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15 February 2018
Castelli Sentenced for Threatening U.S. Military Members and Their FamiliesRead the Press Release
COVINGTON, Ky. – A Maysville, KY woman, who previously pleaded guilty to communicating threats in interstate commerce, was sentenced today to ninety (90) months in prison.
U.S. District Judge David L. Bunning sentenced 57-year-old Marie Antoinette Castelli for communicating threats in interstate commerce.
Castelli, a United States Citizen, was an active member of an invitation-only Facebook group in which many members discussed their support for ISIS. Within this group, the Defendant participated in online discussions and disseminated information and propaganda supporting violence against the West and the establishment of a worldwide Caliphate.
On October 19, 2015, the Defendant posted a message to the Facebook group stating, “A great sister on twitter published addresses of the kafir men who killed sheikh awlaki and his son with the drone[.] [P]raying the mujahadine will send someone for justice[.]” The message included a link to a publically-viewable webpage calling for the killing of certain United States Service Members and their families. The document referred to the service members and their families as “targets,” and outlined their purported “atrocities” against Osama Bin Laden and Anwar Al-Awlaki. The document was posted “to ask my brothers and Al-Qaeda in the U.S. to eventually hunt him down and execute him.”
In addition, the Defendant posted a series of additional messages to the Facebook group. In the first message, the Defendant posted the full name, date of birth and address of the military members, and stated, “they make targets on our heads so here are their heads for targets…” The Defendant transmitted these messages for the purpose of issuing a threat, and with knowledge that the communications would be viewed as a threat.
FBI Special Agents Kristine Holden and W. Aaron Graves investigated the case. Assistant United States Attorney Robert K. McBride, with assistance from the Counterterrorism Section, National Security Division, represented the United States.
Under federal law, Castelli must serve 85% of her prison sentence. She will be under the supervision of the U.S. Probation Office for up to 3 years after her release from prison.
Edward O’Callaghan, Acting Assistant Attorney General, Robert M. Duncan, United States Attorney, and Amy S. Hess, FBI Special Agent in Charge, jointly announced the sentence.
California Man Convicted of Directing Cyber-Attack Against Oklahoma BusinessRead the Press Release
Oklahoma City – DAVID CHESLEY GOODYEAR, 44, of El Segundo, California, was convicted today by a federal jury on one count of directing distributed-denial-of-service (DDoS) cyber-attacks against two websites owned by Oklahoma telescope retailer Astronomics in August 2016, announced Robert J. Troester, Acting United States Attorney for the Western District of Oklahoma.
In distributed-denial-of-service (DDoS) cyber-attacks, the perpetrator floods the victim computer with useless information from botnets (large clusters of connected devices infected with malware and controlled remotely) and prevents legitimate users from accessing the victim computer.
In August 2017, a federal grand jury charged Goodyear by indictment with attacking the websites of Astronomics, a family-owned telescope retailer located in Norman, Oklahoma.
Today, after hearing two days of trial, a jury returned a guilty verdict against Goodyear. Evidence at trial showed that Astronomics operated the world’s largest free astronomy forum on the internet, called Cloudy Nights, and that Goodyear had been a registered user on the site under a variety of aliases. Each of Goodyear’s usernames and his primary IP address had been banned for violating the terms of service of Cloudy Nights, including sending threats to other users, administrators, and moderators.
Evidence at trial showed that Goodyear attempted to access Cloudy Nights as "JamesSober" on August 13, 2016, but his access to the online community was denied because his "JamesSober" account had been banned on August 9, 2016. Goodyear then posted messages on Cloudy Nights under a new alias, "HawaiiAPUser," including pornography and profanity directed at Astronomics and the volunteer administrators and moderators of Cloudy Nights. In the posts, he threatened that he would "talk with [his] contacts and just DOS this site as well as A55tronomics." Evidence further showed that DDoS attacks against Astronomics and Cloudy Nights commenced that night and continued intermittently until the end of August 2016, when Goodyear was interviewed by law enforcement and admitted he was responsible for the attacks.
The jury deliberated for about an hour and a half before returning the guilty verdict. At sentencing, Goodyear faces up to ten years in federal prison, three years of supervised release, a $250,000.00 fine, and payment of restitution to the victim. His sentencing will be set by the court at a future date.
This conviction is the result of an investigation led by the Federal Bureau of Investigation, with support from the United States Secret Service Electronic Crimes Task Force in Los Angeles, which includes personnel from the Los Angeles Police Department. The case was prosecuted by Assistant U.S. Attorneys McKenzie Anderson and William Farrior.
Bronx Men Charged in Manhattan Federal Court with Explosives ChargesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Police Commissioner of the City of New York, (“NYPD”), announced that CHRISTIAN TORO and TYLER TORO have been charged in U.S. District Court for the Southern District of New York in connection with their stockpiling of explosive materials and manufacture of destructive devices at their residence in the Bronx. Both defendants were presented before U.S. Magistrate Judge Debra Freeman in Manhattan federal court this afternoon and detained.
As alleged in the Complaint[1]:
On or about December 4, 2017, a bomb threat was called into a high school in Harlem, New York (the “School”). Shortly after a student was arrested in connection with that incident, CHRISTIAN TORO, who was a teacher at the School, resigned. After CHRISTIAN TORO’s resignation, TYLER TORO returned to the School a laptop computer (the “Laptop”) that the School had provided to CHRISTIAN TORO for use in connection with his employment. A School employee found, on the Laptop, a copy of a book that provides instructions for, among other things, manufacturing explosive devices.
Law enforcement agents subsequently interviewed multiple students at the School, who indicated that at least two students at the School had visited CHRISTIAN TORO’s residence (the “Residence”), where CHRISTIAN TORO would pay them approximately $50 per hour to break apart fireworks and store the powder that came out of the fireworks in containers.
On February 15, 2018, law enforcement agents conducted a search of the Residence pursuant to a judicially authorized search warrant. In a bedroom identified as shared by CHRISTIAN TORO and TYLER TORO, law enforcement agents recovered, among other items, (i) approximately 20 pounds of iron oxide; (ii) approximately five pounds of aluminum powder; (iii) a substance appearing to be thermite, mixed from iron oxide and aluminum powder; (iv) approximately five pounds of potassium nitrate; (v) a glass jar containing explosive powder; and (vi) a cardboard box containing firecrackers. In addition, law enforcement agents found a handwritten diary labeled with TYLER TORO’s name, which stated, among other things, “WE ARE TWIN TOROS STRIKE US NOW, WE WILL RETURN WITH NANO THERMITE” and “I AM HERE 100%, LIVING, BUYING WEAPONS. WHATEVER WE NEED.” Law enforcement agents also recovered a backpack, identified as belonging to CHRISTIAN TORO, containing an index card with handwriting reading “UNDER THE FULL MOON THE SMALL ONES WILL KNOW TERROR.”
* * *
CHRISTIAN TORO, 27, of the Bronx, New York, is charged in the Complaint with one count of unlawfully manufacturing a destructive device, in violation of 26 U.S.C. §§ 5822, 5861(f), and 5871 and 18 U.S.C. § 2, which carries a maximum sentence of 10 years in prison, and one count of distribution of explosive materials to a minor, in violation of 18 U.S.C. § 842(d)(1), which carries a maximum sentence of 10 years in prison. TYLER TORO, also 27 and of the Bronx, New York, is charged with one count of unlawfully manufacturing a destructive device, in violation of 26 U.S.C. §§ 5822, 5861(f), and 5871 and 18 U.S.C. § 2, which carries a maximum sentence of 10 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. Berman praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force, which consists principally of agents of the FBI and detectives of the NYPD.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorney Elizabeth Hanft is in charge of the prosecution.
The charges 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.
Billerica Man Sentenced to 40 Years in Prison for Sexual Exploitation of Two Young BoysRead the Press Release
BOSTON – A Billerica man was sentenced today in federal court in Boston for sexually exploiting two young boys over a five-and-a-half year period.
Philip Toronto, 43, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 40 years in prison and five years of supervised release. In November 2017, Toronto pleaded guilty to two counts of sexual exploitation of children.
On Feb. 28, 2017, a search warrant was executed at Toronto’s home in response to multiple CyberTips that tracked the trade of child pornography over Skype to Toronto’s Billerica address. During the search, law enforcement recovered evidence of child pornography. Law enforcement confronted Toronto with evidence that some of the child pornography appeared to be homemade. Toronto admitted to filming his sexual abuse of two young boys: a five-year-old boy as recently as September 2016; and a now 15-year-old boy between 2011 and 2014.
More extensive forensic review of the devices seized from Toronto’s home revealed surreptitious recordings of the children in various stages of undress as well as videos and images of Toronto raping and indecently assaulting each of the boys.
United States Attorney Andrew E. Lelling; Raymond Moss, Acting Inspector in Charge of the U.S. Postal Inspection Service; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement today. This case was investigated in conjunction with the Middlesex District Attorney’s Office, which indicted Toronto for the rape and assault of both boys. Assistant U.S. Attorney Anne Paruti, Lelling’s Project Safe Childhood Coordinator and a member of his Major Crimes Unit, prosecuted the case.
The case was brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by U.S. Attorneys’ Offices and DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Bettendorf Woman Sentenced to 72 Months in Prison for Wire Fraud and Benefits FraudRead the Press Release
DAVENPORT, Iowa - On February 14, 2018, Chief United States District Court Judge John A. Jarvey sentenced Michele Lynn McGee, 45, of Bettendorf, Iowa, to 72 months in prison for five counts of wire fraud and one count of benefits fraud, announced United States Attorney Marc Krickbaum. McGee was also ordered to serve 3 years of supervised release following her imprisonment, and pay $600 to the Crime Victims’ Fund. McGee was also ordered to self-surrender to the designated prison.
On August 28, 2017, McGee pled guilty to the charges, which arose from an investigation initiated by the Bettendorf Police Department and further pursued by the Federal Bureau of Investigations. As stated in the plea agreement, McGee defrauded UbiCare, a healthcare solutions company out of Boston, Massachusetts, that markets interactive mobile messaging to healthcare providers throughout the country. They hired McGee as the director of sales attempting to expand into the Midwest market. McGee was employed from May 12, 2014, through February 12, 2015. Between those dates, McGee purportedly signed five new clients (hospitals) to contracts with UbiCare totaling $1,896,375, all of which were fraudulent, in that all of the contracts contained a forged signature placed there by McGee. McGee was paid a salary, commission, and bonuses totaling $115,973. During the execution of a search warrant at McGee’s residence, McGee admitted that she drafted the five fraudulent contracts. McGee was ordered to pay $115,973 in restitution to UbiCare.
Further investigation revealed that beginning in February 2012, McGee received Supplemental Nutrition Assistance Program (SNAP) benefits and received Title XIX Medicaid benefits through the Iowa Department of Human Services (DHS). These benefits continued monthly until July 2014. During that time period, McGee received over $11,000 in fraudulent food stamps and Medicaid benefits by not reporting her household earnings. McGee admitted that she knowingly withheld household income information from DHS because she believed her public aid would be cancelled if DHS was aware of it. McGee was ordered to pay the State of Iowa $11,514.91.
From February 2012 until August 2012, McGee worked from home for RXS Group, LLC, a company located in Utah. McGee represented to RXS that she obtained a contract with the Nevada prisons for RXS to provide pharmaceutical medications for a five-year period. The contract was fraudulent and contained a forged signature placed there by McGee. Based on the contract, RXS drew up a business plan for expanded operations in Nevada which included entering into purchase agreements for a pharmacy and equipment needed to package the medications, suffering a substantial loss. McGee was ordered to pay restitution to RXS in the amount of $384,869.57.
This matter was investigated by Bettendorf Police Department, and the Federal Bureau of Investigations. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Bay Area Defendants Indicted in Alleged Drug Trafficking ConspiracyRead the Press Release
SAN FRANCISCO – A federal grand jury indicted three Bay Area men for their respective roles in an alleged conspiracy to possess and distribute methamphetamine, announced Acting United States Attorney Alex G. Tse, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin, Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin, and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. One defendant also is charged in the indictment with possessing with the intent to distribute cocaine. All three defendants have been arrested and are in custody. Complaints were also filed against each of these defendants in connection with these charges.
According to the indictment, between December 8, 2016, and January 30, 2018, Sergio Steven Vasquez-Gonzalez (a/k/a Checo, a/k/a Checks a/k/a Number One), 26, of Bay Point, California; Arturo Vazquez, 33, of Stockton, California; and Sergio Rubalcaba, 23, of Bay Point, California, conspired to distribute and possess with intent to distribute 500 grams or more of methamphetamine in the Northern District of California and elsewhere. In addition, the indictment alleges that on May 16, 2017, Vasquez-Gonzalez distributed 50 grams or more of pure methamphetamine, and on January 29, 2018, possessed with the intent to distribute 500 or more grams or more of cocaine. In addition, A. Vazquez is alleged to have distributed 50 grams of methamphetamine on November 29, 2017, and Rubalcaba is alleged to have possessed with intent to distribute 500 grams or more of the drug on January 30, 2018.
