and had to be hospitalized for more than three weeks.
The case was investigated by the Red Lake Department of Public Safety, Federal Bureau of Investigation, FBI Headwaters Safe Trails Task Force, and U.S. Customs and Border Protection.
Assistant U.S. Attorney Deidre Y. Aanstad prosecuted the case.
Defendant Information:
RICHARD JAMES SMITH, 27
Red Lake, Minn.
Convicted:
- Assault resulting in serious bodily injury, 1 count
Sentenced:
- 82 months in prison
- 3 years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Plymouth Man Charged with Cyberstalking CampaignRead the Press Release
BOSTON – A Plymouth man was arrested today and charged in federal court in Boston with anonymously stalking a woman by text message and social media for more than two years, including throughout the 14-months that they dated.
Joseph Kukstis, 29, was charged with one count of stalking by electronic means. He will appear before U.S. District Court Chief Magistrate Judge David H. Hennessy later today.
According to the charging documents, between September 2015 and about October 2017, Kukstis targeted the victim with an anonymous harassment campaign that was intended to cause - and did cause – the victim substantial emotional distress.
Kukstis’ course of conduct included: (1) sending the victim hundreds of degrading text messages, many of which urged her to kill herself; (2) instilling fear in the victim that her harasser was coming to her home; (3) sending private, intimate pictures of the victim to her friends and acquaintances through a “spoofed” Instagram account he created in the victim’s name; (4) harassing men who Kukstis believed were romantically involved with the victim; and (5) attempting to obtain or obtaining unauthorized access to the victim’s social media accounts.
Kukstis also sent himself harassing messages that he then shared with the victim, purportedly as proof to her that he, too, was a victim of the stalking.
On Jan. 22, 2018, Kukstis sent an e-mail from an account in his own name to the victim, saying: “it was me the entire time, I hate myself for it.”
The charge of stalking provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, and restitution. Sentences are imposed by a U.S. district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Seth B. Kosto of Lelling’s Cybercrime Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner of Michigan Payroll Companies Pleads Guilty to Employment Tax FraudRead the Press Release
A resident of West Bloomfield, Michigan, pleaded guilty today to willfully failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to documents and information provided to the court, Dino Rotondo owned and operated four professional employer organizations (PEOs) located in Troy, Michigan, which provided payroll-related services to client companies. Rotondo processed payroll and agreed to withhold from client employee paychecks, and send to the IRS, the employment taxes that were due. Despite this obligation, Rotondo did not pay to the IRS employment tax withholdings that his PEOs collected during 2012 and the first quarter of 2013.
Rotondo also admitted that he did not pay to the IRS employment taxes due for an additional business that he owned. In total, Rotondo did not pay more than $1.5 million in employment taxes owed to the IRS.
U.S. District Judge Bernard A. Friedman scheduled sentencing for Jan. 18, 2019. Rotondo faces a statutory maximum sentence of five years in prison. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Abigail Burger Chingos and Jeffrey Bender, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Oklahoma man indicted for sex offender registry violationRead the Press Release
WHEELING, WEST VIRGINIA –Marvin Gene McLaughlin, of Enid, Oklahoma, was indicted today by a federal grand jury on a sex offender registry violation, United States Attorney Bill Powell announced.
McLaughlin, age 58, was indicted on one count of “Failure to Update Sex Offender Registration.” McLaughlin, a person required to register under the Sex Offender Registration and Notification Act, is accused of traveling from Oklahoma to Marion County, West Virginia without updating his sex offender registration in January 2018.
McLaughlin faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah E. Wagner is prosecuting the case on behalf of the government. The United States Marshals Service investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Oklahoma Man Charged with Drug Trafficking Following Major Marijuana SeizureRead the Press Release
United States Attorney Trent Shores announced today that a federal grand jury returned a two-count indictment against Kong Meng Vang, 34, of Tulsa, Oklahoma: Count One – Conspiracy to Distribute and Possess With Intent to Distribute 100 Kilograms or More of Marijuana; Count Two – Possess With Intent to Distribute 100 Kilograms or More of Marijuana; and a Forfeiture Allegation.
A complaint and affidavit filed last week affirmed that state and federal law enforcement officers executed search warrants at Vang’s residence and business, Vang’s Dyno Performance. The search of the residence resulted in the seizure of almost 1,500 pounds of marijuana located in two rental trucks, a cell phone, and three semi-automatic handguns. Seizures at the business included several additional firearms and 23 vehicles.
The maximum penalty on each count of the indictment is not less than 5 years or more than 40 years imprisonment, a fine of $5,000,000, and a period of supervised release of at least 4 years following any sentence of imprisonment. Additionally, a $100 special monetary assessment applies to each count.
United States Attorney Shores stated, “It is our mission at the United States Attorney’s Office to enforce the laws of the United States. This includes the federal laws prohibiting the distribution of marijuana. My office will adhere to the rule of law and prosecute those who traffic marijuana into our community, especially – as in this case – when we discover nearly 1,500 pounds of marijuana and firearms.”
The return of an indictment is a method of informing a defendant of alleged violations of federal law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
The indictment is the result of a joint investigation by the Tulsa Police Department, the Drug Enforcement Administration, and the Internal Revenue Service. Assistant United States Attorney Joseph F. Wilson is prosecuting the case as part of the United States Attorney’s Organized Crime and Drug Enforcement Task Force.Norwood Man Convicted by Federal Jury of Heroin TraffickingRead the Press Release
BOSTON – A Norwood man was convicted yesterday in federal court in Boston of distributing heroin in the Taunton area.
Oristel Soto-Peguero, 25, was convicted by a federal jury of possession with intent to distribute more than a kilogram of heroin, conspiring to distribute more than a kilogram of heroin, and discharging a firearm during and in relation to a drug offense. U.S. District Court Judge Rya W. Zobel scheduled sentencing for Aug. 2, 2018.
In early 2015, federal agents conducted a wiretap investigation of Eddyberto Mejia-Ramos, a regional heroin trafficker operating in Taunton. In May and June, agents identified Soto-Peguero as Mejia-Ramos’ primary source of supply. On July 6, 2015, law enforcement intercepted calls in which Mejia-Ramos asked Soto-Peguero to send him something “heavy,” to which Soto-Peguero responded that his girlfriend was on her way. At that time, agents were conducting surveillance outside Soto-Peguero’s Norwood apartment and observed co-conspirator Mercedes Cabral exit the apartment and drive towards Taunton. During a subsequent traffic stop, officers found 10 blocks of heroin (918 grams) protruding from Cabral’s purse.
After seizing the heroin, law enforcement officers attempted to secure Soto-Peguero’s apartment in anticipation of obtaining a federal search warrant. They knocked on the door and announced the presence of police, but no one answered. As officers began a forced entry through the front door, someone inside fired a gunshot through the front door. Fortunately, no one was shot. Officers eventually gained entry and arrested two men, identified as Soto-Peguero and Luis Guzman-Ortiz. The next day, officers executed a search warrant at the home and seized two kilograms of heroin, a loaded semiautomatic pistol, two hydraulic drug presses, and other evidence that showed the apartment was being used to prepare and package heroin. Gunshot residue testing and other evidence established that Soto-Peguero fired the shot through the door.
In September 2016, Mejia-Ramos was sentenced to 90 months in prison. In May 2017, Cabral was sentenced to time served (22 months) and three years of supervised release. Guzman-Ortiz pleaded not guilty and is scheduled to stand trial on June 18, 2018.