According to the complaint filed against him, Vasquez-Gonzalez was arrested on January 29, 2018, when a traffic stop of the vehicle he was driving resulted in the seizure of a kilogram of cocaine. According to the complaint filed against him, Rubalcaba was arrested the following day when law enforcement searched his vehicle and seized a kilogram of methamphetamine, ten pounds of marijuana, and two ounces of black tar heroin. A. Vazquez was arrested in Stockton pursuant to a federal complaint alleging that he distributed methamphetamine on November 29, 2017.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The charges carry the maximum statutory sentences indicated in the chart below:
Charge
Defendants Charged
Maximum Statutory Sentence
Count One:
Conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 846)
All Three Defendants
Life in prison
Count Two:
Distribution of 50 grams or more of methamphetamine
(21 U.S.C. § 841(a)(1))
Sergio Steven Vasquez-Gonzalez
Life in prison
Count Three:
Possession with intent to distribute 500 grams or more of a mixture and substance containing cocaine
(21 U.S.C. § 841(a)(1))
Sergio Steven Vasquez-Gonzalez
40 years in prison
Count Four:
Distribution of 50 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 841(a)(1))
Arturo Vazquez
40 years in prison
Count Five:
Possession with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 841(a)(1))
Sergio Rubalcaba
Life in prison
In addition, any defendant convicted of the conspiracy charge will face a mandatory 10-year term of imprisonment. The remaining counts carry the following mandatory minimum terms of imprisonment: Count Two–10 years; Count Three–5 years; Count Four–5 years; Count Five–10 years. Any sentences following the defendants’ convictions would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Vasquez-Gonzalez and Rubalcaba appeared on the indictment this morning before the Honorable Kandis A. Westmore, U.S. District Magistrate Judge. Vazquez was previously arraigned in Stockton, California, and is being transported to the Northern District of California. All of the defendants remain in federal custody. The parties are scheduled to appear before the District Court on March 9, 2018.
Assistant U.S. Attorneys Andrew Dawson and Nikhil Bhagat are prosecuting the case with the assistance of Patricia Mahoney and Rawaty Yim. The prosecution is the result of an investigation by HSI, the DEA, and the FBI. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.
Baton Rouge Man Sentenced to Federal Prison for Oxycodone DistributionRead the Press Release
BILLINGS – Nishen Ramon Palmer, a 36-year-old resident of Baton Rouge, was sentenced today to 27 months in prison followed by 3 years supervised release after pleading guilty to conspiracy to possess with intent to distribute oxycodone last August. U.S. District Judge Susan Watters handed down the sentence.
In late 2015, Palmer sold over 550 oxycodone pills to undercover agents for $20,000 in four separate transactions. The transactions occurred in Billings, Denver, and Houston. Palmer would stop in Billings on his way to or from California and Louisiana. The investigation ended in Spring 2016 when Palmer was arrested in Louisiana.
The case was prosecuted by Assistant U.S. Attorney Paulette Stewart and investigated by the Drug Enforcement Administration Tactical Diversion Squad and its task force officers.
Bank Robber Sentenced to 180 Months ImprisonmentRead the Press Release
Spokane– Joseph H. Harrington, United States Attorney for the Eastern District of Washington, announced that Darryl William Young, age 66, of Seattle, Washington, was sentenced for three counts of Armed Bank Robbery and two counts of Bank Robbery. United States District Judge Salvador Mendoza, Jr. sentenced Young to a 180-month term of imprisonment, to be followed by five years of court supervision after he is released from federal prison. Young pled guilty to these charges on October 11, 2017.
According to information disclosed during court proceedings, Young committed a string of five bank robberies over a five-week period. On June 8, 2016, and June 18, 2016, Young entered a Key Bank and a Wells Fargo Bank in Seattle, Washington, brandished a pistol replica at a teller at each bank, and demanded money. The tellers gave Young money and he left the banks. On June 29, 2016, and July 1, 2016, Young entered a Key Bank in Issaquah, Washington, and a Banner Bank in Woodinville, Washington, approached a teller at each bank, and demanded money. The tellers gave Young money and he departed. On July 11, 2016, Young entered a U.S. Bank in Selah, Washington, and asked a teller to change a $10 bill. After this transaction, Young made a gesture which led the teller to believe he was armed, and he demanded money. The teller gave Young money and he left. Young was arrested later that day.
On February 14, 2018, United States District Judge Salvador Mendoza, Jr. sentenced Young to a 180-month term of imprisonment, followed by five years of court supervision, and ordered Young to pay $14,000 in restitution.
Joseph H. Harrington said, “This office will continue to prosecute to the fullest extent any person who uses the threat of violence to victimize the community and commit crime. This case is yet another example of the successful investigative efforts that can be accomplished when state and federal law enforcement work in partnership.”
The Federal Bureau of Investigation, the Selah Police Department, the Yakima County Sheriff’s Office, the Seattle Police Department, the Kennewick Police Department, and the King County Sheriff’s Office conducted the investigation of this matter. The case was prosecuted by Benjamin D. Seal, an Assistant United States Attorney for the Eastern District of Washington.
Ashburn Woman Arrested for $5 Million Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – An Ashburn woman was arrested today on charges of orchestrating a multi-year loan fraud scheme causing approximately $5 million in losses to dozens of victims.
According to allegations in the complaint affidavit, Keisha L. Williams, 42, solicited over $5 million from individual victim lenders by telling them that she needed emergency funding to get software that she had purchased out of “escrow” in Austria. In fact, Williams spent the vast majority of victims’ money on personal expenditures, including approximately $1 million on luxury travel and $1 million on shopping and retail purchases at places like Chanel, Gucci, and Louis Vuitton.
Williams has been charged with conspiracy to commit wire fraud and faces a maximum penalty of 20 years in prison if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement. Assistant U.S. Attorney Grace L. Hill is prosecuting the case.
Individuals who believe they may be a victim of this fraud are encouraged to call the Eastern District of Virginia Victim/Witness Coordinators at 1-800-221-6538.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-mj-68.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Arapahoe, Wyoming Resident Convicted on Drug, Firearm, and Assault ChargesRead the Press Release
U.S. Attorney Mark Klaassen announced today that Arapahoe resident Cameron Means-Goodman has been convicted in federal court. A jury found Means-Goodman guilty of Conspiracy to Distribute Methamphetamine, Possession with Intent to Distribute Methamphetamine, Using and Carrying a Firearm During and In Relation to a Federal Drug Trafficking Crime, Felon in Possession of a Firearm, and Assault after a seven-day jury trial in the United States District Court in Cheyenne. Means-Goodman is scheduled to be sentenced on April 24, 2018.
This case was prosecuted by Assistant U.S. Attorney Kerry J. Jacobson, with the assistance of the Bureau of Indian Affairs, U.S. Drug Enforcement Administration, Wind River Police Department, Fremont County Sheriff’s Office and, Federal Bureau of Investigation.
14 February 2018
Wexford Man Indicted for Failure to Register as a Sex Offender and Failure to Surrender to Serve his Prison SentenceRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of failure of to register as a sex offender and failure to surrender for service of sentence, United States Attorney Scott W. Brady announced today.
The two-count indictment, returned on February 13, named Daniel Teed, 56, of Wexford, Pa., as the sole defendant.
According to the indictment, from October 23, 2017, and continuing through the date of this indictment, Teed, who was required to register under the Sex Offender Registration and Notification Act (SORNA) after being convicted of Conspiracy to Commit Sex Trafficking of Children on June 14, 2017, knowingly failed to register, as required by the SORNA. The indictment further alleges that on January 2, 2018, Teed, after having been released, while awaiting surrender for service of sentence after conviction for Sex Trafficking of Children, a felony, and having been directed by the Court to surrender for service of sentence to the Federal Correctional Institution (FCI) Loretto in the Western District of Pennsylvania, knowingly and willfully failed to surrender for service of sentence as ordered by the Court.
Teed was arrested on February 12 in Flagstaff, Ariz. The U.S. Marshals Service led a nationwide manhunt that resulted in the apprehension. Teed, a convicted sex offender, was wanted for failing to surrender to serve a 10-year prison term. Deputy Marshals were dispatched to multiple states and eventually developed information that Teed had traveled to Flagstaff. Investigation revealed that Teed was employing an alias and had disguised his appearance to avoid capture. Deputy Marshals developed information that Teed was at staying at the Super 8 in the 2500 block of East Lucky Lane, in Flagstaff. Teed was arrested without incident late Monday afternoon as he exited the motel and approached his vehicle.
The law provides for a maximum total sentence of 20 years imprisonment, fine of $500,000, a term of supervised release for no more than three years, or any or all of the above. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The United States Marshals Service and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Weleetka Man Sentenced to 24 Months, $100,000 Fine for Health Care FraudRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Guy William Sheneman, age 61, of Weleetka, Oklahoma, was sentenced to 24 months imprisonment, $100,000 fine and 3 years supervised release for Health Care Fraud, in violation of Title 18, United States Code, Section 1347.
The Information alleged that beginning on January 3, 2012, and continuing through October 31, 2014, within the Eastern District of Oklahoma and elsewhere, the defendant knowingly and willfully, with the intent to defraud, devised and executed a scheme to defraud the Medicaid and Medicare programs by causing fraudulent claims to be filed, in that defendant submitted claims for reimbursement for more expensive drugs than were actually dispensed to the patients.
The charge arose from an investigation by the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.United States Attorney Brian J. Kuester said, “Schemes like the defendant’s that defraud Medicaid and Medicare drive up the cost of health care and in essence steal tax dollars that should be used for legitimate medical claims. This investigation and prosecution of Mr. Sheneman put an end to the fraudulent padding of his pockets and holds him accountable. This office is thankful for the work of the HHS Inspector General and the FBI which allowed us to successfully prosecute the defendant.”
The Honorable Ronald A. White, U.S. District Jude in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Melody Nelson represented the United States.Virginia man admits to bank fraudRead the Press Release
MARTINSBURG, WEST VIRGINIA – A Virginia man has admitted to bank fraud, United States Attorney Bill Powell announced.
Ajarhi Roberts, also known as Wayne Roberts , age 25, of Stephens City, Virginia, pled guilty to one count of “Bank Fraud.” Roberts admitted to using another’s identifying information to commit bank fraud. The crime occurred in March and June of 2016 in Berkeley County, West Virginia.
Roberts faces up to 30 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Federal Bureau of Investigation is investigating.U.S. Magistrate Judge Robert W. Trumble presided.
U.S. Attorney’s Office Hosts Roundtable Discussion on Sexual Harassment in HousingRead the Press Release
LOS ANGELES – The U.S. Attorney’s Office for the Central District of California hosted a roundtable discussion yesterday on Sexual Harassment in Housing for community organizations, U.S. Attorney Nicola T. Hanna announced.
The event included local legal services offices, fair housing organizations, shelters and transitional housing providers. Each organization was invited because they often work with the Central District of California’s most vulnerable populations, who could also become victims of sexual harassment in housing.
The Department of Justice, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of sex discrimination prohibited by the Act. Sexual harassment by landlords, property managers, maintenance workers, and others with power over housing often affects the most vulnerable populations – single parents, individuals who have financial difficulties, and people who have suffered sexual violence in their past. These individuals often do not know where to turn for help.
“Sexual harassment in housing is often underreported, but it is an egregious violation of a person’s right to fair housing,” U.S. Attorney Hanna said. “Landlords and property managers using the power they have over tenants to extort sexual favors, or even commit assaults, is intolerable. My Office is dedicated to uncovering such violations where they exist and vigorously enforcing the law.”
In October 2017, the Justice Department’s Civil Rights Division announced the Sexual Harassment Initiative, an effort to combat sexual harassment in housing. The Justice Department’s initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of its enforcement efforts – both among survivors and those they may report to – and collaborate with federal, state, and local partners to increase reporting and help survivors quickly and easily connect with federal resources.
The Justice Department is hosting a series of roundtable discussions on this topic around the country and this was the first one on the West Coast. The U.S. Attorney’s Office for the Central District of California is collaborating with the Civil Rights Division to spread the word about options to help individuals experiencing sexual harassment within the seven districts that comprise the Central District of California: Los Angeles, Orange, Riverside, Santa Barbara, San Bernardino, San Luis Obispo, and Ventura counties. Community organizations, such as legal services offices, fair housing organizations, shelters and transitional housing providers, can identify the misconduct and recommend that individuals report sexual harassment to the Justice Department.
The Justice Department brings cases each year involving egregious conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures.