United States Attorney Andrew E. Lelling and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement. Investigative assistance was provided by the Massachusetts State Police, the Massachusetts State Police Criminal Laboratory, the Taunton Police Department, and the Bristol County Sheriff’s Office. Assistant U.S. Attorneys Theodore Heinrich and Brian Pérez-Daple of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. Any remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Multiple Defendants Charged in Fraud and Money Laundering Scheme Involving over $200 Million in Small Business ContractsRead the Press Release
United States Attorney Matthew D. Krueger for the Eastern District of Wisconsin announced that on April 3, 2018, a federal grand jury returned a twenty-two count Indictment charging three defendants with a 12-year fraud and money laundering scheme involving over $200 million in government-funded contracts intended to benefit small businesses. The Indictment named individuals Brian L. Ganos (age: 57) of Muskego and Mark F. Spindler (age: 56) of Menomonee Falls, and the business Sonag Company, Inc. as defendants. In a related case, Nicholas Rivecca, Sr. (age: 68) of Hartland, agreed to plead guilty to an Information charging him with conspiring to defraud the United States.
The indicted defendants were charged with a conspiracy to commit mail fraud and wire fraud. According to the Indictment, the conspiracy involved operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies. The conspirators then fraudulently obtained small business program certifications to win government-funded contracts to which they were not entitled. The Indictment alleges that “the conspirators enriched themselves, undermined the small business programs, and deprived honest small businesses of opportunities for work.”
Specifically, the Indictment and Information allege the following:
- Nuvo Construction Company, Inc. was misrepresented to be majority-owned and controlled by J.L. in order to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration (SBA) and as a Disadvantaged Business Enterprise (DBE) from Milwaukee County. In reality, J.L. worked full-time for a different entity in Minnesota and did not actually control Nuvo.
- C3T, Inc. was misrepresented to be majority owned and controlled by T.A. to obtain verification as a Service-Disabled Veteran-Owned Small Business. In reality, for long stretches, T.A. had virtually no involvement in C3T.
- Pagasa Construction Company, Inc. was misrepresented to be majority owned and controlled by O.M. in order to obtain certification as a Small Disadvantaged Business from the SBA. In reality, O.M. relied on the assistance of conspirators to form Pagasa.
The Indictment alleges that the defendants used those certifications to obtain over $200 million in federal, state, and local contract payments. These included federal construction contracts that were set aside for Small Disadvantaged Businesses or Service-Disabled Veteran-Owned Small Businesses. The Indictment also alleges that the scheme included using Nuvo’s
DBE certification to win ready-mix concrete contracts based on the false representation that Nuvo provided ready-mix concrete independently when, in truth, Nuvo’s concrete operations depended heavily on Sonag Ready Mix. As a part owner of Sonag Ready Mix, Nicholas Rivecca, Sr. agreed to plead guilty to that portion of the scheme.
According to the Indictment, on multiple occasions, the conspirators engaged in efforts to conceal the scheme and obstruct investigations into the matter. It alleges that, when interviewed, Ganos and Spindler each gave materially false statements to federal agents.
The Indictment also alleges that Ganos conspired with Sonag Company, Inc. and others to launder proceeds of the fraud scheme in order to disguise and conceal the nature, source, and location of those fraud proceeds. As a part of that conspiracy, Ganos is alleged to have transferred fraud proceeds from accounts of Nuvo and C3T to accounts that Ganos controlled. The Indictment further charged Ganos with three counts of concealment money laundering transactions, one of which involved the purchase of a Corvette with proceeds of the fraud scheme, and seven counts of spending money laundering transactions.
United States Attorney Krueger stated: “These charges send a clear message to firms that seek public funds. Cheating will not be tolerated. Lying to regulators is a serious crime. And attempts to obstruct investigations will be prosecuted vigorously. We commend the collaboration and commitment of the federal agencies that investigated this case. Their work will help protect programs that assist honest firms led by disadvantaged individuals and veterans who were injured while serving our country.”
Special Agent-in-Charge Justin Tolomeo of the Federal Bureau of Investigation added: “The FBI considers these charges an aggressive move toward justice for the legitimate minority, disadvantaged and service-disabled veteran small business owners of Wisconsin, who were harmed when the defendants abused the government programs that were designed to help them succeed. The FBI credits effective interagency collaboration for this success.”
"The GSA Office of Inspector General will aggressively pursue contractors who make false representations in order to obtain federal contracts” said Special Agent-in-Charge, Stuart G. Berman. “Schemes to fraudulently access opportunities designated as set-aside contracts cheat the government and deserving bidders.”
Special Agent-in-Charge Gregg Hirstein of the VA Office of Inspector General added, “The VA’s Service-Disabled Veteran-Owned Small Business set-aside program is designed to assist our nation’s service-connected veterans in their legitimate post-service endeavors, not to further enrich already well established successful companies. The VA Office of Inspector General aggressively pursues cases in which this program is defrauded. Anyone aware of an ongoing similar fraud scheme can report that to the VA OIG Hotline by calling 1-800-488-8244 or emailing [email protected].”
“The Defense Criminal Investigative Service will investigate all allegations of abuse related to Government set aside programs designed to encourage and support veteran, woman and minority owned small businesses. DCIS will pursue all appropriate criminal, civil and administrative actions against individuals who abuse these programs for illicit financial gain,” stated John F. Khin, Special Agent in Charge, Southeast Field Office.
“Today’s charges stand as a deterrent to those who would engage in fraud and corruption for personal gain, and are a testament to the thorough and professional effort of our investigative and prosecutorial team,” said Special Agent-in-Charge Brian Hauck, of the U.S. Army Criminal Investigation Command's North Central Fraud Field Office. “We will diligently continue our efforts to pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and resources within our purview.”
“DBE fraud harms the integrity of the DBE program and law-abiding contractors, including many small businesses, by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said Thomas J. Ullom, Regional Special Agent-in-Charge of the U.S. Department of Transportation (DOT) Office of Inspector General. “Our agents will continue to work with the Department, the Federal Highway Administration, and other Federal, State, and local law enforcement and prosecutorial partners to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs in Wisconsin and throughout the country.”
“The egregious fraud scheme alleged to have been perpetuated by the individuals and businesses subject to this Indictment denied eligible service-disabled, veteran-owned small business and other disadvantaged small businesses opportunities to prosper and grow their businesses,” said SBA OIG Central Region Special Agent-in-Charge Talmadge J. Gaylor. “Federal contracts set aside for eligible service-disabled, veteran-owned and other disadvantaged small businesses are intended to grow these businesses and expand the nation’s economic base. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their investigative leadership and dedication.”
The maximum penalties for each of the wire and mail fraud-related charges are 20 years in prison, a $250,000 fine, and forfeiture of criminal proceeds. The maximum term of imprisonment for conspiring to defraud the United States is five years. The maximum term of imprisonment for the money laundering conspiracy and for each of the three concealment money laundering charges is 20 years in prison. The maximum term of imprisonment for each of the seven spending laundering charges is 10 years in prison. Each of the 11 money laundering charge also carries a fine of up to $250,000 or twice the amount laundered and subjects the defendant to forfeiture of all money and property involved in the laundering transaction.
The forfeiture notice of the Indictment indicates that the United States seeks to forfeit real property located at 201 Zephyr Way, #2800, Winter Park, Colorado, and at 5500-5510 West Florist Avenue, Milwaukee, Wisconsin; a 2014 Chevrolet Corvette Stingray Convertible; and more than $2.2 million seized from two bank accounts. Each of those assets is subject to civil forfeiture actions filed by the United States.
The following agencies are participating in the investigation: the Federal Bureau of Investigation; U.S. General Services Administration, Office of Inspector General; Department of Veterans Affairs, Office of Inspector General; Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; U.S. Department of Transportation, Office of Inspector General; U.S. Small Business Administration, Office of Inspector General, Investigations Division; Defense Contract Audit Agency; U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.
The case is being prosecuted by United States Attorney Matthew D. Krueger and Assistant United States Attorney Zachary J. Corey. The related civil forfeiture cases are being prosecuted by Assistant United States Attorney Scott J. Campbell.
An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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For Additional Information Contact:
Public Information Officer Dean Puschnig 414-297-1700
Monroe County Man Pleads Guilty to Heroin TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Myles Davis, age 29, of Tobyhanna, Pennsylvania, pleaded guilty on April 2, 2018, before U.S. District Court Judge A. Richard Caputo to the charge of conspiracy to distribute more than 100 grams of heroin.