In 2017, the Justice Department recovered for harassment victims more than $1 million in damages. Many instances of sexual harassment in housing continue to go unreported. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.
The Justice Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Civil Rights Division by calling (844) 380-6178 or emailing: [email protected].
Individuals who believe they may have been victims of discrimination may also file a complaint with the U.S. Attorney’s Office Civil Division’s Civil Rights Section.
Two Violent YNB Stretch Gang Members Admit to Drug and Firearm ChargesRead the Press Release
DALLAS — Kris Landon Green, aka “#5,” 20, and Marcus Jackson, aka “Marty-Mar,” 23, both of Dallas, Texas, pleaded guilty yesterday before U.S. District Magistrate Judge Rebecca Rutherford to their role in a drug distribution group that operated within an area referred to as the “2600 Money Block” (4500 block of Maple Avenue in Dallas, Texas), announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas
Green, a member of the Dallas–based violent criminal street gang known as “YNB Stretchgang,” pleaded guilty to one count of conspiracy to distribute a Schedule II controlled substance (cocaine base) and one count of possession of a firearm by a user of a controlled substance. Green faces not less than five years or more than forty years in federal prison and a $5,000,000 fine on the conspiracy count and not more than 10 years in federal prison and a $250,000 fine for the firearms count. Green will remain in custody pending sentencing.
Jackson, pleaded guilty to one count of distribution of a Schedule II controlled substance (cocaine base). Jackson faces up to twenty years in federal prison and a $1,000,000 fine. Jackson will remain in custody pending sentencing.
“Gangs, such as YNB Stretchgang, that spread illegal drugs and wage violence in our community will be held accountable by the Department of Justice,” said U.S. Attorney Nealy Cox. “I commend the many law enforcement officers efforts who have dedicated enormous amounts of time and effort investigating and prosecuting this case.”
A thirty-three count superseding indictment was returned in December 2017 charging fifteen defendants, including Greene and Jackson. The superseding indictment alleges that beginning in January 2016, the defendants used an area in Dallas referred to as “2600 Money Block” to cut, package and distribute cocaine, crack cocaine, marijuana, methamphetamine and ecstasy/OxyContin pills to numerous customers. The proceeds from the sale of drugs were sometimes used to produce music videos glorifying acts of violence and promoting the lifestyle of “YNB Stretchgang” members and associates. Those videos were often uploaded to YouTube or shared through social media.
According to the plea agreement factual resumes filed in Green’s and Jackson’s case, both defendants admit that beginning in March 2016, they were members of “YNB Stretchgang.” On multiple occasions during 2016 and 2017, Green, Jackson and other “YNB Stretchgang” members and associates produced and appeared in music videos glorifying acts of violence and promoting the lifestyle of “YNB Stretchgang” members. Green and Jackson distributed controlled substances including cocaine base and marijuana as a means to make money within the 4500 block of Maple Avenue in Dallas, Texas.
The Bureau of Alcohol Tobacco and Firearms, United States Marshal’s Service, and Dallas Police Department investigated the case. The case is being prosecuted by Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert.
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Two Russian Nationals Sentenced to Prison for Massive Data Breach ConspiracyRead the Press Release
CAMDEN, N.J. – Two Russian nationals were sentenced today to federal prison terms for their respective roles in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
The sentencings were announced by New Jersey, Acting U.S. Attorney William E. Fitzpatrick, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, and Mark McKevitt, Special Agent in Charge of the U.S. Secret Service Newark Field Office.
Vladimir Drinkman, 37, of Syktyvkar and Moscow, Russia, previously pleaded guilty before U.S. District Judge Jerome B. Simandle of the District of New Jersey to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud. He was sentenced to 144 months in prison. Dmitriy Smilianets, 34, of Moscow, previously pleaded guilty to conspiracy to commit wire fraud in a manner affecting a financial institution and was sentenced to 51 months and 21 days (in prison) time served. Both men pleaded guilty in September 2013 before Judge Simandle, who imposed the sentences today in Camden federal court.
Drinkman and Smilianets were arrested in the Netherlands on June 28, 2012. Drinkman was extradited to the District of New Jersey on Feb. 17, 2015, and Smilianets was extradited on Sept. 7, 2012.
“These defendants operated at the highest levels of illegal hacking and trafficking of stolen identities,” Acting U.S. Attorney Fitzpatrick said. “They used their sophisticated computer skills to infiltrate computer networks, steal information and sell it for a profit. Perpetrators of some of the largest data breaches in history, these defendants posed a real threat to our economy, privacy and national security, and cannot be tolerated.”
“Drinkman and Smilianets not only stole over 160 million credit card numbers from credit card processors, banks, retailers, and other corporate victims, they also used their bounty to fuel a robust underground market for hacked information,” Acting Assistant Attorney General Cronan said. “While mega breaches like these continue to affect millions of individuals around the world, hackers and would-be hackers should know that the Department of Justice will use all available tools to identify, arrest, and prosecute anyone who attacks the networks on which businesses and their customers rely.”
“This case demonstrates the investigative capabilities of the U.S. Secret Service and the collaborative efforts of our law enforcement partners, specifically the U.S. Attorney’s Office District of New Jersey, and the Dutch Ministry of Security and Justice,” Special Agent in Charge McKevitt said. “The Secret Service will continue to develop innovative ways to protect the financial infrastructure of the United States and bring to justice cyber criminals who use emerging technologies to conduct business.”
According to documents filed in this case and statements made in court:
Drinkman, Smilianets and three co-defendants hacked into the networks of corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information that the conspirators could exploit for profit, including the computer networks of NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
The five defendants each played specific roles in the scheme. Drinkman and Alexandr Kalinin, 31, of St. Petersburg, Russia, specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 36, of Moscow, also a hacker, specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 30, of Odessa, Ukraine. Smilianets sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, Florida, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Kalinin, Kotov and Rytikov are fugitives.
The Attacks
The five defendants penetrated the computer networks of corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants placed malicious code, or malware, in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.
The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, selling the data only to trusted identity theft wholesalers. He charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
* * *
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges. The charges and allegations contained in indictments against the remaining defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
In addition to the prison terms, Judge Simandle sentenced Drinkman and Smilianets to three years of supervised release.
Acting U.S. Attorney Fitzpatrick and Acting Assistant Attorney General Cronan credited the special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge McKevitt, and the Criminal Investigative Division, under the direction of Special Agent in Charge Michael D’Ambrosio, for the ongoing investigation leading to today’s sentencings. They also thanked public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
The government is represented by Assistant U.S. Attorney Justin Herring of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorneys Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
Two Linn County Men Each Sentenced to More than a Decade in Prison for Stealing GunsRead the Press Release
Two men from Linn County, Iowa, who stole guns from two federally licensed firearms dealers in June 2017 were each sentenced on February 13, 2018, to more than ten years in federal prison.
John Gillespie, age 19, from Cedar Rapids, Iowa, received the prison term after an August 31, 2017, guilty plea to two counts of theft from a federal firearms licensee. Jeremy Reynolds, age 18, from Hiawatha, Iowa, received the prison term after September 1, 2017, guilty plea to two counts of theft from a federal firearms licensee.
At their plea hearings, both Gillespie and Reynolds admitted to breaking into America’s Second Amendment Firearms in Cedar Rapids on June 3, 2017, and Midwest Shooting in Hiawatha on June 16, 2017. In total, the two stole 60 guns from the two stores. Law enforcement officers arrested Reynolds near Midwest Shooting shortly after the break in. Officers arrested Gillespie several hours later after locating him in a car containing a duffle bag with multiple guns stolen from Midwest Shooting. After his arrest, Gillespie attempted to discard one of the guns stolen from America’s Second Amendment Firearms in the back of a police car.
Gillespie was sentenced to 131 months’ imprisonment. Reynolds was sentenced to 121 months’ imprisonment. Both Gillespie and Reynolds were ordered to pay a special assessment of $200 and were ordered to make $12,996.96 in restitution to the two businesses. Both most also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Gillespie and Reynolds were each sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade.
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.
Gillespie and Reynolds are being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Hiawatha Police Department, the Cedar Rapids Police Department, and the Loves Park Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. Gillespie’s case file number is 17-CR-00050 and Reynolds’ case file number is 17-CR-00051.
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Two Indian Citizens and India-based Corporation Sentenced for Conspiring to Smuggle Counterfeit CigarettesRead the Press Release
Abhishek Shukla and Harish Shabhai Panchal, both citizens of India, along with the India-based company, Jubilee Tobacco Industries Corp., were sentenced in federal District Court in Miami, for conspiring to smuggle counterfeit cigarettes into the United States.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Peter H. Kuehl, Acting Special Agent in Charge, U.S. Food & Drug Administration, Office of Criminal Investigations (FDA-OCI), Miami Field Office, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO), made the announcement.
U.S. District Judge Kathleen M. Williams sentenced each of Shukla and Panchal to 23 months imprisonment, to be followed by supervised release for two years. Judge Williams sentenced Jubilee to corporate probation of two years and ordered Jubilee to forfeit $300,000 to the United States.
All three defendants previously pled guilty to conspiring with each other, with the intent to defraud and mislead, sell and cause the sale and dispensing of a counterfeit tobacco product (cigarettes), the containers and labeling of which bore the trade name and marks of the American brand of Newport cigarettes, a tobacco product listed with the FDA pursuant to Title 21, United States Code, Section 387(e)(i)(1), (approximately 68,600 cartons of cigarettes), while knowingly using a counterfeit mark on and in connection with such cigarettes, the use of which marks was likely to cause confusion, to cause mistake, and to deceive. The counterfeit marks were substantially indistinguishable from the marks of the United States domestic manufacturer of Newport brand cigarettes, which marks were then in use by and registered to that manufacturer on the principal register of the United States Patent and Trademark Office, all in violation of Title 18, United States Code, Section 371.
According to court records, including a Joint Factual Statement submitted by the parties, beginning in March 2015 and continuing through August 16, 2017, the defendants initiated contact with an individual cooperating with FDA-OCI, offering counterfeit cigarettes for sale. Through internet negotiations, an agreement was reached for a 20-foot container filled with counterfeit Newport brand cigarettes to be shipped from India to Miami. Payment for the shipment was made in installments through international wire transfers to bank accounts in India and in Dubai, United Arab Emirates. On November 1, 2016, the container arrived and was seized at the Port of Miami with the assistance of U.S. Customs and Border Protection Officers. If distributed in the State of Florida, the un-taxed importation would have an approximate value of $1.2 million. Analysis conducted by FDA’s Forensic Chemistry Center determined that the cartons, packs, and cigarettes were all counterfeit.
Within two weeks of the arrival, the coconspirators sought out FDA-OCI undercover agents offering another shipment, twice as large. By April 2017, deposits totaling $55,000 had been made for more counterfeit Newport cigarettes. On June 9, 2017, the container arrived at the Port of Miami and was again seized with the assistance of Customs and Border Protection Officers, and turned over to FDA-OCI Special Agents. If distributed in the State of Florida, the un-taxed importation would have an approximate value of $3.2 million.
According to acts described in the conspiracy charge, Shukla and Panchal traveled to Miami in August 2017 to meet with the undercover agents to promote further business dealings. During the recorded meeting, they advised the agents that they had been partners for twelve years and personally oversaw the production of all the products being offered. They also assured the agents that they could counterfeit any American-made menthol cigarette with no problem, as well as other trademarked brands, and that they could produce tobacco blends, which would closely match the legitimate product.
Mr. Greenberg commended the investigative efforts of FDA-OCI, ICE-HSI and BSO, for their assistance with this long-term investigation. Mr. Greenberg also thanked U.S. Customs and Border Protection for their support. This matter was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Cedar Falls Men Charged with Possessing Carfentanil Disguised as Oxycodone Pills with Intent to DistributeRead the Press Release
Cameron James Lensmeyer, age 20, and Evan Paul Sage, age 20, from Cedar Falls, Iowa, have each been charged with one count of possessing with intent to distribute carfentanil, as well as other drugs. Sage has also been charged with possessing a firearm in furtherance of a drug trafficking crime. The charges are contained in an Indictment unsealed on February 9, 2018, in United States District Court in Cedar Rapids.
The Indictment alleges that, on or about June 30, 2017, Lensmeyer possessed with intent to distribute carfentanil and marijuana. It further alleges that, on the same date, Sage possessed with intent to distribute carfentanil, marijuana, and cocaine, and that he possessed a firearm in furtherance of those drug crimes.
Evidence at a detention hearing held on February 13, 2018, showed that, in June 2017, the Tri-County Drug Enforcement Task Force conducted a search of Lensmeyer’s and Sage’s shared Cedar Falls residence. During the search, investigators seized over 800 blue pills that appeared to be prescription oxycodone pills (depicted below), over $20,000 in cash, over 30 grams of cocaine, over 600 grams of marijuana, and a loaded .32 caliber handgun. Later testing determined that the blue pills contained carfentanil. Carfentanil is a powerful narcotic that is 10,000 times more potent than morphine and 100 times more potent than fentanyl. It is not approved for use by humans, but is used as an elephant tranquilizer.
If convicted, Lensmeyer faces a maximum possible sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and a lifetime of supervised release following any imprisonment. If convicted on all charges, Sage faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $5,250,000 fine, $200 in special assessments, and a lifetime of supervised release following any imprisonment.
Both men appeared on February 9, 2018, in federal court in Cedar Rapids. Trial for both men is set for March 26, 2018.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Tri‑County Drug Enforcement Task Force and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-2004-LRR.
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Tallahassee Woman Convicted of Drug TraffickingRead the Press Release
TALLAHASSEE, FLORIDA – After a day and a half trial, Jamila Takiyah Hunter, 32, of Tallahassee, was convicted yesterday afternoon of possession with intent to distribute the controlled substance α-Pyrrolidinovalerophenone or “Alpha-PVP.” The verdict was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Hunter’s four co-defendants pled guilty in late 2017 and early 2018 as follows:
- Conspiracy to distribute and possess with intent to distribute a controlled substance:
Travis L. Glasco, Charik James, Tyrail Gallman, and Dora Williams; - Possess with intent to distribute a controlled substance: Glasco, James, and Williams;
- Possession of a firearm in furtherance of drug trafficking: Glasco; and
- Possession of a firearm by a convicted felon: Glasco.
In November 2016, law enforcement officers identified a kilogram package of alpha-PVP destined for delivery to a commercial UPS mailbox rented by Hunter. Agents conducted a controlled delivery of the drug-laden parcel and arrested Hunter after she signed for and accepted the parcel. When agents attempted to contact her co-conspirators, Glasco fled from the parking lot and abandoned a vehicle in the middle of Capital Circle during lunch hour traffic. Subsequent investigation revealed the identity of Hunter’s co-conspirators, who were charged in a superseding indictment.
Glasco, James, Gallman, Williams, and Hunter face a maximum of 20 years in prison for each controlled substance conviction. Additionally, Glasco faces a minimum of 5 years and a maximum of life in prison for possession of a firearm in furtherance of drug trafficking; and a minimum of 15 years and a maximum of life in prison for possession of a firearm by a convicted felon.
The sentencing hearings are scheduled as follows at the U.S. Courthouse in Tallahassee:
- February 23, 2018: Williams (9:30 a.m.);
- April 20, 2018: James (9:00 a.m.) and Gallman (10:30 a.m.); and
- May 10, 2018: Glasco (9:30 a.m.) and Hunter (3:00 p.m.).
This case resulted from investigations by the United States Immigration and Customs Enforcement Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Postal Inspection Service; the Drug Enforcement Administration; the Leon County Sheriff’s Office; and the Tallahassee Police Department. The case was prosecuted by Assistant United States Attorney Michael J. Harwin.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The 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 mcoore information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
- Conspiracy to distribute and possess with intent to distribute a controlled substance:
South Bend Woman Sentenced to 120 Months in PrisonRead the Press Release
SOUTH BEND - Brittany N. Stenberg, age 30, of South Bend, Indiana, was sentenced before South Bend District Court Judge Jon E. DeGuilio for the crime of transporting a minor with intent to engage in criminal sexual activity, announced United States Attorney Thomas L. Kirsch II.
Stenberg was sentenced to 120 months imprisonment followed by 5 years of supervised release.
According to documents in this case, from September 30, 2014, to October 3, 2014, Stenberg transported a minor from Indiana to Illinois for the purpose of engaging in prostitution.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Cook County, Illinois, Sheriff’s Department. The case was handled by Assistant U.S. Attorneys John Maciejczyk and Molly Donnelly.
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South Bend Man Sentenced to 51 Months in PrisonRead the Press Release
SOUTH BEND - George Harvey, age 64, of South Bend, Indiana, was sentenced before South Bend District Court Judge Jon E. DeGuilio for being a convicted felon in possession of a firearm announced United States Attorney Thomas L. Kirsch II.
Harvey was sentenced to 51 months imprisonment followed by 1 year of supervised release.
According to documents in this case, in the middle of the night Harvey was driving without a valid license. Police stopped the car for a traffic violation, found a loaded handgun and a crack pipe. Harvey has approximately eleven (11) felony convictions and twenty (20) misdemeanor convictions. Harvey was awaiting sentencing for a crime in state court when he possessed the firearm.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms with the assistance of the South Bend Police Department. The case was handled by Assistant United States Attorney Joel Gabrielse.
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Second Pittsburgh Woman Sentenced for Role in Fraudulent Tax Return SchemeRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to three years probation on her convictions of mail fraud conspiracy and conspiracy to defraud the United States, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak imposed the sentence on Simone Prater, 29, who was incarcerated pending sentencing. Judge Hornak also ordered that Ms. Prater pay $25,000 in restitution to the Internal Revenue Service.
According to information presented to the court, Sean Brooks, while incarcerated on other charges, prepared and arranged for the filing of more than one hundred fraudulent tax returns on behalf of fellow inmates and other individuals and generated more than $200,000 in fraudulent refunds. The fraudulent refunds were sent to a number of different addresses, and, after forging the endorsement of the payees, the checks were cashed through federally insured financial institutions and through check-cashing establishments. Simone Prater, among others, assisted the conspiracy in a variety of ways, including sending the Internal Revenue Service the fraudulent tax returns, picking up refund checks and providing them to others to cash; disbursing the proceeds of the fraud amongst the conspirators, and providing the names and addresses of closed businesses for Brooks to use as fake employers for taxpayers on the fraudulent tax returns.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
United States Attorney Brady commended the Internal Revenue Service – Criminal Investigation, United States Postal Inspection Service and the Department of Homeland Security – Homeland Security Investigations, for the investigation leading to the successful prosecution of Prater.
Providence Man Admits to Selling Silencer Equipped Machine Gun and Fentanyl Laced HeroinRead the Press Release
PROVIDENCE, RI – A Providence man arrested in April 2017 during a year-long Project Safe Neighborhoods investigation to identify individuals possessing or trafficking firearms in and around the Chad Brown neighborhood of Providence, pleaded guilty today in federal court to possessing and selling an unregistered machine gun equipped with a silencer and selling 240 grams of fentanyl laced heroin to an undercover federal law enforcement agent.
Edward Trinidad, 29, plead guilty as charged in an indictment returned on April 6, 2017, to one count each of possession of an unregistered machine, possession of an unregistered silencer, and transfer of a machine gun; two counts of distribution of heroin and fentanyl; and one count of distribution of 100 grams or more of heroin.
Project Safe Neighborhoods is a federal, state and local law enforcement collaboration to identify, investigate and prosecute individuals responsible for violent crimes in our neighborhoods. Project Safe Neighborhoods has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
Trinidad’s guilty plea is announced by United States Attorney Stephen G. Dambruch; Mickey Leadingham, Special Agent in Charge of the Boston Field Division of ATF; and Providence Police Chief Colonel Hugh T. Clements, Jr.
Appearing before U.S. District Court Chief Judge William E. Smith, Trinidad admitted to the Court that on June 3, 2016, he sold an undercover ATF agent an unregistered Koch Model 94 machine gun equipped with a silencer for $2,500. Trinidad also admitted to the Court that on June 24, 2016, he sold the undercover agent 29.61 grams of fentanyl laced heroin for $1,800; on November 9, 2016, he sold the undercover agent 109.42 grams of fentanyl laced heroin for $5,500; and that on March 31, 2017, he sold the agent 101.15 grams of a material containing fentanyl for $5,500.
In spring 2016, the ATF, the Rhode Island ATF Task Force and the Providence Police Department launched a joint Safe Streets Neighborhoods investigation to analyze shell casings retrieved from crime scenes in and around the Chad Brown neighborhood and elsewhere, utilizing ATF’s National Integrated Ballistic Information Network (NIBN). The investigation was expanded to attempt to determine who possessed various firearms used to commit crimes and the origin of those firearms.
NIBN identifies marks left on shell casings unique to a particular firearm. NIBN then assists in linking crime scenes to a firearm.
The investigation, publicly disclosed in April 2017, resulted in the seizure of the machine gun equipped with a silencer, a .45 caliber semi-automatic pistol, a .40 caliber semi-automatic pistol, a .25 caliber semi-automatic pistol, a .22 caliber revolver; a .380 caliber semi-automatic pistol, various types and quantities of ammunition, substantial quantities of heroin, fentanyl, cocaine and crack cocaine, and approximately $21,000 in suspected drug proceeds.
Trinidad, who has been detained in federal custody since his arrest on April 7, 2017, is scheduled to be sentenced on May 11, 2018. Possession of an unregistered machine gun, transfer of a machine gun and possession of an unregistered silence are each punishable by up to 10 years in federal prison followed by up to 3 years supervised release. Distribution of heroin and fentanyl is punishable by up to 20 years in federal prison followed by up to a life term of supervised release with a minimum 3 years. Distribution of 100 grams or more of heroin is punishable by up to 40 years and no less than 5 years of imprisonment followed by a life term of supervised release with a minimum of 5 years.
At sentencing, Trinidad also faces fines of up to $7,270,000.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
The ATF Task Force is comprised of agents and officers from ATF, Providence Police Department, Pawtucket Police Department, Cranston Police Department, Rhode Island State Police, Providence Fire Department and the Rhode Island Department of Corrections.
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Previously Convicted Felon from Essex County Admits Firearms Possession, Drug Distribution OffensesRead the Press Release
NEWARK, N.J. – A Newark man with at least six prior felony convictions today admitted distributing narcotics and possessing multiple firearms, including two assault rifles and a 12-guage shotgun, U.S. Attorney Craig Carpenito announced.
Carlos Bess, 37, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an indictment charging him with two counts of illegal possession of a firearm as a convicted felon and four counts of distribution and possession with intent to distribute heroin and cocaine.
According to documents filed in this case and statements made in court:
Bess admitted that as a previously convicted felon, he knowingly possessed multiple firearms, including two Rebel Arms AR-15 rifles, a loaded .357 revolver, two loaded .380 pistols, a loaded 9 millimeter pistol, and a 12-gauge shotgun. Bess also admitted distributing heroin in an around Newark on Sept. 30, 2015 and Dec. 1, 2015, and knowingly possessing the heroin and more than 500 grams of cocaine that were found at his residence when he was arrested in December 2015. Sentencing is scheduled for May 31, 2018.
U.S. Attorney Carpenito credited special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge John B. Devito, and special agents with the Drug Enforcement Administration’s (DEA) New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit in Newark.
18-059
Defense Counsel: Frank Arleo, Esq., West Orange, New Jersey
Pittsburgh Woman Sentenced for Participating in Tax Return SchemeRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to three years of probation on her convictions of mail fraud conspiracy and conspiracy to defraud the United States, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak imposed the sentence yesterday on Amber Eubanks, 28, who was incarcerated pending sentencing. Judge Hornak also ordered that Ms. Eubanks pay $26,000 in restitution to the Internal Revenue Service.
According to information presented to the court, Sean Brooks, while incarcerated on other charges, prepared and arranged for the filing of more than 100 fraudulent tax returns on behalf of fellow inmates and other individuals and generated more than $200,000 in fraudulent refunds. The fraudulent refunds were sent to a number of different addresses, and, after forging the endorsement of the payees, the checks were cashed through federally insured financial institutions and through check-cashing establishments. Amber Eubanks, among others, assisted the conspiracy in a variety of ways, including receiving and cashing the fraudulent refund checks using power of attorney provided to her by Brooks, and arranging for checks to be sent to the address of a friend, after which Eubanks would pick up and cash the checks.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
United States Attorney Brady commended the Internal Revenue Service – Criminal Investigation, United States Postal Inspection Service and the Department of Homeland Security – Homeland Security Investigations, for the investigation leading to the successful prosecution of Eubanks.
Pittsburgh Man Pleads Guilty to Illegally Distributing Oxycodone PillsRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania pleaded guilty in federal court to a charge of possession with intent to distribute and distribution of oxycodone, a Schedule II controlled substance, United States Attorney Scott W. Brady announced today.
Michael C. Pegher, 46, pleaded guilty yesterday to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that Pegher, from April 2013 to September 2014, unlawfully distributed more than 3,000 oxycodone tablets he acquired by prescription from Alan Barnett, M.D. Alan Barnett entered a guilty plea on August 26, 2016, to unlawfully distributing prescriptions for oxycodone to Pegher and others, knowing that the recipients were drug addicts or were unlawfully distributing the drugs to others. Barnett was sentenced to five years probation, to include eight months of home detention, and 250 hours community service. Barnett was also ordered to pay $50,000 in fines.