According to United States Attorney David J. Freed, Davis admitted to participating in a conspiracy to distribute between 100 and 400 grams of heroin (which is equivalent to 4,000 to 16,000 individual doses of heroin) in the Monroe County area between May and July 2015. Davis was one of eleven individuals indicted by a grand jury in July 2015 and charged with conspiring to distribute heroin and cocaine in the Monroe County area.
Judge Caputo ordered a presentence report to be completed. Sentencing will be scheduled at a later date.
The investigation was conducted by the Drug Enforcement Administration (DEA) and the Pocono Mountain Regional Police Department. Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is up to 40 years in prison, a term of supervised release following imprisonment, and a fine. The charge also carries a mandatory minimum sentence of five years’ imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Monongalia man indicted on drug and firearms chargesRead the Press Release
WHEELING, WEST VIRGINIA – Isaiah Davis, of Morgantown, West Virginia, was indicted today by a federal grand jury on drug and firearms charges, United States Attorney Bill Powell announced.
Davis, age 26, was indicted on two counts of “Possession with Intent to Distribute Heroin,” two counts of “Possession with Intent to Distribute Cocaine Hydrochloride,” one count of “Unlawful Possession of a Firearm,” and one count of “Use of a Firearm During and in Relation to a Drug Offense.” Davis is accused of possessing and distributing heroin and cocaine hydrochloride in Monongalia County in October 2017. Davis, who was previously convicted of a felony, is accused of having a 9mm pistol in October of 2017 and a .40 caliber pistol, which he is accused of having during a drug offense, in January of 2018 in Monongalia County.
Davis faces up to 20 years incarceration and a fine of up to $1,000,000 for each of the drug counts, faces up to 10 years incarceration and a fine of up to $250,000 for the unlawful possession of a firearm count, and five years incarceration and a fine of up to $250,000 for the firearm during a drug offense 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 Zelda E. Wesley is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Morgantown Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Methamphetamine Trafficking and Firearms Offenses in the Fox Valley Region Leads to Prison Sentences for EightRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, announced that eight individuals were sentenced after convictions for drug trafficking in Northeastern Wisconsin. The sentences imposed by Chief United States District Judge William C. Griesbach were the result of guilty pleas by all eight individuals between May 11, 2017 and January 11, 2018:
Defendant
Charge of Conviction
Sentencing date
Months of Prison
Months of Supervised Release
Brady Pomeroy
Conspiracy to Distribute Methamphetamine
9/8/17
120
60
Brady Pomeroy (2nd Charge)
Possession of a Firearm in Furtherance of Drug Trafficking Crimes
9/8/17
60 (consecutive; 180 months total)
36
Teng Her
Conspiracy to Distribute Methamphetamine
8/21/17
120
60
David Ly
Conspiracy to Distribute Methamphetamine
7/14/17
120
60
Zoey Scott
Conspiracy to Distribute Methamphetamine
10/3/17
40
60
Curtis Whitaker
Conspiracy to Distribute Methamphetamine
9/11/17
31
60
Zachary Hietpas
Conspiracy to Distribute Methamphetamine
11/27/17
18
60
Zachary Kryzaniak
Conspiracy to Distribute Methamphetamine
9/15/17
12 months and 1 day
60
Omar Sanchez
Distribution of Methamphetamine
3/29/18
40
72
The investigation revealed that the defendants conspired amongst themselves and with others, and distributed a large quantity of methamphetamine in the Fox Valley region of Northeastern Wisconsin. The defendants obtained methamphetamine from sources in the Los Angeles and San Francisco Bay Areas of California, who sent several packages containing a half-pound or more of methamphetamine to the defendants. The defendants also obtained methamphetamine directly from locations in Milwaukee and California. The defendants used a residence in Fox Crossing, and a business in Menasha, to repackage and transfer the methamphetamine to local distributors. Several controlled purchases and multiple search warrants led to the recovery of large quantities of methamphetamine, packaging material, drug ledgers, currency, ammunition, and firearms.