Judge Conti scheduled Pegher’s sentencing for June 4, 2018, at 3:30 p.m. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pegher was released on an unsecured bond pending sentencing.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Pegher.
Palmer Man Sentenced for Conspiring to Import Prescription Drugs from PakistanRead the Press Release
BOSTON – A Palmer man was sentenced for conspiring to import prescription drugs from Pakistan.
Harry Aliengena, 65, was sentenced by U.S. District Court Judge Mark G. Mastroianni to two years in prison and three years of supervised release. In November 2017, Aliengena pleaded guilty to one count of conspiracy to import controlled substances, two counts of felony introduction of misbranded drugs with intent to defraud or mislead, and one count of misdemeanor introduction of misbranded drugs.
Between July 2011 and June 2012, Aliengena conspired to import prescription drugs from Pakistan into the United States and distributed misbranded drugs to U.S. customers. Aliengena communicated regularly with a Pakistani company and ordered various drugs - including Ritalin, Percocet, Hydrocodone, Adderall, and Restoril - all DEA controlled substances. Aliengena then reshipped a portion of these drugs to customers in the United States on behalf of the Pakistani company in return for payments and discounts on drugs for his personal use.
United States Attorney Andrew E. Lelling; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Deepika Bains Shukla of Lelling’s Springfield Branch Office prosecuted the case.
Owner of Medford Pizza Shop Pleads Guilty to Federal Tax ChargesRead the Press Release
BOSTON – The owner of Pinky’s Famous Pizza in Medford pleaded guilty yesterday in federal court in Boston in connection with filing tax returns which failed to disclose the cash payroll payments he paid to employees.
Nikita Yanakopulos, 40, pleaded guilty to two counts of aiding and assisting in filing false Forms 941, Employer’s Quarterly Federal Tax Return, which is used to report income taxes, Social Security taxes, and Medicare taxes withheld from employees’ paychecks. U.S. District Court Judge Richard G. Stearns scheduled sentencing for May 22, 2018.
Yanakopulos owned and operated Pinky’s from approximately 2000 to 2016. During that period, Yanakopulos paid several employees by check and cash and other employees entirely in cash. Yanakopulos caused his payroll service to file Forms 941 that only included the payroll paid by check. During those years, Yanakopulos made cash payroll payments to his employees totaling approximately $675,000, but failed to report those payments to his payroll service or pay the required withholding amounts to the IRS. He thereby avoided paying FICA, Medicare, and withholding taxes totaling approximately $172,000.
The charge of aiding and assisting the filing of false tax returns provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit is prosecuting the case.
North Country Man Pleads Guilty to Contraband Cigarette ChargesRead the Press Release
SYRACUSE, NEW YORK – Jeffrey Lazare, age 47, of Hogansburg, New York, pled guilty today to failing to maintain required records relating to the manufacture and sale of cigarettes, announced United States Attorney Grant C. Jaquith and Tom Crone, Assistant Administrator for Field Operations, U.S. Alcohol and Tobacco Trade and Tax Bureau (TTB). Sentencing is scheduled for June 7, 2018, in Utica, New York.
In pleading guilty, Jeffrey Lazare admitted that from January 2014 through August 2014, in Franklin County, he shipped, sold, and distributed quantities of cigarettes in excess of 10,000 in single transactions and failed to maintain required information about these transfers as required by federal law. Lazare further admitted that during this period his business generated proceeds of at least $3,500,000.00 from his unlicensed cigarette manufacturing operation.
As part of his guilty plea today, Lazare admitted that on numerous occasions between January 2014 and August 2014, as the sole owner of Braves Manufacturing and/or Braves Packaging, he shipped, sold, or distributed quantities of cigarettes in single transactions involving in excess of 10,000 cigarettes, to numerous tobacco and cigarette vendors. Lazare failed to keep required records concerning the shipment, sale, and distribution of cigarettes, which records are mandated to include the identity of, and shipping information for, the purchaser.
Lazare also admitted that his failure to maintain required records was part of an effort to avoid paying the Federal Excise Tax (FET) on the cigarettes he manufactured and distributed, and that the thirty-eight (38) separate sales of 10,000 or more cigarettes were subject to an FET of at least $247,623.60 that was not paid.
The plea agreement in this case calls for a recommended sentence for Lazare of one year and a day imprisonment, and forfeiture of $3,500,000, which includes $957,065.00 seized by federal authorities from the defendant’s bank account in 2013. The Court can also impose a term of supervised release of up to one year. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the U.S. Alcohol and Tobacco Trade and Tax Bureau (TTB) and is being prosecuted by Assistant U.S. Attorney Carl Eurenius.
New York Man Admits Orchestrating $45 Million Dollar Compounding Pharmacy SchemeRead the Press Release
NEWARK, N.J. – A North Tonawanda, New York, man today admitted running a large-scale scheme to defraud private and federally-funded health care benefit programs out of millions of dollars by submitting fraudulent claims for medically unnecessary compounded medications, U.S. Attorney Craig Carpenito announced.
Steven M. Butcher, 39, a former pharmaceutical sales representative turned owner and operator of MedMax LLC, a marketing company for compounded medications, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit health care fraud and violate the Anti-Kickback Statute.
According to documents filed in this case and statements made in court:
Butcher admitted that from July 2014 through April 2016, he organized a large-scale scheme to defraud health insurance plans by submitting phony claims for medically unnecessary prescription compounded medications, including scar creams, pain creams, and metabolic supplements marketed by MedMax for certain compounding pharmacies.
Through MedMax, Butcher and others targeted individuals covered by private and federally-funded insurance plans that paid for compounded medications and convinced these individuals to obtain them regardless of medical necessity. Butcher also admitted that from December 2014 through June 2015, he conspired with others to pay kickbacks to persuade individuals to bill TRICARE – a health care benefit program for members of the military and their families – for medically unnecessary compounded medications.
During the scheme, Butcher would either send prescriptions directly to a compounding pharmacy or to a billing distribution company, which would then refer the prescription to a particular compounding pharmacy and submit a claim to the appropriate health insurance plan on behalf of that pharmacy. In return, Butcher received anywhere between 40 and 53 percent of the reimbursement received for each paid claim. At that time, health insurance plans were reimbursing compounding pharmacies anywhere between $3,000 and $43,000 for each compounded prescription.
To maximize profit in the compounding scheme, Butcher recruited several individuals as “sales representatives” who were paid a certain percentage for each compounded medication that they caused to be billed to a targeted health insurance plan. If a sales representative was a direct beneficiary of a targeted health insurance plan, Butcher paid them to obtain medically unnecessary compounded medications for themselves or their family. In addition, Butcher paid sales representatives for any individual that they recruited to the scheme.
For instance, Butcher recruited former pharmaceutical employee Peter Pappas, 45, of Drexel Hill, Pennsylvania. As a MedMax sales representative, Pappas received medically unnecessary prescriptions for himself and also recruited several other individuals, including other former pharmaceutical sales representatives Jason Cerge, 41, of Media, Pennsylvania, and Julie Andresen, 40, of Haddonfield, New Jersey. Cerge recruited an individual identified in the information as “CC-1,” a New Jersey resident who targeted TRICARE beneficiaries.
Butcher paid Pappas for each of his personal compounded prescriptions and for each medically unnecessary medication Cerge, CC-1, and Andresen caused to be billed to a targeted health insurance plan.
Butcher and other conspirators, including Pappas, Cerge, and Andresen, took advantage of their relationships with physicians and other health care professionals to get prescriptions. For instance, Butcher used his relationship with an individual identified in the information as “Physician Assistant 1,” to request that Physician Assistant 1 prescribe several medically unnecessary compounded medications for TRICARE beneficiaries. Physician Assistant-1 agreed and Butcher and others profited from phony claims to TRICARE.
As part of his plea agreement, Butcher must forfeit $4,584,597.92 in criminal proceeds and pay restitution of at least $45 million.
Of the $45 million loss Butcher caused to health care benefit programs, at least $3 million was attributable to TRICARE.
For the conspiracy to commit health care fraud charge, Butcher faces a statutory maximum of 10 years in prison. For the conspiracy to violate the Anti-Kickback Statute charge, Butcher faces a statutory maximum of five years in prison. Each offense is also punishable by a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 18, 2018.
Pappas, Andresen and Cerge have all pleaded guilty to their roles in the scheme. Pappas and Cerge await sentencing. Andresen was sentenced Feb. 7, 2018 to 15 months in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the ongoing investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Erica Liu and Vikas Khanna, Deputy Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.
To date, the New Jersey U.S. Attorney’s Office has prosecuted 19 individuals involved in various compounding pharmacy schemes across New Jersey to defraud health care benefit programs, and has recovered more than $4 million through forfeiture and restitution. These schemes have caused a total loss of more than $70 million to the health care industry, which has affected state, federal and private health care benefit programs.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.38 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Herbert L. Greenman Esq., Buffalo, New York
New Orleans Man Charged with Illegal Possession of a FirearmRead the Press Release
U.S. Attorney Duane A. Evans announced that DARREN RUFFIN, age 26, of New Orleans, was charged in a one-count Indictment with being a felon in possession of a firearm.
According to the Indictment, RUFFIN, who had previously been convicted of a felony in Orleans Parish Criminal District Court, possessed a .40 caliber Glock Model 27 pistol in December 2017.
If convicted, RUFFIN faces a maximum term of imprisonment of ten years, a fine of $250,000, and three years of supervised release following any term of imprisonment.
U. S. Attorney Evans reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
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.
U.S. Attorney Evans praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the New Orleans Police Department in investigating this matter. Assistant United States Attorney Jonathan L. Shih is in charge of the prosecution.
Multi-Agency Collaboration Leads to 69 Searches and over 25 Arrests in Effort to Fight Coordinated Criminal Activity in Northern CaliforniaRead the Press Release
SACRAMENTO, Calif. — Today U.S. Attorney McGregor W. Scott announced the arrest of 18 federal defendants on narcotics and weapons-related charges as part of a multi-agency law enforcement investigation into coordinated criminal activity in Woodland, California. The U.S. Attorney was joined in announcing the results of the operation by FBI Special Agent in Charge Sean Ragan, California Department of Corrections and Rehabilitation Secretary Scott Kernan, Woodland Chief of Police Luis Soler, Yolo County District Attorney Jeff Reisig, and Yolo County Sheriff Ed Prieto.
Early this morning, a coalition of local, state and federal law enforcement officers conducted 69 searches pursuant to federal warrants and parole or probation search conditions at various locations throughout Northern California. Officers arrested 18 individuals on charges alleged in six separate federal indictments and one federal criminal complaints that were unsealed today. Three additional, related criminal complaints were filed this week, one in the Eastern District of California, one in the Western District of Pennsylvania, and one in the District of Oregon. In addition, local officials arrested more than 10 additional individuals on state charges as part of the operation. The investigation, led by the FBI, the California Department of Corrections and Rehabilitation, and the Woodland Police Department, focused on coordinated criminal activity that centered in Yolo County but extended to other Northern California counties and prisons.
Beginning in the spring of 2016, this investigation uncovered organized criminal activity in Woodland, California with ties to criminal organizations located in California’s jail and prison system. Although centered in Yolo County, the investigation revealed that at least 9 other California counties were negatively impacted by these criminal organizatons: Sacramento, Sutter, Colusa, Yuba, Del Norte, Solano, Fresno, Santa Clara, and Siskiyou.
The investigation focused on intercepting communications of those involved in drug and firearms offenses – including cellphone communications, social media communications on Facebook and Instagram, and clandestine communications on Snapchat and other platforms. In several instances, these modes of communication were used to sell weapons and coordinate the sales of cocaine, methamphetamine, and prescription drugs. In some instances, it is alleged that prison inmates directed defendants outside the prisons to smuggle drugs into the prison or to sell and distribute narcotics outside the prison.
U.S. Attorney McGregor W. Scott stated, “Today’s operation is the result of a months-long endeavor involving federal, state, and local law enforcement agencies to disrupt coordinated criminal activity that, although centered in Yolo County, spread to several other Northern California counties. This operation demonstrates how federal law enforcement can join forces with our state and local partners to make our communities safer and stop illegal guns and drugs from flooding our streets.”
“The FBI is committed to joining forces with our state and local partners to effectively combat the gang and drug-related violence that plagues our communities,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Our shared goal is stopping gang violence, getting drugs and weapons off the streets, and helping to bring justice to the victims of crimes committed in our communities. Today’s arrests demonstrate the strength of successful law enforcement collaboration and highlight our shared commitment to the public we serve.”
“Our department is committed to putting a stop to illegal activities conducted by prison gangs in our neighborhoods, schools and communities to further their criminal organizations and instill fear in people,” said Secretary Scott Kernan, California Department of Corrections and Rehabilitation. “The success of this investigation demonstrates how effective our partnerships are with local, state, and federal agencies. When we work together, we effectively are able to target dangerous individuals in and out of prison. I am thankful and proud of the hard work that went into this operation.”
“Over the last several years, many of the defendants who were arrested today and their associates have plagued Yolo County with their criminal activity. This operation has helped to disable their organization at its most basic level and will hopefully have positive long term impacts on public safety,” said Yolo County District Attorney Jeff Reisig.
Operation Silent Night is the product of an investigation by the FBI, California Department of Corrections and Rehabilitation (CDCR), Yolo County District Attorney, Woodland Police Department, and the California Highway Patrol. The following agencies provided substantial assistance: Colusa County Sheriff’s Office, Sacramento Police Department, Sacramento County Sheriff’s Office, West Sacramento Police Department, Yolo County Sheriff’s Office, Davis Police Department, Yuba City Police Department, Yuba County Sheriff’s Office, Sutter County Sheriff’s Office, Solano County Sheriff’s Office, Vacaville Police Department, the Correctional Intelligence Task Force (CITF), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service, and the Drug Enforcement Administration (DEA). Assistant U.S. Attorneys Owen Roth and Justin L. Lee are prosecuting the cases.
The federal defendants and their charges are listed below. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
• Aldo Arellano, 24, of Marysville, is charged with distribution of methamphetamine.
• Raul Barajas, 21, of Woodland, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances, and possession with intent to distribute methamphetamine.
• Patrick Botello, 31, of Pelican Bay State Prison, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin and using a cellphone to facilitate a drug trafficking offense.
• Israel Covarrubias, 25, of Woodland, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances after having been convicted of a felony drug offense, possession with intent to distribute methamphetamine, distribution of methamphetamine, and using a cellphone to facilitate a drug trafficking offense.
• Milton Escobedo, 28, of Woodland, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances, distribution of cocaine, and using a cellphone to facilitate a drug trafficking offense.
• Rachel Felix, 38, of Woodland, is charged with distribution of methamphetamine.
• Ashley Habash, 28, of Marysville, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin and using a cellphone to facilitate a drug trafficking offense.
• Edgar Jimenez, 19, of Sacramento, is charged with distribution of cocaine and using a cellphone to facilitate a drug trafficking offense.
• Justin Johnson, 33, of Sacramento, is charged with possession with intent to distribute methamphetamine and being a felon in possession of a firearm.
• Jose Madrigal-Vega, 31, Woodland, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances, and distribution of methamphetamine.
• Victor Magana, 24, of Woodland, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances, possession with intent to distribute methamphetamine, distribution of methamphetamine, distribution of cocaine, and using a cellphone to facilitate a drug trafficking offense.
• James Masterson, 28, of Newcastle, is charged with using a cellphone to facilitate a drug trafficking offense.
• Brenda Miranda, 21, of Napa, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin and using a cellphone to facilitate a drug trafficking offense.
• Reginald Pajimola, 23, of Marysville, is charged with possession with intent to distribute cocaine and using a cellphone to facilitate a drug trafficking offense.
• Mercedez Silva-Sims, 21, of Colusa, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin and using a cellphone to facilitate a drug trafficking offense.
• Joshua Sims, 24, of Colusa, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin, attempted distribution of methamphetamine, using a cellphone to facilitate a drug trafficking offense, and distribution of cocaine.
• Erica Umbay, 42, of Woodland, is charged with being a felon in possession of a firearm.
• Ricardo Villa, 39, of Pelican Bay State Prison, is charged with conspiracy to possess with intent to distribute and to distribute methamphetamine and heroin, and using a cellphone to facilitate a drug trafficking offense.
• Trevor White, 27, of Sacramento, is charged with conspiracy to possess with intent to distribute and to distribute controlled substances and distribution of methamphetamine.
Two additional defendants are being charged in the District of Oregon and the Western District of Pennsylvania. The Yolo County District Attorney’s Office and the U.S. Attorney’s Office continue to review possible charges against additional potential defendants.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
This case is brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
Mineral County woman admits to drug distribution chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – A Keyser, West Virginia woman has admitted to a drug distribution charge, United States Attorney Bill Powell announced.
Autumn Breann Ward, age 34, pled guilty to one count of “Distribution of Heroin.” Ward admitted to selling heroin in August 2016 in Mineral County.
Ward faces up to 20 years incarceration and a fine of up to $1,000,000. 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.
Special Assistant U.S. Attorney C. Lydia Lehman, also with the Berkeley County Prosecuting Attorney’s Office, is prosecuting the case on behalf of the government. The Potomac Highlands Drug and Violent Crimes Task Force investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Man Arrested for “Ponzi” Style Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – A Fairfax man was arrested today on charges of orchestrating a multi-year investment fraud scheme causing at least hundreds of thousands of dollars in losses to dozens of victims.
According to allegations in the complaint, Amrit Jaswant Singh Chahal, 30, operated an investment fraud scheme through The Kane Capital Investment Group, LLC (Kane Capital), a company he established and operated. Chahal executed this fraud through a “Ponzi” scheme, whereby funds solicited from new investors were used to pay disbursements to old investors, without disclosing this fact to his investors.
According to allegations in the complaint, Chahal falsely represented that Kane Capital had earned returns of roughly 28 to 34 percent annually, when in fact, Chahal had suffered substantial losses in managing investors’ funds. The complaint further alleges that Chahal created falsified brokerage statements to conceal the losses he had sustained, opened a bank account in the name of an investor without that investor’s knowledge or consent, and siphoned off some of his investors’ funds by transferring the money to accounts he controlled or by spending the funds on personal items.
The criminal complaint charging Chahal with wire fraud was unsealed today. He faces a maximum penalty of 20 years in prison if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement. Assistant U.S. Attorneys Matthew Burke and Jamar K. Walker are prosecuting the case.
Individuals who believe they may be a victim of this fraud are encouraged to call the Eastern District of Virginia Victim/Witness Coordinators at 1-800-221-6538.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-MJ-70.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
MS-13 gang member sentenced in federal court for illegal gun possessionRead the Press Release
Illegal alien from El Salvador lived on the Westside of Indianapolis
PRESS RELEASE
Indianapolis - United States Attorney Josh Minkler today announced the sentencing of an illegal alien and violent gang member found to be in possession of a firearm. Jose Salvador Gonzalez-Campos, age 27, was sentenced to 1 year and 1 day imprisonment by U.S. District Judge Sarah Evans Barker.
“Protecting our communities from ruthless transnational criminal organizations like MS-13 who exploit our immigration laws and terrorize our communities is a top priority of this office and the Department of Justice,” said Minkler.
Gonzalez-Campos was found in the company of other known MS-13 gang members’ associates in the Columbus, Ohio area. On more than one occasion, investigators observed Gonzalez-Campos wearing a light blue backpack. In addition, photographs posted on a Facebook page associated with Gonzalez-Campos showed him wearing a light blue backpack.
On August 15, 2017, members of an FBI SWAT team executed a search of the defendant’s residence, 2810 West Ray Street, Indianapolis, and agents took Gonzalez-Campos and three other alleged MS-13 gang members into federal custody. During a subsequent search of the residence, agents located a light blue backpack similar to the one Gonzalez-Campos had been seen wearing. In the backpack, agents discovered an El Salvadorian passport with the defendant's name listed on it; a stainless steel Taurus .357 caliber revolver and five rounds of .357 ammunition. In the same room with the backpack, agents found a second passport with Gonzalez-Campos’ name and a photograph that depicted the defendant in various poses with family members.
Gonzalez Campos is an illegal alien and cannot legally possess a firearm.
This 18-month investigation was conducted by the Federal Bureau of Investigation (FBI); Immigration Customs Enforcement; the Columbus, Indiana Police Department; and the Franklin County, Indiana, Sheriff’s Office.
“Violent criminal street gangs like MS-13 threaten our communities. Today’s sentence will not only make our neighborhoods safer, but send a message to other gang members that the FBI and its law enforcement partners will continue to aggressively pursue efforts to disrupt and dismantle organized crime groups such as these,” said Robert Middleton, Acting Special Agent in Charge of the FBI’s Indianapolis Division.
According to Assistant United States Attorney Barry Glickman, who serves as the Deputy Chief of Gun and Violent Crimes, Gonzalez-Campos will likely be removed to his native country of El Salvador after serving his sentence. Judge Barker also imposed a term of three years supervised release.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the office’s firm commitment to utilize and partner with law enforcement agencies to prosecute illegal immigration cases, to prosecute our most violent criminals and focus local prosecutions on illegal gun possession. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Section 1.8, 2.2 and 2.9.
MS-13 Member Pleads Guilty to Conspiring to Participate in a Violent Racketeering EnterpriseRead the Press Release
A Maryland gang member pleaded guilty today to his participation in a racketeering enterprise in furtherance of the activities of the gang known as La Mara Salvatrucha, or MS-13, including his participation in two conspiracies to commit murder.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Acting U.S. Attorney Stephen M. Schenning of the District of Maryland; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Henry P. Stawinski III of the Prince George’s County, Maryland, Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief Douglas Holland of the Hyattsville Police Department; Chief Edward Hargis of the Frederick Police Department; Frederick County State’s Attorney J. Charles Smith; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy made the announcement.
Selvin Raymundo Salazar, aka “Inquieto,” aka “Little,” 26, pleaded guilty before the Honorable Judge Peter J. Messitte in the District of Maryland to conspiracy to participate in a racketeering enterprise.
“Selvin Raymundo Salazar and his MS-13 clique terrorized communities in Maryland by committing senseless acts of violence,” said Acting Assistant Attorney General Cronan. “Today’s guilty plea makes plain the Department’s unwavering commitment to working with our federal, state, and local partners to use all lawful tools at our disposal to disrupt the significant threat that this violent and ruthless gang poses to our communities.”
“MS-13 is a transnational criminal organization that presents a direct public safety threat, not just to the Maryland-area communities we’ve been sworn to protect, but also to communities across the country,” said Special Agent in Charge Watson. “Homeland Security Investigations is committed to investigating MS-13 criminal activities, collaborating with our local law-enforcement partners to crackdown on this international gang and ensuring that Maryland remains safeguarded from the violent crimes MS-13 commits.”
According to the plea agreement, MS-13 is a national and international gang composed primarily of immigrants or descendants of immigrants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County, Montgomery County, and Frederick County, Maryland. MS-13 members are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Pursuant to his plea agreement, Salazar admitted that from at least 2012 through at least 2014, he was a member and associate of the Normandie Locos Salvatrucha clique of MS-13. Salazar admitted that on Feb. 28, 2013, and again on July 30, 2014, for the purpose of maintaining and increasing his position in MS-13, he and other MS-13 members conspired to murder victims that he and his co-conspirators had identified as chavalas.
Specifically, Salazar admitted that on Feb. 28, 2013, in the Lewisdale community of Prince George’s County, Maryland, he and members of the Sailors Locos Salvatrucha Westside clique of MS-13 traveled in a vehicle, searching for chavalas. Salazar was armed with a .380 caliber handgun that belonged to the Normandie clique. After observing an individual that he and his co-conspirators believed to be a chavala, a co-conspirator took the firearm from Salazar, and Salazar and a co-conspirator exited the car and approached the victim, who was standing with a companion. Salazar’s co-conspirator took the handgun from Salazar and shot the victim as the victim’s companion ran away. Salazar and his co-conspirator ran back to the vehicle and he and the occupants of the vehicle fled. Salazar then returned the .380 caliber firearm to the Normandie clique.
Salazar further admitted that on July 30, 2014, in Hyattsville, Maryland, he and at least two other members or associates of the Normandie clique of MS-13 approached three victims. According to Salazar, two of his co-defendants pulled out firearms and shot one of the victims seven times, causing wounds to the victim’s upper torso, right arm and face. The second victim sustained a gunshot wound to his right side. Salazar further stated that, prior to the shooting, he and his co-conspirators had been informed by an associate of MS-13 that the victims were chavalas.
Five of the shell casings recovered from the scene of the July 30, 2014 shooting were linked to fired casings recovered at other MS-13-related crime scenes, including the Feb. 28, 2013 shooting described above; a murder that took place in Hyattsville, Maryland on Nov. 11, 2012; and a shooting that took place in Laurel, Maryland on March 28, 2014.
Two of Salazar’s co-defendants remain charged in the third superseding indictment with various racketeering violations and multiple violent crimes, including murder. The trial of one of the remaining defendants is scheduled to commence on Feb. 20. An indictment is merely an allegation. Those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Salazar is scheduled to be sentenced on May 23.