Chief Judge Griesbach noted the seriousness of the offenses the defendants committed, and remarked that the defendants caused immeasurable damage to the community through the sale and distribution of what he called “poison.”
The case was investigated by the Lake Winnebago Area Metropolitan Enforcement Group-Drug Unit and US Drug Enforcement Administration, with assistance from the Appleton Police Department, Oshkosh Police Department, Menasha Police Department, Neenah Police Department, Fox Crossing Police Department, and the Wisconsin State Crime Laboratory. It was prosecuted by Assistant United States Attorney Andrew J. Maier.
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For Additional Information Contact:
Public Information Officer Dean Puschnig 414-297-1700
Medical Device Company Employee Admits Accepting Bribes for Securing Contract with His CompanyRead the Press Release
NEWARK, N.J. – A Monroe, New York, man today admitted accepting bribes in exchange for his assistance in securing a contract between a metallurgical technology company (the “technology company”) and his employer, a medical device company in New Jersey (the “medical device company”), U.S. Attorney Craig Carpenito announced.
Daniel Lawrynowicz, 48, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of violating the Federal Travel Act.
According to documents filed in this case and statements made in court:
In 2012, Lawrynowicz was an employee of the medical device company in New Jersey. Eugene Ostrovsky and two other individuals were principals of the technology company. Ostrovsky, along with the other individuals, sought a contract worth $5.5 million with the medical device company. Lawrynowicz could make recommendations to others at the medical device company related to the goods that the technology company sought to supply under the contract.
Ostrovsky and the other individuals made illicit bribe payments to Lawrynowicz in exchange for his assistance in helping the technology company secure the contract with the medical device company. These payments included a cash payment of approximately $75,000 to Lawrynowicz after the contract between the two companies was signed.
The count of violating the Federal Travel Act carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Lawrynowicz must also forfeit $75,000 as part of today’s guilty plea. Sentencing is scheduled for July 23, 2018.
On Feb. 27, 2017, Ostrovsky pleaded guilty to an information charging him with violating the Federal Travel Act for his role in the bribery scheme. He was sentenced March 9, 2018, to six months in prison, six months of home confinement and two years of supervised release.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Defense counsel: Peter Till Esq., Springfield, New Jersey
Maryland Man Sentenced to 62 Months in Prison for Attacking People and Stealing VehiclesRead the Press Release
WASHINGTON – Deon Walker, 18, of District Heights, Md., was sentenced today to 62 months in prison for a pair of attacks he committed on the same block last summer while stealing vehicles in Southeast Washington, U.S. Attorney Jessie K. Liu announced.
Walker pled guilty in January 2018, in the Superior Court of the District of Columbia, to robbery and attempted robbery charges. The plea, which was contingent upon the Court’s approval, called for an agreed-up sentence of four to six years in prison. The Honorable Chief Judge Robert E. Morin accepted the plea and sentenced the defendant accordingly. Following his prison term, Walker will be placed on three years of supervised release.
According to a proffer of facts submitted at the time of the plea, the first crime took place on July 7, 2017, at approximately 4:15 p.m. Walker approached a man and a woman who were standing next to their 2006 Toyota Camry in the 4300 block of Barker Street SE. He punched the man twice in the face and took his car and house keys. Walker also took the woman’s purse. He then drove off in the victim’s car. The Camry later was recovered.
The second crime took place on Aug. 31, 2017, at approximately 10:35 a.m., also in the 4300 block of Barker Street SE. This time, Walker approached a woman who was getting into her 2002 Lexus sport-utility vehicle and demanded her car key. She attempted to run away, but Walker followed her, pushed her to the ground, and put his hands around her neck. The woman dropped the car key, and Walker picked it up and then drove off.
Surveillance video captured the second incident. The Lexus later was recovered and processed for fingerprints. Some of the fingerprints matched Walker’s. He was arrested by the Metropolitan Police Department (MPD) in December 2017 and admitted taking both vehicles. Walker has remained in custody since his arrest.
In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department. She also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences. Finally, she commended the efforts of Assistant U.S. Attorney Natasha Smalky, who investigated and prosecuted the case.