HSI Baltimore, the Prince George’s County Police Department, the Frederick County Police Department, the Hyattsville City Police Department, the Montgomery County Police Department, and the Prince George’s County State’s Attorney’s Office investigated the case. Trial Attorney Francesca Liquori of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Lindsay Eyler Kaplan are prosecuting the case.
MS-13 Member Pleads Guilty to Conspiring to Participate in A Violent Racketeering EnterpriseRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – A Maryland gang member pleaded guilty today to his participation in a racketeering enterprise in furtherance of the activities of the gang known as La Mara Salvatrucha, or MS-13, including his participation in two conspiracies to commit murder.
Acting U.S. Attorney Stephen M. Schenning of the District of Maryland; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Henry P. Stawinski III of the Prince George’s County, Maryland, Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief Douglas Holland of the Hyattsville Police Department; Chief Edward Hargis of the Frederick Police Department; Frederick County State’s Attorney J. Charles Smith; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy made the announcement.
Selvin Raymundo Salazar, aka “Inquieto,” aka “Little,” 26, pleaded guilty before the Honorable Judge Peter J. Messitte in the District of Maryland to conspiracy to participate in a racketeering enterprise.
“Selvin Raymundo Salazar and his MS-13 clique terrorized communities in Maryland by committing senseless acts of violence,” said Acting Assistant Attorney General Cronan. “Today’s guilty plea makes plain the Department’s unwavering commitment to working with our federal, state, and local partners to use all lawful tools at our disposal to disrupt the significant threat that this violent and ruthless gang poses to our communities.”
According to the plea agreement, MS-13 is a national and international gang composed primarily of immigrants or descendants of immigrants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County, Montgomery County, and Frederick County, Maryland. MS-13 members are required to commit acts of violence within the gang and against rival gangs. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Pursuant to his plea agreement, Salazar admitted that from at least 2012 through at least 2014, he was a member and associate of the Normandie Locos Salvatrucha clique of MS-13. Salazar admitted that on Feb. 28, 2013, and again on July 30, 2014, for the purpose of maintaining and increasing his position in MS-13, he and other MS-13 members conspired to murder victims that he and his co-conspirators had identified as chavalas.
Specifically, Salazar admitted that on Feb. 28, 2013, in the Lewisdale community of Prince George’s County, Maryland, he and members of the Sailors Locos Salvatrucha Westside clique of MS-13 traveled in a vehicle, searching for chavalas. Salazar was armed with a .380 caliber handgun that belonged to the Normandie clique. After observing an individual that he and his co-conspirators believed to be a chavala, a co-conspirator took the firearm from Salazar, and Salazar and a co-conspirator exited the car and approached the victim, who was standing with a companion. Salazar’s co-conspirator took the handgun from Salazar and shot the victim as the victim’s companion ran away. Salazar and his co-conspirator ran back to the vehicle and he and the occupants of the vehicle fled. Salazar then returned the .380 caliber firearm to the Normandie clique.
Salazar further admitted that on July 30, 2014, in Hyattsville, Maryland, he and at least two other members or associates of the Normandie clique of MS-13 approached three victims. According to Salazar, two of his co-defendants pulled out firearms and shot one of the victims seven times, causing wounds to the victim’s upper torso, right arm and face. The second victim sustained a gunshot wound to his right side. Salazar further stated that, prior to the shooting, he and his co-conspirators had been informed by an associate of MS-13 that the victims were chavalas.
Five of the shell casings recovered from the scene of the July 30, 2014 shooting were linked to fired casings recovered at other MS-13-related crime scenes, including the Feb. 28, 2013 shooting described above; a murder that took place in Hyattsville, Maryland on Nov. 11, 2012; and a shooting that took place in Laurel, Maryland on March 28, 2014.
Two of Salazar’s co-defendants remain charged in the third superseding indictment with various racketeering violations and multiple violent crimes, including murder. The trial of one of the remaining defendants is scheduled to commence on Feb. 20. An indictment is merely an allegation. Those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Salazar is scheduled to be sentenced on May 23.
HSI Baltimore, the Prince George’s County Police Department, the Frederick County Police Department, the Hyattsville City Police Department, the Montgomery County Police Department, and the Prince George’s County State’s Attorney’s Office investigated the case. Trial Attorney Francesca Liquori of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Lindsay Eyler Kaplan are prosecuting the case.
Law Office Manager Forged and Cashed Firm Checks for Personal UseRead the Press Release
PITTSBURGH - An Allegheny County resident pleaded guilty in federal court to a charge of bank fraud, United States Attorney Scott W. Brady announced today.
Anthony Calaiaro, 34, of Pittsburgh, Pennsylvania, pleaded guilty to one count before United States District Judge David S. Cercone.
According to the indictment, from June 2014 through approximately April 2016, Calaiaro, who was employed as an Office Manager for a law firm, wrote checks to himself by forging the signature of a partner from the firm. Calaiaro then cashed the forged checks at various locations and used the funds for his own personal use. The total loss is approximately $827,020.39.
Judge Cercone scheduled sentencing for June 22, 2018 at 11 a.m. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Anthony Calaiaro.
Jury Convicts Attorney-Imposter Who Operated Fraudulent Nationwide Law PracticeRead the Press Release
PHILADELPHIA – A federal jury yesterday returned guilty verdicts on all counts against Leaford George Cameron, 65, of Burlington, New Jersey, in connection with his operation of a fraudulent nationwide law practice. Cameron was convicted of one count of mail fraud, two counts of wire fraud, and three counts of making false statements.
The government’s trial evidence proved that for over a decade, Cameron posed as an attorney in numerous legal cases pending in federal and state courts around the United States, defrauding over 100 victim “clients” who paid Cameron for what they believed were legitimate legal services. Cameron’s victim “clients” resided around the country and world, including in Pennsylvania, New York, New Jersey, Connecticut, Florida, Illinois, Jamaica, and India.
To gain access to the legal system, and to deceive victims, courts, judges, and opposing lawyers, Cameron repeatedly stated in his legal motions, forms, and filings – often under the penalty of perjury – that he was an attorney with a law license issued by the Pennsylvania Supreme Court. Cameron, who is not a lawyer and has never been a lawyer, used multiple stolen Attorney Identification Numbers belonging to real lawyers, including an Administrative Law Judge in Washington, D.C., when filing his legal forms and motions.
To deceive the world into believing that he was a real lawyer, Cameron devised a fake law firm complete with fake lawyers and fake administrative/support staff. Cameron, who called his fraudulent firm “The Law Offices of Cameron, Hamilton and Associates” or “The Law Offices of Bernstein, Cameron, Hamilton and Associates,” invented the identities of fake lawyers with the last names “Hamilton” and “Bernstein,” neither of whom were real lawyers working at the firm. Cameron obtained and used business cards, letters, and envelopes which contained images of the scales of justice and that listed the name of his fake law firm and the other fake lawyers in the firm. Cameron submitted legal filings to courts in which he forged the name of one of the fake lawyers at his fake firm, and also communicated with victims by writing letters that he signed using different versions of a fake staff worker who Cameron called, at various times, either “Ann Marie Hyde,” “Ann Marie Hall,” or “Ann Marie Hinds.” In one letter Cameron wrote to a victim using the “Ann Marie” identity, Cameron threatened the victim that failing to pay Cameron’s legal bill would cause adverse consequences for the victim’s immigration status in the United States.
Cameron, who ran his fraudulent law practice from his house in Burlington, NJ, created fake identifiers for his home address to deceive his victims and the courts into believing that he had a real commercial office. Specifically, Cameron added the words “Suite B-1,” “Suite B-2,” “PO Box 399,” and/or “PO Box 1399” to his letters and filings to give the impression that his house was a commercial setting. Cameron, however, knew that he could not tell the IRS or the New Jersey government that he was a lawyer in his tax returns, and risk being caught; Cameron thus stated in his tax returns that he either was a “consultant,” “litigation specialist,” or “legal consultant.”
Cameron, who claimed to have earned various degrees including a BSC, MBA, LLB and LLM, had little idea what he was doing in his victims’ legal matters, causing significant harm to his victims and their cases. In one home foreclosure case pending in the Delaware County, Pennsylvania Court of Common Pleas, Cameron’s victim “client” lost her home as a result of the lawsuit; the same victim “client” later hired Cameron for a guardianship matter pending in the Probate Court of Gwinnett County, Georgia, which also resulted in a loss. Cameron also posed as a lawyer in other types of cases, including in an automobile accident case and a divorce case. Cameron also represented dozens of victim “clients” in their immigration matters pending in immigration courts around the country, including in Chicago, IL, New York City, NY, Philadelphia, PA, and Hartford, CT. Cameron’s fraudulent legal work in those cases resulted in his victim “clients” suffering serious adverse consequences, including being ordered removed from the United States.
Cameron’s sentencing was set for Thursday, May 31, 2018, before U.S. District Judge Gene E.K. Pratter. Cameron faces a statutory maximum sentence of 75 years in prison, up to $1.5 million in fines, three years of supervised release, and a $600 special assessment.
The case was investigated by Homeland Security Investigations (HSI), within the U.S. Department of Homeland Security, with assistance provided by U.S. Citizenship and Immigration Services. It was prosecuted by Assistant United States Attorney James Petkun.
Indictment for Attempted Production of Child Pornography Returned for Man Accused of Recording Video in High School Locker RoomRead the Press Release
Charles E. Peeler, United States Attorney for the Middle District of Georgia, announced that today the grand jury returned an indictment charging Timothy Brian Burnette, age 40, of Union Point, Georgia, with two counts of attempted production of child pornography.
The charges against Mr. Burnette stem from the allegation that while working as a custodian at Oconee County High School, he repeatedly used a cell phone to record video of minor students while they were changing in the locker room. Mr. Burnette was previously arrested on state charges of illegal surveillance and remains in custody in the Oconee County Jail.
Each of the charges against Mr. Burnette carries a mandatory minimum sentence of 15 years in federal prison, up to a maximum of 30 years in prison, a maximum fine of $250,000.00, at least 5 years and up to a lifetime of supervised release, and registration as a sex offender.
A copy of the indictment is attached. The indictment is only an allegation of criminal conduct. A defendant is presumed innocent until and unless proven guilty in a court of law.
This case is being investigated by the Oconee County Sheriff’s Office and the Federal Bureau of Investigation. The Georgia Bureau of Investigation has provided additional assistance. Assistant U.S. Attorney Peter D. Leary is prosecuting the case for the Government.
Indianola Man Sentenced to 235 months in Prison for Child Pornography OffensesRead the Press Release
DES MOINES, Iowa – On February 2, 2018, Scott Jacob Smith, age 33, of Indianola, appeared before United States District Court Judge Stephanie M. Rose and was sentenced to 235 months in prison following a jury trial where he was found guilty of receipt of visual depictions of minors engaging in sexually explicit conduct and possession of child pornography.
According to evidence presented at trial, a search warrant was executed at Smith’s residence in Indianola on August 1, 2013, and his computer was seized by law enforcement. A subsequent forensic examination of Smith’s computer showed he received and possessed images containing child pornography.
This investigation was conducted by the United States Department of Homeland Security – Homeland Security Investigations, Iowa Division of Criminal Investigation – Internet Crimes Against Children Task Force, United States Marshals Service, Indianola Police Department, and Iowa Department of Human Services. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the United States Department of Justice’s “Project Safe Child” initiative, which was started in 2006 as a nationwide effort to combine law enforcement investigations and prosecutions, community action, and public awareness in order to reduce the incidence of sexual exploitation of children.Any persons having knowledge of a child being sexually abused are encouraged to call the Iowa Sexual Abuse Hotline at 1-800-284-7821.
Illegal Alien Guilty of Drug Trafficking, Immigration Violations in East TexasRead the Press Release
TYLER, Texas – A 48-year-old Mexican national illegally residing in Carthage, Texas, has been found guilty of drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Alan R. Jackson today.
Conrado Depaz Arellano was found guilty by a jury of conspiracy to possess with intent to distribute cocaine today following a three-day trial before U.S. District Judge Ron Clark. Additionally, Arellano pleaded guilty on Feb. 12, 2018, to being illegally in the United States after having been deported.
According to information presented in court, on Aug. 2, 2017, a vehicle was stopped for a traffic violation in the Western District of Texas by U.S. Border Patrol Agents. The vehicle contained two kilograms of cocaine, which was intended to be delivered to Arellano in Carthage, Texas. Federal agents arranged for the cocaine to be delivered to Arellano in Carthage as planned and at that time arrested him for drug trafficking crimes. At the time of his arrest, Arellano was in possession of two Mexican identification documents. Further investigation revealed Arellano had been deported to Mexico in 2012 and 2007 and had since reentered the United States illegally. Arellano was indicted by a federal grand jury on Sep. 20, 2017.
Under federal statutes, Arellano faces up to 40 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Drug Enforcement Administration, U.S. Border Patrol and ICE-Homeland Security Investigations. This case is being prosecuted by Assistant U.S. Attorneys Allen Hurst and Jim Noble.
Idaho Falls Man Sentenced for Filing a False Claim with the U.S. Department of EnergyRead the Press Release
POCATELLO – Michael Hendrickson, 56, Idaho Falls, was sentenced yesterday to one year of confinement, including six months of imprisonment and six months of home detention, for filing a false claim with the United States Department of Energy, U.S. Attorney Bart Davis announced. Hendrickson pleaded guilty to the charge in November 2017.
Hendrickson worked for Paramount Supply of Idaho Falls. In April 2009, Hendrickson created another business entity. Both Paramount Supply and Hendrickson’s other business sold equipment to the Department of Energy at the Idaho National Laboratory (INL). In June and July 2010, while still employed with Paramount Supply, Hendrickson ordered a number of valves and transmitters from Paramount for the INL. Hendrickson shipped the items to the INL and billed Battelle Energy Alliance, the contractor which operates the INL for the U.S. Department of Energy, approximately $80,000 for the items. The bill submitted by Hendrickson to the INL fraudulently represented that the items were being sold to the government by Hendrickson’s other business, not Paramount, and payment went to Hendrickson’s business. Actually, the items had been paid for by Paramount Supply. Because of Hendrickson’s false claim, the government paid Hendrickson’s business for the items which had been stolen from Paramount Supply.
U.S. District Judge David C. Nye also ordered Hendrickson to pay restitution of $337,000 to Paramount and ordered that Hendrickson pay a fine of $5,000 and be on supervised release for three years.
The case was investigated by the Federal Bureau of Investigation and the Department of Energy Office of Inspector General.
Honduran National Pleads Guilty to Illegal Use of a Social Security NumberRead the Press Release
United States Attorney Duane A. Evans announced that ALLAN ARZU MATAMOROS-BANEGAS (“MATAMOROS-BANEGAS”), age 31, pleaded guilty today to a one-count Bill of Information charging him with illegal use of a social security number in violation of Title 42, United States Code, Section 408(a)(7)(B).
According to court records, MATAMOROS-BANEGAS knowingly and with the intent to deceive, falsely represented that a social security number was assigned to him by the Commissioner of Social Security when, in fact, as MATAMOROS-BANEGAS knew, the social security number had not been assigned to him. His deception and illegal use of the social security number was done for the purpose of obtaining employment located in the Eastern District of Louisiana. At sentencing, which is currently set for May 17, 2018, MATAMOROS-BANEGAS faces a maximum term of imprisonment of five years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
U.S. Attorney Evans praised the work of the U. S. Department of Homeland Security in investigating this matter. Assistant U. S. Attorney Michael M. Simpson is in charge of the prosecution.
Four from Cleveland indicted for trafficking Oxycodone and hundreds of pounds of marijuana; five firearms and $2.1 million seizedRead the Press Release
Four Cleveland men were named in a 25-count federal indictment that charges they conspired to distribute at least 220 pounds of marijuana and 345 pills of Oxycodone, law enforcement officials said.
Indicted are Amer Jabir, 37; Ahmad Jabir, 22; Aymen Abdelrahim, 28, and Gerald Knox, 37. All four are charged with conspiracy to possess with intent to distribute least 100 kilograms of marijuana and 345 pills of Oxycodone between 2015 and 2018.
There are additional charges for distribution of marijuana, distribution of Oxycodone, and related charges. Knox is charged with possession of a firearm related to drug trafficking and being a felon in possession of a firearm.
The indictment also seeks to forfeit more than $2.1 million in cash, five firearms, a 2015 Range Rover, a $5,000 casino poker chip and miscellaneous jewelry seized from locations in Cleveland, North Olmsted and Chicago as part of the investigation.
Amer Jabir was the leader of an organization that brought hundreds of pounds of marijuana from grow operations in California to Chicago and then Cleveland. The marijuana was hidden in secret trap compartments in vehicles that were then placed in the back of car haulers, according to court documents.
Some of the pills and marijuana were sold by Aymen Abdhelrahim, from a gas station on West 25th Street where Abdelrahim worked as a clerk, according to court documents.
If convicted, the defendants’ sentences will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case was investigated by the Federal Bureau of Investigation, the North Olmsted Police Department, the Westlake Police Department, the Ohio State Highway Patrol, U.S. Customs and Border Protection and the Westshore Enforcement Bureau. It is being handled by Assistant U.S. Attorneys Justin Seabury Gould and Robert F. Corts.
An charge is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Four Individuals Indicted in February 2018 Federal Grand JuryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office announced today the results of the February 2018 Federal Grand Jury.
"The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable."
RICKY LEE BANKS JR, age 40, of Muskogee, OklahomaCounterfeiting An Obligation Of The United States (4 counts)
In or about November, 2017, to on or about January 16, 2018, in the Eastern District of Oklahoma, the Defendant, RICKY LEE BANKS JR., with intent to defraud, did counterfeit and falsely make an obligation of the United States, that is, falsely made and counterfeited Federal Reserve Notes, in violation of Title 18, United States Code, Sections 471 and 2, punishable by not more than 20 years imprisonment, a fine up to $250,000.00 or both for each count.
The charges arose from an investigation by the Muskogee Police Department and the United States Secret Service.
Assistant United States Attorney John David Luton.
CARLOS PERALTA, age 32, of Wagoner, OklahomaPossession With Intent To Distribute Methamphetamine
On or about June 22, 2017, within the Eastern District of Oklahoma, the Defendant, CARLOS PERALTA, did knowingly and intentionally possess with intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), punishable by not less than 10 years imprisonment, a fine up to $10,000,000.00 or both.
The charges arose from an investigation by the Cherokee County Sherriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant United States Attorney Chris Wilson
WAYLON LEE WILLIAMS, age 36, of Stilwell, Oklahoma
CHASSIDY DAWN BURKE, age 36, of Stilwell, OklahomaDrug Conspiracy (1 count each)
On a date unknown to the Grand Jury prior to July 26, 2017, and continuing until on or about January 29, 2018, within the Eastern District of Oklahoma and elsewhere, the defendants, WAYLON LEE WILLIAMS and CHASSIDY DAWN BURKE, did knowingly and intentionally combine, conspire, confederate and agree together, and with others known and unknown to the Grand Jury, to commit offenses against the United States in violation of Title 21, United States Code, Section 846, as follows: possession with intent to distribute and distribution of 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A); and possession with intent to distribute less than 50 kilograms of a mixture or substance containing a detectable amount of Marijuana, a Schedule I Controlled Substance, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(D), punishable by not less than 10 years and not more than life imprisonment, a fine up to $10,000,000.00 or both.
The charges arose from an investigation by the Adair County Sheriff’s Office, the Oklahoma Bureau of Narcotics, and the Drug Enforcement Administration.
Assistant United States Attorney Rob Wallace
Fort Myers Armed Career Criminal Sentenced to Fifteen Years for Firearms OffenseRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Jovon McClures (40, Fort Myers) to 15 years in federal prison for possessing a firearm as a convicted felon. The Court also ordered him to forfeit the firearm used during the offense. He pleaded guilty on October 31, 2017.
According to court documents, on January 29, 2017, officers from the Fort Myers Police Department located a loaded firearm in McClures’s jacket pocket while investigating a loud argument in an apartment parking lot. As a previously convicted felon, McClures is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Myers Police Department. It was prosecuted by Assistant United States Attorney Simon R. Eth.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety – one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Former San Juan Municipal Police Officer Sentenced to 40 Years in Prison for Violating the Rico Act in Puerto RicoRead the Press Release
SAN JUAN, P.R. – Today, U.S. District Court Judge Jay A. García-Gregory sentenced former San Juan Municipal Police officer Carlos Velázquez-Fontanez to 40 years in prison for RICO Act violations, announced United States Attorney Rosa Emilia Rodríguez-Vélez. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Puerto Rico Police Department (PRPD) San Juan and Carolina Strike Forces were in charge of the investigation, with the assistance of PRPD’s Major Crimes Unit.
After a 17-day jury trial, on November 9, 2016, Velázquez-Fontanez was found guilty of racketeering, drug trafficking, drive-by shooting murders and related firearm offenses. During trial, the government presented photos, videos, other documentary evidence, and witness testimonies that proved that the defendant had been participating actively in the drug trafficking organization "La Rompe ONU" and found him guilty of all charges against him.
"La Rompe ONU" was a criminal organization that sold crack, cocaine, heroin, and marihuana in public housing projects, including: Jardines del Paraíso, Villa Andalucía, Alturas de Cupey, Jardines de Cupey, Brisas de Cupey, Los Claveles, Nuestra Señora de Covodonga, Los Lirios, Jardines de Monte Hatillo, Jardines de Campo Rico, Jardines de Berwind, San Martín, Monte Park, and Villa Lomas Verdes Public Housing Projects; as well as El Polvorín Ward, Mango Sector and other surrounding areas within the municipalities of San Juan, Trujillo Alto and Carolina, PR. Members of the organization used violence and intimidation, including murder, to increase the power, territory, and profits of "La Rompe ONU."
According to the evidence presented during trial, Velázquez-Fontanez participated during a drive-by shooting known as the "Tortuguero Massacre." On June 25, 2011, during a "drive-by" shooting, enforcers from the organization shot and killed Edwin Díaz-Cruz, Hervin Valcarcel-Martínez, aka "Prieto," Javier Catala-Bermúdez, and Orlando Meléndez-Villegas.
"We remain undeterred in our commitment to ensure safety and seek justice for victims of violent crimes in Puerto Rico," said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. "‘I thank our team of prosecutors and our federal law enforcement partners for the teamwork they showed in leading us to a successful outcome. We will continue to use all the tools at our disposal to build solid cases against violent criminals and bring them to justice."
Assistant U.S. Attorneys Alberto López-Rocafort and Victor O. Acevedo-Hernández were in charge of the prosecution of the case. They were assisted by Attorney from the United States Department of Justice’s Capital Crimes Section and Organized Crime and Gang Section. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Puerto Rico Police Department (PRPD) were in charge of the investigation.
Former President and CEO of Pennsylvania Health Services Company Indicted for Conspiring to Defraud the IRS and Filing False Tax ReturnsRead the Press Release
PITTSBURGH – The former President and Chief Executive Officer of a Pennsylvania health services management company has been indicted by a federal grand jury in Pittsburgh on charges of conspiracy to defraud the United States and filing fraudulent income tax returns, United States Attorney Scott W. Brady announced today.
The 10-count indictment, returned on February 13, named Joseph W. Nocito as the sole defendant.
"This indictment charges Joseph Nocito, the CEO and President of AHS, Inc., with defrauding the Internal Revenue Service through a multi-year, multi-million dollar tax fraud," stated U.S. Attorney Brady. "The indictment alleges that Nocito conspired to conceal millions of dollars in personal income from the IRS in two ways: first, by causing construction costs for his multi-million dollar personal residence to be recorded as business expenses of companies he controlled, and second, by devising an elaborate shell game where he transferred money among his companies for the purpose of evading taxes. My office is committed to protecting the taxpayers of western Pennsylvania from those who would defraud the United States government."
Ed Wirth, Acting Special Agent in Charge, IRS Criminal Investigation, added, "When dishonest individuals fraudulently write off their personal expenses and underreport their income, this cheats the honest taxpayers who pay their fair share for the government services and protections that we all enjoy. The Special Agents of IRS Criminal Investigation remain committed to investigating and recommending prosecution of these individuals."
According to the indictment, Joseph W. Nocito was CEO and President of Automated Health Systems Inc. (AHS), a Pittsburgh-based company that administered public health programs for state and local governments. The indictment alleges that Nocito conspired with others to defraud the IRS by fraudulently claiming millions of dollars of personal expenses as corporate business expenses – including the construction of his 39,000 square-foot home in Sewickley, which Nocito referred to as "Villa Noci," payments on a Jaguar, Maserati, and Rolls Royce, a personal butler and cook, and country club memberships. Nocito is also charged with understating his income on his personal tax returns by not reporting the income he diverted for personal expenses.
The indictment further alleges that Nocito concealed millions in taxable profits of AHS by shuffling millions in payments between AHS and other companies Nocito owned, such as Northland Properties, Golden Triangle Leasing, Management Financial Services, in order to fraudulently deduct the payments as business expenses and reduce the tax liability of AHS. Nocito is accused of falsely characterizing these payments as management, administrative and consulting expenses, and in turn fraudulently deducting the payments on corporate tax returns filed with the IRS.
The law provides for a total sentence of 32 years in prison, a fine of $2,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorneys Gregory C. Melucci, Mary M. Houghton, and Nelson P. Cohen, as well as Department of Justice Tax Division Trial Attorney Jeffrey B. Bender, are prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigation and the United States Postal Inspection Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.